RECENT comments from Burkina Faso Prime Minister Jean Emmanuel Ouédraogo that the government plans to expand control over the country’s resources were no surprise but were unlikely to have a significant impact on Endeavour, the group’s CEO Ian Cockerill said.
Cockerill was answering questions on a conference call with analysts after Endeavour’s Q1 results presentation. He said the only change to the new mining code introduced in Burkina Faso last year could be that previously government said existing mining conventions would not be affected by its additional 5% free carry and it now appeared that government intended to accelerate that change. However, the actual impact on Endeavour would be small, at about only 1% of group NAV.
Endeavour owns two operating mines in Burkina Faso, one mine in Senegal and two in Cote d’Ivoire, where it is also busy with a definitive feasibility study into the Assafouproject.
Cockerill said he has met senior government ministers in Burkino Faso over the past year. Endeavour has a good working relationship with the government and these discussions provided an opportunity to influence the debate and demonstrate that Endeavour consistently performs well and delivers good returns.
“If shareholders don’t like West African exposure, they should not hold Endeavour shares,” he said.
He was also asked about discussions under way in Côted’Ivoire between the government and the chamber of mines about that government’s desire to increase the royalty rate on mines. He said at this stage it was a debate and there were no definitive proposals. Endeavour’s existing agreements have stabilization clauses so any increase in the royalty rate was likely to apply to new, not existing operations.
Endeavour reported a strong operational and financial March quarter. It generated record free cash flow of $409 million, equivalent to $1,199/oz of gold produced, which enabled it to reduce the net debt to ebitda ratio further to 0.22 times from 0.55 times in the December 2024 quarter.
Cockerill said the focus for this year would be on increasing shareholder returns and developing the pipeline of organic growth opportunities. Endeavour intends to supplement the minimum dividend payout of $225 million for 2025 to which it has already committed with additional dividends, given a continuing supportive gold price and free cash flow, and undertake opportunistic share buybacks. So far this year it has spent $52 million on share buybacks.
