Canada’s Endeavour Mining to restart Boungou mine
Endeavour Mining, the Canadian mining company, has announced that mining operations have successfully restarted at its Boungou mine in Burkina Faso, following the mobilisation of the West African mining contractor and completion of infrastructure and operating improvements.
In a statement, Endeavour adds that it has confirmed potential annual synergies of £27 million to £30 million during its SEMAFO integration process, following its acquisition of the latter in July this year. The identified synergies are in the areas of procurement and supply chain optimisation, corporate and in-country G&A savings, centralisation of technical services and functions across the group, the statement says.
It is estimated that 60 percent of these synergies will be progressively unlocked by year end 2020 and the remaining next year.
Sébastien de Montessus, President and CEO of Endeavour, states: “We are pleased to have restarted mining operations at Boungou which marks a significant milestone in the integration process. The newly acquired assets are now well embedded into our West African operating model which is centred on an agile and streamlined management approach, based on empowered decision making at the mine level with shared regional support functions.
“In addition to the significant procurement, supply chain, and G&A savings, we are also seeing the benefits of softer synergies that arise from being the largest gold producer in Burkina Faso, such as a further strengthening of our partnership with the government and an enhanced ability to manage risks across the business.”
Endeavour adds that the Boungou plant has been processing stockpiles since early 2020. Following the acquisition on July 1, a range of infrastructure improvements have been implemented, along with new security and operating procedures for the mining restart program.
In early September, Endeavour awarded the mining contract for the Bougou mine to SFTP Mining, a West African mining contractor, who also provides mining services to its Karma mine. SFTP immediately began to mobilise mining equipment and personnel, and in order to accelerate the restart, purchased a portion of the on-site fleet from the previous contractor.
The mobilisation of the remaining equipment is expected to be complete within the coming weeks. Local recruitment for the operation of the mine has been prioritised, with training currently in progress, the statement adds. Approximately 1,100 people, including subcontractors, will be employed by the mine.
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 Q4-2020, 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 2–2.3 million tonnes per month.
The Boungou mine is now expected to achieve the top half of its 2020 production guidance of 130-150koz 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 Q4-2020, targeting near-mill targets, Endeavour adds.
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 also 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. These improvements will also help foster economic development in the region, the statement concludes.
Gerald Group resolves iron ore dispute with Sierra Leone
Gerald Group, the US commodity trader, will pay Sierra Leone $20mn and cede a 10% stake in an iron ore project as part of the resolution to a nearly two-year dispute that led to the shutdown of production, the two sides revealed.
Gerald's wholly-owned subsidiary SL Mining filed for arbitration in August 2019 over a royalty payment dispute and suspended the Marampa mine the following month. Sierra Leone's government responded by cancelling its mining licence.
As part of the agreement signed on Friday, Sierra Leone will take a non-dilutable 10% stake in a new company that will replace SL Mining and resume operations at Marampa by June 1, Gerald said in a statement.
Gerald will make two $10mn payments this year and will have the immediate right to ship its current stockpile of about 707,000 tonnes of iron ore, it said.
Both sides will withdraw their legal claims before the International Chamber of Commerce (ICC) and International Centre for Settlement of Investment Disputes (ICSID), the statement added.
Gerald’s chairman and CEO Craig Dean commented: "I am delighted that we have been able to resolve our differences and have a fresh start and new beginning with the government of Sierra Leone."
Sierra Leone's Mines Minister Timothy Kabba told a news conference on Tuesday that the agreement was a milestone for the country.
"Whatever the pain we may have borne or dreaded throughout these two years ... this outcome justifies our action," he said.
Gerald estimates that Marampa holds about 1 billion tonnes of iron ore with a potential lifespan of 30 years.
Back in 2019, Dean spoke with Mining about the development of Marampa and commented: "SL Mining offers a substantial opportunity for Gerald Group as our Marampa mine in Sierra Leone is set to deliver six million tonnes of high-grade iron ore during its operational life. If you analyse the iron ore market it has transformed, even from a couple of years ago when prices were very low. Now prices have stabilised we’re in a favourable position with our first shipments leaving for China.
"Our goal is to make ‘Marampa Blue’ an internationally recognised premium grade iron ore brand. We intend to expand the delivery of high-grade 65% iron ore concentrate to markets in Europe and Africa.”