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A: We entered the Zacatecas mining district in 2016 with the $6.7 million acquisition of the El Compas property and the leased La Plata government plant. Normally we would not consider acquiring such a small project but the mine is already permitted, shallow and high grade, and the leased plant is already permitted. Based on our recent preliminary economic assessment, the low capex (<$10 million) and low all-in sustaining cost (<$10 per silver equivalent oz) estimates generate accretive cash flows and profit margins for Endeavour. We therefore view the El Compas project as picking “low hanging fruit” that establishes a foothold for us in the region and a foundation on which to grow.
Zacatecas state has a rich silver mining history that dates back to the 16th century. It is the largest silver producing state in Mexico and home to some of the world’s largest silver mines, including the world class Fresnillo mine. Other mining companies active in the state include Goldcorp, Pan American Silver, First Majestic Silver and MAG Silver. With El Compas having such a great address, our focus has now turned to building critical mass by picking up other prospective properties in the district to grow reserves, increase production, and extend the mine life. The recently acquired Calicanto and Veta Grande properties were acquired for their near-term mine exploration and development potential
We are now drilling at Calicanto, we expect to start developing the main access ramp at El Compas in the third quarter, and we hope to permit and drill the Veta Grande properties later this year. Stay tuned for news as we get busy in this prospective silver mining district!