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Endeavour Mining: A Look At The Q4 Results

Mar. 11, 2020 5:55 AM ETEndeavour Mining plc (EDVMF), EDV:CA16 Comments
Taylor Dart profile picture
Taylor Dart


  • Endeavour Mining reported its FY-2019 results this week, missing production guidance and narrowly beating out its cost guidance.
  • The company produced just over 650,000 ounces of gold in FY-2019, and expects to see annual gold production of over 700,000 ounces in FY-2020.
  • Based on an underwhelming year, I have moved the company out of my top 3 producers in Africa, and I see B2Gold and Teranga Gold as more attractive on dips.

We're now more than 90% of the way through the gold miners' Q4 earnings season, with just over 60% of companies beating estimates, and projected FY-2020 EPS growth for the group of over 40%. The most recent name to report earnings in the sector is Endeavour Mining (OTCQX:EDVMF), an African miner that missed guidance slightly for the year on the production side. While Endeavour's all-in sustaining costs came in right at the mid-point of guidance, annual production came in at only 651,000 ounces, more than 3% below the mid-point.

Although Endeavour Mining offers a stable production profile and industry-leading cash costs, the guidance miss is a little disappointing, considering that peers like B2Gold (BTG) and Teranga Gold (OTCQX:TGCDF) smashed guidance in nearly every area. Based on this, while I view Endeavour Mining as a Hold, I see B2Gold and Teranga Gold as more attractive African producers after a slightly underwhelming year for Endeavour Mining.

(Source: Author's Table)

Endeavour Mining is the most recent name to report its Q4 and FY-2019 results, and we saw a somewhat mixed year from the company. The company managed to narrowly beat the mid-point of its cost guidance of $820/oz, but annual gold production missed the mark by quite a bit, 3% below the guidance mid-point. For the full year, Endeavour Mining reported annual gold production of 651,000 ounces at all-in sustaining costs of $818/oz. As the chart shows below, the company has noted that guidance was met for its 7th straight year, but this year was much more underwhelming compared to prior years for where guidance came in.

As we can see, gold production in previous years was at or above the mid-point, whereas this year, it came in just 1,000 ounces above the low end of this range. While I wouldn't call this a huge disappointment, it certainly

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Taylor Dart profile picture
"A bull market is when you check your stocks every day to see how much they went up. A bear market is when you don't bother to look anymore."- John Hammerslough You can access more in-depth research, my current portfolios, new positions I am entering/exiting, and proprietary sentiment indicators for gold miners in my newsletter below.  Returns Link: https://imgur.com/a/6fcWjD6Subscription Link: https://buy.stripe.com/3cseV37nl9Y7dUcaEI - Disclosure: I am not a financial advisor. All articles are my opinion - they are not suggestions to buy or sell any securities. Perform your own due diligence and consult a financial professional before trading or investing.

Analyst’s Disclosure: I am/we are long GLD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (16)

Considering worldwide cracks in banking system, it might generally become hard to fund capex requirement for even very best gold mining companies, and it is kind of interesting since final product is the hardest currency of all..., gold. In order to accommodate this issue changing the metrics requirements for buying stock is a must. Like last session was just a huge margin call, I expect the same kind of session tomorrow. Sit tight on the cash and get ready to reevaluate situation, the upward move for gold might be rapid and I wouldn't be surprised to see capitalization of some gold miners going up 20 or 30 percent within few hours. Regards.
I could be wrong, there might be coming sellable rally in the morning, yyyeeeehahahaha dead bat bounce. Seriously, after craziness induced by central bankers and Obama Barrack in 2009 and lasting for past 11 years this market represents once in a life time opportunity let's not waste it. Now its gonna be all about the earnings, cashflows, profits. By the way, stay away from companies that borrowed the money to fund shares buybacks in the past few years.
Reading61 profile picture

Thank you. I like the current RGLD, Marathon Gold, FNV and OR. I think its drastically under valued based on the current gold price. Cheers
Thanks and really enjoying your service! Out of curiosity what are your thoughts on Marathon? Really tempted to buy!
Taylor Dart profile picture
Hi Jeff,

Thank you - flattered to hear that. They’re just slaughtering everything right now, so no buying for me yet. Lots of exceptional deals out there valuations wise, but when panic sets in, fundamentals for out window. I’m just sitting tight waiting for some volatility to clean up. It’s not about getting lowest value price for my strategies, but getting the right price when path of least resistance is confirmed to be higher.
agree with Taylor...I would prefer to wait until some uptrend is confirmed than to try to pick a bottom in a stock or sector...I tried to place a few trades late in the day but was asked to come back later...was there a glitch somewhere? jmho
Any opinion on why the share price is falling?
Taylor Dart profile picture
Hi User149,

Whole sector is getting killed due to overall market carnage lately. I only am long 2-3 miners currently across my portfolios as fundamentals have gone out the windows for most names.
Thanks Taylor for your reply.
Joeri van der Sman profile picture
Thanks for the article.
Taylor Dart profile picture
Hi Joeri,

Happy it was of value.
Valuable analysis, thank you.

Endeavour's been on my watchlist for years but never quite hit my target buy price. Funnily enough, after reading the results, I'd set an alert at C$21.95 - in line with your suggested C$22. However, I'm more than full with African miners (Semafo, Roxgold, B2Gold, Teranga, Asanko, plus a couple of explorers - Orca and Orezone) so I'd be looking for a keen price to start a position.
Taylor Dart profile picture
Hi Diottica,

Thank you, happy to hear it was of value. Yes, for my risk tolerance, I'd prob just pick the top 3 in Africa, size small, and hold tight. Not long any currently, but might do some shopping if the bloodbath continues. Teranga and B2Gold certainly 2 of the top 3.
Thanks Taylor
Taylor Dart profile picture
Hi User149,

Flattered it was of value.
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