Endeavour Silver Corp. Q1 FY2026 earnings call

Dan Dickson stated Endeavour delivered excellent results in Q1 2026 with new records in production and revenue, strong cash flow. Cubo plant expansion was substantially complete and Terronera's operations were near design expectations. Copa and Terronera additions led to significant production and revenue growth but also increased all-in sustaining costs initially. Terronera moved from construction to operations team, adjusted personnel, and metrics improved. Copa enhanced plant capacity. Guanacevi had good cash flow but higher operating costs. Cash position was over $232 million and working capital north of $173 million. Pitarrilla continued exploration, studies, and economic evaluation with expectation to provide economic evaluation in Q3.

In the first quarter, Endeavour produced nearly 2 million ounces of silver and 12,000 ounces of gold with base metals, totaling 3 million silver equivalent ounces, a 78% increase compared to Q1 2025 with the additions of Copa and Terronera. Revenue was $210 million, an increase of 23% compared to prior year. Cost of sales was $160 million, mine operating earnings were $94 million and mine operating cash flow was $115 million before taxes, a 400% increase from Q1 2025. All-in sustaining costs net of byproduct credits were $37 this quarter, a 51% increase compared to Q1 2025 due to the additions of Copa and Terronera, but 9% lower than Q4 2025. Adjusted net earnings were $59 million or an adjusted earnings per share of $0.21. Copa installed and commissioned a new three-stage crusher and ball mill, increasing plant capacity to above 2,500 tonnes per day. Terronera transitioned from a construction and start-up team to an operations team in Q1, with mine and plant metrics improving, expecting higher ore grades and cost efficiencies in the second half. Guanacevi had cash flows north of $20 million this quarter, with higher operating costs per tonne due to lower throughput and cost structure factors, and step-out drilling had commenced.

Dan mentioned Q2 grades at Terronera similar to Q1, expecting slightly higher in Q2 and significant grade step-up in back half of Q3 and Q4. Experience from Terronera ramp-up can be applied to other assets. Pitarrilla feasibility study expected in Q3 2026, possibly back half. Drilling at Terronera for La Luz to optimize mine plan, likely pushing La Luz work to Q1 or Q2 next year. Pitarrilla tailings storage facility permit hoped in first half of 2027, then construction in late 2027. Cash generated expected to be used for Pitarrilla development with expectation of good return for shareholders.

Mentioned security issues in Mexico, such as blockades in February affecting supply chains and leading to 3-day operation shutdown. Variations in costs due to security-related logistical considerations between locations, but security costs between locations were similar with similar procedures and protocols in place.

Q: Views on grades at Terronera in Q2 so far?

A: Q2 grades similar to Q1, expected slightly higher than Q1, significant step-up in back half of Q3 and Q4.

Q: Talk about learning from Terronera ramp-up and Pitarrilla feasibility study?

A: Learned a lot from Terronera build-out, can apply to Pitarrilla, with Pitarrilla having MEA and working on tailings storage facility permit.

Q: Security in Mexico and cost variations?

A: Mexico has varying security, impacted supply chains, but security costs between locations similar.

Q: Guanacevi economics and third-party material purchase?

A: Guanacevi still profitable, will continue operating, grades and cutoff grades considered for margins.

Q: Pitarrilla FS timeline?

A: Still targeting Q3 2026, possibly back half.

Q: Terronera grade pickup and Pitarrilla permits?

A: Drilling La Luz for mine plan, Pitarrilla tailings storage facility permit hoped in first half of 2027, construction in late 2027.

Q: M&A discussion?

A: Always looking at M&A, but small silver space, corporate development guy works on it.