Endeavour Mining LON: EDV reported what management described as a “record quarter” for Q1 2026, supported by steady operating execution and a materially higher realized gold price. On the company’s results webcast, Chief Executive Officer Ian Cockerill said production of 282,000 ounces was “in line with our plan,” while free cash flow reached a record $613 million, which he said equated to $2,176 per ounce produced.
Cockerill said the company expects production and operating performance to improve through the year, with higher output in the second half and a peak in Q4 as stripping activity opens up higher-grade ore. He also pointed to a rapid shift in balance sheet positioning, noting Endeavour moved from net debt of $158 million in the prior quarter to net cash of $405 million at quarter-end, a $563 million change in three months.
Operational performance and cost drivers
Cockerill said Q1 output was lower than Q4 due to “planned lower grades mined and processed,” consistent with mine sequencing. All-in sustaining costs (AISC) on a royalty-adjusted basis came in toward the lower end of guidance, though reported AISC rose in the quarter largely due to higher gold price-driven royalties and some site-specific impacts, including power costs at Mana.
Despite higher costs, Cockerill said all-in sustaining margin improved, citing an AISC margin of $2,976 per ounce, which he said was $751 per ounce higher than Q4 as gold prices increased. He added that while Q1 AISC of $1,834 per ounce was slightly above the company’s guidance range, this was primarily due to the increase in royalties tied to the higher gold price.
Executive Vice President of Operations and ESG Djaria Traoré said Endeavour remains on track to meet full-year guidance, with performance weighted to the second half as production and costs improve at Houndé, Mana, and Ity in line with mine plans.
- Houndé: Traoré said production increased as higher grades were mined and processed from the Kari West and Vindaloo Main pit. AISC rose largely due to higher royalties and higher sustaining capital tied to wet stripping and equipment improvements. The company plans continued stripping at the Venetia Main Pit pushback to access better grades later in the year.
- Ity: Production decreased as lower grades were mined from the Bakatu and Walter pits, with lower throughput due to scheduled mill maintenance. Traoré said AISC improved due to lower sustaining capital and by-product silver sales, despite higher gold prices and lower sales. Performance is expected to be weighted to H2 as grades increase.
- Mana: Production was lower due to lower grades and the wind-down of Sewe underground mining as reserves near depletion. Traoré said AISC increased due to lower production and sales, higher royalties, and continued use of higher-cost self-generated power. Management expects improved grid power availability during Q2 as Burkina Faso adds new capacity, and said mine feed in H2 is expected to be supplemented by Banakem open-pit ore.
- Sabodala-Massawa: Production decreased due to lower grades in line with sequencing, and AISC rose due to lower sales, higher royalties, and higher sustaining capital. Traoré said the company expects steady performance from the CIL plants, while expecting continued improvement at BIOX through ongoing optimization work.
- Lafigué: Production increased on higher grades and improved recovery following completion of processing plant optimization work. AISC increased due to planned waste stripping and higher royalties as well as higher royalty rates. Traoré said grades are expected to decrease next quarter before improving in the second half of 2026 as the mine moves into the next pushback.
Traoré also addressed safety, saying the company was “deeply saddened” by a fatal contractor injury at Mana on March 6. She said a comprehensive investigation identified areas for improvement around contractor onboarding, supervision, and ongoing training, and that actions are being implemented across operations. She added that the Total Recordable Injury Frequency Rate improved to 0.72 on a trailing 12-month basis and “remains one of the lowest in the sector.”
Financial results: record free cash flow and higher gold price
Chief Financial Officer Guy Young said Q1 results were driven by both the higher gold price and consistent operating performance. He said realized gold price increased by $937 per ounce to $4,810 per ounce. Young reported adjusted EBITDA of $880 million, up 29% quarter-over-quarter, and an adjusted EBITDA margin of 65%, up about 12 percentage points.
Young said adjusted net earnings were $442 million, or $1.53 per share, up 65% from Q4. Operating cash flow increased 21% to $737 million, despite higher cash taxes and a larger working capital outflow. Young said the company’s free cash flow rose 29% to $613 million, even with lower production, higher AISC taxes, and working capital headwinds.
Young detailed key cash flow drivers, including a $169 million benefit from higher realized gold prices and a $99 million impact from lower gold sold, which decreased by 24,000 ounces to 278,000 ounces. He said operating and other expenses were $156 million lower than Q4 due to lower mining and processing costs from lower production, and because the company’s hedging program was completed last year, partially offset by higher royalties.
Cash taxes paid increased by $23 million to $46 million, reflecting timing of corporate tax payments and provisional withholding tax payments at Sabodala-Massawa. Young said Endeavour raised its full-year cash tax guidance to $660 million to $770 million from $600 million to $700 million, citing “higher withholding tax payments related to an increase in cash repatriation on the back of higher gold prices.” He noted cash income tax guidance was unchanged.
Working capital was a $91 million outflow, which Young attributed primarily to a reduction in payables, increased VAT, and stockpiles. He said Endeavour saw positive developments in April, including resumption of direct VAT reimbursements in Burkina Faso, reduced processing times in Senegal, and high levels of reimbursements in Côte d’Ivoire, which could support Q2 working capital if maintained. Young also said the company built inventories of certain critical consumables, including fuel and explosives, to mitigate potential impacts from a closure of the Strait of Hormuz.
Capital allocation, dividends and buybacks
Cockerill said the strengthened balance sheet provides flexibility to fund organic growth while also increasing shareholder returns. He said Endeavour will look to increase returns through supplemental dividends in its H1 2026 dividend announcement and through “continued opportunistic share buybacks.” He added that at prevailing gold prices, supplemental returns are expected to be at least double the company’s minimum $1 billion commitment to return capital to shareholders between 2026 and 2028, a commitment it said it would maintain down to a gold price of $3,000 per ounce.
Young said the company ended Q1 with $405 million of net cash after generating $737 million from operations and recording $125 million of investing outflows, including $75 million of sustaining capital, $45 million of non-sustaining capital, and $6 million of growth capital. Financing activities included a net $75 million drawdown on the revolving credit facility, $27 million of share buybacks, $8 million of lease payments, and $4 million of financing fees.
Addressing questions about liquidity, Young said the company expects to pay down the revolving credit facility in Q3 after withholding tax payments in Q2 allow repatriation to begin in Q3 via operating company dividends. He also said Endeavour does not plan to repay Côte d’Ivoire debt early, citing cash, liquidity and tax advantages to holding local debt.
In response to an analyst question about M&A, Cockerill said Endeavour’s principal focus remains organic growth and exploration, while adding the company “constantly look[s]” at opportunities and is not averse to M&A if the right opportunity emerges.
Assafou project and exploration plans
Cockerill said Endeavour’s definitive feasibility study for Assafou confirmed a “high-quality, long-life asset” with “very strong project economics.” He said the project was discovered for $13 million in 2022 and that the DFS, using a $4,000 per ounce gold price, shows an after-tax value of over $5 billion and an internal rate of return of 55%.
He said early works are underway and the company is targeting a final investment decision before the end of 2026, followed by a 24 to 30 month construction period. Cockerill said two key outstanding items are finalizing the resettlement of two villages located on the orebody and finalizing the diversion of a national road that runs through the pit footprint. He added Endeavour has already committed about $80 million of pre-expenditure focused on long-lead items to help de-risk the schedule.
According to Cockerill, the DFS outlines a 5 million tonne per annum gravity and CIL processing plant and projects Assafou could produce 320,000 ounces per year at an AISC of $1,026 per ounce over the first eight years of a planned 16-year mine life. He said increased drilling—nearly 100,000 meters of additional close-spaced work—improved confidence in the mine plan by increasing reserves and resources and introducing maiden proven reserves and measured resources.
Young later said non-sustaining capital related to Assafou is primarily driven by stripping needs due to the deposit’s depth. He also said owner’s costs are higher than some prior projects because Endeavour has tried to fully capture project-specific costs, including teams for cost management and earlier ramp-up efforts in operational readiness. He said resettlement efforts are included in owner’s costs, while road and power diversion costs sit within infrastructure.
On exploration, Cockerill said Endeavour increased its 2026 exploration guidance to $100 million, prioritizing near-mine resources across the portfolio, resource expansion at Assafou and nearby targets, and new ventures to replenish the longer-term pipeline. He also highlighted a $20 million strategic investment in Altair for a 9.9% stake to gain exposure to Guyana, which he described as part of the company’s focus on Tier-1 gold provinces.
Executive Vice President of Growth and Exploration Sonia Scarselli said Endeavour expects to report a maiden resource for the Vindaloo Deeps target at Houndé in the first half of the year. She also said the company identified more than 20 opportunities at Sabodala-Massawa following a portfolio review, with a maiden resource expected by year-end at Kawsara, and that Ity continues to generate positive exploration results with ongoing infill drilling near the CIL plant. On Assafou, she said the focus has shifted from confidence in the main resource to evaluating underexplored brownfield opportunities, with more detail expected later this year and into next year.
During Q&A, Cockerill also said Endeavour has no operating exposure to Mali and only a legacy Kalana project that it is in the process of selling. He said the company has not seen impacts on operations from Mali’s volatility and is not currently seeing deterioration in Burkina Faso’s situation.
About Endeavour Mining LON: EDV
Endeavour Mining is one of the world's senior gold producers and the largest in West Africa, with operating assets across Senegal, Côte d'Ivoire and Burkina Faso and a strong portfolio of advanced development projects and exploration assets in the highly prospective Birimian Greenstone Belt across West Africa. A member of the World Gold Council, Endeavour is committed to the principles of responsible mining and delivering meaningful value to people and society. Endeavour is admitted to listing and to trading on the London Stock Exchange and the Toronto Stock Exchange, under the symbol EDV.
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