Endeavour Silver to acquire more land in Mexico

With record prices for gold continuing to lift those of other precious metals, silver has hit a 16-month peak of US$18.83 per oz. and it seems like companies such as Endeavour Silver (EDR-T, EXK-X) are moving quickly to get more ground and move it into production as fast as possible.

The small-cap silver producer announced today that it has acquired an option to purchase the San Juanico properties, adjacent to its El Cometa property, on the outskirts of the city of Hidalgo de Parral in Mexico’s Chihuahua state.

Endeavour has also entered into a joint-venture agreement with the current owner to share in the development and production from the properties during the 24-month option period.

Under the agreement Endeavour is loaning the owner US$150,000 to rent or purchase equipment and supplies to redevelop the San Juanico mine back into small scale production. The loan is secured by a first mortgage on the San Juanico properties.

The news sent Endeavor’s shares to a new 52-week high of $3.86, up 7.22% or 26¢ per share, in early afternoon trading in Toronto.

Two small mine shafts, San Juanico and Dolores, have a history of small-scale production down to depths of 100 and 150 meters, respectively, and the upper mine levels were until recently producing roughly 25 tonnes a day of silver-rich lead-zinc-gold ores. The ore was processed at the state-owned SGM plant less than 2 km away, which has a 500-tonne-per day processing capacity.

The San Juanico mine properties (including the Ampliacion de San Juanico, Dolores and El Jazmin concessions) cover about 800 meters along the trend of the Esmeralda vein structure to the north of and adjoining Endeavour Silver’s El Cometa property.

Endeavour believes there is “substantial” resource potential at San Juanico because the historic and recently producing mineralized veins on the San Juanico property “appear to be simple extensions of the mineralized veins drilled next door on the El Cometa property.”

And, as was the case when Endeavour acquired El Cometa, the mineralized veins at San Juanico have never been explored by drilling.

El Cometa has an indicated resource of 934,000 tonnes grading 49 grams silver per tonne (1.47 million oz. of contained silver); 1.46 grams gold per tonne (43,800 oz. contained gold); 3.2% zinc; and 3.2% lead.

In the inferred category El Cometa has a resource of 528,000 tonnes grading 61 grams silver (1.04 million oz. contained silver); 1.45 grams gold (24,600 oz. contained gold); 3% zinc; and 2.7% lead.

Endeavour can purchase a 100% interest in the San Juanico properties with US$130,000 in cash payments over 18 months and a final payment in 24 months of a minimum US$300,000 to a maximum of US$1.9 million based on a National Instrument 43-101 compliant silver-equivalent resource.

Phase 1 exploration drilling program at San Juanico will start in the first quarter of 2010.