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Endeavour Mining reports strong first quarter, with gold output lifted and debt reduced

The group operates the Agbaou and Ity mines in Côte d’Ivoire and the Houndé and Karma mines in Burkina Faso

Endeavour Mining Corp -
The group told investors that its operations had not been significantly impacted by the coronavirus pandemic

Endeavour Mining Corporation (TSE:EDV) (OTCMKTS:EDVMF), the West Africa-focused gold miner, has started 2020 with gusto, reporting increased production and record operating cash flow in its first quarter to the end of March.

The group operates the Agbaou and Ity mines in Côte d’Ivoire and the Houndé and Karma mines in Burkina Faso and told investors Wednesday that output and costs from all its mines were tracking in line with its full-year guidance.

READ: Endeavour Mining executives to donate part of their salary to help fight coronavirus in West Africa

It also said its activities had not been significantly impacted by the coronavirus pandemic and where there had been cases, the individuals concerned had fully recovered and returned to work.

In the three months to March 31, 2020, Endeavour said group production was up 42% compared to the first quarter of 2019, at 172,000 ounces, driven by the start-up of the Ity mine, which led to a 44% increase of ounces sold.

Adjusted net earnings in the first quarter were US$34 million, up US$39 million from a loss of US$5 million in Q1, 2019 on revenue of US$270 million, up 78% compared to US$151 million last year. Operating cash flow came in at US$126 million, which was a fivefold increase over the first quarter last year of US$23 million, the firm added.

In a statement, Sébastien de Montessus, the group's chief executive said "we are particularly pleased to have achieved a record in operating cash flow, which has enabled us to further reduce our net debt by $55 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 going forward as we place an increased focus on return on capital employed," he added.

During the quarter, the boss said, the firm had invested nearly 40% of its annual budget across the portfolio on exploration.

"Over the coming months, we expect to see the fruits of this activity as we announce resource increases for the Kari area at Houndé, the Le Plaque area at Ity, and at Fetekro. In addition, we aim to demonstrate the value created by publishing increased reserves and updated mine plans at both Houndé and Ity along with a PEA for Fetekro," said de Montessus.

The group also told investors it was "well positioned" to meet its full year 2020 production guidance of between 680 and 740,000 ounces and all-in-sustaining costs  (AISC) of US$845 to US$895 per ounce.

As at the end of March, the group had cash of US$357 million, compared to US$84 million at the same time a year ago. The net debt was US$473 million, down from US$528 million at the end of 2019.

A business continuity program was put in place in early March this year by Endeavour to mitigate risks from the outbreak of the pandemic.

Shares in Toronto advanced 4.71% on the day to stand at C$28.65. 

---Updates for share price---

Contact the author at [email protected]

Quick facts: Endeavour Mining Corp

Price: 33.24 CAD

TSX:EDV
Market: TSX
Market Cap: $5.27 billion
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