West African gold producer Endeavour Mining has entered into a binding sale agreement for its interest in the non-core Tabakoto mine to Algom Resources, a subsidiary of BCM Investments, for a total cash consideration of US$60 million.
The consideration is payable upon closing of the transaction which is expected to occur during the fourth quarter of 2018.
"We are pleased to continue to pursue our portfolio management strategy through the sale of our non-core Tabakoto mine,” says Endeavour Mining president and CEO Sébastien de Montessus.
“This will increase our overall portfolio quality and allow management to focus on high cash generating assets with low AISC and long mine lives,: he adds, noting that the Tabakoto asset has been sold following a comprehensive review which determined that the capital investments required to reduce its AISC did not meet the company’s capital allocation criteria.
“We believe this transaction will benefit Tabakoto's stakeholders, including employees, the government of Mali, and local communities as BCM Investments is a longstanding partner with the right set of skills, expertise, and investment capabilities to maximise Tabakoto's operational performance. We are confident that Algom will ensure a smooth transition and will continue to develop the mine, as was demonstrated with their previous Nzema acquisition last year,” De Montessus says.
Peter Spivey, the COO of Algom Resources said that the company is pleased for the opportunity to enter into this arrangement with Endeavour Mining.
Algom added that the Tabakoto mine has been well established as both an open pit as well as underground mining operation for a number of years and we recognize it has excellent geological potential to continue operating well into the future.
“The underground operations at Segala and Tabakoto are well understood, and we look forward to working closely with our business partners in making improvements to the efficiency and operating costs of the operations. Algom will also make significant investment as required in further drilling to secure the pipeline of open pit as well as underground ore resource targets that have been well identified by Endeavour,” he concludes.
Endeavour Mining acquired Tabakoto in 2012.