Endeavour Silver Corp. (TSX: EDR, NYSE: EXK) reports its production
results for the Third Quarter, 2019 from the Company’s four
silver-gold mines in Mexico: the Guanaceví mine in Durango state,
the Bolañitos and El Cubo mines in Guanajuato state and the El
Compas mine in Zacatecas state.
Silver production in the Third Quarter, 2019 was
948,547 ounces (oz) and gold production was 9,716 oz, resulting in
silver equivalent production of 1.7 million oz at an 80:1
silver-gold ratio. The lower silver and gold production in
Q3, 2019 compared to Q3, 2018 were due to the planned reduction of
mine output at El Cubo and lower throughput and grades at
Bolanitos, partly offset by higher production at Guanacevi and new
production at El Compas.
Bradford Cooke, Endeavour CEO, commented, “Our
production in the Third Quarter 2019 was down year-on-year but we
are seeing positive traction from all the operational changes made
in the past two quarters. We expect lower operating costs in Q3 and
further improvements of Guanacevi and Bolanitos tonnes and grades
in Q4, 2019 which should have a positive impact on costs and
production.”
“We continued to advance our Terronera and
Parral projects with engineering trade off studies during the
quarter. The mining and processing of bulk samples from each
project are planned this quarter in order to complete a final PFS
for Terronera and an initial PEA for Parral. Our exploration
programs continue to generate positive brownfields results and we
plan to drill two greenfields projects in Chile in Q4, 2019.”
Production Highlights for Third Quarter,
2019 (Compared to Third Quarter, 2018)
- Silver production decreased 34% to 948,547 oz
- Gold production decreased 25% to 9,716 oz
- Silver equivalent production was 1.7 million oz (80:1 silver:
gold ratio)
- Silver oz sold decreased 45% to 835,045 oz
- Gold oz sold decreased 28% to 9,373 oz
- Bullion inventory at quarter-end included 146,820 oz silver and
448 oz gold
- Concentrate inventory at quarter-end included 74,824 oz silver
and 1,544 oz gold
Operations Summary for Third Quarter,
2019
A Company-wide review of the four mines at the
end of Q1, 2019 identified several deficiencies in the operating
performance at each mine-site. As a result, management
initiated multiple measures in Q2 and Q3, 2019 including changes of
mine-site management and contractors, changes to shift and
contractor supervision, renting used mining equipment and leasing
new mining equipment, revising the 2019 mine plans for all four
mines, particularly Guanacevi, and reducing the work force.
The Company also took actions to cut operating and administrative
costs and deferred all discretionary expenditures.
Third Quarter 2019 production was slightly lower
than Second Quarter 2019 production because the many operational
changes took longer to implement than planned, dilution remains
high due to narrower than planned veins and a heavy rain season
negatively impacted ore tonnes processed by the plants.
However, management expects Q3 operating costs should be lower than
Q2, due to the cost reductions, and Bolanitos and Guanacevi Q4
silver equivalent production, tonnes and grades should increase
towards plan due to the operational changes.
Guanacevi
Production increased compared to Q3, 2018 due to
higher ore grades mined from the Milache ore body. Output continues
to rise as planned at Milache, but fell short of target at SCS due
to slower than planned development of the SCS ore body. During the
quarter, the Company acquired exploration and exploitation rights
to two properties adjacent to the Guanacevi mine. The properties
cover possible extensions of the Porvenir Norte (PN) and Porvenir
Cuatro (P4) ore bodies. During the quarter, equipment and personnel
were allocated to commence mining of the PN extension and
exploration of the P4 extension. Mine tonnes and grades were
relatively flat in Q3, 2019 but are expected to increase in Q4,
2019.
Bolañitos
Production decreased compared Q3, 2018 due to
lower throughput and grades, partly offset by higher recoveries.
Mine output declined year-on-year because the mine plan had
to be re-sequenced to allow for blending of high and low arsenic
ores, equipment availability issues and lack of stope access.
Mine tonnes rose month to month during Q3, 2019 and higher tonnes
and grades are expected in Q4, 2019.
El Cubo
Production decreased compared to both Q3, 2018
and Q2, 2019 due to lower throughput and grades. Lower than
planned grades were due to narrower widths and higher dilution of
the V-Ascuncion ore body than estimated. The Company is currently
assessing the area to determine whether better mining practices can
reduce dilution going forward. Mine tonnes and grades are expected
to stabilize in Q4, 2019.
El Compas
Production increased compared to Q2, 2019 due to
higher grades and recoveries in this second full quarter of
commercial production. Throughput was 94% of plan, while gold and
silver grades exceeded plan and recoveries continued to improve.
Mine tonnes and grades are expected to be stable in Q4, 2019.
Production Tables for Third Quarter,
2019
Production |
Tonnes |
Tonnes |
Grade |
Grade |
Recovery |
Recovery |
Silver |
Gold |
by mine |
Produced |
per day |
Ag gpt(1) |
Au gpt(1) |
Ag % |
Au % |
Oz |
Oz |
Guanaceví |
78,517 |
853 |
232 |
0.67 |
91.2% |
92.1% |
533,923 |
1,557 |
Bolañitos |
71,541 |
778 |
77 |
1.62 |
83.0% |
86.6% |
147,078 |
3,226 |
El Cubo |
62,253 |
677 |
128 |
1.29 |
87.4% |
86.5% |
223,912 |
2,234 |
El Compas |
21,885 |
238 |
90 |
4.56 |
68.9% |
84.1% |
43,634 |
2,699 |
Consolidated |
234,196 |
2,602 |
144 |
1.49 |
87.6% |
86.7% |
948,547 |
9,716 |
(1) gpt = grams per tonne |
Production Tables for the Nine Months Ended September
30, 2019
Production |
Tonnes |
Tonnes |
Grade |
Grade |
Recovery |
Recovery |
Silver |
Gold |
by mine |
Produced |
per day |
Ag gpt(1) |
Au gpt(1) |
Ag % |
Au % |
Oz |
Oz |
Guanaceví |
230,665 |
845 |
227 |
0.61 |
90.8% |
89.8% |
1,529,033 |
4,062 |
Bolañitos |
234,561 |
859 |
81 |
1.65 |
84.3% |
85.9% |
514,979 |
10,691 |
El Cubo |
206,212 |
755 |
165 |
1.61 |
88.2% |
87.1% |
964,353 |
9,297 |
El Compas(2) |
46,917 |
232 |
79 |
4.39 |
59.5% |
79.7% |
70,859 |
5,279 |
Consolidated |
718,355 |
2,692 |
152 |
1.48 |
87.8% |
85.6% |
3,079,224 |
29,329 |
(1) gpt = grams
per tonne |
(2) Results are as
of commercial production achieved March 16, 2019 |
Three Months Ended September 30 |
Q3 2019 Highlights |
Nine Months Ended September 30 |
2019 |
2018 |
% Change |
2019 |
2018 |
% Change |
234,196 |
317,821 |
(26%) |
Throughput (tonnes) |
718,355 |
957,795 |
(25%) |
948,547 |
1,428,828 |
(34%) |
Silver ounces produced |
3,079,224 |
4,135,563 |
(26%) |
9,716 |
12,968 |
(25%) |
Gold ounces produced |
29,329 |
39,850 |
(26%) |
938,572 |
1,404,677 |
(33%) |
Payable silver ounces produced |
3,028,383 |
4,058,377 |
(25%) |
9,465 |
12,665 |
(25%) |
Payable gold ounces produced |
28,606 |
39,005 |
(27%) |
1,725,827 |
2,466,268 |
(30%) |
Silver equivalent ounces produced(1) |
5,425,544 |
7,323,563 |
(26%) |
835,045 |
1,532,097 |
(45%) |
Silver ounces sold |
3,004,495 |
4,196,857 |
(28%) |
9,373 |
13,025 |
(28%) |
Gold ounces sold |
28,348 |
39,499 |
(28%) |
(1) Silver
equivalent ounces calculated using 80:1 ratio. |
Development Projects
Terronera
The Terronera mine project has the potential to
become the Company’s next core asset, its fifth and largest mine,
with the longest mine life and lowest operating
costs. Endeavour recently appointed the mine engineering firm
JDS Energy and Mining Inc. (JDS) to conduct a full review of the
project and to issue a final updated pre-feasibility study
(PFS). Their work will focus on but is not limited to
refining the 1,500 tonne per day (tpd) mine plan, plant flowsheet,
waste rock and back fill management, underground haulage, power
generation, plant and surface infrastructure and capital and
operating costs in order to optimize the anticipated financial
performance of the mine. The PFS should be completed in late
Q4, 2019.
New metallurgical work is underway to
characterize the silver and gold grades as well as sulfur, arsenic
and other elementals during the first five years of
operations. A 2,000 tonne bulk sample is planned to be mined
in October for processing at the Bolanitos plant in November in
order to refine metal recoveries, and to evaluate the geotechnical
conditions to support long hole mining to further reduce operating
costs, as opposed to the 2018 PFS assumption of 100% cut and fill
mining. The Company’s community relations department
continues to be active in the local communities and most recently
organized an event where almost 200 children participated to
promote and support healthy eating.
Surface prospecting, geological mapping and rock
chip sampling of this large (17,369 hectare) property continued in
the third quarter with positive assay results, including the new
Pajaros vein to the west, the El Hundido vein to south, the El
Carmen vein to the north and the Santa Gertrudis vein in the
central part of the property. Significant exploration
potential remains on a number of historical silver-gold veins and
mines that have yet to be mapped and sampled in detail.
Management continues to work towards closing the
capital financing needed to commence construction.
Parral
The Parral mine project also has the potential
to become a core asset and was Endeavour’s largest exploration
project both last year and this year. The Company recently
appointed the mine engineering firm Roscoe Postle Associates Ltd.
(RPA) to conduct a preliminary economic assessment (PEA) for an
initial small scale development of the project. Parral was a
previously permitted and operating mine until 1990 so the time
frame to re-permit mining activities is expected to be
significantly reduced. The district has three active small toll
mills processing small miner’s ores. RPA will evaluate a first
stage, small scale 200 tpd mining and toll milling project which
could generate cash flow to help fund a PFS for a Stage 2 larger
scale 1,500-2,000 tpd mining operation. The mining of a 2,000 tonne
bulk sample is planned for processing at one of the local toll
mills to further refine metal recoveries and help evaluate the
geotechnical conditions. The PEA should be completed in late
Q4, 2019.
Additional metallurgical work on Veta Colorada
(Sierra Plata zone) drill core is underway to assess and optimize
silver recoveries using the agitated leach/Merrill Crowe
method. A Social Impact Study is underway by an external
consultant to identify the key stakeholders of the project and the
impact of the project in the area, as a baseline to define the
Company’s community relations activities for this
project.
One underground drill is currently working at
the Sierra Plata mine on the Veta Colorada vein to infill and
expand the historic resource left behind by IMMSA when the mine
closed in 1989. Additionally, underground drill stations are
being prepared within the Sierra Planta and at the El Verde mine on
the Veta Colorada vein to test the mineralization to
depth.
Brownfields Exploration
Projects
At Guanacevi, the Company acquired the right to
explore, develop and mine two properties adjacent to the active
Porvenir Norte and closed Porvenir Cuatro mines. The Company
moved quickly to commence mining in August on the El Porvenir
property which was previously drilled and covers an upper extension
of the Porvernir Norte orebody. Endeavour also commenced
drilling in September on the previously unexplored El Curso
property that covers the west extension of the Porvenir Cuatro
orebody. Drill results are pending.
At Bolanitos, one surface drill is testing the
400 meter (m) gap between the Bolanitos vein, one of the main
historic productive veins at Bolanitos, and the recently discovered
San Miguel vein, which is interpreted to be a northern splay of the
Bolanitos vein. Drill results are pending.
At El Cubo, four drill holes were completed
earlier this year, intersecting narrow, high grade mineralization
to extend the V-Asuncion orebody another 100 meters to the north at
depth.
At El Compas, one surface drill is planned to
test for extensions of the El Compas and Ana Camilla veins, after
which it will move to the Calicanto property near the plant to test
for extensions of the Calicanto, Veinte and Aguila de Oro
veins.
Greenfields Exploration
Projects
At Cerro Marquez, drilling is now underway with
one surface drill to test the main porphyry copper
(gold-molybdenum) target this quarter with 2,400 m of core drilling
in 4-5 holes. The property covers a 6.5 x 3.0 km potassic,
phyllic, argillic, silicic alteration zone in a Miocene volcanic
caldera dissected by NW trending faults. Three porphyry
targets have been outlined by strong coincident alteration,
geochemical and geophysical anomalies. The main target is a
2.6 km x 1.3 km high temperature clay, molybdenum (Cu-Au-Pb-Zn)
anomaly with a pronounced IP chargeability high flanked by
resistivity lows within a magnetic low.
At Paloma, one surface drill will test the main
high sulfidation epithermal gold target this quarter with 2,400 m
of core drilling in 4-5 holes. The property covers a 3.5 x
2.0 km, acid sulfate, silica-phyllic-argillic-alteration zone
within a in Miocene volcanic caldera crosscut by EW trending
faults. The main target is a 1 km x 0.5 km zone of vuggy
silica breccias, stockworks and disseminations marked by high
temperature clays, strong trace element anomaly (Hg-As-Sb-Bi-Te-Pb)
and a well defined CSAMT resistivity anomaly within a magnetic
low.
At Aida, the Company has filed an amended drill
permit and anticipates drilling the main low sulfidation epithermal
silver target next year.
Release of Third Quarter, 2019 Financial
Results and Conference Call
The 2019 Third Quarter Financial Results will be
released before market on Tuesday, November 5, 2019 and a telephone
conference call will be held the same day at 10:00am PT (1:00pm
ET). To participate in the conference call, please dial the numbers
below. No pass-code is necessary.
Toll-free in Canada and the US: 1-800-319-4610 Local Vancouver:
604-638-5340 Outside of Canada and the US: +604-638-5340
A replay of the conference call will be
available by dialing 1-800-319-6413 in Canada and the US
(toll-free) or +604-638-9010 outside of Canada and the US. The
required pass-code is 3677#. The audio replay and a written
transcript will be available on the Company's website
at www.edrsilver.com under the Investor Relations, Events
section.
About Endeavour Silver –
Endeavour Silver Corp. is a mid-tier precious metals mining company
that owns and operates four high-grade, underground, silver-gold
mines in Mexico. Endeavour is currently advancing the Terronera
mine project towards a development decision and exploring its
portfolio of exploration and development projects in Mexico and
Chile to facilitate its goal to become a premier senior silver
producer. Our philosophy of corporate social integrity
creates value for all stakeholders.
SOURCE Endeavour Silver Corp.
Contact Information: Galina Meleger, Director,
Investor Relations
Toll free: (877) 685-9775 Tel: (604) 640-4804 Fax: (604)
685-9744 Email: gmeleger@edrsilver.com Website:
www.edrsilver.com
Follow Endeavour Silver on Facebook, Twitter,
Instagram and LinkedIn
Cautionary Note Regarding
Forward-Looking Statements
This news release contains “forward-looking
statements” within the meaning of the United States private
securities litigation reform act of 1995 and “forward-looking
information” within the meaning of applicable Canadian securities
legislation. Such forward‑looking statements and information herein
include but are not limited to statements regarding Endeavour’s
anticipated performance in 2019 including changes in mining
operations and production levels, and the timing and results of
various activities. The Company does not intend to and does not
assume any obligation to update such forward-looking statements or
information, other than as required by applicable law.
Forward-looking statements or information
involve known and unknown risks, uncertainties and other factors
that may cause the actual results, level of activity, production
levels, performance or achievements of Endeavour and its operations
to be materially different from those expressed or implied by such
statements. Such factors include but are not limited to changes in
production and costs guidance, national and local governments,
legislation, taxation, controls, regulations and political or
economic developments in Canada and Mexico; financial risks due to
precious metals prices, operating or technical difficulties in
mineral exploration, development and mining activities; risks and
hazards of mineral exploration, development and mining; the
speculative nature of mineral exploration and development, risks in
obtaining necessary licenses and permits, and challenges to the
Company’s title to properties; as well as those factors described
in the section “risk factors” contained in the Company’s most
recent form 40F/Annual Information Form filed with the S.E.C. and
Canadian securities regulatory authorities.
Forward-looking statements are based on
assumptions management believes to be reasonable, including but not
limited to: the continued operation of the Company’s mining
operations, no material adverse change in the market price of
commodities, mining operations will operate and the mining products
will be completed in accordance with management’s expectations and
achieve their stated production outcomes, and such other
assumptions and factors as set out herein. Although the Company has
attempted to identify important factors that could cause actual
results to differ materially from those contained in
forward-looking statements or information, there may be other
factors that cause results to be materially different from those
anticipated, described, estimated, assessed or intended. There can
be no assurance that any forward-looking statements or information
will prove to be accurate as actual results and future events could
differ materially from those anticipated in such statements or
information. Accordingly, readers should not place undue reliance
on forward-looking statements or information.
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