Expanding Silver Production, Reserves and Resources in Mexico. January 2010

Transcription

1 Expanding Silver Production, Reserves and Resources in Mexico January 21 1

2 Cautionary Note: Forward Looking Statements This presentation contains forward-looking statements within the meaning of the United States private securities litigation reform act of 1995 and forward-looking information within the meaning of applicable Canadian securities legislation. Such forward-looking statements and information herein include, but are not limited to, statements regarding Endeavour s anticipated future performance, including silver and gold production, reserves and resources, timing and expenditures to expand mine and plant capacities and develop new mines, metal grades and recoveries, cash costs and capital expenditures. Forward-looking statements or information involve known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Endeavour and its operations to be materially different from those expressed or implied by such statements. Such factors include, among others: fluctuations in metal prices and currency markets (particularly the Mexican peso, Canadian dollar and U.S. dollar); changes in national and local governments, legislation, policies, taxation, regulations; political or economic developments in Canada and Mexico; management, operating or technical risks, hazards or difficulties in exploration, development and mining activities; inadequate insurance, or inability to obtain insurance; availability of and costs associated with mining inputs and labour; the speculative nature of mineral exploration and development, diminishing quantities or grades of mineral reserves as properties are mined; the ability to successfully integrate acquisitions; risks in obtaining necessary licenses and permits, and challenges to the company s title to properties; as well as those factors described in the section risk factors contained in the Company s most recent form 4F and Annual Information Form filed with the S.E.C. and Canadian securities regulatory authorities. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or information, there may be other factors that cause results to be materially different from those anticipated, described, estimated, assessed or intended. There can be no assurance that any forward-looking statements or information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements or information. Accordingly, readers should not place undue reliance on forward-looking statements or information. The Company does not intend to, and does not assume any obligation to update such forward-looking statements or information, other than as required by applicable law. We Seek Safe Harbor. 2

3 Introduction: Who is Endeavour? Endeavour Silver Corp: One of North America s fastest growing silver mining companies Core Assets: Two high grade silver-gold mines in Mexico; Guanacevi Mine in Durango State and Guanajuato Mine in Guanajuato State Goal: Become a top mid-tier (5-1 million oz per year) primary silver producer within two years 3

4 Silver vs. Gold Silver typically lags gold, then plays catch-up, resulting in highly leveraged investment opportunities. Silver: gold ratio - 61:1 4

5 Highlights: Why Own Endeavour Pure Silver Leverage The Mexico Advantage Quality Core Assets Experienced Management Team Proven Track Record Strong Organic Growth Additional Acquisition Growth Attractive Market Capitalization 5

6 Share Capital: Leverage To Growth Exchange Listings: EXK: NYSE-Amex EDR: TSX EJD: DB-Frankfurt EDR.WT: TSX Shares Issued: 6.5 Million Warrants/Options/Debt: 21.2 Million Fully Diluted: 81.7 Million Share Price: (January 12, 21) US$ 3.97 Market Cap: US$ 24 Million Daily Volume: 946,754 Shares Largest Shareholder: Fresnillo PLC 5% 6

7 Company Profile: At A Glance Working Capital: Convertible Debt: Silver Hedge: Silver Reserves: Silver Resources: Silver-Equiv. Res-Res: 28 Silver Production: 29 Silver Production: US$38 Million US$12 Million Nil 7.8 Million Oz 39. Million Oz 62.1 Million Oz 2.3 Million Oz 2.6 Million Oz 7

8 Core Assets: Two Producing Silver Mines, Two Exploration Projects Business Model: Acquire underexplored mines in historic silver districts that are built, permitted and about to close Invest the capital and expertise needed to discover new orebodies and re-open the mines Consolidate district land-holdings and expand silver resources, reserves and production Exploring prospective silver mines close to existing infrastructure. 8

9 Guanacevi: A Top 5 Mexican Silver District District Highlights: Located in the Sierra Madre Occidental gold-silver belt Produced over 45 million oz silver historically Multiple silver veins span 1 km x 5 km area Classic epithermal ore-bodies in Lower Tertiary andesites Accessed by paved state highway 4 ½ hours NW of Durango City On state power grid, ample labour and water available Porvenir Mine now in production, three more ore-bodies being developed District is ripe for consolidation to ensure long mine life 9

10 Guanacevi: Underground, Mechanized, Ramp Access Mine Reserves: Q4, 29 Summary P+P: Indicated: Inferred: Production: 6.1 million oz Ag 16. million oz Ag 12.7 million oz Ag 587, oz Ag Throughput: 75 tonnes per day Recoveries: 79% Ag 9% Au Operations: North Porvenir Porvenir Dos Development: 2, m Porvenir is the largest mine operating in the Guanacevi district. 1

11 Guanacevi: Upgrading the Plant to 12 TPD Capacity Capital Projects: Expand milling circuit Expand leach circuit Re-habilitate flotation circuit New Merrill Crowe circuit New silver refinery Currently operating at 8 tpd Targeting 1 tpd capacity by 21 New lab, warehouse, security Expand tailings pond (in progress ) Expand crushing circuit (in progress) 11

12 Guanacevi: Reserves/Resources Longitudinal Section Endeavour Discovered Four New Silver Deposits In Three Years December 31, 28 NI Reserves & Resources: Red: Blue: Tan: P+P Reserves:.53 million 353 gpt Ag,.49 gpt Au= 6.1 million oz Silver Ind. Resources: 1.74 million 285 gpt Ag,.51 gpt Au= 15.9 million oz Silver Inf. Resources: 1.1 million 258 gpt Ag,.46 gpt Au= 9.1 million oz Silver 12

13 Guanacevi: Recent Discovery At Porvenir Cuatro Hole Vein From PC49-1 PC5-1 PC5-2 PC51-1 PC51-2 PC52-1 PC52-2 Santa Cruz Vein Including Santa Cruz Vein Santa Cruz Vein Including Including Including Santa Cruz Vein Including Santa Cruz Vein Including Santa Cruz Vein Santa Cruz Vein Including True Width New high grade silver-gold mineralization at Porvenir Cuatro. Silver Gold (m) (m) (gpt) (gpt) , , , , <

14 Guanajuato: The 2nd Largest Silver District In Mexico District Highlights: Located in the Sierra Madre silver belt Produced over 1.2 billion oz silver historically Three main silver vein systems span 2 km x1 km area Classic epithermal ore-bodies in Lower Tertiary andesites Accessed by all-weather road ½ hour NW of Guanajuato City On state power grid, ample labour and water available Cebada and Bolanitos Mines now in production, new orebodies recently discovered Multiple exploration targets and acquisition opportunities 14

15 Guanajuato: Underground, Mechanized and Track, Shaft Access Mines Resources: Q4, 29 Summary Probable: Indicated: Inferred: Production : 1.7 Million Oz Ag 1.9 Million Oz Ag 5.8 Million Oz Ag 192, Oz Ag Throughput: 55 tpd Recoveries: 8% Ag 82% Au Operations: Development: Bolanitos/Lucero/Cebada 1,5 m The Bolanitos Mines were operated by Penoles from the 197 s to the 199 s 15

16 Guanajuato: Only Ten Years Old, 55 TPD Plant Capacity Capital Projects: Rehabilitate conveyors Rehabilitate cone crusher Re-configure flotation circuit New concentrate load-out Expand tailings pond New assay lab New security Currently operating at 55 tpd on a 6 day per week basis 16

17 Guanajuato: Reserves/Resources Longitudinal Sections Vetas La Luz, Mina Bolanitos Lucero Bolanitos Drill targets Santa Maria Veta Madre, Mina Cebada 3785 Drill targets Drill targets 17

18 Guanajuato: Several Recent Discoveries in Cebada and Bolanitos Areas 29 Drill Program: 15, m Recent Drill Results Hole Length Silver Gold (#) (m) (gpt) (gpt) MV SJS incl , incl..6 1, incl CE CE CE High grade silver-gold vein mineralization discovered in five prospect areas, including the new Lucero vein (SJS-1) 18

19 GCVI GJTO Silver Production: Seven-Fold Growth Over Five Years Annual Silver Production (million oz s) Capacity

20 Reserves/Resources: Ten Year Mine-Life at Plant Capacity Total Silver Equivalent Reserves and Resources (million oz s) Target: Note: Silver equivalents based on 7:1 silver: gold ratio, base metals are not included 2

21 Cash Costs: Reducing Costs Six Consecutive Quarters Cash GPR EXK/EDR 12 1 Costs 8 FR PAAS CDE HL HOC Q2 8 Q3 8 Q4 8 Q1 9 Q2 9 Q Per Ounce 21

22 Relative Valuations Senior Producers Adjusted Market Cap SLW Divided 25 FRES By 2 Projected (29) 15 1 CDE HL Silver 5 PAAS EXK/EDR HOC Production Adjusted Market Cap Divided by Silver Reserves + Resources 22

23 Relative Valuations Junior Producers 15 Adjusted 125 SPM Market Cap Divided 1 FR FVI EXN By 75 EXK/EDR Projected (29) Silver Production 5 25 GPR Adjusted Market Cap Divided by Silver Reserves + Resources 23

24 Beta Response Relative To Other Producers Since March 28 24

25 Cash Flow Leverage For A $1/oz. Change In The Silver Price 25

26 Social Responsibility Endeavour Silver strives to improve the quality of life in the Mexican communities in which it works. Safety: Safety is a priority. We operate continuous training programs, develop active mine rescue teams, and have hired new safety staff plus built a new safety building. Environment: More green areas added, more trees planted, water recycled, mineral waste disposed in an environmentally responsible manner. Community: Donated construction materials to maintain sustainability of the community, supported local sport teams, supported local festivities. 26

27 Management Team: A Wealth of Experience Bradford Cooke, M.Sc, P.Geo. - Chairman and CEO - Professional Geologist with 3+ years experience in exploration management and financing including Shell, Chevron, Noranda and Canarc. Godfrey Walton, M.Sc, P.Geo. - President and COO - Professional Geologist with 3+ years mine exploration and development including Chevron, Hemlo Gold, Canarc, others Dan Dickson, CA, CFO - Chartered Accountant with 7 years experience in audit and accounting including 5 years with KPMG David Howe, M.Sc., - VP, Operations - Professional Geologist with 2+ years experience, primarily in Latin America, with Hecla, St. Ann Jamaica Bauxite Barry Devlin, M.Sc., P.Geo. - VP, Exploration, Professional Geologist with 25+ years experience in mine exploration and project management, including Hecla, US Borax, others Hugh Clarke - VP, Corporate Communications, Communications specialist with 3+ years experience in corporate finance, development, investor marketing and communications Miguel Ordaz, Ing. - Projects Director and Legal Representative, Mexico Geological Engineer with 3+years experience Mexican mineral exploration and mine management Len Harris, P.Eng. - Director, Metallurgical Engineer - Former President of Newmont Peru responsible for development of the huge Yanacocha gold mine. Geoff Handley, B.Sc. - Director, Geologist with over 3 years experience in global exploration, acquisitions, planning, most recently Executive VP, Strategic Development, Placer Dome Mario Szotlender, B.IR. - Director, Businessman specializing in financing and managing new business ventures for numerous private and public companies over the past 2 years Rex McLennan, B.Sc., M.B.A.,-Director, Over 25 years industry experience including CFO and Executive VP with Placer Dome Inc. until 25 27

28 Value Proposition Our goal is to become one of the top mid-tier producers of silver (5-1 million oz per year) We ve already grown silver production 7 fold in our first 5 years (2.6 million oz in 29) Organic potential to significantly increase silver production over next 2 years by expanding the mines to fill the plants Acquisition potential to double silver production and attract mid-tier silver market multiple We have the mines, management, and share structure to deliver out-performance Endeavour offers excellent value compared to its peer group 28

29 Contact Us Endeavour Silver Corp. #31-7 West Pender Street Vancouver, BC, V6C 1G8 Canada Phone: Fax: Canada and US Toll-Free: