Endeavour Mining on track to exceed minimum dividend payout for 2021

Sébastien de Montessus, former CEO, Endeavour Mining

ENDEAVOUR Mining could pay more than the $125m in dividends it promised shareholders this year after a strong second quarter in which net earnings increased five-fold year on year to $127m.

The company, which was recently listed in London, paid an interim dividend of $70m “… placing us on track to deliver more than the guided minimum dividend of $125m for the full year,” said Sébastien de Montessus, president and CEO of Endeavour.

In June, Endeavour targeted total dividends over three years of $500m with the potential to pay more if the gold price traded above $1,500/oz. The gold price is currently trading at about $1,814/oz. It averaged $1,791/oz in the second quarter.

For the 2022 and 2023 financial years, dividends of $150m and $175m would be paid, Endeavour said previously. It paid a $60m maiden dividend for its 2020 financial year.

In addition to the dividend, about $70m in shares had been bought by the company in terms of its share repurchase programme, also unveiled in June. These returns follow a period of intense merger and acquisition activity by Endeavour enabling it to set a production aspiration of between about 1.37 million to 1.5 million oz this year from about 900,000 oz in the 2020 financial year.

Endeavour Mining operates exclusively in West Africa with production sourced from mines in Burkina Faso and Côte d’Ivoire.

De Montessus said Endeavour could achieve the top end of 2021 production guidance “… as all our mines are continuing to perform well and we have quickly integrated the Teranga assets within our business”. Endeavour bought Teranga Gold Corporation last year about a month after buying SEMAFO, another Canadian business.

Production boost

For the second quarter, gold production was 409,000 oz, about 50,0000 oz higher than the first quarter, and taking half year output to 756,000 oz. Given the stronger gold price, this resulted in improved operating cash flow of $200m, almost double the first quarter’s.

Net debt was reduced to $77m, about 84% lower than at the interim stage last year. Cash as of June 30 stood at $833m.

The purpose behind the London listing, which took place in June, with access to the FTSE250 Index likely to follow in September, was to score a re-rating after its M&A failed to get full market acknowledgment.

Shares in the company are 4% higher since the listing, but on a 12-month basis, the stock is about 19% weaker – a reasonable performance given the peer group. B2Gold, a Toronto listed firm that also operates in Africa, is 45% weaker over the last year. Centamin, which operates in Egypt and explores in West Africa, is nearly 50% weaker.