Endeavour expects production of gold to come from three open pits at the Agabou mine over the life of the project (Image: Endeavour Mining Corp.)

Endeavour Mining (EDV:TSX), the African gold miner, that currently operates three mines in West Africa has announced commercial production has been reached at its fourth mine; Agbaou in Cote d'Ivoire.  The company expects to grow production by 1/3rd this year, to approximately 400,000 ounces (up from 300,000 ounces in 2013) while reducing all-in costs per ounce below $1,000 per ounce.  Agbaou is expected to produce between 85,000 and 95,000 ounces this year with LOM production expected around 100,000 ounces per year at an all-in sustaining cost of $800 per ounce.  Commercial production was declared as the process plant achieved approximately 125% of design throughput and gold recovery exceeding 94% over the prior 30 day period.

In addition, at the official mine opening ceremony, a mining convention was signed with the State of Ivory Coast that includes a strong stability clause outlining fiscal conditions and including gold royalty rates and a corporate tax holiday.  These include the following, all of which are in line with other operations in the country:

• Royalties: A  sliding scale will be from 3 per cent to 5 per cent, depending on gold price.
• Corporate tax holiday: Agbaou mine is eligible for a corporate tax holiday for five years from commencement of commercial gold production.
• Stability: A strong stability clause defining fiscal limits will be for the duration of the mining permit.

Neil Woodyer, meeting with Côte d'Ivoire's President Ouattara in May 2013 (Photo: CNW Group/ Endeavour Mining Corp.)

Neil Woodyer, CEO, stated: "Declaring commercial production at Agbaou marks the successful completion of an 18-month construction period.  Endeavour will now benefit from Agbaou's low-cost gold production.  Agbaou was completed safely, ahead of schedule and under our $160-million capital budget."

Endeavour's management team has a track record of delivering on guidance and the fact they were able to build this mine ahead of their forecast and under their budget is a strong testament to their ability to continue to meet guidance.

Endeavour operates the Nzema open pit mine in Ghana which produced between 102-107,000 ounces in 2013 at cash costs between $850-$900 per ounce.  They also operate the Tabakoto open pit and underground mine in Mali which produced between 126-131,000 ounces at cash costs of $880-$920 per ounce.  They have two projects in Burkina; one producing mine called Youga which produced 87-92,000 ounces in 2013 at cash costs between $740-$780 per ounce.

The company is awaiting on clarity to make its final production decision on their development project, Hounde, also located in Burkina.  This project comes with a $315 million price tag but would add 180,000 ounces per year over an 8 year mine-life.

Read: Endeavour Mining Declares Commercial Production at Agbaou and Signs Convention

Also read: Endeavour Mining: 2013 Results, 2014 Guidance, Agbaou Mine Commissioning Coming Up

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