Endeavour Silver adds US$15 million to credit facility

Endeavour Silver Corp. (EDR-TSX, EXK-NYSE) said its Terronera Precious Metals, S.A. de C.V. unit has amended and restated a previously announced senior secured debt facility with ING Capital LLC and Societe General. The credit facility was announced on October 10, 2023.

Among other things, the credit facility was amended and restated to increase the principal amount of up to US$120 million by an additional US$15 million, bringing the aggregate principal amount up to US$135 million.

Proceeds from the credit facility will be used towards completing commissioning at the company’s Terronera project in Jalisco State, Mexico and for general capital purposes

As a condition to funding and a risk management strategy, Terronera has entered into zero cost collars to partially manage silver price exposure and cash flows over the next 12 months. With these zero cost collars, Terronera has protected the downside at US$31 per ounce and will participate in any silver appreciation up to US$42 over that period for approximately 968,000 silver ounces.

The company said Terronera commissioning activities are proceeding as planned and remain aligned with management’s expectations. The company will provide an update as it approaches commencement of commercial production, Endeavour said in a press release.

On Tuesday, Endeavour shares eased 4.12% or 27 cents to $6.288. The shares trade in a 52-week range of $7.87 and $3.38.

Endeavour is a mid-tier precious metals mining company that operates two high-grade underground silver-gold mines in Mexico. They include the Guanacevi Mine in Durango and the Bolanitos Mine in Guanajuato. The company reported 7.6 million ounces of silver equivalent production (AgEq) in 2024.

Endeavour has said the new Terronera mine is expected to transform the company by roughly doubling its production while cutting costs in half.

Once up and running, the Terronera mine is expected to provide jobs for 550 in Jalisco State, Mexico and deliver US$170 million in tax payments over its lifespan.

Endeavour Silver CEO Dan Dickson described the new Terronera mine as “a very important strategic asset for our company and our stakeholders,” boasting an expected 10-year mine life and nearly 90 million silver equivalent ounces in reserves.

Located about 50 kilometres from the Mexican port city of Puerto Vallarta, it is expected to produce 4.0 million ounces of silver and 38,000 ounces of gold per year (7.0 million ounces of AgEq) over its lifespan.

Endeavour Silver, a silver producer in Mexico for 20 years, recently said it has commenced wet commissioning activities at its Terronera project, a critical milestone in the lead-up to full scale production.

Terronera’s wet commissioning process involves the introduction of water and slurry into the plant circuits in order to validate the performance of equipment and systems under operational conditions.