Endeavour Mining, a gold mining company focused on West Africa, reported an increase in gold production during the third quarter. This growth was primarily driven by higher output at its Hounde mine in Burkina Faso. Additionally, the company's all-in sustaining costs (AISC) fell below the desired threshold of $1,000 per ounce. Let's take a closer look at the details provided by Endeavour Mining.
Increased Production from Hounde Mine
During the third quarter of 2023, Endeavour Mining's production from continuing operations reached 281,000 ounces. This represents a 5% increase of 13,000 ounces compared to the preceding quarter (2Q 2023). Despite the challenges posed by the wet season, the company managed to boost production at its Hounde mine. This achievement was mainly attributed to higher grade ore sourced from Kari Pump. However, production at the Ity mine in Ivory Coast and the Sabodala-Massawa mine in Senegal experienced a decline due to lower throughputs and average grades. On the other hand, production at the Mana mine in Burkina Faso remained relatively steady.
Year-to-date Production Figures
In terms of year-to-date production for 2023, Endeavour Mining reported a total of 792,000 ounces from continuing operations. This represents a decrease of 9% or 75,000 ounces compared to the same period in 2022. The decline can be mainly attributed to reduced production at the Sabodala-Massawa mine, which processed lower grade oxide ores according to the mine schedule. Additionally, at the Mana mine, the ramp-up of the new Wona Underground mining contractor was slower than anticipated, resulting in lower processing grades. These downward trends were partially offset by increased production at the Ity mine, thanks to improved throughput and recoveries. The Hounde mine maintained consistent production levels.
All-in Sustaining Costs (AISC)
During the third quarter of 2023, Endeavour Mining achieved an impressive AISC of $967 per ounce from continuing operations. This figure represents a 3% decrease of $33 per ounce compared to the preceding quarter (2Q 2023). This accomplishment is notable for being well below the industry average. The decrease in costs can mostly be attributed to lower expenses at the Hounde mine, as a result of processing higher grades and increased volumes sold. However, there were increased costs at the Ity mine due to the impacts of the wet season, as well as at the Sabodala-Massawa mine, which experienced lower volumes of gold sold. In addition, higher open pit mining and processing unit costs affected the cost structure at the Mana mine.
Endeavour Mining's third-quarter results reveal a positive trajectory in terms of gold production and cost management. With increased output at the Hounde mine and AISC below the desired threshold, the company continues to demonstrate its commitment to delivering value to its stakeholders.
Gold Production Update
Year-to-Date AISC
In the year-to-date 2023, the all-in sustaining cost (AISC) from continuing operations reached $974 per ounce, representing a significant increase of $136 per ounce or 16% compared to the same period in 2022. This rise is mainly attributed to notable increases in Mana, Sabodala-Massawa, and Hounde operations.
Total Cash Cost Decrease in 3Q 2023
During the third quarter of 2023, the total cash cost per ounce decreased from $868 per ounce in the second quarter to $848 per ounce. This positive change can be primarily attributed to the increased gold sales at a group level and lower processing unit costs at Hounde. However, there were some offsetting factors such as increased cash costs at Ity due to lower gold volumes sold and wet season impacts, at Mana due to an increase in waste mining, and at Sabodala-Massawa due to higher processing costs associated with elevated fuel and consumable prices.
Rising Total Cash Costs in Year-to-Date 2023
For the year-to-date 2023, the total cash cost per ounce increased from $716 per ounce in the previous year to $837 per ounce. This rise is primarily due to lower production and gold sales at Sabodala-Massawa and Mana, alongside increasing fuel and consumable costs across the entire group.
Gold Price Realization
During the third quarter of 2023, the realized gold price from continuing operations stood at $1,898 per ounce, slightly lower than the $1,943 per ounce achieved in the second quarter of the same year. However, on a year-to-date basis, the realized gold price increased to $1,915 per ounce in 2023 from $1,808 per ounce in 2022.
Operational Developments
The Sabodala-Massawa expansion and the Lafigue development project in Ivory Coast remain on budget and are expected to commence operations in the second quarter of 2024 and third quarter of 2024, respectively.
Moreover, an updated resource estimate for the Tanda-Iguela greenfield discovery in Ivory Coast is anticipated to be released in late 2023. Encouragingly, additional drilling at the recent Tanda-Iguela discovery has surpassed expectations, with the mineralized trend extending by 50% and outlining potential satellite deposits.
Strong Performance Ahead
The third quarter of this year yielded the strongest performance thus far, and even stronger results are expected in the fourth quarter.
