Response from IR - So, I finally e-mailed Marla @ IR yesterday. She gave me a detailed, timely response and It was comforting to know that there is nothing "bad" happening as some here have posted. Also, based on her reply, looks like we are in for some material news releases in the next few months,... hopefully good.., based on management past track record. I have underlined a couple of key issues that I had raised in my e-mail and her reply to those. Here's her response:
"Thank you for your inquiry. We are concerned about the share price as well and doing what we can to address it. I do think the close today was an anomaly as we traded at $0.83 for most of the day.
We’ve been doing a lot of calls recently with fund managers and analysts and the main concerns about Endeavour seem to be:
1. Whether we can build Agbaou on-time and on-budget
2. Whether we can bring costs down at Nzema and Tabakoto (including completing the mill expansion at Tabakoto)
3. Funding our growth projects (such as Agbaou) in the lower gold price environment
4. We don’t pay a dividend and haven’t announced the timing to begin paying one
So to some extent EDV is a “show me” stock right now. As we deliver on the first three items over the next 3-6 months, we believe we will see our multiple improve. The most important thing for us to do right now is deliver operationally. Investors are very nervous generally and you can see this in the differing stock performances across gold stocks with differing “risk profiles”. For example, the seniors and intermediates are faring better than the juniors overall. West African gold stocks have been underperforming the overall gold sector so that has had an effect on us because investors are concerned about the risk of royalties and taxes being raised in West Africa.
On the dividend topic, that is a difference between Semafo and us since they do pay a dividend. Our management team is looking at instating a dividend but first we must finish building Agbaou since that is a big investment this year. When Agbaou begins to contribute to cash flow, we’ll be in a better position to look at a sustainable dividend.
Let’s look at some numbers. On May 14 (the day we put out our Q1 results) our stock closed at $0.90. Today it closed at $0.79. That is a 12% decrease. Semafo is down 3.5% since they put out their Q1 so we have had a bigger decrease.
On June 6 we closed at $0.89, today we closed at $0.79. That is an 11% decrease.
Let’s look at some bigger trends since we do research on this.
Over the past month, we are down 9.2%, compared with West African gold producers (RRS, PRU, RSG, SMF, TGZ, GSC, AVM, AMA) down 17.8% and market vectors junior gold producer index down 6.4%.
Over the past 3 months, we are down 50.3% vs. West African gold producers down 41.6% and index down 30%
Over the past 6 months we are down 61.8% vs. West African gold producers down 58.2% and index down 46.3%
The twelve month figures are very similar to the 6 month figures.
Hopefully this helps to put things in context for you. There is definitely a West African discount right now. Having said that, we have some things to prove to the market and are working hard to do that. It is also important to not get caught up in single day fluctuations or comparisons with only one other stock.
There is no undisclosed material information for Endeavour. We seek to be very prompt with our disclosure.
Please feel free to contact me with any further questions. Best regards, Marla