Does Mexico Hold Other Early Stage Silver Opportunities Like Endeavour Silver?

silver opportunities
Published on: Jul 12, 2022
Author: Philip Tai

Earlier this week, BlackRock (BLK) downgraded its outlook for stocks amid increasing economic uncertainty and persistent inflation, but all is not grim in the world of stocks.  Endeavour Silver Corp. (NYSE:EXK, TSX:EDR), a mid-tier silver exploration company with active mines in Mexico, posted positive results from its mining operations. The stock is trading now at CAD$3.98, down over 21% since early May, but with positive fundamentals, investors should keep an eye on this stock, and Mexico’s silver industry.

Midtier Precious Metals Miner Endeavour Silver is “well-positioned to beat its guidance for the year”

Endeavour announced earlier this week that it produced 1.36-million ounces of silver and 9,289 ounces of gold, for a second-quarter production of silver equivalent of 2.1-million ounces.

Production outpaces 2022 production guidance of 6.7-million to 7.6-million silver equivalent ounces (SEOs), totaling 4.1-million SEOs for the year’s first half.

CEO and director of Endeavour, Dan Dickson, said, “Amid ongoing turmoil in the markets due to supply constraints, continued inflation concerns, and uncertainty from the raising of interest rates from historical lows, we had another solid quarter of production.

Despite the current macro trends, the company and precious metals outlook remain optimistic. Given our positive view for short-term precious metal prices, we are comfortable holding back bullion inventory over the quarter for future sale.”

Guanacevi, Endeavour’s first and highest-grade silver mine, is located in a historic silver mining district in Durango, situated in northern Mexico.  For the period, the Guanacevi mine continued to outperform. Silver and gold production exceeded plan driven by higher grades offset by lower tonnes milled. Guanacevi processed 94 017 t at a gold grade of 465 g/t and silver grade of 1.37 g/t, yielding 1.19-million ounces of silver and 3 680 oz of gold.

“While it has been gratifying to see grades reach new highs, we expect grades to align with or be slightly above plan for the second half of the year,” Dickson said.

Bolañitos, Endeavour’s second silver project located in Guanajuato, Mexico remained steady in its production.  Bolañitos processed 107 344 t at a gold grade of 54 g/t and silver grade of 1.77 g/t for 165 057 oz of silver and 5 609 oz of gold.

Finding Successful Silver Districts is Half the Battle in Finding Great Silver Exploration Companies

In the world of mining investment, it is generally a good idea to become familiar with the major mining areas of the world.  Understanding the geology, politics, and economics of a specific region can provide investors with an edge when conducting their own due diligence on a mining stock. In the case of Endeavour Silver, understanding Mexico is key to understanding the company’s potential.

The state of Durango, where Endeavour’s Guanacevi mine is located, has had mining activities since 1552, at a time when the iron deposit of Cerro de Mercado was discovered by Spanish Captain Ginés Vázquez de Mercado. This landmark event marked the founding of the city of Durango, where mining production has been relevant for metallic minerals. 

Today, Durango has 23 mines in production in 17 municipalities; five of them rank among the Top 10 with the highest production of metallic minerals out of a total of 240 in the country. Durango ranks fourth place nationwide as having the best performance in the mining industry.  

Durango is a leading national producer of metals, such as gold (fifth place), zinc (second place), silver and plumb (third place), iron (fourth place), and copper (seventh place). In non-metallic minerals, Durango is a leading producer of bentonite (first place), perlite (second place), marble, and fluorite (third place). The state also has gypsum deposits, clays, limestone, sand, and gravel, minerals that, according to Kientzle, contribute to the state’s and country’s GDP.

Durango has 42 economic projects in different areas and according to IMSS, by the end of 2020, the mining industry was responsible for the creation of 367,935 direct jobs and 1,839,675 indirect jobs. Moreover, plans for a current investment for three new mining operations in the state are underway, representing US$46 million expected to begin operations in 1Q22. 

Learn about an Exploration Stage Silver Company Operating near Endeavour Silver

Golden Tag Resources Ltd (TSXV:GOG) is a Toronto-based mineral resource exploration company. The company holds a 100% interest, subject to a 2% NSR, in the San Diego Project, in Durango, Mexico. The San Diego property is among the largest undeveloped silver assets in Mexico and is located within the prolific Velardeña Mining District. Velardeña hosts several mines having produced silver, zinc, lead, and gold for over 100 years.

In May, Golden Tag Resources Ltd. announced that it anticipated expanding the Fernandez zone at its San Diego project in Mexico following the receipt of promising drill results.  The company said it has received complete results from two diamond drill holes – 22-65A and 65B – that were part of an exploration targeting bulk-tonnage mineralization at the property, which showed high-grade intersections close to the surface, including 1,551 grams per tonne (g/t) silver equivalent over 0.60 meters (m), and 1,194 g/t silver equivalent over 0.65m in the Rata zone.

Learn more about Golden Tag here.

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