Canaccord Morning Coffee Today Report cards in January? Endeavour Mining rallied after reporting results from the Hounde Preliminary Economic Assessment (PEA), Q4 production results and 2013 guidance. The PEA for Hounde in Burkina Faso outlines a larger-than-expected operation with lower cash costs, but which comes with higher up front capex. The PEA outlined an 8,000 tpd operation producing an average of 161,000 ounces of gold per year at a cash cost of US$563/oz (before royalties) over a 10-year mine life. Capex is estimated at US$345 million with an additional US$57 million in life of mine sustaining capex. Resources at Hounde have increased to 2.2 million ounces of gold (at 1.91 g/t gold cut-off), up from 1.6 million ounces of gold (at 2.1 g/t gold cut-off). At a US$1,650/oz gold price, the project has an estimated NPV (5%) of US$584 million, which drops to US$288 million at a US$1,300/oz gold price. Endeavour is moving on to feasibility study work on Hounde, which they expect to be on line in 2016. Hounde shows the potential for EDV to ramp up to 600,000-700,000 ounces of gold production by 2016. This growth should be entirely financed through internal cash flow without the need to tap into new equity. It also helps to strengthen its production in Burkina Faso, reducing the weight of its production in Mali and Cote D'Ivoire. Given the turmoil in that part of the country, this is positive for EDV. The company reported Q4 production of 71,589 ounces of gold, a slight miss from Canaccord Genuity's 75,818 ounce forecast. Total production for 2012 was 310,777 ounces of gold. While Q4 production exceeded estimates at Nzema, the slight miss in total production was related to lower than expected production at Tabakoto. In 2013, Endeavour expects to produce 310,000-345,000 ounces of gold at an average cash cost of US$790-830 per ounce, which is essentially in line with analyst expectations.