The President of Côte d’Ivoire, M. Ouattara, has provided notification to Endeavour Mining that his government has approved the previously announced in-principal agreement for SODEMI, the state-owned mining company, to sell a 25% shareholding in the Ity mine to Endeavour Mining.
Under the terms of the agreement, Endeavour Mining will pay a one-off sum of US$52 million plus $5 per oz of additional reserves added post 31 December, 2016. The acquisition should be effective in the coming weeks, once the legal documentation is executed.
“We are delighted to have concluded this agreement with our long-standing partners at Ity, which demonstrates the willingness of all parties to progress with the development of the Ity CIL project for the benefit of all stakeholders,” states Endeavour Mining, president and CEO, Sébastien de Montessus.
“This is an important step in continuing to develop our internal growth strategy as Ity has the potential to become one of our flagship assets, in addition to Houndé which is on schedule for a first gold pour in the fourth quarter.
“We now look forward to moving to a formal investment decision in the coming weeks which would allow our experienced in-house construction team to smoothly transition from Houndé to building the Ity CIL project in the second half of 2017.
“We are currently optimising last year’s published feasibility study, which will most likely result in upsizing the previously announced 3 Mtpa plant design to better capture the value generated from recent exploration discoveries and to take into account the area’s significant additional exploration potential,” he continues.
Ity has the longest operating history of any gold mine in Côte d’Ivoire, with gold first discovered near the village of Ity in the 1950s and the first modern gold production reported in 1991.
Ity has produced more than 1.2 million oz of gold in its 20-plus years of operation from heap leaching.
The feasibility study, published in November 2016, demonstrated that upgrading the heap leach facility to a Carbon-in-Leach (CIL) plant has the potential to extend Ity’s mine life by 14 years, producing approximately 144 000 oz annually for at least the first nine years, at a low AISC of $507/oz.
The Ity CIL project already has robust economics with after-tax NPV 5% of $411 million, IRR of 36% and quick payback period of 25 months based on a gold price of $1,250/oz.
There is further potential for significant improvement to project economics with the anticipated optimisation of the feasibility study by mid-year 2017, which is expected to include a plant design upsize to include additional resource conversion at Daapleau and Mont Ity, and recent high-grade discoveries at Bakatouo, Colline Sud and Verse Ouest.
Feature image: Operations at Ity mine in Côte d’Ivoire
All images courtesy of Endeavour Mining