Endeavour expects production to rise, costs to fall in 2017

JOHANNESBURG (miningweekly.com) – West-African gold miner Endeavour Mining produced a record 583 712 oz of gold in 2016, at a low all-in sustaining cost (AISC) of around $895/oz, achieving both its ambitious production guidance of 575 000 oz to 610 000 oz and its AISC guidance of $870/oz to $920/oz for the year.

This was bolstered by record fourth-quarter production of 175 000 oz, up 20% over the previous quarter.

Production for the full year was 13% higher than that of 2015, with Endeavour’s Agbaou mine, in Côte d’Ivoire, setting another record year, producing 196 000 oz and strong contributions from the Tabakoto, Ity and Karma operations which either met or exceeded their respective guidance.

Production at its Nzema mine, in Ghana, was, however, impacted by lower-than-expected purchased ore.

“In 2017, we are well positioned to continue to increase production and lower AISC even further, notably without the inclusion of organic growth benefits provided by our Houndé project, in Burkina Faso, which is progressing on-time and on-budget.

“Looking ahead, we remain focused on unlocking our organic growth potential, which will be enhanced by a potential positive investment decision at the Ity carbon-in-leach project and through our reinvigorated exploration programme”, said CEO Sébastien de Montessus.

Production is expected to increase to between 600 000 oz and 640 000 oz this year, as improvements at Karma, in Burkina Faso, and Nzema are expected to more than compensate for Agbaou returning to a normalised production level after a record-breaking year.

Production is expected to fluctuate throughout the year, owing to mine plan sequences, with a peak towards the middle of the year.

Group AISC is expected to continue to decrease to between $860/oz and $905/oz owing to the full-year benefit of Karma, optimisations at Nzema and Tabakoto, in Mali, and cost reduction programmes. As with production, AISC is expected to fluctuate throughout the year, with lower costs expected in the second half.

Exploration will continue to be an increased focus for Endeavour this year, with a company-wide exploration budget of roughly $40-million – up 20% over 2016 and more than double that of 2015 – totaling 285 000 m of drilling. Mine-related exploration is expected to total $35-million and an additional $5-million has been allocated for grassroots exploration programmes.