TORONTO (miningweekly.com) – TSX- and NYSE-listed Endeavour Silver, which operates three underground silver/gold mines in Mexico, on Wednesday announced that it planned to hold steady its production growth in 2014, following the significant output growth the company recorded in 2013.

The Vancouver-based miner earlier this month said it had achieved its ninth consecutive year of production growth in 2013, reporting record output of 6.81-million ounces of silver and 75 578 oz of gold. Full-year silver output rose 52% and gold production 95% compared with that produced in 2012.

However, in 2014, Endeavour planned to hold its silver production relatively steady in the range of 6.5-million to 6.9-million ounces. Gold output was expected to range between 65 000 oz and 69 000 oz and silver-equivalent production was expected to be 10.4-million to 11-million ounces, at a silver-to-gold ratio of 60:1.

"After delivering tremendous production growth in 2013, we plan to hold production relatively steady for 2014, hone the operations and position the company for a turnaround in metal prices later this year. Our capital budget is significantly reduced this year which will help boost free cash-flow,” Endeavour CEO Bradford Cooke said.

He underlined that Mexico-focused Endeavour’s focus this year would be on further refining its operating and financial performance through initiatives to improve productivity, reduce operating costs and enhance cash-flow at the Guanacevi mine, in Durango state and the Bolanitos and El Cubo mines, in Guanajuato state, as well as to complete the operational turnaround at El Cubo.

“We have resumed exploration around the mines in order to replace depleted reserves and expand resources, but greenfield exploration will be minimised to drilling our emerging new, high-grade discovery at the San Sebastian property," Cooke said.

The company noted that the main opportunity to expand output in 2014 was at El Cubo, where the plant was currently operating at 1 200 t/d, but is capable of processing 1 550 t/d.

Management said it planned a steady ramp-up of the plant throughput the year as mine development opened up the new Villalpando-Asuncion deposit.

The main area of output decline in 2014 would be at Bolanitos, where the plant was operating at its 1 600 t/d capacity and management had chosen not to continue extra mine production for processing at the El Cubo plant as it did in 2013.

Bolanitos and El Cubo were both producing silver/gold concentrates for sale under one-year contracts to smelters, as their attractive terms offer lower costs and higher profit margins compared with producing doré bars from the El Cubo leach plant at the current low metal prices.

The consolidated by-product cash costs for producing silver (net of gold credits) were expected to be in the range of $9/oz to $10/oz, mainly owing to the lower gold price and reduced gold output. Consolidated co-product cash costs of silver and gold production were expected to be about $13/oz to $14/oz and $800/oz to $850/oz respectively.

All-inclusive by-product sustaining costs of production, including sustaining capital expenditures and exploration, general and administrative costs, were expected to be about $19/oz of silver produced and all-in co-product sustaining costs of production were predicted to be about $19/oz of silver and $1 166/oz of gold. Direct operating costs were estimated to be in the $95/t range.

Endeavour planned to invest $43.9-million in capital projects in 2014, including $34.6-million on mine development, infrastructure, equipment and exploration, and $9.3-million on plant upgrades, infrastructure, equipment and plant and exploration buildings.

Endeavour noted that thanks to its strong operating performance in the second half of 2013, the company was able to significantly add to its cash position and reduce its revolving bank line of credit balance by year-end.

Net debt improved by about $19-million in the last six months of 2013, from cash of about $22-million and debt of $39-million at June 30, to cash of about $35-million and debt of $33-million at December 31.

The company’s TSX-listed stock closed 2.04% lower at C$4.79 apiece.