EXK

Overall Q2 2026 Performance

• Delivered strong results with higher production, record metal sales, significantly improved operating cash flow, and a strengthened balance sheet. As of June 30, 2026, the company held $236 million in cash and $214 million in working capital, providing a stable base for growth initiatives.
• The 47% YoY increase in AISC was driven by higher profitability, which increased royalties, profit sharing, and mining taxes; the appreciated Mexican peso also put upward pressure on all input costs.

Kolpa Mine (Peru) Updates

• Completed Q1 2026 expansion to 2,500 tonnes per day capacity. The 2026 capital budget was increased by $18 million to advance required upgrades to meet company and Peruvian regulatory requirements.
• Capital additions include: $5 million in cost overruns for the new ball mill, $13 million in projects pulled forward from 2027 (including tailings storage facility expansion, new water treatment plant, upgraded power substations, and new employee accommodations to reduce turnover from competition with informal mining).
• Most of the increased capital spending is one-time for long-term operational viability, and Kolpa's operating cash flow fully funds its current capital expenditures. An updated resource statement and mine plan for Kolpa is expected by the end of 2026.

Terronera Mine (Mexico) Updates

• Daily throughput remained steady, with the processing plant focused on improving metal recovery efficiencies to meet design criteria.
• Silver grades are expected to increase incrementally in H2 2026 as mining accesses higher-grade zones of the Terronera vein. The high-grade La Luz gold zone is now planned for production start in 2027, pushed back from 2026 to complete additional drilling and mine planning.
• The LNG power generation plant was fully connected to plant platforms by the end of Q2, with full mine connection expected by mid-August 2026. Cost per tonne is expected to decline incrementally through H2 2026 as ramp-up efficiencies are realized.
• Exploration drilling restarted at Terronera (the first drill program since 2020) to expand and define mineralization for long-term mine planning; an updated resource estimate for Terronera will be released at the end of 2026.

Guanacevi Mine (Mexico) Updates

• Higher metal prices allowed the operation to mine lower-grade zones to extend mine life, which has resulted in lower average grades and higher per-ounce AISC relative to guidance. Higher grades are expected in the near future as operations move toward higher-grade areas.
• Purchased third-party ore (11,000-12,000 tonnes in Q2, equal to ~21% of total throughput) accounts for ~25% of direct per-tonne costs, but delivers a 30-33% margin, extends mine life, and fulfills a legal requirement to provide processing access to small local family mining operations.
• Exploration drilling continued in Q2 focused on deeper zones of existing veins and testing for new vein extensions to expand resources and extend mine life.

Corporate Strategic Updates

• The feasibility study for the Pitarrilla project remains on track for completion by the end of Q3 2026. Permitting for the project's tailings storage facility is ongoing, with progress seen after a period of permitting delays in Mexico.

• Management has not revised full-year 2026 all-in sustaining cost (AISC) guidance, despite current AISC coming in above original guidance due to higher-than-budgeted silver prices that drive higher royalties and profit sharing. Higher sustaining capital spending at Kolpa is expected to be offset by higher by-product credits and operational efficiencies.
• Silver grades at Terronera are expected to see incremental increases through Q3 2026, with higher average silver grades in H2 2026 compared to Q2 2026; Terronera's cost per tonne is expected to decline incrementally through H2 2026.
• The high-grade gold zone at La Luz (Terronera) is not planned for production in 2026, with commercial production of the zone scheduled for 2027.
• Updated resource estimates for both Kolpa and Terronera are expected to be released by the end of 2026.
• The Pitarrilla project feasibility study is confirmed to be on track for completion by the end of Q3 2026; management's preliminary estimate for total Pitarrilla construction capital is $500 million to $600 billion, with a planned mill throughput of 3,500 to 4,000 tonnes per day, with full construction targeted by 2030.
• The $70 million value-added tax refund from the Mexican government is expected to be collected in Q3 2026, as scheduled.

Endeavour Silver operates three producing mine segments: Kolpa, Terronera, and Guanacevi. No separate absolute revenue or revenue contribution percentages were disclosed for individual segments in the call. Overall company-level Q2 2026 results were: total revenue of $212 million (150% increase year-over-year); mine operating earnings of $74 million (up from $7 million YoY); pre-tax mine operating cash flow of $100 million (300% increase YoY); all-in sustaining costs (AISC) net of by-product credits of $37 per ounce (47% increase YoY); adjusted net earnings of $45 million ($0.15 per adjusted diluted share). Total Q2 production was ~2 million ounces of silver and over 10,000 ounces of gold, equal to 3 million silver equivalent ounces, a 36% increase YoY. Kolpa achieved expanded throughput following Q1 2026 commissioning of a new crusher and ball mill, raising plant capacity to 2,500 tonnes per day; direct costs at Kolpa are impacted by metal price-related royalty changes, with a $1 per ounce silver price increase raising cost per tonne by $0.50. At Terronera, daily throughput remained consistent during the quarter, with silver grades in line with plan; a $1 per ounce silver price increase raises Terronera's cost per tonne by $0.90. Guanacevi reported higher per-tonne direct costs this quarter, driven by higher-priced third-party purchased ore and metal price-driven royalty increases; a $1 per ounce silver price increase raises Guanacevi's cost per tonne by $3.80, and AISC at Guanacevi currently exceeds $50 per ounce, above original guidance.

• Higher silver prices directly increase per-tonne operating costs across all mines via higher royalties, mining duties, and profit sharing, which creates AISC volatility that complicates long-term cost forecasting.
• The appreciated Mexican peso has put broad upward pressure on operating input costs for all Mexican operations.
• Geographic and regulatory risks: Post-2025 LNG spill in Mexico, permitting for the Terronera LNG plant took longer than expected due to additional required emergency planning and permit revisions; Pitarrilla project permitting has historically been slow in Mexico, even with recent improvements in the permitting process.
• At Kolpa, high turnover of skilled mining staff due to competition from informal miners (drawn by high metal prices) creates operational risk, requiring accelerated investment in employee accommodations to retain staff.
• At Guanacevi, current lower-than-planned grades push AISC above guidance, even with the benefit of extended mine life from accessing lower-grade zones. Purchased third-party ore costs have risen alongside higher metal prices, though the segment remains profitable on this activity.

Q: Were there any unanticipated bottlenecks or unexpected costs during Terronera's LNG plant commissioning? When will the full mine be connected? / A: The LNG plant itself commissioned smoothly, but permitting took longer than expected. A late 2025 LNG spill in Mexico City required additional emergency response plans and storage permit revisions for the project. The lower and upper plant platforms were connected by the end of Q2, and full mine connection to the LNG system is expected by mid-August 2026, with the mine currently still using diesel generators.

Q: With ~$236 million in cash, what is the minimum necessary cash balance, and when might the company return capital to shareholders via a special dividend? / A: The company has substantial 5-year growth plans, and existing cash plus expected operating cash flow is earmarked for Pitarrilla construction, which is expected to cost $500-600 million. Returning capital via dividends or share buybacks will be considered only after Pitarrilla is completed (around 2030), when the company reaches a larger scale of operations.

Q: Why are Guanacevi's AISC higher than expected, and what is the strategy behind purchasing third-party ore? / A: Higher AISC stems from lower-than-planned mine grades, higher metal price-driven royalties and profit sharing, and higher costs for purchased ore. Purchased ore makes up ~25% of direct per-tonne costs, but delivers a 30-33% margin, extends mine life by allowing the company to process extra ore while exploration continues, and fulfills a legal requirement to provide processing access to local small-scale miners.

Q: What explains the $18 million increase in Kolpa's 2026 capital budget, and is this mostly unexpected one-time spending or a sign of permanently higher sustaining costs? / A: Of the $18 million increase, only ~$5 million is unanticipated cost overruns for the new ball mill and required regulatory upgrades. The remaining $13 million is for projects accelerated from 2027, including tailings facility expansion, power and water infrastructure upgrades, and new employee housing to reduce turnover. Almost all of this spending is one-time, for long-term operational viability to support an extended mine life at Kolpa, not a permanent increase in annual sustaining costs.