Endeavour Mining beats guidance
On Jnauary,15,2015 Endeavour Mining released it's year-end and fourth quarter report and it was a good one.Endeavour produced 120,000 ounces of gold in the fourth quarter and 466,000 ounces in 2014.This exceeded 2014 guidance of 400,000 to 440,000 ounces.In addition,because of their positive cash generation in Q4 they ended the year with a cash balance of $62 million.And had used only $300 million of debt on it's $350 million credit facility.Furthermore Endeavour tells us that they expect to produce 475,000 to 500,000 ounces in 2015.
2014 Highlights
Their production of 466,000 ounces exceeded guidance by 26,000 to 66,000 ounces.Also it was an increase over 2013 annual production of 44%;they produced 324,000 ounces in 2013.This was chiefly because production at the Tabakoto mine and the Nzema mine exceeded production in 2013.Alkso they added the new Agbaou mine.Consequently Endeavour spent about $300 million in 2013 and 2014 on new mine construction.This had another positive result .Their all in sustaining cost (AISC) fell from$1100 per ounce in 2013 to about $995 per ounce in 2014 and should be around $980 per ounce in 2015.Endeavour says that using $1200 per ounce for a price and the mid-point of the AISC cost that it will produce an AISC margin of about $120 million in 2015.This is roughly the same as Cash flow.
The Tabakoto Mill
Endeavour is now getting higher grades of ore from it's Tabakoto mine.In 2014 it commenced mining from it's Kofi C deposit and it's Segala underground mine as well as from the Tabakoto underground mine.Ore from all three sources go through the Tabakoto mill which makes it very efficient.If they meet 2015 guidance they will need more production than 2014 from Tabakoto.On the positive side a gold price above $1200 per ounce will increase cash flow beyond $120 million.Endeavour intends to use this cash flow to reduce debt and it is only $300 million now.But the tremenduous amount of capital spent in the last two years on their mines means that in 2015 they can pare down capital expenditures.If the gold price stays near $1300 an ounce Endeavour Mining will have Cash Flow approaching $140 million.This will create a large amount of free cash flow and will certainly allow Endeavour to look for small acquisitions or open a new mine.
2014 Highlights
Their production of 466,000 ounces exceeded guidance by 26,000 to 66,000 ounces.Also it was an increase over 2013 annual production of 44%;they produced 324,000 ounces in 2013.This was chiefly because production at the Tabakoto mine and the Nzema mine exceeded production in 2013.Alkso they added the new Agbaou mine.Consequently Endeavour spent about $300 million in 2013 and 2014 on new mine construction.This had another positive result .Their all in sustaining cost (AISC) fell from$1100 per ounce in 2013 to about $995 per ounce in 2014 and should be around $980 per ounce in 2015.Endeavour says that using $1200 per ounce for a price and the mid-point of the AISC cost that it will produce an AISC margin of about $120 million in 2015.This is roughly the same as Cash flow.
The Tabakoto Mill
Endeavour is now getting higher grades of ore from it's Tabakoto mine.In 2014 it commenced mining from it's Kofi C deposit and it's Segala underground mine as well as from the Tabakoto underground mine.Ore from all three sources go through the Tabakoto mill which makes it very efficient.If they meet 2015 guidance they will need more production than 2014 from Tabakoto.On the positive side a gold price above $1200 per ounce will increase cash flow beyond $120 million.Endeavour intends to use this cash flow to reduce debt and it is only $300 million now.But the tremenduous amount of capital spent in the last two years on their mines means that in 2015 they can pare down capital expenditures.If the gold price stays near $1300 an ounce Endeavour Mining will have Cash Flow approaching $140 million.This will create a large amount of free cash flow and will certainly allow Endeavour to look for small acquisitions or open a new mine.
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