Endeavour Mining

CN: EDV

CA$2718.4m market cap

CA$24.73 last close

Endeavour Mining is an intermediate gold producer, with four mines in Côte d’Ivoire (Agbaou and Ity) and Burkina Faso (Houndé and Karma) and two major development projects (Ity CIL and Kalana) in the highly prospective west African Birimian greenstone belt.

Investment summary

Since new management was engaged in late-2015 and its strategy reset, Endeavour has built itself into the largest gold producer in the Côte d’Ivoire and one of the top three in Burkina Faso, offering immediate cash flow from production and near-term growth from projects, to which end it has instigated a major exploration programme, expending c US$45m pa with the aim of expanding its resources by c 10–15Moz over five years.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (c)
P/E (x)
P/CF (x)
2017A 652.1 201.2 49.3 (6.0) N/A 7.6
2018A 752.0 264.8 70.5 (8.0) N/A 7.4
2019E 785.1 317.3 61.2 (5.0) N/A 6.9
2020E 979.2 513.0 256.6 128.0 14.8 4.3
Last updated on 25/07/2019
Industry outlook

EDV’s exploration programme holds out the possibility of maintaining and extending near-term production rates into the foreseeable future. In valuing Endeavour, we have opted to discount forecast cash flows back over four years and then to apply an ex-growth multiple to terminal cash-flows consistent with a 10% discount rate, which results in a value for EDV of c US$27.58/share currently. In the meantime, Q119 production and cost results were both better than our prior expectations and the Ity CIL project has achieved commercial production around three months ahead of schedule.

Last updated on 25/07/2019
Share price graph
Balance sheet
Forecast net debt (US$m) 533
Forecast gearing ratio (%) 55
Price performance
%
1m
3m
12m
Actual 17.7 29.4 4.5
Relative* 16.8 30.1 4.1
52-week high/low C$25.3/C$16.4
*% relative to local index
Key management
Michael E. Beckett Chairman
Martino De Ciccio VP Strategy & Investor Relations
Sebastien de Montessus President and CEO
Vincent Benoit Executive VP and CFO