Endeavour’s Houndé mine delivers solid first half results

Endeavour Mining (TSE: EDV; US-OTC: EDVMF) has reported strong growth in production, revenue and earnings in its second quarter results.

The West Africa-focused gold miner produced 299,000 oz. gold in the first half of 2018, an increase of 126,000 oz. gold from the year prior. That increase was driven entirely by Endeavour’s 90%-owned Houndé mine in Burkina Faso’s Birimian greenstone belt. Endeavour began production at Houndé this January, turning out 141,000 oz. gold at all-in sustaining costs of US$521 per oz. in the first six months of 2018. Houndé’s reserves currently stand at 30.2 million tonnes grading 2.02 grams gold per tonne. The mine is Endeavour’s main exploration focus – a 60,000 metre drilling campaign is currently underway, following up on 121,000 metres of drilling during the first half of 2018.

Total revenue increased US$183 million to US$388 million, while net earnings rose US$32 million to US$34 million.

All-in sustaining costs from continuing operations decreased US$168 per oz. to US$732 per ounce. That decrease was driven by production at Houndé, the sale of its Nzema mine in Ghana, and the removal of the Tabakoto mine in Western Mali from continuing operations. Tabakoto’s high costs (all-in sustaining costs were US$1,298 per oz. in the first half of 2018) and short operating life drove Endeavour’s decision to put the mine on the auction block.

Construction of the company’s 80%-owned Ity gold project in Côte d’Ivoire is past the halfway point. The project’s ball and semi-autonomous grinding mills arrived in the second quarter, three months ahead of schedule. Production is expected to begin in mid-2019.

Shares of Endeavour are currently valued at $22.79 with a 52-week range of $21.16 to $26.57. The company has a $2.4 billion market capitalization.