The Ity operation in Cote d'Ivoire
Photo by: Endeavour Mining
Gold miner Endeavour Mining has accelerated the launch of the construction of a recyanidation circuit at its Ity operation, with the additional circuit forming part of its optimisation initiatives at the Côte d’Ivoire-based mine.
The Toronto- and London-listed company on Thursday announced the $41-million investment, stating that it moved forward on the project given the excess cash flow that it was generating in the high gold price environment, coupled with strong operational performance and a cautious approach in staggering growth projects.
The additional circuit would optimise costs by reducing leaching and detox reagent consumption, improving the quality of the discharge water, and increasing production through higher recovery rates, Endeavour explained.
The recyanidation process reduces cyanide consumption by capturing free cyanide from the plant tailings and recycling it back into the leach circuit while increasing recovery rates.
“Given that the project is expected to result in 87 000 oz of additional gold production and $63-million in cost savings over Ity’s current reserve life, the $41-million upfront investment has screened very well within Endeavour’s capital allocation framework based on both its financial returns and positive ESG [environment, social and governance] impact,” Endeavour said.
The addition of the recyanidation circuit has increased Ity’s 2022 nonsustaining capital expenditure (capex) guidance from $29-million to $60-million. The group’s total nonsustaining capex would amount to $204-million this year, of which $41.9-million has been incurred in the first quarter.
The total 2022 growth capex would amount to $121-million, mainly related to the Sabodala-Massawa expansion project, in Senegal.
Endeavour last month launched the Sabodala-Massawa expansion project, which entails adding a 1.2-million-tonne-a-year BIOX plant, designed to process the high-grade refractory ore from the Massawa deposits. The expansion adds incremental production of 1.35-million ounces at an all-in sustaining cost (AISC) of $576/oz over the life of the expansion project, lifting Sabodala-Massawa to top-tier status.
Early-stage works were under way, including access road and drainage construction, the miner reported. The engineering, procurement, construction and management contract would be awarded in the second quarter and construction of the plant and associated infrastructure would ramp up significantly through 2022 with about $115-million of the total $290-million project budget to be spent this year.
“We are focused on continuing to enhance our business resilience by improving the quality of our portfolio through our attractive organic growth opportunities and optimisation initiatives. As such, we have recently begun the expansion of Sabodala-Massawa and the definitive feasibility study [DFS] for our Lafigué project is nearing completion.
“In addition, we are continuously working on improving the efficiency of our operations by identifying and pursuing high priority optimisation initiatives, in an effort to remain a low-cost producer despite the industry-wide inflationary pressures,” CEO Sebastien de Montessus commented.
The DFS for the Lafigué project on the Fetekro property, in Côte d’Ivoire, would now be completed by mid-2022. A positive prefeasibility study was published in February last year. Given its strong exploration potential, Endeavour believes that Fetekro has the potential to become a cornerstone asset with a target of 209 000 oz/y over ten years at an AISC of $838/oz.
Endeavour is also working on the DFS for the Kalana project, in Mali, and said it would be completed in the second half of the year. Kalana has the potential to produce 150 000 oz/y at an AISC of $901/oz over an 11-year mine life.
Q1 PERFORMANCE
Meanwhile, Endeavour reported strong first-quarter results, with production increasing by 14% year-on-year to 357 000 oz/y at a relatively flat AISC of $848/oz. The company has guided full-year production of 1.3-million to 1.4-million ounces at an AISC of $880/oz to $930/oz.
Operating cash flow increased by $96-million to $299-million, up 23% on a per-share basis to $1.21 a share. Adjusted earnings came to $122-million, or $0.49 a share, compared with $101-million, or $0.48 a share, a year earlier.
The miner's net cash position increased by $90-million during the quarter to $167-million, despite $101-million paid in capital returns to shareholders.