Posted by: cdevauld on Feb 02, 2012
ANALYSIS—ProspectingJournal.com—Shortly after announcing its “Merger of Equals” with Australia’s Adamus Resources, West African gold producer and explorer Endeavour Mining [EDV – TSX] has confirmed the value of this strategic partnership by meeting its 2011 production targets.
As the recent release of Endeavour’s Q4 and 2011 gold production results show, the 2011 targets were well-calculated to capitalize on the merger of the two companies’ producing West African projects: the Nzema Mine (Adamus) in Ghana and the Youga Mine (Endeavour) in Burkina Faso.
Without the merger, Endeavour’s estimated production in 2011 would have been approximately 84,000 ounces, while Adamus’ production would have come in at 88,000. With the merger, Endeavour achieved a total annual production of 177,290 ounces of gold at a cash cost per ounce of $614 (excluding royalties), with 90,026 ounces from Nzema and 87,264 ounces from Youga. As 2011 production was expected at 172,000 ounces, this announcement has eased any concerns shareholders may have in regards to the future growth of their company.
For Adamus, the merger presented the dismantling of its US$60M project loan and an additional US$100M slated to reduce its required gold hedge. For Endeavour, the merger presented an opportunity to expand its resources in a growing gold mining region, utilizing Adamus’ experienced management team, along with its excellent production and exploration projects.