Endeavour Silver Corp. (EXK) has announced the resumption of processing at its Guanacevi mine site following the completion of temporary modifications. The company had initially announced the suspension of material processing at the mill on August 12th, 2024, after the trunnion of the primary ball mill failed.
To address the issue, EXK implemented modifications to repurpose one of the regrind mills as the primary ball mill. However, mining operations are currently operating at a reduced rate of 400 tons per day (tpd) during this temporary period to ensure the ore body’s safety and long-term viability.
During this phase, the plant has the potential to produce around 500 tpd, roughly half of its projected output capacity of 1,200 tpd. The mining operation is prioritizing the delivery of the highest-grade ore to the mill while accumulating the remaining ore. Contract mining and local third-party material procurement have been 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 operational. Due to the reduced operating capacity for 15 weeks, 2024 operating costs and all-in sustaining costs are projected to be higher than previously anticipated. Operating costs and all other sustaining costs had already seen an increase year over year in the first half of 2024.
The decreased processing period is expected to impact Guanacevi’s production, resulting in a decline of 0.9 million to 1.1 million silver ounces and 2,000-3,000 gold ounces from its original operating outlook. Despite this, Endeavour Silver maintains an annual consolidated silver production estimate of 4.4-4.6 million ounces for 2024, with gold production projected between 36,000-38,000 ounces.
The company expects its 2024 silver-equivalent production to fall between 7.3 million and 7.6 million ounces. In the first half of 2024, Endeavour Silver produced 4.4 million silver-equivalent ounces. The company reported silver-equivalent production of 2.16 million ounces in the second quarter of 2024, down 5% year over year. This decline was attributed to a 12% reduction in silver output at the Guanacevi mine and a 17% decrease at Bolañitos, both due to lower grades.
Despite the decrease in silver production, Endeavour Silver witnessed a 7% year-over-year improvement in gold production, reaching 10,549 ounces. This rise was driven by higher gold grades mined at both Guanacevi and Bolañitos, as well as increased gold content in third-party feed processed at Guanacevi. Gold output at the Guanacevi mine increased by 9% year over year to 4,243 ounces, while the Bolañitos mine’s output grew by 6% to 6,306 ounces.
Shares of EXK have gained 13.7% over the past year, compared with the industry’s 48.8% growth.
