Endeavour Silver Corp (EXK)

[silver100]

Endeavour Silver sees more potential 'dance partners'

http://www.miningweekly.com/article/endeavour-silver-sees-more-potential-dance-partners-2011-03-22

TORONTO (miningweekly.com) – Endeavour Silver, which owns two silver mines in Mexico, believes there is more interest now among its peer group of companies in looking at merger and acquisition opportunities.

Endeavour has been evaluating potential transactions for about two years, and although it identified possible combinations, “nobody wanted to dance”, CEO Bradford Cooke said on Tuesday.

“But all that's changed in the last three months,” he said on a conference call.

Endeavour's strong cash position and strengthening share price also mean the company can look at larger acquistions.

Endeavour ended 2010 with working capital of $105-million, including $87-million of cash or cash equivalents.

“We do have irons in the fire, but there's not much more we can say,” Cooke said.

The company will focus on silver as a primary metal in potential acquisitions, “but we have no allergies whatsoever to by-product credits,” he added.

The firm will also continue to look at smaller, earlier-stage acquisition prospects, Cooke said.

Endeavour launched an offer to buy junior Cream Minerals in October last year, but eventually allowed the bid to expire without taking up any shares.

“We'll continue to look for early stage opportunities like that, and don't be surprised if we come with something outside of Mexico soon.”

SILVER PRICE

Cooke said he expects the silver price will hit its 2011 peak in the fourth quarter, but suggested that the long positive run over in recent months may be leading towards a short-term consolidation period.

“And that consolidation may not be very far away.

“So I'm calling for the typical summer doldrums period, and then a very strong fourth quarter,” he said.

“We think that the year's highs will be in the fourth quarter, not the first quarter.”

Silver prices jumped more than 80% in 2010, and the metal has continued rising this year, hitting new highs above $36/oz this month.

RECORD EARNINGS

Endeavour Silver reported an 81% increase in fourth-quarter earnings, to $5,6-million, while revenue rose 18%, to $28,5-million.

Production of both silver and gold rose year-on-year, and the company also benefitted from lower cash operating costs and increased metals prices.

Silver production rose 15%, to 895 931 oz and gold output increased 6%, to 4 871 oz in the quarter.

This year, Endeavour is forecasting silver production of 3,7-million ounces from its Guanajuato and Guanecevi mines, plus 19 000 oz of gold.

The company will expand the plant at Guanajuato from 600 t/d to 1 000 t/d this year, and could get to 1 500 t/d relatively easily in the future, if continued exploration success justified the expansion.