Endeavour generates record first-quarter cash flow

13th May 2020 By: Marleny Arnoldi - Creamer Media Online Writer

TSX-listed gold miner Endeavour Mining started the year on a positive note, with continued momentum across the business and with production and costs in line to meet full-year guidance.

The company confirmed in a May 13 statement that its operations had not been significantly impacted on by Covid-19 in the first quarter of the year.

Nonetheless, the company has a business continuity plan in place and is working closely with host governments to support a coordinated response in the communities where it operates.

“This quarter, we are particularly pleased to have achieved a record in operating cash flow at $126-million, which has enabled us to further reduce our net debt by $55-million to $473-million.

“The additional cash will help to ensure the resilience of our balance sheet as we respond to the current operating environment and will provide us with capital allocation flexibility as we place an increased focus on return on capital employed,” said president and CEO Sébastien de Montessus.

The company had cash reserves of $357-million at the end of the quarter, which provides it with headroom to operate within the Covid-19 environment.

Exploration remains a core strategic pillar for Endeavour and, during the quarter under review, it invested nearly 40% of its annual budget across the portfolio.

Endeavour has four operating mines across Côte d'Ivoire and Burkina Faso, as well as a development project in Mali.

Over the coming months, Endeavour expects to see the fruits of its exploration activity as results are due to be announced for the Kari area at Houndé, the Le Plaque area at Ity, and at Fetekro.

“Additionally, we aim to demonstrate the value created by publishing increased reserves and updated mine plans at both Houndé and Ity along with a preliminary economic assessment for Fetekro.

“As we look ahead, we are well advanced in our planning to integrate our operations with TSX-listed Semafo's. We remain excited about this combination and the value that it will create for all our stakeholders,” Montessus noted.

Semafo and Endeavour have been in negotiations on a $690-million deal to merge the companies and create the largest gold mining company in West Africa.

Meanwhile, Endeavour produced 172 000 oz of gold at an all-in sustaining cost (AISC) of $899/oz in the first quarter.

The full-year production guidance is set at between 680 000 oz and 740 000 oz of gold, at an AISC of between $845/oz and $895/oz.

Endeavour’s production in the first quarter was a 41% increase compared with production in the first quarter of last year, thanks to the start-up of the Ity carbon-in-leach operation.

Montessus advised that AISC should be lower in the second half of the year, owing to increased production and capital spend being more heavily weighted to the first half of the year.