Vancouver —
The company can pay US$3 million to the vendors and invest US$1 million in exploration and development within one year in order to earn a 51% interest in the mine and plant. It must pay an additional US$4 million over another three years to increase its stake to 100%.
The Guanacevi silver-gold district represents a low-sulphidation, epithermal vein camp that ranks as one of the top five historic silver districts in Mexico. The region has produced more than 500 million oz. silver over the past 400 years.
The Santa Cruz vein is one of five main producting silver-gold veins at Guanacevi. It has been traced for more than 6 km.
“The acquisition of the Santa Cruz mine and Guanacevi plant gives Endeavour tremendous leverage to the silver market,” says Godfrey Walton, the company’s vice-president. “Not only do we pick up a cash-flowing, high-grade mine; the opportunities for growth of ore reserves and silver production are substantial. At full capacity, and if the grades are confirmed, we should be able to produce four million ounces of silver per annum.”
The mine and plant are now producing 600,000 oz. silver and 3,000 oz. gold per year from a 150 tonne-per-day operation. Sulphide ore from the mine averages 350 grams silver and 0.5 gram gold per tonne. An additional 250 tonnes per day of oxidized old tailings are being processed; these average 100 grams silver and 1 gram gold with lead and zinc byproducts.
The processing plant is operating at less than 20% capacity. It has a daily capacity of 800 tonnes in the sulphide flotation circuit and 600 tonnes in the oxide cyanidation circuit.
Three ore shoots were drill-tested and sampled, returning grades in excess of 500 grams silver per tonne; however, the vendors lacked the working capital to develop and mine these mineralized zones.
Endeavour will inherit an experienced workforce who live near the mine, and the deal includes equipment needed for mining, milling and trucking of silver-gold concentrates to the Peoles smelter in Torreon.
In addition, Endeavour will inherit 2.3 sq. km of mineral properties covering other veins in the district. These veins have never been explored by modern methods, and represent attractive prospects.
The agreement is still subject to a 90-day period of due diligence and the approval of the TSX Venture Exchange.
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