Canada's Endeavor sees lower Mexico silver production

Canadian precious metals producer Endeavour Silver saw first quarter silver equivalent output drop after changing contractors at one of its Mexican mines.

Silver equivalent fell 8% to 2.71Moz at its Guanaceví, Bolañitos and El Cubo mines in Mexico from 2.93Moz a year earlier, the Vancouver-based company said in a statement.

Silver production dropped 17% to 1.51Moz in the first quarter, while gold production climbed 1% to 15,960oz as the company processed 408,553t, up 7%, the company said. Silver sales declined 19% to 1.51Moz, while gold sales slid 3% to 15,255oz, it said.

Bullion inventory totaled 88,609oz silver and 188oz gold at the end of the first quarter, while the company had stockpiled 67,690oz silver concentrates and 1,316oz gold.

The Guanaceví mine in Durango, the largest of the company's operations, processed less ore than planned after changing a contractor in January, according to Endeavour. The mine is expected to catch up with its original mining plan "over the next few months," the company said. The Bolañitos and El Cubo mines in Guanajuato operated according to plan, it said.

The company, which is due to report Q1 earnings May 11, plans to finish work in the second quarter on a pilot project to reduce waste at the El Cubo plant using optical sorting methods, the company said. Work will also finish this month on infill drilling at the company's Terronera property in Jalisco before carrying out step-out drilling along the vein and engineering work as part of a pre-feasibility study, it said.

"Our plan for 2016 is to focus on profit margin by minimizing all-in sustaining costs and improving after-tax free cash flow at each mine. That means investing less on exploration and development," CEO Bradford Cooke said in the statement. "We will reconsider investing in exploration and development at El Cubo and Bolañitos once we know operating costs can be lowered further and metal prices are materially higher. Until then, we think it is better to produce less metal at a profit than more metal at a loss."

Mexico, which is also home to operations run by miners including Peñoles, Southern Copper, Pan American Silver, Sierra Metals and Fortuna Silver Mines, is the world's largest silver producer.

ALSO READ: BNAMERICAS MINING OPERATORS SERIES

***

UPCOMING BNAMERICAS EVENT

5TH Mexico Infrastructure Summit

Click here to see the agenda and speakers