Endeavour Mining plc (LON:EDV, TSX:EDV, OTCQX:EDVMF) has announced its unaudited preliminary financial and operating results for the fourth quarter and full year 2023, with highlights provided in Table 1 below
| OPERATIONAL AND FINANCIAL HIGHLIGHTS (for continuing operations) |
| Q4-2023 production of 280koz was flat over Q3-2023, while AISC decreased by $31/oz or 3.2% to ~$936/oz despite a $24/oz increase in royalty costs |
| FY-2023 production of 1,072koz, marking the 11th consecutive year of achieving or beating production guidance, with production set to increase by up to 18% in FY-2024 to 1,130-1,270koz due to project start-ups in Q2-2024 |
| Industry low AISC of ~$964/oz for FY-2023, achieving near the top end of guidance which is in line with the previously disclosed outlook, albeit 1.5% above as royalty costs were $18/oz higher; FY-2024 AISC to remain low at $955-1,035/oz |
| Strong financial position with $757m of available liquidity, comprised of $517m in cash and $240m in undrawn credit facilities, while Net Debt stood at a healthy $555m at year-end with two key growth projects approaching completion |
| ROBUST SHAREHOLDER RETURNS |
| H2-2023 dividend of $100m declared, totalling $200m for FY-2023, which is 14% above the minimum committed dividend |
| Share buyback programme continued with $26m worth of shares repurchased in Q4-2023, totalling $66m for FY-2023 |
| Cumulative shareholder returns declared of greater than $900m since 2021, 77% above the minimum commitment |
| ATTRACTIVE ORGANIC GROWTH |
| Sabodala-Massawa expansion on budget and on schedule for start-up in Q2-2024, increasing its expected production up to 400koz in FY-2024 at an AISC of less than $850/oz |
| Lafigué project construction on budget and ahead of schedule with expected start-up in Q2-2024, rather than Q3-2024, expecting to contribute up to 110koz of production in FY-2024 at an AISC of less than $975/oz |
| Significant exploration success achieved in FY-2023 with Tanda-Iguela discovery increasing to 4.5Moz of Indicated resources and near-mine exploration success; continued exploration focus in FY-2024 with $65m budget |
Table 1: Preliminary Financial and Operating Results Highlights1,2
| (In US$m unless otherwise specified) | THREE MONTHS ENDED | YEAR ENDED | |||||
| 31 December 2023 | 30 September 2023 | 31 December 2022 | 31 December 2023 | 31 December 2022 | Δ FY-2023 vs. FY-2022 | ||
| PRODUCTION AND AISC HIGHLIGHTS | |||||||
| Gold Production, koz | 280 | 281 | 294 | 1,072 | 1,161 | (8)% | |
| Gold Sold, koz | 285 | 278 | 290 | 1,084 | 1,150 | (6)% | |
| All-in Sustaining Cost3, $/oz | ~936 | 967 | 885 | ~964 | 850 | +13% | |
| SHAREHOLDER RETURNS | |||||||
| Shareholder dividends paid | — | 100 | — | 200 | 170 | +18% | |
| Share buyback | 26 | 20 | 24 | 66 | 99 | (34)% | |
| Total shareholder returns paid | 26 | 120 | 24 | 266 | 269 | (1)% | |
| ORGANIC GROWTH | |||||||
| Growth capital spend3 | 155 | 116 | 55 | 447 | 127 | +252% | |
| Exploration spend3 | 16 | 27 | 14 | 95 | 82 | +20% | |
| Total investments in organic growth3 | 171 | 143 | 69 | 542 | 209 | +161% | |
| FINANCIAL POSITION HIGHLIGHT | |||||||
| (Net debt) / Net Cash3 | (555) | (445) | 121 | (555) | 121 | n.a | |
1All Q4-2023 and FY-2023 numbers are preliminary and reflect Endeavour’s expected results as at the date of this press release. 2Production and AISC highlights from continuing operations 3This is a non-GAAP measure.
Ian Cockerill, CEO of Endeavour Mining, commented: “I am honoured to assume the role of CEO at a pivotal time for Endeavour as strong foundations are in place to unlock significant value as we deliver on our organic growth pipeline. I look forward to continuing to implement the strategy approved by the Board and lead the Company forward for the benefit of all our stakeholders.
2023 was another successful year for Endeavour during which we continued to focus on improving the quality of our portfolio through asset optimisation initiatives, the divestment of non-core Boungou and Wahgnion mines, construction of our two high-margin, long life growth projects, and continue to deliver significant exploration success.
On the operational front, we are pleased to have met production guidance for the eleventh consecutive year and to remain one of the lowest all-in sustaining cost producers within the sector, allowing us to generate robust cash flow to fund both our organic growth and shareholder returns programmes. Moreover, we achieved record production at both Ity and Houndé in 2023 where production exceeded 300koz. As we look forward to continuing to optimise and explore these two mines with the goal of sustaining such levels of production over the long-term, Endeavour’s other flagship asset, Sabodala-Massawa, is well positioned to produce up to 400koz in 2024.
Regarding our near-term growth plans, we are very pleased to report that both the Sabodala-Massawa expansion and the Lafigué development project are progressing well, with both projects on budget and on, or ahead of, schedule for first production in the second quarter of 2024. Our longer-term organic growth pipeline is equally attractive, following the delineation of a 4.5 million ounce Indicated resource at our Tanda-Iguela greenfield property in Côte d’Ivoire. This represents one of the most significant discoveries in West Africa over the past decade and we have launched a preliminary feasibility study that we expect to finalise by year end, as we continue to focus on increasing its size.
Throughout last year, we continued to execute on our commitment to deliver attractive shareholder returns, returning $200 million of dividends for the year and having repurchased $66 million worth of shares, which combined is equivalent to $226 for every ounce of gold produced from all operations. Importantly, since we began the shareholder returns programme in 2021, we have returned over $900 million to shareholders representing 77% more than the minimum commitment for the period. Looking ahead, our goal is to increase returns further once our two ongoing organic growth projects are complete.
I would like to thank our team for their continued hard work. I look forward with excitement to 2024 and beyond as we will benefit from the efforts undertaken over recent years to improve the quality of our portfolio and strengthen the resilience of our business.”
SHAREHOLDER RETURNS PROGRAMME
- In line with Endeavour’s capital allocation framework, the Company is pleased to continue to deliver attractive shareholder returns by declaring a H2-2023 dividend of $100.0 million, or approximately $0.41 per share. As such, the FY-2023 dividend amounts to $200.0 million, which represents $25.0 million or 14% more than the minimum dividend commitment of $175.0 million for the year, reiterating Endeavour’s strong commitment to paying supplemental shareholder returns.
- Endeavour’s H2-2023 dividend will be paid on 25 March 2024, with an ex-dividend date of 22 February 2024, to shareholders of record on 23 February 2024. Shareholders of shares traded on the Toronto Stock Exchange will receive dividends in Canadian Dollars (“CAD”), but can elect to receive United States Dollars (“USD”). Shareholders of shares traded on the London Stock Exchange will receive dividends in USD, but can elect to receive Pounds Sterling (“GBP”). Currency elections and elections under the Company’s dividend reinvestment plan (“DRIP”) must be made by shareholders prior to 17:00 GMT on 4 March 2024. Dividends will be paid in the default or elected currency on the Payment Date, at the prevailing USD:CAD and USD:GBP exchange rates on 6 March 2024. This dividend does not qualify as an “eligible dividend” for Canadian income tax purposes. The tax consequences of the dividend will be dependent on the particular circumstances of a shareholder.
- Shareholder returns are being supplemented through the Company’s share buyback programme. A total of $65.7 million, or 3.0 million shares were repurchased during FY-2023, of which $25.7 million or 1.3 million shares were repurchased in Q4-2023.
- As shown in Table 2 below, Endeavour has returned $266.0 million to shareholders for FY-2023 through dividends and share buybacks, 52% above the $175.0 million minimum dividend commitment for the year, and equivalent to $226 per ounce produced from all operations. Since the shareholder returns programme began to be paid in 2021, Endeavour has returned $903.0 million to shareholders in the form of dividends and buybacks, inclusive of the H2-2023 dividend, which represents $393.0 million or 77% more than its minimum commitment over the period.
Table 2: Actual Shareholder Returns vs. Minimum Commitment
| MINIMUM | ACTUAL SHAREHOLDER RETURNS | SUPPLEMENTAL | |||
| (All amounts in US$m) | DIVIDEND COMMITMENT | DIVIDENDS | BUYBACKS COMPLETED | TOTAL RETURNS | SHAREHOLDER RETURNS |
| FY-2020 | 60 | 60 | — | 60 | — |
| FY-2021 | 125 | 140 | 138 | 278 | +153 |
| FY-2022 | 150 | 200 | 99 | 299 | +149 |
| FY-20231 | 175 | 200 | 66 | 266 | +91 |
| TOTAL | 510 | 600 | 303 | 903 | +393 |
1H2-2023 dividend declared on 22 January 2024, to be paid on or about 25 March 2024.
- As previously stated, Endeavour Mining implemented a dividend policy in 2021, with the goal of supplementing its minimum dividend commitment with additional dividends and share buybacks provided that the prevailing higher gold prices remained above $1,500/oz and its leverage remained below 0.5x Net Debt / adj EBITDA. Endeavour’s goal is to increase its shareholder returns programme once its organic growth projects are completed, along with the strengthening of its balance sheet, thereby ensuring that its efforts to unlock growth immediately benefit all its stakeholders. Endeavour’s next semi-annual dividend is expected to be announced in early August, along with its Q2 and H1-2024 financial results.
