VANCOUVER, Jan. 22, 2013 /CNW/ - Endeavour Mining Corporation ("Endeavour") (TSX: EDV) (ASX: EVR) (OTCQX: EDVMF) announces the results of a positive NI 43-101 Preliminary Economic Assessment (PEA) of its Houndé Gold Project in Burkina Faso together with an updated mineral resource estimate for the project and positive in-fill drill results completed subsequent to the resource estimate. Endeavour is rapidly advancing Houndé, which has entered the Feasibility Study stage.
(All amounts in US dollars unless otherwise indicated) Houndé PEA Highlights, on a 100% basis, include:
-- Estimated potential average annual production of 161,000 gold ozs per year over a 10 year mine life, with total life of mine production of 1.61 million ozs
-- An average 91% process recovery at a milling rate of 8,000 tonnes per day supplying a conventional gravity/CIL circuit
-- Owner operated open pit mining and a potentially economic portion of the resource of 28 million tonnes grading 2.0 g/t Au (at 0.91 g/t Au cut-off)
-- Initial start-up capital is estimated at $303 million with sustaining capital estimated at $57 million (excluding VAT and import duties)
-- Total initial funding requirement is estimated at $345 million including start-up capital, VAT, import duties and certain first year equipment purchases
-- Forecast life of mine direct cash cost of $563 per ounce (excluding royalties)
-- The project yields, on an after-tax basis:
Neil Woodyer, CEO, stated
"The Houndé Gold Project is an outstanding addition to our potential production growth profile with a well-defined, good grade mineralized deposit that has excellent infrastructure and robust preliminary economics. The Houndé deposit has grown quickly in size with every drill program, including an 63% increase in Indicated resources in the update announced today, and has now reached a scale where the development of a mine at Houndé could potentially increase Endeavour's production rate to over 550,000 gold ozs per year during 2016. Work has already begun on a Feasibility Study for Houndé, with all contractors engaged and shipment of metallurgical samples for testing. The in-fill drill program,
underway since October 2012, is almost 70% complete and is targeting conversion of Inferred resources to Measured and Indicated to further support the Feasibility Study due to be completed in Q4 2013."
Management Conference Calls
Endeavour's Management will host two conference calls to discuss the results of the Houndé PEA, 2012 Production Results, and 2013 Guidance at times convenient for the North American and Australian time zones on January 23, 2013 and January 24, 2013. Both conference calls will include Neil Woodyer, Chief Executive Officer, Attie Roux, Chief Operating Officer, Christian Milau, Chief Financial Officer, and Don Dudek, Senior Vice President - Technical Services. Details for the conference calls can be found at the end of this news release.
Houndé PEA Summary
Endeavour currently has a 100% interest in the Houndé Gold Project, situated in the south-western region of Burkina Faso just south of Semafo's Mana mine (see Figure 1). Ownership is currently 100%, however, upon achieving production it would become 90% by Endeavour and 10% by the government of Burkina Faso.
The Houndé Project PEA focuses on the Vindaloo group of deposits that are located approximately 250 km southwest of Ouagadougou, the capital city of Burkina Faso. The deposits are approximately 2.7 km from a paved highway and as close as 200 metres from a 220 kV power line that extends from Cote d'Ivoire through to Ouagadougou. The nearby town of Houndé has a population of approximately 22,000. A rail line that extends to the port of Abidjan, Cote d'Ivoire lies approximately 25 km east of the deposit area. The PEA considered the owner operated development of two open pit mines over the Vindaloo and Madras NW zones. The Vindaloo pit would mine a series of closely spaced gold zones along an approximate 4.8 km strike length. The Madras NW pit would be approximately 900 metres long and would only mine saprolite and transition mineralization.
The PEA is preliminary in nature as it includes Inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves at this time, and as such there is no certainty that the preliminary assessment and economics set forth in the PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability. The PEA should not be considered a substitute for a preliminary feasibility study. The authors of this Technical Report believe the Project has the potential to be economic and that therefore further studies are warranted. Pit shells were optimized using a $1,300/oz gold price.
SOURCE Endeavour Mining Corporation