In an Aug. 30 research report, BMO Capital Markets analyst Andrew Kaip explained the impact of Endeavour Silver Corp.'s (EDR:TSX; EXK:NYSE; EJD:FSE) results from "nine drill holes from the Santa Cruz vein at Guanaceví," one of its three mines in Mexico. He wrote that "these holes extend the boundaries of the current resource area with the highlight hole grading 786 g/ton silver and 0.71 g/ton gold over 3.4m."
BMO estimated "that the length-weighted average grade of the nine holes is 409 g/ton Ag and 0.59 g/ton Au over an average width of 2.1m" and concluded that "the average grades compare favorably to the Guanaceví reserve grade of 260 g/ton Ag and 0.62 g/ton Au."
The drill results also showed that "new ore grade mineralization has been discovered within a shallow, parallel splay of the Santa Cruz vein known as the La Negra vein," Kaip indicated.
The analyst further explained, "Hole NE-01 (La Negra) was drilled along strike from level 10 of the mine (below the workings near the Garibaldi shaft) while the underground holes in the Santa Cruz vein defined mineralization below existing mine workings toward the northwest. The results should help to offset depletion at year-end."
In terms of next steps for Endeavour at the Guanaceví mine, Kaip noted, "An additional 15 holes have been completed and are awaiting assay results. The 2017 drill program is now essentially completed and the process of year-end resource/reserve estimation will commence."
BMO Capital has a Market Perform rating and $3.50 per share target price on Endeavour. The company's stock is currently trading at about $2.98 per share.
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Disclosures from BMO Capital Markets, Endeavour Silver, Aug. 30, 2017
Analyst's Certification: I, Andrew Kaip, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness in generating new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients.
Analysts employed by BMO Nesbitt Burns Inc. and/or BMO Capital Markets Limited are not registered as research analysts with FINRA. These analysts may not be associated persons of BMO Capital Markets Corp. and therefore may not be subject to the FINRA Rule 2241 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.