Endeavour Mining Corp (TSE:EDV), the West Africa-focused gold miner, posted a decent set of full-year results after it beat output guidance while reducing costs, and the firm expects 2019 to be another strong year.
The miner has five operating mines in the Birimian greenstone belt - in the Ivory Coast, it has the Agbaou and Ity projects, in Burkina Faso, it operated the Houndé mine and Karma mine, and in Mali, it operates the Tabakoto mine.
READ: Endeavour Mining beats output guidance for 2018, thanks to strong performance across its mines
As reported in January, Endeavour told investors that full-year 2018 production had increased by 52% over the prior year to 612,000 ounces, bettering the top end guidance of between 555,000 and 590,000 ounces of gold.
Meanwhile, the important metric of AISC (all in sustaining costs) from continuing operations decreased by around $30 per ounce from the previous year to around $745 per ounce, which was well below the guidance range of between $760 and $810 per ounce.
In terms of financials, for the 12 months to end December, the group reported revenue of US$752 million, an increase of 60% on the previous year of US$471 million. Adjusted net earnings came in at US$53 million compared to US$54 million in 2017.
"2018 was a successful year for Endeavour during which we beat our production guidance and ended with AISC lower than the guided range, all while maintaining a strong safety record," said Sébastien de Montessus, president and CEO of Endeavour.
"The first full-year contribution from Houndé, coupled with the successful management of our portfolio, has sustainably decreased our all-in sustaining costs to below our strategic target of $800/oz."
The company boss added that 2019 was expected to be another strong year as the miner eyes the first gold pour at the Ity CIL plant in the Ivory Coast in the coming weeks, where construction continues to progress ahead of schedule and on budget.
Transformed the portfolio
"Over the past two years, we have transformed our portfolio, investing nearly $1 billion into the business. Once Ity CIL commences production, we expect to enter a period of sustained strong free cash flow generation with a continued focus on return on capital employed."
The group said 2019 was expected to be another pivotal one and listed the following potential catalysts.
- Ity CIL project first gold pour expected in early Q2-2019, following which, the group is expected to be net cash flow positive.
- Maiden reserve for the Kari Pump discovery at Houndé expected by mid-year.
- Maiden resource for the Kari West and Kari center discoveries, and further resource delineation for the Kari Pump deposit at Houndé expected in Q4-2019.
- Increased resource at the Le Plaque discovery at Ity expected in Q2-2019.
- Resource increase at the Fetekro greenfield exploration project expected in Q2-2019 and further results on Kalana in H2-2019.
2019 group outlook
This year's output is expected to increase to between 615 and 695,000 ounces, while AISC (all-in-sustaining costs) are expected to remain low at US$760-US$810 per ounce.
The firm expects to make significant exploration investment of between US$45 and US$50 million, mainly focused on the Houndé and Ity flagship mines.
Shares nudged up 1.3% in Toronto to stand at $20.11.
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