Completing two major acquisitions in one calendar year is a significant achievement by any measure but to do so in the midst of a pandemic makes it even more remarkable – which is one of the reasons why we have chosen Endeavour Mining CEO Sebastien de Montessus as our Mining Person of the Year for 2020.
Last March – just as Covid-19 started turning the world upside down – Endeavour announced the friendly acquisition of Semafo in an all-share deal valued at US$716 million – adding two cornerstone mines (Boungou and Mana in Burkina Faso) to its already sizeable portfolio of mining operations in West Africa. The deal made Endeavour not only the largest gold producer in Côte d’Ivoire and Burkina Faso but the largest gold producer in all of West Africa, with more than 1 million oz. of gold production a year.
Endeavour followed that transaction with the announcement in November of the friendly acquisition of Teranga Gold in an all-share deal worth US$2 billion, which added the Sabodala-Massawa complex in Senegal, the Wahgnion mine in Burkina Faso, and two advanced assets—Golden Hill in Burkina Faso and Afema in Côte d’Ivoire. The transaction transformed Endeavour into the largest gold producer in Senegal and a new Top Ten senior gold producer with estimated annual production of 1.5 million oz. of gold across six core mines in three countries. It also meant Endeavour could meet the investment hurdles of larger funds and institutional investors.
“You don’t always decide the timing of those things, but we saw it was the right timing and we were able to do it,” he says in a telephone interview from France. “We now have an amazing portfolio and a very strong position in West Africa and see a lot of organic growth and so I’m extremely happy with these acquisitions in what has been a very challenging year.”
Since de Montessus became Endeavour’s CEO in 2016, the company has built two mines (Hounde in Burkina Faso in 2017 and Ity CIL in Côte d’Ivoire in 2019) – and created one of the largest portfolios in West Africa with 21 million oz. of measured and indicated resources and footholds in two world-class belts: Hounde in Burkina Faso and Ity in Côte d’Ivoire. On the exploration front, Endeavour’s team under his leadership has discovered 8.5 million oz. gold at an average discovery cost to date of about US$12 per oz., which the company says is six times lower than its West African peers.
In 2020 Endeavour spent US$44 million on exploration across all of its assets drilling more than 73,000 metres at Hounde with 11 rigs; over 85,000 metres at Ity (eight rigs) and another 75,000 metres at its Fetekro greenfield discovery in Côte d’Ivoire; along with 4,000 metres of underground drilling at its Mana mine in Burkina Faso. In December Endeavour increased its stake in Fetekro to 80% from 65% ahead of a prefeasibility study it expects to finish before the end of the first quarter of 2021.
The company ended 2020 with a net cash position of US$70 million after reducing its net debt by US$660 million in just 18 months, and in November declared its first-ever dividend.
De Montessus’ affinity for Africa began when he was a child. He learned to walk at eight months in Niger, and spent his first two years in the West African nation, where his father, an engineer, was working for the World Bank drilling water wells. The family then moved to Cape Town in South Africa for seven years, where his father served as a project manager on the country’s first nuclear plant.
“The first ten years of my childhood was in Africa and that’s probably why I was extremely attracted to Africa and to West Africa,” he said. “And it’s part of Endeavour’s culture, to grow local talent, giving as much chance as we can to all those brilliant local engineers to grow.”
The CEO—who turned 46 in January—spends one to two weeks in West Africa every month and says it’s critical to develop relationships with governments and host communities. It helps that Endeavour’s assets are all in the same time zone and within a two hour flight of each other. As a Frenchman and having logged more than a decade in West Africa, de Montessus also benefits from sharing the language spoken in eight countries in the region (Benin, Burkina Faso, Côte d’Ivoire, Guinea, Mali, Mauritania, Senegal, and Togo).
More importantly he understands the norms and way of life. “I’ve been extremely attached to Africa, to this continent, and to West Africa. So I think I understand the culture and I think what they do respect is because we speak the same language, I understand also that they don’t have the same notion of time,” he says. “Some of the mining companies just fly in for a meeting and then fly out and they are surprised when the president, or the prime minister or the minister of mines, is not available. It’s all a question of how much do they feel they are important to you. If it’s just one meeting in your agenda because then you have to go to New York, or to Russia, or to another jurisdiction, you just don’t give the right message and the reality is that we are hosted in those countries and in order to be admitted, and taken care of by those governments, you need to show them they are important to you and you are ready to spend time there and to try to understand them.”