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Endeavour Mining (LSE:EDV), the FTSE 100 West African gold miner is proving to be… wait for it… something of a gold mine at the moment. Since the start of 2025, its share price has risen 134% on the back of soaring precious metals prices. During this period, an ounce of gold has increased in value by 60%. Imagine a business where your bottom line’s going up without having to sell more or cut costs. That’s Endeavour Mining.
Then and now
However, it hasn’t always been like this. Gold is on a strong rally due to increased global economic uncertainty. It’s seen as a ‘safe haven’ and a reliable store of value. The metal’s now changing hands for nearly $4,200 an ounce. But as little as three years ago, it was trading at $1,500, having more than halved during the previous 22 months.
In those days, like all gold miners, Endeavour was having to produce more just to stand still. Things are very different now. And to try and capitalise on these good times, the group’s been increasing its output.
During the first six months of 2025, it produced 38% more than in the same period in 2024. A winning combination of higher prices, more output and stable costs has resulted in an EBITDA (earnings before interest, tax, depreciation and amortisation) of $1.13bn — some 226% higher than in the first half of 2024.
And I’m sure shareholders will be delighted with the latest forecast from the Bank of America. Its analysts are predicting that gold will reach $5,000 an ounce in 2026. However, it’s warning of a “near-term” correction. Similarly, Goldman Sachs has a target of $4,900 by the end of next year.
But not everyone agrees. HSBC’s predicting little change in the spot price over the next two years. Although nobody knows for sure, the consensus appears to be that it’s unlikely to fall back sharply. And this can only be good for Endeavour’s earnings and cash flow.
Pros and cons
However, mining is one of the most dangerous industries around. Companies in the sector are also vulnerable to production shutdowns for a variety of reasons including strikes, terrorism and the weather.
Significantly, the group’s operations are located in countries (Senegal, Cote d’Ivorie and Burkina Faso) that have a reputation for political instability. Unexpected increases in tax rates and volatile currencies could affect earnings. Worse, nationalisation of the group’s assets cannot be ruled out.
But Endeavour’s been around since 1988 and has overcome these challenges before. It also has one of the lowest all-in sustaining costs of any major producer. The group claims only three major gold miners can extract the precious metal cheaper. This means it’s better placed than most to cope should (when?) the gold price start to fall back.
It also has plenty of reserves. The company estimates that there’s proven — and probable — gold in its mines equivalent to nearly 23 times its 2024 production. This bodes well for its long-term earnings.
On balance, I think Endeavour Mining’s a stock worthy of further consideration. The current trend appears to be towards more financial uncertainty – not less – which means gold should continue to shine.
