Endeavour Silver Corp. ("Endeavour" or the "Company") (NYSE:EXK, TSX:EDR) provides an update to the Guanacevi primary ball mill trunnion failure that was reported on August 12, 2024.
Processing has resumed at the Guanacevi mine site. Temporary modifications have been completed within the plant to re-purpose one of the regrind mills as the primary ball mill which is currently milling at a rate of 400 tonnes per day (tpd). While the grinding circuit is being closely monitored, there is potential for the plant to operate near 500 tpd or close to half of its planned production capacity of 1,200 tpd during this temporary phase.
During this time, mining operations will continue at a reduced rate without comprising safety or the long-term viability of the ore body. The operations will focus on feeding the highest-grade ore to the mill and stockpiling the remaining material. Contract mining activities and local third-party material purchases will cease until the process plant operations have returned to full capacity. These temporary solutions are intended to manage cash flows until the primary mill is fully operational. Using current metal prices, the preliminary estimate indicates a cash shortfall could be limited to during this period of reduced processing is less than US$5 million over an estimated 15-week period. This cash outflow includes accumulating ore stockpile with self-mining activities.
Constructive discussions have been held with our workforce, communities and suppliers to address the potential implications and broader social impact of these temporary measures.
Initial quotes for the trunnion fabrication and installation have been obtained with an estimated fabrication cost of US$0.5 million and a period of 16-weeks to installation. Management is assessing several alternatives to shorten the estimated downtime of the primary ball mill.
During this reduced processing period, Guanacevi production is estimated to decrease by 0.9 million to 1.1 million silver ounces and by 2,000 to 3,000 gold ounces compared to its original operating plan. Annual consolidated silver production for 2024 is expected to range from 4.4 to 4.6 million ounces, and gold production is expected to be between 36,000 ounces and 38,000 ounces. Silver equivalent production for 2024 is now forecast to total between 7.3 million and 7.6 million ounces. We achieved 4.4 million silver equivalent ounces in the first half of the year.
Due to the reduced operating capacity for 15 weeks, operating costs and all in sustaining cost metrics will be higher than originally guided for 2024. Due to the number of variables, estimates and remaining uncertainties, management is withdrawing its cost guidance at this time.