Endeavour Mining — Meeting guidance for 10th consecutive year

Endeavour Mining (LSE: EDV)

Last close As at 04/11/2024

1,415.00

3.00 (0.21%)

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Research: Metals & Mining

Endeavour Mining — Meeting guidance for 10th consecutive year

In preparation for FY22 results on 9 March, Endeavour has released preliminary operational results. Q422 saw a 4% increase in gold production, totalling 355koz, showing a strong close to the year, whereas all-in sustaining costs (AISC) remained stable at c US$954/oz. As such, FY22 marks the 10th year in which Endeavour has either achieved or beaten both its production and AISC cost guidance (see below). Looking to FY23, production guidance is broadly comparable at 1,325–1,425koz and AISC of US$940–995/oz. Endeavour also announced an H222 dividend of US$100m confirming a FY22 total dividend of $200m, 33% above its minimum committed level of US$150m.

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Metals & Mining

Endeavour Mining

Meeting guidance for 10th consecutive year

Q422 preliminary results and FY23 estimates

Metals and mining

1 February 2023

Price

1,891p

Market cap

£4,660m

C$1.33389/US$, US$ 1.23753/£

Net cash (US$m) at end-September

121

Shares in issue

247.0m

Free float

73.2%

Code

EDV

Primary exchange

LSE

Secondary exchange

TSX, USOTC

Share price performance

%

1m

3m

12m

Abs

9.3

25.9

18.8

Rel (local)

5.2

13.9

15.9

52-week high/low

2,090p

1,461p

Business description

Following its acquisitions of SEMAFO and Teranga, Endeavour Mining has become one of the top 10 major gold producers globally, with six mines in Côte d’Ivoire, Burkina Faso and Senegal plus a portfolio of development projects, all in the West African Birimian greenstone belt.

Next events

Ex-dividend date

23 February 2023

FY22 results

9 March 2023

Dividend payment

23 March 2023

Analysts

Thomas Batho

+44 (0)20 3077 5700

Lord Ashbourne

+44 (0)20 3077 5700

Endeavour Mining is a research client of Edison Investment Research Limited

In preparation for FY22 results on 9 March, Endeavour has released preliminary operational results. Q422 saw a 4% increase in gold production, totalling 355koz, showing a strong close to the year, whereas all-in sustaining costs (AISC) remained stable at c US$954/oz. As such, FY22 marks the 10th year in which Endeavour has either achieved or beaten both its production and AISC cost guidance (see below). Looking to FY23, production guidance is broadly comparable at 1,325–1,425koz and AISC of US$940–995/oz. Endeavour also announced an H222 dividend of US$100m confirming a FY22 total dividend of $200m, 33% above its minimum committed level of US$150m.

Year end

Revenue
(US$m)

PBT*
(US$m)

EPS*
(c)

DPS
(c)

P/E
(x)

Yield
(%)

12/20

1,847.9

501.2

185.3

37

15.7

1.3

12/21

2,903.8

756.5

205.0

56

14.2

1.9

12/22e

2,488.1

560.2

103.7

81

28.1

2.8

12/23e

2,635.8

620.9

151.2

82

19.3

2.8

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Positive preliminary results

FY22 gold production from continuing operations totalled 1,400koz, at the top end of Endeavour’s guidance of 1,315–1,400koz, while AISC were c US$928/oz, achieving the guided US$880–930/oz despite industry-wide inflationary pressures. Production guidance for FY23 is 1,325–1,425koz, while AISC are expected to remain consistent with those of recent quarters at US$940–995/oz.

Impressive shareholder returns and cash position

The H222 interim dividend of US$100m confirmed a distribution of US$200m for the full year. This represents a US$50m (33%) uplift relative to the minimum committed level of US$150m, while not compromising net cash, which increased by US$119m over the quarter to US$121m (Endeavour’s calculation). At the same time, share buybacks added US$98.7m to shareholder returns during FY22.

Valuation: Consistent valuation before FY22 results

We broadly maintain our valuation methodology ahead of the FY22 results, whereby we discount back five years of cash flows then apply an ex-growth, ad infinitum multiple to steady-state terminal cash flows in FY26. This implies a present valuation for the company of US$35.07 (C$46.84 or £28.35), previously US$35.54 per share if performed using a 10% discount rate or US$57.32 (C$76.56 or £46.33) per share if performed using a CAPM-derived (real) discount rate of 6.51% (based on inflation expectations of 2.34% derived from US 30-year break-evens). To these valuations a further US$4.30–7.45/share may be added to reflect the value of Endeavour’s five-year exploration programme (see The second five-year plan, published on 20 October 2021).

Positive dividend announcement

Endeavour announced a strong H222 interim dividend of US$100m (approximately US$0.41 per share), resulting in a total dividend for the year of US$200m (c US$0.81/share). This represents a US$50m or 33% uplift relative to the base dividend commitment for the year.

The ex-dividend date for the H222 interims 23 February 2023 and the record date will be 24 February 2023, with the payment being paid to shareholders around 28 March 2023. Shareholder returns are also being supplemented through the company’s share buyback programme, of which a total of US$98.7m, or 4.6m shares, were repurchased during the year. Alongside its robust dividend results, Endeavour also ended the year with a net cash position of US$121.1m, which represents an increase of US$118.6m relative to the prior quarter and US$44.9m over the prior year.

FY22 operational performance updates

Endeavour ended an impressive FY22 with production from continuing operations of 1,400koz, achieving the top end of the guided 1,315–1,400koz range, while AISC amounted to c US$928/oz, within a guided range of $880–930/oz. Strong production performance was largely related to the Houndé and Ity assets, which benefitted from higher than planned throughput, and the Mana mine where higher than expected open pit mining tonnages were extracted from the Wona open pit prior to its depletion. Although industry-wide inflationary pressures have typically affected costing, in Endeavour’s case they were partially offset by favourable foreign exchange movements as the euro declined against the dollar, as well as group-wide optimisation initiatives.

Q422 preliminary results and forecasts

Endeavour’s Q422 preliminary results met the top end of its guidance for the year of 1,400koz for production at an AISC of US$928/oz. In addition to incorporating its Q422 preliminary results into our full-year forecast, we have updated our gold price forecast to reflect a fractionally marginally increased gold price in Q4 (US$1,728/oz vs US$1,727/oz previously). We have also attempted to forecast the effect of realised hedging gains and losses on earnings in the form of an estimate of the intrinsic value of these contracts for the quarter included in profit/(loss) on financial instruments. As a result (and with the usual caveat around quarterly estimates), our updated forecast for adjusted net earnings attributable to shareholders for FY22 for Endeavour in the wake of its Q422 preliminary results is now as follows:

Exhibit 1: Endeavour Mining FY22 forecasts, by quarter

US$000s (unless otherwise indicated)

Q122

Q222

Q322

Q422e
(prior)

Q422e

FY22e

FY22e
(prior)

Houndé production (koz)

73.1

87.0

72.3

57.3

62.5

294.9

289.7

Karma production (koz)

10.2

0.0

0.0

0.0

0.0

10.2

10.2

Ity production (koz)

72.4

76.9

80.9

63.2

82.5

312.7

293.3

Boungou production (koz)

33.8

27.0

29.3

30.4

25.5

115.6

120.5

Mana production (koz)

52.6

54.8

41.7

43.1

45.5

194.5

192.1

Sabodala-Massawa

96.3

72.9

86.3

98.2

103.0

358.5

353.7

Wahgnion

28.9

26.5

32.3

43.1

36.0

123.7

130.8

Total gold produced (koz)

357.1

345.1

342.7

335.1

354.9

***1,410.1

***1,390.3

Total gold sold (koz)

359.1

343.7

338.1

335.1

352.0

***1,403.0

***1,386.0

Gold price (US$/oz)

1,911

*1,832

1,679

1,727

1,718

*1,785

*1,778

Mine level cash costs (US$/oz)**

609

713

733

769

732

701

793

Mine level AISC (US$/oz)

809

934

921

882

907

896

889

Revenue

– Gold revenue

686,200

629,600

567,633

576,424

604,704

2,504,889

2,459,824

Cost of sales

– Operating expenses

217,500

251,200

247,923

222,158

257,861

987,914

944,458

– Royalties

41,000

38,100

35,300

35,608

37,085

153,185

150,008

Gross profit

427,700

340,300

278,700

318,658

309,757

1,356,457

1,365,358

Depreciation

(152,000)

(139,800)

(151,200)

(164,191)

(163,637)

(606,637)

(607,191)

Expenses

– Corporate costs

(14,000)

(6,800)

(12,400)

(15,000)

(16,432)

(49,632)

(48,200)

– Impairments

– Acquisition etc costs

(200)

(1,300)

(1,000)

0

0

(2,500)

(2,500)

– Share based compensation

(7,700)

(3,100)

(4,200)

(7,082)

(7,082)

(22,082)

(22,082)

– Exploration costs

(7,100)

(8,000)

(11,800)

(5,000)

(5,000)

(31,900)

(31,900)

Total expenses

(29,000)

(19,200)

(29,400)

(27,082)

(28,514)

(106,114)

(104,682)

Earnings from operations

246,700

181,300

98,100

127,386

117,606

643,706

653,486

Interest income

Interest expense

(15,200)

(16,500)

(18,600)

(15,681)

(15,681)

(65,981)

(65,981)

Net interest

(15,200)

(16,500)

(18,600)

(15,681)

(15,681)

(65,981)

(65,981)

Profit/(loss) on financial instruments

(178,800)

106,800

60,100

11,458

11,910

10

(442)

Other expenses

(2,000)

(10,600)

(7,400)

0

0

(20,000)

(20,000)

Profit before tax

50,700

261,000

132,200

123,163

113,835

557,735

567,063

Current income tax

74,700

64,700

77,000

34,498

35,747

252,147

250,898

Deferred income tax

11,200

(8,200)

(11,900)

0

0

(8,900)

(8,900)

Total tax

85,900

56,500

65,100

34,498

35,747

243,247

241,998

Effective tax rate (%)

169.4

21.6

49.2

28.0

31.4

43.6

42.7

Profit after tax

(35,200)

204,500

67,100

88,665

78,088

314,488

325,065

Net profit from discontinued ops.

14,800

0

0

0

0

14,800

14,800

Total net and comprehensive income

(20,400)

204,500

67,100

88,665

78,088

329,288

339,875

Minority interest

21,800

15,100

9,500

13,758

13,667

60,067

60,158

Minority interest (%)

(106.9)

7.4

14.2

15.5

17.5

18.2

17.7

Profit attributable to shareholders

(42,200)

189,400

57,600

74,907

64,421

269,221

279,707

Basic EPS from continuing ops (US$)

(0.23)

0.76

0.232

0.303

0.261

1.027

1.069

Diluted EPS from continuing ops (US$)

(0.23)

0.76

0.232

0.303

0.261

1.025

1.067

Basic EPS (US$)

(0.17)

0.76

0.232

0.303

0.261

1.087

1.128

Diluted EPS (US$)

(0.17)

0.76

0.232

0.303

0.261

1.085

1.126

Norm. basic EPS from cont. ops (US$)

0.49

0.34

(0.006)

0.257

0.213

1.037

1.081

Norm. diluted EPS from cont. ops (US$)

0.49

0.34

(0.006)

0.256

0.212

1.035

1.079

Adj net earnings attributable (US$000s)

122,300

111,300

36,500

65,227

54,595

324,695

335,327

Adj net EPS from continuing ops (US$)

0.493

0.448

0.147

0.264

0.221

1.310

1.353

Source: Endeavour Mining, Edison Investment Research. Note: *Includes Karma and Sabodala-Massawa streams. **Excludes royalty costs. ***Includes 10.2koz produced and 10.1koz sold from Karma in Q122.

Please note that in Q420 Endeavour changed its definition of cash costs to include royalties. The decision was made so that Endeavour may be more consistent in reporting within the context of its peer group. For reasons of comparability with past results, however, as well as ease of forecasting (given royalties are reported as a standalone item distinct from operating expenses), we are continuing to calculate total cash costs in Exhibits 1 and 3 excluding royalties.

In the wake of the changes made to our Q422 forecasts, a comparison between our quarterly and full-year forecast and consensus forecasts for FY22 adjusted net EPS is as follows:

Exhibit 2: Edison-adjusted net EPS from continuing operations estimates vs consensus FY22 by quarter

(US$/share)

Q122

Q222

Q322

Q422e

Sum Q1–Q422e

FY22e

Edison

0.493

0.448

0.147

0.221

1.310

1.310

Mean consensus forecast

0.493

0.448

0.147

0.270

1.358

1.310

High consensus forecast

0.493

0.448

0.147

0.350

1.438

1.430

Low consensus forecast

0.493

0.448

0.147

0.130

1.218

1.080

Source: Refinitiv, Edison Investment Research. Note: Consensus at 27 January 2022.

FY23 forecasts

In line with its Q4 preliminary production results, Endeavour also released initial FY23 guidance indicating comparable operational performances with FY22 in production of 1,325–1,425koz (vs 1,400koz in FY22) and AISC of US$940–995/oz (vs US$928oz in FY22). In light of this guidance, we have updated our FY23 forecasts as follows:

Exhibit 3: Endeavour Mining FY23 forecasts, by quarter

US$000s (unless otherwise indicated)

Q123e

Q223e

Q323e

Q423e

FY23e

FY23e
(prior)

FY22e

Houndé production (koz)

55.1

55.1

79.3

87.9

277.5

250.5

294.9

Karma production (koz)

0.0

0.0

0.0

0.0

0.0

0.0

10.2

Ity production (koz)

73.2

71.0

65.4

75.4

285.0

250.6

312.7

Boungou production (koz)

28.0

28.0

29.5

29.5

114.9

122.1

115.6

Mana production (koz)

52.5

52.5

52.5

52.5

209.9

205.0

194.5

Sabodala-Massawa

78.8

78.8

77.3

86.3

321.3

353.7

358.5

Wahgnion

37.9

38.9

42.2

43.7

162.7

147.4

123.7

Total gold produced (koz)

325.5

324.2

346.2

375.3

1,371

1,275

***1,410.1

Total gold sold (koz)

325.5

324.2

346.2

375.3

1,371

1,275

***1,403.0

Gold price (US$/oz)

1,914

1,924

1,925

1,925

1,922

1,749

*1,785

Mine level cash costs (US$/oz)**

723

771

716

648

712

793

701

Mine level AISC (US$/oz)

968

1,017

956

879

952

889

896

Revenue

– Gold revenue

622,950

623,908

666,429

722,470

2,635,757

2,218,986

2,504,889

Cost of sales

– Operating expenses

235,335

249,967

248,016

243,306

976,625

801,748

987,914

– Royalties

38,436

38,537

41,758

45,198

163,930

140,958

153,185

Gross profit

349,178

335,403

376,655

433,966

1,495,202

1,276,279

1,356,457

Depreciation

(158,274)

(163,121)

(179,050)

(194,427)

(694,871)

(461,461)

(606,637)

Expenses

– Corporate costs

(15,000)

(15,000)

(15,000)

(15,000)

(60,000)

(33,104)

(49,632)

– Impairments

0

0

0

0

0

0

– Acquisition etc costs

0

0

0

0

0

0

(2,500)

– Share based compensation

(6,453)

(6,453)

(6,453)

(6,453)

(25,814)

0

(22,082)

– Exploration costs

(8,750)

(8,750)

(8,750)

(8,750)

(35,000)

(20,000)

(31,900)

Total expenses

(30,203)

(30,203)

(30,203)

(30,203)

(120,814)

(53,104)

(106,114)

Earnings from operations

160,701

142,079

167,402

209,336

679,518

761,714

643,706

Interest income

Interest expense

(14,534)

(16,091)

(15,029)

(12,932)

(58,586)

0

(65,981)

Net interest

(14,534)

(16,091)

(15,029)

(12,932)

(58,586)

0

(65,981)

Profit/(loss) on financial instruments

(2,868)

(3,180)

(3,180)

(3,180)

(12,408)

0

10

Other expenses

0

0

0

0

0

0

(20,000)

Profit before tax

143,299

122,808

149,193

193,224

608,524

761,714

557,735

Current income tax

42,469

38,741

42,290

51,250

174,750

216,607

252,147

Deferred income tax

0

0

0

0

0

0

(8,900)

Total tax

42,469

38,741

42,290

51,250

174,750

216,607

243,247

Effective tax rate (%)

29.6

31.5

28.3

26.5

28.7

28.4

43.6

Profit after tax

100,830

84,067

106,903

141,974

433,774

545,108

314,488

Net profit from discontinued ops.

0

0

0

0

0

0

14,800

Total net and comprehensive income

100,830

84,067

106,903

141,974

433,774

545,108

329,288

Minority interest

17,811

16,156

18,036

21,991

73,994

89,696

60,067

Minority interest (%)

17.7

19.2

16.9

15.5

17.1

16.5

18.2

Profit attributable to shareholders

83,019

67,911

88,866

119,983

359,780

455,412

269,221

Basic EPS from continuing ops (US$)

0.337

0.276

0.361

0.487

1.462

1.809

1.027

Diluted EPS from continuing ops (US$)

0.337

0.275

0.360

0.487

1.459

1.800

1.025

Basic EPS (US$)

0.337

0.276

0.361

0.487

1.462

1.809

1.087

Diluted EPS (US$)

0.337

0.275

0.360

0.487

1.459

1.800

1.085

Norm. basic EPS from cont. ops (US$)

0.349

0.289

0.374

0.500

1.512

1.809

1.037

Norm. diluted EPS from cont. ops (US$)

0.349

0.288

0.373

0.499

1.509

1.800

1.035

Adj net earnings attributable (US$000s)

85,380

70,480

91,510

122,671

370,041

389,379

324,695

Adj net EPS from continuing ops (US$)

0.347

0.286

0.372

0.498

1.504

1.547

1.311

Source: Endeavour Mining, Edison Investment Research. Note: *Includes Karma and Sabodala-Massawa streams. **Excludes royalty costs. ***Includes 10.2koz produced and 10.1koz sold from Karma in Q122.


A comparison between our quarterly and full-year forecast and consensus forecasts for FY23 adjusted net EPS is as follows:

Exhibit 4: Edison-adjusted net EPS from continuing operations estimates and consensus FY22 by quarter

(US$/share)

Q123e

Q223e

Q323e

Q423e

Sum Q1–Q423e

FY23e

Edison

0.347

0.286

0.372

0.498

1.504

1.504

Mean consensus forecast

0.300

0.310

0.350

0.350

1.310

1.470

High consensus forecast

0.360

0.370

0.410

0.440

1.580

2.080

Low consensus forecast

0.240

0.260

0.230

0.190

0.920

0.730

Source: Refinitiv, Edison Investment Research. Note: Consensus at 27 January 2023.

Valuation

Endeavour is a multi-asset company that has shown a willingness and desire to trade assets to maintain production, reduce costs and maximise returns to shareholders (eg the sale of Youga in FY16, Nzema in FY17, Tabakoto in FY18, Agbaou in FY20 and Karma in FY22, and the acquisition of SEMAFO in FY20 and Teranga in FY21). Historically, rather than our customary method of discounting maximum potential dividends over the life of operations back to FY22, for Endeavour, we have opted to discount five years of forecast cash flows in FY22–26 back to FY22, then apply an ex-growth terminal multiple of 10x (consistent with using a standardised discount rate of 10%) to forecast cash flows in that year (ie FY26). In the normal course of events, exploration expenditure would have been excluded from such a calculation on the basis that it is an investment. In the case of Endeavour, however, we included it because it was a critical component of ongoing business performance in the company’s ability to continually expand and extend the lives of its mines.

In the wake of Q4 preliminary operational results, we have updated our estimate of cash flows in FY26 to US$4.26/share (US$4.24/share previously), which implies a terminal valuation of the company at end-FY26 of US$42.57/share (US$42.44/share previously) if calculated using a discount rate of 10%. In conjunction with forecast intervening cash flows, this terminal valuation then discounts back to a present valuation of US$35.07/share (US$35.02/share previously) at the start of FY22, as follows:

Exhibit 5: Endeavour forecast valuation and cash flow per share, FY22–26e (US$/share)

Source: Edison Investment Research

Given its elevation into the ranks of the world’s foremost producers of gold, however, we believe Endeavour can increasingly attract lower-cost finance and, as such, a CAPM-derived WACC can also be considered. In this case, long-term nominal equity returns have been 9% and 30-year break-evens are expecting an inflation rate of 2.3339% (source Bloomberg, 26 January) versus 2.3754% previously. These two measures imply an expected real equity return of 6.51% (1.09/1.023339) and applying this to our forecast cash flows would imply a terminal valuation for Endeavour of US$65.35/share (US$65.59/share previously) and a current valuation of US$57.32/share (US$57.63/share previously).

Endeavour peer valuation

Endeavour’s valuation on a series of commonly used measures relative to a selection of gold mining majors (the ranks of which it has now joined since its takeover of SEMAFO and Teranga) is as follows:

Exhibit 6: Endeavour’s valuation relative to peers

Company

Ticker

Price/cash flow (x)

EV/EBITDA (x)

Yield (%)

Year 1

Year 2

Year 3

Year 1

Year 2

Year 3

Year 1

Year 2

Year 3

Endeavour (Edison)

EDV

4.9

5.0

4.8

4.2

3.8

4.3

3.8

3.9

4.5

Endeavour (consensus)

EDV

5.7

5.8

5.5

5.0

5.4

5.0

7.7

4.4

9.1

Majors

Barrick

ABX

9.4

8.5

8.0

8.5

8.1

7.4

2.9

2.6

3.0

Newmont

NEM

11.3

10.8

10.5

10.0

9.4

8.5

4.0

3.3

3.0

Newcrest

NCM AU

8.9

8.6

8.6

7.6

7.5

7.3

1.5

1.5

1.7

Kinross

K

6.1

5.0

5.0

6.7

5.4

5.7

2.5

2.5

2.5

Agnico-Eagle

AEM

11.2

10.9

10.7

9.9

8.8

8.6

2.8

3.0

3.2

Eldorado

ELD

8.2

5.1

4.5

6.2

4.5

4.0

0.0

0.0

0.0

Average

 

9.2

8.1

7.9

8.1

7.3

6.9

2.3

2.1

2.2

Implied EDV share price (US$)

39.97

37.18

34.86

42.06

41.57

36.03

35.69

38.58

43.20

Implied EDV share price (C$)

54.43

50.63

47.48

57.27

56.61

49.06

48.60

52.53

58.83

Source: Edison Investment Research, Refinitiv. Note: Consensus and peers priced at 27 January 2023.

Of note is that, without exception, Endeavour’s valuation is materially lower than the averages of the majors on all the measures shown in Exhibit 6, regardless of whether Edison or consensus forecasts are used. On an individual basis, it is cheaper than its senior gold mining peers on at least 50 out of 54 (93%) valuation measures if Edison forecasts are used and 48 out of 54 (89%) valuation measures if consensus forecasts are used. Reverse engineered, the average valuation measures of its peers imply an average share price for Endeavour of US$38.79, or C$57.53 (or £31.37), per share.

Exhibit 7: Financial summary

US$'000s

2019

2020

2021

2022e

2023e

2024e

December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

1,362,121

1,847,894

2,903,756

2,488,104

2,635,757

2,235,703

Cost of Sales

(884,869)

(1,061,891)

(1,675,393)

(1,237,760)

(1,261,368)

(1,007,684)

Gross Profit

477,252

786,003

1,228,363

1,250,343

1,374,389

1,228,019

EBITDA

 

 

618,443

910,295

1,517,263

1,252,843

1,374,389

1,228,019

Operating Profit (before amort. and except.)

 

281,400

281,400

546,072

859,409

646,206

679,518

Intangible Amortisation

0

0

0

0

0

0

Exceptionals

(199,159)

(201,532)

(266,000)

(2,490)

(12,408)

0

Other

(9,392)

8,886

(32,263)

(20,000)

0

0

Operating Profit

72,849

353,426

561,146

623,716

667,110

707,316

Net Interest

(51,607)

(53,774)

(70,623)

(65,981)

(58,586)

2,135

Profit Before Tax (norm)

 

 

220,401

501,184

756,523

560,225

620,932

709,452

Profit Before Tax (FRS 3)

 

 

21,242

299,652

490,523

557,735

608,524

709,452

Tax

(97,253)

(158,466)

(178,253)

(243,247)

(174,750)

(149,734)

Profit After Tax (norm)

123,148

342,718

578,270

316,978

446,182

559,718

Profit After Tax (FRS 3)

(76,011)

141,186

312,270

314,488

433,774

559,718

Net loss from discontinued operations

(4,394)

0

0

14,800

0

0

Minority interests

33,126

44,719

64,486

60,067

73,994

88,338

Net profit

(80,405)

141,186

312,270

329,288

433,774

559,718

Net attrib. to shareholders contg. businesses (norm)

90,022

297,998

90,022

297,998

513,784

256,911

Net attrib.to shareholders contg. businesses

(109,137)

(109,137)

96,466

247,784

254,421

359,780

Average number of shares outstanding (m)

157.4

157.4

160.8

250.7

247.7

246.1

EPS - normalised (c)

 

 

57.20

185.34

204.95

103.70

151.23

191.50

EPS - normalised fully diluted (c)

 

 

56.95

181.51

203.21

101.72

148.33

187.83

EPS - (IFRS) ($)

 

 

(0.72)

0.60

0.99

1.09

1.46

1.91

Dividend per share (c)

0

37

56

81

82

96

Gross Margin (%)

35.0

42.5

42.3

50.3

52.1

54.9

EBITDA Margin (%)

45.4

49.3

52.3

50.4

52.1

54.9

Operating Margin (before GW and except.) (%)

20.7

20.7

29.6

29.6

26.0

25.8

BALANCE SHEET

Fixed Assets

 

 

2,330,033

5,093,409

5,404,900

5,317,588

5,387,718

5,521,192

Intangible Assets

5,498

24,851

10,000

10,000

10,000

10,000

Tangible Assets

2,254,476

3,968,746

4,980,200

4,892,888

4,963,018

5,096,492

Investments

70,059

1,099,812

414,700

414,700

414,700

414,700

Current Assets

 

 

652,871

1,168,382

1,366,000

1,549,859

1,692,846

1,766,547

Stocks

266,451

305,075

311,300

311,013

329,470

279,463

Debtors

83,836

104,545

139,900

171,434

251,738

218,856

Cash

288,186

751,563

906,200

1,049,901

1,106,537

1,263,125

Other

14,398

7,199

8,600

17,510

5,102

5,102

Current Liabilities

 

 

(354,931)

(661,171)

(567,100)

(661,872)

(660,264)

(586,961)

Creditors

(312,427)

(612,862)

(552,700)

(647,472)

(645,864)

(572,561)

Short term borrowings

(42,504)

(48,309)

(14,400)

(14,400)

(14,400)

(14,400)

Long Term Liabilities

 

 

(963,736)

(1,647,799)

(1,818,100)

(1,818,100)

(1,818,100)

(1,818,100)

Long term borrowings

(770,902)

(1,026,337)

(878,600)

(878,600)

(878,600)

(878,600)

Other long term liabilities

(192,834)

(621,462)

(939,500)

(939,500)

(939,500)

(939,500)

Net Assets

 

 

1,664,237

3,952,821

4,385,700

4,387,475

4,602,200

4,882,678

CASH FLOW

Operating Cash Flow

 

 

628,617

1,046,370

1,415,306

1,330,750

1,299,834

1,237,605

Net Interest

(35,413)

(53,774)

(26,900)

(65,981)

(58,586)

2,135

Tax

(109,494)

(186,332)

(205,573)

(252,147)

(174,750)

(149,734)

Capex

(401,227)

(335,599)

(587,496)

(519,325)

(765,000)

(654,178)

Acquisitions/disposals

3,654

(19,000)

(4,700)

15,000

5,000

0

Financing

2,402

100,000

(89,400)

(119,972)

(5,240)

0

Dividends

(6,154)

(88,288)

(159,800)

(244,623)

(244,623)

(279,240)

Net Cash Flow

82,385

463,377

341,437

143,701

56,636

156,589

Opening net debt/(cash)

 

 

518,607

525,220

323,083

(13,200)

(156,901)

(213,537)

HP finance leases initiated

0

0

0

0

0

0

Other

(88,998)

(261,240)

(5,154)

0

0

0

Closing net debt/(cash)

 

 

525,220

323,083

(13,200)

(156,901)

(213,537)

(370,125)

Source: Company sources, Edison Investment Research. Note: Presented on a pro-forma basis including SEMAFO from FY18 balance sheet and Teranga from FY20 balance sheet. EPS normalised from FY18 to reflect continuing business only. *Excludes restricted cash.


General disclaimer and copyright

This report has been commissioned by Endeavour Mining and prepared and issued by Edison, in consideration of a fee payable by Endeavour Mining. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Endeavour Mining and prepared and issued by Edison, in consideration of a fee payable by Endeavour Mining. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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