Endeavour Mining Corp (TSE:EDV) (OTCMKTS:EDVMF) (FRA:E5Y1) said it has moved to a definitive feasibility stage for its Fetekro and Kalana gold projects after reporting positive pre-feasibility studies (PFS) for both.
The projects, in Ivory Coast and Mali respectively, show long mine lives and attractive economics and confirm the miner has a strong pipeline of assets, which it can grow organically.
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The PFS for Fetekro showed a ten-year mine which can produce over 200,000 ounces a year with an after-tax net present value (NPV) of US$470 million and internal rate of return (IRR) of 33%, based on a gold price of US$1,500 an ounce. All-in-sustaining-costs (AISC) were put at US$838 per ounce.
The document for Kalana envisages an 11-year project with an average annual production of 150,000 ounces at AISC of US$901 per ounce.
"The positive studies announced today confirm the compelling nature of our two most advanced projects and reinforce our focus on organic growth," said Sebastien de Montessus, the chief executive at Endeavour. in a statement
"Together with a number of earlier stage projects, Endeavour now has an attractive pipeline of opportunities, each of which will compete for capital with the goal of generating strong returns across operations, projects and exploration."
The company boss noted that Endeavour's US$20 million investment in exploration at Fetekro over the past three years has paid off, while having purchased Kalana for around US$120 million in 2017, the project now has a NPV of approximately US$330 million at a gold price of $1,500 per ounce, despite the "overhaul of the geological model which incorporates more conservative assumptions".
de Montessus also noted that both projects have low forecast emissions, in line with the group's current operations, as well as the opportunity to benefit from renewable energy, either in the form of a solar plant at Fetekro, or from the Malian grid for Kalana which has a significant portion powered by renewables.
"We will now progress the Definitive Feasibility Studies for both projects, which we expect to announce in late 2021 for Fetekro and in early 2022 for Kalana," he added.
At Fetekro, the Lafigué deposit is near-surface and amenable to conventional open-pit mining and will be developed by contractors in eight stages. Total capital costs for the project, which is expected to take 18 months to build, were pegged at US$338 million, give or take plus 20% or minus 10%.
Meanwhile, the Kalana project showed an after-tax NPV of US$331 million and an IRR of 49%, based on a US$1,500 per ounce gold price. Upfront capital costs were put at US$297 million.
Fetekro has reserves of 2.1 million ounces, while Kalana boasts 1.8 million ounces.
Endeavour Mining operates six producing mines across Ivory Coast and Burkina Faso. It also has four potential development projects in West Africa.
Contact the author at giles@proactiveinvestors.com