Endeavour Mining ((TSE:EDV)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call of Endeavour Mining painted a picture of robust operational performance, marked by significant production and cash flow achievements. The company showcased strong shareholder returns and strategic advancements in exploration projects. However, these positives were balanced by challenges such as increased costs in the second quarter, operational difficulties at specific sites, and the impact of high tax payments on cash flow.
Strong Production and Cost Management
Endeavour Mining reported the production of 647,000 ounces of gold in the first half of 2025, achieving an average all-in sustaining cost (AISC) of $1,281 per ounce. This represents a 16% improvement in throughput compared to the previous year, highlighting the company’s effective cost management strategies.
Record Free Cash Flow Generation
The company generated $514 million of free cash flow in the first half of 2025, which equates to $794 per ounce produced. This achievement is particularly notable given that Endeavour paid 70% of its 2025 tax bill in the first half of the year.
Shareholder Returns
Endeavour Mining announced a record first-half dividend of $150 million, complemented by $69 million in share buybacks. This brings total shareholder returns to $219 million for the first half of 2025, reflecting the company’s commitment to returning value to its shareholders.
Strong EBITDA and Margin Improvement
The company’s adjusted EBITDA increased by 35% to nearly $1.2 billion in the first half of 2025. Additionally, the adjusted EBITDA margin improved by 5 percentage points, reaching 57%, underscoring the company’s enhanced profitability.
Balance Sheet Strength
Endeavour Mining successfully reduced its net debt to $469 million, achieving a leverage ratio of 0.23x net debt to adjusted EBITDA. This figure is significantly below the company’s target of 0.5x, indicating a strong balance sheet.
Exploration Advancements
Significant progress was made on the Assafou Project and other exploration programs, with promising results reported at several mines, including Ity and Sabodala-Massawa. These advancements are expected to support future growth.
Higher Costs in Q2
The second quarter of 2025 saw an increase in all-in sustaining costs to $1,458 per ounce. This rise was driven by higher royalty costs and increased power costs due to lower grid power availability.
Operational Challenges at Sabodala-Massawa
The company faced operational challenges at the Sabodala-Massawa site, with a slight decline in production due to lower grades milled through the CIL plant. There is an ongoing need to improve BIOX throughput and recoveries.
High Tax Payments
Endeavour Mining paid approximately 70% of its expected full-year 2025 cash taxes in the first half, which impacted cash flow during this period.
VAT Receivables Build-Up
The company experienced an $18 million buildup in VAT receivables, primarily at the Houndé, Mana, and Lafigué sites, posing challenges in cash management.
Forward-Looking Guidance
Endeavour Mining’s forward-looking guidance emphasized its robust performance, with production reaching 647,000 ounces of gold at an AISC of $1,281 per ounce, excluding Lafigué’s output. The company reported $514 million in free cash flow and announced significant shareholder returns. Despite higher royalty costs, Endeavour remains focused on productivity and low-cost project development to sustain future growth.
In conclusion, Endeavour Mining’s earnings call highlighted a strong operational performance with notable achievements in production and cash flow. The company demonstrated a commitment to shareholder returns and strategic exploration advancements. However, challenges such as increased costs, operational difficulties, and high tax payments were also acknowledged. Looking ahead, Endeavour remains focused on maintaining its competitive position and driving future growth.