Vancouver — Endeavour Gold (EDR-V) has inked a deal to acquire a full interest in the producing Santa Cruz silver-gold mine and Guanacevi mineral processing plant in Durango, Mexico.
According to the agreement, Endeavour has the option to pay US$3 million to the vendors and invest US$1 million in mine exploration and development within one year in order to earn a 51% interest in the mine and plant. Endeavour must than pay an additional US$4 million over another three-year-period to earn a 100% interest in these operating assets.
The Guanacevi silver-gold district represents a low sulfidation, epithermal vein camp that ranks as one of the top five historic silver districts in Mexico. The region has produced over 500 million ounces of silver over the past 400 years.
Endeavour states that the Santa Cruz vein is one of five main productive silver-gold veins at Guanacevi. It has been traced for more than 6 km.
“The acquisition of the Santa Cruz mine and Guanacevi plant gives Endeavour tremendous leverage to the silver market,” said Godfrey Walton, Vice-President of Endeavour. “Not only do we pick up a cash flowing, high grade mine, the opportunities for growth of ore reserves and silver production are substantial. At full capacity and if the grades are confirmed, we should be able to produce 4 million ounces of silver per annum.”
The mine and plant are currently producing 600,000 ounces silver and 3,000 ounces gold per year from a 150 tonne-per-day operation. Sulphide ore from the mine averages 350 grams silver per tonne and 0.5 grams gold. An additional 250 tonnes-per-day of oxidized old tailings are also being processed. These tailings average 100 grams silver and 1.0 gram gold with lead and zinc by-products.
The processing plant is currently operating at less than 20% capacity. It has a capacity of 800 tonnes-per-day in the sulphide flotation circuit and 600 tonnes-per-day in the oxide cyanidation circuit.
Endeavour reports that three ore shoots were drill tested and sampled and returned grades in excess of 500 grams silver per tonne, but the vendors lacked the working capital to develop and mine these mineralized zones. The company feels that the current mining grades are being sourced from the margins of old high-grade stopes.
Infrastructure is good and Endeavour will inherit an experienced workforce who live near the mine. All of the equipment needed for mining, milling and trucking of silver-gold concentrates to the Penoles smelter in Torreon are also included in the deal.
In addition, Endeavour will inherit 230-ha of mineral properties covering other veins in the district. These veins have never seen any modern exploration and represent attractive prospects for development.
The agreement is still subject to a 90-day period of due diligence and the approval of the TSX Venture Stock Exchange.
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