Endeavour Silver Restarts Guanacevi Mill at Reduced Rate

Endeavour Silver Corp. EXK announced that processing resumed at the Guanacevi mine site following the completion of temporary modifications.

On Aug 12, 2024, the company announced that the trunnion of the primary ball mill at the Guanacevi mill had failed, resulting in the suspension of material processing at the mill.

Since then, EXK made modifications to the plant to repurpose one of the regrind mills as the primary ball mill. However, mining will continue at a reduced rate of 400 tons per day (tpd) during this temporary period to maintain the ore body's safety and long-term viability. During this temporary phase, the plant has the potential to produce around 500 tpd or around half of its projected output capacity of 1,200 tpd.

In this period, the mining operation will concentrate on delivering the highest-grade ore to the mill while accumulating the rest. Contract mining and local third-party material procurement will be halted until the process plant operations are restored to full capacity.

These temporary solutions are expected to manage cash flow until the primary mill is fully functioning.

Due to the lower operating capacity for 15 weeks, 2024 operating costs and all in-sustaining costs will be higher than previously projected. Notably, operating costs and all other sustaining costs increased year over year in the first half of 2024.

During this decreased processing period, Guanacevi's production is expected to fall by 0.9 million to 1.1 million silver ounces and 2,000-3,000 gold ounces from its original operating outlook. The annual consolidated silver production for 2024 is estimated at 4.4-4.6 million ounces, with gold production of 36,000-38,000 ounces.

Endeavour Silver's silver-equivalent production for 2024 is expected between 7.3 million and 7.6 million ounces. It produced 4.4 million silver-equivalent ounces in the first half of 2024.

The company reported silver equivalent production of 2.16 million ounces in the second quarter of 2024, down 5% year over year. EKX produced 1.3 million ounces of silver in the quarter, down 12% from the second quarter of 2023. This was due to a 12% reduction in silver output at the Guanaceví mine and a 17% decrease at Bolañitos, both due to lower grades.

Endeavour Silver, however, witnessed a 7% year-over-year improvement in gold production at 10,549 ounces. The rise was driven by higher gold grades mined at both Guanaceví and Bolañitos, as well as increased gold content in third-party feed processed at Guanaceví. Gold output at the Guanaceví mine rose 9% year over year to 4,243 ounces, whereas the Bolañitos mine's output grew 6% to 6,306 ounces.

Price Performance

Shares of EXK have gained 13.7% over the past year compared with the industry's 48.8% growth.

Image Source: Zacks Investment Research

Zacks Rank & Stocks to Consider

Endeavour Silver currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the basic materials space are Carpenter Technology Corporation CRS, IAMGOLD Corporation IAG and Eldorado Gold Corporation EGO. CRS, IAG and EGO sport a Zacks Rank #1 at present.

The Zacks Consensus Estimate for Carpenter Technology's fiscal 2025 earnings is pegged at $6.06 per share. The consensus estimate for 2025 earnings has moved 17% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 15.9%. CRS shares have gained 155.9% in a year.

The Zacks Consensus Estimate for IAMGOLD's 2024 earnings is pegged at 39 cents per share. The consensus estimate for 2024 earnings has moved 44% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 200%. CRS shares have gained 137% in a year.

The Zacks Consensus Estimate for Eldorado Gold's 2024 earnings is pegged at $1.32 per share. The consensus estimate for 2024 earnings has moved 22% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 430%. EGO shares have gained 103% in a year.

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