Ity extension to add life – Mining Journal (subscription)

Endeavour Mining (CN:EDV) has found what looks like an extension of the gold mineralisation that underpins the companys Ity gold mine in Cte d'Ivoire, just 5km to the south of the current operation.

A cross section of the Le Plaque area near Ity, Cte d'Ivoire (dimensions adjusted for web)

The miner this week reported the discovery of several high-grade mineralised trends in an area known as Le Plaque, which if economic could feed into a planned carbon-in-leach (CIL) operation at Ity.

The best intercepts were 3.08m grading 36.94g/t Au; 13.09m grading 22.36g/t Au; and 2.94m grading 61.23g/t Au.

Ity is currently operating as a heap leach operation with only three years of reserves but Endeavour published a feasibility study late last year outlining a 3 million tonne per annum gravity circuit and CIL processing route, which would deliver average production of 114,000 ounces per annum at an all-in sustaining cost of US$603/oz for an initial 14 years, based on a 1.9 million ounce reserve.

The up-front cost for the project facelift is $307 million and the build time is estimated at just over one-and-a-half years. The NPV (post-tax, 5% discount) is $411 million with an IRR of 36% based on a $1,250/oz gold price. The gold price this week was approaching $1,270/oz.

The payback period on capital invested is expected to be a shade over two years owing to the front-ending of production at a rate of 165,000ozpa for the first five years at AISC of $507/oz.

Endeavour executive vice president for exploration and growth, Patrick Bouisset, said the discoveries at Le Plaque would require more drilling but a maiden resource for the area was expected by year end.

The complexity of the geology requires more drilling and interpretation, but we are very encouraged by the multiple trends discovered which exhibit the potential to host significant resources, he said.

We are equally excited about both the ongoing exploration on the other targets located in proximity to the Ity mining complex and on conducting interpretative work to generate new greenfield targets in the wider 80km Ity corridor that was secured last year.

The Le Plaque area is of a similar size to the multiple-deposit Ity mining complex to the north at 4km2 and hosts several large high gold-in-soil anomalies. These trends stretch over 400m, with the largest a 2km-long geochemical anomaly with best values or more than 1,000ppb Au. The trends are all open along strike and at depth.

A note from investment bank RBC this week said continued near-mine exploration at Ity could provide additional high-grade ounces for the CIL project.

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Ity extension to add life - Mining Journal (subscription)