|Endeavour plans to invest $36.5 million on capital projects for its El Cubo mine in 2015.|
Endeavour Silver is increasing production at its El Cubo silver mine in Guanajuato state, Mexico, from 1,550 metric tons per day (mt/d) to 2,200 mt/d, with expectations that the expansion will be complete by July. The additional 650 mt/d of mine production will come primarily from the V-Asunción mine area, which has thicker mineralized zones amenable to long hole mining, and the Santa Cecilia mine area, which has narrower but higher-grade veins.
The added production will be processed at Endeavour’s Bolañitos plant, 18 km from El Cubo. The Bolañitos plant has available capacity and comparable circuits to the plant at El Cubo. Production at Bolañitos will be reduced by a small amount to accommodate processing of more El Cubo ore.
“The main reason for the mine expansion is to drive operating costs lower and generate free cash flow at El Cubo by taking advantage of the available plant capacity at Bolañitos,” the Endeavour announcement said. “As a result, El Cubo will become the company’s largest mine by metal production. Endeavour received the cooperation of the miners’ union at El Cubo in finalizing a labor contract that facilitates the mine expansion and helps establish the short- and long-term viability of the mine.”
Endeavour has three mines in Mexico: El Cubo, Bolañitos and Guanacevi. With increased production from El Cubo, the company is now forecasting 2015 production of 6.3 million to 7 million oz of silver and 60,000 to 66,000 oz of gold. Consolidated cash costs on a co-product basis are expected to come in around $13 to $14/oz for silver and $900 to $975/oz for gold.
Endeavour plans to invest $36.5 million on capital projects in 2015. The total includes $30 million for mine development, infrastructure and exploration; $4.3 million for plant infrastructure, equipment and tailings; and $2.2 million for miscellaneous items. The mine development capital is for accessing reserves and converting resources into reserves.
Endeavour Silver CEO Bradford Cook said, “We fulfilled our initial two-year capital expansion and operating turn-around plans at El Cubo in December 2014, but with precious metal prices still falling, it was clear we needed to do more to make El Cubo a viable mine. The current mine expansion will bring operating costs down further and should allow El Cubo to start generating free cash flow.”