Endeavour Silver Corp. · TSX:EDR
Endeavour Silver — Investor Presentation (November 2017)
55 slides from Endeavour Silver's investor presentation, November 2017
Slide 1: Building New Mines, Focus on Growth
Building New Mines, Focus on Growth November 2017
Slide 2: Cautionary Note
Cautionary Note This presentation 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 inf
Slide 3: Investor Highlights
Investor Highlights Mid-tier precious metals miner; on track to Endeavour Silver Corp. produce 8.5–9.0 million oz Ag Eq in 2017 Three high-grade silver-gold mines located in Core Assets two historic mining districts of Mexico Operational Excellence Terronera silver-gold discovery still growing; PFS
Slide 4: Core Assets
Core Assets Sierra Madre Occidental Silver & Gold Belt Chihuahua Guanaceví Guadalupe y Calvo Parral Durango Canada Zacatecas Bolañitos El Compas Lourdes Head Office Vancouver Guanajuato Terronera Jalisco El Cubo Mexico City Mexico Office Leon Production Mines Development Exploration Development Chil
Slide 5: Organic Resource Growth
Organic Resource Growth Reserves and Resources (million oz) 250 Five years of no 2012 growth during bear Acquired market El Cubo 200 Gold Silver Nine years of resource growth Silver equivalents during bull market 150 million oz 2007 100 Acquired Bolañitos 2004 50 Acquired Guanaceví 0 2004 2005 2006
Slide 6: Strategic Production Growth
Strategic Production Growth Annual Production (million oz) 15 Ten years of production growth during bull market Four years of no growth during Gold bear market Silver Silver equivalents 10 2012 acquired El Cubo million oz 2007 5 acquired Bolañitos 2004 acquired Guanaceví 0 2004 2005 2006 2007 2008 2
Slide 7: Reducing Operating Costs
Reducing Operating Costs Consolidated Cash Costs ($/oz) $10 $8.31 $8.39 $8.11 $9 $7.87 $7.39 $8 $6.78 $7 Consolidated Direct Costs ($/Tonne) $6 $5 $4 $120 $3 $96.81 $95.05 $2 $100 $92.17 $1 $80.18 $81.60 $- $80 $72.42 2012 2013 2014 2015 2016 2017 (est) $60 Consolidated AISC ($/oz) $40 $30 $27.79 $2
Slide 8: Q3, 2017 Highlights
Q3, 2017 Highlights Net Earnings, EBITDA, Cash-flow and Revenue Up - compared to Q2 Production rising, costs falling – Production up 6% Q3/Q2, Guanaceví mine issues mostly resolved, production continues to improve in Q4 Commenced El Compas mine development – Estimated 9 months and US$10 million cape
Slide 9: Operating Mines: Guanaceví, Durango
Title OPERATING MINES: GUANACEVĺ DURANGO 9 GROWTH WITH INTEGRITY
Slide 10: Guanaceví – Our Largest Silver Producer
Guanaceví – Our Largest Silver Producer • Guanaceví is our largest silver producer, 2017 plan to produce 2.0 million oz silver, 4,500 oz gold, 2.3-2.4 million oz AgEq • Endeavour controls the west and north sides of this 5th largest silver mining district in Mexico • 7 new discoveries along the 8 km
Slide 11: Guanaceví – A Top Mexican Silver District
Guanaceví – A Top 5 Mexican Silver District 2016 Reserves and Resources (1) Proven and probable 5.0 million oz Ag 11,900 oz Au Measured and indicated 24.6 million oz Ag 56,900 oz Au Inferred 9.8 million oz Ag 19,400 oz Au Operations YTD 2017 Production (2) 1,522,331 oz Ag 3,495 oz Au 1,766,981 oz Ag
Slide 12: Bolañitos, Guanajuato
BOLAÑITOS GUANAJUATO 12
Slide 13: Bolañitos – Our Lowest Cost Mine
Bolañitos – Our Lowest Cost Mine • Bolañitos is our lowest cost mine, 2017 plan to produce 0.95 million oz silver , 22,000 oz gold, 2.5-2.7 million oz AgEq • Bolanitos covers the west, north sides of Guanajuato , the 2nd largest silver district in Mexico • Multiple new discoveries in Lucero and LL-
Slide 14: Bolañitos – In 2nd Largest Silver District
Bolañitos – In 2nd Largest Silver District 2016 Reserves and Resources (1) Proven and probable 1.3 million oz Ag 28,100 oz Au Measured and indicated 4.1 million oz Ag 52,300 oz Au Inferred 5.7 million oz Ag 84,800 oz Au Operations Est. YTD 2017 Production (2) 653,526 oz Ag 19,706 oz Au 2,032,946 oz
Slide 15: El Cubo, Guanajuato
EL CUBO GUANAJUATO 15
Slide 16: El Cubo – Our Largest Mine
El Cubo – Our Largest Mine • El Cubo was our biggest operational turnaround, 2017 plan to produce 2.0 million oz silver, 23,000 oz gold, 3.6-3.9 million oz AgEq • El Cubo controls the east side of Guanajuato, the 2nd largest silver mining district in Mexico • One new discovery in Villapando-Asuncion
Slide 17: El Cubo – Our Second Mine in Guanajuato
El Cubo – Our Second Mine in Guanajuato 2016 Silver Reserves and Resources (1) Direct Production Costs ($/tonne) Proven and probable 4.3 million oz Ag $140 51,100 oz Au $120 Measured and indicated 5.9 million oz Ag $100 78,800 oz Au $80 Inferred 10.0 million oz Ag $60 129,900 oz Au $40 $20 Operation
Slide 18: Development Projects: El Compas, Zacatecas
DEVELOPMENT PROJECTS: EL COMPAS ZACATECAS 18
Slide 19: El Compas – Near Term Production
El Compas – Near Term Production • El Compas is our next high grade mine, annual production est. 150,000 oz silver, 12,000 oz gold, 1.0 million oz AgEq • Endeavour controls the south end of Panuco La Plomosa Zacatecas, the 3rd largest silver mining district in Mexico • Two orebodies, El Compas and E
Slide 20: El Compas – Developing Our Fourth Mine
El Compas – Developing Our Fourth Mine Preliminary Economic Assessment – robust economic returns, very scalable if we discover or purchase additional mineral resources in the Zacatecas district and refurbish the second ball mill to double the plant capacity to 500 tpd Production decision – now devel
Slide 21: El Compas – Mine Permitted, Plant Leased
El Compas – Mine Permitted, Plant Leased 21
Slide 22: Terronera, Jalisco
TERRONERA JALISCO 22
Slide 23: Terronera – Large, Low Cost Mine Potential
Terronera – Large, Low Cost Mine Potential • Terronera will become our largest mine, annual production est. 4.0 million oz silver, 33,000 oz gold, 6.4 million oz AgEq • Endeavour controls the entire district of San Sebastian, 50 old mines on 20 known veins, all closed in 1910 Mexican revolution • On
Slide 24: Terronera – New Discovery Still Open
Terronera – New Discovery Still Open Open Open Open From True width Au Ag AgEq From True width Au Ag AgEq Hole Structure Hole Structure (m) (m) (gpt) (gpt) (gpt) (m) (m) (gpt) (gpt) (gpt) Terronera 505.10 6.7 5.0 226 576 La Luz 207.45 1.1 58.6 408 4,512 TR09-6* LL-02* Including 511.40 0.7 16.9 527 1
Slide 25: Terronera – Developing Our Fifth Mine
Terronera – Developing Our Fifth Mine Pre-feasibility study – robust economic returns; 1,000 tpd, expanding to 2,000 tpd in year three Production decision – decision to develop the new Terronera mine subject to receiving final permits and debt financing Permits pending – MIA (EIS) already approved,
Slide 26: Parral, Chihuahua
-_ —_— PARRAL CHIHUAHUA es le ea Endeavour ®
Slide 27: Parral – Potential Sixth Silver Mine
Parral – Potential Sixth Silver Mine • Parral is potentially our 6th silver mine, no annual production forecast yet but mine produced 4 million oz silver per year before closing in 1990 • Endeavour controls much of the district of Parral, another large historical silver mining district in Mexico • 3
Slide 28: Parral – Abundant High-Grade Targets
Parral – Abundant High-Grade Targets • Exploration permits and land access agreements already in place • Will conduct twin, infill drilling to verify Remedio Argentina historic resource in 2017 • US$2 million exploration commitment at San Patricio and La Palmilla over next two years • Many additiona
Slide 29: Attractive Relative Valuation
Attractive Relative Valuation EV/AgEq PP Reserves EV/AgEq M+I Resources 20 20 15 15 10 10 5 5 - - EV/2016 AgEq Production EV/2017E AgEq Production 200 250 160 200 120 150 80 100 40 50 - - Source: S&P Capital IQ Oct 13, 2017 29 GROWTH WITH INTEGRITY
Slide 30: Shareholder Information
Shareholder Information Issued/outstanding (Sep 30, 2017) 127.4 million Exchange listings NYSE:EXK, TSX:EDR Fully diluted (Sep 30, 2017) 133.5 million Working capital (Sep 30, 2017) $70.3 million Recent price (Oct 31, 2017) US$2.06 Cash position (Sep 30, 2017) $43.5 million Market cap (Oct 31, 2017)
Slide 31: Future Catalysts
Future Catalysts • Improve Guanaceví – get mine back on plan: rising production, falling costs • Complete El Compas development –grow resources, explore multiple new veins, consolidate land holdings in district, target production in 2018 • Receive Terronera permits – make production decision, commen
Slide 32: Why Endeavour?
Why Endeavour? Experienced Board and Strategic Acquisitions Proven Track Record Management Identified hidden potential 12 consecutive years of 400+ collective years in at Guanaceví, Bolañitos, out-performance in mining industry El Cubo, El Compas, mining operations Terronera, Parral Quality Assets O
Slide 33: Appendix
APPENDIX 33 GROWTH WITH INTEGRITY
Slide 34: Management and Board
Management and Board Management Bradford Cooke, M.Sc., P.Geo. – Founder and CEO Godfrey Walton, M.Sc., P.Geo. – President and COO Dan Dickson, CA – CFO Tomas Iturriaga-Hidalgo, B.Sc., Global MBA – VP, Operations and Country Manager, Mexico Dale Mah, B.Sc., P.Geo. – VP, Corporate Development Luis Cas
Slide 35: Institutional Investors, Analyst Coverage
Institutional Investors, Analyst Coverage • Van Eck Associates • Andrew Kaip, BMO • Renaissance Technologies • Dalton Baretto, Canaccord Genuity • Fresnillo • Cosmos Chiu, CIBC • Connor Clark & Lunn • Bhakti Pavani, Euro Pacific Capital • BMO Asset Management • Ian Parkinson, GMP Securities • Global
Slide 36: Reserves and Resources (Dec 31, 2016)
Reserves and Resources (Dec 31, 2016) Silver-Gold Reserves and Resources Tonnes Au oz Ag Eq oz Ag g/t Au g/t Ag Eq g/t Ag oz (000s) (000s) (000s) (000s) Proven Guanaceví 87 247 0.49 284 691 1.4 794 Bolañitos 157 90 2.84 311 454 14.3 1,570 El Cubo 409 154 1.99 295 2,025 26.2 3,879 Total Proven 653 15
Slide 37: Reserves and Resources (Dec 31, 2016) Notes
Reserves and Resources (Dec 31, 2016) Notes 1. Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that any or all part of the mineral resources will be converted into mineral reserves. 2. Mineral resources are exclusive of and in additio
Slide 38: Consolidated Mine Operations Table
Consolidated Mine Operations Table Comparative Table of Consolidated Mine Operations Ore grades (g/t) Recovered ounces Recoveries (%) Plant throughput Cash costs AISC ($/oz Direct costs Period Silver Gold Silver Gold Silver Gold (tonnes) ($/oz Ag) Ag) ($/tonne) Q1 2013 376,344 154 1.51 1,489,746 15,
Slide 39: Guanaceví Mine Operations Table
Guanaceví Mine Operations Table Ore grades (g/t) Recovered ounces Recoveries (%) Plant Cash costs AISC Direct costs Period throughput Silver Gold Silver Gold Silver Gold ($/oz Ag) ($/oz Ag) ($/tonne) (tonnes) Q1 2013 106,653 233 0.34 640,616 942 80.2 80.8 16.70 27.75 113.61 Q2 2013 100,781 240 0.68
Slide 40: Guanaceví – Operations Overview
Guanaceví – Operations Overview 40
Slide 41: Bolañitos Mine Operations Table
Bolañitos Mine Operations Table Ore grades (g/t) Recovered ounces Recoveries (%) Plant Cash costs AISC Direct costs Period throughput Silver Gold Silver Gold Silver Gold ($/oz Ag) ($/oz Ag) ($/tonne) (tonnes) Q1 2013 167,500 135 2.27 578,654 9,891 79.8 81.0 (0.06) 17.05 85.10 Q2 2013 202,472 160 2.8
Slide 42: Bolañitos – Operations Overview
Bolañitos – Operations Overview 42
Slide 43: El Cubo Mine Operations Table
El Cubo Mine Operations Table Ore grades (g/t) Recovered ounces Recoveries (%) Plant Cash costs AISC Direct costs Period throughput Silver Gold Silver Gold Silver Gold ($/oz Ag) ($/oz Ag) ($/tonne) (tonnes) Q1 2013 102,191 103 1.48 270,446 4,199 79.9 86.4 15.30 32.86 108.85 Q2 2013 89,817 93 1.41 17
Slide 44: El Cubo – Operations Overview
El Cubo – Operations Overview 44
Slide 45: Significant Operating Costs Breakdown
Significant Operating Costs Breakdown Consolidated 7% El Cubo 4% 5% Labour 5% Re-agents & Grinding Labour 32% Fuel 38% Re-agents & Grinding 27% Power Fuel 21% Royalties Power Contractor Contractor Refining Explosives 2% Explosives 11% 11% tolled Ore 14% 17% 3% 3% Guanaceví Labour 6% Bolañitos 8% 3%
Slide 46: Corporate Social Integrity and Sustainable Development
Corporate Social Integrity and Sustainable Development, CSR The Endeavour Way “Corporate Social Integrity”, The Endeavour Way to CSR or Why “Who You Are” and “What You Do” Determine the Strength of Your Community Relationships We receive annual awards 46 for the way we do business
Slide 47: Mission, Vision, Values
Mission, Vision, Values Who we are and what we do: We find, build and operate quality silver mines in a sustainable way to create real value for all stakeholders Our goal is to continue growing to become a premier, low cost senior producer in the silver mining sector By continually improving what we
Slide 48: Formal Sustainability Policies
Formal Sustainability Policies In 2008 Endeavour started formalizing its sustainable development policies: • Corporate governance • Economic development • Health and safety • Education and training • Environmental protection 48 GROWTH WITH INTEGRITY
Slide 49: Corporate Governance
Corporate Governance • Corporate governance lays the foundation upon which our business is built • Formalized our approach to doing business by establishing our Board and Committee charters and policies on Ethical Code of Conduct, Anti-Bribery and Corruption, Whistle Blower, Disclosure and Advance N
Slide 50: Economic Development
Economic Development • Investments are essential to generate economic impact and profits are essential to fulfil community and sustainability objectives • Our most obvious positive economic impacts have been from investing in acquisition of properties, mines and plants exploration to discover ne
Slide 51: Health and Safety
Health and Safety • Because mining is a high risk industry, employee health and safety is our #1 priority, governed by extensive safety policies and practices • Every employee goes through rigorous safety induction, daily safety procedures, regular refresher courses, job site audits and each mine ha
Slide 52: Education and Training
Education and Training • Education and training are important to improving the quality of life in the local communities • Endeavour sponsors university scholarships in Mexico and Canada, high school scholarships in Mexico, and online courses to complete high school diplomas, technical and self-emplo
Slide 53: Environmental Protection
Environmental Protection • Protection of our natural environment is paramount for Endeavour • We monitor dumps, tailings, water and energy consumption and emissions, waste recycling and disposal and biodiversity • In particular, tailings management has been a hot topic recently but from day one we h
Slide 54: Community Enrichment
Community Enrichment • We support our local communities in many ways in order to improve their quality of life, resolve issues and build sustainable capacity • Endeavour donates our time, funds, food and gifts for cultural and religious celebrations; we sponsor sports teams, kids camps and field tri
Slide 55: Sustainability Reporting
Sustainability Reporting • 2012 – Endeavour started GRI 4.0 reporting of its sustainability activities, based on stakeholder engagement and materiality assessment • Every year, we go to our stakeholders for feedback on a full range of interests, and every two years, we conduct a materiality review t
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