Endeavour Mining Reports Rise in Second-Quarter Production

Endeavour Mining, a West Africa-focused gold mining company, announced a notable increase in second-quarter production compared to the previous quarter. The company also reaffirmed its full-year guidance. Here are the key details shared by Endeavour Mining:

Production Highlights

• In the second quarter, production from continuing operations reached 268koz, representing a 10% increase or 24koz higher than the first quarter. This growth can be attributed to enhanced production from Hounde and Sabodala-Massawa mines. Interestingly, the increased production can be attributed to mining and processing higher grade ore. However, this positive trend was partly offset by a decline in production at Ity mine due to slightly lower grade, throughput, and recovery rates. A similar decrease was observed at Mana mine due to the heightened focus on underground development.

• Looking at the first half of the year, production from continuing operations amounted to 511koz, indicating a decrease of 13% or 75koz compared to the same period in 2022. This decline is primarily attributed to decreased production at Hounde and Sabodala-Massawa mines. During this period, these mines prioritized stripping activities, resulting in the processing of lower grade ore. Furthermore, Mana mine experienced decreased production due to an increased emphasis on underground development. However, there was some offset to this overall decrease as Ity mine witnessed increased production thanks to improvements in throughput and recoveries.

All-in Sustaining Costs (AISC)

Increase in AISC for 2Q 2022

According to the latest report, the all-in sustaining costs (AISC) from continuing operations in the second quarter of 2022 stood at $1,000/oz. This represents an increase of $45/oz or 5% compared to the first quarter. The rise in costs can be attributed to several factors. At the Ity mine, there was a higher utilization of self-generated power, while at the Mana mine, the increased open pit strip ratio and focus on underground development contributed to higher costs. However, this increase was partially offset by lower costs at the Hounde and Sabodala-Massawa mines.

AISC Increase in 1H 2022

During the first half of 2022, the AISC from continuing operations amounted to $978/oz. This represents a significant increase of $150/oz or 18% compared to the same period last year. The higher AISC was primarily due to lower production at the Hounde, Mana, and Sabodala-Massawa mines. However, there were improved costs at the Ity mine, which offset a portion of the increase.

Outlook for the Future

The company remains optimistic about its future prospects. It is on track to achieve its production guidance for 2023, targeting a range of 1,060-1,135koz at an AISC of $895-950/oz. The Hounde mine is also performing well and is expected to meet its production guidance of 270-285koz in 2023. Additionally, the AISC at the Hounde mine is expected to be at the higher end of the guided $850-925/oz range.

Challenges at the Mana Mine

However, there have been some challenges at the Mana mine. The ramp-up of the new underground mining contractor at the Wona Underground operation has been slower than expected. As a result, production at the Mana mine is anticipated to be below the guided range of 190-210koz. Furthermore, the AISC at the Mana mine is expected to be above the guided range of $950-$1,050/oz.

In conclusion, despite the challenges faced at certain operations, the company remains focused on achieving its production targets and managing costs effectively.