(Kitco News) - Endeavour Mining Corp. (TSX:EDV)(ASX:EVR) reported solid third-quarter results with an onus on the company’s success in reducing its cash costs.
Gold production in the third quarter totaled 117,612 ounces of gold at all-in sustaining cash costs (AISC) of $991, with the company showing a $32.1 million AISC margin.
That AISC figure put the company under its goal of gold production below the $1,000-per-ounce level.
In a telephone interview Wednesday, Neil Woodyer, chief executive officer of Endeavour Mining, he said that while he was pleased with cash costs coming in below the company’s target, he sees lower cash costs on the horizon.
“We think it’s going to continue carrying down as we bring in all the benefits of Tabakoto and enjoy the pluses from Agbaou,” he said. “We’ve got to maintain as low a cost profile as we can; we need to be very tight on essential capital expenditure and squeeze out our working capital so we can generate as much cash as we can.
“If gold prices remain at this kind of level, or lower, obviously we’re going to have to look at the longer term of what we’re mining to make sure we’re not mining too much waste – but we’re not changing that yet,” Woodyer continued. “We’ve survived lower prices than we see today. It’s just a question of managing that.”
Endeavour’s Agbaou mine, located in the Ivory Coast, continues to exceed guidance expectations, producing 43,428 ounces of gold in the third quarter and beating the company’s 2014 guidance of between 85,000 to 95,000 ounces for the year.
It has produced 99,392 ounces of gold in the nine months ended Sept. 30 with mine-level AISC totaled $590 per ounce sold in the third quarter. Woodyer said this wasn’t a surprise to the company.
“Once we started seeing the mine producing in January, February and March, we knew it would be good for a considerable amount of time,” he said. “Having got through the second quarter, we could see that the third quarter would continue in the same kind of way.
“It’s been better than what we thought originally,” he added.
The company’s Tabakoto mine, located in Mali, produced 30,866 ounces of gold in the third quarter at mine-level AISC of $1,451 per ounce sold.
Costs at Tabakoto were elevated in the third quarter, but are expected to come down during the fourth quarter.
“The grade that we took out of Tabakoto in the last quarter was down because we hadn’t done a lot of development work in the earlier part,” Woodyer said. “So we were a little boxed in where we were taking the material from, but that’s come back well now.”
He also noted that “due to the contract mine takeover at Tabakoto, development was a bit behind. Also, the ramp-up from Segala and work on Kofi.”
The ramp-up at Segala has gone well, reaching 1,500 tons of orev per day in September, while road construction towards the Kofi C deposit and site preparation is under way for pre-stripping to start in December, the company noted in an earnings report.
Endeavour Mining reported adjusted net earnings after tax of $1.7 million, or 0 cents per basic share, in the third quarter while ending the quarter with $55.4 million in cash. Endeavour’s adjusted EBITDA in the third quarter totaled $37.6 million.
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- Agbaou Powers Endeavour Mining to Record 2Q Gold Production – Endeavour CFO
- Endeavour Mining Lowering Costs By Reinvesting In Assets – CEO
By Alex Létourneau of Kitco News aletourneau@kitco.com
Follow Alex Letourneau @alex_letourneau