TSX-listed Endeavour Mining on Monday reported that its production for the 2019 financial year, at 651 000 oz, at an all-in sustaining cost (AISC) of $818/oz, had been in line with guidance.

Production was 6% higher year-on-year and at the bottom end of the miner’s guidance of 650 000 oz and 695 000 oz.

Endeavour has met its production guidance for a seventh consecutive year.

The company reported a slower-than-expected ramp-up at the newly commissioned Bouéré deposit at Houndé, caused by heavy rain in the third quarter of the year.

Meanwhile, operating cash flow increased by 20% year-on-year to $302-million.

Additionally, Endeavour noted on Monday that, following nearly four years of intensive growth-capital investment, net debt was reduced by $52-million in the third quarter and by a further $80-million in the fourth quarter.

Adjusted net earnings for the year were up by 39% year-on-year to $74-million.

Commenting on the company’s results, president and CEO Sébastien de Montessys said Endeavour had “successfully transitioned from a period of intense capital investment to an exciting new phase of significant cash flow generation”.

He added that, in the near term, Endeavour would be “squarely focused” on strengthening its balance sheet and ensuring optionality was built into its portfolio.

Endeavour intends to achieve this through continuing to deleverage, which is supported by strong free cash flows, while simultaneously progressing studies at its Kalana and Fetekro projects and continuing to advance exploration.

KEY ACHIEVEMENTS

In 2019, Endeavour said it “continued to deliver against its strategy”, with strong progress made across operational excellence, project development, unlocking exploration value, as well as its active portfolio and balance sheet management.

In terms of project development, in particular, the miner’s Ity carbon-in-leach (CIL) project, in Côte d’Ivoire, was completed on budget and four months ahead of schedule with the five-million-tonne-a-year volumetric upgrade completed for minimal capital expenditure.

Under the exploration value banner, Endeavour continued to deliver against its five-year discovery target, with 2.1-million ounces of measured and indicated resources discovered in 2019, totalling 6.3-million ounces at a discovery cost of about $12/oz.

OPERATIONAL UPDATE

Production at the Ity mine decreased slightly in the fourth quarter as lower processed grades and recoveries were partially offset by increased throughput. In contrast, mining activity increased following the end of the rainy season with 3.6-million tonnes of material moved, compared with 3.2-million tonnes in the previous quarter.

Tonnes of ore mined decreased slightly owing to an increase in the strip ratio, with activity mainly focused on the Ity, Daapleu and Bakatouo pits, the latter of which was not mined during the rainy season.

Plant throughput increased in line with the volumetric upgrade to five-million tonnes a year, which was completed during the fourth quarter.

AISC increased owing to a higher strip ratio, lower recovery rates, and higher unit mining costs which were partially offset by lower unit processing costs and lower sustaining capital. Mining unit costs increased from $4.27/t to $5/t mined owing to the use of a mining contractor to supplement load and haul activities in the Bakatouo pit in particular.

Nonsustaining capital increased from $100 000 to $1.3-million, which Endeavour said was mainly related to land compensation and waste capitalisation.

Production at Ity for 2019 totalled 190 000 oz, achieving the upper end of the original guidance of between 160 000 oz and 200 000 oz, mainly owing to its quick ramp-up period. AISC was $616/oz, in line with the outlook provided in the previous quarterly reporting period.

This year, Ity is expected to produce about 235 255 oz at an AISC of between $630/oz and $675/oz.  

A greater proportion of fresh ore is planned to be processed during the upcoming year as mining elevations get deeper while processed grades are expected to remain stable, Endeavour said.

Meanwhile, production at the Houndé mine remained flat during the last quarter of 2019 owing to the slightly higher throughput being offset by lower processed grades. Mining during the period focused mainly on the Vindaloo main and Bouéré pits, with total tonnes of ore mined decreasing as mining activities continued to prioritise waste extraction.

Tonnes milled during the year increased slightly and continued to perform nearly 30% above nameplate capacity while the ore blend continued to be mainly transitional/fresh ore. Processed grades, meanwhile, decreased despite an about 20% increase in mined grades, as low-grade stockpiles supplemented the mill feed.

Recovery rates remained flat and AISC decreased.

Production at Houndé totalled 223 000 oz at an AISC of $878/oz for the 2019 financial year.

For this year, Houndé is expected to produce between 230 000 oz and 250 000 oz at an AISC of $865/oz to $895/oz.

An exploration programme of up to $11-million totalling about 94 000 m has been planned for 2020 at Houndé, with the aim of delineating additional resources in the Kari area and at the Vindaloo South and Vindaloo North targets. Other targets such as Dohun and Sia/Sianikoui are expected to be tested as well.

Meanwhile, production at the Agbaou mine totalled 138 000 oz during the year, beating the upper end of the guidance range of between 120 000 oz and 130 000 oz owing to better-than-expected mill throughput and recovery rates.

AISC amounted to $796/oz, well below the guided range of between $850/oz and $900/oz as a result of higher production and lower sustaining costs.

For this year, Agbaou is expected to produce between 115 000 oz and 125 000 oz at an AISC of between $940/oz and $990/oz.

Meanwhile, an exploration programme of up to $2-million is being considered at Agbaou for 2020 with the aim of continuing to test targets located along extensions of known deposits and on parallel trends.

Further, production at Endeavour’s Karma mine remained flat during the final quarter of 2019 owing to an increase in stacked tonnage and recovery rates offsetting the lower stacked grades.

Production at the operation totalled 97 000 oz at an AISC of $903/oz, below the 2019 production guidance of between 105 000 oz and 115 000 oz owing to less-than-expected oxide material mined in the fourth quarter, in turn, owing to lower overall ore tonnes in Kao Main and the prolonged rainy season.

AISC was within the guided range of between $860/oz and $910/oz, a better-than-expected result compared to the outlook provided in the previous quarterly reporting owing to year-end accrual and working capital adjustments, Endeavour enthused on Monday.

For this year, Karma is expected to produce between 100 000 oz and 110 000 oz at an AISC of between $980/oz and $1 050/oz.

Mining activity is expected to occur at the Kao North pit throughout the year, while the GG1 deposit is expected to be started late in the first quarter.

The overall strip ratio is expected to remain in line with the prior year.

An exploration programme of up to $2-million is being considered for this year with the aim of in-fill drilling and testing extensions of known deposits.