Endeavour Mining plc T.EDV

RE: Canaccord Renews $5.00 Target

[scissors14]

Endeavour Mining Corporation | Nicholas Campbell, 1.604.643.7027

EDV : TSX : C$2.38 | C$271.0M | Speculative Buy , Target C$5.00

• An 84,000 oz per year gold producer trading at less than 1x EV/EBITDA;

maintain SPECULATIVE BUY and C$5.00 target

Investment recommendation

We maintain our SPECULATIVE BUY recommendation on the shares of

Endeavour Mining Corporation with a target price of C$5.00.

Investment highlights

• Endeavour reported Q1/11 EPS of (
.00) compared with our Q1/11 EPS

estimate of US
.03.

• Grip power interruptions and sanding-related issues limited throughput

during the quarter, resulting in lower production and higher costs at the

Youga gold mine in Burkina Faso.

• Engineering studies for the Zergore deposit are on track to be completed in

Q3/11 with studies expected to be completed on the A2NE, Nanga and Tail

deposits in Q4/11. These deposits could extend the Youga mine life by 1-2

years.

• Engineering and exploration work at the Agbaou project is set to recommence

in June, with an optimized feasibility study expected by the end of

2011.

• With no debt and working capital of US$214 million, EDV has an enterprise

value of only US$57 million for a company that we project to generate 2012E

EBITDA of US$57 million.

Valuation

We value the Youga gold mine and the Agbaou gold project based primarily on a

discounted cash flow valuation. We estimate a peak gold price NAVPS (5%,

US$1,600/oz Au) of C$6.00 per share for Endeavour Mining. We continue to value

the shares of EDV based on a 0.85x multiple to our peak gold price estimate of

NAVPS. EDV is trading at 0.42x P/NAV (5%, spot) and 4.4x 2012E CFPS vs. the

junior producer average of 0.73x P/NAV (5%, spot) and 8.4x 2012E CFPS.