BMO Capital has maintained its Outperform rating on Endeavour Silver (NYSE:EXK) Corp (EDR: CN) (NYSE: EXK), with a steady price target of Cdn$7.00. The company has announced the resumption of operations at its Guanacevi mill, which had experienced a failure reported last week. Currently, the mill operates at a capacity of 400 tons per day (tpd), with the possibility of increasing to 500 tpd.
The repair of the primary ball mill, which was shut down last week, is expected to take approximately 16 weeks. The cost of replacing the trunnion is estimated at $0.5 million. As a result of this incident, Endeavour Silver has reduced its production guidance by 1 million ounces of silver equivalent (AgEq) and has chosen to suspend its cost guidance.
The BMO analyst noted that while the issues at Guanacevi present challenges, the progress of the Terronera project remains a crucial factor for the company.
In other recent news, Endeavour Silver reported a net loss of $14 million in Q2 2024, a significant increase from the $1 million loss in the same quarter of the previous year. The company's silver equivalent production was noted at 2.2 million ounces, comprised of 1.3 million ounces of silver and 10,500 ounces of gold.
Endeavour Silver also highlighted the ongoing development of its Terronera project, which is currently 65% complete and expected to be commissioned in the fourth quarter of 2024.
The company raised $14.7 million through share issuances and completed its first drawdown of the Terronera senior secured debt facility. Despite a $9 million loss related to derivatives required for hedging gold and a $7.5 million loss due to the appreciation of gold, the company remains optimistic about increasing production and reducing costs in the future. The Terronera project is expected to be 77% complete by the end of the next two quarters, with some concentrate production anticipated by the end of the year.
InvestingPro Insights
As Endeavour Silver Corp (EDR:CN) (NYSE: EXK) faces operational challenges at its Guanacevi mill, real-time data and insights from InvestingPro can provide investors with a deeper understanding of the company's financial health and market position. With a market capitalization of approximately $792.42 million and a negative P/E ratio of -48.61, reflecting challenges in profitability, the company's financial metrics offer a mixed picture. Notably, Endeavour Silver has experienced a significant return over the last week with an 11.03% price total return, signaling investor optimism in the short term.
InvestingPro Tips highlight that the company is trading at a high EBITDA valuation multiple, which may suggest that the market is pricing in future growth expectations. Additionally, analysts have revised their earnings downwards for the upcoming period, indicating potential concerns about the company's near-term profitability. With these considerations, investors should keep an eye on the progress of the Terronera project, which could be a pivotal factor for the company's future performance. For more detailed analysis and additional InvestingPro Tips, interested parties can explore the full suite of insights available for Endeavour Silver Corp.
InvestingPro data also shows that the company's revenue has seen a slight decline of -2.31% over the last twelve months as of Q2 2024, but a more positive quarterly revenue growth of 16.35% in Q2 2024. This suggests some resilience in the company's operations despite recent setbacks. With the next earnings date set for November 5, 2024, investors should watch for updates on the company's financial performance and operational developments.
For those seeking to make informed investment decisions, Endeavour Silver Corp's current price is $3.22, with analysts' fair value targets reaching as high as $5.25, indicating a potential upside. However, the InvestingPro Fair Value estimate stands at $3.04, suggesting a more conservative view. Investors can find a comprehensive list of over 13 additional InvestingPro Tips for Endeavour Silver Corp to help navigate the complexities of the market.
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