TORONTO (miningweekly.com) – The TSX-listed shares of Mexico-centric precious metals producer Endeavour Silver on Monday rose nearly 10% after the company reported record silver output of two-million ounces.
The Vancouver-based company said fourth-quarter output was up 4% over the corresponding quarter a year earlier, underpinned by the record performance of the Guanaceví mine.
Despite fourth-quarter gold output being down 14% year-on-year at 15 127 oz, Endeavour noted that it had achieved its tenth straight year of increased silver output since its start-up more than ten years ago.
Endeavour reported total 2014 silver output of 7.21-million ounces, up 6% over the previous year, while total gold output fell 17% to 62 895 oz. Silver equivalent output was 11.6-million ounces, combining the two precious metals at a ratio of 70 oz of silver to 1 oz of gold in 2014.
In the fourth quarter, the company sold more than two-million ounces of silver and 13 635 oz of gold.
"We beat the high end of our silver production guidance by 5%, although our gold production fell short of guidance by 3%.
"Lower precious metal prices continued to beset the mining industry in 2014 and I am proud of our management team for their ongoing efforts to reduce our all-in sustaining costs in this difficult environment. We remain focused on optimising our mining operations further to ensure that each mine generates positive operating cash flow through this current metal price downturn," CEO Bradford Cooke said.
Despite missing sliver and gold output targets, the El Cubo mine’s fourth-quarter performance allowed the company to meet its 2014 plans of ramping up throughput by 36%, and fill the El Cubo plant to capacity by year-end. Endeavour pointed out that the mine had a “much improved” performance since making site management changes at the end of the third quarter.
At Guanaceví, the mine achieved record quarterly and full-year output, boosted by higher recoveries and higher grades, mainly from the Porvenir Cuatro orebody, and helped the operation beat the silver output guidance by almost one-million ounces. Endeavour also discovered two new areas of silver mineralisation at the site.
The Bolanitos mine operated steadily at capacity throughout the year and met its operating guidance, with higher silver recoveries partly offset by lower throughput and gold grades. The mine output and mill throughput reverted to the plant capacity in 2014 after benefiting from increased mine production to fill available capacity at the Las Torres plant in 2013. Endeavour reported an expected decline in gold grades owing to the metal distribution in the orebodies.
Endeavour noted that San Sebastián, its new high-grade silver/gold discovery in Jalisco state, could become its fourth mine, subject to economic studies now under way. Exploration drilling had successfully delineated the Terronera mineralised zone.
The company said management was working on the individual change-of-soil-use permits, an updated resource estimate, initial mine plan, project engineering and independent economic evaluation.
Endeavour planned to publish its updated reserve and resource estimate, and full-year outlook with production guidance within the next two weeks.
The miner’s stock climbed 9.44% on Monday to C$3.13 apiece.