African gold miner Endeavour would rather be agile than huge
CAPE TOWN – Endeavour Mining one of the fastest-growing gold producers in Africa, says bigger isn’t always better.
"One of the reasons the majors have failed over the years is they’ve built such large corporate teams that the decision-making processes within those organizations is so slow," CEO Sebastien De Montessus said in an interview in Cape Town. "Being able to remain quite lean gives you the agility to move and to take the right decisions whatever happens to the market."
Endeavour produced 663 000 oz in 2017 from six projects in West Africa. The company will commission two new mines in the next 2 1/2 years, but does not intend to grow beyond 900 000 oz/y and five to seven projects, De Montessus said.
"The more assets you have, the less efficient you are because management is then de-focused and diluted.”
A potential tie-up with Acacia Mining in 2016 would have made Endeavour one of the biggest gold producers in Africa but collapsed when the merger didn’t get support from Acacia’s controlling shareholder, Barrick Gold, De Montessus said. The CEO is open to other mergers or acquisitions but says his firm doesn’t need to do another deal.
"We don’t need to acquire for growth but we will remain very opportunistic," he said.
Endeavour benefits from the support of Egyptian billionaire Naguib Sawiris, who acquired 30% in 2015 through his La Mancha Group and brought in De Montessus as chief executive.
La Mancha, of which De Montessus is also a director, hired Acacia’s former CFO Andrew Wray in November to invest in gold projects in Latin America and Central Asia. Sawiris also acquired 31% of Australian producer Evolution Mining in 2015, again with help from De Montessus, and the pair are seeking to build a global portfolio of mid-tier producers.
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