Endeavour Mining plc T.EDV

My Latest Thinking on EDV

[marben100]

It is good to see (from my UK POV) that the EDV's London listing is now growing in importance, with London traded volumes now often exceeding those in Canada and, in recent days, the London market has led the share price higher.

However, my opinion on EDV has deteriorated since the Q4 conference call. In the call, it emerged that management don't see much future for Boungou and Wahgnion and are looking to dispose of those assets. Whereas I had foreseen production rising to ~1,600oz by 2025, with the Sab-Mas upgrade and Lafigue, following those disposals we'll be back to roughly where we are now, in terms of produced oz. Admittedly, those will be higher quality oz, produced at a lower AISC and generating improved cashflows. Nevertheless, we seem to be "running to stand still" production-wise.

ISTM that whilst management are doing a good job operationally and in mine building they have overpaid for acquisitions in the past, notably True Gold, where Karma turned out to be a dud and, more recently, for Semafo, where it has proved impossible to overcome the security issues at Boungou sufficiently and the asset has been written down. This knocks my confidence in management.

I am also cheesed off by today's announcement of share options being issued to managament. I attended last year's AGM and, after the formal business, had a quiet word with the new Chair, Venkat. He seemed to agree with me that executive remunderation was excessive and that the company should seek to moderate it. I am therefore rather cross that the announcement today shows that the company is still handing out share awards like confetti to the executives (especially noting my comments above, where some of their actions have destroyed shareholder value).

I have therefore taken advantage of recent share price strength to reduce my holding. It silll remains a significiant position for me, as the shares still look good value, especially if the gold price holds above $2,000. Another bull point is the recent Tanda-Iguela discovery. That looks very interesting indeed and could lead to a significant step up in production in due course - but there's a lot of exploration to do before the scale of the project and its feasibility can be determined.

Cheers,

Mark

[mercedesman]

thx Marben for those well thought out comments. Generally I agree with you regarding a sub-optimal production growth profile looking forward, however the top line is impacted by both production and the PoG.   I see the PoG going much higher in the coming years. Further the newer mines coming on board will be, as you say, at a lower cost.   The price of oil (a major input cost)

[theCurse]

Thanks for the info Mark.  Much appreciated.  I sold 1/2 of my holdings in all tax-free accounts last week in the mid 34's.  The rest just now.  Not because of a loss of confidence but they just paid their dividend and I was sitting on decent gains and a recent great run on gold.   I never see a point of holding gold stocks long term any more.  Sold 1/2 in

[biker222]

Thanks for your thoughtful update. Gee. I now know why I am more optimistic mark, I became an endeavour shareholder from a substantial investment in both True Gold and Semafoe.So I am not so annoyed by their production . ( mild humour). What I like is the steady production at such a low asic in a gold market that I think might just get its day ( again ). This makes edv a cash cow/bull//pig - what

[marben100]

TBF biker, I also benefitted from EDV overpaying for an acquisition that I was invested in - but an earlier one: Avion. Avion's only producing asset was the Tabakoto mine, which turned out to be another high-cost dud... OTOH Avion also brought the Hounde licence, which eventually became a cornerstone asset for EDV (and looks to have a long and fruitful life ahead of it), after EDV spent a lot

[Dale327845]

I held Avion at the time of the buyout by Endeavor, and didn't think EDV overpaid.  Actually I think they got a great deal.  At the time, if memory serves, Tabakoto became Endeavor's largest mine?  Avion had mismanaged things pretty badly, but Endeavor ran Tabakoto at a profit for a number of years, selling it with their push to nothing but low cost mines.  And of

[Nickphil]

Hi Mark,   Thank you for your comments. I always hear what you have to say.  The problem with the mining companies is that there are not many out there for long-term investing.  Prior to the conflict in Ukraine, you could possibly consider Polyus and Polymetal, but now this is not an option.   In this favorable macro environment for Gold, I feel we have, to my

[mercedesman]

And fewer still with : a large organic growth profile ability to pay dividends  ability to do massive stock buy-backs one of the best AISC profiles top 10 producer proven Mgt ability to open new mines and find more oz's