An updated prefeasibility study (PFS) for the Terronera silver/gold mine, in Mexico, has returned less robust economics than a prior study, prompting the Vancouver-based company to initiate an internal review of the PFS before proceeding to a full independent feasibility study.
Endeavour Silver explains that significant changes were made to the operations plan, and capital and operating costs compared with the previous PFS, which was published in 2018. Although still positive, the new PFS returned less robust economics, the company said, without stating what those were.
The 2018 PFS delivered an aftertax net present value, at a 5% discount, of $117.8-million and an aftertax internal rate of return of 23.5%. That study determined cash costs of $0.15/oz of silver and an all-in sustaining cash cost of $1.36/oz of silver.
To establish a 750 t/d operation, the 2018 PFS estimated capital expenditure of $75.8-million and another $39.2-million to expand that to 1 500 t/d.
According to the 2018 study, Terronera will operate for 9.5 years and produce 2.9-million ounces a year of silver and 28 000 oz/y of gold.
“The Terronera project has the potential to become our largest, lowest cost, and longest life mine. We’re disappointed the latest draft PFS economics differ from the prior PFS economics. As a result, we have decided to reconceptualise the project using our in-house expertise so that Terronera can become a model for our future mines,” said CEO Bradford Cooke.
Endeavour’s new director of project development would conduct a review of both studies to assess assumptions and optimise the project design and economics for an internal updated PFS.
The company said it would provide a further update of the project in the next three months.
Endeavour also owns three other mines and said that, to date, there had been no known or suspected cases of Covid-19 reported at any of the company’s work places in Canada, Mexico and Chile.