“These are a good set of results and we maintain a buy recommendation and price target of 2,800p per share based on multiples of 1.5 times net asset value and eight times EBITDA,” said broker Berenberg after Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF, FRA:6E2) delivered an upbeat set of second quarter results.
“Production a beat driven by Houndé and Ity,” continued Berenberg, referring to two of Endeavour’s gold mines in West Africa.
Production was split between 80,000 ounces of gold from Houndé, 25,000 ounces from Karma, 39,000 ounces from Boungou, 49,000 ounces from Mana, 41,000 from Wahgnion, 79,000 ounces from Ity 96,000 ounces from Sabodala-Massawa.
Overall this represented a significant outperformance on what Berenberg had been expecting.
“The beat reflected both a strong operational quarter across the portfolio and a later start to the West African wet season,” said the broker.
“Houndé mined higher grade from the Kari Pump area, with Ity also mining high grade ore from the Bakatouo pit.”
The broker is looking for production of 1.471mln ounces at an all-in sustaining cost for the full year.
“Earnings also a beat with a US$70mln interim dividend,” continued the broker.
Revenues were US$753mln, with EBITDA of US$363mln.
“The main upcoming project catalysts should be the completion of definitive feasibility studies for the Sabodala-Massawa expansion project and the Fetekro project in Ivory Coast in the fourth quarter and the Kalana project in Mali in the first quarter of 2022.