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Endeavour Mining Corp. (EDV, TSX) is Moving Toward Mid Tier Gold Producer Status
Issue 29 August 9, 2011
As longtime readers know, the summer season in the venture market means that some fantastic bottom fishing opportunities can occur. Last week's negative news about the U.S. credit rating downgrade by the S&P coupled with ongoing European debt problems have sent the markets into a tail spin. For select well managed, well financed companies with prospective business models this means greater opportunities for investors.
As you would expect, this worrisome economic news has propelled gold to over $1700.
So this leads me to one of our favorite stocks which is now trading at fire sale prices, Endeavour Mining Corp. (EDV, TSX). Given today's price at just over $2 and with a strong balance sheet including $1.71 in cash, the downside is close to zero.
Summary
Endeavour Mining is a junior gold producer who is on the verge of stepping up into the "mid tier producer" category. Their principal projects are the Youga gold mine in Burkina Faso (90%), the Agbaou gold project in Cote d'Ivoire (85%), and the Finkolo gold project in Mali (40%).
The company is currently producing about 84,000 ounces of gold per year with the goal of increasing production to a target of 150,000 ounces by 2014 from its existing assets plus whatever additional ounces it adds through strategic acquisitions.
Last week the company provided a very encouraging operational update on their producing Youga Mine, the feasibility stage Agbaou and the development of the Ouar� property.
Agbaou Exploration Update
The company reported highlights from the first 45 drill holes completed on Agbaou which will help to upgrade the reserve and resource estimates. Drilling has confirmed that mineralization has continued and the expectation is that inferred resources will be upgraded to the measured & indicated category with an overall increase in the resource numbers and Life of Mine (LOM.)
A previous feasibility study completed in November 2008 by MDM International Engineering Ltd reported that reserves were 732,000 oz, production was pegged at 73,100 per year over 9.1 years and the Life of Mine cash cost would be US $516 per ounce (with an owner fleet.)
With ongoing work since then, a construction decision and updated feasibility study are to be evaluated in Q1 of 2012. Production could begin in late 2013 or early 2014 with a good chance that the annual production numbers could be bumped up.
The map below shows there could be an extension of mineralization of the West Pit separated by a fault or an entirely new ore body. It's interesting to note that the drill intercepts occur on adjacent drill lines (or sections) which are 300 m apart as shown on the diagram, suggesting they are linked.
Full Article
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For further information, please contact:
Vanguard Shareholder Solutions
Tel: 604.608.0824
Toll Free: 866.341.4111
investor@endeavourmining.com
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