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« Portfolio Update 26 May 2009 | Main | Upside Down Gold »

Endeavour Silver Corporation Making Good Progress

EXK Chart 15 May 09.JPG

Chart courtesy of Stockcharts

EXK has formed a series of higher lows and is making steady progress. The technical indicators are middling so we could see some consolidation in the near term. However Endeavour forms part of our core position and we will be holding this stock in anticipation of silver moving to much higher ground, which we expect to see by the end of the year. Sounds a long way off? Not really this year is going to go by in a flash.

Hugh Grant.JPG

Over the weekend we have been in touch with Hugh Clarke, Vice-President Corporate Communications, regarding Endeavour's current performance and the outlook for the future of this silver producer and this is what he had to say


”Notwithstanding the share price, 2008 was a year of tremendous success for Endeavour Silver….record silver production, record gold production, record mine operating profits, three new high grade discoveries, continuation of our capital development programs and a dramatic decrease in our cash costs to produce an ounce of silver. 2009 promises to be an even better year for the company.”

The cash cost has now decreased to $7.56/oz which represents substantial progress in our humble opinion.

The latest financial results from Endeavour Silver Corporation have just been released with the highlights outlined below:

First Quarter, 2009 Highlights (Compared to Q1, 2008)

- Silver production rose 13% to 572,785 oz

- Gold production jumped 63% to 2,335 oz

- Silver-equivalent production up 22% to 736,235 oz (70:1 silver:gold ratio and no base metals)

- Mineral sales fell 21% to $8.5 million

- Mine operating cash-flow dropped 37% to $2.6 million

- Cash costs reduced 24% to $7.56 per oz silver produced

- Closed $11 million convertible redeemable debenture financing

Bradford Cooke, Chairman and CEO, commented, "Endeavour enjoyed another strong quarter of silver production in Q1, 2009 compared to Q1, 2008. We put the brakes on our production growth late last year due to the low silver price and as a result, silver production is down from Q4, 2008. However, the silver price rebounded in the First Quarter, and thanks to our recent US$11 million financing, new capital projects are now underway at both mines that should facilitate a +20% expansion of silver production this year to the 2.7-2.9 million oz range."

"Cash costs were also sharply lower in Q1, 2009 compared to Q1, 2008 as a result of the plant upgrade programs that facilitated higher tonnage throughputs and improved silver recoveries, and the depreciation of the Mexican peso relative to the US dollar. Notwithstanding the recent five day temporary shut-down to comply with the Presidential decree to restrict the spread of the H1N1 swine influenza virus, management expects Q2, 2009 silver production and cash costs to be comparable with Q1, 2009 as previously forecast."

Cash costs were $7.56 per oz silver produced in Q1, 2009, down 24% (Q1, 2008 - $10.01 per oz) thanks to higher tonnage throughputs at Guanajuato as a result of the rehabilitation and re-opening of the four main mine shafts in Q2, 2008, higher metal recoveries at Guanacevi as a result of the numerous plant upgrade capital projects completed last year, and the depreciation of the Mexican peso. Endeavour reports its cash costs according to the Gold Institute cash cost reporting guidelines so they include offsite costs such as transportation, smelting and refining costs.

Before investing your hard earned cash into any silver producer check their stated cash costs and also check the methodology that they use for such calculations. Not all companies report according to the Gold Institute so you can be comparing apples with oranges and not apples with apples.

Endeavour Silver Corporation has a Market Capitalisation of $87.10million with 69.30 million shares outstanding on a fully diluted basis, a 52 week high of $3.60 and 52 week low of $0.71, closed on Friday at $1.69 and and can be found on the following three Stock Exchanges:

EJD: DB Frankfurt,

giving the company exposure to investors in the United States, Canada and Germany and thus establishing their presence in these investment communities well before the silver bull takes off for higher ground.

To read the latest news release from Endeavour Silver please click this link.

Endeavour Silver Logo.JPG

Any thoughts – then fire them in.

Have a good one.

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