VANCOUVER (miningweekly.com) – West Africa-focused miner Endeavour Gold has reached the 85%-complete mark in building the Houndé mine, in Burkina Faso, after receiving and starting installation of the longest lead time item, the semi-autogenous grinding mill.

Endeavour, which expects to produce between 600 000 oz and 640 000 oz of gold this year - excluding Houndé, which is expected to produce first gold in the fourth quarter - reported on Tuesday that all procurement has now been completed, reducing cost over-run risk, and with less than $120-million out of the forecast $327-million total project capital expenditures remaining to be spent, representing less than 35% of the remaining budget.

To date, the SAG and ball mill plinths concrete has been completed, with components on site and being installed. The first cell of the tailings storage facility has been completed, with construction of the second cell now under way, in parallel with an extension of the run-of-mine (ROM) pad.

TSX-listed Endeavour advised that the power station concrete civils is complete and the 90 kV overhead power line construction is 90% complete. Power from the national grid is scheduled for connection at the end of July.

Further, Endeavour started openpit prestrip mining at the Main Vindaloo deposit late in December. Ore mining has also started, with a mine plan to have 600 000 t of stockpiled ore on the ROM pad during plant commissioning.

Construction of the 300-person permanent accommodation village and resettlement has also been completed. 

Endeavour also reported that construction of the water harvest dam decant tower is complete, with water already being pumped to the water storage dam.

More than 2 000 personnel, including contractors, are currently employed on site, more than 94% of whom are Burkinabe.

Meanwhile, Endeavour has restarted exploration drilling early this year after a two-year hiatus, focusing on delineating high-grade targets such as Bouere and Kari Pump, Sia, and Kari Fault, as well as performing reconnaissance drilling.

Endeavour owns 90% of Houndé, with the Burkina Faso government having a 10% free carried interest.

The project is expected to produce 190 000 oz of yellow metal over its ten-year mine life, at all-in sustaining costs of $709/oz.

At a base case gold price assumption of $1 250/oz, Houndé has an after-tax net present value, using a 5% discount, of $342-million and a strong internal rate of return of 32%.