Endeavour Mining plc (EDV.L) | Investment Case

1. Company Snapshot

1.a. Company Description

Endeavour Mining plc, together with its subsidiaries, operates as a gold mining company in West Africa.Its project portfolio includes 90% owned Houndé, Mana, Boungou, and Wahgnion mines in Burkina Faso; 85% owned Ity mine located in Côte d'Ivoire; 90% owned Sabodala-Massawa mine situated in Senegal; and Fetekro, Kalana, Bantou, Nabanga, and Afema development projects.The company was incorporated in 2021 and is based in London, the United Kingdom.

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1.b. Last Insights on EDV

Endeavour Mining's recent performance was driven by a record second-half dividend declaration, exceeding FY-2025 guidance. The company's Q4 production beat expectations, solidifying its position in the gold mining sector. Strong equipment sales also contributed to the positive performance, as Caterpillar Inc's Q4 earnings topped estimates. Additionally, the gold price surged above $5,000 an oz, boosting investor sentiment. Furthermore, Endeavour Mining's exploration outlook for the next five years targets the discovery of 12-15 million ounces of mineral resources at a cost of less than $40 per ounce, indicating a promising future for the company.

1.c. Company Highlights

Last Price	4882
Change Percentage	3.65%
Open	4862
Previous Close	4710
Market Cap ( Millions)	11781
Volume	75545
Year High	4898
Year Low	1486
M A 50	4150.44
M A 200	3082.57

FCF Yield	5.68%
Dividend Yield	1.85%
ROE	16.99%
Debt / Equity	25.96%
Net Debt / EBIDTA	27.20%
Price To Book	5.14
Price Earnings Ratio	32.35
Price To FCF	17.62
Price To sales	4.08
EV / EBITDA	8.26

2. Endeavour Mining's Q3 2025 Results: Strong Financials and Operational Performance

Endeavour Mining reported a robust financial performance in Q3 2025, with adjusted EBITDA reaching $1.6 billion and an adjusted EBITDA margin of 55%. The company's EPS came in at $0.491, below analyst estimates of $0.79. Free cash flow year-to-date stood at $680 million, and $948 million over the last 12 months, equivalent to a 19% free cash flow yield. The company's financial performance was driven by its solid operating results, with production reaching 911,000 ounces year-to-date, positioning Endeavour to achieve the top half of its production guidance.

Publication Date: Nov -16

                                    📋 Highlights
                                    Production Guidance Progress::
                                                Achieved 911,000 ounces year-to-date, on track to meet the top half of annual production guidance.
Free Cash Flow Generation::
                                                Generated $680 million year-to-date and $948 million over the last 12 months, yielding a 19% free cash flow margin.
Adjusted EBITDA Growth::
                                                110% year-over-year increase to $1.6 billion, with a 55% adjusted EBITDA margin, driven by improved operational efficiency.
Shareholder Returns::
                                                Returned $233 million to shareholders in 2025, exceeding minimum commitments, and expects to return $346 million for the full year.
Cost Management::
                                                All-in sustaining costs at $1,362 per ounce, aligned with guidance despite $103/ounce royalty impact from higher gold prices.

                                

Operational Highlights

The company's operational performance improved year-over-year, driven by a 110% increase in adjusted EBITDA. Endeavour's mines are on track to meet their production guidance, with Houndé and Sabodala-Massawa expected to achieve the top half of the range. The company is also advancing its organic growth pipeline, including the Tier 1 Assafou project in Côte d'Ivoire, which continues to progress with a definitive feasibility study on track for completion in early 2026.

Cost Management and Margins

Endeavour's all-in sustaining cost (AISC) was $1,362 per ounce, impacted by higher royalty costs due to increased gold prices. Adjusting for this, costs are within the guidance range. The company's cost management is a key focus area, with initiatives underway to reduce costs, particularly at Mana, where costs are expected to exceed the top end of guidance due to higher power costs and grid stability issues.

Valuation and Returns

Endeavour's valuation metrics indicate a premium valuation, with a P/E Ratio of 46.11 and an EV/EBITDA of 6.69. The company's dividend yield stands at 2.73%, with a free cash flow yield of 7.44%. Analysts estimate next year's revenue growth at 16.5%, which may support the company's premium valuation. CEO Ian Cockerill noted that the company is well-positioned to sustainably deliver sector-leading organic growth and shareholder returns.

Growth Prospects and Exploration

Endeavour is advancing its exploration pipeline, with a new 5-year exploration strategy to be presented in Q4, focusing on brownfield and greenfield opportunities. The company has also entered a joint venture with East Star Resources in Kazakhstan, targeting highly prospective gold provinces. The Assafou project is progressing, with a definitive feasibility study on track for completion in early 2026 and exploitation permit approval expected in Q1 2026.

Outlook and Risks

The company's outlook is positive, driven by its solid operational performance and growth prospects. However, risks remain, including upward pressure on royalty rates in West Africa and potential changes to the mining code in Senegal. Endeavour has stability agreements in place in some countries, mitigating these risks. The company's expected credit loss (ECL) for VAT receivables is a concern, particularly in Burkina Faso, but management is exploring alternatives to mitigate timing issues.