Endeavour Mining has received a payment of US$25.3 million from Turkish gold company MNG Gold from the sale of its non-core Youga mine in Ouagadougou.

The total cash consideration for Youga is comprised of $20 million for the asset and $5.3 million for the cash-on-hand.

In addition, Endeavour Mining has retained a 1.8% net smelter royalty on production realised beyond the current reserve from the property sold, and with the inclusion of a buyback provision. [quote]

“This transaction provides upfront value for Youga’s remaining two year mine life and gives us greater financial flexibility to pursue growth opportunities. It is in line with our strategic objective of actively managing our portfolio to improve its overall quality,” says Endeavour Mining CEO Neil Woodyer.

Since MNG’s nearby Balogo high-grade deposit, located in proximity to the Youga mill, in Burkina Faso, will give a second life to the Youga operation, we firmly believe that this transaction is in the best interest of all stakeholders, including our employees, the government, and the local population, Woodyer added.

Youga background

Endeavour holds a 90% interest in Burkina Mining Company (BMC) which has been granted the rights to exploit the Youga gold deposit. The remaining 10% of BMC is held by the Government of Burkina Faso.

Youga is an open pit mining operation with a 1 Mtpa gravity/carbon-in-leach processing facility.

It has recovered a total of over 0.6 million ounces of gold since operations commenced in 2008. Youga employs approximately 665 workers in total, including full time Endeavour employees and contractors.

As at 31December  2015, measured and indicated mineral resources (inclusive of reserves) were 17.8 Mt at 1.4 g/t gold containing 0.8 Moz and the proven and probable mineral reserves were 2.5 Mt at 1.6 g/t gold containing 0.1 Moz.

In 2015, Youga produced 68 407 oz of gold.

Production in 2016 is forecast to be 40 000 to 45 000 ounces at a mine-level AISC cost of $980 to $1 030/oz.