Endeavour to cut back spending amid volatile gold market
Dual-listed gold miner Endeavour Mining announced last week 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 capi- tal 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.”
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