Endeavour Silver Reports First Quarter, 2017 Financial Results; Conference Call at 9am PDT (12pm EDT) Today ______________________________________________________________________________
NEWS RELEASE
Endeavour Silver Reports First Quarter, 2017 Financial Results;
Conference Call at 9am PDT (12pm EDT) Today
______________________________________________________________________________
Vancouver, Canada – May 3, 2017 - Endeavour Silver Corp. (NYSE: EXK; TSX: EDR) released today
its financial results for the period ended March 31, 2017. Endeavour owns and operates three underground
silver-gold mines in Mexico: the Guanaceví mine in Durango state, and the Bolañitos and El Cubo mines
in Guanajuato state.
The Company’s financial performance in the First Quarter, 2017 improved compared to the First Quarter,
2016. Revenue and cost of sales were down due to lower production but earnings were up as a result of
higher precious metal prices, foreign exchange gains and tax recoveries. (Click here for an audio review of
Q1 highlights).
Highlights of First Quarter 2017 (Compared to First Quarter 2016)
Financial
Net earnings increased 230% to $6.0 million ($0.05 per share) compared to $1.8 million ($0.02 per
share)
EBITDA(1) increased 4% to $9.0 million
Cash flow from operations before working capital changes increased 19% to $8.9 million
Mine operating cash flow before taxes(1) increased 4% to $12.0 million
Revenue decreased 12% to $36.4 million
Realized silver price increased 17% to $17.79 per ounce (oz) sold (2% above average spot price)
Realized gold price increased 5% to $1,280 per oz sold (5% above average spot price)
Cash costs(1) rose 2% to $7.81 per oz silver payable (net of gold credits)
All-in sustaining costs(1) rose 64% to $18.24 per oz silver payable (net of gold credits)
Cash and cash equivalents dipped 2.5% to $70.5 million
Working capital was flat at $81.7 million compared to $81.6 million at year end
Operations
Silver production decreased 29% to 1,076,974 oz
Gold production decreased 27% to 11,724 oz
Silver equivalent production was 1.9 million oz (at a 70:1 silver: gold ratio)
Silver oz sold down 18% to 1,235,594 oz
Gold oz sold down 26% to 11,290 oz
Bullion inventory at quarter-end included 116,108 oz silver and 292 oz gold
Concentrate inventory at quarter-end included 32,995 oz silver and 764 oz gold
Appointed new VP Operations Tomas Iturriaga
Announced high grade drill results for Terronera and La Luz veins on Terronera project
Announced a robust Preliminary Economic Assessment on the El Compas project and made a
decision to develop the mine to production
Announced a robust Pre-Feasibility Study on the Terronera project and continuing work to facilitate
a decision to develop the mine to production
(1) EBITDA, mine operating cash flow, cash costs and all-in sustaining costs are non-IFRS measures. Please refer to the definitions in the
Company’s Management Discussion & Analysis.
Endeavour CEO Bradford Cooke commented, “We are pleased to report significantly higher first quarter
earnings for 2017, especially in light of our lower production compared to Q1, 2016 and our increased
investments on exploration and development. Our plan to increase production throughout the year bodes
well for our financial outlook on the year.
“We recently made a decision to develop El Compas into our fourth mine and we look forward to giving
the green light soon to develop Terronera into our fifth mine. The high grade drill results from Terronera
released during the first quarter were not included in our recent resource estimate and pre-feasibility study
and represent a future opportunity to optimize our mine plan at Terronera.”
Financial Results
For the first quarter ended March 31, 2017, the Company generated revenue totaling $36.4 million (2016 -
$41.5 million). During the quarter, the Company sold 1, 235,594 silver ounces and 11,290 gold ounces at
realized prices of $17.79 and $1,280 per ounce respectively, compared to sales of 1,511,319 silver ounces
and 15,255 gold ounces at realized prices of 15.18 and $1,219 per ounce respectively in Q1 2016.
After cost of sales of $ 28.6 million (2016 - $35.2 million), mine operating earnings amounted to $ 7.8
million (2016 - $6.3 million) from mining and milling operations in Mexico. The 19% decrease in cost of
sales was primarily due to reduced production levels, and a lower Mexican peso against the U .S. dollar.
Excluding depreciation and depletion of $4.1 million (2016 - $5.2 million) mine operating cash flow before
taxes was $12.0 million (2016 – $11.5 million) in the first quarter of 2017.
Net earnings were $6.0 million (2016 –$1.8 million) after exploration, general and administrative, foreign
exchange, other income and taxes. Exploration activities increased to $3.3 million (2016 – $1.2 million) as
a result of management’s renewed focus on exploration and development due to rising metal prices.
Direct production costs per tonne and cash costs in Q1, 2017 were relatively flat compared with Q1, 2016.
Cost reductions and the benefits of a lower Mexican peso were offset by reduced mining activity. Both the
cost per tonne and cash costs per ounce rose 2% to $75.77 and $7.81, respectively. Guanaceví is currently
underperforming the mine plan as a result of operating issues experienced in 2016 but productivity is
expected to return to historical levels and cost metrics are expected fall over the course of 2017. All-in
sustaining costs rose as a res ult the aforementioned renewed focus on exploration and development to
extend mine lives, primarily at Guanaceví and El Cubo.
The Condensed Consolidated Interim Financial Statements and Management’s Discussion & Analysis can
be viewed on the Company’s website at www.edrsilver.com, on SEDAR at www.sedar.com and EDGAR
at www.sec.gov. All amounts are reported in US$.
Conference Call
A conference call to discuss the results will be held today, Wednesday, May 3, 2017 at 9am PDT (12pm
EDT). To participate in the conference call, please dial the numbers below. No pass-code is necessary.
Toll-free in Canada and the US: 1-800-319-4610
Local Vancouver: 604-638-5340
Outside of Canada and the US: + 604-638-5340
A replay of the conference call will be available until May 17, 2016 by dialing 1-800-319-6413 in Canada
and the US (toll-free) or + 604-638-9010 outside of Canada and the US. The required pass-code is 1087#.
The replay will also be available on the Company’s website at www.edrsilver.com.
About Endeavour Silver – Endeavour Silver is a mid-tier precious metals mining company that owns three
high grade, underground, silver -gold mines in Mexico. Since start -up in 2004, Endeavour has grown its
mining operations organically to produce 9.7 million ounces of silver and equivalents in 2016. We find,
build and operate quality silver mines in a sustainable way to create real value for all stakeholders.
Endeavour Silver’s shares trade on the TSX (EDR) and the NYSE (EXK).
Contact Information - For more information, please contact:
Meghan Brown, Director Investor Relations
Toll free: (877) 685-9775
Tel: (604) 640-4804
Fax: (604) 685-9744
Email: [email protected]
Website: www.edrsilver.com
Cautionary Note Regarding Forward-Looking Statements
This news release contains “forward -looking statements” w ithin 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 a re not limited to statements regarding Endeavour’ s anticipated
performance in 2017 including changes in mining and operations and the timing a nd 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, performance or achievements of Endeavour and its operations to be materially different from those
expressed or implied by such statements. Such factors include, among others, changes in 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 descr ibed
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: t he
continued operation of the Company’s mining operations, no material adverse change in the market price of commodities, 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. Accordingl y,
readers should not place undue reliance on forward-looking statements or information.
ENDEAVOUR SILVER CORP.
COMPARATIVE HIGHLIGHTS
1) Silver equivalents are calculated using a 70:1 ratio. 2016 Silver equivalents have been restated from 75:1 to 70:1 for comparative purposes
2) Cost metrics, EBITDA, mine operating cash flow, operating cash flow before working capital changes are non-IFRS measures.
Please refer to the definitions in the Company’s Management Discussion & Analysis.
2017 2016 % Change
Silver ounces produced 1,076,974 1,510,065 (29%)
Gold ounces produced 11,724 15,960 (27%)
Payable silver ounces produced 1,054,110 1,473,682 (28%)
Payable gold ounces produced 11,459 15,518 (26%)
Silver equivalent ounces produced (1) 1,897,654 2,627,265 (28%)
Cash costs per silver ounce (2) 7.81 7.63 2%
Total production costs per ounce (2) 11.62 10.95 6%
All-in sustaining costs per ounce (2) 18.24 11.12 64%
Processed tonnes 303,222 408,553 (26%)
Direct production costs per tonne (2) 75.77 74.26 2%
Silver co-product cash costs (2) 11.96 10.87 10%
Gold co-product cash costs (2) 861 873 (1%)
Revenue ($ millions) 36.4 41.5 (12%)
Silver ounces sold 1,235,594 1,511,319 (18%)
Gold ounces sold 11,290 15,255 (26%)
Realized silver price per ounce 17.79 15.18 17%
Realized gold price per ounce 1,280 1,219 5%
Net earnings (loss) ($ millions) 6.0 1.8 230%
Mine operating earnings (loss) ($ millions) 7.8 6.3 25%
Mine operating cash flow (2) ($ millions) 12.0 11.5 4%
Operating cash flow before working capital changes (2) 8.9 7.5 19%
Earnings before ITDA (2) 9.0 8.6 4%
Working capital ($ millions) 81.7 29.3 179%
Earnings (loss) per share – basic 0.05 0.02 150%
Operating cash flow before working capital changes per share (2) 0.07 0.07 0%
Weighted average shares outstanding 127,095,764 104,646,404 21%
Shareholders
Q1 2017 Highlights
Three Months Ended March 31
Production
Financial
ENDEAVOUR SILVER CORP.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
(unaudited – prepared by management)
(expressed in thousands of U.S. dollars)
March 31, March 31,
2017 2016
Operating activities
Net earnings (loss) for the period 6,035$ 1,829$
Items not affecting cash:
Share-based compensation 337 457
Depreciation and depletion 4,182 5,222
Deferred income tax expense (recovery) (1,665) (103)
Unrealized foreign exchange loss (gain) (462) (242)
Loss on available for sale assets - 269
Finance costs 236 63
Write off of exploration property 233 -
Net changes in non-cash working capital 771 (10,324)
Cash from operating activities 9,667 (2,829)
Investing activites
Property, plant and equipment expenditures (9,368) (3,087)
Proceeds from disposition of available for sale assets - 448
Redemption of long term deposits - 133
Cash used in investing activities (9,368) (2,506)
Financing activities
Repayment of credit facility (2,500) (3,000)
Repayment of obligation under finance lease - (226)
Debt issuance costs - (304)
Interest paid (167) (174)
Public equity offerings - 9,098
Exercise of options 74 31
Share issuance costs - (278)
Cash used in financing activites (2,593) 5,147
Effect of exchange rate change on cash and cash equivalents 462 160
Increase (decrease) in cash and cash equivalents (2,294) (188)
Cash and cash equivalents, beginning of period 72,317 20,413
Cash and cash equivalents, end of period 70,485$ 20,385$
Three Months Ended
This statement should be read in conjunction with the condensed consolidated interim financial statements for the period ended
March 31, 2017 and the related notes contained therein.
ENDEAVOUR SILVER CORP.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME
(unaudited – prepared by management)
(expressed in thousands of US dollars, except for shares and per share amounts)
March 31, March 31,
2017 2016
Revenue 36,441$ 41,541$
Cost of sales:
Direct production costs 24,048 29,844
Royalties 440 209
Share-based compensation - 56
Depreciation and depletion 4,113 5,154
28,601 35,263
Mine operating earnings 7,840 6,278
Expenses:
Exploration 3,336 1,199
General and administrative 1,955 2,028
5,291 3,227
Operating earnings (loss) 2,549 3,051
Finance costs 236 287
Other income (expense):
Foreign exchange 2,147 514
Investment and other 77 (141)
2,224 373
Earnings (loss) before income taxes 4,537 3,137
Income tax expense (recovery):
Current income tax expense 299 1,411
Deferred income tax expense (recovery) (1,797) (103)
(1,498) 1,308
Net earnings (loss) for the period 6,035 1,829
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on available-for-sale financial assets 17 162
Total other comprehensive income (loss) for the period 17 162
Comprehensive income (loss) for the period 6,052$ 1,991$
Basic earnings (loss) per share based on net earnings 0.05$ 0.02$
Diluted earnings (loss) per share based on net earnings 0.05$ 0.02$
Basic weighted average number of shares outstanding 127,095,764 104,646,404
Diluted weighted average number of shares outstanding 128,523,833 105,071,404
Three Months Ended
This statement should be read in conjunction with the condensed consolidated interim financial statements for the period ended
March 31, 2017 and the related notes contained therein.
ENDEAVOUR SILVER CORP.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
(unaudited – prepared by management)
(expressed in thousands of US dollars)
March 31, December 31,
2017 2016
ASSETS
Current assets
Cash and cash equivalents 70,485$ 72,317$
Investments 102 85
Accounts receivable 26,633 25,560
Inventories 12,688 13,431
Prepaid expenses 1,774 2,037
Total current assets 111,682 113,430
Non-current deposits 659 659
Deferred income tax asset 1,042 183
Mineral properties, plant and equipment 70,990 66,238
Total assets 184,373$ 180,510$
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities 20,179$ 18,229$
Income taxes payable 3,307 4,631
Credit facility 6,500 9,000
Total current liabilities 29,986 31,860
Provision for reclamation and rehabilitation 7,867 7,846
Deferred income tax liability 6,739 7,545
Total liabilities 44,592 47,251
Shareholders' equity
Common shares, unlimited shares authorized, no par value, issued
and outstanding 127,108,264 shares (Dec 31, 2016 - 127,080,264 shares) 449,703 449,594
Contributed surplus 7,050 6,689
Accumulated comprehensive income (loss) 61 44
Retained earnings (deficit) (317,033) (323,068)
Total shareholders' equity 139,781 133,259
Total liabilities and shareholders' equity 184,373$ 180,510$
This statement should be read in conjunction with the condensed consolidated interim financial statements for the period ended
March 31, 2017 and the related notes contained therein.