Endeavour Gold to beat full year production guidance
The Endeavour Group continued strong safety record, with a lost time injury frequency rate (“LTIFR”) of 0.21 for the trailing twelve months ending 30 September 2021.
The acquisition of Teranga Gold was completed on 10 February 2021 and the Sabodala-Massawa and Wahgnion assets have been consolidated into the financial statements from this date. The sale of Endeavour’s non-core Agbaou mine closed on 1 March 2021, and has been classified as a discontinued operation.
A better than expected performance was achieved in Q3-2021 due to outperformance notably at the Houndé and Sabodala-Massawa mines. Production decreased by 7% in Q3-2021 over Q2-2021 to 382koz mainly due to the rainy season, while AISC increased by $50/oz to $904/oz due to the rainy season and scheduled higher sustaining capital spend.
Production increased by 57% in Q3-2021 over Q3-2020, due to the full benefit of consolidated production from Sabodala-Massawa and Wahgnion and the strong operational performance notably at Ity, Houndé and Boungou, while Group AISC remained fairly flat.
Production remained consistent with Q2-2021 as the greater throughput and recovery rate were offset by lower grades;
- Total tonnes mined decreased in Q3-2021 following the accelerated mining activity in the first half of the year, due to the scheduled reduction in mining during the wet season and a lower strip ratio, as the focus was on ore mining in Phase 2 of the West Pit and waste stripping in the Phase 3 of the West and East pits. Ore mining was constrained to lower grade areas as the larger mining fleet was focused on waste extraction at the East pit. Mining activities continued to focus on the West pit Phase 2 and 3 with total tonnes of ore mined increasing as a result of the lower strip ratio and the benefit of mining on the top benches. Pre-stripping activities at the East pit continued during Q3-2021.
- Tonnes milled increased in Q3-2021 relative to Q2-2021 as higher mill utilisation resulted from improved mining fragmentation of the ore, as well as the benefit of improvements made to the SAG mill, pebble crusher and vertical tower mill.
- Average processed grades decreased in Q3-2021 as the mill feed continued to be sourced from the lower grade areas of the West Pit Phase 2, as the higher grade areas were targeted during the restart of mining activities in Q4-2020 and Q1-2021.
AISC per ounce of gold decreased in Q3-2021 compared to Q2-2021 due to the decrease in sustaining capital resulting from less stripping at the West pit and a decrease in unit mining and processing costs due to improved mining fragmentation and shorter hauls associated with the near surface Phase 3 expansion.
Sustaining capital of $3.4 million mainly related to waste capitalisation at the West Pit and the third TSF wall raise.
Non-sustaining capital of $5.4 million related to pre-stripping at the East pit.
2021 OUTLOOK
- Boungou is expected to achieve the bottom half of the FY-2021 production guidance of 180 – 200koz, while AISC are expected to continue to trend above the guided $690 – 740 per ounce range as a result of higher fuel prices and increased security costs.
- Plant feed is expected to continue to be sourced from the West Pit with waste stripping activities continuing at the East Pit through to the end of the year. Mill throughput and average processed grades are expected to remain broadly consistent with year to date performance in Q4-2021.
- The sustaining capital spend outlook for FY-2021 remains unchanged compared to the initial guidance of $19.0 million, of which $16.5 million has been incurred year to date. The non-sustaining capital spend outlook for FY-2021 also remains unchanged compared to the initial guidance of $22.0 million, of which $13.9 million has been incurred year to date.
