Interesting ....

Endeavour Financial already looking at gold deal No 2


By: Liezel Hill
13th October 2009

Updated 22 minutes agoTEXT SIZE TORONTO (miningweekly.com) – Merchant bank
Endeavour Financial is already looking closely at a second potential gold
transaction, after it announced last month it would take up to a 54% stake in
struggling gold junior Etruscan Resources, Endeavour marketing and business
development director Sally Eyre said in an interview.

Endeavour, which has ties to legendary Canadian resources dealmaker Frank
Giustra, has put together a new strategy for the gold sector, with the ultimate
goal of creating a million-ounce producer by combining distressed juniors into a
larger intermediate company.

The idea is that the market would rate the stable mid-tier producer more highly
than the 'risky' junior plays.

Endeavour has about $150-million on hand that it will dedicate to the gold
strategy, and Eyre said this will likely see it through up to three
transactions.

"We have one that we are looking at closely at the moment. It's difficult to say
if and when that may happen, but we certainly have got a target opportunity for
number two lined up."

Beyond the $150-million, million-ounce plan, Endeavour may also look in the
future to bring on strategic partners on certain gold deals, Eyre said.

"There's certainly plenty of opportunities to bring on a co-investment partner
deal by deal, but for now we do have our own capital to do it independently. "

Future deals could be for assets anywhere in the globe, she said.

The main criteria for a deal is that it must offer potential for Endeavour's
team to add value, and the management of the company must be open to a friendly
transaction.

There are still some questions remaining over how the million ounce target will
ultimately be achieved, however.

"People say to me: 'is Etruscan the vehicle to start consolidating?' It may be,
but we don't know yet," Eyre said.

"Is Endeavour the vehicle? It could be.

"I think people will start to appreciate what we are doing once we've done
transaction number two - it should become more apparent as to what the game
ultimately is."

Last year, Endeavour and Giustra had a hand in bringing together three juniors:
New Gold, Peak Gold and Metallica Resources in a three-way merger.

Endeavour's current strategy is slightly different to the New Gold deal, as the
company has actually taken an equity position in Etruscan, but the end game is
the same, Eyre commented.

"In that you try to control a resource base and resource companies with the
ultimate goal of getting that market rerating."

ETRUSCAN

Etruscan, which has an operating gold mine in Burkina Faso, as well as projects
and prospects in Mali, Côte d'Ivoire, Ghana and Namibia, had been struggling to
come up with the cash for looming debt repayments because of operational
difficulties at its Youga mine.

The company announced in September it had agreed to sell about 153-million
shares to Endeavour, to raise $43-million, and will use the funds to restructure
its senior debt facility, repurchase gold call positions on production from
Youga and for much-needed working capital.

"Etruscan is a company with a great asset, it is in a jurisdiction that we feel
comfortable working in, and ultimately it was in financial distress," Eyre said.

"Obviously management had been working to solve their own financial issues, but
it is a very tough environment to be doing that.

"So Endeavour was able to come in and implement not only its financial skills,
but its own capital, and obviously its own dealmaking capabilities," she said.

"We were able to restructure the debt, we're helping the technical team to turn
around the operation, and we've put in enough capital to do things like reduce
the hedge book.

"So all of a sudden we're already looking at increasing operating cash flow, so
the Etruscan management can focus on delivering on production - they no longer
have to worry about the financial distress that the company was clearly under."

Edited by: Liezel Hill

http://www.miningweekly.com/article/endeavour-financial-already-looking-at-gold-deal-no-2-2009-10-13