Seeking Alpha
Profile| Send Message| ()  

Endeavour Silver Corp. (EXK) is a well established gold-silver producer in Mexico. Since 2004 the company has posted 8 consecutive years of growth. It currently has three operating mines, Guanacevi, Bolanitos, and El Cubo. All produced silver and gold in three different Mexico locations. On top of the three producing mines, there are seven exploration projects, one of which is located in Chile. EXK takes underperforming mines and turns them around to create new production from those mines.

Previous Forecasts

The 2011 guidance that EXK set was 3.7 million ounces of silver and 19,000 ounces of gold. The silver goal was hit with 3.73 million ounces and the gold goal was hit and well over-achieved at 21,810 ounces of gold.

The 2012 guidance was placed at 4.3 million ounces of silver and 26,000 ounces of gold. Once again this was achieved with 4.5 million ounces of silver and 38,600 ounces of gold.

Outlook

MineSilver Production (M oz)Gold Production (K oz)Tonnes per Day (tpd)
Guanacevi2.4-2.56.5-7.01250-1350
Bolanitos1.7-1.825.0-26.01500-1650
El Cubo0.9-1.014.5-16.01050-1200
Total5.0-5.346.0-49.03800-4200

The new forecast for 2013 is set at 5-5.3 million ounces of silver and 46-46 thousand ounces of gold, described by the press release chart.

New Mine

On July 13, 2012 EXK acquired their El Cubo mine in Mexico. The mine operated for 171 days and helped achieve the 2012 guideline. The mine required many new buildings and machinery. As a result the other two mines that EXK operates did not contribute growth in the 2013 forecast. The higher 2013 forecast takes previous results from Guanacevi and Bolanitos mines and adds them to the expected results of a single fully operational El Cubo mine in the 2nd Quarter. Once El Cubo is fully operational more attention will be given to increasing mine production at the other two mines and exploration locations.

New Drilling

EXK has extended the drilling on their San Sebastian property in Mexico. The property has reported 301 grams per ton of silver and .32 grams per ton of gold. This level of silver concentration is similar to EXK's most producing Guanacevi mine which has a 300+ grams per ton silver rate. In 2010 EXK acquired the option to purchase the property and it has been an exploration location since then.

Conclusion

EXK is currently trading just above its 52 week low. This might be a perfect opportunity to enter. Other opportunities include right before El Cubo becomes fully operational. EXK should hit and over come its 2013 guidelines because they don't take into consideration the full potential of the Guanacevi and Bolanitos mines which will receive more development after El Cubo is completed halfway through the year. Once all three mines are operational the guidelines for the year will be easily obtainable.

Source: Endeavour Silver Forecasts Strong Year