Take physic, pomp

Oh look, Endeavour Silver (EDR.to) (EXK) just spent a third of its market cap on a piece of shit asset and thinks the deal is non-dilutive

Here’s the link to tonight’s NR all about how Endeavour Silver (EDR.to) (EXK) has agreed to pay $250m to AuRico (AUQ) (ex-Gammon Gold (aka Scam’em Cold) for the El Cubo gold/silver mine, along with the Guadalupe and Calvo projects.
So let’s just start by saying out loud and for the record once and for all Oh yes, Mr. Cooke, don’t you just know that the El Cubo workforce, the same guys that went on strike for three quarters during 2010 and 2011 to maintain jobs and improve pay, are just going to LOVE your brand spanking ideas about costs savings and synergies. Betcha they’re just DYING to queue for their redundancy cheques.
Anyway, that’s off my chest and now here are a few charts that show you just how El Cubo’s been doing these last couple of years under Rene Marion & Co (my stars, Xmas has come early Rene, no?)
Gold Production
Silver production
By the way, 1q12 productions are estimated from the AuEq number published by AUQ on April 11th. The total AuEq number was 8,351oz AuEq, down from 8,917oz AuEq for 4q11 and 10,008oz AuEq for 3q11. In other words 1q12 was another pisspoor quarter and our estimates aren’t going to be far out.
Here’s gold grades
 Here’s silver grades
 Here’s tonnage throughputs
 Here’s cash costs.
Now I dunno ’bout you, but I tend to see a trend of things slipping downwards, from left to right, on most of those charts. OH! Except for the cash costs one at the end, which kinda does an upward slopey thingy, doesn’t it!
And oh look, we’re down to about $550 margin per OzEq. So let’s call that $5m mine operating income for the last couple of quarters, before all that G&A jazz and boring stuff like taxes. And Mr Bradford Cooke of EDR.to has just paid how much? $250million? Holy maloney, even if EDR gets production up, costs down, gets those gold grades moving back up to where they were, keeps the miners happy and doubles MOI we’re still looking at 25 quarters here. 
Oh, but they got those two projects in with the deal too. And it only has a ticket price of 1/3 the market cap of EDR, so there’s no dilution, right? Oh well, that’s all right then.
Jeez, these guys must be desperate to grow.

Leave a Reply

Your email address will not be published.

Hello, you are not in a chatroom, you are in my living room. Opposing views and criticisms welcome, insults or urinating on furniture unwelcome. Please refrain from swearing if possible, it is not needed.