OGC, EDV
Oceanagold aka OGC released their Q1 results, which were largely in line with expectations. It was known that gold production in New Zealand would be lower thanks to several now-resolved operational issues, but good quarters at Haile in the US and Didipio in the Philippines made up for that expected shortfall. Consolidated production for Q1 was 118k oz Au and 3.5 kt Cu, with the cash cost per oz Au dropping to $861, resulting in a net Q1 profit of $30M. Their cash stash did drop slightly to $53M, but this was due to a large inventory of unsold gold, so this will even out over the rest of the year.
OGC reaffirmed their guidance for 2023, based on what is expected to be a stronger H2 for a number of their operations. And they reaffirmed that production from Haile underground, currently under construction, will begin in Q4. And to remind you, OGC has also reinstituted their dividend, with the first payments arriving last month.
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It's interesting to compare the two analyst reports I came across that were issued in response to this PR. Both Scotia and BMO mentioned the slight earnings beat,the reiterated annual guidance, and the coming start of production at Halle underground. Both raised their target to $4.25, with BMO rating them at Outperform and Scotia at Sector Outperform. That's consensus...
And then I came across Sctoia's response, which makes the same points and keeps OGC at Sector Outperform with a target of $4.25. Yet more consensus!
West African gold producer Endeavour Mining aka EDV released its Q1 financial results. We already knew their production results, which were largely as expected, down a bit from Q4 but expected to get stronger through the rest of the year. As a result, EBITDA and cash flow were both down compared to Q4, but once the accountants had done their adjustments, net earnings were up. Their cash stash dropped to a still healthy $810M, primarily because they spent $100M on dividends, $11M on share buybacks (which I expect will drop off given how the share price has been rising of late), and $330M buying back a convertible bond.
As well, EDV is continuing an extensive exploration programmes, both greenfield and brownfield. In terms of immediate growth, the Sabodala-Massawa expansion the Lafigué greenfield project are both on budget, with 70% and 46% of the initial capital committed respectively, and on schedule to begin production in Q2-2024 and Q3-2024 respectively.
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