Endeavour Mining (LSE, TSX: EDV) has approved construction of its $1.2-billion (C$1.7 billion) Assafou gold project in Côte d’Ivoire, at an estimated cost 13% above April’s feasibility estimate, with first production targeted for the first half of 2029.
Shares traded 8.1% weaker at £37.94 in London Thursday afternoon, valuing Endeavour at about £9 billion ($11.9 billion). The company expects processing at its suspended Mana mine in Burkina Faso to resume in the second quarter of 2027, later than National Bank had forecast.
“Overall, we view the quarter positively on earnings, cost containment and cash conversion, although the timeline for a restart at Mana may be longer than what is currently implied by consensus estimates,” National Bank mining analyst Mohamed Sidibé wrote Thursday.
Assafou and an underground expansion at Sabodala-Massawa in Senegal underpin Endeavour’s goal of producing 1.5 million oz. annually by 2030. The investment decision comes as record cash generation strengthens its ability to fund growth, while operating setbacks constrain near-term output.
Higher compensation
Assafou’s budget has risen by $139 million from the $1.06 billion estimated in the feasibility study released April 23. Higher land and crop compensation accounts for about 60% of the increase, power infrastructure allowances for 10%, and preparations for operations and additional contingency for 15% each.
Power connection costs and the final route of a national highway diversion remain under negotiation. Terms of the project’s mining convention have been agreed in principle with Côte d’Ivoire, with signing expected in the coming weeks, Endeavour said.
The project, about 280 km northeast of Abidjan, is expected to produce an average of 320,000 oz. annually during its first eight years at all-in sustaining costs (AISC) of $1,026 an ounce. The cost estimate uses a gold price of $2,500 an ounce. The study envisages a 16-year mine life and a plant processing 5 million tonnes annually.
Endeavour has awarded Lycopodium the engineering, procurement and construction management contract. Resettlement earthworks are scheduled to begin late this month and plant earthworks before year-end, followed by concrete work in the second quarter of 2027 and commissioning in early 2029.
Power, tailings and water-storage construction is expected to start early next year, with mine pre-stripping in 2028. Endeavour is weighing contractor mining against operating its own fleet. It has committed $58.7 million, about 5% of the revised budget, with spending expected to accelerate this quarter.
The company is also evaluating more than 20 exploration targets within 10 km of Assafou. Its 2026–2030 program targets another 1 million to 1.5 million oz. of resources across the Tanda-Iguela property.
Mana weighs
Underground mining at Mana was suspended Oct. 28 after part of an access ramp subsided. Restart plans remain subject to geotechnical work and regulatory approval, with processing to follow the resumption of mining and rebuilding of stockpiles.
Sidibé had expected a restart in the first quarter of 2027. He now considers about 90,000 oz. a reasonable preliminary production estimate for Mana next year, compared with consensus of 158,000 ounces. That shortfall could reduce consensus forecasts for group free cash flow by about $160 million, or 6%, he said.
Endeavour maintained its 2026 production guidance of 1.09 million to 1.265 million oz., with output expected in the lower half. Production through September fell 10% to 820,000 oz., at AISC of $1,866 an ounce.
The company also maintained AISC guidance of $1,600 to $1,800 per oz., based on a gold price of $3,000 an ounce. Removing the additional royalties associated with higher gold prices puts nine-month costs at about $1,700 an ounce, Endeavour said.
Cash funds growth
Free cash flow reached a record $1.02 billion through September, up 50% from a year earlier. Endeavour ended the quarter with $263 million in net cash after reducing gross debt by $412 million, and returned $312 million to shareholders through dividends and buybacks by Nov. 10.
Third-quarter adjusted earnings of $1 per share exceeded the 77¢ consensus cited by BMO Capital Markets. Stronger Lafigué production helped, but the earnings beat largely reflected lower taxes and a smaller share of earnings attributable to minority shareholders, BMO mining analyst Raj Ray said in a note.
At Sabodala-Massawa, Endeavour targets first underground development ore before year-end and commercial production in early 2028.
Source: www.northernminer.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
