PERTH (miningweekly.com) – Dual-listed gold miner Endeavour Mining on Wednesday announced that it would cut back on capital spend during 2013, as market volatility in the gold sector continued.

The miner produced some 73 654 oz of gold during the first quarter of 2013, at a total cash cost of A$897/oz, while gold sales for the quarter reached 71 926 oz for a cash margin of A$46-million.

The ASX- and TSX-listed miner said it had invested some A$55.6-million in new mine construction, development and exploration during the quarter.

However, a number of cost reductions were being implemented for the remainder of the year, including reducing the full-year exploration budget from A$20-million to A$15-million, reducing its land position by some 50% to cut back on spending commitments on noncore properties, reducing corporate expenses by A$5-million, and selling off its noncore rare earths assets.

CEO Neil Woodyer told shareholders that Endeavour was continually reviewing its capital and operating spend and was focusing on core operations in the current market environment, as well as completing the construction of its Agbaou mine, in Côte d'Ivoire, and limiting cash spending in other areas.

“Assuming a gold price of $1 400/oz for the balance of the year, we expect to generate an all-in sustaining margin of around A$127-million for 2013, which compares to our original forecast of A$166-million at a $1 600/oz gold price,” he said.

He added that this operating cash flow, supplemented by the cash on hand and the bullion balance of A$128-million, would fund Endeavour’s planned 2013 investments.

“Our growth plans remain intact and Agbaou is a key asset in our future operating profile that will make a meaningful contribution to our cash flow in early 2014, while reducing our average cash costs.”

Meanwhile, the company reported that its Tabakoto mine, in Mali, produced some 28 159 oz during the first three months of the financial year, with previously announced cost reduction initiatives reducing the operation’s cash costs during the quarter.

These initiatives included staff reductions and the introduction of openpit owner mining.

“We have had a significant impact in restructuring Tabakoto and appreciate the efforts of our management, employees and contractors in achieving a 25% decrease in cash costs per ounce from late 2012,” Woodyer said.

He noted that the Tabakoto mill expansion had been completed, with its ramp-up now under way. Further unit-cost improvements are expected as contractors leave the site and the operation reaches full capacity.

At the Nzema gold mine, in Ghana, Endeavour produced some 22 456 oz during the quarter, with production affected by the slower-than-planned access to and development of the Adamus pits, owing to protracted negotiations in the resettlement process.

Endeavour expected that gold grades and production at Nzema would improve in the second half of the year, as higher-grade portions of the Adamus pits were accessed.

“Nzema had a challenging quarter from a cost perspective, due to processing the initial lower-grade material at the Adamus pits and including some transitional material from the Salman deposits, which is known to have low gold recoveries,” said Woodyer.

He added that costs at Nzema were also expected to decrease in the second half of the year, as the higher-grade portions of Adamus were accessed, along with higher volumes, which would allow Endeavour to reduce mining of the Salman transition material.