Endeavour Mining gets a new mine
On February2,2015 Endeavour Mining reported it's fourth quarter and year-end results.It showed production of 120,000 ounces for the fourth quarter and 466,000 ounces for 2014.This made year-end cash flow of $120 million.This also shows an increase of annual production over 2013 of 44% and cash balance on hand of $62 million.Endeavour raised it's annual guidance to 475,000 to 500,000 ounces for 2015.My blog on this site dated February10,2015 predicted that Endeavour could have cash flow of up to $140 million for 2015.This blog also predicted that this would allow Endeavour Mining to make a small acquisition or open another mine.On February 6,2015 Endeavour announced that it just got a permit to open a new mine called the Houndé project in Burkina Fasso.This mine will likely be opened in 2015 but whether it is in production in the third or fourth quarter is unknown yet.
The four producing mines
The main reason that Endeavour`s production exceeded that of 2013 is that they got more production from the Tabakoto and the Nzema mines.They got higher grades of ore from the Tabakoto mine and started mining the Kofi C deposit,the Segala underground mine and the Tabakoto underground mine.All these deposits use the Tabakoto mill.The Nzema mine had a good grade of ore and increased production also.Endeavour also added a new mine called Agbaou.Mine productivity is high and costs have been reduced as Endeavour spent $300 million over the last two years on mine construction.Endeavour did not have significant debt but they used their 2014 cash flow to reduce debt further.Endeavour expects all in sustaining costs(AISC) margin of $ 120 million for 2015.But if the price of gold rises above $1200 per ounce and production exceeds guidance then AISC margin will be greater than $120 million-perhaps $140 to $145 million.AISC margin is roughly equal to cash flow.A cash flow of $140 million as explained in the earlier blog on Endeavour Mining will allow it to open another mine or even make a small acquisition.
The fifth Mine Now Endeavour tells it`s investors that it is ready to open that new mine (the Houndé mine) and has already spent money on getting it`s permit.This blog feels that it is very likely that Endeavour will have to make new guidance for production, revenue and cash flow.It is quite likely that Endeavour may set production guidance of 550,000 ounces; even if they don`t quite meet it they are now likely to be close to it.
The four producing mines
The main reason that Endeavour`s production exceeded that of 2013 is that they got more production from the Tabakoto and the Nzema mines.They got higher grades of ore from the Tabakoto mine and started mining the Kofi C deposit,the Segala underground mine and the Tabakoto underground mine.All these deposits use the Tabakoto mill.The Nzema mine had a good grade of ore and increased production also.Endeavour also added a new mine called Agbaou.Mine productivity is high and costs have been reduced as Endeavour spent $300 million over the last two years on mine construction.Endeavour did not have significant debt but they used their 2014 cash flow to reduce debt further.Endeavour expects all in sustaining costs(AISC) margin of $ 120 million for 2015.But if the price of gold rises above $1200 per ounce and production exceeds guidance then AISC margin will be greater than $120 million-perhaps $140 to $145 million.AISC margin is roughly equal to cash flow.A cash flow of $140 million as explained in the earlier blog on Endeavour Mining will allow it to open another mine or even make a small acquisition.
The fifth Mine Now Endeavour tells it`s investors that it is ready to open that new mine (the Houndé mine) and has already spent money on getting it`s permit.This blog feels that it is very likely that Endeavour will have to make new guidance for production, revenue and cash flow.It is quite likely that Endeavour may set production guidance of 550,000 ounces; even if they don`t quite meet it they are now likely to be close to it.
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