Endeavour Mining Corporation (TSE:EDV) (OTCMKTS:EDVMF) doubled its operating cash flow in a strong third quarter that saw the miner increase production from its West African operations.
The company reported Tuesday that its quarterly production was 181,000 ounces, a 6% increase over second quarter 2019 figures, while all-in-sustaining costs remained flat.
Total earnings for the period ended September 30 came in at US$33 million or US$0.30 per share compared to a loss of US$1 million or US$0.01 per share a year prior.
READ: Endeavour Mining tapping into West Africa's golden hotspot potential as it continues to rapidly grow resource base
Operating cash flow also doubled to US$115 million compared to the second quarter and net free cash flow hit US$52 million.
Sébastien de Montessus, Endeavour’s CEO, said that the strong net free cash flow generated during the quarter marked an “important milestone” that showed the company’s efforts to reposition the group as a cash-generating business after nearly four years of intensive growth-capital spend.
“Our business is now strategically diversified across multiple assets with stronger long-term planning capabilities,” de Montessus said in a statement. “This provides greater comfort in our ability to generate stable cash flows, as demonstrated by the strong third quarter results achieved despite the severe rainy season.”
The miner reduced its net debt from US$660 million to US$608 million, a US$52 million decrease from 2Q 2019.
Growing the resource
The CEO told shareholders that Endeavour’s priority now was to quickly deleverage the business, underpinned by short investment payback periods.
“During this debt reduction phase, we expect to benefit from low capital-intensive growth with Ity’s 25% volumetric upgrade nearly complete and the expected upcoming integration of recently discovered higher grade deposits at our flagship Ity and Houndé mines,” de Montessus said.
The mid-tier producer boasts a market cap of just over US$2 billion thanks to four producing mines in West Africa, but is looking to grow its resource base further through the drill bit.
Endeavour said it will continue to focus on building optionality into its portfolio with an “aggressive” exploration program.
The firm recently announced a 1.2 million ounce indicated resource at 2.5 grams per ton at its greenfield Fetekro property in Cote d’Ivoire.
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