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Endeavour Silver's (EXK) Silver Production Up 27% in Q2

·4 min read

Endeavour Silver Corporation EXK produced 2.1 million silver equivalent ounces in the second quarter of 2022, which was 7% higher year on year. Consolidated silver production was up 27% year over year to 1,359,207 ounces, courtesy of higher silver production at the Guanacevi mine. Total production for the six months period ended Jun 30, 2022, came in ahead of the anticipated amount at 4.1 million silver equivalent ounces on the back of higher ore grades at Guanacevi, which continues to exceed expectations for both silver and gold. Supported by this outperformance, the company anticipates surpassing its guidance of 6.7-7.6 million silver equivalent ounces for the year.

Meanwhile, at Bolanitos, strong silver production, higher silver grades and increased throughput were offset by the impact of lower-than-anticipated gold production and gold grades. Overall gold production slumped 17% to 9,289 ounces in the quarter, impacted by lower gold grades at the mine. Increased gold production at the Guanacevi mine offset the impact of the suspension of operations at the El Compas mine.

Endeavour Silver sold 602,894 ounces of silver and 9,792 ounces of gold in the quarter. At the quarter-end, the company held 1,399,355 ounces of silver and 2,580 ounces of gold in bullion inventory and 12,408 ounces of silver and 588 ounces of gold in concentrate inventory.

On Jul 6, Endeavour Silver declared that it completed the previously announced acquisition of SSR Mining Inc.’s SSRM Pitarrilla Project. Located in Durango, Mexico, it is one of the largest undeveloped silver deposits in the world and adds to EXK’s growth pipeline in a mining-friendly jurisdiction, where the company already has extensive experience and expertise. This move marks a step forward in Endeavour Silver’s goal of becoming a premier senior silver producer. The buyout will augment the company's pipeline of growth projects, which includes Terronera and Parral.

Pitarrilla is a strategic fit for Endeavour Silver, which has a successful development, exploration and underground mining track record in the region. The project has been de-risked by SSR Mining, with several key exploration and mining permits obtained and collaboration agreements already in place with the local community. The geology at Pitarrilla is similar to Endeavour Silver’s underground mines — Guanacevi and Bolanitos — which is an advantage.

Regarding Terronera, the company stated that it plans to make a formal construction decision, subject to completion of a financing package and receipt of additional amended permits in the coming months.

Price Performance

Shares of the company have fallen 43.7% over the past year compared with the industry's decline of 43%.

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Zacks Rank & Stocks to Consider

Endeavour Silver currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Albemarle Corporation ALB and Cabot Corporation CBT, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Albemarle has a projected earnings growth rate of 231.7% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 112.4% upward in the past 60 days.

Albemarle's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 20%. ALB has rallied roughly 10% in a year.

Cabot has an expected earnings growth rate of 22.5% for the current fiscal year. The Zacks Consensus Estimate for CBT's earnings for the current fiscal has been revised 6% upward in the past 60 days.

Cabot's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 16.2%. CBT has risen around 12% in a year.

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