(Ecofin Agency) - The Houndé gold mine in Burkina Faso, owned at 90% by Canadian mining company Endeavour, entered construction stage after the firm’s board gave its approval. The firm which started with the licences it had earthworks, said construction works would begin by the end of this month.

The company was expected to produce at the Houndé project 190,000oz/yr over a ten-year mine life at a global cost of $709/oz. It indicated that over the first four years, average production should be at 23,000oz/yr at a global cost of $610/oz.

“With the ramp-up of Karma soon underway, and our operations delivering a strong performance, we are now well positioned to build the Hounde project, which will further lift the overall quality of our portfolio. Once in production, it will become our flagship low-cost mine and will rank amongst West Africa’s top tier cash generating mines,” said Endeavour’s CEO Neil Woodyer.

The Hounde project is fully-funded based on expected pro forma cash after completion of True Gold acquisition, the mine equipment financing, and the undrawn portion of its revolving credit facility, the CEO added. Instead of taping in its revolving credit facility, the mining company implemented a short-term gold revenue protection so as to secure the necessary cash flows, providing comfort even if the gold price were to fall to $1,000/oz.

Endeavour Mining is an intermediate gold producer established in Mali, Cote d’Ivoire, Ghana and Burkina Faso. In these four countries, it owns five mines and could produce this year between 575,000 and 600,000 ounces at a cost of $870-$920 per ounce.

Louis-Nino Kansoun