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OPERATOR PROGRESSING WITH EXPANSION AMID SECURITY CONCERNS Bradford Cooke CEO of Endeavour Silver
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Godfrey Walton President and COO of Endeavour Silver
Q: What is your perception of the Mexican mining industry?
many problems. We felt safer and more secure but this is
GW: We are optimistic about the mining industry as a
changing again for the worse.
whole because we should soon enter a cycle of higher metal prices. However, we are concerned about rising
BC: We need to see positive actions in each of these
issues in Mexico like security and the political risk of an
areas of concern. The administration should reduce taxes,
election year. Some of our people have been threatened
speed up VAT recovery, improve security and rule of law,
by local gangs but fortunately, we have not experienced
improve land access, speed up permitting and provide more
more serious security issues like some other companies.
government services in the remote communities where
If Mexico wants to take full advantage of the next upturn
most mines are located.
in metal prices and ensure that mining investment from Canada continues, the administration needs to do a better
Q: How are you working to reduce your operational costs
job resolving security issues. Many of our shareholders are
over the next couple of years?
worried about investing in a country where safety is such a
GW: We are going through the process of making our mines
large concern. We are committed to building and operating
more efficient and productive. We started in Guanaceví,
new mines in Mexico if the administration can improve the
which was our highest-cost mine in 2017. Once we achieve
investment climate for foreign investors.
greater efficiency at this mine, we will implement a similar program to enhance productivity at El Cubo and Bolañitos.
BC: Mexico is very fortunate to have an abundance of
We are striving to make our mining processes leaner as quick
natural resource potential and good infrastructure to
as possible. We are simply trying to make better use of our
facilitate the development of the mining industry for the
equipment and people, which are our two biggest assets.
benefit of all. However, we see issues throughout Mexico, such as a high tax rate, slow VAT recovery, high security risk,
BC: We are reducing our operating costs in three ways.
slow government response, difficult land access issues, slow
Historically we have embraced a philosophy of continuous
mine permitting and an increase in community activism.
improvement at each of our operating mines. We are
My perception of the mining industry in Mexico is that it is
focused on improving our metallurgical recoveries by doing
becoming increasingly more difficult to do business.
more research and introducing different equipment and chemicals. We are also conducting programs to improve the
Q: What would you like to see the new administration
productivity at each mine by upgrading our operational and
prioritize to create a healthier mining industry in Mexico?
management systems. But the biggest difference could be
GW: Project permitting and VAT refunds both need to be
the construction of new, higher quality, lower cost mines.
faster, clearer and more transparent. We all know what the rules are but there are some bureaucrats who do not
Q: What have been the company’s biggest advancements
always follow these standards and this makes it hard for
when it comes to its mines in development?
the industry. Better security, as I mentioned, should also
GW: At El Compas, we expect to finish construction of the
be a priority. When President Peña Nieto came into power,
mine and refurbishment of the plant on time and budget
security was a huge issue but he managed to smooth over
in 2Q18 and we will strive for full production by the end of July and an official plant opening in 3Q18. Our largest development project is Terronera near Puerto Vallarta and
Endeavour Silver is a midtier precious metals mining company
we expect to start construction by the end of 2Q18 and
that owns three high-grade, underground, silver-gold mines in
production by the end of the 4Q19, so that 2020 will be
Mexico. The company is forecasting a 20 percent increase in
the first full year of production. The company is investing
production to 10.2-11.2 million silver equivalent ounces in 2018
US$11 million at El Compas and US$90 million at Terronera
