Endeavour Silver marks first year of production

Vancouver – Having entered the realm of silver producers, Endeavour Silver (EDR-V, EDRGF-O) is looking to accelerate output at its Guanacevi operations on the Santa Cruz project in Durango State, Mexico.

First year silver production was 948,323 direct oz. in addition to 2,332 oz. of gold, to give a silver equivalent yield of 1,088,543 oz. (using a 60-to-1 silver-to-gold equivalence ratio). The Guanacevi plant processed almost 103,000 tonnes of ore grading 385 grams silver per tonne and 0.88 gram gold per tonne (438 grams silver equivalent) and delivered recoveries of 74.7% for silver and 80.5% for gold.

Cash operating cost for silver output averaged US$5.07 per oz., net of gold credits, while sales averaged US$7.01 net of smelting and refining costs.Three-quarters of the ore-feed came from mining at Endeavour’s new North Porvenir zone on its Santa Cruz property. The remaining production came from past tailings, mine dumps, and lower grade toll milling ores.

Endeavour optioned Guanacevi in mid-2004, fast tracking development of the North Porvenir zone. About US$4 million in capital investments were expended in 2005, with the project generating US$1.5 million in net operating cash-flow from gross revenues of US$6.5 million. The company holds a 51% interest in the operation and can acquire the remaining 49% for two payments totaling US$3 million by early 2008.

An expansion initiative on the current 350-tonne-per-day mining rate, to a 600-tonne-per-day level, has 2006 silver production from Guanacevi forecast to double to about 2 million oz.; with cash operating costs of around US$4.50 per oz. Endeavour is budgeting US$4.3 million in 2006 for the new development and exploration.

An early-2005 resource estimate at Santa Cruz reviewed a resource of almost 4 million oz. of silver in the North Porvenir zone in the measured, indicated and inferred categories. Additionally, an historic resource estimate on the Santa Cruz Deep zone, by past operator Industrias Peoles, reviews 229,000 tonnes grading 525 grams silver, or about 3.9 million contained oz. A revised resource calculation is expected in the first quarter of 2006.

On the production report, shares of Endeavour Silver rallied to a new high closing price of $3.35 apiece. The company posts a $108 million market capitalization based on its 32.3 million shares outstanding.