Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Toronto Stock Exchange  >  Endeavour Mining Corporation    EDV   KYG3040R1589

ENDEAVOUR MINING CORPORATION

(EDV)
  Report  
Delayed Quote. Delayed Toronto Stock Exchange - 11/15 04:00:00 pm
24.66 CAD   -1.32%
11/08Attack on Canadian miner in Burkina Faso threatens gold’s final frontier
RE
11/05TSX rises 0.07% to 16,681.92
RE
11/05ENDEAVOUR MINING CORPORATION : Q3-2019 Financial Results
GL
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsPress ReleasesOfficial PublicationsSector newsAnalyst Recommendations

Attack on Canadian miner in Burkina Faso threatens gold’s final frontier

share with twitter share with LinkedIn share with facebook
share via e-mail
0
11/08/2019 | 02:14am EST
Family members of victims of an ambush on workers near a Canadian-owned mine, react during their meeting with officials in Ouagadougou

As jihadists wreaked ever more havoc in the last two years, mining firms in Burkina Faso rolled out extra security measures, from barracks for government troops protecting them to safe rooms for workers behind barbed wire and mounds.

Expatriates generally fly in and out, while local staff still drive but in guarded convoys.

That has added millions of dollars to security costs for foreign companies, mainly from Canada and Australia, operating in the West African nation where industrial miners are forecast to produce 60 tonnes of gold this year.

Yet this week's attack on a convoy ferrying hundreds of local employees and contractors from a mine owned by Canada’s Semafo has exposed how vulnerable firms still are.

At least 37 civilians died, with another 60 injured and dozens more feared missing.

"This is the deadliest incident targeting the mining industry, or any private businesses, in the Sahel since the 2013 In Amenas hostage crisis," said Vincent Rouget, an analyst at Control Risks Group, referring to an attack on a gas plant in the Algerian desert that killed dozens of foreign hostages.

There has been no claim for Wednesday's ambush, but the modus operandi – a bomb attack on military escorts followed by gunmen unleashing bullets – suggested the involvement of Islamist groups.

They have been pushing south from strongholds in northern Mali to carry out attacks across much of Burkina Faso and parts of western Niger.

Over 1,000 people have been killed in Burkina Faso since 2016 and nearly 500,000 more have fled their homes, mainly this year. In this time, there have been dozens of attacks on industrial and small-scale mining operations.

After Wednesday's attack Semafo said its Boungou mine site remained secured, but it suspended operations there.

It is a dilemma for miners.

The region is seen as the gold industry's final frontier, with large untapped reserves.

Lured by relatively low-cost mining, Semafo and others like Barrick, IAMGOLD, Endeavour Mining, and Resolute Mining, have invested billions there over the last decade - but expansion by al Qaeda and Islamic State-linked militants could force them to rethink.

WORTH THE RISK?

"Because of the escalating security situation in Burkina, there are companies looking at decreasing their exposure to the country or leaving," said Bill Witham, the head of AAMEG, a body representing Australian resource companies in Africa.

"But the miners still see West Africa as a whole as quite a good investment."

Semafo's Toronto-listed shares have fallen 17 percent since the attack. And major mines just over the borders in northern Ghana and Ivory Coast are now within striking distance of Islamist strongholds, experts warn.

Last year, AQIM, the main al Qaeda affiliate in West Africa, told followers Western companies, especially from France, were "legitimate targets".

Semafo, whose staff, contractors or escorts have been attacked three time in the last 18 months, declined to comment further, saying only that it had beefed up security since those episodes.

Eight other companies contacted by Reuters around the Sahel would not give details of their extra security costs.

West Africa has long been considered a risky prospect where political instability, volatile tax regimes and tricky relations with small-scale miners weigh heavily on boardrooms.

Yet government incentives and the potential to produce gold relatively cheaply led to over $7 billion invested in mining projects in the region between 2004 and 2018, according to a tally by S&P Global, a market intelligence company.

This peaked at $1.2 billion in 2012, when gold prices were at an all-time high.

That year, al Qaeda-linked groups took over northern Mali but gold operations were unscathed as most mines are in the south, hundreds of kilometres away from militant strongholds.

Since then, France has deployed over 4,000 troops to the region, there is a 16,000-strong United Nations peacekeeping mission in Mali, and West African leaders have launched regional security initiatives. However, local armies are losing ground.

Since 2017, researchers documented at least 28 violent incidents at mines or involving mining workers in Burkina Faso, 17 of them this year, according to a Reuters analysis of data compiled by the Armed Conflict Location & Event Data Project.

At least 12 of those events this year, which include attacks on workers, abductions and the use of improvised explosive devices, were linked to jihadists. Prior to Wednesday, at least 54 people had been killed in mining-related violence this year, five times as many as all of 2018.

"BRACING FOR AN ATTACK"

This has forced the industry to accept that the threat has spread well beyond Niger’s northern deserts, where the likes of Frances's Areva have uranium mining operations and expatriates have been kidnapped, said Rouget.

In October 2018, France scrambled two jets to strike militants attacking a gold mine in northern Burkina Faso.

Earlier this year, Burkina Faso's government asked mining firms to help fund a rapid reaction unit with helicopters to respond to incidents like Wednesday's, but the initiative did not materialise, according to two people involved in meetings.

One company security official said his firm spent millions of dollars on armoured vehicles, bullet-proof walls and safety rooms. "We are bracing for an In Amenas-style attack," he said.

However, some still think it's a gamble worth taking.

The top investor in Semafo said risk and gold mining went hand-in-hand, and extra security costs would not be a game-changer.

"Obviously it will add maybe a few dollars to the cost of producing an ounce of gold, but it is not going to change the overall economics," said Joe Foster, gold fund portfolio manager at VanEck Investment Management, which has a 10.1% stake in Semafo and a 9.8% stake in Endeavour, another Canadian firm with two mines in Burkina Faso.

One immediate impact could be restrictions on how far afield firms are prepared to send geologists.

In May, Oumarou Idani, Burkina Faso’s minister of mines, identified exploration companies as high risk. "They work over large areas, sometimes 250 square kilometres ... it is difficult to have a secure way of working over that size of area."

Months earlier, Kirk Woodman, a Canadian geologist with 20 years' experience in the region, was kidnapped and found dead.

That was a "a big wakeup call", a former senior mining executive who is now an investor told Reuters.

"Miners are going to risk exploring further afield a lot less now," he said, asking not to be named. "This will affect how many new gold deposits are found."

(David Lewis in Nairobi, Helen Reid in Johannesburg, and Zandi Shabalala and Ryan McNeill in London; Editing by Andrew Cawthorne)

By David Lewis, Helen Reid and Zandi Shabalala

Stocks mentioned in the article
ChangeLast1st jan.
ENDEAVOUR MINING CORPORATION -1.32% 24.66 Delayed Quote.10.39%
IAMGOLD CORPORATION -2.09% 4.69 Delayed Quote.-6.39%
RESOURCE GENERATION -3.91% 1.105 End-of-day quote.-0.43%
SEMAFO INC. 0.00% 2.75 Delayed Quote.-6.78%
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on ENDEAVOUR MINING CORPORATI
11/08Attack on Canadian miner in Burkina Faso threatens gold’s final frontie..
RE
11/05TSX rises 0.07% to 16,681.92
RE
11/05ENDEAVOUR MINING CORPORATION : Q3-2019 Financial Results
GL
11/04ENDEAVOUR MINING : Announces appointment of independent non-executive director
AQ
11/01ENDEAVOUR MINING : Announces Appointment of Independent Non-Executive Director
AQ
10/15ENDEAVOUR MINING : Q3 2019 Results Conference Call and Webcast on November 5, 20..
AQ
09/03Endeavour Increases Indicated Resources at Fetekro by 141% to 1.2Moz
GL
08/26NAGUIB SAWIRIS : Egypt's Sawiris eyes mining opportunities at home with new law
RE
08/01Endeavour Reports Q2 Results
GL
07/19ENDEAVOUR MINING : To announce its q2 results and host webcast on august 1st, 20..
AQ
More news
Financials (CAD)
Sales 2019 1 193 M
EBIT 2019 257 M
Net income 2019 64,5 M
Debt 2019 772 M
Yield 2019 -
P/E ratio 2019 41,7x
P/E ratio 2020 13,6x
EV / Sales2019 2,92x
EV / Sales2020 2,26x
Capitalization 2 711 M
Chart ENDEAVOUR MINING CORPORATION
Duration : Period :
Endeavour Mining Corporation Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends ENDEAVOUR MINING CORPORATI
Short TermMid-TermLong Term
TrendsNeutralNeutralNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 12
Average target price 32,66  CAD
Last Close Price 24,66  CAD
Spread / Highest target 50,0%
Spread / Average Target 32,4%
Spread / Lowest Target 5,43%
EPS Revisions
Managers
NameTitle
Sébastien Bernard de Montessus President, CEO & Executive Director
Michael Ernest Beckett Chairman
Mark Morcombe Chief Operating Officer
Louis Irvine Chief Financial Officer & Executive Vice President
Henri de Joux Executive VP-People & Information Technology
Sector and Competitors
1st jan.Capitalization (M$)
ENDEAVOUR MINING CORPORATION10.39%2 049
NEWMONT MINING CORPORATION8.54%30 834
BARRICK GOLD CORPORATION19.80%29 447
NEWCREST MINING LIMITED42.71%16 309
POLYUS PAO--.--%14 809
AGNICO EAGLE MINES LIMITED45.10%14 009