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Q: Why are the all-in sustaining costs at Terronera expected to be much lower than at Endeavour’s other mines?

A: As outlined in our "NI 43-101 Technical Report on the Feasibility Study of the Terronera Project, Jalisco State, Mexico" dated October 21, 2021, Terronera is designed to be a classic underground mine with a ramp accessing a shallow deposit that has thick veins varying 1 to 30 metres wide, (averaging 5-6 metres) and has high-grade ore averaging 197 grams per tonne silver and 2.25 grams per tonne gold, or 3.74 grams per tonne silver equivalent at a silver:gold ratio of 79:1. There are two defined ore bodies: the Terronera vein and La Luz vein. La Luz is almost entirely high-grade and the mine plan sequences the high-grade La Luz ore body in the early years to optimize grade and cash flow. In years 1 to 4 production at La Luz is expected to average 7.5 million oz silver equivalent at an average throughput grade of 455 grams per tonne silver equivalent.

Terronera’s mine-site all-in sustaining costs, net of by-product credits, are estimated to be $3.24 per payable ounce silver. To put this in context, Endeavour’s consolidated (Guanacevi and Bolanitos) 2022 outlook for AISC is $20-$21 per ounce.

The reason underlying the lower AISC at Terronera compared to our other mines is twofold. First, Terronera is higher-grade and has thick veins, which makes it easier and less expensive to mine on a per ounce basis. Second, our existing mines – Guanacevi and Bolanitos – are mature operations and require high levels of sustaining capex (estimated at $32.6 million for 2022), which is captured in the calculation for AISC. Terronera’s sustaining capital expenditures are estimated to be significantly lower over its 12-year mine life due to the thickness and continuity of the defined ore body.

In the coming months, Endeavour intends to make a formal decision to commence construction at Terronera, subject to completion of a financing package and receipt of amended permits.

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