Endeavour Silver Q1 2025 Earnings Results & Report

Endeavour Silver EPS Results

• Actual EPS: -$0.13
• Consensus EPS: $0.03
• Beat/Miss: Missed by -$0.16
• One Year Ago EPS: N/A
• EPS Beat Rate: 3 of last 8 quarters

Endeavour Silver Revenue Results

• Actual Revenue: $63.50 million
• Expected Revenue: $83.10 million
• Beat/Miss: Missed by -$19.60 million
• YoY Revenue Growth: N/A

Endeavour Silver (NYSE:EXK) Corp. is a Canadian precious-metals mining company focused on the acquisition, exploration, development and operation of silver-gold properties. The company produces silver and gold concentrates and related mineral products from underground mining and milling operations.

Endeavour Silver’s operations and mineral projects are located primarily in Mexico. Its principal assets have included the Guanaceví mine in Durango and the Bolañitos mine in Guanajuato, along with the Terronera project in Jalisco. The company has also pursued exploration and development opportunities in Mexico and other regions to expand its production profile.

Founded in 2004, Endeavour Silver has grown through the development and operation of high-grade silver-gold assets in Mexico. Dan Dickson serves as the company’s chief executive officer. Endeavour Silver’s common shares trade under the symbol EXK on the NYSE American and under EDR on the Toronto Stock Exchange.

Endeavour Silver Q1 2025 Earnings Call Transcript

Key Takeaways

• Strong Q1 production: Endeavor produced 1.2 million ounces of silver and 8,300 ounces of gold (1.9 million silver equivalent ounces), generating $64 million in revenue, in line with last year.
• Net loss of $32.9 million was primarily due to unrealized, non-cash mark-to-market adjustments on gold hedging and forward swap contracts, with a small adjusted loss of $0.2 million excluding these items.
• Terronera project progress: Final construction stages completed, first concentrate produced at quarter end, commissioning underway with a ~90-day ramp-up to full throughput, marking a transformational step for growth.
• Copa mine acquisition: Closed May 1, adding 5 million silver equivalent ounces of production, ample exploration upside and existing infrastructure to support a long mine life and bolster Endeavor’s asset base.
• Stable cost structure and liquidity: Cash costs of $15.89/oz and all-in sustaining costs of $24.48/oz were slightly below guidance, while cash of $65 million and working capital of $15 million fund ongoing investments.

Presentation

[Operator]

Standing by. This is the conference operator. Welcome to the Endeavour Silver First Quarter 2025 Financial Results Conference Call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would now like to turn the conference over to Allison Pettit, Director of Investor Relations. Please go ahead.

[Allison Pettit, VP of Investor Relations at Endeavour Silver Corp.]

Thank you, Operator, and good morning, everyone. Before we get started, I ask that you view our MD&A precautionary language regarding forward-looking statements and the risk factors pertaining to these statements. Our MD&A and financial statements are available on our website at edrsilver.com. On today's call, we have Dan Dickson, Endeavour Silver's CEO, Elizabeth Senez, our CFO, and Don Gray, Endeavour's COO. Following Dan's formal remarks, we will open the call for questions. Now, over to Dan.

[Dan Dickson, CEO at Endeavour Silver Corp.]

Thank you, Allison, and welcome, everyone. Q1 marked a strong start to the year for Endeavour Silver, with solid production figures and continued progress on key developments. With Guanaceví and Bolañitos performing in line with plan and Terronera now producing concentrates as it approaches the final stages of construction, we're quickly approaching a major milestone. The addition of this transformational asset will soon become a key contributor to our production profile, marking a significant step forward in our growth strategy. In Q1, Endeavour produced 1.2 million ounces of silver and 8,300 ounces of gold, totaling 1.9 million silver-equivalent ounces. We reported revenue of $64 million in line with the prior year, benefiting from the higher precious metal prices. Direct operating costs per ton increased by 6% compared to Q1 2024, caused by a 6% lower throughput, while total direct operating costs remained relatively flat.

[Dan Dickson, CEO at Endeavour Silver Corp.]

The company reported a net loss of $32.9 million for the period, primarily due to the unrealized non-cash impact of gold hedging and forward swap contracts entered into March 2024. These contracts, which relate to the portion of the forecasted gold production from the Terronera project, were implemented as part of the senior debt facility used to finance its construction. As gold rose from $2,600 to $3,100 in the quarter, the loss reflects a mark-to-market accounting adjustment and does not represent cash outflow. Excluding mark-to-market adjustments, the company reported a small adjusted loss of $200,000 compared to income of $300,000 in Q1 2024. Cash costs were $15.89 per ounce of silver, and all-in sustaining costs were $2,448 net of gold credits, both slightly below annual guidance, primarily driven by the higher bipartite gold credits.

[Dan Dickson, CEO at Endeavour Silver Corp.]

As of March 31st, 2025, the company's cash position was $65 million, and working capital was $15 million. Cash and working capital decreased from December 31, 2024, as the company continued investing in development activities at Terronera. Terronera is in its final stages of construction and started producing its first batch of concentrates at the end of Q1, and as of our latest news release on May 6, commissioning is currently underway. Terronera represents a game-changing opportunity for Endeavour Silver and is poised to redefine the trajectory of our company. As we move closer to commercial production, we remain excited about the transformational impact this asset will have on our business. With a projected mine life spanning well over a decade, Terronera will serve as a long-term cornerstone asset in our portfolio, underpinning our growth strategy and reinforcing our position as a leading mid-tier silver producer.

[Dan Dickson, CEO at Endeavour Silver Corp.]

As the commissioning phase progresses, attention will be given to increasing fees and run times and ramping up to full throughput. The company will provide operational guidance as ramp-up advances. On April 1st, we announced the acquisition of the Kolpa mine in Peru, and on May 1st, we closed that transaction. We're excited about the addition of Kolpa to Endeavour's operating and growth pipeline as it significantly enhances our current production profile with significant exploration upside and existing infrastructure for a long mine life. Kolpa represents a compelling opportunity where we can leverage our proven technical expertise and development capabilities. The project aligns with our existing operations and supports our strategy of building a scalable silver-dominant asset base. The company is working towards validating and updating the historical resource estimate prepared by the previous owners.

[Dan Dickson, CEO at Endeavour Silver Corp.]

In the meantime, using Kolpa's 2024 annual production of 5 million silver-equivalent ounces as a guide and with Terronera expected to come online in the near term, we are well positioned for a significant step change in production. When combined with our two producing assets, Guanaceví and Bolañitos, Endeavour is on track to achieve annualized production of approaching 20 million silver-equivalent ounces. With that, I'm happy to open up to questions. Operator, please proceed to our Q&A session.

[Operator]

We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. The first question comes from Nick Giles with B. Riley Securities. Please go ahead.

[Nick Giles, Senior Research Analyst at B. Riley Securities]

Thank you, Operator, and good afternoon, everyone. Dan and team, congrats on all the progress this quarter. Really good to see. My first question is just on Terronera. I think you said you'll provide guidance as the ramp-up advances. My question is, what do you ultimately need to see in the ramp to have the confidence to come out with something more formal, specifically on the cost side?

[Dan Dickson, CEO at Endeavour Silver Corp.]

Yeah. I mean, first and foremost, it's going to come down to production and throughput, and we want to see that we maintain consistent throughput through the mill and all the way to the filter press. That way, we have confidence on timelines of that ramp-up. Ultimately, we have a very short planned ramp-up of about 90 days, and that obviously could be plus or minus the 90 days. Because of that uncertainty, we don't want to give production guidance until we know at a higher probability of how many months we'll be operating at Terronera. It doesn't make a lot of sense to give to the market six months if we're only going to be operating for five months, or if we're six months, we're going to be seven months. That's the first and foremost, is the production guidance.

[Dan Dickson, CEO at Endeavour Silver Corp.]

Then behind that comes the cost and the impact of the cost. Obviously, in the first three to six months of commercial production, we'll be running lower-grade ore than what would be deemed in our long-term mine plan, just to make sure we're getting through all the bugs. We just want to go through that when we understand grades and ultimately the timeline that we'll be offering for 2025, and then provide guidance around costs with that. Obviously, for 2026, we'll come out with operational guidance and costs with the other mines.

[Nick Giles, Senior Research Analyst at B. Riley Securities]

Dan, that all makes sense. I appreciate those comments. Maybe just as a follow-up, it seems like wet commissioning has gone well to date, but what are kind of the most near-term priorities in just ensuring that the ramp kind of stays on path, specifically at the plant?

[Dan Dickson, CEO at Endeavour Silver Corp.]

Yeah. I'm going to defer that to Don. I mean, before I give it to Don, ultimately, I'd say wet commissioning, it's hard to say how well it's going to date because it's a start-and-stop process. Ultimately, some days you feel like you're making steps forward; other days, you take a break. I think that's just part of the nature of commissioning. You've got punch list items that you need to do, but as far as particulars of what's required, I'll defer to Don on that.

[Don Gray, COO at Endeavour Silver Corp.]

Yeah. Nick, thanks for your question. To stay on path, our team there is really focused on going system by system, and you start at the upper end of the plant and work through to the lower end of the plant. That is what we have been doing now. We have been running the mills, running the mills and checking systems out, making sure bearings and clearances and things like that are running well. We have just started to feed water and shortly the tailing down into the tailing filter area, and that will really get things rolling. It is just a process of working down through the system.

[Nick Giles, Senior Research Analyst at B. Riley Securities]

Got it, Don. That's all very helpful. Guys, one more if I could. Just Nick, can you remind me, what's ultimately the capital intensity? This is at Kolpa. What's the capital intensity of the throughput expansion from 1,800 tons per day to the 2,500 level?

[Don Gray, COO at Endeavour Silver Corp.]

Yeah. At this point in time, just early estimates work that was previously done by the predecessors is anywhere from $12 million-$16 million to go from 2,000 to 2,500 tons per day capacity.

[Nick Giles, Senior Research Analyst at B. Riley Securities]

Got it. Okay. Very clear. Guys, again, congrats on the progress and keep up the good work.

[Dan Dickson, CEO at Endeavour Silver Corp.]

Thanks for the questions, Nick.

[Operator]

The next question comes from Wayne Lam with TD Securities. Please go ahead.

[Wayne Lam, Director of Mining Research at TD Securities]

Yeah. Thanks, guys. Sorry, maybe just one follow-up question on the previous ramp-up period. Can you just clarify on that 90-day ramp-up? Is that 90 days from when you started wet commissioning, or if you could just clarify what specific timeline period you're kind of referring to?

[Dan Dickson, CEO at Endeavour Silver Corp.]

Yeah. It'd be from May 1st. May 6th, we put that out just to keep it easy, May 1st.

[Wayne Lam, Director of Mining Research at TD Securities]

Okay. Great. Then just on the cost of completion on the 332 at Terronera, looks like you guys have about $7 million remaining in guide spend. Is that inclusive of all the costs through the commissioning and the ramp-up phase, or just wondering if perhaps we should be baking in a modest increase in the funding requirement as you guys kind of continue to ramp up?

[Libby Senez, CFO at Endeavour Silver Corp.]

Hi, Wayne. This is Libby Senez. To answer your question on how much to complete, the build cost, yeah, you're right. We're about $10 million off from the guided total, and we're not anticipating many more costs to go into that build cost. During the operating phase or during the ramp-up phase, all of those costs are operating costs and go into the cost of the inventory, not into the build cost of the project.

[Wayne Lam, Director of Mining Research at TD Securities]

Okay. Great. Thanks. Maybe just last one on the balance sheet. How comfortable are you guys in terms of the cash balance and working capital requirements needed to fund the Terronera through the ramp-up? Just curious how you're thinking about the flexibility here on the balance sheet and if there's potential to quickly refinance once you've declared commercial production?

[Dan Dickson, CEO at Endeavour Silver Corp.]

Yeah. There's a handful in there. I mean, any time with ramp-up and going through commissioning, there's a lot of uncertainty. Obviously, our cash balance being at $65 million at March 31st feels healthy. At the end of the day, working capital is about $15 million. We're at that phase of the project where it's high stress, high anxiety, and pushing to get it there to make sure we don't run too low in cash. It's something that we're going to be monitoring very closely over the next kind of two, three months to see how ramp-up's going, to see where cash balances are. As far as when we get into commercial production and what we do with the project loan facility, and again, that's the overnight rate plus 4.25% right now as well as the 3.75%. Always looking to lower our cost of capital.

[Dan Dickson, CEO at Endeavour Silver Corp.]

Obviously, it completely changes the project because it's now de-risked and in operations. As a management team, it's our job to find the best cost of capital and also with that to make sure that we have sufficient liquidity to get through what we need to get through. Obviously, Guanaceví and Bolañitos right now are creating cash flow for us. Like I say, we're at the stress point of the build, and we're coming down to the end. The sooner we can get into commercial production, obviously, the better for Terronera and ultimately the company.

[Wayne Lam, Director of Mining Research at TD Securities]

Okay. Perfect. Thanks for taking my questions, and best of luck with the ramp-up in the month ahead.

[Dan Dickson, CEO at Endeavour Silver Corp.]

Thanks, Wayne. I appreciate the questions.

[Operator]

Again, if you have a question, please press star then one. The next question comes from Heiko Ihle with H.C. Wainwright. Please go ahead.

[Heiko Ihle, Senior Metals and Mining Analyst at H.C. Wainwright]

Hey there, Dan and team. Thanks for taking my questions. Just building on your prepared remarks from earlier and the first question that was asked in the Q&A portion earlier, are there still meaningful cash flows going into Terronera in Q2? If so, you want to give us a best guess estimate how much is getting shipped there in Q2 and what it's being spent on?

[Dan Dickson, CEO at Endeavour Silver Corp.]

Yeah. We are still spending money in April. We were spending money down there to get everything completed, get into the commissioning process. Libby touched on a little bit too. What has changed in the accounting world is ultimately revenues are recognized in the income statement, and cost of sales are recognized in the income statement. Obviously, going from zero tons, hopefully up to 2,000 tons, we will be making a loss here in Q2 as we are commissioning. We do not capitalize that anymore, and there is cash outflow. Unfortunately, we do not have April data ready and complete, so I do not want to comment exactly on how much cash we sent down in April. We did continue to fund in April. Now with kind of the whole plant being done, tailings press in there, it is about instrumentation and going through commissioning. There are still costs incurred with that.

[Dan Dickson, CEO at Endeavour Silver Corp.]

Obviously, there's going to be costs incurred with finishing up various little things, but the big spends been done. Hopefully, it's slowed down, and now it's just about commissioning going into operations.

[Heiko Ihle, Senior Metals and Mining Analyst at H.C. Wainwright]

That's a good answer. Obviously, I wrote these questions before I joined the question queue, so I'll have to adjust a little bit. Shifting gears completely on Kolpa and purely out of curiosity, it's obviously a huge operation on 25,000 hectares of claims. In your press release announcing the deal, there was a little note in there that only 10% of the claims have seen work thus far. Can you walk us through some of the higher priority targets that you have for this year and even beyond that now that the deal is formally closed?

[Dan Dickson, CEO at Endeavour Silver Corp.]

Yeah. I mean, we actually have a significant budget at Kolpa again, it was from predecessors of what they had worked on. From October to December, they had made a new discovery on a vein they called Puerto Rosa. That was not in our historical resource estimate. We have just got our boots on the ground with regards to our exploration team and trying to help the Kolpa team out with their exploration plans. I think they have done a phenomenal job mining the Kolpa asset. They have done a phenomenal job growing that asset. We think where we can help them out is exploration, the work that we can do on it. There is a main structure that supports about half the production at Kolpa. We think there are opportunities for additional structures like that, and perhaps this Puerto Rosa is one of those.

[Dan Dickson, CEO at Endeavour Silver Corp.]

We have effectively a $12 million exploration program for the next 24 months or from when we acquired it in 24 months. There are also tension veins coming off the main structure that were recently discovered again by the predecessors, and we have been working on that. Right now, in the near term, we are going to continue to focus on some of these veins that they were previously working on, and we are going to take a step back with our exploration team, look at some brownfields opportunities, and look for markers on surface through geochem work, trenching work, geophysics to try to identify some of the more significant structures. There are a lot of veins. There are a lot of workings over the history.

[Dan Dickson, CEO at Endeavour Silver Corp.]

It's very similar to almost Bolañitos' quantity that we went to 20 years ago where we can bring in exploration techniques and expertise and hopefully uncover more resources. I would point that there is a historical resource of about 118 million ounces. We are working to validate that and ultimately eventually grow from there. We have some time. They have a mine plan in place. Before we give too much comment, we just want to get more into the data and validate a lot of the historical work they've done. Just to our standards, we're more comfortable talking about it, Heiko.

[Heiko Ihle, Senior Metals and Mining Analyst at H.C. Wainwright]

That's extremely helpful. I'm going to get back in queue, and thanks again for the answer and good quarter.

[Dan Dickson, CEO at Endeavour Silver Corp.]

Thank you, Heiko.

[Operator]

This concludes the question and answer session. I would like to turn the conference back over to Dan Dickson for any closing remarks.

[Dan Dickson, CEO at Endeavour Silver Corp.]

Thank you, Operator, and thanks for everybody attending our Q1 session. As everyone likely knows, Q2 is going to be a very important quarter for us. Obviously, we're really focused to get Terronera ramped up and into commercial production as soon as possible and look forward to our Q2 earnings call in July or August. Thank you.

[Operator]

This brings to an end today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.

Participants

Executives

• Don Gray, COO
• Dan Dickson, CEO
• Allison Pettit, VP of Investor Relations
• Libby Senez, CFO

Analysts

• Heiko Ihle, Senior Metals and Mining Analyst at H.C. Wainwright
• Wayne Lam, Director of Mining Research at TD Securities
• Nick Giles, Senior Research Analyst at B. Riley Securities