Endeavour Silver Corp. · TSX:EDR
Endeavour Silver — Investor Presentation (October 2006)
29 slides from Endeavour Silver's investor presentation, Oct 31, 2006
Slide 1: Silver Producer Focused on Growth
Silver Producer Focused on Growth.
Slide 2: Caution - Forward Looking Statements
CAUTION - 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
Slide 3: Introduction: Who is Endeavour?
Introduction: Who is Endeavour? • Endeavour Silver Corp: One of North America’s fastest growing silver mining companies • Core Asset: Santa Cruz silver mine, Porvenir silver mine and Guanacevi process plant in Durango, Mexico ( the “Guanacevi Mines Project”) • Goal: Become a top 5 primary silver pro
Slide 4: Highlights: Why Own Endeavour?
Highlights: Why Own Endeavour? • Demonstrated Success – Already delivered three- fold production, resource and cash-flow growth at Guanacevi in first year of operations (2005) • Strong Growth Profile –Additional five-fold growth over next two years through exploration and development at Guanacevi to
Slide 5: Highlights: Why Own Endeavour?
Highlights: Why Own Endeavour? • High Grade, High Leverage Ores – High grade (+450 gpt Ag) silver ores highly leveraged (>90% of revenue) to silver price • Strategic Relationships – Through Endeavour’s Strategic Alliance with Peñoles and other senior companies, Endeavour can acquire select mining pr
Slide 6: Silver vs. Gold
Silver vs. Gold Silver typically follows gold higher, but is more volatile. 25-Oct-06 Gold Silver 6
Slide 7: Silver Supply And Demand
Silver Supply And Demand 1000 Million 700 oz 400 2007 E 2006 E 1999 2003 1998 2000 2001 2002 1995 1996 1997 2004 2005 Source: GFMS & CIBC World Markets Demand Supply (mining & scrap) 7
Slide 8: Silver Inventories At A Historic Low
Silver Inventories At A Historic Low Inventory Million oz Source: CPM Group, 2006 8
Slide 9: Mexico: History Rich In Silver
Mexico: History Rich In Silver • Top silver producing country in the world, 103 million oz in 2005. • Four hundred year culture of silver mining, dating back to the Spaniards • Low political risk, modern growing economy and attractive mining code • Substantially under-explored by modern companies an
Slide 10: Guanacevi: A Top Mexican Silver District
Guanacevi: A Top 5 Mexican Silver District Located in the Sierra Madre gold and silver belt, the Guanacevi district has produced over 450 million oz silver. 10
Slide 11: Location: Excellent Access & Infrastructure
Location: Excellent Access & Infrastructure Paved road access, state power grid and all modern amenities. 11
Slide 12: Geology: Classic Low Sulfidation, Epithermal Vein District
Geology: Classic Low Sulfidation, Epithermal Vein District Five main veins have been traced for over 6 km. 12
Slide 13: Mine: Fully Mechanized Underground Mine
Mine: Fully Mechanized Underground Mine Porvenir is the only significant mine operating in the Guanacevi district. 13
Slide 14: Ore: High Silver Grades, Leverage
Ore: High Silver Grades, Leverage High silver grades >450 gpt over robust vein widths (2-10m) >90% of the ore value is silver 14
Slide 15: Exploration 2006: Select Drill Results
Exploration 2006: Select Drill Results Hole From Length Silver Gold Ag Equiv (no.) (m) (m) (gpt) (gpt) (opt) (ft) NP11D 94.70 13.95 290 0.33 9.0 45.8 NP16-3 356.40 1.00 3898 0.07 113.8 3.3 NP19-3 292.00 10.10 378 0.84 12.4 33.1 NP19-4 304.70 7.00 334 1.07 11.5 23.0 DSC2-8 197.0 5.70 938 3.84 32.9 18
Slide 16: Reserves/Resources 2006: 14.1 M oz Silver
Reserves/Resources 2006: 14.1 M oz Silver (NI 43-101compliant, March 2006) Classification Tonnes Silver Gold Silver Gold Silver Equivalent (gpt) (gpt) oz oz (opt) oz Total Porvenir Mine Reserves 183,875 589 0.85 3,481,200 5,053 18.7 3,792,588 (Proven & Probable) Porvenir Mine Inferred Resources 392,
Slide 17: Reserves/Resources: Longitudinal Section
Reserves/Resources: Longitudinal Section 17
Slide 18: Plant: 5.0 Million Opy Silver Capacity
Plant: 5.0 Million Opy Silver Capacity Filling the plant to capacity (5.0 million oz Ag per year) should make Endeavour a top 5 primary silver producer. 18
Slide 19: Highlights: What's New
Highlights: What’s New • Guanacevi Mines Project Set Records in Q2, 2006 for: • Silver production 350,087 oz Ag up 16% on Q1 • Mine output 491 tpd up 11% • Plant stock piles 37,357 up 412% • Operating cashflow US $3.2 million up 265% • Operating earnings US $2.3 million up 404% • Cash costs US $4.65
Slide 20: Highlights: What's New
Highlights: What’s New • Endeavour Expanded into Second Major Silver District: • Dominant land position in Parral • Potential for large tonnage, medium grade, polymetallic orebodies • Closed US $25 Million Equity Financing • Cash and equivalents currently CA $42 million • Peñoles adds to equity posi
Slide 21: Annual Production Targets Guanaceví: Twelve-Fold Growth Over Five Years
Annual Production Targets Guanaceví: Twelve-Fold Growth Over Five Years Annual Silver Production (millions oz) 5.0 4.5-5.0 4.5 4.0 3.5 3.0-3.5 3.0 2.5 1.5-2.0 2.0 1.5 0.95 1.0 0.35 0.5 0.0 2004 2005 2006E 2007E 2008E 21
Slide 22: Annual Resource Targets Guanaceví: Ten Year Mine-Life at Plant Capacity
Annual Resource Targets Guanaceví: Ten Year Mine-Life at Plant Capacity Total Resources (millions oz) 50 40-50 40 30-40 30 20-30 20 14.1* 10 0 2004 2005 2006E 2007E 2008E * Proven/Probable reserves of 3.5 million oz and inferred resources of 10.6 million oz (updated March 2006). • Long term target i
Slide 23: Cash Cost Targets Guanacevi: Reducing Cash Costs
Cash Cost Targets Guanacevi: Reducing Cash Costs Cash Cost Per Oz 10 8 $7.10 $7.10 - $4.90 6 $4.75 – $4.25 <$4.25 <$4.00 4 2 0 2004 2005 2006E 2007E 2008E *Cash costs have decreased from $7.10 per oz in Q1, 2005 to $4.65 in Q2,2006. Long term target is $3.90 cash cost per oz. 23
Slide 24: Cash-Flow Targets at Guanaceví: Increasing Operating Cash-Flows
Cash-Flow Targets at Guanaceví : Increasing Operating Cash-Flows Net Pre-Tax Cash-Flow (US$ millions) 40 $33-37 35 30 25 $22-$26 20 15 $10-$13.5 10 Silver price 5 assumptions 2 $6.67/oz $1.48 $7.25/oz $10.00/oz $12.00/oz $12.00/oz 0 2004 2005 2006E 2007E 2008E • Operating Cash-Flows rose from nil in
Slide 25: Capitalization Summary
Capitalization Summary: • TSX Ticker EDR • FSE Ticker EJD • Share Price (26 Oct 06) CA$4.00 • Market Capitalization CA$168 million • Shares Outstanding 41.9 million • Options 3.8 million • Warrants 6.6 million • Fully Diluted 52.3 million • Cash CA$40 million • Cash Fully Diluted CA$76 million • Deb
Slide 26: Company Comparison: Increasing Valuation On Growth
Company Comparison: Increasing Valuation On Growth 2500 240 220 2000 200 180 160 Market Cap/Oz Market Cap 1500 140 Annual ($ USM) 120 Production- 1000 100 2005 80 60 500 40 20 0 0 SLW EDR (FD) CDE (2007) EDR PAA SVM HL • Production of 3.6 Million oz silver per year would rank Endeavour as a top 5 pr
Slide 27: Silver/Endeavour: Price Comparison
Silver/Endeavour: Price Comparison Endeavour vs. Silver 25-Oct-06 SILVER ($US) EDR ($CA) 27
Slide 28: Management Team: Wealth of Experience
Management Team: Wealth of Experience • Bradford Cooke, M.Sc, P.Geo. - Chairman and CEO, Professional Geologist - 30 years experience with Shell, Chevron, Noranda and Canarc. • Godfrey Walton, M.Sc, P.Geo. - President and COO, Professional Geologist - 32 years specializing in discovery and developme
Slide 29: Silver Producer Focused on Growth
Silver Producer Focused on Growth.
Endeavour Silver — Investor Presentation (October 2006) on 6ix