Endeavour Mining’s Gold Production and Costs in 2023

by Warren Seah

Endeavour Mining, a London-based gold miner, has announced that its gold output in 2023 met the company’s targets. However, the all-in sustaining costs (AISC) came in above the guided range. Looking ahead to 2024, Endeavour Mining expects production to increase by as much as 19%. This growth will be driven by the start-up of production at the Lafigue project in Ivory Coast and the expansion of the Sabodala-Massawa mine in Senegal.

Production Report

For 2023, Endeavour Mining had set a production target between 1.06 million and 1.135 million ounces. The company achieved fourth-quarter production from continuing operations of 280,000 ounces, which was consistent with the third quarter. The anticipated decrease at Hounde in Burkina Faso was offset by increases at Sabodala-Massawa, although the latter encountered lower grades in the Sabodala pit during its final phase of mining. Meanwhile, Mana in Burkina Faso and Ity in Ivory Coast both maintained flat production levels.

Overall, Endeavour Mining’s production from continuing operations in 2023 amounted to 1.07 million ounces. This represents a decrease of 89,000 ounces (8%) compared to the 1.16 million ounces produced in 2022. The decline was primarily attributed to lower production at Mana and Sabodala-Massawa, despite record annual production achieved at both Hounde and Ity.

All-In Sustaining Costs Analysis

Regarding all-in sustaining costs (AISC), Endeavour Mining had initially guided for a range between $895 and $950 per ounce in 2023. However, the AISC from continuing operations increased by $114 per ounce from $850 per ounce in 2022 to approximately $964 per ounce in 2023. This increase in AISC was observed at Hounde, Mana, Sabodala-Massawa, and Corporate operations. Additionally, there was a $15 per ounce increase in royalty costs, although this rise was partially offset by decreased AISC at Ity.

For the fourth quarter, the AISC decreased by $31 per ounce (3.2%) compared to the third quarter, amounting to approximately $936 per ounce. This reduction occurred despite a $24 per ounce increase in royalty costs due to higher realized gold prices and the impact of changes in the sliding scale royalty rates in Burkina Faso, which went into effect in November 2023.

Overall, Endeavour Mining demonstrated mixed results in terms of production and costs in 2023. While achieving its production targets, the company faced higher AISC than originally anticipated. However, with the upcoming projects in Ivory Coast and Senegal, the miner expects a significant boost in production for the year 2024.

Endeavour Mining Expects Increased Production in 2024

Endeavour Mining, a top gold producer, has provided an update on its performance and future plans. The company’s all-in sustaining cost (AISC) has been positively impacted by reductions at Sabodala-Massawa and Mana mines. However, there has been a slight increase at the Hounde mine, while the Ity mine has remained steady.

Production Guidance for 2024

Endeavour Mining is expecting a significant increase in production for the year 2024. The projected amount ranges from 1.130 million to 1.27 million ounces, reflecting a growth of nearly 200,000 ounces or 19%. This increase is primarily attributed to the commissioning of the Sabodala-Massawa expansion and the Lafigue projects in the second quarter of 2024.

AISC and Quality Improvement

The company anticipates that the AISC will remain consistent with its recent quarters’ achievements, at an impressive industry-low range of $955 to $1,035 per ounce. Additionally, Endeavour Mining expects a higher production concentration during the second half of the year. Moreover, the AISC is anticipated to decrease during this period due to the significant enhancement in the company’s portfolio resulting from its organic growth projects.

Capital Expenditure Plans

In terms of capital expenditure, Endeavour Mining foresees a decline in both sustaining and non-sustaining capital spend for 2024. The total projected mine capital expenditure for the year is approximately $315.0 million, which reflects a decrease of $32.7 million or 9% compared to the previous year.

As for growth capital spend, the company plans to invest around $245.0 million in 2024, marking a significant reduction of $202.1 million or 45% compared to 2023. The expenditure will cover the remaining growth capital for the Sabodala-Massawa expansion project and the Lafigue project, amounting to approximately $75.0 million and $170.0 million respectively.

Focus on Exploration

Endeavour Mining aims to maintain a strong focus on exploration activities throughout 2024. It has allocated a company-wide exploration budget of $65.0 million. A significant portion of this budget, approximately $15.0 million, will be dedicated to the highly promising Tanda-Iguela property in Ivory Coast. This property has emerged as one of the most significant mineral discoveries in West Africa over the last decade.

In conclusion, Endeavour Mining’s strategic initiatives and projected outcomes indicate a positive trajectory for the company. With increased production, low AISC, and focused exploration efforts, it is well-positioned to capitalize on the potential growth opportunities in the gold mining sector.

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