Endeavour Mining plc reports strong Q3-2024 results, meeting production guidance

From GlobeNewswire: 2024-11-07 02:00:00

Endeavour Mining plc reported Q3-2024 results, including Adjusted EBITDA of $317m, Free Cash Flow of $97m, and $229m in shareholder returns paid. The company achieved its strongest quarterly production of 270koz at an AISC of $1,287/oz, with YTD production at 741koz. They expect FY-2024 production to meet guidance.

YTD-2024 AISC was impacted by higher royalty costs due to increased gold prices, low grid power availability in H1-2024, and underperformance at the Sabodala-Massawa CIL. Endeavour reported Adj. Net Earnings of $74m for Q3-2024, up 27% over Q2-2024, with operating cash flow of $245m. The company’s net debt is $834m with a leverage ratio of 0.77x, tracking towards their target of 0.5x.

Endeavour achieved commercial production at both Sabodala-Massawa BIOX® Expansion and Lafigué on schedule in August 2024. They spent $74m on exploration YTD-2024, with positive results from the Tanda-Iguela program near the Assafou project. The company remains focused on organic growth and exploration efforts to drive future success. Endeavour reported a 27% increase in EBITDA to $755 million and a 13% increase in shareholder returns through dividends and share buybacks. The net debt remained stable at $445 million, with a debt ratio of 0.40x trailing EBITDA. Management announced a conference call for further details.

During Q3-2024, Endeavour achieved commercial production at two growth projects, leading to its strongest production quarter. Full-year production is expected at the lower end of guidance, with higher costs due to royalties and power. The company generated $100 million in free cash flow and repaid $160 million of its credit facility.

Endeavour implemented a new shareholder returns program for 2024-2025, focusing on free cash flow generation. The program includes minimum dividends of $435 million, supplemented by additional dividends and share buybacks. Over the previous period, the company returned $903 million to shareholders, exceeding minimum commitments. Dividends will be paid semi-annually based on gold prices and financial health. Endeavour expects to pay supplemental returns through dividends and share buybacks if gold prices exceed $1,850/oz and the company maintains a strong financial position. Since the start of the year, $200.0 million has been paid in dividends, with an additional $28.9 million returned through share buybacks. In total, over $1,032.0 million has been returned to shareholders since the first dividend in FY-2021.

The company has shown strong safety performance, with a Lost Time Injury Frequency Rate of 0.12 for the trailing twelve months ending 30 September 2024. Q3-2024 production reached 270koz, a 19koz increase from Q2-2024, driven by the ramp-up of Sabodala-Massawa BIOX and Lafigué operations. AISC remained stable quarter on quarter at $1,287/oz, with commercial production starting at the low-cost Lafigué mine offsetting higher AISC at Ity, Sabodala-Massawa, and Mana. In the third quarter of 2024, Endeavour Mining’s group production reached 270 koz, with Houndé contributing 74 koz, Ity with 77 koz, Mana with 30 koz, Sabodala-Massawa with 54 koz, and Lafigué with 36 koz. The Boungou and Wahgnion mines were divested in 2023. All-In Sustaining Costs (AISC) for the group were $1,287/oz.

Looking ahead to the full year 2024, Endeavour Mining anticipates group production to align with the lower end of the 1,130 – 1,270 koz guidance. However, AISC is expected to exceed the $955 – $1,035/oz range due to lower production and higher costs at the Sabodala-Massawa CIL operation, impacted by gold prices and power availability issues.

By the end of the third quarter of 2024, Houndé produced 179 koz, Ity 259 koz, Mana 107 koz, Sabodala-Massawa 159 koz, and Lafigué 36 koz. The group production stood at 741 koz. The FY-2024 outlook indicates that performance is on track or exceeding expectations, with a stronger focus on Q4-2024 for improved production. Houndé and Mana mines are expected to see improvements in ore grade and throughput, while Sabodala-Massawa operations will benefit from new higher-grade ore sources. Ity mine may see a decrease in average grades processed. FY-2024 production at Sabodala-Massawa is expected to be below guidance range due to lower high-grade non-refractory ore availability.

Group AISC guidance for FY-2024 is expected to be above the top end of the range due to factors like higher gold prices increasing royalty costs and lower grid power availability, impacting operations at Houndé and Mana. Sabodala-Massawa is facing lower production levels at higher costs, contributing to higher AISC.

Higher gold prices, low grid power availability, and underperformance at Sabodala-Massawa CIL have impacted YTD-2024 AISC by approximately $149/oz. Q4-2024 AISC is expected to be lower due to higher production levels. Sustaining capital expenditure outlook for FY-2024 has decreased at Sabodala-Massawa and Lafigué, while non-sustaining capital expenditure has increased. The increase in capital expenditure at Ity, Mana, and Lafigué is attributed to accelerated waste stripping, TSF 2 construction, and increased underground development. FY-2024 growth capital expenditure remains at $245.0 million, with $227.4 million already spent. Exploration expenditure for FY-2024 is expected to slightly exceed $77.0 million due to increased activity at Sabodala-Massawa. 1. The stock market experienced a sharp decline today, with the Dow Jones Industrial Average dropping 500 points due to concerns about rising inflation and interest rates.

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