Endeavour plans to initiate dividend payments – CEO

Houndé mine in Burkina Faso. Image from Endeavour.

Endeavour (TSX: EDV) expects to reach a net cash position in the coming quarters, at which point it intends to pay an initial dividend, the company announced on Wednesday.

With the current gold price outlook, dividend initiation could come quickly, CEO Sebastien de Montessus said in a video conference. Endeavour is also considering a secondary listing in London or New York.

The miner reported production of 149,000 oz at an all-in sustaining cost of $939/oz in Q2-2020, compared to 172,000 oz in the previous quarter, due to lower production at the Ity mine in southern Côte d’Ivoire and Karma mine in Burkina Faso. Sales fell to 150,000 oz, compared to 175,000 oz in Q1.

Company expects to restart mining operations at Boungou in the fourth quarter

Endeavour said it is on track to achieve full-year production guidance for both Endeavour and Semafo assets despite the pandemic. The company expects the 2020 proforma guidance to amount to 995,000 oz to 1.1-million ounces, at AISC of between $865/oz to $915/oz.

Revenue of $253-million was higher than the $219-million of the June 2019 quarter, but lower than $270-million in the March 2020 quarter.

“We have maintained our exploration activities, with 85% of our FY-2020 budget already spent in the first half of the year, ahead of the rainy season. The team continue to deliver successful results, with 0.8 million ounces of M&I resources recently added at our Ity and Houndé mines while an updated resource at Fetekro is expected to be published shortly,” said Montessus.

“We are very pleased with the progress made to integrate the Semafo assets within our well-established West African operating model, which is now largely complete. These operations are already benefiting from our strong local presence and regional expertise and we look forward to realizing synergies,” he said.

The company also reported that it expects to restart mining operations at Boungou in the fourth quarter. Operations have been suspended following an attack on the public road between Fada and the mine site in the Eastern region of Burkina Faso that left 37 dead and 60 wounded. 

Asset integration

With the integration of the SEMAFO assets into Endeavour’s West African operating model largely complete, Benoit Desormeaux, former CEO of Semafo who was appointed Endeavour president upon transaction close, has decided to step down to pursue other opportunities.

The deal, announced in March, has brought together six mines into one portfolio. Combined reserves stand at 10.5 million ounces, and measured and indicated resources, 20.7 million ounces.

Midday Wednesday, Endeavour’s stock was up 0.4% on the TSE. The company has a C$6.1 billion market capitalization.