Endeavour Silver Corp. (EXK, Financial) jumped 7% on the New York Stock Exchange to $3.13 over the last trading day due to its purchase of assets in Mexico.
Part of the stock's boost can be attributed to rising gold and silver prices on the Bullion market since the beginning of May. Gold is currently trading around $1,292.70 per troy ounce, up 5.2% since the beginning of May. Silver is trading around $17.60 per troy ounce, up 8.2% over the last month.
The company has also largely benefited from its announcement of acquiring a 100% interest in the Calicanto and Veta Grande properties on June 6. Calicanto was bought from Arian Silver Corp.Ă‚ (LSE:AGQ, Financial) for $400,000. Ă‚ Veta Grande was purchased for $500,000 from IMPACT Silver Corp. (TSXV:IPT, Financial).
Calicanto and Veta Grande are two small claims situated in the Mexican state of Zacatecas.
The properties have the potential to enhance the quality of Endeavour Silver’s asset base in the near term.
While small, the two properties offer the mid-tier mining company the opportunity of developing ore deposits with numerous veins of high-grade mineralization that previous exploration activities have found to be along strikes and down dips.
Furthermore, the two properties are located in non-hostile mining jurisdiction countries and are not far from two of the company’s other plants. The Calicanto claim is adjacent to the La Plata plant while Veta Grande is in the proximity of El Compas Mine.
Both offer positive synergies with El Compas mine, a project Endeavour is developing in Zacatecas.
Bradford Cooke, Endeavour Silver's CEO, said he is pleased to add these properties to the company's exploration activities in Mexico.
“The two transactions confirm there are good opportunities to consolidate a larger mineral land position in Zacatecas, one of the largest historic silver mining districts in Mexico," Cooke said. "Drilling is now underway at the Calicanto properties and we expect to permit and drill the Veta Grande properties later this year.”
Despite this recent uptrend, Endeavour Silver has lost almost 11% year to date. The stock has a price-earnings (P/E) ratio of 47.62, a price-book (P/B) ratio of 2.73 and an EV/Ebitda ratio of 12.11.
Endeavour Silver was upgraded by Raymond James to outperform from market perform and analysts have set a target price of $4.73 per share, which represents a 27.8% upside from the current share price. The recommendation rating is 2.4 out of 5.
Disclosure: I have no positions in Endeavour Silver Corp.
