Endeavour Silver Corp. (“Endeavour” or the
“Company”) (NYSE: EXK; TSX: EDR) is
pleased to announce its consolidated production and cost guidance
and its capital and exploration budgets for 2023. All dollar
amounts are in US dollars (US$).
2023 Production and Cost Guidance
Highlights
In 2023, silver production is expected to range
from 5.7 to 6.3 million ounces (oz) and gold production is expected
to be between 36,000 oz and 40,000 oz. Silver equivalent production
is forecasted to total between 8.6 million and 9.5 million oz at an
80:1 silver:gold ratio.
Consolidated cash costs2 and all-in sustaining
costs2 (“AISC”) in 2023 are estimated to be $10.00-$11.00 per oz
silver and $19.00-20.00 per oz silver, respectively, net of gold
by-product credits. Consolidated cash costs on a per ounce basis
are expected to be similar to 2022 and AISC slightly lower as
comparable sustaining capital, exploration and general and
administrative costs will be allocated over increased
production.
“Our 2023 guidance marks our fourth consecutive
year of production growth and a 25% increase from the mid-point of
last year’s original forecast. Our ongoing operational success is a
product of culture and values promoted throughout the Company for
safe and sustainable operations, together with improved mineral
quality at Guanaceví,” stated Dan Dickson, Endeavour’s CEO. “The
combination of higher consolidated throughput and produced ounces
allows for similar projected unit costs, amidst an
inflationary-challenged landscape. While we continue to see cost
pressures in explosives, energy prices and steel, we have also
identified efficiencies to mitigate costs.”
Mr. Dickson added, “As we look to the year
ahead, our commitment to creating shareholder value will continue
by way of organic growth and continued strong operating
performance. We are in an enviable position with one development
project and multiple advanced exploration projects that provide
considerable upside for value creation both near and long term. A
development decision on Terronera is expected soon and will
redefine our cost profile when production commences. The planned
advancement of the Pitarrilla and Parral assets will provide
further similar opportunities for growth and value.”
2023 Guidance Summary
|
|
Guanaceví |
Bolañitos |
Consolidated |
Tonnes per day |
tpd |
1,150 - 1,250 |
1,150 - 1,250 |
2,300 - 2,500 |
Silver production |
M oz |
5.2 – 5.7 |
0.5 - 0.6 |
5.7 – 6.3 |
Gold production |
k oz |
15.0 - 17.0 |
21.0 - 23.0 |
36.0 - 40.0 |
Silver Eq production1 |
M oz |
6.4 – 7.0 |
2.2 - 2.4 |
8.6 – 9.5 |
Cash costs, net of gold by-product credits2 |
$/oz |
|
|
$10.00 - $11.00 |
AISC, net of gold by-product credits2 |
$/oz |
|
|
$19.00 - $20.00 |
Sustaining capital2 budget |
$M |
|
|
$34.7 |
Development budget |
$M |
|
|
$25.7 |
Exploration budget |
$M |
|
|
$9.3 |
Operating Mines
At Guanaceví, 2023 plant throughput will range
from 1,150 tonnes per day (tpd) to 1,250 tpd and average 1,200 tpd
sourcing from Milache, SCS and El Curso. A significant portion of
production will be mined from the Porvenir Cuatro extension on the
El Curso concessions. The El Curso concessions were leased from a
third party with no upfront costs, but with significant royalty
payments on production. Compared to 2022, mine grades are expected
to remain elevated and recoveries are anticipated to be similar in
2023. Cash costs per ounce and direct costs2 on a per tonne basis
are expected to be similar to 2022, with an increase in costs
offset by both increased processed tonnes and increased
production.
In 2023, plant throughput at Bolañitos is
expected to range from 1,150 tpd to 1,250 tpd and average 1,200 tpd
sourcing from the Plateros-La Luz, Lucero-Karina and Bolañitos-San
Miguel vein systems. Mine grades and recoveries are expected to be
similar to 2022. Direct costs on a per tonne basis are expected to
decrease slightly due to both a reduction in indirect costs and an
increase in processed tonnes. Cash costs per ounce are expected to
be slightly lower than 2022 due to an increase in gold ounces
produced.
Consolidated Operating
Costs
2023 cash costs, net of gold by-product credits,
are expected to be $10.00-$11.00 per oz of silver produced.
Consolidated cash costs on a co-product basis2 are anticipated to
be $13.00-$14.00 per oz silver and $1,100-$1,200 per oz gold.
All-in sustaining costs, net of gold by-product
credits, in accordance with the World Gold Council standard, are
estimated to be $19.00-$20.00 per oz of silver produced. Excluding
non-cash items, AISC are forecast to be in the $18.00-$19.00
range.
Direct operating costs2 per tonne are estimated
to be $115-$120 with inflationary pressures expected to continue in
2023. Direct costs2, which include royalties and special mining
duties, are estimated to be in the range of $140-$145 per
tonne.
Management made the following assumptions in
calculating its 2023 cost forecasts: $21 per oz silver price,
$1,680 per oz gold price, 20:1 Mexican peso per US dollar exchange
rate and a 5% US annual inflation rate.
2023 Capital Budget
|
Sustaining MineDevelopment |
Sustaining Other
Capital |
Total Sustaining Capital |
Growth Capital |
Total Capital |
Guanaceví |
$14.0 million |
$8.9 million |
$22.9 million |
- |
$22.9 million |
Bolañitos |
$8.2 million |
$3.6 million |
$11.8 million |
- |
$11.8 million |
Terronera |
- |
- |
- |
$25.7 million |
$25.7 million |
Corporate and Exploration |
|
|
|
$2.1 million |
$2.1 million |
Total |
$22.2 million |
$12.5 million |
$34.7 million |
$27.8 million |
$62.5 million |
Sustaining Capital
Investments
In 2023, Endeavour plans to invest $34.7 million
in sustaining capital at its two operating mines. At current metal
prices, the sustaining capital investments are expected to be paid
out of operating cash flow.
At Guanaceví, $22.9 million will be invested in
capital projects, the largest of which is 4.5 kilometres of mine
development at Milache, SCS and El Curso for an estimated $14.0
million. The additional $8.9 million will go towards improving
plant infrastructure, upgrading the mining fleet, and supporting
surface site infrastructure.
At Bolañitos, $11.8 million will be invested in
capital projects, including $8.2 million for 3.8 kilometres of mine
development to access resources in the Plateros-La Luz,
Lucero-Karina, and Bolañitos-San Miguel areas. The additional $3.6
million will go to upgrade the mining fleet, plant improvements
which include an elevation raise to the tailings dam, and to
support site infrastructure.
At Terronera, a $25.7 million development budget
has been allocated for the first quarter of 2023 to continue with
pre-construction activities. The approval is based on utilizing
existing cash on hand and cash flow from operations, ahead of
formalized project financing as the Company continues to advance
the project. With the ramp up of the procurement phase well
underway, the funds will be used for final detailed engineering,
assembly of initial project infrastructure, further earthworks
pertaining to site clearing, road upgrades and underground mine
access development. The Company intends to make a formal
construction decision, subject to completion of a financing package
and receipt of amended permits, in the coming months, at which time
the budget for the remainder of 2023 for the project will be
determined.
The Company also plans to spend $2.1 million to
maintain exploration concessions, acquire mobile exploration
equipment and cover corporate infrastructure.
2023 Exploration Budget
Project |
2023 Activity |
Drill Metres |
Expenditures |
Guanaceví |
Drilling |
7,000 |
$1.1 million |
Bolañitos |
Drilling |
6,000 |
$0.9 million |
Terronera |
Drilling |
4,000 |
$0.7 million |
Pitarrilla |
Drilling/Evaluation |
5,000 |
$3.1 million |
Parral |
Drilling/Economic Study |
6,000 |
$1.5 million |
Chile - Aida |
Drilling |
2,000 |
$0.8 million |
Chile - Other |
Evaluation |
- |
$1.0 million |
Bruner |
Evaluation |
- |
$0.2 million |
Total |
|
30,000 |
$9.3 million |
In 2023, the Company plans to spend $9.3 million
drilling 30,000 metres across its properties.
At the Guanaceví and Bolañitos mines, 13,000
metres of drilling are planned at a cost of $2.0 million to replace
reserves and expand resources.
At the Terronera development project, 4,000
metres of drilling are planned to test multiple regional targets
identified in 2022 to expand resources within the district.
At the Pitarrilla project, management plans to
invest $3.1 million on maintenance of the office and camp,
underground drilling and evaluation programs, and 500 metres of
underground development. The largest portion of the expenditure at
Pitarrilla in 2023 relates to ramp fortification costs to continue
advancement of a 1 kilometre long tunnel that will be used as a
drill platform. The Company plans to drill 5,000 metres to test the
high-grade zone (“underground manto”) at various angles from the
newly extended and improved ramp.
At the Parral project in Chihuahua state, 6,000
metres of drilling are planned at a cost of $1.5 million to
delineate existing resources, expand resources and test new
targets. In the second half of the year, the Company expects to
initiate a preliminary economic assessment.
In Chile, management intends to invest $0.8
million to drill 2,000 metres to test a manto target with
significant silver-manganese-lead-zinc anomalies at surface.
Additionally, the Company plans to conduct mapping, sampling and
surface exploration on several other exploration projects,
estimated to cost $0.7 million including administration costs in
the country.
At the Bruner project in Nevada management plans
to invest $0.2 million to map and sample new targets.
Technical Disclosure
The scientific and technical information
contained in this news release has been reviewed and approved by
Dale Mah, P.Geo., Vice President Corporate Development of
Endeavour, a Qualified Person under NI43-101.
About Endeavour Silver –
Endeavour Silver Corp. is a mid-tier precious metals mining company
that operates two high-grade underground silver-gold mines in
Mexico. Endeavour is currently advancing the Terronera mine project
towards a development decision, pending financing and final permits
and exploring its portfolio of exploration and development projects
in Mexico, Chile and the United States to facilitate its goal to
become a premier senior silver producer. Our philosophy of
corporate social integrity creates value for all stakeholders.
SOURCE Endeavour Silver Corp.
Contact InformationGalina
Meleger, VP of Investor Relations Tel: (604)640-4804Email:
gmeleger@edrsilver.com Website: www.edrsilver.com
Follow Endeavour Silver on Facebook, Twitter,
Instagram and LinkedIn
Endnotes
1 Silver equivalent is calculated using an 80:1 silver:gold
ratio.
2 Non-IFRS Financial Measures
The Company has included certain performance
measures that are not defined under International Financial
Reporting Standards (“IFRS”). The Company believes that these
measures, in addition to conventional measures prepared in
accordance with IFRS, provide investors an improved ability to
evaluate the underlying performance of the Company. The non-IFRS
measures are intended to provide additional information and should
not be considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS as an indicator of
performance. These measures do not have any standardized meaning
prescribed under IFRS, and therefore may not be comparable to other
issuers with similar descriptions.
Cash costs and cash costs per
ounce
Cash costs per ounce is a non-IFRS measure. In
the silver mining industry, this metric is a common performance
measure that does not have a standardized meaning under IFRS. Cash
costs include direct costs (including smelting, refining,
transportation and selling costs), royalties and special mining
duty and changes in finished goods inventory net of gold credits.
Cash costs per ounce is based on ounces of silver produced and is
calculated by dividing cash costs by the number of ounces of silver
produced.
Cash costs on a co-product and cash
costs on a co-product per ounce
Silver co-product cash costs and gold co-product
cash costs include mining, processing (including smelting,
refining, transportation and selling costs), and direct overhead
costs allocated on pro-rated basis of realized metal value. Cash
costs on a co-product per ounce is based on the number of either
silver or gold ounces produced.
Direct operating costs and direct
costs
Direct operating costs per tonne include mining,
processing (including smelting, refining, transportation and
selling costs) and direct overhead at the operation sites. Direct
costs per tonne include all direct operating costs, royalties and
special mining duty.
All-in sustaining costs (“AISC”) and
AISC per ounce
This measure is intended to assist readers in
evaluating the total cost of producing silver from operations.
While there is no standardized meaning across the industry for AISC
measures, the Company’s definition conforms to the definition of
AISC as set out by the World Gold Council and used as a standard of
the Silver Institute. The Company defines AISC as the cash costs
(as defined above), plus reclamation cost accretion, mine site
expensed exploration, corporate general and administration costs
and sustaining capital expenditures. AISC per ounce is based on
ounces of silver produced and is calculated by dividing AISC by the
number of ounces of silver produced.
Sustaining capital
Sustaining capital is defined as the capital
required to maintain operations at existing levels. This
measurement is used by management to assess the effectiveness of an
investment program.
For further information on reconciliations of
Non-GAAP measures, refer to the Non-IFRS Measures section of the
Company’s Management’s Discussion & Analysis for the three and
nine months ending September 30, 2022, beginning on page 18.
Cautionary Note Regarding Forward-Looking
Statements
This news release contains “forward-looking
statements” within the meaning of the United States private
securities litigation reform act of 1995 and “forward-looking
information” within the meaning of applicable Canadian securities
legislation. Such forward-looking statements and information herein
include but are not limited to statements regarding Endeavour’s
anticipated performance in 2023 including changes in mining
operations and forecasts of production levels, anticipated
production costs and all-in sustaining costs, the timing and
results of various activities including exploration and
development, and the impact of the COVID 19 pandemic on operations.
The Company does not intend to and does not assume any obligation
to update such forward-looking statements or information, other
than as required by applicable law.
Forward-looking statements or information
involve known and unknown risks, uncertainties and other factors
that may cause the actual results, level of activity, production
levels, performance or achievements of Endeavour and its operations
to be materially different from those expressed or implied by such
statements. Such factors include but are not limited to the
ultimate impact of the COVID 19 pandemic on operations and results,
changes in production and costs guidance, national and local
governments, legislation, taxation, controls, regulations and
political or economic developments in Canada and Mexico; financial
risks due to precious metals prices, operating or technical
difficulties in mineral exploration, development and mining
activities; risks and hazards of mineral exploration, development
and mining; the speculative nature of mineral exploration and
development, risks in obtaining necessary licenses and permits, and
challenges to the Company’s title to properties; as well as those
factors described in the section “risk factors” contained in the
Company’s most recent form 40F/Annual Information Form filed with
the S.E.C. and Canadian securities regulatory authorities available
at www.sedar.com.
Forward-looking statements are based on
assumptions management believes to be reasonable, including but not
limited to: the continued operation of the Company’s mining
operations, no material adverse change in the market price of
commodities, mining operations will operate and the mining products
will be completed in accordance with management’s expectations and
achieve their stated production outcomes, and such other
assumptions and factors as set out herein. Although the Company has
attempted to identify important factors that could cause actual
results to differ materially from those contained in
forward-looking statements or information, there may be other
factors that cause results to be materially different from those
anticipated, described, estimated, assessed or intended. There can
be no assurance that any forward-looking statements or information
will prove to be accurate as actual results and future events could
differ materially from those anticipated in such statements or
information. Accordingly, readers should not place undue reliance
on forward-looking statements or information.
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