Endeavour Silver Corp. (EXK, Financial) – a Canadian mid-tier gold and silver producer - continues to drill high ore grades from the La Luz Vein on the Terronera claim, which is located in the Mexican state of Jalisco.
At Terronera, Endeavour is defining a high-grade mineral deposit for future production.
The mineral deposit's promising drilling results are presented in the chart below.
Source of data: Endeavour Silver Corporation
From hole number LL-23, Endeavour Silver's exploration team intersected a rich deposit of mineral at 1.7 meters, which contains an average 16.22 grams of gold and 45 grams of silver per tonne of mineral, for silver equivalent of 1,180 grams per tonne of ore. This body of mineralized rock is characterized by a concentration of silver and gold in a 0.2 meter subspace. The metal concentrations lead to 3,335 grams of silver equivalent per tonne of mineral.
The results coming from Hw La luz vein structure and from hole number LL-36 are also very good.
The highest concentration of silver equivalent per tonne of ore came from hole number LL-35, which includes a 0.1 meter subspace grading 11,245 grams of silver equivalent per tonne of ore.
What do these results mean for the company's investors?
Once the Terronera project becomes a productive asset, Endeavour may add a considerable amount of silver equivalent to its total annual production. These drilling results will enable the company to bring Terronera’s resource estimate up to date and to finalize the project's Preliminary Economic Assessment (or PEA).
The encouraging results lead me to believe it will not be long before the company makes a decision on a pre-feasibility study and obtain the necessary permits for the construction of a producing asset. As the project enters into this development stage, the value of Endeavour Silver may soar on the stock market if it is adequately promoted.
Endeavour Silver is currently trading around $2.14 per share with a market capitalization of $273.05 million, a price-book (P/B) ratio of 1.93, a price-earnings (P/E) ratio of 42.80, a price-sales (P/S) ratio of 1.96 and an EV/Ebitda ratio of 10.97.
The company's stock has a recommendation rating of 2.4, which ranges between 1 (Strong Buy) and 5 (Sell). The analysts' average target price per share is $4.20, which represents nearly 96.3% upside from the current market value.
Endeavour Silver had 63,397,000 ounces of silver equivalent reserves as of Dec. 31, 2016. The company has an enterprise value of $224.33 million. When the enterprise value is divided by the silver reserves, it yields an EVO metric of $3.54.
Disclosure: I have no positions in Endeavour Silver.
