Lydia and Ebenezer, Operations Employees at the Agbaou Gold Mine (Endeavour Mining)
Endeavour Mining Delivers 324k oz in 2013, Forecasts 400k to 440k oz in 2014. All in costs: $985-$1070
Today, after the Canadian markets closed, Endeavour Mining (EDV:TSX) released their 2013 fiscal year end numbers as well as an official outlook for fiscal 2014. The company produced a total of 324,275 ounces of gold in 2013 which was on the higher end of their guidance range of between 315,000 to 330,000 ounces. Average all-in sustaining costs were within their guidance at less than $1,100 per ounce (guidance was $1,055-$1,155 per ounce). The company is guiding production of between 400,000 and 440,000 ounces this year with their recently commissioned Agbaou mine now producing at commerical levels. They are expecting all-in sustaining costs to average $985-$1,070 per ounce in 2014.
The company's production profile puts them in the same category as market darling, B2Gold (BTO:TSX) which is guiding production of 360,000-380,000 ounces in 2013 and growing that to 395,000-420,000 in 2014. B2Gold's all-in sustaining cost guidance for 2014 is higher than Endeavour's at $1,025-$1,125 per ounce. B2Gold has an enterprise value of $1.67 billion whereas Endeavour's enterprise value is roughly a quarter of B2Gold's at $450 million. The disconnect is too large to remain (IMO), especially now that construction and commissioning at Agbaou are complete.
Endeavour produced 125,231 ounces from their Tabakoto open-pit and underground operations in Mali, 103,464 ounces from their Nzeme open-pit mine in Ghana and another 89,448 ounces at the company's Youga open-pit mine in Burkina Faso. Agbaou, which poured its first gold bar at the beginning of December, ended up producing a total of 6,132 ounces of gold in December and is now producing at 125% of design throughput.
Endeavour's Hounde project (post-feasibility stage) has the potential to add an additional 180,000 ounces per year at an average all-in sustaining cost well below ($775 per ounce) their current levels. The company is determining whether it is better to spend the +$300 million to build the mine or whether there are opportunties to acquire a mine for cheaper. There are no plans to construct a mine in 2014.
Neil Woodyer, CEO, stated: "2013 was a successful year with production of over 324,000 ounces from our three mines and our newly constructed Agbaou mine that poured its first gold in November. Agbaou achieved commercial production during January 2014 and we are very pleased to report it was constructed for less than our $160 million budget. Our 2014 AISC cost definition includes all underground development expenses as "sustaining capital" at Tabakoto and at Segala from mid-2014 once commercial stoping ore production is achieved. Our 2014 guidance range represents an approximate 10% improvement as compared to 2013, using the 2014 AISC definition.
Segala undergound mine plans (Source: Endeavour Mining)
In 2013, the Tabakoto mill expansion was completed on schedule and significant progress was made with access and ramp development for the Segala deposit. Endeavour's non-sustaining investments in 2014 will be focused on completing the optimization of Tabakoto. This includes $20 million for completion of the Segala ramp and pre-stoping development by mid-2014 and ancillary investments of $13 million for a CRF plant, TSF expansion and other items. In addition, the Segala and Tabakoto underground operations are transitioning to 100% owner mining this year to significantly reduce mining costs in 2014 and in the future. This transition started in December 2013, after the first gold pour at Agbaou, with the purchase of $7 million of mining equipment.
During 2014, we expect equipment purchases of approximately $10 to $15 million to complete the mining fleet at Segala and approximately $10 million at Tabakoto to replace equipment currently provided by the mining contractor. A significant portion of the equipment purchases is expected to be leased.Beyond Tabakoto, Endeavour's non-sustaining investments in 2014 are expected to include $7 million at Nzema for a new pebble crushing circuit and pit development work and less than $2 million at Agbaou. The 2014 exploration budget will be similar to 2013 with $10 million invested in programs to extend mine life."
Management has now proven it can beat/deliver on guidance and that they can successfully build and operate mines; the market can't ignore them forever.
Shares in Endeavour are up nearly 30% in the month of January and closed today flat at $0.68 on 5.56 million shares in Toronto.
Read: Endeavour Mining Delivers 324,275 oz in 2013 and Forecasts 400,000 to 440,000 oz in 2014
Also: Endeavour Starts Commercial Production at Agbaou, Targeting 85-95,000 ounces from Mine in 2014
Related: These are the 5 best junior mining charts today
Disclaimer: This article is not to be considered unbiased and fully independent. Please read Endeavour Mining Corp.’s Cautionary Statement Regarding Forward Looking Statement's carefully.
All statements in this report, other than statements of historical fact should be considered forward-looking statements. These statements relate to future events or future performance. Forward-looking statements are often, but not always identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions. Much of this report is comprised of statements of projection. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Risks and uncertainties respecting mineral exploration companies are generally disclosed in the annual financial or other filing documents of those and similar companies as filed with the relevant securities commissions, and should be reviewed by any reader of this article. In addition, with respect to any particular company, a number of risks relate to any statement of projection or forward statement.
Nothing in this article should be construed as a solicitation to buy or sell any securities mentioned anywhere in this newsletter (specifically in regard to Endeavour Mining Corp.). This article is intended for informational and entertainment purposes only! The author of this article and its publishers bear no liability for losses and/or damages arising from the use of this article.
Be advised, Pacific Website Company Inc., CEO.CA and its employees are not a registered broker-dealer or financial advisor. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer.
Never, ever, make an investment based solely on what you read in an online newsletter, including CEO.CA’s online newsletter, or Internet bulletin board, especially if the investment involves a small, thinly-traded company that isn’t well known.
Pacific Website Company Inc., owner of CEO.CA, its officers, directors, employees, and consultants shall not be liable for any damages, losses, or costs of any kind or type arising out of or in any way connected with the use of its products or services, including this article. Pacific Website Company Inc., owner of CEO.CA, its employees, consultants and affiliates are not responsible for any claims made by any of the mentioned companies or third party writers. You should independently investigate and fully understand all risks before investing. We want to remind you again that CEO.CA is often paid editorial fees for its writing and the dissemination of material. The clients represented by CEO.CA are typically development-stage companies that pose a much higher risk to investors. When investing in speculative stocks of this nature, it is possible to lose your entire investment over time. Please recognize that we are extremely biased when it comes to Endeavour Mining Corp.
Pacific Website Company Inc. and CEO.CA (including its employees and consultants) are not chartered business valuators; the methods used by business valuators often cannot justify any trading price for most junior stock exchange listed companies.
Any decision to purchase or sell as a result of the opinions expressed in this report OR ON CEO.CA will be the full responsibility of the person authorizing such transaction, and should only be made after such person has consulted a registered financial advisor and conducted thorough due diligence. Information in this report has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete. Our views and opinions regarding the companies we feature on CEO.CA and in this newsletter are our own views and are based on information that we have received, which we assumed to be reliable. We do not guarantee that any of the companies mentioned in this newsletter (specifically Endeavour Mining Corp.) or on CEO.CA will perform as we expect, and any comparisons we have made to other companies may not be valid or come into effect.
Pacific Website Company Inc. is a distributor (and not a publisher) of content supplied by third parties and subscribers. Accordingly, Pacific Website Company Inc. has no more editorial control over such content than does a public library, bookstore, or newsstand. Any opinions, advice, statements, services, offers, or other information or content expressed or made available by third parties, including information providers, Subscribers or any other user of The Pacific Website Company Inc. Network of Sites, are those of the respective author(s) or distributor(s) and not of Pacific Website Company Inc. Neither Pacific Website Company Inc. nor any third-party provider of information guarantees the accuracy, completeness, or usefulness of any content, nor its fitness for any particular purpose.
Pacific Website Company Inc, owner of CEO.CA, does not undertake any obligation to publicly update or revise any statements made in this report.
The information contained in this content is not an offer to buy or sell securities. Do not base any investment decision upon any materials found in this content. We are not registered as a securities broker-dealer or an investment advisor either within any securities regulatory authority. We are neither licensed nor qualified to provide investment advice. The information contained in this content is for informational and educational purposes only and is not intended to be used as a complete source of information on any particular company. Neither the information contained in this content, nor in any other place, is provided to any particular individual with a view toward their individual circumstances and nothing in this content should be construed as investment, business, or other professional advice. We are committed to providing factual information on the companies that are profiled. However, we do not provide any assurance as to the accuracy or completeness of the information provided, including information regarding a profiled company’s plans or ability to effect any planned or proposed actions. We have no first-hand knowledge of any profiled company’s operations and therefore cannot comment on their capabilities, intent, resources, nor experience and we make no attempt to do so.
Individuals should assume that all information contained in this content is not trustworthy unless verified by their own independent research. Information contained in this content will contain “forward looking statements.” These forward looking statements are subject to a number of known and unknown risks and uncertainties outside of our control that could cause actual operations or results to differ materially from those anticipated. Factors that could affect performance include, but are not limited to, those factors that are discussed in each profiled company’s most recent reports or registration statements filed with the appropriate regulators. You should consider these factors in evaluating the forward looking statements and not place undue reliance upon such statements. To the fullest extent of the law, we will not be liable to any person or entity for the quality, accuracy, completeness, reliability, or timeliness of the information provided in this content, or for any direct, indirect, consequential, incidental, special or punitive damages that may arise out of the use of information we provide to any person or entity (including, but not limited to, lost profits, loss opportunities, trading losses, and damages that may result from any inaccuracy or incompleteness of this information). Any individual who chooses to invest in any securities should do so with caution. Investing in securities is speculative and carries a high degree of risk; you may lose some or all of the money that is invested. Always research your own investments and consult with a registered investment adviser or licensed stock broker before investing. We will not be responsible for the success or failure of any individual or entity which implements information received from this content.
Learn how to protect yourself and become a more informed investor at www.investright.org
