UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 40-F
[ ] REGISTRATION STATEMENT PURSUANT TO SECTION
12 OF THE SECURITIES EXCHANGE ACT OF 1934
OR
[X] ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
December 31,
2018
Commission file number:
001-33153
ENDEAVOUR SILVER CORP.
(Exact Name of Registrant as Specified in its Charter)
British Columbia
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1040
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N/A
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(Province or other jurisdiction of incorporation or
organization)
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(Primary Standard Industrial
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(I.R.S. Employer Identification No.)
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Classification Code)
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#1130-609 Granville Street
Vancouver, British
Columbia, Canada V7Y 1G5
(604) 685-9775
(Address and Telephone Number of Registrants Principal Executive
Offices)
DL Services Inc.
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Copies to:
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Columbia Center, 701 Fifth Avenue, Suite 1600
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Jason K. Brenkert
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Seattle, Washington 98104
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Dorsey & Whitney LLP
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(206) 903-5448
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1400 Wewatta Street, Suite 400
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(Name, address (including zip code) and telephone number
(including area
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Denver, Colorado 80202-5549
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code) of agent for service in the United States)
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(303) 629-3400
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Securities registered or to be registered pursuant to Section
12(b) of the Act:
Title of Each Class:
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Name of Each Exchange On Which Registered:
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Common Shares, no par value
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NYSE
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Securities registered or to be registered pursuant to Section
12(g) of the Act:
None
Securities for which there is a reporting obligation pursuant
to Section 15(d) of the Act:
None
For annual reports, indicate by check mark the information
filed with this form:
[X] Annual Information
Form [X] Audited
Annual Financial Statements
Indicate the number of outstanding shares of each of the
issuer's classes of capital or common stock as of the close of the period
covered by the annual report: As at December 31, 2018,
130,781,052
common
shares of the Registrant were issued and outstanding.
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
[X]
Yes [ ]
No
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).
[ ]
Yes [ ]
No
Indicate by check mark whether the registrant is an emerging
growth company as defined in Rule 12b-2 of the Exchange Act .
[ ] Emerging growth company.
If an emerging growth company that prepares its financial
statements in accordance with U.S. GAAP, indicate by check mark if the
registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to
Section 13(a) of the Exchange Act. [ ]
2
EXPLANATORY NOTE
Endeavour Silver Corp. (the Company or the Registrant) is a
Canadian issuer eligible to file its annual report pursuant to Section 13 of the
Securities Exchange Act of 1934, as amended (the Exchange Act), on Form 40-F
pursuant to the multi-jurisdictional disclosure system of the Exchange Act. The
Company is a foreign private issuer as defined in Rule 3b-4 under the Exchange
Act. Equity securities of the Company are accordingly exempt from Sections
14(a), 14(b), 14(c), 14(f) and 16 of the Exchange Act pursuant to Rule 3a12-3
thereunder.
FORWARD-LOOKING STATEMENTS
This annual report on Form 40-F and the exhibits attached
hereto contain forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
concern the Companys anticipated results and developments in the Companys
operations in future periods, planned exploration and development of its
properties, plans related to its business and other matters that may occur in
the future. These statements relate to analyses and other information that are
based on forecasts of future results, estimates of amounts not yet determinable
and assumptions of management.
Statements concerning reserves and mineral resource estimates
may also be deemed to constitute forward-looking statements to the extent that
they involve estimates of the mineralization that will be encountered if the
Companys property is developed, and in the case of mineral reserves, such
statements reflect the conclusion based on certain assumptions that a mineral
deposit can be economically exploited. Any statements that express or involve
discussions with respect to predictions, expectations, beliefs, plans,
projections, objectives, assumptions or future events or performance (often, but
not always, using words or phrases such as expects or does not expect, is
expected, anticipates or does not anticipate, plans, estimates or
intends, or stating that certain actions, events or results may, could,
would, might or will (or the negative and grammatical variations of any of
these terms and similar expressions) be taken, occur or be achieved,) are not
statements of historical fact and may be forward-looking statements.
Forward-looking statements are subject to a variety of known and unknown risks,
uncertainties and other factors which could cause actual events or results to
differ from those expressed or implied by the forward-looking statements,
including, without limitation:
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risks related to precious and base metal price fluctuations;
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risks related to fluctuations in the currency markets
(particularly the Mexican peso, Canadian dollar and United States dollar);
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risks related to the inherently dangerous activity of mining,
including conditions or events beyond our control, and operating or technical
difficulties in mineral exploration, development and mining activities; /
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uncertainty in our ability to fund the development of our
mineral properties or the completion of further exploration programs;
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uncertainty as to actual capital costs, operating costs,
production and economic returns, and uncertainty that our development activities
will result in profitable mining operations;
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risks related to our reserves and mineral resource figures
being estimates based on interpretations and assumptions which may result in
less mineral production under actual conditions than is currently estimated and
to diminishing quantities or grades of mineral reserves as properties are mined;
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risks related to changes in governmental regulations, tax and
labour laws and obtaining necessary licenses and permits;
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risks related to our business being subject to environmental
laws and regulations which may increase our costs of doing business and restrict
our operations;
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risks related to our mineral properties being subject to prior
unregistered agreements, transfers, or claims and other defects in title;
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risks relating to inadequate insurance or inability to obtain
insurance;
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risks related to our ability to successfully integrate
acquisitions;
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uncertainty in our ability to obtain necessary financing;
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risks related to increased competition that could adversely
affect our ability to attract necessary capital funding or acquire suitable
producing properties for mineral exploration in the future;
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risks related to many of our primary properties being located
in Mexico, including political, economic, and regulatory instability; and
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risks related to our officers and directors becoming associated
with other natural resource companies which may give rise to conflicts of
interests
This list is not exhaustive of the factors that may affect our
forward-looking statements. Some of the important risks and uncertainties that
could affect forward-looking statements are described further in the exhibits
attached to this annual report on Form 40-F, including in the Annual Information
Form of the Company filed as
Exhibit 99.1
to this annual report on Form
40-F and are incorporated by reference herein. Should one or more of these risks
and uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described in the forward-looking
statements. The Companys forward-looking statements are based on beliefs,
expectations and opinions of management on the date the statements are made and
the Company does not assume any obligation to update forward-looking statements
if circumstances or managements beliefs, expectations or opinions change,
except as required by law. For the reasons set forth above, investors should not
place undue reliance on forward-looking statements.
NOTE TO UNITED STATES READERS-
DIFFERENCES IN
UNITED STATES AND CANADIAN REPORTING PRACTICES
The Company is permitted, under the multi-jurisdictional
disclosure system adopted by the United States Securities and Exchange
Commission (the SEC), to prepare this annual report in accordance with
Canadian disclosure requirements, which differ from those of the United States.
The Company has prepared its consolidated financial statements, which are filed
as
Exhibit 99.2
to this annual report on Form 40-F, in accordance with
International Financial Reporting Standards as issued by the International
Accounting Standards Board (IFRS) and they are not comparable to financial
statements of United States companies.
MINERAL RESOURCE AND RESERVE ESTIMATES
The Companys Annual Information Form (AIF) filed as
Exhibit 99.1
to this annual report on Form 40-F and managements
discussion and analysis for the fiscal year ended December 31, 2018 filed as
Exhibit 99.4
has been prepared in accordance with the requirements of the
securities laws in effect in Canada, which differ from the requirements of
United States securities laws. The terms mineral reserve, proven mineral
reserve and probable mineral reserve are Canadian mining terms as defined in
accordance with Canadian National Instrument 43-101 Standards of Disclosure
for Mineral Projects (NI 43-101) and the Canadian Institute of Mining,
Metallurgy and Petroleum (the CIM) -
CIM Definition Standards on Mineral
Resources and Mineral Reserves
, adopted by the CIM Council, as amended.
These definitions differ materially from the definitions in SEC Industry Guide 7
(SEC Industry Guide 7) under the United States Securities Act of 1933, as
amended (the Securities Act).
Under SEC Industry Guide 7 standards, a final or bankable
feasibility study is required to report reserves, the three-year historical
average price is used in any reserve or cash flow analysis to designate reserves
and the primary environmental analysis or report must be filed with the
appropriate governmental authority.
In addition, the terms mineral resource, measured mineral
resource, indicated mineral resource and inferred mineral resource are
defined in and required to be disclosed by NI 43-101; however, these terms are
not defined terms under SEC Industry Guide 7 and are normally not permitted to
be used in reports and registration statements filed with the SEC. Investors are
cautioned not to assume that all or any part of a mineral deposit in these
categories will ever be converted into SEC Industry Guide 7 reserves. Inferred
mineral resources have a great amount of uncertainty as to their existence, and
great uncertainty as to their economic and legal feasibility. It cannot be
assumed that all or any part of an inferred mineral resource will ever be
upgraded to a higher category. Under Canadian rules, estimates of inferred
mineral resources may not form the basis of feasibility or pre-feasibility
studies, except in rare cases. Investors are cautioned not to assume that all or
any part of an inferred mineral resource exists or is economically or legally
mineable. Disclosure of contained ounces in a resource is permitted disclosure
under Canadian regulations; however, the SEC normally only permits issuers to
report mineralization that does not constitute reserves by SEC Industry Guide
7 standards as in place tonnage and grade without reference to unit measures.
Accordingly, information contained in this annual report on
Form 40-F and the documents incorporated by reference herein contain
descriptions of our mineral deposits that may not be comparable to similar
information made public by U.S. companies subject to the reporting and
disclosure requirements under the United States federal securities laws and the
rules and regulations thereunder, including SEC Industry Guide 7.
CURRENCY
Unless otherwise indicated, all dollar amounts in this annual
report on Form 40-F are in United States dollars. The exchange rate of Canadian
dollars into United States dollars, on December 31, 2018, based upon the noon
exchange rate as quoted by the Bank of Canada, was Cdn.$1.00 = US.$0.7330.
ANNUAL INFORMATION FORM
The Companys AIF for the fiscal year ended December 31, 2018
is filed as
Exhibit 99.1
to this annual report on Form 40-F and is
incorporated by reference herein.
AUDITED ANNUAL FINANCIAL STATEMENTS
The audited consolidated financial statements of the Company
for the years ended December 31, 2018 and 2017, including the report of the
independent auditor with respect thereto, are filed as
Exhibit 99.2
to
this annual report on Form 40-F and are incorporated by reference herein.
MANAGEMENTS DISCUSSION AND ANALYSIS
The Companys managements discussion and analysis for the
fiscal year ended December 31, 2018 (MD&A) is filed as
Exhibit 99.4
to this annual report on Form 40-F and is incorporated by reference herein.
TAX MATTERS
Purchasing, holding, or disposing of the Companys securities
may have tax consequences under the laws of the United States and Canada that
are not described in this annual report on Form 40-F.
CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
At the end of the period covered by this annual report on Form
40-F for the fiscal year ended December 31, 2018, an evaluation was carried out
under the supervision of, and with the participation of, the Companys
management, including its Chief Executive Officer (CEO) and Chief Financial
Officer (CFO), of the effectiveness of the design and operation of the Companys
disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange
Act). Based upon that evaluation, the Companys CEO and CFO have concluded that
the Companys disclosure controls and procedures were effective to give
reasonable assurance that the information required to be disclosed by the
Company in reports that it files or submits under the Exchange Act is (i)
recorded, processed, summarized and reported, within the time periods specified
in the SECs rules and forms, and (ii) accumulated and communicated to
management, including its principal executive and principal financial officers,
or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.
Managements Report on Internal Control over Financial
Reporting
Management is responsible for establishing and maintaining
adequate internal control over financial reporting, as defined in Rules
13a-15(f) of the Exchange Act. A companys internal control over financial
reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles.
A companys internal control over financial reporting includes
those policies and procedures that (i) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (ii) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the companys assets that could have a
material effect on the financial statements. It should be noted that a control
system, no matter how well conceived or operated, can only provide reasonable
assurance, not absolute assurance, that the objectives of the control system are
met.
Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with policies and
procedures may deteriorate.
Management, including the CEO and CFO, assessed the
effectiveness of the Companys internal control over financial reporting as of
December 31, 2018. In making this assessment, management used the criteria set
forth in the Internal Control Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based
on its assessment, management has concluded that, as of December 31, 2018, the
Companys internal control over financial reporting was effective and no
material weaknesses in the Companys internal control over financial reporting
were discovered.
The Company is required to provide an auditors attestation
report on its internal control over financial reporting for the fiscal year
ended December 31, 2018. In this annual report on Form 40-F, the Companys
independent registered public accounting firm, KPMG LLP (KPMG), has provided
its opinion as to the effectiveness of the Companys internal control over
financial reporting as of December 31, 2018. KPMG has also audited the Companys
financial statements included in this annual report on Form 40-F and issued a
report thereon.
Auditors Attestation Report
KPMGs attestation report on the Companys internal control
over financial reporting is included in the audit report filed in
Exhibit
99.3
of this annual report on Form 40-F and is incorporated by reference
herein.
Changes in Internal Control over Financial Reporting
There have been no changes in internal control over financial
reporting that occurred during the fiscal year ended December 31, 2018 that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
CORPORATE GOVERNANCE
The Companys Board of Directors (the Board of Directors) is
responsible for the Companys Corporate Governance policies and has separately
designated standing Compensation, Corporate Governance and Nominating, and Audit
Committees. The Board of Directors has determined that all the members of the
Compensation, Corporate Governance and Nominating, and Audit Committees are
independent, based on the criteria for independence prescribed by section
303A.02 of the NYSE Listed Company Manual.
Compensation Committee
Compensation of the Companys CEO and all other officers is
recommended by management to the Compensation Committee, established in
accordance with section 303A.05 of the NYSE Listed Company Manual, for
evaluation and recommendation to the Board of Directors.
The Compensation Committee develops, reviews and monitors
director and executive compensation and policies. The Compensation Committee is
also responsible for annually reviewing the adequacy of compensation for
directors and others and the composition of compensation packages. The Companys
CEO cannot be present during the Committees deliberations or vote. The
Compensation Committee is composed of four independent directors (as determined
under section 303A.02 and section 303A.05 of the NYSE Listed Company Manual):
Ricardo Campoy (Chair), Geoffrey Handley, Ken Pickering and Mario Szotlender.
The Companys Compensation Committee Charter is available on the Companys
website at www.edrsilver.com.
Corporate Governance and Nominating Committee
The Companys Corporate Governance and Nominating Committee,
established in accordance with section 303A.04 of the NYSE Listed Company
Manual, is tasked with (a) developing and recommending to the Board of Directors
corporate governance principles applicable to the Company; (b) identifying and
recommending qualified individuals for nomination to the Board of Directors; and
(c) providing such assistance as the Chair of the Board of Directors, if
independent, or alternatively the lead director of the Board of Directors, may
require. The Corporate Governance and Nominating Committee is composed of three
independent directors (as determined under Section 303A.02 of the NYSE Listed
Company Manual): Geoffrey Handley (Chair), Rex McLennan, and Mario Szotlender.
The Corporate Governance and Nominating Committee Charter is available on the
Companys website at www.edrsilver.com.
The principal corporate governance responsibilities of the
Corporate Governance and Nominating Committee include the following:
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a)
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reviewing and reassessing at least annually the adequacy
of the Companys corporate governance procedures and recommending any
proposed changes to the Board of Directors for approval;
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b)
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reviewing and recommending changes to the Board of
Directors of the Companys Code of Conduct and considering any requests
for waivers from the Companys Code of Conduct;
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c)
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receiving comments from all directors and reporting
annually to the Board of Directors with an assessment of the Board of
Directors performance to be discussed with the full Board of Directors
following the end of each fiscal year.
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The principal responsibilities of the Corporate Governance and
Nominating Committee for selection and nomination of director nominees include
the following:
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a)
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in making recommendations to the Board of Directors
regarding director nominees, the Corporate Governance and Nominating
Committee shall consider the appropriate size of the Board of Directors;
the competencies and skills that the Board of Directors considers to be
necessary for the Board of Directors, as a whole, to possess; the
competencies and skills that the Board of Directors considers each
existing director to possess; the competencies and skills each new nominee
will bring to the Board of Directors; and whether or not each new nominee
can devote sufficient time and resources to the nominees duties as a
director of the Company;
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b)
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developing qualification criteria for directors for
recommendation to the Board of Directors and, in conjunction with the
Chair of the Board of Directors (or, if the Chair is not an independent
director, any lead director of the Board of Directors), the Corporate
Governance and Nominating Committee shall appoint directors to the various
committees of the Board of Directors;
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c)
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having the sole authority to retain and terminate any
search firm to be used to identify director candidates or any other
outside advisors considered necessary to carry out its duties and to
determine the terms of such retainer;
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d)
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in conjunction with the Chair of the Board of Directors
(or, if the Chair of the Board of Directors is not an independent
director, any lead director of the Board of Directors), overseeing the
evaluation of the Board of Directors and of the Company and making
recommendations to the Board of Directors as
appropriate.
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AUDIT COMMITTEE
The Companys Board of Directors has a separately designated
standing Audit Committee established in accordance with section 3(a)(58)(A) of
the Exchange Act and section 303A.06 and 303A.07 of the NYSE Listed Company
Manual. The Companys Audit Committee is comprised of:
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Rex McLennan (Chair)
-
Ken Pickering
-
Ricardo Campoy
-
Geoffrey Handley
In the opinion of the Companys Board of Directors, all members
of the Audit Committee are independent (as determined under Rule 10A-3 of the
Exchange Act and section 303A.02 of the NYSE Listed Company Manual) and are
financially literate. The members of the Audit Committee do not have fixed terms
and are appointed and replaced from time to time by resolution of the Board of
Directors.
The Audit Committee meets with the Companys President, the
CEO, the CFO and the Companys independent auditors to review and inquire into
matters affecting financial reporting, the system of internal accounting and
financial controls, as well as audit procedures and audit plans. The Audit
Committee also recommends to the Board of Directors which independent registered
public auditing firm should be appointed by the Company. In addition, the Audit
Committee reviews and recommends to the Board of Directors for approval the
annual financial statements, the MD&A, and undertakes other activities
required by exchanges on which the Companys securities are listed and by
regulatory authorities to which the Company is held responsible. The Companys
Audit Committee Charter is available on the Companys website at
www.edrsilver.com.
Audit Committee Financial Expert
The Companys Board of Directors has determined that Rex
McLennan qualifies as a financial expert (as defined in Item 407 (d)(5)(ii) of
Regulation S-K under the Exchange Act), has financial management expertise
(pursuant to section 303A.07 of the NYSE Listed Company Manual) and is
independent (as determined under Exchange Act Rule 10A-3 and section 303A.02 of
the NYSE Listed Company Manual).
PRINCIPAL ACCOUNTING FEES AND SERVICES INDEPENDENT
AUDITORS
The following table shows the aggregate fees billed to the
Company by KPMG LLP and its affiliates, Chartered Professional Accountants, the Companys
independent registered public auditing firm, in each of the last two years.
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2018
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2017
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Audit Fees (1)
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$582,500
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$463,400
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Tax Fees (2)
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$0
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$0
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All other fees (3)
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$0
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$0
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Total*
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$582,500
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$463,400
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* All amounts are expressed in Canadian dollars
(1)
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The aggregate fees billed in each of the last two fiscal
years for assurance and related services by the Companys external auditor
that are reasonably related to the performance of the audit or review of
the Companys financial statements.
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(2)
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The aggregate fees billed in each of the last two fiscal
years for professional services rendered by the companys external auditor
for tax compliance and tax advice.
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(3)
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The aggregate fees billed in each of the last two fiscal
years for products and services provided by the Companys external
auditor, other than the services reported under clauses 1and 2
above.
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PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES PROVIDED BY
INDEPENDENT AUDITORS
The Audit Committee pre-approves all audit services to be
provided to the Company by its independent auditors. Non-audit services that are
prohibited to be provided to the Company by its independent auditors may not be
pre-approved. In addition, prior to the granting of any pre-approval, the Audit
Committee must be satisfied that the performance of the services in question
will not compromise the independence of the independent auditors. All non-audit
services performed by the Companys auditor for the fiscal year ended December
31, 2018 were pre-approved by the Audit Committee of the Company. No non-audit
services were approved pursuant to the
de minimis
exemption to the
pre-approval requirement.
OFF-BALANCE SHEET TRANSACTIONS
The Company does not have any off-balance sheet financing
arrangements or relationships with unconsolidated special purpose entities.
CODE OF ETHICS
The Company has adopted a Code of Business Conduct and Ethics
(the Code) that applies to all the Companys directors, executive officers and
employees, which is available on the Companys website at www.edrsilver.com and
in print to any shareholder who requests it. The Code meets the requirements for
a code of ethics within the meaning of that term in General Instruction 9(b)
of Form 40-F.
All amendments to the Code, and all waivers of the Code with
respect to any of the officers covered by it, will be posted on the Companys
website, www.edrsilver.com within five business days of the amendment or waiver
and provided in print to any shareholder who requests them. During the fiscal
year ended December 31, 2018, the Company did not substantively amend, waive or
implicitly waive any provision of the Code with respect to any of the directors,
executive officers or employees subject to it.
CONTRACTUAL OBLIGATIONS
The following table lists as of December 31, 2018 information
with respect to the Companys known contractual obligations.
Payments due by period (in thousands of
dollars)
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Contractual
Obligations
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Total
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Less
than 1 year
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1 3
years
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3 5
years
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More
than 5 years
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Accounts Payable
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$
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19,470
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$
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19,470
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$
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-
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$
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-
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$
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-
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Income Tax Payable
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4,050
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4.050
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-
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-
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-
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Operating Leases
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2,840
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394
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720
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542
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1,184
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Capital Commitments
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140
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140
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-
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-
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-
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Other Long-Term Liabilities
(1)
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8,195
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-
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6,066
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2,129
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-
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Total
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$
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34,695
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$
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24,054
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$
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6,786
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$
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2,671
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$
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1,184
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(1)
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The $8.2 million of other long-term liabilities is the
discounted cost estimate to settle the Companys reclamation costs of the
Guanacevi mine, Bolanitos mine, El Cubo and El Compas mine in Mexico.
These costs include land rehabilitation, decommissioning of buildings and
mine facilities, on-going care and maintenance and other
costs.
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NOTICES PURSUANT TO REGULATION BTR
There were no notices required by Rule 104 of Regulation BTR
that the Registrant sent during the year ended December 31, 2018 concerning any
equity security subject to a blackout period under Rule 101 of Regulation BTR.
NYSE CORPORATE GOVERNANCE
The Companys common shares are listed on the NYSE. Sections
103.00 and 303A.11 of the NYSE Listed Company Manual permit foreign private
issuers to follow home country practices in lieu of certain provisions of the
NYSE Listed Company Manual. A foreign private issuer that follows home country
practices in lieu of certain provision of the NYSE Listed Company Manual must
disclose any significant ways in which its corporate governance practices differ
from those followed by domestic companies either on the its website or in the
annual report that it distributes to shareholders in the United States. A
description of the significant ways in which the Companys governance practices
differ from those followed by domestic companies pursuant to NYSE standards is
as follows:
Shareholder Meeting Quorum Requirement
: The NYSE is of
the opinion that the quorum required for any meeting of shareholders should be
sufficiently high to insure a representative vote. The Companys quorum
requirement is set forth in its Memorandum and Articles. A quorum for a meeting
of members of the Company is two persons who are, or who represent by proxy,
shareholders who, in the aggregate, hold at least 5% of the shares entitled to
be voted at the meeting.
Proxy Delivery Requirement
: The NYSE requires the
solicitation of proxies and delivery of proxy statements for all shareholder
meetings, and requires that these proxies shall be solicited pursuant to a proxy
statement that conforms to SEC proxy rules. The Company is a foreign private
issuer as defined in Rule 3b-4 under the Exchange Act, and the equity
securities of the Company are accordingly exempt from the proxy rules set forth
in Sections 14(a), 14(b), 14(c) and 14(f) of the Exchange Act. The Company
solicits proxies in accordance with applicable rules and regulations in Canada.
Shareholder Approval Requirement:
The Company will
follow Toronto Stock Exchange rules for shareholder approval of new issuances of
its common shares. Following Toronto Stock Exchange rules, shareholder approval
is required for certain issuances of shares that: (i) materially affect control
of the Company; or (ii) provide consideration to insiders in aggregate of 10% or
greater of the market capitalization of the listed issuer and have not been
negotiated at arms length. Shareholder approval is also required, pursuant to
Toronto Stock Exchange rules, in the case of private placements: (x) for an
aggregate number of listed securities issuable greater than 25% of the number of
securities of the listed issuer which are outstanding, on a non-diluted basis,
prior to the date of closing of the transaction if the price per security is
less than the market price; or (y) that during any six month period are to
insiders for listed securities or options, rights or other entitlements to
listed securities greater than 10% of the number of securities of the listed
issuer which are outstanding, on a non-diluted basis, prior to the date of the
closing of the first private placement to an insider during the six month
period.
The foregoing are consistent with the laws, customs and
practices in Canada.
In addition, the Company may from time-to-time seek relief from
the NYSE corporate governance requirements on specific transactions under the
NYSE Listed Company Guide, in which case, the Company shall make the disclosure
of such transactions available on the Companys website at www.edrsilver.com.
Information contained on the Companys website is not part of this annual report
on Form 40-F.
MINE SAFETY DISCLOSURE
Pursuant to Section 1503(a) of the Dodd-Frank Wall Street
Reform and Consumer Protection Act of 2010 (Dodd-Frank Act), issuers that are
operators, or that have a subsidiary that is an operator, of a coal or other
mine in the United States are required to disclose in their periodic reports
filed with the SEC information regarding specified health and safety violations,
orders and citations, related assessments and legal actions, and mining-related
fatalities under the regulation of the Federal Mine Safety and Health
Administration (MSHA) under the Federal Mine Safety and Health Act of 1977
(the Mine Act). During the fiscal year ended December 31, 2018, the Company
had no mines in the United States subject to regulation by MSHA under the Mine
Act.
UNDERTAKING
The Company undertakes to make available, in person or by
telephone, representatives to respond to inquiries made by the Commission staff,
and to furnish promptly, when requested to do so by the Commission staff,
information relating to: the securities registered pursuant to Form 40-F; the
securities in relation to which the obligation to file an annual report on Form
40-F arises; or transactions in said securities.
CONSENT TO SERVICE OF PROCESS
The Company filed an Appointment of Agent for Service of
Process and Undertaking on Form F-X/A with the SEC on March 28, 2013, with
respect to the class of securities in relation to which the obligation to file
this annual report on Form 40-F arises. Any change to the name or address of the
agent for service of process will be communicated promptly to the SEC by
amendment to Form F-X/A referencing the Companys file number.
EXHIBIT INDEX
The following exhibits have been filed as part of this annual
report on Form 40-F:
Exhibit
|
Description
|
Annual Information
|
99.1
|
Annual Information Form of the Company for the
year ended December 31, 2018
|
99.2
|
The following audited
consolidated financial statements of the Company, are exhibits to and form
a part of this annual report:
|
|
Consolidated Statements of Financial Position as of December 31,
2018 and 2017
|
|
Consolidated
Statements of Comprehensive Income (Loss) for the year ended December 31,
2018 and December 31, 2017
|
|
Consolidated
Statement of Changes in Equity for the years ended December 31, 2018 and
December 31, 2017
|
|
Consolidated
Statements of Cash Flow for the years ended December 31, 2018 and December
31, 2017
|
|
Notes to Consolidated Financial Statements
|
99.3
|
Independent Registered Public
Accounting Firms Report on Consolidated Financial Statements and
Attestation on Internal Control Over Financial Reporting
|
99.4
|
Managements Discussion and Analysis
|
Certifications
|
99.5
|
Certificate of Chief Executive Officer Pursuant
to Rule 13a-14(a) of the Exchange Act
|
99.6
|
Certificate of Chief Financial
Officer Pursuant to Rule 13a-14(a) of the Exchange Act
|
99.7
|
Certificate of Chief Executive Officer Pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|
99.8
|
Certificate of Chief Financial Officer Pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
|
Consents
|
|
99.9
|
Consents of Peter J. Smith, P.
Eng. of Smith Foster & Associates
|
99.10
|
Consents of Humberto F. Preciado, P.E. of Wood
PLC
|
99.11
|
Consent of Jarita Barry, P.
Geo. of P&E Mining Consultants Inc.
|
99.12
|
Consents of David Burga, P. Geo. of P&E
Mining Consultants Inc.
|
99.13
|
Consents of Eugene Puritch, P.
Geo., FEC, of P&E Mining Consultants Inc.
|
SIGNATURES
Pursuant to the requirements of
the Exchange Act, the Registrant certifies that it meets all of the requirements
for filing on Form 40-F and has duly caused this annual report to be signed on
its behalf by the undersigned, thereto duly authorized.
|
ENDEAVOUR SILVER
CORP.
|
|
|
|
|
|
|
|
By:
|
/s/ Bradford Cooke
|
|
Name:
|
Bradford Cooke
|
|
Title:
|
Chief Executive Officer
|
|
|
|
Date: February 25, 2019
|
|
|
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