IAN Cockerill, CEO of Endeavour Mining, said the company will increase its focus “on supplemental returns” following a one-fifth leap in third quarter free cash flow.
The West African gold miner generated about $100m in free cash flow for the three months ended September, largely owing to a higher average gold price.
At the same time, it completed an expansion of the Sabodala-Massawa processing circuit in Senegal and the Lafigué newbuild in Côte d’Ivoire.
Cockerill said that given Endeavour’s strong outlook “we are now focused on shareholder returns and our balance sheet”.
“We expect to outline our new outlook next year, which will underpin our continued commitments to disciplined capital allocation and delivering attractive shareholder returns,” he added in notes to the third quarter numbers.
Endeavour had a strong production quarter – 270,000 ounces were mined – but full year production would be at the low end of its forecast 1.13 to 1.27 million oz at an all in sustaining cost (AISC) of between $955 and $1,035/oz. AISC for 2024 would be at the high end of guidance, the company said.
Shares in Endeavour have flatlined this year despite record highs for gold. The company has paid about $229m in dividends ($100m H1) and share buy-backs but net debt as of 30 September was relatively high at $834m, 0.77x of adjusted Ebitda (Q2: 0.8x).
Endeavour repaid $160m of its revolving credit facility during the quarter. A net debt to adjusted Ebitda ration of 0.5x has been targeted.
The gold price has slipped nearly $100 per ounce since the re-election of Donald Trump to the US presidency while the dollar and bitcoin strengthened. “We see today’s pullback in commodities as a short-term reaction to the stronger US dollar and increased uncertainty from the Trump victory,” said analysts at SP Angel in a note on Wednesday.
However, China were expected to continuing seeking ways to weaken the dollar as the world’s preeminent currency implying sustained or increased central bank gold holdings, the stockbrokerage said.
