Endeavour Silver beats Q1 production forecast

Shares of Endeavour Silver (TSX: EDR; NYSE: EXK) rose to their highest level in a week as the company beat analysts' expectations in its quarterly report.

The company produced 1.3 million oz. silver in the first quarter of 2022, a 25% increase from the first quarter last year and 17% higher than BMO's predictions. It also produced 8,695 oz. gold, a 22% decrease from its production last year but 5% higher than BMO's forecast.

"Our first quarter performance was strong, putting us on track to achieve our 2022 production guidance," the company's CEO Dan Dickson said in a press release.

The performance of the company's Bolanitos and Guanacevi mines in Mexico beat expectations and played a key role behind the positive performance in the quarter. Guanacevi produced 1.13 million oz. silver, up from 918,217 oz. in the first quarter last year and 14% higher than BMO's forecast, while Bolanitos produced 181,105 oz. silver, almost twice as much as analysts' expectations.

Endeavour Silver's El Cubo silver mine in Guanajuato, Mexico. Credit: Endeavour Silver.

Dickson expects the two mines to continue performing well this year but added that industry-wide inflation was a growing challenge which the company would have to try to mitigate.

Looking ahead, Endeavour Silver is hoping to secure debt financing to advance its Terronera project in Jalisco State, Mexico, for which a feasibility study was completed last year. It also hopes to close its $70 million acquisition of the Pitarrilla silver-lead-zinc project in northern Mexico from SSR Mining (TSX: SSRM; NASDAQ: SSRM; ASX: SSR).

"After the deal closes, drilling will commence to verify Pitarrilla's historical data and update the historical resource. This will become a key focus for us for the balance of 2022," said Dickson.

The company reported net earnings of $11.7 million, or $0.07 per share for the quarter, down from $12.2 million, or $0.08 per share in the first quarter of 2021.

At press time in Toronto, Endeavour Silver's shares were trading at $4.84 in the morning after opening at $4.38, before falling to $4.57 in the afternoon, up 53 ? or 13%, within a 52-week trading range of $4 and $9.32. The company has 180.1 million common shares outstanding for a market cap of $825.1 million.