Shares of Endeavour Silver (EDR-T, EXK-X) fell after the Vancouver-based company said it will issue shares to take full ownership of the Guanacevi Mines properties in Durango, Mexico.
The news comes less than two months after the company announced a tripling of silver reserves at Guanacevi to 9.9 million oz. from 608,308 tonnes grading 508 grams. Those reserves come from four separate zones at the project.
Guanacevi has indicated resources of 2 million tonnes averaging 327 grams silver for 21 million oz. and another 1 million tonnes grading 323 grams silver for 10 million oz. in the inferred category.
The company will issue 1.35 million common shares to buy the remaining 49% of Minera Santa Cruz y Garibaldi (MSCG), a move that will give it full control of the project.
In Toronto on May 24, the companys shares fell close to 5% or 28 to $5.37 on 173,746 shares traded. It currently has roughly 44 million shares outstanding.
Endeavour paid US$1.7 million for its initial 51% interest in MSCG back in 2005. Part of the initial deal gave Endeavour until January of 2008 to buy the remaining 49% interest for US$1.3 million plus 49% of any pre-tax profits.
The share payment not only covers the US$1.3 million, but also serves as an allocation for past and future profits.
Endeavour decided to move its buy-out ahead of the 2008 deadline so that it could push ahead with mine development sooner rather than later.
It says it will target the Alex Breccia and Santa Cruz zones two areas at Guanacevi for development, and with the earlier buy-out, believes it can make capital investments there in the last half of 2007.
Beyond Guanacevi, the company has an expansion program at its Bolanitos project in Guanajuato. It is also exploring in the states of Chihuahua and Michoacan.
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