Mexico's mines

Jupiter, FL (PRWEB) June 6, 2008 -- Sean Brodrick discusses his recent trip to Mexico's Guanajuato state to visit up and coming silver-gold mines. Mr. Brodrick explains further why these mines could be successful in the future.

Mr. Brodrick recently visited two mines dug up by the Spanish, the Cebada and Bolanitos silver-gold mines in Mexico's Guanajuato state. Inside the Cebada, the rock with silver still running through it could be seen. The company that owns it, Endeavour Silver, is rehabilitating the mine and should increase production substantially. Bolanitos is in much better shape and gearing up production.

Endeavour's strategy is to pick up old, inexpensive mines with existing mills that are in good shape or can be rehabilitated at a low cost. The Bolanitos mining property came with a 500-tonne per day mill. It's in great shape, but only running at 100 tonnes per day now as Endeavour upgrades its mining operations. The mill should be running at 300 tonnes per day by the end of 2008. It should hit its full 500-tonne per day stride by 2009. When Endeavour acquired Bolanitos/Guanajuato, it made the strategic decision to keep the staff on even as it shut down and repaired the shafts. The costs at Bolanitos are running at $24 an ounce on a mill throughput of 100 tonnes per day. However, by the end of 2008, processing at 300 tonnes per day, costs should drop to $11 an ounce. Eventually, the company plans to get costs down to $6 or $7 an ounce.

Endeavour has three active silver mining and exploration projects scattered around Mexico. Along with the Bolanitos/Guanajuato Mines in Guanajuato State, it has the Parral Exploration project in Chihuahua State and its flagship Guanacevi Mines in Durango State, in the heart of the Sierra Madres. Brodrick also visited Guancevi; the plant has expanded and improved, and at the Porvenir Mine and other properties in the area they are drilling as they expand the known resource.

Together, Endeavour's properties contain a total of 41.3 million ounces in resources: 14.9 million ounces in proven and probable reserves, 14.3 million ounces in measured and indicated reserves, and 12.1 million ounces in inferred reserves. The company also has some gold resources. The total of proven, probable, measured, and indicated and inferred resources is 152,600 ounces. Endeavour is already ramping up production. The company produced 2.14 million ounces in 2007, a 58% year over year increase and up 600% since 2004.

The company CEO Godfrey Walton says the company's priority this year is boosting the resources at each of its three active projects in Mexico. To do this, the company has five drill rigs working on a 38,000 meter drilling program. Endeavour is investing $15 million over three years at Guancevi and Bolanitos to expand resources to 60 million ounces of silver. At the same time, it wants to boost production to five million ounces of silver per year.

Sales for the first quarter of 2008 jumped by 48% over the year earlier period to $10.7 million, production rose by 3% to 505,000 ounces, and cash costs were $10.01 per ounce. That's higher than a year earlier, but down from the fourth quarter. However, costs could be a short-term problem for the current quarter because Endeavour has a high cash cost at its Guanajuato operations. As those operations ramp up, Endeavour's costs should drop dramatically.

Endeavour is not making money now. The company had an operating loss in the first quarter of $1.8 million. However, Bolanitos is following the same pattern that Guanacevi did, refitting an old mine and dramatically lowering costs as production picks up.

"Endeavour used 2007 as a year to slow growth, reduce cash costs at Guanacevi, and expand on their exploration and consolidation. This raised operating expenses. But I expect those costs to go down quite a bit in the second half of this year. Probably by the middle of next year, Endeavour will be giving us projections for a path to profitability. Plus, it has $21 million in working capital, which should be enough for its needs unless it makes a major purchase," Brodrick states.

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About SEAN BRODRICK & MONEY AND MARKETS     

Sean Brodrick joined Weiss Research in 2000 as an analyst, bringing more than 25 years experience as a journalist and financial analyst to the position. He is Weiss Research's small-caps specialist, especially in natural resources, and is the editor of the company's Red-Hot Canadian Small-Caps, as well as a regular contributor to its daily e-letter, Money and Markets.

Previously, Mr. Brodrick was the investment director of The Sovereign Society, the world's leading publisher of offshore asset protection strategies and global investment opportunities.

Recognized for his expertise on Canadian and Australian investment opportunities, Mr. Brodrick has been featured on many financial talk shows, including CNBC Squawk Box and Bloomberg Market Line. He is a weekly guest on Market Matters Radio, a contributing columnist to MarketWatch.com and a frequent commentator on one of Canada's premiere financial websites, HoweStreet.com. His report, "70 Days to Empty," has garnered acclaim for its analysis of the forces pushing America toward its next oil crisis and was described by

The Daily Reckoning as "the most important report you're likely to read this year," while his knowledge of uranium has helped investors earn solid gains on the commodity.

Mr. Brodrick holds a B.A. degree from the University of Maine.

Money and Markets (www.moneyandmarkets.com) is a free daily investment newsletter from Dr. Martin Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Weiss Research, Inc. is located in Jupiter, Florida. For more information about our editors, or to set up an interview, please contact Jennifer Moran at 561-627-3300 or visit www.moneyandmarkets.com.

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