Endeavour finds new veins at Guanajuato

Vancouver – Endeavour Silver (EDR-T) has hit a swarm of new high grade gold-silver veins at its producing Guanajuato mine in Mexico, adding another discovery to a year of exploration successes at the operation.

Endeavour had already discovered two veins at Guanajuato this year, known as Karina and Fernanda, and drill hole KA-15 was designed to extend those discoveries. The hole, though, did more than that: it intersected the Karina and Fernanda veins and then cut through another 12 veins, including a large new vein that has been named Daniela. Daniela produced a 9.1-metre intercept grading 179 grams silver per tonne and 7.14 grams gold per tonne.

A new vein above Daniela returned 1.2 metres grading 133 grams silver and 5.28 grams gold while another previously unknown vein below Daniela returned 1.5 metres of 253 grams silver and 12.13 grams gold. As for the intercepts from the targeted veins, Karina returned 1.3 metres grading 218 grams silver and 1.93 grams gold while Fernanda returned 0.3 metres of 177 grams silver and 3.87 grams gold.

Karina, Fernanda, and Daniela are close to the producing Lucero vein, which itself was only discovered last year and was put into production within six months. Endeavour is currently developing a second access ramp into Lucero, this one aimed at the south end of the vein, to accelerate production.

“These new vein discoveries carry higher gold grades, in some cases much higher gold grades, compared to other veins in the district,” said Barry Devlin, Endeavour’s vice-president of exploration. “We now have three drill rigs working in Guanajuato to try to delineate the extent of our new finds, and we still have multiple drill targets yet to test.”

Endeavour’s exploration team has been so successful this year at Guanajuato that the company is considering a major mine and plant expansion in 2011.The underground mine currently churns through 600 tonnes of ore daily; in the third quarter of the year the mine produced 211,632 oz. silver and 3,060 oz. gold. Endeavour is considering increasing daily throughput to 800 tonnes.

It is not just exploration that is going well for Endeavour, which also runs the Guanacevi mine in Durango State, Mexico. The company is on track to record its first year of net earnings, based on higher gold and silver prices combined with moderately increased throughput and well-managed operating costs. In the third quarter, for example, Endeavour recorded net earnings of US$100,000, up from a US$1.5-million loss the previous year.

During the quarter the company completed an expansion at its Guanacevi plant, bringing throughput there to 1,000 tonne per day, while also identifying three new silver-gold veins near that mine. And the company became debt free when it converted US$10.1 million worth of debentures into 5.3 million units, with each unit comprising a share and half a warrant.

The company has also been busy buying new properties in the Guanacevi district, closing three deals in as many months. Yet at the end of September the company still had cash and equivalents totaling US$19.6 million and had access to US$42.4 million in working capital.

On top of that, in November the company announced a $50-million bought deal financing, in which Endeavour is selling 8.15 million shares at $6.15 a piece.

Endeavour’s share price has been climbing nicely since August, rising from below $3.50 to above $6. On news of the new vein swarm it added 2¢ to close at $6.21. Endeavour has 70 million shares outstanding.