VANCOUVER , Feb. 19, 2015 /CNW/ - Endeavour Mining Corporation ("Endeavour" or the "Corporation") (EDV.TO) (EVR.AX) (EDVMF) announces year-end mineral reserves of 2.1 million ounces (see Tables 1 and 2) at the Houndé Project, an increase of 34% due to the expansion of the Vindaloo deposit and inclusion of two new deposits located within 14 kilometres of the proposed plant site.  An updated open pit mine plan delivers more gold production and extended mine life with highlights including: 10 year life, total gold production of 1.9 million ounces, forecast LOM AISC of $714 /oz, and after-tax IRR of 31.4% at $1,250 /oz gold price.  The strong project economics across a range of gold prices confirms that Houndé is a core asset in our growth profile.

Houndé Exploration Drill Program and Resource & Reserve Update

• The Houndé drilling program began in June 2014 and was completed in November 2014.  It included 57,978 metres drilled with 110 diamond holes (22,780 metres) and 358 reverse-circulation holes (35,198 metres) completed (Figure 1).
• Drilling along the Vindaloo trend had two objectives: (1) test the extents of the Vindaloo Main mineralization at depth and on strike; and (2) convert Inferred mineral resources to Indicated category (Figure 2). Drilling on the Vindaloo West and Vindaloo Main zone targeted Inferred resource blocks and was successful in confirming mineralization.  Upgrading of Inferred mineral resources not only provided additions to mineral reserves but also reduced strip ratios in the Vindaloo Main zone. 
• Bouéré is located 12 km west of the Houndé process plant site and the drilling program was successful in extending the mineralization over a 600 metre strike length with widths of mineralization varying from 2 to 25 metres and generally 80 degree dip to the northwest.
• Dohoun is located approximately 14 km northwest of the Houndé process plant site and the drill program aimed at improving confidence in grade and continuity to enable resource estimation.  The Dohoun mineralization is 500 metres along strike and dips steeply northwest in the main ore zone.

Neil Woodyer , CEO, stated

"We are very pleased to report on the exploration success at Houndé during 2014.  We invested $6.7 million in the Houndé program during 2014 while we progressed through the mine permitting phase.  This has resulted in a 523,000 ounce addition to Proven and Probable reserves, or a 34% increase, for a cost of approximately $13 per discovered reserve ounce. 

The reserve additions have enhanced the after-tax project IRR to between 28% and 35%, with a gold price range of $1,200 to $1,300 /oz.  At a $1,250 /oz gold price the 5% NPV is $359 million .

The mining permit was received on February 5, 2015 and our Construction Services team, which recently completed the construction of the Agbaou Mine in Côte d'Ivoire both ahead of schedule and under budget, is preparing the Houndé Project for a construction decision.  We have had the upfront capital cost estimate confirmed by Lycopodium at $325 million and a detailed construction plan has been completed.  We are now focusing on refining the Houndé operations plan, which now includes the updated mine plan with the 2014 exploration additions.  We are also reviewing operating costs in the context of reduced energy costs and the benefits of local currency rate devaluation.  The strong project economics across a range of gold price assumptions highlights the significant value of Houndé to Endeavour shareholders." 

Table 1: Houndé Mineral Resources (including reserves, effective December 31, 2014 )

1 Prepared by M. Zammit, MAIG (Cube Consulting) reported above 0.5 g/t cut-off and inside an optimized pit shell using US$1,500 per ounce gold price; - includes Vindaloo, Madras and Koho mineral resources
2 Prepared by K. Harris CPG ( Endeavour ) reported above 0.5 g/t cut-off and inside an optimized pit shell using US$1,500 per ounce gold price

Table 2: Houndé Mineral Reserves (effective December 31, 2014 ) using $1,300 /oz gold price

1 Prepared by R.M. Cheyne FAusIMM (ORELOGY)
² Prepared by M. Alyoshin MAusIMM CP Min ( Endeavour )

Houndé Updated Mine Plan

Endeavour has prepared an updated economic model based on the substantially updated mineral reserves and rescheduled mine plan prepared by ORELOGY Group Pty Ltd. (see Table 3).  The updated mine plan defines a large-scale open pit mine that delivers 1.9 million ounces of recovered gold and the processing plant consists of a 3.0 million tonne per year primary crushing with SABC milling circuit to feed a gravity / CIL plant.  The enhanced production relative to the November 2013 Feasibility Study is a result of the exploration additions from 2014 and an optimization of the mine plan to access high grade and shallow gold mineralization during the initial years of the mine life.

Table 3: Houndé LOM Production Profile¹

1

Houndé Capital Cost Estimate and Financial Summary

Endeavour engaged Lycopodium Minerals Pty Ltd to complete a detailed review and assessment of the total estimated cost to bring the Houndé Project into production.  The updated capital cost is $325 million (inclusive of contingency, working capital, and import duties), representing a 3.2% increase over the $315 million estimate in the November 2013 Feasibility Study.  Endeavour's Construction Services team has also completed a mine construction plan. 

The key parameters of the Houndé Project which are included in the updated financial model are summarized in Table 4 along with a summary of the key economic indicators. 

Table 4: Key Parameters of the Houndé Project and Updated Economic Summary