On Aug. 30, Endeavour Silver Corp. (EXK, Financial) (TSX:EDR, Financial) presented new results from drilling activities its exploration team did at Guanacevà mine, which is located in the Mexican state of Durango.
The results from nine new drill holes in the Santa Cruz vein extended the length of the mineralization area, which is characterized by higher concentrations of silver and gold per ton of ore.
The most encouraging result comes from drill hole number UG-19. The exploration team intersected a gold and silver mineralized area at 3.4 meters grading 836 grams of equivalent silver per ton of ore. This mineralized area is characterized by a richer 0.3-meter subspace grading 2,381 grams of equivalent silver per ton of ore.
Exploration activites at the La Negra vein were also fruitful as a new ore grade mineralization was discovered. From drilling hole number NE-01, the exploration team intersected a two-meter interval of silver and gold mineralized rock grading 285 grams of equivalent silver per ton of mineral. This interval includes a 0.8-meter subspace rich in silver and gold. The average grade is 468 grams of equivalent silver per ton of ore.
CEO Bradford Cooke commented on the drilling results:
“These encouraging drill results continue to extend the resource envelope in the Santa Cruz vein at Guanacevà along strike from our current reserves and operating production areas. Another 15 drill holes have been completed and are in the lab for assaying. The 2017 drill program will wrap up this month below budget and ahead of schedule. We will then commence the process of the year-end resource and reserve estimation.”
The drilling results are important because the company will be able to determine and enhance its reserve volume and resources. As a result, the stock could be positively impacted.
Endeavour Silver is currently trading around $2.32 per share with a market capitalization of $295.7 million, a price-book (P/B) ratio of 2.07, a price-earnings (P/E) ratio of 46.40, a price-sales (P/S) ratio of 2.13 and an EV/Ebitda ratio of 12.09.
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 $4.23, which represents a nearly 82.3% 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 $247.26 million. When the enterprise value is divided by the silver reserves, it yields an EVO metric of $3.9.
Disclosure: I have no positions in Endeavour Silver.
