Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Endeavour Mining PLC (EDVMF, Financial) achieved commercial production at both growth projects during the quarter, with both projects ramping up in line with their plans.
- The company generated approximately $100 million of free cash flow during the quarter, marking a significant improvement in leverage.
- Endeavour Mining PLC (EDVMF) has successfully reduced its gross debt by repaying $160 million of its revolving credit facility.
- The company is on track to return at least $435 million in dividends to shareholders for both 2024 and 2025.
- Endeavour Mining PLC (EDVMF) remains one of the lowest cost producers in the sector, firmly in the lowest cost quartile.
Negative Points
- Production for the full year is expected to be at or around the low end of the guidance range.
- The all-in sustaining cost is expected to be above the top end of the range due to high gold prices and lower power availability.
- The Sabodala Massawa cil operation underperformed, impacting year-to-date all-in sustaining costs.
- There was a $112 million impairment from the writedown of expected proceeds from the disposal of Bonu and Wyong.
- The company faced challenges with grid power availability in Burkina Faso and Cote d'Ivoire during the first half of the year.
Q & A Highlights
Q: Can you provide clarity on the working capital situation for Q4, and should we expect cleaner financial statements moving forward?
A: We expect working capital to be largely flat in Q4, with some stockpile releases and a focus on reducing metal inventories and gold receivables. The VAT buildup, particularly in Burkina Faso, remains a challenge, but we anticipate recovering these balances over the next 12 months. Regarding financial statements, we don't foresee further impairments, and we aim for cleaner financials with improved free cash flow generation in Q4 and 2025.
Q: What is the expected production and all-in sustaining cost (AISC) for the Mana mine in Q4, and does it deserve to remain in the group if costs don't improve?
A: We expect Mana to run above 2.2 million tons annually, supporting increased production at lower costs. Recent trends in mining and processing costs are encouraging, and we anticipate improved throughput and unit costs in Q4. If costs don't reach a decent level, we will reassess its place in the group.
Q: With Lafigue expected to exceed nameplate capacity in Q4, will it reach the high end of the full-year guidance range?
A: Lafigue is on track to deliver within the guidance range and is expected to produce between 200,000 to 210,000 ounces next year, maintaining strong performance.
Q: How will accelerating production at Sabodala Massawa impact 2025 production, and what should we expect for Q4 AISC?
A: We are filling the gap created by accelerating production with near-mine exploration targets, which should support 2025 production. For Q4, we anticipate a significant reduction in AISC, moving closer to the top end of guidance, driven by improved operational performance.
Q: What is the timeline for achieving the 1.5 million ounces per annum target, and which projects will contribute to this growth?
A: The 1.5 million ounces target is expected by the end of the decade, with significant contributions from the Asa Fu project. We also see potential for modest increases at Ity and improved performance at Sabodala Massawa, supported by recent exploration results.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
