RE:expecting big q2 results
We already know a fair bit about production & costs in Q2 from this: https://web.tmxmoney.com/article.php?newsid=61583782&qm_symbol=EDV
Based on operating results to June 30, 2013 Endeavour reiterates its full year 2013 production and cost guidance of between 310,000 and 345,000 ounces at a cash cost (excluding royalties) of between $840 to $880 per ounce
- During the six month period to June 30, 2013, Endeavour produced 149,075 ounces, and the second half of 2013 is forecast to produce between 165,000 and 180,000 ounces as a result of the recent completion of the mill expansion at Tabakoto and the scheduled processed grade improvement at Nzema
- Cash cost per ounce produced in Q1/2013 was $899. During Q2/2013, cash costs are expected to be in the same range as Q1 and during the second half of 2013 are forecast to be between $790 and $820 per ounce for an approximate 10% unit cost reduction during the year
There are two factors that will complicate the results this quarter. On the positive side, our 100,000oz+ of hedging will show strong unrealised gains. We'll also have added to our cash pile by the sale of 27,000oz of bullion previously held on account. However, there are two important questions to be answered in the results: 1) has the company had to write-down any past acquisitions/investments as a result of the gold price fall, as many other gold cos have? 2) has the company had to take on more hedging to satisfy its financiers (and if so, on what terms)?
Personally, I'm not too bothered if there are write-downs, as that's history which has no bearing on the future. I would also hope that if hedging has been required, Woodyer has done so in such a fashion that future profits wouldn't be heavily impacted should the gold price rebound.
The answers to these questions may determine how the market reacts.
I make no share price predictions but am optimistic that Endeavour will perform well in the long run.
Cheers,
Mark