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).

Financial Overview (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 +1-800-319-4610Local or International +1-604-638-5340Please 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.

SOURCE Endeavour Silver Corp. Contact InformationGalina Meleger, Vice President of Investor Relations Tel: (877) 685 - 9775Email: gmeleger@edrsilver.com Website: www.edrsilver.com

Follow Endeavour Silver on Facebook, Twitter, Instagram and LinkedIn

Endnotes

1 Silver equivalent (AgEq)

AgEq is calculated using an 80:1 silver:gold ratio.

2 Non-IFRS and Other Financial Measures and Ratios

Certain non-IFRS and other non-financial measures and ratios are included in this press release, including cash costs per silver ounce, total production costs per ounce, all-in costs per ounce, all-in sustaining cost (“AISC”) per ounce, direct operating costs per tonne, direct costs per tonne, silver co-product cash costs, gold co-product cash costs, realized silver price per ounce, realized gold price per ounce, adjusted net earnings (loss) adjusted net earnings (loss) per share, mine operating cash flow before taxes, working capital, operating cash flow before working capital adjustments, operating cash flow before working capital changes per share, earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted EBITDA per share and sustaining and growth capital.

Please see the March 31, 2023 MD&A for explanations and discussion of these non-IFRS and other non-financial measures and ratios. The Company believes that these measures and ratios, in addition to conventional measures and ratios prepared in accordance with International Financial Reporting Standards (“IFRS”), provide management and investors an improved ability to evaluate the underlying performance of the Company. The non-IFRS and other non-financial measures and ratios are intended to provide additional information and should not be considered in isolation or as a substitute for measures or ratios of performance prepared in accordance with IFRS. These measures and ratios do not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to other issuers. Certain additional disclosures for these non-IFRS measures have been incorporated by reference and can be found in the section “Non-IFRS Measures” in the March 31, 2023 MD&A available on SEDAR at www.sedar.com.

Reconciliation of Working Capital

Expressed in thousands US dollars As at March 31, 2023 As at December 31, 2022  
           
Current assets   $138,862   $146,333  
Current liabilities   46,049   52,749  
Working capital   $92,813   $93,584  
           

Reconciliation of Adjusted Net Earnings (Loss) and Adjusted Net Earnings (Loss) Per Share

Expressed in thousands US dollars Three Months Ended March 31
(except for share numbers and per share amounts) 2023   2022
Net earnings (loss) for the period per financial statements $6,456   $11,662
Change in fair value of investments 3,097   5,357
Adjusted net earnings (loss) $9,553   $17,019
Basic weighted average share outstanding 190,274,768   171,557,220
Adjusted net earnings (loss) per share $0.05   $0.10
     
Reconciliation of Mine Operating Cash Flow Before Taxes  
Expressed in thousands US dollars Three Months Ended March 31
  2023   2022
Mine operating earnings per financial statements $16,025   $20,269
Share-based compensation 132   127
Amortization and depletion 6,253   6,306
Mine operating cash flow before taxes $22,410   $26,702
     
Reconciliation of Operating Cash Flow Before Working Capital Changes and Operating Cash Flow Before Working Capital Changes Per Share  
Expressed in thousands US dollars Three Months Ended March 31
(except for per share amounts) 2023   2022
Cash from (used in) operating activities per financial statements ($401)   $21,733
Net changes in non-cash working capital per financial statements (12,902)   1,114
Operating cash flow before working capital changes $12,501   $20,619
Basic weighted average shares outstanding 190,274,768   171,557,220
Operating cash flow before working capital changes per share $0.07   $0.12
     
Reconciliation of EBITDA and Adjusted EBITDA    
Expressed in thousands US dollars Three Months Ended March 31
  2023   2022
Net earnings (loss) for the period per financial statements $6,456   $11,662
Depreciation and depletion – cost of sales 6,253   6,306
Depreciation and depletion – exploration 278   107
Depreciation and depletion – general & administration 62   48
Depreciation and depletion – care & maintenance -   30
Finance costs 259   177
Current income tax expense 4,445   1,015
Deferred income tax expense 1,676   6,222
EBITDA $19,429   $25,567
Share based compensation 1,625   1,527
Change in fair value of investments 3,097   5,357
Adjusted EBITDA $24,151   $32,451
Basic weighted average shares outstanding 190,274,768   171,557,220
Adjusted EBITDA per share $0.13   $0.19
     

Reconciliation of Cash Cost Per Silver Ounce, Total Production Costs Per Ounce, Direct Operating Costs Per Tonne, Direct Costs Per Tonne

Expressed in thousands US dollars Three Months Ended March 31, 2023 Three Months Ended March 31, 2022
Guanaceví Bolañitos Total Guanaceví Bolañitos Total
Direct production costs per financial statements   18,145     8,371     26,516     17,884     8,837     26,721  
Smelting and refining costs included in net revenue   -     656     656     -     654     654  
Opening finished goods   (4,953)     (245)     (5,198)     (10,093)     (2,857)     (12,950)  
Closing finished goods   4,848     1,063     5,911     7,908     2,995     10,903  
Direct operating costs   18,040     9,845     27,885     15,699     9,629     25,328  
Royalties   6,471     64     6,535     4,234     83     4,317  
Special mining duty (1)   1,270     85     1,355     731     244     975  
Direct costs   25,781     9,994     35,775     20,664     9,956     30,620  
By-product gold sales   (8,433)     (9,064)     (17,497)     (5,022)     (11,488)     (16,510)  
Opening gold inventory fair market value   2,740     354     3,094     1,900     4,784     6,684  
Closing gold inventory fair market value   (2,500)     (995)     (3,495)     (3,724)     (3,763)     (7,487)  
Cash costs net of by-product   17,588     289     17,877     13,818     (511)     13,307  
Amortization and depletion   3,474     2,779     6,253     3,910     2,396     6,306  
Share-based compensation   66     66     132     63     64     127  
Opening finished goods depreciation and depletion   (862)     (60)     (922)     (1,965)     (635)     (2,600)  
Closing finished goods depreciation and depletion   1,115     355     1,470     1,689     897     2,586  
Total production costs $21,381   $3,429   $24,810   $17,515   $2,211   $19,726  
             
  Three Months Ended March 31, 2023 Three Months Ended March 31, 2022
Guanaceví Bolañitos Total Guanaceví Bolañitos Total
Throughput tonnes   102,375     108,698     211,073     101,253     104,894     206,147  
Payable silver ounces   1,435,604     172,608     1,608,212     1,130,448     173,092     1,303,540  
             
Cash costs per silver ounce   $12.25     $1.67     $11.12     $12.22     ($2.95)     $10.21  
Total production costs per ounce   $14.89     $19.87     $15.43     $15.49     $12.77     $15.13  
Direct operating costs per tonne   $176.21     $90.57     $132.11     $155.05     $91.80     $122.86  
Direct costs per tonne   $251.83     $91.94     $169.49     $204.08     $94.91     $148.53  
             
             
Expressed in thousands US dollars March 31, 2023 March 31, 2022
Guanaceví Bolañitos Total Guanaceví Bolañitos Total
Closing finished goods   4,848     1,063     5,911     7,908     2,995     10,903  
Closing finished goods depletion   1,115     355     1,470     1,689     897     2,586  
Finished goods inventory $5,963   $1,418   $7,381   $9,597   $3,892   $13,489  

Reconciliation of All-In Costs Per Ounce and AISC per ounce

Expressed in thousands US dollars Three Months Ended March 31, 2023 Three Months Ended March 31, 2022
  Guanaceví Bolañitos Total Guanaceví Bolañitos Total
Cash costs net of by-product $17,588 $289 $17,877 $13,818   ($511)   $13,307
Operations share-based compensation   66   66   132   63   64     127
Corporate general and administrative   2,616   878   3,494   2,067   876     2,943
Corporate share-based compensation   1,019   342   1,361   917   389     1,306
Reclamation - amortization/accretion   79   62   141   65   53     118
Mine site expensed exploration   379   313   692   352   250     602
Intangible payments   -   -   -   29   12     41
Equipment loan payments   245   487   732   245   489     734
Capital expenditures sustaining   5,690   2,301   7,991   5,646   2,426     8,072
All-In-Sustaining Costs $27,682 $4,738 $32,420 $23,202 $4,048   $27,250
Growth exploration and evaluation       3,063       2,413
Growth capital expenditures       12,726       4,925
All-In-Costs     $48,209     $34,588
             
  Three Months Ended March 31, 2023 Three Months Ended March 31, 2022
  Guanaceví Bolañitos Total Guanaceví Bolañitos Total
Throughput tonnes   102,375   108,698   211,073   101,253   104,894     206,147
Payable silver ounces   1,435,604   172,608   1,608,212   1,130,448   173,092     1,303,540
Silver equivalent production (ounces)   1,774,964   595,941   2,370,905   1,412,010   598,545     2,010,555
             
Sustaining cost per ounce $19.28 $27.45 $20.16 $20.52 $23.39   $20.90
All-In-costs per ounce     $29.98     $26.53
             
Expressed in thousands US dollars Three Months Ended March 31
2023 2022
Mine site expensed exploration $692 $602
Growth exploration and evaluation 3,063 2,413
Total exploration and evaluation 3,755 3,015
Exploration depreciation and depletion 278 107
Exploration share-based compensation 131 94
Exploration and evaluation expense $4,164 $3,216

 Reconciliation of Sustaining Capital and Growth Capital

Expressed in thousands US dollars Three Months Ended March 31
2023 2022
Capital expenditures sustaining $7,991 $8,072
Growth capital expenditures 12,726 4,925
Property, plant and equipment expenditures per Consolidated Statement of Cash Flows $20,717 $12,997

Reconciliation of Silver Co-Product Cash Costs and Gold Co-Product Cash Costs

Expressed in thousands US dollars Three Months Ended March 31, 2023 Three Months Ended March 31, 2022
  Guanaceví Bolañitos Total Guanaceví Bolañitos Total
Direct production costs per financial statements $18,145   $8,371   $26,516   $17,884   $8,837   $26,721  
Smelting and refining costs included in net revenue -   656   656   -   654   654  
Royalties 6,471   64   6,535   4,234   83   4,317  
Special mining duty (1) 1,270   85   1,355   731   244   975  
Opening finished goods (4,953)   (245)   (5,198)   (10,093)   (2,857)   (12,950)  
Closing finished goods 4,848   1,063   5,911   7,908   2,995   10,903  
Direct costs $25,781   $9,994   $35,775   $20,664   $9,956   $30,620  
             
  Three Months Ended March 31, 2023 Three Months Ended March 31, 2022
  Guanaceví Bolañitos Total Guanaceví Bolañitos Total
Silver production (ounces) 1,439,924   183,621   1,623,545   1,133,850   181,105   1,314,955  
Average realized silver price ($) 23.16   23.16   23.16   24.38   24.38   24.38  
Silver value ($) 33,351,084   4,252,974   37,604,058   27,643,263   4,415,340   32,058,603  
             
Gold production (ounces) 4,188   5,154   9,342   3,477   5,218   8,695  
Average realized gold price ($) 1,917   1,917   1,917   1,970   1,970   1,970  
Gold value ($) 8,029,524   9,881,606   17,911,130   6,849,690   10,279,460   17,129,150  
             
Total metal value ($) 41,380,608   14,134,580   55,515,189   34,492,953   14,694,800   49,187,753  
Pro-rated silver costs (%) 81%   30%   68%   80%   30%   65%  
Pro-rated gold costs (%) 19%   70%   32%   20%   70%   35%  
             
Pro-rated silver costs ($) 20,778   3,007   24,233   16,560   2,991   19,957  
Pro-rated gold costs ($) 5,003   6,987   11,542   4,104   6,965   10,663  
             
Silver co-product cash costs ($) 14.43   16.38   14.93   14.61   16.52   15.18  
Gold co-product cash costs ($) 1,194   1,356   1,236   1,180   1,335   1,226  

Reconciliation of Realized Silver Price Per Ounce and Realized Gold Price Per Ounce

Expressed in thousands US dollars Three Months Ended March 31
2023 2022
Gross silver sales $38,620 $41,884
Silver ounces sold 1,667,408 1,717,768
Realized silver price per ounces $23.16 $24.38
     
Expressed in thousands US dollars Three Months Ended March 31
2023 2022
Gross gold sales $17,497 $16,510
Gold ounces sold 9,126 8,381
Realized gold price per ounces $1,917 $1,970

Cautionary Note Regarding Forward-Looking Statements

This news release contains “forward-looking statements” within the meaning of the United States private securities litigation reform act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities legislation. Such forward-looking statements and information herein include but are not limited to statements regarding the development and financing of the Terronera Project, including anticipated terms and timing of the Debt Facility, estimated Project economics, Terronera’s forecasted operations, costs and expenditures, and the timing and results of various activities. The Company does not intend to and does not assume any obligation to update such forward-looking statements or information, other than as required by applicable law.

Forward-looking statements or information involve known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, production levels, performance or achievements of Endeavour and its operations to be materially different from those expressed or implied by such statements. Such factors include but are not limited to the completion of Societe Generale’s and ING’s due diligence requirements; the final terms of the Debt Facility and the Company’s ability to successfully drawdown under the Debt Facility; the ongoing effects of inflation and supply chain issues on Project economics; national and local governments, legislation, taxation, controls, regulations and political or economic developments in Canada and Mexico; financial risks due to precious metals prices; operating or technical difficulties in mineral exploration, development and mining activities; risks and hazards of mineral exploration, development and mining; the speculative nature of mineral exploration and development; risks in obtaining necessary licenses and permits; and challenges to the Company’s title to properties; as well as those factors described in the section “risk factors” contained in the Company’s most recent form 40F/Annual Information Form filed with the S.E.C. and Canadian securities regulatory authorities.

Forward-looking statements are based on assumptions management believes to be reasonable, including but not limited to: the ability of the Company to successfully secure a debt facility, the continued operation of the Company’s mining operations, no material adverse change in the market price of commodities, the Project’s forecasted economics as of 2023, mining operations will operate and the mining products will be completed in accordance with management’s expectations and achieve their stated production outcomes, and such other assumptions and factors as set out herein. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or information, there may be other factors that cause results to be materially different from those anticipated, described, estimated, assessed or intended. There can be no assurance that any forward-looking statements or information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements or information. Accordingly, readers should not place undue reliance on forward-looking statements or information.

Appendix

ENDEAVOUR SILVER CORP.CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE EARNINGS (unaudited – prepared by management)(expressed in thousands of US dollars, except for shares and per share amounts)

         
    Three months ended
    March 31,   March 31,
     2023    2022
         
Revenue   $ 55,461   $ 57,740
         
Cost of sales:        
Direct production costs     26,516     26,721
Royalties     6,535     4,317
Share-based payments     132     127
Depreciation, depletion and amortization     6,253     6,306
      39,436     37,471
         
Mine operating earnings     16,025     20,269
         
Expenses:        
Exploration and evaluation     4,164     3,216
General and administrative     4,917     4,297
Care and maintenance costs     -     190
      9,081     7,703
         
Operating earnings     6,944     12,566
         
Finance costs     400     298
         
Other income (expense):        
Foreign exchange gain (loss)     1,889     811
Gain on asset disposal     62     -
Investment and other     4,082     5,820
      6,033     6,631
         
Earnings before income taxes     12,577     18,899
         
Income tax expense:        
Current income tax expense     4,445     1,015
Deferred income tax expense     1,676     6,222
      6,121     7,237
         
Net earnings and comprehensive earnings for the period   $ 6,456   $ 11,662
         
         
Basic earnings per share based on net earnings   $ 0.03   $ 0.07
Diluted earnings per share based on net earnings   $ 0.03   $ 0.07
         
Basic weighted average number of shares outstanding     190,274,768     171,557,220
Diluted weighted average number of shares outstanding     192,295,971     174,438,202
         

ENDEAVOUR SILVER CORP.CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION(unaudited – prepared by management)(expressed in thousands of US dollars)

       
  March 31,   December 31,
    2023       2022  
       
ASSETS      
       
Current assets      
Cash and cash equivalents $ 61,650     $ 83,391  
Other investments   13,132       8,647  
Accounts and other receivables   15,610       13,136  
Income tax receivable   1,861       4,024  
Inventories   23,305       19,184  
Prepaid expenses   22,304       16,951  
Loans receivable   1,000       1,000  
Total current assets   138,862       146,333  
       
Non-current deposits   497       565  
Non-current income tax receivable   3,570       3,570  
Non-current other investments   -       1,388  
Non-current IVA receivable   12,055       10,154  
Non-current loans receivable   2,722       2,729  
Right-of-use leased assets   809       806  
Mineral properties, plant and equipment   243,430       233,892  
Total assets $ 401,945     $ 399,437  
       
LIABILITIES AND SHAREHOLDERS' EQUITY      
       
Current liabilities      
Accounts payable and accrued liabilities $ 35,453     $ 39,831  
Income taxes payable   4,677       6,616  
Loans payable   5,607       6,041  
Lease liabilities   312       261  
Total current liabilities   46,049       52,749  
       
Loans payable   7,329       8,469  
Lease liabilities   786       812  
Provision for reclamation and rehabilitation   8,766       7,601  
Deferred income tax liability   14,620       12,944  
Other non-current liabilities   1,020       968  
Total liabilities   78,570       83,543  
       
Shareholders' equity      
Common shares, unlimited shares authorized, no par value, issued, issuable      
and outstanding 191,276,399 shares (Dec 31, 2022 - 189,995,563 shares)   661,029       657,866  
Contributed surplus   3,973       6,115  
Retained earnings (deficit)   (341,627 )     (348,087 )
Total shareholders' equity   323,375       315,894  
Total liabilities and shareholders' equity $ 401,945     $ 399,437  
       

ENDEAVOUR SILVER CORP.CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS(unaudited – prepared by management)(expressed in thousands of US dollars)

       
  Three months ended
  March 31,   March 31,
    2023       2022  
       
Operating activities      
Net earnings (loss) for the period $ 6,456     $ 11,662  
       
Items not affecting cash:      
Share-based compensation   1,625       1,527  
Depreciation, depletion and amortization   6,619       6,462  
Deferred income tax expense (recovery)   1,676       6,222  
Unrealized foreign exchange loss (gain)   1,095   -   (136 )
Finance costs   400       298  
Accretion of loans receivable   (93 )     -  
Loss (gain) on asset disposal   (62 )     (59 )
Loss (gain) on other investments   (3,097 )     (5,357 )
Performance and deferred share units settled in cash   (2,118 )     -  
Net changes in non-cash working capital   (12,902 )     1,114  
Cash from (used in) operating activities   (401 )     21,733  
       
Investing activities      
Proceeds on disposal of property, plant and equipment   -       34  
Mineral properties, plant and equipment   (20,717 )     (12,997 )
Purchase of other investments   -       (1,371 )
Redemption of (investment in) non-current deposits   68       2  
Cash used in investing activities   (20,649 )     (14,332 )
       
Financing activities      
Repayment of loans payable   (1,574 )     (1,083 )
Repayment of lease liabilities   (63 )     (52 )
Interest paid   (239 )     (177 )
Public equity offerings   -       46,001  
Exercise of options   1,812       130  
Proceeds from loans receivable   100       -  
Share issuance costs   -       (2,797 )
Performance and deferred share units witholding tax settlement   (294 )     (1,897 )
Cash from (used in) financing activities   (258 )     40,125  
       
Effect of exchange rate change on cash and cash equivalents   (433 )     185  
       
Increase (decrease) in cash and cash equivalents   (21,308 )     47,526  
Cash and cash equivalents, beginning of the period   83,391       103,303  
Cash and cash equivalents, end of the period $ 61,650     $ 151,014  
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