Endeavour Mining Share Discussion Threads

[energyi] 19/10/2005 06:45

12 CORE POSITIONS- what are they??

"The merchant banking transactions (excluding the early stage opportunities) consisted of approximately 12 core positions which generated approximately 53% of total investment income"

(and from the above article):
To be more specific I've extracted EDV's Core Merchant Banking Positions from their 2004 annual and included a $2,5M position in AV.V announced in January:

= = =
Endeavour. /EDV.t : Gold Bugs. / $HUI : Bema Gold / BGO-- : Goldcorp.. / GG-- : Silver Wht./ SLW- :

Adobe Ven. / AV.v : BolivarGld /BGO.t : CenturyMn / CMM.v : No. Orion / NNO.t : Vista Gold / VGZ- :

[energyi] 19/10/2005 06:36

12 CORE POSITIONS- what are they??

"The merchant banking transactions (excluding the early stage opportunities) consisted of approximately 12 core positions which generated approximately 53% of total investment income"

- -

Here's a link to a write-up on EDV, I suggest you read it:



Basically EDV is a cheap way to go long on metals and mining since the stock is selling at about a 30% discount from its Net Asset Value, or the value of the investments it holds in its portfolio. The discount to NAV might partly be explained by the hefty fees paid to EDV's investment advisors (or portfolio managers if you will) Endeavour Financial. In 2004, the fee was $3M on assets of $75M and in 2003 the fee was $4M on assets of $45M. The fee is two-tiered: 1) an investment advisory fee, calculated as 2% on the first $50 million of net assets, 1.5% on the next $50 million of net assets, and 1% on net assets in excess of $100 million, payable as to 1/12th monthly. 2) The investment advisor also receives an annualized performance fee of 20% of the Corporation¡¦s net income from operations in excess of a 15% return on the weighted average Shareholders¡¦ Equity during the fiscal period. Notice that this fee structure is a lot like a hedge fund, although this alone is no guarentee that the advisory services add any value to EDV, it is nevertheless an indicator that EDV believes that this is the case. Indeed two distinguishing traits of Endeavour Financial compared to your typical mutual fund managers are 1) They invest a lot in private opportunities, hence acting a lot more like a VC firm, with an intimate (EDV sits on the board of 40% of its invetsments) and specific knowledge of the junior mining industry and 2) an active investment approach with a high turnover of assets (in 2004 EDV sold $44M worth of its portfolio and invested $55M worth in new opportunities).

Ok now that I've set the context EDV sits in, let me explain why I believe there might be a short-term opportunity here with a potential upside of 10-15% to be earned in just a few days (I've been long this stock for a while but intend to doubel my position this week - you can play it however you want, short term trade or long term)

The company publishes its Net Asset Value (NAV) on its website every month (7-14 days from end of month) and I believe that EDV will report an increase in NAV in the range of 20-25% for February, something that EDV's stock has failed to discount (at least entierly) since its stock is up only 10% since the beginning of the month. Furthermore considering EDV's high volatility I believe a small position could be established at 3.45 -3.50$ (5% below current levels) within the week.



How exactly do I know that? Well as might be expected, EDV's share price will be strongly correlated to the performance of its investments; furthermore the market's expectations as to its "present" and future performance will stick closely to that of the sector of investments it is weighted in. Originally EDV was strongly invested in Gold and other precious metals, and EDV's performance in 2003 mirrored closely that of the Phily Gold and Silver Index ^XAU



To this day EDV is strongly weighted in Gold and Precious Metals stock (in their 2004 annual report they again provide the XAU index as a backdrop for analysis), however in 2004 EDV has likely diversified its holdings to include more base/industrial metals and mining stocks, as evidenced by their annual reports for the last 2 years (I included excerpts at the end of the write up). Furthermore I do not believe that the ^XAU index ever was an appropriate framework for EDV since the latter has a strong focus on junior mining companies, which are inherently more risky and hence offer better returns on a sector bull market than their XAU counterparts. I believe that a better framework is the S&P/TSX CANADIAN MINING INDEX, ^GSPTTMN, although EDV's portfolio is only 20% weighted in North American stocks, I believe that the smaller and more diversified nature of ^GSPTTMN's components more closely reflects EDV's current portfolio. This is evidenced by the close correlation of EDV to that index in the past 2 years:



In February the ^GSPTTMN index has rallied 25% (mainly because of a broad rally in industrial metals while the gold index has only rallied 8%, mirroring EDV's roughly 10% appreciation sicne February)

To be more specific I've extracted EDV's Core Merchant Banking Positions from their 2004 annual and included a $2,5M position in AV.V announced in January:Here is the Performance for the month of February

February January December 12Months Jan03-04:

BGO.TO: 5% 0% (13%) 68%

BGC.TO: 50% (13%) (10%) 150%

CMM.V: 15% (13%) (4%) 10%

NNO.TO 8% 14% 1% 27%

SLW.TO 25% (8%) (1%)

WRM.TO 4% 6% 0% 20%

AV.V: 25%


Average Return 19% (2.5%) (4.5%) 50%

EDV NAV: ? (0.005%) (2.5%) 0%

^GSPTTMN 24% 1% 2% 25%


I do not know to what extent these positions are representative of EDV's portfolio because the weights of these investmenst arent provided. However I note that 4 of the 6 were also mentionned as core merchant banking positions in 2003 (hence 2 positions were initiated sometime in 2004, these are CMM.V and SLW.TO ), 75% of the 2003 portfolio was turned over in 2004 and two major positions were shed at some point during the year GGG.TO (down 40%) and OXS.L (down 20%).You can draw your own conclusions from the relative performance of the portfolio to that of EDV's NAV. However I believe that the portfolio as it was announced in the annual report which came out last month could be very relavant as it is up to date and could make up 50-60% of the publicly traded securities which are used in the NAV calculation

I intend to buy 2000 more shares at 3.45 in the next 7 days hence doubling up my position. Also the chairman purchased 20,000 shares in the open market at 3.40$ on February 11th, he had no holdings previously.


...MORE:

[energyi] 19/10/2005 06:21

ENDEAVOUR MINING CAPITAL ANNOUNCES 2005 YEAR-END RESULTS
Earnings of US$24.9 million Return on Equity of 34%

George Town, October 17, 2005
Endeavour Mining Capital Corp. (¡§Endeavour¡¨ or ¡§Corporation¡¨) recorded net income of US$24.9 million or US$1.08 per share (or approximately CDN$1.28 per share) for the year ended August 31, 2005. This compares with net income of US$14.7 million or US$0.68 per share (or approximately CDN$0.89 per share) recorded for the year ended August 31, 2004.

The Corporation¡¦s performance during fiscal 2005 continued to build on our previous three years results and further demonstrates our ability to generate strong earnings and growth. During fiscal 2005, total investment income was US$31.3 million which compares to US$19.1 million during fiscal 2004. The Corporation¡¦s merchant banking business strategy remains highly profitable and generated a return on equity of 34% for the year, which compares to a 26% return during fiscal 2004, with our 2005 return being generated from a significantly larger net asset base relative to 2004.

As of August 31, 2005, the Corporation¡¦s investment capital base was US$97.1 million or US$4.19 per share (or approximately CDN$4.99 per share) which compares to US$73.5 million or US$3.18 per share (or approximately CDN$4.17 per share) as of August 31, 2004. As of September 30, 2005, the Corporation¡¦s net asset value was US$4.80 per share (or approximately CDN$5.58 per share).

Within its merchant banking portfolio, the Corporation has established a sub-set regarded as early stage opportunities. These early stage opportunities are generally defined as investments made during the formative stages of a new business, as it is developing its business plan and building its asset base. These are differentiated from other merchant banking transactions, which generally involve investments into cash flowing or near-cash flowing companies. During fiscal 2005, the Corporation generated investment income from approximately 10 early stage opportunities and these investments generated approximately 35% of total investment income.

The merchant banking transactions (excluding the early stage opportunities) consisted of approximately 12 core positions which generated approximately 53% of total investment income. Collectively, merchant banking activities generated approximately 88% of total investment income.

Endeavour Mining Capital Corp. is a publicly traded merchant banking company focused on the global natural resources sector. The Corporation offers a unique combination of financial and intellectual capital to help build companies and create shareholder value. Our shares are listed on the Toronto Stock Exchange under the symbol EDV and offer a distinctly different way to invest in the natural resources sector.

...MORE/ Figures:

[energyi] 29/9/2005 17:49

ENDEAVOUR MINING CAPITAL - ACQUISITION OF ADOBE SHARES

Endeavour Mining Capital Corp. has acquired 1.35 million common shares of Adobe Ventures Inc. through public transactions at a price of 35 cents per common share.

Following this acquisition, Endeavour will hold a total of 4,963,500 common shares of Adobe, representing approximately 19.9 per cent of the 24,901,378 common shares currently issued and outstanding. The common shares are being acquired by Endeavour for investment purposes only. Endeavour has no present intention of acquiring other securities of Adobe or disposing of any of the securities of Adobe it holds. Depending on its evaluation of Adobe's business, financial condition, the market for Adobe securities, general economic conditions and other factors, Endeavour may acquire additional securities of Adobe or sell some or all of the securities it holds (subject to compliance with any applicable hold periods under securities laws).

[energyi] 22/9/2005 15:16

--DATE--: Price- --NAV-- -Disc. -HUI--, Ratio:HUI/NAV EDV/Hui ASA EDV/A
10/06/05: C$3.60 C$5.79E -37.8% 237.40, 41.00 Est.... 1.51% 45.80 7.86%
09/22/ID: C$3.57 C$5.75A -37.9% 236.71, 41.17 Est.... 1.51% 45.15 7.91%
08/31/05: C$3.13 C$5.04A -37.9% 205.99, 40.87 Actual. 1.52% 38.80 8.07%
07/29/05: C$2.81 C$4.69A -40.1% 196.77, 41.96 Actual. l.43% 37.62 7.47%
06/30/05: C$2.67 C$4.69A -43.1% 201.56, 42.98 Actual. 1.32% 38.82 6.88%

[karzy] 03/9/2005 20:52

Commodity boom to continue?

[alan greenspan] 30/8/2005 19:29

energyi
Of the 150 posts on this thread you have posted HOW MANY?
You appear to be talking to yourself

a.g.

[energyi] 30/8/2005 17:10

--DATE--: Price- --NAV-- -Disc. -HUI--, Ratio:HUI/NAV EDV/Hui ASA EDV/A
08/30/05: C$2.95 C$4.77E -38.2% 200.53, 42.00 Est.... 1.47% 37.93 7.78%
07/29/05: C$2.81 C$4.69A -40.1% 196.77, 41.96 Actual. 1.43% 37.62 7.47%
06/30/05: C$2.67 C$4.69A -43.1% 201.56, 42.98 Actual. 1.32% 38.82 6.88%
05/31/05: C$2.48 C$4.48A -44.6% 185.78, 41.46 Actual. 1.33% 36.44 6.90%

[energyi] 18/8/2005 16:29

STOCKHOUSE COMMENTS

1/
SUBJECT: Buybacks Posted By: JJR19989
Post Time: 8/8/05 12:29

Buybacks are not done in a vacuum. If Endeavor can invest funds with better IRR's than a buyback will produce, they should invest accordingly. Buybacks, though, at these huge discounts to NAV are a huge hurdle rate for any new investment to surmount. On a per share basis, (which is really the way to look at this from OUR point of view), it's tough to see how buying their own portfolio at a deep discount is not better than placing funds in new investments.

I think they should issue a PR stating that buybacks will be done any time the discounts widens beyond 25%. Buying at such prices would create real value for existing shareholders. NAV/share would continue to rise producing a virtuous cycle of value accretion. I'd have much less problem with a deep discount if I knew the company was actively buying shares at those prices...in fact, I'd welcome it!

Unfortunately, this won't come to pass until management is compensated accordingly. A larger asset base means more fees for them, so it's not in their long-term best interest to think along the lines of buybacks and increasing shareholder value. We have to align what's in our best interest with what's in their best interest, which will require them to actually care about the stock price. They are tremendous operators who have done wonderfully, but they don't own a lot of stock. Management takes part in the private placements along with EDV, but it's an indirect form of ownership from our perspective. I'd much prefer them buying EDV's stock to enjoy those private placement benefits.

Jim


2/

[energyi] 18/8/2005 16:23

thanks for your comments... EDV goes ex-dividend on 8/16:
"cash dividend of CDN$0.035 per share, payable on August 31, 2005 to shareholders of record at the close of business on August 16, 2005."
see that the 20 day moving average currently at 2.81

@:

[energyi] 18/8/2005 16:20

Endeavour Mining acquires 1.35 million shares of Adobe

2005-01-07 15:18 ET - News Release

See News Release (C-EDV) Endeavour Mining Capital Corp


Mr. Bill Koutsouras of Endeavour reports

ENDEAVOUR MINING CAPITAL - ACQUISITION OF ADOBE SHARES

Endeavour Mining Capital Corp. has acquired 1.35 million common shares of Adobe Ventures Inc. through public transactions at a price of 35 cents per common share.

Following this acquisition, Endeavour will hold a total of 4,963,500 common shares of Adobe, representing approximately 19.9 per cent of the 24,901,378 common shares currently issued and outstanding. The common shares are being acquired by Endeavour for investment purposes only. Endeavour has no present intention of acquiring other securities of Adobe or disposing of any of the securities of Adobe it holds. Depending on its evaluation of Adobe's business, financial condition, the market for Adobe securities, general economic conditions and other factors, Endeavour may acquire additional securities of Adobe or sell some or all of the securities it holds (subject to compliance with any applicable hold periods under securities laws).

[energyi] 03/8/2005 17:08

Net Asset Values, Historical
--DATE--: Price- --NAV-- -Disc. -HUI--, Ratio:HUI/NAV EDV/Hui ASA EDV/A
08/03/05: C$2.90 C$4.86E -40.3% 209.14, 43.00 Est.... 1.39% 38.80 7.47%
07/29/05: C$2.81 C$4.8-E -40.-% 196.77, 43.00 Est.... 1.43% 37.62 7.47%
07/11/05: C$2.85 C$4.77E -40.3% 205.01, 43.00 Est.... 1.39% 39.38 7.24%
06/30/05: C$2.67 C$4.69A -43.1% 201.56, 42.98 Actual. 1.32% 38.82 6.88%

[energyi] 11/7/2005 21:34

Endeavour Mining Capital - Third quarter results
6/28/05

GEORGE TOWN, Grand Cayman, Jun 28, 2005 (Canada NewsWire via COMTEX) --
Endeavour Mining Capital Corp. ("Endeavour" or "Corporation") recorded a net loss of US$12.2 million or US$0.53 per share (or approximately CDN$0.67 per share) for the third quarter ended May 31, 2005. This compares with a net loss of US$5.8 million or US$0.25 per share (or approximately CDN$0.34 per share) reported for the quarter ended May 31, 2004.

As of May 31, 2005, the net asset value per share was US$3.57 (or approximately CDN$4.48). During the third quarter, the Corporation realized gains on investments of US$2.8 million and generated interest, dividend and fee income of US$0.5 million, however, these gains were offset by unrealized losses on investments held of US$17.4 million. During the third quarter the resource equity markets experienced a sharp decline, which had an impact on the carrying value of several of our investments. The fundamental value of our merchant banking positions remains strong and well positioned for future growth. Management accounts indicate that during June 2005 the Corporation generated investment gains of approximately US$7.5 million to bring the net asset value per share to approximately CDN$4.73 as of market close on June 21, 2005.

For the nine-month period ended May 31, 2005, the Corporation recorded net income of US$9.7 million or US$0.42 per share (or approximately CDN$0.53 per share). This compares with net income of US$18.7 million or US$0.88 per share (or approximately CDN$1.20) reported for the nine-month period ended May 31, 2004.


...MORE Figures:

[energyi] 17/6/2005 21:04

At a 43.5% discount to NAV,
EDV is bl@@dy cheap again !

[energyi] 25/3/2005 09:45

Silver Wheaton's chart, SLW.TO is an EDV core position:


During fiscal 2004, several of our merchant banking investments matured, and certain of these holdings were realized, in whole or in part. We nonetheless retain core merchant banking positions in Bema Gold, Bolivar Gold, Century Mining, Northern Orion, Silver Wheaton and Wheaton River Minerals, among others.

[energyi] 25/3/2005 09:41

TWO Charts

[energyi] 18/3/2005 17:45

Update:

--DATE--: Price- --NAV-- -Disc. -HUI--, Ratio:HUI/NAV EDV/HUI
03/17/05: C$3.58 C$5.02E -28.7% 218.26, 43.50 Est.... 1.64%
02/28/05: C$3.73 c$5.06A -26.3% 215.32, 42.55 Act.... 1.73%
02/04/05: C$3.14 C$4.29E -26.8% 197.39, 46.00 Est.... 1.59%
01/31/05: C$3.22 C$4.38E -26.5% 201.57, 46.00 Est.... 1.60%
01/13/05: C$3.33 C$4.44E -25.0% 204.25, 46.00 Est.... 1.63%
01/06/05: C$3.17 C$4.36E -27.2% 200.46, 46.00 Est.... 1.58%

Note: Div. of 3.5 Cents paid after Feb.28th Close

[energyi] 04/2/2005 20:16

Endeavour Mining declares 3.5-cent semi-annual dividend

2005-02-01 13:49 ET - News Release
Mr. Bill Koutsouras reports

ENDEAVOUR MINING CAPITAL -- DECLARES SEMI-ANNUAL DIVIDEND

Endeavour Mining Capital Corp. has declared a cash dividend of 3.5 cents per share, payable on Feb. 28, 2005, to shareholders of record at the close on Feb. 11, 2005. The corporation's board maintains a policy of paying a semi-annual dividend.

[energyi] 14/1/2005 22:48

Results were AHEAD of expectations, which is why EDV is climbing
in a boring gold market

[energyi] 14/1/2005 22:33

ENDEAVOUR MINING CAPITAL - FIRST QUARTER RESULTS

Endeavour Mining Capital Corp. has recorded a net income of $19.8-million (U.S.), or 86 U.S. cents per share (or approximately $1.02 per share), for the first quarter ended Nov. 30, 2004. This compares with net income of $26.9-million (U.S.) or $1.54 (U.S.) per share (or approximately $2 per share), reported for the quarter ended Nov. 30, 2003. The corporation's continued profitable financial performance reflects the strength of its growing merchant-banking business, where it is providing financial and intellectual capital to a growing list of clients.

The corporation reported total investment income of $22.6-million (U.S.) for the first quarter, with operating expenses of $2.8-million (U.S.), leading to an operating margin of 88 per cent during the period. The corporation captured $11.7-million (U.S.) of realized gains, interest, loan fees and dividends, and recorded unrealized gains of $10.9-million (U.S.) during the quarter. During the first quarter, the corporation's merchant-banking positions continued to perform well and certain of these holdings were liquidated.

As of Nov. 30, 2004, the corporation's investment capital base has grown to $93.3-million (U.S.) (or approximately $4.79 (U.S.) per share), which gives it the financial resources to augment the company's business strategy to take advantage of growth opportunities in a broader range of natural resource sectors. The core merchant-banking positions remain based on metals and a number of special situations in coal, platinum, and oil and gas have been recently added.