Endeavour Silver(EXK) - 2021 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Year-over-year silver production increased by nearly 40%, driven by record production at Guanacevi, while gold production increased by 3% [5] - The company is tracking to the upper end of its full year 2021 production guidance, which was revised upwards in October [6] - The decision to withhold metal sales due to soft precious metal prices negatively impacted third quarter revenue, earnings, and mine operating cash flow [7] Business Line Data and Key Metrics Changes - Operations at El Compas were suspended, representing only 5% of consolidated annual production, with minimal impact on overall projections [6] - The company is carrying a larger than normal finished goods inventory due to withheld metal sales, which is less than $1 million below estimated fair market value [7] Market Data and Key Metrics Changes - Silver prices dropped from $24 to $21.5 during Q3, but have since rebounded above $24 [20] Company Strategy and Development Direction - The development of the Terronera mine is a key focus, expected to double production and cut costs in half upon completion [13] - An updated feasibility study for Terronera showed a 33% increase in reserves and extended mine life from 10 to 12 years [8] - The company plans to fund the Terronera development through cash on hand, operating cash flow, and debt financing, with an $80 million to $100 million debt facility in progress [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the future, highlighting a solid third quarter and expectations for a strong finish to the year [33] - The company remains optimistic about opportunities in both Nevada and Mexico, emphasizing strong relationships with local communities [27][29] Other Important Information - The company acquired the Bruner Gold Project for $10 million, with plans to spend $1 million to $1.5 million on exploration in 2022 [17][18] - Initial earthworks and early procurement activities for Terronera are underway, with a budget of $13 million for Q4 2021 [22][11] Q&A Session Summary Question: Exploration plans for the Bruner Gold Project - The company plans to provide guidance on exploration plans for 2022 in early January, with an envisioned budget of $1 million to $1.5 million for exploration [17][18] Question: Plans for selling withheld metals - The company intends to sell withheld metals in the coming months, depending on market prices, with a focus on not selling into a falling market [19][20] Question: Spending on Terronera in Q4 and Q1 - A budget of $13 million is allocated for early works from September to December 31, with monthly holding costs of about $500,000 [22][24] Question: Opportunities in Nevada and Mexico - The company sees opportunities in both Nevada and Mexico, maintaining a positive outlook on the political climate in Mexico and its competitive advantages [26][27][29]