JOHANNESBURG (miningweekly.com) – Mexico-focused silver producer Endeavour Silver has reported a 26% year-on-year decrease in silver production for the second quarter ended June 30, while silver ounces sold decreased by 34%.
The NYSE- and TSX-listed company said in a statement on Thursday that financial performance during the period was impacted by lower production and increased exploration and development activities compared with the previous year.
Endeavour generated revenue totalling $32.7-million in the period under review, and sold 988 821 oz of silver and 13 058 oz of gold at realised prices of $17.16/oz and $1 270/oz respectively.
Mine operating earnings amounted to $5.4-million.
Excluding depreciation and depletion of $3.3-million, mine operating cash flow before taxes was $8.8-million.
Direct production costs per tonne per ounce increased 15%.
Production was lower in the second quarter compared with the same period last year, owing to differences in the annual mine plans.
"Our second-quarter production was an improvement over the first quarter thanks to higher tonnes and grades from our Mexico-based Bolañitos and El Cubo mines. The Guanaceví mine, also in Mexico, continued to lag behind plan and another internal review was initiated to better understand the new issues and possible resolutions,” noted CEO Bradford Cooke.
At Guanaceví, power outages in the first quarter caused pump failures and some flooding underground.
Slower-than-planned mine development, owing to narrower vein widths than in the resource model, also contributed to lower-than-planned mine output, while excess dilution of the ore resulted in lower-than-planned grades.
In July, a lightning strike caused electrical issues, just as electrical repairs were nearing completion, resulting in another pump failure and renewed flooding in the deeper workings.
Recent completion of electrical and ventilation repairs, as well as the construction of a new underground pump station should help smooth production in the second half of the year.
Owing to these setbacks, Endeavour confirmed that Guanacevi would not meet its planned production this year. The company is therefore reducing its consolidated production guidance and raising its consolidated cost guidance.
Overall production in the second quarter was higher than in the first quarter, owing to improved performance at the Bolañitos and El Cubo mines.
These mines are now performing in line with their operating plans for the year, while Guanacevi continues to lag behind plan.