PI Financial analysts have reiterated their ‘Buy’ rating and maintained their C$41 price target for Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) after the West Africa-focused gold miner reported fourth-quarter 2022 production results that were slightly above their estimates.
In a note to clients, the analysts also noted that Endeavour’s consolidated production guidance for 2023 is generally in line with their estimates, with all-in-sustaining costs (AISC) guidance slightly above.
“With a strong end to 2022, Endeavour once again achieved its guidance (10 years running now), and provided 2023 guidance that was mixed relative to our estimates, with production in line and costs slightly higher,” the analysts wrote. “Higher costs are attributable to both higher sustaining capital spending and higher unit costs.”
READ: Endeavour Mining hits top end of gold production guidance for 2022
With a declared dividend of US$100 million, or US$0.41 per share, for the second half of fiscal 2022 and further buybacks of US$24 million in 4Q, the analysts noted that Endeavour has spent US$299 million in shareholder returns for 2022, and over US$600 million since beginning its shareholder returns program in 2020.
“Construction of the Sabodala-Massawa Phase 2 project and Lafigué greenfield project are both continuing on schedule and budget, with a 2023 growth capital budget of US$400 million, and both projects expected to begin producing in 2024,” the analysts said.
Additionally, they said Endeavour's exploration upside continues to set it apart from other producers its size, with a 2023 exploration budget of US$70 million expected to focus on the recent Tanda greenfield discovery, where a maiden 3- million-ounce gold resource was recently announced, adding to the company's five-year target of discovering 15-20 million ounces.
Endeavour's shares are trading around C$32 on the Toronto Stock Exchange.
Contact the author at stephen.gunnion@proactiveinvestors.com