Endeavour Silver has started cost-cutting initiatives in an effort to rebound from the precious metals price drop.
Endeavour Silver (TSX:EDR) has put several measures in place in order to reduce capital, operating and other costs in Canada and Mexico following a price drop in precious metals, the company announced on Wednesday (August 29).
The reduced costs from revised exploration, development and mining plans are expected to boost production and reduce operating and capital costs throughout the company’s fourth quarter.
“Enhanced cost discipline is the prudent course of action for mining companies during times of lower metal prices, especially when investing to develop new mines. This austerity program is our proactive response to the current low metal prices,” stated Bradford Cook, CEO.
“Once metal prices recover, Endeavour Silver will be in a position to deliver more robust returns thanks to improved operational performance and a strong growth profile,” he added.
In order to cut these costs, the company will reduce general and administrative costs, including investor relations marketing. Exploration personnel are also focused on lower cost mapping and sampling programs in Mexico and Chile.
Since Endeavour has already achieved most of its goals for the year and will cease all drilling activities at month end, it is currently preparing new resource estimates and planning for 2019 when drill programs are expected to resume.
Additionally, delayed hiring has been implemented on the Terronera project and previously permitted earthworks on roads and the project’s plant site will not commence until receipt of final government permits for the mine dumps and plant tailings.
The company has also reported that it will temporarily suspend production at its El Compass plant, which is not expected to achieve its production guidance for the year.
Endeavour stated that the plant has faced excess clay in ore and higher-than-normal precipitation during the past two months, which led to the company’s decision to temporarily halt operations in order to allow the tailings area to be dewatered and clay removed for improved drainage.
On a positive note, the company believes that fourth-quarter adjusted mine plans for the other three mines should help compensate for the shortfall at El Compas.
As of 3:30 p.m. EST, Endeavour Silver was down 1.34 percent, trading at C$2.95.
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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.