To estimate Endeavour Mining's potential stock price if gold reaches $4,000 per ounce, we can follow these steps: Step 1: Project Revenue at $4,000 Gold Current Production : 1.2 million ounces Projected Revenue : Revenue=Production×Gold Price=1,200,000 oz×4,000 USD/oz=4,800,000,000 USD\text{Revenue} = \text{Production} \times \text{Gold Price} = 1,200,000 \, \text{oz} \times 4,000 \, \text{USD/oz} = 4,800,000,000 \, \text{USD}Revenue=Production×Gold Price=1,200,000oz×4,000USD/oz=4,800,000,000USD Step 2: Estimate Costs Assuming all-in costs remain at approximately $1,400 per ounce: Total Costs=Production×All-in Costs=1,200,000 oz×1,400 USD/oz=1,680,000,000 USD\text{Total Costs} = \text{Production} \times \text{All-in Costs} = 1,200,000 \, \text{oz} \times 1,400 \, \text{USD/oz} = 1,680,000,000 \, \text{USD}Total Costs=Production×All-in Costs=1,200,000oz×1,400USD/oz=1,680,000,000USD Step 3: Calculate Free Cash Flow (FCF) FCF=Revenue−Total Costs=4,800,000,000−1,680,000,000=3,120,000,000 USD\text{FCF} = \text{Revenue} - \text{Total Costs} = 4,800,000,000 - 1,680,000,000 = 3,120,000,000 \, \text{USD}FCF=Revenue−Total Costs=4,800,000,000−1,680,000,000=3,120,000,000USD Step 4: Valuation Based on Free Cash Flow Assuming a conservative multiple of 10x free cash flow for valuation: Market Cap=FCF×Multiple=3,120,000,000×10=31,200,000,000 USD\text{Market Cap} = \text{FCF} \times \text{Multiple} = 3,120,000,000 \times 10 = 31,200,000,000 \, \text{USD}Market Cap=FCF×Multiple=3,120,000,000×10=31,200,000,000USD Step 5: Calculate Stock Price To find the stock price, divide the market cap by the total shares outstanding. Assuming there are approximately 200 million shares outstanding (a rough estimate based on industry standards): Stock Price=Market CapShares Outstanding=31,200,000,000200,000,000=156 USD\text{Stock Price} = \frac{\text{Market Cap}}{\text{Shares Outstanding}} = \frac{31,200,000,000}{200,000,000} = 156 \, \text{USD}Stock Price=Shares OutstandingMarket Cap=200,000,00031,200,000,000=156USD Conclusion If gold reaches $4,000 per ounce, Endeavour Mining could potentially see its stock price rise to approximately $156 per share, given the assumptions about costs and production levels.
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