Endeavour scopes out projects worth 359koz in annual output for $635m capital cost

ENDEAVOUR Mining has scoped out $635m in new projects producing a combined 359,000 ounces of gold a year – about 24% of the group’s current forecast production.

The firm said in an announcement today that according to prefeasibility studies the two new developments – Fetekro in Côte d’Ivoire and Kalana in Mali – would produce gold for a period of nine-and-a-half, and 11 years respectively.

“The positive studies announced today confirm the compelling nature of our two most advanced projects and reinforce our focus on organic growth,” said Sébastien de Montessus, CEO of Endeavour Mining in a statement.

Endeavour Mining last year propelled itself from mid-tier gold mining firm to among the world’s top 10 largest producers after mergers with SEMAFO and Teranga Gold Corp. – both of which are listed primarily in Toronto.

Endeavour is to take a secondary, premium listing on the London Stock Exchange during the second quarter of this year in order to capitalise on improved investment interest in gold mining firms amid the up-cycle in the gold price.

De Montessus said earlier this year after formally completing the Teranga Gold transaction that the company had finished merger and acquisition activity and would focus on dividend returns to shareholders, building its balance sheet and organic growth.

Based on the prefeasibility numbers, Fetekro has a capital cost of $338m. It is scoped to produce 209,000 oz of gold a year at an all-in sustaining cost (AISC) of $838/oz. Measured and indicated reserves have been put at 2.5 million oz.

A definitive feasibility study on Fetekro will be published in the fourth quarter.

Kalana has a capital cost of $297m and will produce about 150,000 oz/year at an AISC of $901/oz. At this run rate, a mine life of 11 years has been imputed, based on measured and indicated reserves of 2.3 million oz. A definitive feasibility study is due during the first quarter of Endeavour’s 2022 financial year.

Post-tax net present values of $479m and $331m have been imputed to Fetekro and Kalana respectively assuming a gold price of $1,500/oz.

“Together with a number of earlier stage projects, Endeavour now has an attractive pipeline of opportunities, each of which will compete for capital with the goal of generating strong returns across operations, projects, and exploration,” said De Montessus.

Shares in Endeavour Mining were 3.6% lower in Toronto at close on Tuesday taking the 12-month performance to a near-10% decline. This was after the share achieved an all-time high in September of C$38,85/share.