Endeavour Silver Corp. · TSX:EDR
Endeavour Silver — Investor Presentation (December 2010)
33 slides from Endeavour Silver's investor presentation, December 2010
Slide 1: Expanding Silver Production, Reserves and Resources in Mexico
Expanding Silver Production, Reserves and Resources in Mexico December 2010 1
Slide 2: Cautionary Note: Forward Looking Statements
Cautionary Note: Forward Looking Statements 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 forwar
Slide 3: Introduction: Who is Endeavour?
Introduction: Who is Endeavour? • Endeavour Silver Corp: One of North America’s fastest growing silver mining companies • Producing Assets: Two high grade silver-gold mines in Mexico; Guanacevi Mines in Durango State and Guanajuato Mines in Guanajuato State • Exploration Projects: Three district-sca
Slide 4: Highlights: Why Own Endeavour?
Highlights: Why Own Endeavour? • Silver Leverage: 75/25 silver/gold and no base metals • Mexico Advantage: Friendly to mining, great exploration potential, modern infrastructure, stable economy, low taxes • Quality Assets: Higher grade silver-gold ores • Strong Financials: Working capital December 1
Slide 5: Share Capital: Leverage To Growth
Share Capital: Leverage To Growth • Exchange Listings: EDR: TSX EXK:NYSE-Amex EJD: DB-Frankfurt • Shares Issued: 79.6 Million • Warrants/Options: 12.7 Million (adds $36.6 million) • Fully Diluted: 92.3 Million • Share Price (12/8/10): US$ 6.96 • Market Cap: US$ 554 Million • Daily Volume (3 mths end
Slide 6: Silver vs. Gold: The Current Cycle
Silver vs. Gold: The Current Cycle Silver typically lags gold, then plays catch-up, resulting in highly leveraged investment opportunities. Silver: gold ratio - 49:1 49:1 45:1 85:1 55:1 6
Slide 7: Highlights: 2010 Goals and Q3 Performance
Highlights: 2010 Goals and Q3 Performance Fifth consecutive year of record financial performance: • Sales revenue target: 30% growth (up 105% to $20.1 million in Q3/10) • EBITDA target: 50% growth (up 826% to $6.5 million in Q3/10) • Net earnings target: first year of net earnings Sixth Consecut
Slide 8: Core Assets: Two Producing Silver Mines, Three Exploration Projects
Core Assets: Two Producing Silver Mines, Three Exploration Projects Business Model: • Acquire under- explored mines in historic silver districts that are built, permitted and about to close • Invest the capital and expertise needed to discover new ore- bodies and re-open the mines • Consolidate dist
Slide 9: Guanacevi: A Top Mexican Silver District
Guanacevi: A Top 5 Mexican Silver District District Highlights: • Located in the Sierra Madre Occidental gold-silver belt • Produced over 450 million oz silver historically • Multiple silver veins span 10 km x 5 km area • Classic epithermal ore-bodies in Lower Tertiary andesites • Accessed by paved
Slide 10: Guanacevi: Underground, Mechanized, Ramp Access Mine
Guanacevi: Underground, Mechanized, Ramp Access Mine Q3, 2010 Summary Reserves/Resources: P+P:1 5.0 million oz Ag M+I: 17.8 million oz Ag Inf: 9.6 million oz Ag Production: 585,000 oz Ag 1,545 oz Au Throughput: 815 tonnes per day Porvenir Norte Grades: 330 gpt Ag 0.8 gpt Au Recoveries: 74% Ag 83% Au
Slide 11: Guanacevi: Upgrading the Plant
Guanacevi: Upgrading the Plant Capital Projects: Expand milling circuit Expanded Crushing Expand leach circuit Circuit Re-habilitate flotation circuit New Merrill Crowe circuit New silver refinery Expanded CCD Circuit New lab, warehouse, security Expand tailings pond Currently operatin
Slide 12: Guanacevi: Reserves/Resources Longitudinal Section
Guanacevi: Reserves/Resources Longitudinal Section Endeavour Discovered Five New Silver Deposits In Five Years PORVENIR PORVENIR CUATRO CUATRO MINE MINE PORVENIR DOS MINE PORVENIR NORTE MINE SANTA CRUZ MINE Under Development Current Production Under Development 12
Slide 13: Guanajuato: The 2nd Largest Silver District In Mexico
Guanajuato: The 2nd Largest Silver District In Mexico District Highlights: • Located in the Sierra Madre silver-gold belt • Produced over 1.2 billion oz silver historically and 5 million oz gold • Three main vein systems span 20 km x 20 km area • Classic epithermal ore-bodies in Lower Tertiary andes
Slide 14: Guanajuato: Underground, Mechanized, Track and Shaft Access Mines
Guanajuato: Underground, Mechanized, Track and Shaft Access Mines Q3, 2010 Summary Reserves/Resources: P+P: 1.6 Million Oz Ag M+I: 4.3 Million Oz Ag Inf: 7.7 Million Oz Ag Production: 212,000 Oz Ag 3,060 Oz Au Throughput: 560 tpd Grades: 177 gpt Ag 2.5 gpt Au Recoveries: 72% Ag 75% Au Operations: Bo
Slide 15: Guanajuato: Only Ten Years Old, 600 TPD Plant Capacity
Guanajuato: Only Ten Years Old, 600 TPD Plant Capacity Capital Projects: Rehabilitate conveyors Install new cone crusher Re-configure flotation circuit New concentrate load-out Expand tailings pond New assay lab New security building Currently operating at 575 tpd Proposed expansion to
Slide 16: Guanajuato: Reserves/Resources 2009 Longitudinal Sections
Guanajuato: Reserves/Resources 2009 Longitudinal Sections Vetas La Luz Vetas La Luz, Mina Bolanitos Drill Target Drill Target Santa Maria Veta Madre, Mina Cebada 3785 Under Development Currently Producing 16
Slide 17: Guanajuato: Bolanitos Veins Location Map
Guanajuato: Bolanitos Veins Location Map 17
Slide 18: Guanajuato: Lucero Vein Long Section
Guanajuato: Lucero Vein Long Section Lucero Discovery now 800 m long x 150 m vertical x 3-5 m thick 18
Slide 19: Guanajuato: Karina Vein Long Section
Guanajuato: Karina Vein Long Section Karina Discovery now 500 m long x 150m vertical x 2-4 m thick 19
Slide 20: Guanajuato: Fernanda Long Section
Guanajuato: Fernanda Long Section Fernanda Discovery now 200 m long x 150 m vertical x 1-3 m thick 20
Slide 21: Guanajuato: L-K-F-D Veins Recent Drill Highlights
Guanajuato: L-K-F-D Veins Recent Drill Highlights From Core Length True Width Ag Au Hole Vein (m) (m) (m) (g/t) (g/t) Lucero Vein 179.45 6.75 3.38 472 5.78 LC-27 Including 180.55 0.75 0.38 1,140 23.90 Lucero Vein 218.90 3.30 2.33 249 4.90 LC-35 Including 220.65 0.55 0.39 659 12.05 Karina 164.50 4.20
Slide 22: Reserves/Resources: Thirteen Year Mine-Life at 2010 Production Rate
Reserves/Resources: Thirteen Year Mine-Life at 2010 Production Rate Silver Equivalent Reserves and Resources (million oz’s) 100 100 GJTO 88 90 80 76 GCVI 70 62 60 53 46 50 40 30 20 16 10 0 0 2004 2005 2006 2007 2008 2009 2010 (est) 2012 Target Note: Silver equivalents based on 65:1 silver: gold rati
Slide 23: Silver Production: Growth in Years
Silver Production: 814% Growth in 7 Years Annual Silver Production (million oz’s) 4.50 4.5 GJTO 4 3.5 3.20 GCVI 3 2.60 2.35 2.5 2.15 2 1.35 1.5 0.95 1 0.35 0.5 0 2004 2005 2006 2007 2008 2009 2010 (est) 2012 Target 23
Slide 24: Gold Production: Growth in Years
Gold Production: 672% Growth in 6 Years Annual Gold Production (thousand oz’s) 25,000 25 GJTO 20 15,626 15 13,298 10 8,019 GCVI 6,427 5 2,332 2,493 0 2005 2006 2007 2008 2009 2010 (est) 2012 Target 24
Slide 25: Mine Operating Cash Flow: Growth in Past Years
Mine Operating Cash Flow: 380% Growth in Past 3 Years Annual Mine Operating Cash Flow (million US$’s) $36.0 $21.3 $11.5 $8.0 $3.5 2006 2007 2008 2009 2010 (est) 25
Slide 26: Increasing Margins: Decreasing Costs
Increasing Margins: Decreasing Costs $20.00 Total Cash Costs Margin Realized Silver Price $18.46 $18.00 $15.49 $16.00 $14.51 $13.38 $14.00 $11.55 $12.00 $5.48 $12.53 $9.45 $/oz $2.17 $10.00 $6.83 $8.00 $6.00 $9.38 $9.03 $4.00 $6.55 $6.04 $5.93 $2.00 $- 2006 2007 2008 2009 2010 (Q3) 26
Slide 27: Relative Valuations: Silver Producers
Relative Valuations: Silver Producers 550 500 SVM Adjusted 450 Market Cap 400 350 Per 300 SPM HL 250 FVI Oz 200 FR GPR Silver 150 PAASCDE EXN 100 EXK Production 50 0 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 Adjusted Market Cap Per Oz Silver Reserves + Resources 27
Slide 28: Social Responsibility
Social Responsibility Endeavour Silver strives to improve the quality of life for every employee and each Safety: Safety is a top priority. We community in which it works by operating operate continuous training in the most socially responsible manner. programs, developed mine rescue teams, hired ne
Slide 29: Management Team: A Wealth of Experience
Management Team: A Wealth of Experience • Bradford Cooke, M.Sc., P.Geo. - Chairman and CEO - Professional Geologist with 34+ years experience in exploration management and financing including Shell, Chevron, Noranda and Canarc. • Godfrey Walton, M.Sc., P.Geo. - President and COO - Professional Geolo
Slide 30: Board of Directors
Board of Directors • Len Harris, P.Eng. - Director, Metallurgical Engineer - Former President of Newmont Peru responsible for development of the huge Yanacocha gold mine. • Geoff Handley, B.Sc. - Director, Geologist with over 30 years experience in global exploration, acquisitions, planning, most re
Slide 31: Institutional Investors, Analysts Coverage
Institutional Investors, Analysts Coverage • Royce & Associates • Ash Guglani/Tim Lee, Salman Partners • Van Eck Associates • Brian Quast, CIBC • AGF Funds, Inc. • Chris Thompson, Haywood • Fidelity Investments Canada • Thomas Tan, Euro Pacific Capital • Connor, Clarke & Lunn • Andrew Kaip, BMO • RB
Slide 32: Value Proposition
Value Proposition • Near term goal to become a top mid-tier producer of silver (5-10 million oz per year) • Already grown silver production 8 fold in our first 6 years (3.1 million oz target in 2010) • Organic potential to significantly increase silver production over next 2 years by opening new min
Slide 33: Contact Us
Contact Us Endeavour Silver Corp. Suite 301-700 West Pender Street Vancouver, BC, V6C 1G8 Canada hugh@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
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