VANCOUVER, British Columbia - Endeavour Silver Corp. (NYSE: EXK; TSX: EDR) has reported a major setback at its Guanacevi mill, as the trunnion on the primary ball mill has failed, resulting in the suspension of material processing. The company estimates that it could take up to 12 weeks to replace the trunnion, leaving management to explore alternative options to mitigate the impact on production.
The failure of the trunnion comes as a significant blow to Endeavour Silver Corp. which has already been struggling financially. According to the company’s financial reports, it recorded a cumulative net loss of $48 million during the 12 months ending in the fourth quarter of 2019. This has resulted in a negative return on assets (ROA) of -29.36%, showcasing the challenges faced by the company in recent times.
Management at Endeavour Silver Corp. is now actively assessing several alternatives to minimize the disruption caused by the trunnion failure. One immediate consideration is the possibility of operating at a significantly reduced capacity by making minor conveyor modifications and utilizing smaller regrind mills until the primary ball mill is repaired. This strategy could potentially allow the company to continue processing material, albeit on a limited scale.
However, the extended timeline of up to 12 weeks to replace the trunnion emphasizes the severity of the issue, and the potential impact it may have on Endeavour Silver Corp’s financial performance. The suspension of material processing at the Guanacevi mill is expected to adversely affect the company’s revenue and profit margins during this period.
The failure of the trunnion is also a reminder of the infrastructural challenges faced by mining companies in maintaining and operating their equipment. While Endeavour Silver Corp. grapples with this setback, investors and industry insiders will closely monitor the company’s ability to navigate through this turbulent period and regain stability.
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