Endeavour Silver Corp. · TSX:EDR
Endeavour Silver — Investor Presentation (March 2014)
46 slides from Endeavour Silver's investor presentation, March 2014
Slide 1: Honing Performance; Growing Margins
Honing Performance; Growing Margins NYSE: EXK TSX: EDR March 2014 1
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: Introduction
Introduction A mid-tier silver miner focused on accretive Endeavour Silver Corp: growth to build real value for stakeholders Three high grade silver-gold mines in Mexico, Core Assets: Guanaceví, Bolañitos and El Cubo, and an emerging new discovery at San Sebastián We acquire underperforming mines in
Slide 4: Market Snapshot
Market Snapshot EXK Shares: Leverage to Precious Metals Shares Issued: 101.1 million Fully Diluted: 106.6 million Recent Price (March 21/14): US$4.87 Market Cap (March 21/14): US$492 million 52-week high-low: US$6.57-$2.88 Exchange Listings: NYSE:EXK TSX:EDR Daily Volume: 2.1 million shares Cash Pos
Slide 5: Core Assets
Core Assets Exploration Mines San Sebastián Guanaceví Panuco Bolañitos Parral El Cubo Guadalupe y Calvo El Inca Three producing mines and seven exploration projects Arroyo Seco Lourdes 5
Slide 6: Strategic Acquisitions
Strategic Acquisitions Guanaceví Bolañitos El Cubo 2004 2007 2012 • Acquired Guanaceví in 2004 • Acquired Bolañitos in 2007 • Acquired El Cubo in 2012 • Processing 100 tpd of old • Processing 50 tpd of old minefill • Processing 1,100 tpd of low tailings into a 600 tpd plant into a 500 tpd plant grad
Slide 7: Organic Resource Growth
Organic Resource Growth Silver and Silver Equivalent Reserves and Resources (million oz) 250 206 200 2012 191 Acquired El Cubo 150 142 Silver Equivalents Millions 121 123 2007 100 Acquired 90 88 Bolañitos 76 71 Silver 62 59 53 2004 46 47 50 Acquired 41 41 Guanaceví 14 16 4.7 5.4 0 Other 2004 2005 20
Slide 8: Consistent Production Growth
Consistent Production Growth Silver and Silver Equivalent Annual Production 12 11.3 10 2012 millions of ounces Acquired 8 El Cubo 6.8 6.4 6 Silver Equivalents 4.9 4.5 2007 4.3 4 Acquired Bolañitos 3.3 3.7 3.3 2.8 2.6 Silver 2004 2.5 2.35 Acquired 2.15 2 Guanaceví 1.35 1.5 0.95 1.1 0.35 0.4 0 2004 20
Slide 9: Strong Financial Performance
Strong Financial Performance Revenue per Share Operating Cash Flow per Share(1) $3.00 $2.77 $1.00 $0.89 $0.82 $2.50 $2.23 $0.80 $2.00 $0.60 $0.54 $1.46 $0.40 $1.50 $0.40 $1.07 $0.20 $1.00 $0.80 $0.84 $0.20 $0.66 -$0.05 -$0.09 $0.50 $0.00 $0.00 -$0.20 2007 2008 2009 2010 2011 2012 2013 2007 2008 2009
Slide 10: Market Multiples: Attractive Peer Comparisons
Market Multiples: Attractive Peer Comparisons P/E (adjusted; trailing 4Q) P/CF (trailing 4Q) nmf nmf 40 100 80 30 60 20 40 10 20 0 0 nmf = not meaningful EV/oz Resources EV/oz 2013 Production (Ag Eq.) 6 (Ag Eq., excluding base metals) 150 100 4 50 2 0 0 10
Slide 11: EBITDA Leverage to Silver Price 2014
EBITDA Leverage to Silver Price 2014 Impact on Precious metal price Change (+/-) from Impact on annual cash costs assumptions current spot prices (1) EBITDA (2) ($/oz Ag) $21 silver/$1,260 gold $1silver/$60 gold $0.61 $11.4 million (1) Silver equivalents based on 60:1 silver:gold ratio (2) Assuming
Slide 12: Record Production in 2013
Record Production in 2013 EXK Mines Continued to Out-Perform Financial Performance 2012 2013 Revenue $208 M $277 M EBITDA $90.5 M $100.0 M Operating cash flow(1) $82.9 M $81.6 M Adjusted net earnings(2) $40.2 M $11.1 M Cash costs(3) $7.33 per oz Ag $7.92 per oz Ag All-in sustaining costs(4) $23.03 p
Slide 13: Focus on Margin Growth in 2014
Focus on Margin Growth in 2014 2014 Guidance Operating 2014 Silver production 6.5-6.9 million oz Gold production 65,000-69,000 oz Silver equivalent production (1) 10.4-11.0 million oz Financial Cash costs – by-product $9-10 per oz Ag Cash costs – co-product – silver $13-14 per oz Ag Cash costs – by-
Slide 14: Guanaceví
GUANACEVÍ A High Grade, Underground, Silver-Gold Vein Mine 14
Slide 15: Guanaceví: A Top Five Mexican Silver District
Guanaceví: A Top Five Mexican Silver District District Highlights: Location: Durango, Mexico Property: 4,076 hectares Infrastructure: State highway, power grid, local labour Past Production: 450 million oz Ag Deposit Type: Low sulfidation epithermal veins Operating Mines: Porvenir Norte Porvenir Cua
Slide 16: Guanaceví: Producing +2.5 Million Oz Ag Per Year
Guanaceví: Producing +2.5 Million Oz Ag Per Year 2013 Reserves and Resources(1): Proven and Probable: 3.3 million oz Ag Measured and Indicated: 14.0 million oz Ag Inferred: 9.4 million oz Ag 2013 Production Production(2): 2,772,227 oz Ag 6,784 oz Au 3,179,267 oz Ag Eq. Throughput: 1,194 tpd Grades:
Slide 17: Guanaceví: New High-Grade Discovery at Milache
Guanaceví: New High-Grade Discovery at Milache New Resources Added Indicated: • 5.3 million oz Ag • 15,600 oz Au Inferred: • 1.4 million oz Ag • 3,200 oz Au Conceptual Plan 2013: • Complete step-out drilling 2014: • Commence mine development 2015: • Commence mine production 17
Slide 18: Bolañitos
BOLAÑITOS A High Grade, Underground, Silver-Gold Vein Mine 18
Slide 19: Bolañitos: Second Largest Mexico Silver District
Bolañitos: Second Largest Mexico Silver District District Highlights: Location: Guanajuato, Mexico Property: 2,538 hectares Infrastructure: State road, power grid, local labour Past Production:1.2 billion oz Ag 5 million oz Au Deposit Type: Low sulfidation epithermal veins Operating Mines: Lucero Bo
Slide 20: Bolañitos: Producing +2.5 Million Oz Ag Per Year
Bolañitos: Producing +2.5 Million Oz Ag Per Year 2013 Reserves and Resources(1): Proven and Probable: 2.3 million oz Ag Measured and Indicated: 4.6 million oz Ag Inferred: 9.6 million oz Ag 2013 Production Production(2): 2,881,816 oz Ag 51,652 oz Au 5,980,936 oz Ag Eq. Throughput: 1,947 tpd Grades:
Slide 21: Bolañitos: Exploration Targets 2013-2015
Bolañitos: Exploration Targets 2013-2015 Socorro 21
Slide 22: Bolañitos: La Luz
Bolanitos: La Luz FINISHED HOLES ~ MINERALIZED HORIZON ™ (100 AgEq cutoff) SAN JUAN DE DIOS SHAFT AVE MARIA INCLINED SHAFT | q N 2 & oO w a < = = 4 9 ° a } BOCA MINA LA LUZ LA LUZ SHAFT \ LONGITUDINAL SECTION LA LUZ NORTH-SOUTH LOOKING AT EAST LA LUZ TOWN SANTA LUCIA SHAFT NEPOMUCENO SHAFT | CLARA S
Slide 23: El Cubo
< \ @comeasia MINERA DEL CUBO sa. decy “PLANTA EL TAJO" Y “MINA DOLORES" ENDEAVOUR Oe FOCUSED ON GROWTH SILVER
Slide 24: El Cubo: A Great Fit for Endeavour in Guanajuato
El Cubo: A Great Fit for Endeavour in Guanajuato El Cubo Highlights: Location: Guanajuato, Mexico Property: 8,144 hectares Infrastructure: State roads, power grid, local labour Past Production: 80 million oz Ag 2 million oz Au Deposit Type: Low sulfidation epithermal veins Operating Mines: San Nicol
Slide 25: El Cubo: Operational Turn-Around Underway
El Cubo: Operational Turn-Around Underway 2013 Reserves and Resources(1): Bolañitos is Model for Turn-Around Proven and Probable: 5.9 million oz Ag Measured and Indicated: 10.6 million oz Ag Inferred: 6.0 million oz Ag 2013 Production Production(2): 1,159,026 oz Ag 17,142 oz Au 2,187,546 oz Ag Eq. T
Slide 26: El Cubo: Exploration Targets 2013-2015
El Cubo: Exploration Targets 2013-2015 26
Slide 27: El Cubo: Asunción – Villalpando
El Cubo: Asunción – Villalpando 27
Slide 28: San Sebastián
ie ak SS IVOUR 28 FOCUSED ON GROWTH
Slide 29: San Sebastián: Historic Silver-Gold District
San Sebastián: Historic Silver-Gold District Property Highlights • Discovered in 1542, mined for centuries, largely unexplored • Four large silver-gold vein systems each 3 km long • Covers +50 small historic mines on +20 separate veins • Classic epithermal ore-bodies in Lower Tertiary andesites • Lo
Slide 30: San Sebastián: Emerging High-Grade Discovery
San Sebastián: Emerging High-Grade Discovery 2013 Resource Estimate Conceptual Plan Indicated : 2014 • Complete initial economic evaluation • 18.2 million oz Ag • Commence environmental studies, permitting • 86,300 oz Au 2015 • Complete infill drilling Inferred: • Make production decision • 13.4 mil
Slide 31: Growth Plan
Growth Plan Targeting 60% Production Growth 16m oz 10m oz 10m oz 6m oz Ag Ag Eq. Ag Ag Eq. 2013 2014 2015 2016 San Sebastián Exploration Permitting Construction Production El Cubo Turn around Expand Discover Expand operations production resources plant 1,500 tpd 2,000 tpd Bolañitos Expand Discover E
Slide 32: Why Endeavour?
Why Endeavour? Experienced Board Building Quality Proven Track Record: and Management: Assets: Nine consecutive years of 300+ years in mining organic production Low political risk, large industry growth districts, big veins, high grades, low cash costs Accretive Compelling Organic Acquisition: Growt
Slide 33: Contact Us
Contact Us Endeavour Silver Corp. Suite 301-700 West Pender Street Vancouver, BC, V6C 1G8 Canada mbrown@edrsilver.com www.edrsilver.com Phone: 1-604-685-9775 Fax: 1-604-685-9744 Canada and US Toll-Free: 1-877-685-9775 33
Slide 34: Appendix
Appendix ENDEAVOUR 34 FOCUSED ON GROWTH
Slide 35: Why Silver?
Why Silver? • Silver is an industrial metal: unlike gold, silver is consumed and the number of industrial uses is multiplying • Silver is a precious metal: like gold, silver is money and its role as a store of value and a hedge against monetary inflation is growing Denarius % Silver • Currency debas
Slide 36: Silver vs Gold
Silver vs Gold $SILVER Silver - Spot Price (EOD) CME © StockCharts.com 10-Mar-2014 Open 20.93 High 21.08 Low 20.61 Close 20.83 Volume 38.9K Chg -0.06 (0.29%) ~ 1900 — $SILVER (Daily) 20.83 —FGOLD 1339.30) 48 1850 1800 a6 1750 44 1700 ! 1650 | 42 1600 40 1550 ' 38 1600 \ 1460 | | 38 1400 34 1360 1300
Slide 37: Management and Board
Management and Board Management Bradford Cooke, M.Sc., P.Geo. – Founder and CEO Godfrey Walton, M.Sc., P.Geo. – President and COO Dan Dickson, CA – CFO Terry Chandler, B.Sc., P.Geo. – VP Corporate Development David Howe, M.Sc. – VP Operations and Mexico Country Manager Luis Castro, Ing. Geo. – VP Ex
Slide 38: Institutional Investors, Analyst Coverage
Institutional Investors, Analyst Coverage • Van Eck Associates • Ash Guglani, Salman Partners • Renaissance Technologies • Chris Lichtenheldt, Dundee • Royce & Associates • Ben Asuncion, Haywood • Global X Management • Andrew Kaip, BMO • Profund Advisors • Blackrock (Canada) • Chris Thompson, Raymon
Slide 39: Reserves and Resources (Dec 31, 2013)
Reserves and Resources (Dec 31, 2013) Silver-Gold Reserves and Resources Tonnes Ag g/t Au g/t Ag oz Au oz Aq Eq Proven Guanaceví 327,711 281 0.51 2,961,100 5,300 3,279,100 Bolañitos 380,522 156 2.50 1,910,300 30,500 3,740,300 El Cubo 752,534 138 2.16 3,330,400 52,200 6,462,400 Total Proven 1,460,766
Slide 40: Consolidated Mine Operations Table
Consolidated Mine Operations Table Comparative Table of Consolidated Mine Operations Ore grades (g/t) Recovered ounces Recoveries (%) Plant t’put Cash costs(1) Direct costs Period Silver Gold Silver Gold Silver Gold (tonnes) ($/oz Ag) ($/tonne) 2011 Q1 2011 141,942 263 1.36 900,133 5,008 75.0 81.0 4
Slide 41: Guanaceví Mine Operations Table
Guanaceví Mine Operations Table Comparative Table of Guanaceví Mine Operations Ore grades (g/t) Recovered ounces Recoveries (%) Plant t’put Cash costs(1) Direct costs Period Silver Gold Silver Gold Silver Gold (tonnes) ($/oz Ag) ($/tonne) 2011 Q1 2011 91,104 307 0.70 663,202 1,750 73.8 85.4 8.63 89.
Slide 42: Bolañitos Mine Operations Table
Bolañitos Mine Operations Table Comparative Table of Bolañitos Mine Operations Ore grades (g/t) Recovered ounces Recoveries (%) Plant t’put Cash costs(1) Direct costs Period Silver Gold Silver Gold Silver Gold (tonnes) ($/oz Ag) ($/tonne) 2011 Q1 2011 50,838 184 2.53 236,931 3,258 78.8 78.8 (6.59) 6
Slide 43: El Cubo Mine Operations Table
El Cubo Mine Operations Table Comparative Table of El Cubo Mine Operations Ore grades (g/t) Recovered ounces Recoveries (%) Plant t’put Cash costs(1) Direct costs Period Silver Gold Silver Gold Silver Gold (tonnes) ($/oz Ag) ($/tonne) 2012 Q1, 2012 Q2, 2012 Q3, 2012 80,550 92 1.42 106,260 1,724 44.6
Slide 44: Significant Operating Costs Breakdown
Significant Operating Costs Breakdown Consolidated El Cubo 4% 7% 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 Bolañitos 8% Labour 6% 3%
Slide 45: Guanaceví: Reserve/Resource Long. Section
Guanaceví: Reserve/Resource Long. Section Endeavour Discovered Five New Silver Deposits in Five Years 773,000 tonnes @ 304 Ag gpt + 0.65 Au gpt = 7.55 million Oz Ag (8.4 million Oz Ag-Eq) 799,000 tonnes @ 231 Ag gpt + 0.39 Au gpt = 5.93 million Oz Ag (6.5 million Oz Ag-Eq) 2.8 million tonnes @ 217 A
Slide 46: Bolañitos: Daniela Vein Long. Section
Bolañitos: Daniela Vein Long. Section Daniela discovery is 800m long x150m vertical x 3-10m thick 46
Endeavour Silver — Investor Presentation (March 2014) on 6ix