Endeavour Silver Corp. · TSX:EDR
Endeavour Silver — Investor Presentation (February 2011)
33 slides from Endeavour Silver's investor presentation, February 2011
Slide 1: Expanding Silver Production, Reserves and Resources in Mexico
Expanding Silver Production, Reserves and Resources in Mexico February 2011 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? • Proven Track Record: 842% production growth in first 7 years • Compelling Organic Growth: 33% production growth in next 2 years • Additional Acquisition Growth: Looking to find or buy mine # 3 • Quality Assets: Higher grade silver-gold ores • Strong Financials: Worki
Slide 5: Share Capital: Leverage To Growth
Share Capital: Leverage To Growth • Exchange Listings: EDR: TSX EXK:NYSE-Amex EJD: DB-Frankfurt • Shares Issued: 80.6 Million • Warrants/Options: 11.6 Million (adds $34.3 million) • Fully Diluted: 92.2 Million • Share Price (2/4/11): US$ 6.76 • Market Cap: US$ 545 Million • Daily Volume (Q4, 2010):
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 - 46:1 6
Slide 7: Highlights: 2010 Performance & 2011 Outlook
Highlights: 2010 Performance & 2011 Outlook Sixth Consecutive Year of Record Financial Performance: • Sales Revenues: 2010 up 60% to est. US$81 million, 2011 target 40% growth • Mine Operating Cash Flow: 2010 up 90% to est. US$42 million, 2011 target +50% growth • Net Earnings: 2010 first full yea
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 Q4, 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: 998 tonnes per day Porvenir Norte Grades: 308 gpt Ag 0.65 gpt Au Recoveries: 73% Ag 84% A
Slide 11: Guanacevi: Upgrading the Mines & Plant
Guanacevi: Upgrading the Mines & Plant 2011 Capital Projects: Total: $18.1 million Plant: Dry Stack Tailings Mine: Underground development 9630 m Mine: Buildings and miscellaneous Mine: Underground equipment View of New Crushing Circuit; Plant Currently Operating at 1000 tpd; Additional Expansion Po
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 Development/ Production Production Development/ Production 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, Ramp, Track and Shaft Access Mines
Guanajuato: Underground, Mechanized, Ramp, Track and Shaft Access Mines Q4, 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: 563 tpd Grades: 195 gpt Ag 2.66 gpt Au Recoveries: 71% Ag 74% Au Operati
Slide 15: Guanajuato: Expanding the Mines & Plant
Guanajuato: Expanding the Mines & Plant 2011 Capital Projects: Total:$14.7 million Plant: Add new crusher, conveyors, mill, cyclones, float cells Mine: Underground development 8460 m Mine: Underground equipment Mine: Buildings & miscellaneous Currently operating at 600 tpd; Proposed expansion to 100
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 Currently Producing Veta Madre, Mina Cebada 3785 Under Development Currently Producing 16
Slide 17: Guanajuato: Bolanitos New Veins 2010
Guanajuato: Bolanitos New Veins 2010 Lucero South Mine 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: 842% Growth in Years
Silver Production: 842% Growth in 6 Years Annual Silver Production (million oz’s) 5 4.5 4.40 GJTO 4 3.5 3.30 GCVI 3 2.60 2.5 2.35 2.15 2 1.5 1.35 1 0.95 0.5 0.35 0 2004 2005 2006 2007 2008 2009 2010 2012 Target 23
Slide 24: Gold Production: 672% Growth in Years
Gold Production: 672% Growth in 6 Years Annual Gold Production (thousand oz’s) 25 22,500 GJTO 20 17,713 15 13,298 10 8,019 GCVI 6,427 5 2,332 2,493 0 2005 2006 2007 2008 2009 2010 2012 Target 24
Slide 25: Mine Operating Cash Flow: 265% Growth in Past Years
Mine Operating Cash Flow: 265% Growth in Past 3 Years Annual Mine Operating Cash Flow (million US$’s) 80 $74.0 70 60 50 $42.0 40 30 $21.3 20 $11.5 $8.0 10 $3.5 0 2006 2007 2008 2009 2010 (est) 2012 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 450 400 Adjusted SVM 350 Market Cap 300 SPM Per 250 FVI HL 200 Oz FR 150 EXN GPR Silver PAAS CDE 100 EXK/EDR Production 50 0 0 2 4 6 8 10 12 14 16 18 20 22 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: Near Term Catalysts For Growth
Near Term Catalysts For Growth • Earnings growth: +50% target in 2011 • Production growth: +33% target over next 2 years • Reserve/resource growth: Every year we expand our mineral inventory even after depletion • Discovery growth: every year we acquire & explore exciting new silver properties, San
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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