Endeavour Silver (TSX:EDR,NYSE:EXK) is the latest company forced to temporarily close due to an emergency national measure aimed at curbing the spread of the coronavirus.
The Mexican government declared a health emergency on Monday (March 30), ordering citizens to limit gatherings and prolonging the suspension of non-essential services until the end of April.
There are more than 964,000 cases of the virus, with the death toll reaching 49,242. Over 203,270 people are recovering from the novel respiratory virus, which started spreading globally in February.
While some countries have listed mining as an essential service and others have issued exemptions for specific projects, Mexico has not.
As a result, Endeavour announced it has started the process of stopping activity at its three active underground silver-gold mines in the country.
“Suspending our mining operations on a temporary basis is the best way to ensure the health of our workforce during this COVID-19 crisis,” said CEO Bradford Cooke. “We are also working with the local communities to protect the health of the local people, inform them of the precautions needed to stay healthy, and provide medical supplies, masks, cleaners and disinfectants as needed.”
The mid-tier silver producer will keep a small staff of essential personnel on site with enhanced health and safety protocols, and has sent all other employees home to self-isolate.
The precious metals miner will continue to pay base salaries.
Citing the unforeseeable uncertainty brought on by COVID-19, Endeavour has also withdrawn its 2020 cost and production guidance at this time. In 2019, Endeavour produced more than 4 million ounces of silver and over 38,000 ounces of gold.
The suspension of mining activity is the second piece of hard news the company has had to deliver to shareholders in as many months.
In mid-March, Endeavour received an economic summary for an updated prefeasibility study (PFS) conducted at the Terronera property in Jalisco, Mexico. Due to “significant” changes made to the plans and costing, the new PFS is less economically robust as the initial study.
“We’re disappointed the latest draft PFS economics differ from the prior PFS economics,” Cooke commented. “As a result, we have decided to reconceptualize the project using our inhouse expertise so that Terronera can become a model for our future mines.”
Endeavour shares were 6.3 percent lower on Thursday (April 2), trading for C$1.77.
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.