Endeavour Silver Corp. (EXK, Financial) has provided shareholders with a December update concerning its mineral project at El Compas in Zacatecas, Mexico.
Endeavor is reporting that work on the mine project is progressing as planned. The company plans to begin initial production of gold and silver sometime at the end of the first quarter of this year. So far, 83 percent of the mine is completed. The goal is to have 95 percent completed by the end of the month. The company has finished several infrastructure projects involving the mine gateway and the service ramp entrance.
Investors should closely watch the development of the El Compas mine. Endeavour Silver forecasts show it should add a sizeable amount of silver and gold to annual production. The mine will produce 150,000 ounces of the gray metal and 12,000 ounces of gold, amounting to a total annual volume of approximately 1 million ounces of equivalent silver or 10 to 10.5% of Endeavour Silver Corp’s future production.
The miner is currently producing the precious metals at three mines: Guanacevà, Bolañitos and El Cubo. The company is also advancing the Terronera development project and undertaking several exploration activities at Parral, Guadalupe y Calvo and Lourdes. Endeavour Silver Corp’s activities and interests are all located in Mexico.
Commodities permitting, the company’s revenue, profit and cash flow will be boosted once operations at El Compas are on-line..
As of today, Endeavor Silver Corp. was trading at a stock price of $2.35 per share on the New York Stock Exchange. For the 52 weeks ending Jan. 9, the stock lost nearly 42% on the market and underperformed the VanEck Vectors Gold Miners ETF (GDX) by 44.4%.
The current market value per share is 109% below the 52-week high of $4.90. The 52-week low is $1.94 per share.
Endeavour Silver Corp is trading below the 200-SMA line but above the 50 and 100-SMA lines.
And with a down trending RSI line, a further depreciation of the stock is highly possible. Therefore, I would wait a little bit longer before increasing the holding. The RSI is in the 40 to 60 range.
With a value of 2.11, the price-book (P/B) ratio of Endeavour Silver Corp is still a bit higher than the industry average of 2.01. It has an EV-to-EBITDA ratio of 16.34 times, which is higher than the industry median of 10.14 times.
The stock has an EBITDA margin of 11.4% versus an industry median of 22.8%.
Analysts foresee a 90.2% increase in the market value of the stock to $4.47 per share within the next 12 trading months. The recommendation rating is 2.4 out of 5.
Van Eck Associates Corporation is the institutional investor who holds the highest stake in Endeavour Silver Corp with a 7.35% of shares outstanding. It is followed by Renaissance Technologies with 3.59%. These holdings are as of Sept. 29.
Institutional ownership currently accounts for 25.75% of Endeavour Silver Corp. The company has about 127.46 million of shares outstanding.
Disclosure: no positions in any securities mentioned in this article.
