Endeavour Mining increased its production by 13% in 2016, with its Agbaou mine in Côte d’Ivoire, setting another record year. This record production was also made possible as a result of strong contributions from its Tabakoto mine in Mali, Ity mine in Côte d’Ivoire and Karma mine in Burkina Faso, which either met or exceeded their respective guidance.
The West Africa focused gold miner however experienced lower than expected ore purchases at its Nzema mine in Ghana.
All-in sustaining cost continued to decrease by 4% in 2016 with strong performance at Agbaou and an improved asset portfolio with a full year’s contribution from Ity, the purchase and ramp-up of Karma and the divestment of the higher-cost Youga mine, the company said in a release of its preliminary financial and operating results for the fourth quarter and full year 2016.
The fourth quarter of 2016 was Endeavour Mining’s strongest quarter with production up 20% over the previous quarter to a record 175 000 oz, and all-in sustaining cost down 3% to a record low of $865/oz. Fourth quarter performance was lifted by strong increases at Agbaou, Ity and Tabakoto, which benefited from the end of the rainy season and continued ramp-up at Karma, the company said .
Endeavour Mining significantly improved its balance sheet in 2016, with net debt reduced to $25 million as of 31 December 2016 compared to $144 million in 2015, despite roughly $100 million spent on the Houndé project construction, which began in April 2016.
“In 2017, we are well positioned to continue to increase production and lower all-in sustaining costs even further, notably without the inclusion of organic growth benefits provided by our Houndé project, which is progressing on-time and on-budget, says Endeavour Mining president and CEO Sébastien de Montessus.
“Looking ahead, we remain focused on unlocking our organic growth potential which will be enhanced by a potential positive investment decision at the Ity CIL project and through our reinvigorated exploration programme.”
2017 production guidance
In line with this, Endeavour Mining expects to increase its gold production to between 600 000 oz and 640 000 oz (excluding Houndé) in 2017 as improvements at Karma and Nzema are expected to more than compensate for Agbaou returning to a normalised production level after a record-breaking year.
As was the case in 2016, production is expected to fluctuate throughout the year due to mine plan sequences, with a peak towards the middle of the year.
Endeavour Mining also expects to continue to decrease its all-in sustaining costs to bwtween $860/oz and 905/oz in 2017 due to the full year benefit of Karma, optimisations at Nzema and Tabakoto, and cost reduction programmes.
As with production, AISC are expected to fluctuate throughout the year with lower costs expected in the second half.
Exploration will continue to be an increased focus in 2017 with a company-wide exploration programme of roughly $40 million (up approximately 20% over 2016 and more than double that of 2015), totaling 285 000 me of drilling. Mine-related exploration is expected to total $35 million and in addition approximately $5 million has been allocated for grassroots exploration programmes throughout the year.