Endeavour Mining, listed on the TSX, has announced that its 90 %-owned Houndé gold project in Burkina Faso has entered the construction phase of its development, following approval of the project by Endeavour’s board of directors.
The project is located approximately 250 km (or a three-hour drive) south-west of Ouagadougou, the capital city of Burkina Faso. The property is within the Houndé greenstone belt and just south of Semafo's Mana mine.
Houndé is expected to deliver average production of 190 000 ounces per year over a 10-year mine life at an AISC of US$709/oz, based on current reserves. The project is an open-pit mine with a 3,0 Mt/a gravity circuit/CIL plant. The initial capital cost is estimated at US$328 million, inclusive of US$S47 million for the owner-mining fleet.
Comments Neil Woodyer, CEO of Endeavour: “With the ramp-up of Karma soon underway, and our operations delivering a strong performance, we are now well positioned to build the Houndé project, which will further lift the overall quality of our portfolio. Once in production, it will become our flagship low-cost mine and will rank amongst West Africa’s top tier cash generating mines. Furthermore, Houndé will benefit both from our construction track-record, demonstrated most recently at Agbaou, and our team’s operating experience in Burkina Faso.”
During the past year, a thorough review and optimisation of the Houndé project was completed and an implementation plan was established. The mining and ore processing schedules have remained unchanged since February 2015 while the operating and capital costs were fully scoped and optimised by Endeavour, with assistance from Lycopodium Minerals.
During the optimisation process both the ROM pad and the Tailings Storage Facility (TSF) were relocated to more favorable locations. Furthermore, the TSF was changed from basin to paddock style to optimise the usage of waste material and generate nearlyUS$25 million in reclamation and closure cost savings.
Project capital commitment in 2016 is expected to be approximately US$180 million, with the remainder in 2017. Within the coming weeks, Endeavour expects to lock-in approximately 25 % of the total capital cost by placing firm orders for the SAG and ball mills, purchasing the mining fleet and paying land compensation and related taxes.
Replicating its successful construction partnership at both Nzema and Agbaou, Endeavour has awarded the EPCM contract to Lycopodium Minerals, and detailed engineering is now commencing
The overall duration of the project construction is estimated to be 18 months. Endeavour plans to self-perform 72 % of the project build, while Lycopodium will focus primarily on the processing facility which is the remaining 28 % of the total capital commitment for the project. Endeavour’s Project Management team will include approximately 90 personnel to perform all remaining construction tasks. Endeavour’s team will also be responsible for all concrete work, which was the successful approach employed at Agbaou.
Endeavour Mining operates four West African mines in Côte d’Ivoire, Mali, and Ghana. In 2016, it expects to produce between 535 000 and 560 000 ounces at an all in sustaining cost of US$870 to US$920 per ounce, after adjustment of the recent Youga sale and excluding the Karma mine (where the transaction with True Gold is expected to close at the end of April 2016).
