They toured EDR and liked what they saw. Findings below:

1.Increased confidence that EXK is a stock to hold till the end of bull market. The degree of turnaround underway at El Cubo after less than three months of ownership was amazing. Endeavour’s other assets are strong and have big upside as well. It goes without saying that much of our confidence is based on our opinion of management and their track record of success.

2.El Cubo’s labor union poses the biggest risk. The impending vote on the new CBA in February will be the big test. If the union rejects the offer, a strike is possible and would negatively impact the stock. However, depending on what the circumstances are at the time, we would likely view that as a buying opportunity. We would not postpone buying shares now, though, on the possibility of something that might happen. I’ll note that Louis is less concerned about the union than I am; he thinks odds are strong that management’s proactive efforts will pay off.

The labor union is not the only risk, of course. There’s plenty of work to do at El Cubo, from operational and infrastructure improvements, to improved safety protocols and better recordkeeping. It won’t happen overnight or be a smooth ride, but the finished product at El Cubo, after a couple years, should be a well-run and highly profitable operation.

3.Tremendous exploration upside. Guanajuato is the second-largest silver district in Mexico – and it’s been poorly explored using modern mining methods. Separately, management are confident they’ll find many more veins at both Bolañitos and El Cubo. There is ample territory yet to drill, and news about more