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GOLD
April 2016
MODERN MINING
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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
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.”
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).