EXK — Endeavour Silver Corp.

Endeavour Silver (EXK) Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• Production: 11 million ounces of silver equivalent in 2025, a 48% increase from 2024. Q4 production was 2 million ounces of silver and 14,000 ounces of gold, totaling nearly 4 million silver equivalent ounces (up 146% YoY).
• Revenue: Record revenue of $468 million, up 115% from 2024.
• Cost of Sales: $385 million, leading to mine operating earnings of $83 million.
• Cash Flow: Mine operating cash flow before taxes was $156 million, up 116% YoY.
• Adjusted Net Earnings: $4.8 million or $0.02 per share, impacted by derivative losses and higher financing costs.
• Direct Operating Costs: Increased to $19 per ounce of payable silver due to production profile changes.
• Cash Position: $215 million as of December 31, 2025.

2. Strategic Updates and Business Highlights

• Acquisitions and Developments:
  • Acquired Kolpa in May 2025.
  • Achieved commercial production at Terronera in October 2025.
  • Sold Bolanitos Mine, closing in January 2026.
• Expansion Plans:
  • Increasing Kolpa's capacity from 2,000 to 2,500 tonnes per day.
  • Investing $68 million in Pitarrilla for exploration and feasibility studies.
• Market Positioning: Positioned to benefit from high silver prices (silver above $90, gold above $5,000) and increased industrial demand.

3. Forward Guidance and Outlook

• Cost Expectations: Anticipate a reduction in direct operating costs as operations stabilize and transition to liquefied natural gas (LNG) in Q2 2026.
• Production and Cost Projections:
  • Expect all-in sustaining costs to decrease throughout 2026, with guidance of $28-$29 per ounce.
  • Gradual improvement in grades and throughput at Terronera expected in the second half of 2026.
• Pitarrilla Development: Feasibility study targeted for completion in Q3 2026, with a construction decision anticipated in early 2027.

4. Bad News, Challenges, or Points of Concern

• Operational Challenges:
  • Temporary suspension of operations at Terronera due to security events in Mexico.
  • Initial ramp-up issues at Terronera led to higher costs and lower grades than expected.
• Cost Pressures: Rising costs associated with higher royalties and duties as silver prices increase, impacting margins.
• Security Concerns: Ongoing volatility in Jalisco may necessitate increased security measures and could affect operational stability.

5. Notable Q&A Insights

• Operational Improvements: Management reported improvements in throughput and recovery rates at Terronera since the start of commercial production.
• Cost Management: Direct costs per ton expected to improve as the company transitions to LNG and stabilizes operations.
• Hedging Strategy: The company has hedged gold but maintains a policy of remaining unhedged on silver to capture upside potential.
• Permitting and Expansion: Kolpa's expansion is on track, with expected completion of construction permits soon. Pitarrilla's tailings storage facility permit is a key focus, with a target for Q1 2027 approval.

Overall, Endeavour Silver's Q4 2025 results reflect significant growth and strategic positioning in a favorable market, despite facing operational challenges and external risks. The company remains focused on optimizing costs and advancing key projects to enhance shareholder value.