Endeavour Silver to reopen Mexican mines

Endeavour Silver to reopen Mexican mines

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Canada’s Endeavour Silver (TSX: EDR) (NYSE: EXK) anticipates reopening its three Mexican mines on May 18, despite the country’s government extending the suspension of all non-essential activities until May 30.

The reason for the early resumption of operations is that President Andres Manuel Lopez Obrador said he would allow the restart of certain activities, including mining, in areas with low numbers of coronavirus cases.

Endeavour’s Guanacevi, Bolanitos and El Compás mines are all located  in municipalities with low or no transmission of covid-19, the company said.

 “We look forward to bringing our mines back to production in a safe and orderly manner,” chief executive, Bradford Cooke, said in the statement.

“Naturally, we will continue to apply all aspects of our coronavirus plan to maintain the health of our people and the local communities.”

The Vancouver-based silver producer has also filed a new shelf prospectus in the United States, hoping to secure needed financing to construct the Terronera project, which could become its next core asset.

Potentially Endeavour’s fifth and largest mine, Terronera is located in San Sebastian, a historic silver mining district, 40 km northeast of Puerto Vallarta, in the Jalisco State.

Hardest hit commodity

Silver has been the commodity hardest hit by mine closures mandated by governments to stop the spread of the coronavirus pandemic.

Mexican industry leaders have been pushing for an exclusion to the temporary halt of non-essential activities. They argue that mining should be allowed to continue due to its importance to national supply chains and the well being of host communities.

“To define the mining sector as non-essential, is not only to economically affect thousands of workers, but also to leave 656 communities alone where we operate and to whom we provide basic health services,” Fernando Alanís, president of the Mexican mining chamber (Camimex), said in March via Twitter.

Mexico is facing in 2020 one of the deepest recessions in its history as an already weak economy can barely cope with the impact of the coronavirus outbreak.

Global production on hold by commodity
Among the mining activities affected by covid-19, silver production has been the biggest victim, with nearly 66% of the world’s annual output still on hold.

The country’s economy is forecast to contract 6.7% this year, deeper than during the devastating Tequila Crisis of the mid 1990s, the latest Citibanamex analysts survey shows.

Mexico is responsible for nearly 23% of world production of silver, churning out more than 200 million ounces last year, up from 196.6 million ounces in 2018.

It also has major copper and zinc mines, operated by Grupo Mexico and Southern Copper, and produces a significant amount of gold, making the mining sector responsible for about 4% of the nation’s gross domestic product.

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