Night-time operation at Endeavour Mining's Youga mine in Burkina Faso

Night-time operation at Endeavour Mining's Youga mine in Burkina Faso

African gold miner Endeavour Mining (EDV on the TSX) is adding production and strengthening its balance sheet through an alliance with La Mancha, the private gold producer controlled by the family of billionaire Naguib Sawiris.

The deal sees Endeavour picking up La Mancha's 55% indirect interest in Société des Mines d'Ity S.A. ("SMI"), which operates the Ity Gold Mine in Côte d'Ivoire, plus various regional exploration properties. La Mancha picks up a 30% stake in Endeavour Mining and will contribute US$63 million cash into the acquired businesses.

"We are pleased to welcome La Mancha and Naguib Sawiris as our long term strategic partner with the shared vision of building a leading, Africa-focused gold producer," stated Endeavour CEO Neil Woodyer, who will eventually become executive chairman after a management transition. "This transaction will immediately add to Endeavour's operating cash flow, increase our attributable Mineral reserve and resource base by 22% and 23%, respectively, while also strengthening our balance sheet and funding position to pursue further growth.

La Mancha has also expressed an in-principle commitment to invest up to US$75 million in additional funds to support Endeavour's growth. Upon completion of the deal, La Mancha will be issued approximately 177.1 million Endeavour ordinary shares representing 30% of the enlarged share capital. On a pro forma basis, Endeavour will have an annual gold production rate of 580,000 ounces from five operations across West Africa, a strengthened balance sheet and further growth opportunities in Africa.

The agreement is subject to approval from Endeavour's current shareholders.

Endeavour also announced management changes, with Sebastien De Montessus expected to resign his president and CEO posts at La Mancha to become president of Endeavour. He will eventually add the chief executive post. Woodyer will remain Endeavour's CEO in the interim.

Endeavour currently produces about 500,000 ounces of gold a year from majority stakes in the Agbaou gold mine in Ivory Coast, the Nzema gold mine in Ghana, Tabakoto in Mali and the Youga gold mine in Burkina Faso.

The fully permitted Hounde gold mine in Burkina Faso would add a projected 190,000 gold ounces annually.

The patriarch of the Egypt-based Sawiris family is Onsi Sawiris, who founded a telecom company called Orascom and grew it into a conglomerate spanning telecom, construction, tourism and technology.

Onsi's three sons - Naguib, Samih and Nassef - run the family business and have net worths ranging from US$1.05 billion to $5.9 billion, according to Forbes.

There's even a Subscriber Summit connection to the deal. The founder of La Mancha Resources, purchased in 2012 for $499 million by the Sawiris family (through Weather II), was North Vancouver entrepreneur Walter Berukoff.

Berukoff's latest play is Fiji gold developer Lion One Metals, which will be presenting at the Subscriber Investment Summit on Oct. 8 at the Pan Pacific in Vancouver.

Here's Canadian Press on the deal.

News release: Endeavour Mining announces strategic, long-term African gold partnership with Naguib Sawiris and La Mancha

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