Exclusive Interview – Why Endeavour Silver Corp. Is Now Withholding Gold & Silver Inventory From The Market
January 26, 2012 | By Tekoa Da Silva
Like many fellow gold and silver bugs, I was excited to see Endeavour Silver’s recent press release indicating the company is now withholding substantial amounts of physical gold and silver from the market. Looking to discover exactly why, I reached out to Bradford Cooke, Chairman and CEO of Endeavour Silver, to find out more.
We had a fantastic conversation, and I was impressed at the steps Endeavour is taking to not only listen to and respond to investors, but also to build a great silver company and brand.
When asked about the company’s decision to substantially withhold metal production from the market, Brad commented, “The primary motivation behind not selling some metal, was very simply [our] cash management philosophy. We took the view at the end of the 3rd quarter that the metal prices were into a multi-month slump, and therefore we would be better off sitting on our metal rather than selling it, because of our bullish view that the metal would recover from the correction, and that we would be in the position to sell the metal at higher prices in the future…If something else comes along that we need the cash for, such as a compelling acquisition, we’ll certainly go ahead and sell the metal and buy the acquisition…The long and short of it is–we’re bulls on silver, we took the view that there was a short term downturn, so it just made better sense for our stock holders to hold metal instead of cash.”
With regard to global investors reaching out to Endeavour directly for physical silver, Brad said, ”We started fielding calls [in 2005] from private Chinese smelters, coin sellers in Germany, and more significant commodity investors out of the Middle East, asking if they could buy our silver. We haven’t ever taken up any of those offers, because almost all of those potential small buyers wanted discounts…there’s no money in it for shareholders to do something like that, in fact if you go back over the last three years, I think you’ll find that Endeavour pretty consistently averages higher than the annual spot price of silver on our sales. And that’s because of this inventory and sales strategy that we have…We basically refine our silver into pure bullion bars and then we sell them into the international markets.”
With respect to opportunities available to producers in down metals markets such as we’re in now, Brad added, “If you go back to 2007…it was really difficult to get trained personnel, impossible to get exploration drills, everybody was scrambling, and money was freely available. The 08′ crisis obviously brought that to a screeching halt, and threw a little bit of cold water on the markets…but out of that came opportunity. Same thing is happening now, this is an echo of the 08′ crisis going on in Europe right now, and because of that we have this shadow over the markets—the exploration companies are having a hard time both with their stock prices and availability of equity funding and that creates opportunity for a well funded and stronger company like Endeavour. So we are very actively shopping for more personnel, more drills, more exploration properties, and more producing mines. This is the time to do it.”
This was another “must-listen” interview on precious metals, and is required listening for all mining share investors.
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To learn more about Endeavour Silver visit: Endeavour Silver Corp
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