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Post by Entendance on Jun 20, 2020 4:38:07 GMT -5
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Post by Entendance on Jul 9, 2020 10:58:06 GMT -5
Endeavour Silver Produces 596,545 oz Silver and 5,817 oz Gold in Abbreviated Second Quarter, 2020
July 9, 2020VANCOUVER, British Columbia, July 09, 2020 -- Endeavour Silver Corp. (TSX: EDR, NYSE: EXK) reports production of 596,545 silver ounces (oz) and 5,817 gold oz in Q2, 2020, for silver equivalent (“AgEq”) production of 1.06 million oz at an 80:1 silver:gold ratio (1.18 million oz at 100:1 ratio). During the quarter, mining operations were suspended on April 1st as mandated by the Mexican government to halt the spread of the COVID-19 pandemic. In late May, mining was deemed to be an essential activity by the Mexican authorities, which allowed mining operations to start up with health protocols in place. Endeavour had the advantage of having already put in place a rigorous coronavirus prevention and response plan and having built up ore stockpiles at each mine site. That enabled Endeavour to restart its operations, initially with plant personnel only, to process the ore stockpiles built up in Q1, 2020. Therefore, Q2 plant throughput was only down 52% and silver equivalent production was down only 42% compared to Q2, 2019. Management expects to update shareholders on its second half and full year production and cost guidance when it reports the Q2, 2020 financial results on August 6, 2020.
2020 Second Quarter Highlights
Mines Successfully Re-Started: Each mine plan was adjusted to enhance short term cash flow and in June, the mines exceeded their adjusted consolidated throughputs at higher than adjusted consolidated ore grades.
Guanacevi Continued to Outperform: Processed tonnes, silver and gold grades and recoveries continued to deliver well above plan. The operational turn-around and transition to mining the new, higher grade El Curso, Milache and SCS orebodies had a significant positive impact on the re-start. Ore stockpiles and pre-prepared long hole stopes allowed for an expedited restart, while the testing of the newly installed cone crushers in April allowed for significant plant throughput in May.
Bolanitos and El Compas Steady: Bolanitos and El Compas re-starts were slower than Guanacevi due to smaller stockpiles and greater focus on mine development and grade control during the ramp up period. Gold grades exceeded historical grades in June, while silver grades remained low due to variations in the ore bodies.
Metal Sales and Inventories: Sold 634,839 oz silver and 5,218 oz gold, held 221,100 oz silver and 738 oz gold of bullion inventory and 14,000 oz silver and 1,215 oz gold in concentrate inventory.
Positive Bolanitos Drill Results: Drilling intersected new high-grade gold-silver mineralization in the Melladito vein near the Bolanitos plant with assays up to 24.3 grams per tonne (gpt) gold and 787 gpt silver for 3,217 gpt silver equivalents (AgEq) at a 100:1 silver:gold ratio over a 1.5 meter (m) true width in hole BN27. The new mineralized zone is 100 m long by 200 m deep and remains open in all directions within 300 m of the current mine workings.
Positive Guanacevi Drill Results: Drilling in Q1, 2020 intersected new high-grade gold-silver mineralization in the Santa Cruz vein on the El Curso property with assays up to 1,085 gpt silver and 3.25 gpt gold for 1,410 gpt AgEq over 10.0 m true width in hole UCM-27. The new mineralized zone measures 250 m long by 150 m deep, still open along strike and at depth, within 100 m of the current mine access ramp.
Released 2019 Sustainability Report: The Company released its 8th consecutive Sustainability Report at csr.edrsilver.com outlining its sustainability initiatives and results for 2019.
Launched At-The-Market Financing: The Company entered into a sales agreement with a syndicate of banks to sell up to $23 million worth of common shares to advance the Terronera project and provide working capital during these uncertain global economic conditions.
Bradford Cooke, Endeavour CEO, commented, “I am pleased to report that notwithstanding the challenges of the COVID-19 pandemic, Endeavour personnel were pro-active in minimizing its impact on our mining operations in Mexico. We implemented our coronavirus prevention and response plan in mid-March and it has been very effective. I commend our Mexico management and employees for responding positively when called upon by these extraordinary circumstances.”
“During the mine suspension period, we sent our employees home on full salary while keeping essential personnel working at each mine site to maintain safety, security and equipment. After the mines restarted, we were able to outperform our adjusted mine plans in June. We will now look for opportunities to enhance our production in H2, 2020 to partly make up for lost ground in H1, 2020.”
Mine Operations Consolidated silver and gold production in Q2, 2020 were both lower than Q2, 2019 due to the suspension of the Guanacevi, Bolanitos and El Compas mines as a result of the COVID-19 pandemic and the suspension of the El Cubo mine, related to lack of ore in November 2019. Ignoring El Cubo, Q2, 2020 production, pro-rated for the number of operating days, increased significantly due to the improved plant throughput and ore grades at Guanacevi
Guanacevi silver and gold grades were higher than Q2, 2019 and well above plan, while silver recoveries were lower and gold recoveries were higher than Q2, 2019. Mining the new, higher grade El Curso, Milache and SCS orebodies, and processing the high-grade ore stockpiles plus using two refurbished cone crushers installed in April allowed for a quick, efficient ramp up of production in May. June plant throughput averaged 1,051 tpd with a plan to increase to 1150 tpd in H2, 2020.
Bolanitos gold grades were higher and silver grades were lower than Q2, 2019 and approached planned grades. The mine re-start focused on accelerated mine development and additional dilution control in order to return to plan in Q3, 2020. June plant throughput averaged 1,070 tonnes per day (tpd). Mine development will continue to focus on accessing the San Miguel ore body and developing the Medallito discovery.
El Compas gold grades were higher and silver grades were lower than Q2, 2019, above and below planned grades respectively. The mine re-start focused on dilution controls and higher-grade material in the upper El Compas vein to improve short term cash flows. Management finished replacing the mining contractor with new employees in June, when throughput averaged 240 tpd. The transition from contractor cut and fill mining to employee long hole mining should be completed in H2, 2020.
Production Highlights for Three Months and Six Months Ended June 30, 2020 here
Release of Second Quarter, 2020 Financial Results and Conference CallThe 2020 First Quarter Financial Results will be released before market on Thursday, August 6, 2020 and a telephone conference call will be held the same day at 10:00am PT (1:00pm ET). To participate in the conference call, please dial the numbers below. No pass code is necessary.Toll-free in Canada and the US: 1-800-319-4610 Local Vancouver: 604-638-5340 Outside of Canada and the US: +604-638-5340
A replay of the conference call will be available by dialing 1-800-319-6413 in Canada and the US (toll-free) or +604-638-9010 outside of Canada and the US. The required pass code is 4879#. The audio replay and a written transcript will be available on the Company's website at www.edrsilver.com under the Investor Relations, Events section. About Endeavour Silver – Endeavour Silver Corp. is a mid-tier precious metals mining company that owns and operates three high-grade, underground, silver-gold mines in Mexico. Endeavour is currently advancing the Terronera mine project towards a development decision and exploring its portfolio of exploration and development projects in Mexico and Chile to facilitate its goal to become a premier senior silver producer. Our philosophy of corporate social integrity creates value for all stakeholders. SOURCE Endeavour Silver Corp. Contact Information: Galina Meleger, Director, Investor Relations Toll free: (877) 685-9775 Tel: (604) 640-4804 Email: gmeleger@edrsilver.com Website: www.edrsilver.com
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Post by Entendance on Aug 4, 2020 6:48:55 GMT -5
Endeavour Silver Corp. (NYSE: EXK; TSX: EDR) released its financial results today for the three month and six month periods ended June 30, 2020. The Company operates three silver-gold mines in Mexico: the Guanaceví mine in Durango state, the Bolañitos mine in Guanajuato state and the El Compas mine in Zacatecas state. Bradford Cooke, Endeavour CEO, commented, “I am pleased to report that notwithstanding the suspension of mining operations during the 2nd quarter due to the COVID-19 pandemic, Endeavour was able to reduce its net loss quarter-on-quarter, as each mine generated positive Mine Free Cash Flow thanks to improved operating performance and higher precious metal prices. After the mines restarted, we were able to outperform our adjusted mine plans in June. We are now looking for opportunities to enhance safe production in H2, 2020.” “We were pro-active in implementing our coronavirus prevention and response plan in mid-March to minimize its impact on our mining operations in Mexico. As a result, we have been able to stop the contagion at the mine gates, although our work force has been reduced due to higher risk employees staying home during this time. I commend our Mexico management and employees for responding positively when called upon by these extraordinary circumstances.”
2020 Second Quarter Highlights (all dollar amounts in US$) Net Revenue: $20.2 million revenue from the sale of 634,839 oz of silver and 5,218 oz gold at average realized prices of $17.04 per oz silver and $1,862 per oz gold. Cash Flow: $1.9 million cash flow from operations before working capital changes, and EBITDA(1) of $1.2 million, notwithstanding the suspension of mining for all of April and part of May. Net Income: Loss of $3.3 million ($0.02 per share) which included $2.2 million in care and maintenance costs during the mine suspension period and $1.1 million in general and administrative expenses related to the mark to market of deferred share units due to the higher share price. Improved operating performance and higher precious metal prices significantly reduced losses both quarter-on-quarter and year-on-year. Balance Sheet: Cash position of $30.5 million and working capital of $44.6 million. Term liabilities consist solely of equipment loans of $11.0 million to upgrade the mobile mining equipment. Raised $21.7 million in equity financing using the ATM facility, net of issuance costs. Metal Production: Produced 596,545 oz silver and 5,817 oz gold, despite the government mandated suspension of mining operations, for a total of 1.1 million oz silver equivalent (AgEq) at an 80:1 silver:gold ratio. Operating Costs: Cash cost(1) was $2.78 per oz payable silver and all-in sustaining cost (AISC)(1) was $14.91 per oz payable silver, both net of gold credits. Cash cost and AISC were substantially lower both quarter-on-quarter and year-on-year due to the improved operating performance at Guanacevi, and the higher realized gold price that increased the by-product credit. The lower AISC was partly offset by increased capital expenditures at Bolanitos to effect the operating turnaround.
Guanacevi Continued to Out Perform: Nothwithstanding the mine suspension period, Mine Free Cash Flow (Cash from operating activities less capital expenditures) was $2.7 million as processed tonnes, silver and gold grades and recoveries continued well above plan. The operational turn-around and transition to mining the new, higher grade El Curso, Milache and SCS orebodies had a significant positive impact on the operating performance. Ore stockpiles and prepared long hole stopes allowed for an expedited mining restart, while the testing of the newly installed cone crushers in April allowed for significant plant throughput in May. Bolanitos Turning a Corner: Nothwithstanding the mine suspension period, Mine Free Cash Flow was $0.1 million as the re-start was slower than Guanacevi due to a smaller stockpile and greater focus on mine development and grade control during the ramp-up period. Gold grades rose during the quarter while silver grades remained low due to variations in the ore bodies. El Compas Generated Free Cash Flow: Nothwithstanding the mine suspension period, Mine Free Cash Flow was $1.1 million as the re-start was slower than Guanacevi due to a smaller stockpile and greater focus on mine development and grade control during the ramp-up period. Gold grades trended higher during the quarter while silver grades remained low due to variations in the ore bodies. Continued Exploration Success: Positive exploration drill results from the El Curso area at Guanacevi and the Melladito area at Bolanitos.
(1) Mine operating cash flow, cash costs and all-in sustaining costs are non-IFRS measures. Please refer to the definitions in the Company’s Management Discussion & Analysis.
Financial Results (Consolidated Statement of Operations Appended Below) For the three-month period ended June 30, 2020, the Company generated net revenue totaling $20.2 million (Q2, 2019 - $28.3 million). During the period, the Company sold 634,839 silver oz sold and 5,218 oz gold at realized prices of $17.04 and $1,862 per oz respectively, compared to sales of 1,100,065 oz silver and 9,416 oz gold at realized prices of $15.02 and $1,366 per oz respectively in the same period of 2019. The Company decreased its finished goods silver and increased its gold inventory to 235,100 silver oz and 1,953 gold oz, respectively at June 30, 2020 compared to 279,320 oz silver and 1,452 oz gold held at March 31, 2020. Cost of sales for Q2, 2020 was $17.1 million, a decrease of 50% over the cost of sales of $34.4 million for the same period of 2019. The 50% decrease in cost of sales was primarily related to the suspension of the El Cubo operation in Q4, 2019 and the temporary suspension of the Guanacevi, Bolanitos and El Compas operations due to COVID-19 as consolidated throughput fell 52%. After cost of sales of $17.1 million (Q2, 2019 - $34.4 million), mine operating earnings was $3.1 million (Q2, 2019 – loss of $6.1 million) from mining and milling operations in Mexico. Exploration expenses decreased in Q2, 2020 to $1.7 million from $3.2 million for the same period of 2019 as the Mexico health decree resulted in a month and half of suspension of all activities. General and administrative expenses increased to $3.1 million in Q2, 2020 compared to $2.0 million for the same period of 2019, primarily due to mark-to-market fluctuations for director’s deferred share units. The quarter included $2.9 million of care and maintenance expense of which $0.7 million related to the shutdown El Cubo operation and $2.2 million related to the temporary suspension of the Guanacevi, Bolanitos and El Compas operations due to COVID-19. Excluding depreciation and depletion of $4.0 million (Q2, 2019 - $7.1 million), stock-based compensation of $0.1 million (Q2, 2019- $0.1 million) and the inventory write off of $0.5 million (Q2, 2019- $1.5 million) mine operating cash flow before taxes was $7.6 million in Q2, 2020 (Q2, 2019 – $2.6 million). Operating loss was $4.6 million (Q2, 2019 – loss of $11.3 million) after exploration expenditures of general and administrative expense and care and maintenance costs. Net loss amounted to $3.3 million (loss of $0.02 per share) compared to a net loss of $10.1 million (loss of $0.08 per share) in Q2, 2019. Direct production costs per tonne in Q2, 2020 decreased 4%, to $109.74 compared with Q2, 2019 due to lower operating costs at the Guanaceví operation, offset by the slightly higher costs at the Bolañitos and El Compas operations and the exclusion the El Cubo operation which suspended activities in Q4, 2019. Consolidated cash costs per oz, net of by-product credits (a non-IFRS measure and a standard of the Silver Institute) decreased 80% to $2.78 primarily due to lower operating costs per tonne, higher gold grades and higher realized gold price that increased the by-product credit compared to the same period in 2019. The higher proportional gold production, and rising gold price, which increased 36% compared to the same period ended in 2019, were significant drivers in the lower cash cost net of by-product credits. On a co-product cash costs basis, both silver and gold cost per ounce improved compared to the Q2, 2019. Silver co-product cash costs fell 28%, while gold co-product costs fell 13% to $10.16 per ounce and $1,111 per ounce respectively. The improvement was primarily driven by improved cost per tonne, the higher grade ore and improved gold recoveries. All-in sustaining costs (also a non-IFRS measure) decreased 29% to $14.91 per oz in Q2, 2020 as a result of lower operating costs offset by higher corporate general and administrative costs and increased capital expenditures at Bolañitos to accelerated mine development. General and administrative costs increased due to mark to market deferred share units and were allocated for the entire operating period despite suspension activities during April and May. The Company retained essential personnel at operations during the suspension period to maintain safety protocols, environmental monitoring, security measures and day-to-day maintenance. $2.1 million of costs were incurred from April 1st until the May re-starts and were allocated to care and maintenance expenses and excluded from mine operating costs or the corresponding metrics. The Mexican government declared mining as an essential business, however in Mexico positive COVID-19 cases continue to rise at a significant rate to date. A local outbreak, an impediment to the supply chain or market logistics, or a change in government health orders remains a significant risk. The mines are operating under strict safety protocols with the expectations of operating near throughput capacity. Due to the continued uncertainty, management will not provide second half guidance at this time.
The Condensed Consolidated Interim Financial Statements and Management’s Discussion & Analysis can be viewed on the Company’s website at www.edrsilver.com, on SEDAR at www.sedar.com and EDGAR at www.sec.gov. All amounts are reported in US$.
Conference Call A conference call to discuss these results will be held today, Tuesday, August 4 at 10am PDT (1pm EDT). To participate in the conference call, please dial the numbers below. No pass-code is necessary. Toll-free in Canada and the US: 1-800-319-4610 Local Vancouver: 604-638-5340 Outside of Canada and the US: +-604-638-5340
A replay of the conference call will be available by dialing 1-800-319-6413 in Canada and the US (toll-free) or +604-638-9010 outside of Canada and the US. The required pass-code is 4879#. The replay will also be available on the Company’s website at www.edrsilver.com. About Endeavour Silver – Endeavour Silver Corp. is a mid-tier precious metals mining company that owns and operates three high-grade, underground, silver-gold mines in Mexico. Endeavour is currently advancing the Terronera mine project towards a development decision and exploring its portfolio of exploration and development projects in Mexico and Chile to facilitate its goal to become a premier senior silver producer. Our philosophy of corporate social integrity creates value for all stakeholders.
SOURCE Endeavour Silver Corp.
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Post by Entendance on Aug 5, 2020 4:41:24 GMT -5
Company Participants Galina Meleger - Director of Investor Relations Bradford Cooke - Chief Executive Officer Dan Dickson - Chief Financial Officer Godfrey Walton - Chief Operating Officer
Conference Call Participants Marcus Giannini - H.C. Wainwright Joseph Reagor - ROTH Capital Partners Justin Stevens - PI Financial Bhakti Pavani - Alliance Global Partners
Galina Meleger Good morning, everyone, and welcome to the Endeavour Silver 2020 Second Quarter Financial Results Conference Call. With me on the line today, we have the company's Chief Executive Officer, Bradford Cooke; our Chief Financial Officer, Dan Dickson; and our Chief Operating Officer, Godfrey Walton. Before we get started, I'm required to remind you that certain statements on today's call will contain forward-looking information within the meaning of applicable securities laws. These may include statements regarding Endeavour's anticipated performance in 2020 and future years, including revenue and cost figures, silver and gold production, grades and recoveries, and the timing and expenditures required to develop new silver mines and mineralized zones. We do not intend to and do not assume any obligation to update such forward-looking information other than as required by applicable law. On behalf of Endeavour Silver, I'd like to thank you again for joining our call. And I'll now turn it over to our CEO, Bradford Cooke.
Bradford Cooke Great. Thank you, Galina, and welcome everybody to this financial results for the second quarter conference call. We had a lot of challenges thrown at us during the second quarter not the least, of which was the COVID-19 pandemic, the government-mandated shutdown of mines in Mexico, since reopened, and all the issues related to that. I am pleased to report that, notwithstanding all of that, Endeavour was actually able to deliver a decent quarter. We reduced our net loss quarter-on-quarter. Each mine generated positive line free cash flow. And that was generally due to the – not only the higher metal – precious metal prices but our improved operating performance across the three mines. So I'm just going to go through the highlights of today's news release and then we'll open it up for Q&A. Top line revenue was $20.2 million in the second quarter. And of course with reduced production that was quite an accomplishment. Our cash flow came in at $1.9 million before – sorry that's from operations before working capital changes. Net income was a loss of $3.3 million or $0.02 per share, but virtually all of that could be found in the care and maintenance costs during the mine suspension period when we actually had to send our employees home on their full wages and wait out the suspension period, and also in general and administrative costs related to the mark-to-market of our deferred share units, due to the higher share price. So balance sheet improved during the quarter. We finished the quarter with more than $30 million in cash, and more than $44 million working capital. That was partly, due to making use of our ATM equity financing, but also due to the performance of the operations. Metal production as a reminder was just shy of 600,000 ounces silver and 6,000 ounces gold. That works out to about 1.1 million ounces of silver equivalents at the now 80:1 silver/gold ratio. Operating costs improved significantly during the quarter. Cash costs were down to $2.78 per ounce net of the gold credit. And the all-in sustaining costs consolidated were $14.91 per ounce of payable silver net of the gold credit. Both were substantially lower quarter-on-quarter and year-on-year, again due to the improved operating performance at Guanacevi and the high realized – higher realized gold price for the by-product credit. Guanacevi continues to outperform. If you recall, we launched over a year ago a complete clean sweep of the operations operating turnaround and a transitioning from mining deep low-grade ore bodies to opening new higher-grade ore bodies. That transition was completed in January. As a result in Q2, Guanacevi continued to generate mine free cash flow of around $2.7 million, and we saw higher processed tonnes higher silver and gold grades, higher silver and gold recoveries all well above plan. We also had an advantage at Guanacevi when we did the restart in May in that we've had not only a significant high-grade stockpile built up prior to shutdown, but we had prepared some long hole stopes for blasting prior to shutdown. And that really expedited both an early plant restart and a on-time mine restart. Bolanitos, still turning the corner. As forecasted the operating turnaround there was launched not even a year ago. But it also was able to squeak out a small profit on a mine free cash flow basis. And its restart was slower -- because of smaller stockpile and more of a focus on accelerating the mine development and grade control during the ramp-up period the restart period. El Compas was also able to generate free cash flow with mine free cash flow at $1.1 million. Its restart was also slower than Guanacevi again due to a smaller stockpile and the focus on mine development and grade control. And last, but not least, we did rev up the exploration drills again in late May after a shutdown in early April. And we did enjoy continued exploration, positive exploration drill results from the El Curso area at Guanacevi and the Melladito area at Bolanitos. We're actually mining the El Curso area now and they continue to grow the resources there. And we're currently developing towards the Melladito area and we hope to be in it here in Q3, Q4 for production. So that's basically a summary of our Q2 operational and financial performance. I think now we might as well open this up for Q&A.
Marcus Giannini H.C. Wainwright Hey, guys. This is Marcus Giannini calling in for Heiko. Thanks for taking questions and congrats on the quarter. You made some pretty strong moves in the silver prices recently.
Bradford Cooke Yes. Thank you.
Marcus Giannini So you meaningfully improved operations at Guanacevi as the mine seems to be running quite well and it's nice to see all the progress that's been made. We're currently in August so there's about five months left in 2020. Could you just provide some 2021 and possibly even longer-term plans and goals for the mine?
Bradford Cooke For Guanacevi in particular?
Marcus Giannini Yes, Guanacevi in particular.
Bradford Cooke Okay. Well, thanks for your question Marcus. On the financial side maybe I'll let Dan answer.
Dan Dickson Well, we haven't come out with 2020 guidance just because of the COVID situation in Mexico where COVID cases are continuing to rise. But otherwise, if we can continue to operate we are an essential business in Mexico. We continue to operate close to 1,200 tonne per day capacity. So we'll be slightly below the 1,200 days 1,150 with similar grades to what we originally guided for the year. But ultimately we expect that same capacity and similar grades into 2021 if you're trying to predict that Marcus.
Marcus Giannini All right. Excellent. Yeah.
Bradford Cooke So if I could add to that. What Dan's saying is that everything based on site is going according to plan or better. But offsite concerns such as stopping COVID at the gates, keeping high-risk people at home so we actually have a depleted workforce because -- particularly the contractors can't maintain the level of employment that we require. We're still a little bit concerned that we'll be able to outperform on a continued basis. So this is just being careful. But everything that we control on-site is doing better than planned.
Marcus Giannini Okay. Yes, fair enough. And then, sort of, on that note if we ask you to guess do you have a dollar figure regarding the impact of COVID-19 through today? And if you have an estimate of sort of projected expenditures related to COVID that have not yet been incurred thus far?
Dan Dickson Yes. As far as costs have not yet been incurred, I think, we've incurred everything from a COVID standpoint. We were shut down for remote -- all of April and a little bit of May, which ended up being about $800,000 but most of that was standby costs. The costs incurred to bring in lost stations increased security, get metal equipment were really incurred in April -- March and April. And then ultimately it's the testing kits that, we have on-site, that is the continued cost. So it's actually quite little. You're talking about $125,000 on a quarterly basis, so small impact at each operation going forward. It's just the larger impact of COVID that is a bigger concern for us. There’s other thing that because of COVID we've seen a decrease in costs, such as travel to and from sites. So even that -- the increased medical costs, so to speak has probably been offset a little bit by efficiencies just using, Zoom and Teams and reduced workforce. Eventually maybe that will catch up to all mines that are offering that way, but we seem to be managing pretty well.
Bradford Cooke And I think we are able to utilize our existing workforce. The security, we haven't really had to beef up much. They're doing more obviously with temperature and questionnaires. And all of that with every person coming and going at the gates of each mine. But it didn't require a significant increase in security. Same thing with sanitation, we probably hired a few more bodies to do a lot more sanitation. But it wasn't a big number.
Marcus Giannini Perfect. All right. Thanks for taking my questions guys.
Joseph Reagor of ROTH Capital Partners Good morning guys. Thanks for taking my questions.
Bradford Cooke
Hi Joseph.
Joseph Reagor Just -- hi. So on the G&A level, when I looked at the breakdown, it looks like, salaries wages and benefits were up quite a bit in the quarter. Is that just like a one-time thing because of the shutdown, you had to move some G&A costs from the mine level up to the corporate level?
Dan Dickson No, actually Joe, its Dan here. The G&A movement was actually mark-to-market on deferred share units. A lot of our directors are paid in deferred shares. And under IFRS we have to mark that to market. So it's a function of our share price going from about CAD 2.14, up into the CAD 4 -- I don't want to say almost CAD 5 range, at the end of the quarter. So we have a $1.1 million salary charge related just to that mark-to-market.
Joseph Reagor Okay, but its, non-cash, right? So...
Dan Dickson Non-cash.
Joseph Reagor Yeah. Okay. All right, so I guess the way to think about it is if the stock is higher again there might be another one this quarter but just backing out of our cash flow statement.
Dan Dickson Exactly.
Joseph Reagor Okay. Then on -- obviously ATM you guys raised a good amount of money. Balance sheet is a lot stronger than it was at the end of last quarter. Do you guys think you have enough capital to now go out and fund Terronera via debt-only in addition to here, or do you still think there might be an equity component to that in addition to what you've already raised? And do you have any [Technical Difficulty] used what is it $2.25 million on the [Technical Difficulty]
Bradford Cooke Thanks for your question, Joe. It's Brad. I don't think we've changed how we plan to finance Terronera. It's still going to be a debt equity mix. The timing and amounts are still somewhat, up to debate. But with the new CapEx on Terronera of around $100 million, it does make it a lot more financeable project. And ideally, it would be like a 35-65 equity debt split. So that's the plan. We have launched into commissioning a feasibility study. We hope to actually grant the study to an engineering firm by the end of August, early September. And it will be less than a year from then to complete that study. Guanacevi the hot markets, we may not need to wait to put the financing in place. That was the original plan. But when gold was -- and silver prices were beat up, in March. We were thinking well, we'll just go to feasibility and worry about financing later. But obviously the markets have responded very robustly to the global monetization of COVID shall we say. And as a result, the markets are definitely open. So timing still to be determined, but 35-65 debt -- equity debt split is still the plan.
Justin Stevens of PI Financial Good morning, guys. Most of my questions have been crossed off here. So, just a couple on some order sourcing though. So, Guanacevi, how's the development of Santa Cruz Sur going? I know it was running a bit behind schedule. But are you guys getting close there?
Godfrey Walton Thanks, Justin. This is Godfrey. We were a bit behind in Q2, but we've actually managed to catch up. And the ore split right now is a third from Milache, a third from Curso and a third from Santa Cruz Sur. So, we've got some very nice grades coming out of Santa Cruz Sur at the present time.
Justin Stevens And that -- and so that's pretty steady now. That will be the plan, I guess going forward for at least the next few quarters year? Is it was about one-third, one-third, one-third?
Godfrey Walton Yeah. That's the plan for the rest of year.
Justin Stevens Okay. Great. No, that's what I like to hear. And then just over the Bolanitos side. I think Brad you said that you're currently mining from San Miguel, but you're getting into Bolanitos? Is that what I heard?
Bradford Cooke Yeah. The plan is to be -- we're developing towards Bolanitos right now, and we expect to be in there in Q4. So, we'll have some self development mineral coming from there in Q4.
Justin Stevens Great. Yeah. And then we did -- I guess I mean Brad you sort of touched on that there. But, just sort of the -- do you guys have an idea internally of what your tipping point might be in terms of, I guess silver price or sort of cost of capital that would make you sort of move ahead to the Terronera decision development design before the feasibility study?
Bradford Cooke Well, I don't think it's going to be price sensitive. If we're weighing the money on price that was on the old prices, not today's price. I think the determinant factor on timing is simply, are the markets sufficient to finance the project and are there some long lead items that our Project Director is happy that he'd be willing to start breaking ground for instance before the feasibility study is finished. So, those are questions we hope to answer here very quickly in the coming weeks and give some clarity on timing in the -- hopefully this quarter.
Justin Stevens Great. All right. That’s it for me. Thanks guys.
Bhakti Pavani of Alliance Global Partners Good morning, guys. Thank you for taking my questions, and congratulations on the quarter.
Bradford Cooke Thank you, Bhakti.
Bhakti Pavani I just wanted to dig a little bit deeper into Guanacevi. I know Dan kind of previously alluded on the grade profile. But the grade for both silver and gold increased quite a bit in second quarter compared to first quarter of this year. So, from the margin perspective, what would be the best way to model the grades as well going forward?
Godfrey Walton Hi, Bhakti, this is Godfrey. Yeah, ore grades did come up. And that was a result of mining from Curso and actually even getting some high-grade material from Santa Cruz Sur. But we're still planning on the budgeted grades, which was lower than what we actually mined in Q2. But, we do expect to continue with those grades and maybe get a little bit higher grades.
Bhakti Pavani Got it, okay. And secondly, you did previously mentioned about the increasing COVID cases in Mexico. I know everything is uncertain at this point. But how are you preparing yourself in case, there is a second shutdown? Are you doing anything in particular?
Godfrey Walton Hi, Bhakti, it's Godfrey again. We are very diligent at checking everybody as they come on to site and checking everybody on a daily basis. So, we've stopped a few cases at the gate and turned people back and send them for further evaluation at some of the clinics. So we're just being extra cautious. So far we've had a few cases occur at our operations, but we've been very, very successful in making sure it doesn't spread very quickly.
Bhakti Pavani Got it. And in terms of mine planning and mine development has there been any changes?
Godfrey Walton No, the mine planning and development has continued. We were able to up -- increase the speed of some development at Bolanitos, which was holding us back in Q1 and Q2. So that's catching up. And development at Guanacevi's been going very well.
Bradford Cooke Well, thank you operator and thanks all for listening today. As we look forward through the rest of the quarter, we've got some pretty significant catalysts. We've restarted exploration drilling at several sites. Specifically Bolanitos, Guanacevi, near El Compas and we're planning to get started on Terronera this quarter as well. It will be almost two years Godfrey since we drilled Terronera?
Godfrey Walton Yeah about two years.
Bradford Cooke So there's significant upside to be had through drilling additional veins at Terronera. And we only stopped drilling two years ago because of the desire to go to economic analysis and see if we had enough reserves to build a mine, which we do. And now that we've got the final PFS results and they're extremely robust it's time to restart the drills. So that's one catalyst for this quarter. Another catalyst, obviously, is granting the feasibility study to an EPC firm here in the next month and get that work underway. In fact there's some bridge engineering studies already being conducted under the auspices of our Director of Project Development, Ernesto Lima, so work is already underway on the feasibility level. And Dan do you want to add anything to that?
Dan Dickson So I think we're in a good position going forward especially with where the silver and gold prices are. And -- but the operations continue to operate at capacity and where we expect they'll operate especially after putting in significant time and energy into getting them back to what we've historically done especially at Guanacevi and hopefully coming here soon at Bolanitos, we should be in a great position to be able to fund a lot of these programs going forward.
Bradford Cooke Godfrey anything to add?
Godfrey Walton No. I will just continue with a steady ship.
Bradford Cooke All right. Well I'm busy with Dale on various merger and acquisition opportunities, small brownfields one kind of bolt-ons to our existing operations. We're always working on those, always optimistic and every once in a while we pulled the trigger like our deal last year in Guanacevi, which really helped to turn around that operation. We're looking at bigger opportunities as well, but they always take time and it takes two to dance. So lots going on, a very catalyst-rich quarter for the company. And boy what a tailwind for metal prices, I do think we're still early in the precious metal cycle. We've probably got a little bit too far too fast. And so I wouldn't be surprised if there was a minor pullback in the near future. But other than that, I mean, the overall, overarching direction here is more monetary intervention globally by central bankers. And there's only one direction I think that precious metal prices can go from here.
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Post by Entendance on Sept 5, 2020 1:32:43 GMT -5
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Post by Entendance on Nov 5, 2020 7:33:21 GMT -5
VANCOUVER, British Columbia, Nov. 05, 2020 (GLOBE NEWSWIRE) -- Endeavour Silver Corp. (NYSE: EXK; TSX: EDR) released today its financial results for the three month and nine month periods ended September 30, 2020. The Company operates three silver-gold mines in Mexico: the Guanaceví mine in Durango state, the Bolañitos mine in Guanajuato state and the El Compas mine in Zacatecas state.Bradford Cooke, Endeavour CEO, commented, “Revenue, operating cash flow and net earnings were all sharply higher in Q3, 2020 compared to Q3, 2019. Cash cost and all-in sustaining cost (AISC) were significantly lower year-on-year. The improved operating performance and higher precious metal prices generated the Company’s return to profitability for the first time in 18 months. The Company’s cash and working capital positions increased substantially during the Third Quarter 2020.”“Our consolidated operating costs continue to trend lower, generating significant operating cash flow and improving our net earnings performance. We held a significant portion of our production as inventory at quarter end due to the sharp sell-off of metal prices in September, which muted our revenue and earnings performance this quarter, but we expect to sell this inventory this quarter based on an anticipated rebound of metal prices.” 2020 Third Quarter Highlights (all dollar amounts in US$) Net Income: Income of $0.5 million ($0.00 per share), compared to loss of $6.8 million in Q3, 2019. Earnings would have been higher but for the increased metal inventory at quarter-end and the $1.6 million general and administrative expense related to the mark to market of deferred share units at the higher share price. Cash Flow: $10.3 million cash flow from operations before working capital changes, an increase of 397% and EBITDA(1) of $10.6 million, an increase of 936%, both compared to Q3, 2019. Revenue: $35.6 million revenue, up 29% compared to Q3, 2019 from the sale of 741,262 oz of silver and 8,997 oz gold at average realized prices of $25.08 per oz silver and $1,952 per oz gold. Balance Sheet: Cash position of $44.9 million, up 47% and working capital of $53.8 million, up 21%, both compared to Q2, 2020. Term liabilities consist solely of equipment loans of $10.7 million. Raised $2.1 million in ATM equity financing and $5.6 million from exercised stock options during the quarter, net of issuance costs. Metal Production: Produced 932,837 oz silver and 10,041 oz gold for a total of 1.8 million oz silver equivalent (AgEq) at an 80:1 silver:gold ratio. Metal Inventory: The Company increased metal holdings 81% to 462,674 silver oz and 53% to 2,995 gold oz. The cost allocated on the balance sheet to this metal is $6.0 million, while the fair market value at September 30, 2020 is $15.7 million. Operating Costs: Cash cost(1) decreased 68% to $3.69 per oz payable silver and all-in sustaining cost (AISC)(1) was down 19% to $17.48 per oz payable silver, both net of gold credits. Cash cost and AISC were substantially lower compared to Q3, 2019 year-on-year due to the improved operating performance at Guanacevi, and the higher realized gold price that increased the by-product credit. The AISC was elevated due to higher general and administration costs. Guanacevi Out-Performed : Silver and gold grades continued well above plan, however throughput was affected by significant rainfall in Q3, 2020. The improved grades and higher metal prices significantly increased royalty costs during the quarter. Additionally, management increased its processing of toll ores as higher prices increased mining activity from small local miners in the district. Bolanitos Continued to Improve : Throughput averaged 1,075 tpd while gold grades aligned with plan and silver grades remain lower than plan, and costs were in line with budget. El Compas Throughput Steady : Throughput remained steady with gold grades similar to plan, while silver grades remained lower than plan. Increased mine development and administrative costs (COVID protocols, training, security) significantly impacted financial performance. (1) Mine operating cash flow, cash costs and all-in sustaining costs are non-IFRS measures. Please refer to the definitions in the Company’s Management Discussion & Analysis. Financial Results (Consolidated Statement of Operations Appended Below)For the three-month period ended September 30, 2020, the Company generated net revenue totaling $35.6 million (Q2, 2019 - $27.6 million). During the period, the Company sold 741,262 silver oz sold and 8,997 oz gold at realized prices of $25.08 and $1,952 per oz respectively, compared to sales of 835,045 oz silver and 9,373 oz gold at realized prices of $17.52 and $1,489 per oz respectively in the same period of 2019. The Company increased its finished goods silver and gold inventories to 462,674 silver oz and 2,995 gold oz, respectively at September 30, 2020. The finished goods inventory is held on the balance sheet at $6.0 million, the cost to produce the metal, compared to the market value of $15.7 million. Cost of sales for Q3, 2020 was $29.3 million, a 1% decrease over the cost of sales of $29.4 million for the same period of 2019. The 1% decrease in cost of sales was primarily related to improved productivity at the Guanacevi and Bolanitos operations and the deprecation of the Mexican Peso offset by significantly higher royalty costs and higher costs incurred at the El Compas operation. After cost of sales of $29.3 million (Q3, 2019 - $29.4 million), mine operating earnings was $6.3 million (Q3, 2019 – loss of $1.7 million) from mining and milling operations in Mexico. Exploration expenses were relatively flat in Q3, 2020 to $1.6 million from $1.7 million for the same period of 2019 as activities resumed planned levels following the suspension of activities in Q2, 2020 due to the pandemic. General and administrative expenses increased to $3.7 million in Q2, 2020 compared to $2.4 million for the same period of 2019, primarily due to mark-to-market fluctuations for director’s deferred share units. The quarter included $0.6 million of care and maintenance costs at the El Cubo mine shutdown in November 2019. Excluding depreciation and depletion of $8.1 million (Q3, 2019 - $7.1 million), stock-based compensation of $0.1 million (Q3, 2019- $0.1 million) and the inventory write off of $0.6 million (Q3, 2019- $1.2 million) mine operating cash flow before taxes was $15.1 million in Q3, 2020 (Q3, 2019 – $6.6 million). Operating earnings was $0.4 million (Q3, 2019 – loss of $5.8 million) after exploration expenditures, general and administrative expense and care and maintenance costs. Net earnings amounted to $0.5 million (break-even per share) compared to a net loss of $6.8 million (loss of $0.05 per share) in Q3, 2019. Direct production costs per tonne in Q3, 2020 increased 4%, to $112.37 compared with Q3, 2019 due to a significant increase in royalty costs and purchased ore at the Guanaceví operation, higher costs incurred at the El Compas operation, offset by the lower costs at the Bolañitos. Consolidated cash costs per oz, net of by-product credits (a non-IFRS measure and a standard of the Silver Institute) decreased 68% to $3.69 primarily due to higher gold grades and higher realized gold price that increased the by-product credit compared to the same period in 2019. The higher proportional gold production, and rising gold price, which increased 31% compared to the same period ended in 2019, were significant drivers in the lower cash cost net of by-product credits. On a co-product cash costs basis, both silver and gold cost per ounce improved compared to the Q3, 2019. Silver co-product cash costs fell 5%, while gold co-product costs fell 13% to $13.32 per ounce and $1,037 per ounce respectively. The improvement was primarily driven by the higher grade ore. All-in sustaining costs (also a non-IFRS measure) decreased 19% to $17.48 per oz in Q3, 2020 as a result of lower operating costs offset by higher corporate general and administrative costs, increased brownfield expenditures and increased capital expenditures to accelerate mine development to improve daily mine output. General and administrative costs increased due to mark to market deferred share units. Exploration expenditures increased compared to prior year at Guanacevi and Bolanitos to in-fill and extent recent discoveries. At El Compas, exploration expenditures increased to test regional targets to grow resources in the district to process at the El Compas plant. The Condensed Consolidated Interim Financial Statements and Management’s Discussion & Analysis can be viewed on the Company’s website at www.edrsilver.com, on SEDAR at www.sedar.com and EDGAR at www.sec.gov. All amounts are reported in US$. Conference CallA conference call to discuss these results will be held today, Thursday, November 5, 2020 at 10am PDT (1pm EDT). To participate in the conference call, please dial the numbers below. No pass-code is necessary.
Toll-free in Canada and the US: 1-800-319-4610 Local Vancouver: 604-638-5340 Outside of Canada and the US: +-604-638-5340
A replay of the conference call will be available by dialing 1-800-319-6413 in Canada and the US (toll-free) or +604-638-9010 outside of Canada and the US. The required pass-code is 5378#. The replay will also be available on the Company’s website at www.edrsilver.com. Video UpdateBradford Cooke, Chief Executive Officer, prepared a four minute video update on the Q3 Financial results released today. The video can be accessed here and will be archived on the company website, under the Investor Relations, Events Section. About Endeavour Silver – Endeavour Silver Corp. is a mid-tier precious metals mining company that owns and operates three high-grade, underground, silver-gold mines in Mexico. Endeavour is currently advancing the Terronera mine project towards a development decision and exploring its portfolio of exploration and development projects in Mexico and Chile to facilitate its goal to become a premier senior silver producer. Our philosophy of corporate social integrity creates value for all stakeholders. SOURCE Endeavour Silver Corp. Contact Information: Galina Meleger, Director Investor Relations Toll free: (877) 685-9775 Tel: (604) 640-4804 Email: gmeleger@edrsilver.com Website: www.edrsilver.com
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Post by Entendance on Nov 6, 2020 3:58:52 GMT -5
Endeavour Silver Corp. (NYSE:EXK) Q3 2020 Earnings Conference Call November 5, 2020 1:00 PM ET Company Participants Galina Meleger - Director of Investor Relations Bradford Cooke - Chief Executive Officer Dan Dickson - Chief Financial Officer Don Gray - Chief Operating Officer Godfrey Walton - President
Conference Call Participants Heiko Ihle - H.C. Wainwright Craig Hutchison - TD Bank Joseph Reagor - Roth Capital Partners Lucas Pipes - B. Riley Securities Chris Thompson - PI Financial
Galina Meleger Good morning, everyone, and welcome to the Endeavour Silver 2020 third quarter financial results conference call. With me on the line today we have the company's Chief Executive Officer, Bradford Cooke; our Chief Financial Officer, Dan Dickson; our Chief Operating Officer Don Gray; and our President, Godfrey Walton. Before we get started, I'm required to remind you that certain statements on today's call will contain forward-looking information within the meaning of applicable securities laws. These may include statements regarding Endeavour's anticipated performance in 2020 and future years, including revenue and cost figures, silver and gold production, grades and recoveries and the timing and expenditures required to develop new silver mines and mineralized zones. While we do not intend to and do not assume any obligation to update such forward-looking information, other than as required by applicable law. On behalf of Endeavour Silver, I'd like to thank you again for joining our call. And I will now turn it over to our CEO, Brad Cooke.
Bradford Cooke Thank you very much Galina. And again welcome everybody to this conference call on our third quarter financial results. I think, first of all, I'd like to welcome Don Gray to the group. This is his first earnings call as our new COO. And then, also, especially like to recognize Godfrey Walton, who was with me when we went to Mexico in 2003, looking for an asset we can build a company around. This was Godfrey's last earnings call and so kudos Godfrey. It was a great run. Moving on to our press release this morning. I'd just like to open with comments on the quarter. It was our best quarter in 18 months. In fact our best quarter in a long time, when you consider the changes of revenue cash flow and earnings, all sharply higher this year compared to the same quarter last year. Our cash costs and all-in sustaining costs were significantly lower year-on-year and this improved operating performance combined with the higher precious metal prices, generated a significant return to profitability again for the first time in six quarters. As a result our cash and working capital positions also increased substantially during the third quarter. So let's now drill down a little bit into the numbers. Our revenues were up 29% to just shy of $36 million in the quarter. And our cash flow jumped almost 400% to $10.3 million year-on-year. Net income or earnings came in at a positive $0.5 million compared to almost $7 million loss a year ago. And I should point out that, we did carry a significant increased metal inventory through the quarter end, largely because of the summer run-up in metal prices and then the significant correction at the end of September. So we chose not to sell a significant amount of silver and gold at the end of the quarter. We carried it in inventory. The cost of that inventory is about $6 million, but the mark-to-market of that inventory at the end of September was in the order of $15 million. What that implies is that if we had sold that metal, our earnings would actually be in the $10 million range, not the $0.5 billion range. Production on the quarter was just shy of 1 million ounces of silver and 10,000 ounces of gold per 1.8 million ounces of silver equivalents. And I mentioned already our balance sheet cash was up 47% to just shy of $45 million and working cap was up in the $54 million range, up 21% year-on-year. Moving to the operations. Guanacevi continued to outperform with both silver and gold grades well above plan. We were affected by significant rainfall in the rain season in Q3. And as a result throughput was only 911 tonnes per day in the quarter with a 1,200 tonne plant that implies that, as we bounce back here exiting the rain season in Q4, there's actually more production at lower costs in our future at Guanacevi. I should point out, however, that the improved grades are accompanied by higher royalty payments. We're mining a property at Guanacevi where there are very significant royalties paid. So our costs will slowly rise as the metal price rises, just due to the royalties. Bolañitos continue to improve. It's not quite on plan yet, but we achieved 1,075 tonnes per day into a 1,200 tonne plant. Again, implying that there's still room for improvement on throughputs. Gold grades were on plan Silver grades remain below plan, but costs were fine. And all three assets generated free cash flow in the quarter. Last but not least, El Compas is pretty much on plan. Throughput steady, gold grades on plan. Silver grades below plan, but we're doing fine there and making a little bit of money. It's our smallest mine. Guanacevi, our largest mine, has by far the biggest impact on our financial performance. So I think on that note, operator, let's wrap up my comments and open it up for Q&A.
Heiko Ihle, H.C. Wainwright Hi, Brad. Thanks for taking my questions and congratulations on a very, very good quarter here.
Bradford Cooke Thank you.
Heiko Ihle Just going to the financials here I'm looking at the -- your deferred income tax asset has gone from $7.14 million at the beginning of the year to $5.3 million today. Going through that segment disclosures chart on page 15 of your financials, it looks like the improvement was almost exclusively related to Bolanitos. Should we expect further improvements for the company there? I mean because that's -- I don't want to say free money, but it's certainly good cash flow if it actually -- if you get paid back.
Dan Dickson Yes. Heiko, Dan Dickson here. Thanks for the question. You did touch on -- our deferred tax actually went from $7 million to $5 million. Basically that's -- we're actually using up that deferred tax asset which is a non-cash item. And what's happening we've made significant profits in Bolanitos this year. But we've been offsetting those profits against previous year's losses. So we have lost care for as we used. And ultimately that reduces the value of that deferred income tax asset. So -- and we are benefiting. We will see more profits in Q4 likely from Bolanitos and Guanacevi. Guanacevi, we also have loss carry forwards there. So I don't expect to have an income tax a current income tax expense in Q4 other than for special mining duty, but we'll see us grind away from that asset and have an expense on a non-cash basis.
Heiko Ihle Got it. Perfect. Thank you. And then a completely different question. Can you just sort of walk us through how your plans in Mexico have changed since you restarted operations with safety related to COVID? Has there been meaningful changes? Are people adhering to the safety precautions properly? I mean it seems like your safety record there is pretty good. So just if you could provide some more color that would be great. Thanks.
Bradford Cooke Well let me -- thanks Heiko. Let me give you a very high-level comment then I'll turn it over to Godfrey and Don. We -- quite fortunately we're able to move very quickly to put our COVID precautions in place both our prevention plan and our urgency response plan. And then by and large it served us very well stopping COVID at the gates of the operations. Our actual workforce that is mine and plant that had minimal impacts from COVID. We've had some office workers impacted by Covid all eventually returned to work. But maybe I'll ask Godfrey and Don to give you a little more color on our plans since the first and second quarters.
Godfrey Walton Hi, Heiko. This is Godfrey. Yes, we actually have a pretty intense protocol -- protocols to make sure that we do stop the cohort of the gate as Brad mentioned. We make sure that every worker as they come in is the temperatures checked, they're sprayed down, everybody is wearing a mask 100% of the time. And you spray down body wise not for front and back and your vehicles are sprayed down as you come in. So it's pretty intense. And unless you're actually there Don and I went through the last month or so we've been in and out of different operations. And it's to me very, very good. I was very impressed with how far we're being. Yes, we've had a few cases. But typically we've got about 11 to 15 active cases at any one time. And nobody seriously infected. But it has been -- that has been done very effectively I think. Don, do you have anything else to add to that?
Don Gray I think I'd just add that the screening is pretty comprehensive with temperature checks and checking symptoms and that sort of thing. So when there is somebody detected that could be coming in we do send them right out for testing. And the testing of our operations we can turn that around very quickly. So if we do identify somebody that does test positive we take the profit precautions for corn tuning and then also our medical response has been quite good. And so we have really good response, probably the response is just better as you get just about anywhere in the world. It actually is really good. So I think from that perspective, we're taking out precautions and measures to take care of our people as well as make sure that the operation can maintain continuity. Very informative.
Bradford Cooke Sorry. Just had one thing Heiko is, we've actually -- we have adopted at all our operations and we've increased the number of doctors just to help out with the screening and evaluation of people. So I would say, we probably triple the number of doctors we have on staff now just during this COVID. Just because it does take up quite a bit of time for them when shift changes on. So if you got a couple of hundred people coming through the gate it takes quite a bit to get them all checked out and evaluate it.
Heiko Ihle Very good. It's nice to hear the whole team chime in on an answer to a similar question. It's actually really good how you guys play off of one another. Thanks for taking my questions. I will get back in queue.
Craig Hutchison, TD Bank Hi, good morning. Good afternoon. I was wondering if you could give me some more clarity in terms of grades as how we should think about sort of Q4 here. In particular Guanacevi, should we assume similar grades to Q3 which are obviously very high?
Bradford Cooke Again high-level short answer yes. Godfrey?
Godfrey Walton Hi, Craig. This is Godfrey. Yes. I think you're going to see grades continue at Guanacevi. A lot of the grades that we're getting is coming from a property called Ocampo that we do pay a high royalty on. So the grade needs to be good. But it's also coming from third party ore that we're buying which is part of our sort of social license to continue operating at Guanacevi. So I think the grades you're seeing Guanacevi compass and at Bolanitos are going to be similar in Q4 as they were in Q3.
Craig Hutchison Okay. Very good. And then just in terms of accounting question depreciation was fairly high in the quarter. Should we expect similar levels in Q4 as well?
Dan Dickson Yes Craig, Dan here. I mean ultimately our depreciation is high. We're very conservative in that standpoint. We depreciate on proven and probable. So I would expect very similar depletion and depreciation in Q4.
Craig Hutchison Okay. Thanks guys.
Joseph Reagor, Roth Capital Partners Hey guys, thanks for taking the question. So I guess first thing Terronera what -- any update there on time line to making a construction decision?
Bradford Cooke Well of course it's subject to the feasibility study which is underway and expected next summer. But Don, do you want to comment?
Don Gray Yes. We just -- we just as you know awarded the feasibility study work to win consultants and they're starting out. So we'll be working up a feasibility reporting sometime -- being completed sometime mid next year. And then we'll be able to go to the Board with the recommendation as to when to start construction. So right now the timeline it's what we have in the FS, but subject to any additional work we do in the FS in the feasibility study.
Bradford Cooke And the current pre-construction schedule once we break ground is I believe 18 months to the start of commercial production. So we've got lots of work to do but we're finally into the final feasibility process.
Joseph Reagor Okay. Fair enough. And then thinking about next year, I know it's a little early to provide guidance probably, but from a modeling standpoint should we be thinking about the Guanacevi and Bolanitos kind of returning to normal operating rates near their planned capacity? Or should we be thinking about a certain percentage of plant capacity for the next 12 months?
Bradford Cooke Yes. I think -- well I don't think we're going to average 1200 tonnes per day at either operation next year. We're certainly going to be bumping up against it on a regular basis. The reason why I'm cautious about talking about operating at full capacity is simply rainy seasons are a bit unpredictable. And COVID is still out there. So -- but yes it will be in our plan to operate close to capacity.
Joseph Reagor Okay. Thanks for that color. I will turn it over.
Lucas Pipes, B. Riley Securities Hey, good day everybody. I wanted to ask a question on the direct production costs per tonne. And there's been a lot of noise in that metric between COVID and then other challenges year-to-date? And kind of looking at the third quarter, they're very nice performance kind of across the board, but it's still $110 -- over $110 per tonne. And so do you think we can get below kind of $100 per tonne figure maybe back into the $80 to $90 range we really appreciate your thoughts and the various puts and takes here on that. Thank you very much.
Dan Dickson Yes Lucas. Thanks for the question. Dan here again a very good question and it's hard to speak to it just on a consolidated basis and getting below $100 on a consolidated basis for probably will be difficult only because a significant driver to all this is Guanacevi and Godfrey touched on it. We've been buying a lot of toll ore out of Garnet. It was almost 11% of our production in Q3. And ultimately when that ore comes to us at these high prices we take it. It keeps ounces in the ground for us for another day. And ultimately, it's high-grade ore. So, we pay a significant portion for it. We roughly make about 30% to 35% profit off that ore on a cash basis and we expect that to continue because those prices and we go up more this or comes available. And it's got a lot of benefits to us. A, we get to go find out where that ore is coming from and gives us a little bit of exploration opportunity or -- and like I said ultimately, keeps it in the ground. The other aspect is the El Curso concessions that we lease from Ocampo. We pay a $12 processing fee per tonne on that material. And then we also pay a royalty cost on that material. So, we picked up Versal concessions effectively at no cost but we do pay a very high royalty on it. And over $20, we paid a 3% NSR on it. So effectively, in Q3, we paid about on across all our tonne we paid almost $28 of royalty per tonne in there. So, that's really driving up our cost per tonne. Guanacevi, and the reason why Guanacevi at $146 for Q3 when ultimately we operated around $100 per tonne. I'm just basic mining processing and indirect costs. Bolanitos were right in line with our cost per tonne in line with budget in line with historicals at $68. If we hit this throughput tonnage, we should be around that if not a little bit lower if we can get to 1,200 tonnes per day. And at Compass, it's just a high variability because of the size of the operation. So, it's only 250 tonnes per day. And ultimately we spent almost $1 million a little bit more than $1 million this quarter than what we had planned. But because it's such a low amount of throughput and scope of that operation, it really hits cost per tonne. It doesn't have a huge impact consolidated, but obviously, on an operations level we get big variability there. We do expect to come down. We put in a lot of training safety real safety program has been there trying to increase our level of safety commitment at Compass. We hope it's going to come down in Q4. We're monitoring it and we want to make sure that those costs come down and improve the free cash flow there. But I don't see it coming under $100 consolidated. I hope we get into $100 million to $105 million for Q4.
Lucas Pipes That's very helpful. I appreciate that color. And then as a second question. Just checking in on Chile, can you update us on where you're spending your time there? And what are some of the milestones that investors should be looking forward to over the coming call it next to two to three quarters? Thank you.
BradfordCooke Who wants to take that one? Godfrey?
Godfrey Walton Sure. I can take that one here. In Chile, we are currently drilling at the Paloma property. And we're sort of following up on some intercepts -- interception and intersection that we got last year in a first hole. So, we've completed a couple of holes now. We have not got any assays at this point. But we expect to continue drilling until Christmas and then the season will pretty much close down because we're up at about 5,000 meters. Once we have our results early next year we'll be able to put those out. And so we're encouraged with what we see in the core, but we don't have any numbers yet and we won't until Q1 next year. It's going to be the time for that. On into the rest of the year because Chile is sort of in the Southern Hemisphere, most of the activity is happening now are in the fall. So, we're busy right now looking at other properties and evaluating what's happening up at Cerro Marquez and talking to a variety of people about that property. And then it will go quiet during our summer and could become active again in the fall and through Christmas.
Bradford Cooke And just if I could tip in for the rest of our estimates context of our portfolio in Chile is that these are all high-impact world-class targets. For instance Paloma, we consider to be able to be a multi-million ounce gold target and we're just getting into the drilling now. So, we're going to be patient. It's a big area to drill. But like Godfrey said, we're seeing all of the things that we want to see in the core silica, hydrothermal [Indiscernible], sulfides, and other related geological factors that indicate the presence of gold, but we don't have the assay yet.
Lucas Pipes Got it. Gentlemen, thank you very much for the information. And best of luck.
Joseph Reagor, Roth Capital Partners Hey guys. I just had one more. At El Cubo any update there? I mean with higher prices is there some let's call it mineralized material that was outside the resource that might come in? Or have you been able to get any further and talks for neighboring projects? Just any color you can give us.
Bradford Cooke Well, the good news is that, these ore prices we're getting a lot of inbound and inquiries about possible sale. The bad news is that, it doesn't really change. The higher prices don't really change the amount of ounces in the ground. And our decision to close is, because we exhaust reserves and the remaining resources we felt were just too small for us to restart a 1,500 ton plant. We have been as you know actively scouring the district for opportunities. And continue to do so. But there's no decisions been made, whether to buy something and restart or just sell the whole thing yet.
Joseph Reagor Okay. Thanks.
Chris Thompson, PI Financial Hey. Good morning guys. Brad, I think it's just probably a question for you. It's a little bit maybe just broad. Obviously with higher margins, we're experiencing right now, on the back of good metal prices and obviously you reduce costs. That speaks to, higher cash flow. I wonder if you could just give us a sense of, how you would apportion this cash flow by way of preparation for Terronera. Obviously what's happening with Coral, and maybe the need for mine life expansion through drilling and discovery at your operating assets?
Bradford Cooke Yes. Good point and good question. Chris thanks for your question. Obviously with a rising cash balance and we've really only had one quarter of that. It gives us a lot more flexibility, in what to do. We've always historically balanced our capital spending from our cash flow model each year. And we spend, at least for the three mines, only out of our cash flow. Not only we've got lots of free cash flow, it opens up other possibilities. So for instance, we took two years off from drilling Terronera, while we focused on our economic studies. As of September, we've resumed drilling on a number of very interesting undrilled veins of tar in artery and continue boosting the resources there. Same thing at Parral, we took a one-year break from drilling Parral, which is intended to follow Terronera in our development pipeline. But I think it's safe to assume that, there will be aggressive drilling programs on both, Terronera and Parral next year. So in terms of allocating some of our free cash flow there's, two projects. We'll continue with our Brownfield exploration around Guanacevi and Bolañitos. And they're not going to grow. Those programs aren't going to grow or shrink. They're just steady on. Chile we're drilling Paloma now. And we hope to be drilling it next year, as well. So there's a kind of discretionary exploration expense that we'll consider and then, of course just building up our cash for the equity component of the $100 million CapEx to build Turner. So those are our considerations. No decisions made yet. We typically do year-end planning. But just to give you an idea of what we would do.
Chris Thompson Great Thanks, Brad. I'm just to ask another quick question, I'll sneak one in. Obviously higher metal prices both for, gold and silver, can you speak to the effect that this -- on resource baits, at I guess wanted to be at Bolanitos if any? Because the veins have clean walls and these are not desalinated bodies of low-grade halos. I don't think there's much change in our approach. We're going to remind the veins. The cutoff grades can drop a bit, -- and such high grade at both operational like it certainly at [Indiscernible] that had zero impact. At Bolanitos we'll look at whether or not we can bring some of the lower-grade resources into the mine plan. But that's probably the only impact.
Chris Thompson Great. Brad, thanks a lot. Thank you.
Bradford Cooke Well, thank you all for tuning in for our third quarter call on our financial results. It's been a great quarter. We expect bigger and better, as we go forward. And we've got, I think one of the best outlooks in the sector with leverage to cash flow, not only from higher metal prices, but falling costs. Leverage to production growth through our own organic growth profile there is not one but two projects awaiting development. Terronera which is largely permitted and Parrel which even though, it's an advanced exploration project is -- looks like it has the potential to be in a new way, down the road. And last but not least, leverage to new discoveries potentially world-class with three drill-ready targets in Chile. So, very exciting times for us, so we're a catalyst-rich time for the company, and we've come through that transition phase, where we undertook in the last six quarters operational turnarounds to try and get out of the doldrums during the bear market. And we've succeeded. So, lots of catalysts to drive value for the shareholders over the next year. Thank you very much.
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Post by Entendance on Dec 31, 2020 7:54:36 GMT -5
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Post by Entendance on Jan 7, 2021 7:05:28 GMT -5
Endeavour Silver hits highest quarterly production in two years
Endeavour Silver Reports Highest Quarterly Production in Two Years; Produces 1,117,289 oz Silver and 12,586 oz Gold (2.1 Million oz Silver Equivalents) in Fourth Quarter, 2020
VANCOUVER, British Columbia, Jan. 07, 2021 (GLOBE NEWSWIRE) -- Endeavour Silver Corp. (TSX: EDR, NYSE: EXK) reports its highest quarterly production in the last two years from its three high grade, underground, silver-gold mines in Mexico; Guanacevi in Durango state, Bolañitos in Guanajuato state and El Compas in Zacatecas state. Fourth Quarter, 2020 production was 1,117,289 silver ounces (oz) and 12,568 gold oz for 2.1 million oz silver equivalent (“AgEq”) at an 80:1 silver:gold ratio. The Company’s 2020 full year production met its original guidance notwithstanding the government mandated two-month suspension of operations due to the pandemic. In fiscal 2020, silver production totaled 3,513,767 oz and gold production totaled 37,139 oz for 6.5 million oz AgEq. The Company withdrew its 2020 production guidance in early April due to the COVID-19 pandemic and the temporary shutdown mandated by the Mexican government and chose not to issue revised guidance when production was resumed at the end of May due to continued uncertainty caused by the ongoing pandemic. Bradford Cooke, Endeavour CEO, commented, “Endeavour enjoyed its strongest operational performance in two years thanks to the measures we initiated in 2019 to return the Guanacevi and Bolañitos mines to profitability. I would like to commend our operations team for their hard work, commitment and resilience during the global pandemic to meet our safety and production goals last year.” “So long as the pandemic is still with us, we will remain diligent with our heightened health and safety protocols, and we continue to make safety our first priority. Our entire workforce was flexible, innovative and responsible during 2020 which allowed us to deliver exceptional results given the circumstances.”
“Subject to our pending feasibility study, appropriate financing and board approval, we plan to turn our attention this year to developing our next core asset, the Terronera project in Jalisco state. This year should prove to be very rewarding for our staff, communities and stakeholders.”Silver and gold production were higher in Q4, 2020 compared to Q4, 2019 due to the continued operational improvements at the Guanacevi and Bolañitos mines. At Guanacevi, Q4, 2020 throughput increased 15%, with a 31% increase in silver equivalent grades processed compared to Q4, 2019. At Bolañitos, Q4 2020, throughput increased 31%, with an 8% increase in silver equivalent grades compared to Q4, 2019. Despite the temporary shutdown in Q2, 2020, annual silver production exceeded the high range of original guidance by 1%, gold production missed the low range by 2% and silver equivalent production achieved the mid-point of the original 2020 production guidance.2020 Fourth Quarter Highlights Consolidated Production Continued to Improve Q-o-Q: Silver equivalent production was up 21% compared to Q3, 2020, primarily due to higher throughput. Guanacevi Continued to Outperform: Silver and gold grades continued to deliver well above plan and plant throughput approached plant capacity. Bolañitos Continued to Improve: Throughput exceeded plan, approached plant capacity and was the highest since 2018, gold grades aligned with plan and silver grades remained lower than plan. El Compas Remained Steady: Throughput remained steady at close to plant capacity, gold grades were on plan, silver grades remained lower than plan, and with a short mine life, management is reviewing alternative mine plans to ensure positive free cash flow in 2021. Metal Sales and Inventories: Sold 1,419,037 oz silver and 13,850 oz gold, held 105,925 oz silver and 388 oz gold of bullion inventory and 10,559 oz silver and 1,071 oz gold in concentrate inventory. Delivered Positive Brownfields Exploration Results from the Three Mines: Drilling continued to intersect high-grade gold-silver mineralization in the Santa Cruz vein at Guanacevi, the Melladito and San Bernabe veins at Bolañitos, and the Misie and Calicanto veins at El Compas. Expanded Land Position and Resumed Greenfields Exploration at Terronera: Acquired two adjacent groups of mineral concessions spanning 4,959 hectares and covering multiple mineralized vein structures. Agreed to Sell the El Cubo Assets: Signed a binding letter agreement to sell the El Cubo Mine and related assets to VanGold Mining Corp. for US$15 million in cash and share payments plus additional contingent payments, deal anticipated to close in Q1, 2021. Filed At-The- Market Prospectus Supplement for $60 million: ATM not active in Q4, 2020, future proceeds to be used for funding growth initiatives including advancing Terronera, Parral, Chile, prospective mergers and acquisitions and working capital.
2020 Fourth Quarter Mining Operations
Consolidated silver, gold and silver equivalent production were all higher in Q4, 2020 compared to Q4, 2019 due mainly to higher silver and gold grades, higher gold recoveries and lower silver recoveries. Throughputs were higher at each of the three mines but comparable Y-o-Y due to the November 2019 suspension of the El Cubo operation.
Guanacevi throughput, silver and gold grades were each significantly higher than Q4, 2019 and well above plan, partly offset by lower silver recoveries. Mining the new, higher grade El Curso, Milache and SCS orebodies has led to significantly improved ore grades and plant throughputs, which at 1,157 tonnes per day approached plant capacity in Q4, 2020, the highest throughput since 2015.
Bolañitos throughput, gold grades and silver and gold recoveries were higher than Q4, 2019, partly offset by lower silver grades. Mine output approached plan and plant throughput exceeded plan in Q4, 2020 and both are expected to be sustainable going forward. Silver grades remain lower than plan due to lower mine output from the San Miguel vein which has higher silver and gold grades than other working areas.
El Compas throughput and gold recoveries were above plan, partly offset by lower silver grades, however dilution remains a continuing focus of the mine. The current resource is sufficient to support mining until mid-2021, and brownfields exploration has returned encouraging results on the Calicanto property. Management is reviewing alternative plans to ensure positive free cash flow in 2021.
Production Highlights for Three Months and Year Ended December 31, 2020
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Post by Entendance on Jan 19, 2021 3:46:23 GMT -5
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Post by Entendance on Jan 28, 2021 7:39:52 GMT -5
January 28, 2021
Endeavour Silver Provides 2021 Production and Cost Guidance, Forecasting 3.6-4.3 Million oz Silver and 31,000-35,500 oz Gold, or 6.1-7.1 Million oz Silver Equivalent VANCOUVER, British Columbia -- Endeavour Silver Corp. (TSX: EDR, NYSE: EXK) released today the 2021 production and cost guidance for its three silver-gold mines in Mexico, the Guanacevi mine in Durango state, the Bolanitos mine in Guanajuato state and the El Compas mine in Zacatecas state. The Company also provides its 2021 capital and exploration budgets for the three mines and several exploration and development projects (all dollar amounts in US$).
2021 Production and Cost Guidance Highlights More here
In 2021, silver production is expected to range from 3.6 to 4.3 million ounces (oz) and gold production is anticipated to be in the 31,000 to 35,500 oz range. Silver equivalent production is forecasted to total 6.1-7.1 million oz at an 80:1 silver:gold ratio.
Consolidated cash costs and all-in sustaining costs in 2021 are estimated respectively to be $7.00-8.00 per oz silver and $19.00-20.00 per oz silver, net of gold by-product credits. Costs are anticipated to be higher than 2020 due to higher royalty and mining duty payments expected in 2021. Metal price assumptions for 2021 are $22 per oz silver and $1,760 per oz gold.
Bradford Cooke, Endeavour CEO, commented, “Having completed the operational turn arounds at our Guanacevi and Bolanitos mines in 2020, we are forecasting relatively steady state performance from our operating mines in 2021, with slightly higher consolidated production offset by slightly higher operating costs at the three mines. Advancing our Terronera mine project through the feasibility study and project financing will be a key focus during the first half of the year.”
Dan Dickson, Endeavour CFO, discusses the outlook for 2021 in a short video which can be accessed (here) and will be available on the Company’s website under the Investor Relations, Webcast section.
Operating Mines At Guanaceví, production will range between 1000 tonnes per day (tpd) to 1200 tpd and average 1100 tpd from the Milache, SCS and P4E orebodies. A significant portion of production will be mined from the Porvenir Cuatro extension on the El Curso concessions. The El Curso concessions were leased from a third party with no upfront costs but with significant royalty payments on production. As a result, the cash cost per ounce will increase in 2021, although direct operating costs per tonne should be similar to 2020.
At Bolanitos, production will range between 1000 tpd to 1200 tpd and average 1,050 tpd from the Plateros-La Luz, Lucero-Karina and Bolanitos-San Miguel vein systems. Ore grades are expected to be similar to 2020 mined grades and the cash cost per oz and direct cost per tonne should be similar to 2020.
At El Compas, production is forecast to continue into Q2, 2021 from the El Compas mine. New resources discovered in the Calicanto and Misie veins on the Calicanto property are currently being evaluated for possible addition to the mine plan.
Operating Costs Cash costs, net of gold by-product credits, are expected to be $7.00-8.00 per oz of silver produced in 2021. Consolidated cash costs on a co-product basis are anticipated to be $13.00-$14.00 per oz silver and $1,000-$1,100 per oz gold. All-in sustaining costs, net of gold by-product credits, in accordance with the World Gold Council standard, are estimated to be $19.00-$20.00 per oz of silver produced. When non-cash items such as stock-based compensation are excluded, AISC are forecast to be in the $18.00-$19.00 range. Direct operating costs are estimated to be in the range of $105-$115 per tonne, including royalties and special mining duties, which are both expected to be significantly higher in 2021 compared to 2020. Management has used a $22 per oz silver price, $1,760 per oz gold price, and 20:1 Mexican peso per US dollar exchange rate for its 2021 cost forecasts.
Sustaining Capital Investments In 2021, Endeavour plans to invest $32.8 million on capital projects, mainly as sustaining capital at the three operating mines, including $2.0 million in growth capital to maintain the exploration concessions and cover corporate infrastructure. At current metal prices, the sustaining capital investments should be covered by operating cash flow.
At Guanacevi, $16.7 million will be invested on capital projects, the largest of which is the development of 6.8 kilometres (km) of mine access at the Milache, SCS and the P4E orebodies for an estimated $7.2 million. The additional $9.5 million will go to upgrade the mining fleet, support site infrastructure, and expand the tailings dam.
At Bolanitos, $14.1 million will be invested on capital projects, including $7.8 million for 5.3 km of mine development to access reserves and resources in the Plateros-La Luz, Lucero-Karina and Bolanitos-San Miguel vein systems. The additional $5.9 million will go to upgrade the mining fleet, support site infrastructure, raise the tailings dam and commence a new portal for the Belen resources.
At El Compas, management is evaluating new areas for future production on the Calicanto concessions and below the current working areas of the Orito vein.
New Development Investments At Terronera, the feasibility study is currently being prepared which will include the results of additional engineering studies and revised cost estimates at a cost of $1.0 million in 2021. Management has approved a $9.0 million budget to complete the feasibility study, expand the project team, prepare for site-prep and source long lead items required to commence development upon completion of the feasibility study. Following the completion of the feasibility study and board approval, management will release a revised program and budget for the project.
Exploration Budget In 2021, the Company plans to spend $10.2 million drilling 50,000 metres of core on brownfields projects near the three mine-sites, greenfields exploration projects, and development engineering across its portfolio of mines and properties. At the Guanacevi and Bolanitos mines, 11,500 metres of core drilling are planned at a cost of $3.9 million to replace reserves and expand resources. At Terronera, Parral and Paloma, 27,000 metres of core drilling are planned at a cost of $6.3 million and permitting continues for drilling the Aida project in Chile.
Release of 2020 Financial Results and Conference Call The 2021 Fourth Quarter and year-end consolidated financial results will be released before market on Monday, March 1, 2021 and a telephone conference call will be held the same day at 10:00am PT (1:00pm ET). To participate in the conference call, please dial the numbers below. No pass-code is necessary.
Toll-free in Canada and the US: 1-800-319-4610 Local Vancouver: 604-638-5340 Outside of Canada and the US: +604-638-5340
A replay of the conference call will be available by dialing 1-800-319-6413 in Canada and the US (toll-free) or +604-638-9010 outside of Canada and the US. The required pass-code is 5891#. The audio replay and a written transcript will also be made available on the Company's website at www.edrsilver.com.
About Endeavour Silver – Endeavour Silver Corp. is a mid-tier precious metals mining company that owns and operates three high-grade, underground, silver-gold mines in Mexico. Endeavour is currently advancing the Terronera mine project towards a development decision and exploring its portfolio of exploration and development projects in Mexico and Chile to facilitate its goal to become a premier senior silver producer. Our philosophy of corporate social integrity creates value for all stakeholders.
SOURCE Endeavour Silver Corp. Contact Information Galina Meleger, Director Investor Relations Toll free: (877) 685-9775 Tel: (604) 640-4804 Email: gmeleger@edrsilver.com Website: www.edrsilver.com
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Post by Entendance on Feb 1, 2021 9:07:44 GMT -5
Endeavour Silver rallies on granting option to Ridgestone Mining
Endeavour Silver Grants Option to Purchase Guadalupe y Calvo Project in Chihuahua, Mexico to Ridgestone MiningFebruary 1, 2021VANCOUVER, British Columbia, Feb. 01, 2021 -- Endeavour Silver Corp. (TSX: EDR, NYSE: EXK) has granted an option to purchase a 100% interest in its Guadalupe y Calvo gold-silver exploration project in Chihuahua, Mexico to Ridgestone Mining Inc. Under the terms of the option agreement, Ridgestone has the right to acquire a 100% interest in the project through payments over a four-year period of US$1.5 million in cash and US$1.75 million in shares based on the 20 day volume weighted average price of the shares preceding each issuance, plus US$0.75 million in exploration expenditures, for a total commitment of US$4 million. Ridgestone will grant a 2% net smelter return royalty (NSR) to Endeavour, with the option to buy back the 2% NSR for US$2 million prior to the commencement of commercial production.
About Endeavour Silver – Endeavour Silver Corp. is a mid-tier precious metals mining company that owns and operates three high-grade, underground, silver-gold mines in Mexico. Endeavour is currently advancing the Terronera mine project towards a development decision and exploring its portfolio of exploration and development projects in Mexico and Chile to facilitate its goal to become a premier senior silver producer. Our philosophy of corporate social integrity creates value for all stakeholders.SOURCE Endeavour Silver Corp.Contact Information:Galina Meleger, Director, Investor RelationsToll free: (877) 685-9775Tel: (604) 640-4804Email: gmeleger@edrsilver.comWebsite: www.edrsilver.com
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Post by Entendance on Feb 3, 2021 8:27:27 GMT -5
"...only physical demand can truly break The Banks and force an unwinding of the leverage. Buying futures is fun...but...The Banks will simply create more in order to dilute supply and the CME will just raise margins in order to force some selling..."
VANCOUVER, British Columbia, Feb. 03, 2021 -- Endeavour Silver Corp. (TSX: EDR, NYSE: EXK) reports updated Mineral Reserve and Resource Estimates for its three operating silver-gold mines in Mexico, Guanacevi in Durango state, Bolanitos in Guanajuato state and El Compas in Zacatecas state, and two key exploration and development projects, Terronera in Jalisco state and Parral in Chihuahua state.
2020 Mineral Reserve and Resource Highlights (Compared to December 31, 2019)
Silver Proven and Probable Mineral Reserves increased 11% to 48.6 million ounces (oz) Gold Proven and Probable Mineral Reserves decreased 1% to 472,000 oz Silver equivalent Proven and Probable Mineral Reserves of 86.3 million oz (80:1 silver:gold ratio)
Silver Measured and Indicated Mineral Resources decreased 11% to 25.9 million oz Gold Measured and Indicated Mineral Resources decreased 2% to 222,500 oz Silver equivalent Measured and Indicated Mineral Resources of 43.7 million oz
Silver Inferred Mineral Resources increased 6% to 64.4 million oz Gold Inferred Mineral Resources decreased 1% to 283,800 oz Silver equivalent Inferred Mineral Resources of 87.1 million oz
Bradford Cooke, CEO of Endeavour, stated, “Our brownfields exploration programs were successful last year in replacing our reserves and resources. Reserves and resources increased significantly at Guanacevi due to our successful exploration of the El Curso property, which separates and adjoins our current Milache and historic Porvenir Cuatro orebodies. With additional drilling, these have the potential to become one large orebody, on the scale of our original Porvenir Norte discovery which we mined for 15 years.”
“At Bolanitos and El Compas, reserves and resources declined somewhat, however we continued to make new discoveries in each district. Bolanitos benefited from the delineation of the Melladito discovery and El Compas benefited from the discovery of new silver-gold-lead-zinc resources on the Calicanto property near the plant. We are currently evaluating the economic potential of these new resources at El Compas. After conducting minimal exploration drilling at Terronera and none at Parral in 2020, we have returned our focus to expanding resources at these two projects in 2021.”
Mineral Reserve and Resource Discussion Proven and Probable Mineral Reserves for silver increased year on year by 11% to 48.6 million oz, while Proven and Probable Mineral Reserves for gold remained relatively unchanged to 472,000 oz. Silver equivalent Mineral Reserves increased 5% year on year to 86.3 million oz (at a silver to gold ratio of 80:1), due mainly to delineating new reserves and resources at Guanacevi.
Measured and Indicated Mineral Resources for silver decreased by 11% to 25.9 million oz and Measured and Indicated Mineral Resources for gold decreased by 2% to 222,500 oz gold. Silver equivalent Measured and Indicated Mineral Resources declined 8% to 43.7 million oz due mainly to reserve and resource reductions at Bolanitos and Compas.
Inferred Mineral Resources for silver increased by 6% to 64.4 million oz and Inferred Mineral Resources for gold decreased by 1% to 283,800 oz. Silver equivalent Inferred Mineral Resources rose 4% to 87.1 million oz due mainly to gains at Guanacevi and El Compas.
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Post by Entendance on Feb 20, 2021 5:25:28 GMT -5
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Post by Entendance on Mar 1, 2021 7:34:13 GMT -5
March 1, 2021 Presentation PDF
Endeavour Silver EPS beats by $0.07, beats on revenue Endeavour Silver (NYSE:EXK; TSX: EDR): Q4 GAAP EPS of $0.13 beats by $0.07. Revenue of $61.2M (+76.9% Y/Y) beats by $11.22M. Metal Production: 1,117,289 oz silver and 12,586 oz gold for 2.1 million oz silver equivalent (AgEq), up 25% compared to 1,705,751 oz AgEq in Q4, 2019 using an 80:1 silver:gold ratio.
Endeavour Silver Reports $19.9 Million Earnings in the Fourth Quarter, 2020 and $1.2 Million Earnings for the Full Year, 2020
Earnings Conference Call at 10am PST (1pm EST) Today VANCOUVER, British Columbia, March 01, 2021-- Endeavour Silver Corp. (NYSE: EXK; TSX: EDR) released today its financial results for the fourth quarter and year ended December 31, 2020. The Company operates three silver-gold mines in Mexico: the Guanaceví mine in Durango state, the Bolañitos mine in Guanajuato state and the El Compas mine in Zacatecas state. All dollar ($) amounts are reported in United States dollars (US$). Bradford Cooke, Endeavour CEO, commented, “While 2019 was operationally the most challenging in our 16-year history as a producing company, 2020 was perhaps one of the most satisfying. Notwithstanding a government mandated two-month suspension of mining operations due to the COVID pandemic, we delivered higher production and lower costs at each of our three operating mines in 2020.” “Lower costs coupled with higher metal prices drove significantly higher revenues, cash flow and earnings, which turned positive for the first time in three years thanks to our very strong performance in Q4, 2020. The operational turn-around programs implemented in 2019 have been a big success operationally and financially, a testament to the hard work, skill, passion and persistence of our operations team.” “We remain alert regarding the COVID pandemic in Mexico and diligent with all our health and safety protocols, continuing to prioritize our employees’ safety as a key goal. I am pleased to report that Guanacevi, our largest mine, posted a second consecutive year with more than 1 million hours worked without a lost time accident.”
2020 Fourth Quarter Highlights Gross Sales: $61.2 million, up 81% from $34.6 million in Q4, 2019 on the sale of 1.4 million ounces (oz) of silver and 13,850 oz gold at average realized prices of $24.76 per oz silver and $1,885 per oz gold. Cash Flow: $21.6 million from operations before working capital changes, up from negative $7.9 million in 2019, mine operating cash flow before taxes(1) was $30.2 million up from $4.9 million in Q4 2019. Net Income: $19.9 million ($0.13 per share), up from a net loss of $17.9 million in Q4, 2019, Q4 2020 EBITDA was $24.3 million. Metal Production: 1,117,289 oz silver and 12,586 oz gold for 2.1 million oz silver equivalent (AgEq), up 25% compared to 1,705,751 oz AgEq in Q4, 2019 using an 80:1 silver:gold ratio. Cash Cost (1): $6.83 per oz silver payable net of gold credits, down 50% from $13.63 per oz in Q4, 2019. Direct cost per tonne increased due to higher royalty payments and third-party ore purchased at the Guanaceví mine, partly offset by lower costs at the Bolanitos and El Compas mines. Excluding royalties and special mining duties, operating cost per tonne declined in Q4, 2020 due to improved productivity. All-in Sustaining Cost (AISC) (1): $18.52 per oz silver payable net of gold credits, down 20% from $23.20 per oz in Q4, 2019.
2020 Full Year Highlights Gross Revenue: $140.3 million, up 15% from $121.7 million in 2019 on the sale of 3.5 million oz of silver and 35,519 oz gold at average realized prices of $21.60 per oz silver and $1,846 per oz gold. Cash Flow: $28.8 million from operations before working capital changes, up from negative $8.9 million in 2019, mine operating cash flow before taxes(1) was $56.2 million up from $14.9 million in 2019. Net Income: $1.2 million ($0.01 per share), up from a net loss of $48.1 million in 2019, full year EBITDA(1) was $29.4 million. Metal Production: 3,513,767 oz silver and 37,139 oz gold for 6.5 million oz AgEq, down 9% from 7.1 million oz AgEq in 2019 using an 80:1 silver:gold ratio primarily due to the suspension of operations at the El Cubo mine on November 30, 2019. Cash Cost ( 1): $5.55 per oz silver payable net of gold credits, down 57% from $12.85 per oz in 2019. All-in Sustaining Cost ( 1): $17.59 per oz silver payable net of gold credits, down 17% from $21.19 per oz in 2019. Direct cost per tonne increased due to higher royalty payments and toll ore purchases at the Guanaceví mine, partly offset by lower costs at the Bolanitos and El Compas mines. Excluding royalties and special mining duties, operating cost per tonne declined due to improved productivity.
Balance Sheet: Year-end cash balance was $61.1 million, working capital was $70.4 million. Only long term debt consist of equipment loans of $6.1 million used to upgrade our mobile fleet. Raised net $25.3 million in proceeds from an ATM equity offering in the first seven months of 2020 with a new ATM of $60 million currently in place and available for use.
Guanacevi Continued to Outperform: Operating costs increased due to purchasing more toll ore from small miners, while the higher prices and profitability increased royalty payments and special mining duties. Delivered free cash flow of $20.8 million.
Bolanitos Continued to Improve: Higher prices and improved profitability resulted in higher special mining duties which increased direct costs per tonne. Direct operating costs improved from 2019 due to increased productivity in 2020. Delivered free cash flow of $3.2 million.
El Compas Costs Improved: Cost profile improved compared to prior quarters, while throughput remained steady.
Terronera Pre-Feasibility Study Finalized: Represents the Company’s next core asset with a low CAPEX, low operating costs, short payback period and exceptional financial returns, feasibility study now half way towards completion in Q3, 2021.
Expanded Land Position and Resumed Greenfields Exploration at Terronera: Acquired two adjacent mineral concessions spanning 4,959 hectares, covering multiple mineralized vein structures, and resumed drilling of untested veins.
Delivered Positive Brownfields Exploration Results: Drilling continued to intersect high-grade gold-silver mineralization in the Santa Cruz vein at Guanacevi, the Melladito and San Bernabe veins at Bolanitos, and the Misie and Calicanto veins in the El Compas district. (1) Mine operating cash flow, direct cost per tonne, direct operating cost per tonne, cash costs and all-in sustaining costs are non-IFRS measures. Please refer to the definitions in the Company’s Management Discussion & Analysis.
Financial Overview In 2020, revenue, net of smelting and refining costs, increased 18% to $138.4 million as sharply higher metal prices were partly offset by 9% lower silver equivalent production year on year. Mine operating cash flows, operating cash flows, earnings and EBITDA all substantially increased compared to 2019. Net earnings improved to $1.2 million compared to a net loss of $48.1 million in 2019, including $19.9 million earnings in Q4, 2020. A Company-wide review of operations in early 2019 identified several opportunities to improve operating performance. As a result, management initiated multiple remedial measures including changes of mine-site management and mining contractors, changes to shift and contractor supervision, renting used mining equipment, leasing new mining equipment and reducing the work force. The goal of these remedial measures was to improve safety, boost productivity, reduce operating costs and generate free cash flow. Management notes that the remedial measures had a positive impact on mine operating performance, the operational turn-arounds were completed last year and the benefit of these initiatives was realized in the second half of 2020. These improvements accommodated increased health protocols and new government restrictions related to the COVID-19 global pandemic (COVID-19), including the temporary suspension of mining operations in April and May of 2020. Direct costs per tonne in 2020 increased 4%, to $114.57 compared with 2019 due to higher royalties, special mining duties and toll ore purchases offset by improved productivity at the Guanaceví and Bolañitos operation, the depreciation of the Mexican Peso and the exclusion of the El Cubo operation, which suspended activities in Q4, 2019. Direct operating cost per tonne, which excludes royalties and special mining duties, was 6% lower at $101.17 per tonne compared to $107.96 per tonne in 2019.
Consolidated cash costs per oz, net of by-product credits, decreased 57% to $5.55 primarily due to higher ore grades and higher a realized gold price that increased the by-product credit compared to 2019. All-in sustaining cost decreased 17% to $17.59 per oz in 2020 as a result of lower operating costs partly offset by higher corporate general and administrative costs and increased capital expenditures to accelerate mine development. General and administrative costs increased $2.7 million primarily due to a $3.5 million expense related the mark to market of deferred share units.
Financial Results (Consolidated Statement of Operations Appended Below) For the year ended December 31, 2020, the Company generated net revenue totalling $138.4 million (2019 - $117.4 million). During the year, the Company sold 3,460,638 silver oz and 35,519 gold oz at realized prices of $21.60 and $1,846 per oz respectively, compared to sales of 4,054,652 oz silver and 39,151 oz gold at realized prices of $16.29 and $1,422 per oz respectively in 2019.
Cost of sales for 2020 was $111.1 million, a decrease of 18% over the cost of sales of $134.8 million for 2019. The 18% decrease in cost of sales was primarily related to the 21% decrease in tonnes processed and the depreciation of the Mexican Peso while cost cutting and efficiency measures implemented during 2019 were partly offset by inefficiencies of the suspension and re-start of activities due to COVID-19 and higher royalty expense with the rising prices. Royalties increased 301% to $8.2 million due to higher realized prices and the increased mining of the high grade El Curso property at the Guanacevi operation which is subject to significantly higher royalty rates.
Mine operating earnings was $27.3 million compared to a loss of $17.4 million in 2019. Excluding depreciation and depletion of $28.1million (2019 - $31.5 million), stock-based compensation of $0.3 million (2019- $0.2 million) and the inventory write off of $0.4 million (2019- $0.6 million) mine operating cash flow before taxes was $56.2 million in 2020 (2019 – $14.9 million).
Operating losses before taxes was $0.8 million (2019 – loss of $43.9 million) after exploration expenditures of $9.8 million (2019 – $12.0 million), general and administrative expense of $12.7 million (2019 – $10.0 million), care and maintenance expense for the shutdown of the El Cubo mine of $3.0 million and $2.2 million in care and maintenance costs related to the temporary suspension of the Guanaceví, Bolañitos and El Compas operations due to COVID-19 in Q2, 2020. In 2020, the operating loss included impairments, net of impairment reversals, of non-current assets of $0.4 million related the value in use estimates of the Guanacevi and El Compas operations. The operating loss for 2019 included a severance expense of $4.6 million related to the suspension of operations at El Cubo at the end of 2019.
There was an income tax recovery of $2.2 million in 2020 compared to an income tax expense of $4.1 million in 2019. The $2.2 million tax recovery is comprised of $3.0 million in current income tax expense (2019 - $2.7 million) and $5.2 million in deferred income tax recovery (2019- $1.4 million deferred income tax expense). The current income tax expense consists of $2.0 million of special mining duty taxes and $1.0 million of income taxes. In 2019, the Company did not pay special mining duty due the losses generated at the operations. The deferred income tax recovery of $5.2 million is primarily due recognition loss carry forwards as the future profitability of the Guanacevi operation has significantly increased with the recent increase in reserve estimates.
Conference Call A conference call to discuss these results will be held today, Monday, March 1st at 10am PST (1pm EST). To participate in the conference call, please dial the numbers below. No pass-code is necessary. Toll-free in Canada and the US: 1-800-319-4610 Local Vancouver: 604-638-5340 Outside of Canada and the US: +-604-638-5340
A replay of the conference call will be available by dialing 1-800-319-6413 in Canada and the US (toll-free) or +604-638-9010 outside of Canada and the US. The required pass-code is 5891#. The replay will also be available on the Company’s website at www.edrsilver.com.
The complete financial statements and Management’s Discussion & Analysis can be viewed on the Company’s website, on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. All shareholders can receive a hard copy of the Company’s complete audited financial statements free of charge upon request. To receive this material in hard copy, please contact Galina Meleger, Director Investor Relations at 604-640-4804, toll free at 1-877-685-9775 or email at gmeleger@edrsilver.com About Endeavour Silver – Endeavour Silver Corp. is a mid-tier precious metals mining company that owns and operates three high-grade, underground, silver-gold mines in Mexico. Endeavour is currently advancing the Terronera mine project towards a development decision and exploring its portfolio of exploration and development projects in Mexico and Chile to facilitate its goal to become a premier senior silver producer. Our philosophy of corporate social integrity creates value for all stakeholders SOURCE Endeavour Silver Corp. Contact Information: Galina Meleger, Director Investor Relations Toll free: (877) 685-9775 Tel: (604) 640-4804 Email: gmeleger@edrsilver.com
Bijoutier, Outer Islands, Seychelles
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Post by Entendance on Mar 2, 2021 5:20:27 GMT -5
Endeavour Silver Corp. Q4 2020 Earnings Conference Call March 1, 2021
Company Participants Galina Meleger - Director, Investor Relations Bradford Cooke - Chief Executive Officer
Conference Call Participants Jake Sekelsky - Alliance Global Partners Heiko Ihle - H.C. Wainwright Joseph Reagor - Roth Capital Partners Craig Hutchison - TD Securities Lucas Pipes - B. Riley Henry Westender
Arcadia Economics
Galina Meleger Good morning, everyone, and welcome to the Endeavour Silver 2020 fourth quarter and year-end financial results conference call. With me on the line today we have the company's Chief Executive Officer, Bradford Cooke; our Chief Financial Officer, Dan Dickson; and our Chief Operating Officer, Don Gray. Before we get started, I'm required to remind you that certain statements on today's call will contain forward-looking information within the meaning of applicable securities laws. These may include statements regarding Endeavour's anticipated performance in 2021 and future years, including revenue and cost figures, silver and gold production, grades and recoveries and the timing and expenditures required to develop new silver mines and mineralized zones. We do not intend to and do not assume any obligation to update such forward-looking information, other than as required by applicable law. On behalf of Endeavour Silver, I'd like to thank you again for joining our call.
Bradford Cooke Thank you very much Galina. And welcome everybody to this year-end financials call for Endeavour Silver. Maybe I'll just start with some highlights. 2020 turned into a very challenging year with the COVID pandemic, but ultimately, was one of our most satisfying years as our operational group really came through in the crunch. We drove our costs down and coupled with higher metal prices that drove significantly higher revenues, higher cash flow, higher earnings. We turned positive in terms of earnings for the first time in three years. And notwithstanding the government mandated two months suspension of mining operations throughout Mexico, we were not only able to meet our 2020 original production guidance, we delivered higher production and lower costs at each of the three operating mines. Perhaps last, but not least in terms of high level comments. We obviously continued to focus on safety as our number one priority and for the second year in a row, Guanacevi, our largest mine, posted more than a million hours worked without a lost time accident. So, kudos to, again, to our operations team. Let me touch on some numbers in today's news release, and then we'll open it up for Q&A. So, as I mentioned in a very good year in 2020, and we've certainly finished the year with a bang, fourth quarter sales were $61 million, up 81% year-on-year. Cash flow was $22 million, up from negative $8 million a year ago. And net income was almost $20 million or $0.13 a share, up from a net loss of $18 million a year ago.
Moving to the full year highlights. We posted $140 million of revenue, up 15%. Cash flow of $29 million before working capital changes, up from negative $9 million; and a net income of $1.2 million, up from a net loss of $48 million in 2019. Our production was solid at 6.5 million ounces of silver and equivalents. The only equivalent being gold, that was actually down 9% from the prior year due to the closure of a now non-core operation the El Cubo mine. Cash cost at $5.55 per ounce of silver net of the gold credits was down 57%. So, a significant reduction in cash operating costs. And all-in sustaining costs were $17.59 per ounce net of gold credit down 17% year-on-year. We finished the year with a very strong balance sheet, $61 million cash, $70 million working capital, and just a reminder that we started 2020 with $23 million cash. So, it was a heck of a year for adding cash to the balance sheet. So, those are the financial highlights from today's news release.
Jake Sekelsky, Alliance Global Partners. Hey, Brad and team, congrats on the strong fourth quarter and thanks for taking my questions.
Bradford Cooke Yeah. Thanks, Jake.
Jake Sekelsky Just two quick questions on Terronera. Can you just provide us some color around the timing of the feasibility? I guess, are you seeing any delays in the timeline due to the pandemic? I know some of your peers have been seeing extended turnaround times on studies and whatnot. So, I'm just curious how competent you are in a timeline for that?
Bradford Cooke We're still reasonably confident. We had our quarterly management meetings last week. And the report from our director of project development was that we're almost bang on 50% complete. The feasibility study would -- is the engineering consultant conducting this study on our behalf, but our director of project development is very active, obviously in the whole process. We are targeting mid summer receipt of the full feasibility study. And that would allow us to go to the board for a development decision thereafter.
Jake Sekelsky That's good to hear. And then just switching gears to exploration. In the release, you've touched on some Greenfield exploration that the new concessions at Terronera, I'm just curious, what's the budget for that. And how much of a priority is that relative to exploration across the rest of the portfolio?
Bradford Cooke So our Terronera budget this year for drilling, mostly untested veins on this very large property is $2 million. And we're focusing in two main areas this year, the Southeast extension of the main reserve in the Terronera vein is still open to the Southeast. And we're testing an area about a kilometer further South along the same vein structure. It does splay into two or three different parallel veins at that point. And we've had some encouraging results so far. The other one is -- on one of the newly acquired properties to the West of our original holdings at Terronera. And it's a big vein. It's called Los Cuates and so big as in up to 30 and we've traced it for three kilometers. And we've just started testing various proportions of that vein system. So, early days yet, but we are hopeful that coming out of this year we'll have not only a new discovery, but some new resources that Terronera.
Jake Sekelsky Okay. Got it. That's helpful. That's all from my end. Thanks again, guys.
Heiko Ihle, H.C. Wainwright Hey, Brad. Thanks for taking my questions.
Bradford Cooke Hey, good morning.
Heiko Ihle Hey. Your firm recently exceeds $1 billion in market cap. Congratulations. Has this done anything to your investor base? And on that same note, have you seen people interested that are able to purchase shares that previously weren’t allowed to do so and have the whole thing feed on itself a little bit? Have you seen anything like that? Have you gotten phone calls from people you've never really heard of before funds that have -- mandates like a market cap minimum?
Bradford Cooke Absolutely, Heiko. I don't know if we're seeing it yet, but in the coming 12 days, Endeavour is certainly under reviewed to be added to not one, but two indices, we're certainly qualify or appear to qualify for the GDX inclusion and the GDX index. We're currently on the GDXJ. But we're also in line and could possibly qualify for the S&P TSX 500 index, both indices that actually do their additions in the -- I think the third week of March. So, it's coming up here pretty quick. And we're hopeful that given our $1 billion market cap U.S., that we do qualify to meet these two new indices, which is not just index buying, but a number of investors, institutional investors who only buy index stocks. So, it could open the door for more institutional involvement.
Heiko Ihle Very helpful. Thank you. Shifting gears quite a bit. I was going through your $12.8 million in net deferred income taxes on page 39 of the financial statements. The figure includes $18.4 million of tax loss carry forwards. Are there expiration timelines for these assets? And if so, what's the timeline? And also we're now in March, albeit March 1st, have you managed to recover anything of this some year-to-date?
Unidentified Company Representative Yeah. Heiko, good question. Way to get into the depth of those financials note 26 or 36. In that note, we actually show the expiration dates of our loss carry forwards. We are recognizing an asset related to those temporary differences. I believe $9 million at Guanacevi and $3 million at Bolanitos. The timeline to actually chew through those loss carry forwards is about 16 months for Guanacevi and less for Bolanitos that should be in 2021. So, less than 12 months. Q1 is continued.
Heiko Ihle Am I understanding you correctly that some of these are expiring this year?
Unidentified Company Representative Sorry. There is …
Heiko Ihle You're looking at the -- you're looking at the -- on page 40, correct?
Unidentified Company Representative I'm not looking at it. But I know -- I familiar with the note. So, ultimately the expert -- typically a loss carry forward lasts for 10 years in Mexico. And I think some of them start running out in 2025 for us. But we'll use those loss carry forwards in 2021, Heiko, just based off the profitability. So, the -- regards to your question for what -- are we eating some of that up now. It's similar, like our production in Q3 and Q4 show that we're now making profit for tax purposes in Mexico. That's continuing here in Q1. We put out our guidance for 2021 and we expect to be profitable at these prices. Hence use enough of loss carry forwards.
Heiko Ihle Got it. Thanks for taking my question. So, I'll get back in the queue and stay safe.
Joseph Reagor, Roth Capital Partners Morning, guys. Thanks for taking the questions.
Bradford Cooke Yeah. Thanks, Joe.
Joseph Reagor So, looking at kind of the results from the fourth quarter, Guanacevi, you had slightly higher direct costs there. It seems like part of that was related to the purchasing of ore. Was there any other factors driving higher costs there? And then, what are your thoughts on purchasing ore going forward?
Unidentified Company Representative Yeah. Joe, you're right. We did purchase more ore. Obviously with higher prices, we're seeing more of the local miners bring a third-party ore to the -- to our processing plant, which were required to process, I believe, up to 10% of local ore just under the terms of when that plant was built. The other thing that's coming through our cost structure in Q4 -- and it's going to persist 2021 -- is royalties and special mining duty. So, as we're profitable in Mexico, we're paying more special mining duties that goes into our KPI metrics. And the royalties coming from El Curso, which is a property we acquired in 2019. We didn't have any upfront capital, but it does have a big royalty on it. A significant of our production is actually coming from El Curso, about 50% for 2021. So, that's going to persist through our cost structure going forward.
Joseph Reagor Okay. And then, on the tax front, I saw some commentary, I can't remember from which government person. But basically that the Mexican government expects less investment in Mexico in the coming years, because their tax structure has become more cumbersome and more expensive and that they believe people are going to look to invest in South America instead. Do you think that there's any opportunities to see them kind of roll back some of the taxes they added kind of just after the last peak in the gold cycle? Or is that wishful thinking?
Unidentified Company Representative I think at this time it's wishful thinking based off the current government regime that's there. You're hearing a lot of rhetoric out of Mexico with regards to how much Mexican mining companies and Canadian mining companies are paying in taxes. The special mining duty was introduced in 2013, plus environmental duty, which is a 0.5% on gross revenue for precious metal companies. I would guess that none of that's going to get rolled back during this regime. And quite frankly, it'd be great if taxes got lower in all jurisdictions, but I would think that going forward there -- I'd always be conservative and hope that it stays where we're at now. And we'll be comfortable with that.
Bradford Cooke And maybe I can give some more color to that. [Indiscernible] come out last week in a press conference in State, no new mining taxes. I guess, we're supposed to take that as good news. And in the overall scheme things, the total tax burden in Mexico is around 52%, 53%. So, right up there, with Canada and some other countries, not exactly the cheapest jurisdiction in the world. They would love to have more investment, but the Mexico has cost in the middle of this COVID pandemic with a crash in employment to crash in tax incomes to the government. And no financial relief in Mexico for poor people, like there is in Canada or the States. So, I think it's steady as she goes in terms of taxes in Mexico.
Joseph Reagor Okay. Just continue on that and maybe one other thing just real quick. Is that part of the reason the company is started to look at South American opportunities. And then, on that note, any update on what to expect from Parral this year?
Bradford Cooke So, yes. We diversified in recent years our exploration projects. We have three active and world-class prospects in Northern Chile. We really liked Chile a country. And we're looking at other South American jurisdictions as well as North America. So not just exclusively Mexico. And then Parral after a one-year hiatus in terms of exploration drilling, we resumed in January, drilling our Parral project with a $2 million budget to try and grow the resource space there. We've basically got two more years to grow the resource space before Parral goes to economic studies and Terronera is up and running. We'd love to have our project development team move straight from Terronera to Parral in 2024.
Joseph Reagor Okay. Thanks. Let's turn it over.
Craig Hutchison, TD Securities Just a question on reserves and resources, you still have fairly substantial indicated resources at Bolanitos. What are the opportunities to have some of those resources sort of converted into reserves? And do you see there the mine life at Bolanitos extending well into -- to next year this point?
Bradford Cooke Yeah. Bolanitos is a bit different than Guanacevi because the main area where mining is underneath the village of La Luz, which really prevents us from being able to drill from surface. So, almost all of our drilling in recent years of the La Luz vein system has been from underground. And, of course, that then -- it's a cost reward exercise to see how far ahead we want to drill. Can we convert indicated resources to reserves? Certainly to some degree. But we're typically run a one year reserve envelope and an additional couple of years of resources. And I don't think that's going to change just because of the constraints of drilling ahead of the reserve envelope, the oil pricing could have some beneficial impact on conversion of resources to reserves as well.
Craig Hutchison And can you remind me what's the budget for Bolanitos in terms of explorations resume?
Unidentified Company Representative 2,250,000 for Brownfield's exploration this year.
Craig Hutchison Okay. Great. Thanks, guys.
Lucas Pipes, B. Riley Hey, good morning, everyone. And well down on the quarter, congratulations there. So most of my questions already asked, but then I'll add some follow-up questions. So, first on the purchased ore, can you remind us how we should think about margins on that business? Thank you.
Unidentified Company Representative Yeah. From a margin standpoint, we look to -- we pay about 60% of the value of that ore. And ultimately when it's all said and done, we share about 35% to 40% with the processing costs and royalties, they get put in place. Ultimately, it's about 10 -- last year, we were closer to 11% total production came from the toll ore, which is the highest we have historically ever been. If you go back through the last 10 years, we've approximately 6% of our throughput through toll ore. So, at current prices, I would imagine we're going to be closer to 10% again this year, and generally follow the same formula from a purchase standpoint of shooting for that 40% profit margin from it.
Lucas Pipes Very helpful. Very helpful. I appreciate that detail. And then, second follow-up question just on Chile. Brad, you mentioned how -- you like being there, what's kind of the priority in terms of allocating capital towards that region? And a very high level, kind of what are some of the catalysts we might be looking forward to when it comes to your Chile opportunities? Thank you.
Bradford Cooke Thanks, Lucas. We've been in Chile for, I think, eight years. We've generally run $0.5 million to $1.5 million annual budgets. So, we've actually done a pretty significant investment to acquire, explore and prepare for drilling our three projects. We're currently drilling one of them. The Paloma project in the far North of Chile is arguably 5 million ounce gold equivalent high sulfation epithermal target. So open-pit, potentially bleached. But early days yet. We just started drilling last year and we hope to have some results here in the next month or two. We're probably going to partner our copper rich project. Cerro Marquez is a copper gold porphyry. Again, we've spent several years and several million dollars grooming it. It's drill ready. And we've had a lot of expressions of interest from copper majors. So, we've signed some confidentiality agreements and our preference is to bring on a partner at Cerro Marquez, which leaves our third project Aida and Aida is our extension of the Bolivian silver belt down into the Northern most Chile. And again, it's drill ready. It's a massive alteration zone with very strong indications of open pit silver. We don't have the drill permit yet. We expect it late this year and it would lead to a central program at Aida either this year or next year. So, we really liked drilling, truly. We focused on world-class prospects when we acquired these things during the bear market. We're not done yet. We'll keep continue to try and grow that pipeline. And the whole goal of our Chilean exposure is to get into a discovery that has world-class potential and ultimately to add it to the development pipeline.
Lucas Pipes This is very helpful color. I appreciate all the detail and continued best of luck. Thank you.
Henry Westender, a private investor Well, gentleman, you seemed to have had a very, very good fourth quarter and that strikes me that the future in 2021 and beyond could be very substantial. And without pushing the envelope too far, could you comment on 2021?
Bradford Cooke In terms of our public guidance, we've guided our production to be silver to slightly higher than last year. So, I think, a 6.1 to 7.1 million ounces of silver equivalent production forecasted this year. Obviously, performance in Q4 with the lower costs and higher metal prices is a pretty good guide for how we're going to do financially this year. We don't provide financial guidance, but Q4 is certainly a good indicator.
Henry Westender You provided a little one-- you said you're going to use up the tax loss carry forward in Mexico this year. What'd you say you're going to use it up very, very safely? Just about, is it up or is it dicey?
Unidentified Company Representative Using those loss carry forwards, it's just a function of production and what we've used historically from a cost standpoint. So, we have multiple entities in Mexico and at Guanacevi from 2016 to 2019 where we had challenges financially and we accumulated those loss carry forwards and hopefully over the -- likely say the next 16 months, we eat through those loss carry forwards.
Henry Westender Excellent. Excellent. For what it's worth -- I've been one of the us since 2003 up in that, and I think we're going up again. Thank you, gentlemen.
Bradford Cooke
Thanks for your questions.
Arcadia Economics Hi, guys. Thank you for having me. Congratulations on a great quarter four. My question has to do around -- has to do with the developments that arose during quarter four, and mostly quarter one, specifically with the silver squeeze and the manipulation of the price of silver on the Comex. My question is, does Endeavour have any strategic plan to deal with this? The combat, the manipulation, an idea I've heard is withholding 5% of production. I just have -- I just want to hear your answers around that and the future concerning that.
Bradford Cooke Well, thank you for your question. I guess I've got two different answers, because there's really two different issues here. With regard to our sales strategy and whether we withhold or accelerate silver sales, that's typically a short-term decision based on our short-term view on the direction of the silver price. And we have in the past, for instance, when we felt that the silver price was rising, held back our sales for instance, most recently last September. We built up a finished goods inventory because of the crash on the silver price late September. In the presumption that silver would bounce back in Q4, which it did with a bang. And we were able to sell that accumulated inventory and make extra profit on it. So, we do this from time to time. It's a sales strategy. With regard to the infamous silver short squeeze, I have a lot to say on it and I actually got posted an Ask the CEO comment on our website a few weeks ago. So, you're welcome to go and read that. But my view on this is perhaps a bit different than most. I don't think it was a silver squeeze. I think it was a classic pump and dump by some knowledgeable investors who did purchase $35 call options on silver before posting on Reddit. Those options on the Tuesday before the Reddit post thing were $0.35 -- $0.30 to $0.35. And on the following Monday after promoting it for three days, those options were worth $1.65. So, I think some smart investors made a lot of money on that. Very short-term pump and dump. I don't think it was a squeeze at all. Secondly, it's very difficult to squeeze silver. Because banks are generally agnostic to the silver price. What I mean by that is that they're generally neither long nor short, or more accurately. They are long physical sitting in volts. And they're short paper. And banks using fractional banking do lend out their assets. If you're on down to the local branch, your cash is being lent out several times. And that is probably the case in silver, but it's not manipulation. It's simply a function of what banks do. And to be honest, if investors were to try and squeeze silver and buy physical by the ETF, by the call options, what's the bank going to do, they're sitting on physical. So, they're the ones who are actually going to make money at higher prices and they can rollout of -- like they're typically hedging their silver, right? And it doesn't cost them anything to rollout of the short position and set it higher and rollout of it and set it higher. And they could do that all the way up to a thousand dollars silver. So, I don't think, there is a mother of all squeezes to be had in silver. I think it's a function. By the way, this is my last comment on this. Silver amongst all the metals traded in the options and futures market is different. Why is it different? Because of all the common metals, it's the only one that is a by-product of other mines, to by-product compromise, but I think mines -- gold mines. And those big diversified global producers of copper lead and zinc and gold typically sell forward their silver, lock in the revenue stream for their by-product. So, they're unhedged on their primary products. What that means is that silver amongst all the metals has a massively higher derivative book compared to the other metals and compared to physical. And that's because diversified miners sell forward their silver. Who buys it, the buying center into those forward contracts. So, now they have not only physical, they have a commitment to buy more physical. And because they're agnostic, they balance that long commitment with a derivative sharp and that's the structure of the silver market. So, I think it's very, very challenging to try and squeeze something like silver, because the main beneficiaries of higher silver prices would be the bankers and the miners.
Arcadia Economics Okay. So kind of going off that -- this is my last question. Thank you for your answer. What is your projection for silver in 2021?
Bradford Cooke Crystal ball, well, I'm not shy when it comes to forecasting internally, but I rarely do it externally. We obviously think that there's a silver bull market well underway, precious metal market, well underway. It's probably got years to run. I say that for two reasons. In the case of precious metals, primarily gold, there's a whole backdrop of record low interest rates, massive government intervention, no change in the fed view for at least two more years, maybe three. So the fundamentals underlying a higher gold price on therefore a higher silver price, a very strong. But silver, again, is not just a precious metals. It's an industrial metal. And the industrial side of silver is really taking off. Silver is a green metal. You can't have an electronics industry without silver. You can't have solar photovoltaic power without silver. You can't have electric vehicles without silver. You can't have 5G technology, telephonics without silver. And I think that there is an emerging appreciation finally amongst generalist, investors that silver is a go-to-metal in a green economy. Thanks all for listening in today. Obviously, this was a great year. 2020 was a great year for us, very satisfying after some challenging years. Q4 was a great way to finish the year, and I think it's a good guide to how we expect to do in 2021.
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Post by Entendance on Mar 30, 2021 7:56:21 GMT -5
Watch the fireside chat with CEO, Bradford Cooke and BMO Analyst, Ryan Thompson during the BMO Global Mining Conference. Brad provides a recap of our 2020 numbers, an overview of our projects and our Covid-19 response here
Endeavour Silver (NYSE:EXK) says CEO Bradford Cooke will step down from the position following its annual general meeting scheduled for May 12 to become Executive Chair, as Geoff Handley plans to depart. Current CFO Dan Dickson is nominated to assume the role of CEO of Endeavour, and VP Controller Christine West is nominated to become CFO. Cooke founded Endeavour Silver Corp. in 2003 for the purpose of acquiring high-grade silver-gold projects in Mexico; previously he founded Canarc Resource Corp. Dickson joined Endeavour as Controller in 2007 and became CFO in 2008; West has held the Controller position since 2008.
- Endeavour Silver Corp. (TSX: EDR, NYSE: EXK) (“Endeavour”) announces its forthcoming board and management succession plans. In anticipation of the re-election of the current directors as proposed in the Management Information Circular for the Annual General Meeting (“AGM”) of Shareholders to be held on May 12, 2021, Geoff Handley, Chair of Endeavour, plans to step down as the Chair of the Board of Directors but will remain active as a Director. Rex McLennan will become the Lead Independent Director at that time. Bradford Cooke, Chief Executive Officer and Director, has been invited by the Board to assume the role of Executive Chair of Endeavour, and plans to step down as the CEO immediately following the AGM. Dan Dickson, Chief Financial Officer, has been nominated to assume the role of CEO of Endeavour, and Christine West, Vice President Controller, has been nominated to assume the role of CFO of Endeavour.
Bradford Cooke commented, “I am pleased to announce this seamless board and management transition without having to reach outside of the organization. It speaks to the depth of our management team, and the skills and dedication they bring to the Company. I look forward to supporting Dan and Christine in their new roles, and we appreciate the vote of confidence of our Board of Directors.” “I plan to stay active with Endeavour, utilizing my knowledge of and contacts in the mining industry to continue building a bigger and better Company. However, given that Endeavour is now preparing for its next phase of growth, starting with the construction of the Terronera project this year, now is an appropriate time to pass the baton to our rising stars in management.”
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Post by Entendance on Apr 8, 2021 7:34:06 GMT -5
“Management withheld metal [silver] from sale during the price correction over last two weeks of March and plans to sell the withheld metal inventory in anticipation of a precious metal prices rebound in Q2, 2021”
It’s rare to find a stronger statement of conviction for the price potential of gold and silver than for a company to withhold production from the market in the anticipation of higher prices for the precious metals. I would argue that implicit in that view from EXK is the acknowledgement that the prices of gold and silver are actively manipulated...
Endeavour Silver Corp. (TSX: EDR, NYSE: EXK) reports production of 1,048,100 silver ounces (oz) and 11,109 gold oz in Q1, 2021, for silver equivalent (AgEq) production of 1.9 million oz at an 80:1 silver:gold ratio. Silver production increased 22% and gold production increased 31% compared to Q1, 2020, due primarily to higher ore grades mined and processed.
2021 First Quarter Highlights Consolidated Production on Plan: Silver equivalent production at each mine is on track to meet or exceed 2021 production plans.
Guanacevi Production on Plan: Higher silver and gold grades were partly offset by slightly lower throughput than planned during the quarter.
Bolanitos Ahead of Plan: Processed tonnes, gold grade and gold recoveries are ahead of plan, partly offset by slightly lower silver grades and recoveries compared to plan.
El Compas Ahead of Plan: Processed tonnes, and gold grade are ahead of plan, partly offset by slightly lower silver grade and lower gold recoveries compared to plan.
Metal Sales and Inventories: Sold 623,379 oz silver and 10,663 oz gold, held 523,235 oz silver and 1,123 oz gold of bullion inventory and 6,582 oz silver and 566 oz gold in concentrate inventory. Management withheld metal from sale during the price correction over last two weeks of March and plans to sell the withheld metal inventory in anticipation of a precious metal prices rebound in Q2, 2021.
Signed Definitive Agreement to Sell the El Cubo Assets: Advanced sale of the El Cubo mine in Guanajuato, Mexico to VanGold Mining Corp for $15 million in cash and share payments, with up to $3 million in contingent payments. The transaction is anticipated to close in April 2021.
Shares Included in Two Major Indices: The Company’s common shares were added to the S&P/TSX Composite Index and the NYSE Arca Gold Miners Index (GDX ETF) in March.
Announced Management Succession Plan: Bradford Cooke plans to step down as CEO and assume the role of Executive Chair of the Company following the AGM on May 12, 2021. Dan Dickson has been nominated to the role of CEO and Christine West has been nominated to become the CFO. Both Mr. Dickson and Ms. West have been key members of management for over 13 years and will lead the Company into its next phase of growth.
Bradford Cooke, Endeavour CEO, commented, “It is gratifying to see the Company firing on all cylinders, with the mining operations meeting or exceeding expectations and the development team advancing the Terronera project to drive the next phase of growth. I will look forward to supporting Dan and Christine in their new roles as they build a bigger and better Company.”
Mine Operations Consolidated silver and gold production were both higher in Q1, 2021 compared to Q1, 2020 due to a significant increase in ore grades at Guanacevi and improved throughput and ore grades at Bolanitos. Guanacevi silver and gold grades were higher compared to Q1, 2020 and well above plan. In February, unusually cold weather in northern Mexico resulted in power curtailments effecting mine and process plant production over a three-day period. In March, throughput was lower than initially planned as the refurbishment of the tailings filter presses impacted daily throughput. The plant throughput is expected to return to its 1200 tonnes per day capacity in April. Stockpiled ore inventory increased during the quarter as the mine output was on plan. With the higher metal prices, supplies of local third-party ores continued to supplement mine production, amounting to 10% of quarterly throughput, and contributed to the higher ore grades. Ore grades are expected to revert to plan in Q2, 2021 and for the remainder of the year. Bolanitos and El Compas processed tonnes, and gold grade were all higher compared to Q1, 2020, partly offset by lower silver grades and both mines are slightly ahead of planned production. Settlement of El Compas concentrates resulted in lower recoveries during the quarter. COVID-19 pandemic remains prevalent in Mexico, and at the Company’s business locations, process and protocols remain in place to ensure staff and workers as well as our communities remain as safe as possible. Release of First Quarter, 2021 Financial Results and Conference Call The 2021 First Quarter Financial Results will be released before market on Tuesday, May 11, 2021 and a telephone conference call will be held the same day at 9:00am PT (12:00pm ET). To participate in the conference call, please dial the numbers below. No pass code is necessary. Toll-free in Canada and the US: 1-800-319-4610 Local Vancouver: 604-638-5340 Outside of Canada and the US: +604-638-5340 A replay of the conference call will be available by dialing 1-800-319-6413 in Canada and the US (toll-free) or +604-638-9010 outside of Canada and the US. The required pass code is 6594#. The audio replay and a written transcript will be available on the Company's website at www.edrsilver.com under the Investor Relations, Events section.
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Post by Entendance on Apr 13, 2021 1:27:51 GMT -5
VANCOUVER, British Columbia, April 12, 2021 -- Endeavour Silver Corp. (TSX: EDR, NYSE: EXK) (“Endeavour”) announces that it has now closed the sale of the El Cubo Mine in Guanajuato, Mexico to VanGold Mining Corp. (“VanGold”) for $15 million in cash and share payments plus up to $3 million in future contingent payments (all dollar amounts in US dollars unless otherwise noted) (the “Transaction”).
VanGold paid $15,000,000 to Endeavour as follows:
$7.5 million cash on closing. $5.0 million (C$6,399,317.40) in VanGold common shares (“VanGold Shares”) on closing, priced at $0.2344 (C$0.30) per VanGold Share for a total of 21,331,058 VanGold Shares (“Consideration Shares”) representing approximately 10.9% of the issued and outstanding VanGold Shares. $2.5 million promissory note due 12 months from closing.
VanGold has also agreed to pay Endeavour up to an additional $3,000,000 in contingent payments based on the following:
$1.0 million upon VanGold producing 3,000,000 silver equivalent ounces from the El Cubo mill, derived from either the El Cubo or El Pinguico project, $500,000 of which may, in VanGold’s discretion, be paid in VanGold Shares. $1.0 million if the price of gold closes at or above $2,000 per ounce for 20 consecutive trading days within two years after the closing date of the Transaction. A further $1.0 million if the price of gold closes at or above $2,200 per ounce for 20 consecutive trading days within three years after the closing date of the Transaction.
Bradford Cooke, Endeavour CEO and Director, commented, “We are pleased to close this transaction and I congratulate VanGold for helping make it a win-win deal for both companies. They are in the best position to create more value out of the El Cubo assets given their emerging El Pinguico project located very close to El Cubo, and we now become the largest shareholder of VanGold. I look forward to supporting VanGold in their efforts to become the next junior silver-gold producer in Mexico!”
On the closing of the Transaction, Endeavour acquired 21,331,058 VanGold Shares. Based on 194,931,838 VanGold Shares outstanding as of the closing date of the Transaction, the Consideration Shares represent 10.9% of the outstanding VanGold Shares on an undiluted basis. Prior to the closing date of the Transaction, Endeavour did not own any VanGold Shares or other securities of VanGold. Endeavour has agreed to abstain from voting its shares of VanGold, other than as recommended by VanGold’s management, for a period of 2 years, and to a 12-month restriction on the resale of any VanGold shares acquired in this Transaction.
Endeavour acquired its interest in the Consideration Shares for long term investment purposes and will continue to monitor the business, prospects, financial condition and potential capital requirements of VanGold. Endeavour may acquire additional securities of VanGold including on the open market or through private acquisitions or sell securities of VanGold including on the open market or through private dispositions in the future depending on market conditions, reformulation of plans and/or other relevant factors.
About Endeavour Silver – Endeavour Silver Corp. is a mid-tier precious metals mining company that owns and operates three high-grade, underground, silver-gold mines in Mexico. Endeavour is currently advancing the Terronera mine project towards a development decision and exploring its portfolio of exploration and development projects in Mexico and Chile to facilitate its goal to become a premier senior silver producer. Our philosophy of corporate social integrity creates value for all stakeholders.
SOURCE Endeavour Silver Corp.
Endeavour will file an early warning report in connection with the Transaction on SEDAR at www.sedar.com. A copy of the report may be obtained by contacting Galina Meleger at:
Contact Information Galina Meleger, Director Investor Relations Toll free: (877) 685-9775 Tel: (604) 640-4804 Email: gmeleger@edrsilver.com Website: www.edrsilver.com
Endeavour Silver agrees to sell the El Cubo mine in Guanajuato, Mexico, to VanGold Mining VGLDF for $15M in cash and share payments plus as much as $3M in contingent payments. Endeavour also says its common shares will be be added to the S&P/TSX Composite and the NYSE Arca Gold Miners indices effective after market close on March 19.
Endeavour Silver Signs Definitive Agreement to Sell the El Cubo Mine in Guanajuato, Mexico to VanGold Mining; Endeavour to be Added to the S&P/TSX Composite and NYSE Arca Gold Miners (GDX ETF) Indices
VANCOUVER, British Columbia, March 17, 2021 -- Endeavour Silver Corp. (TSX: EDR, NYSE: EXK) (“Endeavour”) announces that it has signed a definitive agreement to sell the El Cubo mine in Guanajuato, Mexico to VanGold Mining Corp. (“VanGold”) for $15 million in cash and share payments plus up to $3 million in contingent payments (all dollar amounts in USD unless otherwise noted). VanGold will pay $15,000,000 to Endeavour as follows: A non-refundable down-payment of $500,000 cash (received). $7.0 million cash payment on closing, anticipated by the end of March 2021. $5.0 million in VanGold common shares on closing, priced at $0.2344 (CAD$0.30) per share for a total of 21,331,058 VanGold shares representing approximately 11.3% of the issued shares. $2.5 million promissory note due 12 months from the closing date. Endeavour has agreed to (a) abstain from voting its shares of VanGold, other than as recommended by VanGold’s management, for a period of two years from the closing date and (b) a 12-month restriction on the resale of any VanGold shares acquired in this transaction. VanGold has also agreed to pay Endeavour up to an additional $3.0 million in contingent payments based on the following: $1.0 million upon VanGold producing 3,000,000 silver equivalent ounces at El Cubo mill, derived from either the El Cubo or El Pinguico project. $1.0 million if the price of gold closes at or above $2,000 per ounce for 20 consecutive days within two years after closing. $1.0 million if the price of gold closes at or above $2,200 per ounce for 20 consecutive days within three years after closing. Endeavour also announces its common shares will be be added to the S&P/TSX Composite and the NYSE Arca Gold Miners (GDX ETF) Indices effective after market close on Friday March 19, 2021, as per their respective Q1, 2021 rebalances, as announced on Friday March 12, 2021. Bradford Cooke, Endeavour CEO, commented, “Inclusion in these two major indices is a great milestone for the Company, validating our recent success and providing greater visibility to investors. Constituents of these indices receive both an increase in the company profile and inclusion in mutual and pension funds that use these indices as benchmarks.”The S&P/TSX Composite Index is the benchmark index for the Canadian equity market. It is the broadest measure of the S&P/TSX family and tracks approximately 250 companies. For more information, visit: www.standardandpoors.com. The NYSE Arca Gold Miners Index is a modified market capitalization weighted index comprised of approximately 50 publicly traded companies primarily involved in the mining of gold and silver globally, and it is the underlying index to the VanEck Vectors Gold Miners ETF (GDX). For more information, visit: www.nyse.com. About Endeavour Silver – Endeavour Silver Corp. is a mid-tier precious metals mining company that owns and operates three high-grade, underground, silver-gold mines in Mexico. Endeavour is currently advancing the Terronera mine project towards a development decision and exploring its portfolio of exploration and development projects in Mexico and Chile to facilitate its goal to become a premier senior silver producer. Our philosophy of corporate social integrity creates value for all stakeholders. SOURCE Endeavour Silver Corp. Contact Information Galina Meleger, Director Investor Relations Toll free: (877) 685-9775 Tel: (604) 640-4804 Email: gmeleger@edrsilver.com Website: www.edrsilver.com
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Post by Entendance on May 4, 2021 6:56:51 GMT -5
May 4, 2021
VANCOUVER, British Columbia, May 04, 2021
Endeavour Silver Corp. (TSX: EDR, NYSE: EXK) has intersected high grade silver-gold mineralization in its 2021 exploration drill program to expand the El Curso orebody at the Guanacevi Mine in Durango State, Mexico. The Company is currently producing from three orebodies at Guanacevi: Milache, El Curso and SCS. Exploration drilling is ongoing at El Curso and SCS (view longitudinal section here).
Highlights from the latest drill results include: 3.27 grams per tonne (gpt) gold and 2,753 gpt silver for 2,982 gpt silver equivalent (AgEq at an 70:1 silver:gold ratio) over a 4.1 metre (m) true width (87.0 oz per short ton (opT) AgEq over 13.5 feet (ft)), including 0.6 gpt gold and 18,752 gpt silver for 18,794 gpt AgEq over 0.3 m (548.2 opT AgEq over 1.0 ft) in drill hole UCM-48 4.29 gpt gold and 3,464 gpt silver for 3,764 gpt AgEq over a 2.6 m true width (109.8 opT AgEq over 8.5 feet (ft)), including 25.7 gpt gold and 19,390 gpt silver for 21,189 gpt AgEq over 0.3 m (618.0 opT AgEq over 1.0 ft) in drill hole UCM-50
Luis Castro, Vice President of Exploration, commented, “We continue to intersect excellent drill results as we step out from the current margins of the El Curso orebody. There remains an additional 100 m to drill until we connect El Curso with the Milache orebody to the west, and there is a similar gap to fill to connect El Curso with the Porvenir Cuatro orebody (previously mined) to the east.”
“Ultimately, we anticipate that Porvenir Cuatro, El Curso and Milache will all connect to form one continuous orebody over a 1,500 m length by 400 m vertical extent. This would make it comparable to the original Porvenir Norte orebody which supported production at Guanacevi for over 14 years. The future is looking bright for Guanacevi.”
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Post by Entendance on May 11, 2021 6:12:13 GMT -5
GAAP EPS of $0.08, beats by $0.06.
VANCOUVER, British Columbia, May 11, 2021 -- Endeavour Silver Corp. (NYSE: EXK; TSX: EDR) released its financial results today for the three months ended March 31, 2021. The Company operates three silver-gold mines in Mexico: the Guanacevi mine in Durango state, the Bolanitos mine in Guanajuato state and the El Compas mine in Zacatecas state.
Bradford Cooke, CEO, commented, “We are off to a good start in 2021, with the mining operations meeting our production plans notwithstanding the severe weather events that caused a slow down of production during the 1st quarter. As a result, our operating costs were a bit higher than plan but we expect costs to be lower going forward.” “Revenue, cash flow and earnings were all sharply higher in Q1, 2021 compared to Q1, 2020. The sale of El Cubo helped boost our earnings, offset by our decisions to hold back some metal inventory from sale near the end of the 1st quarter as well as elevated general and administrative expenses.” “The Terronera feasibility study is on track for completion in the 3rd quarter and exploration is ongoing at each of our mines and projects to test highly prospective targets. We have a busy year ahead, as our attention turns to developing our next core asset at Terronera.”
2021 First Quarter Highlights Metal Production: Produced 1,039,710 ounces (oz) silver, up 22% and 10,894 oz gold, up 31%, in line with guidance of 1.9 million oz silver equivalent (AgEq), up 26%, at an 80:1 silver:gold ratio, compared to Q1, 2020.
Gross Sales: Total $35.1 million, up 58%, from the sale of 623,379 oz of silver and 10,663 oz gold at average realized prices of $27.17 per oz silver and $1,703 per oz gold. Held 523,235 oz silver and 1,123 oz gold of bullion inventory and 6,582 oz silver and 566 oz gold in concentrate inventory. Management withheld metal from sale during the price correction over last two weeks of March.
Operating Costs: Cash cost(1) $7.86 per oz payable silver, flat year-on-year and all-in sustaining cost (AISC)(1) $19.94 per oz payable silver, up 8% year-on-year, both net of gold credits.
Cash Flow: $5.2 million in cash flow from operations before working capital changes, up 205% compared to Q1, 2020 as the Company accumulated finished goods, invested in exploration activities and advanced the Terronera Feasibility Study.
Net Earnings: Earnings of $12.2 million or $0.08 per share, up sharply compared to a loss of $15.9 million in Q1, 2020 due to the reversal of the historical impairment of the El Cubo asset sold in April, offset by increased exploration activities, evaluation activities, and higher tax expense. Excluding the impairment reversal, the adjusted earnings resulted in a loss of $4.5 million. At quarter end, the finished golds inventory was carried at a cost of $8.0 million compared to the fair market value of $15.9 million.
Agreement to Sell the El Cubo Assets: Advanced the sale of the El Cubo assets in Guanajuato, Mexico to Vangold Mining Corp for $15 million in cash and share payments with up to $3 million in contingent payments, with the transaction closing April 9, 2021.
Balance Sheet: Cash position $86.0 million, up 473% and working capital $113.1 million, up 316% compared to Q1, 2020. Raised $30.1 million in equity financing through an ATM facility. Only term liabilities are equipment loans of $8.7 million, entered into in previous years to upgrade the mobile fleet.
(1) Mine operating cash flow, cash costs and all-in sustaining costs are non-IFRS measures. Please refer to the definitions in the Company’s Management Discussion & Analysis.
Financial Overview In Q1, 2021, net revenue increased 58% to $34.5 million as a result of higher metal prices and increased production. As a result, mine operating cash flows, operating cash flows and EBITDA all increased significantly compared to Q1, 2020. The Company recognized earnings of $12.2 million compared to a loss of $15.9 million in Q1, 2020. An impairment reversal of $16.8 million was recognized as a result of the classifying the El Cubo mine and related assets and liabilities, as held for sale in relation to the April 9th sale.
Cost of sales for Q1, 2021 was $28.8 million, an increase of 16% over the cost of sales of $24.8 million for the same period of 2020. The increase in cost of sales was primarily related to significantly higher royalty costs and labour costs partially offset by improved productivity at the Guanacevi and Bolanitos operations. Royalties increased 187% to $2.5 million due to higher realized prices and the increased mining of the high grade Porvenir Cuatro extensions at the Guanacevi operation which is subject to the significantly higher royalty rates.
The Company increased its finished goods silver and gold inventory to 529,817 oz and 1,689 oz, respectively at March 31, 2021 compared to 116,484 oz silver and 1,459 oz gold at December 31, 2020. The cost allocated to these finished goods was $8.0 million at March 31, 2021, compared to $3.6 million at December 31, 2020. At March 31, 2021, the finished goods inventory fair market value was $15.9 million, compared to $5.8 million at December 31, 2020.
Financial Results (Consolidated Statement of Operations Appended Below) For the period ended March 31, 2021, the Company generated net revenue of $34.5 million an increase of 58% compared to $21.9 million. Gross sales of $35.1 million in Q1, 2021 represented a 57% increase over the $22.8 million for the same period in 2020. There was a 6% decrease in silver ounces sold and a 77% increase in the realized silver price resulting in a 66% increase to silver sales. There was a 43% increase in gold ounces sold with a 4% increase in realized gold prices resulting in a 49% increase in gold sales. During the period, the Company sold 623,379 oz silver and 10,663 oz gold, for realized prices of $27.17 and $1,703 per oz respectively, compared to sales of 665,500 oz silver and 7,454 oz gold, for realized prices of $15.33 and $1,633 per oz, respectively, in the same period of 2020. For the three months ended March 31, 2021, silver and gold spot prices averaged $26.26 and $1,794, respectively.
After cost of sales of $28.8 million (Q1, 2020 - $24.8 million), mine operating earnings amounted to a $5.7 million (Q1, 2020 – loss of $2.9 million) from mining and milling operations in Mexico.
Excluding depreciation and depletion of $7.5 million (Q1, 2020 - $6.0 million), stock-based compensation of $0.1 million (Q1, 2020- $0.1 million) mine operating cash flow before taxes was $13.3 million in Q1, 2021 (Q1, 2020 – $4.3 million). Operating earnings were $14.3 million (Q1, 2020 – loss of $8.6 million) after exploration and evaluation expenditures of $4.1 million (Q1, 2020 – $2.4 million), general and administrative expense of $3.5 million (Q1, 2020 – $2.0 million) and El Cubo care and maintenance costs of $0.5 million (Q1, 2020 – $1.3 million). An impairment reversal of $16.8 million was recognized as a result of the classifying the El Cubo mine and related assets and liabilities as held for sale in relation to the April 9th sale.
Net earnings amounted to $12.2 million ($0.08 per share) compared to a net loss of $15.9 million (loss of $0.11 per share) in Q1, 2020.
Current income tax expense increased to $0.7 million (Q1, 2020 – $0.3 million) related to an increase in special mining duty, while deferred income tax expense of $3.1 million was recognized due to the estimated use of loss carry forwards to reduce taxable income at Guanacevi and Bolanitos (Q1, 2020 – $1.9 million).
Direct operating costs per tonne in Q1, 2021 increased 16%, to $112.36 compared with Q1, 2020 due to higher operating costs at Guanacevi and Bolanitos, offset by lower costs at El Compas. Guanacevi and Bolanitos have seen increased labour costs and increased third party ore purchased at Guanacevi compared to prior year. Including royalties and special mining duty, direct costs per tonne increased 24% to $126.23. Royalties increase 187% to $2.5 million as increased production from the El Curso concession at Guanacevi and higher prices substantially increased the royalty expense. The higher prices and higher grades increased special mining duty expense to $0.4 million for Q1, 2021.
Consolidated cash costs per ounce, net of by-product credits (a non-IFRS measure and a standard of the Silver Institute) was flat at $7.86 as the higher grades and higher prices offset the higher direct costs per tonne. All-in sustaining costs (also a non-IFRS measure) increased 8% to $19.84 per ounce in Q1, 2021 as a result of higher corporate general and administrative costs and increased capital expenditures at Guanacevi to accelerate mine development within the El Curso ore body. In Q1, 2020 corporate general and administrative included a $1.1 million mark to market recovery of deferred share units expense whereas the mark to market recovery was $0.2 million in Q1, 2021. The Condensed Consolidated Interim Financial Statements and Management’s Discussion & Analysis can be viewed on the Company’s website at www.edrsilver.com, on SEDAR at www.sedar.com and EDGAR at www.sec.gov. All amounts are reported in US$.
Conference Call
A conference call to discuss these results will be held today, Tuesday, May 11 at 10am PDT (1pm EDT). To participate in the conference call, please dial the numbers below. No pass-code is necessary.
Toll-free in Canada and the US: 1-800-319-4610 Local Vancouver: 604-638-5340 Outside of Canada and the US: +-604-638-5340
A replay of the conference call will be available by dialing 1-800-319-6413 in Canada and the US (toll-free) or +604-638-9010 outside of Canada and the US. The required pass-code is 6594 #. The replay will also be available on the Company’s website at www.edrsilver.com.
About Endeavour Silver – Endeavour Silver Corp. is a mid-tier precious metals mining company that owns and operates three high-grade, underground, silver-gold mines in Mexico. Endeavour is currently advancing the Terronera mine project towards a development decision and exploring its portfolio of exploration and development projects in Mexico and Chile to facilitate its goal to become a premier senior silver producer. Our philosophy of corporate social integrity creates value for all stakeholders.
SOURCE Endeavour Silver Corp.
Contact Information: Galina Meleger, Director Investor Relations Toll free: (877) 685-9775 Tel: (604) 640-4804 Email: gmeleger@edrsilver.com Website: www.edrsilver.com
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Post by Entendance on May 11, 2021 13:54:56 GMT -5
"In a shocking retraction, the bullion bank dominated London Bullion Market Association (LBMA) has just announced that it has been overstating LBMA silver vault holdings by a massive 3,300 tonnes of silver. This overstatement relates to the total quantity of physical silver bars that the LBMA claimed were being held in LBMA vaults in London as of end of March 2021..."
Endeavour Silver Releases 2020 Sustainability Report ANCOUVER, British Columbia, May 12, 2021 -- Endeavour Silver Corp. (NYSE: EXK) (TSX: EDR) announces the publication of its 2020 Sustainability Report entitled “Unity in Adversity.” This marks the ninth consecutive year the Company has reported on its sustainability initiatives, including the last eight under the GRI Standards for sustainability reporting. This year, the report includes additional disclosure linked to the Sustainability Accounting Standards Board (SASB) framework. Endeavour’s 2020 Sustainability Report is available at csr.edrsilver.com and the full report can be downloaded here. The Spanish versions will be available by month-end on the company website. All dollar amounts presented below are in U.S. dollars.
2020 Sustainability Highlights Safety and Health Achieved a 25% reduction in the Reportable Injury Rate (RIR), exceeding the target of 10% Implemented a new employee empowering Safety Culture Change Program entitled “Te Cuido” (English translation is “I take care of you”) with a focus on risk awareness and competency Augmented standard safety procedures with COVID-19 protocols to protect our workforce with minimal disruption to the business
Our People Provided an average of 21 hours training for each employee, despite pandemic restrictions, including social distancing measures Deployed the ICARE Values program, “The Endeavour Way” company-wide to improve visibility of ethics and communication with employees
Community Supported 142 Mexican students with scholarships to further their education Donated 534 tablets to local schools and students to support online learning Distributed 2,200 COVID-19 rapid tests and personal protective equipment (PPE) to Mexican households and health centers during the pandemic
Environment Planted 44,000 trees in reforestation projects to reclaim disturbed ground Recycled over 90% of water used in mineral processing Reduced absolute greenhouse gas (GHG) emissions by 34%
Economic Value 99% of our workforce is local, providing $32.4 million in employee wages and benefits. Spent $136 million on goods and services, 96% of total procurement is from within Mexico. Paid $5 million in various taxes
Endeavour CEO Bradford Cooke commented: “In the face of a global pandemic, our people came together not only to resolve new challenges but also capture new opportunities and create a more sustainable future for the Company. We did not just survive a difficult year, we thrived thanks to our ability to unite in the face of adversity.” “COVID-19 has been a reminder that we need to work together in harmony with our stakeholders and the planet in order to protect our people, our most valuable resource. The pandemic also accelerated the trend for a more sustainable approach to investing. On this note, silver has a key role to play as a green metal much needed for solar power and electric vehicles as the world transitions to a lower carbon economy.” “Our sustainability reporting reflects how our mining operations are evolving towards greater sustainability to drive positive change for our stakeholders. Rather than set arbitrary targets for our sustainability goals, we conduct regular materiality assessments with our major stakeholders in order to drive better ESG performance. We have been doing for many years as part of our philosophy of continuous improvement.”
About Endeavour Silver – Endeavour Silver Corp. is a mid-tier precious metals mining company that owns and operates three high-grade, underground, silver-gold mines in Mexico. Endeavour is currently advancing the Terronera Mine project towards a development decision and exploring its portfolio of exploration and development projects in Mexico and Chile to facilitate its goal to become a premier senior silver producer. Our philosophy of corporate social integrity creates value for all stakeholders. SOURCE Endeavour Silver Corp. Contact Information: Galina Meleger, Director, Investor Relations Toll free: (877) 685-9775 Tel: (604) 640-4804 Email: gmeleger@edrsilver.com Website: www.edrsilver.com
Endeavour Silver Corp. 2021 Q1 - Results - Earnings Call Presentation
May 11, 2021
Endeavour Silver Corp.
Company Participants Galina Meleger - Director of Investor Relations Bradford Cooke - Chief Executive Officer Daniel Dickson - Chief Financial Officer Donald Gray - Chief Operating Officer
Conference Call Participants Heiko Ihle - H.C. Wainwright Mark Reichman - Noble Capital Markets Cosmos Chiu - CIBC World Markets Howard Flinker - Flinker & Co Justin Stephens - PI Financials
Bradford Cooke Welcome everybody to this Q1 financial results call. Endeavour had a very good start to this year. There is a lot going on. We pre-released our metal production at 1.04 million ounces of silver of 22% year-on-year, 10,900 ounces of equivalents, up 31% year-on-year for silver equivalents of 1.9 [indiscernible] ratio of 26%, compared to Q1 last year. Our costs were pretty much flat year-on-year, cash - six per ounce payable, silver and after the gold credit all in costs were up a little bit, 8% to 1994, again that at the gold credit. And that led to revenues of $35.1 million, up 58%, that was partly due to obviously higher production, higher prices, but also we held back so a little for sale during the first quarter, partly due to the downturn in metal prices in late March. And, we fully plan to sold much of that inventory hear to higher prices. That impacted our cash flow. We had $5.2 million of cash flow from operations, but that was up sharply from last year and of course a $12.2 million per share so, up sharply compared to a loss of $16 million last year in the Q1. A good chunk of that though is the reversal of our El Cubo asset, which we sold here just recently, offset partly by increased exploration activities, evaluation activities, and a higher tax expense. We would have taken the adjusted loss in the first quarter, but then that is offset by the rise in finished goods inventory. So, I got a busy quarter, a profitable quarter for us. Now we are looking for another very good quarter here in Q2. So, those really the financial highlights from our release today. And I think rather than carry on, why don't we just open this up for Q&A and we would be happy to answer your questions.
Heiko Ihle, H.C. Wainwright Hey, there. Thanks for taking my questions. I just want to thank Don for everything he has done for the farm, then best of luck to you, and I think you are taking over a very well, well, well oiled machine here.
Don Gray Thank you very much. I appreciate that.
Heiko Ihle You have increased your finished goods inventory by quite a bit in the quarter. I mean, you at 530,000 ounces of silver, just under 1700 ounces of gold. In the past, you have done really well trading silver, but I mean, just briefly, where do you stand right now in regards to dollar terms of finished goods as of today? And philosophically, what do you anticipate future accumulations of finished bits might look like? And yes, I know that, it might be more intelligent to ask this question after the AGM tomorrow. But, just curious, maybe your philosophies there.
Bradford Cooke Yes. I think Dan and I shared a similar view that, this is a sales strategy that we have used from time to time. And it is based on the seasonal, seasonality to silver and gold. And sometimes quarterly moves in silver and gold. We did this successfully last September when the metal prices fell sharply at the end of the month, and would rather than sell all of our metal last September, we had to hold on to it because we felt that the wearable market and there would be a nice rebound. In fact, there was a very nice rebound. And we are able to take significant additional profit from the sale of that inventory in Q4 last year, and so this example, is exactly the same. The metals had a great run in the first quarter. They tipped over and fell in March, rather than pushing all of our metal out at quarter end, we felt that there would be a nice balance here in Q2, and in fact, there has been.
Don Gray Yes, I would go down to that question of where we sit today. Generally, we hold about 300,000 ounces of silver just because of outturn timelines, ultimately, that can get down as low as 50,000 ounces of silver, we did sell a lot a big portion of the 525,000 ounces of silver that we had at March 31, with this recent run up into the 26 to 27. So as Brad touched on, it is more of a short-term strategy of watching short-term patterns and trying to, to sell not when the prices are falling, but hopefully when they're rising.
Heiko Ihle You have been extremely successful with this stuff in the past. And I hope it continues like that. So congratulations. And then just a quick clarification, the impairment reversal for El Cubo is completely done now that this is closed, or is there any lingering tax implications or other costs or anything that we should focus on for Q2 and beyond?
Bradford Cooke For Q2, we would recognize the full gain on sale. So ultimately, what we reversed in Q1 as of March 31st was historical balance that would have been remaining after depreciation. And in April 9th, we would recognize the full sale so there is contingent payments that would be coming, we have a fair value for the share value of Van Gold as of April 9th is what we recognized. So there will be a residual amount that we would recognize and gain in Q2.
Heiko Ihle Got it. Well wonderful and once again congratulations to both of you and thank you Brad.
Mark Reichman, Noble Capital Markets Thank you, I just wanted to focus a little bit on the cost. So, the all in sustaining costs were impacted by the higher corporate G&A and the higher capital expenditures that want us to be, which I guess you could kind of look at as an investment. But then the direct operating costs were impacted by the higher labor costs. I was just wondering, if Dan could maybe talk a little bit about how he sees those costs trending. And for example, in terms of the all in sustaining costs, I know, the higher capital expenditures are to develop El Curso. So that should benefit, down the road. So, how do you see those line items trending. Dan?
Daniel Dickson Yes, thanks for the question Mark. You are right, Q1s are a little bit higher. But at Guanacevi, we were well ahead from a mine development standpoint, one of our best development quarters in a long time actually, which ultimately just means either we will do less come year end or continue on, but it should dissipate a little bit. We are getting ahead of ourselves now, which is great for future flexibility. And ultimately, we did have a budget from an all in sustaining costs, which includes our capital expenditures, and that is unchanged for the year for Guanacevi. As far as labor costs and impacting our operating costs. We are seeing a little bit of pressure on labor. I would imagine it is industry wide, things are picking up. A lot of companies are out there looking for operating staff and capable operating staff. We brought on a lot of really good people last year, we had a very good year, we feel from a production standpoint with what we are dealing with and 2020. Some of the bonuses went through on our labor costs in Q1 higher than what we include for a year end. So, that did impact Q1 a bit. So, hopefully we will see labor costs come down. But as we are seeing across the worlds, this global supply chain seems to be quite constrained right now and having issues with that and I don't expect that to change in the next six months. So, maybe a little bit increase in our costs but we are going to work our best to mitigate that. Maybe a little bit increase in our costs. But we are going to work our best to mitigate that and look for solutions and try to get our tonnage up, a little bit to where plan was. We were on plan from announced production standpoint. It would be nicer if our tons and improved for actually - so hopefully our per ton basis, our costs improved throughout the year, and we expect to hit our guidance that we delivered to the market in January.
Mark Reichman That is very helpful. Thank you, Dan.
Cosmos Chiu, CIBC Thanks, Brad, and Dan. And Dan congratulations, I guess the big day is tomorrow.
Daniel Dickson Yes. Thanks, Cosmos.
Cosmos Chiu I guess my question is, what took so long. Joking aside, I do have some real questions here. At Guanacevi, as you talked about, royalties were higher in the quarter, due to higher royalties at Porvenir Quatro sorry about the pronunciation. Could you talk a bit more about the mine plan, going forward for the rest of 2021 should we expect tonnage continue to come out from that area and hence higher royalties?
Daniel Dickson Yes. I think the key to Q1 was, we did have a little bit higher production from El Curso. It is between our program in collateral mine which you are probably familiar with in Malachi. We did mine a little bit more from El Curso just do some of the areas that we are in and a little bit less from Alaska where we don't have that royalty. But the impact on that royalties is when we did our guidance, we guided at $22 silver, $17.60 gold. We sold our silver at $27, and I think gold was slightly below that $17.60. So we had higher royalties in that on that basis. But also the grade that is coming out of El Curso. The grades of Guanacevi were about 15% on a silver equivalent basis above plan. And again, just an area of that El Curso so you saw our, our drill results that we put out a couple of weeks ago with regards to El Curso and Guanacevi and what we were finding on Santa Cruz. So to our surprise, ultimately the grades have been better than what we expected. So, obviously increase in our costs and royalties, but our margins are still extremely good from that area.
Cosmos Chiu Sure. And that is leads in well to my next question here, in terms of, El Curso, and as you mentioned earlier, this month, you put out some very good drill results coming out of Guanacevi. I think I saw over 2000 grand per ton, a lot of it just want to confirm is coming from El Perso. And I guess the other part of my question after confirming is, I guess, in the press release, you mentioned, El Curso and Porvenir Quatro could all become one continuous ore body, potentially over 1.5 kilometers by about 600 or 400 meters. When would we find out more about this potential here and then could you maybe talk about potentially when this concept, when continuous ore body could come into the mind plan now?
Daniel Dickson Yes. There is a lot there. The drill holes that came out a couple of weeks ago were mainly the El Curso ore body in feeling and step-out drilling there. We are also drilling the Santa Cruz silver ore body, which we are actually mining from as well, or just mining that or drilling at depth. And can you have positive results there. But I would say, a majority of the drill holes that came out two weeks ago are from the El Curso ore body. And if you go onto our website and even in our presentation, we have a beautiful longitudinal section between Porvenir Quatro and Malachi showing the ore body about Curso, which gives a pretty good understanding of the size and scope of that ore body. There are some slivers in there which is owned by Frisco, who we have acquired, or leased the El Curso concessions from, that owned some slivers, and we are working with them to hopefully acquire some of that ground to be able to mine that as well, because we do think it is continuous all the way through. Obviously, we have drilled out Malachi. We have proved that Porvenir Quatro, we actually mined a lot of that ore from that mine. So we feel it is continuous, but the scope and scale of it is pretty clean to see just through our website or presentation.
Cosmos Chiu Yes. I have seen that. I have seen that long section as well. So, I guess my question is, we will find out later on, how this kind of all exploration results will impact the mine plan sometime later on?
Daniel Dickson Yes, when it comes down to total resources in total tons in the resources, we are still drilling that area. And we will come up with a resource estimate later on in the year and publish that. Brad, I don't know if you have any more color you'd like to provide with regards to El Curso and our drill results there.
Bradford Cooke Yes, just to answer your question Cosmos. Crystal claim was that we leased from Frisco and the two gaps between our El Curso at Malachi and El Curso at Porvenir Cuatro, our other properties owned by Frisco, we expressed interests, they expressed interest. And so we are hoping we can consummate a way to add those gaps, if you will, to the existing lease agreement, and then we will be able to drill them and prove that that is one continuous or body, the gaps themselves are only a couple 100 meters wide I think so. It is pretty easy to project that this sink should be continuous.
Cosmos Chiu Of course, maybe switching gears a little bit at Terronera. As you mentioned, you are targeting a feasibility study by Q3 2021. The last PA was sometime in 2020. And I think then, or maybe Brad, you touched on it, labor costs have increased. I don't think that is the only cost is increased in the past year, steel prices have gone up, other input costs have gone up. So, I guess my question is, as you do this, finalize the feasibility study at this point in time. Have you seen cost increase, have you factored into your study here and how are you managing that risk?
Bradford Cooke So, I will answer from a higher level. Basically, the feasibility study is still underway. So, we still have an opportunity to finalize costs here in the next month or two. And the main cost drivers of these capitals are the design of the mine and the plant. And most of those we put plans in already. Dan, you want to add to that?
Daniel Dickson Yes, I think it is definitely a risk, and you always look at it. And that is what we paid to manage to do. Ultimately, we are seeing some input increases, which could increase the capital upfront costs or sustaining capital. From an operating standpoint, we think there is a lot of levers there that we can improve our operating costs from the PFS in 2020. So ultimately, when all the numbers come out, which you are right, it'll be early Q3, we will have that we still expect to have a very economic project when it is all said and done.
Cosmos Chiu Okay, for sure. And Dan maybe one last question from me here. Dan as you take the CEO seat, Brad is not leaving, I guess he is going to be Executive Chairperson. And in a press release, talked about Brad, continuing with the company growing the company, one side of it is, for sure billing to an era. The other side, I think we have talked about in the past is potential, acquisitions. Bigger picture, Brad we have seen some of your competitors, divest or diversify into gold, diversify beyond [LATAM] (Ph). You have always talked about in the past, it is harder to make acquisitions, where silver assets, anything that you can share with us in terms of industry wide, are companies specific at this point in time?
Bradford Cooke Sure, so in terms of growing the business through the drill bit, that is organically, I think we have been more successful, and most notably with finding new resources every year at our operating mines. But of course, the discovery of Terronera and the emerging resources that prowl. In terms of our silver gold mix, we have always been silver dominant producer, but with the healthy gold credit, and we see more of that in our future Terronera a lot. Let me say that the operations this year probably are going to be about 60/40 silver gold revenue. Terronera, I think comes in around 65/35. Prowl is 100% silver. So not only are we I think, one of the most, if not the most silvery of the silver producers to go skew more towards sort with our existing development pipeline. That means to M&A and what I my view is that we have room to take on gold and silver remain a primary silver producer, because there is nothing to buy in silver. We are not allergic to buying a gold dominant asset. It is just that we would like to remain more than 50% so by revenue even after M&A.
Cosmos Chiu Great. Thanks. Those are the questions I have. Congrats again, Dan and Brad as well.
Howard Flinker, Flinker & Co Alright, Brad. My two minor questions are: What price did you get in your sale via ATM in quarter one?
Bradford Cooke That is Dan's question. Thanks for your question, Howard. Dan, you want to take that?
Daniel Dickson That is a very good question. We would have averaged just above $5 per for share price. It is actually in our financials. But I don't have it specifically off-the-top of my head right now. So a good question, Howard. But it is just north of $5.
Howard Flinker Okay. And, how many shares are actually outstanding now as compared to the average?
Daniel Dickson We have about 167 million shares outstanding right now.
Howard Flinker Right now, 167?
Daniel Dickson Yes.
Howard Flinker Okay. Thank you.
Daniel Dickson Just carrying on from your question. We had this ATM facility available to us all the way back to last July, but we just wanted to use it primarily for any equity portion of a Terronera project financing. And we were very patient we didn't touch it. And the nice run-up in the share price here in the first quarter. We did tap that ATM for $30 million. So, we closed out the first quarter with $86 million cash and $113 million of working capital. And so I’m sufficed to say that, we now feel that any equity component that is a covered.
Justin Stevens, PI Financials Hey, guys. I think most of what I had to ask is already been covered off. But a couple left on my list here. Obviously, some good results, you guys put out recently, from the [indiscernible]. I was wondering, I mean, you have spent, I would say a good chunk of what you have been budgeting for, I would say brownfields drilling this year already in Q1. Should we expect that, but perhaps you guys won't revisit your drilling budget maybe mid-year as long as you continue to get the good hits that you have been seeing so far?
Bradford Cooke Yes. Justin, I would just say that, we have done this past when we are having a good year and there is excess cash flow than we look on how to put that cash flow to work and it is probably the case this year as well.
Justin Stevens Got it. And obviously we have seen the nice release out of Bolanitos. Can you give some rough timing for when we might see some the Bolanitas’ results?
Bradford Cooke I would assume that that would be up next, following Terronera results.
Justin Stevens Got it. Yes. And, just on the Terronera results, obviously the Q3 is surprisingly soon, I don't know how it got to be mail ready. But in terms of the drawing that you have done there, are you expecting any of that to make it in to the updated resource that will then hit the feasibility study or is it going to be sort of more parallel development?
Daniel Dickson No, what we are doing now, in fact, I think this year we put the pin in the reserve and resource at the end of last year. So, all of the work...
Justin Stevens Got it. Yes. That makes sense. Given the way these timelines work and things got to fit together. Perfect. That is it for me. Thanks guys.
Bradford Cooke Well, thanks everybody for tuning in today. This is actually my final quarterly call, on behalf of the management team of Endeavour, and I'm now formally handing the reins over to Dan and Christine and I just want to say that, we have had a great run, but we are not half done yet. And we look forward to I look forward to listening in on Dan in future calls. So again, thanks all and look forward to our second quarter financial results.
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Post by Entendance on May 13, 2021 5:11:42 GMT -5
Endeavour Silver Announces 2021 Annual General Meeting Results May 12, 2021
VANCOUVER, British Columbia, May 12, 2021 -- Endeavour Silver Corp. (NYSE: EXK; TSX: EDR) announces that at the Company’s 2021 Annual General Meeting (“AGM”) held on May 12, 2021 in Vancouver, shareholders voted in favour of all items of business. A total of 67,521,897 votes were cast or represented by proxy at the AGM, representing 41.25% of the outstanding common shares as of the record date. Here is a tabulation of the votes submitted by proxy. All director nominees were re-elected.
By a vote by show of hands, shareholders voted 98.09% in favour of re-appointing KPMG LLP as auditor of the Company and authorized the Board to fix the auditor's remuneration for the ensuing year. In addition, shareholders also voted 97.51% in favour to reconfirm the Stock Option Plan, as amended by Amendment No. 5 and 97.75% in favour of the Share Unit Plan.
As previously announced, effective today, Bradford Cooke has been appointed Executive Chair of the Board and has stepped down as CEO. Dan Dickson has assumed the role of CEO and has been appointed to the Board, Christine West has assumed the role of CFO and Rex McLennan has been selected as Lead Director of Endeavour. Geoff Handley has stepped down as Chairman but plans to remain an active Director of the Company.
Bradford Cooke commented, “I want to thank all of the people who have supported me over the past 17 years in building up Endeavour Silver to the Company it is today, including our management team, board of directors and of course our shareholders. We have done some great things together but we are not half done yet.” “The time has come to pass the management baton to our rising stars, Dan Dickson and Christine West. I plan to stay active with Endeavour, utilizing my knowledge of and contacts in the mining industry to continue building a bigger and better Company, and supporting Dan and Christine in their new roles. We appreciate the vote of confidence of our directors and shareholders.”
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Post by Entendance on May 14, 2021 1:24:44 GMT -5
VANCOUVER, British Columbia, May 13, 2021 -- Endeavour Silver Corp. (TSX: EDR, NYSE: EXK) is pleased to share the following letter to shareholders from newly appointed Chief Executive Officer, Daniel Dickson.
Dear Shareholders: For almost 20 years, Endeavour Silver has created new opportunities and navigated challenges with innovative thinking, which has transformed us into the company we are today. As I assume the role of Chief Executive Officer, I am keen to build on these strengths while focusing on continued profitability, safety performance and fostering our internal culture aligned with increasingly important ESG principles.
Digging deeper in solid ground Looking back upon our company’s journey – to which I have proudly contributed since 2007 when I first joined as Endeavour’s Controller, then CFO – there is much to admire. Our perseverance and accomplishments have shone through, as we introduced many ‘firsts’ at our Guanaceví mine, followed by our acquisition of Bolañitos in 2007 and El Cubo in 2012. We became one of the fastest growing silver producers during the 2004-2012 precious metals bull market. Through new discoveries, organic growth and strategic acquisitions, we expanded our business. Terronera is our next flagship asset that will strengthen our foundation and fuel our long-term growth. We plan to complete the feasibility study this summer, which should lead to a development decision for what should become our largest and lowest cost mine. Next steps for Q3, 2021 are to announce accretive project financing and break ground on construction. Simultaneously, we are drilling at our portfolio of exploration projects in Mexico and Chile to generate long term value through high impact discoveries.
Strong values drive us forward Although 2020 was a year of global uncertainty, it also reaffirmed the strength of Endeavour’s well-established values. Under the direction of our founders, Brad Cooke and Godfrey Walton, we have always upheld ESG as core to our business. We developed trusted relationships with local stakeholders, and designed health, educational and environmental outreach programs to benefit our shared environment and local communities. The COVID-19 pandemic illustrated the importance of this approach, as we worked to support community resilience and prioritize the health of our employees and communities. Despite challenging conditions, we fortified our commitment to these priorities by implementing the “Te Cuido/I Take Care of You” safety training program and achieved our safety performance targets last year. We also introduced our ICARE Values program, to clearly articulate the company’s underlying culture and bring to life “The Endeavour Way” to current and future team-members.
Delivering on profitability The past year also highlighted our ability to meet scrutiny through the financial lens. In a period of transformation, we completed the transition from old mines to new mines and recorded profitability for the first time in two years. This is a testament to our operations group’s ability to meet and surmount the most difficult challenges. Now, with a current USD$1 billion market capitalization, a strengthened balance sheet, and with results from operations growing our cash balance, we are poised for future growth. Inflationary pressures on costs are inevitable, but we believe the culture we’ve established will contribute to innovative solutions to optimize our cash flows going forward.
Bright future for Endeavour Silver When one combines Endeavour’s strengths with current market conditions, our future is bright. With a global scarcity of silver dominant assets, Endeavour offers a significant competitive advantage with our industry-leading beta to silver price and with 60 per cent of our anticipated 2021 revenue mix attributable to silver. As we grow, we will maintain our majority silver profile. as the metals mix at Terronera is 60% silver and Parral is almost 100% silver. Recent M&A activity in our sector confirms the difficulty in finding pure silver investment vehicles, amidst a bullish global backdrop due to negative interest rates, inflation concerns and sovereign debt. And, with silver’s role as a ‘green metal,’ as the world transitions to lower carbon technologies, we anticipate continued positive investor demand for silver that exceeds global mine supply. These factors all bode well, for both the price of silver and for Endeavour shareholders.
Beyond the numbers, I want to acknowledge the essential role played by former CEO Bradford Cooke, now Executive Chair, my long-time friend and mentor, who led our organization to the enviable place we are today. Brad has demonstrated outstanding vision and passion, which inspired our shared drive for Endeavour’s success. I look forward to Brad’s guidance as Executive Chair, together with the continuous support of our exceptional leadership team. Of particular note is Christine West, who assumes my position as CFO after skillfully supporting our company since 2008. She is an invaluable member of the management team, who brings experience and perspective to our finance and accounting functions.
Today, I am honoured to contribute my experience in overseeing Endeavour’s finances, and begin steering the company forward, focused on safe production, profitable operations and a strong culture. With our favourable outlook for silver’s fundamentals, I believe that the patience of our investors will be rewarded, and I look forward to building a strong future together in the years ahead. Sincerely, Daniel (Dan) Dickson, Chief Executive Officer
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Post by Entendance on May 20, 2021 6:14:07 GMT -5
VANCOUVER, British Columbia, May 20, 2021- Endeavour Silver Corp. (TSX: EDR, NYSE: EXK) has intersected high grade gold-silver mineralization in its 2021 exploration drill program to expand the Melladito and Belen orebodies at the Bolañitos Mine in Guanajuato State, Mexico. The Company is currently producing from four orebodies at Bolañitos: Plateros, Lucero, San Miguel and Melladito. Exploration drilling is ongoing along the Melladito and Belen veins (view longitudinal sections here). Highlights from the latest drill results include: 8.09 grams per tonne (gpt) gold and 1,044 gpt silver for 1,611 gpt silver equivalent (AgEq at an 70:1 silver:gold ratio) over a 1.0 metre (m) true width (47.0 oz per short ton (opT) AgEq over 3.3 feet (ft)), including 14.2 gpt gold and 1,974 gpt silver for 2,966 gpt AgEq over 0.26 m (86.5 opT AgEq over 1.0 ft) in drill hole BN-64 on the Melladito HW vein 4.43 gpt gold and 148 gpt silver for 458 gpt AgEq over a 2.34 m true width (13.4 opT AgEq over 7.7 feet (ft)), including 13.22 gpt gold and 129 gpt silver for 1,054 gpt AgEq over 0.19 m (30.7 opT AgEq over 0.7 ft) in drill hole BL1.5S-4 on the Belen HW vein
Luis Castro, Vice President of Exploration, commented, “We continue to intersect strong drill results as we step out from the current margins of the Melladito and Belen orebodies, with a number of other targets to drill, along both the Melladito and Belen veins.”
Drill results are summarized in the table here
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Post by Entendance on Jun 8, 2021 6:54:00 GMT -5
WORLD SILVER SURVEY 2021 PDF
Silver is the real power of the people, and it is the one thing the Cartel fears more than anything in the entire world because if the Cartel can maintain control of silver, the Fed and the Federal government can maintain freedom and liberty destroying power over the people, and it’s obvious we’re at the end of the current Cartel’s grip on silver, with the “current Cartel” being the ESF, the Fed, and agents acting on behalf of one or both, and unless it’s not blindingly obvious, let me go ahead and spell it out: This fight will go on for the Cartel until the bitter end, and the closer we get to that end, the uglier and nastier the markets and the economy will be. -Paul “Half Dollar” Eberhart
Endeavour Silver Drilling Intersects High-Grade Silver-Gold Mineralization in Multiple Veins at the Terronera Project in Jalisco, Mexico -- Endeavour Silver Corp. (TSX: EDR, NYSE: EXK) announces that it has intercepted high grade silver-gold mineralization in a number of structures near the Terronera vein, highlighting the potential of the area. Four structures, the San Simon, Fresno, Pendencia and Lindero veins are located immediately to the southeast of the Terronera vein, and the Los Cuates vein is located approximately 10 kilometers to the northwest of the Terronera Project (view Terronera property map here).
The drill results reported today represent ongoing exploration work at the Terronera Project, with a plan to complete 16,000 metres of drilling by the end of the year. Key targets include extensions of the Terronera vein, which hosts most of the reserves in the Terronera Feasibility Study that is currently in progress, and more regional targets to grow resources in the district. As the Feasibility Study is nearing completion, all 2021 drill results will not be included as part of the development plan.
Highlights from each structure include:
San Simon: 9.78 gpt Au and 214 gpt Ag for 899 gpt AgEq over 1.35m ETW (TR13S-1) Fresno: 6.05 gpt Au and 1,056 gpt Ag for 1,479 gpt AgEq over 2.88m ETW (TR13S-1) Lindero: 2.63 gpt Au and 25 gpt Ag for 209 gpt AgEq over 1.08m ETW (TR7.5S-1) Pendencia: 1.09 gpt Au and 445 gpt Ag for 521 gpt AgEq over 1.08m ETW (ZP-01) Los Cuates: 1.36 gpt Au and 156 gpt Ag for 251 gpt AgEq over 1.21m ETW (LCT-03) Los Cuates HW: 9.52 gpt Au and 148 gpt Ag for 815 gpt AgEq over 1.95m ETW (LCT-07)
Abbreviations include: gpt: grams per tonne; Au: gold; Ag: silver; ETW: estimated true width; m: metre; HW: hanging wall. Silver equivalents are calculated at a ratio of 70:1 silver:gold.
Luis Castro, Vice President of Exploration, commented, “These results support our view that the Terronera property continues to have significant potential to discover new mineralized zones and grow the mineral resources in multiple veins proximal to the already defined reserves and resources in the main Terronera vein. Over the past couple years, our drill programs have focused solely on delineating reserves and resources within the main Terronera vein to increase the level confidence for the Feasibility Study. During this time, surface exploration work was performed to develop and prepare additional targets in the region. These drill results verify that our detailed, methodical approach continues to be the right approach.”
Significant drill results are summarized in the following table. The Company has drilled 33 drill holes totalling 9,369 metres on the above regional targets over the past 8 months.
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Post by Entendance on Jul 8, 2021 8:05:03 GMT -5
July 08, 2021 Endeavour Silver Produces 1,073,724 oz Silver and 11,166 oz Gold for 2.0 Million oz Silver Equivalents in Q2, 2021
Endeavour Silver Corp. (TSX: EDR, NYSE: EXK) reports production of 1,073,724 silver ounces (oz) and 11,166 gold oz in Q2, 2021, for silver equivalent (“AgEq”) production of 2.0 million oz at an 80:1 silver:gold ratio. Production continues to outpace the 2021 production guidance of 6.1-7.1 million silver equivalent ounces, totaling 3.9 million AgEq oz for the 6 months ended June 30, 2021.
Quarterly production increased significantly compared to Q2, 2020, when mining operations were temporarily suspended as mandated by the Mexican government to halt the spread of the COVID-19 pandemic from April 2020 to late May 2020.
2021 Second Quarter Highlights
Consolidated Production Ahead of Plan: Silver equivalent production at each mine is on track to meet or exceed 2021 production plans. Guanacevi Production Ahead of Plan: Higher throughput and higher grades resulted in production exceeding plan during the quarter and ahead of the annual plan. Bolanitos Production on Plan: Processed tonnes were ahead of plan, offset by slightly lower ore grades than planned during the quarter. El Compas Production on Plan: Processed tonnes were ahead of plan, offset by slightly lower ore grades than planned during the quarter.
Metal Sales and Inventories: Sold 1,120,266 oz silver and 9,810 oz gold, held 459,659 oz silver and 1,891 oz gold of bullion inventory and 12,159 oz silver and 944 oz gold in concentrate inventory. Management withheld metal from sale during the price correction over last two weeks of June and plans to sell the withheld metal inventory in anticipation of a precious metal prices rebound in 2021.
Sold the El Cubo Assets: Completed the sale of the El Cubo mine in Guanajuato, Mexico to Guanajuato Silver (Formerly named VanGold Mining Corp) for $15 million in cash and share payments, with up to $3 million in contingent payments. Seamless Management Succession Plan: Bradford Cooke stepped down as CEO and assumed the role of Executive Chair of the Company following the AGM on May 12, 2021. Dan Dickson assumed the role of CEO and Christine West was promoted to CFO. Delivered Positive Brownfields Exploration Results at Guanacevi and Bolanitos: Drilling continued to intersect high-grade silver-gold mineralization in the Santa Cruz vein at Guanacevi, and in the Medallito and Belen veins at Bolanitos. Delivered Positive Regional Exploration Result at the Terronera Development Project: Intercepted high-grade silver-gold mineralization in a number of structures near the Terronera vein. The Project Management Team continues to advance the feasibility study, which is expected to be completed during the third quarter of 2021.
Dan Dickson, Endeavour CEO, commented, “I am excited to lead the Endeavour team into the Company’s next chapter. I want to commend our management and employees who have professionally navigated the global pandemic with care and understanding for our fellow workers, business partners and communities. As an organization, our goal is to be a leader in our communities while delivering safe, sustainable production.” In Q2, Endeavour delivered positive results in operations and exploration and is pushing to advance the Terronera project to a development decision with the completion of the Terronera Feasibility Study in Q3, 2021.”
Mine Operations Consolidated silver and gold production in Q2, 2021 were both higher than Q2, 2020 due to the suspension of the Guanacevi, Bolanitos and El Compas mines as a result of the COVID-19 pandemic in Q2, 2020. Q2, 2021 production slightly exceeded plan as higher throughput at each operation contributed to the higher production. Guanacevi throughput exceeded plan and was the highest quarterly throughput since 2014 as operations continued to outperform. Mining the new higher grade El Curse orebodies has led to significantly improved grades and mine plan flexibility. Additionally, supplies of local third-party ores continued to supplement mine production, amounting to 10% of quarterly throughput, and contributed to the higher ore grades. Bolanitos and El Compas processed tonnes, were all higher compared to plan, partly offset by slightly lower grades due to normal variations in the ore body. It is expected that grades will align with planned grades over the course of the year. As previously disclosed by the Company (see EDR news release dated January 7, 2021), the existing reserve at El Compas is limited and sufficient to continue mining until mid-2021. Management is currently assessing alternatives, including temporary closure. COVID-19 pandemic remains relevant in Mexico, and at the Company’s business locations, process and protocols remain in place to ensure staff and workers as well as our communities remain as safe as possible. Vaccination programs are advancing in Mexico to allow a return of a new normal in the second half of this year.
Production Highlights for Three Months and Six Months Ended June 30, 2021 here
Paloma Drill Results Endeavour drilling has confirmed widespread alteration and low grade gold mineralization at its Paloma project. The Paloma project is a high-sulphidation, epithermal-style hydrothermal system located in the Chilean Miocene deposit belt, 180 kilometers southeast of the city of Calama, 5,000 metres above sea level. Endeavour has an option to acquire up to 70% ownership of 5,100 hectares from Compañía Minera del Pacifico. To date, Endeavour completed 5,945 metres of diamond drilling in 13 drill holes. Highlights include 0.4 grams per tonne of gold over 46 metres true width, however it is interpreted that the drilling did not reach the core of the system. The exploration team is currently analyzing the drill results to develop the next phase drill program to test for the possibility of higher grade mineralization.
Management Appointment Endeavour Silver is pleased to announce that Galina Meleger has been promoted to the position of Vice President of Investor Relations effective July 15th, 2021. Galina has been with Endeavour Silver since 2017 and brings extensive knowledge and leadership to her role with a strong understanding of business goals and a global investor network. Galina Meleger has over 15 years’ experience in the resource sector, in the capacity of investor relations, corporate communications and more recently ESG. During 2021, Galina was the recipient of several industry awards including the “Belle Mulligan Award for Leadership in Investor Relations” from CIRI (Canadian Investor Relations Institute) and the “30 under 40” which honors the most talented individuals in the investor relations community from NIRI (National Investor Relations Institute). Galina’s career history includes successful and highly regarded companies, with international listings, including, Newmarket Gold and then subsequently Kirkland Lake Gold, KGHM, and Copper Mountain Mining Corporation.
Release of Second Quarter, 2021 Financial Results and Conference Call
The 2021 Second Quarter Financial Results will be released before market on Tuesday, August 10, 2021 and a telephone conference call will be held the same day at 10:00am PT (1:00pm ET). To participate in the conference call, please dial the numbers below. No pass code is necessary.
Toll-free in Canada and the US: 1-800-319-4610 Local Vancouver: 604-638-5340 Outside of Canada and the US: +604-638-5340
A replay of the conference call will be available by dialing 1-800-319-6413 in Canada and the US (toll-free) or +604-638-9010 outside of Canada and the US. The required pass code is 7318#. The audio replay and a written transcript will be available on the Company’s website at www.edrsilver.com under the Investor Relations, Events section. Qualified Person and QA/QC – Dale Mah, P.Geo., Vice President Corporate Development of Endeavour Silver, is the Qualified Person who reviewed and approved the technical information contained in this news release. A Quality Control sampling program of reference standards, blanks and duplicates has been instituted to monitor the integrity of all assay results. All samples are split at the local field office and shipped to SGS Labs, where they are dried, crushed, split and 250 gram pulp samples are prepared for analysis. Gold is determined by fire assay with an atomic absorption (AAS) finish and silver by aqua regia digestion with ICP finish, over-limits by fire assay and gravimetric finish.
About Endeavour Silver – Endeavour Silver Corp. is a mid-tier precious metals mining company that owns and operates three high-grade, underground, silver-gold mines in Mexico. Endeavour is currently advancing the Terronera mine project towards a development decision and exploring its portfolio of exploration and development projects in Mexico and Chile to facilitate its goal to become a premier senior silver producer. Our philosophy of corporate social integrity creates value for all stakeholders. SOURCE Endeavour Silver Corp. Contact Information: Galina Meleger, Director, Investor Relations Toll free: (877) 685-9775 Tel: (604) 640-4804 Email: gmeleger@edrsilver.com Website: www.edrsilver.com
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Post by Entendance on Jul 20, 2021 5:01:12 GMT -5
VANCOUVER, British Columbia, July 19, 2021 -- Endeavour Silver Corp. (TSX: EDR, NYSE: EXK) announces it has entered into a definitive agreement (the “Agreement”) with Canamex Gold Corp. to acquire a 100% interest in Canamex’ Bruner Property, a gold exploration, located in Nye County, Nevada approximately 180 kilometres (km) southeast of Reno for US$10 million in cash. Gold was originally discovered at Bruner in 1906 and the district saw intermittent historic small-scale mining between 1906 and 1998. Recent exploration activities by previous operators included mapping, sampling, geophysical surveys and drilling, culminating in a mineral resource estimate in 2015 and a preliminary economic assessment in 2017 outlining a low capital cost, open pit, heap leach mine operation. Highlights of the Properties: Acquiring a 100% interest totalling 1,457 hectares on patented and unpatented claims, subject to pre-existing NSR royalties, some of which can be repurchased. Ideally located within Nevada’s Walker Lane northwest trending mineral belt currently hosting several producing mines and recent discoveries. Readily accessible by paved highway and gravel roads only 25 km from the town of Gabbs, Nevada. High voltage power is available approximately 30 km from the project and water rights have been secured. Favourable geology with gold and silver occurring in low-sulphidation epithermal veins and in disseminations within sheeted and stockwork zones. Three gold areas have been outlined within a broad 3 km zone of anomalous gold values. Historic resources of 342,000 ounces of gold contained in 17.5 million tonnes grading 0.61 grams per tonne in three zones, Paymaster, HRA and Penelas, as estimated by Canamex Gold. Endeavour has not verified this historic resource estimate and is not relying on it. See below for historic resource estimate qualifications. Strong potential to discover additional gold and silver mineralization amenable to open pit mining, as shown by surface sampling between Paymaster, HRA and Penelas zones. Excellent metallurgy – cyanide leach test results show that each mineralized zone has gold recoveries > 85% for 0.75” to 3.0” crush size with potential for run-of-mine leaching. Provides diversification with an advanced stage exploration project in Nevada, USA, a world class, stable mining jurisdiction. Endeavour CEO, Dan Dickson, commented “We are pleased to add an advanced stage precious metals exploration property to our project pipeline. Bruner represents a good start on building an attractive gold-silver portfolio in Nevada and should be an accretive acquisition for our five-year strategic plan to become a premier senior silver producer, with potential for exploration discoveries, district acquisitions, near-term production, and organic growth. “Our exploration team will focus initially on verifying the historic resources, then turn its attention to the many exploration targets on the Bruner Property. We look forward to unlocking the full potential of the Bruner Property with the goal of building a new mining operation in another historic mining district in Nevada.”
Transaction Summary Pursuant to the Agreement, Endeavour will pay US$10 million in cash for 100% of the Bruner Gold Project which includes mineral claims, mining rights, property assets, water rights, and government authorizations and permits. Completion of the transactions under the Agreement is subject to customary closing conditions and is subject to Canamex shareholder approval. The Bruner Gold Project resource estimate was prepared for Canamex Gold in a technical report dated January 22, 2018 titled “NI 43-101 Technical Report on the Bruner Gold Project, Updated Preliminary Economic Assessment, Nye County, Nevada, USA” by Welsh Hagen Associates. The resource estimate was established through surface drilling. A Qualified Person has not done sufficient work to classify the historical estimate as a current mineral resource or mineral reserve.
Endeavour is not treating the historical estimate as a current mineral resource or mineral reserve, has not verified the historical resource estimate and is not relying on it. Endeavour plans to “twin” certain drill holes and conduct a drilling program to upgrade the historical estimate as a current mineral resource. Dale Mah, B.Sc., P.Geo., Endeavour's Vice President Corporate Development, is the Qualified Person who reviewed and approved this news release.
About Endeavour Silver – Endeavour Silver Corp. is a mid-tier precious metals mining company that owns and operates three high-grade, underground, silver-gold mines in Mexico. Endeavour is currently advancing the Terronera mine project towards a development decision and exploring its portfolio of exploration and development projects in Mexico and Chile to facilitate its goal to become a premier senior silver producer. Our philosophy of corporate social integrity creates value for all stakeholders. SOURCE Endeavour Silver Corp.
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Post by Entendance on Aug 10, 2021 8:24:17 GMT -5
Endeavour Silver: Q2 GAAP EPS of $0.04 Revenue of $47.7M (+136.1% Y/Y) beats by $0.72M
Endeavour Silver Corp. (NYSE: EXK; TSX: EDR) released its financial results today for the three and six months ended June 30, 2021. The Company operates three silver-gold mines in Mexico: the Guanaceví mine in Durango state, the Bolañitos mine in Guanajuato state and the El Compas mine in Zacatecas state. All amounts reported are in United States (US) dollars. Dan Dickson, CEO, commented, “From a financial standpoint, our Q2 performance was stronger than the respective period last year, as revenue, cash flow and earnings were all higher. However, our operating costs are clearly not where we want them to be. We are working to optimize our operating cost profile in the second half of 2021.”
“This month, we plan to suspend operations at El Compas due to exhaustion of reserves. This small asset represents less than 5% of 2021 consolidated production and will not affect our progress towards attaining or surpassing our production guidance for the year. Our remaining production platform at Guanacevi and Bolañitos is strong and sustainable with excellent brownfield exploration opportunities.”
“We are pleased to enter the second half of the year with a robust cash balance of $125 million and a clean balance sheet ahead of a potential construction decision for Terronera later this year. We will be completing the Feasibility Study during Q3 with a construction decision anticipated shortly thereafter.”
2021 Second Quarter Highlights Metal Production: Produced 1,073,724 ounces (oz) silver, up 80% and 11,166 oz gold, up 92%, in-line with guidance for 2.0 million oz silver equivalent (AgEq), up 85%, at an 80:1 silver:gold ratio, compared to Q2, 2020 when operations were suspended due to COVID-19 for a portion of the period. Net Revenue: Totaled $47.7 million, up 136%, from the sale of 1,120,266 oz silver and 9,810 oz gold at average realized prices of $26.82 per oz silver and $1,866 per oz gold. Management withheld metal sales in Q1, 2021 and continues to carry higher metal inventory totaling 459,659 oz silver and 1,891 oz gold of bullion inventory and 12,159 oz silver and 944 oz gold in concentrate inventory. Operating Costs: Cash cost(1) $13.03 per oz payable silver, up 369% year-on-year and all-in sustaining cost (AISC)(1) $25.39 per oz payable silver, up 70% year-on-year, net of gold credits. Operating costs were higher than budgeted due to global supply chain constraints creating inflationary pressures, increased labor costs, a strengthening Mexican Peso and increased operating development at Guanacevi. Cash Flow: $8.7 million in cash flow from operations before working capital changes, up 358% compared to Q2, 2020. The Company continued to hold significant finished goods, increased deposits for equipment purchases, invested in exploration activities and advanced the Terronera Feasibility Study. Earnings: Realized earnings of $6.7 million or $0.04 per share, up sharply compared to a loss of $3.3 million in Q2, 2020 due to increased mine operating earnings, the gain on the sale of the El Cubo asset and gain on the sale of marketable securities, offset by increased exploration and evaluation activities, higher general and administrative costs and higher tax expense. Excluding the gain on sale of the El Cubo asset, the adjusted earnings are $0.8 million. At quarter end, the finished golds inventory was carried at a cost of $10.1 million compared to the fair market value of $17.3 million.
Strong Balance Sheet: Cash position $125.2 million and working capital $146.8 million. Raised $28.4 million in equity financing through an ATM facility, net of issuance costs. Only remaining term liabilities are equipment loans of $7.8 million.
Completed the Sale of El Cubo: The transaction closed on April 9, 2021 for $19.8 million in cash and share payments with up to $3 million in contingent payments payable by Guanajuato Silver (previously Vangold Mining Corp).
Subsequent to the End of the Second Quarter 2021: Suspension of Operations at El Compas: The Company has decided to suspend mining and milling operations at El Compas in August. Mining assets and key talent will be transferred within the Company to Bolañitos and Terronera. The associated suspension costs are estimated to be $1.3 million, including $1.0 million in severance, to be incurred over the remainder of the year. Management is currently evaluating its alternatives for the assets. Agreement to Acquire Bruner Gold Project from Canamex: strategic acquisition opportunity for an advanced stage exploration property in a favorable jurisdiction for $10 million in cash. The agreement is subject to Canamex shareholder approval in Q3 (see EDR news release dated July 19, 2021). (1) Mine operating cash flow, cash costs and all-in sustaining costs are non-IFRS measures. Please refer to the definitions in the Company’s Management Discussion & Analysis.
Financial Overview In Q2 2021, net revenue increased 136% to $47.7 million as a result of higher metal prices and increased production. Mine operating cash flows, operating cash flows and EBITDA increased significantly compared to Q2, 2020. For a period in Q2, 2020, the mine operations were suspended due to government decree to stop the spread of COVID-19. The Company recognized earnings of $6.7 million compared to a loss of $3.3 million in Q2, 2020. A gain of $5.8 million was recognized on the sale of the El Cubo mine and related assets and liabilities. Cost of sales for Q2, 2021 was $37.5 million, an increase of 109% over the cost of sales of $17.1 million for the same period of 2020. The increase in cost of sales was primarily related to the 76% increase in silver ounces sold, significantly higher royalty costs, labour costs and additional costs attributed to global supply constraints. Royalties increased 438% from $0.8 million to $4.3 million due to higher production and realized prices and the increased mining of the high grade Porvenir Cuatro extensions at the Guanaceví operation, which are subject to the significantly higher royalty rates. The Company slightly decreased its finished goods silver and increased its finished goods gold inventory to 459,659oz and 1,891 oz, respectively at June 30, 2021 compared to 529,817 oz silver and 1,689 oz gold at March 31, 2021. The cost allocated to these finished goods was $10.1 million at June 30, 2021, compared to $8.0 million at March 31, 2021. At June 30, 2021, the finished goods inventory fair market value was $17.3 million, compared to $15.9 million at March 31, 2021.
Financial Results (Consolidated Statement of Operations Appended Below) For the period ended June 30, 2021, the Company generated net revenue of $47.7 million an increase of 136% compared to $20.2 million. Gross sales of $48.3 million in Q2, 2021 represented a 136% increase over the $20.5 million for the same period in 2020. There was a 76% increase in silver ounces sold and a 57% increase in the realized silver price resulting in a 179% increase to silver sales. Similarly, there was an 88% increase in gold ounces sold at prices similar to the prior year resulting in an 88% increase in gold sales. During the period, the Company sold 1,120,266 oz silver and 9,810 oz gold, for realized prices of $26.82 and $1,866 per oz, respectively, compared to sales of 634,839 oz silver and 5,218 oz gold, for realized prices of $17.04 and $1,862 per oz, respectively, in the same period of 2020. For the three months ended June 30, 2021, silver and gold spot prices averaged $26.69 and $1,816, respectively.
After cost of sales of $37.5 million (Q2, 2020 - $17.1 million), mine operating earnings amounted to a $10.2 million (Q2, 2020 –$3.1 million) from mining and milling operations in Mexico.
Excluding depreciation and depletion of $6.6 million (Q2, 2020 - $3.9 million), stock-based compensation of $0.1 million (Q2, 2020- $0.1 million) and a write-down of inventory of $0.3 million (Q2, 2020 - $0.5 million), mine operating cash flow before taxes was $17.2 million in Q2, 2021 (Q2, 2020 – $7.6 million). Operating earnings were $0.8 million (Q2, 2020 – loss of $4.6 million) after exploration and evaluation expenditures of $5.0 million (Q2, 2020 – $1.7 million), general and administrative expense of $4.3 million (Q2, 2020 – $3.1 million) and care and maintenance costs of $0.1 million (Q2, 2020 – $2.9 million).
Net earnings amounted to $6.7 million ($0.04 per share) compared to a net loss of $3.3 million (loss of $0.02 per share) in Q2, 2020.
Current income tax expense increased to $2.2 million (Q2 2020 – $0.2 million) due to increased profitability impacting special mining duty, while deferred income tax expense of $1.1 million was recognized due to the estimated use of loss carry forwards to reduce taxable income at Guanacevi (Q2 2020 – $0.5 million deferred income tax recovery).
Direct operating costs per tonne in Q2, 2021 increased 18%, to $119.94 compared with Q2, 2020 due to higher operating costs at all operations. The operations have seen a strengthening of the Mexican Peso, increased labour costs, increased third party ore purchased and increased operating development at Guanaceví compared to prior year and budgeted. Including royalties and special mining duty, direct costs per tonne increased 29% to $141.61. Royalties increase 1,781% to $4.3 million as increased production from the El Curso and El Porvenir concessions at Guanaceví with higher prices substantially increased the royalty expense. The improved profitability increased special mining duty expense to $0.9 million for Q2, 2021, which was negligible in Q2, 2020.
Consolidated cash costs per ounce, net of by-product credits (a non-IFRS measure and a standard of the Silver Institute) increased to $13.03 due to the increased direct costs per tonne. All-in sustaining costs (also a non-IFRS measure) increased to $25.39 per ounce in Q2, 2021 as a result of higher corporate general and administrative costs, increased mine site expensed exploration and increased capital expenditures at Guanaceví to accelerate mine development within the El Curso ore body. In Q2, 2021 corporate general and administrative included a $1.6 million mark to market expense of deferred share units expense whereas the mark to market expense was $1.1 million in Q2, 2020.
The Condensed Consolidated Interim Financial Statements and Management’s Discussion & Analysis can be viewed on the Company’s website at www.edrsilver.com, on SEDAR at www.sedar.com and EDGAR at www.sec.gov.
Conference Call
A conference call to discuss these results will be held today, Tuesday, August 10 at 10am PDT (1pm EDT). To participate in the conference call, please dial the numbers below. No pass-code is necessary.
Toll-free in Canada and the US: 1-800-319-4610 Local Vancouver: 604-638-5340 Outside of Canada and the US: +-604-638-5340 A replay of the conference call will be available by dialing 1-800-319-6413 in Canada and the US (toll-free) or +604-638-9010 outside of Canada and the US. The required pass-code is 7318 #. The replay will also be available on the Company’s website at www.edrsilver.com.
About Endeavour Silver – Endeavour Silver Corp. is a mid-tier precious metals mining company that owns and operates three high-grade, underground, silver-gold mines in Mexico. Endeavour is currently advancing the Terronera mine project towards a development decision and exploring its portfolio of exploration and development projects in Mexico and Chile to facilitate its goal to become a premier senior silver producer. Our philosophy of corporate social integrity creates value for all stakeholders. SOURCE Endeavour Silver Corp.
Contact Information: Galina Meleger, Vice President, Investor Relations Toll free: (877) 685-9775 Tel: (604) 640-4804 Email: gmeleger@edrsilver.com
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Post by Entendance on Aug 11, 2021 2:06:37 GMT -5
August 10, 2021: Endeavour Silver Corp. (EXK) CEO Dan Dickson on Q2 2021 Results
Company Participants Galina Meleger - Investor Relations Dan Dickson - Chief Executive Officer Christine West - Chief Financial Officer Don Gray - Chief Operating Officer
Conference Call Participants Jake Sekelsky - Alliance Global Partners Heiko Ihle - H.C. Wainwright Cosmos Chiu - CIBC Joseph Reagor - ROTH Capital Partners Ryan Thompson - BMO Mark Reichman - Noble Capital Markets
Galina Meleger Good morning, everyone and welcome to the Endeavour Silver 2021 second quarter financial results conference call. With me on the line today, we have the company’s Chief Executive Officer, Dan Dickson; our Chief Financial Officer, Christine West; and our Chief Operating Officer, Don Gray. Before we get started, I am required to remind you that certain statements on today’s call will contain forward-looking information within the meaning of applicable securities laws. These may include statements regarding Endeavour’s anticipated performance in 2021 and future years, including revenue and cost figures, silver and gold production, grades and recoveries and the timing and expenditures required to develop new mines in mineralized zones. We do not intend to and do not assume any obligation to update such forward-looking information other than as required by applicable law. On behalf of Endeavour Silver, I’d like to thank you again for joining today’s call. And I will now turn it over to CEO, Dan Dickson.
Dan Dickson Thanks, Galina and good day, everyone. Welcome to the Endeavour Silver conference call for the second quarter of 2021. Before I dive into Q2 results, I want to highlight that this year so far has been one of leadership change as we position the company for its next stage of growth. As you all are aware, in May, we announced a seamless management transition. I assume the role of CEO, my long time colleague, Christine West, got promoted to the role of CFO; and Brad Cooke stepped into the role of Executive Chairman. Also note, our newly appointed Chief Operating Officer, Don Gray, he has significant expertise in the development of over his 45-year career. This management transformation was an important part of Endeavour Silver’s succession plan that was several years in the making. It represents a celebration of our past and investment into our future. So, with my first quarter in the seat of the CEO, I can assure you that our goal is to deliver exceptional shareholder returns as we execute on our commitment and strategy, with three key areas of focus of safety and culture, ESG and ultimately, profitability. We are already making significant progress in these areas. On the safety and culture side, our I-Care and Taquito operating philosophy continue to be ingrained in our culture, bringing a step back and take charge attitude in a positive way. This is important to me and the way the leadership should view the business. Demand for corporate action and data across a host of environmental, social and governance issues continues to grow at a rapid pace, with increased mandates from investors, regulators and industry stakeholders. At Endeavor, these are serving as catalysts to drive further improvements and new initiatives. We are currently formalizing a multiyear ESG business strategy that we anticipate to release in the fourth quarter. We will build on our existing sustainability practices to address the evolving landscape in this area and achieve meaningful outcomes for our stakeholders. This will be especially important ahead of a development decision at Terronera. Lastly, regarding profitability, our focus over the next couple of quarters will be cost control. We are seeing industry-wide inflationary pressures due to the global supply chain constraints. I was in Mexico last week and we put together a plan for weathering and reducing higher costs in the second part of this year. Beyond the more traditional business risks we faced, we are not out of the woods yet on the pandemic. 25% of Mexico is fully vaccinated. So, COVID-19 risks are prevalent for the country, particularly Delta variant poses risks to our non-vaccinated employees and stakeholders. However, the risk remains less than the original variant due to developed protocols already in place. We are currently rolling out a company-wide internal campaign to increase vaccinations for our employees and their families and testing will become more regular and control in the second half of the year. With that, let’s turn to our Q2 performance and then we will open it up for Q&A. As per our news release this morning, our financial performance this quarter was stronger than previous year. However, comparatively speaking, Q2 2020 was impacted by mandated shutdowns by the Mexican government to prevent the spread of COVID-19. Year-on-year, our revenue was up 136% to $47.7 million on the sale of 1.1 million ounces of silver and almost 10,000 ounces of gold at an average realized price of $26.82 for silver and $1,866 for gold. On a year-to-date basis, our revenue now totals $82.2 million. After quarterly cost of sales of $37.5 million, mine operating earnings amounted to $10.2 million from our operations in Mexico. This resulted in overall net earnings of $6.7 million or $4 per share. Q2 earnings were strengthened by the sale of our El Cubo operation and the gain on sale of marketable securities during the period. The Cubo transaction closed in April for $19.8 million in cash and share payments with up to $3 million in contingent payments in the future. When excluding the gain on El Cubo, the adjusted earnings were just under $1 million for Q2. We reported quarterly EBITDA of close to $16 million in operating cash flow before working capital charges of $8.7 million, both up significantly from the comparative quarter in 2020. It should be noted our quarterly consolidated costs were higher than budget. Cash costs were $13.03 per ounce of silver, up 370% year-on-year and all-in sustaining costs were over $25 per payable ounce of silver, up 70% year-on-year net of gold cost. Operating costs were higher than budget due to the global supply chain constraints, creating inflationary pressures, increased labor costs, strengthening Mexican peso, and we increased operating development at Guanacevi that we should see come to fruition here in the second half of the year. Particularly at Guanacevi, royalty costs increased almost 400% to $4.3 million in Q2. This is obviously due to higher realized silver price and increased mining of the high-grade material at El Curso. On a per ounce basis, the royalty cost alone equates to almost $4 per ounce on cash costs and all-in sustaining metrics. Notwithstanding the increased cost profile, our gold and silver production profile is tracking ahead of guidance totaling $3.9 million – 3.9 million ounces of silver equivalent metal for the first half of the year. We announced – in today’s news release that management will suspend operations at our El Compas mine this month due to exhaustion of reserves. This was communicated in our annual guidance earlier this year and will not impact the company’s ability to meet or exceed production guidance for the year. El Compas is a small gold mine and was intended to be a bridge until Terronera comes on stream, representing less than 5% of our annual consolidated production. We have some very talented individuals at El Compas that we expect to transfer within the company to our operations in Bolañitos and ultimately to Terronera. The anticipated suspension cost is estimated to be $1.3 million that will be incurred over the remainder of the year. And in the meantime, management will be evaluating various value creation opportunities. On a positive note, we are entering the second half of the year with a robust cash balance of $125 million, minimal long-term debt on our balance sheet ahead of the potential construction decision of Terronera later this year. This should help us facilitate our ability to track project financing. Moving on to our mines, Guanacevi is our top performer and will produce over 60% of consolidated production. During Q2, higher throughput and higher grades resulted in production exceeding plan during the quarter and ahead of the annual plan. At Bolañitos, we are focused on developing the Belen vein and expanding production in the Melladito vein, where both areas have multiple drill targets. From a production standpoint, processed tons were higher than planned offset by slightly lower grades during the quarter. And lastly, at Compas, production is declining quarter-over-quarter as planned in preparation of the suspension. So, that’s a brief overview of the operations and we recognize we have improvements to implement in our costs and we are confident we will reduce them in H2 in the second half of the year. In terms of our growth outlook, our attention is on Terronera. Terronera is slated to be our next core asset. We published the pre-feasibility study last year forecasting over 5 million ounces of annual silver equivalent production over 10 years. The project is development-ready and fully permitted. We are now in the final stages of completing our final feasibility study to de-risk the project and evaluating financing alternatives that we use to start construction. The final feasibility study will be released this quarter and we will also host a detailed webcast to discuss the results. Subsequent to the end of Q2, we also announced an agreement to acquire an advanced stage gold exploration asset, the Bruner Gold project in Nevada from Canamex, a company that’s currently under a CTO, a cease trade order, with ideas that we will look for a shareholder vote for the end – during Q3. Endeavor will provide an update on our plan to advance the asset after that vote. At this time, I can say that we viewed the acquisition as opportunistic and the asset could potentially be layered into our growth plans following Terronera. Several years of exploration work remain ahead of any potential development on this gold heap leach asset to model the potential production. For this reason, Mexico and silver remain to be our focus. In closing, we are confident in our business strategy, our financial position and our growth agenda. I am looking forward to leading the Endeavor Silver and continue to work with our Board, executive team, employees and partners through these exciting times for the company.
Jake Sekelsky, Alliance Global Partners
So just looking at Compas winding down this month, I guess what do you see as the most likely outcome here? I know you’re looking at a range of options. Do you think we are likely to see more of an outright sale like what we saw with Cubo and any color on an outcome on this front as far as timeline goes?
Dan Dickson Yes, for sure, Jake. From a timeline, I can’t provide a lot of color there. We have talked with a number of groups that would be interested in Compas. But at the same time, there is exploration opportunities that remain in the district. And ultimately, Cubo worked out really well for the acquirer, VanGold, which is now Guanajuato Silver and worked out well for us. And ideally, that would be the same case for El Compas, but we are early days yet. And as I say, there is a lot of exploration opportunity that remains in that district. We have some other properties, a little bit more base metals that would require refurbishment of the plant, not a huge amount of refurbishment, but nonetheless refurbishment. So, we have exploration opportunity that we can do and continue to push forward. But at this point in time, it’s pretty much all I can say from an El Compas various alternative standpoint.
Jake Sekelsky Okay. That’s helpful. And then I guess just on the finished goods inventory, I mean, we were slightly down from where you were in Q1. I am just curious if this is more related to the timing of shipments or was this just again a strategic decision to withhold some inventory for sale in the higher metals price environment or what are your thoughts on that?
Dan Dickson Yes. As you alluded to, we have built our finished goods balance at the end of Q1 and we continue to hold that balance. I think at the end of the Q1, we actually – the fair market value is about $15 million. And at the end of Q2, that fair market value was about $17 million. So, from a fair market value standpoint, we actually had higher finished goods at the end of Q2. And we do still believe in the long-term price of silver and gold. And ultimately, what we saw on Friday is a short-term dip, what we expect in the prices and we expect that to come back in the fall. And ultimately, when we need that cash, we will dispose of those finished goods.
Jake Sekelsky Got it. That makes sense. Okay, that’s all on my end. Thanks again.
Heiko Ihle, H.C. Wainwright
You mentioned industry-wide pressures in the global supply chain earlier on this call. Can you just provide a little bit of color on the things that concern you the most? I mean, I assume a year ago, it would have been things like masks and cleaning supplies. I mean, that stuff seems to be a pretty decent supply right now. I hear rumors about tires being hard to get equivalent – some particular equipment having long lead times, but is there anything in particular that you see – and almost as importantly, can you maybe say how that answer would have differed 30 days ago?
Dan Dickson Sure. I think our biggest concern right now is going into the construction phase of Terronera. So, steel is going to be a big part and we are seeing increases in basically construction supplies and Terronera being such a key asset to us and ultimately, the cost to build Terronera and we want to do it within the next 2 years and ultimately have that decision this year. Those inputs and we are slightly seeing increases there. We – for us, we are not huge costs or tires were not a huge cost for us with being underground vein development and vein mining as opposed to the big open pits where tires have big significant costs. Other things that we are seeing some costs are all our reagents, cyanide, flocculants we saw some increase in Q1. We have sourced some spots where we think that we are going to see some cost control here for the second half of the year. Ultimately, what we are also seeing increases on is geologists and engineers and the supply constraints with what’s happening in our space that more geologists, more engineers and that’s going to impact their salaries and their asks and that’s starting to come through. One of the other things that we saw come through in Q2 is production bonuses from 2020, PTU payments, profit sharing payments in Mexico. Also what happened in Mexico is the change the outsourcing rules. So, all employees have to be employees of the company that they work for. We have to make that transition in the second quarter, which cost us additional cash as well. But ultimately, the rest of the inflation story that we are seeing across the world impact us a little bit here in Q2 and we are concerned that will impact us across almost all inputs in Q3 and Q4.
Heiko Ihle Got it. And then just a quick clarification, in your MD&A, you breakdown the drilling activity by country and in meters, I think it was Page 22 or something. I noticed that you are spending $1.2 million in Chile at Paloma for only 3,000 meters of drilling. And on a per meter basis, that’s actually quite a bit higher than any of the other assets. So purely out of curiosity, and I am aware of such a small sum of money we are talking about here. But do you think Paloma is just temporary expenses given drilling economies of scale. Am I missing something obvious or is this just a more expensive area to work and operate with? I don’t know, unions getting trouble or hard to access. And would this be any different if there is ultimately a mine there?
Dan Dickson Yes. No, it’s a very fair question. You are right. Paloma we drilled this year. It is more expensive and that was always budgeted that would be more expensive. We also did a lot of surface work too that would be built into some of that cost. So we have been doing permitting at Aida and permitting at Cerro Marquez that would be built into some of that cost on a segment basis that you are reading, but you are right in the fact that Chile itself is more expensive. It’s more expensive from a drilling standpoint. And we also think it would be much more expensive from an operating standpoint. But again, what we are looking for in Chile is an underground being money, it’s open pit, world class-sized assets that would be game changers for Endeavour.
Heiko Ihle Very good. I will get back in queue. Thank you, guys.
Cosmos ChiMy first question is also on cost. I guess, as you mentioned in your MD&A cost was over $25 an ounce higher than what you had expected. You have also talked about inflation and some of the cost pressure here. I am just wondering how much of that cost pressure has been captured in your Q2 numbers? It doesn’t sound like everything I am just wondering, since the Q2 numbers, have you seen more cost pressures into Q3? And could that leak into Q3 and more being reflected into Q3 as well? I am just trying to figure out, even if you have say, improved efficiencies in the second half or in Q3, is that going to be offset by continuing inflationary pressures that were not reflected in your Q2 numbers?
Dan Dickson Yes. No, that’s a fair question. Our goal is those inflationary pressures won’t show up in Q3 and Q4. July production results just came in, and we’re waiting for costs for July yet. So I can’t speak to Q3 is what we’re seeing so far. But our expectation is those costs will be contained here in Q2. So we’ve looked at some of our cost profiles, and we projected out for the next two quarters, and we expect that to be relatively the same. Again, with some of the stuff that we saw in Q2 on bonuses – production bonuses, PTUs, and changeover resulted in salary increases and labor cost increases. Ultimately, those won’t flow through in the third quarter or fourth quarter. And then a big aspect to it all in we’ve always communicated this is the $4 royalty costs. And with prices where they are at today, obviously, that royalty costs will come down. The other thing that happened in Q2 and at Guanacevi was we did a lot of operating development. So development that we expense in an area we call El Porvenir, ultimately, that won’t flow through into Q3 or Q4. So we expect our cost profile to be lower in the third quarter.
Cosmos Chiu
Okay, great. And I guess then into the fourth quarter as well because to confirm, you’ve maintained your cost guidance for the year on sustaining costs of $19 to $20 an ounce, right?
Dan Dickson Yes, we have not changed guidance at this time.
Cosmos Chiu, CIBC Okay, great. Maybe following up on costs, as you mentioned, the feasibility study at Terronera is expected by Q3 and potentially a go-ahead decision after that. As you talked about inflationary factors here in Mexico, there is been recent changes in subcontracting rules as well in the country. How are you going to factor that into your feasibility study? And how can you mitigate some of those – that risk? And how do you see the inflationary pressures in Mexico potentially impacting your decision on Terronera?
Dan Dickson Yes. It’s very fair question. Obviously, from the pre-feasibility side to the feasibility study, we’re going to see cost increases. And we’ve hired Wood, they are exceptional group but being able to determine costs and rely on that. And I think what we’re going to see come through the feasibility study is an inclusion of what we’re seeing from an inflationary pressure standpoint on our initial CapEx. How to mitigate against that, ultimately for us, it’s going to be if we can get into a construction decision to move forward. I think partly as a company that we are, we’re a silver producer and a gold producer. So effectively, any inflation pressures that we see across the world will eventually be showing up in the silver and gold prices on the back end of it. So I think we’re mitigated in that sense. And ultimately, the store can kind of get going on that construction will be better. As I say, I think Woods really and our teams consider the inflationary pressures, and you’re going to see that in initial CapEx and we come out with it and hopefully, in the next month or so.
Cosmos Chiu Great. And then one last question for me here, Dan, the Bruner Gold project, it seems like you’re acquiring it from Canamex. Two questions. I guess the first part is new country, new metal. Can you talk a bit more about that strategy? And number two, is that telling us that it is just really difficult to find good silver assets in terms of acquisitions?
Dan Dickson Yes. I mean, I will say it is difficult. There is a scarcity of primary silver mines in the world, and we see that. And most silver comes from base metal mines and is a byproduct of a lot of other mines. It is difficult. We’ve seen the whole silver space acquired gold assets most recently, Fortuna with Roxgold, [indiscernible] with Sherritt Canyon. We want to maintain our 50% silver production or above 50% silver production. The move into Nevada, which is obviously a world-class jurisdiction and gold was more opportunistic than necessarily a strategic move into gold or into a new jurisdiction. The idea that we’re not obviously concerned with Nevada. We’re not concerned with gold. 40%, 45% of our revenue comes from gold, and we do like gold, but we like silver more and ultimately, we are looking for silver assets. There is just not a lot out there, and there are some but not a lot. And it always takes two to kind of come to an agreement to acquire silver assets and we want to add value. We saw a quick way to add some value. And hopefully, after a shareholder vote from Canamex we can talk about Bruner in more detail.
Cosmos Chiu Great. Thanks, Dan. That’s all the questions I have. Thanks again.
Joseph Reagor, ROTH Capital
On Guanacevi specifically, you guys mentioned in the MD&A that some of the costs in Q2 were related to some development for an ore body that’s not reserves, and therefore, you had to expense it. Can you kind of give us an idea of what that looked like. So maybe we could back it out of the cost numbers? And also how many – how much more you’re going to have for expenses for non-reserve development kind of over the rest of the year?
Dan Dickson Yes. So in Q2 at El Porvenir, it’s an upper area of El Porvenir as part of the El Curso acquisition. We spent about $500,000 accessing some ore that will ultimately be able to mine and drop effectively here in Q3 and because under IFRS rules, there is no reserves there. We chose to expense that development, so like I said, just under $500,000. Ultimately, we’re out of that area now, and we want to just be mining Milache, El Curso and Santa Cruz Sur. So I wouldn’t expect much more in Q3 or Q4 from that area.
Joseph Reagor Okay. Were there any other items like that one-time items in the Guanacevi Q2 numbers?
Dan Dickson Yes. We had profit sharing and true-up of our bonus. So PTU, we paid about $250,000 in PTU to Guanacevi in the second quarter, and we had a top-up of year-end production bonus that we finalized which ultimately amounted to a similar amount of $200,000 to $250,000.
Joseph Reagor Okay. Second thing is if I’m looking at your annual guidance, specifically at the gold guidance for Guanacevi and Bolañitos, you guys are tracking – if you just double the first half, you guys would be above the high end. Should we be thinking about Q2 gold production from those assets being lower than Q1, was Q1 just that much better than expected. Like how should we – whatever color you can give as far as what the Q2 might look like that made it so you guys didn’t decide to raise guidance?
Dan Dickson Yes. We just weren’t ready to raise guidance at this time due to COVID. Obviously, Q1 was phenomenal from a grade standpoint out of Guanacevi and the grades in Q2 at Guanacevi right around what we expected with plan. I think those grades for Q2 might improve a bit here in Q3 and Q4, but ultimately be closer to plan. At Bolañitos, our tonnage has been on plan, a little bit higher than planned in Q2 and the grades from a silver standpoint were slightly lower and gold grades have been on plan. Ultimately, we just weren’t comfortable raising guidance at this point with so much time left in the year. But there is no expectation that we will see a dip in production at Guanacevi or Bolañitos in the second half of the year compared to what we see now.
Joseph Reagor Okay. So it’s fair to say your concern is more about potential impact of COVID on tonnage, not on grade. So the grade do you expect to remain steady?
Dan Dickson Yes.
Joseph Reagor Okay. Okay. And then one final thing, it looks like subsequent to the end of the quarter, you guys finished off the ATM that you had. Any additional plans for any form of equity financing related to Terronera or do you feel with the $125 million in cash you have plus some investments that you guys are well funded on the equity side?
Dan Dickson We are well funded on the equity side. Obviously, our balance sheet is in a great position, and we’ve been working with a number of groups to add project financing in the form of – and we’ve said this for the last 6 months, somewhere between $60 million and $100 million, so say, $75 million to $80 million to help with the funding and keep our cash balance drive for other opportunities that may come along.
Joseph Reagor Okay, it sounds good. Thanks. I will turn it over.
Lucas Pipes, B. Riley Securities
Just a quick macro question for me. We’ve obviously seen a lot of strength in commodity prices over the last 12 months, but precious metals have largely lagged or even decreased. I was wondering if this performance in kind of precious metals surprises you at all and where do you kind of see silver and gold pricing going in the second half of 2021.
Dan Dickson Yes. I mean, I guess, now that in the space for 14 years, surprise isn’t the right word. I think Fridays was kind of one of those tough days, but we’ve seen those in the past. And I think it’s just a correction. Right now, we’re sitting 75:1 silver to gold ratio. And ultimately we see that gold ratio get back down to 65:1. And I think we’re going to be sideways here for a little bit, but I do expect to pick up in fall and into next year. Ultimately, government’s balance sheets haven’t changed. The impact of inflation is still here. And I think inflation is going to be long-term, and we’re going to have to deal with it, and there is not a lot of ways for the government to deal with it with where their balance sheets are. So ultimately, we see silver and gold to be higher going forward, but I can never give a time line of when that’s going to happen. So we’re going to make our decisions on Terronera kind of based on what we see a long-term silver price be and long-term gold price and continue to look into the market and see if we can add more silver into our portfolio all up and down the spectrum.
Lucas Pipes, B. Riley Securities
Got it. That’s very helpful, thank you. And you mentioned the ESG report that you guys are going to publish in the coming months. I was wondering if you’d be able to share what you kind of see as the easiest avenues to kind of improve your ESG profile over the coming years.
Dan Dickson Yes. I mean it’s an ESG strategy. We actually report a sustainability report in May, and then we did our eighth report this year. It’s not one specific area that we can improve. I think it’s partly continue to improve from a culture standpoint. I think we do a really good job internally and from a governance standpoint. But there is going to be things that are changing in the world, specifically carbons and how to manage that over the next 3, 4 years that we’re going to continue to look at. And Terronera gives us that opportunity to try to do some best practice stuff to reduce our footprint in the world. And all mining companies are going to have to look at their carbon footprint, and we’re going to be no different. So hopefully over the next 3 to 4 years, we can improve that and then hopefully report on it and we get a credit to be a leader in the space on it.
Lucas Pipes, B. Riley Securities Got it. That’s helpful. That’s all for me. Best of luck moving forward.
Ryan Thompson, BMO
Hi, Dan, thanks for the updates. I think most of my questions got asked, but I’ll just ask one on Bolañitos, maybe a little bit longer term. Just how should we be thinking about that mine. When I look at the sort of resource grades both in M&I and inferred, they seem to be higher than the reserve grade. So if you could just talk a little bit about sort of converting that material into the reserve mine plan and just how we should be thinking about that asset for the next couple of years? Is it safe to think that grades would be moving up closer to those sort of resource grades?
Dan Dickson Yes. Because of the dynamics right now at Bolañitos, we’re still getting grades we’re trying to open up more areas and get more working faces to be able to kind of get a more blended silver grade to come up. But ultimately, we are going to see this mine be more gold, less silver as we get deeper into the deposits. We do have some areas one Belen that we’ve been drilling and we expect that to come online next year. Metadito, we’ve been – we put out some drill results on that earlier this quarter with some good grades. But ultimately, we’re hovering around the 2, 2.1 gold aspect. And if we can get silver grades back up in the 50s to 60s, that would be ideal. But right now, we’re just seeing variations in the ore body that has lower silver and more gold.
Ryan Thompson Okay. That’s helpful. Thanks for the update.
Mark Reichman, Noble Capital Markets There is a lot of mixed messages in the market about the trajectory of inflation. So I wanted to ask you, Dan, about how you’re thinking about Terronera in terms of the feasibility study coming out in the third quarter. How is this changing the inputs that go into that report? And as the former CFO, how do you kind of think about managing that project in terms of locking in supplies ahead of time versus on an as-needed basis?
Dan Dickson Yes. I mean, I kind of touched on this earlier. Ultimately, I think you’re going to see, and we are going to see initial CapEx increase, and part of that is due to the inflation and what we’re seeing from a cost pressure standpoint in the engineering group and our team foresight to be able to put that in and ultimately impact our costs. As far as locking in supply costs or I think the business that we’re in, gold is obviously a natural hedge to inflation that we don’t need to get way ahead of ourselves and lock in costs. The other aspect to that is the Mexican peso depreciated against the U.S. dollar as an underground vein miner. A significant portion of our cost structure is labor. 30% to 33% is the labor at our three existing assets, and that’s no different at Terronera. So I think if we do see runaway costs from an inflation standpoint, you’ll see our labor costs probably stay relatively same in terms of U.S. dollars. And ultimately, silver and gold is that hedge against higher cost pressures in the world. And there is going to be short-term blips, but ultimately, we expect to be at Terronera for 15, 20, 25 years. Nothing that we can do in the short-term will help us over that length of time, and we’ve got to take the long-term focus on Terronera rather than short-term. Now of course, when it comes to our construction decision, how well can we lock in those prices over the next few years, and we will look to do that as best we can. But at this point, we have no strategy on buying everything upfront.
Mark Reichman Okay. And then the second question is, and I know Terronera is going to be a big change for this company. But in terms of the – where you talked about optimizing your operating cost profile, in the second half, and you may have touched on some of this earlier. But what do you think are the key variables that you’re really focused on to do that? And what do you think – how much of a reduction do you think you can achieve?
Dan Dickson The key aspect write-off the get-go’s labor. As I touched on a lot of the one-time items that rolled through Guanacevi. But then also acquiring – we’ve acquired supplies here in Q2 that we will be using in Q3 and Q4. So there is no particular item that we’re trying to lock in, it’s almost everything. We saw across everything, transportation costs, etcetera, etcetera. The key to us is ensuring that we hit our grades and we hit our tonnage in the Bolañitos and Guanacevi, I am confident that we’re going to be able to hit out here in the second half of the year. And ultimately, what’s taking all those on-time costs out, that we will be able to get our costs in line to what our expectations were at the beginning of the year, somewhere in the $19 to $20 all-in sustaining cost range. It’s a little bit of everything. It’s not one thing.
Mark Reichman Okay, thank you. That’s very helpful.
Dan Dickson I want to thank everybody for joining our call today. I know the big aspect and one of the biggest catalysts for the company is going to be Terronera. It’s going to take our production profile and double it and ultimately cut our cost profile in half. So we have a big quarter coming ahead of us. We do expect the final feasibility study to be out this quarter, and we will be putting a webcast together for that feasibility study as it’s the importance of the company. So hopefully, we can talk again soon, and thank you for all the questions.
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