Endeavour Silver Reports 2023 Financial Results: Earnings Conference Call at 9am PST (12pm EST) Time

VANCOUVER, British Columbia, March 11, 2024 (GLOBE NEWSWIRE) — Endeavour Silver Corp. (“Endeavour” or the “Company”) (NYSE:EXK, TSX:EDR) announces its financial and operating results for the fourth quarter and year ended December 31, 2023. All dollar amounts are in US dollars (US$).

“The path to growth is never a straight line, so our ability to rise above challenges defines our success. During 2023, we kept focused on our main goals, while successfully navigating industry challenges” commented Dan Dickson, CEO of Endeavour Silver. “From a cost perspective, all Mexican miners faced overarching challenges, with persistent cost pressures across various channels. Our operations team demonstrated their resolve to overcome a significant challenge at Guanacevi, by elevating both mine and mill productivity levels above planned targets. As the remediation efforts extended into early Q4, the positive momentum from these initiatives reduced Q4 2023 cost metrics compared to Q3 2023 and will carry forward into the upcoming year.”

Mr. Dickson added, “With operating costs at their peak, we remain focused on cost discipline to offset inflationary and foreign exchange pressures while improving productivity. Bringing Terronera into production in late 2024 will provide the base we need for significant production growth and margin expansion as we move down the cost curve. We believe that project execution is our pathway to adding long-term value, as we position ourselves as a top silver investment vehicle for investors seeking industry leading growth.”

2023 Financial Highlights

Production In-Line with Guidance: Consolidated production of 5,672,703 silver ounces (oz) and 37,858 gold oz for silver equivalent (1) production of 8.7 million oz, representing the Company’s third consecutive year of meeting or exceeding production guidance.

Revenue: Revenue of $205.5 million from the sale of 5,669,760 oz of silver and 37,186 oz of gold at average realized prices of $23.76 per oz silver and $1,968 per oz gold.

Multiple Items Resulted in Escalated Annual Costs; Significant Improvement in Q4: Cash costs(2) of $13.49 per oz payable silver were above guidance due to a strengthened Mexican Peso, inflationary pressures and lower production and All-in Sustaining Costs (2) of $22.93 per oz were above guidance due to the aforementioned higher costs. Fourth quarter cash costs(2) of $12.54 per oz payable silver and all-in sustaining costs (2) of $21.48 signal visible improvement from third quarter costs due to remedial measures implemented at Guanacevi, as productivity improved.

Healthy Balance Sheet: Cash position of $35.3 million and $42.5 million in working capital(2). Cash decreased in Q4, as funds were spent on development activities at Terronera. During Q4, the Company raised gross proceeds of $39.3 million through issuances, primarily to fund the activities at Terronera.

Cash Flow: $37.0 million in operating cash flow before working capital changes(2), and mine operating cash flow before taxes(2) of $64.4 million.

Net Income: Net earnings of $6.1 million, or $0.03 per share, were impacted by inflationary pressures, foreign exchange and higher realized metal prices compared to the prior year.

Construction Continues on Schedule at the Terronera Mine: Concrete work is well advanced and erection of steel for the grinding and flotation areas has started at year end (see news release dated February 12, 2024). Overall project progress reached 43% and the project remains on track for commissioning in Q4 2024.

Financial Overview (see appendix for consolidated financial statements)

Three Months Ended December 31
2023 Highlights
Year Ended December 31

2023
2022
% Change
2023
2022
% Change

 
 
 
Production
  
 
 

1,406,423
1,830,835
(23%)
Silver ounces produced
5,672,703
5,963,445
(5%)

9,608
10,370
(7%)
Gold ounces produced
37,858
37,548
1%

1,396,315
1,816,813
(23%)
Payable silver ounces produced
5,627,379
5,912,509
(5%)

9,440
10,196
(7%)
Payable gold ounces produced
37,189
36,901
1%

2,175,063
2,660,435
(18%)
Silver equivalent ounces produced(1)
8,701,343
8,967,285
(3%)

12.54
11.65
8%
Cash costs per silver ounce(2)
13.49
10.65
27%

17.66
15.03
17%
Total production costs per ounce(2))
18.55
14.70
26%

21.48
19.38
11%
All-in sustaining costs per ounce (2)
22.93
19.97
15%

220,464
224,289
(2%)
Processed tonnes
874,382
834,542
5%

144.59
135.71
7%
Direct operating costs per tonne(2)
141.72
130.80
8%

168.71
177.35
(5%)
Direct costs per tonne(2)
171.00
155.63
10%

 
 
 
Financial
 
 
 

50.5
82.0
(38%)
Revenue ($ millions)
205.5
210.2
(2%)

1,332,648
2,816,882
(53%)
Silver ounces sold
5,669,760
6,464,869
(12%)

9,417
11,843
(20%)
Gold ounces sold
37,186
38,868
(4%)

23.78
21.86
9%
Realized silver price per ounce
23.76
22.07
8%

2,051
1,783
15%
Realized gold price per ounce
1,968
1,814
9%

3.0
8.0
62%
Net earnings (loss) ($ millions)
6.1
6.2
1%

3.6
8.1
56%
Adjusted net earnings (loss) (2) ($ millions)
1.7
6.9
(76%)

5.4
21.7
(75%)
Mine operating earnings ($ millions)
36.6
51.5
(29%)

12.6
30.7
(59%)
Mine operating cash flow before taxes ($ millions)(2)
64.4
78.5
(18%)

9.8
22.5
(56%)
Operating cash flow before working capital changes(2)
37.0
54.0
(31%)

8.3
22.7
(63%)
EBITDA(2) ($ millions)
47.9
51.9
(8%)

42.5
93.6
(55%)
Working capital (2) ($ millions)
42.5
93.6
(55%)

 
 
 
Shareholders
 
 
 

0.01
0.04
(75%)
Earnings (loss) per share – basic ($)
0.03
0.03
0%

0.02
0.04
(50%)
Adjusted earnings (loss) per share – basic ($)(2)
0.01
0.04
(75%)

0.05
0.12
(59%)
Operating cash flow before working capital changes per share(2)
0.19
0.30
(37%)

207,932,318
189,993,085
9%
Weighted average shares outstanding
196,018,623
183,009,339
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 on SEDAR+ at www.sedarplus.ca.

Year Ended December 31, 2023

For the year ended December 31, 2023, revenue, net of $2.4 million of smelting and refining costs, decreased by 2% to $205.5 million (2022: $210.2 million).

The decrease in revenue is attributed to lower production compared to 2022 but was partially offset by higher precious metal prices realized during the year. During the period, the Company sold 5,669,760 oz silver and 37,186 oz gold for realized prices of $23.76 and $1,968 per oz, respectively, compared to sales of 6,464,869 oz silver and 38,868 oz gold for realized prices of $22.07 and $1,814 per oz, respectively, in 2022.

After cost of sales of $168.9 million (2022: $158.6 million), an increase of 6%, mine operating earnings were $36.6 million (2022: $51.5 million). The increase in cost of sales, despite lower sales, was due to higher costs as a result of inflation on a number of direct inputs, the impact of the appreciation of the Mexican peso on labour costs and direct inputs and higher royalty costs. Royalties increased 25% to $22.2 million (2022: $17.8 million) due to increased mining of the high-grade El Curso and El Porvenir extensions at the Guanaceví operation, which are subject to significant royalty rates.

The Company had operating earnings of $8.7 million (2022: $23.5 million) after exploration, evaluation and development costs of $15.1 million (2022: $16.2 million), general and administrative costs of $12.4 million (2022: $10.6 million), and a write-off of exploration properties of $0.4 million (2022: $0.7 million). In 2022, there were also care and maintenance costs of $0.6 million related to the El Compas mine which was sold in late 2022.

Earnings before income taxes were $18.2 million (2022: $25.0 million) after finance costs of $1.4 million (2022: $1.3 million), a foreign exchange gain of $4.7 million (2022: $1.9 million), a net gain on disposal of assets of $7.1 million primarily generated by the gain on the sale of the Cozamin royalty (2022: $2.5 million primarily from the gain on the sale of El Compas mine) and investment and other expense of $0.8 million (2022: $1.6 million).

The Company realized net earnings for 2023 of $6.1 million (2022: $6.2 million) after a tax expense of $12.1 million (2022: $18.7 million). Current income tax expense increased to $11.3 million (2022: $6.4 million) while deferred income tax expense decreased to $0.8 million (2022: $12.4 million) The deferred income tax expense of $0.8 million is derived from changes in temporary timing differences between deductions for accounting versus deductions for tax. During 2022, the changes in deferred taxes were driven primarily by the utilization of loss carryforwards at Guanacevi with no further loss carryforwards available to offset against current income tax in 2023.

Direct operating costs(2) on a per tonne basis increased to $141.72, up 8% compared with 2022 due to higher operating costs. Guanaceví and Bolañitos have seen increased labour, power and consumables costs primarily driven by inflationary pressure as well as the impact of a strengthened Mexican Peso. Direct costs per tonne (2) increased to $171.00, up 10% compared to 2022 due to the increase in direct operating costs as well as the increase in royalty costs.

Consolidated cash costs per oz, net of by-product credits, increased to $13.49 primarily due to the higher direct costs per tonne and a reduction in production partially offset by higher gold credits. All-in sustaining costs increased 15% to $22.93 per oz in 2023 due to the higher cash costs, an increase in allocated general and administrative expenses partially offset by a decrease in capital expenditures.

Consolidated cash costs per oz, net of by-product credits of $13.49 exceeded cash cost guidance of between a $10.00 and $11.00 range, primarily due to higher direct costs which were impacted by a strengthened Mexican Peso and higher inflationary pressure than anticipated. Cash costs, on a per ounce basis, were also impacted by realized production being on the lower end of guidance. All-In-Sustaining Costs (“AISC”) of $22.93 on a per oz basis was above guidance of $19.00 to $20.00 per ounce and similarly impacted by the increased costs.

The complete financial statements and management’s discussion & analysis can be viewed on the Company’s website, on SEDAR+ at www.sedarplus.ca 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 annual 2023 financial results will be held today at 9:00 a.m. PT / 12:00 p.m. ET. To participate in the conference call, please dial the numbers below.

Date & Time:
Monday, March 11, 2024 at 9:00 a.m. PT / 12:00 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 0627#. 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.

Contact Information:

Galina Meleger, VP, Investor Relations Email: gmeleger@edrsilver.com Website: www.edrsilver.com

Follow Endeavour Silver on Facebook, X, 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 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, 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 December 31, 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 December 31, 2023 MD&A available on SEDAR+ at www.sedarplus.ca.

Reconciliation of Working Capital

Expressed in thousands US dollars
As at December 31, 2023
As at December 31, 2022

Current assets
$100,773
$146,333

Current liabilities
58,244
52,749

Working capital
$42,529
$93,584

Reconciliation of Adjusted Net Earnings (Loss) and Adjusted Net Earnings (Loss) Per Share

Expressed in thousands US dollars                
Three Months Ended December 31
Years Ended December 31

(except for share numbers and per share amounts)
2023
2022
2023
2022

Net earnings (loss) for the period per financial statements
$7,961
$7,961
$6,201
$6,201

Gain on sale of Cozamin royalty
–
–
(6,990)
–

Gain on disposal of El Compas mine and equipment, net of tax
–
–
–
(2,733)

Change in fair value of investments
525
104
2,522
3,470

Adjusted net earnings (loss)
$3,574
$8,065
$1,655
$6,938

Basic weighted average share outstanding
207,932,318
189,993,085
196,018,623
183,009,339

Adjusted net earnings (loss) per share
$0.02
$0.04
$0.01
$0.04

Reconciliation of Mine Operating Cash Flow Before Taxes

Expressed in thousands US dollars                
Three Months Ended December 31
Years Ended December 31

 
2023
2022
2023
2022

Mine operating earnings per financial statements
$5,352
$21,655
$36,611
$51,525

Share-based compensation
44
89
(74)
442

Amortization and depletion
7,181
8,945
27,885
25,179

Provision for warehouse inventory
–
–
–
1,323

Mine operating cash flow before taxes
$12,577
$30,689
$64,422
$78,469

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 December 31
Years Ended December 31

(except for per share amounts)
2023
2022
2023
2022

Cash from (used in) operating activities per financial statements
$6,706
$44,391
$11,771
$54,993

Net changes in non-cash working capital per financial statements
(3,085)
21,924
(25,243)
967

Operating cash flow before working capital changes
$9,791
$22,467
$37,014
$54,026

Basic weighted average shares outstanding
207,932,318
189,993,085
196,018,623
183,009,339

Operating cash flow before working capital changes per share
$0.05
$0.12
$0.19
$0.30

Reconciliation of EBITDA and Adjusted EBITDA

Expressed in thousands US dollars                
Three Months Ended December 31
Years Ended December 31

 
2023
2022
2023
2022

Net earnings (loss) for the period per financial statements
$3,049
$3,049
$6,123
$6,123

Depreciation – cost of sales
7,181
7,181
27,885
27,885

Depreciation – exploration
80
80
528
528

Depreciation – general & administration
197
197
376
376

Finance costs
164
233
822
816

Current income tax expense
207
2,850
11,344
6,376

Deferred income tax expense
(2,544)
2,345
786
12,372

EBITDA
$8,334
$22,668
$47,864
$51,853

Share based compensation
714
619
3,618
3,878

Gain on sale of Cozamin royalty
–
–
(6,990)
–

Gain on disposal of El Compas mine and equipment, net of tax
–
–
–
(2,733)

Change in fair value of investments
525
104
2,522
3,470

Adjusted EBITDA
$9,573
$23,391
$47,014
$56,468

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
Years Ended December 31, 2023
Years Ended December 31, 2022

 
Guanaceví
Bolañitos
Total
Guanaceví
Bolañitos
Total

Direct production costs per financial statements
$79,842
$38,989
$118,831
$74,423
$39,457
$113,880

Smelting and refining costs included in net revenue
–
2,451
2,451
–
3,029
3,029

Opening finished goods
(4,953)
(245)
(5,198)