Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) said it has sold its 90% interests in the Boungou and Wahgnion mines in Burkina Faso for a consideration of more than US$300mln.
Lilium Mining, a subsidiary of Lilium Capital, has bought the mines, with payment comprised of upfront and deferred cash as well as net smelter return (NSR) royalties.
“In line with our strategy of actively managing our portfolio to focus management efforts on higher quality assets, we are pleased to announce the sale of our non-core Boungou and Wahgnion mines to Lilium Mining,” commented Endeavour Mining president and chief executive Sébastien de Montessus in a statement.
The sale of the mines is expected to more than offset ongoing construction activities, with the group’s production and all-in sustaining costs (AISC) to improve next year after expansions of projects in Senegal and the Ivory Coast, the company said.
As a result of the sale, Endeavour expects full-year production guidance to fall from the previously guided range of between 1,325koz and 1,425koz to 1,060koz to 1,135koz.
However, AISC (all-in-sustaining-costs) guidance has improved by US$45/oz to between US$895/oz and US$950/oz.
Under the sale terms, US$130mln will be received by 31 July in the form of a reimbursement of historical shareholder loans, which will be used to strengthen the balance sheet and progress further projects, the company said.
A deferred instalment of US$10mln will be paid by the end of the fourth quarter of this year, with a further US$15mln paid by the end of the first quarter of 2023.
Further deferred payments comprised 50% of the net free cash flow generated at Boungou until US$55mln has been paid.
There will also be a 4% NSR (net smelter return) of gold sold at both mines, with Bougnou expected to generate US$52mln over its life of mine, and Wahgnion US$41mln, Endeavour said.