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« Endeavour Silver Corp: Silver Resources Triple | Main | SILVER PORTFOLIO UPDATE: 25 February 2007 »

Endeavour Silver Corporation: Looking good.

Endeavour Silver Corporation is one of the smaller silver mining companies concentrating on the growth of its silver production, resources and reserves in Mexico. Although the market capitalisation is only $174 million this company has plans to become one of the top five silver producers in the world.

This is an ambitious mission to undertake but in our humble opinion it is doable. The biggest threat that we can see against this mission being fulfilled is that it could well be taken out by one of the majors before it gets there. The market is in a mood of consolidation as evidenced by the recent spate in takeover activity. It is sometimes easier to add to your reserves by purchasing other known reserves through the acquisition process, than it is to explore new ground.

The attraction for us as investors is that Endeavours properties contain a high grade of silver currently standing at 15 ounces plus per ton with the substantial exploration upside of the Guanacevi mines project at 30 million ounces.

From a geopolitical stand point Mexico is viewed as a politically stable environment in which to operate. It has a 500-year mining history, reasonable environmental policies, a good infrastructure and a government committed to the development of its natural resources reservoir.

All figures are in US$. The Market capitalisation is $174 million with 42 million shares outstanding and closed on Friday at $4.15, although the asking price was $4.13 in extended hours trading. The 52-week trading range is $1.78 to $6.08 on an average volume of 222,000 shares for the last 10 days so the liquidity is good.

Taking a look at the chart we can see the effect of the pull back suffered across the markets worldwide. This can be seen as a problem or an opportunity, to us it is an opportunity as we believe this a good entry point enabling us to get into position before silver makes a run at $20.00. The figures on the chart are all in Canadian dollars. If the market volatility continues then we may be able to make an investment at around $4.00, which we would regard as a steal.


Endeavour Silver Corporation trades on the AMEX as EXK, on Toronto as EDR and on Frankfurt as EJD.

05 March 2007

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