Endeavour Silver Reports Solid 2022 Financial Results: Earnings Conference Call at 9am PST (12pm EST) Time
VANCOUVER, British Columbia, March 02, 2023 (GLOBE NEWSWIRE) -- Endeavour Silver Corp. (“Endeavour” or the “Company”) (NYSE: EXK; TSX: EDR) is pleased to announce its financial and operating results for the year ended December 31, 2022. All dollar amounts are in US dollars (US$).
“Our strong and reliable operating performance resulted in robust 2022 financial results. We are especially pleased to have delivered against our all-in sustaining cost guidance of less than $20 per ounce, despite industrywide inflationary pressures, as a result of our strong production performance. Cost control will continue to be a key focus for the operations group in 2023, as we find pockets of cost moderation and business improvements,” stated Dan Dickson, CEO of Endeavour Silver. “As silver prices rebounded in Q4, we were able to take advantage of the higher prices by selling almost half of the year’s projected sales towards the end of the year, which resulted in robust cash flow to fund our growth plans.”
Mr. Dickson added, “While the market anticipates the official construction decision at Terronera, our funding plan remains intact. We have been advancing development activities with our existing cash, while we confirm a viable debt financing package. We believe that project execution is the correct path for adding long-term value, as we position ourselves as a top silver investment vehicle for investors seeking industry leading growth.”
2022 Highlights
- Production Surpassed Guidance: Production of 5,963,445 ounces (oz) of silver and 37,548 oz of gold for 9.0 million oz silver equivalent (AgEq)1 as compared to upward revised guidance of 7.6-8.0 million oz AgEq.
- Strong Revenue: Net revenue of $210.2 million from the sale of 6,464,869 oz of silver and 38,868 oz of gold at average realized prices of $22.07 per oz silver and $1,814 per oz gold.
- Costs Per Ounce Relatively In-Line with Guidance, Despite Industry-Wide Inflation: Cash costs(2) of $10.65 per oz payable silver were slightly above guidance due to increased labour, power, consumables and royalty costs and all-in sustaining costs (2) of $19.97 per oz is below cost guidance due to the increased silver oz produced.
- Healthy Balance Sheet: Cash position of $83.4 million and $93.6 million in working capital(2). Cash decreased in the 4th quarter, as funds were spent on development activities at Terronera.
- Increased Cash Flow: $54.0 million in operating cash flow before working capital changes(2), and mine operating cash flow before taxes(2) of $78.5 million.
- Net Income: Net earnings of $6.2 million, or $0.03 per share, were impacted by inflationary pressures and a reduction in the realized silver price as compared to the prior year.
- Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)(2): Generated EBITDA of $51.9 million, 6% decrease from prior year due to the lower realized silver prices offset by the increased production.
- Construction Preparation Advances at the Terronera Project: Progress on development activities include onsite delivery of mobile mining equipment, procurement of major equipment, and assembly of initial project infrastructure such as the temporary mine maintenance shop and a permanent camp facility. Earthworks included site clearing, road upgrades and underground mine access development.
- Financial Due Diligence Continues on Financing the Terronera Project: 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.
- Published Initial Mineral Resource Estimate for the Pitarrilla Project: One of the world’s largest undeveloped silver projects, Pitarrilla will form the cornerstone of the Company’s growth profile, together with Terronera and Parral (see News Release dated December 8, 2022).
Financial Overview (see appendix for consolidated financial statements)
| Three Months Ended December 31 | 2022 Highlights | Year Ended December 31 | ||||
| 2022 | 2021 | % Change | 2022 | 2021 | % Change | |
| Production | ||||||
| 1,830,835 | 1,443,564 | 27% | Silver ounces produced | 5,963,445 | 4,870,787 | 22% |
| 10,370 | 9,446 | 10% | Gold ounces produced | 37,548 | 42,262 | (11%) |
| 1,816,813 | 1,432,578 | 27% | Payable silver ounces produced | 5,912,509 | 4,826,681 | 22% |
| 10,196 | 9,261 | 10% | Payable gold ounces produced | 36,901 | 41,438 | (11%) |
| 2,660,435 | 2,199,244 | 21% | Silver equivalent ounces produced(1) | 8,967,285 | 8,251,747 | 9% |
| 11.65 | 8.65 | 35% | Cash costs per silver ounce(2)(3) | 10.65 | 9.31 | 14% |
| 15.03 | 11.99 | 25% | Total production costs per ounce(2)(4) | 14.70 | 14.70 | 0% |
| 19.38 | 19.48 | (1%) | All-in sustaining costs per ounce (2)(5) | 19.97 | 20.34 | (2%) |
| 224,289 | 213,492 | 5% | Processed tonnes | 834,542 | 887,424 | (6%) |
| 135.71 | 112.91 | 20% | Direct operating costs per tonne(2)(6) | 130.80 | 115.36 | 13% |
| 177.35 | 136.62 | 30% | Direct costs per tonne(2)(6) | 155.63 | 133.97 | 16% |
| 14.86 | 13.41 | 11% | Silver co-product cash costs(7) | 14.35 | 15.11 | (5%) |
| 1,212 | 1,038 | 17% | Gold co-product cash costs(7) | 1,180 | 1,072 | 10% |
| Financial | ||||||
| 82.0 | 48.5 | 69% | Revenue ($ millions) | 210.2 | 165.3 | 27% |
| 2,816,882 | 1,413,699 | 99% | Silver ounces sold | 6,464,869 | 3,856,883 | 68% |
| 11,843 | 8,715 | 36% | Gold ounces sold | 38,868 | 39,113 | (1%) |
| 21.86 | 23.41 | (7%) | Realized silver price per ounce | 22.07 | 25.22 | (12%) |
| 1,783 | 1,811 | (2%) | Realized gold price per ounce | 1,814 | 1,790 | 1% |
| 8.0 | (0.5) | 1790% | Net earnings (loss) ($ millions) | 6.2 | 14.0 | (56%) |
| 8.1 | 4.6 | 74% | Adjusted net earnings (loss) (11) ($ millions) | 6.9 | (6.5) | 206% |
| 21.7 | 12.2 | 77% | Mine operating earnings ($ millions) | 51.5 | 36.4 | 42% |
| 30.7 | 18.2 | 68% | Mine operating cash flow before taxes ($ millions)(8) | 78.5 | 61.9 | 27% |
| 22.5 | 10.7 | 110% | Operating cash flow before working capital changes(9) | 54.0 | 32.2 | 68% |
| 22.7 | 10.7 | 111% | EBITDA(10) ($ millions) | 51.9 | 54.9 | (6%) |
| 93.6 | 121.2 | (23%) | Working capital (12) ($ millions) | 93.6 | 121.2 | (23%) |
| Shareholders | ||||||
| 0.04 | 0.00 | 400% | Earnings (loss) per share – basic ($) | 0.03 | 0.08 | (63%) |
| 0.12 | 0.06 | 89% | Operating cash flow before working capital changes per share(9) | 0.30 | 0.19 | 53% |
| 189,993,085 | 170,518,894 | 11% | Weighted average shares outstanding | 183,009,339 | 167,289,732 | 9% |
(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.sedar.com.
For the year ended December 31, 2022, net revenue, net of $3.0 million of smelting and refining costs, increased by 27% to $210.2 million (2021: $165.3 million).
Gross sales of $213.2 million in 2022 represented a 27% increase over the $167.3 million in 2021. Silver oz sold increased by 68% with a 12% decrease in the realized silver price, resulting in a 47% increase in silver sales. Gold oz sold increased by 1% with a 1% increase in the realized gold price, resulting in a 1% increase in gold sales. During the period, the Company sold 6,464,869 oz silver and 38,868 oz gold for realized prices of $22.07 and $1,814 per oz, respectively, compared to sales of 3,856,883 oz silver and 39,113 oz gold for realized prices of $25.22 and $1,790 per oz, respectively, in 2021. In 2022, silver and gold London spot prices averaged $21.73 and $1,800, respectively.
The Company significantly decreased its finished goods silver and gold inventory to 530,250 oz and 1,707 oz, respectively, at December 31, 2022 compared to 1,082,610 oz silver and 3,674 oz gold at December 31, 2021. The cost allocated to these finished goods was $6.1 million at December 31, 2022 compared to $15.6 million at December 31, 2021. At December 31, 2022, the finished goods inventory fair market value was $15.8 million, compared to $31.7 million at December 31, 2021. Earnings and other financial metrics, including mine operating cash flow(2), operating cash flow(2) and EBITDA(2) were positively impacted by the decreased bullion inventory held at year end.
After cost of sales of $158.6 million (2021 - $128.9 million), an increase of 23%, mine operating earnings were $51.5 million (2021- $36.4 million). The increase in cost of sales was due to increased production, labour, power and consumables costs and significantly higher royalty costs. Cost of sales was also impacted by the increase in ounces sold during 2022, as the Company held less inventory at the end of 2022 than at the end of 2021. Royalties increased 29% to $17.8 million due to increased mining of the high-grade Porvenir and Porvenir Cuatro extensions at the Guanaceví operation, which are subject to higher royalty rates. During 2022 the Company’s operations experienced higher than budgeted costs due to global supply constraints, inflationary pressure, materials shortages, labour costs tracking higher than planned and increased purchased ore at the Guanaceví operation.
The Company had operating earnings of $23.5 million (2021: $22.3 million) after exploration and evaluation costs of $16.2 million (2021: $17.9 million), general and administrative costs of $10.6 million (2021: $10.1 million), care and maintenance cost of $0.6 million (2021: $1.3 million), and a write-off of exploration properties of $0.7 million (2021: $0.7 million). In 2021, there was also an impairment reversal of $16.8 million, resulting from the valuation assessment performed for the El Cubo mine and related assets upon classification as held for sale, and severance cost of $0.7 million.
Earnings before income taxes were $25.0 million (2021: $29.7 million) after finance costs of $1.3 million (2021: $1.0 million), a foreign exchange gain of $1.9 million (2021: loss of $1.1 million), a net gain on disposal of assets of $2.5 million primarily generated by the gain on the sale of the El Compas mine of $2.7 million (2021: gain on the sale of El Cubo mine and assets of $5.8 million) and investment and other expense of $1.6 million (2021: investment and other income of $3.7 million).
The Company realized net earnings for the period of $6.2 million (2021: $14.0 million) after an income tax expense of $18.8 million (2021: $15.7 million). Current income tax expense increased to $6.4 million (2021 - $3.5 million) due to increased profitability of the Guanacevi mine impacting both the current income tax and the special mining duty, while deferred income tax expense of $12.4 million is primarily due to the estimated use of loss carryforwards to reduce taxable income at Guanacevi (2021 – $12.2 million)
Direct operating costs(2) on a per tonne basis increased to $130.80, up 13% compared with 2021 due to higher operating costs at Guanaceví and Bolañitos and a 6% decrease in processed tonnes. Guanaceví and Bolañitos have seen increased labour, power and consumables costs primarily driven by inflationary pressure and at Guanaceví, third party ore purchased and operating development have increased compared to the prior year. Direct costs per tonne (2) increased to $155.63, up 16% compared to 2021 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 $10.65 primarily due to the higher direct costs per tonne partially offset by increased silver production due to increased silver grades. All-in sustaining costs decreased 2% to $19.97 per oz in 2022 due to the higher cash costs and a moderate increase in capital expenditures being allocated over the increased silver ozs produced. Actual cash cost metrics were slightly higher than 2022 cost guidance primarily due to the increased costs relating to labour, power, consumables, increased third party ore purchases, higher royalties and special mining duty offset by the higher ore grades mined at Guanacevi.
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 annual 2022 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: | Thursday, March 2, 2023 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 9734#. 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 mine 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, VP, Investor Relations 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 December 31, 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 December 31, 2022 MD&A available on SEDAR at www.sedar.com.
Reconciliation of Working Capital
| Expressed in thousands US dollars | As at December 31, 2022 | As at December 31, 2021 |
| Current assets | $146,333 | $161,762 |
| Current liabilities | 52,749 | 40,554 |
| Working capital | $93,584 | $121,208 |
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) | 2022 | 2021 | 2022 | 2021 |
| Net earnings (loss) for the period per financial statements | $7,961 | ($471) | $6,201 | $13,955 |
| 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) | - |
| Change in fair value of investments | 104 | 5,103 | 3,470 | 2,117 |
| Adjusted net earnings (loss) | $8,065 | $4,632 | $6,938 | ($6,526) |
| Basic weighted average share outstanding | 189,993,085 | 170,518,894 | 183,009,339 | 167,289,732 |
| Adjusted net earnings (loss) per share | $0.04 | $0.03 | $0.04 | ($0.04) |
Note: The Company defines the adjusted earnings as net income adjusted to include certain non-cash and unusual item, and items that in the Company’s judgement are subject to volatility as a result of factors which are unrelated to the Company’s operation in the period. Certain items that become applicable in a period may be adjusted for, with the Company retroactively presenting comparable periods with an adjustment for such items and, conversely, items no longer applicable may be removed from the calculation. During the current period, the Company has included changes in the fair value of its investments in marketable securities and made retroactive adjustments to prior periods for the same.
Reconciliation of Mine Operating Cash Flow Before Taxes
| Expressed in thousands US dollars | Three Months Ended December 31 | Years Ended December 31 | ||
| 2022 | 2021 | 2022 | 2021 | |
| Mine operating earnings per financial statements | $21,655 | $12,222 | $51,525 | $36,368 |
| Share-based compensation | 89 | 87 | 442 | 421 |
| Amortization and depletion | 8,945 | 5,014 | 25,179 | 23,977 |
| Write down of inventory to net realizable value | - | 896 | 1,323 | 1,168 |
| Mine operating cash flow before taxes | $30,689 | $18,219 | $78,469 | $61,934 |
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) | 2022 | 2021 | 2022 | 2021 |
| Cash from (used in) operating activities per financial statements | $44,391 | $18,071 | $54,993 | $23,462 |
| Net changes in non-cash working capital per financial statements | 21,924 | 7,392 | 967 | (8,776) |
| Operating cash flow before working capital changes | $22,467 | $10,679 | $54,026 | $32,238 |
| Basic weighted average shares outstanding | 189,993,085 | 170,518,894 | 183,009,339 | 167,289,732 |
| Operating cash flow before working capital changes per share | $0.12 | $0.06 | $0.30 | $0.19 |
Reconciliation of EBITDA and Adjusted EBITDA
| Expressed in thousands US dollars | Three Months Ended December 31 | Years Ended December 31 | ||
| 2022 | 2021 | 2022 | 2021 | |
| Net earnings (loss) for the period per financial statements | $7,961 | ($471) | $6,201 | $13,955 |
| Depreciation and depletion – cost of sales | 8,945 | 5,014 | 25,179 | 23,977 |
| Depreciation and depletion – exploration | 276 | 92 | 624 | 330 |
| Depreciation and depletion – general & administration | 58 | 63 | 214 | 165 |
| Depreciation and depletion – care & maintenance | - | 30 | 71 | 55 |
| Depreciation and depletion – inventory write down | - | - | - | 6 |
| Finance costs | 233 | 22 | 816 | 724 |
| Current income tax expense | 2,850 | 1,005 | 6,376 | 3,481 |
| Deferred income tax expense | 2,345 | 4,992 | 12,372 | 12,252 |
| EBITDA | $22,668 | $10,747 | $51,853 | $54,945 |
| Share based compensation | 619 | 718 | 3,878 | 3,636 |
| 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) | - |
| Change in fair value of investments | 104 | 5,103 | 3,470 | 2,117 |
| Adjusted EBITDA | $23,391 | $16,568 | $56,468 | $38,100 |
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 | Year Ended December 31, 2022 | Year Ended December 31, 2021 | |||||
| Guanaceví | Bolañitos | Total | Guanaceví | Bolañitos | El Compas | Total | |
| Direct production costs per financial statements | $74,423 | $39,457 | $113,880 | $51,761 | $28,896 | $8,946 | $89,603 |
| Smelting and refining costs included in net revenue | - | 3,029 | 3,029 | - | 1,715 | 244 | 1,959 |
| Opening finished goods | (10,093) | (2,857) | (12,950) | (1,509) | (250) | (642) | (2,401) |
| Finished goods NRV adjustment | - | - | - | - | - | 266 | 266 |
| Closing finished goods | 4,953 | 245 | 5,198 | 10,093 | 2,857 | - | 12,950 |
| Direct operating costs | 69,283 | 39,874 | 109,157 | 60,345 | 33,218 | 8,814 | 102,377 |
| Royalties | 17,554 | 257 | 17,811 | 13,165 | 265 | 350 | 13,780 |
| Special mining duty (1) | 2,612 | 302 | 2,914 | 2,674 | 53 | - | 2,727 |
| Direct costs | 89,449 | 40,433 | 129,882 | 76,184 | 33,536 | 9,164 | 118,884 |
| By-product gold sales | (27,569) | (42,932) | (70,501) | (22,639) | (38,645) | (8,738) | (70,022) |
| Opening gold inventory fair market value | 1,900 | 4,784 | 6,684 | 735 | 746 | 1,283 | 2,764 |
| Closing gold inventory fair market value | (2,740) | (354) | (3,094) | (1,900) | (4,784) | - | (6,684) |
| Cash costs net of by-product | 61,040 | 1,931 | 62,971 | 52,380 | (9,147) | 1,709 | 44,942 |
| Amortization and depletion | 14,129 | 11,050 | 25,179 | 7,944 | 13,491 | 2,713 | 24,148 |
| Share-based compensation | 221 | 221 | 442 | 180 | 180 | 61 | 421 |
| 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 | 862 | 79 | 941 | 1,965 | 635 | - | 2,600 |
| Total production costs | $74,287 | $12,646 | $86,933 | $62,198 | $5,055 | $3,685 | $70,938 |
| Year Ended December 31, 2022 | Year Ended December 31, 2021 | ||||||
| Guanaceví | Bolañitos | Total | Guanaceví | Bolañitos | El Compas | Total | |
| Throughput tonnes | 412,303 | 422,239 | 834,542 | 414,355 | 418,514 | 54,555 | 887,424 |
| Payable silver ounces | 5,324,531 | 587,978 | 5,912,509 | 4,320,567 | 462,700 | 43,414 | 4,826,681 |
| Cash costs per silver ounce | $11.46 | $3.28 | $10.65 | $12.12 | ($19.77) | $39.37 | $9.31 |
| Total production costs per ounce | $13.95 | $21.51 | $14.70 | $14.40 | $10.93 | $84.88 | $14.70 |
| Direct operating costs per tonne | $168.04 | $94.43 | $130.80 | $145.64 | $79.37 | $161.56 | $115.36 |
| Direct costs per tonne | $216.95 | $95.76 | $155.63 | $183.86 | $80.13 | $167.98 | $133.97 |
| Expressed in thousands US dollars | Three Months Ended December 31, 2022 | Three Months Ended December 31, 2021 | |||||
| Guanaceví | Bolañitos | Total | Guanaceví | Bolañitos | El Compas | Total | |
| Direct production costs per financial statements | 33,586 | 9,235 | 42,821 | 18,689 | 7,329 | (5) | 26,013 |
| Smelting and refining costs included in net revenue | - | 694 | 694 | - | 362 | (4) | 358 |
| Opening finished goods | (18,080) | (195) | (18,275) | (12,910) | (2,306) | - | (15,216) |
| Closing finished goods | 4,953 | 245 | 5,198 | 10,093 | 2,857 | - | 12,950 |
| Direct operating costs | 20,459 | 9,979 | 30,438 | 15,872 | 8,242 | (9) | 24,105 |
| Royalties | 8,430 | 49 | 8,479 | 4,199 | 79 | 4 | 4,282 |
| Special mining duty (1) | 845 | 16 | 861 | 932 | (152) | - | 780 |
| Direct costs | 29,734 | 10,044 | 39,778 | 21,003 | 8,169 | (5) | 29,167 |
| By-product gold sales | (11,591) | (9,527) | (21,118) | (7,293) | (8,380) | (112) | (15,785) |
| Opening gold inventory fair market value | 5,368 | 240 | 5,608 | 2,127 | 3,560 | - | 5,687 |
| Closing gold inventory fair market value | (2,740) | (354) | (3,094) | (1,900) | (4,784) | - | (6,684) |
| Cash costs net of by-product | 20,771 | 403 | 21,174 | 13,937 | (1,435) | (117) | 12,385 |
| Amortization and depletion | 6,160 | 2,785 | 8,945 | 2,181 | 2,827 | 177 | 5,185 |
| Share-based compensation | 45 | 44 | 89 | 43 | 44 | - | 87 |
| Opening finished goods depreciation and depletion | (3,776) | (60) | (3,836) | (1,920) | (1,171) | - | (3,091) |
| Closing finished goods depreciation and depletion | 862 | 79 | 941 | 1,965 | 635 | - | 2,600 |
| Total production costs | $24,062 | $3,251 | $27,313 | $16,206 | $900 | $66 | $17,172 |
| Three Months Ended December 31, 2022 | Three Months Ended December 31, 2021 | ||||||
| Guanaceví | Bolañitos | Total | Guanaceví | Bolañitos | El Compas | Total | |
| Throughput tonnes | 119,305 | 104,984 | 224,289 | 108,334 | 105,158 | N/A | 213,492 |
| Payable silver ounces | 1,675,322 | 141,491 | 1,816,813 | 1,298,036 | 134,178 | 364 | 1,432,578 |
| Cash costs per silver ounce | $12.40 | $2.85 | $11.65 | $10.74 | ($10.69) | N/A | $8.65 |
| Total production costs per ounce | $14.36 | $22.98 | $15.03 | $12.49 | $6.71 | N/A | $11.99 |
| Direct operating costs per tonne | $171.48 | $95.05 | $135.71 | $146.51 | $78.38 | N/A | $112.91 |
| Direct costs per tonne | $249.23 | $95.67 | $177.35 | $193.87 | $77.68 | N/A | $136.62 |
Reconciliation of All-In Costs Per Ounce and AISC per ounce
| Expressed in thousands US dollars | Year Ended December 31, 2022 | Year Ended December 31, 2021 | |||||
| Guanaceví | Bolañitos | Total | Guanaceví | Bolañitos | El Compas | Total | |
| Cash costs net of by-product | $61,040 | $1,931 | $62,971 | $52,380 | ($9,147) | $1,709 | $44,942 |
| Operations share-based compensation | 221 | 221 | 442 | 180 | 180 | 61 | 421 |
| Corporate general and administrative | 5,439 | 1,951 | 7,390 | 4,564 | 2,082 | 329 | 6,975 |
| Corporate share-based compensation | 2,214 | 795 | 3,009 | 1,912 | 873 | 138 | 2,923 |
| Reclamation - amortization/accretion | 268 | 211 | 479 | 100 | 83 | 9 | 192 |
| Mine site expensed exploration | 1,351 | 1,158 | 2,509 | 1,611 | 1,216 | 198 | 3,025 |
| Intangible payments | 30 | 11 | 41 | 250 | 114 | 18 | 382 |
| Equipment loan payments | 981 | 1,955 | 2,936 | 1,099 | 2,082 | - | 3,181 |
| Capital expenditures sustaining | 26,561 | 11,756 | 38,317 | 21,964 | 14,150 | - | 36,114 |
| All-In-Sustaining Costs | $98,105 | $19,989 | $118,094 | $84,060 | $11,633 | $2,462 | $98,155 |
| Growth exploration and evaluation | 12,626 | 14,277 | |||||
| Growth capital expenditures | 35,450 | 7,872 | |||||
| All-In-Costs | $166,170 | $120,304 | |||||
| Year Ended December 31, 2022 | Year Ended December 31, 2021 | ||||||
| Guanaceví | Bolañitos | Total | Guanaceví | Bolañitos | El Compas | Total | |
| Throughput tonnes | 412,303 | 422,239 | 834,542 | 414,355 | 418,514 | 54,555 | 887,424 |
| Payable silver ounces | 5,324,531 | 587,978 | 5,912,509 | 4,320,567 | 462,700 | 43,414 | 4,826,681 |
| Silver equivalent production (ounces) | 6,599,353 | 2,367,932 | 8,967,285 | 5,398,927 | 2,463,572 | 389,248 | 8,251,747 |
| Sustaining cost per ounce | $18.43 | $34.00 | $19.97 | $19.46 | $25.14 | $56.71 | $20.34 |
| All-In-costs per ounce | $28.10 | $24.92 | |||||
| Expressed in thousands US dollars | Three Months Ended December 31, 2022 | Three Months Ended December 31, 2021 | |||||
| Guanaceví | Bolañitos | Total | Guanaceví | Bolañitos | El Compas | Total | |
| Cash costs net of by-product | $20,771 | $403 | $21,174 | $13,937 | ($1,435) | ($117) | $12,385 |
| Operations share-based compensation | 45 | 44 | 89 | 43 | 44 | - | 87 |
| Corporate general and administrative | 1,771 | 506 | 2,277 | 1,538 | 578 | 22 | 2,138 |
| Corporate share-based compensation | 365 | 67 | 432 | 439 | 141 | (11) | 569 |
| Reclamation - amortization/accretion | 70 | 53 | 123 | 62 | 50 | 2 | 114 |
| Mine site expensed exploration | 323 | 295 | 618 | 251 | 448 | - | 699 |
| Intangible payments | - | - | - | 72 | 26 | - | 98 |
| Equipment loan payments | 245 | 489 | 734 | 246 | 489 | - | 735 |
| Capital expenditures sustaining | 6,653 | 3,103 | 9,756 | 7,742 | 3,344 | - | 11,086 |
| All-In-Sustaining Costs | $30,243 | $4,960 | $35,203 | $24,330 | $3,685 | ($104 | $27,911 |
| Growth exploration and evaluation | 4,170 | 3,254 | |||||
| Growth capital expenditures | 18,672 | 4,135 | |||||
| All-In-Costs | $58,045 | $35,300 | |||||
| Three Months Ended December 31, 2022 | Three Months Ended December 31, 2021 | ||||||
| Guanaceví | Bolañitos | Total | Guanaceví | Bolañitos | El Compas | Total | |
| Throughput tonnes | 119,305 | 104,984 | 224,289 | 108,334 | 105,158 | N/A | 213,492 |
| Payable silver ounces | 1,675,322 | 141,491 | 1,816,813 | 1,298,036 | 134,178 | 364 | 1,432,578 |
| Silver equivalent production (ounces) | 2,075,243 | 585,192 | 2,660,435 | 1,612,741 | 581,418 | 5,085 | 2,199,244 |
| Sustaining cost per ounce | $18.05 | $35.06 | $19.38 | $18.74 | $27.46 | ($285.98) | $19.48 |
| All-In-costs per ounce | $31.95 | $24.64 | |||||
Reconciliation of Sustaining Capital and Growth Capital
| Expressed in thousands US dollars | Three Months Ended December 31 | Years Ended December 31 | ||
| 2022 | 2021 | 2022 | 2021 | |
| Capital expenditures sustaining | $9,756 | $11,086 | $38,317 | $36,114 |
| Growth capital expenditures | 18,672 | 4,135 | 35,450 | 7,872 |
| Acquisition capital expenditures | (50) | 10,106 | 35,948 | 10,106 |
| Property, plant and equipment expenditures per Consolidated Statement of Cash Flows | $28,378 | $25,327 | $109,715 | $54,092 |
Reconciliation of Silver Co-Product Cash Costs and Gold Co-Product Cash Costs
| Expressed in thousands US dollars | Year Ended December 31, 2022 | Year Ended December 31, 2021 | |||||
| Guanaceví | Bolañitos | Total | Guanaceví | Bolañitos | El Compas | Total | |
| Direct production costs per financial statements | $74,423 | $39,457 | $113,880 | $51,761 | $28,896 | $8,946 | $89,603 |
| Smelting and refining costs included in net revenue | - | $3,029 | $3,029 | - | 1,715 | 244 | 1,959 |
| Royalties | 17,554 | 257 | 17,811 | 13,165 | 265 | 350 | 13,780 |
| Special mining duty (1) | 2,612 | 302 | 2,914 | 2,674 | 53 | - | 2,727 |
| Opening finished goods | (10,093) | (2,857) | (12,950) | (1,509) | (250) | (642) | (2,401) |
| Finished goods NRV adjustment | - | - | - | - | - | 266 | 266 |
| Closing finished goods | 4,953 | 245 | 5,198 | 10,093 | 2,857 | - | 12,950 |
| Direct costs | 89,449 | 40,433 | 129,882 | 76,184 | 33,536 | 9,164 | 118,884 |
| Year Ended December 31, 2022 | Year Ended December 31, 2021 | ||||||
| Guanaceví | Bolañitos | Total | Guanaceví | Bolañitos | El Compas | Total | |
| Silver production (ounces) | 5,340,553 | 622,892 | 5,963,445 | 4,333,567 | 491,412 | 45,808 | 4,870,787 |
| Average realized silver price ($) | 22.07 | 22.07 | 22.07 | 25.22 | 25.22 | 25.22 | 25.22 |
| Silver value ($) | 117,872,913 | 13,748,032 | 131,620,946 | 109,292,560 | 12,393,411 | 1,155,278 | 122,841,248 |
| Gold production (ounces) | 15,735 | 21,813 | 37,548 | 13,317 | 24,652 | 4,293 | 42,262 |
| Average realized gold price ($) | 1,814 | 1,814 | 1,814 | 1,790 | 1,790 | 1,790 | 1,790 |
| Gold value ($) | 28,541,042 | 39,565,666 | 68,106,709 | 23,837,430 | 44,127,080 | 7,684,470 | 75,648,980 |
| Total metal value ($) | 146,413,956 | 53,313,698 | 199,727,654 | 133,129,990 | 56,520,491 | 8,839,748 | 198,490,228 |
| Pro-rated silver costs (%) | 81% | 26% | 66% | 82% | 22% | 13% | 62% |
| Pro-rated gold costs (%) | 19% | 74% | 34% | 18% | 78% | 87% | 38% |
| Pro-rated silver costs ($) | 72,012 | 10,426 | 85,593 | 62,543 | 7,354 | 1,198 | 73,575 |
| Pro-rated gold costs ($) | 17,437 | 30,007 | 44,289 | 13,641 | 26,182 | 7,966 | 45,309 |
| Silver co-product cash costs ($) | 13.48 | 16.74 | 14.35 | 14.43 | 14.96 | 26.15 | 15.11 |
| Gold co-product cash costs ($) | 1,108 | 1,376 | 1,180 | 1,024 | 1,062 | 1,856 | 1,072 |
| Expressed in thousands US dollars | Three Months Ended December 31, 2022 | Three Months Ended December 31, 2021 | |||||
| Guanaceví | Bolañitos | Total | Guanaceví | Bolañitos | El Compas | Total | |
| Direct production costs per financial statements | $33,586 | $9,235 | $42,821 | $18,689 | $7,329 | ($5) | $26,013 |
| Smelting and refining costs included in net revenue | - | 694 | 694 | - | 362 | (4) | 358 |
| Royalties | 8,430 | 49 | 8,479 | 4,199 | 79 | 4 | 4,282 |
| Special mining duty (1) | 845 | 16 | 861 | 932 | (152) | - | 780 |
| Opening finished goods | (18,080) | (195) | (18,275) | (12,910) | (2,306) | - | (15,216) |
| Closing finished goods | 4,953 | 245 | 5,198 | 10,093 | 2,857 | - | 12,950 |
| Direct costs | $29,734 | $10,044 | $39,778 | $21,003 | $8,169 | ($5) | $29,167 |
| Three Months Ended December 31, 2022 | Three Months Ended December 31, 2021 | ||||||
| Guanaceví | Bolañitos | Total | Guanaceví | Bolañitos | El Compas | Total | |
| Silver production (ounces) | 1,680,363 | 150,472 | 1,830,835 | 1,301,941 | 141,258 | 365 | 1,443,564 |
| Average realized silver price ($) | 21.86 | 21.86 | 21.86 | 23.41 | 23.41 | 23.41 | 23.41 |
| Silver value ($) | 36,725,566 | 3,288,676 | 40,014,242 | 30,478,439 | 3,306,850 | 8,545 | 33,793,833 |
| Gold production (ounces) | 4,936 | 5,434 | 10,370 | 3,885 | 5,502 | 59 | 9,446 |
| Average realized gold price ($) | 1,783 | 1,783 | 1,783 | 1,811 | 1,811 | 1,811 | 1,811 |
| Gold value ($) | 8,801,693 | 9,689,708 | 18,491,401 | 7,035,735 | 9,964,122 | 106,849 | 17,106,706 |
| Total metal value ($) | 45,527,258 | 12,978,384 | 58,505,642 | 37,514,174 | 13,270,972 | 115,394 | 50,900,539 |
| Pro-rated silver costs (%) | 81% | 25% | 68% | 81% | 25% | 7% | 66% |
| Pro-rated gold costs (%) | 19% | 75% | 32% | 19% | 75% | 93% | 34% |
| Pro-rated silver costs ($) | 23,986 | 2,545 | 27,206 | 17,064 | 2,036 | - | 19,365 |
| Pro-rated gold costs ($) | 5,748 | 7,499 | 12,572 | 3,939 | 6,133 | (5) | 9,802 |
| Silver co-product cash costs ($) | 14.27 | 16.91 | 14.86 | 13.11 | 14.41 | (1.01) | 13.41 |
| Gold co-product cash costs ($) | 1,165 | 1,380 | 1,212 | 1,014 | 1,115 | (78) | 1,038 |
Reconciliation of Realized Silver Price Per Ounce and Realized Gold Price Per Ounce
| Expressed in thousands US dollars | Three Months Ended December 31 | Years Ended December 31 | ||
| 2022 | 2021 | 2022 | 2021 | |
| Gross silver sales | $61,565 | $33,090 | $142,688 | $97,257 |
| Silver ounces sold | 2,816,881 | 1,413,699 | 6,464,868 | 3,856,883 |
| Realized silver price per ounces | $21.86 | $23.41 | $22.07 | $25.22 |
| Expressed in thousands US dollars | Three Months Ended December 31 | Years Ended December 31 | ||
| 2022 | 2021 | 2022 | 2021 | |
| Gross gold sales | $21,118 | $15,786 | $70,501 | $70,022 |
| Gold ounces sold | 11,843 | 8,715 | 38,868 | 39,113 |
| Realized gold price per ounces | $1,783 | $1,811 | $1,814 | $1,790 |
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 the development and financing of the Terronera project, including anticipated decisions on construction and financing, estimation of mineral resources at Pitarrilla, prospects for Terronera, Pitarrilla and Parral, Endeavour’s anticipated performance in 2023 including changes in mining operations and forecasts of production levels, anticipated production costs and all-in sustaining costs, and the timing and results of various activities. The Company does not intend to and does not assume any obligation to update such forward-looking statements or information, other than as required by applicable law.
Forward-looking statements or information involve known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, 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, availability of debt financing for the Terronera Project, 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. | ||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (LOSS) | ||||||
| (expressed in thousands of US dollars, except for shares and per share amounts) | ||||||
| Years ended | ||||||
| December 31, | December 31, | |||||
| 2022 | 2021 | |||||
| Revenue | $ | 210,160 | $ | 165,320 | ||
| Cost of sales: | ||||||
| Direct production costs | 113,880 | 89,603 | ||||
| Royalties | 17,811 | 13,783 | ||||
| Share-based payments | 442 | 421 | ||||
| Depreciation, depletion and amortization | 25,179 | 23,977 | ||||
| Write down of inventory to net realizable value | 1,323 | 1,168 | ||||
| 158,635 | 128,952 | |||||
| Mine operating earnings | 51,525 | 36,368 | ||||
| Expenses: | ||||||
| Exploration and evaluation | 16,186 | 17,925 | ||||
| General and administrative | 10,613 | 10,063 | ||||
| Care and maintenance costs | 580 | 1,356 | ||||
| Impairment (reversal of impairment) of non-current assets, net | - | (16,791 | ) | |||
| Severance costs | - | 870 | ||||
| Write off of mineral properties | 682 | 715 | ||||
| 28,061 | 14,138 | |||||
| Operating earnings | 23,464 | 22,230 | ||||
| Finance costs | 1,300 | 985 | ||||
| Other income (expense): | ||||||
| Foreign exchange gain (loss) | 1,853 | (1,131 | ) | |||
| Gain on asset disposal | 2,503 | 5,841 | ||||
| Investment and other | (1,571 | ) | 3,733 | |||
| 2,785 | 8,443 | |||||
| Earnings before income taxes | 24,949 | 29,688 | ||||
| Income tax expense: | ||||||
| Current income tax expense | 6,376 | 3,481 | ||||
| Deferred income tax expense | 12,372 | 12,252 | ||||
| 18,748 | 15,733 | |||||
| Net earnings and comprehensive earnings for the year | $ | 6,201 | $ | 13,955 | ||
| Basic earnings per share based on net earnings | $ | 0.03 | $ | 0.08 | ||
| Diluted earnings per share based on net earnings | $ | 0.03 | $ | 0.08 | ||
| Basic weighted average number of shares outstanding | 183,009,339 | 167,289,732 | ||||
| Diluted weighted average number of shares outstanding | 185,349,634 | 170,663,883 | ||||
| ENDEAVOUR SILVER CORP. | ||||
| CONSOLIDATED STATEMENTS OF FINANCIAL POSITION | ||||
| (expressed in thousands of US dollars) | ||||
| December 31, | December 31, | |||
| 2022 | 2021 | |||
| ASSETS | ||||
| Current assets | ||||
| Cash and cash equivalents | $ | 83,391 | $ | 103,303 |
| Other investments | 8,647 | 11,200 | ||
| Accounts and other receivables | 13,136 | 14,462 | ||
| Income tax receivable | 4,024 | 177 | ||
| Inventories | 19,184 | 27,485 | ||
| Prepaid expenses | 16,951 | 5,135 | ||
| Loans receivable | 1,000 | - | ||
| Total current assets | 146,333 | 161,762 | ||
| Non-current deposits | 565 | 599 | ||
| Non-current income tax receivable | 3,570 | 3,570 | ||
| Non-current other investments | 1,388 | - | ||
| Non-current IVA receivable | 10,154 | 4,256 | ||
| Non-current loans receivable | 2,729 | - | ||
| Deferred income tax asset | - | 936 | ||
| Intangible assets | - | 40 | ||
| Right-of-use leased assets | 806 | 664 | ||
| Mineral properties, plant and equipment | 233,892 | 122,197 | ||
| Total assets | $ | 399,437 | $ | 294,024 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
| Current liabilities | ||||||
| Accounts payable and accrued liabilities | $ | 39,831 | $ | 31,991 | ||
| Income taxes payable | 6,616 | 4,228 | ||||
| Loans payable | 6,041 | 4,128 | ||||
| Lease liabilities | 261 | 207 | ||||
| Total current liabilities | 52,749 | 40,554 | ||||
| Loans payable | 8,469 | 6,366 | ||||
| Lease liabilities | 812 | 794 | ||||
| Provision for reclamation and rehabilitation | 7,601 | 7,397 | ||||
| Deferred income tax liability | 12,944 | 1,506 | ||||
| Other non-current liabilities | 968 | - | ||||
| Total liabilities | 83,543 | 56,617 | ||||
| Shareholders’ equity | ||||||
| Common shares, unlimited shares authorized, no par value, issued, issuable and outstanding 189,995,563 shares (Dec 31, 2021 - 170,537,307 shares) | 657,866 | 585,406 | ||||
| Contributed surplus | 6,115 | 6,331 | ||||
| Retained earnings (deficit) | (348,087 | ) | (354,330 | ) | ||
| Total shareholders’ equity | 315,894 | 237,407 | ||||
| Total liabilities and shareholders’ equity | $ | 399,437 | $ | 294,024 |
| ENDEAVOUR SILVER CORP. | ||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||
| (expressed in thousands of US dollars) | ||||||
| Years ended | ||||||
| December 31, | December 31, | |||||
| 2022 | 2021 | |||||
| Operating activities | ||||||
| Net earnings (loss) for the year | $ | 6,201 | $ | 13,955 | ||
| Items not affecting cash: | ||||||
| Share-based compensation | 3,878 | 3,636 | ||||
| Depreciation, depletion and amortization | 26,088 | 24,527 | ||||
| Impairment (reversal of impairment) of non-current assets, net | - | (16,791 | ) | |||
| Deferred income tax expense (recovery) | 12,372 | 12,252 | ||||
| Unrealized foreign exchange loss (gain) | 344 | (176 | ) | |||
| Finance costs | 1,300 | 985 | ||||
| Accretion of loans receivable | (97 | ) | - | |||
| Long term employee benefits | 968 | - | ||||
| Write off of mineral properties | 682 | 715 | ||||
| Write down of warehouse inventory | 1,323 | 894 | ||||
| Write down of inventory to net realizable value | - | 272 | ||||
| Loss (gain) on asset disposal | (2,503 | ) | (5,914 | ) | ||
| Loss (gain) on other investments | 3,470 | (2,117 | ) | |||
| Net changes in non-cash working capital | 967 | (8,776 | ) | |||
| Cash from operating activities | 54,993 | 23,462 | ||||
| Investing activities | ||||||
| Proceeds on disposal of property, plant and equipment | 350 | 10,113 | ||||
| Mineral properties, plant and equipment | (109,715 | ) | (54,092 | ) | ||
| Purchase of other investments | (2,119 | ) | (3,307 | ) | ||
| Proceeds from disposal of other investments | - | 9,288 | ||||
| Redemption of (investment in) non-current deposits | 34 | (8 | ) | |||
| Cash used in investing activities | (111,450 | ) | (38,006 | ) | ||
| Financing activities | ||||||
| Repayment of loans payable | (5,054 | ) | (3,563 | ) | ||
| Repayment of lease liabilities | (219 | ) | (179 | ) | ||
| Interest paid | (790 | ) | (668 | ) | ||
| Public equity offerings | 46,001 | 59,998 | ||||
| Exercise of options | 1,607 | 4,719 | ||||
| Share issuance costs | (2,885 | ) | (1,293 | ) | ||
| Performance and deferred share unit settlement | (1,904 | ) | (2,363 | ) | ||
| Cash from financing activities | 36,756 | 56,651 | ||||
| Effect of exchange rate change on cash and cash equivalents | (211 | ) | 113 | |||
| Increase in cash and cash equivalents | (19,701 | ) | 42,107 | |||
| Cash and cash equivalents, beginning of the year | 103,303 | 61,083 | ||||
| Cash and cash equivalents, end of the year | $ | 83,391 | $ | 103,303 | ||
| Supplemental cash flow information (Note 19) | ||||||
