Endeavour Silver Announces Q2 2023 Financial Results; Earnings Call at 10AM PDT (1PM EDT) Today
VANCOUVER, British Columbia, Aug. 08, 2023 -- Endeavour Silver Corp. (“Endeavour” or the “Company”) (NYSE: EXK; TSX: EDR) is pleased to announce its financial and operating results for the three and six months ended June 30, 2023. All dollar amounts are in US dollars (US$).
“While we have been successful at managing the inflation trend over the last two years, costs are now outpacing our mitigation efforts. The Mexican Peso has strengthened to a seven year high against the US dollar, which is impacting costs across our operations,” stated Dan Dickson, Chief Executive Officer. “Originally, our 2023 guidance had assumed a 20:1 Mexican Peso per US dollar exchange rate; however the current rate is just under 17:1; representing a 14% increase. Our bottom line has been impacted two-fold, through both inflation and foreign exchange. Cost control will continue to be a key focus for the operations group as cost pressures are expected to continue for the remainder of the year.”
Q2 2023 Highlights
- Production Tracking In-Line with Guidance: 1,494,000 ounces (oz) of silver and 9,819 oz of gold for 2.3 million oz silver equivalent (AgEq)(1) totalling 4.7 million oz AgEq for the first half of the year.
- Revenue: $50.0 million from the sale of 1,299,672 oz of silver and 9,883 oz of gold at average realized prices of $24.13 per oz silver and $1,976 per oz gold.
- Cash Flow: $11.1 million in operating cash flow before working capital changes(2) and $18.8 million in Mine operating cash flow before taxes(2) .
- Negative Earnings due to Non-Cash Item: Net loss of $1.1 million, or $0.01 per share. Adjusted earnings of $2.1 million(2) after adjusting for a $3.2 million change in the fair value of investments.
- Higher Costs Due to Strengthened Peso and Industry-Wide Inflation: Cash costs(2) of $13.52 per oz payable silver and all-in sustaining costs(2) of $22.15 per oz payable silver, net of gold credits. Costs were impacted by both inflationary pressures and a strengthened Mexican Peso. During the year, the Mexican Peso has appreciated by 14%. Cash cost and all-in-sustaining costs metrics were also impacted by lower silver grades at Guanacevi due to changes in mine sequencing. It is expected that grades will return to plan in Q3.
- Management Continues to Monitor Macroeconomic Conditions Closely: Management anticipates these macro trends will continue for the near term and therefore expects actual cost metrics to be higher than cost metrics previously provided in the Company’s 2023 guidance. Management anticipates costs to align to similar levels with H1 2023 actual cost metrics of $12.27 per oz for cash cost and $21.11 per oz for AISC.
- Healthy Balance Sheet: Cash position of $43.5 million and working capital(2) of $78.2 million. Cash decreased as funds were spent on development activities at Terronera.
- Metal Inventory: Finished goods totaled 637,439 oz silver and 1,519 oz gold bullion inventory.
- Construction and Development Update at Terronera: The Company has made significant progress on development activities, with overall construction progress 30% complete. The project remains on schedule for initial production in Q4 2024. (see news release dated July 20, 2023)
- Terronera Debt Financing: Completion of the definitive loan documentation for the $120 million senior secured debt facility remains on track for execution in Q3 (see news release dated April 18, 2023).
- Filed At-The-Market Prospectus Supplement for up to US$60 million: Proceeds to be used for funding development of the Terronera mine, and other growth initiatives including the Pitarrilla and Parral properties as well as prospective acquisitions and general working capital purposes (see news release dated June 27, 2023)
Financial Overview (see appendix for consolidated financial statements)
| Three Months Ended June 30 | Q2 2023 Highlights | Six Months Ended June 30 | ||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | % Change | 2023 | 2022 | % Change |
Production
| 1,494,000 | 1,359,207 | 10% | Silver ounces produced | 3,117,545 | 2,674,162 | 17% |
| 9,819 | 9,289 | 6% | Gold ounces produced | 19,161 | 17,984 | 7% |
| 1,482,255 | 1,346,276 | 10% | Payable silver ounces produced | 3,090,467 | 2,649,816 | 17% |
| 9,636 | 9,117 | 6% | Payable gold ounces produced | 18,820 | 17,666 | 7% |
| 2,279,520 | 2,102,327 | 8% | Silver equivalent ounces produced(1) | 4,650,425 | 4,112,882 | 13% |
| 13.52 | 10.08 | 34% | Cash costs per silver ounce(2)(3) | 12.27 | 10.14 | 21% |
| 18.54 | 14.26 | 30% | Total production costs per ounce(2)(4) | 16.92 | 14.69 | 15% |
| 22.15 | 19.56 | 13% | All-in sustaining costs per ounce (2)(5) | 21.11 | 20.22 | 4% |
| 228,575 | 201,361 | 14% | Processed tonnes | 439,648 | 407,508 | 8% |
| 138.16 | 132.63 | 4% | Direct operating costs per tonne(2)(6) | 135.26 | 127.69 | 6% |
| 169.59 | 148.11 | 15% | Direct costs per tonne(2)(6) | 169.54 | 148.32 | 14% |
| 16.96 | 14.12 | 20% | Silver co-product cash costs(7) | 15.90 | 14.74 | 8% |
| 1,367 | 1,144 | 19% | Gold co-product cash costs(7) | 1,303 | 1,169 | 11% |
Financial
| 50.0 | 30.8 | 62% | Revenue ($ millions) | 105.5 | 88.5 | 19% |
| 1,299,672 | 602,894 | 116% | Silver ounces sold | 2,967,080 | 2,320,662 | 28% |
| 9,883 | 9,792 | 1% | Gold ounces sold | 19,009 | 18,173 | 5% |
| 24.27 | 22.72 | 7% | Realized silver price per ounce | 23.65 | 23.95 | (1%) |
| 1,955 | 1,840 | 6% | Realized gold price per ounce | 1,937 | 1,900 | 2% |
| (1.1) | (11.9) | 91% | Net earnings (loss) ($ millions) | 5.4 | (0.3) | 2170% |
| 2.1 | (4.3) | 149% | Adjusted net earnings (loss) (11) ($ millions) | 5.5 | 2.0 | 172% |
| 12.5 | 4.5 | 180% | Mine operating earnings ($ millions) | 28.6 | 24.7 | 15% |
| 18.8 | 8.8 | 115% | Mine operating cash flow before taxes ($ millions) (8) | 41.3 | 35.5 | 16% |
| 11.5 | 3.6 | 207% | Operating cash flow before working capital changes(9) | 23.6 | 24.2 | (3%) |
| 11.4 | (4.3) | 365% | EBITDA(10) ($ millions) | 30.8 | 21.3 | 45% |
| 78.2 | 149.7 | (48%) | Working capital (12) ($ millions) | 78.2 | 149.7 | (48%) |
Shareholders
| (0.01) | (0.07) | 86% | Earnings (loss) per share – basic ($) | 0.03 | 0.00 | 100% |
| 0.01 | (0.02) | 146% | Adjusted earnings (loss) per share – basic ($)(11) | 0.03 | 0.01 | 151% |
| 0.06 | 0.02 | 190% | Operating cash flow before working capital changes per share(9) | 0.12 | 0.14 | (10%) |
| 191,446,597 | 180,974,609 | 6% | Weighted average shares outstanding | 190,867,192 | 176,291,929 | 8% |
(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 June 30, 2023, revenue, increased by 62% to $50.0 million (Q2 2022: $30.8 million).
Gross sales of $50.9 million in Q2 2023 represented a 61% increase over the $31.7 million in Q2 2022. Silver oz sold increased 116% due to both increased production and the impact of withholding of a significant amount of silver finished goods inventory during Q2, 2022. There was a 7% increase in the realized silver price resulting in a 131% increase in proceeds from silver sales. Gold oz sold increased 1% with a 6% increase in realized gold prices resulting in a 7% increase in proceeds from gold sales. During Q2, 2023 the Company sold 1,299,672 oz silver and 9,883 oz gold, for realized prices of $24.27 and $1,955 per oz, respectively, compared to sales of 602,894 oz silver and 9,792 oz gold, for realized prices of $22.72 and $1,840 per oz, respectively, in the same period of 2022. In Q2, 2023, London spot prices averaged $24.13 and $1,976, respectively
The Company increased its finished goods to 637,439 oz silver and slightly decreased its finished goods gold inventory to 1,519 oz gold at June 30, 2023 compared to 530,250 oz silver and 1,707 oz gold at December 31, 2022. The cost allocated to these finished goods was $13.8 million as at June 30, 2023, compared to $7.4 million at March 31, 2023. At June 30, 2023, the finished goods inventory fair market value was $17.6 million, compared to $14.7 million at March 31, 2023.
After cost of sales of $37.5 million (Q2 2022 - $26.3 million), an increase of 43%, mine operating earnings were $12.5 million (Q2 2022 - $4.5 million). The increase in the cost of sales compared to the prior period was driven by significantly higher silver ounces sold in the current period, a strengthened Mexican peso and higher labour, power and consumables costs as the Company, as well as the industry, has experienced significant inflationary pressures. Additionally, the Company incurred increased royalty costs during Q2, 2023 compared to the prior period,
The Company had operating earnings of $5.4 million (Q2 2022: operating loss of $1.3 million) after exploration and evaluation costs of $4.3 million (Q2 2022: $3.8 million), general and administrative costs of $2.4 million (Q2 2022: $1.3 million) and a write off of exploration properties of $0.4 million (Q2, 2022 - $0.5 million).
Earnings before income taxes was $4.2 million (Q2 2022: loss before taxes of $8.8 million) after finance costs of $0.4 million (Q2 2022: $0.3 million), a foreign exchange gain of $1.9 million (Q2 2022: loss of $0.3 million), and investment and other expense of $2.7 million (Q2 2022: $6.9 million). The investment and other expenses during Q2 2023 primarily resulted from an unrealized loss on marketable securities and warrants of $3.2 million (Q2 2022: $7.6 million).
The Company realized a net loss for the period of $1.1 million (Q2 2022: $11.9 million) after an income tax expense of $5.2 million (Q2 2022: $3.1 million). Current income tax expense increased to $4.4 million (Q2 2022 - $1.3 million) due to increased profitability impacting the income tax and special mining duty, while deferred income tax expense of $0.8 million is derived from changes in temporary timing differences between deductions for accounting versus deductions for tax (Q2 2022 – $1.8 million).
Direct operating costs(2) on a per tonne basis increased to $138.16, up 4% compared with Q2 2022 due to both a strengthening of the Mexican peso and higher operating costs at both Guanacevi and Bolanitos from inflationary pressure during 2022 and the first half of 2023. As the Mexican peso strengthens, the Company’s Mexican peso denominated costs are increased in US dollar terms. Guanacevi and Bolanitos have seen increased labour, power and consumables costs.
Consolidated cash costs per oz(2), net of by-product credits, increased to $13.52 primarily driven by an increase in direct operating costs, an increase in royalties and special mining duties, partially offset by an increase in by-product gold sales and increased silver production. AISC(2) decreased by 4% on a per oz basis compared to Q2 2022 due to the increase in cash costs and an increase in allocated corporate general and administrative expenses partially offset by increased silver production and slightly lower sustaining capital expenditures.
Management anticipates these macro trends will continue for the near term and therefore expects actual cost metrics to be higher than cost metrics previously provided in the Company’s 2023 guidance. Management anticipates costs to align to similar levels with H1 2023 actual cost metrics.
The complete financial statements and management’s discussion & analysis can be viewed on the Company’s website, on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. All shareholders can receive a hard copy of the Company’s complete audited financial statements free of charge upon request. To receive this material in hard copy, please contact Investor Relations at 604-640-4804, toll free at 1-877-685-9775 or by email at [email protected].
Conference Call
A conference call to discuss the Company’s Q2 2023 financial results will be held today at 10:00 a.m. PT / 1:00 p.m. ET. To participate in the conference call, please dial the numbers below.
Date & Time: Tuesday, August 8, 2023 at 10:00 a.m. PT / 1:00 p.m. ET
Telephone: Toll-free in Canada and the US +1-800-319-4610 Local or International +1-604-638-5340 Please allow up to 10 minutes to be connected to the conference call.
Replay: A replay of the conference call will be available by dialing (toll-free) +1-800-319-6413 in Canada and the US (toll-free) or +1-604-638-9010 outside of Canada and the US. The replay passcode is 0279#. The replay will also be available on the Company’s website at www.edrsilver.com.
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.
SOURCE Endeavour Silver Corp.
Contact Information
Galina Meleger, Vice President of Investor Relations Tel: (604)640-4804 Email: [email protected] Website: www.edrsilver.com
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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 June 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 June 30, 2023 MD&A available on SEDAR at www.sedar.com.
Reconciliation of Working Capital
| Expressed in thousands US dollars | As at June 30, 2023 | As at December 31, 2022 |
|---|---|---|
| Current assets | $ 126,678 | $ 146,333 |
| Current liabilities | 48,439 | 52,749 |
| Working capital | $ 78,239 | $ 93,584 |
Reconciliation of Adjusted Net Earnings (Loss) and Adjusted Net Earnings (Loss) Per Share
| Expressed in thousands US dollars (except for share numbers and per share amounts) | Three Months Ended June 30 | Six Months Ended June 30 | ||
|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |
| Net earnings (loss) for the period per financial statements | $ (1,054) | $ (11,923) | $ 5,402 | $ (261) |
| Change in fair value of investments | 3,150 | 7,626 | 53 | 2,269 |
| Adjusted net earnings (loss) | $ 2,096 | $ (4,297) | $ 5,455 | $ 2,008 |
| Basic weighted average share outstanding | 191,446,597 | 180,974,609 | 190,867,192 | 176,291,929 |
| Adjusted net earnings (loss) per share | $ 0.01 | $ (0.02) | $ 0.03 | $ 0.01 |
Reconciliation of Mine Operating Cash Flow Before Taxes
| Expressed in thousands US dollars | Three Months Ended June 30 | Six Months Ended June 30 | ||
|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |
| Mine operating earnings per financial statements | $ 12,542 | $ 4,472 | $ 28,567 | $ 24,741 |
| Share-based compensation | (294) | 113 | (162) | 240 |
| Amortization and depletion | 6,596 | 4,175 | 12,849 | 10,481 |
| Mine operating cash flow before taxes | $ 18,844 | $ 8,760 | $ 41,254 | $ 35,462 |
Reconciliation of Operating Cash Flow Before Working Capital Changes and Operating Cash Flow Before Working Capital Changes Per Share
| Expressed in thousands US dollars (except for per share amounts) | Three Months Ended June 30 | Six Months Ended June 30 | ||
|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |
| Cash from (used in) operating activities per financial statements | $ 4,853 | $ (18,548) | $ 4,452 | $ 3,185 |
| Net changes in non-cash working capital per financial statements | (6,606) | (22,160) | (19,508) | (21,046) |
| Operating cash flow before working capital changes | $ 11,459 | $ 3,612 | $ 23,960 | $ 24,231 |
| Basic weighted average shares outstanding | 191,446,597 | 180,974,609 | 190,867,192 | 176,291,929 |
| Operating cash flow before working capital changes per share | $ 0.06 | $ 0.02 | $ 0.13 | $ 0.14 |
Reconciliation of EBITDA and Adjusted EBITDA
| Expressed in thousands US dollars | Three Months Ended June 30 | Six Months Ended June 30 | ||
|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |
| Net earnings (loss) for the period per financial statements | $ (1,054) | $ (11,923) | $ 5,402 | $ (261) |
| Depreciation and depletion – cost of sales | 6,596 | 4,175 | 12,849 | 10,481 |
| Depreciation and depletion – exploration | 317 | 98 | 595 | 205 |
| Depreciation and depletion – general & administration | 54 | 51 | 116 | 99 |
| Depreciation and depletion – care & maintenance | - | 30 | - | 60 |
| Finance costs | 229 | 212 | 488 | 389 |
| Current income tax expense | 4,442 | 1,325 | 8,887 | 2,340 |
| Deferred income tax expense | 766 | 1,752 | 2,442 | 7,974 |
| EBITDA | $ 11,350 | $ (4,280) | $ 30,779 | $ 21,287 |
| Share based compensation | 416 | 972 | 2,041 | 2,499 |
| Change in fair value of investments | 3,150 | 7,626 | 53 | 2,269 |
| Adjusted EBITDA | $ 14,916 | $ 4,318 | $ 32,873 | $ 26,055 |
| Basic weighted average shares outstanding | 191,446,597 | 180,974,609 | 190,867,192 | 176,291,929 |
| Adjusted EBITDA per share | $ 0.08 | $ 0.02 | $ 0.17 | $ 0.15 |
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 June 30, 2023 | Three Months Ended June 30, 2022 | ||||
|---|---|---|---|---|---|---|
| Guanaceví | Bolañitos | Total | Guanaceví | Bolañitos | Total | |
| Direct production costs per financial statements | $ 14,878 | $ 10,600 | $ 25,478 | $ 7,797 | $ 12,031 | $ 19,828 |
| Smelting and refining costs included in net revenue | - | 795 | 795 | - | 937 | 937 |
| Opening finished goods | (4,848) | (1,063) | (5,911) | (7,908) | (2,995) | (10,903) |
| Closing finished goods | 10,257 | 962 | 11,219 | 16,164 | 681 | 16,845 |
| Direct operating costs | 20,287 | 11,294 | 31,581 | 16,053 | 10,654 | 26,707 |
| Royalties | 5,679 | 70 | 5,749 | 2,128 | 66 | 2,194 |
| Special mining duty (1) | 1,224 | 209 | 1,433 | 795 | 127 | 922 |
| Direct costs | 27,190 | 11,573 | 38,763 | 18,976 | 10,847 | 29,823 |
| By-product gold sales | (8,469) | (10,853) | (19,322) | (5,719) | (12,302) | (18,021) |
| Opening gold inventory fair market value | 2,500 | 995 | 3,495 | 3,724 | 3,763 | 7,487 |
| Closing gold inventory fair market value | (1,629) | (1,268) | (2,897) | (4,662) | (1,061) | (5,723) |
| Cash costs net of by-product | 19,592 | 447 | 20,039 | 12,319 | 1,247 | 13,566 |
| Amortization and depletion | 3,381 | 3,215 | 6,596 | 940 | 3,235 | 4,175 |
| Share-based compensation | (147) | (147) | (294) | 57 | 56 | 113 |
| Opening finished goods depreciation and depletion | (1,115) | (355) | (1,470) | (1,689) | (897) | (2,586) |
| Closing finished goods depreciation and depletion | 2,318 | 288 | 2,606 | 3,733 | 199 | 3,932 |
| Total production costs | $ 24,029 | $ 3,448 | $ 27,477 | $ 15,360 | $ 3,840 | $ 19,200 |
| Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | |||||
|---|---|---|---|---|---|---|
| Guanaceví | Bolañitos | Total | Guanaceví | Bolañitos | Total | |
| Throughput tonnes | 116,908 | 111,667 | 228,575 | 94,017 | 107,344 | 201,361 |
| Payable silver ounces | 1,348,366 | 133,889 | 1,482,255 | 1,190,568 | 155,708 | 1,346,276 |
| Cash costs per silver ounce | $ 14.53 | $ 3.34 | $ 13.52 | $ 10.35 | $ 8.01 | $ 10.08 |
| Total production costs per ounce | $ 17.82 | $ 25.75 | $ 18.54 | $ 12.90 | $ 24.66 | $ 14.26 |
| Direct operating costs per tonne | $ 173.53 | $ 101.14 | $ 138.16 | $ 170.75 | $ 99.25 | $ 132.63 |
| Direct costs per tonne | $ 232.58 | $ 103.64 | $ 169.59 | $ 201.84 | $ 101.05 | $ 148.11 |
| Expressed in thousands US dollars | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | ||||
|---|---|---|---|---|---|---|
| Guanaceví | Bolañitos | Total | Guanaceví | Bolañitos | Total | |
| Direct production costs per financial statements | $ 33,023 | $ 18,971 | $ 51,994 | $ 25,681 | $ 20,868 | $ 46,549 |
| Smelting and refining costs included in net revenue | - | 1,451 | 1,451 | - | 1,591 | 1,591 |
| Opening finished goods | (4,953) | (245) | (5,198) | (10,093) | (2,857) | (12,950) |
Closing finished goods 10,257 962 11,219 16,164 681 16,845
| Direct operating costs | 38,327 | 21,139 | 59,466 | 31,752 | 20,283 | 52,035 |
| Royalties | 12,150 | 134 | 12,284 | 6,362 | 149 | 6,511 |
| Special mining duty (1) | 2,494 | 294 | 2,788 | 1,526 | 371 | 1,897 |
| Direct costs | 52,971 | 21,567 | 74,538 | 39,640 | 20,803 | 60,443 |
| By-product gold sales | (16,902) | (19,917) | (36,819) | (10,741) | (23,790) | (34,531) |
| Opening gold inventory fair market value | 2,740 | 354 | 3,094 | 1,900 | 4,784 | 6,684 |
| Closing gold inventory fair market value | (1,629) | (1,268) | (2,897) | (4,662) | (1,061) | (5,723) |
| Cash costs net of by-product | 37,180 | 736 | 37,916 | 26,137 | 736 | 26,873 |
| Amortization and depletion | 6,855 | 5,994 | 12,849 | 4,850 | 5,631 | 10,481 |
| Share-based compensation | (81) | (81) | (162) | 120 | 120 | 240 |
| Opening finished goods depreciation and depletion | (862) | (60) | (922) | (1,965) | (635) | (2,600) |
| Closing finished goods depreciation and depletion | 2,318 | 288 | 2,606 | 3,733 | 199 | 3,932 |
| Total production costs | $ 45,410 | $ 6,877 | $ 52,287 | $ 32,875 | $ 6,051 | $ 38,926 |
| Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | |||||
|---|---|---|---|---|---|---|
| Guanaceví | Bolañitos | Total | Guanaceví | Bolañitos | Total | |
| Throughput tonnes | 219,283 | 220,365 | 439,648 | 195,270 | 212,238 | 407,508 |
| Payable silver ounces | 2,783,970 | 306,497 | 3,090,467 | 2,321,016 | 328,800 | 2,649,816 |
| Cash costs per silver ounce | $ 13.36 | $ 2.40 | $ 12.27 | $ 11.26 | $ 2.24 | $ 10.14 |
| Total production costs per ounce | $ 16.31 | $ 22.44 | $ 16.92 | $ 14.16 | $ 18.40 | $ 14.69 |
| Direct operating costs per tonne | $ 174.78 | $ 95.93 | $ 135.26 | $ 162.61 | $ 95.57 | $ 127.69 |
| Direct costs per tonne | $ 241.56 | $ 97.87 | $ 169.54 | $ 203.00 | $ 98.02 | $ 148.32 |
| Expressed in thousands US dollars | June 30, 2023 June 30, 2022 | |||||
|---|---|---|---|---|---|---|
| Guanaceví | Bolañitos | Total | Guanaceví | Bolañitos | Total | |
| Closing finished goods | 10,257 | 962 | 11,219 | 16,164 | 681 | 16,845 |
| Closing finished goods depletion | 2,318 | 288 | 2,606 | 3,733 | 199 | 3,932 |
| Finished goods inventory | $12,575 | $1,250 | $13,825 | $19,897 | $880 | $20,777 |
Reconciliation of All-In Costs Per Ounce and AISC per ounce
| Expressed in thousands US dollars | Three Months Ended June 30, 2023 Three Months Ended June 30, 2022 | |||||
|---|---|---|---|---|---|---|
| Guanaceví | Bolañitos | Total | Guanaceví | Bolañitos | Total | |
| Cash costs net of by-product | $ 19,592 | $ 447 | $ 20,039 | $ 12,319 | $ 1,247 | $ 13,566 |
| Operations share-based compensation | (147) | (147) | (294) | 57 | 56 | 113 |
| Corporate general and administrative | 1,228 | 477 | 1,705 | 401 | 155 | 556 |
| Corporate share-based compensation | 430 | 169 | 599 | 527 | 214 | 741 |
| Reclamation - amortization/accretion | 79 | 66 | 145 | 69 | 53 | 122 |
| Mine site expensed exploration | 327 | 350 | 677 | 360 | 308 | 668 |
| Intangible payments | - | - | - | - | - | - |
| Equipment loan payments | 245 | 489 | 734 | 246 | 488 | 734 |
| Capital expenditures sustaining | 6,300 | 2,920 | 9,220 | 7,050 | 2,788 | 9,838 |
| All-In-Sustaining Costs | $ 28,054 | $ 4,771 | $ 32,825 | $ 21,028 | $ 5,310 | $ 26,338 |
| Growth exploration and evaluation | 3,253 | 2,901 | ||||
| Growth capital expenditures | 14,644 | 5,613 | ||||
| All-In-Costs | $ 50,722 | $ 34,852 |
| Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | |||||
|---|---|---|---|---|---|---|
| Guanaceví | Bolañitos | Total | Guanaceví | Bolañitos | Total | |
| Throughput tonnes | 116,908 | 111,667 | 228,575 | 94,017 | 107,344 | 201,361 |
| Payable silver ounces | 1,348,366 | 133,889 | 1,482,255 | 1,190,568 | 155,708 | 1,346,276 |
| Silver equivalent production (ounces) | 1,663,223 | 616,297 | 2,279,520 | 1,488,550 | 613,777 | 2,102,327 |
Sustaining cost per ounce $ 20.81 $ 35.64 $ 22.15 $ 17.66 $ 34.10 $ 19.56 All-In-costs per ounce $ 34.22 $ 25.89
| Expressed in thousands US dollars | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | ||||
|---|---|---|---|---|---|---|
| Guanaceví | Bolañitos | Total | Guanaceví | Bolañitos | Total | |
| Cash costs net of by-product | $ 37,180 | $ 736 | $ 37,916 | $ 26,137 | $ 736 | $ 26,873 |
| Operations share-based compensation | (81) | (81) | (162) | 120 | 120 | 240 |
| Corporate general and administrative | 3,844 | 1,355 | 5,199 | 2,468 | 1,031 | 3,499 |
| Corporate share-based compensation | 1,449 | 511 | 1,960 | 1,444 | 603 | 2,047 |
| Reclamation - amortization/accretion | 158 | 128 | 286 | 134 | 106 | 240 |
| Mine site expensed exploration | 706 | 663 | 1,369 | 712 | 558 | 1,270 |
| Intangible payments | - | - | - | 29 | 12 | 41 |
| Equipment loan payments | 490 | 976 | 1,466 | 491 | 977 | 1,468 |
| Capital expenditures sustaining | 11,990 | 5,221 | 17,211 | 12,696 | 5,214 | 17,910 |
| All-In-Sustaining Costs | $ 55,736 | $ 9,509 | $ 65,245 | $ 44,230 | $ 9,358 | $ 53,588 |
| Growth exploration and evaluation | 6,316 | 5,314 | ||||
| Growth capital expenditures | 27,370 | 10,538 | ||||
| All-In-Costs | $ 98,931 | $ 69,440 |
| Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | |||||
|---|---|---|---|---|---|---|
| Guanaceví | Bolañitos | Total | Guanaceví | Bolañitos | Total | |
| Throughput tonnes | 219,283 | 220,365 | 439,648 | 195,270 | 212,238 | 407,508 |
| Payable silver ounces | 2,783,970 | 306,497 | 3,090,467 | 2,321,016 | 328,800 | 2,649,816 |
| Silver equivalent production (ounces) | 3,438,187 | 1,212,238 | 4,650,425 | 2,900,560 | 1,212,322 | 4,112,882 |
| Sustaining cost per ounce | $ 20.02 | $ 31.03 | $ 21.11 | $ 19.06 | $ 28.46 | $ 20.22 |
| All-In-costs per ounce | $ 32.01 | $ 26.21 |
Reconciliation of Sustaining Capital and Growth Capital
| Expressed in thousands US dollars | Three Months Ended June 30 | Six Months Ended June 30 | ||
|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |
| Capital expenditures sustaining | $ 9,220 | $ 9,838 | $ 17,211 | $ 17,910 |
| Growth capital expenditures | 14,644 | 5,613 | 27,370 | 10,538 |
| Property, plant and equipment expenditures per Consolidated Statement of Cash Flows | $ 23,864 | $ 15,451 | $ 44,581 | $ 28,448 |
Reconciliation of Silver Co-Product Cash Costs and Gold Co-Product Cash Costs
| Expressed in thousands US dollars | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | ||||
|---|---|---|---|---|---|---|
| Guanaceví | Bolañitos | Total | Guanaceví | Bolañitos | Total | |
| Direct production costs per financial statements | $ 14,878 | $ 10,600 | $ 25,478 | $ 7,797 | $ 12,031 | $ 19,828 |
| Smelting and refining costs included in net revenue | - | 795 | 795 | - | 937 | 937 |
| Royalties | 5,679 | 70 | 5,749 | 2,128 | 66 | 2,194 |
| Special mining duty (1) | 1,224 | 209 | 1,433 | 795 | 127 | 922 |
| Opening finished goods | (4,848) | (1,063) | (5,911) | (7,908) | (2,995) | (10,903) |
| Closing finished goods | 10,257 | 962 | 11,219 | 16,164 | 681 | 16,845 |
| Direct costs | $ 27,190 | $ 11,573 | $ 38,763 | $ 18,976 | $ 10,847 | $ 29,823 |
| Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | |||||
|---|---|---|---|---|---|---|
| Guanaceví | Bolañitos | Total | Guanaceví | Bolañitos | Total | |
| Silver production (ounces) | 1,352,423.00 | 141,577 | 1,494,000 | 1,194,150 | 165,057 | 1,359,207 |
Average realized silver price 24.27 24.27 24.27 22.72 22.72 22.72 ($)
| Silver value ($) | 32,823,265 | 3,436,069 | 36,259,335 | 27,131,088 | 3,750,095 | 30,881,183 |
| Gold production (ounces) | 3,885 | 5,934 | 9,819 | 3,680 | 5,609 | 9,289 |
| Average realized gold price ($) | 1,955 | 1,955 | 1,955 | 1,840 | 1,840 | 1,840 |
| Gold value ($) | 7,595,464 | 11,601,411 | 19,196,875 | 6,771,200 | 10,320,560 | 17,091,760 |
| Total metal value ($) | 40,418,729 | 15,037,481 | 55,456,210 | 33,902,288 | 14,070,655 | 47,972,943 |
| Pro-rated silver costs (%) | 81% | 23% | 65% | 80% | 27% | 64% |
| Pro-rated gold costs (%) | 19% | 77% | 35% | 20% | 73% | 36% |
| Pro-rated silver costs ($) | 22,080 | 2,644 | 25,345 | 15,186 | 2,891 | 19,198 |
| Pro-rated gold costs ($) | 5,110 | 8,929 | 13,418 | 3,790 | 7,956 | 10,625 |
| Silver co-product cash costs ($) | 16.33 | 18.68 | 16.96 | 12.72 | 17.51 | 14.12 |
| Gold co-product cash costs ($) | 1,315 | 1,505 | 1,367 | 1,030 | 1,418 | 1,144 |
| Expressed in thousands US dollars | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | ||||
|---|---|---|---|---|---|---|
| Guanaceví | Bolañitos | Total | Guanaceví | Bolañitos | Total | |
| Direct production costs per financial statements | $ 33,023 | $ 18,971 | $ 51,994 | $ 25,681 | $ 20,868 | $ 46,549 |
| Smelting and refining costs included in net revenue | - | $ 1,451 | $ 1,451 | - | 1,591 | 1,591 |
| Royalties | 12,150 | 134 | 12,284 | 6,362 | 149 | 6,511 |
| Special mining duty (1) | 2,494 | 294 | 2,788 | 1,526 | 371 | 1,897 |
| Opening finished goods | (4,953) | (245) | (5,198) | (10,093) | (2,857) | (12,950) |
| Finished goods NRV adjustment | - | - | - | - | - | 0 |
| Closing finished goods | 10,257 | 962 | 11,219 | 16,164 | 681 | 16,845 |
| Direct costs | 52,971 | 21,567 | 74,538 | 39,640 | 20,803 | 60,443 |
| Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | |||||
|---|---|---|---|---|---|---|
| Guanaceví | Bolañitos | Total | Guanaceví | Bolañitos | Total | |
| Silver production (ounces) | 2,792,347 | 325,198 | 3,117,545 | 2,328,000 | 346,162 | 2,674,162 |
| Average realized silver price ($) | 23.65 | 23.65 | 23.65 | 23.95 | 23.95 | 23.95 |
| Silver value ($) | 66,031,062 | 7,690,007 | 73,721,069 | 55,755,600 | 8,290,580 | 64,046,180 |
| Gold production (ounces) | 8,073 | 11,088 | 19,161 | 7,157 | 10,827 | 17,984 |
| Average realized gold price ($) | 1,937 | 1,937 | 1,937 | 1,900 | 1,900 | 1,900 |
| Gold value ($) | 15,636,792 | 21,476,620 | 37,113,413 | 13,598,300 | 20,571,300 | 34,169,600 |
| Total metal value ($) | 81,667,854 | 29,166,628 | 110,834,482 | 69,353,900 | 28,861,880 | 98,215,780 |
| Pro-rated silver costs (%) | 81% | 26% | 67% | 80% | 29% | 65% |
| Pro-rated gold costs (%) | 19% | 74% | 33% | 20% | 71% | 35% |
| Pro-rated silver costs ($) | 42,829 | 5,686 | 49,579 | 31,868 | 5,976 | 39,415 |
| Pro-rated gold costs ($) | 10,142 | 15,881 | 24,959 | 7,772 | 14,827 | 21,028 |
| Silver co-product cash costs ($) | 15.34 | 17.49 | 15.90 | 13.69 | 17.26 | 14.74 |
| Gold co-product cash costs ($) | 1,256 | 1,432 | 1,303 | 1,086 | 1,369 | 1,169 |
Reconciliation of Realized Silver Price Per Ounce and Realized Gold Price Per Ounce
| Expressed in thousands US dollars | Three Months Ended June 30 | Six Months Ended June 30 | ||
|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |
| Gross silver sales | $ 31,543 | $ 13,698 | $ 70,163 | $ 55,582 |
| Silver ounces sold | 1,299,672 | 602,894 | 2,967,080 | 2,320,662 |
| Realized silver price per ounces | $ 24.27 | $ 22.72 | $ 23.65 | $ 23.95 |
| Expressed in thousands US dollars | Three Months Ended June 30 | Six Months Ended June 30 | ||
|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |
| Gross gold sales Gold ounces sold | $ 19,322 | $ 18,021 | $ 36,819 | $ 34,531 |
| 9,883 | 9,792 | 19,009 | 18,173 | |
| Realized gold price per ounces | $ 1,955 | $ 1,840 | $ 1,937 | $ 1,900 |
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 Project progress and timeline 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 Bank N.V.’s due diligence requirements in connection with the Terronera Project financing; the final terms of the financing and the Company’s ability to successfully drawdown funds thereunder; 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 Six months ended June 30, June 30, June 30, June 30, 2023 2022 2023 2022
Revenue $ 30,782 $88,522
$50,071 $105,532
Cost of sales:
| Direct production costs | 25,478 | 19,828 | 51,994 | 46,549 |
| Royalties | 5,749 | 2,194 | 12,284 | 6,511 |
| Share-based payments | (294) | 113 | (162) | 240 |
| Depreciation, depletion and amortization | 6,596 | 4,175 | 12,849 | 10,481 |
37,529 26,310 76,965 63,781
Mine operating earnings 4,472 24,741
12,542 28,567
Expenses:
| Exploration and evaluation | 4,359 | 3,784 | 8,523 | 7,000 |
| General and administrative | 2,358 | 1,348 | 7,275 | 5,645 |
| Care and maintenance costs | - | 189 | - | 379 |
| Write off of mineral properties | 435 | 500 | 435 | 500 |
| 7,152 | 5,821 | 16,233 | 13,524 | |
| Operating earnings (loss) | 5,390 | (1,349) | 12,334 | 11,217 |
| Finance costs | 374 | 336 | 774 | 634 |
Other income (expense):
| Foreign exchange gain (loss) | 1,855 | (289) | 3,744 | 522 |
| Gain on asset disposal | 5 | - | 67 | - |
| Investment and other | (2,722) | (6,872) | 1,360 | (1,052) |
| (862) | (7,161) | 5,171 | (530) | |
| Earnings (loss) before income taxes | 4,154 | (8,846) | 16,731 | 10,053 |
Income tax expense:
| Current income tax expense | 4,442 | 1,325 | 8,887 | 2,340 |
| Deferred income tax expense | 766 | 1,752 | 2,442 | 7,974 |
| 5,208 | 3,077 | 11,329 | 10,314 | |
| Net earnings (loss) and comprehensive earnings for the period | $(11,923) | $ (261) |
$ (1,054) $ 5,402
| Basic earnings (loss) per share based on net earnings | $ (0.01) | $ (0.07) | $ | 0.03 | (0.00) | ||
| Diluted earnings (loss) per share based on net earnings | $ (0.01) | $ (0.07) | $ | 0.03 | (0.00) | ||
| Basic weighted average number of shares outstanding | 191,446,597180,974,609 | 190,867,192176,291,929 | |||||
| Diluted weighted average number of shares outstanding | 191,446,597184,569,970 | 192,811,731179,018,499 |
ENDEAVOUR SILVER CORP.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION (unaudited – prepared by management)
(expressed in thousands of US dollars)
June 30, December 31, 2023 2022
ASSETS
Current assets
| Cash and cash equivalents | $ 43,504 | $ 83,391 |
| Other investments | 8,136 | 8,647 |
| Accounts and other receivables | 17,567 | 13,136 |
| Income tax receivable | 166 | 4,024 |
| Inventories | 30,531 | 19,184 |
| Prepaid expenses | 25,524 | 16,951 |
| Loans receivable | 1,250 | 1,000 |
| Total current assets | 126,678 | 146,333 |
| Non-current deposits | 660 | 565 |
| Non-current income tax receivable | 3,570 | 3,570 |
| Non-current other investments | - | 1,388 |
| Non-current IVA receivable | 14,695 | 10,154 |
| Non-current loans receivable | 2,186 | 2,729 |
| Right-of-use leased assets | 914 | 806 |
| Mineral properties, plant and equipment | 256,307 | 233,892 |
| Total assets | $ 405,010 | $ 399,437 |
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
| Accounts payable and accrued liabilities | $ 35,719 | $ 39,831 |
| Income taxes payable | 7,289 | 6,616 |
| Loans payable | 5,000 | 6,041 |
| Lease liabilities | 431 | 261 |
| Total current liabilities | 48,439 | 52,749 |
| Loans payable | 6,361 | 8,469 |
| Lease liabilities | 810 | 812 |
| Provision for reclamation and rehabilitation | 9,574 | 7,601 |
| Deferred income tax liability | 15,386 | 12,944 |
| Other non-current liabilities | 1,063 | 968 |
| Total liabilities | 81,633 | 83,543 |
Shareholders' equity Common shares, unlimited shares authorized, no par value, issued, issuable and outstanding 191,505,299 shares (Dec 31, 2022 - 189,995,563 shares) 657,866
662,029
| Contributed surplus | 3,793 | 6,115 |
| Retained earnings (deficit) | (342,445) | (348,087) |
| Total shareholders' equity | 323,377 | 315,894 |
| Total liabilities and shareholders' equity | $ 405,010 | $ 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 Six months ended June 30, June 30, June 30, June 30, 2023 2022 2023 2022
Operating activities
Net earnings (loss) for the period $ (1,054) $ (11,923) $ 5,402 $ (261)
Items not affecting cash:
| Share-based compensation | 415 | 972 | 2,040 | 2,499 |
| Depreciation, depletion and amortization | 6,973 | 4,324 | 13,592 | 10,786 |
| Writte off of exploration properties | 435 | 500 | 435 | 500 |
| Deferred income tax expense | 766 | 1,752 | 2,442 | 7,974 |
| Unrealized foreign exchange loss (gain) | 519 | - (84) | 1,614 | - (220) |
| Finance costs | 374 | 336 | 774 | 634 |
| Accretion of loans receivable | (114) | - | (207) | - |
| Loss (gain) on asset disposal | (5) | 105 | (67) | 46 |
| Loss on other investments | 3,150 | 7,626 | 53 | 2,269 |
| Performance and deferred share units settled in cash | - | - | (2,118) | - |
| Net changes in non-cash working capital | (6,606) | (22,156) | (19,508) | (21,042) |
| Cash from (used in) operating activities | 4,853 | (18,548) | 4,452 | 3,185 |
Investing activities
| Proceeds on disposal of property, plant and equipment | - | 48 | - | 82 |
| Mineral properties, plant and equipment | (23,864) | (15,451) | (44,581) | (28,448) |
| Purchase of other investments | - | (748) | - | (2,119) |
| Proceeds from disposal of other investments | 1,846 | - | 1,846 | - |
| Redemption of (investment in) non-current deposits | (163) | 2 | (95) | 4 |
| Cash used in investing activities | (22,181) | (16,149) | (42,830) | (30,481) |
Financing activities
| Repayment of loans payable | (1,575) | (1,214) | (3,149) | (2,297) |
| Repayment of lease liabilities | (86) | (54) | (149) | (106) |
| Interest paid | (214) | (204) | (453) | (381) |
| Public equity offerings | - | - | - | 46,001 |
| Exercise of options | 641 | 1,448 | 2,453 | 1,578 |
| Proceeds from loans receivable | 400 | - | 500 | - |
| Share issuance costs | - | (15) | (2,812) |
Performance and deferred share units witholding tax
- (6) (294) (1,903)
settlement
| Cash from (used in) financing activities | (834) | (45) | (1,092) | 40,080 | |
| Effect of exchange rate change on cash and cash equivalents | 16 | (46) | (417) | 139 | |
| Increase (decrease) in cash and cash equivalents | (18,162) | (34,742) | (39,470) | 12,784 | |
| Cash and cash equivalents, beginning of the period | 61,650 | 151,014 | 83,391 | 103,303 | |
| Cash and cash equivalents, end of the period | $ 43,504 | $116,226 | $ 43,504 | $116,226 |