A: Profit margins have shrunk industry-wide since 2011 due to the sharp fall in precious metal prices, so all mining companies are battling to cut costs and maintain free cash flow. Endeavour has enjoyed many years of strong after-tax free cash flow totaling $82 million from Guanaceví since 2006 and $103 million from Bolañitos since 2007.

At Endeavour, cash costs net of the gold by-product credit have risen the last three years for three reasons: 1) the value of our gold credit has fallen 40%, 2) labour and consumable costs have risen about 5% each year, and 3) we bought the high cost El Cubo mine in 2012 and turned the corner on its cash costs at the end of 2014. Endeavour has been cutting cash costs by increasing productivity, controlling grade at the mines, and improving metal recoveries at the plants. Our optimization efforts succeeded in reducing cash costs in 2014 at both Guanacevi (from $14.32 down to $9.73 per oz) and El Cubo (from $18.77 down to $16.46 per oz) compared to the previous year. We recently announced a significant expansion at El Cubo that will see El Cubo cash costs fall once again and our 2015 consolidated cash costs remain below $10 per ounce of silver produced.

Our all-in sustaining costs, which include all costs except investments for growth, came in at $16.79 per ounce last year. The El Cubo expansion will allow us to maintain AISC in the same range as 2014 even with the lower metal prices. Because we bought small underground mines in historic districts in need of operational turn-arounds and exploration discoveries to drive production growth, our exploration and mine development capital budgets are typically high in the early years of mine expansion and then fall to sustainable levels once the mines stop growing. Our combined capital and exploration spending has been declining at Guanacevi since 2011, Bolanitos since 2012 and El Cubo since 2013.