Endeavour Silver (TSX: EDR; NYSE: EXK) took a significant hit to production in the three months to the end of June, as operations were halted for two months to comply with the Mexican government’s efforts to halt the spread of the coronavirus.
During the quarter, the Vancouver-based precious metal miner churned out 596,545 oz. silver and 5,817 gold oz., for silver equivalent production of 1.06 million ounces.
The figures represent an output drop of 42% when compared to the 1.1 million oz. silver and 9,558 gold oz., or 1.82 million oz. silver-equivalent, Endeavour produced in the same period last year.
Production fell at Endeavour’s three silver-gold mines in Mexico: Guanaceví in Durango state, Bolañitos mine in Guanajuato, and El Compás in the state of Zacatecas.
Operations were suspended at El Cubo mine in November last year, as it ran out of ore.
“Ignoring El Cubo, Q2, 2020 production, pro-rated for the number of operating days, increased significantly due to the improved plant throughput and ore grades at Guanaceví,” the miner said.
Endeavour resumed operations in late May, as Mexico deemed mining an essential activity.
“During the mine suspension period, we sent our employees home on full salary, while keeping essential personnel working at each mine site to maintain safety, security and equipment,” CEO Bradford Cooke said in a statement. “After the mines restarted, we were able to outperform our adjusted mine plans in June.”
Silver has been the commodity hardest hit by mine closures mandated by governments to stop the spread of the coronavirus.
Prices for the precious metal, however, are forecast to surpass the US$21 per-oz.-mark later this year. The gold-silver ratio – the quantity of silver ounces needed to buy an ounce of gold – is expected to drop below 90, The Silver Institute reported on July 9.
Silver prices averaged US$16.65 per oz. in the first half of the year, reaching US$17.84 per oz. at the end of June. It has since broken through the US$18 per oz. barrier.
Mexico, the world’s top producer of the metal, is facing one of the deepest recessions in its history as an already weak economy can barely cope with the impact of the coronavirus outbreak.
The country’s economy is forecast to contract 6.7% this year, which is more than the devastating Tequila Crisis of the mid-1990s, the latest Citibanamex analysts survey shows.
Mexico is responsible for nearly 23% of world production of silver, churning out more than 200 million oz. last year, up from 196.6 million oz. in 2018.
It also has major copper and zinc mines, operated by Grupo Mexico and Southern Copper, and produces a significant amount of gold, making the mining sector responsible for about 4% of the nation’s gross domestic product.
— This article first appeared in MINING.com. The Northern Miner and MINING.com are part of Glacier Resource Innovation Group.