TORONTO (miningweekly.com) – West Africa-focused gold producer Endeavour Mining has increased its second-quarter profit on the back of sharply lower costs and record output, despite a lower average realised price for the yellow metal.
The Vancouver-based company with four operating gold mines in Côte d’Ivoire, Ghana, Mali and Burkina Faso, on Thursday, after market close, reported net earnings of $33-million, resulting in earnings attributable to shareholders of $26.7-million, or $0.06 a share, compared with earnings of $40 000, or $0.00 a share, for the comparable period in 2014.
Excluding special items, the TSX- and ASX-listed miner reported adjusted after-tax net earnings of $25.5-million, or $0.05 a share, up from $8.3-million, or $0.02 a share, a year earlier. The company beat analyst forecasts of adjusted earnings of $0.04 a share.
Endeavour had made considerable progress in optimising the performance of its mines, as demonstrated by a 21% decline in all-in sustaining cost (AISC) an ounce sold since 2013. In 2015, the company had shifted from two years of executing a capital-intensive strategy to improve the efficiency of its existing mines and build a new, longer-life and higher-margin operation to increase cash flow and reduce net debt on its balance sheet.
The AISC of $898/oz for the second quarter was 12% lower year-over-year, demonstrating the continued significant improvements the company had achieved at its operations, as well as the benefit of the favourable Euro exchange rate and the decline of crude oil prices, the company explained.
Endeavour reported record gold output in the period of 131 165 oz and sales of 129 614 oz, compared with production of 122 517 oz and 118 653 oz sold for the three months ended June 30, 2014.
Revenues rose marginally to $154.62-million, shackled by an 8% lower realised gold price at $1 195/oz.
The corporation continued its debt reduction programme with a second $20-million voluntary repayment in July, following $20-million repaid in April. The company’s undrawn portion of the $350-million credit facility was $90-million, which remained fully available for general corporate purposes.
Endeavour planned to make a potential construction decision on its fully permitted Houndé project, in Burkina Faso, by year-end.
The group noted that it was positioned to deliver at the upper-end of the 475 000 oz to 500 000 oz full-year production guidance and at the low-end of the $930/oz to $980/oz AISC guidance.
Endeavour’s stock had trended stable since the start of the year, gaining 4.44% overall, and on Friday traded 10.64% higher at C$0.52 apiece.