Endeavour Mining to expand Sabodala-Massawa mine in Senegal
Endeavour Mining will start construction work this quarter expanding the Sabodala-Massawa complex in Senegal.
The Definitive Feasibility Study recommends the expansion of the complex by supplementing the current 4.2Mtpa Carbon-in-leach plant with a 1.2Mtpa BIOX plant to process the high-grade refractory ores from the Massawa Central Zone and Massawa North Zone deposits, with first gold production expected early 2024.
The expansion project is expected to yield an incremental production of 1.35Moz of gold at a low AISC of $576/oz over the life of mine and boasts robust economics with an after-tax IRR of 72%, NPV of $861 million and 1.4-year payback period at a gold price of $1,700/oz.
Endeavour remains on track to discover its target of 2.3Moz to 2.7Moz of Indicated resources at Sabodala-Massawa over the 2021-2025 period.
Sébastien de Montessus, President and CEO of Endeavour Mining, said the study results demonstrate the asset’s potential to be a top tier mine capable of producing in excess of 400,000 ounces per year at an industry-leading AISC.
"Given the robust project economics, which significantly exceed our investment criteria, and the strong exploration upside potential, we are excited to launch this low-capex intensive brownfield expansion project as it will continue to improve the quality of our operating portfolio and contribute to driving the Group’s return on capital employed above our 20% target," he said.
He added that it has "significantly de-risked the project" by integrating key changes into the DFS, based on experience gained from operating the asset and the results of further technical analysis, and has highly experienced operating and construction teams already in place.
The project is expected to add an incremental average production of 194koz per year, over its first five years of operations (2024-2028) at an average AISC of $531/oz, which is expected to lift the Sabodala-Massawa complex to 'top tier status' with an expected average annual production of 373koz per year over the next 5 years at an average AISC of $745/oz for the combined CIL and BIOX operation.
Strong upside potential exists as the DFS does not include the conversion of the previously announced discovery of 709koz of M&I resources, which is expected to notably boost 2023 production.
Endeavour acquired the Sabodala-Massawa mine from Teranga Gold on February 10 2021, prior to which Teranga Gold acquired the Massawa project from Barrick Gold on March 4 2020, combining the Sabodala mill and deposits with the nearby Massawa deposits.
The Sabodala-Massawa mine consists of two mining licenses, the Sabodala exploitation permit and the Massawa exploitation permit, and two further exploration permits.
The Sabodala licence is held by Sabodala Gold Operations SA (“SGO”) while the Massawa license is held by Massawa SA. Endeavour holds indirectly through its subsidiaries a 90% stake in each of SGO and Massawa with the Government of Senegal holding the remaining interest.