Endeavour Mining Corp (TSE:EDV) (OTCMKTS: EDVMF), the West-Africa focused gold producer, reported a strong third quarter, which saw it lift output and reduce costs, while also declaring a maiden dividend.
The miner also announced an extension to the mine-life at its two flagship operations - at the Hounde and Ity mine, following successful exploration,which will see both assets potentially generating a quarter of a million ounces per year.
READ: Endeavour Mining eyes top-end output from Boungou mine in Burkina Faso after infrastructure improvements
"We are very pleased with our strong performance during the third quarter, which positions us to achieve our annual guidance set at the beginning of the year despite the ongoing challenges presented by the global COVID-19 pandemic," said Endeavour CEO Sebastien de Montessus in a statement.
Given the strong balance sheet and expected robust free cash flow generation, he announced a maiden dividend of US$60 million, or US$0.37 a share for the 2020 fiscal year, which represents a yield of 1.6%.
"Our goal is to maintain a similar dividend yield until we have reached a targeted net cash position of $250 million," the mining company boss added.
For the period ended September 30, 2020, group production increased by 64% to 244,000 ounces, compared to the second quarter this year, while all-in-sustaining costs (AISC) decreased by $33 per ounce (oz) to US$906 per ounce.
There was strong operating cash flow generation at a record US$223 million or US$1.37 per share for the quarter, following the accelerated integration of the SEMAFO Inc assets, Endeavour added.
The company's adjusted net earnings for the quarter totaled US$72 million, up from US$33 million in the same period in 2019, on revenue of US$482 million, versus US$267 million a year earlier.
Notably, the company's net debt has decreased 71% in the last 12 months and by US$298 million in the third quarter to $175 million, Endeavour said.
For the full year, it is on track to achieve its production guidance of between 995,000 and 1,095,000 ounces at an AISC of between US$865 and US$915 per ounce.
Endeavour has six producing mines across Côte d’Ivoire and Burkina Faso. It also has four potential development projects and exploration assets on the highly prospective Birimian Greenstone Belt across Burkina Faso, Côte d’Ivoire, Mali and Guinea.
In a separate statement on Thursday, it also told investors that the mine plans for the Houndé mine in Burkina Faso and the Ity mine in Côte d’Ivoire had been updated to allow for the 2 million additional ounces, which have been discovered at Kari Pump, Kari West and Le Plaque.
Combined annual production at the two mines is now expected to average around 500,000 ounces over the next five years (2021-2025) and around 465,000 ounces over the next ten years (2021-2030). Notably, this is an increase of 27% and 58% respectively compared to the outlook provided in the construction decision studies.
Mining permits have been granted for both the Kari and Le Plaque areas, at Houndé and Ity, respectively, while further maiden reserves are expected by year-end for the newly discovered Kari area deposits at Houndé, the firm noted.
Shares in Toronto advanced 3.4% to C$30.42 each.
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Contact the author at giles@proactiveinvestors.com
