Release Date: May 01, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Endeavour Mining PLC (EDVMF, Financial) delivered a strong operational and financial performance in Q1 2025, producing 341,000 ounces of gold at an all-in sustaining cost of $1,129 per ounce.
- The company generated record free cash flow of $409 million during the quarter, translating to $1,199 for every ounce of gold produced.
- Endeavour Mining PLC (EDVMF) significantly reduced its net debt by $354 million, bringing leverage down to 0.22 times net debt to adjusted EBITDA, well below the long-term target of 0.5 times.
- The company paid record dividends for 2024 of $240 million and has already supplemented returns with $52 million of share buybacks in 2025, indicating a strong commitment to shareholder returns.
- The Asa project is on track to underpin a 35% production growth to 1.5 million ounces by 2030, with a resource update expected in the second half of the year.
Negative Points
- Endeavour Mining PLC (EDVMF) anticipates slightly lower production in the second half of 2025, which may impact overall annual output.
- The company expects to pay significantly higher cash taxes in Q2 and Q3, which will impact cash flow during these quarters.
- There are ongoing challenges with VAT receivables in Burkina Faso, which have led to a small impairment and may continue to affect working capital.
- The company faces potential regulatory changes in Burkina Faso, including an accelerated implementation of a 5% free carry, which could impact financials.
- Endeavour Mining PLC (EDVMF) is operating in a high-risk geopolitical environment in West Africa, which may affect investor sentiment and share valuation.
Q & A Highlights
Q: Could the ongoing technical review impact Sabodala-Massawa's 2025 guidance?
A: Ian Cockerill, Senior Non-Executive Independent Director, stated that the technical review is ongoing, and it's too early to determine if it will increase output. However, Sabodala is on track to achieve the upper end of its current guidance.
Q: Is there potential for increased capital returns given the current free cash flow yield and net debt position?
A: Guy Young, Chief Financial Officer, confirmed that there is potential for increased shareholder returns, including supplemental dividends and share buybacks, as long as the supportive gold price environment continues.
Q: What is the status of VAT receivables, particularly in Burkina Faso?
A: Guy Young explained that there is an ongoing issue with VAT receivables in Burkina Faso, and a conservative provision has been taken. Efforts are being made to resolve this with the government, and the situation is being monitored.
Q: Are there any updates on the permitting for in-pit tailings deposition at Saadalla?
A: Djaria Traore, Executive Vice President - ESG and Supply Chain, confirmed that necessary permits have been received, and discussions with communities are ongoing. The target is to have all validations by the end of Q2 2025.
Q: What are the expectations for tax expenses in 2025, and how does the gold price impact this?
A: Guy Young stated that the tax guidance is based on a gold price assumption of $2,600, with the majority of corporate income tax being fixed as it is based on last year's tax. Withholding tax may flex slightly depending on upstreaming.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
