NYSE- and TSX-listed Endeavour Silver on Monday reported that its revenue for 2018 was flat at $150-million and that mine operating cash flow decreased 3%, as a result of lower metal prices, offset by higher production.
The Mexico-focused company reported a net loss of $12.4-million, or $0.10 apiece, compared to net earnings of $9.7-million, or $0.08 apiece, in 2017.
Endeavour produced 12% more silver, at 5.5-million ounces and produced 52 967 oz of gold, consistent with 2017. Silver-equivalent production was 9.5-million ounces, at a 75:1 silver to gold ratio.
The company sold 5.4-million ounces of silver and 51 318 oz of gold. Both realised silver and realised gold prices decreased in the reporting period, with silver falling 9% to $15.65/oz and gold falling 1% to $1 267/oz.
The company managed to decrease its all-in sustaining cost by 9% to $15.45 and had no outstanding debt by year-end.
Endeavour’s earnings before interest, taxes, depreciation and amortisation decreased by 14% to $21.9-million.
The company stated its consolidated production costs increased owing to continued operational challenges at Guanacevi, in Durango state, partially offset by improved costs at El Cubo, in Guanajuato state.
Net earnings decreased as a result of higher depreciation and depletion at Guanacevi compared with the prior year. Guanacevi’s proven and probable reserve tonnes has since increased 150% and reserve silver equivalent ounces increased by 200%, which should result in significantly lower depletion in 2019.
The El Cubo and Bolanitos, also in the Guanajuato state, mines continued to generate positive free cash flows in 2018, which were reinvested at Guanacevi to develop two new orebodies, and at El Compas, in Zacatecas, to develop the company’s fourth mine.
Further, Endeavour spent $12.4-million on exploration, primarily to advance the Terronera project, in Jalisco, and to explore the Parral properties, where both projects had significant additions to reserves and resources, respectively in 2018.
The company completed an updated prefeasibility study at Terronera and subsequently increased its reserves during the reporting period.
Drilling and sampling at Parral returned multiple high-grade intersections, including 934 g/t silver, 0.21 g/t gold, 3% lead and 5.9% zinc over 4.2 m.
The commissioning of El Compas has been delayed, owing to excess clay in ore that caused a recovery issue in the plant, a water issue in the tailings facilities, which is now resolved, and a ball mill equipment failure late in December, which has since been rectified.
Notwithstanding the operational challenges faced in 2018, the consolidated mining operations returned flat cash costs and lower all-in sustaining costs net of gold by-product credits.
CEO Bradford Cooke anticipated improved performance at Guanacevi and Bolanitos in 2019, while making the most of declining reserves at El Cubo and delivering its first year of commercial production at El Compas, as well as developing the company’s fifth mine at Terronera.