Your Questions, Our Answers
Q:What is Mexico doing to contain the spread of the COVID-19 virus, and what is the impact of the latest government mandate to suspend all non-essential services, including your mining operations?
Mexico was slow to respond to the current COVID-19 (C19) pandemic, but over the past two weeks, the sharp increase in positive C19 cases and deaths forced the government to take drastic action:
- March 23, Mexico launched a national healthy distance day
- March 24, the President issued a Presidential decree launching a national C19 prevention plan
- March 31, the Secretariat of Health ordered Extraordinary Measures to address the force majeur sanitary emergency to mitigate the spread of the C19 virus in coordination with the National Health Counsel
The Presidential Decree can be summarized as follows:
- For the first time, the President stated that the main thing is for Mexicans to stay in their homes.
- Young inhabitants of the country to take care of the older adults and vulnerable population with more fervor, while keeping their social distance and providing them with a good diet.
- Signed a Decree for the public and private sectors to grant permits with enjoyment of salary and benefits to older adults who work and thus be able to remain at home.
- Small businesses (shops, inns, taco stands, workshops, among others) who are "very affected" by the economic crisis will be granted interest-free or very low-rate loans.
- Suspended all schools until April 23 and all events or meetings involving more than 100 people.
- Organizations and companies to implement work from home, to avoid the massive mobility of people.
- Health Sector has infrastructure and facilities ready, and 43,000 medical personnel in total.
- Increased resources to the health system, for a total of 25 billion pesos.
- There are 16,750 medical personnel prepared for C19, 313 health facilities for treatment and 3,070 intensive care and hospital beds available.
The Extraordinary Measures can be summarized as follows:
- Suspension of non-essential activities of all sectors until April 30, 2020.
- Mining is not an essential sector so all mines are shutting down temporarily
- Confirmation that essential sectors must continue to operate, prohibition of meetings of more than 50 persons and the implementation of strict hygienic measures.
- Population to comply as much as possible with the stay-at-home measure
- Strict stay-at-home measure for persons older than 60 years of age, with health issues such as hypertension, diabetes, heart or respiratory illness, immunosuppression, pregnancy etc.
On March 18, Endeavour initiated the following health and business precautions:
- Encouraging social distancing and minimizing interpersonal contacts where possible;
- Encouraging regular and thorough hand cleansing;
- Cancelled all non-essential travel in favour of video conferencing;
- At the head office, working from home until further notice;
- At the operations, extra cleaning in common and food service areas;
- At the operations, all workers will be screened for temperature on arrival at the gates;
- Any employees experiencing symptoms and or a temperature of plus 38 C are immediately sent home to self-quarantine and report to the health authority;
- Backup plans have been created for certain key jobs to ensure continuity of work;
- Educating contractors and suppliers to follow our preventative measures;
- Backup plans if a contractor or supplier cannot perform their duties;
- Increasing critical supplies and spare parts inventories to minimum three months;
- There have been no business restrictions to date in Mexico and no disruptions to either metal sales or supply chains for the company's operations.
On April 2, Endeavour commenced the process of suspending its three mining operations in Mexico until April 30 as mandated by the government:
- Endeavour retained essential personnel at each mine site during the suspension period to maintain safety protocols, environmental monitoring, security measures and equipment maintenance.
- Essential personnel are following Endeavour's strict COVID-19 safety protocols
- Non-essential employees are being sent home to self-isolate and stay healthy, while continuing to receive their base pay
- Endeavour is working with the local communities to protect the health of the local people
- Informing them of the precautions needed to stay healthy
- Providing medical supplies, masks, cleaners and disinfectants as needed
- Endeavour's production and cost guidance were withdrawn until further notice.
Endeavour’s priority is to keep its employees safe and healthy. We demonstrated leadership in moving quickly to launch our own C19 health precautions and response plan. Now we have suspended our mining operations but continue to pay our employees their base wages to self isolate at home. This is a very challenging period for all but we will get through this.
The Company is well prepared to manage this health and financial market crisis. Even though the impact of suspending our mining operations is lower production and higher costs this year, we were on track to meet our production guidance in Q1 before the shut down.
We continue to work on derisking and optimizing the Terronera project as our next core asset. And with so many mines now offline worldwide, even when they come back online, there will be a supply crunch which should boost the silver price short term. In the meantime, we continue to work on brownfields and greenfields acquisitions to boost our production and extend our mine lives.