In a choppy market, the stock of Endeavour Silver (EXK 8.87%) stood out as it zoomed as high as 20.6% in early morning trading today. The penny silver stock gave up some ground as the day progressed, but was still trading up 12.3% as of 12:40 a.m. ET on Wednesday.
The silver mining company, which operates in Mexico, handily beat analysts’ estimates on its first-quarter numbers and is now gearing up for a big growth move in the second quarter.
Here are some important numbers from Endeavour Silver’s first-quarter earnings report (all changes are year over year):
- Silver ounces produced: Up 25%.
- All-in-sustaining cost (AISC): Up 5% to $20.90 per ounce.
- Revenue: Up 67% to $57.7 million.
- Net income: Down 5% to $11.7 million.
- Adjusted net income: Up 357% to $11.7 million.
The market didn’t expect to see such strong growth in Endeavour Silver’s revenue and adjusted earnings. Although the miner realized lower prices on silver it sold during the quarter as compared with last year’s first quarter, its sales volumes rose significantly. Endeavour Silver’s AISC, though, which is a key cost measure for the mining industry, still rose during the quarter on higher input costs and capital expenditures.
Encouraged by Endeavour Silver’s strong first quarter, CEO Dan Dickson is confident of hitting 2022 production guidance, which includes silver production of 4.2 million to 4.8 million ounces and AISC of $20 to $21 per ounce. Note that its guidance calls for a nearly 7.5% drop over last year, and that’s partly because of a mine it shut down last year.
Endeavour Silver is eyeing two milestones during the second quarter: Securing financing for the Terronera project in Mexico that’s in an advanced stage of development, and the acquisition of the Pitarrilla mine in Mexico from SSR Mining for $70 million.
Pitarrilla is an undeveloped silver mine, but is touted to be one of the world’s largest such mines based on its mineral resource estimate. Endeavour Silver currently has two operating mines, and if it can acquire and develop Pitarrilla as planned in the coming years, it should become a much larger and stronger silver mining company.