Endeavour Challenges Overshadow Ambitious Plans For 2024

Endeavour Mining EDVMF announced the 2023 results, beating its guidance and producing 1.1 million ounces at all-in-sustaining costs of $964 per ounce, resulting in $266 million in shareholder returns.

"2023 was another successful year for Endeavour, during which we continued to focus on improving the quality of our portfolio through asset optimization initiatives, the divestment of non-core Boungou and Wahgnion mines, construction of our two high-margin, long-life growth projects, and continuing to deliver significant exploration success," CEO Ian Cockerill said.

The firm expects the Sabodala-Massawa mine in Senegal to commence production in Q2 2024, contributing up to 400,000 ounces in its first full year at costs under $850 per ounce.

Management also moved its Lafigue mine in Ivory Coast ahead of schedule, expecting its start in Q2 instead of its previous Q3 target.

With a budget of $542 million for growth investment and a $200 million dividend declared for 2023, Endeavour seems poised for positive developments, particularly since gold keeps trading above $2,000 / ounce.

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However, the shares continue to decline, dipping as low as -23% year to date, with positive news overshadowed by the recent turmoil within the company.

First, the company dismissed CEO Sébastien de Montessus, prompted by allegations of serious misconduct and an irregular payment tied to an asset disposal.

Endeavour intends to strip him of remuneration worth $29.1 million, including a $2 million bonus earmarked for 2023 and $15.6 million in unvested share awards. De Montessus, the highest-paid FTSE chief executive in 2021, will also return a further $11.5 million as a clawback for compensation in 2021 and 2022.

Adding to the challenges, workers at the Hondué gold mine in Burkina Faso, Endeavour’s second-largest gold operation, initiated a strike. Bloomberg reported seeing a memo of an "illegal" and "unplanned strike" commencing on Jan. 21.

Personnel blocked access to the site and halted operations at a mine, which played a crucial role in the company’s 2023 gold production, accounting for almost 30% of the total output.

The situation at Houndé complicates matters for Endeavour. The mine’s production is anticipated to decline by 7% to 290,000 ounces in 2024.

Representatives from Endeavour and Burkina Faso’s mines ministry are currently discussing resolving the situation.

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