EXK - Endeavour Silver (EXK)(EDR:CA) - Expecting A Strong Finish to the Year
Third quarter 2021 results. Endeavour reported a third quarter net loss of $4.5 million, or $(0.03) per share, compared to net income of $451 thousand, or $0.00 per share, during the prior year period. We had projected net income of $790 thousand or $0.00 per share. Mine operating earnings were $1.4 million lower than our estimate primarily due to lower revenue and higher depreciation, depletion, and amortization expense. The financial results were not indicative of operations since the company withheld a significant amount of production for inventory due to lower commodity prices which it expects to sell during the fourth quarter. At quarter end, Endeavour held 1,030,304 ounces of silver and 1,211 ounces of gold bullion inventory and 37,100 ounces of silver and 2,028 ounces of gold in concentrate inventory.Updating estimates. We have increased our 2021 EPS and EBITDA estimates to $0.02 and $44.4 million, respectively, from $0.01 and $42.9 million. The revision reflects stronger fourth quarter earnings due to sales from inventory. Our 2022 EPS and EBITDA estimates remain $0.15 and $67.2 million.Terronera financing. Endeavour ended the quarter with $101.1 million of cash. The company expects to fund Terronera with a combination of cash on hand, operating cash flow, and debt financing. Management has been working with banks to provide a debt facility with $80 million to $100 million of capacity and expects to receive committed financing in the coming months. Once financing is in place, the Board will approve construction which is expected to take 24 months with Terronera expected to achieve commercial production in the first half of 2024.Rating is Market Perform. Management has successfully improved performance at the Guanacevi and Bolanitos mines and positioned the company for long-term growth with several promising development and exploration projects in Mexico, the United States, and Chile. Terronera represents the largest near-to-intermediate-term source of growth. At present, we think a Market Perform rating is appropriate based on Endeavour's valuation and near-term outlook. Read More >>