Endeavour Silver Corp. Q4 FY2025 earnings call

• Terronera: Operations were temporarily impacted by security events and electrical issues in Q4. However, seen improvement in January and February with better throughput. Received permits to operate LNG plant, expecting to switch to LNG in Q2 2026 which will improve reliability and reduce cost. - Market: Silver and gold benefited from inflationary pressures, global economic uncertainty, and industrial demand, with silver also getting a boost from green energy and technology spaces. - Company milestones: 2025 was transformational with acquisition of Kolpa, Terronera achieving commercial production, sale of Bolanitos Mine, and raising $350 million through convertible debt offering. - Future plans: Anticipate reduction in direct operating costs at Terronera in 2026, expansion of Kolpa's plant to 2,500 tonnes per day in Q1, and continued investment in Pitarrilla with a planned $68 million in 2026 including completion of NI 43 - 101 feasibility study in Q3 2026.

2025 was a transformational year. In 2025, the company produced 11 million ounces of silver equivalent metal, up 48% from 2024. Record revenue was $468 million, up 115% from 2024. Cost of sales was $385 million, mine operating earnings $83 million, and mine operating cash flow before taxes $156 million. In Q4, produced 2 million ounces of silver and 14,000 ounces of gold, totaling nearly 4 million silver equivalent ounces, a 146% increase from Q4 2024. Cash costs increased to $19 per ounce of payable silver. Direct operating costs per ton increased 8% in 2025, with Terronera's initial production contributing to elevated costs. Kolpa will see improved cost efficiency as its plant expands to 2,500 tonnes per day in Q1 2026. Terronera's all - in sustaining costs were elevated in Q4 due to first - quarter production and sustaining capital expenses, but expected to decrease in 2026 as it transitions to LNG, demobilizes construction team, and optimizes workforce and logistics.

• Expect substantial reduction in direct operating costs at Terronera in 2026 as it transitions to LNG, demobilizes construction team, and optimizes. - Kolpa's plant to expand to 2,500 tonnes per day in Q1 2026, improving cost efficiency. - Planned $68 million investment in Pitarrilla in 2026 including completion of NI 43 - 101 feasibility study in Q3 2026.

• Security events in Mexico and Jalisco's Code Red mandate impacted Terronera's operations. Uncertainty around supply routes and potential instability in the region could affect operations. - Foreign exchange risk with Mexican peso hedging; having limited hedges in place and need to monitor exchange rate impact on costs and margins. - Derivative contract risks with realized losses from derivative contracts affecting adjusted net earnings.

Q: Just on the updates operations like Terronera. Can you discuss the mill availability and what happened with the electrical interruptions?

A: Yes, seen a lot of improvement in January and February. Had electrical disruptions due to diesel gen sets and resistors needing replacement in September. Received permits to operate LNG plant, expecting to switch to LNG in Q2 2026 which will improve stability and reduce cost.

Q: So Terronera commercial production, obviously, was October 1. So we'll be in March 1st here in the very near future. So it's 5 months later, you want to just maybe provide the audience here with a little bit of color on how things went since then.

A: It's the first time doing initial build. Things have gone extremely well and some things could be better. Gradual ramp - up of recoveries, seen good throughput in January and February with a couple of days shutdown due to security events. Team has been phenomenal in finding flexible ideas.

Q: Maybe my first question is -- sorry, also on Terronera. But just I'm trying to kind of quantify it. Terronera costs were fairly high in Q4, $50, $65, $70 an ounce. And Dan, you talked about onetime costs, LNG plants and stuff. But in 2026, you're guiding to 28% to 29%. And so I'm just trying to understand how it can drop in 2026.

A: Q1 will be higher than Q2, Q2 higher than Q3. Q3 and Q4 will have higher grades coming in. Cost per ton will improve as it transitions to LNG and optimizes. There are onetime initial CapEx expenses in Q4 and Q1 that will decrease in Q2 and beyond.

Q: Maybe my first question is -- sorry, also on Terronera. But just I'm trying to kind of quantify it. Terronera costs were fairly high in Q4, $50, $65, $70 an ounce. And Dan, you talked about onetime costs, LNG plants and stuff. But in 2026, you're guiding to 28% to 29%. And so I'm just trying to understand how it can drop in 2026.

A: Q1 will be higher than Q2, Q2 higher than Q3. Q3 and Q4 will have higher grades coming in. Cost per ton will improve as it transitions to LNG and optimizes. There are onetime initial CapEx expenses in Q4 and Q1 that will decrease in Q2 and beyond.

Q: Maybe one last question on Pitarrilla. A lot is happening there this year. Can you remind any of permitting time lines or kind of what you're doing to advance that this year? And what news we maybe could expect whether later this year or early next year on the permitting for that project?

A: Spending $68 million at Pitarrilla. Plant and underground mining already permitted, waiting on tailings storage facility permit aiming for Q1 2027. There's additional permitting like for power, but can work through during construction timeline.