Mining
Thursday, January 11th, 2024 3:25 pm EDT
Key Points
- Production and Cost Guidance for 2024: Endeavour Silver Corp. has provided its consolidated production and cost guidance for the year 2024. The company anticipates silver production to range from 5.3 to 5.8 million ounces (oz) and gold production to be between 34,000 oz and 38,000 oz. The forecasted silver equivalent production is estimated to be between 8.1 million and 8.8 million oz. The consolidated cash costs and all-in sustaining costs (AISC) for 2024 are expected to be in the range of $14.00-$15.00 per oz silver and $22.00-$23.00 per oz silver, respectively, net of gold by-product credits.
- Operating Mines Overview: The guidance includes details about operating mines, with the Guanacevi plant throughput estimated to range from 1,150 to 1,250 tonnes per day (tpd) and average 1,200 tpd. At Bolanitos, plant throughput is expected to range from 1,150 tpd to 1,250 tpd, averaging 1,200 tpd. Endeavour provides insights into mine grades, recoveries, cash costs, and AISC for these operating mines in 2024. The company emphasizes its commitment to safety amid ongoing challenges and rising costs.
- Capital Investments and Exploration Plans: Endeavour plans to invest $30.0 million in sustaining capital at its two operating mines in 2024. The breakdown includes investments at Guanacevi and Bolanitos, covering mine development, infrastructure, and equipment upgrades. Additionally, the company allocates funds for exploration, intending to spend $8.7 million on drilling 18,000 meters across its properties. The majority of the budget is directed towards advancing the Pitarrilla project, with discretionary components subject to Board approval. The company also outlines plans and allocations for exploration activities in Chile, Parral, and the Bruner project in Nevada. The technical disclosure of scientific and technical information has been reviewed and approved by a Qualified Person, Don Gray, SME-RM, Chief Operating Officer.
Endeavour Silver Corp. has provided its consolidated production and cost guidance, and its capital and exploration budgets for 2024. The company will provide 2024 guidance on activities at the Terronera project in a separate news release. All dollar amounts are in U.S. dollars.
2024 Production and Cost Guidance Highlights
In 2024, silver production is expected to range from 5.3 to 5.8 million ounces (oz) and gold production is expected to be between 34,000 oz and 38,000 oz. Silver equivalent production is forecast to total between 8.1 million and 8.8 million oz.
Consolidated cash costs and all-in sustaining costs2 (“AISC”) in 2024 are estimated to be $14.00-$15.00 per oz silver and $22.00-23.00 per oz silver, respectively, net of gold by-product credits. Consolidated cash costs on a per ounce basis are expected to be slightly higher than 2023, primarily due to a reduction in gold production and a lower estimated gold price, and AISC slightly lower as reduced sustaining capital and comparable exploration and general and administrative costs will be allocated over similar silver production.
“While we expect 2024 production levels aligning with those of 2023, ongoing challenges include escalating costs,” commented Dan Dickson, Endeavour’s CEO. “The influence of a stronger local currency, coupled with inflationary pressures on essential inputs like labor, explosives, energy, and steel prices, continue to impact the bottom line. While we pursue opportunities to mitigate cost pressures in all areas, maintaining and enhancing safety at our operations will always be our focus.”
Mr. Dickson added, “2024 will be a very important year as we complete the build of our Terronera Project and begin transitioning to a premier senior sliver producer. Our commitment to creating shareholder value will continue by way of delivering a substantial decrease in costs and a path to margin expansion. We are laser-focused on completing construction at Terronera this year which should result in a significant increase in production, a notable reduction in costs and provide substantial free cash flow in future years.”
Operating Mines
At Guanacevi, 2024 plant throughput is estimated to range from 1,150 tonnes per day (tpd) to 1,250 tpd and average 1,200 tpd mining mainly from the Porvenir Cuatro extension on the El Curso concessions. The El Curso concessions were leased from a third party with no upfront costs, but with significant royalty payments on production. Compared to 2023, mine grades are expected to be slightly lower and recoveries are anticipated to be similar in 2024. Cash costs per ounce, AISC per ounce and direct costs2 on a per tonne basis are expected to be similar to 2023.
In 2024, plant throughput at Bolanitos is expected to range from 1,150 tpd to 1,250 tpd and average 1,200 tpd sourcing from the Plateros-La Luz, Lucero-Karina and Bolanitos-San Miguel vein systems. Mine grades are expected to be higher for silver and lower for gold and recoveries are expected to be similar to 2023. Cash costs per ounce are expected to increase due to lower gold production and lower estimated gold prices. AISC per ounce are expected to decrease due to lower sustaining capital and direct costs on a per tonne basis are expected to be similar to 2023.
Consolidated Operating Costs
2024 cash costs, net of gold by-product credits, are expected to be $14.00-$15.00 per oz of silver produced.
All-in sustaining costs, net of gold by-product credits, in accordance with the World Gold Council standard, are estimated to be $22.00-$23.00 per oz of silver produced. Excluding non-cash items, AISC are forecast to be in the $20.00-$21.00 range.
Direct operating costs2 per tonne are estimated to be $140-$145 with inflationary pressures and a strengthened Mexican Peso expected to continue in 2024. Direct costs2, which include royalties and special mining duties, are estimated to be in the range of $165-$170 per tonne.
Management made the following assumptions in calculating its 2024 cost forecasts: $23 per oz silver price, $1,840 per oz gold price, 17:1 Mexican peso per US dollar exchange rate, and a 5% Mexican annual inflation rate.
Sustaining Capital Investments
In 2024, Endeavour plans to invest $30.0 million in sustaining capital at its two operating mines. At assumption metal prices, the sustaining capital investments are expected to be paid out of operating cash flow.
At Guanacevi, $21.2 million will be invested in capital projects, the largest of which is 4.4 kilometres of mine development at El Curso and Milache for an estimated $14.1 million. An additional $5.4 million will be invested in mine infrastructure and mine equipment. A further $1.5 million will be invested in the plant and tailings storage facility, including engineering for a tailings facility expansion. A remaining $0.2 million will be spent on various surface infrastructure or equipment.
At Bolanitos, $8.8 million will be invested in capital projects, including $7.3 million for 5.1 kilometres of mine development to access resources in the Plateros-La Luz, Lucero-Karina, and Bolanitos-San Miguel areas. The additional $1.5 million will go to upgrade the mining fleet, plant improvements and to support site infrastructure.
The Company also plans to spend $2.6 million to maintain exploration concessions, acquire mobile exploration equipment and cover corporate infrastructure.
In 2024, the Company plans to spend $8.7 million drilling 18,000 metres across its properties, with the majority of the budget allocated towards advancing Pitarrilla. The discretionary component is subject to Board approval later in the year, as the Company completes the build of Terronera during a capital-intensive year.
At the Guanacevi and Bolanitos mines, 12,000 metres of drilling are planned at a cost of $2.2 million to replace reserves and expand resources.
At the Pitarrilla project, management plans to invest $5.1 million on several initiatives. The largest portion of the expenditure at Pitarrilla in 2024 relates to ramp fortification costs to continue advancement of an underground drive that will be used as a drill platform. During 2023, the drive was re-directed due to ground conditions, which increased the development estimate. The Company plans to drill 6,000 metres to test the high-grade zone and its feeder structures at various angles from the newly extended and improved ramp. Additional plans include continued maintenance of the office and camp, scoping studies and additional underground infrastructure.
At the Parral project in Chihuahua state, the Company has paused exploratory drilling and has allocated $0.5 million towards economic studies in the second half of the year.
In Chile, management has taken the approach to pause exploration and intends to invest $0.4 million on targeting programs. Subject to Board approval, the Company has allocated a discretionary investment of $1.6 million toward drilling the Aida target and programs related to mapping, sampling, geophysics and surface exploration on several other exploration projects.
At the Bruner project in Nevada management plans to invest $0.4 million to map and sample new targets with a discretionary component of $0.5 million related to engineering work.
Technical Disclosure
The scientific and technical information contained in this news release has been reviewed and approved by Don Gray, SME-RM, Chief Operating Officer, a Qualified Persons as defined under NI 43-101.
About Endeavour Silver
Endeavour is a mid-tier precious metals mining company that operates two high-grade underground silver-gold mines in Mexico. Endeavour is advancing construction of the Terronera Project and exploring its portfolio of exploration projects in Mexico, Chile and the United States to facilitate its goal to become a premier senior silver producer. Our philosophy of corporate social integrity creates value for all stakeholders.
We seek Safe Harbor.
