Gold, News & Features, Resource News

Endeavour Silver and Aurico Gold both winners in El Cubo transaction

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By Lawrence Williams

Followers of the gold and silver junior to mid-tier sectors will by now be well aware of the recent deal between Endeavour Silver and AuRico Gold whereby the former is to purchase the latter’s El Cubo silver/gold mine near Guanajuato in Mexico for around $200-250 million.  From Endeavour’s point of view the addition of a third silver mine to its operating portfolio brings it very much from being a high-end junior silver producer into the mid tier category, on its avowed route to become a plus 10 million oz/year silver miner, while for AuRico the divestment brings it capital for a mining operation which falls outside its main operational focus and which it has, perhaps, let slip a little through being unable to devote sufficient management time to what has been a bit of an anomaly among its mining operations.

As Endeavour’s chairman and CEO, Bradford Cooke pointed out to Mineweb in London recently, Endeavour was the obvious company to buy El Cubo as it already has one of its own major operations nearby, and not only can it bring its expertise from developing this existing Guanajuato mining property into play at El Cubo, but the proximity of the two mines means there is also considerable scope for operational synergies and for cutting costs from economies of scale in the area.  Indeed Cooke is extremely enthusiastic over what the acquisition will mean for the future of the company.