Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) has made “a good start in rebuilding credibility with investors after a 2024 that didn’t live up to the gold producer’s usual track record of delivering versus guidance, that’s according to analysts at UBS.
The Swiss bank repeated a ‘Buy’ recommendation and has upped its price target from 2,500p to 2,800p – compared to a prevailing share price of 2,078p.
Yesterday, the miner announced first quarter results that showed a lucrative three months, amid strengthening gold prices.
It reported strong first-quarter results with production of 341,000 ounces of gold, at an all-in sustaining cost of $1,129 per ounce. Earnings (adjusted EBITDA) were up 12% over the previous quarter at $613 million. Free cash flow reached a record $409 million, marking a 53% increase from the prior quarter.
UBS reckons gold equities in general, and Endeavour in particular, are attractively priced.
“After a Q1 operational beat & cost beat in our view 2025 guidance looks conservative (albeit we note that Q1 is expected to be stronger than Q2) and strong free cash flow gives confidence in further acceleration in cash returns,” analyst Daniel Major said.
Endeavour chief executive Ian Cockerill, meanwhile, committed “Our strong free cash flow generation has enabled us to significantly strengthen our balance sheet.
“We will focus on maximising free cash flow and enhancing shareholder returns, as we advance our high-quality organic growth pipeline.
“With our higher-quality portfolio, sector-leading margins and best-in-class growth outlook, we are well positioned to capitalise on the favourable gold price environment and deliver value for all of our stakeholders.”
Endeavour told investors it is on track to achieve FY-2025 guidance, with performance slightly weighted towards its first half – driven by a notably strong performance at its Houndé mine.