Endeavour Silver(US:EXK)2026-02-27 19:02Financial Data and Key Metrics Changes - In 2025, Endeavour Silver produced 11 million ounces of silver equivalent metal, a 48% increase compared to 2024 [5] - The company reported record revenue of $468 million, up 115% from 2024, with cost of sales at $385 million and mine operating earnings of $83 million [7] - Mine operating cash flow before taxes rose by 116%, while cash costs increased to $19 per ounce of payable silver [7][8] - Adjusted net earnings for Q4 were $4.8 million, or $0.02 per share, impacted by realized losses from derivative contracts and higher financing costs [7][8] Business Line Data and Key Metrics Changes - In Q4, Endeavour Silver produced 2 million ounces of silver and 14,000 ounces of gold, totaling just shy of 4 million silver equivalent ounces, representing a 146% increase compared to Q4 of 2025 [6] - Excluding Coba and Terronera, production was up 27% compared to the same period last year [6] Market Data and Key Metrics Changes - Silver and gold prices have seen exceptional gains, with gold trading above $5,000 and silver above $90, reflecting ongoing confidence in precious metals [4] - The company is well-positioned to benefit from current silver prices, indicating substantial runway remaining in this cycle [4] Company Strategy and Development Direction - Endeavour Silver's strategic initiatives include the acquisition of Kolpa, achieving commercial production at Terronera, and advancing the Pitarrilla development asset [4][5] - The company plans to invest $68 million in Pitarrilla in 2026, including completing a feasibility study and advancing construction [12] - The focus remains on operational investment priorities across main operations and projects to drive growth in 2026 [10] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of safety and operational stability, especially in light of recent security events in Mexico [3] - The transition from diesel to liquefied natural gas is expected to significantly reduce operating costs starting in Q2 2026 [8][17] - Management expressed confidence in achieving a steady state of operations at Terronera by mid-year 2026, with expectations for improved throughput and recoveries [11][91] Other Important Information - The company raised $350 million through a convertible debt offering in December, strengthening its balance sheet [5] - As of December 31, 2025, the company's cash position was $215 million, providing financial strength for strategic initiatives [10] Q&A Session Summary Question: Updates on operational issues at Terronera - Management confirmed improvements in mill availability and electrical disruptions, with expectations to transition to LNG for better stability and cost efficiency [15][17] Question: Grade profile at Terronera - Management indicated that lower grades were due to mining lower grade stockworks initially, with expectations for higher grades in the second half of 2026 [19][23] Question: Capital spending and development at Terronera - Management acknowledged being slightly behind on development but expects costs to decrease as operations stabilize [26][28] Question: Impact of silver prices on costs - Management noted that higher silver prices would increase direct costs due to royalties and duties, but margins remain strong [41][43] Question: Derivative hedge and risk management - Management discussed the remaining gold hedge and the company's policy to remain unhedged on silver, focusing on managing exposure to currency fluctuations [48][50] Question: Accounting implications of Bolanitos sale - Management confirmed an accounting gain from the sale of Bolanitos and discussed the impact of construction costs on taxes [70][72]