The first gold coming out of the furnace at Agbaou (Company)

The first gold coming out of the furnace at Agbaou (Company)

The West African gold producer and developer, Endeavour Mining (EDV:TSX), announced late last week that it has poured first gold at the company's Agbaou Mine in Cote d'Ivoire.  Endeavour planned on pouring first gold within the first quarter of 2014, so they are well-ahead of schedule.  The mine is now advancing in its commissioning phase with ore reclaim, milling, CIL, Knelson concentrator, Gekko Intensive Leach Reactor, cyanide detoxification and tailings areas all fully commissioned.  The plant has been ramped up with the SAG and Ball mills fully commissioned and are now at nameplate design capacity of 203 dry tonnes per hour.  The CIL circuit is also operating well with recoveries exceeding 93%.

Due to management's ability to complete this project ahead of schedule Endeavour will  be able to both grow production as well as reduce all-in sustaining costs per ounce, company-wide, ahead of schedule.  This is what investors should be looking for this holiday season; company's that have capable management teams that have demonstrated their ability to cost-efficiently grow production.  Endeavour has now proven that to investors.  Combine this with a low relative valuation and Endeavour seems to check all of the boxes.

Workers building the mill platform at Agbaou months ago (Company)

Workers building the mill platform at Agbaou months ago (MINING.com)

The Agbaou mine is the second mine built by the Endeavour team and was completed in only 16 months.  It is on schedule to acheive commerical production in the first quarter of 2014.  This advancement of Agbaou ahead of schedule clears the way for them to meet their 2014 target production growth rate of 33% year-over-year to over 400,000 ounces of gold produced next year (up from 300,000 ounces this year).

Neil Woodyer, CEO, stated: "Agbaou is on schedule for achieving full commercial production shortly, and at approximately $800 per ounce all-in sustaining costs, Agbaou is forecast to make a meaningful contribution to our free cash flow in 2014 and beyond."

Endeavour continues to prove its ability to turnaround their Tabakoto mine which should create even more investor confidence in the name.  With Tabakoto costs continually declining and Agbaou coming into commerical production early in 2014, the company should continue to see widening margins and a strengthening balance sheet which will give them flexibility as they make a decision on the Hounde development project.

Read: Endeavour Mining Pours First Gold Bar at Agbaou Mine Ahead of Schedule

Related: Endeavour Exits Q3 with Record Gold Production, Now Poised for Free Cash Flows in 2014