Miner focuses on regional growth

13th October 2023

Miner focuses on regional growth

HOUNDÉ MILL The West African Birimian Greenstone Belt is highly prospective and underexplored

Gold miner Endeavour Mining reports strong operational and financial performance, as well as on-track guidance and robust shareholder returns, following the release of the company’s second-quarter results earlier this year.

During the second quarter, Endeavour Mining reported gold production of 268 000 oz at an all-in sustaining cost (AISC) of $1 000/oz, with the first half of 2023’s production reaching 511 000 oz at an AISC of $978/oz.

This production performance is in line with the miner’s production guidance target to achieve between 1-million and 1.1- million ounces of gold production at an AISC of $895/oz to $950/oz, reflecting the company's commitment to consistent growth and efficiency, CEO and president Sebastien de Montessus says.

He cites the financial performance as “equally impressive”, with the second quarter’s earnings before interest, taxation, depreciation and amortisation (Ebitda) at $273- million, marking a 62% increase over the first quarter of the year.

Adjusted Ebitda stood at $253-million, representing a 5% rise over the previous quarter, while net earnings for the second quarter reached $78-million, up from a loss of $1- million in the first quarter. This demonstrated a “remarkable turnaround”, says De Montessus.

Adjusted net earnings, while slightly down at $54-million, remained robust, the miner reports.

Despite a 28% decrease over the first quarter, Endeavour Mining’s operating cash flow before working capital from all operations amounted to $175-million for the second quarter.

Endeavour Mining declared a $100-million dividend for the first half of the year, equivalent to $0.40 a share, while total shareholder returns have reached $757-million since the first payment in the first quarter of 2021.

The miner also repurchased $20-million worth of shares during the first six months of the year, which De Montessus highlights as the company’s commitment to providing shareholders with attractive returns.

Meanwhile, Endeavour Mining notes that the West African Birimian Greenstone Belt presents what it calls ‘The West African Opportunity’, as the region is highly prospective and underexplored, subsequently becoming one of the most attractive mining jurisdictions globally, with major mining companies active in the region.

Endeavour Mining notes the countries of West Africa have implemented new legal frameworks and mining codes over recent years to promote the development of the industry in the region, which is a key driver of economic growth.​

These initiatives includes the introduction of shortened permitting processes, which the miner says translates into the timeframe from resource discovery to a production phase being under three years.

In addition, Endeavour Mining states that all West African jurisdictions have adopted a responsible approach to mining development, with stringent environmental standards in place and mining codes consistent with international principles.​

This, the miner says, means that resource companies that seek to explore the West African Birimian Greenstone Belt can do so with confidence in the legal framework.​

Organic Growth

Endeavour Mining is also focused on future growth opportunities, and highlighted two significant projects – the Sabodala-Massawa expansion and the Lafigué greenfield project – as “progressing according to plan”.

Both projects are on budget, with 75% and 59% respectively of the initial capital committed thus far, and are scheduled for commissioning in the second and third quarters of 2024, respectively.

These projects are expected to drive substantial growth in the near future, De Montessus says.

The miner is also committed to exploration efforts, with $51-million spent in the first half of this year, while the 2023 guidance for exploration spending has been increased by $15-million to $80-million.

Notably, Endeavour Mining reports that the Tanda-Iguela drilling programme in Côte d’Ivoire for 2023 has been expanded by 157% to reach a cumulative 180 000 m worth of drilling, with an updated resource estimate scheduled for release later in the year.

Further, De Montessus highlights the company's continuous drive for operational efficiency and cost optimisation, pointing to the construction of a 37 MW solar photovoltaic facility at the Senegal-based Sabodala-Massawa mine, which will significantly reduce fossil fuel consumption and power costs, while contributing to lower greenhouse-gas emissions upon its commissioning in early 2025.