Midtier miner Endeavour Silver, which owns four underground silver/gold mines in Mexico, has initiated a range of short- and long-term actions aimed at conserving cash and turning around the weak performance of the first quarter.
The NYSE- and TSX-listed miner on Monday reported a 28% decrease in first-quarter revenue to $29.1-million as its silver production fell by 21% to 1.07-million ounces, its gold output declined by 24% to 10 055 oz and metal prices were lower than a year earlier.
At the same time, cash costs surged 93% to $12.55/oz of silver, while its all-in sustaining costs jumped 37% to $19.37/oz of silver, owing to the lower production and higher cash operating costs.
This plunged Endeavour into the red with a first-quarter net loss of $13.3-million, compared with a year-earlier profit of $2.3-million.
The Bolanitos and El Cubo mines were profitable in the period under review, but the Guanacevi mine incurred almost half the net loss incurred during the three months, the company reported.
“We experienced a challenging start to the year in operations, with no improvement of the systemic issues at Guanacevi and unexpected events such as the seven-week shut-down at El Compas due to a mill failure.
“However, Endeavour management has dealt with similar issues before; we successfully cut costs across the board to address similar operational and economic challenges in 2008 and 2013. The company emerged financially stronger and more profitable as a result,” CEO Bradford Cooke said in a news release.
To conserve cash and to improve its performance, Endeavour has implemented management changes at the Guanacevi and Bolanitos mines to “address systematic issues and improve supervision” to achieve development and production targets.
The company has also hired a senior mine planning engineer to review and redo certain mine plans and a senior mine geological consultant had been retained to review and improve grade control at each mine.
Endeavour has made employee and contractor reductions in the first quarter and would shed more staff in the second quarter, while senior management had taken voluntary reductions in pay and Vancouver administrative staff had moved to a reduced work week.
Most brownfield and greenfield exploration has been placed on the back burner and the exploration department is now assisting mine exploration with mine-site drilling.
Endeavour said that it was assessing a number of mining alternatives for the Guanacevi mine and the viability of the deep Santa Cruz orebody, which would be completed by month-end.