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Endeavour Mining 1Q revenue soars on higher output, gold prices

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(Kitco News) -Endeavour Mining (TSX: EDV) reversed to a profit in the first quarter as revenues rose by 78%, helped by both stronger production and a higher price of gold, the company announced Wednesday.

Endeavour, which in March agreed to acquire SEMAFO Inc., listed adjusted net earnings of $34 million, or 30 cents a share. This was a turnaround from an adjusted loss of $5 million, or 4 cents, in the first quarter of 2019.

Net earnings were $26 million, compared to a year-ago loss of $15 million.

Revenue jumped to $270 million from $151 million a year ago. The average realized gold price climbed to $1,546 an ounce from $1,252.

The company said its first-quarter output of 172,000 gold ounces at all-in sustaining costs of $899 an ounce leaves it positioned to meet 2020 guidance. The first-quarter output was a year-on-year increase of 42%, which Endeavour said was driven by the start-up of the Ity CIL operation.

“To date, our operations have not been significantly impacted by COVID-19,” said Sébastien de Montessus, president and chief executive officer. “We have implemented a business continuity plan and are working very closely with host governments to support a coordinated response in the communities where we operate. In the few instances where we had positive cases, those individuals are fully recovered and have returned to work.”

Endeavour listed record operating cash flow of $126 million in the first quarter, a five-fold increase from the year-ago period.

Net debt was reduced by $55 million to $473 million, which the company said means a reduction of $187 million over the past three quarters, following nearly four years of intensive growth-capital investment. Cash reserves stood $357 million at quarter-end.

The company’s chief executive said Endeavour is “well advanced” in planning to integrate its operations with those of SEMAFO. A shareholder meeting on the SEMAFO acquisition is scheduled for May 28, and the company said it expects the transaction to close in late June.

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