ENDEAVOUR Mining CEO Sébastien de Montessus said the gold producer was under no pressure to develop its Kalana project in Mali as the technical aspects of rival prospects in the portfolio made for better options currently.
The company, which debuted on the London Stock Exchange last year, had three projects to boost gold production that it was considering seriously.
One is the expansion of processing facilities at Sabodala-Massawa, a mine in Senegal; the second was Fetekro in Côte d’Ivoire, and the third was Kalana.
Endeavour said in February the latter two projects had been scoped for $635m in new investment producing a combined 359,000 ounces of gold a year, equal to about 24% of the group’s current forecast production.
“Obviously, in terms of managing expectations and stress on our balance sheets, we would go for two constructions at the same time, not three,” said De Montesssus in an interview earlier this month. “When you look at both the geopolitical environment … [and] … more importantly the quality of the three projects Fetekro and Sabodala-Massawa are ahead of Kalana,” he said.
“So those are probably the two priorities. We’re doing more work on Kalana and we will see what the DFS [definitive feasibility study] says at the end of the year,” he said.
De Montessus’ comments come amid a month of further ructions for Mali in which the military junta that deposed the country’s President Ibrahim Boubacar Keita in August last year fired its interim prime minister.
The 15-nation Economic Community of West African States (ECOWAS) has suspended Mali and imposed sanctions following the second putsch. Mali subsequently installed a new civilian government and promised to adhere to a roadmap to elections early next year. But the situation remains tense.
Political risk remains the commonest question about Endeavour Mining which has all of its proposed 1.35 to 1.48 million ounces in production located in West Africa with a large portion in Burkina Faso. It has no production in Mali currently.
“In terms of geopolitical risk, if I look at our peers who are operating today in Mali they’ve not really been affected by the current environment and some people say it’s not a second coup; in fact, it’s just the first coup which has been maintained,” said De Montessus.
“I don’t think that the military there have renegades on their wish to go for transition after this 18-month period which is ending in less than 12 months,” De Montessus said of Mali. “By the time we are ready for Kalana, hopefully, we will have a regular election in Mali and things go back to normal,” he said.
