Modern Mining April 2016

GOLD

has just announced the first gold pour at its Karma mine, also located in Burkina Faso (see sidebar below). Comments Neil Woodyer, CEO of Endeavour: “With the ramp-up of Karma soon underway, and our operations delivering a strong perfor- mance, we are now well positioned to build the Houndé project, which will further lift the overall quality of our portfolio. Once in pro- duction, it will become our flagship low-cost mine and will rank amongst West Africa’s top tier cash generating mines. Furthermore, Houndé will benefit both from our construc- tion track-record, demonstrated most recently at Agbaou, and our team’s operating experi- ence in Burkina Faso.” 

2017. Endeavour plans to self-perform 72 % of the project build, while Lycopodium will focus primarily on the processing facility which is the remaining 28 % of the total capital com- mitment for the project. Endeavour’s project management team will include approximately 90 personnel to perform all remaining con- struction tasks. Endeavour’s team will also be responsible for all concrete work. The Houndé project is expected to be funded from internal and existing sources of capital, as well as the planned mining equipment financ- ing. In addition, the free cash flow generated during 2016 and 2017 from Endeavour’s operat- ing mines will – it is anticipated – increase total financing sources to above 1,5 times the total capital cost, representing in excess of 50 % financing headroom. Endeavour’s objective is to fund Houndé utilising its free cash flow generated over the construction period rather than accessing its Revolving Credit Facility (RCF). To support this funding approach it has put in place a short-term Gold Revenue Protection Strategy consisting of gold option contracts evenly spread over a 15-month period, to increase the certainty of its upcoming free cash flow. The gold option contracts have been structured to limit Endeavour’s debt requirements even if the gold price drops to US$1 000/oz. Endeavour believes there is considerable potential to increase resources at Houndé. The Houndé exploration tenement covers over 1 075 km² within Burkina Faso’s highly pro- spective Birimian belt. However, in light of the project’s already robust economics, limited exploration has been done over the past years, aside from a short drilling campaign in 2014 which outlined the Bouéré and Dohoun depos- its and resulted in a 34 % increase in mineral reserves to 2,1 million ounces. Historically, exploration focused mainly on the Vindaloo trends; however, at least 15 sig- nificant targets located within 20 km of the planned mill have been identified by previ- ous limited drilling campaigns. Most of these targets are untested and Endeavour expects to explore high grade targets of greater than 5 g/t as its priority. The Houndé long-term exploration strategy is currently being integrated into Endeavour’s ongoing exploration strategic review. Endeavour already has four producing mines in the West African region – Tabakoto in Mali, Ity and Agbaou in Côte d’Ivoire and Nzema in Ghana. Houndé will be its first mine in Burkina Faso. The company is, however, in the process of acquiring True Gold Corp which

Karma project produces its first gold Canada’s True Gold Mining Inc, which is listed on the TSX-V, reports that it achieved first production at the Karma gold mine in Burkina Faso on April 11, 2016, a few weeks following the start of leaching of ore. “This achievement is a direct result of the hard work and dedication of the management team and employees, Board of Directors, our suppliers and financing partners, as well as the strong support of the Government of Burkina Faso and local communities,”commented Christian Milau, Pres- ident & CEO of True Gold. Karma has been designed as a shallow, low-cost, open-pit, 4 Mt/a heap-leach operation which will produce between 110 000 and 120 000 ounces of gold a year in years 1 to 5 at an all-in sustaining cost of ap- proximately US$700/oz. The material being mined is free digging with no blasting required. On present reserves of 33,2 Mt at 0,89 g/t, Karma will have an eight- year mine life although this will likely be extended by about 2,5 years by mining of the North Kao deposit (which currently has an inferred re- source). The mine is situated in the regionally east-west trending Goren greenstone belt, one of the larger Birimian greenstone belts in central north Burkina Faso. 

True Gold executives at the first gold pour. They (from left): David Laing (COO), John Sampson, Cyriaque Ki, Scott Heffernan, and Christian Milau (CEO).

April 2016  MODERN MINING  37