Endeavour Silver Corp. (“Endeavour” or the “Company”) (NYSE: EXK; TSX: EDR) announces its unaudited financial and operating results for the three and nine months ended September 30, 2023. All amounts reported are in United States (US) dollars.

“Our third quarter was challenging on a number of fronts, marking the lowest quarterly production for the Company in over two years. We were negatively impacted by several factors, however reduced productivity at Guanacevi is what led to a production shortfall. This reduced productivity was the result of mine sequencing changes that were initiated to improve access and ventilation, which have resulted in a significant reduction in ore grades. These lower silver and gold grades, combined with lower precious metals prices, a stronger Mexican Peso, and increased operating development and maintenance and repairs, have negatively impacted our financial performance this quarter.” stated Dan Dickson, Chief Executive Officer. “With mine sequencing back on track in Q4, we are now mining in wider, higher-grade areas of the orebody, which has significantly improved mine output and grades. While there is never a good time for these corrective measures to be taken, especially with additional macro pressures, they were necessary, and we have already seen the benefits from the actions implemented in the third quarter.”

Q3 2023 Highlights

  • Production Tracking In-Line with Guidance: 1,148,735 ounces (oz) of silver and 9,089 oz of gold for 1.9 million oz silver equivalent (AgEq) (1), totaling 6.5 million AgEq oz for the 9 months ended September 30, 2023.
  • Revenue: $49.4 million from the sale of 1,370,032 oz of silver and 8,760 oz of gold at average realized prices of $23.99 per oz silver and $1,948 per oz gold.
  • Cash Flow: $3.3 million in operating cash flow before working capital changes(2) and $10.6 million in Mine operating cash flow before taxes(2).
  • Negative Earnings: Net loss of $2.3 million, or $0.01 per share. Adjusted net loss of $7.4 million(2) after adjusting for a $7.0 million gain on disposal of the Cozamin royalty and a $1.9 million reduction in the fair value of investments.
  • Significant Production Shortfall at Guanacevi, Among Other Items, Resulted in Escalated Costs: Cash costs(2) of $17.94 per oz payable silver and all-in sustaining costs(2) of $29.64 per oz payable silver, net of gold credits.   Cost metrics were significantly impacted by lower production at the Guanacevi mine and increased operating development resulting from mine sequencing changes required to focus on improved access and ventilation as well as plant maintenance required during the last week of September. Macro pressures such as inflation, and a strengthened Mexican Peso also contributed to higher costs.
  • Management Continues to Monitor Costs: Additional repair work related to the plant shut down continued for the first week of Q4 and increased operating development continued into Q4 to access high grade ore and open more stopes. Although cost pressures will continue, management anticipates that cost metrics will improve as productivity and production will return to expected levels.
  • Healthy Balance Sheet: Cash position of $41.0 million and working capital(2) of $75.9 million. Cash decreased as funds were spent on development activities at Terronera. During Q3, 2023 the Company raised gross proceeds of $23.4 million through equity issuances, primarily to fund these activities.
  • Construction and Development Update at Terronera: The Company has made significant progress on development activities, with overall construction progress 38% complete. The project remains on schedule for initial production in Q4 2024. (see news release dated October 26, 2023)
  • Obtained US$120 Million Project Financing for Terronera: Societe Generale and ING Capital LLC (together with ING Bank N.V.) have signed a definitive credit agreement for a senior secured debt facility of US$120 million (see news release dated October 10, 2023).

Financial Overview (see appendix for consolidated financial statements)

Three Months Ended September 30 Q3 2023 Highlights Nine Months Ended September 30
2023 2022 % Change 2023 2022 % Change
      Production      
1,148,735 1,458,448 (21%) Silver ounces produced 4,266,280 4,132,610 3%
9,089 9,194 (1%) Gold ounces produced 28,250 27,178 4%
1,140,597 1,445,880 (21%) Payable silver ounces produced 4,231,064 4,095,696 3%
8,929 9,039 (1%) Payable gold ounces produced 27,749 26,705 4%
1,875,855 2,193,968 (14%) Silver equivalent ounces produced(1) 6,526,280 6,306,850 3%
17.94 10.32 74% Cash costs per silver ounce(2) 13.80 10.21 35%
24.10 14.31 68% Total production costs per ounce(2) 18.85 14.56 30%
29.64 20.27 46% All-in sustaining costs per ounce (2) 23.41 20.24 16%
214,270 202,745 6% Processed tonnes 653,918 610,253 7%
152.04 131.61 16% Direct operating costs per tonne(2) 140.76 128.99 9%
176.37 146.30 21% Direct costs per tonne(2) 171.78 147.65 16%
20.03 13.12 53% Silver co-product cash costs(2) 17.09 14.15 21%
1,626 1,144 42% Gold co-product cash costs(2) 1,396 1,163 20%
      Financial      
49.5 39.7 25% Revenue ($ millions) 155.0 128.2 21%
1,370,032 1,327,325 3% Silver ounces sold 4,337,112 3,647,987 19%
8,760 8,852 (1%) Gold ounces sold 27,769 27,025 3%
23.99 19.24 25% Realized silver price per ounce 23.75 22.24 7%
1,948 1,678 16% Realized gold price per ounce 1,940 1,827 6%
(2.3) (1.5) (55%) Net earnings (loss) ($ millions) 3.1 (1.8) 275%
(7.4) (3.1) (135) Adjusted net earnings (loss) (2) ($ millions) (1.9) (1.1) (70%)
2.7 5.1 (48) Mine operating earnings ($ millions) 31.3 29.9 5%
10.6 12.3 (14%) Mine operating cash flow before taxes ($ millions)(2) 51.8 47.8 9%
3.3 7.3 (55%) Operating cash flow before working capital changes(2) 27.2 31.6 (14%)
8.8 7.9 11% EBITDA(2) ($ millions) 39.5 29.2 35%
75.9 101.6 (25%) Working capital (2) ($ millions) 75.9 101.6 (25%)
      Shareholders      
(0.01) (0.01) 0% Earnings (loss) per share – basic ($) 0.02 (0.01) 300%
(0.04) (0.02) (100%) Adjusted earnings (loss) per share – basic ($)(2) (0.01) (0.01) 0%
0.02 0.04 (50%) Operating cash flow before working capital changes per share(2) 0.14 0.17 (18%)
194,249,283 189,241,367 3% Weighted average shares outstanding 192,003,752 180,655,842 6%
 
(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 September 30, 2023, revenue increased by 25% to $49.5 million (Q3 2022: $39.7 million).

Gross sales of $49.9 million in Q3 2023 represented a 24% increase over the $40.3 million in Q3 2022. Silver oz sold increased by 3%, primarily due to the timing of silver sales with less silver withheld during the current quarter offsetting the decrease in silver production.   Compared to Q3, 2022, there was a 25% increase in the realized silver price resulting in a 29% increase in silver sales. Gold oz sold decreased 1% with a 16% increase in realized gold prices resulting in a 15% increase in gold sales. The decrease in gold ounces sold is primarily driven by the 1% decrease in gold production as gold inventory levels are comparable. During the period, the Company sold 1,370,032 oz silver and 8,760 oz gold, for realized prices of $23.99 and $1,948 per oz, respectively, compared to sales of 1,327,325 oz silver and 8,852 oz gold, for realized prices of $19.24 and $1,678 per oz, respectively, in the same period of 2022. For the three months ended September 30, 2023, the realized prices of silver and gold were within 2% of the London spot prices. Silver and gold London spot prices averaged $23.57 and $1,928, respectively, during the three months ended September 30, 2023.

The Company decreased its finished goods to 424,217 oz silver and slightly increased its finished goods gold inventory to 1,689 oz gold at September 30, 2023 compared to 637,439 oz silver and 1,519 oz gold at June 30, 2023. The cost allocated to these finished goods was $11.0 million as at September 30, 2023, compared to $13.8 million at June 30, 2023.   At September 30, 2023, the finished goods inventory fair market value was $12.9 million, compared to $17.6 million at June 30, 2023.  

After cost of sales of $46.7 (Q3 2022: $34.5 million), an increase of 35%, mine operating earnings were $2.8 million (Q3 2022: $5.1 million). The increase in the cost of sales compared to the prior period was driven by a strengthened Mexican peso and higher labour, power and consumables costs as the Company, as well the industry, has experienced significant inflationary pressures. Additionally, the Company incurred increased royalty costs during Q3, 2023 compared to the prior period. At Guanacevi additional operating development, decreased mine productivity, an increase in the purchase of third-party ore and additional repair costs associated with the plant shutdown also negatively impacted costs. Including royalties and special mining duty, direct costs per tonne increased 21% to $176.37. Compared to Q3, 2022, royalties have increased 77% from $2.8 million to $4.8 million with the increase occurring at Guanaceví. At Guanaceví the increase in royalty expense recognized during Q3, 2023 is due to the increase in production coming from concessions subject to royalties and an increase in the realized silver price. The royalty increased to 13% from 9% when the realized silver price crossed a price threshold of $20 per oz.

The Company had an operating loss of $3.8 million (Q3 2022: $1.3 million) after exploration and evaluation costs of $4.2 million (Q3 2022: $4.0 million) and general and administrative expense of $2.4 million (Q3 2022: $2.2 million). In the three months ended September 30, 2022, the operating loss also included $0.2 million in care and maintenance costs related to the suspension of the operations at the El Compas mine.

Earnings before income taxes was $$0.8 million (Q3, 2022: $1.7 million) after a gain on the sale of the Cozamin Royalty of $7.0 million (Q3 2022: $2.8 million, finance costs of $0.3 million (Q3 2022: $0.3 million), a foreign exchange loss of $0.4 million (Q3 2022: foreign exchange gain of $0.8 million) and investment and other expenses of $1.6 million (Q3 2022: $0.3 million).

The Company realized a net loss for the period of $2.3 million (Q3 2022: $1.5 million) after an income tax expense of $3.1 million (Q3, 2022: $3.2 million). Current income tax expense decreased to $3.1 million (Q3 2022: $3.2 million) due to decreased profitability impacting the income tax and special mining duty, while deferred income tax expense of $0.9 million is derived from changes in temporary timing differences between deductions for accounting versus deductions for tax (Q3 2022: $2.0 million).

Direct operating costs(2) on a per tonne basis increased to $152.04, up 16% compared with Q3 2022 due to both a strengthening of the Mexican peso and higher operating costs at both Guanacevi and Bolanitos from inflationary pressure during the lasts half 2022 and into 2023. As the Mexican peso strengthens, the Company’s Mexican peso denominated costs are increased in US dollar terms. Guanacevi and Bolanitos have experienced increased labour, power and consumables costs. Additionally, the Company incurred increased royalty costs during Q3, 2023 compared to the prior period. At Guanacevi additional operating development, decreased mine productivity, an increase in the purchase of third-party ore and additional repair costs associated with the plant shutdown also negatively impacted costs

Consolidated cash costs per oz(2), net of by-product credits, increased to $17.94 primarily driven by a reduction in silver production, an increase in direct operating costs, an increase in royalties and special mining duties which are partially offset by an increase in by-product gold sales. AISC(2) increased by 46% on a per oz basis compared to Q2 2023 due to the increase in cash costs and decreased silver production.

The complete financial statements and management’s discussion & analysis can be viewed on the Company’s website, on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. All shareholders can receive a hard copy of the Company’s complete audited financial statements free of charge upon request. To receive this material in hard copy, please contact Investor Relations at 604-640-4804, toll free at 1-877-685-9775 or by email at gmeleger@edrsilver.com.

Conference Call

A conference call to discuss the Company’s Q3 2023 financial results will be held today at 10:00 a.m. PST / 1:00 p.m. EST. To participate in the conference call, please dial the numbers below.

Date & Time: Tuesday, November 7, 2023 at 10:00 a.m. PST / 1:00 p.m. EST
Telephone: Toll-free in Canada and the US +1-800-319-4610
  Local or International +1-604-638-5340
  Please allow up to 10 minutes to be connected to the conference call.
Replay: A replay of the conference call will be available by dialing (toll-free) +1-800-319-6413 in Canada and the US (toll-free) or +1-604-638-9010 outside of Canada and the US. The replay passcode is 0484#. The replay will also be available on the Company’s website at www.edrsilver.com.

About Endeavour Silver – Endeavour is a mid-tier precious metals mining company that operates two high-grade underground silver-gold mines in Mexico. Endeavour is advancing construction of the Terronera Project and exploring its portfolio of exploration projects in Mexico, Chile and the United States to facilitate its goal to become a premier senior silver producer.  Our philosophy of corporate social integrity creates value for all stakeholders.

Contact InformationGalina Meleger, Vice President of Investor Relations Tel: (604)640-4804Email: 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 September 30, 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 September 30, 2023 MD&A available on SEDAR at www.sedar.com.

Reconciliation of Working Capital
Expressed in thousands US dollars As at September 30, 2023 As at December 31, 2022
Current assets  $131,436    $146,333  
Current liabilities  55,487    52,749  
Working capital  $75,949    $93,584  
         
Reconciliation of Adjusted Net Earnings (Loss) and Adjusted Net Earnings (Loss) Per Share
Expressed in thousands US dollars Three Months Ended September 30 Nine Months Ended September 30
(except for share numbers and per share amounts) 2023   2022   2023   2022  
Net earnings (loss) for the period per financial statements ($2,328)   ($1,499)   $3,074   ($1,760)  
Gain on sale of Cozamin royalty (6,990)   -   (6,990)   -  
Gain on disposal of El Compas mine and equipment, net of tax -   (2,733)   -   (2,733)  
Change in fair value of investments 1,944   1,097   1,997   3,366  
Adjusted net earnings (loss) ($7,374)   ($3,135)   ($1,919)   ($1,127)  
Basic weighted average share outstanding 194,249,283   189,241,367   192,003,752   180,655,842  
Adjusted net earnings (loss) per share ($0.04)   ($0.02)   ($0.01)   ($0.01)  
         
Reconciliation of Mine Operating Cash Flow Before Taxes
Expressed in thousands US dollars Three Months Ended September 30 Nine Months Ended September 30
  2023   2022   2023   2022  
Mine operating earnings per financial statements $2,692   $5,129   $31,259   $29,870  
Share-based compensation 44   113   (118)   353  
Amortization and depletion 7,855   5,753   20,704   16,234  
Write down of inventory to net realizable value -   1,323   -   1,323  
Mine operating cash flow before taxes $10,591   $12,318   $51,845   $47,780  
         
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 September 30 Nine Months Ended September 30
(except for per share amounts) 2023   2022   2023   2022  
Cash from (used in) operating activities per financial statements $613   $7,417   $5,065   $10,602  
Net changes in non-cash working capital per financial statements (2,650)   85   (22,158)   (20,957)  
Operating cash flow before working capital changes $3,263   $7,332   $27,223   $31,559  
Basic weighted average shares outstanding 194,249,283   189,241,367   192,003,752   180,655,842  
Operating cash flow before working capital changes per share $0.02   $0.04   $0.14   $0.17  
         
Reconciliation of EBITDA and Adjusted EBITDA
Expressed in thousands US dollars Three Months Ended September 30 Nine Months Ended September 30
  2023   2022   2023   2022  
Net earnings (loss) for the period per financial statements ($2,328)   ($1,499)   $3,074   ($1,760)  
Depreciation and depletion – cost of sales 7,855   5,753   20,704   16,234  
Depreciation and depletion – exploration (147)   143   448   348  
Depreciation and depletion – general & administration 63   57   179   156  
Depreciation and depletion – care & maintenance -   10   -   70  
Finance costs 170   194   658   583  
Current income tax expense 2,250   1,186   11,137   3,526  
Deferred income tax expense 888   2,053   3,330   10,027  
EBITDA $8,751   $7,897   $39,530   $29,184  
Share based compensation 863   760   2,904   3,259  
Gain on sale of Cozamin royalty (6,990)   -   (6,990)   -  
Gain on disposal of El Compas mine and equipment, net of tax -   (2,733)   -   (2,733)  
Change in fair value of investments 1,944   1,097   1,997   3,366  
Adjusted EBITDA $4,568   $7,021   $37,441   $33,076  
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 September 30, 2023 Three Months Ended September 30, 2022
Guanaceví Bolañitos Total Guanaceví Bolañitos Total
Direct production costs per financial statements $23,863 $10,157 $34,020 $15,156 $9,354 $24,510
Smelting and refining costs included in net revenue - 494 494 - 744 744
Opening finished goods (10,257) (962) (11,219) (16,164) (681) (16,845)
Closing finished goods 8,627 656 9,283 18,080 195 18,275
Direct operating costs 22,233 10,345 32,578 17,072 9,612 26,684
Royalties 4,754 67 4,821 2,762 59 2,821
Special mining duty 306 85 391 241 (85) 156
Direct costs 27,293 10,497 37,790 20,075 9,586 29,661
By-product gold sales (5,326) (11,737) (17,063) (5,237) (9,615) (14,852)
Opening gold inventory fair market value 1,629 1,268 2,897 4,662 1,061 5,723
Closing gold inventory fair market value (2,345) (815) (3,160) (5,368) (240) (5,608)
Cash costs net of by-product 21,251 (787) 20,464 14,132 792 14,924
Amortization and depletion 4,684 3,171 7,855 3,119 2,634 5,753
Share-based compensation 31 13 44 56 57 113
Opening finished goods depreciation and depletion (2,318) (288) (2,606) (3,733) (199) (3,932)
Closing finished goods depreciation and depletion 1,509 222 1,731 3,776 60 3,836
Total production costs $25,157 $2,331 $27,488 $17,350 $3,344 $20,694
             
  Three Months Ended September 30, 2023 Three Months Ended September 30, 2022
Guanaceví Bolañitos Total Guanaceví Bolañitos Total
Throughput tonnes 103,345 110,925 214,270 97,728 105,017 202,745
Payable silver ounces 1,038,087 102,510 1,140,597 1,328,193 117,687 1,445,880
Cash costs per silver ounce $20.47 ($7.68) $17.94 $10.64 $6.73 $10.32
Total production costs per ounce $24.23 $22.74 $24.10 $13.06 $28.41 $14.31
Direct operating costs per tonne $215.13 $93.26 $152.04 $174.69 $91.53 $131.61
Direct costs per tonne $264.10 $94.63 $176.37 $205.42 $91.28 $146.30
             
Expressed in thousands US dollars Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022
Guanaceví Bolañitos Total Guanaceví Bolañitos Total
Direct production costs per financial statements $56,886 $29,128 $86,014 $40,837 $30,222 $71,059
Smelting and refining costs included in net revenue - 1,945 1,945 - 2,335 2,335
Opening finished goods (4,953) (245) (5,198) (10,093) (2,857) (12,950)
Closing finished goods 8,627 656 9,283 18,080 195 18,275
Direct operating costs 60,560 31,484 92,044 48,824 29,895 78,719
Royalties 16,904 201 17,105 9,124 208 9,332
Special mining duty 2,800 379 3,179 1,767 286 2,053
Direct costs 80,264 32,064 112,328 59,715 30,389 90,104
By-product gold sales (22,228) (31,654) (53,882) (15,978) (33,405) (49,383)
Opening gold inventory fair market value 2,740 354 3,094 1,900 4,784 6,684
Closing gold inventory fair market value (2,345) (815) (3,160) (5,368) (240) (5,608)
Cash costs net of by-product 58,431 (51) 58,380 40,269 1,528 41,797
Amortization and depletion 11,539 9,165 20,704 7,969 8,265 16,234
Share-based compensation (50) (68) (118) 176 177 353
Opening finished goods depreciation and depletion (862) (60) (922) (1,965) (635) (2,600)
Closing finished goods depreciation and depletion 1,509 222 1,731 3,776 60 3,836
Total production costs $70,567 $9,208 $79,775 $50,225 $9,395 $59,620
             
  Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022
Guanaceví Bolañitos Total Guanaceví Bolañitos Total
Throughput tonnes 322,628 331,290 653,918 292,998 317,255 610,253
Payable silver ounces 3,822,057 409,007 4,231,064 3,649,209 446,487 4,095,696
Cash costs per silver ounce $15.29 ($0.12) $13.80 $11.03 $3.42 $10.21
Total production costs per ounce $18.46 $22.51 $18.85 $13.76 $21.04 $14.56
Direct operating costs per tonne $187.71 $95.03 $140.76 $166.64 $94.23 $128.99
Direct costs per tonne $248.78 $96.79 $171.78 $203.81 $95.79 $147.65
             
Expressed in thousands US dollars September 30, 2023 September 30, 2022
Guanaceví Bolañitos Total Guanaceví Bolañitos Total
Closing finished goods 8,627 656 9,283 18,080 195 18,275
Closing finished goods depletion 1,509 222 1,731 3,776 60 3,836
Finished goods inventory $10,136 $878 $11,014 $21,856 $255 $22,111
Reconciliation of All-In Costs Per Ounce and AISC per ounce
Expressed in thousands US dollars Three Months Ended September 30, 2023 Three Months Ended September 30, 2022
  Guanaceví Bolañitos Total Guanaceví Bolañitos Total
Cash costs net of by-product $21,251 ($787) $20,464 $14,132 $792 $14,924
Operations share-based compensation 31 13 44 56 57 113
Corporate general and administrative 1,087 514 1,601 1,200 414 1,614
Corporate share-based compensation 475 219 694 405 125 530
Reclamation - amortization/accretion 77 69 146 64 52 116
Mine site expensed exploration 362 339 701 316 305 621
Equipment loan payments 189 489 678 245 489 734
Capital expenditures sustaining 6,697 2,787 9,484 7,212 3,439 10,651
All-In-Sustaining Costs $30,169 $3,643 $33,812 $23,629 $5,674 $29,303
Growth exploration and evaluation     3,476     3,142
Growth capital expenditures     22,252     6,240
All-In-Costs     $59,540     $38,685
             
  Three Months Ended September 30, 2023 Three Months Ended September 30, 2022
  Guanaceví Bolañitos Total Guanaceví Bolañitos Total
Throughput tonnes 103,345 110,925 214,270 97,728 105,017 202,745
Payable silver ounces 1,038,087 102,510 1,140,597 1,328,193 117,687 1,445,880
Silver equivalent production (ounces) 1,294,091 581,764 1,875,855 1,623,550 570,418 2,193,968
Sustaining cost per ounce $29.06 $35.54 $29.64 $17.79 $48.21 $20.27
All-In-costs per ounce     $52.20     $26.76
             
Expressed in thousands US dollars Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022
  Guanaceví Bolañitos Total Guanaceví Bolañitos Total
Cash costs net of by-product $58,431 ($51) $58,380 $40,269 $1,528 $41,797
Operations share-based compensation (50) (68) (118) 176 177 353
Corporate general and administrative 4,931 1,869 6,800 3,668 1,445 5,113
Corporate share-based compensation 1,924 730 2,654 1,849 728 2,577
Reclamation - amortization/accretion 235 197 432 198 158 356
Mine site expensed exploration 1,068 1,002 2,070 1,028 863 1,891
Intangible payments - - - 29 12 41
Equipment loan payments 679 1,465 2,144 736 1,466 2,202
Capital expenditures sustaining 18,687 8,008 26,695 19,908 8,653 28,561
All-In-Sustaining Costs $85,905 $13,152 $99,057 $67,861 $15,030 $82,891
Growth exploration and evaluation     9,792     8,456
Growth capital expenditures     49,622     16,778
All-In-Costs     $158,471     $108,125
             
  Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022
  Guanaceví Bolañitos Total Guanaceví Bolañitos Total
Throughput tonnes 322,628 331,290 653,918 292,998 317,255 610,253
Payable silver ounces 3,822,057 409,007 4,231,064 3,649,209 446,487 4,095,696
Silver equivalent production (ounces) 4,732,278 1,794,002 6,526,280 4,524,110 1,782,740 6,306,850
Sustaining cost per ounce $22.48 $32.16 $23.41 $18.60 $33.66 $20.24
All-In-costs per ounce     $37.45     $26.40
Expressed in thousands US dollars Three Months Ended September 30 Nine Months Ended September 300
2023 2022 2023 2022
Mine site expensed exploration $701 $621 $2,070 $1,891
Growth exploration and evaluation 3,476 3,142 9,792 8,456
Total exploration and evaluation 4,177 3,763 11,862 10,347
Exploration depreciation and depletion (147) 143 448 348
Exploration share-based compensation 125 117 368 328
Exploration and evaluation expense $4,155 $4,023 $12,678 $11,023
Reconciliation of Sustaining Capital and Growth Capital
Expressed in thousands US dollars Three Months Ended September 30 Nine Months Ended September 300  
2023 2022 2023 2022
Capital expenditures sustaining $9,484 $10,651 $26,695 $28,561
Growth capital expenditures 22,252 6,240 49,622 16,778
Property, plant and equipment expenditures per Consolidated Statement of Cash Flows $31,736 $16,891 $76,317 $45,339
Reconciliation of Silver Co-Product Cash Costs and Gold Co-Product Cash Costs
Expressed in thousands US dollars Three Months Ended September 30, 2023 Three Months Ended September 30, 2022
  Guanaceví Bolañitos Total Guanaceví Bolañitos Total
Direct production costs per financial statements $23,863   $10,157   $34,020   $15,156   $9,354   $24,510  
Smelting and refining costs included in net revenue   -     494     494     -     744     744  
Royalties   4,754     67     4,821     2,762     59     2,821  
Special mining duty   306     85     391     241     (85)     156  
Opening finished goods   (10,257)     (962)     (11,219)     (16,164)     (681)     (16,845)  
Closing finished goods   8,627     656     9,283     18,080     195     18,275  
Direct costs $27,293   $10,497   $37,790   $20,075   $9,586   $29,661  
             
  Three Months Ended September 30, 2023 Three Months Ended September 30, 2022
  Guanaceví Bolañitos Total Guanaceví Bolañitos Total
Silver production (ounces)   1,041,211.00     107,524     1,148,735     1,332,190     126,258     1,458,448  
Average realized silver price ($)   23.99     23.99     23.99     19.24     19.24     19.24  
Silver value ($)   24,976,320     2,579,260     27,555,580     25,634,615     2,429,515     28,064,130  
             
Gold production (ounces)   3,161     5,928     9,089     3,642     5,552     9,194  
Average realized gold price ($)   1,948     1,948     1,948     1,678     1,678     1,678  
Gold value ($)   6,157,094     11,546,742     17,703,836     6,110,595     9,315,217     15,425,812  
             
Total metal value ($)   31,133,414     14,126,002     45,259,417     31,745,210     11,744,732     43,489,942  
Pro-rated silver costs (%)   80%     18%     61%     81%     21%     65%  
Pro-rated gold costs (%)   20%     82%     39%     19%     79%     35%  
             
Pro-rated silver costs ($)   21,895     1,917     23,008     16,211     1,983     19,140  
Pro-rated gold costs ($)   5,398     8,580     14,782     3,864     7,603     10,521  
             
Silver co-product cash costs ($)   21.03     17.83     20.03     12.17     15.71     13.12  
Gold co-product cash costs ($)   1,708     1,447     1,626     1,061     1,369     1,144  
             
Expressed in thousands US dollars Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022
  Guanaceví Bolañitos Total Guanaceví Bolañitos Total
Direct production costs per financial statements $56,886   $29,128   $86,014   $40,837   $30,222   $71,059  
Smelting and refining costs included in net revenue   -   $1,945   $1,945     -     2,335     2,335  
Royalties   16,904     201     17,105     9,124     208     9,332  
Special mining duty   2,800     379     3,179     1,767     286     2,053  
Opening finished goods   (4,953)     (245)     (5,198)     (10,093)     (2,857)     (12,950)  
Finished goods NRV adjustment   -     -     -     -     -     0  
Closing finished goods   8,627     656     9,283     18,080     195     18,275  
Direct costs   80,264     32,064     112,328     59,715     30,389     90,104  
             
  Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022
  Guanaceví Bolañitos Total Guanaceví Bolañitos Total
Silver production (ounces)   3,833,558     432,722     4,266,280     3,660,190     472,420     4,132,610  
Average realized silver price ($)   23.75     23.75     23.75     22.24     22.24     22.24  
Silver value ($)   91,065,202     10,279,202     101,344,404     81,394,368     10,505,555     91,899,922  
             
Gold production (ounces)   11,234     17,016     28,250     10,799     16,379     27,178  
Average realized gold price ($)   1,940     1,940     1,940     1,827     1,827     1,827  
Gold value ($)   21,798,062     33,017,253     54,815,316     19,733,100     29,929,479     49,662,579  
             
Total metal value ($)   112,863,264     43,296,455     156,159,719     101,127,468     40,435,034     141,562,501  
Pro-rated silver costs (%)   81%     24%     65%     80%     26%     65%  
Pro-rated gold costs (%)   19%     76%     35%     20%     74%     35%  
             
Pro-rated silver costs ($)   64,762     7,612     72,899     48,063     7,895     58,494  
Pro-rated gold costs ($)   15,502     24,452     39,429     11,652     22,494     31,610  
             
Silver co-product cash costs ($)   16.89     17.59     17.09     13.13     16.71     14.15  
Gold co-product cash costs ($)   1,380     1,437     1,396     1,079     1,373     1,163  
Reconciliation of Realized Silver Price Per Ounce and Realized Gold Price Per Ounce
Expressed in thousands US dollars Three Months Ended September 30 Nine Months Ended September 30
2023 2022 2023 2022
Gross silver sales $32,864 $25,541 $103,027 $81,123
Silver ounces sold 1,370,032 1,327,325 4,337,112 3,647,987
Realized silver price per ounces $23.99 $19.24 $23.75 $22.24
         
Expressed in thousands US dollars Three Months Ended September 30 Nine Months Ended September 30
2023 2022 2023 2022
Gross gold sales $17,063 $14,852 $53,882 $49,383
Realized gold price per ounces $1,948 $1,678 $1,940 $1,827
         

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 timing of the project; anticipated timing of completion of conditions precedent to drawdown under the Debt Facility, estimated project economics, Terronera’s forecasted operations, costs and expenditures, and the timing and results of various related activities, Endeavour’s anticipated performance in 2023 including changes in mining operations and forecasts of production levels, anticipated production costs and all-in sustaining costs 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 changes in production and costs guidance; the ongoing effects of inflation and supply chain issues on mine 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; satisfaction of conditions precedent to drawdown under the Debt Facility; the ongoing effects of inflation and supply chain issues on the Terronera Project economics; fluctuations in the prices of silver and gold, fluctuations in the currency markets (particularly the Mexican peso, Chilean peso, Canadian dollar and U.S. dollar); 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 continued operation of the Company’s mining operations, no material adverse change in the market price of commodities, forecasted mine 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 OFCOMPREHENSIVE EARNINGS (unaudited – prepared by management)(expressed in thousands of US dollars, except for shares and per share amounts)

               
  Three months ended   Nine months ended
  September 30, September 30, September 30, September 30,
    2023       2022       2023       2022  
               
Revenue $ 49,432     $ 39,649     $ 154,964     $ 128,171  
               
Cost of sales:              
Direct production costs   34,020       24,510       86,014       71,059  
Royalties   4,821       2,821       17,105       9,332  
Share-based payments   44       113       (118 )     353  
Depreciation, depletion and amortization   7,855       5,753       20,704       16,234  
Write down of inventory to net realizable value   -       1,323       -       1,323  
    46,740       34,520       123,705       98,301  
               
Mine operating earnings   2,692       5,129       31,259       29,870  
               
Expenses:              
Exploration and evaluation   4,155       4,023       12,678       11,023  
General and administrative   2,358       2,201       9,633       7,846  
Care and maintenance costs   -       203       -       582  
Write off of mineral properties   -       -       435       500  
    6,513       6,427       22,746       19,951  
               
Operating earnings (loss)   (3,821 )     (1,298 )     8,513       9,919  
               
Finance costs   316       311       1,090       945  
               
Other income:              
Foreign exchange gain (loss)   (418 )     841       3,326       1,363  
Gain on asset disposal   6,992       2,780       7,059       2,780  
Investment and other   (1,627 )     (272 )     (267 )     (1,324 )
    4,947       3,349       10,118       2,819  
               
Earnings before income taxes   810       1,740       17,541       11,793  
               
Income tax expense:              
Current income tax expense   2,250       1,186       11,137       3,526  
Deferred income tax expense   888       2,053       3,330       10,027  
    3,138       3,239       14,467       13,553  
               
Net earnings (loss) and comprehensive earnings $ (2,328 )   $ (1,499 )   $ 3,074     $ (1,760 )
               
               
Basic earnings (loss) per share $ (0.01 )   $ (0.01 )   $ 0.02     $ (0.01 )
Diluted earnings (loss) per share $ (0.01 )   $ (0.01 )   $ 0.02     $ (0.01 )
               
Basic weighted average number of shares outstanding 194,249,283   189,241,367   192,003,752   180,655,842  
Diluted weighted average number of shares outstanding 194,249,283   189,241,367   193,875,315   180,655,842  
               

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

       
  September 30,   December 31,
    2023       2022  
       
ASSETS      
       
Current assets      
Cash and cash equivalents $ 40,957     $ 83,391  
Other investments   6,192       8,647  
Accounts and other receivables   16,664       13,136  
Income tax receivable   1,264       4,024  
Inventories   27,601       19,184  
Prepaids   37,508       16,951  
Loans receivable   1,250       1,000  
Total current assets   131,436       146,333  
       
Non-current deposits   717       565  
Non-current income tax receivable   3,570       3,570  
Non-current other investments   -       1,388  
Non-current IVA receivable   17,476       10,154  
Non-current loans receivable   2,273       2,729  
Right-of-use leased assets   819       806  
Mineral properties, plant and equipment   276,864       233,892  
Total assets $ 433,155     $ 399,437  
       
LIABILITIES AND SHAREHOLDERS' EQUITY      
       
Current liabilities      
Accounts payable and accrued liabilities $ 43,416     $ 39,831  
Income taxes payable   7,296       6,616  
Loans payable   4,339       6,041  
Lease liabilities   436       261  
Total current liabilities   55,487       52,749  
       
Loans payable   5,500       8,469  
Lease liabilities   678       812  
Provision for reclamation and rehabilitation   9,582       7,601  
Deferred income tax liability   16,273       12,944  
Other non-current liabilities   1,016       968  
Total liabilities   88,536       83,543  
       
Shareholders' equity      
Common shares, unlimited shares authorized, no par value, issued, issuable      
and outstanding 199,700,826 shares (Dec 31, 2022 - 189,995,563 shares)   684,736       657,866  
Contributed surplus   4,597       6,115  
Retained earnings (deficit)   (344,714 )     (348,087 )
Total shareholders' equity   344,619       315,894  
Total liabilities and shareholders' equity $ 433,155     $ 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   Nine months ended
  September 30,   September 30,   September 30,   September 30,
    2023       2022       2023       2022  
               
Operating activities              
Net earnings (loss) for the period $ (2,328 )   $ (1,499 )   $ 3,074     $ (1,760 )
               
Items not affecting cash:              
Share-based compensation   864       760       2,904       3,259  
Depreciation, depletion and amortization   9,067       6,023       22,659       16,809  
Writte off of exploration properties   -       -       435       500  
Deferred income tax expense   888       2,053       3,330       10,027  
Unrealized foreign exchange loss (gain)   (409 ) -   89       1,205   -   (131 )
Finance costs   316       312       1,090       946  
Accretion of loans receivable   (87 )     -       (294 )     -  
Write down of inventory to net realizable value   -       1,323       -       1,323  
Gain on asset disposal   (6,992 )     (2,826 )     (7,059 )     (2,780 )
Loss on other investments   1,944       1,097       1,997       3,366  
Performance and deferred share units settled in cash   -       -       (2,118 )     -  
Net changes in non-cash working capital   (2,650 )     85       (22,158 )     (20,957 )
Cash from operating activities   613       7,417       5,065       10,602  
               
Investing activities              
Proceeds on disposal of property, plant and equipment   7,567       250       7,567       332  
Mineral properties, plant and equipment   (31,736 )     (53,046 )     (76,317 )     (81,494 )
Purchase of other investments   -       -       -       (2,119 )
Proceeds from disposal of other investments   -       -       1,846       -  
Redemption of (investment in) non-current deposits   (57 )     30       (152 )     34  
Cash used in investing activities   (24,226 )     (52,766 )     (67,056 )     (83,247 )
               
Financing activities              
Repayment of loans payable   (1,522 )     (1,268 )     (4,671 )     (3,565 )
Repayment of lease liabilities   (126 )     (55 )     (275 )     (161 )
Interest paid   (206 )     (204 )     (659 )     (585 )
Public equity offerings   23,390       -       23,390       46,001  
Exercise of options   -       20       2,453       1,598  
Proceeds from loans receivable   -       -       500       -  
Share issuance costs   (683 )     (93 )     (683 )     (2,905 )
   Performance and deferred share units witholding tax settlement   -       -       (294 )     (1,903 )
Cash from (used in) financing activities   20,853       (1,600 )     19,761       38,480  
               
Effect of exchange rate change on cash and cash equivalents   213       (84 )     (204 )     55  
               
Increase (decrease) in cash and cash equivalents   (2,760 )     (46,949 )     (42,230 )     (34,165 )
Cash and cash equivalents, beginning of the period   43,504       116,226       83,391       103,303  
Cash and cash equivalents, end of the period $ 40,957     $ 69,193     $ 40,957     $ 69,193  
               
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