Endeavour Mining successfully restarted mining operations at its Boungou mine in Burkina Faso, following the mobilization of the West African mining contractor and completion of infrastructure and operating improvements. The mine was shut down by former owner, SEMAFO, in November 2019 after several fatal incidents occurred near the mine, including an attack on a convoy carrying employees that killed 39 people.
In addition, Endeavour confirmed potential annual synergies of $35 million to $40 million during its SEMAFO integration process. Endeavour acquired all of the issued and outstanding securities of SEMAFO back in July.
The identified synergies are in the areas of procurement and supply chain optimization, corporate and in-country G&A savings, centralization of technical services and functions across the group. It is estimated that 60% of these synergies will be progressively unlocked by year end 2020 and the remaining next year, according to the company.
“We are pleased to have restarted mining operations at Boungou, which marks a significant milestone in the integration process,” Endeavour President and CEO Sébastien de Montessus said. “The newly acquired assets are now well embedded into our West African operating model, which is centered on an agile and streamlined management approach, based on empowered decision making at the mine level with shared regional support functions.
The Boungou plant has been processing stockpiles since early 2020. Following the acquisition, Endeavour has implemented a range of infrastructure improvements and new security and operating procedures for the mining restart program.
As announced in early September, Endeavour awarded the mining contract to SFTP Mining BF SARL (SFTP), a West African mining contractor, who also provides mining services at Endeavour’s Karma mine. SFTP immediately began to mobilize mining equipment and personnel and, to accelerate the restart, SFTP purchased a portion of the on-site fleet from the previous contractor. The mobilization of the remaining equipment is expected to be completed in the coming weeks. The Boungou mine and SFTP have prioritized local recruitment for the operations, with training currently in progress. The mine will employ approximately 1,100 people, including subcontractors.
Mining activities to date have focused on extracting readily available ore with minimal drilling and blasting requirements. Grade-control drilling began two weeks ago, with two rigs currently active, while blasting activities commenced last week.
During the fourth quarter of 2020, mining activities are expected to focus on the West pits, while preparing the East pit for grade-control drilling in 2021. Mining, drilling, and blasting activities are expected to continue to ramp up in the coming weeks to reach the contracted amount of approximately 2 million metric tons to 2.3 million mt per month.
The Boungou mine is now expected to achieve the top half of its 2020 production guidance of 130,000-150,000 oz at an AISC of $680-725/oz due to the addition of high-grade mill feed from freshly mined ore.
Exploration activities are expected to resume in the fourth quarter of 2020, targeting near-mill targets.
As part of the restart plan, Endeavour, in close partnership with the Burkinabe government, has implemented a comprehensive security plan, which is consistent with its approach at its other operations and takes into account the unique conditions in eastern Burkina Faso. The Burkinabe government has created a dedicated unit assigned to work with Endeavour to ensure the overall security of the mine and the region.
Security improvements at Boungou conducted by Endeavour include upgraded site infrastructure, detailed site security plans, and an improved approach to the movement of employees, supplies and material. Endeavour also completed the construction of an airstrip to fly staff from Ouagadougou and Fada to site. On-site employee housing has also been expanded to accommodate all local and expatriate employees within the site security perimeter during their rotation. Endeavour has contracted a local company to improve the maintenance of the roads, particularly during the rainy season. Endeavour has also launched a study to improve the road infrastructure and traffic conditions on two key roads, RN19 and RR28, in consultation with the relevant authorities, potential partners and international donors.