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Alberto Abaterusso
Alberto Abaterusso
Articles (901) 

Endeavour Silver Corp Rises

But the positive reversal in the bottom line in the fourth quarter was not enough to beat consensus

February 27, 2018 | About:

Following the financial results for full fiscal 2017 and its last quarter, Endeavour Silver Corp. (NYSE:EXK) was up 3.10% after regular trading hours.

The miner closed the last three months reporting period of 2017 with net earnings of 2 cents per share or a net income of $2.7 million. Even though this result represents a positive turnaround from the one-year ago loss of 4 cents, Endeavour Silver Corp was not capable beating consensus on fourth quarter earnings. The 3 cents mean of four 1 cent to 4 cents ranging estimates, was the measure that analysts expected Endeavour Silver Corp. would have closed the quarter.

Fourth quarter net earnings are a 6.5% yield on 1.39 million ounces of silver (+47% year over year) and 14,117 ounces of gold (+28% from the prior-year quarter) that Endeavour Silver Corp placed on the market in the last three months of 2017. At selling prices of $1,288 per ounce of gold (+13% year over year) and of $16.84 per ounce of silver (-1% year over year), quarterly revenue came in at $41.6 million. Fourth quarter revenue increased by 45% on a year over year basis.

Endeavour Silver Corp is currently trading at $2.33 per share on the New York Stock Exchange. The current share price represents a 20.1% appreciation of the 52-week low of $1.94 per share and a 51% discounted 52-week high of $4.76 per share.

As illustrated in the Yahoo Finance’s chart, Endeavour Silver Corp is trading below the 200 and 50-SMA lines, but a bit higher than the 100-SMA line. The stock underperformed the VanEck Vectors Gold Miners (GDX) by about 41% for the 52-weeks through Feb. 26.

Source: Yahoo Finance

Different issues on the entire period of fiscal 2017 tell that the cash flow from the mining company’s operations declined by 32.1% to $15.6 million and the capital investment of $39.71 million more than doubled from full fiscal 2016.

In addition, Endeavour Silver Corp re-proposed a debt-free balance sheet on Dec. 30, 2017 and anticipated an ongoing downtrend in operating costs, mainly in response to additional improvements the company plans to achieve this year at Bolañitos and El Cubo operating mines in Mexico. This improvement in the cost structure should lead to an improvement in the Ebitda margin from 17% of 2017. This is the short-term catalyst to a 94.4% predicted growth in the market value of Endeavour Silver Corp in the following 12 months of trading.

Except for cash generated from operations, the company counts on a $38.3 million endowment of cash on hand and cash equivalents to pursue its growth purposes. Hopefully, the cash flow from operations will be boosted by favorable commodity prices. The company also has to find the necessary financial resources to continue the construction of the El Compas project (Mexico) and building activities at the Terronera project (Mexico). At Terronera, the company is now seeking waste dumps and tailings permits.

(Disclosure: I have no positions in any security mentioned in this article.)

About the author:

Alberto Abaterusso
Alberto Abaterusso is a freelance writer based in The Netherlands. He primarily writes about gold, silver and precious metals mining stocks. His articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. Alberto holds a MBA from Università degli Studi di Bari (Italy), Aldo Moro.

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