ENDEAVOUR Mining said its Boungou mine in Burkina Faso would achieve the upper end of production guidance this year following its re-opening after nearly a year in mothballs.
The mine was acquired in the May merger between Endeavour and SEMAFO. SEMAFO had in December last year shuttered Boungou following a deadly attack by jihadists in which 37 employees were killed and another 60 people wounded.
Guidance was put at between 130,000 to 150,000 oz in gold at an all-in sustaining cost of $680 to $725/oz.
Endeavour said it had identified potential annual synergies of between $35m to $40m during the integration of its assets with those of SEMAFO. The synergies, of which about 60% will be realised by year-end, were derived from procurement and supply chain optimisation, corporate and in-country general and administrative (G&A) activities, and the centralisation of technical services.
The reopening of Boungou is a substantial boost for Endeavour. The mine accounts for about 15% of asset net present value, according to BMO Capital Markets in a report today. Boungou will also comprise 18% of Endeavour’s 2021 production which is expected to top one million oz.
“In addition to the significant procurement, supply chain and G&A savings, we are also seeing the benefits of softer synergies that arise from being the largest gold producer in Burkina Faso, such as a further strengthening of our partnership with the government and an enhanced ability to manage risks across the business,” said Endeavour CEO, Sebastién de Montessus in a statement.