Endeavour Mining plc T.EDV

RE:Endeavour poised to approve $307m Ity project in 2017

[marben100]

I recommend that peeps have a look at EDV's Investor Day presentation: 204 pages! - https://www.endeavourmining.com/assets/docs/ppt/investor-day-presentation-signets.pdf

Fascinating stuff! Of most significance is that it contains the results of the strategic review of exploration. Key points I've gleaned are:

1. Over the last 3 years (due to the cash squeeze), EDV hasn't done the explo. it should have.
2. The consequence is that mine lives (which analyst valuations will be based on) are much shorter than they should be. Current weighted average mine life is only 6 years cf Randgold with a life of 11 years.
3. Management anticipate that they can remedy this, and anticipate production & mine lives similar to Randgold's by 2018 (but AISC around $100/oz higher). Randgold mkt cap. currently US$6.9bn. See slide 6.
4. To remedy this, management intends to spend $35-40m over each of the next 5 years on explo., with an anticipated discovery cost < $15/oz.
5. They aim to discover 10-15Moz of new inferred resources within this budget.
6. In the short-term (2017-18) Tabakoto & Agbaou will receive greatest attention, to extend their mine lives. Focus will then switch to Ity ("Greater Ity Area") and Hounde. (slide 31)
7. I note that Nzema is not mentioned for explo. - perhaps Endeavour will look to dispose?
8. Greater Ity has the highest potential: 4-6Moz - as I mentioned previously, there is scope to expand the new Ity mill, if new discoveries merit it.
9. This is followed by Hounde, with 2.5-3.0Moz potential (slide 29)
10. I'm a bit suprised to see no mention of Liguidi (unless it features later in the presentation - I haven't got beyond p146, yet)! Suspect that, though it might be promising, it just doesn't compare with the "low hanging fruit" of Ity & Hounde.

Bottom line: tons of potential & newsflow, which should lead to a rising SP over the medium/long term as and when the potential turns into the reality of NI43-101 reserves & resources, growing production & lower costs, as the new projects mature.

I look forward to the years ahead. :0)

Cheers,
Mark
Twitter @marben100