Modern Mining: Featured News

Reporting on the year and quarter (Q4) ended 31 December 2017, TSX-listed Endeavour Mining, which operates several gold mines in the West African region, reports that full-year group production in 2017 increased by 12 % over the prior year to a record 663 koz, attaining the top half of its 630-675 koz guidance. AISC decreased by US$17/oz to US$869/oz, ending well within the guidance range of US$850 to US$895/oz.

The commissioning of the new Houndé mine lifted group production in Q4 by 38 % compared with Q3 2017 to 204 koz and decreased group AISC by 13 % to US$785/oz.

The mills at the new Houndé mine in Burkina Faso (photo: Endeavour Mining).

Endeavour says that project development remained a key focus in 2017 with the successful completion of the Houndé construction in October and the Karma plant optimisation in November, as well as the start of the Ity CIL construction in September.

Houndé, which will be a flagship mine for Endeavour, is located 250 km south-west of Ouagadougou in Burkina Faso. It is an open-pit operation served by a 3 Mt/a gravity/CIL plant. It was successfully built ahead of schedule and below budget, with its first gold pour occurring in October 2017 and commercial production announced on 1 November 2017. No LTIs occurred over the 7 million man hours worked during the construction period. It is expected to produce between 250 and 260 koz of gold in 2018 at an AISC of US$580 to US$630/oz.

The US$412 million Ity CIL project will transform the existing Ity mine, a 950 kt/a heap leach operation, into a 4 Mt/a CIL operation with a solid production of 235 koz/a expected over the first five years of a 14-year life. The first gold pour is expected in mid-2019.

Concrete works at the site are tracking well, with all eight ring beams and the SAG mill foundation pour complete and the ball mill foundation pour commencing. The Tailings Storage Facility (TSF) earthworks are progressing on schedule and are 15 % completed.

The Kalana project in Mali – acquired from Avnel – will likely be Endeavour’s next ‘build’ after the Ity CIL project. A feasibility study on the project was completed by Avnel and is currently being optimised by Endeavour with the results expected by year-end. Once developed, Kalana 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.

Apart from Houndé and Ity, Endeavour also operates the Tabakoto (Mali), Karma (Burkina Faso) and Agbaou (Côte d’Ivoire) mines.

Tabakoto was acquired by Endeavour in 2012 and is now a combined open-pit/underground operation. In 2018, production is expected to decrease to 115‑130 koz, mainly due to a decline in grade, and all-in sustaining costs are forecast to increase to US$1 200/oz-US$1 250/oz.

Karma is a 4 Mt/a open-pit/heap leach operation which achieved first gold production in 2016. In 2017 a new front-end and ADR plant were commissioned.

Agbaou is an open-pit mine which produced 177 koz in 2017. This was – as expected – less than the record 2016 performance of 196 koz, with the decrease being due to the mine starting to transition to harder material.

Commenting on the results, Sébastien de Montessus, Endeavour’s President and CEO, described 2017 as yet another strong year for the company. “We delivered against all key performance metrics, achieving record production of 663 koz, up 12 % over 2016, while continuing to successfully reduce our costs. Importantly, we were able to significantly increase our operating cash flow with the start-up of our flagship Houndé mine in the fourth quarter, which we commissioned ahead of schedule and under budget. We also continued to improve our portfolio quality with the sale of our non-core Nzema mine and the purchase of the Kalana project.

“2018 will be a year in which we continue to build on our strengths and achievements, with the construction of our Ity CIL project progressing on track and on budget and an updated feasibility study planned for Kalana later this year. Our aggressive exploration efforts will also continue as we aim to develop more greenfield projects to secure our longer-term growth pipeline. This year our focus on operational excellence and active portfolio management will continue, with a strategic decision regarding our Tabakoto mine to be made later in the year.

“Overall, I am very pleased with our strong performance and would like to thank our entire team for their dedication, focus and excellent delivery, as well as the Board for their support. 2018 will be a key year as we continue our transformation towards achieving our 2019 objective of annual gold production of above 800 koz at below US$800/oz AISC.”

Contact Modern Mining

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

Title: Advertising Manager
Name: Bennie Venter
Email: benniev@crown.co.za
Phone: +27 11 622-4770
Fax: +27 11 615-6108

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