Endeavour Mining Corp (TO:EDV) Q318 results were materially ahead of our expectations, driven by better than expected operational performances at Karma and Ity and lower operating expenses and depreciation relative to Q2, notwithstanding the usual rains during the quarter. These were partially counteracted by a higher tax charge. However, we have still materially increased our forecasts for FY18 in light of the Q318 results and in expectation of a further improvement in Q4. Higher than expected net debt reflected merely the acceleration of Ity CIL capex from H119 into H218.
FY18 production and cost guidance to be met easily
In the aftermath of its third-quarter results, Endeavour’s operations seem likely to broadly meet their production guidance, with the notable exception of the Ity heap leach operation, which has already surpassed its own target and now seems likely to produce a further 15koz gold in Q4. Similarly, all operations appear likely to achieve their AISC cost guidance, with the exception of Tabakoto, which was expected since at least Q2 and which has been sold as a consequence. Group-wide guidance for FY18 is now for production to be at the upper end of the 555–590koz range (Edison 582koz) at an all-in sustaining cost (AISC) at the bottom end of the US$760–810/oz range (Edison US$773/oz).
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