Endeavour Silver Corp. (NYSE:EXK) Q3 2025 Earnings Call Transcript

Endeavour Silver Corp. (NYSE:EXK) Q3 2025 Earnings Call Transcript November 7, 2025

Endeavour Silver Corp. misses on earnings expectations. Reported EPS is $-0.01 EPS, expectations were $0.0275.

Operator: Thank you for standing by. This is the conference operator. Welcome to the Endeavour Silver Corp. Third Quarter 2025 Financial Results Conference Call. After the presentation, there will be an opportunity to ask questions. I would now like to turn the conference over to Allison Lauren Pettit, Vice President of Investor Relations. Please go ahead.

Allison Lauren Pettit: Thank you, operator, and good morning, everyone. Before we get started, I ask that you view our MD&A for cautionary language regarding forward-looking statements and the risk factors pertaining to these statements. Our MD&A and financial statements are available on our website at edrsilver.com. On today’s call, we have Daniel W. Dickson, Endeavour Silver Corp.’s Chief Executive Officer, Elizabeth Senez, our Chief Financial Officer, and Donald P. Gray, Endeavour’s Chief Operating Officer. Following Dan’s formal remarks, we will open the call for questions. And now over to Dan.

Daniel W. Dickson: Thank you, Allison, and welcome, everyone. Q3 has been a transformational quarter at Endeavour Silver Corp. With Terronera now in commercial production and Colpus’ first full quarter under production, our production profile has significantly expanded our operational capabilities and strengthened our position in the market. This progress sets the stage for continued growth and improved performance as we move forward. In Q3, Endeavour produced 1,800,000 ounces of silver, 7,300 ounces of gold totaling approximately 3,000,000 silver equivalent ounces. This does not include Terronera and represents an 88% increase compared to Q3 2024, primarily due to the addition of the Culpa mine and full quarter production from Guanacevi.

We reported revenue of $111,000,000, an increase of 109% compared to the prior year, benefiting from the higher pressure metal prices and increased production profile. Mine operating cash flow before working capital changes rose by 102%, while cash costs increased to $18 per payable silver ounce. The increase is driven by the impact of higher royalties, higher profit participation, and higher cost of third-party mineralized material during the quarter, coupled with lower grades processed at Guanacevi and Bolanitos. All-in sustaining costs increased from the same quarter in 2024 to $30.53 per ounce, net of byproduct credits due to a number of factors including elevated exploration at Culpa to validate historical resources, initial capital investment to upgrade facilities, and an increase in treatment and refining charges.

All-in sustaining costs include $2,300,000 of mark-to-market charge in the quarter for deferred share units granted in previous periods within G&A. Mine operating earnings increased to $15,600,000 from $12,500,000 in Q3 2024, due to the higher operating earnings out of Bolanitos and Guanacevi as well as $3,900,000 in operating earnings from Culpa, offset by Terronera’s mine operating loss of $3,600,000 during the commissioning period. The company reported a net loss of $37,500,000 for the period after a loss on derivative contracts of $39,000,000. As previously reported, the company entered into forward gold sales as part of the project loan facility in March 2024 when gold was trading at $2,325. As of September 30, the company’s cash position was $57,000,000.

Q&A Session

On October 16, the company announced that Terronera has officially reached commercial production following a successful commissioning phase. During commissioning, the operation performed at an average of 90% of design capacity of 2,000 tonnes per day while also achieving at least 90% of its projected metal recoveries. This achievement not only underscores a transformational milestone for the company but also represents a pivotal moment in our corporate strategy, further strengthening our position as a leading mid-tier silver producer. The company forecasts throughput of approximately 350,000 tons over the next six months with average grades estimated to be about 120 grams per ton silver and 2.5 grams per ton gold. These higher-grade zones are scheduled to be accessed in mid-2026.

During this period, the operating team will be working to refine and optimize the operating processes, incrementally improving throughput, recoveries, and our operating processes and efficiencies. In January 2026, the company will issue annualized 2026 production and cost guidance for Terronera with our consolidated guidance. Since completing the Monero Culpa acquisition on May 1, the integration of the asset and the team has progressed smoothly. On September 25, the company announced positive general results from its ongoing exploration program at Culpa, demonstrating outstanding potential. The exploration program is designed to target potential while also completing work to validate historical resource estimates. Part of the acquisition agreement includes $12,000,000 of exploration spend to validate the historical resources over twenty-four months.

In Q3, we incurred $1,500,000 which is included in for infill and step-out drilling. In Q3 2025, Culpa produced 1,300,000 silver equivalent ounces including its base metals, continuing to remain on track to align with Culpa’s historical performance benchmarks of 5,000,000 silver equivalent ounces. Grades were marginally lower than expected, however, throughput was slightly higher, resulting in slightly higher cash cost per ounce than the historical site trend and management’s expectations. Additionally, investments are being made to modernize some parts of the plant and surrounding infrastructure to support a potential increase in production. The mine received permits to increase throughput to 2,500 tonnes per day and the team is executing improvements in the mill and the mine to support an expansion.

Management expects to complete its evaluation of an expanded operation late this quarter. Lastly, before we open the call to questions, we continue to advance PIT3A and are excited for the next chapter as we move this project forward, focusing on upgrading the inferred resources to indicated while engineers are on various studies to support a tailings dam permit and a feasibility study to be published mid-2026. With that, operator, I’d like to open up to questions.

Operator: Thank you. We will now begin the question and answer session.

Heiko Felix Ihle: Hey, Dan and team. Thanks so much for taking my questions.

Daniel W. Dickson: Hey, Heiko. Hope all is well.

Heiko Felix Ihle: Oh, yeah. Very much so. Hey. You hinted at some of this a bit earlier on the call, but maybe walk us through what you’ve been seeing with Culpa versus expectations. And I mean, just talk about grades and costs, the obvious ones, but also, like labor relations, equipment uptime, work you’ve seen with the communities, other impacts, you know, actual versus anticipated twelve months ago, either better or worse than pre-acquisition?

Daniel W. Dickson: Yeah. There’s a lot in there. I mean, obviously, the key drivers for a lot of our cost profile come down to throughput. Our throughput was above 2,000 tonnes per day. Obviously, it’s designed to be 2,000 tonnes per day. And grades were just slightly lower. I mean, obviously, we’re seeing a higher price environment and there’s always opportunities to go into some lower grade areas. And I think we, as very mindful that we’re balancing that to extend mine life versus cash flow today. And obviously, when we took control as of May 1, we have some standards that we want to keep as a company with regards to what our assets and our facilities are. We started some of those programs. And then a big chunk is that we’re spending on exploration as well.

And so the exploration has gone as expected, if not better, as I said, in early September, we put out results, we’ll continue to put out results as we go through our exploration program to really validate these historical resources. I think it’s very important that we get that 43-101 estimate up to date and published so we can speak to guidance and cost profile on the forward basis as opposed to always looking at benchmarks going back. Labor relations, community relations, we did a lot of work on that going into the acquisition of Culpa, and those aligned to what we saw. They’ve got very good relations, very good labor relations. I think we’re very impressed with the operating team. They’re very gung-ho to try to push this 2,500 tonne per day plant and expansion forward.

We’re still trying to go through some of the cash flows and the ultimate benefits in ensuring that there’s going to be economies of scale to really push that 2,500. So whether we have that capacity or how we push that for an underground mine is very important. But again, it’s been one quarter. Our expectation is that we will be delivering cash flow from Culpa. If you look at it from a mine free cash flow, because of the investments we’ve made in improvements in the plant and the exploration, it’s higher than or lower than what we wanted. But ultimately, I think it will deliver us good cash flow in 2026 and beyond.

Heiko Felix Ihle: Fair enough. I promise the next one’s a lot less loaded. And just a quick clarification, Terronera seems to have had eight days of downtime in Q3. What happened? And also, we’re halfway through Q4 at this point. Has there been any downtime this quarter so far? And same question if so, what happened?

Daniel W. Dickson: Yeah. I mean, that’s a very fair question. We had very good results, I think, leading into September, July, we did close to 2,000 tons per day. In August, we brought that back to around 1,800 to focus on recoveries or even 1,600 tonnes per day to focus on recoveries. And then did very well till about September 22, September 23, somewhere around that timeline. We had a shutdown for seven days. And obviously, we expected to announce commercial production on October 1, just getting through September with that consistency and being shut down. And it was an electrical issue, we had to get some specific resistors, which is a very small investment, but ultimately something we didn’t have on hand and they’re made to order.

So it wasn’t that they were available off the shelf either. And we had to wait for that, and it took a little bit longer, a couple of days longer than what we expected. But nonetheless, we started up that plant late September again and got going. Since October, we haven’t had any up down days. In November here, we’re about a week into November. We had a half day a day and a half. We have had intermittent, so we’re not going to be running fully at 2000s more like what we saw in Q3, which is still a great rate above 90%. Ultimately, we are in that kind of honeymoon phase now of hey. We’re in commercial production. We really need to hit our targets and our throughputs. And like I say, over the next six months, it’s going to be about refining and optimizing that plant.

We’re still refining little things, but, again, above what our threshold was for commercial production or declaring commercial production.

Heiko Felix Ihle: Very fair. As you know, I’m quite positive on the assets, so it’s nice to see it all come together and actually, you know, seeing it in person last week. I’ll get back in queue. Thank you guys very much, and have a great weekend.

Daniel W. Dickson: Thanks for the questions, Heiko.

Operator: The next question comes from Wayne Lam with TD Securities. Please go ahead.

Wayne Lam: Yes. Thanks, guys. Maybe just following up on Heiko’s question, maybe a Terronera. Do you have an update on maybe how the performance has gone in the month of October? And just curious what kind of stockpile you might have ahead of the mill? And then maybe just in terms of the grade, the mine plan in the early years had around double the initially guided grades here. So just wondering what you’re seeing in terms of access to those higher grade zones and reconciliation to date versus plan?

Daniel W. Dickson: Yep. Sure. Well, it’s in there again. Thanks for the question, Wayne. For stockpile and this we’ve been saying for a long time, we have room for about 60,000 tons. We can kind of push that to 80,000 tonnes. Because of the topography at Terronera and where we have lay down yards, we don’t have the ability to carry six months of stockpile in front of us. So it’s about making sure we have sufficient stopes available underground and be able to go from underground rig to the crusher. Grades thus far, we’re in an area where lower grade, and that’s just a function in our ultimately, in our initial mine plans or feasibility study it’s focused on IRR payback period. And, ultimately, when you’re kind of going through these refinements, nothing’s perfect yet in that plan.

We want to make sure we’re not putting metal into our tailings dam and getting the best recoveries we can on some of the higher grade material. Now we’ve had pretty decent recoveries, but again, there are still some minor issues that we work might be down for half an hour an hour, and we want to make sure we don’t have those surges. So we designed now that the plum of the resource, the Terronera plum, which is basically the middle chute, or about 100 meters away from that area, and ultimately, we have plans that that comes in mid-2026. So right now, we’re putting through lower grade what we would deem to be lower grade. So as I said earlier on the call, about 2.5 grams gold, 120 grams silver is our expectations for that next six months. And then we bring La Luce, which is a high-grade deposit in that’s about a kilometer away.

To supplement what’s coming out of Terronera. So again, mid-year next year we’re going to see those grades pick up to what you’re going to see in Q3 with Q3, Q4, Q1, Q2, but we should start seeing that in Q2, Q3. Ultimately, grade reconciliation there’s a couple of things that have been happening that we’ve seen. A, on the vein, our grade reconciliation is we’re getting a lot of stock work. So for those on the call that aren’t familiar, stock work would be the mineralization veins. So we have a hanging wall, footwall vein on 150 to 200 grams silver equivalents. Obviously, that has a lot of value, and we moved from either longitudinal soaping or and fill soaping to some transverse soaping. So in these areas that we should have been a little bit higher grade, we’re bringing in lower grade, we’re getting more tons more ounces.

And ultimately extend mine life. And we are in no position to update resources. It’s still relatively early days, and it’s a question of how long these stock work continue on. As we get into that main shoot with the higher grade, bigger widths, we don’t expect that stock work. So we expect those grades to come through. But otherwise, to answer that question, our grades have aligned relatively well to what our resource model has. And then as far as October, October has been a pretty steady month. Not any huge events, knock on wood. So it’s kind of continuing on. And, again, we want to make sure we refine and optimize what we can do in the plant. And then really focus on driving down costs next year. The big push to get us through into commercial production and commend our team on doing that.

And now it’s really focusing on operating efficiency and processes and making sure we hit our marks.

Wayne Lam: Okay. Perfect. That was a great detail then. Just wondering on the balance sheet, with Terronera now having declared commercial production have you continued to execute on the ATM over the past month? And now that you’re commercial, would you be able to refinance that facility for a larger amount? And what could be the timeline beyond that?

Elizabeth Senez: Sure, Wayne. I’ll take that. This is Elizabeth Senez, the CFO. So in terms of your first question on the ATM, no. We’ve not used the ATM in the past month. You can see in our Q3 that we used $15,000,000 during Q3. But since September, we’ve not used the ATM. And then regarding your second question on the project finance, and our plans, what to do with that. Now that we’re in commercial production, yes, we are evaluating our options with how to refinance now that we are in commercial production. We anticipate doing that in the next six months.

Wayne Lam: Okay. That’s great. And maybe just, one last one for me. Just on the balance sheet flexibility, you guys were in a bit of a working capital position the past quarter. Do you have enough in terms of supplies and spares available at the various sites to mitigate or have any buffer to some of the any potential pickup?

Daniel W. Dickson: Yeah. I’ll take that, Wayne. Ultimately, we believe so. You’ll see our warehouse inventory is a healthy number. Obviously, going into new operation, mid-maxes has to be determined and get that experience. What those trends are. We have the idea that we have sufficient inventory and warehouse inventory to be able to work through that. Giving us effectively that flexibility. I say that and know that there’s always something out there that will come up, and that’s our job as management to kind of make sure that we manage that properly if there’s something that we’ve not seen and comes up in that sense. But we feel like we have lots of flexibility. You’re right about the negative working capital on our balance sheet for the last two quarters.

A big portion of that is actually our derivative liabilities. Again, I touched on the $39,000,000 derivative liability based on the hedges that we put in from the project loan. Financing that we did. 2024, we put those hedges in. So, again, we’ve seen gold prices come from $4,500 down to $4,000. That’s reduced that a little bit. But ultimately, our goal is now to get our balance sheet in strength position, and we have positive working capital. Hopefully, we see that sooner rather than later.

Wayne Lam: Okay. Great. Thanks for taking my questions, and best of luck over the coming months.

Daniel W. Dickson: Thanks, Wayne. Those are good questions.

Operator: Next question comes from Alexander Terentiew with National Bank. Please go ahead.

Alexander Terentiew: Hey, guys. Thanks for taking my questions here. Just got a couple of questions on spending and first one, really, on CapEx. It looks like CapEx spending so far this year relative to guidance has been a bit lower than planned. Am I correct in assuming we could see a bit of a catch up in Q4? Or it’s just spending a little bit below planned here, let’s my first question.

Daniel W. Dickson: Yeah, no, that’s a very good question. I think you’re going to see pretty consistent at following a dose in Guanacevi. Obviously at Culpa, it probably will end up being a little bit similar as we finish off some of these projects going into the end of the year. For Terronera, we haven’t put out specific guidance around sustaining capital and what we need for mine development. But I don’t see it being outsized. I think mostly to answer that question it comes down to the existing ones operation. It’s what we’ve seen is what you’ll get in Q4.

Alexander Terentiew: Okay. And just sticking with Culpa, I mean, I know you guys are working towards evaluating that underground expansion. You know, can you you know, in the past, you did give some guidance on spending there, but can you give us any color kind of maybe even over the next six months or a little bit how we can think about spending on that?

Daniel W. Dickson: I know you have the permit to construct. Obviously, you’re doing some underground development as well. You know, I think it’s from my view it seems like it’s pretty clear that you would go ahead, but until you officially made that decision, I guess you can’t say so. But I mean, any clarity on spending plans for the next six months?

Daniel W. Dickson: Yeah. Part of that for the next six months difficult to say because we’re coming through that budget season. That’s part of that evaluation aspect of it. And ultimately, we really need to know what that capital is. And that’s going to be all part of our guidance that come out in January. I don’t want to jump the gun on what it necessarily is. And a little bit of the background on that Culpa and the expansion 2,500 data applied for the expansion prior to our acquisition and they’d actually made some commitments on that expansion. For example, Ball Mill a 2,500 ton ball mill was already committed to and on-site when we kind of acquired it. And our concern just comes down to ensure that there’s sufficient economies of scale, not through the plant, not through the indirect costs, so the camps and support on-site, it’s really down into the mine.

Are we going to be able do we need to open up more stopes and have more labor, more equipment to not get economies of scale? Or are there some areas where we can get better out and be more efficient and actually see that benefit economies of scale? And that’s a process, like I say, we’re kind of in the next two months. Hopefully, we can make a final decision on that and then move forward. And, part of all the trade-off studies of understanding what that capital spend is. And like I say, should have that done by December and hopefully out in everybody’s hands or minds by January. Or in January.

Alexander Terentiew: Okay. Sorry. It can’t be any more than that right now.

Daniel W. Dickson: No. No. I understand.

Alexander Terentiew: I know it’s this time of year, and I was just pressing my luck and asking anyway. Last question, just on Culpa. Q3 G&A, $2,245,000, I think, was the number there. And I noticed that the deal closed in Q2. Is that kind of a number we should be expecting going forward on a quarter basis? Or do you think that can come down a little?

Elizabeth Senez: Hi, Alex. It’s Elizabeth. I’ll take that question. So on the Q3 G&A, it was higher than anticipated because of the share price increase, which affected the revaluation of our DSUs, so $2,700,000 of expense during the quarter. Related to the DSU. If you exclude that, from the quarterly G&A number, then that’s our run rate going forward on corporate G&A.

Daniel W. Dickson: I think it’s a very good question on that, Alex, because that flows into Culpa, and we had the internal discussions of, well, we have G&A out of Vancouver and given out these DSUs historically that get mark to market. Itself, when you look at the all-in sustaining costs for Culpa, that includes those DSUs being allocated. How we do our allocation is a way to way to calculation and how we distribute the cost out of Vancouver. To that. So that G&A is not cost at Culpa. Culpa’s G&A cost, and they’re indirect cost. And on a per ton basis. So obviously, there’s no right or wrong answer to how you allocate those answers. That’s how we’ve done it. That’s how we’ll consistently be. It’s a noncash item, but we do that as it is an expense that historically goes through. So again, not reflective of Culpa’s performance, just an allocation on that all-in sustaining cost.

Alexander Terentiew: Okay. That makes sense. Perfect. Okay. That’s it for me. Thanks.

Daniel W. Dickson: Thanks for those questions, Alex. Good questions. Thank you.

Operator: The next question comes from Sandaria Iyer with B. Riley Securities. Please go ahead.

Sandaria Iyer: Hi, Dan and team. Thanks for taking my question. I just wanted to follow-up on the sustaining CapEx question asked earlier. So at Guanacevi, you spend about $13,000,000 of the $19,000,000 planned, and there is a considerable amount of development being done. So how critical is completing this development to maintaining production levels at one seventy? And what’s the current pace of advancement over there?

Daniel W. Dickson: Yeah. No. Fairly. It’s a very good question. So it’s you pointed out, we spent $13,000,000 year to date. So we’re the nine months, which is just about $3,000,000 just over $3,000,000 per quarter and that’s what we were here in Q3. And again, we don’t have a big catch up in Q4. A lot of the Guanacevi sustaining capital is mine development. And we always want to stay ahead for mine development. That’s ultimately underground mining. We have sufficient development to continue on. And, obviously, we try to always try to get it a bit ahead. And I think we’re always a little bit ambitious on our total capital, so million dollars but we come in at $16,000,000 I think it’s positive. We’ve got the meters that we needed to get this year.

Thus far, and we expect that to come. Typically, what we see in Mexico is December slows down a little bit because of the Christmas. So we focus on or extraction is less on mine development because of that kind of a two-week period around Christmas. At Bolanitos, similarly, we did have some mine equipment that we purchased early this early Q3, but most of the work that we do at Old New Needles is mine development. Again, you look at guidance, we’re slightly behind on what we expect to spend. But we’re hitting our meters. So we don’t see an expected change in our operating profile because of mine development at either of those operations.

Sandaria Iyer: No. That makes sense. Thank you. Thank you for that. And just one more on this third-party old purchases that have gone up and increased the cash cost. So could you just provide some context on the economics of these purchases and how does that fit into like, your own ore extracted at the mine versus this third-party ore?

Daniel W. Dickson: Yeah. Happy to give detail on that. We do have some third-party ore at Culpa, which is a lot more lower impact ultimately to ounces and cost. But at Guanacevi, it’s about 15% of our throughput now. And the Guanacevi plant was built in 1980 or 1981 by the Mexican government. And under the original, when it was passed on to who we bought it from, there’s a requirement that 10% at least 10% of throughput can go through to local miners. And in our district of Guanacevi, there’s a lot of small local miners and obviously with higher prices, there’s actually a lot more ore coming to our plant asking to be tolled. The way we pay out ultimately we buy that tolled ore for a percentage around 70%. We have margins between 20-25% depending on the group, depending on recoveries and ultimately where prices end up.

It does displace our own ore, obviously. But at the same time, it extends life that Guanacevi. And as we’ve price has gone up, that cost per ton when we’re buying that ore ton, it’s higher because what it contains is silver and gold. So with the price increases, we’ve gotten similar grades, sometimes lower grades, but the actual cost for that ore ton is higher. And how we incorporate that in is purchase ore. So it’s higher cost in our mine tons, again, displaces ours, we are making a profit somewhere around 20% to 25%. So we’ll continue to do that. And again, more and more tolled ore is coming to Guanacevi, again, we’re required to take at least 10%, and we’ve been taking higher than that. I hope that answers your question.

Sandaria Iyer: Yeah. Thank you. I’ll get back.

Operator: Thank you. Once again, if you have a question, please press star then 1. The next question comes from Cosmos Chiu with CIBC. Please go ahead.

Cosmos Chiu: Thanks, Dan and Jean, Matt. Thanks for a lot of good details on this call today. But overall, I guess, my question is, Dan, you know, when should we start expecting the company to generate But based on prices now, when would you expect Positive free cash flow? You know, you got close in Q3. Is it next year? Clearly, we’re hitting an inflection point for the company. When can we expect positive free cash flow?

Daniel W. Dickson: Yeah. It’s very fair. I mean, obviously, we averaged $38 on silver this quarter, we’re up in the $48 range. So I would fully expect free cash flow in Q4. It’s all predicated now that Terronera is going from commissioning to commercial production. We hit our numbers in Q4, Q1. We’re going to have free cash flow out of Terronera. I think it’s easier always to speak at separately. Guanacevi and Bolanitos and Cosmos, you and I have had this conversation that mature assets. I think where they are in their life cycle, we got to make sure that the grades that we’re pulling out or the grades that make free cash flow. At this point in time. We can always go into back old areas and trade dollars, but it’s also about harvesting and what our job is in management team is to deliver rate of return.

Right? Rate of return on investment. Guanacevi and Bolanitos have done a phenomenal job for us to build our company. They are going to be high-cost assets going forward. The transition that we’ve gone through over the last two years, and it’s been a bit of a heavy lift some days, is trying to find assets that are long life, low cost. Terronera in itself completely changes our profile. As we go through Q4, Q1, Q2, it’s going to be our job to work to get those cost profiles down to what we expected in the feasibility study. It’s not going to be $88 that we have there. It’s going to be seen inflation 25%, 30%. So we can be around $1.20 to a $130. I think that’s going to be good. Of course, we want it to be 88, but the world’s changed. Right now, we have aspects around Terronera that’s making our costs higher.

We’re running diesel gensets. Because we’re waiting for a permit from the Mexican government, the power arm to ultimately let us start using our LNG plant that’s completed. We’ve had the construction permit. Now we’re waiting for our vaporization permit to be able to shake the LNG, turn it into electricity. We expect that relatively soon. We didn’t have any setbacks in Mexico. There was an LNG truck that exploded in Mexico City. It required everybody to put in an emergency response plan. Hopefully, we get that before the year’s out, but that’s out of our control. But that diesel cost versus LNG cost, you’re talking about 33¢ per kilowatt hour. Compared to LNG, our expectation of $0.17. Big savings that comes from that. Ultimately, we’re trucking some waste, trucking some ore further than we want.

Part of that is our MIA regional permit that we received. We have our Coos, some Kanagua stuff. Again, great dialogue through authorities. We expect that to come. All that to say over the next to answer your question on free cash flow, we expect it soon. We expect those costs at Terronera to really improve over the partly from some of these permits, partly from our operational efficiencies. So Q4, Q1, free cash flow, again, Culpa is going to be in a great position. Again, we’ll get that stuff out, and you’ll see that in January. Hope that helps answer the question, Cos.

Cosmos Chiu: Yeah. Yeah. That does, and I do have a follow-up. And you know, the Q4 and Q1, the positive free cash flow, when can I start asking you about capital return? In terms of, you know, potentially a dividend, share buybacks or, you know, a reverse ATM and other sort of capital return policies like that. Is that we asking you about you know, are you using your ATM? I can, know, potentially ask you about share buybacks.

Daniel W. Dickson: Yep. No. It’s very fair, and I think we’re still in that transition. Right? So excited about what Terronera is going to deliver to us from a cash flow standpoint. I can understand when you look at those numbers, it comes down dividends. So we haven’t really talked about today is the opportunity with Piterrea. So Piterrea, 600,000,000 ounces in the ground, half of that sulfides. Obviously, I touched that we have a feasibility study out next year. Are we there’s a there’s a the envelope numbers that you can look at for Pit three and it’s a very compelling asset. We foresee any of the cash flow that we have Terronera, going into pushing on Piterrea. Our goal is to produce 30,000,000 ounces by 2030, 30 by ’30.

We think it’s a re up being between 3,000, 4,000 ton per day off operation. The grades are running around 300 grams. Silver silver equivalent, 60% of that silver. Could have a mine life of ten, fifteen, twenty, twenty-five years, but ultimately being a low-cost asset. So on roundabout saying that cash flow that we’re going to generate going to go into Piterrea and completely transform Endeavour Silver Corp. Then we can start talking about returning cash to our shareholders. I think it’s very important that we deliver it here at Terronera and hit our marks that will give us the ability to go out and build Piterrea. But I really think the numbers that we’re seeing on the Piterrea feasibility study are going to be compelling and allow us to invest at that operation or that development project.

Cosmos Chiu: So investing in Piterrea likely comes first before capital return?

Daniel W. Dickson: Yes.

Cosmos Chiu: Okay. But how about you know, as you mentioned, Dan, you had to do it, but you had to put in some port sales contract in place, some hedges in place for a part of your gold production. And, you know, gold prices have now since done a lot better, and it’s created some volatility for you in terms of accounting. Also, you know, mark to market, you’re selling gold at a lower price now. Any thoughts in terms of buying those back?

Daniel W. Dickson: Yeah. We talk about it all the time. And, ultimately, the pro the as Libby said in the earlier question, we have project loan facility right now, and we’re always looking to try to improve our cost profile, of course. That’s our job as manager. That project loan and trying to get it refinanced and put it at the corporate level. Is something that we’re looking at. Obviously, part of that whole discussion and then to around everything is those hedge contracts that sit with those project loan providers. And that’s part of our discussion. We haven’t made any decision on how to handle those tests going forward, whether we leave them fully in, fully take them out, or partial. And when we figure that out, obviously, we’ll announce that to the market. We don’t have one way or the other at this point in our heads.

Cosmos Chiu: Okay. Sounds good. And then maybe one last question. Yeah. For sure. I didn’t I didn’t know that Guanacevi was older than you, the mill. But, hopefully, it’s aged okay. Throughput, higher grade, lower. But on that, you know, as you mentioned, Q3, how should we look at, you know, at throughput and grade into Q4? And then, Bolanitos, that you mentioned, throughput and grade were lower in Q3. How should we look Q4?

Daniel W. Dickson: Yeah. Throughput would be similar. I mean, we know they’re pretty steady state between eleven hundred and twelve hundred tons per day for both operations. So ultimately, grades have continued in October to be slightly lower. We always look at the trend for the year. I know for the year, we’ve trended relatively on plan. If you look at our production profile we’ve put out for guidance at Guanacevi and Bolanitos, kind of trending towards the bottom end of that guidance, and that’s because of the grades that we’re seeing really out of Bolanitos and a little bit lower grades out of Guanacevi, but mostly the lower gold grades out of Bolanitos.

Cosmos Chiu: Great. Thanks, Dan, for answering all my questions. I expect that to continue here in Q4. That’s all I have. Have a good weekend.

Daniel W. Dickson: No. I appreciate all those questions, Cos. Thank you. Thank you.

Operator: The next question comes from Trevor Ward, Private Investor. Please go ahead.

Trevor Ward: Dan, for taking my call. Happy to take your call, sir. Thanks, buddy. It’s been quite some time since I last spoke almost two years ago. Obviously, a lot has changed in two years. I will say, you know, obviously, like I’ve mentioned earlier, obviously, these are the talking heads it sounds to me, for the most part, a lot of them represent clients, whereas myself being a personal investor, obviously, it’s rather disappointing to see my portfolio, which I’m mostly exposed with Endeavour. So you know, to fall so so hard, so fast in one month and it’s I think it’s almost 30% or thereabouts. So just a couple of questions in terms of going forward. Obviously, a big another big loss in this third quarter. And if I’m correct, I think I heard you say initially that this third quarter, you didn’t include Terronera?

Daniel W. Dickson: Correct.

Trevor Ward: The Terronera is the so did did so when you say you didn’t include Terronera in the third quarter, it didn’t, obviously, it didn’t make any money or you just included the losses from there into the third quarter?

Daniel W. Dickson: No. So let me clarify that then, Trevor. Yeah. Ultimately, in our income statement, Terronera is included. It was going through the commissioning phase. We actually recognized the revenue. We recognized the cost of sales. Obviously, we incur it. It sits on our balance sheet. The working capital numbers sit on our balance sheet. Where Terronera has not been included is in our production profile metrics. So as we’ve gone through construction into commissioning and commissioning now into commercial production, going forward, our cash costs are all in sustaining costs. Our production profile will include Terronera’s numbers. Prior to that, it’s unfair to kind of throw those in because they’re so volatile, we got days for operating, not operating.

We’re testing different things. Not reflective of what we see going forward at Terronera. So it’s just not in our operating metrics when we report that or speak to that. So speaking to numbers that aren’t reflective of what we see going forward. I hear you from a standpoint on losses, significant loss coming through on Q3. Appreciative of that. And that’s a big function of that, Trevor, is the loss derivative that were recognized on a mark to market basis. Under accounting rules under IFRS. And, ultimately, it was $39,000,000 this quarter. That’s a reflection of gold price going from $2,300 or 2,003 and 25 when we entered into these hedges at the end of the quarter, I think gold sat around $4,400. So that delta $2,000 plus times 68,000 ounces of gold, we recognize that immediately as it’s happening.

And it creates and gauze that the last question it creates a lot of noise in that income statement and a lot of volatility in unfortunately, those are the IFRS rules. We don’t change that. It is what it is. We have to report to that. It creates so much noise that sometimes it’s nice pulling that out, and that’s why you’ll have various companies use adjusted earnings or adjusted EPS, etcetera, etcetera, to take away some of that noise or onetime items. Or mark to markets that aren’t actually cash. So again, we’d love to have that go the other way. But if that meant the other way, that my revenue number goes down. The value of the company goes down. If you’ve held Endeavour for two years and we talked, I would argue that our share price is a lot higher.

I know there’s movements over the last thirty days. We’re silver hit 55. Now we’re sitting at 48. That’s going to be reflected in our share price. And those movements are sometimes hard, but I think the volatility of this endeavor has attracted a lot of different shareholders into us. And over time, I hope our share price appreciates and you stick with us.

Trevor Ward: Yeah. Sure. So the derivative going forward are kind of I kinda get it. I understand it to some extent where it went from ’23, ’25. Obviously, you’re having to pay the difference there. I mean, obviously, I suppose you needed the you needed the input and you needed the money. So you had to take this option. Right?

Daniel W. Dickson: That’s ultimately it when we enter the project loan facility in 2022, all the offers on the table, putting in $6,800 gold hedge. Our gold hedge on 68,000 ounces at $2,300 we gold was at $1,617,100. Felt like a good thing. At 4,400, probably feels a little bit differently.

Trevor Ward: Obviously. So now going forward, what’s the exposure to the same scenario happening in the next quarter, the following quarter, these recurring charges in terms of these derivatives how does that look going forward?

Daniel W. Dickson: Yeah. So right now, we originally entered into 68,000. I think we’re sitting on about 57,000 in that, so it rolls off over time. We have no interest in entering any other gold hedges. But that means in pay three accounts and depending on the marketing, depending on how we want to finance that, we’re going to look at it. Our preference is to stay out of that hedge. If you’re going to invest in Endeavour Silver Corp., believe in the silver price going up. That’s the first hypothesis. I really believe that. We don’t want to take that away from our shareholders. And there’s times, maybe little things intercourse or whatever have you that we do things, but fully recognize that you’re buying a silver company because you believe silver price is going up.

Trevor Ward: Sure. Okay. But I didn’t quite understand that. How long how much how what are you looking at? Let’s just give an average price of this cost in the quarters going forward. I mean, 39,000,000 is a big chunk. I mean, how does that show in real terms on paper? Or I don’t quite understand that.

Daniel W. Dickson: Yeah. Maybe I think The post. Yeah. So if we have 7,000 ounces sold at $23.25 over the next eighteen months, twenty months, we’ll roll out of that. And so ultimately, our cash flow coming in is going to be $23.25. And we recognize that loss, which on a mark to mark basis that flows through as the price happens. So if gold goes to 5,000 at the end of this quarter, you’re going to see more loss go through, and that’s that delta from 4,400 to 5,000. If gold goes from 4,400 to 4,000 like you’ve seen, gonna see a reversal at derivative liability, so you’re gonna have a gain in our income statement, $400 times the 57,000. Again, that rolls off. That noise goes away.

Trevor Ward: Is it not possible? And there’s no way you can buy yourself out of it or refund in somewhere else? Way And that was Cosmos’ question previously.

Daniel W. Dickson: Can you buy yourself out of it? And, again, right now, with where our cash is going, we’re not in a position to go spend $90,000,000 to buy out those hedges. And it’s the right thing, wrong thing. We haven’t made a decision on that at this point in time.

Trevor Ward: Okay. So that was because I didn’t understand his question, but now I get I get to see it. So ultimately, the best thing to do would be hopefully to find the money somewhere to buy yourself out of the situation considering that going forward, gold, silver could reach much higher prices it’s gonna hurt even more.

Daniel W. Dickson: Correct. But we just need to produce and deliver into those. Hedges. So we’re good. Thanks for the questions today, Trevor. Much appreciate it, and thanks for being a shareholder.

Trevor Ward: Okay. Thanks. Bye.

Operator: This concludes the question and answer session. I would like to turn the conference back over to Daniel W. Dickson for any closing remarks. Please go ahead.

Daniel W. Dickson: Thank you, operator, and I appreciate everybody listening in on our Q3 financial call. Again, a very transformational quarter Endeavour Silver Corp. with us bringing Terronera online. We’re very excited about what going to mean for us going forward. Q4, Q1, Q2 and ultimately get out guidance here in January on next year. And again, with where prices are, I’d expect, again, big and ultimately exciting future for our company. Thanks a lot.

Operator: This brings to a close today’s conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.