Endeavour gives green light to expanded $412m Ity project


ENDEAVOUR Mining has given the green light to its Ity expansion project in Côte d’Ivoire following exploration work and by leveraging skills and synergies within the group’s portfolio of mines: Agbaou, Houndé and Ity.

The project, which will add Carbon-In-Leach (CIL) gold extraction to the current heap leach process at Ity, will have higher average gold output numbers over both the first five and ten years owing to a one million ounce increase in reserves to 2.9 million oz. The Ity CIL project will cost $412m to develop over 20 months with first gold to be poured in mid-2019. Funding will be from existing facilities and cash generated internally.

“Its average annual production in the first five years of 235,000 oz with all-in sustaining costs (AISC) below $500/oz and an after-tax internal rate of return of more than 20%, even at a low gold price of $1,000 per ounce, are proof of the compelling economics of the project,” said Sébastien de Montessus, president and CEO of Endeavour Mining in a statement.

When the project was scoped 10 months ago, the project was expected to cost $307m and would lift average mine production to 165,000 oz/year in its first five years.

The project is also an important link in Endeavour Mining’s plans to become an important mid-tier gold producer on the African continent. “With the upcoming first gold pour at Houndé and Ity CIL construction expected to be completed within 20-months, we remain on track to achieve our strategic milestones of becoming a +800,000 ounce per year gold producer with group AISC below $800 per ounce and mine lives above 10 years by 2019,” said de Montsessus.

In May Endeavour Mining paid $52m in order to lift its stake in the Ity mine to 80% from its current holding of 55% following agreement with Côte d’Ivoire state-owned mining firm, SODEMI. In addition to the one-off payment, Endeavour will also pay SODEMI $5 per ounce of additional reserves added to the mine after December 31.

Average annual production over the first ten years of the project has increased by 51% to 204,000 oz which has taken the AISC down 2% to $549/oz. The mine had “… robust economics with after-tax net present value (5% discount rate) of $710m, a 73% increase, based on a gold price of $1,250/oz,” the company said.

Shares in the company increased by 2% on the Toronto Stock Exchange today valuing it at C$2.2bn.