Endeavour Mining PLC (LON:EDV)'s (LSE:EDV, TSX:EDV, OTCQX:EDVMF) rating has been kept at 'buy' at Swiss bank UBS, which sees an inflection point for the gold miner's growth and cash generation approaching.
A FTSE 100 member, Africa-focused Endeavour had its challenges in 2024, notes UBS, especially operationally at Sabodala-Massawa, cash conversion, the departure of its chief executive mid-year and political risk in Burkina Faso.
For the fourth quarter of 2024, UBS forecasts gold production of around 375,000 oz resulting in yearly gold production at the low end of the 1,130-1,270,000 oz guidance range.
“We forecast fourth quarter AISC [sustaining costs] of US$1,180/oz … and underlying profit [EBITDA[ of US$570 million (3% ahead of consensus); with net debt declining from to US$775 million.”
In 2025, UBS expects 2025 gold production of 1.253 million oz, slightly ahead of consensus with cost and capex edging up again
“In our view, it will take time for EDV to rebuild investor confidence, but we believe consensus has adjusted for lower production/higher AISC.
“EDV is close to cash flow inflection and offers medium-term growth through the Assafou project in Ivory Coast; with spot 2025 FCF [free cash flow] yield of more than 15% we remain buyers as we believe strong FCF & debt reduction will part reverse underperformance vs gold peers in 2025.”
Buy with a 2,000p target is the view.
Shares rose 1% to 1,490p.