The company has guided production of 3-3.5 million ounces silver and 38,000-to-44,000oz gold for 6-7Moz silver-equivalent at an 80:1 silver:gold ratio.
In 2019, Endeavour's Guanacevi mine in Durango, Bolanitos in Guanajuato and El Compas in Zacatecas between them produced 4Moz silver and 38,907oz gold for 7.1Moz silver-equivalent at an 80:1 silver:gold ratio. This was 27% down on 2018, when they produced 5.5Moz silver and 52,967oz gold for 9.8Moz silver-equivalent.
The company forecasts lower cash and all-in sustaining costs for 2020 than it achieved in 2019 at around US$6-7/oz silver and $17-18/oz respectively, net of gold by-product credits using metal price assumptions of $17/oz silver and $1,450/oz gold.
"We are forecasting better performance from our operating mines in 2020, with a slight decrease in consolidated production due to the suspension of mining at El Cubo complimented by lower operating costs at Guanacevi, Bolanitos and El Compas, which should decline through the year as productivity improves," said CEO Bradford Cooke in a statement.
Endeavour said Guanacevi will be its largest producer in 2020 as the newly developed Milache, SCS and P4E orebodies continue to scale up and reach the 1,200 tonne per day plant capacity by the end of the first quarter. Guanacevi saw multiple changes initiated to resolve operational challenges in 2019 which saw the operation end the year strongly, compared to the first three quarters, with a 26% increase in grade and 21% increase in plant throughput in the fourth quarter compared to the first quarter. The original Porvenir Norte and Santa Cruz orebodies which had become too deep, narrow and low grade to be economic are now closed.
At Bolanitos, production continues to recover a lack of ore access due to an arsenic issue in 2019, however the development of new areas in the Plateros, Lucero and San Miguel orebodies is expected to fill the 1,250tpd plant by the second semestre. A return to normal operations with rising production and falling costs is estimated to take another two quarters. Gold grades are expected to increase, while silver grades will decrease compared to 2019.
El Compas is now a steady state operation running at close to the current plant capacity of 250tpd and will have its first full year of production in 2020. The company is replacing the mining contractor to reduce operating costs.
The company suspended operations at its El Cubo mine in Guanajuato after determining it was exhausted.
Capital Investments
Endeavour plans to invest $32.6 million on capital projects in 2020, primarily as sustaining capital at the three mines and $1.8 million to maintain exploration concessions and cover corporate infrastructure. This will be sourced from operating cash flow and current cash.
At Guanacevi, $15.8 million will be invested on capital projects including the development of 8.4km of mine access at the Milache, SCS and the P4E orebodies. At Bolanitos, $13.6 million will be invested, including $7.8 million for 8.6km of mine development to access reserves and resources in the Plateros-La Luz, Lucero-Karina and Bolanitos-San Miguel vein systems. The additional $5.8 million will go to upgrade the mining fleet, support site infrastructure and raising the tailings dam. At El Compas, $1.4 million will be invested on mine development and tailings expansion.
Endeavour continues to update a pre-feasibility study on Terronera and will release a revised programme and budget for it once it is complete.
Shares in Endeavour Silver are trading at C$2.74, valuing the company at $383 million. The company's stock fell about 10% following the announcement of its 2019 production figures.
