First Majestic is producing twice the silver eq. that Endeavour is, but Endeavour still hasn’t ramped up to full capacity at its two mines. First Majestic does have bragging rights as its La Encantada mine is the largest/most updated and will be churning out 4 million oz silver eq. in 2010.
In two years Endeavour plans to be at 4.5 million oz silver eq. per year, First Majestic could be at 10 million oz silver eq. per year by that time if they build Del Toro.
Both companies are using the same strategy, buy delapidated silver mines, update the infrastructure, discover more silver resources, and then bring the mines back into production. First Majestic is a little further along than Endeavour, but Endeavour is being very agressive in their growth strategy.
Neither company has much cash, but that is because of all the capital expendtures they have paid out to update these mines. They are both cash flow positive on an operating basis and their cash cost are roughly the same at $5 per oz.
All in all, the companies are very similar, but I have to give the slight edge to First Majestic. La Encantada is a very solid mine, and it is ramping up to 4 million oz silver eq this year. I think having this mine in their portfolio gives them the advantage. Endeavour’s mines are still not at full capacity, but they do have a fantastic growth rate over the next 2 years.
Or course the question is, why don’t the two companies just merge? Their paths are very similar, and immediately they would create a 10 million oz silver eq. producer. A combination of the two would command a higher market cap in the current environment.
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