Endeavour Mining expects more gold M&A

Endeavour’s Agbaou Gold mine in Côte d’Ivoire. Image from Endeavour.

More gold mergers and acquisitions are likely this year, Endeavour Mining CEO Sebastien de Montessus said, after Newmont’s $16.9 billion offer to buy Newcrest ramped up pressure on the sector to consider deals.

De Montessus said the deal was “logical” for Newmont, and that consolidation is needed in the industry, but he would not say whether Endeavour would be willing to participate in it, either as an acquirer or a target.

“I think we will probably see more [deals], simply because some companies are lacking a clear strategy,” de Montessus said in an interview on the sidelines of the Investing in African Mining Indaba.

“You’ve got historical companies like IAMGOLD, Gold Fields, AngloGold, Kinross, where there are a lot of questions about whether their portfolio is well-suited, and whether their strategy is clear enough for investors and shareholders.”

A wave of consolidation sweeping the gold mining sector, which saw Canada’s Agnico Eagle and Pan American buy Yamana Gold for $4.8 billion, is expected to continue, buoyed in part by a stronger gold price.

De Montessus said West Africa-focused Endeavour will be less exposed to conflict-hit Burkina Faso as a planned expansion at its Senegal mine and a project in Cote d’Ivoire enter production.

Conflict has reduced gold production in Burkina and made it more difficult – and costly – for miners such as Endeavour to transport the staff and the supplies they need to keep mining.

Endeavour’s three Burkina Faso mines Hounde, Boungou, and Wahgnion account for between 40% and 45% of its gold production, but that share is likely to fall to around a third by 2024, de Montessus said.

Asked about allegations that Burkina Faso has hired mercenaries from Russian group Wagner, which Burkina’s military head of state has denied, de Montessus said: “For the current president of Burkina Faso, that is today not part of the plan.”

(By Helen Reid; Editing by Barbara Lewis)

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