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Endeavour, Hummingbird push to improve gold traceability

Improving the traceability of gold could help shift perceptions of the gold industry, Endeavour CEO Sebastien de Montessus told Mining Journal.

Endeavour has partnered up with fellow West Africa-focused gold producer Hummingbird Resources to promote Single Mine Origin (SMO) - a certification tool that shows where gold has been sourced.

Almost all gold that is mined goes through the hands of smelters, who mix together metal from multiple sources. This means that a bullion bar, coin, or piece of gold jewellery could come from any origin, or contain metal from multiple sources.

Previous attempts to market gold from specific mines have focused on very small scale and artisanal mining.

But the SMO process, which Endeavour signed up to in June, allows for gold to be traced through commercial smelters.

Gold from a single mine is melted down in a batch, and made into bars or coins marked with QR codes, which allows them to be tracked all the way to the bullion or jewellery market. This means that the process can be implemented on a commercial scale.

De Montessus said that given the work that gold miners already do in local communities, transparency could only improve the sector's perception.

"One of the objectives is to change perceptions of the gold industry," de Montessus said. "We are proud of what we're doing."

"Some investors see mining as an area they are uncomfortable with but they don't realise what gold miners are doing in emerging markets… Traceability is one part of that, but it's just the tip of the iceberg in terms of what we're already doing. Our gold goes through a comprehensive delivery supply chain, in which we can detail the impact on the environment and showcase the positive social benefits that arise from it. We want to be able to show that," he said.

The SMO brand was originated by the Betts group, a family-owned gold bullion dealers. The group managing director, Charlie Betts, partnered with his brother, Dan Betts, CEO of Hummingbird.

Hummingbird's assets include the producing Yanfolila mine in Mali. Dan Betts said that this family connection gave them an oversight of the whole industry, that had made the implementation of gold tracing possible.

"It was an organic process, it wasn't initially by design," Dan Betts said. "We thought, we can sit over the entire vertical supply chain. We've got a unique opportunity to trace gold."

By allowing the buyer to identify the specific mine from which the gold came, SMO allows the consumer to see exactly what environmental and social measures have been taken, Betts said.  

Gold miners are keen to push their ESG credentials, at a time when the sector is losing favour among many investors, who are more interested in the new energy potential of battery minerals, rare earths, or copper.

In November Blackrock's managing director Evy Hambro warned that gold miners would have to work harder to justify their existence, given that the metal has little role in decarbonisation.

De Montessus said that SMO gold was currently most in demand from the jewellery sector. "The jewellery sector is pushing on an open door. It's a response to the end users."

The demand is driven by end users who pay close attention to the sourcing of their consumer goods, and want to extend that attention to gold. "It's nothing different to what we see in coffee," de Montessus said. "You're not just buying coffee. You're buying coffee from Colombia. You want to know where the farm is. You want to make sure it's being produced the right way."

And de Montessus said that if the scheme caught on, he was eager to bring other mines in. "If demand continues to grow, we'll be more than happy to roll this out further," he said.