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Endeavour Silver outlines US$78.2M NPV for Terronera silver-gold mine

A pre-feasibility study on Endeavour Silver Corp.'s Terronera silver-gold project in Mexico estimated a base case net present value of US$78.2 million, using a 5% discount rate, and an after-tax internal rate of return of 21%.

The base case scenario assumes a silver price of US$18 per ounce and a gold price of US$1,260 per ounce, the company said April 3.

Initial CapEx is pegged at US$69.2 million, with payback in 4.3 years.

The mine plan calls for an initial production rate of 1,000 tonnes per day during the first two years of operations, expanding to 2,000 tpd in the third year. The expansion will require CapEx of US$35.5 million.

The plant will process 4.1 million tonnes over the seven-year mine life, producing 22.6 million ounces of silver and 185,000 ounces of gold at life-of-mine all-in sustaining costs of US$4.76 per ounce of silver.

The mine is expected to generate revenue of US$639.5 million over its life, EBITDA of US$347.3 million and total free cash flow of US$125.3 million.

An updated resource estimate for the project outlined 29.6 million silver ounces and 277,000 gold ounces in the indicated category and 7.1 million ounces of silver and 34,000 ounces of gold in the inferred category.

Subject to receiving the remaining government mine permits, securing a debt financing and completing certain optimization work on the pre-feasibility study, the company intends to seek board approval to start development of the Terronera mine and related facilities.

"Any decision to advance the Terronera mine into production will be based on the PFS rather than a full feasibility study, hence the company cautions that historically, such projects can have a higher risk of economic or technical failure," the company said.