Badford Cooke
Endeavour Silver
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Successful Exploration of Existing Projects

Wed, 10/19/2016 - 23:59

Q: What have been the main highlights in the exploration of existing projects and possibilities of acquiring new mining projects?

A: We succeeded in replacing silver reserves and boosting silver resources last year, and we identified new mineralized zones at each mine as well as at the emerging new Terronera project in Jalisco, where we recently made a new greenfield silver discovery. Terronera is an exciting new, high-grade silver-gold find that has the potential to become our largest and most profitable mine. Late last year, deep drilling at Terronera intersected the highest grades yet found on the property. The main mineralized zone is still open at depth and along strike, and surface sampling of several other veins identified multiple new high-grade drill targets. We intend to continue aggressively exploring and engineering this project in 2016.

In May of this year, we announced the acquisition of the El Compas mine project in Zacatecas. The El Compas gold-silver mine project has strong exploration potential to expand resources and solid acquisition potential to consolidate stranded resources and exploration targets within the Zacatecas mining district. Our short-term goal is to invest in exploration to upgrade and expand the resource, consolidate properties in the district to extend mine life, refurbish the plant, re-evaluate the economics to develop the mine, and complete an updated mineral resource estimate by year end. If successful, we would commence production at El Compas in 2017.

Q: What made Guanaceví so successful for you given it had run out of ore and were struggling to survive?

A: At Guanaceví, we have discovered seven high-grade silver-gold ore bodies along a 6km length of the Santa Cruz vein since acquiring the property in 2004. Today, three underground mines feed the central, 1,200t/d plant that produces doré bars. In 2015, Guanaceví outperformed guidance due to higher than expected ore grades, producing 3.4 million ounces of silver and 7,390 ounces of gold, totaling 4 million ounces of silver equivalent. Cash costs in 2015 were US$8.66/oz of silver, while all-in sustaining costs (AISC) were US$12.97/oz of silver, both net of gold credits. We drilled 9,550m in 38 holes to successfully expand the high-grade silver-gold mineralization at Santa Cruz and Porvenir Centro. In 2016, production will continue at the plant’s capacity of 1,200t/d, with ore coming primarily from the Porvenir Cuatro, Porvenir Norte, and Santa Cruz deposits.Theyear’sproductionisforecastat3.1-3.3million ouncesofsilver,and6,000-7,000ouncesofgold,for3.6- 3.8 million ounces of silver equivalent.

Q: What factors contributed to your similar successes with Bolañitos, and how has this project developed?

A: At Bolañitos, we have discovered seven high-grade silver-gold ore bodies since acquiring the property in 2007, and we have opened one new mine and completed three plant expansions. There are now two underground mining operations feeding a central 1,600t/d plant to produce bulk silver-gold concentrates. In 2015, Bolañitos produced 1.5 million ounces of silver, exceeding guidance, and 23,966 ounces of gold, totaling 3.1 million ounces of silver equivalent. Cash costs at Bolañitos in 2015 were US$4.31/oz of silver, while AISC were US$11.79/oz of silver, both net of gold credits. Over the course of last year, we developed the new La Luz-Asunción (LL-Asunción) mine and successfully transitioned our main production to it from the Lucero mine. We further explored and delineated the LL-Asunción ore body, drilling more than 9,500m in 39 holes, and developed another 4.1km of the underground mine. In 2016, Bolañitos will continue to produce 800- 900t/d of ore, primarily from the LL-Asunción deposit. In 1H16, the plant will operate close to its 1,600t/d capacity as it processes the 75,000 ton ore stockpile.

Q: How does the company plan to capitalize on opportunities to exploit the untapped geological potential in each of the regions where it operates?

A: We continue to explore our existing properties to unfold their full potential for the discovery and development of new mines. We also continue to acquire properties in other historic districts where we see strong but untested exploration potential. The property of the exciting new Terronera discovery covers an entire district of outcropping veins containing high-grade silver-gold mineralization.