BMO Capital Markets has maintained its positive stance on Endeavour Silver (NYSE:EXK) Corp (EDR: CN) (NYSE: EXK), with an Outperform rating and a price target of Cdn$7.50.
The firm's analysis followed Endeavour Silver's third-quarter production results, which exceeded expectations.
Endeavour Silver reported a third-quarter production of 1.62 million ounces of silver equivalent (AgEq), surpassing BMO Capital's forecast of 1.54 million ounces.
The production of 875,000 ounces of silver was in line with predictions, while gold output of 9,300 ounces was 19% above estimates. This increase was attributed to higher ore grades at the Guanaceví and Bolañitos mines.
The company is on course to meet its revised 2024 guidance range of 7.3 to 7.6 million ounces of AgEq. This follows a setback in August when a mill trunnion failure at the Guanaceví mine interrupted operations. The mine is expected to return to full production in December.
Additionally, Endeavour Silver completed the final $35 million drawdown on its Terronera debt facility after the quarter ended.
In other recent news, Endeavour Silver Corp encountered a decrease in silver production due to a trunnion failure at the Guanaceví mine, leading to a revised price target of $6 by H.C. Wainwright.
Despite this, the company reported a slight increase in gold production and remains on track to meet its revised annual production guidance of between 7.3 million and 7.6 million silver equivalent ounces (SEOs). Endeavour Silver also reported a significant net loss of $14 million for Q2 2024, a stark contrast to the $1 million loss in the same quarter of the previous year.
The company has resumed operations at its Guanaceví mill, now operating at a capacity of 400 tons per day. Endeavour Silver has also reduced its production guidance by 1 million ounces of silver equivalent due to the mill failure and suspended its cost guidance. Despite these challenges, BMO Capital has maintained its Outperform rating on the company.
Furthermore, Endeavour Silver continues to progress with its Terronera project, which is currently 65% complete and expected to be commissioned in the fourth quarter of 2024. The company raised $14.7 million through share issuances and completed its first drawdown of the Terronera senior secured debt facility.
InvestingPro Insights
Endeavour Silver Corp's recent production results and BMO Capital Markets' positive outlook are complemented by several key insights from InvestingPro. The company's stock has shown remarkable performance, with a 73.58% price total return over the past year and an impressive 116.75% year-to-date return. This aligns with the InvestingPro Tip highlighting the company's "high return over the last year" and "strong return over the last month."
Despite the recent operational challenges mentioned in the article, InvestingPro data shows that Endeavour Silver's revenue grew by 16.35% in the most recent quarter, indicating resilience in its operations. This growth is particularly noteworthy given the temporary setback at the Guanaceví mine.
InvestingPro Tips also suggest that while the company operates with a moderate level of debt, its liquid assets exceed short-term obligations. This financial position could be beneficial as Endeavour Silver works towards meeting its revised 2024 guidance and continues development at Terronera.
For investors seeking a more comprehensive analysis, InvestingPro offers 9 additional tips for Endeavour Silver, providing a deeper understanding of the company's financial health and market position.
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