Canadian-based Endeavour Mining firm has announced that its 90% owned Houndé gold mine project in Burkina Faso moved into construction phase after receiving approval from its board of directors.
The project is expected to deliver approximately 190,000 ounces (oz) per year over ten years of mine life at an AISC of $709/oz, based on current reserves.
The project is an open pit mine with a three metric tonnes per annum (mtpa) gravity circuit / carbon-in-leach plant, and the project has received a green light to commence operations while early earthworks have already begun at the site.
Endeavour CEO Neil Woodyer said: "With the ramp-up of Karma soon underway, and our operations delivering a strong performance, we are now well positioned to build the Houndé project, which will further lift the overall quality of our portfolio.
"Once in production, it will become our flagship low-cost mine and will rank amongst West Africa’s top tier cash generating mines.
"Furthermore, Houndé will benefit both from our construction track-record, demonstrated most recently at Agbaou, and our team’s operating experience in Burkina Faso."
The company also stated that the optimised and fully scoped upfront capital cost has been estimated at $328m, inclusive of $47m for the owner-mining fleet and $28m for contingencies, which is in line with the 2015 estimate of $32m.
Project capital commitment in 2016 is expected to be approximately $180m, with the remainder in 2017.
Neil also said: "The Project is fully-funded based on our expected pro-forma cash position following the completion of the True Gold acquisition, the mine equipment financing, and the undrawn portion of our revolving credit facility.
"However, rather than draw on our revolving facility, our objective is to fund the remaining capital needs from free cash flow.
"We have therefore prudently implemented a short-term Gold Revenue Protection programme to secure and de-risk the necessary cash flows, providing comfort even if the gold price were to fall to $1,000/oz."
Last year, the firm generated 517,000oz of gold at costs of $922 per oz.