Endeavour well positioned to achieve full year production guidance

Gold production increased 18% in Q2-2021 over Q1-2021 to 409koz, while AISC decreased by $15/oz to $853/oz, due to the full benefit of consolidated production from Sabodala-Massawa and Wahgnion, and the strong operational performance as noted above.

A stronger than guided performance was achieved in Q2-2021 due to outperformance at Houndé and Ity which benefited from less rainfall than usual.

The acquisition of Teranga Gold was completed on 10 February, 2021 and the Sabodala-Massawa and Wahgnion assets have been consolidated into the financial statements from this date. The sale of Endeavour’s non-core Agbaou mine closed on 1 March, 2021, and has been classified as a discontinued operation.

Strong H1-2021 performance of 756koz at an AISC of $860/oz positions the Group well to meet the top-half of its FY-2021 production guidance of 1,365-1,495koz at an AISC of $850-900/oz.

H2-2021 will benefit from the full consolidation of the Sabodala-Massawa and Wahgnion mines, which have been consolidated starting from the closing date of the Teranga Gold acquisition of 10 February 2021.

Group sustaining and non-sustaining capital expenditure outlook for FY-2021 remains in line with initial guidance of $173 million and $201 million, respectively.

Operating cash flows increased by $102.5 million from $197.9 million (or $0.99 per share) in Q1-2021 to $300.5 million (or $1.19 per share) in Q2-2021 mainly due to higher gold sales at a higher realised price as well as lower operating costs and a working capital inflow, which more than offset the higher income taxes paid and the foreign exchange losses incurred. Operating cash flow before non-cash working capital from all operations increased by $22.2 million from $263.4 million (or $1.27 per share) in Q1-2021 to $285.7 million (or $1.13 per share) in Q2-2021. Notable variances are summarised below:

  • Gold sales increased by 57koz over Q1-2021 to 421koz in Q2-2021 due to the benefit of a full quarter of production from the newly acquired Sabodala-Massawa and Wahgnion mines, together with strong performances at Houndé and Ity. The realised gold price for Q2-2021 was $1,791/oz compared to $1,749/oz for Q1-2021. Total cash cost per ounce decreased from $751/oz in Q1-2021 to $729/oz in Q2-2021 due to the inclusion of the lower cost Wahgnion and Sabodala-Massawa mines for the full quarter
  • Income taxes paid increased by $82.9 million to $106.5 million in Q2-2021 reflective of the timing of provisional payments based on full year 2020 earnings
  • Working capital was an inflow of $14.8 million in Q2-2021 due to the reduction in receivable balances and inventories. Specifically, VAT receivables at Houndé decreased and certain corporate receivables were received in Q2-2021. There was also a reduction in inventory stockpiles and finished gold inventories at Ity, Sabodala-Massawa and Wahgnion
  • Acquisition and restructuring costs of $14.5 million in Q2-2021 related to the Teranga acquisition and integration as well as restructuring costs

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