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Post by Entendance on Jul 9, 2024 6:24:54 GMT -5
VANCOUVER, British Columbia, July 09, 2024 -- Endeavour Silver Corp. (“Endeavour” or the “Company”) (NYSE: EXK; TSX: EDR) is pleased to report second quarter 2024 production of 1,312,572 silver ounces (oz) and 10,549 gold oz, for silver equivalent (1) (“AgEq”) production of 2.2 million oz. Total year-to-date production of 4.4 million AgEq oz is tracking towards the upper range of the full year 2024 production guidance of 8.1 million to 8.8 million silver equivalent ounces.
“Our safe, reliable and consistent production from operations has been key as capital expenditures increase at Terronera. As construction activities are beginning to peak, we have been implementing our business readiness strategy to smoothly transition into operations.” stated Dan Dickson, Chief Executive Officer. “We remain focused on the commissioning of the Terronera mine in Q4 2024 and production in 2025.”
Q2 2024 Highlights
Guanaceví Reliably Delivering: Throughput and silver production were consistent with plan, while higher gold grades mined and from third-party feed contributed to higher gold production than planned.
Bolañitos Results Remain Consistent: Strong gold production continued following on from the first quarter of 2024. Silver production continues to be slightly below plan due to lower silver grades and lower silver recovery, while throughput remains steady. Milled grades are expected to have similar variation for the second half of the year.
Metal Sales and Inventories: Sold 1,217,569 oz silver and 9,887 oz gold during the quarter. A total of 262,160 oz silver and 939 oz gold bullion inventory and 5,860 oz silver and 322 oz gold in concentrate inventory were held at quarter end.
Published 2023 Sustainability Report entitled “Transformation In Motion”: The Company highlighted progress during the second year of our 2022-2024 Sustainability Strategy (see news release dated May 16, 2024).
Newly Appointed Director, Angela Johnson: Ms. Johnson is a Professional Geologist, MBA, who brings over thirteen years of experience in the mining industry in both technical and corporate development roles as well as extensive knowledge in ESG best practices (see news release dated April 18, 2024).
First Drawdown of the Terronera Senior Secured Debt Facility: Proceeds of USD $60M are being used to develop the Terronera mine. An additional USD $60M remains committed and available for future drawdowns during the second half of 2024 (see news release dated April 10, 2024).
Q2 2024 Mine Operations
Consolidated silver production decreased 12% to 1,312,572 ounces in Q2 2024 compared to Q2 2023, primarily driven by variations in grades, specifically lower silver grades at the Guanaceví mine. Gold production increased by 7% to 10,549 ounces in Q2 2024 compared to Q2 2023, primarily due to higher gold grades mined at both Guanaceví and Bolañitos as well as higher gold content in third-party feed processed at the Guanaceví mine.
Local third-party feed continued to supplement Guanaceví mine production, totaling 15% of quarterly throughput. With current prices, management expects local third-party feed to remain above 10% of throughput going forward. The Guanaceví operations are benefiting from the significant plant improvements and modifications made in 2023, as plant throughput and recoveries have been in line with plan and consistent throughout Q2 and year-to-date 2024... 
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Post by Entendance on Jul 15, 2024 21:35:18 GMT -5
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Post by Entendance on Jul 18, 2024 3:08:14 GMT -5
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Post by Entendance on Jul 20, 2024 2:57:00 GMT -5
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Post by Entendance on Jul 24, 2024 6:15:10 GMT -5
Endeavour Silver Corp. NYSE: EXK; TSX: EDR is pleased to provide a Q2 2024 construction progress update for its Terronera Project in Jalisco state, Mexico. A photo gallery presentation accompanies this news release and can be found here or on the Company website at Terronera Project Progress Photos . All dollar ($) references in this news release are United States dollars.
The Terronera project continued to make significant progress in the second quarter, as concrete and structural steel work are nearing completion on the Upper Plant Platform for areas including crushing, coarse-ore storage, grinding, flotation, and thickening. The Project remains on track for commissioning in Q4 2024 as major mechanical installations continued to advance on schedule.
"Construction is well past the halfway mark, and site activities are beginning to peak," commented Don Gray, Chief Operating Officer. "We are very pleased with the advance at the Upper Platform, which should be ready for dry commissioning in Q3 2024. We are concentrating resources on the Lower Platform to finalize earthworks and begin concrete works in early Q3. Underground mine development continues advancing in line with expectations as we accessed ore in Q2. We are extremely pleased with our Terronera team and their progress. With project completion in sight, our focus has expanded to implementing our business readiness plan as we prepare for operating Endeavour's next core asset."
Q2 2024 Construction and Development Highlights
As of June 30, 2024, site works and activities included:
Safety – The highest workplace priority is the health and safety of our employees and contractors, with a commitment to provide the tools, training, and resources needed to identify risks and apply effective controls. Recently, underground operations increased rescue brigade participation by 40%, and two self-contained mine refuge stations were installed.
Progress – Overall project progress (mine development and surface construction) reached 64.5% completion, with more than $204 million (1) of the project's budget spent to date. Project commitments total $260 million (1,2) , 96% of the $271 million capital budget.
Engineering – Efforts have transitioned to construction support. During the quarter, a detailed design was completed for the tailing storage facility, Portal 2 waste dump, and the Lower Platform excavation.
Mine Development – Over the quarter, over 1,270 meters were developed underground, totaling nearly 4,500 meters.
Upper Platform Plant Site – Surface mill and infrastructure construction is 88% complete and progressing on schedule. Concrete work and structural steel erection are 100% complete.
Primary Crusher – Structural and mechanical construction is complete on the conveyor and apron feeder support steel, and the apron feeder was placed in position. Conveyors are belted, and belts vulcanized. Cabling and terminations are ongoing.
Coarse Ore Stockpile and Reclaim ("COS") Tunnel – SAG Feed Conveyor and belt were installed. Piping, electrical, and instrumentation are ongoing.
Grinding – SAG and ball mill are installed. Piping, mechanical, electrical, and instrumentation are ongoing.
Flotation – Piping, mechanical, electrical, and instrumentation are ongoing. Flotation equipment, including blowers, instruments, and valves, is expected to be procured in early Q3.
Tailing Thickener – The Tailings thickener is complete and signed off. Some steel modifications, such as piping, mechanical, electrical, and instrumentation, are ongoing. Procurement monitoring of some equipment (tanks), instruments, and valves is ongoing.
Lower Facilities Platform and Tailing Storage Facility – Excavation for the tailing storage facility embankment key trench was over 95% complete, and the Lower Platform area was nearly 50% complete. Concrete work on the lower platform is scheduled to start in early Q3.
Procurement – Bulk materials purchase orders have been released, and lead times are aligned with the current schedule. The Procurement team has focused on critical path purchases, such as electrical components and transfer chutes, and reducing bulk material lead times to increase schedule float.
Onsite Personnel – At the end of Q2, the workforce increased to over 190 Endeavour employees and over 700 contractor workers.
Community Relations – Local community support continues to be a major commitment. A plant-operator training program for local community members has been established. The Company is also preparing a comprehensive training and support services plan for groups and individuals seeking to form businesses that can provide local goods and services.
Environmental – Environmental and social impact assessment initiatives continue and will be presented in early Q3 (July 2024), with a 3-month delay compared to the schedule outlined under the Equator Principles requirements for project loan financing.
Next Steps and Planning
The Terronera Project remains on track for commissioning in Q4 2024.
For Q3 2024, surface construction will continue to focus on mechanical, piping, and electrical installations. Completing the Lower Platform excavation is anticipated to be no later than mid-Q3 2024. Concrete work for the tailing and concentrate filtration areas is expected to begin in early Q3 2024, with the LNG and power generation areas to follow. The Company anticipates commissioning using temporary power with the LNG and power generation to be operational subsequent to commissioning. The temporary power has been planned and is expected to be available for Q4. Concentrate and tailing filtration structural, mechanical, and electrical installations will commence as concrete work is completed.
Mine development in Portals 1, 2, and 4 declines will continue, with a test long-hole stop being developed in Q3 2024. Initial long-hole production is planned for early Q4, followed by cut-and-fill mining; ore will be stockpiled for mill ramp-up. At La Luz, development activities are anticipated to begin in Q3, with the portal being constructed and the ramp to ore access being advanced in Q4.
The critical path remains the TSF, Lower Platform construction, and the advancing underground mine.
Visit www.terronera.com , our dedicated project website, to stay informed on the ongoing development at Terronera. Explore updates, learn about our commitment to environmental stewardship, and discover the positive impacts on local communities.
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Post by Entendance on Aug 1, 2024 6:01:53 GMT -5
Endeavour Silver Corp. (“Endeavour” or the “Company”) (NYSE: EXK; TSX: EDR) announces its financial and operating results for the three and six months ended June 30, 2024. All dollar amounts are in US dollars (US$).
“During Q2 2024, the construction of the Terronera project continued to make excellent progress, with significant advance of the upper plant platform surface infrastructure. Staying on track for Q4 2024 commissioning reflects our team's planning, execution and dedication while ensuring financial stability and operational momentum. We are in our last big push before the finish line and remain focused on delivering value to our stakeholders,” stated Dan Dickson, CEO of Endeavour Silver.
Q2 2024 Highlights
Production Tracking Towards Upper Range of Guidance: 1,312,573 ounces (oz) of silver and 10,549 oz of gold for 2.2 million oz silver equivalent (AgEq) (1) .
Strong Revenue from Higher Realized Prices: $58.3 million from the sale of 1,217,569 oz of silver and 9,887 oz of gold at average realized prices of $28.94 per oz silver and $2,374 per oz gold.
Mine Operating Cash Flow: $18.9 million in mine operating cash flow before taxes (2) , similar to Q2 2023.
Adjusted Earnings: Recognized a loss of $1.0 million after excluding loss on derivative contracts, mark to market deferred share units, unrealized foreign exchange, loss on revaluation of cash settled DSUs and investments losses.
Balance Sheet: Cash position of $68.1 million and working capital (2) of $64.5 million. The Company raised gross proceeds of $14.7 million through share issuances, primarily to fund the activities at Terronera.
Drawdown on Terronera Senior Secured Debt Facility: During the quarter the Company completed first drawdown of $60 million from the senior secured debt facility. Subsequent to the reporting period end, the Company completed a second draw of $15 million. An additional $45 million remains committed and available for future drawdowns during the second half of 2024.
Construction Continues on Schedule at the Terronera Mine: Overall project progress reached 64.5% completion, with more than $204 million of the project’s budget spent to date. Project commitments total $260 million, which is 96% of the $271 million capital budget, and remains on track for commissioning in Q4 2024. See news release dated July 24, 2024 here .
Operating And Financial Overview
Conference Call
Management will host a conference call to discuss the Company’s Q2 2024 financial results today at 1:00pm Eastern time (EDT).
Date: Thursday, August 1, 2024
Time: 10:00am Pacific (PDT) / 1:00pm Eastern (EDT)
Telephone: Canada & US +1-844-763-8274
International +1-647-484-8814
Replay: Canada/US Toll Free +1-855-669-9658
International +1-412-317-0088
Passcode is 3649166
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Post by Entendance on Aug 2, 2024 1:51:36 GMT -5
Investors Presentation PDF
Endeavour Silver Corp. (NYSE:EXK) Q2 2024 Earnings Conference Call August 1, 2024 1:00 PM ET
Company Participants
Allison Pettit - Director of Investor Relations
Dan Dickson - Chief Executive Officer
Elizabeth Senez - Chief Financial Officer
Don Gray - Chief Operating Officer
Conference Call Participants
Jake Sekelsky - Alliance Global Partners
Lucas Pipes - B. Riley
Craig Hutchison - TD Cowen
Kay - H.C. Wainwright
Trevor Ward - private investor
Henry Westenberg - private Investor
Allison Pettit
Good morning, everyone. Before we get started, I ask that you view our MD&A precautionary 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.
On today's call, we have Dan Dickson, Endeavour Silver's CEO; Elizabeth Senez, 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, Allison, and welcome, everyone. It's been a productive second quarter at Endeavour Silver as gold reached new all-time highs and with silver starting to follow the company's cash flow and financial position should continue to benefit from these higher prices.
At Terronera, there was significant advance of the upper platform surface infrastructure and the overall project progress reached 65% at June 30. Terronera is on track for commissioning in Q4 2024, and we're excited for it to contribute to our production profile next year and become a cornerstone asset.
Q2's silver equivalent production totaled 2.2 million ounces or 1.3 million ounces of silver and 10,500 ounces of gold. We are in great position to meet the upper range of our 2024 production guidance.
Silver equivalent grades have been in line with expectations, with gold grades slightly higher and silver grades slightly lower. This is expected to be similar going forward, and therefore, we expect a similar production profile for the second half of the year.
We reported top line revenue of $58 million, up 17% year-over-year due to higher metal prices compared to Q2 2023. Cost of sales totaled $48 million, up 28% from Q2 2023 due to the strength in Mexican peso contributing to higher labor, power and consumable costs and continued inflationary effects from 2023 that flowed into 2024.
At Guanacevi, purchased material from local miners increased to 18% of throughput and accounted for $5 million of our cost of sales. In Q2 2023, purchased material was $1.5 million. With higher purchased metal prices, the availability and costs of the purchased material have both increased. There are a number of benefits of purchasing the local material and management expects the purchase of materials remain elevated for the foreseeable future.
The higher prices also means higher royalty expense, and we are generating mining profits increasing our special mining duties, which are impacting our cost metrics. Direct operating costs or mining, processing and site administrative costs are within management's expectations.
Cash costs and all-in sustaining costs benefit from the higher gold credit than estimated at the beginning of the year, offsetting the higher royalties, special mining duty and increased purchased material.
The company reported a net loss of $14 million for the three-month period ended June 30 2024 compared to a $1 million loss in Q2 2023. Excluding certain noncash and unusual items and items that are subject to volatility, which are unrelated to the company's operations, the adjusted loss was $1.0 million compared to the adjusted earnings of $1.6 million in Q2 2023.
With production results and construction results previously released, today's substantial share price action was unexpected and still the magnitude is somewhat puzzling. With higher precious metals prices clearly, there's an expectation for better earnings. And I believe this is one data point over time, we will deliver on those expectations.
As of June 30 2024, the company's cash position was $68 million and working capital was $65 million. The company raised $14.7 million through share issuances primarily to fund Terronera. And during the quarter, the company completed its first drawdown of the Terronera senior secured debt facility drawing $60 million. Subsequent to the reporting end, the company completed a second draw of $50 million and has an additional $45 million committed and available for future drawdowns, expected in the third or fourth quarter.
As I mentioned earlier, the Terronera project reached 65% completion with more than $204 million in the project budget spent to date. Project commitments totaled $260 million, which is 96% of our $271 million capital budget, and remains on track for commission in Q4 2024, as we continue to advance on schedule.
Over 1,250 meters of underground mine development were completed in Q2 for a cumulative total of 4.5 kilometers, and our mine crews continue working in portals one, two and four declines. Development has cut through the Terronera vein and we started to develop test stopes.
On the upper platform surface and infrastructure construction is 88% complete, with concrete and structural steel erection being fully complete and mechanical piping and electrical installation, is well underway. The excavation of the tailings storage facility maintenance key tranche is about 95% complete, and the lower platform is nearly 50% complete.
Concrete work on the lower platform is scheduled to start early Q3 and remains the critical path for commissioning in Q4. Through June 30 87 to 95 procurement packages are now complete and it's now really an exercise in execution and productivity, over the next six months. The company anticipates commissioning using temporary power with the LNG and power generation to be operational subsequent to commissioning.
The temporary power has been planned and is expected to be available for Q4. Similarly there will be other minor structures under construction during commissioning. And lastly, from a community relations standpoint with the local community support continue to be a major commitment a plant operator training program was established a comprehensive training and support service plans is being prepared for groups, and individuals seeking to form businesses that can provide local business and services within the community.
Again for a wholesome construction update at Terronera I would encourage you to visit our website, where you'll find our early photo gallery showcasing the latest development progress and information on Terronera.
Before we move to the Q&A part of the call, I would also like to highlight that we published our 2023 Sustainability Report titled Transformation in Motion in May, that provides a deep dive into Endeavour's sustainability commitments performance and ongoing approach to responsible mining. You can view the full report and the company's strategy, on our website under the Sustainability tab.
With that operator I'm happy to open this up to some questions.
Jake Sekelsky, Alliance Global Partners
Hey, Dan and team, thanks for taking my question.
Dan Dickson
No problem, Jake. Happy to take them.
Jacob Sekelsky
So just starting with the finished goods build during the quarter. I'm just curious were ounces withheld for higher prices this quarter or is this just a function of timing?
Dan Dickson
Just the timing function. I believe our last shipments kind of went out about 28, we didn't sell anything in advance. And, obviously, because of where we are in the position of building Terronera we're not holding back sales and don't expect to hold back sales at this time.
Jake Sekelsky
Okay. That's helpful. And then just on foreign exchange. I'm just curious; do you think the peso has weakened to a level where you might start putting in broader company hedges in place? Or do you want to see a bit more weakness there?
Dan Dickson
I do think there's a little bit more weakness coming in the Mexican peso just based on policy of government, but it's always difficult to determine when that weakness will show up and how long it will persist for.
At this time we have no plans to enter into any more FX hedges. We were required to enter into FX hedges under our build, under the debt facility and we are required to enter into when we go into operations some operational FX hedges but we haven't made a determination when we'll put that in place. Again I think we'll see some more weakness in the Mexican peso but we'll see.
Jake Sekelsky
Got it. Okay. That’s all for me. Thanks again.
Dan Dickson
Thanks for the questions, Jake.
Lucas Pipes, B. Riley
Good afternoon, everyone. My first question is kind of higher level on the operating environment in Mexico. Obviously there was an election. New administration has yet to take office. But I wondered if maybe with the election in the rearview mirror there's a bit more clarity as to the priorities from a regulatory standpoint on the incoming administration? Thank you very much.
Dan Dickson
Yeah. I mean, you're correct on June 2nd there is an election, the MORENA Party won and probably what was expected was even better than -- better results for them than what was originally expected, the new President, Claudia Sheinbaum. She is a successor to effectively AMLO and it will be interesting over the first couple of years in office how closely she follows the platform, which is expected to be relatively closely. She has privately and now kind of percolated out into the press, mining world, should be more pro-mining necessarily than AMLO, she is definitely more pro business.
But the reforms that were put in place that have been lost through a bunch of [Indiscernible] we're still waiting on the Supreme Court decision. There's been some chatter that those will be repealed, but reput in front of the legislature in the fall.
So there is still some uncertainty coming through the current government. How this changes we'll probably be able to see that better in the next six months, I think when it comes to Mexico there's been a lot of rhetoric coming out of AMLO. I think that's going to dissipate. But ultimately it's still one of the best jurisdictions in the world to operate from a mining standpoint.
Again, I don't think some of the compliance requirements that are being put in or ultimately in those mining reforms will impact Endeavour significantly just because we have departments that can handle that. But again, until that comes through and actually gets properly approved or properly put through legislation, it's difficult to comment on it.
Lucas Pipes
Really appreciate your perspective. That's helpful. You note the additional $45 million available at Terronera in the second half of 2024. And I wondered is there any specific project milestones attached to that release? And if so, if you could maybe comment and elaborate on those? Thank you.
Dan Dickson
No, there is no specific milestones required to it. The independent engineers represent the banks, they do the reports and they look at our monthly report and they go through that and we have the best estimations to do, but everything remains on track and we think that will be available over the next like I say six months.
Lucas Pipes
Terrific. Dan, really appreciate your comments to you and the team. All the best. Best of luck.
Dan Dickson
Thanks for the questions, Lucas. Good to hear from you.
Craig Hutchison,TD Cowen
Hi, guys. Just wanted to know on the underground development rates. It looks like it did pick up nicely in the second quarter. In the past I think initially you had some underground to technical issues. But can you just probably comment in terms of how that's going? Are you tracking to plan ahead of time behind plans? Just any kind of sort of sense in terms of how the underground development work is going?
Dan Dickson
Yes. No it's a really good observation Craig. Ultimately we are tracking the plan now, initially with any outset when we started at it. And there's a little bit of a learning curve just understanding ground positions and water conditions. I think the ground conditions are we defined a bit better than expectations based on technical reports. Water and water management is really in line with expectations, if not a little bit less. So things have been going relatively well. We have good days, we have bad days but we're hitting our mark and expect to have the mine development complete, so we can kind of hit our tonnage expectations for 2025.
Craig Hutchison
Okay. And just in terms of the overall progress 65% complete year-to-date. But can you give us some kind of sense of how you guys arrived at that number. I imagine it's a combination of dollars spent versus your budget and kind of the milestones. But just with sort of three or four months ahead of commissioning here I just want to get a sense to achieving the remaining 35-odd percent that's achievable really in the last three, four months stretch here.
Dan Dickson
Yes and it's a very fair question. And just from a layman standpoint, if you look at we were at 53% at the end of the first quarter and now we are effectively 65%. It's obviously a delta of 12%. You apply that over the next two quarters that takes to 77% from 65% to 77% and to 90%. One of the items that's going to be not complete for well or commissioning but probably complete slightly after ultimately, will be our LNG and power generation plant.
We had some delays of getting permits there. We are going to be on diesel generators for start of commissioning and possibly into commercial production. So ultimately, we're not tracking to 100% for commissioning. And as I say, there's some minor structures when that comes to mind as a maintenance shop that will be still being built while we're in commissioning. And our expectations is that it will still be lower in there. So thinking about as we're going to get to 100% complete prior to commissioning isn't the way to think about it it's probably more between 85% and 90% when we're there. And even as we go into commercial production, it's not necessarily that we'll be 100% complete either.
Craig Hutchison
Okay. That's great. Maybe last question for me just with regards to the commissioning by year-end, do you anticipate producing sort of first concentrate at that point? Or is that more... early Q1 next year? Thanks.
Dan Dickson
Yes I mean that's getting into quite specifics. I think probably the other way I would hope to hear is that we expect to have some concentrate by the end of the year and that's kind of our expectation. Obviously, from commissioning to commercial production, it comes down to capacity and making sure, we're hitting our capacity numbers to declare commercial production but there'll be some tonnes produced during commissioning of course. It's just -- it's a matter of how much and exactly when that timing hits.
Craig Hutchison
Great. Thanks, guys and good luck.
Dan Dickson
Thanks for the questions, Craig.
H.C. Wainwright
Hi Dan, this is Kay from H.C. Wainwright. Heiko's traveling right now and can't make it into the question line. Thank you for taking our questions.
Dan Dickson
Happy to. Kay
So the Terronera drawdown of the remaining $45 million, would you be able to give us some insight to when you expect to take the remainder? I assume you -- at least some of it will be needed this quarter?
Elizabeth Senez
Hi, this is Elizabeth Senez. Yes, we do plan to draw down this quarter.
Kay
Any idea how much or is it just played by year?
Elizabeth Senez
Yes, we'll see how the spend goes, but the majority of the construction spend will be incurred this quarter that's remaining. So yes, that would be the expectation.
Kay
Okay. Thank you very much. Just second question last one Dan, maybe a little bit of a philosophic question, but you guys have completed a good part of Terronera as of today obviously. Would you be able to maybe give us some color on things that went better? Maybe some things that got worse during the construction process? Maybe any line items that made the team change anything related to construction in the middle of the process?
Dan Dickson
Yes. I mean that's a big question. I mean every day there's things that feel like they go better and there are days that things feel like they go worse. And I think our operational team and our construction team has done a phenomenal job of always kind of finding plan Bs if needed to or even plan Cs and looking at alternatives, because obviously nothing is linear and nothing goes exactly as planned. Nothing specifically comes to mind with regards to big changes. It's just timing of different things where we make adjustments either from a concrete standpoint.
Obviously the footprint that Terronera is on is very small and it takes a lot of planning with regards to when we bring equipment up because ultimately, we have a laydown yard down in Port Varta and things typically don't laydown up at Terronera for longer than 48 hours. So we call it just in time building and some of that stuff, some of the great engineering that we've done, obviously timing, we got some releases down in the tailings facility, it was later expected to [indiscernible] some market a lot of work that has to be done geotechnical work. I think every day there's things that guys make decisions on that are slightly different than what plan is. I got to commend on Gray [ph] and his team and how well that's gone. I even think about the mine plan and different iterations of the mine plan how we could be more efficient on that.
And come up with seven different distinct mine plans and that will continue to change because even as we get into the Terronera, we're getting into with our reserves for the 96 million ounces and plummet of reserves at the base which is where [indiscernible] target and that's about 20 meters thick. It's not that the ore body ends there. It's just that that's where our estimated based on our confidence with drilling. As we get into that we're going to hopefully drill out and we find more depth and that will change our mine plans again. So I think our team has done a phenomenal job being flexible and making adjustments on the run. But it all lines up. And again we're tracking for commissioning in the fourth quarter.
Trevor Ward, private investor
Obviously pretty shocking. I'm a bit of a gambler. So I got a lot of eggs in one basket with Endeavour. So when we see your stock has tumble like it is today I mean I'm down personally almost 32000 on paper in one day. Fortunately since we last spoke actually up overall since I got my position. But I'm just curious as a layman as somebody who's not well educated especially in the buying and selling of stocks I decided to get into silver. But I have bought and sold things over time.
And so if I manufacture something like I make surfboards and things out there if I make you a surfboard and let's say for instance with all my costs it costs me $23. Obviously that's not relative but say it costs me $23 after all my costs. And then I sell it for $29. I would say that I made $6. So maybe you can explain to me in layman terms why you don't make the adjustments whereby it's easier for us to understand how you lose money if your overall costs are way less than what you sold before? Can you explain that to me laymen terms and where these other interest costs come why the losses have been so huge in this quarter?
I mean the overall consensus for the market was that you would show a profit of $0.04. Whereas why you're showing a loss of $0.06. I mean it's pretty devastating to investors. And then you said you're curious why the market has reacted the way it has. I mean I understand the whole market is down today but maybe you can enlighten me a little bit more in layman's terms how it's computed into such a big loss. Answer
Dan Dickson
Yes. It's a very fair question Trevor. And I think part of it and one of the things in the mining space we talk about cash costs we've talked about all-in sustaining costs. Obviously cash cost is kind of on an operating basis all-in sustaining cost takes into account G&A which [indiscernible] costs exploration dollars that we spend to increase and extend mine life hopefully grow the mines.
And then sustaining capital and sustaining capital obviously from an income stand income statement standpoint doesn't hit earnings. And we always try to have this one metric that solves or distinguishes the company and allows peer groups to kind of compare themselves relatively quickly. And I think as accounted by trade you need a balance sheet income statement and cash flow statement to fully understand what's actually happening with the company.
And unfortunately there's in the IFRS world or the accounting principles world there's been a lot more noise that goes through the income statement now than there was before and makes it a lot more difficult for the layman's term to understand what's going through an income statement and ultimately our financial statements.
In our case, for this quarter, we have a $9 million loss related to derivatives. And under our credit facility for Terronera, we're required to hedge 68,000 ounces of gold that we locked in at $2,325, I believe on March 28.
Obviously, gold appreciated during the quarter, which is a great thing, great for the long-term benefit of Endeavour. But we do recognize a loss on those forward contract -- those contracts amounting to about $75 per ounce this quarter. That translates in the $7.5 million loss in derivatives, that's not impacting to our current operations and obviously, out of our hands. And as I say, long-term it's probably a benefit. Short-term, it's a movement. It's a mark-to-market.
Obviously, gold today is around $2450. Other times during the quarter, it got down to $23, $25, $23.50. And possibly at the end of Q3, when we go through this with gold below $2,400, you recognize a gain on that -- on those derivative contracts. We also have FX derivative contracts that go through our income statement. With all about it makes noise and that's driving our $14 million loss for the quarter.
Again, we look at it as a management team from an adjusted things that we can operate on. And our cost to produce at Guanacevi on an operating basis or at both our operations was $13.43 that excludes depreciation. I think depreciation needs to be considered in there and that's a total production cost per ounce and that's about $22 for us.
But we do have other things that boost our income statement and that's investing into the future of the company. We have our exploration properties. So we have exploration Pitarrilla [ph] one of the things that come mainly to mine. It's one of the world's largest undeveloped silver deposits. We don't capitalize that work. We expense it to our income statement.
Again that creates noise but we think that brings long-term value to our shareholders. And the fact that we want to bring Pitarrilla into production when Terronera is done and there's a lot of work left to be done there, but we think that will be beneficial long-term to shareholders. So, of course, today's drop of about 20%, a lot higher than our peers. And that's what we find puzzling, because we did put out our production numbers and the production numbers are in line with expectations.
Our Terronera construction, which is a lot of what people are looking at for the future value of this company, is in line with expectations. The additional noise going through income statement can be frustrating and that goes through it, but I never like to look at our share price on a one-day basis. So even if we're up 20%, that's a great day but it's meaningful -- not as meaningful if you can put that stack that together with one week, one month, one quarter, one year. So again, we wish it wasn't down 20% today, which is about 15% higher than our peers. I think that will grind back. So stick with us and I believe we'll be able to deliver on this going forward.
Trevor Ward
Okay. Yes. So what about in the future there? How many other derivatives -- not that I really understand what derivatives are. But going forward how much more of this are you still leverage for that? I mean how do we know that in the third quarter, the fourth quarter, you haven't got all these other derivatives that are stacking up further and of course, losses in future quarters?
Dan Dickson
Yes. And they'll be there. So, the 68,000 ounce gold contracts that we're going to sell are going to effectively roll out in 2025 and 2026. So those are going to be there. If gold price continues to appreciate and we're looking at gold at $2,800 I think you'd agree that's positive for the company long-term. Ultimately, if it goes down and then positive for the company long-term, but ultimately it's going to create losses going through our income statement until those roll out. If it goes the other way it's going to create gains to it. So they're going to be there.
I would again from a layman standpoint they are non-cash items. It doesn't mean we're losing cash off our balance sheet. It means we're recognizing the decision that we've had to do through our credit facility that loss now for the future. Under IFRS we're required to do it from a mark-to-market standpoint and that's fine. Again it rolls out over the next two years. And so I can't promise that it won't be there.
Trevor Ward
Well, it helps. Okay. Thanks. All the best.
Dan Dickson
Thanks for the questions. Trevor.
Henry Westenberg, private Investor
Good morning. Very interesting call. We're all very excited about Terronera. But could you give us a few words on this year's progress on Pitarilla. Is there anything moving there? Or you kind of get that in the bench until you get Terronera up and running?
Dan Dickson
Yes, it is moving and we've got a $5 million budget at Pitarrilla for 2024. We are starting to drill at Pitarrilla now. We have a one kilometer added at the beginning of the year we've extended that area. It's going to -- we expect it to go through some gains in a zone -- [indiscernible] zone in the back half of this year.
So we'll have results and a plan put together for the marketplace hopefully by the end of this year. We are excited about it. Obviously it's one of the world's largest undeveloped silver deposits. It's got a resource defined close to 600 million ounces of silver plus one in Vic [ph]. We are looking at it from an underground standpoint. We are underground miners.
I know Pitarrilla and a lot of people out in the market place understand Pitarrilla as an open-pit mine from a historical feasibility study that was done by Silver Standard or SSR Mining. Again, we're looking at it from an underground standpoint. It just started drilling to confirm some of the hypothesis that we have with regards to feeder structures and mantles. Again expect to have information out by the end of the year on that.
Henry Westenberg
That’s terrific. Thank you.
Dan Dickson
Thanks for the question, Henry.
Thank you for everybody listening today. I think Q3 in the back half of the year is going to be an exciting time for Endeavour. We try to bring Terronera into commissioning and ultimately commercial production to significantly increase our production profile and ultimately cut our cost profile. So thank you again for listening and I hope to talk to you guys soon.
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Post by Entendance on Aug 5, 2024 7:32:47 GMT -5
EXK: at this juncture we buy
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Post by Entendance on Aug 12, 2024 3:01:43 GMT -5
Silver can solve major global problems such as wars, debt crises, inflation, recession, and crime by implementing a constrained monetary system and reducing the incentive for war.
The importance of silver in addressing global challenges is a thought-provoking concept that challenges traditional solutions.
Silver is claimed to solve five of the world’s biggest problems: Wars, debt crisis, inflation, recession, and crime.
Only a select few really benefit from wars, while the mass government spending and debt financing have long-term negative effects on the economy.
The US economy is facing a recession despite claims of strength, with inflation rates potentially much higher than reported.
The massive increase in money supply in the past two or three years has led to a 40-year high in inflation, causing unprecedented volatility in the economy.
Canada is now the car theft capital of the world, with a car being stolen every five minutes.
Silver eliminates Wars because printed money finances them.
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Post by Entendance on Aug 12, 2024 6:38:16 GMT -5
 August 12, 2024
Endeavour Silver Reports Guanacevi Primary Ball Mill Trunnion Failure Endeavour Silver Corp. (NYSE: EXK; TSX: EDR) reports the trunnion on the primary ball mill at the Guanacevi mill has failed and could take up to 12 weeks to replace. As a result, processing of material at the Guanacevi mill has been suspended. Management is assessing several alternatives including operating at a significantly reduced capacity with minor conveyor modification using smaller regrind mills until the primary ball mill is operational.
This downtime will impact Q3 production and is expected to impact annual production and cost guidance. Management is conducting an evaluation and analysis this week and will provide an update as soon as its assessment is complete.
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Post by Entendance on Aug 14, 2024 2:26:52 GMT -5
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Post by Entendance on Aug 19, 2024 6:27:42 GMT -5
Endeavour Silver Corp. NYSE: EXK; TSX: EDR provides an update to the Guanacevi primary ball mill trunnion failure that was reported on August 12, 2024.
Processing has resumed at the Guanacevi mine site. Temporary modifications have been completed within the plant to re-purpose one of the regrind mills as the primary ball mill which is currently milling at a rate of 400 tonnes per day (tpd). While the grinding circuit is being closely monitored, there is potential for the plant to operate near 500 tpd or close to half of its planned production capacity of 1,200 tpd during this temporary phase.
During this time, mining operations will continue at a reduced rate without comprising safety or the long-term viability of the ore body. The operations will focus on feeding the highest-grade ore to the mill and stockpiling the remaining material. Contract mining activities and local third-party material purchases will cease until the process plant operations have returned to full capacity. These temporary solutions are intended to manage cash flows until the primary mill is fully operational. Using current metal prices, the preliminary estimate indicates a cash shortfall could be limited to during this period of reduced processing is less than US$5 million over an estimated 15-week period. This cash outflow includes accumulating ore stockpile with self-mining activities.
Constructive discussions have been held with our workforce, communities and suppliers to address the potential implications and broader social impact of these temporary measures.
Initial quotes for the trunnion fabrication and installation have been obtained with an estimated fabrication cost of US$0.5 million and a period of 16-weeks to installation. Management is assessing several alternatives to shorten the estimated downtime of the primary ball mill.
During this reduced processing period, Guanacevi production is estimated to decrease by 0.9 million to 1.1 million silver ounces and by 2,000 to 3,000 gold ounces compared to its original operating plan. Annual consolidated silver production for 2024 is expected to range from 4.4 to 4.6 million ounces, and gold production is expected to be between 36,000 ounces and 38,000 ounces. Silver equivalent production for 2024 is now forecast to total between 7.3 million and 7.6 million ounces. We achieved 4.4 million silver equivalent ounces in the first half of the year.
Due to the reduced operating capacity for 15 weeks, operating costs and all in sustaining cost metrics will be higher than originally guided for 2024. Due to the number of variables, estimates and remaining uncertainties, management is withdrawing its cost guidance at this time.
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Post by Entendance on Aug 25, 2024 5:11:04 GMT -5
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Post by Entendance on Sept 13, 2024 1:35:48 GMT -5
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Post by Entendance on Sept 19, 2024 5:18:57 GMT -5
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Post by Entendance on Sept 23, 2024 1:37:09 GMT -5
While the silver price could spike, the more critical factor is the bullish fundamentals that will keep silver at a higher sustained level. Total silver demand is getting so strong that there just won’t be enough supply in the future without tapping into current inventories, only at much higher prices… |
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Post by Entendance on Sept 25, 2024 1:58:02 GMT -5
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Post by Entendance on Sept 30, 2024 5:42:59 GMT -5
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Post by Entendance on Oct 5, 2024 3:04:11 GMT -5
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Post by Entendance on Oct 6, 2024 1:28:56 GMT -5
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Post by Entendance on Oct 7, 2024 6:59:21 GMT -5
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Post by Entendance on Oct 8, 2024 5:24:15 GMT -5
October 8, 2024
Endeavour Silver Reports Q3 2024 Production Results VANCOUVER, British Columbia, Oct. 08, 2024 -- Endeavour Silver Corp. (“Endeavour” or the “Company”) (NYSE: EXK; TSX: EDR) is pleased to report third quarter 2024 production of 874,717 silver ounces and 9,290 gold ounces, for silver equivalent 1 (“AgEq”) production of 1.6 million ounces. Total year-to-date production of 6.0 million AgEq ounces is tracking towards the updated 2024 production guidance of 7.3 million to 7.6 million AgEq ounces. All amounts are in U.S. dollars unless stated otherwise.
"The trunnion failure at the Guanaceví mine poses a significant short-term challenge for the Company; however, it's how we manage these difficult moments that often shapes our long-term success.” said Dan Dickson, Chief Executive Officer. "The ingenuity, commitment, and hard work of our team have been crucial in reducing the impact on the mine and the surrounding community. We remain focused on further mitigating the effects and look forward to returning Guanaceví to full production capacity in December.”
Q3 2024 Overview
Guanaceví Production Impacted by the Trunnion Failure: Production decreased in August and September due to a trunnion failure of the primary ball mill ( see news release from August 12, 2024 ). Production for Q3 2024 amounted to 768,905 silver ounces and 2,828 gold ounces. Estimated fabrication timing remains at 15 weeks with the mine being back to full operations in December 2024.
Bolañitos Results Remain Consistent: With throughput remaining steady, gold production continues to be slightly above plan due to higher gold grades. Silver production continues to be slightly below plan due to lower silver grades. Processed ore grades are expected to have similar variation for the fourth quarter.
Metal Sales and Inventories : Sold 1,017,392 silver ounces and 9,412 gold ounces during the third quarter. A total of 109,719 silver ounces and 401 gold ounces of bullion inventory and 8,202 silver ounces and 560 gold ounces in concentrate inventory were held at quarter end.
Terronera Senior Secured Debt Facility: Drawdowns totaling $25 million were made during Q3 2024 to develop the Terronera mine, and a further and final drawdown of $35 million subsequent to quarter end ( see news release dated April 10, 2024 ).
Q3 2024 Mine Operations
In August, the Company reported a primary ball mill trunnion failure at the Guanaceví mine. Temporary modifications were completed within the plant to re-purpose one of the regrind mills as the primary ball mill. The temporary modifications allowed throughput to average 565 tonnes per day since re-start after the trunnion failure. The plant team is closely monitoring the operation of the regrind mills to ensure continued reliability and high mechanical availability, including increased planned maintenance down days during this temporary period. ______________________________
1 Silver equivalent (AgEq): AgEq is calculated using an 80:1 silver:gold ratio. Ounces are troy ounces.
During the 15-week period of reduced milling, the preliminary estimate indicated a cash shortfall of less than $5 million with a fabrication cost of $0.5 million for a new trunnion. The timeline for fabrication and installation remains on schedule for December 2024.
Consolidated silver production decreased 24% to 874,717 ounces in Q3 2024 compared to Q3 2023, primarily driven by reduced operating capacity at Guanaceví after the trunnion failure in August. Gold production increased by 2% to 9,290 ounces in Q3 2024 compared to Q3 2023, primarily due to higher gold grades mined at both Guanaceví and Bolañitos as well as higher gold content in third-party feed processed at the Guanaceví mine.
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Post by Entendance on Oct 10, 2024 4:04:52 GMT -5
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Post by Entendance on Oct 15, 2024 11:19:38 GMT -5
'...any new system that is likely to succeed has to be Gold and Silver based...'
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Post by Entendance on Oct 18, 2024 9:43:54 GMT -5
London metals trader Andrew Maguire, appearing on Kinesis Money's "Live from the Vault" program with Shane Morand, says physical demand now is overwhelming derivatives trading in Silver, just as it has done in Gold, and he expects a similarly explosive rise in Silver's price soon.
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Post by Entendance on Oct 21, 2024 7:20:52 GMT -5
VANCOUVER, British Columbia, Oct. 21, 2024 -- Endeavour Silver Corp. ("Endeavour" or the "Company") (NYSE: EXK; TSX: EDR) is pleased to provide a Q3 2024 construction progress update for its Terronera Project in Jalisco state, Mexico. A photo gallery presentation accompanies this news release and can be found here or on the Company website at Terronera Project Progress Photos . All dollar ($) references in this news release are in United States dollars.
The Terronera project made substantial progress during the third quarter as the Upper Plant Platform nears completion. Surface mill and infrastructure construction reached 90%, further preparing for advancement into operations. Focus continues on the Lower Platform, where concrete work is well underway, and the Tailing Storage Facility, with underdrain embankment fill and pipe installation advancing at a good pace.
“We’re in the final construction phase with the finish line in sight,” commented Don Gray, Chief Operating Officer. “The Upper Platform is nearly complete, and the primary jaw crusher was commissioned, with rock crushed in August. The major focus is the Lower Platform and Tailing Storage Facility. Our dedicated Terronera team continues to meet the challenges both for developing the mine and constructing the mill facilities to keep the project on track to begin commissioning systems near the end of Q4.”
Q3 2024 Construction and Development Highlights
As of September 30, 2024, site works and activities included:
Safety – Health and safety for operational readiness is underway. The mine rescue equipment arrived, and team members are being recruited and trained. Two refuge stations were installed.
Community Relations – Local community support continues to be a priority. In Q3, the Company supported a series of local initiatives and investments such as: a municipal cooperative agreement; inauguration of an early-childhood development center; scholarships for university students in Santiago de Pinos; municipal road maintenance; workshops for business entrepreneurship for local residents; environmental education program for primary schools; community tree donation; and summer community workshops for children and youth.
Progress – Overall project progress (mine development and surface construction) reached 77% completion, with more than $258 million 1 of the project's budget spent to date. Project commitments total $270 million 1, 2 , 99% of the $271 million capital budget.
Mine Development – During the third quarter, 1,051 metres were developed underground for a project total of 5,544 metres. Furthermore:
Underground explosive magazines were completed and the explosive use permit application was submitted for approval, which is anticipated in Q4 2024.
Terronera main sump and pump station excavation and support were completed.
Development was nearly complete for the test stope that will be used to verify stope design criteria including opening span widths, length and height as well as establishing longhole drilling, blasting and backfill procedures.
Development ore was stockpiled on surface.
Slashing of an existing portal commenced for access to mine the high-gold grade La Luz vein, which is anticipated to be reached in H1 2025.
Upper Plant Platform Site – Mill and surface infrastructure construction was 90% complete and continues to transition to operations.
Primary Crusher – Primary jaw crusher was commissioned with rock crushed in August, marking a major project milestone.
Coarse Ore Stockpile and Reclaim ("COS") Tunnel – Reached 100% completion and pre-commissioning tests commenced.
Grinding and Thickening – Piping, mechanical, electrical, and instrumentation are expected to be completed in October.
Flotation – Compressor pressure vessel and air dryer systems were installed with piping connections in progress. Flotation equipment, including blowers, instrument, and valve installations are ongoing and scheduled for Q4 completion.
Raw and Process Water Tanks – Steel rings are in place and welding was over 90% complete. Inlet, outlet and access port installations, final weld testing, sand blast/mechanical cleaning, and painting are scheduled for completion in Q4.
Lower Facilities Platform and Tailing Storage Facility (TSF) – Lower Platform area was nearly 30% complete. Focus has been on completing the last section of the tailing filter bearing wall prior to starting the filter support deck; the first structural steel columns and beams were erected for the Concentration Filter building and equipment mechanical structures.
Main Embankment TSF – Excavation for the main embankment key trench was 100% complete, the secondary key was at 40% complete, and underdrain piping placement has been completed.
Tailing Filtration Area – More than 75% of the floor slab and 100% of the filter bearing wall for the tailing filter building has been poured. The tailing filters, which are stored at the Puerto Vallarta warehouse, are schedule to be transported to site for Q4 2024 installation.
Concentrate Filter Area – More than 80% of the floor slab and 75% of the pipe rack and equipment foundations in the concentrate filter area has been poured, and tank foundations and equipment pedestals were nearly complete.
Auxiliary Buildings – Laboratory and Plant Maintenance buildings reached 40% of completion.
Laboratory Building – Majority of the sheathing and insulation have been installed and steel studs are in place. Sheetrock and compressor and dryer installations are in progress.
Plant Maintenance Building – Structural steel installation started in late September.
Procurement –The project team continues to expedite pending arrivals. Procurement was 99% complete.
Onsite Personnel – At the end of Q3, the workforce increased to over 250 Endeavour Silver employees and over 800 contract workers, with the total number expected to decrease in Q4 2024 as commissioning begins.
Next Steps and Planning
The Terronera Project is tracking to begin commissioning systems near the end of Q4.
For Q4 2024, the tailing filter area, which was turned over to the mechanical contractor in early October, will allow focus on installing at least one tailing filter along with the concentrate filter using an extended work schedule to allow initial systems commissioning anticipated near the end of Q4. Grinding, flotation, and thickening systems will be mechanically completed in late October, allowing testing and ramp-up of these circuits to begin in November and December.
Mine development in Portals 1, 2, and 4 declines will continue, with longhole stopes being developed and initial production planned for Q4; ore will continue to be stockpiled for mill ramp-up. At La Luz, the portal is being constructed, and the orebody ramp access will advance in Q4.
The critical path remains the TSF, tailing concentrate filters construction, and the advancing underground mine.
Visit www.terronera.com , our dedicated project website, to stay informed on the ongoing development at Terronera. Explore updates, learn about our commitment to environmental stewardship, and discover the positive impacts on local communities.
About Endeavour Silver: Endeavour is a mid-tier precious metals company committed to sustainable and responsible mining practices. With operations in Mexico and the development of the new cornerstone mine in Jalisco State, the Company aims to contribute positively to the mining industry and the communities in which it operates. In addition, Endeavour has a portfolio of exploration projects in Mexico, Chile, and the United States, which has helped it achieve its goal of becoming a premier senior silver producer.
Contact Information
Allison Pettit, Director of Investor Relations
Tel: (604) 640 4804
Email: apettit@edrsilver.com
Website: www.edrsilver.com
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Post by Entendance on Nov 5, 2024 7:42:38 GMT -5
Investor Presentation PDF
VANCOUVER, British Columbia, Nov. 05, 2024 -- Endeavour Silver Corp. (“Endeavour” or the “Company”) (NYSE: EXK; TSX: EDR) announces its financial and operating results for the three and nine months ended September 30, 2024. All dollar amounts are in US dollars (US$).
“Q3 2024 presented its share of challenges as the Company operated at reduced capacity due to the trunnion failure at the Guanaceví mine,” said Dan Dickson, Chief Executive Officer. “While we are eager to return to full production at Guanaceví, we are most excited to be in the final sprint towards commissioning at the Terronera project, which promises to be a transformative milestone for the Company.”
Q3 2024 Highlights
Production tracking toward the updated 2024 production guidance: Production decreased in August and September due to a trunnion failure of the primary ball mill at the Guanaceví mine ( see news release from August 12, 2024). Q3 production of 874,717 silver ounces (oz) and 9,290 gold oz, for silver equivalent (“AgEq”) production of 1.6 million oz.
Strong Revenue from Higher Realized Prices: $53.4 million from the sale of 1,017,392 oz of silver and 9,412 oz of gold at average realized prices of $29.63 per oz silver and $2,528 per oz gold.
Mine Operating Cash Flow: $19.6 million in mine operating cash flow before taxes ( 2) , compared to $10.6 million in Q3 2023 and operating cash flow before working capital changes of $4.5 million compared to $3.3 million in Q3 2023.
Adjusted Earnings: Recognized an adjusted income of $1.6 million or earnings of $0.01 per share after excluding loss on derivative contracts, mark to market deferred share units, unrealized foreign exchange and investments losses.
Healthy Balance Sheet: Cash position of $54.9 million and working capital ( 2) of $29.4 million.
Drawdown on Terronera Senior Secured Debt Facility: During the third quarter of 2024 the Company completed drawdowns of $25 million from the senior secured debt facility. Subsequent to the end of Q3, the Company completed a final drawdown of $35 million.
Construction Continues on Schedule at the Terronera Mine: Overall project progress reached 77% completion, with more than $258 million of the project’s budget spent to date. Project commitments total $270 million, which is 99% of the $271 million capital budget, and remains on track for commissioning near the end of Q4 2024. ( see news release dated October 21, 2024 ).
Conference Call
Management will host a conference call to discuss the Company’s Q3 2024 financial results today at 1:00pm Eastern time (EDT).
Date: Tuesday, November 5, 2024 Time: 10:00am Pacific (PDT) / 1:00pm Eastern (EDT)
Telephone: Canada & US +1-844-763-8274
International +1-647-484-8814
Replay: Canada/US Toll Free +1-855-669-9658
International +1-412-317-0088
Passcode is 1771202 |
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Post by Entendance on Nov 6, 2024 3:26:34 GMT -5
Endeavour Silver Corp. (EXK) Q3 2024 Earnings Conference Call
Company Participants
Allison Pettit - Director, IR
Dan Dickson - CEO
Don Gray - COO
Elizabeth Senez - CFO
Conference Call Participants
Heiko Ihle - H.C. Wainwright
Nick Giles - B. Riley Securities
Nicholas Clarke - TD Cowen
Jake Sekelsky - Alliance Global Partners
Stephen Soock - Stifel
Allison Pettit
Good morning, everyone. Before we get started, I ask that you view our MD&A precautionary 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.
On today's call, we have Dan Dickson, Endeavour Silver's CEO; Elizabeth Senez, our CFO, 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, Alison, and welcome, everyone. It's been a busy third quarter at Endeavour Silver. As gold reached new all-time highs, and with silver starting to fall, the company's cash flow and financial position should continue to benefit from these higher prices. From an operational standpoint, Q3 brought an unexpected challenge as the company operated at reduced capacity due to a trending failure of the primary ball mill at the Guana City mine.
Temporary modifications were completed in August, allowing processing to continue at roughly 50% of capacity. The estimated timeline back to full capacity remains at 15 weeks, with the mine being in full operation next month. I would like to extend my thanks to our operations team for their dedicated efforts in mitigating the issue.
Q3 silver equivalent production totaled 1.6 million ounces, or 875,000 ounces of silver and 9,300 ounces of gold, tracking well towards the updated 2024 production guidance of 7.3 million to 7.6 million silver equivalent ounces.
Silver equivalent grades have been in line with expectations, with gold grades slightly higher and silver grades slightly lower. This is expected to be similar going forward, and we expect the production profile in the fourth quarter to be similar to Q3. At Terronera, substantial progress was made during the third quarter. Surface construction reached 77% at September 30th, with more than $258 million spent to date. The finish line is in sight as Terronera continues to remain on track for commissioning near the end of the year, and we are excited to have this transformative project added to our production profile in 2025.
Moving to our financials, we reported top line revenue of $53 million, up 8% year-over-year, benefiting from the higher precious metal prices compared to Q3 2023. Cost of sales totals $41 million, a decrease of 12% compared to Q3 2023, driven by lower silver ounces sold in the quarter, as well as cost management measures undertaken at Guanacevi following the trunnion failure, which also includes the termination of third-party contract mining activities.
Direct operating costs on a per-ton basis and per-ounce basis were elevated due to the reduced operating capacity at Guanacevi. Because of the reduced operating capacity, management withdrew cost guidance for 2024 in August. The company reported a net loss of $17 million for the three-month period ended September 30, 2024, compared to a $2.3 million loss in Q3 2023. Excluding certain non-cash and unusual items, and items that are subject to volatility which are unrelated to the company's operations, adjusted income was $1.6 million, compared to an adjusted loss of $8.3 million in Q3 2023.
As of September 30, the company's cash position was $55 million, and working capital was $29 million. During the quarter, the company completed drawdowns of $25 million from the Senior Secure Debt Facility for Terronera, and subsequent to the quarter, the company completed its final drawdown of $35 million.
As I mentioned earlier, the overall progress at Terronera reached 77%, with more than $258 million of the project's budget spent to date. Project commitments totaled $270 million, which is 99% of the $271 million capital budget, and remains on track for commissioning near the end of Q4 2024. During the third quarter, 1,050 meters of underground mine development was completed, for a cumulative total of 5,550 meters, and the team continued progressing portals 1, 2, and 4. With long-wall stokes being developed and an initial production plan for Q4.
The underground explosive magazines were also completed, with the explosive use permit application submitted for approval and anticipated in the New Year. On the upper platform, surface mill and infrastructure construction is 90% complete, and continues to transition to operations.
The Coarse ore stockpile reclaimed tunnel reached 100% completion, with pre-commissioning testing beginning in Q3, and the primary jaw crusher was commissioned with ROC in August, marking a major project milestone. The excavation of the tailing storage facility embankment key trench is 100% complete, with the secondary key at 40% complete. Structural steel columns and beams were erected for the concentration filter building and equipment mechanical structures, and remains on the critical path for commissioning in Q4. Through September 30th, procurement was 99% complete, and the project team continues to excite pending arrivals.
And lastly, from a community relations standpoint, with local community support continue to be a major commitment. In Q3, the company supported a series of local initiatives and investments, such as the inauguration of an early childhood development center, scholarships for university students in Santiago, municipal road maintenance, workshops for business entrepreneurship for local residents, environmental education programs for primary schools, community tree donations, and summer community workshops for children and youth.
For a fulsome construction update at Terronera, I encourage you to visit our website, where you'll find our quarterly photo gallery, showcasing the latest developments, progress, and information.
With that, I'm happy to open up to questions.
Heiko Ihle, H.C. Wainwright
I was going through your October 21st press release regarding Terronera earlier today again. Just a few follow-ups from the release. You hinted at a few of them earlier on this call. You mentioned that you're recruiting and training team members. How many folks are currently on the payroll? And can you maybe give a trajectory for staffing levels with the timeline from now until full employment at the site?
Dan Dickson
I can tell you that full employment at the site when we're in operations is about just over 500 people. Currently, we're well over 750 people at site. In fact, we have a second ship coming to help push us to the end of the year here with regards to our tailings filter press.
As far as the ramp-up of where we're exactly right now compared to where we're going to be when we're in full operations, I think we have about 250 Endeavour Silver employees. And I think there's actually 800 contract workers on site trying to push to get us to the end here.
Heiko Ihle
Impressive numbers. Building on all of that, and again, you had some talking points and preempted some of this in your prepared remarks. Are you seeing community embracement from all of this? I mean, there's still a decent amount of local job creation from all of this. What are you seeing? Can you maybe give some examples? And obviously, you're doing the scholarships and you're doing all sorts of stuff. Is it working? Are they embracing it?
Dan Dickson
Yeah, I'll touch on it a bit, maybe pass it to Don, who's at site a bit more than I am. But ultimately, we've had a community relations group on site since 2013 when we really acquired the property. And I got to hand it to our explorations team that did a phenomenal job of incorporating things that would help the community benefit from our mine, and ultimately incorporating them with understanding what we're doing at Terronera. I'd say over our last four or five years, we've had great engagement with the community.
I think Santiago de los Pinos will benefit greatly, and I think they're greatly involved. We've hired people there and ultimately brought a lot of direct and indirect jobs to the community. As far as the programs that we have, and it's similar to what we've always done at Guanacevi and Bolanitos. I mean, we feel like we're neighbors, and to be a good neighbor, you've got to be part of the community and help out where we can.
Obviously, I touched on some in my talk with tree donations, community support for various days, like Day of the Dead. We're always involved with that, and we're always looking for ways to incorporate ourselves in the community. Because obviously, having a social license to operate is the foundation of Endeavour, and I think that's going to continue to be the case.
Don, I don't know if there's anything else you want to add, or other community programs that we're doing that you see as being greatly beneficial.
Don Gray
I think I mentioned we have a phased training program for our mill operators. Many of the people in the area don't have experience, and so we're bringing them in for early training. When we first started the program, we had a few vacancies in there. And then as the word got around that the training was good and the company was serious, we filled out all the slots. I think that's a real tribute to our guys putting together good programs and working with the community.
Heiko Ihle
Very good. And then just a completely different follow-up on something else. Can you give some color on where we should model G&A for the remainder of the year, and maybe even 2025, assuming the share price stays where it is, given the revaluation of the DSU liabilities, the cash settled one that you encountered this quarter, please?
Dan Dickson
Yeah, no, for sure. I'm not going to get too much into 2025, but ultimately, if you look back at the history of Endeavour, our G&A from a cash perspective has always been about $8 million to $10 million. And then you can put in the DSUs and mark-to-market on DSUs or stock-based comps. I don't know why our G&A would ramp up significantly in 2025 compared to 2024, and I believe we're tracking right along those lines of $8 million to $10 million in cash G&A.
Heiko Ihle
Very good. I'll get back to you. Thank you so much.
Nick Giles, B. Riley Securities
Dan and team, congrats on all the progress at Terronera so far. Maybe a question for both Dan and Don. Just would love to get a little bit more color about the ramp process, how to think about timing, and ultimately, what would you consider the largest potential bottlenecks during that process? Thank you very much.
Dan Dickson
Thanks, Nick. I can help out a little bit with Don. Ultimately, we expect kind of a three-month ramp-up. We're hoping to go a little bit quicker, and I'll leave it to Don. He expects the bottlenecks could be, but I'm sure there's many that come through his head.
Don Gray
Yeah, I mean, it's normal. You have the normal startup items, and we do have much of the upper platform completed, so there's a lot of things we can get pre-checked in advance. Where we'll have the focus is on the, especially on the concentrate and the tailing filters there. We want to get one circuit up and running real well. And then we can complete a lot of the commissioning.
So our focus will be there, and we feel we brought in the right talent, have the vendor support. So we think it'll go along as planned.
Nick Giles
Don, that's great to hear. I appreciate the color. Any updated view on cash costs or on sustaining just based on current gold and silver prices?
Don Gray
Yeah, I'm guessing, Nick, you're asking for 2025 in relation to?
Nick Giles
That's correct.
Don Gray
Yeah. Our plan will be once we get into commissioning and into ramp-up, we'll come out with 2025 guidance early next year. Ultimately, our feasibility study that came out in 2021, we updated that. Great prior to the start of the build, we're ultimately making our investment decision. And our cost per ton at the time was $81, and we fully understand that we've seen a lot of inflationary pressures over the last two years. And we've seen that at our existing operations Guanacevi and Bolanitos.
As we get into going through all our budgeting and making sure our cost driver is right, it'll take a little bit of time, and we want to make sure we understand all the numbers and then the timelines to come out with that. You can bear with us. We expect it to come out, like I said, in January, February of next year.
Nick Giles
Fair enough. I appreciate that. If I can squeeze one more in, maybe a question for Elizabeth. It would be great to get your perspective on target liquidity, cash on balance sheet, just as Terronera reaches full run rates.
Elizabeth Senez
As you saw at the end of September, we had $55 million in cash, and then obviously during the month of October, we've been continuing to build Terronera. But what we're seeing is that a lot of the deposits that were made in advance with our vendors are now being applied to our activities. The cash burn at Terronera has been slowing down, so we do anticipate a smooth cash position as we move into 2025 and start that ramp-up process and see cash flows coming in at Terronera early in 2025.
Nick Giles
Great. That's super helpful. Dan, Elizabeth, Don, to you and the rest of the team, continue best of luck. Thanks so much.
Nicholas Clarke,TD Cowen
Hi, Dan and team. Thanks for taking my questions. Nick Clarke here asking on behalf of Craig Hutchison. Just one question, if I could circle back on Terronera, and maybe this is just a little more clarification, but if we're looking at about 99% of that $271 million budget being committed currently, would it be fair to kind of think of that remaining 23% left on a fiscal completion as being covered by those commitments, or would there be a little bit of a delta there? Thank you.
Dan Dickson
Yeah, I'm happy to answer that. I mean, Elizabeth and Don are sitting right now in Mexico. Ultimately, the $270 million committed and the $258 million spent, includes prepays and advances that Elizabeth touched on with Nick Giles' question there. Ultimately, with what's left, and it's a very dynamic question because we have a lot going on with regards to our LNG vaporization plant.
Ultimately, we've been staying in the market. That's going to be ready in 2025 or open by the end of the first quarter, but we could ultimately be in commercial production before that's completed. We have the embankment on our tailings dam. Originally, it's estimated to be $40 million in that $271 million. We think we can start up with a lower embankment. Of course, we're trying to hit what our percentage completion was, or actual expectation, and then mine development.
Depending on that commissioning timeline, it's difficult, but we do know we're in the ballpark. We're not coming out with a commitment of exactly what our spend will be, but we're on good track right now.
Nicholas Clarke
Got it. Thank you. Just to clarify, if we look at 77% of $271 million, that's around $209 million, but that is not suggesting that you guys are $50 million off of where you were hoping to be?
Dan Dickson
Correct.
Nicholas Clarke
Great. Thanks, guys.
Jake Sekelsky, Alliance Global Partners
Can you just provide a bit of color on the return to steady state at Guanacevi, maybe on the timing and any hiccups you think you might encounter getting back to more normalized levels?
Dan Dickson
Yeah, I'll happily pass that to Don.
Don Gray
I think, as Dan mentioned in the opening comments, our operating team did a really good job working on the milling circuit and keeping that going. Also, they've done equally as good a job on the repair work, maintaining close contact with the foundry because we did have to have some things put together. That's continuing like we planned. I think we're in good shape. We have the contractor lined up for when the parts get there and the components. We don't expect any glitches there.
Jake Sekelsky
Okay, that's helpful. Then just in a broad sense, with where precious metals prices are, I'm just curious, does that cause you guys to revisit any of the near-term or medium-term mine plans or how you're looking at milling at Guanacevi?
Dan Dickson
Yeah, that's a good question. It's something that we look at every year. It's that time of year right now, budgeting the mine plans and finalizing those for next year. I would say even at Terronera, it's a dynamic with where prices are. Obviously, in our resource models, we have indicated ounces and we have inferred ounces. Often we as Endeavour, with our underground mining, have brought in inferred ounces and indicated ounces into the mine plans. Sometimes potential ounces aren't even in our resource.
With higher prices, it allows us to go in some areas that we may be abandoned in the past. Again, we're going through a resource update for 2024, year-end 2024, and we'll come out with that, probably in our MD&A or our information, but our AIF ultimately for year-end.
Jake Sekelsky
Okay, thanks for that. That's all for me. Thanks again.
Dan Dickson
Thanks for the questions, Jake.
Stephen Soock, Stifel
Hi, Dan and team. Congrats on a good quarter despite some operational challenges. Kudos to all of you. I just wanted to ask about the underground at Terronera. Has there been any test mining or update on how the ore body and ground conditions look compared to expectations now that you're well into it? Maybe just as a follow-on, how comfortable are you with the amount of underground development established now that we're just ahead of the start of production?
Dan Dickson
Great question, Stephen. I'll let Don respond. Okay.
Don Gray
We have developed an area to do a test stove. We're actually close to beginning some blasting in that stove and extracting the ore. The good thing is that area, it'll be a long hole stove. In that area originally in the feasibility, it was cut and filled. We have seen ground conditions in the veins better than what we anticipated from the feasibility study. So we've been looking at that, doing a lot of rock mechanics work and feel there's some upside there.
For the development, because we are finding more areas that we'll put in the mine plan as long hole stoping that just takes the pressure off of so much development to get the cut and fill stopes ready. We'll be in good shape.
Stephen Soock
That's great to hear and hopefully continues. I know that has really positive implications on your ASIC number if you're able to cut down that life mine development through more long holes. That's great.
Maybe just on a bit of a different note, can you give us a quick update on what's happening at Pitarilla and maybe just what to look forward to there through 2025 at a high level?
Don Gray
Yeah, that's a great question, actually, Stephen. Ultimately, which was in our original guidance for the year, we're going to spend about $5 million at Pitarilla advancing an underground ramp that we had towards what's called our Manto Zone. Then we feel like there's some feeder structures there. We've been drilling there for the last almost three -months and we should have news out on Pitarilla in the coming weeks to push that forward. Ultimately, we really believe in what we have at Pitarilla. We think ultimately what we purchased two years ago from SSR Mining is a special asset. For those that aren't familiar with Pitarilla, we have 600 million ounces of Silver-defined Plus Zinc and Lead.
Ultimately, we've been looking at Pitarilla’s an underground operation or potential for an underground operation. Like I say, we should have some news out on that in the next couple of weeks. Great timing for that question, Stephen.
Stephen Soock
Perfect. I'll stay tuned. That's it for you guys. I appreciate the color.
Don Gray
Thanks for the questions.
Dan Dickson
Thanks for everyone attending our Q3 financial call. Like I said at the beginning of our call today, it was a bit of a challenging quarter with the trending. I think our operating team did a phenomenal job to mitigate that as best we could. Terronera continues to be on track and we're excited to see what Q4 in 2025 brings for the company. Thank you, everyone, for attending. |
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Post by Entendance on Nov 13, 2024 7:54:48 GMT -5
VANCOUVER, British Columbia, Nov. 13, 2024 -- Endeavour Silver Corp. (“Endeavour” or the “Company”) (NYSE: EXK; TSX: EDR) is pleased to report an update on the 2024 exploration and evaluation initiatives at its 100% owned Pitarrilla project. Engineering firms have been retained to commence technical studies for the basis of a future economic study.
Since acquiring the Pitarrilla project in July 2022, Endeavour has re-logged historic drill core to further understand the geology and mineralization controls of the deposit. Priority has been focused on identifying and defining numerous high-grade feeder structures that are interpreted to be the source of the silver, lead and zinc sulphide mineralization, and that extend through the high-grade manto, originally identified by SSR Mining. The Company published a technical report dated November 21, 2022 outlining Mineral Resource Estimates ( See news release dated December 8, 2022 ).
Endeavour has refurbished an existing underground ramp and extended it over 1.3 kilometres. The ramp has been developed through the projected feeder structures and crosscuts have been made for drill stations to further interpret and test the high-grade zones and its feeder structures with core drilling at various angles. The ramp lies directly above the manto. This work confirmed management’s interpretation and identified at least four structures that extend through the manto (Figures 1 and 2): Palmito vein, Danna vein, Victoria vein and Casas Blancas vein. During development of the ramp, additional mineralized structures were also identified, including the Norma vein, Danna hanging wall (HW) vein and Peña dike. Further work and interpretation are required to understand the significance and extent of these additional structures. In the ramp, the Peña dyke is the thickest structure with channel samples averaging 4.5 metres to 4.7 metres in width, oriented near perpendicular to strike. Results from the 16 channel samples are presented in Figure 3 and Table 3.
Since August, the Company completed nine diamond drill holes, six from surface and three from underground drill stations. The three holes from underground were targeted to intersect the manto and multiple veins, while the holes drilled from surface were directed to intersect the Casas Blancas vein. All holes successfully intersected the targeted mineralization, supporting managements geological interpretation and the potential of underground bulk tonnage mining.
Based on the re-logging of historic drill holes resulting in re-interpreting the geologic model along with current activities, it is estimated that all four primary feeder veins have a vertical extent of approximately 600 to 800 metres and strike lengths approaching 700 metres; these veins appear open to depth. Danna is the largest vein with an approximate 800 metre vertical extent and a strike length approaching 500 metres. Thicknesses can vary but are typically three metres wide (ETW). This work is being performed to understand the potential for an underground bulk tonnage mining scenario, which would focus mining activities on the high-grade structures and manto.
"The combined favorable grades, strike length, vertical extent, and vein proximity, along with the manto’s size and continuity, make the deposit attractive for underground bulk mining," said Don Gray, Chief Operating Officer. "Our exploration team’s careful attention while relogging the historic drill results provided an alternative geologic model. Not only are ongoing drilling and underground development work confirming this model, but they are also validating our original decision to acquire Pitarrilla. We are quite confident Pitarilla will create significant shareholder value and prove to be Endeavour’s next cornerstone asset."
The Company is also pleased to announce that SGS Canada Inc., SGS Bateman, JDS Energy & Mining, T Engineering, Stantec and SRK Consulting have been retained to begin preliminary work on the project. This work will include the metallurgical testing program with a comprehensive review of historical test data, flowsheet evaluation, mine design, rock mechanics evaluation, backfill testing and design, hydrology investigations, and tailing storage facility design. The work will build on the SSR Mining’s extensive previous work and will be used to advance the project to the development stage, forming the basis for an economic study by the end of 2025...
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Post by Entendance on Nov 14, 2024 3:44:39 GMT -5
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