Endeavour Silver Announces Q3 Financial Results; Earnings Conference Call at 10am PST (1pm EST) Today

2022-11-08 / @GlobeNewswire

 

VANCOUVER, British Columbia, Nov. 08, 2022 (GLOBE NEWSWIRE) -- Endeavour Silver Corp. (“Endeavour” or the “Company”) (NYSE: EXK; TSX: EDR) is pleased to announce its unaudited financial and operating results for the three and nine months ended September 30, 2022. All amounts reported are in United States (US) dollars.

Dan Dickson, CEO, commented, “This quarter is a continuation of our strong operational performance. With production guidance reaffirmed, and a strong fourth quarter expected, we are feeling confident about our 2022 production results. Like the rest of the industry, profit margins are under pressure. The strength of the USD is weighing on commodity prices, and inflation is increasing direct costs. We are fortunate that the elevated grade profile at Guanacevi and strong operational performance has allowed us to stay within or near our guided cost ranges on a per ounce basis.”

“We continue to focus on business improvement and cost management initiatives, while being mindful of the future. Continuing to advance the Terronera project in a deliberate and disciplined manner towards a construction decision and the completion of the Pitarrilla acquisition, are both significant developments towards the future of the Company.”

Q3 2022 Highlights

  • Continued Strong Production: 1,458,448 ounces (oz) of silver and 9,194 oz of gold for 2.2 million oz silver equivalent (AgEq) (1) at an 80:1 silver:gold ratio, totaling 6.3 million AgEq oz for the 9 months ended September 30, 2022. Strong year to date production reinforces delivery of 2022 guidance.
  • Revenue Impacted by Withholding Metal Sales & Lower Realized Prices: Generated $40.4 million from the sale of 1,327,325 oz silver and 8,852 oz gold at average realized prices of $19.24 per oz silver and $1,678 per oz gold. Management continued to carry higher metal inventory totaling 1,527,549 oz silver and 3,210 oz gold of bullion inventory and 2,770 oz silver and 143 oz gold in concentrate inventory, with a market value of approximately $35 million at September 30, 2022.
  • Operating Costs per Ounce In-Line with Guidance, Despite Industry-Wide Inflation: Cash costs(2) of $10.32 per oz payable silver and all-in sustaining costs (AISC)(2) of $20.27 per oz payable silver, net of gold credits.
  • Negative Earnings and Lower Cash Flow Due to Impacted Revenue: Net loss of $1.5 million or $0.01 loss per share. $7.3 million in cash flow from operations before working capital changes(2) and mine operating cash flow before taxes(2) of $12.3 million. The Company continued to hold significant finished goods held at costs on the balance sheet at quarter end.
  • Healthy Balance Sheet: Cash position of $69.2 million and $101.6 million in working capital(2). Cash decreased in the quarter, as funds were spent to complete the acquisition of the Pitarrilla Project with a $35 million cash payment and early works expenditures to advance the Terronera project.

  • Strong Liquidity Remains: While the cash balance decreased during the quarter, the realized sale of finished goods inventory, with a market value of approximately $35 million at quarter end, would imply a cash balance closer to $100 million.

  • Advancing the Terronera Project: Work continued on predevelopment activities initiated last year including detailed engineering, critical contracts, procurement of long-lead items and road and camp construction. 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. Budgeted development expenditures for 2022 are estimated to be $41.0 million.

  • Completed the Acquisition of the Pitarrilla Project: The world’s largest undeveloped silver project that will form the cornerstone of the Company’s growth profile, together with Terronera and Parral (see News Release dated July 6, 2022).

  • Divested the El Compas Property to Grupo ROSGO: Completed the sale of the property and the plant for US$5 million over five years (see News Release dated September 12, 2022).

Financial Overview (see appendix for consolidated financial statements)

Three Months Ended September 30Q3 2022 HighlightsNine Months Ended September 30 
20222021% Change20222021% Change 
   Production    
1,458,4481,305,39912%Silver ounces produced4,132,6103,427,22321% 
9,19410,541(13%)Gold ounces produced27,17832,816(17%) 
1,445,8801,295,12612%Payable silver ounces produced4,095,6963,394,10321% 
9,03910,328(12%)Payable gold ounces produced26,70532,177(17%) 
2,193,9682,148,6792%Silver equivalent ounces produced(1)6,306,8506,052,5034% 
10.328.1627%Cash costs per silver ounce(2)(3)10.219.596% 
14.3113.149%Total production costs per ounce(2)(4)14.5615.84(8%) 
20.2717.4616%All-in sustaining costs per ounce (2)(5)20.2420.70(2%) 
202,745222,461(9%)Processed tonnes610,253673,932(9%) 
131.61115.5714%Direct operating costs per tonne(2)(6)128.99116.1411% 
146.30130.3812%Direct costs per tonne(2)(6)147.65133.1211% 
13.1213.98(6%)Silver co-product cash costs(7)14.1515.86(11%) 
1,1441,02012%Gold co-product cash costs(7)1,1631,0788% 
   Financial    
39.734.615%Revenue ($ millions)128.2116.810% 
1,327,325699,53990%Silver ounces sold3,647,9872,443,18449% 
8,8529,925(11%)Gold ounces sold27,02530,398(11%) 
19.2424.56(22%)Realized silver price per ounce22.2426.26(15%) 
1,6781,791(6%)Realized gold price per ounce1,8271,7842% 
(1.5)(4.5)(67%)Net earnings (loss) ($ millions)(1.8)14.4(112%) 
(3.1)(1.5)106%Adjusted net earnings (loss) (11) ($ millions)(1.1)(5.2)78% 
5.18.3(38%)Mine operating earnings ($ millions)29.924.124% 
12.313.2(7%)Mine operating cash flow before taxes ($ millions)(8)47.843.79% 
7.37.7(4%)Operating cash flow before working capital changes(9)31.621.646% 
7.94.481%EBITDA(10) ($ millions)29.244.2(34%) 
101.6128.7(21%)Working capital (12) ($ millions)101.6128.7(21%) 
   Shareholders    
(0.01)(0.03)(67%)Earnings (loss) per share – basic ($)(0.01)0.09(111%) 
0.040.04(14%)Operating cash flow before working capital changes per share(9)0.170.1335% 
189,241,367170,432,32611%Weighted average shares outstanding180,655,842166,201,7279% 
        

(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 September 30, 2022, net revenue, increased by 15% to $39.7 million (Q3 2021: $34.6 million).

Gross sales of $40.4 million in Q3 2022 represented a 15% increase over the $35.0 million in Q3 2021. Silver oz sold increased by 90%, due to both a 12% increase in silver production and a significantly smaller buildup of finished goods inventory during Q3, 2022 compared to Q3, 2021.   There was a 22% decrease in the realized silver price resulting in a 48% increase to silver sales. Gold oz sold decreased 11% with a 6% decrease in realized gold prices resulting in a 16% decrease in gold sales. The decrease in gold sales is primarily driven by the decreased gold grades at the Bolañitos mine and the suspension of production from the El Compas mine. During the period, the Company sold 1,327,325 oz silver and 8,852 oz gold, for realized prices of $19.24 and $1,678 per oz, respectively, compared to sales of 699,539 oz silver and 9,925 oz gold, for realized prices of $24.56 and $1,791 per oz, respectively, in the same period of 2021. For the three months ended September 30, 2022, the realized prices of silver and gold were within 3% of the London spot prices. Silver and gold London spot prices averaged $19.23 and $1,729, respectively, during the three months ended September 30, 2022

The Company increased its finished goods silver and finished goods gold inventory to 1,530,319 oz silver and 3,353 oz gold, at September 30, 2022 compared to 1,411,764 oz silver and 3,167 oz gold at June 30, 2022. The cost allocated to these finished goods was $22.1 million at September 30, 2022, compared to $20.8 million at June 30, 2022 and $18.3 million at September 30, 2021. At September 30, 2022, the finished goods inventory fair market value was $34.7 million, compared to $34.5 million at June 30, 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 Q3 2022.

Cost of sales for Q3, 2022 was $34.5 million, an increase of 31% over the cost of sales of $26.3 million for Q3, 2021. The cost of sales in Q3, 2022 was impacted by increased input costs and slightly impacted by the delay in recognition of costs associated with the increase in the quantity of silver ounces in finished goods at the end of the period. Overall costs for Q3, 2022 were impacted by higher labour, power and consumables costs as the Company is experiencing significant inflationary pressures. During Q3, 2022, the Company also recorded an allowance on the valuation of warehouse inventory of $1.3 million (Q3, 2021 – Nil).

In Q3, 2022, the Company had an operating loss of $1.3 million (Q3, 2021 – operating earnings of $3.0 million) after exploration and evaluations costs of $4.0 million (Q3, 2021 – $4.7 million), general and administrative expense of $2.2 million (Q3, 2021 – expense recovery $0.5 million), and care and maintenance expense of $0.2 million (Q3, 2021 – $0.4 million). In the three months ended September 30, 2021 operating earnings included $0.7 million in severance costs related to the suspension of the operations at the El Compas mine.

The earnings before taxes for Q3, 2022 was $1.7 million (Q3, 2021 – loss $0.8 million) after finance costs of $0.3 million (Q3, 2021 – $0.2 million), a foreign exchange gain of $0.8 million (Q3, 2021 –foreign exchange loss of $1.2 million), gain on assets disposal of $2.8 million (Q3, 2021 -$Nil) and investment and other expense of $0.3 million (Q3, 2021 –$2.4 million).

The Company realized a net loss for the period of $1.5 million (Q3, 2021 –$4.5 million) after an income tax expense of $3.2 million (Q3, 2021 – $3.7 million). In Q3, 2022 earnings were impacted by a $1.1 million mark-to-market adjustment resulting in an unrealized loss on investments included in investment and other expense (Q3, 2021 - $3.0 million).

Current income tax expense increased to $1.2 million (Q3 2021 - $0.7 million) due to increased profitability impacting the income tax and special mining duty, while deferred income tax expense of $2.0 million is primarily due to the estimated use of loss carryforwards to reduce taxable income generated at both Guanaceví and Bolañitos (Q3 2021 – $3.0 million).

Direct operating costs(2) on a per tonne basis increased to $131.61, up 14% compared with Q3 2021 due to higher operating costs at Guanaceví and Bolañitos and a reduction in ore tonnes processed. 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 increased 27% to $10.32 driven by increased direct costs per tonne(2) and a reduction in by-product gold sales, offset by increased ore grades. AISC(2) increased by 16% on a per oz basis compared to Q3, 2021 as a result of the increased cash costs(2) and increased allocated general and administrative costs offset by a slight reduction in 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 Q3 2022 financial results will be held today at 10:00 a.m. PST / 1:00 p.m. EST. To participate in the conference call, please dial the numbers below.

Date & Time:Tuesday, November 8, 2022 at 10:00 a.m. PST / 1:00 p.m. EST
  
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 9479#. 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 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

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 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 September 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 September 30, 2022 MD&A available on SEDAR at www.sedar.com.

Reconciliation of Working Capital

Expressed in thousands US dollars  As at September 30, 2022As at December 31, 2021
Current assets $139,925  $161,762 
Current liabilities 38,307  40,554 
Working capital $101,618  $121,208 
     

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

Expressed in thousands US dollars  Three Months Ended September 30Nine Months Ended September 30
(except for share numbers and per share amounts)2022202120222021
Net earnings (loss) for the period per financial statements($1,499)($4,479)($1,760)$14,426
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)
Gain on disposal of El Compas mine and equipment, net of tax(2,733)-(2,733)-
Change in fair value of investments1,0972,9593,3662,968
Adjusted net earnings (loss)($3,135)($1,520)($1,127)($5,204)
Basic weighted average share outstanding189,241,367170,432,326180,655,842166,201,727
Adjusted net earnings (loss) per share($0.02)($0.01)($0.01)($0.03)
     

Reconciliation of Mine Operating Cash Flow Before Taxes

Expressed in thousands US dollarsThree Months Ended September 30Nine Months Ended September 30
2022202120222021
Mine operating earnings per financial statements$5,129$8,277$29,870$24,146
Share-based compensation113105353334
Amortization and depletion5,7534,84316,23418,963
Write down of inventory to net realizable value$1,323-1,323272
Mine operating cash flow before taxes$12,318$13,225$47,780$43,715
     

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 September 30Nine Months Ended September 30
(except for  per share amounts)2022202120222021
Cash from (used in) operating activities per financial statements$7,417($153)$10,602$5,391
Net changes in non-cash working capital per financial statements85(7,808)(20,957)(16,168)
Operating cash flow before working capital changes$7,332$7,655$31,559$21,559
Basic weighted average shares outstanding189,241,367170,432,326180,655,842166,201,727
Operating cash flow before working capital changes per share$0.04$0.04$0.17$0.13
     

Reconciliation of EBITDA and Adjusted EBITDA

Expressed in thousands US dollars Three Months Ended September 30Nine Months Ended September 30
 2022202120222021
Net earnings (loss) for the period per financial statements($1,499)($4,479)($1,760)$14,426
Depreciation and depletion – cost of sales5,7534,84316,23418,963
Depreciation and depletion – exploration14387348238
Depreciation and depletion – general & administration5730156102
Depreciation and depletion – care & maintenance10217025
Depreciation and depletion – inventory write down---6
Finance costs194195583702
Current income tax expense1,1866593,5262,476
Deferred income tax expense2,0533,01710,0277,260
EBITDA$7,897$4,373$29,184$44,198
Share based compensation7607253,2592,918
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)
Gain on disposal of El Compas mine and equipment, net of tax(2,733)-(2,733)-
Change in fair value of investments1,0972,9593,3662,968
Adjusted EBITDA$7,021$8,057$33,076$27,486
     

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 dollarsThree Months Ended September 30, 2022Three Months Ended September 30, 2021
GuanacevíBolañitosTotalGuanacevíBolañitosEl CompasTotal
Direct production costs per financial statements$15,156$9,354$24,510$9,299$6,692$2,648$18,639
Smelting and refining costs included in net revenue-744744-35042392
Opening finished goods(16,164)(681)(16,845)(6,985)(408)(1,145)(8,538)
Finished goods NRV adjustment-------
Closing finished goods18,08019518,27512,9102,306-15,216
Direct operating costs17,0729,61226,68415,2248,9401,54525,709
Royalties2,762592,8212,59548552,698
Special mining duty (1)241(85)156801(203)-598
Direct costs20,0759,58629,66118,6208,7851,60029,005
By-product gold sales(5,237)(9,615)(14,852)(7,673)(7,827)(2,274)(17,774)
Opening gold inventory fair market value4,6621,0615,7233,3496331,0385,020
Closing gold inventory fair market value(5,368)(240)(5,608)(2,127)(3,560)-(5,687)
Cash costs net of by-product14,13279214,92412,169(1,969)36410,564
Amortization and depletion3,1192,6345,7531,6833,071894,843
Share-based compensation5657113444516105
Opening finished goods depreciation and depletion(3,733)(199)(3,932)(1,333)(220)(30)(1,583)
NRV depreciation cost adjustment-------
Closing finished goods depreciation and depletion3,776603,8361,9201,171-3,091
Total production costs$17,350$3,344$20,694$14,483$2,098$439$17,020


 Three Months Ended September 30, 2022Three Months Ended September 30, 2021
GuanacevíBolañitosTotalGuanacevíBolañitosEl CompasTotal
Throughput tonnes97,728105,017202,745105,496107,7529,213222,461
Payable silver ounces1,328,193117,6871,445,8801,170,645117,0787,4031,295,126
Cash costs per silver ounce$10.64$6.73$10.32$10.40($16.82)$49.17$8.16
Total production costs per ounce$13.06$28.41$14.31$12.37$17.92$59.30$13.14
Direct operating costs per tonne$174.69$91.53$131.61$144.31$82.97$167.70$115.57
Direct costs per tonne$205.42$91.28$146.30$176.50$81.53$173.67$130.38


Expressed in thousands US dollars Nine Months Ended September 30, 2022Nine Months Ended September 30, 2021
GuanacevíBolañitosTotalGuanacevíBolañitosEl CompasTotal
Direct production costs per financial statements$40,837$30,222$71,059$33,072$21,567$8,951$63,590
Smelting and refining costs included in net revenue-2,3352,335-1,3532481,601
Opening finished goods(10,093)(2,857)(12,950)(1,509)(250)(642)(2,401)
Finished goods NRV adjustment-----266266
Closing finished goods18,08019518,27512,9102,306-15,216
Direct operating costs48,82429,89578,71944,47324,9768,82378,272
Royalties9,1242089,3328,9661863469,498
Special mining duty (1)1,7672862,0531,742205-1,947
Direct costs59,71530,38990,10455,18125,3679,16989,717
By-product gold sales(15,978)(33,405)(49,383)(15,346)(30,265)(8,626)(54,237)
Opening gold inventory fair market value1,9004,7846,6847357461,2832,764
Closing gold inventory fair market value(5,368)(240)(5,608)(2,127)(3,560)-(5,687)
Cash costs net of by-product40,2691,52841,79738,443(7,712)1,82632,557
Amortization and depletion7,9698,26516,2345,76310,6642,53618,963
Share-based compensation17617735313713661334
Opening finished goods depreciation and depletion(1,965)(635)(2,600)(271)(104)(804)(1,179)
NRV depreciation and depletion cost adjustment-----66
Closing finished goods depreciation and depletion3,776603,8361,9201,171-3,091
Total production costs$50,225$9,395$59,620$45,992$4,155$3,625$53,772


 Nine Months Ended September 30, 2022Nine Months Ended September 30, 2021
GuanacevíBolañitosTotalGuanacevíBolañitosEl CompasTotal
Throughput tonnes292,998317,255610,253306,021313,35654,555673,932
Payable silver ounces3,649,209446,4874,095,6963,022,531328,52243,0503,394,103
Cash costs per silver ounce$11.03$3.42$10.21$12.72($23.47)$42.42$9.59
Total production costs per ounce$13.76$21.04$14.56$15.22$12.65$84.20$15.84
Direct operating costs per tonne$166.64$94.23$128.99$145.33$79.70$161.73$116.14
Direct costs per tonne$203.81$95.79$147.65$180.32$80.95$168.07$133.12


Expressed in thousands US dollars September 30, 2022September 30, 2021
GuanacevíBolañitosTotalGuanacevíBolañitosEl CompasTotal
Closing finished goods18,08019518,27512,9102,306-15,216
Closing finished goods depletion3,776603,8361,9201,171-3,091
Finished goods inventory$21,856$255$22,111$14,830$3,477$0$18,307
        

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

Expressed in thousands US dollarsThree Months Ended September 30, 2022Three Months Ended September 30, 2021
GuanacevíBolañitosTotalGuanacevíBolañitosEl CompasTotal
Cash costs net of by-product$14,132$792$14,924$12,169($1,969)$364$10,564
Operations share-based compensation5657113444516105
Corporate general and administrative1,2004141,614(781)(389)(79)(1,249)
Corporate share-based compensation40512553043621644697
Reclamation - amortization/accretion64521161311226
Mine site expensed exploration3163056213662293598
Intangible payments---6130697
Equipment loan payments245489734245501-746
Capital expenditures sustaining7,2123,43910,6516,3224,706-11,028
All-In-Sustaining Costs$23,629$5,674$29,303$18,875$3,381$357$22,612
Growth exploration and evaluation  3,142   4,053
Growth capital expenditures  6,240   2,303
All-In-Costs  $38,685   $28,968


 Three Months Ended September 30, 2022Three Months Ended September 30, 2021
 GuanacevíBolañitosTotalGuanacevíBolañitosEl CompasTotal
Throughput tonnes97,728105,017202,745105,496107,7529,213222,461
Payable silver ounces1,328,193117,6871,445,8801,170,645117,0787,4031,295,126
Silver equivalent production (ounces)1,623,550570,4182,193,9681,462,568621,08365,0282,148,679
Sustaining cost per ounce$17.79$48.21$20.27$16.12$28.88$48.16$17.46
All-In-costs per ounce  $26.76   $22.37
        
Expressed in thousands US dollars  Nine Months Ended September 30, 2022Nine Months Ended September 30, 2021
GuanacevíBolañitosTotalGuanacevíBolañitosEl CompasTotal
Cash costs net of by-product$40,269$1,528$41,797$38,443($7,712)$1,826$32,557
Operations share-based compensation17617735313713661334
Corporate general and administrative3,6681,4455,1133,0261,5043074,837
Corporate share-based compensation1,8497282,5771,4737321492,355
Reclamation - amortization/accretion1981583563833778
Mine site expensed exploration1,0288631,8911,3607681982,326
Intangible payments2912411788818284
Equipment loan payments7361,4662,2028531,593-2,446
Capital expenditures sustaining19,9088,65328,56114,22210,806-25,028
All-In-Sustaining Costs$67,861$15,030$82,891$59,730$7,949$2,567$70,245
Growth exploration and evaluation  8,456   11,023
Growth capital expenditures  16,778   3,737
All-In-Costs  $108,125   $85,005
        
 Nine Months Ended September 30, 2022Nine Months Ended September 30, 2021
 GuanacevíBolañitosTotalGuanacevíBolañitosEl CompasTotal
Throughput tonnes292,998317,255610,253306,021313,35654,555673,932
Payable silver ounces3,649,209446,4874,095,6963,022,531328,52243,0503,394,103
Silver equivalent production (ounces)4,524,1101,782,7406,306,8503,786,1861,882,154384,1636,052,503
Sustaining cost per ounce$18.60$33.66$20.24$19.76$24.20$59.62$20.70
All-In-costs per ounce  $26.40   $25.04
        

Reconciliation of Sustaining Capital and Growth Capital

Expressed in thousands US dollarsThree Months Ended September 30Nine Months Ended September 30
2022202120222021
Capital expenditures sustaining$10,651$11,028$28,561$25,028
Growth capital expenditures6,2402,30316,7783,737
Acquisition capital expenditures35,99810,04235,99810,042
Property, plant and equipment expenditures per Consolidated Statement of Cash Flows$52,889$23,373$81,337$38,807
     

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

Expressed in thousands US dollarsThree Months Ended September 30, 2022Three Months Ended September 30, 2021
GuanacevíBolañitosTotalGuanacevíBolañitosEl CompasTotal
Direct production costs per financial statements$15,156$9,354$24,510$9,299$6,692$2,648$18,639
Smelting and refining costs included in net revenue-744744-35042392
Royalties2,762592,8212,59548552,698
Special mining duty (1)241(85)156801(203)-598
Opening finished goods(16,164)(681)(16,845)(6,985)(408)(1,145)(8,538)
Closing finished goods18,08019518,27512,9102,306-15,216
Direct costs$20,075$9,586$29,661$18,620$8,785$1,600$29,005
        
 Three Months Ended September 30, 2022Three Months Ended September 30, 2021
 GuanacevíBolañitosTotalGuanacevíBolañitosEl CompasTotal
Silver production (ounces)1,332,190126,2581,458,4481,174,168123,8837,3481,305,399
Average realized silver price ($)19.2419.2419.2424.5624.5624.5624.56
Silver value ($)25,634,6152,429,51528,064,12928,837,5663,042,566180,46732,060,599
Gold production (ounces)3,6425,5529,1943,6056,21572110,541
Average realized gold price ($)1,6781,6781,6781,7911,7911,7911,791
Gold value ($)6,110,5959,315,21715,425,8126,456,55511,131,0651,291,31118,878,931
Total metal value ($)31,745,20911,744,73243,489,94135,294,12114,173,6311,471,77850,939,530
Pro-rated silver costs (%)81%21%65%82%21%12%63%
Pro-rated gold costs (%)19%79%35%18%79%88%37%
Pro-rated silver costs ($)16,2111,98319,14015,2141,88619618,255
Pro-rated gold costs ($)3,8647,60310,5213,4066,8991,40410,750
Silver co-product cash costs ($)12.1715.7113.1212.9615.2226.7013.98
Gold co-product cash costs ($)1,0611,3691,1449451,1101,9471,020
        
Expressed in thousands US dollarsNine Months Ended September 30, 2022Nine Months Ended September 30, 2021
GuanacevíBolañitosTotalGuanacevíBolañitosEl CompasTotal
Direct production costs per financial statements$40,837$30,222$71,059$33,072$21,567$8,951$63,590
Smelting and refining costs included in net revenue-$2,335$2,335-1,3532481,601
Royalties9,1242089,3328,9661863469,498
Special mining duty (1)1,7672862,0531,742205-1,947
Opening finished goods(10,093)(2,857)(12,950)(1,509)(250)(642)(2,401)
Finished goods NRV adjustment-----266266
Closing finished goods18,08019518,27512,9102,306-15,216
Direct costs59,71530,38990,10455,18125,3679,16989,717
        
 Nine Months Ended September 30, 2022Nine Months Ended September 30, 2021
 GuanacevíBolañitosTotalGuanacevíBolañitosEl CompasTotal
Silver production (ounces)3,660,190472,4204,132,6103,031,626350,15445,4433,427,223
Average realized silver price ($)22.2422.2422.2426.2626.2626.2626.26
Silver value ($)81,394,36710,505,55591,899,92279,610,4999,195,0441,193,33389,998,876
Gold production (ounces)10,79916,37927,1789,43219,1504,23432,816
Average realized gold price ($)1,8271,8271,8271,7841,7841,7841,784
Gold value ($)19,733,10029,929,47949,662,57816,826,68834,163,6007,553,45658,543,744
Total metal value ($)101,127,46740,435,033141,562,50096,437,18743,358,6448,746,789148,542,620
Pro-rated silver costs (%)80%26%65%83%21%14%61%
Pro-rated gold costs (%)20%74%35%17%79%86%39%
Pro-rated silver costs ($)48,0637,89558,49445,5535,3801,25154,358
Pro-rated gold costs ($)11,65222,49431,6109,62819,9877,91835,359
Silver co-product cash costs ($)13.1316.7114.1515.0315.3627.5315.86
Gold co-product cash costs ($)1,0791,3731,1631,0211,0441,8701,078
        

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

Expressed in thousands US dollars                                                Three Months Ended September 30Nine Months Ended September 30
2022202120222021
Gross silver sales$25,541$17,180$81,123$64,167
Silver ounces sold1,327,325699,5393,647,9872,443,184
Realized silver price per ounces$19.24$24.56$22.24$26.26
     
Expressed in thousands US dollars                                                Three Months Ended September 30Nine Months Ended September 30
2022202120222021
Gross gold sales$14,852$17,774$49,383$54,237
Gold ounces sold8,8529,92527,02530,398
Realized gold price per ounces$1,678$1,791$1,827$1,784


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 available at www.sedar.com.

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  Nine months ended 
  September 30, September 30, September 30, September 30,
  2022   2021   2022   2021 
         
Revenue $ 39,649   $34,562  $ 128,171   $116,803 
Cost of sales:        
Direct production costs     24,510    18,639        71,059    63,590 
Royalties       2,821    2,698          9,332    9,498 
Share-based payments         113    105             353    334 
Depreciation, depletion and amortization       5,753    4,843        16,234    18,963 
Write down of inventory to net realizable value       1,323    -          1,323    272 
      34,520    26,285        98,301    92,657 
Mine operating earnings       5,129    8,277        29,870    24,146 
Expenses:        
Exploration and evaluation       4,023    4,660        11,023    13,815 
General and administrative       2,201    (522)         7,846    7,294 
Care and maintenance costs          203    364             582    940 
Severance costs            -      737               -      737 
Impairment (reversal of impairment) of non-current assets, net            -      -                     -      (16,791)
Write off of exploration properties            -      -                   500    - 
        6,427    5,239        19,951    5,995 
         
Operating earnings (loss)     (1,298)  3,038          9,919    18,151 
         
Finance costs          311    195             945    702 
         
Other income (expense):        
Foreign exchange gain (loss)          841    (1,184)         1,363    (1,219)
Gain on asset disposal       2,780    -                2,780    5,841 
Investment and other        (272)  (2,462)       (1,324)  2,091 
        3,349    (3,646)         2,819    6,713 
Earnings (loss) before income taxes       1,740    (803)       11,793    24,162 
Income tax expense:        
Current income tax expense       1,186    659          3,526    2,476 
Deferred income tax expense       2,053    3,017        10,027    7,260 
        3,239    3,676        13,553    9,736 
Net earnings (loss) and comprehensive earnings (loss) for the period $ (1,499) $(4,479) $   (1,760) $14,426 
Basic earnings (loss) per share based on net earnings$   (0.01) $(0.03) $     (0.01) $0.09 
Diluted earnings (loss) per share based on net earnings$   (0.01) $(0.03) $     (0.01) $0.09 
Basic weighted average number of shares outstanding 189,241,367   170,432,326   180,655,842   166,201,727 
Diluted weighted average number of shares outstanding 189,241,367   170,432,326   180,655,842   169,628,783 
         

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

      
  September 30, December 31, 
   2022   2021  
      
ASSETS     
Current assets     
Cash and cash equivalents $        69,193   $103,303  
Other investments              8,146    11,200  
Accounts and other receivable            11,301    14,462  
Income tax receivable              2,474    177  
Inventories            36,528    27,485  
Prepaid expenses            11,369    5,135  
Loans receivable                 914    -  
Total current assets          139,925    161,762  
Non-current deposits                 565    599  
Non-current income tax receivable              3,570    3,570  
Non-current other investments              1,993    -  
Non-current IVA receivable              7,507    4,256  
Non-current loans receivable              2,718    -  
Deferred income tax asset                      -    936  
Intangible assets                      -    40  
Right-of-use leased assets                 563    664  
Mineral properties, plant and  equipment          215,863    122,197  
Total assets $      372,704   $294,024  
      
LIABILITIES AND SHAREHOLDERS' EQUITY     
      
Current liabilities     
Accounts payable and accrued liabilities $        27,740   $31,991  
Income taxes payable              4,631    4,228  
Loans payable              5,791    4,128  
Lease liabilities                 145    207  
Total current liabilities            38,307    40,554  
Loans payable              8,242    6,366  
Lease liabilities                 680    794  
Provision for reclamation and rehabilitation              7,592    7,397  
Deferred income tax liability            10,597    1,506  
Total liabilities            65,418    56,617  
      
Shareholders' equity     
Common shares, unlimited shares authorized, no par value, issued, issuable    
and outstanding 189,989,563 shares (Dec 31, 2021 - 170,537,307 shares)         657,833    585,406  
Contributed surplus              5,543    6,331  
Retained earnings (deficit)         (356,090)  (354,330) 
Total shareholders' equity          307,286    237,407  
Total liabilities and shareholders' equity $      372,704   $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  Nine months ended 
   September 30, September 30, September 30, September 30,
    2022   2021   2022   2021 
          
Operating activities         
Net earnings (loss) for the period  $      (1,499) $(4,479) $      (1,760) $14,426 
          
Items not affecting cash:         
Share-based compensation                760    725             3,259    2,918 
Depreciation, depletion and amortization             6,023    4,980           16,809    19,327 
Impairment (reversal of impairment) of non-current assets, net                    -    -                    -    (16,791)
Write off of exploration properties                    -    -                500    - 
Deferred income tax expense             2,053    3,017           10,027    7,260 
Unrealized foreign exchange loss (gain)                  89    140              (131)  87 
Finance costs                312    195                946    702 
Write down of inventory to net realizable value             1,323    -             1,323    272 
Loss (gain) on asset disposal           (2,826)  -           (2,780)  (5,807)
Loss (gain) on other investments             1,097    3,077             3,366    (835)
Net changes in non-cash working capital                  85    (7,808)        (20,957)  (16,168)
Cash from (used in) operating activities             7,417    (153)          10,602    5,391 
          
Investing activities         
Proceeds on disposal of property, plant and equipment               250    -                332    7,541 
Mineral property, plant and equipment         (52,889)  (23,373)        (81,337)  (38,807)
Reclamation and rehabilitation change in estimate              (157)  -              (157)  - 
Purchase of investments                    -    -           (2,119)  (832)
Proceeds from disposal of marketable securities                    -    -                    -    9,288 
Redemption of (investment in) non-current deposits                 30    1                  34    - 
Cash from (used) in investing activities         (52,766)  (23,372)        (83,247)  (22,810)
          
Financing activities         
Repayment of loans payable           (1,268)  (843)          (3,565)  (2,730)
Repayment of lease liabilities                (55)  (46)             (161)  (131)
Interest paid              (204)  (159)             (585)  (526)
Public equity offerings                    -    864           46,001    59,998 
Exercise of options                  20    -             1,598    4,583 
Share issuance costs                (93)  (27)          (2,905)  (1,293)
Deferred share unit redemption                    -    -                  (6)  - 
Performance share unit redemption                    -    (189)          (1,897)  (2,363)
Cash from (used) financing activities           (1,600)  (400)          38,480    57,538 
          
Effect of exchange rate change on cash and cash equivalents              (84)  (190)                 55    (126)
          
Increase (decrease) in cash and cash equivalents         (46,949)  (23,925)        (34,165)  40,119 
Cash and cash equivalents, beginning of the period        116,226    125,191         103,303    61,083 
Cash and cash equivalents, end of the period $      69,193   $101,076  $      69,193   $101,076 
          

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