Endeavour currently has a 100% interest in the Houndé Gold Project, situated in the south-western region of Burkina Faso just south of Semafo's Mana mine (see Figure 1). Ownership is currently 100%, however, upon achieving production it would become 90% by Endeavour and 10% by the government of Burkina Faso. A Feasibility Study was initiated on Houndé in January 2013, targeted for completion by year-end. Work being completed for the Feasibility Study includes: in-fill drilling (41,365 metres in 369 drill holes) toward a revised mineral resource estimate, geotechnical and sterilization drilling, metallurgical testing and an environmental baseline study
Figure 1: Houndé location map
In a January 22, 2013 news release, Endeavour announced the results of the Houndé Preliminary Economic Assessment (PEA). The Houndé Project PEA focused on the Vindaloo group of deposits that are located approximately 250 km southwest of Ouagadougou, the capital city of Burkina Faso. The deposits are approximately 2.7 km from a paved highway and as close as 200 metres from a 220 kV power line that extends from Cote d'Ivoire through to Ouagadougou. The nearby town of Houndé has a population of approximately 22,000. A rail line that extends to the port of Abidjan, Cote d'Ivoire lies approximately 25 km east of the deposit area.
The PEA considered the owner operated development of two open pit mines over the Vindaloo and Madras NW zones. The Vindaloo pit would mine a series of closely spaced gold zones along an approximate 4.8 km strike length. The Madras NW pit would be approximately 900 metres long and would only mine saprolite and transition mineralization. (See Figure 2)
Figure 2: Whittle Pit with Phase 1 in blue at the south end of the Vindaloo deposits
Houndé PEA Highlights, on a 100% basis, include:
(All amounts in US dollars unless otherwise indicated)
- Owner operated open pit mining and a potentially economic portion (including dilution and mineable extraction) of the resource of 28 million tonnes grading 2.0 g/t Au (at 0.91 g/t Au cut-off) yielding 1.78 million ounces of contained gold
- Estimated potential average annual production of 161,000 gold ozs per year over a 10 year mine life, with total life of mine production of 1.61 million ozs
- An average 91% process recovery at a milling rate of 8,000 tonnes per day supplying a conventional gravity/CIL circuit
- Initial start-up capital is estimated at $303 million with sustaining capital estimated at $57 million (excluding VAT and import duties)
- Total initial funding requirement is estimated at $345 million including start-up capital, VAT, import duties and certain first year equipment purchases
- Forecast life of mine direct cash cost of $563 per ounce (excluding royalties)
- The project yields, on an after-tax basis:
|
At $1,300/oz Gold Price (Base Case) |
At $1,650/oz Gold Price (Sensitivity) |
NPV 0% |
$505 million |
$920 million |
NPV 5% |
$288 million |
$584 million |
IRR |
21% |
34% |
PDF download (13 MB file):
Houndé PEA Technical Report March 11, 2013
