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Endeavour Mining selling 90% interest in Nzema gold mine for US$65M


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Endeavour Mining selling 90% interest in Nzema gold mine for US$65M

Endeavour Mining Corp. agreed to sell its 90% stake in the Nzema gold mine in Ghana to BCM International Ltd. for total cash consideration of up to US$65 million, calling the operation a noncore property.

Under the deal, announced Aug. 9, BCM International will pay Endeavour US$20 million upon closing, with an additional US$45 million in deferred payments to be made over the remaining current mine life to 2019 based upon reaching certain milestones related to free cash flow generation.

The sale is expected to close at the end of September, following approval from the Ghanaian government.

President and CEO Sebastien de Montessus said the deal will enable the company to further streamline efforts on long-life low-cost operations, with two in Mali, two in Burkina Faso and two in Ivory Coast.

Endeavour said the effective date of the sale is July 1 for economic purposes, and so it removed the Nzema mine from its full-year 2017 guidance.

The company now expects full-year production in the range of 500,000 to 530,000 ounces of gold, down from previously stated guidance of 600,000 to 640,000 ounces.

All-in sustaining costs, or AISC, are expected to come in between US$855 per ounce and US$900 per ounce, improving slightly as compared to a range of US$860 per ounce to US$905 per ounce outlined previously.

In discussing the AISC metric, Endeavour said the benefit of removing the higher-cost Nzema mine was partially offset by corporate and sustaining exploration costs being divided among fewer ounces of gold at the group level.