Endeavour Silver Announces Q2 2022 Financial Results; Raises 2022 Production Guidance

Vancouver, British Columbia, CANADA


VANCOUVER, British Columbia, Aug. 09, 2022 (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, 2022. As a result of the Company’s strong operating performance, Management has raised its 2022 production guidance. All dollar amounts are in US dollars (US$).  

“We have continued to outperform our mine plans, by delivering an exceptional Q2 with production 15% above plan, stated Dan Dickson, CEO of Endeavour Silver. “This has prompted management to raise our production outlook for 2022 to 7.6 – 8.0 million silver equivalent ounces. The additional production has allowed us to maintain our cost guidance on per ounce metrics, but industry-wide inflation continues to be a challenge. We are seeing the largest inflationary impacts on energy costs, plant reagents and steel prices which are affecting both operating and development costs. Cost control will continue to be a key focus as cost pressures are expected to continue for the remainder of the year.”  

Added Mr. Dickson, “During the 2nd quarter, again we made the decision to withhold from sale a meaningful amount of silver, due to the drop in silver price. We are holding over 1.6 million silver equivalent ounces in finished goods inventory for future sale. Short term, the increased inventory has negatively impacted our quarterly financial metrics such as revenue, earnings, cash flow and our cash balance. Longer term, we anticipate selling the inventory at higher metal prices.”

Q2 2022 Highlights

  • Higher Production: 1,359,207 ounces (oz) of silver and 9,289 oz of gold for 2.1 million oz silver equivalent (AgEq)(1) reinforces delivery of improved consolidated production for the year.
  • Lower Revenue Due to Withholding Metal Sales: Revenue of $30.8 million from the sale of 602,894 oz of silver and 9,792 oz of gold at average realized prices of $22.72 per oz silver and $1,840 per oz gold.
  • Negative Earnings and Lower Cash Flow Due to Lower Revenue and Non-Cash Items: Net loss of $11.9 million, or $0.07 per share. Adjusted net loss of $4.3 million(2) after adjusting for a $7.6 million change in the fair value of investments. $3.6 million in operating cash flow before working capital changes(2) and Mine operating cash flow before taxes(2) of $8.8 million.
  • Operating Costs per Ounce In-Line with Guidance, Despite Industry-Wide Inflation: Cash costs(2) of $10.08 per oz payable silver and all-in sustaining costs(2) of $19.56 per oz payable silver, net of gold credits.
  • Healthy Balance Sheet: Cash position of $116.2 million and working capital(2) of $149.7 million.
  • Guanacevi Continued to Outperform: Production exceeded plan driven by higher grades.
  • Bolañitos Remained Steady: Strong silver production from higher silver grades and increased throughput were offset by lower gold production and lower gold grades.
  • Withheld Significant Metal Inventories: Metal inventory at quarter end totaled 1,399,356 oz silver and 2,580 oz gold of bullion inventory and 12,408 oz silver and 587 oz gold in concentrate inventory. The market value of finished goods at June 30, 2022 was $34.5 million.
  • Advancing the Terronera Project: Work continued on the early works program initiated last year including engineering, critical contracts, procurement of long-lead items and extensive due diligence on the project financing. The Company intends to make a formal construction decision subject to completion of a financing package and receipt of additional amended permits in the coming months. $18 million has been spent as of June 30th 2022, with an additional budget of $23 million expected to be spent through to the end of October to continue the advancement of the project.

Subsequent to Quarter End

  • Closed the Acquisition of the Pitarrilla Project: The addition of the Pitarrilla project enhances the company’s growth profile while maintaining a silver focus.

Revision to Full Year 2022 Guidance

The following table summarizes the updated 2022 Production Guidance for Endeavour Silver:

  GuanaceviBolanitosConsolidated
Tonnes per daytpd1,100 - 1,2001,000 - 1,2002,100 - 2,400
Silver productionM oz4.3 – 4.50.6 - 0.64.9 – 5.1
Gold productionk oz13.0 - 14.021.0 - 22.034.0 - 36.0
Silver Eq production1US$/oz5.3 – 5.62.3 - 2.47.6 - 8.0
Cash costs, net of gold by-product credits2US$/oz  $9.00 - $10.00
AISC, net of gold by-product credits2US$/oz  $19.00 - $20.00
  • Consolidated Silver Equivalent(1) Production has increased to 7.6 – 8.0 million oz from 6.7 – 7.6 million oz. The increase to consolidated production is primarily driven by higher than planned ore-grades along the El Curso orebody at Guanacevi. Production at Bolanitos has been slightly revised upwards to meet the upper end of its previous guidance.

  • Operating Costs Guidance is expected to remain unchanged with cash costs expected to average $9.00 - $10.00 per oz and AISC are expected to average $19.00 - $20.00 per oz. Management notes that the Company is tracking to meet the upper end of the guidance range, given persisting global inflationary pressures. Increases in prices of raw materials such as reagents, explosives, steel, diesel and power are driving continued cost escalation across the industry. The company has identified efficiencies to mitigate pressure on costs and cost metrics in the second half of the year, including enhanced monitoring and tracking at the mines, improved blasting in development, the gradual increase of tonnes milled and reduced waste handling at Guanacevi.

Financial Overview (see appendix for consolidated financial statements)

Three Months Ended June 30Q2 2022 Highlights

Six Months Ended June 30
2022 2021% Change2022 2021 % Change
   Production   
1,359,207 1,073,72427% Silver ounces produced2,674,162 2,121,824 26% 
9,289 11,166(17%) Gold ounces produced17,984 22,275 (19%) 
1,346,276 1,062,26727% Payable silver ounces produced2,649,816 2,098,977 26% 
9,117 10,955(17%) Payable gold ounces produced17,666 21,849 (19%) 
2,102,327 1,967,0047% Silver equivalent ounces produced(1)4,112,882 3,903,824 5% 
10.08 13.03(23%) Cash costs per silver ounce(2)10.14 10.48 (3%) 
14.26 19.55(27%) Total production costs per ounce(2)14.69 17.51 (16%) 
19.56 25.39(23%) All-in sustaining costs per ounce (2)20.22 22.69 (11%) 
201,361 242,018(17%) Processed tonnes407,508 451,471 (10%) 
132.63 119.9411% Direct operating costs per tonne(2)127.69 116.43 10% 
148.11 141.615% Direct costs per tonne(2)148.32 134.48 10% 
14.12 18.52(24%) Silver co-product cash costs(2)14.74 16.89 (13%) 
1,144 1,289(11%) Gold co-product cash costs(2)1,169 1,116 5% 
   Financial   
30.8 47.7(35%) Revenue ($ millions)88.5 82.2 8% 
602,894 1,120,266(46%) Silver ounces sold2,320,662 1,743,645 33% 
9,792 9,810(0%) Gold ounces sold18,173 20,473 (11%) 
22.72 26.82(15%) Realized silver price per ounce23.95 26.95 (11%) 
1,840 1,866(1%) Realized gold price per ounce1,900 1,781 7% 
(11.9) 6.7(279%) Net earnings (loss) ($ millions)(0.3) 18.9 (101%) 
(4.3) 2.4(280%) Adjusted net earnings (loss) (2) ($ millions)2.0 (3.7) 155% 
4.5 10.256% Mine operating earnings ($ millions)24.7 15.9 56% 
8.8 17.2(49%) Mine operating cash flow before taxes ($ millions)(2)35.5 30.5 16% 
3.6 8.7(58%) Operating cash flow before working capital changes(2)24.2 13.9 74% 
(4.3) 15.9(127%) EBITDA(2) ($ millions)21.3 39.8 (47%) 
149.7 146.82% Working capital (2) ($ millions)149.7 146.8 2% 
   Shareholders   
(0.07) 0.04(275%) Earnings (loss) per share – basic ($)0.00 0.12 (100%) 
0.02 0.05(61%) Operating cash flow before working capital changes per share(2)0.14 0.08 62% 
180,974,609 168,383,7557% Weighted average shares outstanding176,291,929 164,051,368 7% 

(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, 2022, net revenue, decreased by 35% to $30.8 million (Q2 2021: $47.7 million).

Gross sales of $31.7 million in Q2 2022 represented a 34% decrease over the $48.3 million in Q2 2021. Silver oz sold decreased by 46%, due to the buildup of the larger finished goods inventory held at June 30, 2022. There was a 15% decrease in the realized silver price, resulting in a 54% decrease in proceeds from silver sales. Gold oz sold were flat with a 1% decrease in the realized gold price, resulting in a 1% decrease in proceeds from gold sales. During the period, the Company sold 602,894 oz silver and 9,792 oz gold for realized prices of $22.72 and $1,840 per oz, respectively, compared to Q2 2021 sales of 1,120,266 oz silver and 9,810 oz gold for realized prices of $26.82 and $1,866 per oz, respectively. In Q2 2022, London spot prices for silver and gold averaged $22.60 and $1,877, respectively.

The Company significantly increased its finished goods silver inventory and slightly decreased its finished goods gold inventory to 1,411,764 oz and 3,167 oz, respectively, at June 30, 2022 compared to 668,382 oz silver and 3,841 oz gold at March 31, 2022. The cost allocated to these finished goods was $20.8 million at June 30, 2022 compared to $13.5 million at March 31, 2022. At June 30, 2022, the finished goods inventory fair market value was $34.5 million, compared to $24.1 million at March 31, 2022. Earnings and other financial metrics, including mine operating cash flow(2), operating cash flow(2) and EBITDA(2) were impacted by the withholding of sales during Q2 2022.

After cost of sales of $26.3 million (Q2 2021 - $37.5 million), a decrease of 30%, mine operating earnings were $4.5 million (Q2 2021 - $10.2 million). The decrease in cost of sales was impacted by the decrease in the quantity of silver ounces sold during the period offset by increased labour, power and consumables costs with lower royalty costs. Royalties decreased 49% to $2.2 million primarily due to the decrease in silver ounces sold during the period.

The Company had an operating loss of $1.3 million (Q2 2021: operating earnings of $0.8 million) after exploration and evaluation costs of $3.8 million (Q2 2021: $5.0 million), general and administrative costs of $1.3 million (Q2 2021: $4.3 million) a write off of exploration properties of $0.5 million (Q2, 2021 - $Nil), and care and maintenance cost of $0.2 million (Q2 2021: $0.1 million).

The loss before income taxes was $8.8 million (Q2 2021: earnings before taxes of $8.9 million) after finance costs of $0.3 million (Q2 2021: $0.2 million), a foreign exchange loss of $0.3 million (Q2 2021: gain of $0.7 million), and investment and other expense of $6.9 million (Q2 2021: investment and other income of $1.8 million). The investment and other expenses during Q2 2022 primarily resulted from an unrealized loss on marketable securities and warrants of $7.6 million (Q2 2021: $1.5 million).

The Company realized a net loss for the period of $11.9 million (Q2 2021: net earnings of $6.7 million) after an income tax expense of $3.1 million (Q2 2021: $2.2 million).   Current income tax expense increased to $1.3 million (Q2 2021 - $1.1 million) due to increased profitability impacting the income tax and special mining duty, while deferred income tax expense of $1.8 million is primarily due to the estimated use of loss carryforwards to reduce taxable income generated at both Guanacevi and Bolanitos (Q2 2021 – $1.1 million).

Direct operating costs(2) on a per tonne basis increased to $132.63, up 11% compared with Q2 2021 due to higher operating costs at Guanaceví and Bolañitos. Guanaceví and Bolañitos have seen increased labour, power and consumables costs and at Guanaceví, increased third party ore purchased and operating development have increased compared to the prior year.

Consolidated cash costs per oz(2), net of by-product credits, decreased to $10.08 driven by increased silver grades, reduced royalty costs and increased by-product gold sales, offset by increased direct operating costs per tonne(2)    AISC(2) decreased by 23% on a per oz basis compared to Q2 2021 as a result of a 27% increase in ounces produced driven by a 51% increase in silver grade, decreased allocated general and administrative costs and a decrease in mine site exploration offset by increased sustaining capital expenditures.

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 gmeleger@edrsilver.com.

Conference Call

A conference call to discuss the Company’s Q2 2022 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 9, 2022 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 9151#. The replay will also be available on the Company’s website at www.edrsilver.com.

About Endeavour Silver – Endeavour Silver Corp. is a mid-tier precious metals mining company that operates two high-grade underground silver-gold mines in Mexico. Endeavour is currently advancing the Terronera project towards a development decision, pending financing and final permits and exploring its portfolio of exploration and development 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: gmeleger@edrsilver.com
Website: www.edrsilver.com

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Endnotes

1 Silver equivalent (AgEq)

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

2 Non-IFRS and Other Financial Measures and Ratios

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, 2022 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, 2022 MD&A available on SEDAR at www.sedar.com.

Reconciliation of Working Capital 

Expressed in thousands US dollars As at June 30, 2022As at December 31, 2021
     
Current assets $186,454  $161,762 
Current liabilities  36,733   40,554 
Working capital $149,721  $121,208 
     
Reconciliation of Adjusted Net Earnings (Loss) and Adjusted Net Earnings (Loss) Per Share
   
Expressed in thousands US dollars Three Months Ended June 30Six Months Ended June 30
(except for share numbers and per share amounts) 2022  2021  2022  2021 
Net earnings (loss) for the period per financial statements($11,923)$6,656 ($261)$18,905 
Impairment (reversal) of non-current assets, net of tax -  -  -  (16,791)
Gain on disposal of El Cubo mine and equipment, net of tax -  (5,807) -  (5,807)
Change in fair value of investments 7,626  1,539  2,269  9 
Adjusted net earnings (loss)($4,297)$2,388 $2,008 ($3,684)
Basic weighted average share outstanding 180,974,609  168,383,755  176,291,929  164,051,368 
Adjusted net earnings (loss) per share($0.02)$0.01 $0.01 ($0.02)
     
Reconciliation of Mine Operating Cash Flow Before Taxes
   
Expressed in thousands US dollars Three Months Ended June 30Six Months Ended June 30
  2022  2021  2022  2021 
Mine operating earnings per financial statements$4,472 $10,205 $24,741 $15,869 
Share-based compensation 113  111  240  229 
Amortization and depletion 4,175  6,624  10,481  14,120 
Write down of inventory to net realizable value -  272  -  272 
Mine operating cash flow before taxes$8,760 $17,212 $35,462 $30,490 
     
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 30Six Months Ended June 30
(except for per share amounts) 2022  2021  2022  2021 
Cash from (used in) operating activities per financial statements($18,548)$9,467 $3,185 $5,544 
Net changes in non-cash working capital per financial statements (22,160) 806  (21,046) (8,360)
Operating cash flow before working capital changes$3,612 $8,661 $24,231 $13,904 
Basic weighted average shares outstanding 180,974,609  168,383,755  176,291,929  164,051,368 
Operating cash flow before working capital changes per share$0.02 $0.05 $0.14 $0.08 
     
Reconciliation of EBITDA and Adjusted EBITDA    
     
Expressed in thousands US dollars Three Months Ended June 30Six Months Ended June 30
  2022  2021  2022  2021 
Net income for the period per financial statements($11,923)$6,656 ($261)$18,905 
Depreciation and depletion – cost of sales 4,175  6,624  10,481  14,120 
Depreciation and depletion – exploration 98  72  205  151 
Depreciation and depletion – general & administration 51  38  99  72 
Depreciation and depletion – care & maintenance 30  (11) 60  4 
Depreciation and depletion – inventory write down -  6  -  6 
Finance costs 212  216  389  507 
Current income tax expense 1,325  1,146  2,340  1,817 
Deferred income tax expense 1,752  1,116  7,974  4,243 
EBITDA($4,280)$15,863 $21,287 $39,825 
Share based compensation 972  1,028  2,499  2,193 
Impairment (reversal) of non-current assets, net of tax -  -  -  (16,791)
Gain on disposal of El Cubo mine and equipment, net of tax -  (5,807) -  (5,807)
Change in fair value of investments 7,626  1,539  2,269  9 
Adjusted EBITDA$4,318 $12,623 $26,055 $19,429 
Basic weighted average shares outstanding 180,974,609  168,383,755  176,291,929  164,051,368 
Adjusted EBITDA per share$0.02 $0.07 $0.15 $0.12 

 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, 2022Three Months Ended June 30, 2021
GuanacevíBolañitosTotalGuanacevíBolañitosEl CompasTotal
Direct production costs per financial statements$7,797 $12,031 $19,828 $15,713 $7,770 $2,740 $26,223 
Smelting and refining costs included in net revenue -  937  937  -  514  68  582 
Opening finished goods (7,908) (2,995) (10,903) (5,935) (204) (442) (6,581)
Finished goods NRV adjustment -  -  -  -  -  266  266 
Closing finished goods 16,164  681  16,845  6,985  408  1,145  8,538 
Direct operating costs 16,053  10,654  26,707  16,763  8,488  3,777  29,028 
Royalties 2,128  66  2,194  4,158  70  112  4,340 
Special mining duty (1) 795  127  922  684  257  (38) 903 
Direct costs 18,976  10,847  29,823  21,605  8,815  3,851  34,271 
By-product gold sales (5,719) (12,302) (18,021) (4,209) (11,909) (2,187) (18,305)
Opening gold inventory fair market value 3,724  3,763  7,487  1,925  309  662  2,896 
Closing gold inventory fair market value (4,662) (1,061) (5,723) (3,349) (633) (1,038) (5,020)
Cash costs net of by-product 12,319  1,247  13,566  15,972  (3,418) 1,288  13,842 
Amortization and depletion 940  3,235  4,175  2,487  3,800  337  6,624 
Share-based compensation 57  56  113  54  51  6  111 
Opening finished goods depreciation and depletion (1,689) (897) (2,586) (1,137) (118) (133) (1,388)
NRV depreciation cost adjustment -  -  -  -  -  6  - 
Closing finished goods depreciation and depletion 3,733  199  3,932  1,333  220  30  1,583 
Total production costs$15,360 $3,840 $19,200 $18,709 $535 $1,534 $20,772 
        
 

Three Months Ended June 30, 2022Three Months Ended June 30, 2021
GuanacevíBolañitosTotalGuanacevíBolañitosEl CompasTotal
Throughput tonnes 94,017  107,344  201,361  111,893  107,912  22,213  242,018 
Payable silver ounces 1,190,568  155,708  1,346,276  936,424  112,456  13,387  1,062,267 
        
Cash costs per silver ounce$10.35 $8.01 $10.08 $17.06 ($30.39)$96.21 $13.03 
Total production costs per ounce$12.90 $24.66 $14.26 $19.98 $4.76 $114.59 $19.55 
Direct operating costs per tonne$170.75 $99.25 $132.63 $149.81 $78.66 $170.04 $119.94 
Direct costs per tonne$201.84 $101.05 $148.11 $193.09 $81.69 $173.37 $141.61 
        
Expressed in thousands US dollars
Six Months Ended June 30, 2022Six Months Ended June 30, 2021
GuanacevíBolañitosTotalGuanacevíBolañitosEl CompasTotal
Direct production costs per financial statements$25,681 $20,868 $46,549 $23,773 $14,875 $6,303 $44,951 
Smelting and refining costs included in net revenue -  1,591  1,591  -  1,003  206  1,209 
Opening finished goods (10,093) (2,857) (12,950) (1,509) (250) (642) (2,401)
Finished goods NRV adjustment -  -  -  -  -  266  266 
Closing finished goods 16,164  681  16,845  6,985  408  1,145  8,538 
Direct operating costs 31,752  20,283  52,035  29,249  16,036  7,278  52,563 
Royalties 6,362  149  6,511  6,371  138  291  6,800 
Special mining duty (1) 1,526  371  1,897  941  408  -  1,349 
Direct costs 39,640  20,803  60,443  36,561  16,582  7,569  60,712 
By-product gold sales (10,741) (23,790) (34,531) (7,673) (22,438) (6,352) (36,463)
Opening gold inventory fair market value 1,900  4,784  6,684  735  746  1,283  2,764 
Closing gold inventory fair market value (4,662) (1,061) (5,723) (3,349) (633) (1,038) (5,020)
Cash costs net of by-product 26,137  736  26,873  26,274  (5,743) 1,462  21,993 
Amortization and depletion 4,850  5,631  10,481  4,080  7,593  2,447  14,120 
Share-based compensation 120  120  240  93  91  45  229 
Opening finished goods depreciation and depletion (1,965) (635) (2,600) (271) (104) (804) (1,179)
NRV depreciation and depletion cost adjustment -  -  -  -  -  6  6 
Closing finished goods depreciation and depletion 3,733  199  3,932  1,333  220  30  1,583 
Total production costs$32,875 $6,051 $38,926 $31,509 $2,057 $3,186 $36,752 
        
 

Six Months Ended June 30, 2022Six Months Ended June 30, 2021
GuanacevíBolañitosTotalGuanacevíBolañitosEl CompasTotal
Throughput tonnes 195,270  212,238  407,508  200,525  205,604  45,342  451,471 
Payable silver ounces 2,321,016  328,800  2,649,816  1,851,886  211,444  35,647  2,098,977 
        
Cash costs per silver ounce$11.26 $2.24 $10.14 $14.19 ($27.16)$41.01 $10.48 
Total production costs per ounce$14.16 $18.40 $14.69 $17.01 $9.73 $89.38 $17.51 
Direct operating costs per tonne$162.61 $95.57 $127.69 $145.86 $77.99 $160.51 $116.43 
Direct costs per tonne$203.00 $98.02 $148.32 $182.33 $80.65 $166.93 $134.48 


Expressed in thousands US dollars
June 30, 2022June 30, 2021
GuanacevíBolañitosTotalGuanacevíBolañitosEl CompasTotal
Closing finished goods 16,164 681 16,845 6,985 408 1,145 8,538
Closing finished goods depletion 3,733 199 3,932 1,333 220 30 1,583
Finished goods inventory$19,897$880$20,777$8,318$628$1,175$10,121

Reconciliation of All-In Costs Per Ounce and AISC per ounce

Expressed in thousands US dollars Three Months Ended June 30, 2022Three Months Ended June 30, 2021
 GuanacevíBolañitosTotalGuanacevíBolañitosEl CompasTotal
Cash costs net of by-product$12,319 $1,247$13,566 $15,972($3,418)$1,288 $13,842
Operations share-based compensation 57  56 113  39 40  39  118
Corporate general and administrative 401  155 556  2,013 1,093  277  3,383
Corporate share-based compensation 527  214 741  460 250  64  773
Reclamation - amortization/accretion 69  53 122  13 11  3  27
Mine site expensed exploration 360  308 668  538 305  2  845
Intangible payments (0) 0 (0) 80 29  (16) 94
Equipment loan payments 246  488 734  300 524  -  824
Capital expenditures sustaining 7,050  2,788 9,838  3,696 3,366  -  7,062
All-In-Sustaining Costs$21,028 $5,310$26,338 $23,112$2,200 $1,656 $26,968
Growth exploration and evaluation   2,901     3,963
Growth capital expenditures   5,613     1,102
All-In-Costs  $34,852    $32,033
        
 Three Months Ended June 30, 2022Three Months Ended June 30, 2021
 GuanacevíBolañitosTotalGuanacevíBolañitosEl CompasTotal
Throughput tonnes 94,017  107,344 201,361  111,893 107,912  22,213  242,018
Payable silver ounces 1,190,568  155,708 1,346,276  936,424 112,456  13,387  1,062,267
Silver equivalent production (ounces) 1,488,550  613,777 2,102,327  1,185,961 660,284  120,759  1,967,004
        
Sustaining cost per ounce$17.66 $34.10$19.56 $24.68$19.56 $123.73 $25.39
All-In-costs per ounce  $25.89    $30.16
        
Expressed in thousands US dollars Six Months Ended June 30, 2022Six Months Ended June 30, 2021
 GuanacevíBolañitosTotalGuanacevíBolañitosEl CompasTotal
Cash costs net of by-product$26,137 $736$26,873 $26,274($5,743)$1,462 $21,993
Operations share-based compensation 120  120 240  93 91  45  229
Corporate general and administrative 2,468  1,031 3,499  3,622 1,966  498  6,086
Corporate share-based compensation 1,444  603 2,047  987 536  136  1,658
Reclamation - amortization/accretion 134  106 240  25 22  5  52
Mine site expensed exploration 712  558 1,270  994 539  195  1,728
Intangible payments 29  12 41  111 60  15  187
Equipment loan payments 491  977 1,468  608 1,092  -  1,700
Capital expenditures sustaining 12,696  5,214 17,910  7,900 6,100  -  14,000
All-In-Sustaining Costs$44,230 $9,358$53,588 $40,615$4,663 $2,355 $47,633
Growth exploration and evaluation   5,314     6,970
Growth capital expenditures   10,538     1,434
All-In-Costs  $69,440    $56,037
        
 Six Months Ended June 30, 2022Six Months Ended June 30, 2021
 GuanacevíBolañitosTotalGuanacevíBolañitosEl CompasTotal
Throughput tonnes 195,270  212,238 407,508  200,525 205,604  45,342  451,471
Payable silver ounces 2,321,016  328,800 2,649,816  1,851,886 211,444  35,647  2,098,977
Silver equivalent production (ounces) 2,900,560  1,212,322 4,112,882  2,323,618 1,261,071  319,135  3,903,824
        
Sustaining cost per ounce$19.06 $28.46$20.22 $21.93$22.05 $66.07 $22.69
All-In-costs per ounce  $26.21    $26.70

Reconciliation of Sustaining Capital and Growth Capital  

Expressed in thousands US dollars
Three Months Ended June 30Six Months Ended June 30
 2022 2021 2022 2021
Capital expenditures sustaining$9,838$7,062$17,910$14,000
Growth capital expenditures 5,613 1,102 10,538 1,434
Property, plant and equipment expenditures per Consolidated Statement of Cash Flows$15,451$8,164$28,448$15,434

Reconciliation of Silver Co-Product Cash Costs and Gold Co-Product Cash Costs    

Expressed in thousands US dollars Three Months Ended June 30, 2022Three Months Ended June 30, 2021
 GuanacevíBolañitosTotalGuanacevíBolañitosEl CompasTotal
Direct production costs per financial statements$7,797 $12,031 $19,828 $15,713 $7,770 $2,740 $26,223 
Smelting and refining costs included in net revenue -  937  937  -  514  68  582 
Royalties 2,128  66  2,194  4,158  70  112  4,340 
Special mining duty (1) 795  127  922  684  257  (38) 903 
Opening finished goods (7,908) (2,995) (10,903) (5,935) (204) (442) (6,581)
Finished goods NRV adjustment -  -  -  -  -  266  266 
Closing finished goods 16,164  681  16,845  6,985  408  1,145  8,538 
Direct costs$18,976 $10,847 $29,823 $21,605 $8,815 $3,851 $34,271 
        
 Three Months Ended June 30, 2022Three Months Ended June 30, 2021
 GuanacevíBolañitosTotalGuanacevíBolañitosEl CompasTotal
Silver production (ounces) 1,194,150  165,057  1,359,207  939,241  120,044  14,439  1,073,724 
Average realized silver price ($) 22.72  22.72  22.72  26.82  26.82  26.82  26.82 
Silver value ($) 27,131,580  3,750,163  30,881,743  25,186,472  3,219,073  387,193  28,792,738 
        
Gold production (ounces) 3,680  5,609  9,289  3,084  6,753  1,329  11,166 
Average realized gold price ($) 1,840  1,840  1,840  1,866  1,866  1,866  1,866 
Gold value ($) 6,772,598  10,322,691  17,095,289  5,754,599  12,600,781  2,479,852  20,835,232 
        
Total metal value ($) 33,904,178  14,072,854  47,977,032  30,941,072  15,819,854  2,867,045  49,627,970 
Pro-rated silver costs (%) 80% 27% 64% 81% 20% 14% 58%
Pro-rated gold costs (%) 20% 73% 36% 19% 80% 86% 42%
        
Pro-rated silver costs ($) 15,185  2,891  19,196  17,587  1,794  520  19,883 
Pro-rated gold costs ($) 3,791  7,956  10,627  4,018  7,021  3,331  14,388 
        
Silver co-product cash costs ($) 12.72  17.51  14.12  18.72  14.94  36.02  18.52 
Gold co-product cash costs ($) 1,030  1,419  1,144  1,303  1,040  2,506  1,289 
        
Expressed in thousands US dollars Six Months Ended June 30, 2022Six Months Ended June 30, 2021
 GuanacevíBolañitosTotalGuanacevíBolañitosEl CompasTotal
Direct production costs per financial statements$25,681 $20,868 $46,549 $23,773 $14,875 $6,303 $44,951 
Smelting and refining costs included in net revenue - $1,591 $1,591  -  1,003  206  1,209 
Royalties 6,362  149  6,511  6,371  138  291  6,800 
Special mining duty (1) 1,526  371  1,897  941  408  -  1,349 
Opening finished goods (10,093) (2,857) (12,950) (1,509) (250) (642) (2,401)
Finished goods NRV adjustment -  -  -  -  -  266  266 
Closing finished goods 16,164  681  16,845  6,985  408  1,145  8,538 
Direct costs 39,640  20,803  60,443  36,561  16,582  7,569  60,712 
        
 Six Months Ended June 30, 2022Six Months Ended June 30, 2021
 GuanacevíBolañitosTotalGuanacevíBolañitosEl CompasTotal
Silver production (ounces) 2,328,000  346,162  2,674,162  1,857,458  226,271  38,095  2,121,824 
Average realized silver price ($) 23.95  23.95  23.95  26.95  26.95  26.95  26.95 
Silver value ($) 55,757,752  8,290,900  64,048,652  50,053,984  6,097,454  1,026,568  57,178,006 
        
Gold production (ounces) 7,157  10,827  17,984  5,827  12,935  3,513  22,275 
Average realized gold price ($) 1,900  1,900  1,900  1,781  1,781  1,781  1,781 
Gold value ($) 13,599,206  20,572,670  34,171,876  10,378,054  23,037,606  6,256,754  39,672,414 
        
Total metal value ($) 69,356,958  28,863,570  98,220,528  60,432,038  29,135,060  7,283,321  96,850,420 
Pro-rated silver costs (%) 80% 29% 65% 83% 21% 14% 59%
Pro-rated gold costs (%) 20% 71% 35% 17% 79% 86% 41%
        
Pro-rated silver costs ($) 31,868  5,976  39,414  30,282  3,470  1,067  35,843 
Pro-rated gold costs ($) 7,772  14,827  21,029  6,279  13,112  6,502  24,869 
        
Silver co-product cash costs ($) 13.69  17.26  14.74  16.30  15.34  28.00  16.89 
Gold co-product cash costs ($) 1,086  1,369  1,169  1,078  1,014  1,851  1,116 

Reconciliation of Realized Silver Price Per Ounce and Realized Gold Price Per Ounce     

Expressed in thousands US dollars

Three Months Ended June 30Six Months Ended June 30
 2022 2021 2022 2021
Gross silver sales$13,698$30,052$55,582$46,987
Silver ounces sold 602,894 1,120,266 2,320,662 1,743,645
Realized silver price per ounces$22.72$26.82$23.95$26.95
     
Expressed in thousands US dollars

Three Months Ended June 30Six Months Ended June 30
 2022 2021 2022 2021
Gross gold sales$18,021$18,305$34,531$36,463
Gold ounces sold 9,792 9,810 18,173 20,473
Realized gold price per ounces$1,840$1,866$1,900$1,781

 
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 2022 including changes in mining operations and forecasts of production levels, anticipated production costs and all-in sustaining costs, the timing and results of various activities and the impact of the COVID 19 pandemic on operations. 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 ultimate impact of the COVID 19 pandemic on operations and results, changes in production and costs guidance, 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.

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,
   2022   2021  2022   2021 
         
Revenue $ 30,782  $47,775 $ 88,522  $82,241 
         
Cost of sales:        
Direct production costs  19,828   26,223  46,549   44,951 
Royalties  2,194   4,340  6,511   6,800 
Share-based payments  113   111  240   229 
Depreciation, depletion and amortization  4,175   6,624  10,481   14,120 
Write down of inventory to net realizable value  -   272  -   272 
   26,310   37,570  63,781   66,372 
         
Mine operating earnings  4,472   10,205  24,741   15,869 
         
Expenses:        
Exploration and evaluation  3,784   5,025  7,000   9,155 
General and administrative  1,348   4,293  5,645   7,816 
Care and maintenance costs  189   55  379   576 
Impairment (reversal of impairment) of non-current assets, net  -   -  -   (16,791)
Write off of exploration properties  500   -  500   - 
         
   5,821   9,373  13,524   756 
         
Operating earnings (loss)  (1,349)  832  11,217   15,113 
         
Finance costs  336   216  634   507 
         
Other income (expense):        
Foreign exchange  (289)  659  522   (35)
Gain on asset disposal  -   5,841  -   5,841 
Investment and other  (6,872)  1,802  (1,052)  4,553 
   (7,161)  8,302  (530)  10,359 
         
Earnings (loss) before income taxes  (8,846)  8,918  10,053   24,965 
         
Income tax expense:        
Current income tax expense  1,325   1,146  2,340   1,817 
Deferred income tax expense  1,752   1,116  7,974   4,243 
   3,077   2,262  10,314   6,060 
         
Net earnings (loss) and comprehensive earnings (loss) for the period $ (11,923) $6,656 $ (261) $18,905 
         
         
Basic earnings (loss) per share based on net earnings$ (0.07) $0.04 $ (0.00) $0.12 
Diluted earnings (loss) per share based on net earnings$ (0.07) $0.04 $ (0.00) $0.11 
         
Basic weighted average number of shares outstanding 180,974,609   168,383,755  176,291,929   164,051,368 
Diluted weighted average number of shares outstanding 184,569,970   172,195,942  179,018,499   167,743,113 

ENDEAVOUR SILVER CORP.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
(unaudited – prepared by management)
(expressed in thousands of US dollars)

     
  June 30, December 31,
   2022   2021 
     
ASSETS    
     
Current assets    
Cash and cash equivalents $ 116,226  $103,303 
Other investments  8,293   11,200 
Accounts and other receivable  13,486   14,462 
Income tax receivable  1,219   177 
Inventories  35,664   27,485 
Prepaid expenses  11,566   5,135 
Total current assets  186,454   161,762 
     
Non-current deposits  595   599 
Non-current income tax receivable  3,570   3,570 
Non-current other investments  2,943   - 
Non-current IVA receivable  7,528   4,256 
Deferred income tax asset  -   936 
Intangible assets  -   40 
Right-of-use leased assets  614   664 
Mineral properties, plant and equipment  141,806   122,197 
Total assets $ 343,510  $294,024 
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
     
Current liabilities    
Accounts payable and accrued liabilities $ 26,383  $31,991 
Income taxes payable  4,995   4,228 
Loans payable  5,179   4,128 
Lease liabilities  176   207 
Total current liabilities  36,733   40,554 
     
Loans payable  7,392   6,366 
Lease liabilities  755   794 
Provision for reclamation and rehabilitation  7,576   7,397 
Deferred income tax liability  8,545   1,506 
Total liabilities  61,001   56,617 
     
Shareholders' equity    
Common shares, unlimited shares authorized, no par value, issued    
and outstanding 181,051,354 shares (Dec 31, 2021 - 170,537,307 shares) 631,751   585,406 
Contributed surplus  5,349   6,331 
Retained earnings (deficit)  (354,591)  (354,330)
Total shareholders' equity  282,509   237,407 
Total liabilities and shareholders' equity $ 343,510  $294,024 
     

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,
    2022   2021   2022   2021 
          
Operating activities         
Net earnings (loss) for the period  $ (11,923) $6,656  $ (261) $18,905 
          
Items not affecting cash:         
Share-based compensation   972   1,028   2,499   2,193 
Depreciation, depletion and amortization   4,324   6,723   10,786   14,347 
Impairment (reversal of impairment) of non-current assets, net   -   -   -   (16,791)
Write off of exploration properties   500   -   500   - 
Deferred income tax expense   1,752   1,116   7,974   4,243 
Unrealized foreign exchange loss (gain)   (84)- (143)  (220)- (53)
Finance costs   336   216   634   507 
Write down of inventory to net realizable value   -   272   -   272 
Loss (gain) on asset disposal   105   (5,841)  46   (5,807)
Loss (gain) on other investments   7,626   (1,366)  2,269   (3,912)
Net changes in non-cash working capital   (22,156)  806   (21,042)  (8,360)
Cash from (used in) operating activities   (18,548)  9,467   3,185   5,544 
          
          
Investing activities         
Proceeds on disposal of property, plant and equipment  48   6,985   82   7,541 
Mineral property, plant and equipment   (15,451)  (8,164)  (28,448)  (15,434)
Purchase of investments   (748)  -   (2,119)  (832)
Proceeds from disposal of marketable securities   -   4,905   -   9,288 
Redemption of (investment in) non-current deposits  2   19   4   (1)
Cash from (used) in investing activities   (16,149)  3,745   (30,481)  562 
          
          
Financing activities         
Repayment of loans payable   (1,214)  (918)  (2,297)  (1,887)
Repayment of lease liabilities   (54)  (43)  (106)  (85)
Interest paid   (204)  (174)  (381)  (367)
Public equity offerings   -   29,034   46,001   59,134 
Exercise of options   1,448   785   1,578   4,583 
Share issuance costs   (15)  (664)  (2,812)  (1,266)
Deferred share unit redemption   (6)  -   (6)  - 
Performance share unit redemption   -   (2,174)  (1,897)  (2,174)
Cash from (used) financing activities   (45)  25,846   40,080   57,938 
          
Effect of exchange rate change on cash and cash equivalents   (46)  144   139   64 
          
Increase (decrease) in cash and cash equivalents  (34,742)  39,058   12,784   64,044 
Cash and cash equivalents, beginning of the period  151,014   85,989   103,303   61,083 
Cash and cash equivalents, end of the period  $ 116,226  $125,191  $ 116,226  $125,191