Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
West Africa-focused Endeavour Mining (TSX:EDV) (OTCQX:EDVMF) said Monday gold production for the three month ended Sep. 30 jumped 6% to 146,000 ounces with increases forecast across its operating mines during the fourth quarter of the year, expected to be the strongest yet.
The miner attributed the output increase to the first-time contribution of Karma, a newly built mine in Burkina Faso, which Endeavour inherited earlier this year after acquiring fellow Canadian miner True Gold Mining for about Cdn$240 million.
Year to date, the company has produced 408,000 ounces of gold, which represents a 8% increase compared to the same period in 2015.
Year to date, the miner has produced 408,000 ounces of gold from five operations in Mali, Côte d’Ivoire and Ghana, including the now sold Youga mine.
“Our results year-to-date, combined with our expectation for stronger performance from each of our five operating mines in the fourth quarter have us well positioned to meet our key guidance metrics in 2016,” said chief executive and president, Sébastien de Montessus in the statement.
The company plans to summon its shareholders next month to unveil a new growth strategy that Africa Mining Intelligence (subs. required) recently called both “ambitious and costly.”
But management is optimistic. It said free cash flow was “well on-track” to meet 2016 full year guidance of $135 million owing to the improvement in operating performance, including the now operating Karma mine, lower non-sustaining working capital, and the close of a hedge at Nzema, which lost $9 million on forward gold sales.
In total, Endeavour now owns five mines in Côte d’Ivoire, Ghana, Mali and Burkina Faso, and could produce between 575,000 and 600,000 ounces of gold this year at all-in sustaining costs ranging from $870 to $920 per ounce.
That amount will increase significantly next year, once its new mine in Burkina Faso, Houndé, is fully operational. The operation is expected to add 190,000 ounces to Endeavour’s total annual gold output.
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Anon-Y-Mous-e
Love EDV, long and strong. Also keen on Jay Taylors Top Pick; New Carolin Gold Corp. (TSX VENTURE: LAD) (OTC: LADFF) (Frankfurt: 29N) is identified in a newly issued research report by Market Equities Research Group with several potential catalysts that exist near-term with potential to result in $100 million market cap (50 cents /share) for LAD. New Carolin Gold Corp.’s 100%-owned Ladner Gold Project is located only 150 km (2 hours) East of Vancouver, BC, Canada, in the Coquihalla Gold Belt. With LAD currently trading at a market cap of ~$11.7 million and potential to show a 1+ million oz. resource in 2017, combined with the many project advantages, we see strong potential for a rapidly increase in valuation for LAD based on a $ / oz basis to form a solid core value for LAD in 2017.
The full research report may be found at http://sectornewswire.com/MarketEquitiesResearch-LAD-2016-Q4.pdf online.