Endeavour Silver (EXK) Provides '22 Production & Cost View

Endeavour Silver Corporation EXK expects to produce silver to be 4.2-4.8 million ounces in 2022 and gold between 31,000 ounces and 35,000 ounces. Silver equivalent production is projected between 6.7 million ounces and 7.6 million ounces.

In 2021, the company produced 8.3 million silver equivalent ounces, which was 22% higher year over year. This was driven by a steady performance at Bolanitos and record mill throughput, grade and production at Guanacevi. The figure of 8.3 million ounces for the year consisted of 4,870,787 ounces of silver and 42,262 gold ounces. It also surpassed the company’s expectation of 7.7-8.0 million silver equivalents.

Endeavor Silver’s 2022 production guidance is lower than 2021 but at par with the average of the last three years. Last year, higher-than-anticipated mined ore grades at Guanacevi had led to the outperformance. This year, the company anticipated lower ore grades at Guanacevi, thus leading to a lower production view.

The company projects consolidated cash costs to be 9.00-$10.00 per ounces of silver in 2022. All-in sustaining costs (“AISC”) are expected to be $20.00-21.00 per ounces of silver. The cost outlook is higher than 2021 as inflation, royalties and mining duties are anticipated to increase this year. The company stated that it would focus on managing costs to offset the inflationary pressures.

Endeavour Silver plans to invest $34.3 million in sustaining capital this year. Of this, $20.4 million has been earmarked for Guanacevi and $12.2 million for Bolañitos. At Terronera, $9.5 million is budgeted for the first quarter of 2022 to continue with final detailed engineering, early earth works, critical contracts and procurement of long-lead items. The company intends to make a formal construction decision in the coming months. It will then determine the budget for the project for the remaining part of the year.

However, the capital budget does not include the $70 million acquisition cost associated with the company’s recently announced buyout of the Pitarrilla Project in Mexico from SSR Mining Inc. SSRM. The transaction is expected to be completed in the first half of 2022.

It is one of the world’s largest undeveloped silver projects. Per the deal, SSR Mining will retain a 1.25% NSR Royalty on Pitarrilla. Endeavour Silver will have matching rights to purchase the NSR Royalty in the event SSRM proposes to sell it.

A Look at Its Peers Performances in 2021

Hecla Mining HL reported silver production of 12.9 million ounces in 2021, in line with the guidance of 12.6-13.3 million ounces and gold production of 201,326 ounces compared to its outlook of 193,000-201,000 ounces. On a year-over-year basis, silver and gold production was down 5% and 4%, respectively. Significant production growth at Lucky Friday and Casa Berardi was offset by lower production at the Greens Creek Mine.

Hecla Mining’s silver equivalent production for the year was 37.6 million ounces, while gold equivalent production was 525,531 ounces. HL had provided silver equivalent production guidance for 2021 at 42.0-43.5 million ounces and gold equivalent production at 469-485 thousand ounces.

First Majestic Silver AG reported a record production of 26.9 million silver equivalent ounces in 2021. This consisted of 12.8 million silver ounces and 192,353 gold ounces. Silver production slightly missed the lower end of the company's guidance range of 13.0 million to 13.8 million ounces of silver. Gold production achieved the higher end of AG’s guidance of 181,000-194,000 ounces.

In 2022, First Majestic expects to produce between 32.2 million and 35.8 million silver equivalent ounces, comprising 12.2 to 13.5 million ounces of silver and 258,000 to 288,000 ounces of gold. AG’s guidance for AISC is at $16.79 to $18.06 per silver equivalent ounce.

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