Name of the Project
Houndé gold project.

Location
Burkina Faso.

Client
Houndé Gold Operation, Endeavour Mining’s Burkina Faso operating subsidiary.

Project Description
A National Instrument 43-101 compliant feasibility study completed on the Houndé project in November 2013 proved positive for an openpit gold mine. A subsequent update on the project’s resources and reserves, mine plan and project economics was completed in February 2015.

A 34% increase in the estimated mineral reserve has resulted in greater output expectations and a longer mine life. The project has proven and probable reserves of 30.6-million tonnes, with an average grade of 2.1 g/t of gold.

An expansion of the Vindaloo deposit and the inclusion of two new deposits within 14 km of the proposed plant site have resulted in the Houndé mineral reserve increasing to 2.07-million ounces.

The enlarged reserve will result in total gold production of about 1.9-million ounces over a ten-year mine life, compared with the originally estimated 1.4-million ounces over an eight-year mine life.

The processing plant consists of a three-million-tonne-a-year primary crusher, with a semiautogenous/ball crushing circuit to feed a gravity/carbon-in-leach (CIL)plant.

The updated mine plan defines a large-scale openpit mine that provides 29.7-million tonnes of ore at 2.15 g/t of gold and 251-million tonnes of waste for a strip ratio of 8.4:1. The enhanced production relative to the November 2013 feasibility study is a result of the exploration additions from 2014 and an optimisation of the mine plan to access high-grade and shallow gold mineralisation during the initial years of the mine life.

Jobs to be Created
Endeavour will employ up to 1 800 people during Houndé’s construction phase and 470 once the project reaches commercial production, and aims to employ 90% Burkinabe nationals and increase employment of women in the region.

Net Present Value/Internal Rate of Return
The project’s internal rate of return has increased from the previously estimated 22.4% to between 28% and 35%, with a gold price ranging from between A$1 200/oz and A$1 300/oz. The project’s net present value has been estimated at A$359-million from an initial estimate of A$230-million.

Value
The updated capital cost is estimated at $328-million (inclusive of contingency, working capital, and import duties), representing a 3.2% increase over the $315-million estimate in the November 2013 feasibility study.

Duration
Engineering, procurement and construction are estimated at between 18 to 20 months from board approval to first gold production.

Latest Developments
Detailed engineering of the processing facility at the mine is progressing well and is on schedule to be completed by mid-November.

“We are pleased to have successfully achieved our first set of key project milestones safely, ahead of schedule and on budget, despite the wet season being upon us.” Endeavour construction services executive VP Jeremy Langford said in a September announcement.

Some of the key milestones achieved include the CIL ring-beam concrete pour in early August, two weeks ahead of schedule, with all six ring beams completed as of September 6.

The company’s mining fleet equipment financing agreement signed with equipment manufacturing company Komatsu is complete, with deliveries already on site, and machinery commissioned and operational. The water harvest dam construction has also been completed two months ahead of schedule, with water already being pumped to the water-storage dam.

The construction of the 300-person permanent accommodation village is 30% complete and on schedule for completion during the first quarter of 2017. Endeavour explains that the land compensation process has been successfully completed and resettlement is under way, with all approvals in place.

Langford explains that, once in production, Houndé, which is 90%-owned by Endeavour, will become the company’s flagship low-cost mine, ranking among West Africa’s top-tier cash-generating mines, with an average production rate of 190 000 oz/y at an all-in sustaining cost (AISC) of $709/oz over an initial ten-year mine life, based on reserves.

In its first four years, the average yearly production is expected to be 235 000 oz at an AISC of $610/oz.

The project’s initial capital cost is estimated at $328-million, inclusive of $46-million for the owner-mining fleet.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
The Houndé gold project is progressing on schedule and within budget, with the first gold pour expected during the fourth quarter of 2017.

Contact Details for Project Information
Endeavour Mining senior VP business development, Doug Reddy, tel +1 604 609 6114 or email investor@endeavourmining.com.