Endeavour Silver’s Earnings Call: Growth Amid Challenges

Endeavour Silver ((TSE:EDR)) has held its Q3 earnings call. Read on for the main highlights of the call.

The recent earnings call for Endeavour Silver Corp. painted a picture of both growth and challenges. The company experienced significant production increases and revenue growth, alongside successful project milestones like the commercial production of Terronera. However, these achievements were tempered by increased costs, a net loss due to derivative contracts, and operational setbacks at Terronera. The sentiment was balanced, reflecting both the company’s achievements and the financial challenges it faces.

Significant Increase in Production

Endeavour Silver Corp. reported a substantial increase in production, with 1,800,000 ounces of silver and 7,300 ounces of gold, totaling approximately 3,000,000 silver equivalent ounces. This marks an impressive 88% increase compared to Q3 2024, showcasing the company’s robust growth in output.

Revenue Surge

The company saw a remarkable revenue surge, reporting $111,000,000, which represents a 109% increase compared to the previous year. This growth was driven by higher precious metal prices and increased production, highlighting the company’s strong financial performance.

Terronera Achieves Commercial Production

A pivotal milestone for Endeavour Silver was the achievement of commercial production at Terronera, which is now operating at an average of 90% of its design capacity. This development is crucial for the company’s future growth and stability.

Successful Culpa Mine Integration

The integration of the Culpa mine has been successful, producing 1,300,000 silver equivalent ounces. The mine also received permits to increase throughput to 2,500 tonnes per day, aligning with historical performance benchmarks and supporting the company’s expansion plans.

Positive Exploration Results at Culpa

Endeavour Silver announced positive exploration results at the Culpa mine, demonstrating outstanding potential. The company has committed $12,000,000 to exploration, indicating a strong focus on future growth opportunities.

Increased Cash Costs

The company reported increased cash costs, rising to $18 per payable silver ounce. This increase was driven by higher royalties, profit participation, and costs of third-party mineralized material, impacting the company’s cost structure.

High All-In Sustaining Costs

All-in sustaining costs rose to $30.53 per ounce, influenced by elevated exploration, initial capital investments, and increased treatment and refining charges. This reflects the company’s ongoing investment in its operations and future growth.

Net Loss and Derivative Contract Impact

Endeavour Silver reported a net loss of $37,500,000, primarily due to a $39,000,000 loss on derivative contracts. This loss reflects the fluctuations in gold prices from hedging activities, impacting the company’s financial results.

Terronera Operating Loss During Commissioning

During its commissioning phase, Terronera reported a mine operating loss of $3,600,000. This setback highlights the challenges faced during the initial stages of production.

Electrical Downtime at Terronera

Terronera experienced seven days of downtime due to an electrical issue, affecting its overall performance in September. This operational setback underscores the challenges in maintaining consistent production levels.

Forward-Looking Guidance

Looking ahead, Endeavour Silver Corp. anticipates processing approximately 350,000 tons over the next six months at Terronera, with expectations to reach higher-grade zones by mid-2026. The company plans to issue annualized production and cost guidance for 2026 in January, indicating a strategic focus on future growth and operational efficiency.

In summary, Endeavour Silver Corp.’s earnings call reflected a balanced sentiment of growth and challenges. The company achieved significant production and revenue increases, alongside successful project milestones. However, these were offset by increased costs and financial losses due to derivative contracts and operational setbacks. The forward-looking guidance suggests a strategic focus on overcoming these challenges and capitalizing on growth opportunities.