Tag Archives: Ity

Endeavour looks to consolidate West Africa gold sector with SEMAFO acquisition

Endeavour Mining is to acquire fellow West Africa-focused gold producer SEMAFO in a friendly, all-share deal that, Endeavour says, will create a top 15 global gold producer and the largest yellow metal miner in West Africa.

The deal, which both sets of Board of Directors have unanimously approved, values SEMAFO at C$1 billion ($694 million) and comes with a 27.2% premium based on the 20-day volume weighted average price of both companies for the period ended March 20, 2020. It would see existing Endeavour and SEMAFO shareholders hold around 70% and 30%, respectively, of the combined company on a “fully-diluted in-the-money basis”.

Such a transaction comes less than six months since SEMAFO suspended operations at its Boungou open-pit mine, in Burkina Faso, following a deadly attack on a public road in the Est region. This led to a seven-week suspension of the mine in 2019. This incident followed on the heels of a pit wall failure at its Mana mine, also in Burkina Faso, in August, that led to a 10-week suspension.

Endeavour, meanwhile, had its hopes of merging with fellow Africa gold producer, Centamin, dashed earlier this year after Endeavour President & CEO, Sebastien de Montessus, said the quality of information received during the accelerated due diligence process had been insufficient to allow the company to be confident in proceeding with a “firm offer” for Centamin.

On a pro-forma basis, a combined Endeavour and SEMAFO would have more than 1 Moz of gold production in 2020 (based on current company guidance), placing it among the top 15 gold producers globally, while all-in sustaining costs (AISC) would be below $900/oz, placing it within the bottom third of the industry cost curve, the companies said.

Assets would include the Ity, Houndé, Agbaou and Karma mines from Endeavour (which produced 651,000 oz at an AISC of $818/oz in 2019) and the Boungou and Mana mines from SEMAFO (which produced 340,900 oz at an AISC of $724/oz in 2019).

Endeavour-SEMAFO would also have 10.5 Moz of reserves and 20.7 Moz of measure and indicated resources (inclusive of reserves), plus an additional 6.3 Moz of inferred resources.

It would be strategically positioned as the largest gold producer in both Cote d’Ivoire and Burkina Faso, which account for two-thirds of the highly prospective West African Birimian Greenstone Belt, they said.

It would also consolidate the Houndé belt in Burkina Faso to create a “world-class mining district with two mines, exploration upside and strong future development potential”, they said.

Endeavour said influential investor La Mancha will continue to be a highly supportive cornerstone shareholder, committing to invest $100 million, although decreasing its overall stake from around 31% in Endeavour to about 25% in the combined entity (calculated on a pro-forma basis using current share prices), to “provide for a larger free float and greater stock liquidity”.

These M&A discussions have been going on for some time, according to Endeavour.

In early 2019, both companies engaged in a mutual dialogue in order to evaluate the merits of a business combination. The dialogue included extensive mutual due diligence as well as discussion of potential terms of a transaction, with a final proposal in May 2019. At that time, it was not possible to agree on terms which appropriately shared the risks and rewards of a combination.

In early 2020, discussions between Endeavour and SEMAFO recommenced. Endeavour’s management team completed on-site due diligence at SEMAFO’s operations in Burkina Faso during February 2020, including a comprehensive assessment of security, operations and exploration.

Both companies also re-opened data rooms for mutual confirmatory due diligence, including visits and, following collaborative discussions, confirmed their shared strategic vision and desire to complete a combination subject to negotiation of agreeable terms, they said. Negotiations proceeded, culminating in agreement on the terms of the transaction announced today.

For Endeavour, pursuant to the rules of the TSX, the transaction will require approval by a simple majority of the votes cast by its shareholders. In addition, shareholders of Endeavour will be asked to approve the issuance of Endeavour ordinary shares to La Mancha. For SEMAFO, meanwhile, the transaction will require the approval of 66.6% of votes cast by its shareholders.

It is anticipated that both shareholder meetings and the closing of the transaction will take place in the June quarter of 2020.

Africa first for Gekko’s Carbon Scout technology

Gekko Systems says Endeavour Mining’s Ity gold operation, in Cote d’Ivoire, has become the first mine in Africa to install a Gekko Carbon Scout.

The self-contained Carbon Scout device collects slurry samples from carbon-in-pulp (CIP) and carbon-in-leach (CIL) tanks to determine the distribution of the activated carbon in the pulp for each tank, to an accuracy of ± 0.5 grams of carbon per litre of pulp, according to Gekko.

Gekko, following a collaboration agreement signed with Curtin University for the development and commercialisation of a cutting-edge carbon management technology, went commercial with the technology in 2017. At that point, the company said the product promised to quickly become critical for gold process plant optimisation and for minimising soluble gold losses on tails.

By advancing the accuracy, regularity and consistency of sampling, the self-contained, ground-level unit will improve measurements in CIL and CIP circuits, Gekko said, adding that the Carbon Scout will also greatly improve the safety of operations by reducing operator exposure to cyanide and other hazards.

As recently as November, Endeavour announced it had completed a planned CIL plant expansion at Ity, upping capacity from 4 Mt/y to 5 Mt/y. This followed the commissioning of the 4 Mt/y plant in April 2019.

Endeavour Mining pours first gold from Ity CIL project in Côte d’Ivoire

Endeavour Mining Corp says it has poured first gold from the Ity CIL project in Côte d’Ivoire, ahead of schedule and under budget.

The first pour yielded around 1,800 oz of gold, while some 135,160 t of ore has been processed since being first introduced into the CIL processing plant on February 20.

The initial estimated budget was $412 million, with first gold pour coming four months ahead of the previous schedule.

Endeavour said commercial production was expected to be declared early in the June quarter with performance trial testing soon to commence, as the crushing, milling and CIL circuits have quickly attained a stable nameplate capacity of 4 Mt/y.

Following the performance tests already conducted, Endeavour launched optimisation and de-bottlenecking work which is expected to increase the plant nameplate capacity by 1 Mt/y to 5 Mt/y, at a minimal cost of $10-15 million.

The volumetric upsize work mainly comprises an upgrade in pipes and pumps, and a second 50-t oxygen plant with no additional mining fleet required. “These plant upgrades are expected to be completed during scheduled plant maintenance shut-downs throughout the next six months,” the company said.

Sébastien de Montessus, President and CEO, said: “As we approach commercial production, I would like to acknowledge the hard work of our in-house construction team for successfully delivering the Ity CIL project ahead of schedule and under-budget, with an exceptional safety record of over 8.5 million hours without a lost time injury.

“This first gold pour and the remarkably quick ramp-up period is a transformational event for Endeavour as the Ity CIL project will quickly contribute to group’s cash generation potential.

“Given its current 15-year mine life and strong exploration potential, our ability to increase the plant size by 1 Mt/y to 5 Mt/y for minimal additional capex represents a very compelling investment and is in line with our focus on capital allocation efficiency and return on capital employed criteria. With this upgrade, Ity has the potential to produce circa 300,000 oz of gold per annum at a low all-in sustaining cost (AISC).”

The Ity CIL project capex spend is tracking under-budget compared to the initial guidance of $412 million.

“As construction is tracking ahead of schedule and below budget, Endeavour decided to conduct additional works such as the construction of a fuel farm, building exploration facilities, and an additional $7 million of crop compensation and resettlement related to prospective exploration grounds,” Endeavour said. “Due to these additional works, and the $10-15 million required for the above-stated plant upgrade to 5 Mt/y, the total project capex spend is expected to amount to circa-$420 million.”

An $11 million exploration programme totalling around 71,000 m of drilling has been planned for 2019, with the aim of delineating additional resources at the Le Plaque target, and testing other targets such as Floleu, Daapleu SW and Samuel.

As previously guided, Ity is expected to produce 160,000-200,000 oz in 2019 at an AISC of $525-590/oz, with the bottom-end of production guidance corresponding to the 4 Mt/y nameplate capacity while the top-end factors in upsides such as an earlier start date, an expedited ramp-up and the plant producing above its nameplate.

Teranga and Endeavour Mining on board with the World Gold Council

The World Gold Council has welcomed Teranga Gold Corp and Endeavour Mining Corporation as its newest board members.

David Harquail (pictured), Chair of the market development organisation for the gold industry, said: “Both companies play an important role in the production and exploration of gold across West Africa and bring with them a wealth of experience that will be of significant value.”

Teranga is a Canada-based gold company focused on production and development as well as the exploration of approximately 6,000 km2 of land located on prospective gold belts across West Africa, according to the WGC.

Since its initial public offering in 2010, Teranga has produced more than 1.6 Moz of gold at its flagship operation in Senegal. Focused on diversification and growth, the company is advancing construction of its second producing gold mine, located in Burkina Faso, as well as carrying out exploration programmes in Côte d’Ivoire, Burkina Faso and Senegal.

Endeavour is an intermediate gold producer with a track record of operational excellence, project development and exploration in the Birimian greenstone belt in West Africa, WGC said.

Endeavour operates four mines across Côte d’Ivoire (Agbaou and Ity) and Burkina Faso (Houndé, Karma) which are expected to produce 615-695,000 oz in 2019 at an all-in sustaining cost of $760-810/oz.

Sébastien De Montessus, CEO and President of Endeavour, said: “We are very pleased to be joining the World Gold Council. We share the organisation’s belief in the importance of setting global standards to reinforce trust and transparency in the sector and across the whole value chain. We look forward to working with the council and its members to improve understanding of the gold industry.”

Richard Young, President and CEO, Teranga Gold, said: “For more than 30 years, the World Gold Council has supported greater understanding of gold’s enduring value and global influence. Today, at a time of both uncertainty and unprecedented opportunity, the work of organisations such as the World Gold Council is of paramount importance.”