Don't Forget To
Rate This Article
   

Get the Latest Investment Ideas Delivered Straight to Your Inbox. Subscribe

TICKERS: EDV; EVR

Co. Among Top 10 Gold Producers Reports In Line Q3/22 Results
Research Report

Share on Stocktwits

Source:

The outlook for full-year 2022 production is positive, and growth is expected, noted a Haywood Securities report.

Endeavour Mining Corp. (EDV:TSX; EVR:ASX) Q3/22 financial results were solid, and the miner is well-positioned to reach the upper end of 2022 production guidance, reported Haywood Securities analyst Geordie Mark in a November 10 research note.

"The company's operations and financials performances beat average analysts' forecasts surveyed across the board," Mark wrote.

Value for Shareholders

With a current share price of CA$27.55, Mark pointed out, the gold producer is trading "mostly cheaply compared to its peers on a range of metrics, especially considering its nearer-term growth potential." Haywood's target price on Endeavor is CA$40 per share, and its rating is Buy.

Mark added that "Endeavor is now a Top 10 gold producer by production volume and the largest gold producer in West Africa."

"Endeavor's shares offer shareholder value in a higher gold price environment given the diverse asset base, organic growth catalysts, and raw natural resource potential across its exploration portfolio," Mark wrote.

He added that "Endeavor is now a Top 10 gold producer by production volume and the largest gold producer in West Africa, and we continue to view EDV as a favorable pick in the senior producer space."

A Look at Production

Mark reviewed the England-based miner's Q3/22 figures, noting the company reported softer financial performance during the quarter than in the previous one.

Production and all-in-sustaining cost (AISC) remained relatively static. Production came in at 343,000 ounces (343 Koz) of gold versus Q2/22 production of 345 Koz and Haywood's Q3/22 estimate of 318 Koz.

Production at Ity and at Hounde was better than Haywood anticipated due to higher grade and throughput. It produced 81 Koz Au versus 78 Koz Au. Hounde produced 72 Koz Au versus 67 Koz Au. On the other hand, Sabodala-Massawa underperformed, yielding 86 Koz Au, due to lower-than-expected average mill grades.

Q3/22 AISC was US$960, below Haywood's forecast of US$1,000 but slightly above Q2/22's AISC of US$954.

Cash costs, though, were higher than Haywood expected, coming in at US$843 per ounce (US$843/oz) versus US$824/oz.

"Given reported production, Endeavor remains well-positioned to meet full-year 2022 (FY22) guidance of 1,315–1,400 Koz at [an] AISC of US$880–930/oz," wrote Mark.

Impressive Financials

Cash flow from operations stands out in Q3/22, at US$253 million (US$253M), well above Haywood's projection of US$237M. At the quarter's end, the company had US$833M in cash.

"The company's groundbreaking cash position has led to [a] successful dividend payment of about US$100M in Q3/22," Mark noted.

Endeavor's EBITDA in Q3/22 was US$329M, above Haywood's estimate of US$322M. However, adjusted earnings per share were slightly lower than Haywood's forecast, at US$0.45 versus US$0.46.


Want to be the first to know about interesting Gold investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter. Subscribe

Disclosures:
1) Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. 

3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.

4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. 

Disclosures For Haywood Capital Markets, Endeavour Mining Corp., November 10, 2022

Analyst Certification: I, Geordie Mark, hereby certify that the views expressed in this report (which includes the rating assigned to the issuer’s shares as well as the analytical substance and tone of the report) accurately reflect my/our personal views about the subject securities and the issuer. No part of my/our compensation was, is, or will be directly or indirectly related to the specific recommendations.

Important Disclosures:  Of the companies included in the report the following Important Disclosures apply:

Haywood Securities, Inc. has reviewed lead projects of Endeavour Mining Corp. (EDV-T), Alamos Gold Inc. (AGI-T) and a portion of the expenses for this travel may have been reimbursed by the issuer.

Haywood Securities, Inc. or one of its subsidiaries has received compensation for investment banking services from Alamos Gold Inc. (AGI-T) in the past 12 months. 




Want to read more about Gold investment ideas?
Get Our Streetwise Reports Newsletter Free and be the first to know!

A valid email address is required to subscribe