Endeavour Silver has entered into a definitive agreement with Canarc Resource Corp. to acquire a 100% interest in Oro Silver Resources, a wholly owned subsidiary of Canarc. Oro Silver owns the El Compas gold-silver development property and has a five-year renewable lease on the 500-metric-ton-per-day (mt/d) La Plata ore processing plant in Zacatecas, Mexico.

Consideration for the transaction is C$10.5 million in Endeavour shares. Endeavour will assume Canarc’s obligation to pay an aggregate of 165 troy oz of gold from production to Marlin Gold Mining. The transaction was expected to close no later than June 30.

Canarc completed a preliminary economic assessment of development of a 450 mt/d underground mine at El Compas in January. Indicated resources are estimated at 552,000 mt grading 6.55 g/mt gold and 66.2 g/mt silver for 116,000 oz of contained gold and 1.2 million oz of contained silver. Inferred resources are estimated at 421,000 mt grading 4.18 g/mt gold and 59.9 oz/mt gold for 57,000 oz of contained gold and 812,000 oz of contained silver.

The bulk of the resources are located within 200 m of the surface. The mine would be accessed via a 900-m ramp. The orebody would be mined using a longhole sublevel mining method.

The La Plata processing plant was constructed by the Zacatecas state government in September 2013 to process minerals available from local small miners. It last operated in October 2014; was leased to Oro Silver in January 2016; has fully permitted crushing, grinding, flotation, and tailings circuits; and is located within 20 km on mostly paved roads from the proposed El Compas mine.

Total production over a mine life of 7.25 years is estimated at 114,600 oz of gold and 885,900 oz of silver.

Capital costs to develop the El Compas project are estimated at less than $10 million, and the time frame to develop the mine and refurbish the plant is estimated at less than one year.

The 3,990-ha El Compas property has good exploration potential, including 10 regional vein targets.

Endeavour Silver is a Mexico-focused Canadian company headquartered in Vancouver, British Colombia. It has three operating mines: Guanaceví in Durango state, and Bolañitos and El Cubo in Guanajuato state. Combined production from the mines in 2015 totaled 7.2 million oz of silver and 60,000 oz of gold.

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