Endeavour raises production

Endeavour Mining merged last year with Avion Gold.The merged company had production of more than 200,000 ounces.It has brought on a couple of new mines in 2013.But the price of gold has affected it like all junior producers.Gold hit a high of $1900 ounces about a year ago and then was less than $1200 an ounce in December.This dramatic change in price has caused all  juniors to be more efficient and reduce their costs.Endeavour is no exception.It used to contract out  much of the mining operation to contractors;now it has purchased new equipment and does all of the mining itself.It also increased the capacity of it's Tabakoto mill which processes ore from the Tabakoto and the Segala deposit.They are also expecting almost 180,000 ounces of new production from their new Hounde mine.We'll see if they get it.In about one month they have already mined 6000 ounces from another new mine called Agboau.They are expecting 400,000 to 440,000 ounces in 2014.They have reduced their cash cost of production and expect an operating margin of $95 million in 2014.
 The price of gold
The price of gold was slightly below $1200 in December and Endeavour was trading at about $.47 a share.This was before the price moved back up and before Endeavour announced their 2013 production and 2014 guidance.Now it is at $.72 per share.Their new mining operation helps to reduce costs for whatever the price of gold ends up at.If they reach guidance they will be producing about the same as higher priced juniors such as B2 Gold and Semafo Gold.Both expect to produce around 325, 000 ounces but both are priced above $2.50 a share and Semafo is priced at almost $4.00 a share.Endeavour should be trading in the same range as these two small mid-tier producers.
    Mid-tier producers
The dramatic change in the price of gold has caused juniors to be more efficient and to find new ore bodies around their existing mines.Endeavour ,for example, has found another deposit around
it's Tabakoto deposit called Segala.It will add to the expected production from Tabakoto in 2014.Endeavour has now joined the ranks of other small-tier producers that have moved up their production.A small mid-tier producer will be producing 400,000 to 600,000 ounces.The dividing line for senior producers is taken to be 1,000,000 ounces.Endeavour will not be in this category for awhile;in fact giving guidance of 400,000 to 440,000 ounces is not he same as meeting it's guidance.We will have to wait and see if Endeavour can raise it's production to meet guidance.If it does expect the price to be around $2.00 by Q3 of 2014.                see Blogdaleupsome for advice on gold stocks