Endomines - License to drill
Endomines reported Q1 figures that were on a record-level, although slightly weaker than anticipated mainly due to NRI’s. Expect a very interesting year ahead, as Endomines embarks on the biggest drilling campaign in its history.
Q1 figures slightly below expectations mainly due to NRI’s
Endomines reported its Q1 results, which overall were somewhat below what we had expected. Revenue of EUR 18.5m was well in line with our estimate (EUR 18.6m), with y/y growth of 77% aided by the clearly higher gold price and production growth. Pampalo EBITDA of EUR 11.6m was also in line with our expectations (EUR 11.4m), but adjusting for changes in inventory, the production OPEX was higher than anticipated. Cash cost in Q1 was EUR 1,481/oz, slightly above our estimate of EUR 1,450/oz. Group EBITDA amounted to EUR 8.8m (Evli EUR 10.3m), below our estimate mainly due to non-recurring items relating to the sale of US assets. With the CMD held in March, the Q1 report held little new information regarding on-going and future projects.
Largest drilling campaign in company history started
We have made some revisions to our estimates for 2026e mainly due to revised expectations for group costs, with our EBITDA estimate now at EUR 32.1m (prev. 37.8m). Our gold production estimate is intact at 19,653 ounces. The implied production guidance for 2026 is roughly 18,300-20,000oz. 2026 will be very interesting for the investment case, as Endomines embarks on the largest drilling campaign in the company’s history, planning to drill some 50,000 meters. Positive news regarding the defining of new gold resources remains key for the investment case. The implied potential of tungsten production is very interesting but still in a very early stage.
ACCUMULATE (BUY) with a TP of EUR 11.0
After adjustments made to our estimates, mainly through cost revisions, our SOTP equity value range is now at EUR 10.3-12.0 (prev. 10.9-12.7). We reiterate our target price of EUR 11.0, but downgrade our rating to ACCUMULATE (BUY) following recent share price increases.