EXK - Earnings call transcript Q2 2022

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Operator

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

As a reminder, all participants are in a listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. now Vice turn President would to, conference I Meleger, Galina of Instructions] like the to over [Operator Investor Relations. ahead. go Please

Galina Meleger

Good today's to and everyone call. morning, welcome

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

available and are website our on MD&A Our statements disclosure under our financial portal.

and a a XX You us the today’s will joining On with correct release. for to through CFO. news now about minutes his formal have I'd release Christine behalf all-in our news of forecast The today's for made sustaining regards have over This Endeavour net seen CEO today. $XX of Dan estimate to to call the call retransmission that turn XXXX our for West, $XX on again is the that it to gold thank change credit. there you to per was Silver, ago. our was of Dan amendment With I'll cost we And only like went our Silver’s ounce Dickson, remarks. Endeavour to CEO,

Dan Dickson

Thank you, call XXXX. the conference to Galina, everyone of quarter welcome this second for and

touch our Before I'd we on QX current like discuss conditions. to market results,

inflation metals. remain is prices actual bullish our as rate Year-to-date, persistent. equities commodities. down gold operational performance in gold are the Recently, our seen in XX%, precious movements our underperformed is has stock and current miner and silver, and space. S&P price this environment are we've peak remains While robust from is similarly equities our impacted trading for down our the have and and operational nearing in cycle We performance. that about equities hiking positive disconnected metal despite been stock The XX%, sell-off confident expectations markets we especially silver down their XX% been the the in across strong, have by has both and broader gold underlying the

expect for trend to in the strong accelerate the of potential metals second precious make this a half with We to this year rebound.

we we a withhold view So June, metal. meaningful end with of pricing, million finished the silver a carrying of a inventory value million. ounces X.X the with At approximately amount in on almost once decision that were strategic of again sale to equivalent have of $XX goods market made

XX%, quarter's one finished that Given cash and worth negatively goods, metal by operating XXX%, XX%. capital were full by before metrics in flow by almost our fell earnings remains of impacted. Revenue financial declined decreased working

$XXX short-term the liquidity of the to strategy. no million than on flexibility support more have and in sales balance we With cash benefit the having sheet debt, the material and both

by to sheet silver However, back we inventory cash do put selling strengthened. on expect balance our finished when prices goods the

generated local production from closure Bolañitos Guanacevi, due production while El ore mines, primarily of Guanacevi of Our Guanacevi during miners. due body, last by strong XX%, within driven Compas the has mining outperforming by the QX. increased have gold to and the to decreased ore increased XX%, Silver two third-party operating nearly an results excellent performance August. at been higher-grade Curso the mine El ore purchase by

higher been levels, grades going rewarding these the to it's reach than to be but expect grades While we forward, very lower still see planned.

will QX, half the cone allow new planned the in in year. at second to in than crusher Additionally, was a throughput throughput invested we of increase as lower us This Guanacevi.

per the little over gold metrics For costs $XX averaging relatively cost ounce the with a have line sustaining net ounce per in costs quarter, averaging ounce all-in and $XX.XX of a been credit. per little tracking cash over our

industry-wide guidance allowed to have from a materials, escalation similar raw have continued per additional explosives, by prices our as inflationary us the The exceptional but be industry. Increases steel, of ounce reagents, trends. continues at across tonne XX% other production by increased to cost inflationary per the in impacted driving grades are across due Like cost Guanacevi such cost metrics, a all inputs. were pressures number on relevant. to operating we diesel direct maintain miners, inflation Our and of power

As you today's at production in operating annual release, reflect we better increased saw our better anticipated performance the than mainly outlook -- reflect news Guanacevi. to the

XX% half to to after the equivalent higher targeting to up silver body. planned the year. the factoring response And now and X.X of positive are the We we El to operating the our end Overall Guanacevi its in ore production previous increased for we outlook produce by first this upper in guidance. Bolañitos meet forecast million along of tightened Curso ounces XXXX, than results ore at of X.X grades

maintained pressures costs inflationary to be cost that $XX. our costs acknowledge to to persist the per closer the closer We end and to the at for with of outlook, to upper global respective we are are While their expected average expected $XX all-in rest sustaining original likely costs average cash expected of to ranges year. ounce

the new our we additional and is the Terronera, Terronera. expenditures Pitarrilla until the pipeline SSR access from the XXXX we're of October. world's As and purchasing engineering these Subsequent quarter long locked of the future at a our an look growth. mine, budget much prices on of our on site mitigate we've vote largest end maintain project to the construction clearing largest to spent financing million building our to which a works, of end, continue million, inflationary to months. cost project, XX, and investment deal This providing At the top and decision the same a $XX early $XX the undeveloped of the expertise. financing This with and of Since only to long Board our team. lead to an fuel on million our the say pleased while To is such, us pressures. significant forward complements roads, to to development we've be a silver does in to with with acquisition costs working that us lowest-cost Terronera tirelessly forward has priority with of signaling to have by worked and on operations We're up financing to getting the silver strengthens will identified time, mitigate running to the deposit. reaching With coming to an respect we confidence move $XX closer are well, ahead already projects moving it's metrics. impressive pressures subsequent advancement approved to and in management regional with development of update efficiencies allow With development complete Along we items. we June impact. to of completed high brings Board to XXXX. important items complete equipment, hard I'm in acquisition leverage this but very Not growth, it pathway our allow the package for a Mining, a lead are

remainder highly our on and then exploration of focus verifying this initially many year, attention targets property. the For team turned on the exploration to promising will the their historic resources

We've built operational the remarkable a longer-term is on Silver growth for capital prices truly me this of performance. Parral. Endeavour made areas strategic an in of silver pipeline focused strength potential and our in for time Terronera, operational with the improvements see benefiting and we markets in Let business, up. and and from Pitarrilla all for exciting wrap This our

over Let's open for stop Operator, up let's just and there, questions. to you.

Operator

you. Thank

ahead. Please Heiko We go is with question will begin the from Instructions] session. Ihle H.C. [Operator now question-and-answer Wainright. The first

Marcus Giannini

good Hi, with is on quarter taking everyone. This Marcus raising for Congrats calling guidance. for in the Heiko. Giannini Thanks my questions.

industry speak the and release. not much So, can firm current right out down key you now cost Obviously, pretty the guys in for you well. even else do in of of everyone the can maybe of control Out the about and efficiencies the you quantify curiosity, in bring easy the business category? focus a you out with as think environment it's savings to where break some

Dan Dickson

will to be some It quantify savings category. Marcus of difficult the Yeah. by

meshing with the at bolting amount of our doing. of we're that Some mainly on is looking the development we're things and side,

So we're going thing we can us Obviously, We're forward. that Guanaceví our relooking for it's we're at of in that, meshing increase really kind the bolting which inflationary biggest in is seeing better really of an deploy and and how is a scale. the high seeing costs, steel. economies

actually also mining see hit our has for rate been that the hit haven't year. hasn't tonnes our can what planned. processing You plan ultimately, our as And

lot end year, of on function we're the of our day, on tonnes below plant. the get of couple the to tonnes through per is for work I going cone we been a that's out think first maintenance leach a did lower been the in on tanks. the a guidance day that and has closer original done other things the cone of One of day. stuff tonnes per changing allow And For per a to And has crusher, crusher or half us to installed year. that's X,XXX a and that slightly

be obviously things. a for power get efficiencies that is Things tonne very we get scale And just and the down, going do. to X,XXX day tonnes of there's those been of operations. as throughput the through. ensuring year do think, We're at I As cost efficiencies there that some the little half of the opportunity that's those looking accepting Guanaceví, its throughout will And productivity we've Guanaceví lot come that. of costs economies to per of that at tonnes and our inflationary can to it's the in we're we is our finding ultimately the to some like, hitting we're costs per diesel to see able still up and make for second way is

going royalties was royalty $XX Curso. $XX of royalty paid $XX as And XX% we XX%. between have is Again, our when come on down paid it Guanaceví costs over big we costs that paid portion Secondly, to to silver X%. at down, we $XX as a come the are prices come well. from below A our El

the cost So of higher ultimately, well. that to royalties forward getting we help royalties. in paying these have and would higher prices prices course, push prefer our some will But with down costs of going lower are we as savings some

Marcus Giannini

since you as into Yeah. That And guess as willing idea further Perfect. to of see a claims Any estimate much funds for fees, breakdown the Okay. basis? spent how site a little to remainder then and the what year be to on the a an would then on cetera? combined to And on pushing approximate was I lastly, venture and helpful. use expect you Pitarrilla, guess, labor to congrats you've here. bit closing how monthly really et

Dan Dickson

budget QX after of shortly Claim beginning the closed not a how I work $XXX,XXX here, we XX when there's we've of we Yeah. project. to carrying can those plant pushing which mean, acquired a $XXX,XXX we're with think are mobilizing about to to is there had that the year, the all costs Pitarrilla in labor haven't Pitarrilla. sorry fees keeping kind you're $X.X at or that going months, it, acquired we've rate project. acquired team burn to camp, individuals our million, the and we too our just get much. that exploration We the we're individuals exploration of and mobilized. and I Since that most $X.X – we've our that million going basis, monthly on incurred the close employed a six On -- And that. for come start depending through mean much. we

probably and actual between about between be far costs $XXX,XXX. I As breakdown $X.X say, million. to can would somewhere Labor labor $XXX,XXX as costs the

do that to there's And we to about that it's that. I of then with ultimately, surface, have with time. in ramp take on it exploration. up next X.X breakdown targets work a said, more historic I be five Once That geologists to then don't fault to that's work there. have we in, kilometers that those there's to then We'll we're need And have couple terms around. out It's come here if good contractors resource. regards in four XXXX new for We of give Like in plans. Pitarrilla. a we'll have And to will the But plan for months, exploration would needs and a ultimately work exploration I Some for done Pitarrilla. prove going from some on much of the consider. new collapsed. some come plans get an to know, through

Marcus Giannini

right. All

Dan Dickson

claims. That July. The January The the carrying claims costs paid and sorry is less and I'd is small which in on, say question, all last than would for been paid $XXX,XXX costs the carrying have that's normally, very year.

Marcus Giannini

Got it.

it Thanks lot. Perfect. from Okay. that’s a me

Dan Dickson

Marcus. questions, the for Thanks

Operator

Sekelsky Jake from is with question Alliance next Global ahead. The go Partners. Please

Jake Sekelsky

able of taking Hi, half you moderate for the remains a still what quantify on they'll bit little back to Dan first of might half? to second on but but bit in the a you the and half, strong handle in trying Are you a Thanks thi,s profile a elevated. see mentioned I'm second grades. type team. Dan, And we questions. Obviously, higher my get had just

Dan Dickson

Yes.

seeing think some higher just that, have we're we're grades are. Guanaceví that come our what I been always than of concerned reserve the through grades

that mined. put continually are grades drill area We which of you we've significantly to had are higher And ultimately, I don't point. And still extension can't seeing on expect we want this put protective this can that. higher earlier that and specific the I number grades a even know there'll going year, at to a this -- Curso, do to planned. out be think of higher. the a be But actually the reserves to we kind we some we in point it, we're again, being that be of results on than to an even reversion El what

grams of equivalents, tonne quarter silver X% I per down almost averaged kind that and would to come of last think close the XX%. I think we to XXX in

to closer tonne. we're equivalent grams So the silver XXX per

Jake Sekelsky

feel helpful. metals are the between equities from that an Pitarrilla, kind or accelerating mentioned at development an just plate disconnect, Realizing continue you looking Okay. now? you you your That's, that full of of on and opportunistic precious you'll you right do prices Terronera, just that at is right where do And sort to is closed now. standpoint, M&A think stance then take

Dan Dickson

No. the to higher is our approach I put And opportunistic And M&A. predominantly think long silver -- be now. being on and we to to definitely to we prudent a a is take But going And long-term good same Ultimately, than have down in where pens down haven't with persist build plate company. now. pens that's to Yes, of right that full are they at that at regards find the to out the potential do time, a think especially are there don't it's for things. not hard assets It's prices silver will kind ultimately. assets I we time. look put space. the think silver view

things. to continue we at So, look

would to be the those use of flow cash just as grow, to and we funds. flow time project cash if priority But meaningful at because that. be to probably value to over things take become trying a same take don't at to stop we to going on be we you'd development of course more want Of able there's find had, is in operations able looking advantage

Jake Sekelsky

Got it.

for Okay, me. that’s all Thanks again.

Dan Dickson

for Thanks question Jake. the

Operator

is Joseph from Partners. question next go Reagor ROTH ahead. with The Capital Please

Joseph Reagor

for Thanks team. my and questions. Dan Hey taking

guys do project? change estimates have feel publicly that approach you're Do when But about touched think of inflation. most I on comes maybe people. the to cost think there the -- seeing on on you was Do you want a puts proactive to takes it of you these you cost you're the bit you'll expect Do stuff them? take inflation larger have How two detail prior impact financing more there? the I Like you a already of touch little by the that with? doing package? and out the are comfortable what to a Terronera

Dan Dickson

Yes. Thanks Joe.

a very that's very mindful that It's of. question. are fair something think I we

a from I items. Terronera think of we've with the our locked good news is standpoint lot lead in

equipment are a prices. So, that procured equipment XX of fleet Sandvik XX site. on have equipment locked items pieces our of and plant in number think arrived those have with of mobile I We've

way to down not And looked its and on it. that's really it's over going through. changed it's year we've we're million inflation the And to have at infrastructure. going the But the come $XXX the study. to inflation come regards things with with feasibility that I uncomfortable past that's So, that obviously to in think

we with what's market that. there development what purchased, been purchase happened space would and and for build going out in consideration when come come definitely out be come be we'll of a come budget there's would across estimate able have able to quite reflective can be we costs I Again I from out and into want But decision. a make decision the capital guide to locked think a built think we've we the mindful a sure project. of appropriately. be for that into Terronera new when actually standpoint already then that that with inflation inflationary go we're the when with which Terronera we to and that's out development to we what up with taking a to I we're

Joseph Reagor

Maybe did bit the detail further a you million percentage guys little of Okay. in? $XXX there. lock already What

Dan Dickson

almost. in locked We've

development So, purchased. includes we've million that we've budget, which a got already equipment $XX

already of have that in me, As far million I'm $XXX as XX% towards the locked don't is more front range. the what but percentage XX%, it's guessing of in I

Joseph Reagor

Okay.

low looking in up fair And though they you XX there. still for lower least feels And think even the at of it there's If guidance enough. in end guidance were even raise, get too. -- QX, the there. would that's even I guidance to easily the Guanacevi, the grades enough silver tried tonnage with revised than My Okay, then upside to figures guidance. at room as of midpoint grams get of at some were your there. the Jake Even to this

not with much? grade little originally I expected? the to is end but that catch able be you for -- know that there that behind you've So been the really a than up, some might fall up thought is going account said schedule, is I concerns tonnage how that? do that you it lighter may Like, or guys have you some to being

Dan Dickson

question. our a the half lighter. second think, fair be the Yes. year of it's we No, don't And tonnage I to expect in

year, first of we expect the the plant In be half the the than because work it to just and that expectations. of fact, in our done better we've

One to a the plant. guide of that us difficult much to is, for how the it comes makes third-party ore things

miners the of by actually With some delivered the first ore comes half year. higher ore saw we the the to the prices, grade to third-party the plant highest more plant of and in

just vary, of So That third grades don't of of it be ultimately we aspect miners minds we we when ultimately, either. they into transparency I like that's say, have And have what guide can prices of have. grades what to going of cautious the one really or some are know specifically to forward. of that local because they're probably going don't the

there. So down ultimately, as Curso have into ore through we're guide. have estimates it's to do -- And the and use that as a a we we we done guesstimate taking move El body, reserves

Now, going our grades it's quite year. been just we there's grades grades the we seeing expectations other what go the those of to in with and a possibility But, half cautious compared being of to sure if reserve than middle operating putting us guidance in continue on change plan. elevated with yes, are have had beat reserves, higher second relatively it. we're our be of improve, for think, than idea I where we be further out grades to the And to that that our can't but that going data we

Joseph Reagor

tonnes How you in third-party did on ore half? of then, quick. the just first Okay. many process real And ore, third-party the

Dan Dickson

our XX% third-party did tonnes were about in we of ore. the first In half,

I think in almost XX% and in XX% QX QX.

Joseph Reagor

it Thanks. right. over. turn I’ll All Okay.

Dan Dickson

Thanks, Joseph. you. questions. good Thank Very

Operator

ahead. Financial. Justin next with is [Operator question go from Instructions] PI The Please, Stevens

Justin Stevens

year Congrats to solid Hey, the a start guys. Yes. on really here.

of going a that Joe's pay for just of or was from pay tonne? percentage rate you on third-party you sort is content, When start following question metal I there. per a flat do ore think I to by guys

Dan Dickson

pay we of at No, percentage a metal content.

depending we metal it's So just of delivered, on that in about and on tonne payment content. it's a actually payment when make to XX% what's per ore XX%

content with and per prices, basis third-party coming in overall higher on higher shows more ore in tonne. our with the up metal we So that a pay cost

Justin Stevens

Yeah. That sense. makes it. Got

Curso, question rates of you terms sort of or tonnage other, in all have a royalty lease. obviously, the was Guanaceví content the guys the off I ore in versus the is leased the think what rough higher Do of idea metal terms feed had I sort El properties the that paying you coming are either of, from comes of existing in wholly-owned? for terms

Dan Dickson

Yes.

our -- day under agreement per that over XXX required Frisco minimum we're Curso. comes So tonnes from with El

So ultimately half. almost

related XX% I Curso of think closer El we've material to of months throughput the rollout been to to year. our XX% the six first of

Justin Stevens

obviously there. some sort guess, of only question know how had put of I the Perfect. a sort on resource of holes out I couple line or That's updates twin you looking other historical just lines the And, Bruner and validate great. Gold that's I going? to was, on time Any

Dan Dickson

We've geologists in quarter actually at ground. like was fourth third of look on prices are say the we on could early quarter third for planned quarter. yet to it's quarter. But drills We Yes. this end slow down. schedule of point -- that fourth ground got have where fourth in on that end the time, don't the With I the into quarter

Justin Stevens

QA/QC be That's for I by then guess then year at the next you it'd results the the probably then right? into and modeling the get drilling. look actually time And

Dan Dickson

of end the or year next QX. Into

Justin Stevens

it Thank Got from me. so it. That’s right. you Great. All much.

Dan Dickson

Thanks, questions. Justin. Good

Operator

questions. There turn for more like Dickson, no session. any conference the to seems concludes CEO closing I'd question-and-answer This be to back over Dan to the remarks.

Dan Dickson

know it's the doldrums this everybody Thanks, attending operator today's and for want I call. summer. I thank to

be think the and our good of year to I as the second I as the half with of a good first put expect performance of hopefully we half really year together year. half first operational the

what everybody continue senior company and the is us for finance announce pushing push put a Thanks to talking. can space, so we silver again grow era this and main producer. together we're on to become the trying active to in to for silver attending that and a course, forward working Of ultimately things keep an in goal our development is

Operator

call. conference today's concludes This

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

Endeavour Silver (EXK) 9 Aug 222022 Q2 Earnings call transcript