Analysts at Canaccord Genuity (TSX:CF, LSE:CF) have reiterated their 'buy' rating on Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) and increased their target price for the company's Canadian-listed stock to C$46 from C$45 following news that construction of the Lafigue project in Cote d'Ivoire has been approved following the completion of a Definitive Feasibility Study (DFS).
The Canadian broker's analysts said: "We forecast Endeavour consolidated production increasing to 1.56Moz by 2025 from 1.39Moz this year (+12%). We also forecast Endeavour remaining cash flow positive throughout the construction period, at current gold prices, and to continue paying its dividend."
They noted that Endeavour expects to pour first gold in the third quarter of 2024 after a 22-month construction period and early works and engineering have already begun.
The analysts added: "We have tweaked our mine model to reflect the update including a longer mine life but lower grades. We now value the project at an NPV5% of $788 million (at a LT gold price of $2,002/oz) up from an NPV7% of $594 million given the completion of the DFS. La Figué represents ~9% of our mining NAV."
The Canaccord analysts concluded: "Overall, we had expected the project to move forward, and we view the study update as slightly positive."
Barclays also repeats 'buy'
Meanwhile, analysts at Barclays also repeated a 'buy' rating with an unchanged 2,500p London price target on Endeavour Mining following the Lafigue project approval news.
The bank's analysts noted that Lafigue will add 203,000 ounces per annum of gold production for Endeavour, a 15% increase versus the midpoint of 2022 guidance, at an All-In-Sustaining Cost (AISC) of $871 per ounce, making it the company's second lowest cost mine, over a 13 year initial life.
They said: "Key metrics on mine life, scale and AISC are in line with the company's strategic filters. Capex is $448m, 5% below our $475m estimate, but AISC is 7% higher than we had modelled ($871/oz vs. $814/oz) leading to 10% lower NPV vs. our prior estimate."
The Barclays analysts concluded: "We estimate a 21% post-tax IRR at our assumed $1500/oz LT gold price. However, management notes it is seeing reduced inflationary pressures and more favourable FX (e.g. study assumes 0.87 USD/EUR vs. spot 1.03) which hints to potentially superior outcomes vs. the DFS."
Endeavour Mining shares were trading at 1,509p in London, up 0.8%, while in Toronto the stock was changing hands for C$23.83, up 0.4%.