Côte d’Ivoire – ASX/TSX-listed gold mining company Endeavour Mining has entered into a long term strategic partnership with La Mancha Holding, a privately-held gold investment company.
As part of the transaction, Endeavour will acquire La Mancha’s indirect 55% interest in Société des Mines d’Ity S.A. (SMI), which operates the Ity gold mine in Côte d’Ivoire, plus various regional exploration properties.
La Mancha will, in turn, contribute US$63 million cash into the acquired businesses and has also expressed an in-principle commitment to invest up to $75 million in additional funds to support Endeavour’s growth.
Upon completion of the transaction, La Mancha will be issued approximately 177.1 million Endeavour ordinary shares representing 30.0% of the enlarged share capital.
The transaction will ensure that Endeavour will have an annual gold production rate of 580 000 ounces from five operations across West Africa, a strengthened balance sheet and further growth opportunities in Africa.
Among other conditions, this transaction is subject to approval from Endeavour’s current shareholders.
“We are pleased to welcome La Mancha and Naguib Sawiris as our long term strategic partner with the shared vision of building a leading, Africa-focused gold producer,” Endeavour Mining CEO Neil Woodyer said.
“This transaction will immediately add to Endeavour’s operating cash flow, increase our attributable mineral reserve and resource base by 22% and 23%, respectively, while also strengthening our balance sheet and funding position to pursue further growth.”
The Ity Mine and resource base, which Endeavour will gain a share in, has grown significantly under the leadership of La Mancha. An aggressive exploration program at Ity has increased M&I resources since 2011 from 0.2Moz to 2.9Moz.
“With our successful track record in building and operating mines, together we will have the expertise and the funding to grow across Africa, says Woodyear.
“By adding the brownfield Ity development project alongside our Houndé project, we will have strengthened our pipeline for near term growth. With the additional exploration properties, we will become the mining company with the largest exploration package in Côte d’Ivoire, which is one of the most prospective greenstone belts in the world,” he says.
The transaction will see Sebastien de Montessus join Endeavour as President and current CEO of La Mancha, and experience in African mining operations.
At closing, Sebastien de Montessus will join Endeavour in the newly created position of President where he adds his proven management skills as former CEO of Areva Mining and he will resign from his position as President and CEO at La Mancha.
Within 24 months, it is envisioned that Sebastien de Montessus will transition to Endeavour’s CEO position and Neil Woodyer will transition to an Executive Chairman role.
Most importantly, the transaction is value accretive to shareholders and the in-principle commitment of up to US$75 million in additional funding puts Endeavour in a stronger positon to continue its growth strategy at a low point in this gold price cycle. The industry has seen the successful role La Mancha has played in the growth of Evolution Mining Limited in Australia, including the A$112 million equity capital support for the Cowal acquisition – in excess of the A$100 million in-principle commitment made, and we see similar opportunities across Africa.”