Endeavour Silver (TSX: EDR, NYSE: EXK) announced on Friday it has filed an NI 43-101 technical report for its recently acquired Pitarrilla silver-lead-zinc project in Durango state, Mexico. The report, prepared by GS Geological Services, provides an independent estimate of the mineral resources identified at Pitarrilla as of October 6, 2022.
Total indicated resources (open pit and underground) at Pitarrilla are estimated at 158.6 million tonnes containing 491.6 million oz. of silver grading 96.4 grams per tonne, 1.1 million lb. of lead grading 0.31% and 2.6 million lb. of zinc grading 0.74%, for a total of 693.9 million oz. of silver-equivalent (AgEq) grading 136 g/t.
The inferred resource (open pit and underground) totalled 35.4 million tonnes containing 99.4 million oz. of silver grading of 87.2 g/t, 281 million lb. of lead grading 0.36% and 661 million lb. of zinc grading 0.85%, for a total of 151.2 million oz. of AgEq grading 132.7 g/t.
“With a verified current resource of nearly 600 million ounces of silver, the 2022 Pitarrilla report validates the merits of acquiring one of the world’s largest undeveloped silver deposits,” stated Dan Dickson, CEO of Endeavour Silver.
Dickson added that the Pitarrilla project has benefitted from over 225,000 metres of historic drilling, and was advanced to a prefeasibility study of an underground operation and an open pit feasibility study in 2009 and 2012, respectively.
“The comprehensive work done to date, combined with the size and the scale of the deposit, provide flexibility and versatility for various mining scenarios. We will use the data collected to guide our exploration path going forward,” he said.
Pitarrilla represents is a large undeveloped silver-lead-zinc project located 160 km north of Durango City in northern Mexico. The property comprises 4,950 hectares across five concessions and has significant infrastructure in place with direct access to utilities.
The project was previously held by SSR Mining, which made the grassroots discovery in 2002 and subsequently conducted extensive drill campaigns on the property between 2003-2012. During that period, SSR published two technical reports for Pitarrilla: a prefeasibility study in 2009 focused on a high-grade underground mine scenario and a feasibility study in 2012 that evaluated an open-pit concept. In September 2020, SSR merged with Alacer Gold, and the resulting entity became a gold-focused company.
Endeavour later purchased the Pitarrilla project from SSR in July 2022 for total consideration of $70 million and a 1.25% net smelter returns royalty. According to Endeavour, this acquisition presents “an excellent fit” for the Endeavour regional team in Mexico and enhances the company’s growth pipeline together with the Terronera and Parral projects.
Endeavour also agreed to incur a minimum of $10 million in exploration expenditures on Pitarrilla over the next five years, and has plans to evaluate various production alternatives, including an underground option, which would strengthen its long-term production profile.
Meanwhile, the company will continue to advance its next core asset – the Terronera mine project in Jalisco state, Mexico – towards a development decision, pending financing and final permits. A 2021 feasibility study on Terronera supported a high-grade silver-gold underground mining operation, producing an average of 3.3 million payable oz. silver and 32,874 payable oz. gold per year over a 12-year mine life.
Shares of Endeavour Silver rose 2.6% by 12:05 p.m. ET Friday. The company’s market value currently stands at C$889.4 million.