VANCOUVER, April 7 /PRNewswire-FirstCall/ -- Endeavour Silver Corp.
(EDR: TSX, EJD: DBFrankfurt and EXK: AMEX) announced today its
operating results and audited year end financial statements for
2007. The financial results are expressed in US dollars (US$) and
are based on Canadian generally accepted accounting practices. For
a more detailed review of Endeavour's 2007 financial and operating
results, shareholders can view the complete financial statements
and management discussion and analysis at the Company's website,
http://www.edrsilver.com/ and on the SEDAR website,
http://www.sedar.ca/. Highlights 2007 --------------- - Increased
annual sales by 106% to $32.3 million. - Increased silver
production by 58% to 2.1 million oz. - Increased proven and
probable reserves by 50% to 14.9 million oz. - Increased silver
equivalent reserves and resources by 11% to 50.0 million oz. -
Acquired remaining 49% of Guanacevi Mines project in Durango for
$6.8 million in shares. - Acquired 100% of Guanajuato Mines project
in Guanajuato for $7.7 million in cash, shares and warrants. -
Discovered new polymetallic mineralized zone in Cometa vein at
Parral project in Chihuahua - Common shares listed for trading on
American Stock Exchange (symbol EXK) Bradford Cooke, Chairman and
CEO, commented, "Endeavour enjoyed its best year yet in 2007,
setting records for the fourth consecutive year in annual sales,
silver production and mine reserves. The Company's consistent
growth year on year can be attributed in part to our business
strategy of acquiring prospective silver properties within mature
mining districts that have existing mine and plant infrastructure
so that new discoveries can be fast-tracked to production." "Last
year, our aggressive production growth pushed cash costs higher so
management turned its focus in the fourth quarter to strengthening
our operating team and improving our operating performance. As a
result, we are already starting to see cash costs decline at
Guanacevi and a similar trend is anticipated at Guanajuato this
year. Shareholders can look forward to another banner year of
growth for Endeavour in 2008, fueled by new mineral discoveries,
expanded mine output and upgraded plant facilities." Financial
Results ----------------- In 2007, Endeavour posted record sales
(revenues) of $32.3 million (up 106% over 2006) as a result of
sharply higher silver production totalling 2.1 million oz (up 58%
over 2006) and higher realized silver prices averaging $13.23 per
oz (up 28% over 2006). Production was higher thanks to the
expansion of mine and plant throughput at the Guanacevi Mines
project in Durango, Mexico and the acquisition of the Guanajuato
Mines project in Guanajuato, Mexico. The Company's cost of sales
also rose in 2007 to $24.3 million, resulting in cash costs
averaging $9.38 per oz net of gold credits (up 43% over 2006).
Revenue less cost of sales and depreciation fell slightly to $3.3
million, and the Company posted a $12.2 million loss for the year
($0.27 per share). The escalation of cash costs in 2007 resulted
from an industry-wide problem of rising labour, energy, equipment
and supply costs, as well as certain project-related factors. At
Guanacevi, cash costs rose 25% to $8.16 per oz in 2007 as mine
productivity suffered due to the aggressive production growth, ore
grades dropped due to excessive mine dilution and the processing of
lower grade ore stockpiles, and metal recoveries fell due to higher
manganese contents in the ore, shorter retention times in the leach
circuit and delays in the plant upgrade projects. At Guanajuato,
cash costs were already marginal at the time of purchase in Q2,
2007, and jumped to $20.06 per oz for the year as the Company
incurred substantial additional operating costs to clean up old
underground workings and complete safety and environmental upgrades
in order to provide access to and mine mineralized material in
historic reserve blocks. Management addressed many of these issues
in Q4, 2007 and as a result, we are now starting to see
improvements in productivity and dilution, as shown by the
reduction of cash costs at Guanacevi in Q4 compared to Q3, 2007,
down 28% to $7.45 per oz. The Company's Phase 2 capital projects to
upgrade the Guanacevi plant are also expected to have a positive
impact on operations when they are completed in the second quarter,
2008. The Statement of Operations (appended below) shows that other
costs were also higher in 2007. Exploration expenses rose as a
result of the increase in drilling activities at greenfields
projects such as Parral and Arroyo Seco. General and administrative
costs rose as a result of 2007 being the first year of SOX
compliance for the Company. Stock-based compensation escalated due
to new stock options being issued to attract new senior members to
the management and operations teams in order to facilitate the
Company's growth. The Company also took a $1.3 million write-down
on $5.2 million in asset-backed commercial paper. The Balance Sheet
(appended below) confirms Endeavour's strong financial position at
year-end, including $30.5 million in current assets, $25.3 million
in working capital and $20.2 million in cash and marketable
securities, amongst the best in our peer group. Shareholder equity
also grew 30% to $70.4 million in 2007. Operating Results
----------------- Endeavour recorded its fourth consecutive year of
rising silver production thanks to another jump in mine and plant
throughput at Guanacevi, the Company's first and largest mining
operation. This production growth was facilitated by an increase in
mine labour, the purchase of new mine equipment and the expansion
of the milling circuit at the plant. Initial mine and plant
operations at Guanajuato, after the closing of this second major
acquisition for the Company in the second quarter, 2007, also
contributed to the higher silver output. In 2007, consolidated
silver production totalled 2,135,484 oz, an increase of 58%
compared to 1,352,661 oz in 2006, and gold production was up 158%
to 6,427 oz. Plant throughput for the year was 291,561 tonnes (up
149%) at average grades of 319 gpt silver (down 29%) and 0.87 gpt
gold (down 4%). Silver recoveries were 70.4%, down 12% and gold
recoveries were 76.8%, up 17% compared to 2006. In Q4, 2007,
consolidated silver production was 636,866 oz, an increase of 72%
compared to 369,295 oz in Q4, 2006, and gold production was up 216%
to 2,122 oz. Plant throughput for Q4, 2007 was 91,251 tonnes (up
171%) at average grades of 319 gpt silver (down 25%) and 0.85 gpt
gold (up 6%). Silver recoveries were 68.0%, down 14% and gold
recoveries were 80.4%, up 61% compared to 2006. Compared to Q3,
2007, silver production rose 10% largely due to a 14% increase in
silver grades and 8% increase in silver recoveries. At Guanacevi,
silver production for 2007 totalled 1,907,795 oz, an increase of
41% compared to 1,352,661 oz in 2006, and gold production was up
59% to 3,957 oz. Plant throughput for the year was 226,295 tonnes
(up 93%) at average grades of 375 gpt silver (down 16%) and 0.70
gpt gold (down 23%). Silver recoveries were 69.4%, down 13% and
gold recoveries were 75.7%, up 15% compared to 2006. At Guanajuato,
silver production for 2007 totalled 227,689 oz and gold production
was 2,360 oz for approximately 8 months of production after the
closing of the acquisition in Q2, 2007. Plant throughput for the
period was 65,266 tonnes at average grades of 133 gpt silver and
1.47 gpt gold. Silver recoveries were 81.5% and gold recoveries
were 76.6%. Comparative tables providing more details on the
Consolidated, Guanacevi and Guanajuato Mines production in 2006 and
2007 are appended below. Capital Projects ----------------
Endeavour invested $15.2 million on capital projects in 2007,
including $9.6 million on plant and equipment and $2.1 million for
underground mine development. Most of these investments were made
at Guanacevi to facilitate expanded mine output and enhanced plant
production and metal recoveries. The Phase 1 Guanacevi plant
expansion and upgrade program was completed with the commissioning
of a 10 1/2 x 12 foot ball mill in Q1, 2007 which significantly
improved the ore grind. A Phase 2 plant capital program got
underway including the refurbishment and doubling the capacity of
the CCD agitation leach circuit, construction of a new lined
tailings pond, installation of new expanded Merrill Crowe silver
precipitation and refinery circuits, and building a new tailings
thickener system. - Mill Installation Completed March - Agitation
Refurbishment Completed May - Lined Tailings Pond Completed July -
Merrill Crowe Completed October - Silver Refinery 95% Completed at
year-end - Tailings Thickeners 40% Completed at year-end -
Agitation Expansion 20% Completed at year-end The Guanacevi mine
capital projects completed in 2007 include: - 2450 m underground
mine development - New mine camp and kitchen - Underground pump
station - Expand electrical substation At Guanajuato, the focus was
on completing the Phase 1 tailings pond expansion, commencing the
Phase 2 tailings program, rearranging the flotation circuit and
rehabilitating old underground mine workings to provide for long
term access in certain areas. - Phase 1 tailings expansion
Completed July - Phase 2 tailings expansion 30% Completed at
year-end - Rearrange flotation circuit Completed September - Cebada
level 315 clean up Completed December - Cebada level 515 cleanup
Completed early 2008 Exploration Projects --------------------
Endeavour spent $6.0 million on exploration projects in 2007 in
order to increase the Company's reserves and resources. In total,
the Company drilled 24,000 m of core in 76 drill holes testing
several prospective silver targets in 4 separate project areas,
Guanacevi in Durango, Guanajuato in Guanajuato, Parral in Chihuahua
and Arroyo Seco in Michoacan. Proven and probable reserves jumped
50% to 14.9 million oz silver and the combined silver equivalent
reserves and resources (including gold at a 1 gold: 55 silver
ratio, but not including base metals) climbed 11% to 50.0 million
oz. For more details, please refer to the Company's news release
updating reserves and resources on March 3, 2008. Click here. The
most exciting new development in exploration last year was the
discovery of a new, polymetallic mineralized zone in the Cometa
vein, part of the Parral project. Even though the new mineralized
zone is not silver-rich, it has substantial zinc, lead and gold
values. El Cometa is attractively located adjacent to existing
infrastructure for rapid development and represents the first of
what management hopes will be several new discoveries in this
historic mining district. The indicated and inferred resources for
El Cometa are shown below and for more details on all of
Endeavour's exploration projects, please refer to the Company's
news release dated February 12, 2008 reviewing the 2007 exploration
results. Click here.
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Resources Indicated
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Ag Au Zn Pb Cu Ag Au Description Tonnes g/t g/t (%) (%) % oz oz
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Total Indicated 600,000 39 1.00 3.0 2.7 0.16 752,000 19,000
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Resources Inferred
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Ag Au Zn Pb Cu Ag Au Description Tonnes g/t g/t (%) (%) % oz oz
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Total Inferred 1,150,000 39 1.00 2.5 2.4 0.17 1,440,000 37,000
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(x) Cut-off grade for Cometa Resources is 4.5% Zinc-Equivalent for
Cometa, ZnEq % = ( Au g/t + Zn % + Pb % + Ag oz/t). 2008 Outlook
------------ In 2008, Endeavour expects to deliver its fifth
consecutive year of growth by expanding silver production 22% to
2.6 million oz or higher. Management will focus not only on
production growth but also on expanding the silver equivalent
reserves and resources and reducing the cash operating costs. Cash
costs are forecast to average $8 per oz or lower in 2008. Guanacevi
is forecast to operate at 850 tpd at an average grade of 340 gpt
silver and produce 2.2 million oz silver. Guanajuato is forecast to
operate at 200 tpd at an average grade of 190 gpt silver and
produce 0.4 million oz silver. Like 2007, silver production is
expected to be slower in the first two quarters of 2008 and then
pick up significantly in the last two quarters as the various
capital mine and plant projects are completed. The capital budget
is $15 million in 2008, most of which should be covered by mine
operating cash-flow. At Guanacevi, the capital projects include
finishing the Phase 2 plant expansion and upgrades described above,
initiating a Phase 3 plant program to expand the crushing and
tailings circuits and hiring a new mining contractor to accelerate
the underground mine development of the Porvenir mine as well as
developing production ramps for the proposed Santa Cruz and Alex
Breccia mines. At Guanajuato, the capital projects include
completion of the tailings expansion program, the development of
new underground mine workings and finishing safety upgrades in the
mine shafts, all of which have been closed since early in the year.
Endeavour plans to hold a conference call and webcast to discuss
its 2007 year-end financial results at 11:00 AM Pacific Time (2:00
PM Eastern Time) on Monday, April 7, 2008. To participate in the
conference call, please dial the following: - 1-800-732-0232 Canada
& USA (Toll-Free) - 416-644-3415 Toronto area callers - No pass
code necessary A replay of the conference call will be available
until April 21, 2008 by dialing 1-877-289-8525 in Canada & USA
(Toll-free) or 416-640-1917 in the Toronto area. The required pass
code is 21268130 followed by the Number key. A simultaneous webcast
of the conference call will be posted on the home page of the
company's website, http://www.edrsilver.com/. Barry Devlin, M.Sc.,
P.Geo., Vice President Exploration, is the Qualified Person who
reviewed the technical disclosures herein for the purposes of NI
43-101. Endeavour Silver Corp. (EDR: TSX, EXK: AMEX, EJD:
DBFrankfurt) is a small-cap silver mining company focused on the
growth of its silver production, reserves and resources in Mexico.
The expansion programs now underway at Endeavour's two operating
mines, Guanacevi in Durango and Bolanitos in Guanajuato, coupled
with the Company's aggressive acquisition and exploration programs
in Mexico should enable Endeavour to join the ranks of top primary
silver producers worldwide. ENDEAVOUR SILVER CORP. Per: /s/
"Bradford J. Cooke" Bradford Cooke Chairman and CEO The TSX
Exchange has neither approved nor disapproved the contents of this
news release. CAUTIONARY DISCLAIMER - FORWARD LOOKING STATEMENTS
-------------------------------------------------- Certain
statements contained herein regarding the Company and its
operations constitute "forward-looking statements" within the
meaning of the United States Private Securities Litigation Reform
Act of 1995. All statements that are not historical facts,
including without limitation statements regarding future estimates,
plans, objectives, assumptions or expectations of future
performance, are "forward-looking statements". We caution you that
such "forward looking statements" involve known and unknown risks
and uncertainties that could cause actual results and future events
to differ materially from those anticipated in such statements.
Such risks and uncertainties include fluctuations in precious metal
prices, unpredictable results of exploration activities,
uncertainties inherent in the estimation of mineral reserves and
resources, fluctuations in the costs of goods and services,
problems associated with exploration and mining operations, changes
in legal, social or political conditions in the jurisdictions where
the Company operates, lack of appropriate funding and other risk
factors, as discussed in the Company's filings with Canadian and
American Securities regulatory agencies. Resource and production
goals and forecasts may be based on data insufficient to support
them. Godfrey Walton, P.Geo. and/or Bradford Cooke, P.Geo. are the
Qualified Persons for the Company as required by NI 43-101. The
Company expressly disclaims any obligation to update any
forward-looking statements. We seek safe harbour. ENDEAVOUR SILVER
CORP. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME (expressed in thousands of US dollars, except for shares and
per share amounts) Re-stated note 2 and 4
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Ten Months Year Ended Year Ended Ended December 31 December 31
December 31 Notes 2007 2006 2005
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Sales $ 32,319 $ 15,671 $ - Cost of sales 24,335 9,174 -
Depreciation and depletion 4,682 2,639 17 Exploration 5,967 400 451
General and administrative 4,836 3,009 2,194 Stock-based
compensation 13 4,681 3,413 1,137
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Earnings (loss) (12,182) (2,964) (3,799) Foreign exchange gain
(loss) 2,427 494 (344) Income (loss) from property option interest
- 122 (1,121) Realized gain (loss) on marketable securities 665 176
115 Impairment on asset backed commercial paper 10 (1,327) - -
Investment and other income 867 789 -
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Loss before taxes and other items (9,550) (1,383) (5,149)
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Non-controlling interest (1,483) (1,156) - Income tax recovery
(provision) 16 (1,169) (1,409) -
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Net loss for the period (12,202) (3,948) (5,149)
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Other comprehensive income, net of tax Unrealized gain (loss) on
marketable securities 4 206 - - Reclassification adjustment for
gain (loss) included in net income 4 (210) - -
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(4) - -
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Comprehensive income (loss) for the period (12,206) (3,948) (5,149)
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Basic and diluted loss per share based on net loss $ (0.27) $
(0.10) $ (0.21)
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Weighted average number of shares outstanding 45,441,128 37,713,913
24,518,980
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ENDEAVOUR SILVER CORP. CONSOLIDATED BALANCE SHEET (expressed in
thousands of US dollars)
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December 31, December 31, Notes 2007 2006
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restated ASSETS note 2 and 4 Current assets Cash and cash
equivalents $ 16,577 $ 31,870 Marketable securities 6 3,573 3,072
Accounts receivable and prepaids 7 7,200 3,104 Inventories 8 2,916
3,332 Due from related parties 9 228 34
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Total current assets 30,494 41,412 Long term deposits 877 - Long
term investments 10 3,932 - Mineral property, plant and equipment
11 46,848 20,866
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Total assets $ 82,151 $ 62,278
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LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts
payable and accrued liabilities $ 4,348 $ 3,046 Income taxes
payable 781 4
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Total current liabilities 5,129 3,050 Asset retirement obligations
12 1,578 954 Future income tax liability 16 5,068 2,968
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Total liabilities 11,775 6,972
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Non-controlling interest 5 - 1,198 Shareholders' equity Common
shares, unlimited shares authorized, no par value, issued and
outstanding 48,982,146 shares (2006 - 42,373,988 shares) Page 5
87,458 63,353 Contributed surplus Page 5 8,921 5,064 Accumulated
comprehensive income Page 5 720 212 Deficit (26,723) (14,521)
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Total shareholders' equity 70,376 54,108
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$ 82,151 $ 62,278
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Nature of Operations (note 1) Commitments and contingencies (note
11) Subsequent events (notes 11 & 13) Comparative Table of
Consolidated Mine Operations
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Plant T'put Grade Production Recoveries ----------- -----
---------- ---------- Period Tonnes Ag(gpt) Au(gpt) Ag(oz) Au(oz)
Ag(%) Au(%)
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Production 2006 Year: 51% mine ownership January 28, 2006 Q1, 2006
24,805 479 0.95 300,872 503 77.4 66.0 Q2, 2006 27,585 492 1.18
350,087 700 80.3 67.0 Q3, 2006 31,201 404 0.73 332,407 619 81.9
81.8 Q4, 2006 33,664 426 0.80 369,295 671 78.7 50.0
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2006 117,255 449 0.90 1,352,661 2,493 80.0 73.0
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Production 2007 Year: Q1, 2007 47,781 427 0.88 490,986 1,020 74.8
75.1 Q2, 2007 58,060 290 0.99 430,248 1,481 74.8 76.4 Q3, 2007
94,469 281 0.80 577,384 1,804 67.8 74.4 Q4, 2007 91,251 319 0.85
636,866 2,122 68.0 80.4
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2007 291,561 319 0.87 2,135,484 6,427 70.4 76.8
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Q4, 2007 : Q3, 2007 -3% 14% 6% 10% 18% 0% 8%
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Q4, 2007 : Q4, 2006 171% -25% 6% 72% 216% -14% 61%
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YTD, 2007 : YTD, 2006 149% -29% -4% 58% 158% -12% 17%
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Comparative Table of Guanajuato Mine Operations
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Plant T'put Grade Production Recoveries ----------- -----
---------- ---------- Period Tonnes Ag(gpt) Au(gpt) Ag(oz) Au(oz)
Ag(%) Au(%)
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Production 2007 Year: Purchased May 2, 2007 Q1, 2007 0 0 0 0 0 0
0.0 Q2, 2007 17,311 120 1.70 47,870 657 71.7 69.4 Q3, 2007 26,385
124 1.29 85,742 817 81.5 74.7 Q4, 2007 21,570 155 1.50 94,077 886
87.7 85.0
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YTD 2007 65,266 133 1.47 227,689 2,360 81.5 76.6
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Q4, 2007 : Q3, 2007 -18% 25% 16% 10% 8% 8% 14%
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Comparative Table of Guanacevi Mine Operations
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Plant T'put Grade Production Recoveries ----------- -----
---------- ---------- Period Tonnes Ag(gpt) Au(gpt) Ag(oz) Au(oz)
Ag(%) Au(%)
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Production 2006 Year: 51% mine ownership January 28, 2006 Q1, 2006
24,805 479 0.95 300,872 503 77.4 66.0 Q2, 2006 27,585 492 1.18
350,087 700 80.3 67.0 Q3, 2006 31,201 404 0.73 332,407 619 81.9
81.8 Q4, 2006 33,664 426 0.80 369,295 671 80.2 50.0
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2006 117,255 449 0.90 1,352,661 2,493 80.0 73.0
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Production 2007 Year: 100% mine ownership April 1, 2008 Q1, 2007
47,781 427 0.88 490,986 1,020 74.8 75.1 Q2, 2007 40,749 377 0.72
382,377 824 75.9 76.4 Q3, 2007 68,084 342 0.61 491,643 987 65.8
74.5 Q4, 2007 69,681 370 0.65 542,789 1,126 65.4 76.9
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2007 226,295 375 0.70 1,907,795 3,957 69.4 75.7
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Q4, 2007 : Q3, 2007 2% 8% 7% 10% 14% -1% 3%
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Q4, 2007 : Q4, 2006 107% -13% -19% 47% 68% -18% 54%
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YTD, 2007 : YTD, 2006 93% -16% -23% 41% 59% -13% 15%
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CONTACT: Hugh Clarke, Toll free: (877) 685-9775, tel: (604)
685-9775, fax: (604) 685-9744, email ; http://www.edrsilver.com/
DATASOURCE: Endeavour Silver Corp. CONTACT: Hugh Clarke, Toll free:
(877) 685-9775, tel: (604) 685-9775, fax: (604) 685-9744, email ;
http://www.edrsilver.com/
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