- Endeavour Mining
- 01 May 2025 10:56:28
Source: Sharecast
The FTSE 100 company confirmed it was on track to meet its full-year production and cost guidance, with performance slightly weighted towards the first half following a robust showing at the Houndé mine.
Gold production for the quarter totalled 341,000 ounces at an all-in sustaining cost (AISC) of $1,129 per ounce.
While output was 22,000 ounces lower than in the fourth quarter of 2024, the decrease was largely due to expected grade sequencing at Houndé and Lafigué.
That was partially offset by improved output at Mana and Sabodala-Massawa.
Total cash costs for the quarter came in at $929 per ounce, down $50 from the prior quarter, driven by efficiency gains in mining and processing at key sites and the benefit of higher gold sales volumes.
Adjusted net earnings more than doubled to $219m, or 90 cents per share, while operating cash flow before working capital changes rose 66% to $592m.
Over the last three quarters, Endeavour said it had generated $775m in free cash flow following the end of its major growth phase in mid-2024.
Net debt was reduced by over $350m in the quarter to $378m, lowering the net debt to adjusted EBITDA ratio to 0.22x, well below the group’s target of 0.50x.
Shareholder returns remained a priority, with Endeavour paying a record $140m second-half 2024 dividend in April and executing $37m in share buybacks, bringing total 2024 distributions to $277m.
For 2025, the company said it had already committed to a minimum return of $277m, including $52m of share repurchases to date.
Management said it expected total returns for the year to exceed 2024 levels.
Exploration spending totalled $24m during the quarter, focused on near-mine targets and advancing the Assafou project, where a definitive feasibility study remained on track for late 2025 or early 2026.
A maiden resource at the nearby Pala Trend 3 target was anticipated in the second half of the year.
Endeavour reiterated its full-year guidance of 1.11 to 1.26m ounces of gold production at an AISC of $1,150 to $1,350 per ounce.
The group reported no lost time injuries in the quarter, maintaining a strong safety record with a trailing 12-month LTIFR of 0.05.
“We are pleased that the strong momentum from the end of last year has continued into the first quarter, as we delivered another quarter of exceptional operational performance, placing us firmly on track to achieve our full-year guidance,” said chief executive officer Ian Cockerill.
“Production and all-in sustaining costs were significantly stronger than the prior year period, as we realised the full benefit of our recently completed growth phase, coupled with strong performance across the rest of the portfolio.
“During the first quarter, we generated record free cash flow of over $400m, reflecting our transition to a highly free cash flow generative phase.”
Cockerill said that since completing its growth phase three quarters ago, the firm had generated more than $775m of free cash flow, equivalent to $795 per ounce produced.
“Our strong free cash flow generation has enabled us to significantly strengthen our balance sheet, reducing our net debt by over $350m and bringing our leverage ratio below our 0.50x target, down to 0.22x.
“Our resilient balance sheet gives us the flexibility to invest in future organic growth, through the tier one Assafou project, while sustainably rewarding shareholders.
“We supplemented our record 2024 dividend of $240m with $37m of share buybacks, bringing total shareholder returns for 2024 to $277m, equivalent to an indicative yield of 5.9%, or $251 per ounce produced, returned to shareholders.”
The company had continued to increase its commitment to shareholder returns and, year-to-date, had completed over $52m of share buybacks, which Ian Cockerill said was more than it purchased through the whole of 2024, already bringing the minimum returns for 2025 to at least $277m and ensuring that the financial year’s total shareholder returns would exceed 2024.
“Our tier one Assafou project continues to advance on schedule, with the project shaping up to be a cornerstone asset in our portfolio.
“We now see significant scope for the endowment of the wider district to continue growing, and we expect to provide a resource update later this year, as we advance the definitive feasibility study towards completion.
“Building on our momentum through the year, we will focus on maximising free cash flow and enhancing shareholder returns, as we advance our high-quality organic growth pipeline.”
At 1037 BST, shares in Endeavour Mining were up 3.47% at 2,086p.
Reporting by Josh White for Sharecast.com.