Endeavour Mining completes first instalment of 10-year exploration drive

ENDEAVOUR Mining said it had discovered three million ounces of gold registered in the measured and indicated categories at its West African mines marking the successful close of a five year exploration drive to find five million ounces of gold.

The discoveries include additional gold at Fetekro, a gold-bearing property in Côte d’Ivoire where Endeavour already operates the Ity mine.

Measured and indicated resources found on Fetekro now total 2.9 million ounces, an increase of 18%. The discovery would justify a larger four million tons a year processing plant compared to earlier estimations for a three million ton plant.

A definitive feasibility study on Fetekro is due to be published this quarter, said Endeavour CEO, Sébastien de Montessus.

De Montessus announced in October that Endeavour planned to discover between 15 million to 20 million ounces of gold from seven assets in an effort to extend the life of its mines beyond 10 years.

Today’s results represent the first five-year instalment of that plan and also include discoveries in measured and indicated resources at its Houndé mine in Burkina Faso, Ity and the Sabodala-Massawa mine in Senegal.

“We are particularly pleased with the significant discoveries made at our flagship mines, Ity, Houndé and Sabodala-Massawa,” said De Montessus today. “At our Ity mine, we have added over 1 million ounces of resources which is an extraordinary achievement.”

The exploration strategy is an effort to inject greater certainty into Endeavour’s business case. The company has already locked in production of between 1.4 to 1.6 million oz a year over the next five years largely through merger and acquisition activity.

Following two quick-fire deals in which it bought SEMAFO and Teranga Gold Corporation, Endeavour said it was switching tack to organic growth.

West Africa is highly prospective for gold.

Currently, the region comprises 12.5% of world gold output, largely owing to major new mineral discoveries in the francophone regions of Mali, Côte d’Ivoire and Burkina Faso.

It attracts the most gold exploration spend after North America and Australia, and consequently has been host to an estimated 79 million ounces in new discoveries in the past decade, the most globally, according to a report by S&P Market Intelligence.

Shares in the company have traded flat over the last 12 months but the company was hopeful of knocking on the door of the FTSE 100 Index after listing in the City in June.

BMO Capital Markets analyst Raj Ray said there were a number of catalysts on the horizon for Endeavour. Whilst he didn’t expect inclusion into the MSCI Europe index until mid 2022 near term catalysts included a potentially upbeat 2021 production report and strong gold production guidance for Endeavour’s 2022 financial year.

The publication of feasibility studies for its Sabodala-Massawa Phase II and Fetekro “… should generate interest in the stock”, he said.