Each one in plain English, with the numbers worked through for a shareholder.
26 Jan 2010drilling result▲ Good
Endeavour's 2009 exploration review says it drilled about 18,000 m in 61 holes on 6 targets and plans a 36,000 m, 125-hole program for 2010. New results include 3,960 gpt silver and 92.8 gpt gold over 0.25 m (hole LC-4) south of the Lucero ore-body at Guanajuato, and 1,205 gpt silver over 0.69 m at San Pedro in Guanacevi. Management expects the next reserve and resource update in a few weeks, and a Phase 1 drill program at San Juanico is planned for 2010. Cometa figures are restated as of March 2009 (1.5 million oz silver indicated, 1.0 million oz inferred). The El Cometa property option was exercised in 2009. This pairs the Porvenir Cuatro and San Juanico threads with a larger 2010 drilling plan.
Further drilling at Porvenir Cuatro near Guanacevi kept hitting high-grade silver-gold, with the best new hole PC50-3 at 727 gpt silver and 1.51 gpt gold over 3.44 m true width. The zone is now outlined by 11 holes over 200 m long by 200 m deep and is still open. Management approved a 75% increase in the 2009 exploration budget, with 5 more holes planned in Q4 2009 (16 already done) and a resource estimate and mine planning targeted by year-end. Early leach tests on four samples recovered an average of 81.9% of silver and 79.2% of gold before optimization. This follows the September 2009 discovery and the June 2009 option purchase. Third-quarter results are due November 10, 2009, with a call on November 12.
First drilling at the newly acquired Porvenir Cuatro property near Guanacevi found a new high-grade silver-gold zone. Best hole PC50-2 returned 713 gpt silver and 3.85 gpt gold over 5.67 m true width. The zone is open along strike and down dip, and a 5,200 m, 16-hole Phase II program has been approved and is underway. Porvenir Dos is stated to be in development for production in Q4 2009. This follows the June 2009 option acquisition of the property.
The Lucero vein at Guanajuato, found in September 2008, has been in production since March 2009 and now supplies about half of the ore at the mine, per the CEO. Mining drifts show averages of 270 gpt silver and 2.58 gpt gold over 2.8 m, and 238 gpt silver and 2.46 gpt gold over 2.1 m. The CEO says Guanajuato silver production and cash costs are beating the year's forecast. Management has committed to expanding the plant 20% to 600 tonnes per day this quarter at about $250,000, and is planning a possible 800 tonnes per day expansion next year. This follows the December 2008 plan for 500 tpd and the Lucero development start.
Updated estimates to December 31, 2008 show proven and probable reserves of 7.8 million oz silver (9.6 million oz silver-equivalent), indicated resources of 19.5 million oz silver and inferred resources of 19.5 million oz silver. Total silver-equivalent reserves and resources are up 24% on a year earlier after replacing 2008 mining depletion. Reserves are lower than the 14.9 million oz reported a year ago, though that figure is not directly comparable because it used different assumptions. Lucero and San Jose at Guanajuato went from discovery to initial production in January 2009. San Pedro near Guanacevi has initial resources, and the Cometa zone at Parral was re-estimated. This delivers the updated Guanajuato and Guanacevi estimates expected after year-end.
Drilling extended the Alex Breccia zone at Guanacevi about 150 m along strike and more than 200 m deep, with best results of 670 gpt silver, 0.71 gpt gold and 4.9% combined lead-zinc over 5.18 m (BAU-12). The company is building ramp access with production targeted for Q1 2009, when it would become the second operating mine at Guanacevi, and an updated resource estimate for Guanacevi is being prepared for Q1 2009. This is the first of three new mines the CEO says are scheduled at Guanacevi in 2009.
Drilling extended three recently found vein zones at Guanajuato (Bolanitos, Santa Maria and the newly named Lucero), with best results of 166 gpt silver and 5.54 gpt gold over 6.00 m (BSV-3). The company says the Lucero vein is already being developed with production starting in December, the '3785' zone at Cebada is being developed for mining next year, and the plant is on track to reach 500 tonnes per day by year-end. An updated resource estimate is planned after year-end.
More drilling at San Pedro near Guanacevi expanded three new silver zones, with the best result 1,295 gpt silver over 0.35 m inside 3.95 m at 325 gpt silver (hole NB2-1, C vein). The C vein is defined over about 100 m length and 100 m depth and is still open; 2,000 m more drilling is planned to year-end, and management expects an initial San Pedro resource by year end. This continues the June 2008 San Pedro discoveries.
Drilling south of the operating Bolanitos mine at Guanajuato found four new zones of high-grade silver-gold, with the best hole SJS-1 returning 374 gpt silver and 3.14 gpt gold over 9.50 m. The company says the intercepts are close to existing workings and could be reached by extending ramps; 2,400 m of drilling is done and another 2,100 m has started. This builds on the February 2008 '3785' discovery at Cebada.
Drilling on the San Pedro properties (acquired near Guanacevi, with the adjacent Milache) found several new zones of high-grade silver, including 6,680 gpt silver and 11.2 gpt gold over 1.15 m in hole EPS3-1. Seven of 12 holes hit interesting silver mineralization across five target areas, all open for expansion; 1,500 m more core drilling has started and a 3,000 m reverse-circulation program is being mobilized.
Drilling extended the Santa Cruz zone at Guanacevi about 100 m further down-dip, with base metals found for the first time, and infill drilling better defined the El Cometa zone at Parral. A ramp towards Santa Cruz is 530 m of 820 m complete, with production targeted for Q3 2009. The company also set 1,400,000 stock options at $3.05, vesting over two years.
Updated estimates to December 31, 2007 show proven and probable silver reserves up 50% to 14.9 million oz (Guanacevi and Guanajuato), and total silver-equivalent reserves and resources up 11% on a year earlier. The Guanajuato acquisition in Q2 2007 added reserves, and the Cometa zone at Parral (Cometa resources only, no reserves) has a preliminary economic assessment nearing completion. This builds on the February drilling results.
Drilling at the Cebada Mine in Guanajuato found a new gold-silver zone (best hole: 4.54 gpt gold and 316 gpt silver over 1.70 m core length), and drilling at Porvenir in Guanacevi extended the known silver orebody (best: 531 gpt silver and 1.45 gpt gold over 2.10 m). Six more holes are underway at Cebada, and the company has five rigs working in Mexico under a 38,000 m 2008 drilling budget.
