Mexican Mining

[Lone Clone]

Endeavour's Q4 silver results top analyst views due to stronger recoveries
Tue 3:28 pm by Deborah Bacal

http://www.proactiveinvestors.com/companies/news/59235/endeavours-q4-silver-results-top-analyst-views-due-to-stronger-recoveries-59235.html

Endeavour Silver Corp (EDR.TO)

Endeavour Silver (TSE:EDR) shares rose earlier Tuesday after the company received positive comments from industry analysts after announcing better-than-expected fourth quarter operational results.

Dundee Capital Markets, which has a neutral rating and C$3.50 price target on the Mexico-focused silver producer, said Endeavour posted a strong finish to 2014.

Shares reached as high as C$3.27 on Tuesday, from a closing price of C$3.13 yesterday. The stock has climbed about 20 percent so far in 2015.

On Monday, the company announced silver production of 2.0 million ounces in the fourth quarter, 19 percent above Dundee's expectations, on higher grades and recoveries. Gold production, however, was 15,000 ounces, 9 percent below estimates due to weaker grades at the Bolanitos mine.

BMO Capital Markets also said the silver quarterly results were 18 percent above the firm's estimates of 1.8 million ounces of silver.

"The production beat on silver is attributed to higher than-forecast production and recoveries at El Cubo, which offset lower mining rates at Bolañitos and Guanaceví," said BMO analyst Andrew Kaip, who has a market perform rating and C$3.50 target price on Endeavour.

"Silver sales were also positively impacted by the timing of concentrate sales in the quarter."

On a silver equivalent basis, fourth quarter payable production was 11.6 million ounces, slightly above BMO's forecasts of 11.2 million ounces.

Endeavour's El Cubo mine saw improved throughput in the quarter, as it ramped up to plant capacity of 1,500 tonnes per day in December. Dundee said that the higher grade V-Asuncion zone saw additional drilling and delineation as well as accelerated development, which "should bring higher grades to the mine, although timing and impact has not yet been provided."

"While Endeavour had a relatively good quarter we will await guidance on their 2015 mine plan. As such, our target is unchanged at C$3.50 per share," wrote Dundee analyst Matthew O'Keefe.

The precious metals miner is due to release its updated reserve and resource estimates, as well as 2015 production guidance, within the next two weeks, which is expected to provide improved visibility on Endeavour.

O'Keefe said that the upcoming results from the reserve and resource work will be key in determining the potential impact of exploration at Porvenir Centro at Guanacevi, which "show[s] promise".

Dundee also noted the source of potential growth at the company's San Sebastian development project in Mexico, where economic studies are underway following the completion of permitting last year. Results from the study are expected later in 2015.