ENDEAVOUR Mining reduced its gold production forecast for its 2022 financial year to between 1.32 million to 1.4 million ounces following the sale of its Karma mine in Burkina Faso.
Endeavour’s all-in sustaining costs were also dropped $10 per oz to between $880 and $930/oz. The gold price is currently trading at $1,978/oz after bursting through $2,000/oz level on Tuesday amid increased bombing of Ukrainian civilians by Russia’s invading forces.
The Karma gold mine is to be sold to Néré Mining for up to $25m plus a 2.5% Net Smelter Return (NSR) royalty, Endeavour said.
In terms of the deal, $10m had been paid up front in respect of the reimbursement of historical shareholder loans. A further deferred cash of $5m would be paid about six months after deal closure.
The final instalment of up to $10m would be paid depending on the gold price after 12 months from deal closure.
The 2.5% NSR royalty would be payable on all ounces produced in excess of 160,000 oz of recovered gold from 1 January 2022. The transaction has been closed, with an effective date of 10 March 2022, said Endeavour.
“The sale of our non-core Karma mine to Néré Mining is in line with our strategy of actively managing our portfolio to focus management efforts on high margin, long-life and low all-in sustaining cost, core assets,” said Sébastien de Montessus, CEO of Endeavour.
The company will report its year-end figures for its 2021 financial year on March 17.
