Endeavour Silver has decided to proceed with the construction of an underground mine and mill at the Terronera Project in Jalisco, Mexico.
The decision comes despite additional cost pressures that have emerged since the filing of the company’s 2021 feasibility study, due to systemic inflation and constrained global supply chains.
As a result, the company further assessed operating scenarios, cost-benefit initiatives and technologies to optimise the operating flexibility and economics of the Terronera Project.
Endeavour COO Don Gray said: “The optimisation work on the project over the past year has captured opportunities for higher throughput and improved metallurgical recoveries. At the same time, technical risks have been mitigated by further study, engineering, testing and early works.
“This has significantly de-risked the project, as we have been able to secure several procurement contracts before certain inflationary cost spikes and supply chain constraints.”
The board has approved the company’s revised scenario for the Terronera project, which includes a process plant with a capacity of 2,000 tonnes per day and an initial capital expenditure of $230m.
Endeavour expects construction work on the project to take 21 months to complete with initial production scheduled to start in Q4 2024.
The company has secured a senior secured debt facility of up to $120m with Societe Generale and ING Bank to fund the capital expenditures of the project.
In a press statement, Endeavour said: “Prior to the company securing this commitment, the board approved early expenditures focused on deliberately advancing the project in a disciplined manner to de-risk various aspects prior to the final construction decision.
“Proceeding with these early expenditures has reduced inflationary and timing pressures and has also advanced key work that will facilitate ramp-up to full construction.”