Endeavour to Buy Adamus for West African Gold Mine
The booming commodities market has seen the price of gold skyrocket in a relatively short period of time, and mining companies are targeting gold to cash in on the market spike. Canada’s Endeavour Mining Corp. is among such companies and has agreed to buy Australia’s Adamus Resources to create a producer focused on West Africa’s gold resources.
Adamus has had a presence in West Africa’s gold sector since January of this year. Its Nzema project in Ghana has been preparing to ramp up output and bring its processing activities to full capacity. Ghana is the second-largest gold producer in Africa, and the country’s output increased an entire percent in 2010 amidst rising gold prices, pushing production to 2.97 million ounces that year.
Adamus shareholders will receive .285 of Endeavor stock for each Adamus share held. The deal is estimated to be worth a C$313.4 million, and Endeavor plans to pay a minimum of C$160 million to repay project debt on Adamus’ Nzema operation.
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The new gold producer to be formed out of the acquisition is expected to produce 172,000 ounces of gold in 2011 from Endeavor’s Youga mine in Burkina Faso and Adamus’ Nzema mine. Profit after production costs is estimated to range between $575 and $625 per ounce. By the end of 2013, the companies believe production could reach 250,000 ounces per year from existing assets.
"This (deal) enables accelerated growth through the combined portfolio of development and exploration projects," said Neil Woodyer, chief executive of Endeavour.
British Lithium Pressured Due To Calls for Electric Cars
The British demand for lithium is set to reach 75,000 tonnes by 2035 as the government works towards their ban on the sale of high-polluting diesel and petrol vehicles within the UK. This comes as automakers worldwide continue to insist on the benefits electric vehicles will have on slowing the rate of climate change.
It is estimated that the UK will require 50,000-60,000 MT of lithium carbonate a year by 2035 for battery production to satisfy government needs. This is assuming production remains at 1.2 million vehicles per year, and the amount of lithium required does not increase.
British Lithium, which hopes to begin constructing a quarry to produce 20,000 MT of lithium carbonate a year in a $400 million investment, are not without competitors, both within the UK and abroad.
Competition For Lithium Rises In Europe
After only five years after its initial launch, Cornish Lithium is setting its sights on becoming a UK powerhouse in mining lithium, aiming to begin commercial production in under four years. Jeremy Wrathall, a former investment banker and current managing director of Cornish Lithium, had the future in mind when founding the company.
“In 2016, I started to think about the electric vehicle revolution and what that would mean for metal demand, and I started to think about lithium,” he said in an interview with AFP. “A friend of mine mentioned lithium being identified in Cornwall, and I just wondered if that was a sort of unrecognised thing in the UK.”
Lithium was first discovered in Cornwall around 1864 and has not been mined again since 1914 when it was produced as an ingredient in fireworks. Now, however, Cornish Lithium is reportedly in the testing stage to see if the metal can be produced commercially to meet the growing demand required for the electric car sector.
Despite Cornwall’s close historic ties to mining lithium, Wrathall insists that the project is purely commercial.
Cornish Mining Revival For Lithium Production
“It’s not a mission that drives me to the point of being emotional or romantic,” he says. “It’s vitally important that we do get this technology otherwise Europe has got no lithium supply.”
The European Commission has also stated their goal to end the sale of new petrol and diesel cars by 2035 to aid the environment. That being said, the majority of lithium extraction currently relies on power provided by environmentally damaging fossil fuels─a slight contradiction.
Alex Keynes, from the Brussels-based lobby group Transport & Environment, is adamant that mining for lithium should be done sustainably.
“Our view is that medium-to-long term, the majority of materials including lithium should come from efficient and clean recycling.
“Europe from a strategic point of view should be looking at securing its own supply of lithium.”
Despite growing competition from abroad, British Lithium Chairman, Roderick Smith, continues to place importance on the mining of lithium within the UK.
“Imagine what the UK economy would look like if we lost our automotive industry,” Smith says. “The stakes are high for the UK.”
Smith expects the UK to compete with other European countries to secure a lithium battery plant in the near future.