Endomines will adapt to the current gold price by introducing Selective Mining in order to improve profitability
Endomines will adapt its mine production, by early 2016, to the prevailing and short-term forecasted gold price development. Production in 2016 will be based on the selective mining principle. During 2016, the Company intends to mine and process approximately 125,000 tonnes of high-grade ore. Mining will therefore be concentrated to earlier known as well as in 2015 discovered high-grade areas.
The reduced mine tonnage of some 125,000 tonnes will be processed in campaigns, approximately for 7-10 days per month. The Pampalo underground mine will operate continuously, but only during weekdays.
There will be a reduction in the workforce for both own and contractor employees. The Company’s fully owned subsidiary Endomines Oy has today concluded personnel co-operation negotiations. The outcome of these negotiations was that 7 officers and 28 workers are laid off temporarily. The lay-offs represents about 50 % of the total number of own employees.
The Company expects these changes to the mining and processing schedule, including the temporary lay-offs of personnel, to improve the profitability of its Pampalo Gold mine operations. Cash Cost is estimated to be reduced below the current and forecasted gold price level.
In the selective mining mode, the relatively lower grade areas will be not be mined at this stage but rather left secured and mined when the gold price turns upwards and the market conditions improve. The Company shares the widely held view in the market that the primary gold production from gold mines will peak in 2016 (“Peak Gold 2016”) and start to decline thereafter. “Peak gold” during 2016 is commonly expected to result in an improved gold price for year 2017 and beyond.
The recent underground exploration in the Pampalo mine has given exceptionally good results. The Company has therefore decided to concentrate its exploration activities to the same. Regional exploration activities will be temporarily reduced and activated when conditions improve.
The Exploration Manager Jyrki Bergström has, at his own request, decided to leave Endomines to commence working for an international mining company. The Company will, as earlier announced, complete “the Karelian Gold Rush – international exploration challenge” and announce the winners at the “Prospectors and Developers Association Conference” in Toronto (PDAC 2016) early March 2016.
“We will now concentrate our mining activities to the higher grade areas in the Pampalo underground mine. This will improve our profitability through optimal use of available resources until gold prices pick up again. Earlier we have been required to seek profitability by maximizing our mine and processing tonnage. Mining the high grade areas at this stage is the best option to secure the long term future of the Pampalo operations”, comments Markus Ekberg, CEO of the Company.
For further information, please contact:
Markus Ekberg, CEO of Endomines AB, tel. +358 40 706 48 50
Or visit the Company´s home page: www.endomines.com
Endomines AB discloses the information provided herein pursuant to the Swedish Securities Markets Act and/or the Swedish Financial Instruments Trading Act. The information was submitted for publication at 08:45 CET on November 6, 2015.
Endomines conducts exploration and mining business along the 40 kilometer long Karelian Gold Line. Through various regulatory approvals, Endomines controls the exploration rights to this entire area.
The Company’s first mine, Pampalo, started in February 2011. During 2014, Endomines initiated the production of ore from the mine in Rämepuro. The ore from satellite mines will be processed in the centrally located mill at Pampalo.
The Company’s operations are based on sustainable principles and on minimizing the impact on the environment.
Endomines applies SveMin's & FinnMin's respective rules for reporting for public mining & exploration companies. The Company has chosen to report mineral resources and ore reserves according to the JORC-code, which is the internationally accepted Australasian code for reporting ore reserves and mineral resources.
Endomines vision is to participate in the future structural transformation and consolidation of the Nordic mining industry. The Company may therefore be involved in acquisitions of interesting deposits or companies, should such opportunities arise.
The shares of Endomines AB are quoted on NASDAQ Stockholm under ticker ENDO and on NASDAQ Helsinki under ticker ENDOM. The Liquidity Provider in both Stockholm and Helsinki is Erik Penser Bankaktiebolag.
This news release may contain forward-looking statements, which address future events and conditions, which are subject to various risks and uncertainties. The Company's actual results, programs and financial position could differ materially from those anticipated in such forward-looking statements as a result of numerous factors, some of which may be beyond the Company's control. These factors include: the availability of funds; the timing and content of work programs; results of exploration activities and development of mineral properties, the interpretation of drilling results and other geological data, the uncertainties of resource and reserve estimations, receipt and security of mineral property titles; project cost overruns or unanticipated costs and expenses, fluctuations in metal prices; currency fluctuations; and general market and industry conditions.
Forward-looking statements are based on the expectations and opinions of the Company's management on the date the statements are made. The assumptions used in the preparation of such statements, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking