Endomines - Year ends with a resource increase

Korvilansuo resources increased by 307%

Endomines reported updated mineral resource estimate for its Korvilansuo deposit situated in the Karelian Gold Line, roughly 20 kilometers south of Pampalo mine. The updated mineral resources include 838 kt @2.49 g/t Au for 67,200 ounces of contained gold. Previously, Korvilansuo deposit hosted 256 kt @ 2.00 g/t Au for 16,500 ounces. The updated resource estimate therefore increases ore tonnes by 227% and gold ounces by 307% as the grade of the new findings exceeds that of the old resources.

Multiple adjustments into our estimates and SOTP model

The estimate update represents a notable increase to the company’s resource base in the Karelian gold line. We have included the new resources into our real option model for the Karelian Gold Line satellite deposits. One of the company’s operational goals is to have a partnership agreement in the US by the end of 2023, as there has been no news on the subject, we have revised our estimate for the value downwards. Our current estimate for the US asset value is roughly in line with the current balance sheet value (Idaho 24m USD, Montana 12m USD). Additionally, we made updates to our operational estimates. With the changes, we now estimate revenue of EUR 21.3m (prev. EUR 20.8m) and EBITDA of EUR 1.1m (EUR 0.9m) for FY 2023. We have also increased Pampalo's production forecasts for the coming years as financing for initiating production from Hosko deposit has been secured.

HOLD with a TP of EUR 4.7

We maintain our valuation at the lower end of our SOTP-based valuation range. The positive adjustments for Pampalo and Karelian Gold Line are offset by negative adjustments to the value of the company’s US assets. We also see that the company may require further financing for exploration activities in 2024 depending on the planned scale. We keep our rating and TP unchanged at HOLD with a TP of EUR 4.7.