Endeavour Mining reports that
its Youga Mine in Burkina Faso,
which it acquired a 90% interest in
when it completed the purchase of
Etruscan resources in September
2010, produced 82,400 ounces of
gold in 2010.
The production makes 2010 a
milestone year in Endeavour’s conversion
from a purely merchant
banker to a producing gold company.
For 2011, the production from the
Youga Mine is expected to remain at
about the same level as 2010, or
84,000 ounces. cash costs should
also be about the same, $600 per
ounce, excluding royalties. Assuming
an average gold price of $1,350,
which may be a bit rich, the mine is
forecast to generate US$32 million of
free operating cash during for 2011.
Endeavour also repaid the
US$28 million Youga project debt
facility, making it effectively debtfree.
At year-end, the company had
cash and marketable securities of
about US$200 million and an
untapped acquisition credit facility of
US$100 million.
On the exploration front,
Endeavour has budgeted US$10 million
to drill more than 50,000 meters
in 2011, and the program has already
begun. The goal is to increase proven
and probable reserves at Youga,
which, as of december 2009, stood
at 5.9 million tonnes at an average
grade of 2.5 g/t gold, or 473,000
ounces, assuming a $700 gold price.
An updated resource estimate was
expected by the end of december
2010, but the company has not yet
commented on the delay or when it is
now expected.
last year’s exploration along the
Youga Gold Belt discovered new
drill targets, including not only
extensions to the A2NE and Zergoré
deposits, but also a new “Triple ‘A’
Zone” to the east of the main pit.
That Endeavour is fully committed
to its role as a gold producing
company should no longer be in
doubt: The company has agreed to
sell its 47.3% interest in rockwell
diamonds back to rockwell, and is
also in the process of spinning out
its Namibian rare earth assets into a
new, publicly traded entity.
On the gold front, the company
is conducting a 20,000-meter drill
program on its Agbaou Gold project
in the ivory coast, and is also conducting
engineering and technical
studies to optimize the project’s feasibility
study.
And the company hopes to
make good use of its cash hoard,
with several gold potential gold production
acquisitions now under
evaluation in Africa, South America
and other regions.
Endeavour’s management team
believes in gold. They expect the
price of the yellow metal will continue
to rise in coming years, and
their goal is to leverage that gain
through the aggressive growth of
gold production through development
and acquisitions.
i don’t know of any group more
qualified to undertake that mission,
and so Endeavour remains a strong
hold.