Endeavour increases 2016 production guidance

JOHANNESBURG (miningweekly.com) – TSX-listed Endeavour Mining has increased its full-year production guidance for the 2016 financial year, following the company’s March acquisition of True Gold’s 90% interest in the Burkina Faso-based Karma mine, which is in its ramp-up phase.

The group on Friday said that it expected higher output during the second half of the year and would meet the raised production guidance of 575 000 oz to 610 000 oz for the full year.

Gold production for the six months to June increased 20% to 262 000 oz, with an “impressive outperformance” at the Agbaou and Ity operations, in Côte d’Ivoire, compensating for lower production from the lagging Tabakoto and Nzema mines, respectively located in south-western Mali and Ghana.

“We expect Nzema and Tabakoto’s performance to improve in the second half of the year as we continue to deliver against our group-level objectives, remaining on track to meet all our guidance metrics for 2016,” said Endeavour president and CEO Sébastien de Montessus.

The company has decreased Nzema’s 2016 production guidance from between 110 000 oz and 130 000 oz to between 90 000 oz and 100 000 oz, while Tabakoto’s production guidance remains unchanged at 155 000 oz to 175 000 oz. Both mines, however, are expected to deliver a stronger performance in the next half-year.

Meanwhile, Endeavour hiked its expected guidance for the Agbaou operation from the initial range of between 165 000 oz and 175 000 oz to between 180 000 oz and 195 000 oz, on the back of strong performance and the positive outlook for the rest of the year.

Ity’s production guidance has been increased from between 65 000 oz and 75 000 oz to between 70 000 oz and 80 000 oz.

Further output is expected from the Karma mine, which is currently in a ramp-up phase and is performing well since first gold pour in April.

Around 14 000 oz has been produced to date, with production guidance of 50 000 oz to 60 000 oz set.

Endeavour currently expects to declare commercial production in the fourth quarter of the year.

Meanwhile, it reported a 5% decline in all-in sustaining costs (AISC) to $896/oz during the first-half under review, and a 39% surge in the all-in sustaining margin to $82-million, on the back of increased production, lower costs and higher gold prices.

Free cash flow was $59-million, up 26% over the year-ago corresponding period.

Endeavour turned net cash positive, with $21-million as at June, significantly improving its balance sheet. Net debt reduced to $82-million, from the $242-million reported in the comparative period last year.