Endeavour updates Ity resource as more discoveries beckon

Endeavour Mining (EDV; LSE: EDV; US-OTQX: EDVMF) says it is likely to discover 3.5 to 4.5 million indicated oz. gold at the cornerstone Ity mine in Côte d’Ivoire by 2025.

The Africa-focused gold major already found 2 million oz. in the past two years.

Endeavour released an updated mineral resource estimate for Ity on Tuesday, for the first time incorporating satellite discoveries into a global resource within a 20-km radius from the plant, which was completed in 2019.

The indicated resource grew 17% to 99 million tonnes grading 1.62 grams gold per tonne for 5.2 million oz.

The company noted that drilling confirmed the continuity of the mineralized system, which hosts seven deposits near the processing plant. Mineralization remains open at the West Flotouo, Daapleu, Bakatouo, Colline Sud and Walter deposits.

According to Endeavour, drilling targeted the Plaque area, the Yopleu-Legaleu deposit, the Delta Extension deposit, the Delta SE target, and the Gbampleu target.

CEO Sebastien de Montessus said the mine now ranked amongst the highest-quality operations within west Africa owing to its low-cost production profile and long mine life. “This status has been underpinned by our significant exploration success at Ity, which has led to a more than doubling of the resource base since its feasibility study was published in 2016, coupled with a strong operating performance,” the executive said in a press release.

In 2022, Endeavour completed about 51,181 meters of drilling at Ity. The work resulted in the company adding 753,000 oz. of measured and indicated resources, with the additions coming from West Flotouo, Yopleu-Legaleu, Ity-Ity Flat, Verse Est and Walter.

Critically, Canaccord Genuity Capital Markets mining analyst Carey MacRury pointed out in a note to clients that drilling had confirmed the continuity of the mineralized system, resulting in a new single resource model for the area.

Drilling has also confirmed the presence of an extensive mineralized system covering the Plaque area, which is 7 kilometres away from the processing plant.

For Haywood Capital Markets mining analyst Geordie Mark, Endeavour’s resource update had two key takeaways: a significant increase in resources in the indicated category and an increase in the average grade.

The analyst expects the higher indicated resources to translate into a longer production path for the Ity gold mine.

During 2023, Endeavour expects to focus the drilling program on delineating further resources and to release an initial resource at the Delta Southeast target (located on the PE53 mining permit near the processing plant).

Endeavour has also reported a discovery at the Gbampleu target, about 22 km from the plant. Intercept highlights include hole GP22-051, which returned 43.25 meters at 11.32 grams gold per tonne from 175.8 meters, including 4.3 meters at 29.81 grams gold from 178.75 meters, and 3 meters at 61.68 grams from 185 meters. It also includes 2 metres at 31.18 grams from 193 meters and 2 meters at 10.95 grams from 206 meters. Endeavour has delineated the deposit over 450 meters along strike.

All three of Endeavour’s flagship assets, Sabodala-Massawa, Houndé and Ity, now boast measured and indicated resources above 5 million oz. gold.

At a group level, de Montessus said Endeavour expects to discover between 15 and 20 million oz. of indicated gold resources over the same period.

On the operational front, Ity remains on track to beat its full-year production guidance of between 255,000 and 270,000 oz. at all-in sustaining costs of between US$850 and US$900 per oz.

Endeavour’s Toronto-listed stock has recovered from a recent 12-month low at $22.77, rising to the current level of $27.96 (still down 7% over the 12-month frame) and some ways off its March high of $35.44. The company has a market cap of $6.9 billion.