Endeavour Mining announced on Friday the sale of its 90% interests in the Boungou and Wahgnion gold mines in Burkina Faso for approximately $300 million. The move is part of the company’s strategy to prioritize higher quality assets.
The buyer, Lilium Mining, a subsidiary of Lilium Capital, is an investment vehicle focused on African and frontier markets, led by West African entrepreneurs, according to Endeavour Mining.
The consideration for the mines, which were deemed non-core to Endeavour, consists of upfront and deferred cash payments. Additionally, Endeavour will receive a 4% net smelter return royalty (NSR) on gold sold from both mines. The Boungou mine is expected to generate $52 million over its productive life, while the Wahgnion mine is projected to generate $41 million, the company stated.
As a result of the sale, Endeavour Mining revised its full-year gold production guidance to a range of 1.06 to 1.135 million ounces, down from the previous outlook of 1.325 to 1.425 million ounces. The all-in sustaining costs have also been adjusted and are expected to improve by $45 per ounce to a range of $895 to $950 per ounce.
This divestment allows Endeavour to reduce its exposure to the conflict-ridden region of Burkina Faso. The company aims to focus on its planned expansion at the Sabodala-Massawa mine complex in Senegal, as well as a project in Cote d’Ivoire, both of which are entering production.
Endeavour Mining has faced security challenges in its Burkina Faso operations, with terrorist attacks affecting its mines in the country over the past three years. The ongoing conflict has disrupted gold production and made it more challenging and costly to transport personnel and supplies. However, the company will retain its Houndé mine in Burkina Faso, as it is considered one of its key assets.
Endeavour intends to sustain a production level of over 250,000 ounces per year at the Houndé mine for more than ten years. In addition, the company announced a significant greenfield gold discovery in Côte d’Ivoire in November, which has the potential to become one of its flagship assets.
It was reported that Endeavour Mining recently made a takeover approach to Kinross Gold, but the Canadian company rejected the offer.
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