Bold steps taken to ensure growth in West Africa

With the development of a strong project pipeline and exploration activities prioritised in the underexplored Birimian belt, in West Africa, gold miner Endeavour Mining is on a clear path to achieving its 2019 goal of becoming a premier African gold producer, says CEO Sebastien de Montessus.

The company’s project pipeline comprises three development projects that have the potential to deliver medium- and long-term growth, with more than 800 000 oz/y of production at an all-in sustaining cost (AISC) below $800/oz. The pipeline includes Endeavour’s Houndé project, in Burkina Faso, its Ity carbon-in-leach (CIL) project, in Côte d’Ivoire, and its most recent addition, the Kalana development, in Mali.

Endeavour Mining is approaching commercial production at Houndé, with first gold pour imminent. Once in production, De Montessus points out, Houndé will become the company’s flagship low-cost mine, ranking among West Africa’s top-tier cash-generating mines, with an average production of 190 000 oz/y at an AISC of $709/oz over an initial ten-year mine life, based on current reserves. In its first four years, the average production is expected to be 235 000 oz/y at an AISC of $610/oz.

With Houndé’s construction coming to a close, Endeavour Mining’s in-house construction team has been redeployed to the Ity CIL project, which has been in operation for more than 20 years, where construction to improve and expand the project has started and is expected to be completed by mid-2019. Construction is expected to extend the asset’s mine life by 14 years, turning it into another flagship asset for Endeavour Mining, with production of about 235 000 oz/y for the first five years at an AISC of $494/oz.

“The development of these projects enables us to draw on the strong record and experience of our highly regarded construction team, which were gleaned through the success of our low-cost, long-life mine Agbaou, in Côte d’Ivoire.”

In September, the company also announced the completion of its acquisition of gold miner Avnel Gold Mining, which owns 80% of the Mali-based Kalana gold project. De Montessus highlights that Kalana meets the criteria that Endeavour set for evaluating its portfolio and new opportunities “very well”. These include a life-of-mine exceeding ten years, a low AISC and significant additional near-mine exploration potential.

He adds that the development of Kalana also dovetails neatly with Endeavour’s project pipeline, pointing out that the company will work to improve Kalana’s existing feasibility study (FS) until the end of 2018. “The construction team will be ready to begin work on Kalana once Ity is completed by about mid-2019. This will also ensure that we have the maximum potential to leverage corporate and operating synergies in the region and create value for our shareholders.”

Predevelopment activities to enhance the Kalana project will include stopping the current small-scale operations and clearing the underground workings and existing infrastructure to allow for the development of future openpits and access to exploration. Exploration activities will also be resumed on the Kalana deposit and nearby targets, including Kalanako, with the initial campaign expected to run until the end of 2018.

A revised FS will aim to increase the current plant design capacity to lift the average yearly production and shorten the mine life based on current reserves, integrate the exploration results from the upcoming drilling campaign and leverage Endeavour’s construction expertise, while integrating operating synergies. The environmental-impact assessment will also be updated to incorporate the revised FS results and dedicated Kalana project community relations will be established and health and safety teams will be created to validate the census and stakeholder mapping to define a resettlement action plan ahead of relocation activities.

“Endeavour expects to take advantage of its construction expertise, operating synergies and exploration experience to redesign and enhance the current FS. With an expanded plant capacity, Endeavour believes that Kalana has the potential to increase its production profile to more than 150 000 oz/y and become another high-quality asset in Endeavour’s portfolio.”

The optimisation work will take place during 2018, with construction expected to begin in mid-2019, following the completion of the Ity CIL project.