H.C. Wainwright has adjusted its price target for Endeavour Silver Corp (NYSE: NYSE:EXK) to $6.00, down from $6.25, while reiterating a Buy rating on the stock.
The revision follows Endeavour Silver's announcement of its third-quarter production results on Tuesday, which showed a 14% year-over-year decrease in silver equivalent ounces (SEOs) produced.
The company reported the production of 1.6 million SEOs, comprising 0.9 million ounces of silver, down 24% from the previous year, and 9,290 ounces of gold, which is a 2% increase year-over-year.
The decline in silver production was largely attributed to a trunnion failure at the Guanaceví mine, which had been previously disclosed. Endeavour Silver anticipates a return to full operations at the mine by late in the fourth quarter of 2024.
Conversely, the slight rise in gold production was driven by higher gold grades at the Guanaceví and Bolañitos mines, as well as increased gold content in third-party feed processed at the Guanaceví mine.
The company remains focused on completing construction at the Terronera project, with $25.0 million in draw-downs during the quarter and a subsequent final draw-down of $35.0 million after the quarter's end. Despite the production setback, Endeavour Silver is still on track to meet its revised production guidance of between 7.3 million and 7.6 million SEOs for the year.
In other recent news, Endeavour Silver Corp reported a significant increase in its net loss for Q2 2024, rising to $14 million from a $1 million loss in the same quarter of the previous year.
The company's silver equivalent production was noted at 2.2 million ounces, comprised of 1.3 million ounces of silver and 10,500 ounces of gold. Endeavour Silver has also announced the resumption of operations at its Guanacevi mill, which had experienced a failure, and is now operating at a capacity of 400 tons per day.
The company has reduced its production guidance by 1 million ounces of silver equivalent due to the mill failure and has suspended its cost guidance. BMO Capital has maintained its Outperform rating on Endeavour Silver, despite these challenges. Endeavour Silver has also been progressing 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. Despite losses related to gold hedging and gold appreciation, Endeavour Silver is optimistic about increasing production and reducing costs in the future. The Terronera project is expected to be 77% complete by the end of the next two quarters, with some concentrate production anticipated by the end of the year.
InvestingPro Insights
Endeavour Silver Corp's recent production challenges are reflected in its financial metrics, as highlighted by InvestingPro data. The company's revenue growth has slowed, with a 2.31% decline in the last twelve months as of Q2 2024. However, there are signs of resilience, with quarterly revenue growth of 16.35% in Q2 2024, suggesting a potential turnaround in line with the company's efforts to address production issues.
InvestingPro Tips indicate that Endeavour Silver's stock price movements have been quite volatile, which aligns with the production challenges and subsequent analyst price target adjustment. Despite these challenges, the company has shown a strong return over the last month, with a 41.39% price total return, and an impressive 116.75% year-to-date return as of the latest data.
It's worth noting that while the company was not profitable over the last twelve months, analysts predict profitability this year. This optimism may be tied to the expected resumption of full operations at the Guanaceví mine and the progress on the Terronera project mentioned in the article.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Endeavour Silver Corp, providing a deeper insight into the company's financial health and market position.
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