Name of the Project
Houndé 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 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.

Exloration 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.

Jobs to Be Created
There are more than 2 000 personnel, including contractors currently working on site, of which more than 94% are Burkinabe. Notably, more than 2.7-million person hours have been worked without a single lost-time incident, highlighting the company’s focus on safety.

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
Houndé is progressing as planned.

The processing plant, which entailed detailed engineering of the processing facility along with the design hazard and operability study, was completed ahead of schedule in November 2016.

The CIL ring-beam concrete pour was achieved in early August 2016, and the SAG and ball mill first lift on both plinths was completed by year-end.

The construction of the 38-km-long, 91 kV overhead power line is more than 60% complete, with first power from Burkina Faso power utility Sonabel scheduled for August 2017.

Further, construction contracts for a 26 MW backup power station have been awarded and the plant is on schedule to be operational in the third quarter of 2017.

The tailings storage facility is also progressing ahead of schedule and is nearly 60% complete.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Construction at the Houndé project is progressing as planned, with more than 65% of project construction completed, only a year after breaking ground.

The first gold pour is expected in the fourth quarter of 2017.

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