EDR.To : Endeavour Silver Corps 11/6/19

Hey Silver Bugs!

Endeavour Silver Corp ( EDR ) is a Mexico based silver producer listed on the TSX and NYSE stock exchanges, which grew by acquiring past producing properties, proving them up, and bringing them to production.

The company started its life as a producer in 2005 when its exploration team discovered the first of seven new orebodies at the Guanacevi mine, only half of which it has mined to date.

From there it pursued the same sort of business model with Bolanitos (2007) and El Cuba (2012), although it is having trouble extending mine life at El Cuba now. However, their newest mine, El Compas, achieved commercial production in April. And their latest development project, Terronera, which will boost annual production by a sizable 5.1 million silver equivalent ounces, is in its permitting stages. So, there is growth ahead here too.

The bad news is that Endeavour has guided lower on its original 2019 forecast of 8.1 to 9.4 AgEq million ounces for 2019, bringing it down to about 7.4 to 8.2 million AgEq ounces. And the AISC at their Guanacevi and Bolanitos mines is above current silver prices. Plus, we suspect they will report higher costs ahead.

The company gets good marks for the productivity of its exploration team. They are good. I know their track record over the decades. It’s a bit controversial because they are also very good promoters. Unfortunately, that’s one negative. They don’t hold back on hype and can be a bit loose with their projections in a bid to finance their ambitions. But they often come through. They’ve got the right address. We love Mexico.

Moreover, at a $25 silver price, with the addition of Terronera, a conservative estimate of production of 12 million AgEq ounces at an AISC of $18/oz, would generate a sizable $84 million in pre-tax income.

The shares are priced at a 3.7x multiple of that blue sky. And the market hasn't priced in any improvement in operating efficiency, especially at the struggling Guanacevi mine which is processing marginal ore.

We like this as a small little junior “producer” with potential sparkle in a silver bull market.

Stay ahead of the masses,

Seth Maniscalco
Founder, Crypto Wealth Coach LLC
Owner, Modern Wealth Management LP VIP

Stay ahead of the masses,

Seth Maniscalco
Author, Prohibited Profits
Founder, Crypto Wealth Coach
Owner, Modern Wealth Management