Endeavour Silver eyes El Cubo revamp, more M&A
By Julie Gordon
TORONTO (Reuters) - Endeavour Silver Corp EDR.TO, fresh off announcing a $250 million deal to buy AuRico Gold Inc's AUG.TO El Cubo silver-gold mine in Mexico, is open to more acquisitions, though its immediate focus is on unlocking El Cubo's value, the company's CEO said on Monday.
With the deal expected to close within 45 days, Endeavour will spend the next few months developing a plan to improve operations and increase output at El Cubo, Chief Executive Bradford Cooke told Reuters.
"It's enough to keep us busy for a few months," he said, adding that the Vancouver-based company, which owns two other mines in Mexico, remains "acquisitive".
"We typically buy small mines in historic districts that are fully built, permitted and staffed, but impoverished in some way," Cooke said. "El Cubo very much qualifies for that. It was a non-core asset, a silver-rich asset, in a larger gold company."
Late on Sunday, Endeavour said it would pay AuRico $200 million for the El Cubo mine with an additional $50 million paid out based as targets are hit over the next three years.
Shares of Endeavour slid 3.96 percent to close at C$8.74 on Monday on the Toronto Stock Exchange, while AuRico was down 2.58 percent at C$8.69 as precious metals prices fell.
El Cubo is a producing silver-gold mine in the historic Guanajuato mining district in central Mexico and is located less than 10 kilometers (6.2 miles) from Endeavour's Guanajuato mine.
AuRico expects the mine to produce 47,000 to 57,000 gold equivalent ounces in 2012. Cooke would not give targets for El Cubo, but said it had historically produced some 2 million ounces of silver and 20,000 ounces of gold a year. Continued...