Modern Mining: Featured News

Fresh from its highly successful commissioning of the Houndé gold mine in Burkina Faso, TSX-listed Endeavour Mining is already well into the construction phase of its US$412 million Ity CIL project in Côte d’Ivoire. The project will breathe new life into the country’s oldest active gold mine, transforming it from a 950 kt/a heap leach operation that was nearing the end of its life into a 4 Mt/a CIL operation with at least a 14-year mine life ahead. The ‘new’ Ity will rank as a flagship asset for Endeavour.

Currently Ity is a relatively modest gold producer, with annual production running at approximately 75 000 to 80 000 ounces a year. Once the CIL project is commissioned in mid-2019, this will increase roughly threefold, with production expected to be 235 000 ounces a year over the first five years of operation at an excellent All-in Sustaining Cost (AISC) of under US$500/oz. Houndé will have a similar level of production over its first four years of operation and the two mines will become the twin flagships of the Endeavour Mining group, a title held until now by Agbaou, also located in Côte d’Ivoire, which is a 175 000 to 180 000 ounces-a-year producer.

           A recent view of the Ity CIL site with earthworks underway.

The gold mineralisation at Ity, located 480 km north-west of Côte d’Ivoire’s economic capital, Dakar, was discovered in the 1950s but it was not until the early 1990s that a commercial mine was established at the site, the developers and owners of the operation being France’s BRGM and the Côte d’Ivoire government. Since the first gold was poured in 1991, the mine has been in near-continuous operation and has produced more than 1,2 Moz.

Ity became part of the Endeavour Mining group in 2015, when Endeavour announced a partnership with La Mancha Holding, a privately-held gold investment company controlled by the Sawiris Family, headed by Egyptian billionaire Naguib Sawiris. In terms of the transaction and putting it in its simplest terms, Endeavour acquired La Mancha’s indirectly held 55 % interest in Ity with La Mancha in return becoming a 30 % stakeholder in Endeavour. La Mancha also contributed US$63 million in cash to Endeavour. Since this initial investment, La Mancha has injected a further US$200 million to support Endeavour’s growth. Sébastien de Montessus, the then CEO of La Mancha, became President of Endeavour in late 2015 and CEO in mid-2016.

Prior to the Endeavour transaction, La Mancha was already investigating a CIL operation at Ity, completing a Pre-Feasibility Study (PFS) on a 2 Mt/a project. In November 2016 Endeavour announced the results of a positive Feasibility Study (FS) defining a 3 Mt/a CIL operation able to produce 165 koz/a over its first five years of operation.

The company said at the time that the project had plenty of upside potential, given the ongoing exploration at Ity and the excellent results being achieved. This in fact proved to be the case and in late July 2017 Endeavour was able to announce that the indicated resource inventory for the CIL project had increased by 1,5 Moz (plus 65 %) compared to the inventory on which the 2016 FS was based. In view of this massive expansion of the resource base, Endeavour said it was working on an Optimisation Study (OS) designed to better capture the value created by the exploration success.

The very robust results from the OS were published in September last year, with Endeavour Mining further increasing the plant size to 4 Mt/a and confirming at the same time that the project had entered the construction phase following board approval. The company said that its in-house construction team was being transitioned over from Houndé to Ity and that it expected a 20-month construction with the first gold pour taking place in mid-2019.

Outlining the synergies with other Endeavour operations, Jeremy Langford, Endeavour’s COO, said: “We have optimised the Ity CIL project by maximising the construction and operational synergies between Agbaou, Houndé and Ity, and by leveraging the same designs, components, equipment and spare parts where possible from one project to the other, along with incorporating our extensive construction expertise. The construction team is excited to transition from Houndé to Ity and to continue to build on its construction track-record.”

The “track-record” referred to by Langford includes the construction of both the Agbaou and Houndé mines under budget and ahead of schedule, with Agbaou having entered commercial production in early 2014 and Houndé on 1 November 2017. Both, remarkably, were built without a single LTI being recorded. Successful as Agbaou’s start-up was, Houndé seems to have done even better, with commercial production being achieved two months early and with a saving of US$15 million being achieved on the initial US$328 million budget. The mine is currently running at nameplate capacity with all key parameters in line with the DFS.

According to the OS, at a gold price of US$1 250/oz, the Ity CIL project delivers an after-tax IRR of 40 % (compared to 36 % in the FS) and an after-tax NPV5% of US$710 million (a 73 % increase on the US$411 million of the FS). Average annual gold production over the first five years has increased by 42 % over the FS figure to 235 koz while the AISC has decreased by 3 % to US$494/oz. Average annual production over the first 10 years has increased by 51 % to 204 koz and AISC has decreased by 2 % to US$549/oz. The mine life has increased by plus 4 % from 13,7 years to 14,3 years.

As envisaged in the OS, mining for the Ity CIL project will be undertaken by an owner-operated mining fleet using 90-tonne haul trucks with seven pits to be mined over the life of mine at an average strip ratio of 1,9 (waste to ore). A maximum mining movement of 16 Mt a year with a vertical advance rate of approximately 40 m a year is envisaged. Whereas previously the mining period was nine years followed by the processing of stockpiled low-grade ore for another five years, the current mine plan is based on 12 years of mining followed by the processing of stockpiled low-grade ore for another two years. The overall grade profile declines gradually over the life of mine as higher-grade deposits such as Bakatouo, Daapleu and Mont Ity/Flat are mined upfront.

The mining fleet contract has been awarded to Komatsu to benefit from synergies relating to minimising spare parts inventory and maintenance costs, as both Houndé and Endeavour’s Karma mine (also in Burkina Faso) have similar fleets.

The plant comprises a single-stage primary crushing circuit and a two-stage SAG (with pebble crusher recycle)/ball milling in closed circuit with hydrocyclones to produce a P80 grind size of 75 micrometres. A gravity concentrator and Intensive Leach Reactor (ILR) have been included in the design as per the FS. The CIL circuit comprises eight CIL tanks containing carbon for gold and silver adsorption with oxygen sparged from two 25-tonne PSA oxygen plants and an 18-tonne split Anglo (AARL) elution circuit. Electrowinning and induction furnace smelting complete the gold doré production process.

A cyanide detoxification and arsenic removal circuit is included in the process facility design, for treatment of process residue before discharge to the fully-lined 57 Mt Tailings Storage Facility (TSF), locate­­d adjacent to the processing facility. Feed water for the processing facility will come from various sources such as pit dewatering bores, the Cavally River (for make-up) and decant return from the TSF.

The processing plant is similar in design to Houndé, with identical ball and mill designs. Among key changes from the FS design are the addition of a high-speed 20 MW diesel backup power station, an upgrade in the crusher (it will be a C160 from Metso), an increase in the diameter of the pre-leach thickener to 38 m, an increase in the number of CIL tanks from six to eight, and an increase in detox and arsenic destruction capacity to control significant Cu and As in the ore. Reagent mixing/storage capacity has also been increased.

Apart from the higher production due to the fourfold increase in throughput, advantages of the CIL plant compared to the current heap leach facility include lower processing costs, higher recovery rates on oxide ore, and the ability to process a range of ore types. Endeavour is currently anticipating that the heap leach operation will be discontinued once the CIL plant is commissioned.

In terms of progress, Lycopodium (the lead engineer on the FS and the OS) has been appointed as the EPCM contractor, a role which it also fulfilled at Houndé. Long-lead items have been ordered and US$116 in spend had already been committed as at mid-November. Current work on site is concentrating on bush clearing and process plant earthworks and is reportedly progressing well.

Along with Houndé, the Ity CIL project is key to Endeavour’s plan to grow its annual production to plus 800 koz/a of gold at a group AISC of under US$800/oz by 2019 (with mine lives at all its operations of over 10 years). Beyond Ity CIL, Endeavour’s next ‘build’ will almost certainly be Kalana in Mali, which it acquired in 2016 from Avnel. A feasibility study on the project was completed by Avnel and is currently being optimised by Endeavour. Once developed, it will be a somewhat smaller mine than either Houndé or Ity CIL but nevertheless an attractive one, with an average annual production that is likely to be in the region of 150 000 oz/a.

Looking further out, Endeavour has one of the biggest exploration programmes in West Africa (it spends about US$40 million a year on this function) designed to not only increase reserves at its current mines but also identify new ‘greenfield’ projects. Given this commitment and the company’s already outstanding track record in exploration, there is a good chance that the Ity CIL project and Kalana will be followed by further new mines and certainly one would not be surprised to see the group’s annual production nudging – or even exceeding – the million-ounce-a-year mark within the next several years.

Report by Arthur Tassell, photos courtesy of Endeavour Mining.

Contact Modern Mining

Title: Editor
Name: Arthur Tassell
Email: mining@crown.co.za
Phone: +27 11 622-4770
Fax: +27 11 615-6108

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Name: Bennie Venter
Email: benniev@crown.co.za
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