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Primary Silver Producer’s Most Profitable Mine Closed Indefinitely As Reserves Depleted

Management knew the mine was running out of reserves but tried to continue exploration activities over the past few years to find new profitable ore bodies. Unfortunately, the company failed to locate sufficient new reserves to continue operations so that the mine will be shut down indefinitely.  As of the last Q3 2019 report, El Cubo Mine employed 350 people and 200 contractors.

Endeavour Silver acquired the El Cubo Mine in 2012, and it has been producing the lion’s share of the company’s silver supply for the past several years.  Furthermore, the El Cubo Mine produced silver at an average yield of 4.7 oz per ton in 2019.  Here is the production data for Endeavour Silver’s three mines:

Total Silver Production 2015-2018:

While Endeavour Silver lost one of its top primary silver mines, the company has another project in development called the Terronera Mine in Mexico. According to the company’s newest investor presentation, the Terronera Mine will produce approximately 2.9 million oz of silver a year and 28,000 oz of gold.  But, it may be a few years before the mine is in commercial status.  I have not yet seen a proposed date for the first commercial production.

Lastly, a tweet from Rudy Havenstein seems to wrap up the situation at Endeavour Silver:

The closure of El Cubo Mine reminds us that silver reserves do not last forever. While the USGS published 20 years’ worth of silver reserves remaining in its latest 2019 Silver Mineral Summary Report, I highly doubt we will recover 50% of those reserves.  And with energy becoming a big problem over the next decade, we may (or already have) reach peak silver production much sooner than later.

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