EXK - Earnings call transcript Q1 2022

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Operator

Thank you for standing by. This is the conference operator. Welcome to the Endeavour Silver First Quarter 2022 Financial Results Conference Call.

As a reminder, all participants are in a listen-only mode, and the conference is being recorded. I would now like to turn the conference over to Trish Moran, Interim Head of Investor Relations. ahead. go Please

Trish Moran

good and Thank day, you, everyone.

get you that we the factors statements. would forward-looking ask our MD&A, risk these to I view pertaining the and Before statements started, cautionary regarding language

statements MD&A on Operating CEO; Officer. Endeavour’s us we Christine are Our our call financial available our and edrsilver.com. today’s Endeavour website Dickson, Dan Chief CFO; on have West, With at Silver’s Gray, and Don

open the to Following call questions. will Dan’s formal over remarks, And you, then Dan. we now, for

Dan Dickson

everyone. welcome, Not a quarter we and Thanks, future off start. Company. for on is mines, of Trish, a strong active long-term ‘XX only to operating out very was good the have the building it been our

silver Guanacevi offset talk last to gold than on And Consolidated, based First, had about equivalent quarter, impact up silver grade the higher it’s QX great This are operations. high X% and August. was suspending near-term. driven operations grades. enough in this the was ore, we a where Compas more our by X El mining to let’s production ounces. continue expected of million year-over-year to

silver is in flow production to production to steady to equivalent million great remain expected Bolañitos grade In year’s continue quarter. ore achieve higher. expected reached Ultimately, are down local also quarter miners, to addition, while and into this is between XXXX. enhancing and gold our our This guidance throughout cash is significantly the At ounces. X.X were we the further Bolañitos, gold puts ounces mine shape up second free X.X and QX continue of from first in ounces grades silver grades. which purchasing provide us to produced silver

quarter. in production increased consolidate noted, X% the As first by

year-end to lot is quarter’s However, have at that revenue we the of today’s This attributable that unsold which The rose saw a prices the are about that million. sold more half $XX in throughout withheld quarter December, call to sale -- activities first significantly this market revenue we bullion cash operating year-end. aware higher Spike at on million. in bullion of $XX was than opportunistically to metal we held what A had contributed held XXXX. value at of of flow from you in today XX%. about listening of close bullion than

$XXX course As working normal equipment at we capital no March $XXX from XXst, million. and debt had leases long-term and aside of million

X% to ounce. our this of the just For our per be higher continues all-in environment. year, range quarter, ounce were Containing major the costs guidance focus a sustaining per $XX to inside previous supply-constrained costs in metrics than $XX inflationary,

ago of we that moment closely future this of to the see mentioned While A to year, can throughout reviewing is mitigate where industry-wide building we the have are the an Company. the prevail impact. our course actively been purchasing the expected how issue practices is and that out we I long-term

are We here in second milestones the Terronera acquisition. for financing closing the and quarter, securing tracking Pitarrilla two major

to double Terronera, priority. is expected production cut profile completed, let down our First, you in where half. respect things update which Terronera are cost our with and our biggest Once to is me

the We’re believe levels the documentation various of this and advancing project the sustainability meet required requirements communities be beneficial commercial with sustainability documentation regards for loan financing. will long-term to banking of government. with We in to consultation project

May. on and months visits has from Aside underway activity for the to wrap documentation caused is the other and end by this COVID, up of site by been delays diligence due to several expected

behind schedule, slightly put has the move to project this While our us forward. continues original

the this if through debt of the the Terronera first $XX year-end the QX. were still approved the financing. We prior we and Board an million half end secure year, advance in $X to In of million this terms complete additional while of $XX million Last commissioning are spent can by project the quarter. working our schedule, to of expecting portion XXXX, financing we project to in we

We early camp and on are down clearing, site earthworks infrastructure. well detailed the engineering, road

have of $X.X the earmarked complete commencement to at another camp second spend construction. the and Terronera in engineering earthworks, Phase detailed to quarter permanent of million We the X

game-changer, For a us, Terronera of is a very and important part it’s our future.

the to deposits exploration quarter, cash. Pitarrilla. called and that approval we’re At balance Mexico, of sheet. highlight really of world’s the advance be addition believe Commission the million our it’s new our exciting imminently. will announced undeveloped to one the targets our and State, to be reflects tomorrow, close first three the be commence this the you completed to in focusing fund will cash flow time we an updated tomorrow. pillars: achieving formal in in the portion, During the have. commitment comments and transaction, It my XXXX stakeholders that up raise, current also view prosper. end has which published Bought an of Myself, our financed. recognize That million of operating that potential The We a our define recommend To transparency for with the and and for our economic metrics. we will to a Pitarrilla after sustainability strong to recall, a a to Q&A. Don help wraps in and XX% is questions resource, a the our project will One report. and sustainability largest project take Economic introduced to to Durango study. and our our $XX today. of answer our fully XX% price to reflects to Tier happy will To we of This expected year, of commitment Christine actions for Situated resources advanced silver $XX people, be financial highly for before business the Federal strategy time planet this are shares our that’s our before new has Mexican we awaiting acquisition I last a This equity Deal together We it’s long-term quarter, Endeavour the purchase sustainable and announced strategy, we and goes acquisition asset. item very historical shape the important you paid want report branding. pleased on Competition assess March. number more close year’s cash releasing outset immediately success online and to work you new beyond ongoing to business. X I’m at June, speaks mid-January move expect as inclusive report we stage any future it strengthened I say may

So, over for operator, you, to Q&A.

Operator

[Operator & Heiko Ihle Instructions] ahead. of go First H.C. question Wainwright Please comes from Co.

Heiko Ihle

my assume you taking me questions. Hey there. you Thank can okay? guys I hear for

Dan Dickson

Yes.

great, sound You Heiko.

Heiko Ihle

a had hold But, or for I I’ve trying and on frustrated Earlier interesting call, people been no success consumer because little quite stupid who’s jobs or much spoke really less as same that more smaller scale. Hey. whatnot, hire Wonderful. just very do about you adjusting this contractors prices. felt the on have your thing a of or I frankly, some obviously, purchasing. to your small when show-up

is give the us impact please? maybe be some to pressures, where maybe can you haven’t really are workers the mitigate been areas actually not where working you examples able some working, negotiating you’d with of if things So so and just inflationary and like where --

Dan Dickson

Electricity. power I of areas some Mexican can’t that’s the our mean, power pressures, Yes, get of significant We’ve we in CFE, costs, largest that. where are of mitigate for costs from sure. third think and us, Commission Federal we cost. a increase I the power most on And inflation and obvious our seen

but the can get build this Terronera. we on push I have contractors, -- with obviously, think we site. a we’ve but inflationary prevalent with equipment, difficult obviously do but we’re cyanide overly it combining to date something end and front our power, we that with equipment power Terronera of actually going lot we’ve of been lucky purchasing gone seeing to because stuff, on at obviously, successful get of is obviously, we Guanacevi to that going Guanacevi. union seen on The can very and the of day, And obviously it’s haven’t don’t purchasing and lot the and And the down. and we our costs, already primary Where purchased we’re regards operating if is Bolañitos inputs. bit much. see we it’s lot concessions we’ve where some increases sourced a largest that And of labor. our -- combine wages and contract cost to at is we’re little other And, those through are comes Sandvik our to But at, of be looking a you cost, in come and they’re are between steel, and to never the most down a where Bolañitos can

ball a already mill have site. We on

been when have line. front at and Guanacevi comes we that standpoint, from then at sense purchasing it volumes Terronera. So, in an between it that in Bolañitos ultimately, more looking can it’s operations and again, But share we hopefully, of Terronera on

Operator

comes Our from Partners. Capital Please go next ahead. question Reagor Joseph of Roth

Joseph Reagor

a year, fluctuated expenses forecast so. But basis, of way a of you should like cash G&A safe with basis and last number? know do account expense. we for from that a has going So, stock to cash has G&A What’s forward? quarter-to-quarter And expense your guys I bit kind quarterly the on some G&A how

Dan Dickson

Yes.

very There are as can is lot our be line. it’s our our underlying share right. million, the that and mark-to-market between mark-to-market and $X stock and Board. cash from and $X somewhere on pretty of a paid a you and You’re that on of so know, deferred fluctuations. to units ultimately, $X force ultimately fluctuation, million, the And price metal because budgeted a causes volatile straight million But G&A that’s

million administration I of just general, the to there. But $X.X million $X of generally regards think year, kind kind it stuff you in costs higher for gets of with the per QX used quarter, you to because audit. has

Joseph Reagor

the then, Pitarrilla And acquisition. helpful. mentioned That’s Okay. you

expected. June. a delays And get for at June getting originally in hoping seems target It point? approvals? closed longer Mexico it it like that’s with comfortable COVID-related You’re that little maybe are how than to by you was Is this

Dan Dickson

ultimately, I is Endeavour and the against submitting share going information antitrust, commission think is The thing and in COFECE, target. I’m them on, with globally we’ve biggest silver. regard and with Mexico back market forth to Silver’s and which very comfortable June been with the

a of questions so, times. of all back documentation. our submitted came number a And number we’ve They actually with

completely belief So, answered it’s all we’ve their our questions.

through now is it’s we we out. think have getting that just So, that think We is could actually quite imminent. which before process, May

a for But able at be to weeks, should approval. think get close down in point, June conservative quickly we’re just we this being if waiting that. coming we do line. the relatively regulatory with But I time we’re after the

Operator

from go [Operator Instructions] comes ahead. Riley B. Our next Securities. question Please Pipes Lucas of

Lucas Pipes

also you’re local about the much. I you approximately to on bit pressures. if inflationary of the you currency? inflation currency distinguish wanted cost percentage in very your ask in seeing dollar the between and rates U.S. rate, I versus could maybe what Thank local a is wondered And

Dan Dickson

Yes. Very fair question.

our being the last costs, XX%, of out labor XX% U.S. half about again, in comes of Mexico tied obviously kind are operating And Those incurred our which So, direct half is of to of the largest Mexican is operating sort pesos. costs. and dollar. cost, about then

the XX% about Mexican we’re ultimately, So XX% peso. to tied to

seeing was Now we’re bit in last U.S. up higher X%. This it’s it’s inflation rate where and peso’s Mexican United is. than the the the XXXX, year, little of States. shy a Canada to that, year, to similar tracking lining But in ultimately, what just

would like tied less not will the a at continue. that given running higher With again a traveling imagine I with purchase us. prices Mexican generally with impacting rate or Mexican And little with almost us is it’s up tourism being peso our are expect So, Mexican peso, bit. they I the to better peso. higher, behind COVID industry peso do the quite oil inflation because pick a does bit people

Lucas Pipes

balance to That’s for very a helpful. Thank the moment. just turning then that. sheet And you for

you say there appreciate might markets. look of across balance up today? desire at shoring that. So, pretty things a feels your bit for broader how been be It capital I choppier you’d Thank and a could bulletproof perspective more And the perspective here? on dry that. or you the share the congratulations if sheet it’s I kind are if wondered on you. If You’ve powder, financing, on like

Dan Dickson

Yes.

XXst. March on, I capital mean, touched As of $XXX working our is I as million

cash million. Our of balance is $XXX north

will paid million when course, Of to SSR out close $XX of we that be Pitarrilla. cash

And a two a that’s the $XXX us feasibility right we’re big is going years. on now, very study, million. So, still be position. strong to Obviously, Terronera in cash It’s decision the paid coming in for over the Terronera. CapEx construction formal pipe down thing is initial our

been working debt portion. do the we six last have for So, a and months on

equity that at ultimately, about So, debt the want float book coming the in the portion loan like hand we company million flow to a the a feel cash on financing cash in have with the the you we we operations. project on ability. and to from have $XX But and million $XX of put carry

we’re going think where million going shareholders. still think, We for sheet, is route capital. go think of the of shareholders. We prudent ultimately, we’re regards asset path. on use it’s our financing. a that’s of I I We’ve Carrying very our go. for that best $XX to to debt to balance loan it’s our the for the best our with think down lot around work a sustainability done project Terronera And

putting not at So, time. sheet, as balance far the it’s on as more this powder

Of that capital, more further at capital. something looking And we it be development this means is accretive. time. and it’s we corporate have it out and potential assets our means go But at out if grow course, looking we’re that always group raise not to more raise would go to

coming think, absolutely I our on. of of with the want construction going Pitarrilla, don’t I acquisition to got We’ve we’re busy. kill the quite with lots Terronera, staff.

we hopefully, and in can those of and then can or what XXXX to look see swallow we moving on So, that XXXX. do kind get

Operator

to closing session. Dan over conference turn This I remarks. back to any concludes the for like Dickson question-and-answer would the

Dan Dickson

And you operator. thank everyone again for us for today. joining you, Thank

there. reminder a Hotel of held our have the good a that it’s you Just And Meeting XX:XX General Shareholders, at Metropolitan more at a.m. We Annual Vancouver is to being day. in hope see

Operator

This conference today’s concludes call.

You a may lines. you your participating, pleasant and day. disconnect Thank have for

Endeavour Silver (EXK) 11 May 222022 Q1 Earnings call transcript