Name of the Project
Houndé gold project.

Location
The project is located within the Birimian greenstone belt in Burkina Faso, just south of Semafo’s Mana mine and about 250 km south-west of the capital city, Ouagadougou, and benefits from excellent existing infrastructure.

Client
Houndé Gold Operation, Endeavour Mining’s Burkina Faso operating subsidiary.

Project Description
With its robust grade and low cash costs, Houndé ranks among West Africa’s highest-quality gold development projects.

Once in full production, Houndé is expected to become Endeavour’s flagship low-cost operation, with a life-of-mine of more than ten years.

Endeavour Mining expects to produce an average of 190 000 oz/y at an all-in sustaining cost (AISC) of $709/oz over the life-of-mine. Over its first four years, Houndé’s average production is expected to be 235 000 oz/y at an AISC of $610/oz.

A 34% increase in the estimated mineral reserve has resulted in greater output expectations and a longer mine life.

The project has proven and probable reserves of 30.6-million tonnes, with an average grade of 2.1 g/t gold.

The updated mine plan defines a large-scale openpit mine that provides 29.7-million tonnes of ore at 2.15 g/t of gold and 251-million tonnes of waste for a strip ratio of 8.4:1.

The enhanced production relative to the November 2013 feasibility study is a result of the exploration additions from 2014 and an optimisation of the mine plan to access high-grade and shallow gold-mineralisation during the initial years of the mine life.

The processing plant consists of a three-million-tonne-a-year gravity circuit/carbon-in-leach (CIL) plant with a semiautogenous (SAG) ball crushing comminution circuit.

Additional infrastructure includes the construction of the 38-km-long, 91 kV overhead power line.

Exploration potential
The Houndé exploration tenement covers more than 1 075 km2 within the highly prospective Birimian greenstone belt. Following a two-year period of no drilling, exploration activities will resume in 2017, with a $5-million programme totalling an estimated 45 000 m.

The focus will be on delineating high-grade targets, such as Bouere and Kari Pump, in addition to performing reconnaissance drilling.

Openpit prestrip mining at the main Vindaloo openpit, adjacent to the processing facility, also started in late 2016.

The enlarged reserve will result in total gold production of about 1.9-million ounces over a ten-year mine life, compared with the originally estimated 1.4-million ounces over an eight-year mine life.

Potential Job Creation
More than 2 000 personnel, including contractors, are on site, of which more than 94% are Burkinabe.

Net Present Value/Internal Rate of Return
The internal rate of return has increased from the previously estimated 22.4% to 32% at a gold price of $1 250/oz.

The project’s after-tax net present value has been estimated at $359-million at the same gold price.

Value
The updated capital cost is estimated at $328-million, including contingency, working capital and import duties.

This represents a 3.2% increase over the $315-million estimate in the November 2013 feasibility study.

Duration
Engineering, procurement and construction are estimated at between 18 to 20 months from board approval to first gold production.

The Houndé project began construction in April 2016, with the first gold pour expected by the fourth quarter of 2017.

Latest Developments
Endeavour Mining has reported that wet commissioning at the Houndé gold project has started, with the first ore making its way through the milling circuit.

Endeavour believes that it has significantly derisked the project’s start-up with three months' worth of ore feed already stockpiled on the run-of-mine and the transition of the experienced Agbaou processing team to Houndé.

Endeavour’s confidence in the project’s progress has enabled it to continue twith the aggressive advancement of the high-quality project pipeline, with a portion of the Houndé construction team already transitioning to the Ity carbon-in-leach project, in Côte d'Ivoire, and the launch of the Kalana updated feasibility study, in Mali, following the company’s recent acquisition of London-listed Avnel Mining.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
The project is progressing ahead of schedule, with more than 97% of the total project complete and within budget, and the first gold pour expected ahead of schedule in the first half of the fourth quarter.

Contact Details for Project Information
Endeavour Mining, tel +44 203 640 8665 or email info@endeavourmining.com.