Endeavour Silver Corp. (TSX: EDR) (NYSE: EXK) reports 2018 consolidated production of 5.5 million ounces (oz) silver and 52,967 oz gold, for silver equivalent production of 9.5 million oz at a 75:1 silver: gold ratio. Silver production in the Fourth Quarter, 2018 was 1,386,505 oz and gold production was 13,117 oz, for silver equivalent production of 2.4 million oz.
Endeavour owns and operates three silver mines in Mexico, the Guanaceví mine in Durango state and the Bolañitos and El Cubo mines in Guanajuato state. Last year, the Company developed and is now commissioning a fourth mine, the El Compas mine in Zacatecas state. Production from the three mines was higher in 2018 compared to 2017 but fell short of the Company’s 2018 production guidance.
The 7% improved production performance in 2018 compared to 2017 was due to higher mine output, silver and gold grades and recoveries at the El Cubo mine. The 7% production shortfall in 2018 compared to guidance was due to lower mine output and silver grades at Guanaceví, lower gold grades at Bolañitos and delays in achieving commercial production at El Compas.
Highlights for Fourth Quarter, 2018 (Compared to Fourth Quarter, 2017)
Highlights for Fiscal 2018 (Compared to Fiscal 2017)
Bradford Cooke, CEO, commented, “All in all, 2018 was quite a transition year for Endeavour Silver. We saw improved performance from El Cubo, but declining performance at Bolañitos, where new mineralized zones were discovered and at Guanaceví, where two new orebodies are being developed. The new El Compas mine completed its initial mine development but plant commissioning issues have delayed production. In October, Nick Shakesby was appointed new VP Operations to help make a positive difference in our mining operations.
“We also appointed Manuel Echevarria in May as VP New Projects to oversee the engineering and development of our new mines. The Terronera project advanced to an expanded reserve and resource estimate and a new and improved pre-feasibility study was released in August. At Parral, drilling intersected multiple high-grade intersections in the San Patricio vein and significant silver mineralization was mapped and sampled underground at the Veta Colorada mine.
“In 2019, we anticipate improving the performance of the Guanaceví and Bolañitos mines, making the most of our declining reserves at the El Cubo mine, delivering our first year of commercial production at El Compas and upon receiving a positive board decision, commencing the development of our fifth mine at Terronera. Endeavour is fortunate to have a compelling pipeline of development projects to replace old mines and fuel our future growth.”
Operating Highlights for 2018
|Three Months Ended December 31||Year Ended December 31|
|1,386,505||1,436,962||(4%)||Silver ounces produced||5,522,068||4,919,788||12%|
|13,117||14,577||(10%)||Gold ounces produced||52,967||53,007||(0%)|
|1,359,256||1,400,705||(3%)||Payable silver ounces produced||5,417,633||4,803,589||13%|
|12,821||14,245||(10%)||Payable gold ounces produced||51,826||51,797||0%|
|2,370,280||2,530,237||(6%)||Silver equivalent ounces produced(1)||9,494,593||8,895,313||7%|
|1,264,340||1,392,518||(9%)||Silver ounces sold||5,461,197||4,892,855||12%|
|11,819||14,117||(16%)||Gold ounces sold||51,318||51,460||(0%)|
|Fourth Quarter Production by Mine
|by mine||Produced||per day||Ag gpt(1)||Au gpt(1)||Ag %||Au %||Oz||Oz|
|2018 Production by Mine
|by mine||Produced||per day||Ag gpt(1)||Au gpt(1)||Ag %||Au %||Oz||Oz|
|1) 2018 & 2017 silver equivalents based on a 75:1 gold:silver ratio;|
|2) gpt = grams per tonne|
In 2018, Guanaceví continued to face operational challenges. The remaining reserves at the two operating mines, Porvenir Norte and Santa Cruz, are now deeper, narrower and lower grade compared to prior years, resulting in lower production from these areas. The permitting and development of two new shallower, wider, higher grade orebodies, Milache and SCS, suffered delays which resulted in a shortfall of both tonnes and grades to the plant. At year-end, the Milache orebody had three underground levels open and advancing in lower grade ore with grades increasing with depth as modeled. A new adit was collared late in the year to develop the SCS orebody. Management expects both new orebodies will reach their planned production rates during 2019.
In 2018, Bolañitos throughput exceeded plan however grades were below the mine plan, which was modified to include new but lower grade resources along the margins of the LL-Asuncion and Plateros veins to extend the mine life, resulting in lower production grades and metal production compared to guidance. Ore grades are expected to increase modestly in 2019, in line with the new mine plan.
El Cubo Mine
In 2018, El Cubo had a good year, with both throughput and grades coming in above the mine plan. Variations in the V-Asuncion orebody resulted in higher gold grades, offset by lower silver grades than planned. The higher throughput resulted in silver production meeting the low range of guidance and gold production exceeding guidance. However, exploration was not able to replace the depleted resources so the Company plans to reduce the production rate in 2019 to approximately half its 1500 tonne per day capacity, which will result in higher operating costs compared to 2018, while continuing to explore for new resources to extend the mine life. Accordingly, the Company has initiated layoffs of approximately 240 employees to reflect the lower production rate in 2019. The mine will continue to run at three shifts per day but the plant will move to one shift per day. Some idled mining equipment at El Cubo was transferred to the El Compas mine in Zacatecas to facilitate their mine plan in 2019.
El Compas Mine
Mining of lower grade development ore and commissioning of the El Compas plant was initiated in the 2nd quarter. A total of 6,500 tonnes was processed to test all the plant circuits through the middle of August. Excess clay in the ore created recovery issues so various plant circuits were modified to resolve the clay and other normal start-up issues. In mid-August 2018, based on an independent engineering review, commissioning of the plant was temporarily halted to allow the tailings area to be dewatered and excess clay to be removed for improved drainage. A second fine tailings area was excavated in September 2018 to improve overall settling of the fine tailings and allow the coarse tailings storage area to form a solid beach. The plant commissioning re-commenced in mid-October, 2018. In late December, the ball mill pinion failed which brought plant operations to a halt (mine still operating and ore stockpile now exceeds 10,000 tonnes). Management expects to recommence plant operations after a new pinion is installed in late January.
Over the next month, Endeavour expects to release the following:
About Endeavour Silver
Endeavour Silver Corp. is a mid-tier precious metals mining company that owns and operates three high-grade, underground, silver-gold mines in Mexico. Endeavour is currently commissioning its fourth mine at El Compas, advancing a possible fifth mine at the Terronera mine project and exploring its portfolio of exploration and development projects in Mexico and Chile to facilitate its goal to become a premier senior silver producer. Our philosophy of corporate social integrity creates value for all stakeholders.
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