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August 8, 2023

Endeavour Silver Announces Q2 2023 Financial Results; Earnings Call at 10AM PDT (1PM EDT) Today

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VANCOUVER, British Columbia, Aug. 08, 2023 (GLOBE NEWSWIRE) -- 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 .

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:
Website: www.edrsilver.com

Follow Endeavour Silver on Facebook , Twitter , Instagram and LinkedIn

Endnotes

1 Silver equivalent ( AgEq )

AgEq is calculated using an 80:1 silver:gold ratio.

2 Non-IFRS and Other Financial Measures and R atios

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 Three Months Ended June 30 Six Months Ended June 30  
(except for share numbers and per share amounts)   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 Three Months Ended June 30 Six Months Ended June 30  
(except for per share amounts)   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 $ 19,322   $ 18,021   $ 36,819   $ 34,531    
Gold ounces sold   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       $ 50,071     $ 30,782     $ 105,532     $ 88,522    
                       
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         12,542       4,472       28,567       24,741    
                       
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       $ (1,054 )   $ (11,923 )   $ 5,402     $ (261 )  
                       
                       
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 191,446,597   180,974,609   190,867,192   176,291,929    
Diluted weighted average number of shares outstanding 191,446,597   184,569,970   192,811,731   179,018,499    
                       

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)   662,029       657,866    
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