ENDEAVOUR Mining will take gold production from its Sabodala-Masawa mine in Senegal to 373,000 ounces a year after today authorising its $290m expansion.
The London-listed firm said that in terms of a definitive feasibility study it would add 1.35 million tons in low cost refractory ore processed through Biox facilities. The increased output would be for at least five years at an all in sustaining cost (AISC) of $745/oz.
Capital for the expansion would be funded from cash flow generated by Sabodala-Masawa, a mine Endeavour bought following its takeover of Teranga Gold Corp. last year.
The feasibility study did not include some 700,000 ounces of gold in mineral reserves discovered at the mine. As a result, the mine had potential to exceed 400,000 oz/year in gold production, said Sébastien de Montessus, CEO of Endeavour Mining.
The expansion generates $200m of incremental annual free cash flow during its first five years assuming a gold price of $1,700 per ounce, Endeavour said.
Endeavour announced it would pay a $140m dividend for its 2021 financial year, $15m more than its previously stated target following a 79% year-on-year increase in adjusted net earnings of $577m.
Total production for the year came out at 1.54 million ounces which was 69% more than in its 2020 financial year.
Endeavour acquired the mines of SEMAFO and Teranga Gold last year propelling itself into the top rung of world gold producers by size. AISC were $885 per oz for the 2021 financial year compared to $873/oz in the previous year.
Earlier this year, the company was admitted to the FTSE100 index following the exit from the index of Evraz and Polymetal, the Russian companies that fell under some fierce selling by investors owing to that country’s invasion of Ukraine.
Shares in the company gained nearly 5% in mid-morning trade on Monday. On a year to date basis, shares in the company are nearly 23% higher.