VANCOUVER, British Columbia, Aug. 02, 2018 (GLOBE NEWSWIRE) -- Endeavour Silver Corp. (NYSE: EXK; TSX: EDR) released today its financial results for the Second Quarter ended June 30, 2018. The Company operates three silver-gold mines in Mexico, the Guanaceví mine in Durango state, and the Bolañitos and El Cubo mines in Guanajuato state. Endeavour is currently commissioning its fourth mine, El Compas, in Zacatecas state and advancing the Terronera mine project in Jalisco state to a development decision. 

The Company reports a net loss of $5.7 million in the Second Quarter, 2018 compared to $16 thousand loss in the Second Quarter, 2017, primarily due to higher depreciation and depletion charges and foreign exchange loss. Revenue increased 19% to $38.8 million and mine operating cash flow before taxes(1) increased 69% to $14.9 million due to higher production, but cash flow from operations before working capital changes decreased 17% to $3.6 million and EBITDA fell 26% to $2.7 million as compared to the same period last year.

Cash costs fell 9% to $7.61 per oz silver payable (net of gold credits) and all-in sustaining costs fell 16% to $17.28 per oz silver payable (net of gold credits).

Highlights of Second Quarter 2018 (Compared to Second Quarter 2017)

Financial

  • Net loss increased to 5.7 million (loss of $0.04 per share) compared to break even in 2017
  • EBITDA(1) decreased 26% to $2.7 million
  • Cash flow from operations before working capital changes decreased 17% to $3.6 million
  • Mine operating cash flow before taxes(1) increased 69% to $14.9 million
  • Revenue increased 19% to $38.8 million
  • Realized silver price decreased 2% to $16.76 per ounce (oz) sold
  • Realized gold price increased 1% to $1,281 per oz sold
  • Cash costs(1) fell 9% to $7.61 per oz silver payable (net of gold credits)
  • All-in sustaining costs(1) fell 16% to $17.28 per oz silver payable (net of gold credits)
  • Working capital has fallen 11% at $58.9 million compared to $66.2 million at year end
  • Secured ATM of up to $35.7 million primarily to advance the Terronera Project

Operations

  • Silver production increased 19% to 1,355,895 oz
  • Gold production increased 5% to 13,674 oz
  • Silver equivalent production was 2.4 million oz (at a 75:1 silver: gold ratio)
  • Silver oz sold increased 27% to 1,258,617 oz
  • Gold oz sold increased 12% to 13,800 oz
  • Bullion inventory at quarter-end included 176,452 oz silver and 265 oz gold
  • Concentrate inventory at quarter-end included 53,810 oz silver and 827 oz gold
  • Completed construction of the El Compas project, commenced plant commissioning
  • Completed engineering trade-off studies for Terronera, preparing updated PFS
  • Reported positive drill results from an in-fill drill program at Terronera
  • Reported positive metallurgy and positive drill results from a step-out drill program at the Parral exploration property
  • Appointed VP, New Projects, Manuel Echevarria to oversee technical services and development projects

(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 financial performance in Q2, 2018 was tempered by higher depreciation and depletion charges primarily at Guanacevi, higher foreign exchange losses related to depreciation of the Mexican peso, higher current taxes primarily at Bolanitos and El Cubo and increased expenditures advancing Terronera and exploring Parral. 

“El Cubo continues to out-perform plan, delivering record grades and providing strong cash flow for the Company. Bolanitos is running a bit behind plan but continues to generate strong cash flow and should improve in Q3.  Guanacevi continues to be challenging, but the focus on higher development in Q2 is returning higher throughput in July. El Compas is expected to achieve commercial production in Q3 and start generating positive cash flow for the Company in the second half of this year.”

Financial Results

Revenue in the Second Quarter, 2018 totaled $38.8 million (2017 - $32.7 million) on sales of 1,258,617 silver ounces and 13,800 gold ounces at realized prices of $16.76 and $1,281 per ounce respectively, compared to sales of 988,821 silver ounces and 12,294 gold ounces at realized prices of $17.16 and $1,270 per ounce respectively in Q2, 2017.

After cost of sales of $34.2 million (2017 - $27.2 million), mine operating earnings amounted to $4.6 million (2017 - $5.4 million) from mining and milling operations in Mexico. The 26% increase in cost of sales was primarily due to increased depreciation and depletion. Excluding depreciation and depletion of $7.9 million (2017 - $3.3 million), share-based payments recovery of $0.1 million and an inventory write down of $2.5 million, mine operating cash flow before taxes was $14.9 million (2017 – $8.8 million) in Q2, 2018.

Net losses amount to $5.7 million (2017 –$16 thousand) after depreciation and depletion, exploration, general and administrative expenses and foreign exchange.  

Direct production costs per tonne in Q2, 2018 increased 3% compared with Q2, 2017.  The higher production costs per tonne were driven mainly by lower Guanaceví mine output due to increased mine development and the costs related to implementing a productivity optimization program.  The higher costs at Guanaceví were offset by increased production due to higher throughput and grades at El Cubo.

The out-performance of El Cubo resulted in 9% lower consolidated 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) decreased 16% to $17.28 per oz in Q2, 2018 due to lower operating costs per ounce and lower capital expenditures in Q2, 2018 compared to Q2, 2017, offset by higher general and administration charges at the corporate level.

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, August 2, 2018 at 10:00am PT (1:00pm ET). 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 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 2443#. The audio replay and a written transcript will be available on the Company's website at www.edrsilver.com under the Investor Relations, Events section.

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 commissioning its fourth mine at El Compas, advancing towards development of the Terronera project and exploring its portfolio of exploration and development projects in Mexico and Chile 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:  gmeleger@edrsilver.com 
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

Three Months Ended June 30Q2 2018 HighlightsSix Months Ended June 30
20182017% Change20182017% Change
Production
1,355,8951,143,78819% Silver ounces produced2,706,7352,220,76222%
13,67413,0585% Gold ounces produced26,88224,7828%
1,328,8441,116,79919% Payable silver ounces produced2,653,7002,170,90922%
13,39612,7565% Payable gold ounces produced26,34024,2159%
2,381,4452,123,13812% Silver equivalent ounces produced(1)4,722,8854,079,41216%
7.618.36(9%) Cash costs per silver ounce(2)(3)7.058.09(13%)
14.1012.0217% Total production costs per ounce(2)(4)14.1211.8319%
17.2820.46(16%) All-in sustaining costs per ounce(2)(5)15.7319.38(19%)
314,305303,9433% Processed tonnes639,974607,1655%
86.4384.013% Direct production costs per tonne(2)(6)82.8479.904%
11.3112.10(7%) Silver co-product cash costs(7)11.0412.05(8%)
865896(3%) Gold co-product cash costs(7)861878(2%)
Financial
38.832.719% Revenue ($ millions)79.169.114%
1,258,617988,82127% Silver ounces sold2,664,7602,224,41520%
13,80012,29412% Gold ounces sold26,47423,58412%
16.7617.16(2%) Realized silver price per ounce16.7217.51(5%)
1,2811,2701% Realized gold price per ounce1,3041,2752%
(5.7)(0.0)(100%) Net earnings (loss) ($ millions)(3.3)6.0(155%)
4.65.5(15%) Mine operating earnings ($ millions)7.913.3(41%)
14.98.869% Mine operating cash flow(8) ($ millions)28.720.838%
3.64.4(17%) Operating cash flow before working capital changes (9) 15.213.315%
2.73.7(26%) Earnings before ITDA (10)($ millions)14.112.612%
58.975.2(22%) Working capital ($ millions)58.975.2(22%)
Shareholders
(0.04)0.00(100%) Earnings (loss)  per share – basic(0.03)0.05(160%)
0.030.030% Operating cash flow before working capital changes per share (9)0.120.1020%
127,570,254127,318,9260% Weighted average shares outstanding127,529,558127,207,9610%

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 Six months ended
 June 30,June 30,June 30,June 30,
  2018201720182017
     
Operating activities    
Net earnings (loss) for the year $  (5,651) $(16) $  (3,326) $6,019 
     
Items not affecting cash:    
Share-based compensation    777   1,231     1,193   1,568 
Depreciation and depletion    7,939   3,333     17,776   7,515 
Deferred income tax expense (recovery)    (2,415)  (354)    (4,201)  (2,019)
Unrealized foreign exchange loss (gain)    398   30     348   (432)
Finance costs    37   208     75   444 
Write off of mineral properties    -   -     -   233 
Write down of inventory to net realizable value    2,527   -     3,282   - 
Unrealized loss (gain) on other investments    26   (72)    46   (72)
Net changes in non-cash working capital    661   (8,636)    (2,875)  (7,865)
Cash from operating activities    4,299   (4,276)    12,318   5,391 
     
     
Investing activities    
Property, plant and equipment expenditures    (11,772)  (11,371)    (22,737)  (20,739)
Proceeds from disposition of other investments    -   72     -    72 
Redemption of (investment in) non-current deposits    1   (6)    1   (6)
Cash used in investing activities    (11,771)  (11,305)    (22,736)  (20,673)
     
     
Financing activities    
Repayment of credit facility  -   (2,500)    -    (5,000)
Restricted cash    -   -     1,000   - 
Interest paid    -   (137)    -   (304)
Public equity offerings    2,071   -     2,071   - 
Exercise of options    256   -     256   74 
Share issuance costs    (84)  -     (84)  - 
Cash from (used in) financing activities    2,243   (2,637)    3,243   (5,230)
     
Effect of exchange rate change on cash and cash equivalents    (274)  (30)    (45)  432 
     
Increase (decrease) in cash and cash equivalents    (5,229)  (18,218)    (7,175)  (20,512)
Cash and cash equivalents, beginning of the period    36,560   70,485     38,277   72,317 
Cash and cash equivalents, end of the period $  31,057  $52,237  $  31,057  $52,237 

This statement should be read in conjunction with the condensed consolidated interim financial statements for the period ended June 30, 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 Six months ended
 June 30, June 30, June 30, June 30,
 2018 2017 2018 2017
        
        
Revenue$38,765  $32,636  $79,095  $69,077 
        
Cost of sales:       
Direct production costs 23,720   23,483   49,526   47,531 
Royalties 177   340   875   780 
Share-based payments (130)  92   (93)  92 
Depreciation and depletion 7,855   3,271   17,614   7,384 
Write down of inventory to net realizable value 2,527   -   3,282   - 
  34,149   27,186   71,204   55,787 
        
Mine operating earnings 4,616   5,450   7,891   13,290 
        
Expenses:       
Exploration 4,430   3,765   6,453   7,101 
General and administrative 3,211   2,431   5,529   4,386 
  7,641   6,196   11,982   11,487 
        
Operating earnings (loss) (3,025)  (746)  (4,091)  1,803 
        
Finance costs 49   208   98   444 
        
Other income (expense):       
Foreign exchange (3,170)  868   (897)  3,015 
Investment and other 143   212   212   289 
  (3,027)  1,080   (685)  3,304 
        
Earnings (loss) before income taxes (6,101)  126   (4,874)  4,663 
        
Income tax expense (recovery):       
Current income tax expense 1,965   545   2,653   844 
Deferred income tax expense (recovery) (2,415)  (403)  (4,201)  (2,200)
  (450)  142   (1,548)  (1,356)
        
Net earnings (loss) for the period (5,651)  (16)  (3,326)  6,019 
        
Other comprehensive income (loss), net of tax       
Realized (gain) loss on other investments   -    (72)  -   (72)
Unrealized gain (loss) on other investments   -    163   -   180 
Total other comprehensive income (loss) for the period   -    91   -   108 
        
Comprehensive income (loss) for the period$(5,651) $75  $(3,326) $6,127 
        
Basic earnings (loss) per share based on net earnings$(0.04) $(0.00) $(0.03) $0.05 
Diluted earnings (loss) per share based on net earnings$(0.04) $(0.00) $(0.03) $0.05 
        
Basic weighted average number of shares outstanding 127,570,254   127,318,926   127,529,558   127,207,961 
Diluted weighted average number of shares outstanding 127,570,254   127,318,926   127,529,558   128,057,465 

This statement should be read in conjunction with the condensed consolidated interim financial statements for the period ended June 30, 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)

    
 June 30, December 31,
 2018
 2017
    
ASSETS   
    
Current assets   
Cash and cash equivalents$  31,057  $38,277 
Restricted cash   -    1,000 
Other investments   122   168 
Accounts receivable   35,182   34,012 
Inventories   12,553   13,131 
Prepaid expenses   1,923   1,911 
Total current assets   80,837   88,499 
    
Non-current deposits   609   610 
Deferred income tax asset   4,328   655 
Mineral properties, plant and equipment   92,155   88,816 
Total assets$  177,929  $178,580 
    
LIABILITIES AND SHAREHOLDERS' EQUITY   
    
Current liabilities   
Accounts payable and accrued liabilities$  19,602  $19,068 
Income taxes payable   2,339   3,185 
Total current liabilities   21,941   22,253 
    
Deferred lease inducement   229   236 
Provision for reclamation and rehabilitation   8,057   7,982 
Deferred income tax liability   1,037   1,592 
Total liabilities   31,264   32,063 
    
Shareholders' equity   
Common shares, unlimited shares authorized, no par value, issued   
 and outstanding 128,261,027 shares (Dec 31, 2017 - 127,488,410 shares)   453,114   450,740 
Contributed surplus   8,468   8,747 
Accumulated comprehensive income (loss)   -   127 
Retained earnings (deficit)   (314,917)  (313,097)
Total shareholders' equity   146,665   146,517 
Total liabilities and shareholders' equity$  177,929  $178,580 

This statement should be read in conjunction with the condensed consolidated interim financial statements for the period ended June 30, 2018 and the related notes contained therein.