TORONTO (miningweekly.com) – Africa-focused gold producer Endeavour Mining has sold its noncore Youga mine, located about 180 km south-east of Ouagadougou, the capital city of Burkina Faso, for $25.3-million to Turkish explorer and development firm MNG Gold.

The total cash price comprised $20-million for the asset and $5.3-million for the cash-on-hand. Endeavour had also retained a 1.8% net smelter royalty on production realised beyond the current reserve from the property sold, including a buy-back provision.

“This transaction provides upfront value for Youga’s remaining two-year mine life and gives us greater financial flexibility to pursue growth opportunities. It is in line with our strategic objective of actively managing our portfolio to improve its overall quality.

“Since MNG’s nearby Balogo high-grade deposit will give a second life to the Youga operation, we firmly believe that this transaction is in the best interest of all stakeholders, including our employees, the government, and the local population,” stated Endeavour CEO Neil Woodyer on Monday.

Endeavour held a 90% stake in the Youga mine, with the balance controlled by the Burkina Faso government.

The Youga deposit held 800 000 oz of gold at a grade of 1.4 g/t in the compliant measured and indicated resources, of which 100 000 oz at a grade of 1.6 g/t were classified in the proven and probable reserve categories.

In 2015, Youga produced 68 407 oz of gold. Output for 2016 was forecast to be 40 000 oz to 45 000 oz at mine-level all-in sustaining costs of between $980/oz and $1 030/oz.

EXPLORATION SUCCESS
Meanwhile, Endeavour also on Monday reported exploration success at its other operations, lifting proven and probable reserves by 32% to 5.9-million ounces of gold and its measured and indicated resources by 39% to 11-million ounces.

On an attributable basis, the company had 4.7-million gold ounces in the proven and probable categories, and 8.6-million ounces in the measured and indicated mineral categories.

Through its nearly $80-million acquisition of La Mancha Holdings in 2015, Endeavour added about 1.6-million ounces of gold in the proven and probable categories, and 3.1-million ounces in the measured and indicated categories from the 55% interest in Ity, Côte d’Ivoire.

At Agbaou, also located in Côte d’Ivoire, Endeavour managed to lift the reserves and resources to above 2014 preproduction levels, extending the low-cost free-dig oxide mine life by another year.

At Tabakoto, in Mali, exploration more than replaced all ounces mined in 2015, despite only realising 40% of the underground exploration plan, which was hampered by a lack of drilling access and flooding.

Contrary to actions taken by many gold miners in recent months as they tried to repair their stressed balance sheets, Endeavour increased its exploration budget in 2016 by $2-million to $20-million, focused almost exclusively on reserve replacement and mine life extensions.

Endeavour’s TSX-listed stock on Monday reflected the good news, climbing as much as 5% to C$12.20 apiece.