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« Hecla Mining Company sold Silver Wheaton Corporation bought | Main | Are Silver Stocks worth the effort? »

Endeavour Silver Corporation’s Stock Price fails to reflect achievements

EXK Chart 09 August 2010.JPG

Endeavour Silver Corporation (EXK) has once again come up with some good results continuing with their solid progress as evidenced by their ability to stick to their schedule. However, the results are struggling to find their way into the stock price as with many other silver producers. Taking a quick look at the above chart we can see that progress has been down to sideways in a pattern of consolidation albeit at a level that is a little low in our humble opinion. The downward crossover made by the 50 day moving average crossing over the 200 day moving average does not bode well for the stock price, so a fairly rapid upward movement is required in order to reverse this situation.

The following highlights below have been extracted from Endeavour's recently published financial results:

Silver production climbed 41% to 826,439 ounces (oz)
Gold production jumped 61% to 4,460 oz
Silver equivalent production rose 46% to 1,116,404 oz (65:1 silver: gold ratio, no base metals)
Cash costs fell 15% to $5.94 per oz silver produced (net of gold credits)
Sales revenues increased 140% to $19.7 million
Mine operating cash-flow escalated 263% to $9.4 million
EBITDA was up 250% to $4.9 million

Bradford Cooke, Chairman and CEO, added the following comments:

"Endeavour Silver's financial and operating performance continued to shine in Q2, 2010 thanks to rising silver-gold production, falling cash costs and higher metal prices. As a result, Company revenues, cash-flow, EBITDA and earnings were all sharply higher in Q2, 2010 compared to Q2, 2009. Add to that our recent exploration success at Lucero South and the acquisition of the new Belen properties in Guanajuato and it is safe to say Endeavour enjoyed a good Second Quarter."

A point of note for those considering an investment in this tiny sector of the market is the cash cost element of their operations, which are stated below and are calculated as per the Gold Institute reporting guidelines. You might want to check the reporting methodology of your favourite precious metals producers as not all of them use the same reporting format and therefore results can be misleading.

Cash Operating Costs declined 15% to $5.94 per oz silver produced in Q2, 2010 (Q1, 2009 - $6.95 per oz) thanks to higher plant throughputs at Guanacevi, higher gold production and gold prices, partially offset by the appreciation of the Mexican peso. Endeavour reports its cash operating costs according to the Gold Institute reporting guidelines so they include offsite costs such as transportation, smelting and refining, net of by-product credits.

Endeavour Silver Corporation is appearing on a screen near you as the company trades on three stock exchanges as follows:

(TSX: EDR) (NYSE-AMEX: EXK) (DB-Frankfurt: EJD)

This week we will be making changes to our portfolio as some companies are performing better than others and we intend to re-balance our allocation of cash accordingly, as we have been discussing in such as articles as Are Silver Stocks worth the effort? for instance.

Stay on your toes and have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.

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On Friday 7th May our premium options trading service OPTIONTRADER opened a speculative short term trade on GLD Puts, signalling to short sell the $105 May-10 Puts series at $0.09.

On Tuesday the 11th May we bought back the puts for just $0.05, making a 44.44% profit in just 4 days.

Accumulated Profits from Investing $1000 in each OPTIONTRADE signal 14 May 2010.jpg

Recently our premium options trading service OPTIONTRADER has been putting in a great performance, the last 16 trades with an average gain of 42.73% per trade, in an average of just under 38 days per trade. Click here to sign up or find out more. have been rather fortunate to close both the $15.00 and the $16.00 options trade on Silver Wheaton Corporation, with both returning a little over 100% profit.

To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

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Reader Comments (1)

But EDR again fails to report a profit on the last line.

August 9, 2010 | Unregistered CommenterMagnus

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