Endeavour Mining Acquires Mali Gold Project, Sells Ghana Gold Mine

In separate transactions, Endeavour Mining has announced agreements to acquire Avnel Gold Mining and its 80% interest in the Kalana gold project in southern Mali, and to sell its 90% stake in the Nzema gold mine in southwest Ghana to BCM International Ltd. Consideration for the Avenel purchase is Endeavour shares valued at approximately $122 million. Consideration to be received by Endeavour for the Nzema sale is cash totaling up to $65 million.

Kalana is a fully permitted, feasibility- stage project based on a carbonin- leach plant having 1.2-million-metricn- tons-per-year (mt/y) of throughput capacity and a single open-pit-constrained reserve of approximately 2 million ounces (oz) grading 2.8 grams/mt of gold. The feasibility study projects an 18-year mine life, producing an average of 101,000 oz/y at average all-in sustaining costs (AISC) of $784/oz, including an average of 148,000 oz/y during the first five years at average AISC of $589/oz.

The initial capital cost to develop Kalana is forecast at $196.3 million. Avnel has pursued optimization scenarios that could reduce average AISC to $730/oz over the 18-year mine life and to $561/oz over the first five years. Endeavour believes the project can be further optimized to produce 150,000 oz/y over a mine life of at least 10 years at AISC of $850/oz, with exploration potential to add to that mine life.

Nzema is an open-pit mining operation with a 1.6-million-mt/y gravity/CIL processing facility. The property is on track to meet full-year 2017 production guidance of 100,000 oz to 110,000 oz of gold at all-in sustaining costs of $895/oz to $940/ oz. Nzema’ new owner, BCM International, is one of Africa’s largest mining and civil contractors, with headquarters in Ghana and offices across eight African countries.

Endeavour is a Canadian company focused on mining in West Africa. Assuming completion of the two transactions reported here, the company will have four producing gold mines — the Agbaou and Ity mines in Côte d’Ivoire, the Tabakoto mine in Mali, and the Karma mine in Burkina Faso. Group production guidance for 2017, not counting any production from Nzema, now stands at 500,000 oz to 530,000 oz.

Endeavour’s Ity carbon-in-leach project in Côte d’Ivoire and Houndé mine project in Burkina Faso are nearing completion. A targeted startup date for the Kalana project has not been announced.

Regarding the Avnel acquisition, Endeavour President and CEO Sébastien de Montessus said, “Kalana adds a third high-quality project to our portfolio, which we intend to develop following the completion of our Houndé and Ity CIL projects. In the interim, we look forward to optimizing the current feasibility study, which should unlock further value for both Endeavour and Avnel shareholders, as well as benefiting our partners, the state of Mali and the local communities around Kalana.”

Regarding Endeavour’s sale of Nzema, de Montessus said, “The sale of Nzema fits into our stated strategic objective of actively managing our asset portfolio to improve its overall quality. The sale also enables us to further streamline our efforts on long-life, lowcost operations . . .

“BCM has extensive experience in Ghana, where it is headquartered, and we believe it has the right set of skills and capabilities to take Nzema beyond its current three-year mine life, for the benefit of all its stakeholders, including employees, the government of Ghana, and local communities.”

As featured in Womp 2017 Vol 09 - www.womp-int.com