Terronera, M & As Expected to Drive Endeavor Silver Growth
Endeavor Silver CEO Dan Dickson aims to make the company a much bigger player in the silver business, with growth stemming from Mexican projects, exploration and potential acquisitions, he said. he told BNamericas.
Dickson – who took on the role earlier in May after his previous role as CFO – plans to continue on the path set by his predecessor and company founder Brad Cooke, who continues to work part-time at the company.
While advancing the Terronera project is currently the primary focus, the Vancouver-based company is also exploring M&A opportunities in the Americas, ranging from silver-dominant exploration assets to producing mines.
Another priority is to advance the company’s Te Cuido (I’m taking care of you) program, which aims to establish a culture in which all workers can make their own decisions and have their ideas heard.
BNamericas: How do you see the potential of your mines and projects?
Dickson: We have been in Guanaceví for 15 years now. You can see from our recent drill results that we keep making discoveries, and our grades have increased dramatically, and our ounces and our width, all right now, is almost like the discovery we had there. 14 years old.
We’re basically connecting two old deposits that we own, and between them a space that Minera Frisco owned and that we acquired in 2019, and we’ve been digging that since.
We also made a discovery in 2018 of what we called the Santacruz Sur deposit. Same thing, we are on the edges and there is a lot of potential there.
So, at Guanaceví, from a long-term perspective, we went from near ore depletion in 2016-2018 to a 10-year lifespan.
In Bolañitos, similarly, we released drilling results showing again that when we extract resources, we can replace them.
Being an underground vein mining, we never had any reserve life. We’ve never had more than two years of mine life in Guanaceví or Bolañitos, but we’ve been there for 15 and 12 years.
At Bolañitos we keep making discoveries and more expansions, and there is a new area called Belén that we have been holding for a while and we are now drilling with the idea that we can put it into production over the next few years. next two years. .
At Bolañitos we can realistically continue to operate for 5 to 8 years and this is how we have built the company, from these two assets.
El Compás is small, 250t / d [throughput]. It’s a great neighborhood. We haven’t had the same exploration success that we have had in our other operations, so it’s still small.
We are trying to extend life. We have land deals with other companies in Vancouver where they’ve discovered and we’ll get royalties from them, but there is still work to be done.
Ultimately, it comes down to Terronera.
We’ve fully licensed it, we have a few license changes that we need, but that’s the long-term growth of Endeavor.
This will take us from 6Moz / year of money equivalent to 12Moz / year and cut our costs in half.
It really is a flagship product for the business, where people can point to a 10 year shelf life, and will really enhance the value of the business.
We are completing a feasibility study there, expected by the end of June, are working on financial arrangements for this asset and hope to start construction in the fourth quarter.
This has been very positive for us over the past couple of years, and metal prices have helped make everything much more economical and robust.
The next stop after that is Parral. It is a silver asset to Chihuahua. We have invested US $ 5-6 million in Parral so far, we have an exploration budget of US $ 2.0 million.
We opened the year to 40Moz of silver in the ground, and the idea is to grow it to 60-65Moz, and put a PEA on it.
Ultimately, if all goes well, we’ll take the development team we have at Terronera, finish the development there, and move that team to Parral.
BNamericas: When do you expect to reach commercial production at Terronera?
Dickson: End of 2023. It is a construction of 18 months and six months for commissioning.
BNamericas: What are your short-term priorities and longer-term vision for the business?
Dickson: The priority in the short term is to make sure we are making a profit. Internally, for me personally, it’s about internal culture, and running home a cultural program that we started last year, called Te Cuido, I take care of you.
It’s all about safety, but at the end of the day it’s about organizational behavior and getting people involved and showcasing what’s going on, and leveraging what we have for our people.
We have some really smart guys working for us, good engineers. It’s about building a culture where everyone can make their own decisions and make their ideas heard.
We worked with two groups, one from Mexico and one from Australia, to help build the culture of safety and ultimately an organizational behavior program.
It is above all for us internally.
From an operational point of view, we want to achieve our goals, but Terronera is the highest priority for us. Carrying out this feasibility study.
In the long run, at the end of the day, it’s about growing and becoming a bigger business. Scale and size give us the ability to do things better from a sustainability standpoint and the ability to be more innovative from a technological standpoint.
It gives us a little more leeway on some of these things.
Many silver producers have purchased gold assets. Cash flow and earnings are important to us, but we want to maintain this dominance of money in our income stream.
Growth happens to us both through mergers and acquisitions and through the drilling rig.
On the business development side, there are things there. There aren’t a lot of silver assets, but we hope to uncover a few.
Ultimately, thanks to the drill bit, we are built as exploration geologists. [Former CEO] Brad Cooke is still with us, he works 1-2 days a week, he’s been in the field before and done some geology which is fantastic.
I always like to think of geology as our competitive advantage.
I’ve been working here for 14 years and participating in the strategic direction, so it’s not like there are any drastic changes with me.
Our long-term vision is to achieve this production of 15-20Moz / year.
BNamericas: At what stage of the projects are you considering?
Dickson: There aren’t many producing mines, especially in the silver space. You have a few entities with silver assets, I’m thinking of SilverCrest Metals, which is also Mexico, and Gatos Silver, also in Mexico.
There aren’t a lot of silver producing assets, so you have to get down the spectrum to the development and exploration stage.
In Chile, we have three projects in the exploration stage, so we’re all at the top and bottom of the spectrum, and I think that’s how the industry has been.
We look at pristine land right through to brownfield assets that are under development. It’s just a matter of finding the right one.
Hopefully that’s money, and we can add value through the drill and grow it, and give back to our shareholders that way.
BNamericas: Which countries will you focus on for possible mergers and acquisitions?
Dickson: The Americas really. Obviously, there are some countries that worry us, but we want to stay where our advantage is, so obviously Mexico and Chile.
We looked at assets in the United States, Canada, Peru and Panama. We don’t know much about Brazil, but we looked at a couple of things there.
Argentina has problems, obviously, but at the end of the day the draft is going to dictate where we go.
If we had a slam-dunk trump card in Brazil, this is where we would go.
Although Mexico gets a little harder with [President Andrés Manuel López Obrador] AMLO, we think it’s still a good jurisdiction at this point.