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66 www.resourceworld.com F E B R U A R Y / M A R C H 2 0 1 8 ENDEAVOUR SILVER CORP. [EDR-TSX; EXK-NYSE] is a mid-tier silver and gold producer. The company is on track to produce over 5 million ounces of silver and 50,000 ounces of gold for 2017 from three high-grade underground mines in Mexico. That's about 8.5 million ounces of silver equivalent. In addition, the com- pany plans to build three new mines over the next three years that will not only sig- nificantly grow production but also shrink costs, as each of the new mines has a lower cost profile than the current mines. In late 2016, miners at the Guanacevi Mine in Durango broke into a hot spring in the deepest and highest grade part of the mine. As a result, that part of the mine flooded which reduced production and drove costs higher in 2017. The operations team modernized and expanded the pump- ing and ventilation systems and re-opened that area of the mine in June, 2017 only to have lightning strike the mine's electri- cal substation in early July that cut power and disabled the water pumps, flooding the mine once again. While these were unfortunate non-related events, some skit- tish investors sold their positions, driving Endeavour Silver's shares down from over $6 to around $2.60 at the low. In an interview, CEO Brad Cooke told Resource World that these problems have been solved and, although total pro- duction at Guanacevi will be less than originally planned for 2017, it has been increasing each quarter, the shares are now bouncing back and returning this mine to good health is a top priority for the com- pany in 2018. Endeavour Silver has two producing mines in Guanajuato, central Mexico: the Bolañitos and El Cubo mines. Bolañitos is the company's lowest cost mine with 2017 production expected to be 950,000 ounces of silver and 22,000 ounces of gold, or 2.5- 2.7 million ounce silver equivalents. Gold production pays for the all-in sustaining costs to operate the mine making the silver essentially free. El Cubo is the company's largest mine, with 2017 production target- ing 2 million ounces of silver and 23,000 ounces of gold, or 3.6-3.9 million ounces of silver equivalents. In Zacatecas, Endeavour Silver's fourth mine, the El Compas Mine, is under con- struction and should be up and running by the end of March 2018 with full com- mercial production a few months later, according to Cooke. He noted that the company has a 10-year lease on an existing processing plant that is being refurbished, and has double the capacity of the initial mine output. "The plant should be ready late February so we will try to find other sources of ore, possibly from the old mine workings and from small miners working in the district, to commence commissioning and testing of the plant in March," said Cooke. El Compas is expected to produce more than 150,000 ounces of silver and 12,000 ounces of gold annually for a 1 million-ounce silver equiv- alent. Initially, the mine will produce 250 tpd however plant capacity is ultimately 500 tpd so the mine is very scalable depend- ing on new reserves." Endeavour Silver has another proj- ect in the pipeline – the Terronera Mine, which will be the company's fifth and larg- est mine – which is a virgin, high-grade, silver-gold discovery in the historic San Sebastian mining district in Jalisco state. "We're now optimizing the Terronera prefeasibility study for release in February and we hope to make a production decision by the end of the first quarter," said Cooke. "Terronera will become our largest mine with an estimated all-in operating costs of less than $5.00 per ounce. We're most of the way through permitting. We received permits in August for the mine and plant. We're just waiting now for the dumps and tailings permits, hopefully in the first quar- ter of 2018." ENDEAVOUR SILVER – lightning sparks investment opportunity by Ellsworth Dickson At the end of 2017, plant construction at the El Compas Mine was more than 80% complete. The El Compas Mine, located in Zacatecas State, Mexico, is scheduled to commence production at the end of Q1 2018. Photo courtesy Endeavour Silver Corp. MINING