Endeavour Silver Corp. - Precious Metals
Key arguments supporting the idea
Gold is currently trading above $2500, reflecting a 36% increase from its low point last October and a 23% rise since the start of the new bull run in late February. However, the market has yet to price-in these astronomical gold price levels with gold mining stocks. We conducted a thorough analysis of the gold mining landscape and came up with a list of the companies that have the most potential in the coming year in our view.
We evaluated gold mining companies based on three pillars: 1) their performance in the past year, 2) production growth expected in 2025, and 3) EBITDA margin going into 2025. With all three in mind, we decided to list the most undervalued stocks and came up with the following list.
Bull Thesis for Gold Miners
A rally in the gold prices has led to margin expansion for many of the players with some of them going into 2025 with a secured EBITDA margin of nearly 90% (for royalty companies), and 60-70% (for those miners with an AISC of less than $800 per ounce).
A rally has fast forwarded many of the projects under construction phase, prompting miners to enjoy the fruitful seasoning with ingredients such as high price, government support and a decrease in interest rates.
While we may be worried that there’s little room left for expansion in the gold pricing, it does little to affect gold miners, who’re willingly secure future gold sales at currently elevated forward prices, ensuring them hefty margins years in advance.
Business Overview
Endeavour Silver is a mid-tier precious metals mining company primarily focused on the production, development, and exploration of silver and gold properties in Mexico. The company operates three high-grade underground silver-gold mines: Guanaceví, Bolañitos, and El Compas. Endeavour Silver is known for its expertise in exploring and developing mineral assets, with a particular emphasis on silver, making it one of the leading silver producers in Mexico.
Endeavour Silver has a growth-oriented strategy that includes expanding its production capacity, optimizing its operations, and advancing its exploration projects, such as the Terronera Project, which is expected to become the company's next cornerstone asset.
The stock has materially declined from the $5 per share observed in July this year, signing a 35% decrease. The responding stock action was probably envigored by the 12% YoY silver production decline, which scared off some investors. It’s however undeniable that such an overreaction has no place in the market. Nonetheless, the consensus estimates points to an 82% increase in gold output next year, which would near the sales of the company to a $0.5 bn mark, that’s near the $0.7 bn market cap of the company today.
Gold is currently trading above $2500, reflecting a 36% increase from its low point last October and a 23% rise since the start of the new bull run in late February. However, the market has yet to price-in these astronomical gold price levels with gold mining stocks. We conducted a thorough analysis of the gold mining landscape and came up with a list of the companies that have the most potential in the coming year in our view.
We evaluated gold mining companies based on three pillars: 1) their performance in the past year, 2) production growth expected in 2025, and 3) EBITDA margin going into 2025. With all three in mind, we decided to list the most undervalued stocks and came up with the following list.
Bull Thesis for Gold Miners
A rally in the gold prices has led to margin expansion for many of the players with some of them going into 2025 with a secured EBITDA margin of nearly 90% (for royalty companies), and 60-70% (for those miners with an AISC of less than $800 per ounce).
A rally has fast forwarded many of the projects under construction phase, prompting miners to enjoy the fruitful seasoning with ingredients such as high price, government support and a decrease in interest rates.
While we may be worried that there’s little room left for expansion in the gold pricing, it does little to affect gold miners, who’re willingly secure future gold sales at currently elevated forward prices, ensuring them hefty margins years in advance.
Business Overview
Endeavour Silver is a mid-tier precious metals mining company primarily focused on the production, development, and exploration of silver and gold properties in Mexico. The company operates three high-grade underground silver-gold mines: Guanaceví, Bolañitos, and El Compas. Endeavour Silver is known for its expertise in exploring and developing mineral assets, with a particular emphasis on silver, making it one of the leading silver producers in Mexico.
Endeavour Silver has a growth-oriented strategy that includes expanding its production capacity, optimizing its operations, and advancing its exploration projects, such as the Terronera Project, which is expected to become the company's next cornerstone asset.
The stock has materially declined from the $5 per share observed in July this year, signing a 35% decrease. The responding stock action was probably envigored by the 12% YoY silver production decline, which scared off some investors. It’s however undeniable that such an overreaction has no place in the market. Nonetheless, the consensus estimates points to an 82% increase in gold output next year, which would near the sales of the company to a $0.5 bn mark, that’s near the $0.7 bn market cap of the company today.
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