Endeavour Silver Reports First Quarter, 2018 Financial Results; Conference Call at 9am PDT (12pm EDT) Today
Endeavour Silver Reports First Quarter, 2018 Financial Results; Conference
Call at 9am PDT (12pm EDT) Today
VANCOUVER, British Columbia, May 03, 2018 -- Endeavour Silver Corp. (NYSE:EXK) (TSX:EDR) released today its
financial results for the period ended March 31, 2018. The Company 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. Endeavour is also
developing the El Compas mine project in Zacatecas state to production and advancing the Terronera mine project in Jalisco
state to a development decision.
The Company’s net earnings in the First Quarter, 2018 were lower than in the First Quarter, 2017, primarily due to higher
depreciation and depletion charges. Revenue was up 11% due to higher production, mine operating cash flow before taxes (1)
increased 16% to $13.8 million, cash flow from operations before working capital charges increased 30% to $11.6 million and
EBITDA rose 24% to $11.1 million.
Highlights of First Quarter 2018 (Compared to First Quarter 2017)
Financial
• Net earnings decreased 61% to $2.3 million ($0.02 per share)
• EBITDA(1) increased 24% to $11.1 million
• Cash flow from operations before working capital changes increased 30% to $11.6 million
• Mine operating cash flow before taxes(1) increased 16% to $13.8 million
• Revenue increased 11% to $40.3 million
• Realized silver price decreased 6% to $16.70 per ounce (oz) sold
• Realized gold price increased 4% to $1,330 per oz sold
• Cash costs (1) fell 17% to $6.50 per oz silver payable (net of gold credits)
• All-in sustaining costs (1) fell 22% to $14.18 per oz silver payable (net of gold credits)
• Cash and cash equivalents dipped 7% to $36.6 million
• Working capital was flat at $66.6 million compared to $66.2 million at year end
Operations
• Silver production increased 25% to 1,350,840 oz
• Gold production increased 13% to 13,208 oz
• Silver equivalent production was 2.3 million oz (at a 75:1 silver: gold ratio)
• Silver oz sold increased 14% to 1,406,143 oz
• Gold oz sold increased 12% to 12,674 oz
• Bullion inventory at quarter-end included 85,675 oz silver and 302 oz gold
• Concentrate inventory at quarter-end included 74,359 oz silver and 1,195 oz gold
• El Compas mine development on track for commercial production by July 31, 2018
• Terronera engineering trade-off studies on track for optimized pre-feasibility study in Q2, 2018
• Announced a Preliminary Mineral Resource for the Parral properties in northern Mexico
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.
Bradford Cooke, Endeavour CEO, commented, “Our First Quarter 2018 financial performance was better than last year, with
revenue, cash flow and EBITDA all up year-on-year, but net earnings down due to higher depreciation and depletion. With our
production rising and cash and all-in sustaining costs falling, the First Quarter was a good start on meeting our guidance for
the year.
“Guanacevi continues to be our highest cost mine but we saw incremental month-to-month improvement during the quarter as
the productivity optimization program launched in January started to gain traction. El Cubo contributed lower costs thanks to
higher production and grades and Bolanitos continues to be our lowest cost mine notwithstanding lower grades in Q1, 2018.”
Financial Results
For the first quarter ended March 31, 2018, the Company generated revenue totaling $40.3 million (2017 - $36.4 million).
During the quarter, the Company sold 1,406,143 silver ounces and 12,674 gold ounces at realized prices of $16.70 and $1,330
per ounce respectively, compared to sales of 1,235,594 silver ounces and 11,290 gold ounces at realized prices of $17.79 and
$1,280 per ounce respectively in Q1 2017.
After cost of sales of $37.0 million (2017 - $28.6 million), mine operating earnings amounted to $3.3 million (2017 - $7.8
million) from mining and milling operations in Mexico. The 29% increase in cost of sales was primarily due to increased
depreciation and depletion. Excluding depreciation and depletion of $9.8 million (2017 - $4.1 million), share-based payments of
$37,000 and inventory write down of $0.8 million, mine operating cash flow before taxes was $13.8 million (2017 – $12.0
million) in Q1, 2018.
Net earnings were $2.3 million (2017 –$6.0 million) after exploration, general and administrative, foreign exchange, other
income and taxes.
Direct production costs per tonne in Q1, 2018 increased 5% compared with Q1, 2017. The higher production costs per tonne
were the result of Guanaceví’s lower mine output due to mine development falling behind schedule in 2017. A productivity
optimization program designed and overseen by a third party launched in January at Guanacevi aims to review and improve
every aspect of operations, from employee culture to people and equipment availability to planning, execution, supervision and
reporting. This seven month program is intended to return Guanacevi to normal operations in Q3, 2018. The higher costs at
Guanaceví were offset by lower costs at Bolañitos and increased proportion of production from the El Cubo operation.
The higher costs per tonne were offset by higher grades primarily at El Cubo. The improved grades resulted in 17% lower cash
costs per oz, net of by-product credits (a non-IFRS measure and a standard of the Silver Institute). Similarly, all-in sustaining
costs (also a non-IFRS measure) which, compared to Q1, 2017, decreased 22% to $14.18 per oz in Q1, 2018. This decrease
in all -in sustaining costs was a result of the lower operating costs per oz and the lower capital expenditures in Q1, 2018
compared to Q1, 2017.
The Condensed Consolidated Interim Financial Statements and Management’s Discussion & Analysis can be viewed on the
Company’s website at www.edrsilver.com, on SEDAR at www.sedar.com and EDGAR at www.sec.gov. All amounts are
reported in US$.
Conference Call
A conference call to discuss the results will be held today, Thursday, May 3, 2018 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, 2018 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 Corp. is a mid-tier precious metals mining company that operates three high-
grade, underground, silver-gold mines in Mexico. The Company is forecasting 20% production growth to 10.2-11.2 million oz
silver equivalent in 2018. Endeavour is currently developing its fourth high-grade, underground, silver-gold mine in Mexico and
has a compelling pipeline of exploration and development projects 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 - For more information, please contact:
Galina Meleger, 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” 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 Endeavour’s anticipated
performance in 2018 including changes in mining and operations 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, 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 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,
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.
ENDEAVOUR SILVER CORP.
COMPARATIVE HIGHLIGHTS
Q1 2018 Highlights
Three Months Ended March 31
2018 2017 % Change
Production
Silver ounces produced 1,350,840 1,076,974 25%
Gold ounces produced 13,208 11,724 13%
Payable silver ounces produced 1,324,856 1,054,110 26%
Payable gold ounces produced 12,944 11,459 13%
Silver equivalent ounces produced(1) 2,341,440 1,956,274 20%
Cash costs per silver ounce(2)(3) 6.50 7.81 (17%)
Total production costs per ounce(2)(4) 13.70 11.62 18%
All-in sustaining costs per ounce (2)(5) 14.18 18.24 (22%)
Processed tonnes 325,669 303,222 7%
Direct production costs per tonne (2)(6) 79.38 75.77 5%
Silver co-product cash costs (7) 10.76 11.96 (10%)
Gold co-product cash costs (7) 857 861 (0%)
Financial
Revenue ($ millions) 40.3 36.4 11%
Silver ounces sold 1,406,143 1,235,594 14%
Gold ounces sold 12,674 11,290 12%
Realized silver price per ounce 16.70 17.79 (6%)
Realized gold price per ounce 1,330 1,280 4%
Net earnings (loss) ($ millions) 2.3 6.0 (61%)
Mine operating earnings ($ millions) 3.3 7.8 (58%)
Mine operating cash flow(8) ($ millions) 13.8 12.0 16%
Operating cash flow before working capital changes (9) 11.6 8.9 30%
Earnings before ITDA (10)($ millions) 11.1 9.0 24%
Working capital ($ millions) 66.6 81.7 (18%)
Shareholders
Earnings (loss) per share – basic 0.02 0.05 (60%)
Operating cash flow before working capital changes per share (9) 0.09 0.07 29%
Weighted average shares outstanding 127,488,410 127,095,764 0%
1. Silver equivalents are calculated using a 75:1 ratio.
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.
ENDEAVOUR SILVER CORP.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
(unaudited – prepared by management)
(expressed in thousands of U.S. dollars)
Three months ended
March 31, March 31,
2018 2017
Operating activities
Net earnings (loss) for the year $ 2,325 $ 6,035
Items not affecting cash:
Share-based compensation 416 337
Depreciation and depletion 9,837 4,182
Deferred income tax expense (recovery) (1,786) (1,665)
Unrealized foreign exchange loss (gain) (50) (462)
Finance costs 38 236
Write off of mineral properties - 233
Write down of inventory to net realizable value 755 -
Unrealized loss (gain) on other investments 20 -
Net changes in non-cash working capital (3,536) 771
Cash from operating activities 8,019 9,667
Investing activities
Property, plant and equipment expenditures (10,965) (9,368)
Cash used in investing activities (10,965) (9,368)
Financing activities
Repayment of credit facility - (2,500)
Restricted cash 1,000 -
Interest paid - (167)
Exercise of options - 74
Cash from (used in) financing activities 1,000 (2,593)
Effect of exchange rate change on cash and cash equivalents 229 462
Increase (decrease) in cash and cash equivalents (1,946) (2,294)
Cash and cash equivalents, beginning of year 38,277 72,317
Cash and cash equivalents, end of year $ 36,560 $ 70,485
This statement should be read in conjunction with the condensed consolidated interim financial statements for the period
ended March 31, 2018 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)
Three months ended
March 31, March 31,
2018 2017
Revenue $ 40,330 $ 36,441
Cost of sales:
Direct production costs 25,806 24,048
Royalties 698 440
Share-based payments 37 -
Depreciation and depletion 9,759 4,113
Write down of inventory to net realizable value 755 -
37,055 28,601
Mine operating earnings 3,275 7,840
Expenses:
Exploration 2,023 3,336
General and administrative 2,318 1,955
4,341 5,291
Operating earnings (loss) (1,066) 2,549
Finance costs 49 236
Other income (expense):
Foreign exchange 2,273 2,147
Investment and other 69 77
2,342 2,224
Earnings (loss) before income taxes 1,227 4,537
Income tax expense (recovery):
Current income tax expense 688 299
Deferred income tax expense (recovery) (1,786) (1,797)
(1,098) (1,498)
Net earnings (loss) for the period 2,325 6,035
Other comprehensive income (loss), net of tax
Unrealized gain (loss) on other investments - 17
Total other comprehensive income (loss) for the period - 17
Comprehensive income (loss) for the period $ 2,325 $ 6,052
Basic earnings (loss) per share based on net earnings $ 0.02 $ 0.05
Diluted earnings (loss) per share based on net earnings $ 0.02 $ 0.05
Basic weighted average number of shares outstanding 127,488,410
127,095,764
Diluted weighted average number of shares outstanding
127,827,863
128,523,833
This statement should be read in conjunction with the condensed consolidated interim financial statements for the period
ended March 31, 2018 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,
2018 2017
ASSETS
Current Assets
Cash and cash equivalents $ 36,560 $ 38,277
Restricted cash - 1,000
Other investments 148 168
Accounts receivable 35,241 34,012
Inventories 12,344 13,131
Prepaid expenses 1,983 1,911
Total current assets 86,276 88,499
Non-current deposits 610 610
Deferred income tax asset 1,913 655
Mineral properties, plant and equipment 89,628 88,816
Total assets $ 178,427 $ 178,580
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued liabilities $ 18,285 $ 19,068
Income taxes payable 1,354 3,185
Total current liabilities 19,639 22,253
Deferred lease inducement 229 236
Provision for reclamation and rehabilitation 8,020 7,982
Deferred income tax liability 1,243 1,592
Total liabilities 29,131 32,063
Shareholders' equity
Common shares, unlimited shares authorized, no par value, issued
and outstanding 127,488,410 shares (Dec 31, 2017 - 127,488,410 shares)
450,740 450,740
Contributed surplus 9,201 8,747
Accumulated comprehensive income (loss) - 127
Retained earnings (deficit) (310,645) (313,097)
Total shareholders' equity 149,296 146,517
Total liabilities and shareholders' equity $ 178,427 $ 178,580
This statement should be read in conjunction with the condensed consolidated interim financial statements for the period
ended March 31, 2018 and the related notes contained therein.