On Thursday, Endeavour Silver reported a 61 percent drop in net earnings to US$2.3 million in 1Q18 from US$6 million in 1Q17 due to higher depreciations and depletion charges. Nevertheless, revenues rose significantly to US$40.3 million, up 11 percent from US$36.4 million in 1Q17. EBITDA and cash flow also increased thanks to better production results. “With our production rising and cash and all-in sustaining costs falling, the first quarter was a good start on meeting our guidance for the year,” said Bradford Cooke, CEO of Endeavour Silver in the quarterly report. The company’s silver production increased 25 percent to 1.35 million ounces from 1.1 million ounces in 1Q17 and gold production was up 13 percent to 13,208 ounces from 11,724 ounces in 1Q17.
Endeavour Silver owns and operates three mines in Mexico, Guanaceví in Durango and Bolañitos and El Cubo in Guanajuato. It is currently developing the El Compas mine in Zacatecas and advancing Terronera in Jalisco. El Compas is expected to reach commercial production in July 31, 2018 and Terronera is advancing toward an optimized pre-feasibility study in 2Q18. “El Cubo contributed lower costs thanks to higher production and grades and Bolañitos continues to be our lowest cost mine notwithstanding lower grades in 1Q18,” said Cooke.
To further improve profit and reduce costs, Endeavour is focusing on optimizing operational efficiency. In an exclusive interview with Mexico Mining Review, Godfrey Walton, the operator’s President and COO said that this process started in Guanaceví, which was its highest cost mine in 2017. “Once we achieve more efficiency at this mine, we will implement a similar program to enhance productivity at El Cubo and Bolañitos,” he said.
Along with improving the productivity of its projects, the company is investing in expanding its portfolio. “Our largest development project is Terronera,” said Walton. “We expect to start construction by the end of 2Q18 and production by the end of 4Q19, so that 2020 will be the first full year of production. The company is investing US$11 million at El Compas and US$90 million at Terronera over the next two years and US$48 million into its three operating mines in 2018.” Endeavour forecasts a 20 percent production growth in 2018, which will rise to 50 percent once Terronera starts production.