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Post by Entendance on Apr 18, 2023 6:22:16 GMT -5
Endeavour Silver Announces Construction Decision for the Terronera Project in Jalisco State, Mexico; Executes Commitment Letter for Senior Secured Debt Facility of $120 Million April 18, 2023
Endeavour Silver Corp. (“Endeavour” or the “Company”) (NYSE: EXK; TSX: EDR) is pleased to announce the Board of Directors (the “ Board ”) of the Company has made the decision to proceed with the construction of an underground mine and mill at the Terronera Project in Jalisco state, Mexico. To date, the Company made significant progress on development activities, with long-lead item procurement well advanced and a seasoned team of development personnel established on the ground. Additional activities include onsite delivery of mobile mining equipment, assembly of initial project infrastructure and advanced earthworks with commencement of underground mine access development. All references to dollars ($) in this news release are in United States dollars.
Project Loan Facility The Company has entered into a Commitment Letter with Societe Generale and ING Bank N.V. with certain definitive terms agreed to for a senior secured debt facility for up to $120 million (the “ Debt Facility ”). Artemis Capital Advisors has acted as the financial advisor to the Company regarding this transaction, with ING Capital LLC (together with ING BANK N.V. “ ING ”) and Societe Generale acting as Joint Lead Arrangers. A summary of the key terms of the Debt Facility are as follows:
Up to $120 million principal amount Term of 8.5 years, including a 2-year grace period during the construction phase Interest rate of US Secured Overnight Financing Rate (“ SOFR ”) + 4.50% per annum prior to completion (SOFR + 3.75% per annum upon completion) First security ranking over the Terronera Project Principal payments are payable in quarterly installments commencing three months after attaining completion of the Terronera Project Cash sweep will be applied to 35% of excess cash flow after debt service from completion onwards until $35 million of loan principal has been prepaid Certain hedging arrangements are required including hedging up to 68,000 ounces of gold over the initial three operating years No hedging requirements apply to the silver production Customary financial and debt servicing covenants
“With official Board approval now in hand, the path is cleared to advance construction of the Terronera Project, which will be Endeavour’s next producing mine,” said Dan Dickson, Endeavour’s CEO. “We are very pleased with the financial commitments that Societe Generale and ING have made towards the development of the Terronera Project. After undergoing a comprehensive due diligence process, we secured very competitive financing terms with quality financiers that protect the upside for our shareholders.”
The Debt Facility will include standard and customary project finance terms and conditions regarding fees and conditions precedent to closing (including satisfaction of remaining customary due diligence and other approvals) and remains subject to the completion and execution of definitive loan documentation. Closing of the transaction is expected to occur in the third quarter of 2023. Further details of the Debt Facility will be released upon signing of the final documentation. Technical, environmental, and social due diligence has been completed by Societe Generale and ING to issue their Commitment Letter.
Prior to the Company securing this commitment, the Board approved early expenditures focused on deliberately advancing the Project in a disciplined manner to de-risk various aspects prior to the final construction decision. Proceeding with these early expenditures has reduced inflationary and timing pressures and has also advanced key work that will facilitate ramp-up to full construction.
Updated Development Plans and Initial Capital Costs
Since the Company filed its feasibility study entitled “NI 43-101 Technical Report on the Feasibility Study of the Terronera Project, Jalisco State, Mexico” dated October 21, 2021 with an effective date of September 9, 2021 (the “ Terronera Feasibility Study ”), the Company has further evaluated various operating scenarios, cost-benefit initiatives and technologies to optimize the Terronera Project’s operating flexibility and economics. Since 2021, additional cost pressures have emerged from systemic inflation and constrained global supply chains, which have contributed to increased costs of inputs within the mining sector. The Company’s move to assemble an experienced development team has worked to mitigate some of these impacts, and management believes the Company is well-equipped to navigate the current business environment.
Management recommended and the Board has approved the construction of an optimized Terronera Project scenario (the “Revised Scenario”), consisting of a process plant with 2,000 tonne per day (tpd) capacity and an initial capital expenditure cost of $230 million, partially offset by a decrease in sustaining capital to $88.3 million over the life of the mine. Endeavour expects a 21-month construction period, including 3 to 6 months ramp up to full production with initial production expected in the fourth quarter of 2024.
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Post by Entendance on May 1, 2023 7:03:49 GMT -5
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Post by Entendance on May 2, 2023 1:55:11 GMT -5
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Post by Entendance on May 7, 2023 3:48:23 GMT -5
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Post by Entendance on May 10, 2023 1:46:02 GMT -5
Endeavour Silver Releases its 2022 Sustainability Report; Reports on First Year of its Three Year Strategy
VANCOUVER, British Columbia, May 09, 2023 Endeavour Silver Corp. (“Endeavour” or the “Company”) (TSX: EDR, NYSE: EXK published its 2022 Sustainability Report , describing the Company’s progress in executing the first year of its 2022-2024 Sustainability Strategy .A highlights video accompanies the report, featuring CEO, Dan Dickson, and CFO, Christine West, discussing the past year’s efforts and milestones.
Dan Dickson, CEO of Endeavour Silver, stated: “In 2022, we rolled up our sleeves to execute Year One of our new Sustainability Strategy. I’m pleased with how our team transformed Endeavour Silver’s commitments into real-life action, ‘walking the talk’ by continuing to embed ESG practices into our operations and driving positive impacts across the three pillars of our Sustainability Strategy - people, planet and business.”
2022 Performance Highlights (All dollar amounts presented below are in U.S. dollars.)
People Achieved 0.87 reportable injury rate, a 28% decline from the prior year and continuing a four-year downward trend Improved our onboarding process to set up new hires for success, providing an average of 30 training hours for every employee and contractor Increased our community investments to $433,167, supporting local needs such as education, economic development, public health and infrastructure Marked the sixth anniversary of our Scholarship Program, with 155 scholarships awarded last year to enhance access to education for local students Awarded the ‘Socially Responsible Company’ distinction by the Mexican Center for Philanthropy
Planet Performed climate scenario analysis to assess potential climate-related risks and impacts, and prepared our first climate report aligned to the Task Force on Climate-related Financial Disclosures (TCFD) framework, entitled “ Our Climate Journey ” Recycled over 90% of water used in our operations, minimizing our use of fresh water Diverted 78% of our overall waste from landfills Planted 61,905 trees through our reforestation program to restore land disturbed by mining activity
Business 100% of our employees completed training on our Code of Business Conduct and Ethics Set a target of achieving at least 30% representation of women on the Board by the Company’s 2023 annual meeting of shareholders Strengthened our commitment to human rights by launching a Human Rights Policy along with specialized training for our workforce Spent $220 million on goods and services, 90% of which was from within Mexico Updated all corporate governance policies and expanded our Sustainability Policy to include new Board responsibilities related to climate change and more coverage of Environmental, Social and Governance (ESG) topics
Entitled “Enriched By Our Past, Engaged In Our Future”, the Company’s 10th Sustainability Report has been prepared in accordance with the Global Reporting Initiative (GRI) Standards and the Sustainability Accounting Standards Board (SASB) framework, as well as with reference to the United Nations Sustainable Development Goals (SDGs). A Spanish version of the 2022 Sustainability Report will be available online during Q3, 2023.
The 2022 Sustainability Report and related performance tables are available on Endeavour’s website . Earlier this year, Endeavour released its inaugural climate report, entitled “ Our Climate Journey ”, highlighting the Company’s approach to climate change and aligning with the recommendations of the TCFD.
About Endeavour Silver – Endeavour is a mid-tier precious metals mining company that operates two high-grade underground silver-gold mines in Mexico. Endeavour is currently advancing construction of the Terronera project and exploring its portfolio of exploration and development projects in Mexico, Chile and the United States to facilitate its goal to become a premier senior silver producer. Our philosophy of corporate social integrity creates value for all stakeholders.
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Post by Entendance on May 10, 2023 6:20:17 GMT -5
Endeavour Silver Non-GAAP EPS of $0.05 beats by $0.02, revenue of $55.5M beats by $2.86M
VANCOUVER, British Columbia, May 10, 2023
Endeavour Silver Corp. (“Endeavour” or the “Company”) (NYSE: EXK; TSX: EDR) is pleased to announce its financial and operating results for the three months ended March 31, 2023. All dollar amounts are in US dollars (US$). “We are pleased to report a solid start this year with consolidated production expected to meet full year guidance,” stated Dan Dickson, CEO of Endeavour Silver. “Guanacevi continues to perform well, generating strong operating cash flow which we are reinvesting in the business. Industry-wide inflation pressures continue to persist, which combined with a strengthening Mexican Peso, are increasing our operating costs. We are working to manage our inputs in order to offset these cost pressures as we pursue productivity and efficiency initiatives. Added Mr. Dickson, “On April 18, 2023, we reached a key milestone with the announcement of the project financing commitment of $120 million and a subsequent formal construction decision at Terronera. The successful execution of this underground mine development and mill is integral to achieving our growth goal to nearly double our production by 2025 and transform our cost profile. With a seasoned team of development personnel, we are moving forward confidently and look forward to establishing an exciting future for our stakeholders.”
Q1 2023 Highlights Production Tracking Towards Upper Range of Guidance: 1,623,545 ounces (oz) of silver and 9,342 oz of gold for 2.4 million oz silver equivalent (AgEq) ( 1) . Revenue : $55.5 million from the sale of 1,667,408 oz of silver and 9,126 oz of gold at average realized prices of $23.16 per oz silver and $1,917 per oz gold. Reduced Earnings Due to Lower Realized Prices : $6.5 million, or $0.03 per share, down 45% from Q1 2022. Earnings Before Interest, Taxes, Depreciation & Amortization (EBITDA) ( 2) of $19.4 million, a decrease of 24% from Q1 2022. Cash Flow : $12.5 million in operating cash flow before working capital changes ( 2) , a decrease of 39% from Q1 2022. Mine operating cash flow before taxes ( 2) also decreased to $22.4 million. Higher Costs Due to Strengthened Peso and Industry-Wide Inflation: Cash costs ( 2) of $11.12 per oz payable silver and all-in sustaining costs ( 2 ) of $20.16 per oz payable silver, net of gold credits. Cash costs ( 2) were slightly above guidance due to a strengthening of the Mexican Peso and increased labour, power and consumables costs. Management continues to work diligently to reduce costs and improve efficiencies where possible. Healthy Balance Sheet: Cash position of $61.6 million and working capital ( 2) of $92.8 million. Cash decreased as funds were spent on development activities at Terronera.
Subsequent to Q1 2023 Company Secures Project Financing and Updates Development Plans for Terronera : Societe Generale and ING Bank N.V. have entered into a commitment letter for a Senior Secured Debt Facility of $120 million. The Company has optimized the project’s operating flexibility from the NI 43-101 Feasibility Study of the Terronera Project filed in 2021. The Revised scenario approves the construction of a 2,000 tpd process plant with an initial capital expenditure of $230 million (see news release dated April 18, 2023 ). Terronera De-risked with over $58 million Invested to date into Development : The Board of Directors has approved the construction of an underground mine and mill at Terronera. The Company has made significant progress on development activities, with long-lead item procurement well advanced and a seasoned team of development personnel established on the ground (see news release dated April 20, 2023).
(see appendix for consolidated financial statements) Q1 2023 Highlights Three Months Ended March 31 2023 2022 % Change Production Silver ounces produced 1,623,545 1,314,955 23 % Gold ounces produced 9,342 8,695 7 % Payable silver ounces produced 1,608,212 1,303,540 23 % Payable gold ounces produced 9,184 8,549 7 % Silver equivalent ounces produced (1) 2,370,905 2,010,555 18 % Cash costs per silver ounce (2)(3) 11.12 10.21 9 % Total production costs per ounce (2)(4) 15.43 15.13 2 % All-in sustaining costs per ounce (2)(5) 20.16 20.90 (4 %) Processed tonnes 211,073 206,147 2 % Direct operating costs per tonne (2)(6) 132.11 122.86 8 % Direct costs per tonne (2)(6) 169.49 148.53 14 % Silver co-product cash costs (7) 14.93 15.18 (2 %) Gold co-product cash costs (7) 1,236 1,226 1 % Financial Revenue ($ millions) 55.5 57.7 (4 %) Silver ounces sold 1,667,408 1,717,768 (3 %) Gold ounces sold 9,126 8,381 9 % Realized silver price per ounce 23.16 24.38 (5 %) Realized gold price per ounce 1,917 1,970 (3 %) Net earnings (loss) ($ millions) 6.5 11.7 (45 %) Adjusted net earnings (loss) (11) ($ millions) 9.6 17.0 44 % Mine operating earnings ($ millions) 16.0 20.3 (21 %) Mine operating cash flow before taxes ($ millions) (8) 22.4 26.7 (16 %) Operating cash flow before working capital changes (9) 12.5 20.6 (39 %) EBITDA (10) ($ millions) 19.4 25.6 (24 %) Working capital (12) ($ millions) 92.8 168.4 (45 %) Shareholders Earnings (loss) per share – basic ($) 0.03 0.07 (57 %) Adjusted earnings (loss) per share – basic ($) (11) 0.05 0.10 49 % Operating cash flow before working capital changes per share (9) 0.07 0.12 (45 %) Weighted average shares outstanding 190,274,768 171,557,220 11 %
( 1 ) Silver equivalent (AgEq) is calculated using an 80:1 silver:gold ratio. (2) These are non-IFRS financial measures and ratios. Further details on these non-IFRS financial measures and ratios are provided at the end of this press release and in the MD&A accompanying the Company’s financial statements, which can be viewed on the Company’s website, on SEDAR at www.sedar.com and on EDGAR at www.sec.gov .
For the three months ended March 31, 2023, revenue, net of $0.6 million of smelting and refining costs, decreased by 4% to $55.5 million (Q1 2022: $57.7 million).
Gross sales of $56.1 million in Q1 2023 represented a 4% decrease over the $58.4 million in Q1 2022. Silver oz sold decreased by 3%, due to a decrease in finished goods silver ounces available for sale as at December 31, 2022 compared to December 31, 2021, offset by increased silver production. There was a 5% decrease in the realized silver price, resulting in an 8% decrease in proceeds from silver sales. Gold oz sold increased by 9% with a 3% decrease in the realized gold price, resulting in a 6% increase in proceeds from gold sales. During the period, the Company sold 1,667,408 oz silver and 9,126 oz gold for realized prices of $23.16 and $1,917 per oz, respectively, compared to Q1 2022 sales of 1,717,768 oz silver and 8,381 oz gold for realized prices of $24.38 and $1,970 per oz, respectively. In Q1 2023, London spot prices for silver and gold averaged $22.55 and $1,890, respectively.
The Company slightly decreased its finished goods silver inventory and slightly increased its finished goods gold inventory to 471,069 oz and 1,766 oz, respectively, at March 31, 2023 compared to 530,250 oz silver and 1,707 oz gold at December 31, 2022. The cost allocated to these finished goods was $7.4 million at March 31, 2023 compared to $6.1 million at December 31, 2022. At March 31, 2023, the finished goods inventory fair market value was $14.7 million, compared to $15.8 million at December 31, 2022.
After cost of sales of $39.54 million (Q1 2022 - $37.4 million), an increase of 6%, mine operating earnings were $16.0 million (Q1 2022 - $20.3 million). The cost of sales in Q1, 2023 was impacted by a strengthened Mexican peso, higher labour, power and consumables costs as the Company, as well as the industry, has experienced significant inflationary pressures. The Company also recognized increased royalty costs during Q1, 2023 compared to the prior period as a higher percentage of the production at Guanacevi has come from the El Curso and El Porvenir concessions, which are subject to royalties.
The Company had operating earnings of $6.9 million (Q1 2022: $12.6 million) after exploration and evaluation costs of $4.2 million (Q1 2022: $3.2 million) and general and administrative costs of $4.9 million (Q1 2022: $4.3 million. Exploration and evaluation costs increased primarily to additional spending on the recently acquired Pitarrilla project and general and administrative costs increased primarily due to investment in a new ERP system.
Earnings before income taxes were $12.5 million (Q1 2022: $18.9 million) after finance costs of $0.4 million (Q1 2022: $0.3 million), a foreign exchange gain of $1.9 million (Q1 2022: $0.8 million), and investment and other income of $4.0 million (Q1 2022: $5.8 million). The increase in the foreign exchange gain is due to the strengthening of the Mexican peso which increases the value of peso denominated working capital items. The investment and other income during Q1 2023 primarily resulted from an unrealized gain on marketable securities and warrants of $3.1 million (Q1 2022: $5.4 million).
The Company realized net earnings for the period of $6.5 million (Q1 2022: $11.7 million) after an income tax expense of $6.1 million (Q1 2022: $7.2 million). Current income tax expense increased to $4.4 million (Q1 2022 - $1.0 million) and deferred income taxes decreased to $1.7 million (Q1, 2022: $6.2 million).During 2022, the changes in current and deferred taxes were driven primarily by the utilization of loss carryforwards at Guanacevi and during 2023 there were no further loss carryforwards available to offset against current income tax and changes in deferred income taxes was primarily derived from changes in temporary timing differences between deductions for accounting versus deductions for tax.
Direct operating costs ( 2) on a per tonne basis increased to $132.11, up 8% compared with Q1 2022 due to both a strengthening of the Mexican peso and higher operating costs at both Guanaceví and Bolanitos from increased inflationary pressure during 2022 and Q1 2023. As the Mexican peso strengthens, the Company’s Mexican peso denominated costs are increased in US dollar terms. Guanaceví and Bolañitos have seen increased labour, power and consumable costs.
Consolidated cash costs per oz, net of by-product credits, increased to $11.12 primarily due to the higher direct costs per tonne slightly offset by a higher gold credit driven by higher gold production compared to Q1 2022. AISC decreased by 4% on a per oz basis compared to Q1 2022 as a result of costs being allocated over increased ounces produced which offset the increased costs.
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, VP of Investor Relations at 604-640-4804, toll free at 1-877-685-9775 or by email at gmeleger@edrsilver.com
Conference Call A conference call to discuss the Company’s Q1 2023 financial results will be held today at 10:00 a.m. PT / 1:00 p.m. ET. To participate in the conference call, please dial the numbers below. Date & Time: Wednesday, May 10, 2023 at 10:00 a.m. PT / 1:00 p.m. ET Telephone: Toll-free in Canada and the US +1-800-319-4610 Local or International +1-604-638-5340 Please allow up to 10 minutes to be connected to the conference call. Replay: A replay of the conference call will be available by dialing (toll-free) +1-800-319-6413 in Canada and the US (toll-free) or +1-604-638-9010 outside of Canada and the US. The replay passcode is 0037#. The replay will also be available on the Company’s website at www.edrsilver.com .
About Endeavour Silver – Endeavour is a mid-tier precious metals mining company that operates two high-grade underground silver-gold mines in Mexico. Endeavour is currently advancing construction of the Terronera project and exploring its portfolio of exploration and development projects in Mexico, Chile and the United States to facilitate its goal to become a premier senior silver producer. Our philosophy of corporate social integrity creates value for all stakeholders.
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Post by Entendance on May 11, 2023 3:31:15 GMT -5
Endeavour Silver Corp. Q1 2023 Earnings Conference Call May 10, 2023
Company Participants Galina Meleger - Vice President, Investor Relations Dan Dickson - Chief Executive Officer
Conference Call Participants Craig Hutchison - TD Securities Matt Taylor PI Financial
Galina Meleger Good morning, everyone. Before we get started, I ask that you view our MD&A for cautionary language regarding forward-looking statements and the risk factors pertaining to these statements. Our MD&A and financial statements are available on our website at edrsilver.com. With us on today’s call is Dan Dickson, Endeavour Silver’s CEO; Christine West, our Chief Financial Officer; and Don Gray, Endeavour’s COO. Following Dan’s formal remarks, we will then open the call for questions. Now over to Dan.
Dan Dickson Thank you, Galina, and welcome, everyone. 2023 is off to a strong start. Not only was it a good quarter for our operating mines, but we also attained a significant milestones towards building the long-term future of the company. Consolidated Q1 silver equivalent production was up 18% year-over-year to 2.4 million silver equivalent ounces. Ultimately, this performance puts us in great shape to achieve this year's production guidance of between 8.6 million to 9.5 million silver equivalent ounces. Once again, from a production standpoint, Guanacevi had a positive quarter, driven by robust silver and gold grades. However, mill performance was impacted due to the extended maintenance of our -- on our mill liners and concentrate filter cap changes in February. While throughput returned to planned levels in March, it was down 13% quarter-over-quarter, averaging 1,138 tonnes per day for the quarter. The performance of our other operating mine, Bolañitos remained steady. There is increased silver production offset by lower gold production. We continue to evaluate opportunities to increase mine life at Bolañitos and are cognizant of Bolañitos in the current landscape. Their operating team has done a good job meeting their targets. Moving to financials. We reported top line revenue of $56 million, with cost of sales of $40 million for mine operating earnings of $16 million. After exploration and G&A, we reported net earnings of $6.5 million or $0.03 per share. At the site level, Guanacevi delivered mine free cash flow of $9 million, and Bolañitos contributed just under $1 million for the quarter. Regarding operating costs, we've seen pressures across several inputs, driven by foreign exchange and inflation. So our direct cost per ton, were up 14%. Specifically, the Mexican peso strengthened substantially, up 7% from year-end and 9% from Q1 2022, which increased our local cost in US dollar terms. Additionally, Guanacevi and Bolañitos continue to increase labor costs, power and consumable costs and steel and processing for items such as cyanide and zinc. Lastly, we sourced more production from royalty concession areas, which resulted in increased royalty fees. The combination of these cost pressures has placed both the quarterly cash costs and the all-in sustaining costs slightly above the upper bound of our guidance at $11.12 per ounce for cash costs and $20.16 per ounce for all-in sustaining costs. While inflation is an industry-wide issue that expect to persist throughout the year, we're closely reviewing our purchasing practices to see where and how we can mitigate this impact. Containing costs will continue to be a key focus as we work to improve the efficiencies of our operations. The higher-than-planned order rates, continues to offset the higher direct cost per ton. And with the recent strengthening of the gold price, we benefit from a higher by-product credit on a per-ounce reporting metrics. But to be clear, cost improvement continues to be a focus. As at March 31, we had a cash on hand of $62 million and working capital of $93 million. Cash decreased as $12 million is spent on development activities at Terronera and prepaids went up to account for deposits and payments on various items. As mentioned earlier, we announced an exciting milestone in March -- sorry, in April. Board approval to formally proceed with the construction of an underground mine and mill at Terronera. The green light comes on the back of a financing commitment for $120 million in senior secured debt from Softgen and ING Capital. Overall, I'm very pleased with the terms and details of the project loans. We worked very hard to secure favorable terms to protect the upside of the project for our shareholders. The facility has a term of 8.5 years at a secured overnight financing rate of plus 3.75% once the project is in full production. The loan has a two-year grace period during the construction phase, and there are no hedging requirements on silver production. That said, there is a hedging program for foreign exchange and for up to 68,000 ounces of gold over the first two years of production at Terronera. Given the additional cost pressures that the industry has faced, we updated our development plans and initial capital costs for Terronera, as the last feasibility study was completed almost two years ago. The updated mine plan increases the initial CapEx to $230 million from $175 million, while the processing plant capacity increased to 2,000 tonnes per day from the 1,700 in the feasibility study. The updated plan provides increased operating flexibility includes inflationary cost estimates and bring forward capital investment. Life of mine sustaining capital estimate decreases to $88 million compared to $106 million in the feasibility study, as those costs have been included in initial CapEx. The current plant design optimizes the recoveries, while the construction schedule is 21 months, with initial production expected in the fourth quarter of 2024. With a seasoned development team in place, we are committed to delivering on time and budget. With significant early works already underway, we have spent $58 million to date on direct development. If you're interested in seeing photos of the construction progress, I encourage you to visit our website under the Terronera page. Let me recap some of our recent developments. The full mobile mining fleet is now on site. We ordered all the major equipment, plant equipment and expect most of that to arrive this summer. Upgrades to the access roads, totaling almost 7 kilometers is nearly complete, we're nearing completion of the permanent camp. We are nearly finished excavating the plant site, and we are advancing underground mine access. Supported by these results, our main focus now is progressing mine development, finalizing earthworks and pouring concrete for the mill platform before the rainy season. Through all these operational milestones and advances, we continue to demonstrate our commitment to responsible and sustainable mining. To learn more about these and other efforts, I encourage you to read our latest sustainability report, which we released yesterday. The report captures our efforts in 2022 to maximize our positive impacts on society and the environment. This past year, we started executing our 2022 to 2024 sustainability strategy. I'm pleased with how our team delivered on our priorities, especially in areas like health and safety and embedded ESG practices deeper into our operations. Let me highlight just a few examples. We continue to achieve commendable safety performance in 2022, as part of our four-year downward trend with our reportable injury rate dropping to 0.87. We recycled over 90% of water used in our operations, minimizing our fresh use of water. And we performed climate scenario analysis to assess potential climate-related risks and impacts and prepared our inaugural climate report line to TCFD framework. Lastly, I want to touch on the recent development of the new Mexican mining laws. Of course, this has been a topic with a lot of uncertainty and unfortunately moved swiftly through the Mexican government. From an operating standpoint, our expectation is the new law will increase compliance requirements, specifically around water use and reclamation activities, but don't expect a disruption of our operations or construction activities. There is still uncertainty of the details, but unfortunately, these new laws could discourage future investment into Mexico's exploration sector. We will see these new laws challenge through the courts and ultimately have more clarity in the coming weeks and months with regarding its impact. I think that wraps up my formal comments for today. Myself, Don Gray, our COO and Christine are happy to answer any questions that you may have.
Craig Hutchison, TD Securities Just a question on the inflationary pressures. On the labor front, are there any more pressure you see there over the next sort of 12 months? Have you have any labor negotiations to come here, or is that largely wrapped up in just more of a broader inflation type theme?
Dan Dickson Yeah. Right now, that's wrapped up. We finished that typically in February, sometimes built into March. So we gave a 5% increase to the unions that want and Bolañitos. The -- really where the impact hurting us from a labor standpoint really comes down to foreign exchange. So about 33% of our costs are incurred in Mexican pesos for labor and with the appreciation of the peso this past quarter, obviously impact us right to the bottom line. And I think short term we see some strength in the peso. But hopefully, long term, it reverts back to what we've seen for the last 20 years, and that's kind of depreciation against the US dollar.
Craig Hutchison Okay. And how about on the energy front? Are you seeing any pressures kind of coming off on that front, or is that still sort of similar to levels you guys experienced in Q1?
Dan Dickson Yeah. I think we're going to see similar costs and most of our power obviously come through CFDs -- electric commission in Mexico. Our expectation is it's going to stay where it at from Q1. But as we've seen the last kind of five, six quarters, inflation has been a factor. And if the next government or the commission decides to increase rates that will obviously impact us for us. Most of the power costs impact us through a plant standpoint and then pumping water pumping at Guanacevi as well. So again, hopefully, we see that kind of flatten out here and maintain where the levels are.
Craig Hutchison Okay. And maybe just one last question for me. Just I wanted to be you guys look like you're tracking already kind of above the guidance. When do you kind of expect maybe a reflection downwards in terms of grades, or do you expect maybe lower throughput, I try to model to the midpoint of your guidance. I assume it comes down at some point otherwise you guys look like you may exceed. But just curious in terms of any kind of color on grades and when you might sort of even sort of you talk a little bit.
Dan Dickson Yes. I mean, elevated grades because of El Curso for the last two years. And obviously, we've been quite conservative in our reserve estimates on El Curso. So frankly, we should see our tons per day come up, it wants. We had a tough February just with some maintenance requirements, mainly on the liner and some cost work that we had to do on the tailings dry stack tailings facility. So ultimately, our expectation is our tons come up, which hopefully drives down our cost per ton. As far as grades, like I say, we -- for the last two years, kind of exceeded what we've had in reserves. I do essentially us being conservative to that kind of come back to what we have in our plan. We just had a nice area in El Curso, and we seem to continue to get these. So maybe it stays elevated. And if it does, we'll come into the upper range of our guidance, if not maybe be, but if we revert to what is in the mine plan, then we end up being where we are. So we're not at this point really changed guidance at Guanacevi ultimately consolidate it.
Craig Hutchison Perfect. Thanks, guys.
Dan Dickson No problem. Thanks for the question, Craig.
Matt Taylor, PI Financial Hey, guys. Thanks. Just looking awful questions on our end. Just spending at Terronera this quarter is a little lower than expected. Are we going to -- should we expect a ramp up through Q2, or will it be likely later in the year?
Dan Dickson No. Now that we have formal construction decision, I would expect that ramp up. Everything is kind of running now. And like I say, with the Board's approval, the quicker we can move the better, obviously. I mean I think if we can stay on time, we can stay on budget. Sometimes for things under control, we built contingencies on that time line, and I guess we'd like to spend a little bit more in Q1, meaning we moved along. But at the same time, without having that formal construction decision, we tried to be conservative with just looking at early works. As far as expenditures between now and the end of 2024 when we get into production, I would say it's going to be relatively homogenous payments over that kind of next certain quarters. And again, hopefully, things ramp up relatively quickly here in Q2.
Matt Taylor Perfect. And then just switching over to Bolañitos. Are we going to -- should we expect an uptick in gold production later this year? I saw in Q1, it was slightly lagging. Just wondering what those are going to be?
Dan Dickson Yeah, for sure. I mean, absolutely, Bolañitos has moved into the gold operation, our expectation was going to be more gold, less silver in this quarter, we flipped, silver grades came up and gold grades come down. Similar to Guanacevi, I mean we expect that to revert to our mine plan. So on a proportional basis, I would expect gold to come up and silver to slightly come down, partly that's going to be getting to certain areas in our mine plan. And like anything with the underground vein mining sometimes the areas that allow more ore tons to be able to come out, things that are in resources are actually not even in our mine plan that are there. But ultimately, if we follow mine plan expectations are gold comes up, sliver comes slightly down.
Matt Taylor
Perfect, cheers.
Dan Dickson Thanks for the questions, Matt. It's been an interesting quarter with regards to the changes in the Mexican mining laws where we're seeing silver and gold prices. I think today's reflection of questions maybe just comes down to what's happening in the marketplace. We see silver flipping all over the place. And it was up at start of the day, now it's down. And then I see some -- the results and our share price just were down. I think it's early in the year, and our goal is to get our costs in line to where our expectations and where our guidance is. And ultimately, we'll be working from that from an operation standpoint. But I think it's an exciting year for Endeavour. I think moving forward with the Terronera project are going to significantly change the profile of the company over the next two years, and it's something we're excited for and I look forward to next quarter's conference call to be able to give an update on where we're at, at Terronera and hopefully continued good performance at Guanacevi and Bolañitos. So thank you, everyone, for attending today and talk soon.
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Post by Entendance on May 12, 2023 1:27:13 GMT -5
Remember: the technicians do not help produce yachts for the costumers, but they do help generate the trading that produces yachts for the brokers.
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Post by Entendance on May 23, 2023 1:30:17 GMT -5
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Post by Entendance on May 24, 2023 2:10:22 GMT -5
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Post by Entendance on Jul 21, 2023 5:42:22 GMT -5
July 20, 2023
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Post by Entendance on Jul 27, 2023 7:11:00 GMT -5
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Post by Entendance on Jul 31, 2023 7:10:29 GMT -5
Endeavour Silver Corp. (“Endeavour” or the “Company”) (NYSE: EXK; TSX: EDR) is pleased to announce that its wholly-owned subsidiary, Minera Plata Adelante SA de CV (“MPA”) has entered into an agreement with Gold Royalty Corp. to sell all of MPA's interest in the 1% Cozamin royalty (“Royalty”) for total consideration of US$7,500,000, payable in cash. The Royalty applies to two concessions (Calicanto and Vicochea) on Capstone’s Cozamin copper-silver mine, located 3.6 kilometres north-northwest of Zacatecas City in state of Zacatecas, Mexico.
The Company obtained the Royalty through a concession division agreement signed in 2017 on seven wholly owned concessions which were acquired for US$445,000 The Cozamin Mine, a copper-silver mine owned and operated by Capstone Copper in Zacatecas, Mexico, is located on two of the seven Concessions. The sale agreement includes an option granted to Gold Royalty Corp to purchase any additional royalties which may be granted on the five remaining concessions under the 2017 concession division agreement. The definitive agreement is subject to standard closing conditions and is expected to be completed by August 31, 2023.
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Post by Entendance on Aug 8, 2023 6:10:25 GMT -5
VANCOUVER, British Columbia, Aug. 08, 2023 (GLOBE NEWSWIRE) -- Endeavour Silver Corp. (“Endeavour” or the “Company”) (NYSE: EXK; TSX: EDR) is pleased to announce its financial and operating results for the three and six months ended June 30, 2023. All dollar amounts are in US dollars (US$). “While we have been successful at managing the inflation trend over the last two years, costs are now outpacing our mitigation efforts. The Mexican Peso has strengthened to a seven year high against the US dollar, which is impacting costs across our operations,” stated Dan Dickson, Chief Executive Officer. “Originally, our 2023 guidance had assumed a 20:1 Mexican Peso per US dollar exchange rate; however the current rate is just under 17:1; representing a 14% increase. Our bottom line has been impacted two-fold, through both inflation and foreign exchange. Cost control will continue to be a key focus for the operations group as cost pressures are expected to continue for the remainder of the year.”
Q2 2023 Highlights
Production Tracking In-Line with Guidance: 1,494,000 ounces (oz) of silver and 9,819 oz of gold for 2.3 million oz silver equivalent (AgEq) (1) totalling 4.7 million oz AgEq for the first half of the year. Revenue : $50.0 million from the sale of 1,299,672 oz of silver and 9,883 oz of gold at average realized prices of $24.13 per oz silver and $1,976 per oz gold. Cash Flow : $11.1 million in operating cash flow before working capital changes (2) and $18.8 million in Mine operating cash flow before taxes (2) . Negative Earnings due to Non-Cash Item : Net loss of $1.1 million, or $0.01 per share. Adjusted earnings of $2.1 million (2) after adjusting for a $3.2 million change in the fair value of investments. Higher Costs Due to Strengthened Peso and Industry-Wide Inflation: Cash costs (2) of $13.52 per oz payable silver and all-in sustaining costs (2) of $22.15 per oz payable silver, net of gold credits. Costs were impacted by both inflationary pressures and a strengthened Mexican Peso. During the year, the Mexican Peso has appreciated by 14%. Cash cost and all-in-sustaining costs metrics were also impacted by lower silver grades at Guanacevi due to changes in mine sequencing. It is expected that grades will return to plan in Q3. Management Continues to Monitor Macroeconomic Conditions Closely: Management anticipates these macro trends will continue for the near term and therefore expects actual cost metrics to be higher than cost metrics previously provided in the Company’s 2023 guidance. Management anticipates costs to align to similar levels with H1 2023 actual cost metrics of $12.27 per oz for cash cost and $21.11 per oz for AISC. Healthy Balance Sheet: Cash position of $43.5 million and working capital (2 ) of $78.2 million. Cash decreased as funds were spent on development activities at Terronera. Metal Inventory : Finished goods totaled 637,439 oz silver and 1,519 oz gold bullion inventory. Construction and Development Update at Terronera : The Company has made significant progress on development activities, with overall construction progress 30% complete. The project remains on schedule for initial production in Q4 2024. (see news release dated July 20, 2023 ) Terronera Debt Financing: Completion of the definitive loan documentation for the $120 million senior secured debt facility remains on track for execution in Q3 (see news release dated April 18, 2023 ). Filed At-The-Market Prospectus Supplement for up to US$60 million : Proceeds to be used for funding development of the Terronera mine, and other growth initiatives including the Pitarrilla and Parral properties as well as prospective acquisitions and general working capital purposes (see news release dated June 27, 2023 )
For the three months ended June 30, 2023, revenue, increased by 62% to $50.0 million (Q2 2022: $30.8 million).
Gross sales of $50.9 million in Q2 2023 represented a 61% increase over the $31.7 million in Q2 2022. Silver oz sold increased 116% due to both increased production and the impact of withholding of a significant amount of silver finished goods inventory during Q2, 2022. There was a 7% increase in the realized silver price resulting in a 131% increase in proceeds from silver sales. Gold oz sold increased 1% with a 6% increase in realized gold prices resulting in a 7% increase in proceeds from gold sales. During Q2, 2023 the Company sold 1,299,672 oz silver and 9,883 oz gold, for realized prices of $24.27 and $1,955 per oz, respectively, compared to sales of 602,894 oz silver and 9,792 oz gold, for realized prices of $22.72 and $1,840 per oz, respectively, in the same period of 2022. In Q2, 2023, London spot prices averaged $24.13 and $1,976, respectively
The Company increased its finished goods to 637,439 oz silver and slightly decreased its finished goods gold inventory to 1,519 oz gold at June 30, 2023 compared to 530,250 oz silver and 1,707 oz gold at December 31, 2022. The cost allocated to these finished goods was $13.8 million as at June 30, 2023, compared to $7.4 million at March 31, 2023. At June 30, 2023, the finished goods inventory fair market value was $17.6 million, compared to $14.7 million at March 31, 2023.
After cost of sales of $37.5 million (Q2 2022 - $26.3 million), an increase of 43%, mine operating earnings were $12.5 million (Q2 2022 - $4.5 million). The increase in the cost of sales compared to the prior period was driven by significantly higher silver ounces sold in the current period, a strengthened Mexican peso and higher labour, power and consumables costs as the Company, as well as the industry, has experienced significant inflationary pressures. Additionally, the Company incurred increased royalty costs during Q2, 2023 compared to the prior period,
The Company had operating earnings of $5.4 million (Q2 2022: operating loss of $1.3 million) after exploration and evaluation costs of $4.3 million (Q2 2022: $3.8 million), general and administrative costs of $2.4 million (Q2 2022: $1.3 million) and a write off of exploration properties of $0.4 million (Q2, 2022 - $0.5 million).
Earnings before income taxes was $4.2 million (Q2 2022: loss before taxes of $8.8 million) after finance costs of $0.4 million (Q2 2022: $0.3 million), a foreign exchange gain of $1.9 million (Q2 2022: loss of $0.3 million), and investment and other expense of $2.7 million (Q2 2022: $6.9 million). The investment and other expenses during Q2 2023 primarily resulted from an unrealized loss on marketable securities and warrants of $3.2 million (Q2 2022: $7.6 million).
The Company realized a net loss for the period of $1.1 million (Q2 2022: $11.9 million) after an income tax expense of $5.2 million (Q2 2022: $3.1 million). Current income tax expense increased to $4.4 million (Q2 2022 - $1.3 million) due to increased profitability impacting the income tax and special mining duty, while deferred income tax expense of $0.8 million is derived from changes in temporary timing differences between deductions for accounting versus deductions for tax (Q2 2022 – $1.8 million).
Direct operating costs (2) on a per tonne basis increased to $138.16, up 4% compared with Q2 2022 due to both a strengthening of the Mexican peso and higher operating costs at both Guanacevi and Bolanitos from inflationary pressure during 2022 and the first half of 2023. As the Mexican peso strengthens, the Company’s Mexican peso denominated costs are increased in US dollar terms. Guanacevi and Bolanitos have seen increased labour, power and consumables costs.
Consolidated cash costs per oz( 2 ), net of by-product credits, increased to $13.52 primarily driven by an increase in direct operating costs, an increase in royalties and special mining duties, partially offset by an increase in by-product gold sales and increased silver production. AISC( 2 ) decreased by 4% on a per oz basis compared to Q2 2022 due to the increase in cash costs and an increase in allocated corporate general and administrative expenses partially offset by increased silver production and slightly lower sustaining capital expenditures.
Management anticipates these macro trends will continue for the near term and therefore expects actual cost metrics to be higher than cost metrics previously provided in the Company’s 2023 guidance. Management anticipates costs to align to similar levels with H1 2023 actual cost metrics.
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 Investor Relations at 604-640-4804, toll free at 1-877-685-9775 or by email at gmeleger@edrsilver.com.
Conference Call A conference call to discuss the Company’s Q2 2023 financial results will be held today at 10:00 a.m. PT / 1:00 p.m. ET. To participate in the conference call, please dial the numbers below. Date & Time: Tuesday, August 8, 2023 at 10:00 a.m. PT / 1:00 p.m. ET Telephone: Toll-free in Canada and the US +1-800-319-4610 Local or International +1-604-638-5340 Please allow up to 10 minutes to be connected to the conference call. Replay: A replay of the conference call will be available by dialing (toll-free) +1-800-319-6413 in Canada and the US (toll-free) or +1-604-638-9010 outside of Canada and the US. The replay passcode is 0279#. The replay will also be available on the Company’s website at www.edrsilver.com .
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Post by Entendance on Aug 8, 2023 16:36:06 GMT -5
Endeavour Silver Corp. Q2 2023 Earnings Conference Call August 8, 2023 1:00 PM ET
Company Participants Galina Meleger - Vice President, Investor Relations Dan Dickson - Chief Executive Officer Don Gray - Chief Operating Officer
Conference Call Participants Heiko Ihle - H.C. Wainwright Craig Hutchison - TD Securities Lucas Pipes - B. Riley Securities Justin Stevens - PI Financial Cosmos Chiu - CIBC
Galina Meleger Good morning everyone. Before we get started, I ask that you view our MD&A for cautionary language regarding forward-looking statements and the risk factors pertaining to these statements. Our MD&A and financial statements are available on our website at edrsilver.com. With us on today's call is Dan Dickson, Endeavour's CEO; Christine West, our Chief Financial Officer; and Don Gray, Endeavour's COO. Following Dan's formal remarks, we will open the call for questions. And now over to Dan.
Dan Dickson Thank you, Galina and welcome everyone. I would like to start by acknowledging the tremendous achievements we made at Terronera in Q2, which advances our strategy in pursuing high-margin production growth. During the quarter, we obtained formal Board approval committed to project loan financing, established a seasoned team, and now construction is well underway. Terronera is a unique opportunity that will reposition the company to generate significant free cash flow, bringing us one step closer to achieving our mission of becoming a premier senior silver producer. Nevertheless, despite continued positive production performance, the headline for this quarter continues to be pressure on costs. As a company with operations in Mexico, we are facing the challenge of rising costs for which we remain vigilant to mitigate the impacts. Like all our peers, macroeconomic factors such as industry-wide inflation and a strengthening Mexican peso have continued to put pressure on consumables and labor costs across our operations. Unfortunately, we expect these trends to continue for the near-term. In terms of production, consolidated Q2 silver equivalent production was up 8% year-over-year to 2.3 million silver equivalent ounces, bringing us to 4.7 million silver equivalent ounces for the first half of the year. This performance puts us well and in line to achieve this year's production guidance of 8.6 million to 9.5 million silver equivalent ounces. Compared to the same period prior year, both silver and gold production are up 10% and 6% respectively. While our Guanacevi operation was generally in line, higher tonnes milled were offset by lower grades. Adjustments to the mine sequencing during the quarter resulted in lower grades compared to our planned and recent quarters. However, we expect to return to higher grades for both the third and fourth quarters. As compared to Q1 both silver and gold grades decreased by 20% in Q2. Performance of our other operating mine, Bolañitos remains steady. Increased gold production was offset by lower silver production in Q2. The Bolañitos operations team continued a strong effort to meet or beat their targets including mined and processed tonnes. Moving to our financials. We reported topline revenue of $50 million with a cost of sales of $37.5 million for operating earnings of $12.5 million. After exploration, G&A, and other expenses, we reported a net loss of $1.1 million or negative $0.01 per share. Excluding non-cash mark-to-market adjustments on marketable securities our adjusted earnings totaled $2.1 million or $0.01 per share this quarter. At the site level, Guanacevi delivered mine free cash flow of $5 million and Bolañitos was pretty much breakeven. Regarding operating costs we've seen pressures across several inputs. Our direct cost per tonne were up 15% this quarter. At the time of guidance, our inflation assumptions were 5%. However year-to-date we've seen those costs the costs of key inputs like steel used for ground support and consumables such as zinc and cyanide continue to increase well above our assumption. Additionally, labor costs are having a significant effect with the strengthening of the Mexican peso. The peso has strengthened to a 7-year high. Originally, our 2023 guidance had assumed a 21:1 Mexican peso to US dollar exchange rate. However, we're currently looking at 17:1. This is up 14% year-to-date which is increase in our local cost in U.S. dollar terms. All these factors manifest themselves into overall higher costs. Both quarterly cash costs and the all-in sustaining costs are above our upper bounds of our guidance at $13.52 per ounce for cash costs and $22.15 per ounce for silver all-in sustaining cost per ounce. As a result, management expects costs to be higher than cost metrics, previously provided in our 2023 guidance. Inflation is an industry-wide issue that's expected to persist throughout the year. We're closely reviewing our purchasing practices to see where and how we can mitigate the impact. Containing costs will continue to be a key focus as we work to improve the efficiencies of our operations. Management anticipates cost metrics for the remainder of the year to align with H1 2023 actual costs. At June 30, we had cash on hand of $43 million and a working capital of $78 million. To maintain flexibility on project execution, we initiated a $60 million ATM filing in Q2. Completion of the definitive loan documentation for the $120 million senior secured debt facility is expected soon with closing and drawdown expected in Q3. After the quarter, we further enhanced our liquidity by selling a 1% stake in Capstone's Cozamin Royalty to Gold Royalty Corp. This sale will bring in a cash injection of $7.5 million in Q3. We originally obtained that royalty through a concession division agreement back in 2017 for less than $500,000. Let me give you a quick update on construction at Terronera. At the end of Q2, we reached 30% completion. We have spent $70 million to the end of Q2 on direct development. Project commitments totaled $144 million and we are tracking in line with the optimized plan both on timing and on budget. During the quarter, we had steady momentum on engineering, surface construction at the plant site, mine development and establishing internal processes to best execute the project. If you're interested in seeing photos of the construction progress, I encourage you to visit our website under the Terronera page. A quick recap. On-site personnel has increased to over 450 employees and contractors. Detailed mill and surface facilities engineering is over 70% complete. Engineering was finalized to request proposals for the mill construction contract including structural steel mechanical, piping, electrical and instrumentation. Access road construction is substantially complete. The focus on early road improvements have greatly facilitated construction ramp-up especially prior to the rainy season. The camp to accommodate 550 personnel is substantially complete. Nearly all dormitory units have been installed. Several final living units remain pending. Mine development is advancing on two fronts with over 600 meters completed as at June 30. In the meantime, a new portal is being prepped to access the lower part of the ore body. Bulk earthworks for the planter is nearing completion with nearly 300,000 cubic meters of material moved. Excavations were completed for the course or reclaim tunnel, grinding areas and now rebar installation has begun. On the procurement side, deliveries are advancing on schedule with shipments arriving at the company's laydown warehouse. Major equipment deliveries in Q2 include jaw and pebble crushers vibrating screens flotation cells and the concentrate bag system. And lastly on the community side, we continue to partner with local schools to support education campaigns and cultural celebrations. Looking ahead, our main focus is now progressing mine development, advancing concrete work for the mill platform and awarding the mill construction contract which will kick off the next major phase of construction.
I think that wraps up today's formal comments. Myself Dan and Christine are happy to answer any questions that you may have.
Heiko Ihle, H.C. Wainwright Thank you, Galina, Dan. I assume you can hear me okay?
Dan Dickson We can you hear you well, Heiko.
Heiko Ihle Excellent. Hey, on Terronera, I went through your July press release again earlier today and I compared it with your note today. I mean Dan also, you obviously provided some more color earlier on this call as well, but I still got to ask, are there any factors that are giving you a bit of a headache both from an availability and pricing point of view? It seems like the camp is mostly done and mine development continues at a good pace. But is there anything that we should maybe know about? I assume the answer is no, but I just want to double check.
Dan Dickson No, it's a fair question. I mean like you say, we're seeing a lot of inflation across our operations. I think Don and his team, have done a really good job from a procurement standpoint and being ahead of the game and locking a lot of our key components in. And I've mentioned this in the prior calls and prior press releases that our entire mobile fleet has already been on site. A lot of the key components of the plant have been procured quite early on and expect delivery here in well we got some in Q2 and in back half of the year the remaining will come. And a lot of that those components or key purchases have come in line with what our expectations were come in line with what our optimized plan is and the feasibility study. So we did a really good job with that. Now there's always things that we get are concerned with and that's our job as management and making sure that we hit our mine development headings and the rates and executing on that over the next year, year and a half will help us be on time and on budget for Terronera. Of course, there are some things that we win on and hopefully there are some things -- or things that we'll lose on and hopefully there'll be things that we win on from a cost standpoint. But at this point in time, and it's early like I say, we're only 30% complete at Terronera. We feel like we're tracking very well to what budgets have been.
Heiko Ihle That was a very nice lead over to my next question. Obviously the Mexican peso has increased quite a bit. You mentioned earlier in this call and also in your release we were at 17.12 right now. What are you using in your model for the remainder of the year? And I don't know if you have a longer-term modeling number for the peso as well please?
Dan Dickson Yes. For the remainder of our year, we're generally putting our cost guidance right around what we did with H1. So we averaged just above $17 for H1, maybe it's closer to $18, so $18 the ones is probably be comfortable saying that. For long-term, we'll look at that at the end of the year. We're kind of going through our budgets for 2024 at this point and just getting that kicked off. Through different discussions with various banks, we do expect the peso to continue that depreciation that we've seen for the last 20 years. But again, we don't have a crystal ball when does that turn around and we no longer see appreciation in the peso. It's hopefully in the next six months, but again, don't have a crystal ball on that. And when we come out with guidance for 2024 we typically state what we're using for an FX rate at that time.
Heiko Ihle Got it. Okay. Clear. I’ll get back in queue. Appreciate your time.
Dan Dickson Thanks Heiko. Thanks for the questions. Good to hear your voice.
Craig Hutchison, TD Securities Hi, guys. Thanks for taking my questions.
Dan Dickson Hey, Craig. How are you?
Craig Hutchison Good, well, thanks. Just on Terronera with regards to the Mexican peso, can you give us a sense of how much is exposed to I guess domestic currency the peso versus how much is exposed to the US dollar?
Dan Dickson Yes. I mean obviously labor costs are significantly exposed to the peso compared to the dollar. A lot of the items that we've procured have been in US dollars and we've committed $144 million of the $230 million. So for the $90 million left to be exposed. We're expecting somewhere between $30 million and $50 million to be tied to the Mexican peso. So, not significant at this point in time in time.
Craig Hutchison
Okay. Great. And then in terms of your operations, is it -- what's the kind of rough breakdown at Guanacevi and Bolañitos in terms of the exposure? Dan Dickson Yes. Yes. 30% to 35% of our – I think Bolañitos around 32% and Guanacevi a little bit higher around 34% or 35% of our costs are incurred in labor. Obviously, labor is completely exposed. So for the remaining 65% about half is tied to the Mexican peso. So in total, you're looking at 55% to 65% of our costs are tied to the Mexican peso.
Craig Hutchison And just on the financing and just you talked about the inflation and some pressures you've seen on FX. Is there a potential to upsize that from the $120 million that's sort of been agreed to at this point, or has it sort of been finalized and that's the number we can expect?
Don Gray Yes. No it's been finalized. And I think for us as the management team we think that's kind of the upper end that we want to take on from a debt standpoint. We did put in the $60 million ATM facility that we haven't drawn -- protection. Ultimately, if we do end up above the $230 million we prefer that to come from equity just because we don't want to get too levered to debt.
Craig Hutchison Okay. That makes sense. All right. Thanks, guys.
Dan Dickson Thanks for the questions, Craig.
Lucas Pipes, B. Riley Securities Good afternoon, everyone. I also wanted to start out on the cost side and maybe more broadly kind of what sort of measures you're taking today to ring-fence cost inflation? Are there things you're looking at the operational level? I would appreciate any additional color you might be able to share. Thank you.
Don Gray Yes. Thanks, Lucas. It's a difficult thing to ring-fence inflation and ultimately the strengthening of the Mexican peso when it comes to labor. But from an efficiency standpoint and making sure we're operating as best we can, I think we've done that well at Bolañitos. At Guanaceví we can be better at that. We're looking at improving our ventilation and our pumping reducing our electricity usage with pumping and being more efficient in that standpoint. We're also looking to be more efficient on our advances underground, making sure that we have – we're using the right amount of explosives, right amount of steel rather than potentially using more than what we should have been. And so I think it's really an efficiency standpoint from our operations team that we can find little wins here and there and whether it's about the inputs going into the number of units that we're using as opposed to those costs of those units. Because there's only so much you can do from a – like for example the strengthening of the peso our labor cost we need those labors. The question is do we need as much labor as what we have. That's where we can make those adjustments. Of course we've been kind of in a good fortune like Guanacevi the discoveries we've made in 2019 in the high grade. I think some of that grade is going to pick up in the back half of the year that will improve our cost on a per ounce basis. It's little things and being vigilant on those little things and making sure we're operating as best as we can.
Lucas Pipes Thank you for that. And a follow-up on Guanaceví. The higher grades with the El Curso ore body. How sustainable is that over the – you mentioned the back half of the year but as we look into 2024, should we continue to see those benefits improve or kind of stabilize the second half level? Thank you.
Dan Dickson Yes I think it would stabilize. We do have a good life with El Curso remaining. I mean obviously we have Milache, we have Santa Cruz, Sur, other areas that we're able to mine but Santa Cruz or El Curso is kind of the heart of where our production is coming from and that will continue for the foreseeable future, especially into 2024 and 2025.
Lucas Pipes I appreciate that. Thank you. And then one quick last one from me. Just with Pitarrilla, what's the outlook there and major milestones for the market to look forward to?
Dan Dickson Yes. No that's a very fair question. I'm glad you brought that up. Well for us Pitarrilla, as most of our listeners probably know we purchased that in 2023 for $70 million and we've really been pushing there. And to the end of 2023 and early 2024, we did a lot of relogging of the historical data. And for this year we have $3.3 million budget and most of that's to push the ramp to what we think is or what our predecessors thought were as a manto zone and it was about 300 meters away to get there. We've had some delays. We've had some workarounds on the old historical ramp. It looks like we're going to have to push a parallel ramp, which means rather than being 300 meters, we'll have to be 500 to 600 meters ourselves, which will delay our drilling program and end up being either late Q4 more likely into 2024. So, we're not going to have as much news on Pitarrilla this year, which was expected kind of the end of the year from a drilling standpoint and an economic analysis next year. So I'll push into next year just because of this ramp. But we do have big expectations still with Pitarrilla.
Obviously, we've defined a resource of over 600 million ounces, but we are looking at an expectation of seeing if we can make this an underground operation similar to what Silver Standard had looked at back in 2009. Obviously, I always wish things went faster than what sometimes they do. And hopefully, we can still get through that economic analysis in 2024.
Lucas Pipes I really appreciate all the color and detail. To you and to team best of luck.
Dan Dickson
Thanks, Lucas. Thanks for the questions, for call as well. Justin Stevens, PI Financial Hey, everyone. Most of my questions have been crossed off, but I got one last one. Obviously, the Guanacevi grades took a hit in Q2, but you're expecting an uptick in Q3 and beyond. Was the sequencing impact there mostly development related? And if so do you think you'll be able to sort of stay ahead and keep enough stopes and high grade sections to keep that grade pretty flat going forward?
Dan Dickson Yes. A couple of factors went into that sequencing. We actually lost one of our high grade stopes. And we've had spent a lot of Q2 cleaning that up and refixing up, so we can go back in here in Q3. Development has been a little bit behind but not terribly behind, but we are -- we have a recovery plan to make sure our development stays ahead, so we don't have these changes in our plans -- our mine plan sequencing and it's kind of the bugaboo of all underground operations and making sure that we have sufficient mine development and not getting ahead of ourselves and pulling out more ore, because eventually that always catches up to you. But we do expect Q3 and Q4 to stabilize and again grades to be slightly below Q1. I thought Q1 was pretty high grade that we really significantly do plan, but it will somewhere be between Q2 and Q1.
Justin Stevens Just on that the high-grade stope was that just like an isolated ground condition issue or…
Dan Dickson Yes, we believe it was isolated. I'm always looking at that but we've had very good ground in El Curso and continue to expect to have good ground.
Justin Stevens Great. And I guess one other. Just maybe an idea of time essentially. I know you've been looking to twin some holes of Bruner and sort of re-up that resource. Is that just sort of -- should we expect that just by the end of the year?
Dan Dickson No, I think, that's going to fall into 2024. We haven't really pushed on Bruner this year. We did get all our drilling permits. But again, there's no plans and we want to make sure that we keep that cash...
Justin Stevens Priority is obviously on Terronera and everything?
Dan Dickson Yes, exactly, exactly.
Justin Stevens Yes. Great. All right. Thanks and look forward to seeing the uptick back in Q3
Dan Dickson Thank you. Thanks for the questions Justin.
Cosmos Chiu, CIBC Hi. Thanks, Dan and team. Maybe my first question is on Bolañitos. I think in the MD&A you mentioned that Q2 experienced higher gold grades, increased throughput offset by lower silver production and lower silver grades. I guess, my question is that higher gold grade and lower silver grade is that going to continue? And is that going to revert some time into the future?
Dan Dickson Yes. Thanks for the question, Cosmos. I mean, we actually get quite variations between Bolañitos between gold and silver. In general, I think our silver equivalent grades were in line with expectations with budget and Bolañitos is performing as expected. Q3, Q4, it would probably line up pretty good with H1's gold grades and silver ratio. And then going forward similar at that point.
Cosmos Chiu Great. And then looking at your guidance, Dan, as you mentioned production guidance has been maintained. Cost guidance has been maintained. But as we talked about on this call, there's a lot of questions about inflation, foreign exchange, FX rates. And you I guess in the MD&A you even made the comment that some of these inflationary pressures are expected to continue in the near-term expect actual cost metrics to be higher than cost metrics previously provided by the company's 2023 guidance. So what does that mean? Are we potentially looking at for the full year cost to potentially come in higher, or is that just looking out into Q3? I wasn't too sure what the wording around?
Dan Dickson No. Yeah, I can be more clear on that Cosmos. Ultimately as you said from a production standpoint we're at 4.7 million silver equivalent ounces produced. Our upper bound range is 9.5 million silver equivalent. So we're tracking really well from a production standpoint to the upper bound. Unfortunately from a cost standpoint, all-in sustaining costs have been $22.15, cash costs have been near $12 or $12.21 for the first half of the year. We're expecting our costs to be above the upper bound range of our guidance. So we're not restating the number, but we do expect for the second half of the year our cost metrics to be similar to H1, which again puts us above the upper bound range of our original guidance. Cosmos Chiu
Understood. And I guess Dan -- sorry you were saying…
Dan Dickson No, no it's good. I'm glad you understood just wanted to make that clear.
Cosmos Chiu Okay. I guess, as we talked about what are the key components of the Mexican peso, I just looked at it again. I don't think right now you are hedged in any way in terms of Mexican peso. And then as you mentioned you don't have a crystal ball, I don't have a crystal ball either. So is there any thinking behind potentially hedging away that risk longer term especially with some of the costs associated with Terronera?
Dan Dickson Yeah, it's a very good question. And there's two parts to that almost. From an operating standpoint, we aren't going to enter into any FX hedges for Guanaceví or Bolañitos. I think a lot of the literature that we still get is we expect peso to stay relatively strong through 2023, but to reverse course and get back on historical trend of depreciation against the US dollar. So that's part of the thought patterns on why nothing from an operating standpoint. From a Terronera standpoint, it's different right? Because we have a big incurrence, because of the debt that we're putting in place with Soc Gen and ING, it's $120 million, there is an FX component hedging with regards to Terronera. It's not significant. Craig had earlier asked the question about what remains from an FX standpoint. We've provided that detail to those banks and we'll have to incur some FX hedging in place for the -- as a covenant for the loan facility. Again for everybody else on the call with that loan facility there's also a gold hedge requirement for the first two to three years amounts to between 50,000 and 60,000 ounces of gold on that three-year basis so averaging 20,000 ounces of gold per year. And we'll get into that detail when that gets all finalized hopefully this quarter Cosmos.
Cosmos Chiu Great. And then one last question. As you mentioned rainy season is coming out in Mexico. You've gone through many rainy seasons. And so -- but I just want you to talk about how have you prepared for it at the operations and also at Terronera? I'm reading there's upcoming major milestones at Terronera, but it's a lot of delivery some concrete work. I don't see a lot of major earthworks. But again how have you thought about the risk around rainy season coming upon in Mexico?
Dan Dickson Yeah. Obviously as you stated with our operations, we've dealt with rainy seasons for 17 years, 16 years at the operations. I think we are pretty well averse to handling it and you don't see big changes in our production profile because of the rainy season. We've had issues in the past various years whether it's clay in the crushers that impacted but only on a, I'd say minute level. From a Terronera standpoint, I think we've done a very good job preparing for it. That's the reason we've put so much work into the roads and the drainage around the roads and requirements for drainage. But I'm probably going to pass this question off to Don who's sitting in Mexico and is on the call. He knows this very well and probably can give you a better answer than I can. Don, do you want to give Cosmos a little bit of color around the work we've done around rainy season for Terronera?
Don Gray Sure. There's quite a few things that we've done and similar to what we've done on other projects previously and simple things like we pour lean concrete down in the bottom of the excavation, so that the contractor has something to work off of when it is raining ready with pumps and things like that for excavations where they may accumulate rainfall that kind of thing. The other thing is that we've done in some other places is put up some tents and overhead structures real simple things. But if the contractor is prepared which our contractor is that we have the concrete contractor on site now, then we can get through it. So we've been prepared for it and are preparing for it and anticipate we can meet the challenge.
Cosmos Chiu Great. Thanks, Don. As you look out the window right now is it raining?
Dan Dickson Out the window right now it's -- I've got mostly blue sky and a little bit cloudy afternoon. The clouds come in and we get the afternoon rains, but it's kind of typical for right now in this part of the rainy season so.
Cosmos Chiu Perfect. Thank you, Dan. Sorry for putting you on this call. But again, thanks, Dan for answering all my questions.
Dan Dickson No, those are great questions, Cosmos and always happy to answer them. Well, thank you everybody listening to our Q2 financial results call. I can tell by the questions. I think everybody understands the importance of Terronera and executing on Terronera over the next 1.5 years for Endeavour. Of course, management is always eager to happy to answer calls from analysts. And hopefully, we expect good results here in Q3 from a production standpoint and we maintain our eye on costs and try to drive that down as best we can. Thanks everyone and have a good day.
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Post by Entendance on Aug 15, 2023 5:50:31 GMT -5
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Post by Entendance on Aug 23, 2023 5:19:25 GMT -5
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Post by Entendance on Aug 29, 2023 1:37:30 GMT -5
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Post by Entendance on Aug 31, 2023 4:47:15 GMT -5
Endeavour Silver Closes Sale of Cozamin Royalty to Gold Royalty Corp VANCOUVER, British Columbia, Aug. 30, 2023 -- Endeavour Silver Corp. (“Endeavour” or the “Company”) (NYSE: EXK; TSX: EDR) is pleased to announce that its wholly-owned subsidiary, Minera Plata Adelante SA de CV (“MPA”) has closed the royalty sale (the “Royalty Transaction”) with Gold Royalty Corp. As previously announced on July 31, 2023, MPA agreed to sell its interest in the 1% Cozamin royalty (“Royalty”) for total consideration of US$7,500,000, payable in cash. The Royalty applies to two concessions (Calicanto and Vicochea) on Capstone’s Cozamin copper-silver mine, located 3.6 kilometres north-northwest of Zacatecas City in state of Zacatecas, Mexico. The sale transaction includes an option granted to Gold Royalty Corp to purchase any additional royalties which may be granted on the five remaining concessions under the 2017 concession division agreement. The Company obtained the Royalty through a concession division agreement signed in 2017 on seven wholly owned concessions which were acquired for US$445,000. The Cozamin Mine, a copper-silver mine owned and operated by Capstone Copper in Zacatecas, Mexico, is located on two of the seven Concessions.
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Post by Entendance on Sept 19, 2023 3:18:36 GMT -5
Endeavour Silver Corp. (NYSE:EXK) Receives Average Rating of "Buy" from Analysts
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Post by Entendance on Sept 20, 2023 4:29:13 GMT -5
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Post by Entendance on Sept 26, 2023 6:44:09 GMT -5
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Post by Entendance on Sept 30, 2023 7:25:57 GMT -5
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Post by Entendance on Oct 10, 2023 6:36:58 GMT -5
Endeavour Silver Closes US$120 Million Project Loan Debt Facility to Advance the Development of TerroneraEndeavour Silver Corp. (“Endeavour” or the “Company”) (NYSE: EXK; TSX: EDR) is pleased to announce that its wholly-owned subsidiary, Terronera Precious Metals, S.A. de C.V. (Terronera) has executed the credit agreement for a senior secured debt facility for up to $120 million (the “ Debt Facility ”) with ING Capital LLC (together with ING BANK N.V. “ ING ”) and Societe Generale acting as Joint Lead Arrangers. Proceeds from the Debt Facility will be used towards construction of the underground mine and mill at the Company’s Terronera Project in Jalisco state, Mexico. All references to dollars ($) in this news release are in United States dollars. “Completion of the project loan marks a step forward in our deep-rooted commitment to creating shareholder value and executing on our strategic vision to foster economic growth, environmental responsibility, and to positively impact lives by promoting local development”, said Dan Dickson, Endeavour’s CEO. “ING and Societe Generale are tier one lenders to the mining industry, and we are grateful for their partnership and support towards executing this vision. We look forward to unlocking all these benefits as we advance Terronera towards production.”
Debt Facility Details Key terms of the Debt Facility are consistent with those previously announced in the Company’s news release dated April 18, 2023 and include the following: Facility amount - Up to $120 million principal amount on senior secured debt. Term - 8.5 years, including a 2-year grace period during the construction phase. Cash sweep will be applied to 35% of excess cash flow after debt service from completion onwards until $35 million of loan principal has been prepaid. Interest rate - US Secured Overnight Financing Rate (“ SOFR ”) + 4.50% per annum prior to completion (SOFR + 3.75% per annum upon completion). Repayment and maturity - Principal payments are payable in quarterly installments commencing in the fourth quarter of 2025. Gold hedge – Prior to initial drawdown, Terronera is required to enter into a hedging program for 68,000 ounces of gold over the initial two operating years prior to initial drawdown. No hedging requirements apply to the silver production. Foreign exchange hedge – Prior to initial drawdown, Terronera is required to enter into a hedging program for managing exposure to the Mexican Peso during construction. The program requires approximately 75% of the remaining capital expenditure incurred in Mexican Pesos be hedged. Prior to initial production, a hedging program is required for managing exposure to the Mexican Peso during operations. Under this program 50% of the projected operating costs incurred in Mexican Pesos are hedged prior to completion. Thereafter, the foreign exchange protection program for operations will rise to 70% of the projected operating costs incurred in Mexican pesos. Project cost overrun funding - Cost overrun funding is required in the form of cash, letter of credit issued by a Canadian financial institution or or a combination of both for up to $48 million. Financial Covenants - The Debt Facility is subject to certain customary conditions precedent and debt servicing covenants. The Debt Facility is secured through corporate guarantees from Endeavour and certain Endeavour subsidiaries and a first ranking security interest over the Terronera project. Terronera expects to drawdown in 2024 to advance the project in accordance with the 21-month construction period with initial production expected in the fourth quarter of 2024. Artemis Capital Advisors acted as Endeavour’s financial advisor. Koffman Kalef LLP and Cereceres Estudio Legal, S.C. acted as Endeavour’s Canadian and Mexican legal counsel, respectively. About Endeavour Silver – Endeavour Silver Corp. is a mid-tier precious metals mining company that operates two high-grade underground silver-gold mines in Mexico. Endeavour is advancing construction of the Terronera Project and exploring its portfolio of exploration projects in Mexico, Chile and the United States to facilitate its goal to become a premier senior silver producer. Our philosophy of corporate social integrity creates value for all stakeholders. About Societe Generale – Societe Generale has a longstanding and well-established track record in providing financial advisory services and arranging capabilities in relation to project financing, in multiple sectors across the world, including the Metals and Mining Industries. Societe Generale supports the entire value chain from mining extraction to metals transformation to downstream industries focused on decarbonization, sustainability and full life cycle solutions. About ING – ING serves corporate clients and financial institutions in over 40 countries, pairing local and global insight with sector knowledge and financial expertise. As part of the Commodities, Food & Agriculture sector group, through the Metals, Mining & Fertilizers subsector, ING services clients who operate mines, smelters, and refining facilities and produce tradable and relatively liquid commodities. Through in-depth industry knowledge ING seeks to add value to its clients through corporate and structured financing solutions, as well as solutions related to working capital management, trade finance, financial markets, capital markets, and advisory services.
About Artemis Capital Advisors – Artemis Capital Advisors, based in New York City, is a financial advisory firm providing tailored corporate and project finance advice to companies in the metals and mining sectors. The Artemis team has over 50 years of collective experience in mining investment banking and proven expertise in commodity markets, having executed transactions with a combined value of over $4 billion to date. The firm serves its clients with senior-level talent at every step in the process to secure financing for project development, expansion or acquisition. To learn more visit www.artemis.llc
Contact Information Galina Meleger, VP, Investor Relations Email: gmeleger@edrsilver.com Website: www.edrsilver.com
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Post by Entendance on Oct 11, 2023 6:39:48 GMT -5
VANCOUVER, British Columbia, Oct. 11, 2023 - Endeavour Silver Corp. (“Endeavour” or the “Company”) (NYSE: EXK; TSX: EDR) reports third quarter 2023 production of 1,148,735 silver ounces (oz) and 9,089 gold oz, for silver equivalent 1 (“AgEq”) production of 1.9 million oz. Production continues to track in-line with the 2023 production guidance of 8.6-9.5 million silver equivalent ounces, totaling 6.5 million AgEq oz for the nine months ended September 30, 2023. “Our production decreased this quarter compared to previous quarters due to lower throughput and ore grades processed at Guanacevi. We mined lower grades due to mine sequencing changes related to access and ventilation, whereas throughput was impacted due to an extended scheduled maintenance program. The mine sequencing is now back to plan, which will result in access to improved ore grades going forward. Additionally, the maintenance program has been executed successfully to minimize operational risks in the mill,” stated Dan Dickson, Chief Executive Officer. “We anticipate improved operational performance and operational efficiency in the last quarter.”
Q3 2023 Highlights Guanacevi Performance: Production was below plan due to a reduction in silver and gold grades and also impacted by lower processed tonnes due to a scheduled maintenance shutdown. Mine sequencing changes that were initiated in Q2 have resulted in lower grades compared to plan and historical comparisons. It is expected that the grades will increase in Q4 and stabilize going forward. Bolañitos’ Performance Remained Steady: Strong gold production, higher gold grades and increased throughput were offset by the impact of lower silver production and silver grades. Metal Sales and Inventories: Sold 1,370,032 oz silver and 8,760 oz gold during the quarter. Held 416,033 oz silver and 1,253 oz gold of bullion inventory and 8,184 oz silver and 436 oz gold in concentrate inventory at quarter end. Completed the sale of the Cozamin Royalty to Gold Royalty Corp: Total consideration of US$7,500,000 was received by the Company in cash upon closing on the sale of the 1% Cozamin royalty (see news release dated August 30, 2023 ). Published Mid-Term Update on our 2022-2024 Sustainability Strategy: This publication describes the Company’s progress in executing the first half (18 months) of its three-year plan. Of the 39 targets that were set in the 2022-2024 Sustainability Strategy, 21 have been completed or achieved, 13 are on track or underway and 5 require more improvement.
Subsequent to Q3 Obtained US$120 Million Project Financing for Terronera : Societe Generale and ING Capital LLC (together with ING Bank N.V.) have signed a definitive credit agreement for a senior secured debt facility of US$120 million (see news release dated October 10, 2023 ).
Q3 2023 Mine Operations Consolidated silver production decreased 21% to 1,148,735 ounces in Q3, 2023 compared to Q3, 2022, primarily driven by decreased silver production at the Guanacevi mine due to a reduction in silver grade partially offset by higher milling rates. Although historically higher grades have been mined from the El Curso orebody, mine sequencing changes during Q2, 2023 have resulted in lower grades compared to both Q3, 2022 and Q2, 2023. It is expected that grades will increase in Q4, 2023. Local third-party ores continued to supplement mine production, totaling 21% of quarterly throughput. Consolidated gold production decreased by 1% to 9,089 ounces primarily due to increased throughput at both the Guanacevi and Bolanitos mines offset by a reduction in gold grade mined at the Guanacevi mine. Guanacevi Q3, 2023 throughput was 6% higher than Q3, 2022 with silver grades 27% lower and gold grades 20% lower. Silver production decreased by 22% while gold production decreased by 13% at the Guanacevi mine. Bolañitos Q3, 2023 throughput was 6% higher than Q3, 2022 with silver grades 15% lower and gold grades 1% higher. Silver production decreased by 15% while gold production increased by 7% at the Bolañitos mine. The change in grades was due to typical variations in the ore body.
Scheduled Maintenance at Guanacevi Towards the end of the third quarter, Guanacevi entered its scheduled maintenance shutdown, which took place in the last week of September and the first week of October. Repairs and maintenance work were performed on a filter press transformer, the primary thickener, and the secondary crushing circuit. Concurrently, mining activities have been focused on building stockpiles. With the maintenance work now complete, both the mine and the plant are back to operating according to plan. The Company believes that it is well positioned to complete this year within the previously stated production guidance of between 8.6-9.5 million silver equivalent ounces.
Q3 2023 Financial Results and Conference Call The Company’s Q3 2023 financial results will be released before markets open on Tuesday, November 7, 2023, and a telephone conference call will be held the same day at 10:00 a.m. PT / 1:00 p.m. ET. To participate in the conference call, please dial the numbers below. Date & Time: Tuesday, November 7, 2023 at 10:00 a.m. PT / 1:00 p.m. ET Telephone: Toll-free in Canada and the US +1-800-319-4610 Local or International +1-604-638-5340 Please allow up to 10 minutes to be connected to the conference call. Replay: A replay of the conference call will be available by dialing (toll-free) +1-800-319-6413 in Canada and the US (toll-free) or +1-604-638-9010 outside of Canada and the US. The replay passcode is 0484#. The replay will also be available on the Company’s website
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Post by Entendance on Oct 18, 2023 8:45:37 GMT -5
Endeavour Silver Continues to Intersect High-Grade Mineralization at the Guanacevi Mine including 3.43 g/t Gold and 1,265 g/t Silver for 1,540 g/t Silver Equivalents over 2.2 metres
October 18, 2023 Endeavour Silver Corp. (TSX: EDR, NYSE: EXK) (“Endeavour” or the “Company”) is pleased to report positive drill results from its ongoing drill program at the Guanacevi Mine in Durango state, Mexico. Drilling continues along the prolific Santa Cruz vein in two areas (view Santa Cruz vein longitudinal section ), with the objective to convert, expand, and discover new resources. The 2023 drill program has continued to focus on the El Curso - Alondra properties, establishing lateral and vertical extensions of the mineralized zone towards Porvenir Cuatro and continued testing the deep northwest extension of the Porvenir Dos orebody. The exploration and exploitation rights to the El Curso and Alondra properties were obtained in 2019 and 2021, respectively from Ocampo Mining S.A. de CV. and have become an integral contributor to the operation. “These encouraging drill results expand our knowledge as we continue to push the boundaries of the mineralized horizons along the Santa Cruz vein. Given the widths and grades of the intersections near existing development, this work is expected continue Guanacevi’s history of growth and reserve replacement,” stated Dan Dickson, Chief Executive Officer. “We’ve been mining in this area for nearly 20 years, and the prolific Santa Cruz region remains prospective and is expected to contribute to our strong production profile for years to come.”
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Post by Entendance on Oct 25, 2023 7:58:36 GMT -5
Endeavour Silver Continues to Intersect High Grade Polymetallic Mineralization in the San Patricio Vein System on the Parral Property VANCOUVER, British Columbia, Oct. 25, 2023
Endeavour Silver Corp. (TSX: EDR, NYSE: EXK) is pleased to report positive drill results from its drill program over the past year at its Parral project in the State of Chihuahua, Mexico. The high-grade results show the potential for resource expansion at depth and along strike in the San Patricio area. Since September 2022, the Company has drilled over 6,595 metres (m) in 22 holes from surface, with the aim to expand mineralized zones at San Patricio (view San Patricio longitudinal section ) and test regional targets previously identified. “We continue to make progress in understanding the mineralization system, growing resources and advancing the project to sufficient scale to support an economic study. This phase of drilling focused on high-grade polymetallic mineralization within the San Patricio vein system, verifying extensions of the mineralized zones at depth and along strike below historic mine workings.” stated Dan Dickson, Chief Executive Officer. “For Endeavour, Parral represents a historic silver producing district with significant district scale exploration and development potential."
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Post by Entendance on Oct 26, 2023 6:35:37 GMT -5
VANCOUVER, British Columbia, Oct. 26, 2023 -- Endeavour Silver Corp. (“Endeavour” or the “Company”) (NYSE: EXK; TSX: EDR) is pleased to provide a Q3 construction update for its Terronera Project in Jalisco state, Mexico. The photo gallery presentation which accompanies this news release can be found here or on the Company website at Terronera Project Progress Photos . All dollar ($) references in this news release are United States dollars.
“During Q3, we’ve made notable progress in a number of key areas,” commented Don Gray, Chief Operating Officer. “Not only have we completed construction of our permanent camp and can now fully accommodate our workforce, but we’ve also made significant progress on construction of our process plant. Our procurement efforts are on schedule, with most long-lead major equipment anticipated to be received by year’s end. With our underground mine development, we’re seeing a noticeable increase in rates, as our mining team is now advancing four working faces simultaneously. We’re pleased with Terronera’s progress to date as we expedite completion of this next core asset.”
Q3 2023 Construction and Development Highlights Early works, initiated in the first quarter of 2022, have rapidly advanced, with more than $95 million of the project’s budget spent to date. Overall construction progress is 38% complete. Project commitments total $160 million, which is 69% of the $230.4 million capital budget. The project remains on track and on budget for initial production in Q4 2024. As of September 30, 2023, site works and activities have included:
Safety – Our strong safety focus at site continues. Key safety initiatives have included improved accident investigation procedures, accident prevention measures, and development of on-site emergency brigade. During the recent annual rainy season, hazard lightning control measures were reinforced. Engineering – Total engineering progress is 97% complete. The mine waste rock dump design is nearing completion. Final design for the tailing storage facility as well as the filters, LNG and warehouse areas is pending completion of geotechnical site investigation. Access Road Construction –Site road access is now established following extensive improvements over the last year. Equipment access and material deliveries to site remained unaffected during the annual rainy season. Permanent Camp – All permanent camp dormitory units have been installed for accommodation of 550 personnel. Fully operational facilities include the dining, laundry, medical clinic, and training areas. Mine Development – During Q3, Portal 1 mine yard excavation reached the design elevation of 1,475 metres allowing mine development to advance on four fronts: Portal 1, Portal 2, and Portal 4 (incline & decline). Over 1,300 metres of underground development have been completed through to Q3. As planned, mining advance rates increased as Portals 2 and 4 passed through the fault zone and ground conditions improved. Plant Site – Concrete work and rebar installation continued in the SAG and ball mill grinding, coarse ore stockpile and flotation areas, and concrete work began for the primary crusher. Excavation work started in the tailing thickener area. Procurement – Most long-lead major equipment is anticipated to be received by year’s end. Purchase order contracts were executed for initial structural steel support. During Q3, the request for bid proposal for the mill construction contract was released, which includes structural steel, mechanical, piping, electrical and instrumentation. Onsite Personnel – The workforce has increased to 91 employees and 430 contractor workers. Community Relations – During Q3, community relations focused on local municipality support to maintain and improve municipal roads from the state highway to the site area, as well as assistance with a municipal landfill facility. Additionally, local community suppliers continued to be integrated into the Terronera value chain. Summer initiatives included several cultural and sports activities. Environmental – Environmental and social assessment initiatives continued as outlined under the Equator Principal requirements set forth within the project loan financing. Items completed during Q3 included the flora and fauna baseline study, integrated pest management plan, rainy season biodiversity monitoring, and the visual baseline report. In addition, development of a comprehensive reclamation and closure program is in progress. Liquidity – Upon execution of a credit agreement for a $120 million senior secured debt facility, the Company is well-positioned to satisfy the financing requirements of the project (see news release dated October 10, 2023 ). It is expected that Project commitments will total nearly 100% of the $230.4 million budget in early Q2 2024. Project Timeline and Next Steps The Company remains focused on advancing the Terronera Project to initial production. Upcoming major milestones include:
Advancing mill area concrete work on schedule with the electromechanical contractor mobilization schedule; handover in early 2024. Electromechanical contract award and mobilization – Q4 2023. Waste Dump area two earthworks – Q4 2023. Begin filtration and LNG power plant area platform excavation – Q4 2023. Complete Portal 4 incline breakthrough to surface – Q4 2023. Develop Portal 2 and Portal 4 declines for initial ore access – Q1 2024. Continue developing Portal 1 decline to establish main haulage and lower ore access.
About Endeavour Silver – Endeavour is a mid-tier precious metals mining company that operates two high-grade underground silver-gold mines in Mexico. Endeavour is advancing construction of the Terronera Project and exploring its portfolio of exploration projects in Mexico, Chile and the United States to facilitate its goal to become a premier senior silver producer. Our philosophy of corporate social integrity creates value for all stakeholders.
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Post by Entendance on Nov 7, 2023 7:12:02 GMT -5
Endeavour Silver Non-GAAP EPS of -$0.04, revenue of $49.4M beats by $5.78M
Endeavour Silver Corp. (“Endeavour” or the “Company”) (NYSE: EXK; TSX: EDR) announces its unaudited financial and operating results for the three and nine months ended September 30, 2023. All amounts reported are in United States (US) dollars. “Our third quarter was challenging on a number of fronts, marking the lowest quarterly production for the Company in over two years. We were negatively impacted by several factors, however reduced productivity at Guanacevi is what led to a production shortfall. This reduced productivity was the result of mine sequencing changes that were initiated to improve access and ventilation, which have resulted in a significant reduction in ore grades. These lower silver and gold grades, combined with lower precious metals prices, a stronger Mexican Peso, and increased operating development and maintenance and repairs, have negatively impacted our financial performance this quarter.” stated Dan Dickson, Chief Executive Officer. “With mine sequencing back on track in Q4, we are now mining in wider, higher-grade areas of the orebody, which has significantly improved mine output and grades. While there is never a good time for these corrective measures to be taken, especially with additional macro pressures, they were necessary, and we have already seen the benefits from the actions implemented in the third quarter.”
Q3 2023 Highlights
Production Tracking In-Line with Guidance: 1,148,735 ounces (oz) of silver and 9,089 oz of gold for 1.9 million oz silver equivalent (AgEq) ( 1 ) , totaling 6.5 million AgEq oz for the 9 months ended September 30, 2023.
Revenue: $49.4 million from the sale of 1,370,032 oz of silver and 8,760 oz of gold at average realized prices of $23.99 per oz silver and $1,948 per oz gold. Cash Flow: $3.3 million in operating cash flow before working capital changes ( 2) and $10.6 million in Mine operating cash flow before taxes (2) . Negative Earnings : Net loss of $2.3 million, or $0.01 per share. Adjusted net loss of $7.4 million ( 2) after adjusting for a $7.0 million gain on disposal of the Cozamin royalty and a $1.9 million reduction in the fair value of investments. Significant Production Shortfall at Guanacevi, Among Other Items, Resulted in Escalated Costs: Cash costs ( 2) of $17.94 per oz payable silver and all-in sustaining costs (2) of $29.64 per oz payable silver, net of gold credits. Cost metrics were significantly impacted by lower production at the Guanacevi mine and increased operating development resulting from mine sequencing changes required to focus on improved access and ventilation as well as plant maintenance required during the last week of September. Macro pressures such as inflation, and a strengthened Mexican Peso also contributed to higher costs.
Management Continues to Monitor Costs: Additional repair work related to the plant shut down continued for the first week of Q4 and increased operating development continued into Q4 to access high grade ore and open more stopes. Although cost pressures will continue, management anticipates that cost metrics will improve as productivity and production will return to expected levels. Healthy Balance Sheet: Cash position of $41.0 million and working capital ( 2) of $75.9 million. Cash decreased as funds were spent on development activities at Terronera. During Q3, 2023 the Company raised gross proceeds of $23.4 million through equity issuances, primarily to fund these activities. Construction and Development Update at Terronera : The Company has made significant progress on development activities, with overall construction progress 38% complete. The project remains on schedule for initial production in Q4 2024. (see news release dated October 26, 2023 ) Obtained US$120 Million Project Financing for Terronera : Societe Generale and ING Capital LLC (together with ING Bank N.V.) have signed a definitive credit agreement for a senior secured debt facility of US$120 million (see news release dated October 10, 2023).
For the three months ended September 30, 2023, revenue increased by 25% to $49.5 million (Q3 2022: $39.7 million). Gross sales of $49.9 million in Q3 2023 represented a 24% increase over the $40.3 million in Q3 2022. Silver oz sold increased by 3%, primarily due to the timing of silver sales with less silver withheld during the current quarter offsetting the decrease in silver production. Compared to Q3, 2022, there was a 25% increase in the realized silver price resulting in a 29% increase in silver sales. Gold oz sold decreased 1% with a 16% increase in realized gold prices resulting in a 15% increase in gold sales. The decrease in gold ounces sold is primarily driven by the 1% decrease in gold production as gold inventory levels are comparable. During the period, the Company sold 1,370,032 oz silver and 8,760 oz gold, for realized prices of $23.99 and $1,948 per oz, respectively, compared to sales of 1,327,325 oz silver and 8,852 oz gold, for realized prices of $19.24 and $1,678 per oz, respectively, in the same period of 2022. For the three months ended September 30, 2023, the realized prices of silver and gold were within 2% of the London spot prices. Silver and gold London spot prices averaged $23.57 and $1,928, respectively, during the three months ended September 30, 2023.
The Company decreased its finished goods to 424,217 oz silver and slightly increased its finished goods gold inventory to 1,689 oz gold at September 30, 2023 compared to 637,439 oz silver and 1,519 oz gold at June 30, 2023. The cost allocated to these finished goods was $11.0 million as at September 30, 2023, compared to $13.8 million at June 30, 2023. At September 30, 2023, the finished goods inventory fair market value was $12.9 million, compared to $17.6 million at June 30, 2023.
After cost of sales of $46.7 (Q3 2022: $34.5 million), an increase of 35%, mine operating earnings were $2.8 million (Q3 2022: $5.1 million). The increase in the cost of sales compared to the prior period was driven by a strengthened Mexican peso and higher labour, power and consumables costs as the Company, as well the industry, has experienced significant inflationary pressures. Additionally, the Company incurred increased royalty costs during Q3, 2023 compared to the prior period. At Guanacevi additional operating development, decreased mine productivity, an increase in the purchase of third-party ore and additional repair costs associated with the plant shutdown also negatively impacted costs. Including royalties and special mining duty, direct costs per tonne increased 21% to $176.37. Compared to Q3, 2022, royalties have increased 77% from $2.8 million to $4.8 million with the increase occurring at Guanaceví. At Guanaceví the increase in royalty expense recognized during Q3, 2023 is due to the increase in production coming from concessions subject to royalties and an increase in the realized silver price. The royalty increased to 13% from 9% when the realized silver price crossed a price threshold of $20 per oz.
The Company had an operating loss of $3.8 million (Q3 2022: $1.3 million) after exploration and evaluation costs of $4.2 million (Q3 2022: $4.0 million) and general and administrative expense of $2.4 million (Q3 2022: $2.2 million). In the three months ended September 30, 2022, the operating loss also included $0.2 million in care and maintenance costs related to the suspension of the operations at the El Compas mine.
Earnings before income taxes was $$0.8 million (Q3, 2022: $1.7 million) after a gain on the sale of the Cozamin Royalty of $7.0 million (Q3 2022: $2.8 million, finance costs of $0.3 million (Q3 2022: $0.3 million), a foreign exchange loss of $0.4 million (Q3 2022: foreign exchange gain of $0.8 million) and investment and other expenses of $1.6 million (Q3 2022: $0.3 million).
The Company realized a net loss for the period of $2.3 million (Q3 2022: $1.5 million) after an income tax expense of $3.1 million (Q3, 2022: $3.2 million). Current income tax expense decreased to $3.1 million (Q3 2022: $3.2 million) due to decreased profitability impacting the income tax and special mining duty, while deferred income tax expense of $0.9 million is derived from changes in temporary timing differences between deductions for accounting versus deductions for tax (Q3 2022: $2.0 million).
Direct operating costs ( 2) on a per tonne basis increased to $152.04, up 16% compared with Q3 2022 due to both a strengthening of the Mexican peso and higher operating costs at both Guanacevi and Bolanitos from inflationary pressure during the lasts half 2022 and into 2023. As the Mexican peso strengthens, the Company’s Mexican peso denominated costs are increased in US dollar terms. Guanacevi and Bolanitos have experienced increased labour, power and consumables costs. Additionally, the Company incurred increased royalty costs during Q3, 2023 compared to the prior period. At Guanacevi additional operating development, decreased mine productivity, an increase in the purchase of third-party ore and additional repair costs associated with the plant shutdown also negatively impacted costs
Consolidated cash costs per oz( 2 ), net of by-product credits, increased to $17.94 primarily driven by a reduction in silver production, an increase in direct operating costs, an increase in royalties and special mining duties which are partially offset by an increase in by-product gold sales. AISC( 2 ) increased by 46% on a per oz basis compared to Q2 2023 due to the increase in cash costs and decreased silver production.
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 Investor Relations at 604-640-4804, toll free at 1-877-685-9775 or by email at gmeleger@edrsilver.com.
Conference Call
A conference call to discuss the Company’s Q3 2023 financial results will be held today at 10:00 a.m. PST / 1:00 p.m. EST. To participate in the conference call, please dial the numbers below. Date & Time: Tuesday, November 7, 2023 at 10:00 a.m. PST / 1:00 p.m. EST Telephone: Toll-free in Canada and the US +1-800-319-4610 Local or International +1-604-638-5340 Please allow up to 10 minutes to be connected to the conference call. Replay: A replay of the conference call will be available by dialing (toll-free) +1-800-319-6413 in Canada and the US (toll-free) or +1-604-638-9010 outside of Canada and the US. The replay passcode is 0484#. The replay will also be available on the Company’s website at www.edrsilver.com .
About Endeavour Silver – Endeavour is a mid-tier precious metals mining company that operates two high-grade underground silver-gold mines in Mexico. Endeavour is advancing construction of the Terronera Project and exploring its portfolio of exploration projects in Mexico, Chile and the United States to facilitate its goal to become a premier senior silver producer. Our philosophy of corporate social integrity creates value for all stakeholders.
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Post by Entendance on Nov 7, 2023 17:04:54 GMT -5
Q3 2023 Results Conference Call November 7, 2023 1:00 PM ET
Company Participants Galina Meleger - VP, IR Dan Dickson - CEO Christine West - CFO Don Gray - COO
Conference Call Participants Heiko Ihle - H.C. Wainwright Lucas Pipes - B. Riley Securities Craig Hutchison - TD Securities
Galina Meleger Good morning, everyone. Before we get started, I ask that you view our MD&A for cautionary language regarding forward-looking statements and the risk factors pertaining to these statements. Our MD&A and the financial statements are available on our website at edrsilver.com. With us on today’s call is Dan Dickson, Endeavour Silver’s CEO; Christine West, our Chief Financial Officer; and Don Gray, Endeavour’s COO. Following Dan’s formal remarks, we will open the call for questions. And now over to Dan.
Dan Dickson Thank you, Galina, and welcome, everyone. I’d like to begin by saying that we navigated through a difficult third quarter. Not only were we hit with challenging market conditions that caused a sharp decline in the Silver Miners Index by nearly 20%, our cornerstone mine, Guanaceví had a difficult operating quarter. The impact of lower throughput, significantly lower grades, non-routine expenses related to repairs and maintenance and an increased operating development resulted in escalated costs on a per unit basis in Q3. Costs were further amplified by macro factors such as the ongoing industry-wide inflation pressures and a strong Mexican peso. While the headline for this quarter is our elevated costs, we’ve taken corrective measures to get Guanaceví back on track and not have issues affecting productivity persist. Of course, nobody likes to experience a lackluster quarter, but it’s an opportunity to learn and improve, such was the case for us as our new VP of Operations is taking steps to sustainably improve Guanaceví’s operating performance. I’m pleased to tell you that we’re seeing a significant improvement in mine productivity this quarter. Of course, during the past quarter, we continued to advance in the Terronera project. Terronera provides a clear path to margin expansion, repositioning the company to attain significant free cash flow once the mine is in production. Let’s discuss this year’s -- or this quarter’s production in more detail. Consolidated Q3 silver equivalent production was down 14% year-over-year to 1.9 million silver equivalent ounces, bringing us to 6.5 million silver equivalent ounces year-to-date. While this quarter’s results still put us on track to be within this year’s production guidance range, there’s a little room for setback in Q4. Guanaceví’s production shortfall is due to a number of factors. If you recall, we discussed initiating changes to our mine plan and infrastructure to improve working conditions for our employees by providing better ventilation and improving our water management. To address these conditions, we temporarily changed mine sequencing. This meant mining lower silver and gold grade stopes until we sufficiently address the temperatures and the water in blows lower in our mine. Ultimately, these issues could have been better managed to prevent impacts on production. Simultaneously increased sill development during Q3 to open more stopes further impacted Q3’s mine outlook. Sequencing of sill development will continue to be a focus for Guanaceví to ensure a stable production schedule going forward near term and long term. While the temporary changes have lasted longer than we anticipated, conditions have improved and mine output has increased. With the conditions within the mine, management felt it was an appropriate opportunity for an extended plant shutdown to address areas within the plant requiring more time than our standard maintenance shutdowns. Considerable maintenance work is performed in all areas of the plant, including crushing, grinding, thickeners and the filter press to ensure we maintain consistent throughput going forward and alleviate risks that could result in unplanned downturn. With the plant maintenance completed in early October, both the mine and the plant are operating at or above capacity. The combination of these events during the third quarter resulted in quarterly silver gold production decreasing by 22% and 13%, respectively. It equates to a production shortfall of nearly 400,000 ounces of silver compared to previous quarters and our annual mine plan. But as I’ve said, we are back on track with Q4 expected to meet plan. The performance of our other mine Bolañitos remained steady. Increased gold production was offset by lower silver production in Q3. The Bolañitos operation seems to continue a strong effort to meet or beat their targets, including mined and process tons. Our safety programs and results have been outstanding at both operations. Moving to our financials. We reported revenue of $49.5 million, with cost of sales of $46.7 million for operating earnings of $2.7 million and mine operating cash flow of $10.6 million. After exploration, G&A and other investment expenses, we reported a net loss of $2.3 million or a loss -- $0.01 loss per share. This quarter, our cost of sales increased 35% compared to the same period last year. While there are a number of drivers including a strength in Mexican peso, higher labor, power and consumable costs, and increased royalty costs, a significant part the Q3 story was a low production at Guanaceví, impacting costs on a per unit basis. Guanaceví delivered $6.7 million of operating cash flow. However, after capital and exploration expenditures, Guanaceví reported negative mine free cash flow of $1.3 million. It’s been quite some time since Guanaceví has not delivered a positive free cash flow quarter. Year-to-date, Guanaceví has delivered $12.2 million of mine free cash flow, and Bolañitos remained slightly above breakeven. Regarding operating costs, we’ve seen pressures on several fronts. Our direct cost per ton were up 23%. The increase in operating development, paired with higher energy costs, increased labor due to reshifting the workforce and increase in costs from [indiscernible] ore had the largest effect this quarter. While the Mexican peso weakened in the latter part of Q3, it remained high averaging 17:1 in the third quarter. The peso has recently reversed course, but it’s still 10% above our budgeted assumptions. Again, all these factors translate into higher costs overall. Quarterly cash costs and the all-in sustaining costs are at $17.95 per ounce, and $29.64 per ounce, respectively. On a year-to-date basis, we’ve reported a $13.08 cash cost and $23.41 all-in sustaining costs, which are both above our original guidance provided in January. Looking to the rest of the year, containing costs will continue to be a focus as we work to improve the efficiencies of our operations. We’re closely reviewing our purchasing practices to see where and how we can make improvements. At this time, while we expect cost metrics to improve, additional maintenance work related to the plant shutdown continued for the first week of Q4 and increased operating development is expected to continue into Q4. Additionally, cost pressures related to macro factors will continue. However, management anticipates that Q4 cost metrics will improve as productivity and production are expected to return to historic levels. As at September 30th, we had cash on hand of $41 million and working capital of $76 million. During the quarter, we raised gross proceeds of $23 million through the ATM and another allotment of $17 million was raised subsequent to quarter-end to ensure there is sufficient funding for the development of the Terronera project. On October 10th, we executed the $120 million project financing agreement with SocGen and ING Capital to fund the Terronera project. As per requirements under the project loan, the Company will primarily self-fund development through cash on hand before drawing down on the facility. As such, the Company expects to draw down on these funds in 2024. Based on the project spend schedule, anticipate we’ll be fully committed on the project capital costs in the early Q2 2024. Moving to more detailed information on the construction of Terronera. At the end of Q3, we reached 38% completion, and we expect to be close to crossing the halfway mark by year-end. We spent $95 million to the end of Q3 on direct development. Project commitments totaled $160 million, which is 69% of the $230 million initial CapEx budget. With the execution of the $120 million senior secured debt facility, we are well positioned to satisfy the financing requirements of the budget. During the quarter, we made notable progress in a number of key areas. Not only have we completed construction of our permanent camp and now can fully accommodate our workforce, but we’ve also made significant progress on construction of our process plant, with surface construction now above 42% complete. If you’re interested in seeing photos of the construction progress, I encourage you to visit our website under the Terronera page. Let me recap some recent developments. Of note, with rainy season upon us during Q3, construction safety measures were modified. The focus was on visibility and project growth maintenance. We are pleased the extensive improvements over the last year helped maintain the site roads, keeping them in good condition and accessible. As a result, equipment access and material deliveries to the site were unaffected during the rainy season. Additionally, visibility control measures were reinforced. On the recruitment side, the workforce continues to grow with on-site personnel having increased over 520 employees and contractors. The total engineering progress is nearly complete. Most equipment has now been purchased and deliveries for all major plant equipment will be completed by year-end. During Q3, the request for bid proposals for the mill construction contract was nearly complete, which includes structural steel, mechanical, piping, electrical and instrumentation. Mine development remains our critical path. At quarter end, over 1,300 meters have been completed and advance rates are gaining momentum as Portals 2 and 4 passed through the fault zone and ground conditions have improved. During the quarter, Portal 1 reached its design elevation, allowing for mine development events now on forefront, Portal 1, 2, 4, which is incline and decline directions. Plant site earthworks, concrete work and rebar installation are underway. Concrete work and rebar installations continuing the SAG and ball mill grinding areas, coarse ore stockpile and flotation areas. Concrete work also began for the primary crusher and excavation work started in the tailings thickener area. And lastly, on the community side, we continue to focus on supporting the municipality with projects like upgrades to our roads, our local landfill and communication infrastructure. Looking ahead, our main focuses remain progressing our mine development, advancing concrete work for the mill platform on schedule with electromechanical contractor mobilization in early 2024, which marks the next major phase of the construction for Terronera. And starting excavation on the filtration and LNG power plant areas and the TSL. That wraps my formal comments for today. Myself, Don Gray and Christine are happy to answer any questions that you may have.
Heiko Ihle, H.C. Wainwrigh It’s nice to see an 8-figure mine operating cash flow before taxes figure, even though this was obviously a challenging quarter. Building on all of that, you had a productive shortfall obviously due to mine sequencing changes required to focus on improved access and ventilation. Some of the maintenance there was completed in September, it’s now November, as per your release. So building all of that, which if any of the effects from the mine sequencing changes should we anticipate to last through the remainder of the year or maybe even into 2024? Phrasing it differently, I guess, more simple. Has your expectation for Q4 changed from what was two months ago and all the meaningful impacts that we should model out?
Dan Dickson Sorry, Heiko. It’s good to hear from you. Just your question that muffled there a little bit at the end. I’m not sure I heard it properly.
Heiko Ihle The question ultimately is, building on the changes at Guanaceví, should we anticipate them to last through the remainder of the year or most of the impacts from them gone? And then, I phrase it a little differently. Has your expectation for Q4 for the site changed from where it was about two months ago?
Dan Dickson Yes. It’s a very fair question, and it’s nice to hear from you, Heiko. Ultimately, our -- the designs of the change that we put through is to improve ventilation and improve our -- the management of our water. We’re getting more inflow down the El Curso concession than necessarily was expected about a year ago. And we’re making those changes. And ultimately, our throughput and our mine output have increased here in Q4. We expect that most of the work that we did in Q2 and Q3 would be lasting. So not only do we expect Q4’s production throughput -- production output from the mine and ultimately, throughput through the plant to meet plan, which is effectively around 1,200 tons per day, those changes should help benefit us for 2024 and beyond. And I say some of these things are preventable, the fact that we could have managed it better last year, made sure that we were advanced on our ventilation program and our water inflow program. It’s something we didn’t do. We can do better on it. It’s just that all this came kind of all at once, and ultimately impacted our production here in Q3. And with that impact on production in Q3 really showed in our financial results and, ultimately, our cost metrics at Guanaceví. I wouldn’t say it’s completely behind us. We’re still working on ventilation and water management. We expect that to be done here in Q4. But ultimately, our output is up. So, with our output up, we’ll at least meet our production plans.
Heiko Ihle I think that’s a very fair answer and reassuring as well. Completely different thing. You’re hosting a visit for Terronera in two weeks, and we’re obviously excited to attend. Construction progress at the site is 38% complete as per your release today of the site. Just going through the last release you had on the site, it stated that procurement efforts are on schedule with most long-lead major equipment anticipated be received by year’s end. And it was 1.5 weeks ago. What exactly is still missing and where exactly is it? Is it a custom and a shift? Is it the suppliers? Anything that’s concerning you or maybe should concern us? I assume the answer is no, but I just wanted to make sure.
Dan Dickson No, there’s always things that concern us. I mean, the big thing that comes to mind right now is some delays in [indiscernible]. Those weren’t expected. I wouldn’t necessarily call them critical items, but they’re important items because every piece of equipment and parts matter to get the plant up and going. As I say, all our key components for the mine and key components to the plant were ultimately ordered quite early on, and most of that’s being delivered this year. There’s smaller equipment now that we’re going through. Right now, we’re going through ATCs on steel. That’s going to be kind of delivered out to suppliers and that expectation is going to come. But over the next year until we get into production or start up the plant, there’ll be always little things and our job is to manage that. And there’s always unforeseen items that we have to manage. And right now, it’s been fine. So, there’s been nothing critical, but something will come up and it will be our job to manage that.
Lucas Pipes, B. Riley Securities My first question is a follow-up on Guanaceví. And as you look out to 2024, what do you think could these measures you’ve taken mean when it comes to production and the cost profile? Thank you very much.
Dan Dickson Yes. For us, for 2024, we’ll put out guidance in January, but Guanaceví, we’ve been there 18 years. The plant capacity is 1,200 tons per day. I mean now it’s pretty easy to make the assumptions that we’ll be able to do 1,200 tons per day for 2024. Ultimately, the measures we’ve taken in Q3 ensures that we can have a 1,200 ton per day operation. If we can maintain our production profile, it will allow us to meet guidance from a cost standpoint and our all-in sustaining cost is expected to be between $19 and $20 this year. That’s probably going to be a little bit higher next year because of the inflation factors, but we’ll come out with that guidance in January.
Lucas Pipes I appreciate those comments. Thank you very much. And then a question on Terronera. In terms of kind of your minimum cash and liquidity targets, while you do the development there, anything specific we should keep in mind as we model kind of cash flow over the coming quarters? Would appreciate your perspective. Thanks.
Dan Dickson Yes. I think it’s important that we maintain a certain level of liquidity. Right now, we’re sitting on $76 million of working capital, and that’s what we look to when we’re looking at our liquidity, especially during this development cycle that we’re in with Terronera. I think it’s important to know that we do have to spend our cash first before we can draw down on our debt facility. And we expect to draw down our cash not to zero, but to a certain level, probably $20 million, $25 million before we draw down on that facility. And once we start drawing down that facility, hopefully, our cash builds with performance at Guanaceví and Bolañitos, and we’ll see that in 2024.
Trevor Ward, private investor Good morning. I’m calling from Hawaii. I’m a relatively new in terms of purchasing common stocks and I bought a substantial and -- a substantial position in Endeavour. So, I’m currently holding 40,000 shares at an average cost of $3.10. What I’m curious about is all this jargon and the numbers, for me, the bottom line is, in terms of, let’s say, over the next year and then looking forward, when do I expect to actually see Endeavour actually turn a profit and show a dividend?
Dan Dickson Well, Trevor, you are lucky that you’re sitting in Hawaii right now. We’re here in Vancouver. So I do wish I was where you were. For Endeavour Silver, where we are right now from a growth profile standpoint is we’re investing in our Terronera project. And Terronera is going to take it from 9 million ounces of silver equivalent to 16 million ounces of silver equivalent production per year. Having that scale should improve our earnings. And we’ve had positive earnings over the years. This quarter in itself, of course, we lost $0.01. Obviously, we don’t want to be in that position. We want to be making money, no matter what price of silver is or what price of gold is. And I think Terronera is going to do that for us. As far as dividend, because of Terronera, that’s going to be in the future. I wouldn’t say in the near future because we also have the Pitarrilla project coming in behind that. Our goal is to advance Pitarrilla. Pitarrilla would be a significant scale project that we still have a lot of work to do on, but we are feeling confident with it. But again, any capital and cash flow that comes from Terronera, we’re probably going to reinvest in the Company. So unfortunately, if you’re looking for a dividend from Endeavor Silver, it’s probably not going to come in the near future. But what can happen in the silver price and ultimately, if you’re investing in Endeavour Silver, you’re investing in silver, that could change, and I hope it does. But like I say, currently, right now, with where we’re at with $23 silver, I don’t see a dividend in the near future until we’re fully invested with and exploit what we have with Pitarrilla, Parral our other exploration programs.
Trevor Ward, private investor Right. So just a couple of more quick questions. It’s a little while ago, I saw -- watched a interview with yourselves and your projection, and your assumption at that time was that by the end of 2023, silver would hit $30 an ounce. Just quickly what projects to that? And also in terms of maybe a quick brief explanation of how the international silver market works. And then, the last question before I say goodbye is, what is your current position? And can you tell me since you’ve been in this position, what is your current holding of stock? And when was the last time you bought or sold the stock?
Dan Dickson Sure. And there’s a lot of questions there, the overall market and my personal position. My personal position, I believe I hold about 400,000, 450,000 shares of Endeavour. My holding price would probably be between $4 and $5 and my carrying price would be. The last time I bought stock would have been last year about May or March of 2022. But that’s probably enough about me. With regards to me saying that silver price would have been $30, I couldn’t tell you when -- which YouTube or which interview you listened to, but I have said on in the past and ultimately, that would be based on where the gold price is. And if you look at the history of gold and silver ratio, the last 35 years has averaged about 35:1. Right now, gold is sitting just below $2,000, maybe at that time was $2,100. So to get to a ratio -- right now, I think we’re sitting 86:1, to get to a ratio similar to what we’ve seen historically, that would push silver up into the high-20s and ultimately $30. We hit $29 silver, a couple of years ago now, and we’ve really come off of that. And I mean it’s been very uncertain times. And with rising interest rates, silver price has not performed. But funny enough, gold has held on considerably well. I think that’s a positive thing for the silver price. I think if gold pushes up through $2,000 and $2,100, silver always eventually follows. It’s just the lag time and the lag period and sometimes that lag period is six months, sometimes that lag period is for one year. So with me forecasting or projecting that silver was going to be $30, I don’t think I’ve never -- not said that, I likely did maybe based on where gold price is. And then ultimately, how the silver market works in the world, that’s a huge question. I mean it’s a large market. There’s over 800 million ounces that are produced and sold. It’s sold through different exchanges in the United States, China, across everywhere. So, I don’t think I’ll get into that right now, Trevor. But happy to answer those questions through our info line. Give our IR a call, and we’ll take you through that another time. But I’ll move now to next question.
Craig Hutchison, TD Securities I was wondering if you guys can give us an update with respect to Pitarrilla, what some of the milestones are. I know you had some issues around ground control. But any kind of milestones in terms of the exploration work there and potential for an updated PEA?
Dan Dickson Yes. No, that’s a great question, Craig. Thank you. Ultimately, we wished we were drilling at Pitarrilla this quarter. As you touched on, we had some ground issues, the fault that we’re getting through, we support it. But ultimately, there continue to be rock falls in the old pattern that was there. So we are doing a parallel add, and we’ve taken that drill program and ultimately put it into an added advance this year. So we will not be drilling Pitarrilla until January possibly February of next year. Still allows us to do that PEA or start doing economic studies on Pitarrilla next year. But we want to make sure we get that out complete, get the drilling done on what we think is some feeder zones and then ultimately look at this project as potentially a next development project after Terronera. And that would be, like I said, starting to make those economic studies, hopefully midyear to end of next year.
Craig Hutchison Okay. And just one other question for me. Just with regards to the debt funding, there’s a stipulation that you’ll need a cost overrun funding in the form of cash or letter of credit up to $48 million. How should we think about that? Is that a requirement? Would that effect become like restricted cash requirement you have to hold for a certain period, or how do we just understand that $48 million requirement?
Dan Dickson Yes. It’s a very good question, fair question. It’s actually broken into two tranches. So the first $60 million of $120 million is available to us with costs overrun funding of $24 million. Ultimately, it wouldn’t be restricted. However, it’s almost treated like restricted cash. And then, of course, when the next $60 million funding comes of $120 million, another $24 million required. Now we’ll look at where we are from a project construction standpoint and whether the full $48 million of overrun funding is required, and we’ll do that with the independent engineers. So, we’ll come to that sometime, I guess, midyear in 2024. But your question, is that restricted? Possibly yes.
Craig Hutchison Okay. And maybe just maybe as a follow-up, I guess, would it be fair to say you have more to do on the ATM facility this quarter just to kind of get your cash position up ahead of that drawdown?
Dan Dickson Yes, it’s very possible if the market allows it. Obviously, we want us to be performing as expected, and that impacts our balance sheet. Now I think our balance sheet is in great shape. We have over $41 million of cash at the end of the quarter with $76 million in working capital. There are some levers on our long term. We had -- about $18 million related to Terronera that hopefully we can get to current in relatively short order. So, that gives us more funding that’s available, almost $96 million of working capital if we include that. So I think we’re in really good shape, but it’s something that we have to be mindful of while we’re in development and with these markets, so, we will be, and I think we’re doing a good job managing that. Thank you, everyone joining our Q3 call. Again, I think it’s important to note that management is working to resolve some of these cost issues that we have at Guanaceví. I think that’s going to be done through getting our output up to where we expect it to be and on plan. Thank you, everyone. I look forward to having our Q4 call and financial release for 2023 and talk to everybody again in March 2024. Thank you.
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