Endeavour triples silver tally at Guanacevi (April 02, 2007)

Vancouver — Following last year’s drill effort, Endeavour Silver (EDR-T, EXK-X) has boosted silver reserves nearly threefold at its Guanacevi Mines project in northwestern Durango state, Mexico.

The study tabled a 285% increase in proven and probable reserves, since March 2006, to 608,308 tonnes grading 508 grams silver per tonne, equal to about 9.9 million contained ounces silver. Reserves are contained within four separate zones at Guanacevi.

Indicated resources of 2 million tonnes averaging 327 grams silver were also reviewed in the estimate, about 21 million contained ounces silver. Another 1 million inferred tonnes grading 323 grams silver holds about 10 million contained ounces silver.

Resource estimates were based on a minimum mining width of 1.5 metres and a 200-gram silver cutoff grade.

“We set an aggressive resource target of twenty to thirty million ounces for the Guanacevi Mines Project,” said Endeavour chairman and CEO Bradford Cooke. “I am very pleased to say that, once again, our talented exploration team beat that target.”

Endeavour also reported about 571,000 contained ounces silver in stockpiles at last year’s end.

“Reserves and resources at Guanacevi now total forty-one million ounces, well in excess of the ten-year mine life,” Cooke continued.

Endeavour produced just over 1.35 million oz. silver and about 2,500 oz. gold from Guanacevi in 2006. The Porvenir mine delivered all the ore production of 153,794 tonnes averaging 425 grams silver last year, however, only 117,255 tonnes was processed due to delays in plant expansion. The remaining 46,891 tonnes of mine production was added to the plant stockpiles, which stood at 57,643 tonnes of 308 grams silver at year-end (570,805 contained ounces).

The company forecasts 2007 silver output to double at about 2.57 million oz. silver and 4,720 oz. gold from an anticipated 275,820 tonnes of ore (756 tonnes per day) grading 376 grams silver and 0.68 gram gold.

Cash production costs for last year are expected to come in around US$5 per oz., dropping to the US$4-per-oz. level for 2007.

The new 600-tonne-per-day ball mill, installed in late 2006, is now operating at its design specifications and is finishing commissioning. The company recently replaced a mining contractor at the Porvenir mine, opting for company-employed miners, and recently ordered about US$3.5 million in new equipment for the planned boost in mining rates.

Endeavour Silver optioned Guanacevi in mid-2004 from a local company that owned the plant and from the stakeholders of the Santa Cruz mine. Convinced of its growth potential, development of the North Porvenir zone was fast tracked in 2005 to bring in revenue for continued exploration drilling.

Mineralization is typical of that throughout Mexico’s Sierra Madre belt, hosted in low-sulphidation epithermal veins. Quartz-carbonate veins occur mainly in a Tertiary Lower Volcanic sequence of andesites and volcaniclastics overlain by an Upper Volcanic sequence of rhyolites.

In the Guanacevi area, an erosional window has exposed the Lower Volcanics plus sections of an older, underlying conglomerate unit. The Santa Cruz vein system occurs along the western edge of a horst structure, parallelling the lower volcanic-conglomerate contact. Mineralized veins have also been discovered within the conglomerate.

Silver mineralization occurs primarily as argentite plus acanthite with some gold, galena, sphalerite, pyrite and manganese oxides.

Official historic production records for the region pegs silver output in the order of about 500 million oz. from several dozen mines, placing the Guanacevi area in the top-five of producing districts in Mexico.

Endeavour Silver shares recently traded around $5.20, giving the company a $222-million market capitalization based on its 42.7 million shares outstanding. The stock has traded in a 52-week range of $2.60-$5.92.