After the Merger: Endeavour Mining Meets 2011 Gold Production Targets
February 2, 2012
Shortly after announcing its "Merger of Equals" with Australia's Adamus Resources, West African gold producer and explorer Endeavour Mining [EDV - TSX] has confirmed the value of this strategic partnership by meeting its 2011 production targets.
As the recent release of Endeavour's Q4 and 2011 gold production results show, the 2011 targets were well-calculated to capitalize on the merger of the two companies' producing West African projects: the Nzema Mine (Adamus) in Ghana and the Youga Mine (Endeavour) in Burkina Faso.
Without the merger, Endeavour's estimated production in 2011 would have been approximately 84,000 ounces, while Adamus' production would have come in at 88,000. With the merger, Endeavour achieved a total annual production of 177,290 ounces of gold at a cash cost per ounce of $614 (excluding royalties), with 90,026 ounces from Nzema and 87,264 ounces from Youga. As 2011 production was expected at 172,000 ounces, this announcement has eased any concerns shareholders may have in regards to the future growth of their company.
For Adamus, the merger presented the dismantling of its US$60M project loan and an additional US$100M slated to reduce its required gold hedge. For Endeavour, the merger presented an opportunity to expand its resources in a growing gold mining region, utilizing Adamus' experienced management team, along with its excellent production and exploration projects. Endeavour expects 2012 production from Nzema and Youga to range from 170,000 to 190,000 at a cash cost per ounce (excluding royalties) of $645 to $685. On top of this target, Endeavour anticipates near-term production of approximately 100,000 ounces per year from its Agbaou Gold Project in C�te d'Ivoire, which is set for 2013 production. With the addition of Agbaou, Endeavour expects to pass the 250,000 ounce gold production market and have a combined resource of 3.5 M ounces.
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