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New Gold Discovery for Endeavour (EDV)

September 14th, 2016 by

In an era when such reports are becoming fewer and farther between, Endeavour Mining (EDV) has announced that it has uncovered a “significant” new extension of its gold resources at the Ity mine in the Ivory Coast (also known as Côte d’Ivoire in French).

Jump In Resources

ore-mineEndeavour, the Canada-based gold miner, has discovered an extension near the Ity mine that the company says is characterized by high-grade gold deposits that are near the surface. (This makes extraction of the ore much easier and more cost-effective.) The new discovery came as part of Endeavour’s broader drilling exploration program. As a result of the promising find, the “measured and inferred resources” of the Ity mine now stand at 3.2 million troy ounces of gold—up from just 200,000 troy oz as recently as last year.

The company is now conducting a feasibility study along the 800-meter-by-250-meter area of the new discovery. The executive vice president of Endeavour’s Exploration and Growth division, Patrick Bouisset, says this development “continues to demonstrate the prolific nature” of the Ity project. Conclusions from the feasibility study are expected to be released in the fourth quarter.

Exploration for diamonds by the firm in the area will also continue as part of its exploration efforts in mining gold in West Africa.

According to Miningmx,

“In a presentation published on its website in July, Endeavour outlined a strategic objective to reach 900,000 oz/year in gold production by 2020 at an all-in cash cost of less than $800/oz. This will be achieved partly through the development of its Houndé project [in Burkina Faso]. The life of mine of its core assets would exceed 10 years, it added.”

Increasingly Rare

One of the important aspects of these successful preliminary exploration results is that such discoveries are becoming increasingly uncommon. In the two decades leading up to 2012 (when expenditures on exploration across the gold mining industry peaked at roughly $6 billion), an average of 10 major gold deposits were found each year. In the four years since, a total of just four significant gold deposits have been uncovered.

Source: Palisade Research via Mining.com

The dwindling of new deposits obviously has something to do with the geological limitations of our planet. The rapid advancement of machinery and technology used in the mining industry has meant the faster depletion of gold reserves, including those that were previously inaccessible. It is estimated that more gold has been mined over the last few decades than in the entire history of human civilization up to that point. (Keep in mind: people have been extracting gold from the earth for several thousand years.)

However, another point is the far higher price of gold today (over $1,300 per ounce) compared to the 1990s, when gold traded below $400/oz on average. This makes it much more expensive and capital-intensive for miners to pursue new projects that may or may not yield a long-lasting source of freshly mined gold. The experts at Palisade Research explain it concisely: “Explorers must spend more money to find new deposits or rely on the experience of successful management teams to increase the odds.”

 

The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.

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