Forecasting 20% Production Growth in Europe April 2018

Transcription

1 Forecasting 20% Production Growth in 2018 TSX: EDR I NYSE: EXK I Europe April 2018

2 Cautionary Note 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 performance in 2018 and future years, including revenue, cash flow, operating and capital cost forecasts, silver and gold production, timing and expenditures to explore and develop new silver mines and mineralized zones, silver and gold grades and recoveries, cash and all-in sustaining costs per ounce, initial and sustaining capital expenditures, and the use of the Company s working capital. 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. 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 the prices of silver and gold, fluctuations in the currency markets (particularly the Mexican peso, Canadian dollar and U.S. dollar); fluctuations in the price of consumed commodities, changes in national and local governments, legislation, taxation, controls, regulations and political or economic developments in Canada and Mexico; operating or technical difficulties in mineral exploration, development and mining activities; risks and hazards of mineral exploration, development and mining (including environmental hazards, industrial accidents, unusual or unexpected geological conditions, pressures, cave-ins and flooding); 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, reliability of calculation of mineral reserves and resources and precious metal recoveries, diminishing quantities or grades of mineral reserves as properties are mined; risks in obtaining necessary licenses and permits, global market events and conditions 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 40F/Annual Information Form filed with the S.E.C. and Canadian securities regulatory authorities Forward-looking statements are based on assumptions management believes to be reasonable, including but not limited to: the continued operation of the Company s mining operations, no material adverse change in the market price of commodities, mining operations will operate and the mining products will be completed in accordance with management s expectations and achieve their stated production outcomes, and such other assumptions and factors as set out herein. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forwardlooking 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. 2

3 Investor Highlights Mid-tier Producer Guiding 20% production growth in 2018 to mil oz Ag & 58-64,000 oz Au ( mil oz Ag Eq (1) ) Core Assets Four high-grade silver-gold mines located in three historic mining districts of Mexico Strategic Acquisitions Operational Excellence Exploration Expertise Focus on Growth El Compas acquired in 2016, started development in 2017, production in 2018 Renewed focus on reducing operating costs; new focus on near-term growth Terronera silver-gold discovery still growing; PFS shows robust economics Building new mines to fuel future growth; best organic growth profile in silver mining sector 1. Silver equivalents based on a 75:1 gold: silver ratio 3

4 Core Assets Sierra Madre Occidental Silver & Gold Belt Guadalupe y Calvo Chihuahua Parral Guanaceví Mexico Office Leon Canada Head Office Vancouver Terronera Durango Zacatecas El Compas Lourdes Guanajuato Jalisco Mexico City Bolañitos El Cubo Production Development Exploration Office Chile Office Santiago Mines Guanaceví Bolañitos El Cubo Development El Compas Terronera Exploration Parral Guadalupe y Calvo Lourdes Cerro Marquez 4

5 Silver & Equivalent ounces (millions) Resuming Production Growth Annual Production (million oz) Gold Silver Silver equivalent Ten years of production growth during bull market 2012 acquired El Cubo 2013 Acquired Terronera Strategic acquisitions during bear market will fuel growth 2016 Acquired El Compas & Parral Forecasting +20% increase in 2018 production acquired Guanaceví 2007 acquired Bolañitos est. 1. Gold ounces converted to silver equivalent ounces on a 75:1 ratio in (1) Mid-point of guidance

6 Reducing Operating Costs Consolidated Cash Costs, net of gold byproduct credits (US$/oz Sold) 10 $8.31 $8.39 Consolidated Direct Costs (US$/Tonne) $7.87 $8.06 $92.17 $96.81 $95.05 $80.18 $72.42 $ $6.78 $ est. $18.31 $16.79 $15.62 $12.43 $16.96 Mid-point of guidance (2) Consolidated AISC, net of gold by-product credits (US$/oz Sold) $ est. Mid-point of guidance (2) 1. Cash costs per ounce and AISC per ounce are examples of Non-IFRS measures. See disclosure in quarterly MD&A for information on Non-GAAP measures found on the company website 2. See EDR News Release dated January 25, 2018 for full disclosure on 2018 Guidance; 2018 costs forecasts reflect an 19:1 Mexican Peso per US Dollar exchange rate, $17/ oz Ag & $1,275/ oz Au price assumption 6

7 Q1, 2018 & 2017 Highlights Q1, 2018 Production Up 20% Y-o-Y to 1.35 million oz Ag, 13,208 oz Au for 2.3 million oz Ag Eq (1), production to rise each quarter during Net Earnings Increased 148% Y-o-Y to $9.7 million ($0.08/ share) notwithstanding lower revenue and cashflow 2017 Production Met Revised Guidance 4.9 million oz Ag and 53,007 oz Au for 8.9 million oz Ag Eq (1) notwithstanding operating issues at Guanacevi Reserves Increased 228% to 57.1 million oz Ag Eq, primarily due to resource conversion at Terronera El Compas Commissioning in April mine development nearly complete, expanded mill capacity and mine plan by 30%, on track for commercial production in Q3/18 Terronera Positive PFS optimization underway, received mine and plant permits, awaiting dumps and tailings permits Parral Maiden Resource 32.3 million oz Ag Eq with exploration upside 2017 Ag Eq Production of 8.9 million oz El Cubo, 3.5 million oz 4.9 million oz silver, average realized price $17.24 per oz 40% Guanacevi, 2.4 million oz Bolanitos, 3.0 million oz 2017 Revenue of $150.5 million 56% Ag 33% 27% 44% Au 51,460 oz gold, average realized price $1,285 per oz Silver Equivalents based on 75:1 gold:silver ratio Silver Sales Gold Sales 7

8 Operational Improvements Underway Falling Operating Costs due to rising production, Cash costs (1,2) decreased 15% & AISC (1,3) decreased 37%. Production Improvements Underway (4) Q1/18 production below plan due to decreased throughput. Production expected to rise Q-o-Q in 2018 Cash Cost (US$/oz Sold) $9.37 Cash costs fell due to higher throughput & higher grades AISC (US$/oz Sold) $20.11 AISC fell due to lowered cash costs, lower G&A, and lower capital and exploration 2.0M oz 2.1M oz 2.3M oz 2.5M oz 2.3M oz -15% -37% $7.97 $12.70 Q4/16 Q4/17 Q4/16 Q4/17 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q4/18 (est.) 1. Cash costs per ounce and AISC per ounce are examples of Non-IFRS measures See disclosure in quarterly MD&A for information on Non-GAAP measures found on the company website 2. Net of by-product credits 3. All-in sustaining costs (AISC) include mining, processing, direct overhead, corporate G&A, on-site exploration, share-based compensation, reclamation, and sustaining capital net of gold credits Guanacevi Bolanitos El Cubo Silver Equivalents based on 75:1 gold: silver ratio 8

9 2018 Outlook: Higher Production, Lower Costs Guidance Highlights Silver equivalent production to increase +20% from 2017 Cash costs & AISC to decrease in 2018 Increased capital budget due to development of El Compas & two new orebodies at Guanacevi Decreased exploration budget due to shift towards development El Cubo 41% 6% 26% 2018 Ag Eq Production by Mine (M oz) 27% El Compas Bolanitos Guanacevi $ millions unless otherwise stated, US dollars Guanacevi Bolanitos El Cubo El Compas (1) Consolidated Silver Production (M oz) Gold Production (K oz) Silver Eq Production (M oz) (2) Cash Costs, net of gold by-product credits (US$/oz) (3), (4) $ $7.00 AISC, net of gold by-product credits (US$/ oz) (3), (4) $ $16.00 Sustaining Capital $41.1 Growth Capital $7.3 Exploration Budget $ El Compas is scheduled to achieve commercial production by the end of July Gold ounces converted to silver equivalent ounces on a 75:1 ratio in Cash costs per ounce and AISC per ounce are examples of Non-IFRS measures. See disclosure in quarterly MD&A for information on Non-GAAP measures found on the company website. 4. See EDR News Release dated January 25, 2018 for full disclosure on 2018 Guidance; 2018 costs forecasts reflect an 19:1 Mexican Peso per US Dollar exchange rate, $17/ oz Ag & $1,275/ oz Au price assumption. 9

10 OPERATING Title MINES GUANACEVĺ DURANGO 10

11 Guanaceví Our Largest Silver Producer Guanaceví is our largest silver producer, and only mine that produces dore bars Endeavour controls the west and north sides of this 5 th largest silver mining district in Mexico 2017 Ag Eq Production (1) of 2.4 million oz was inline with revised guidance, despite operational challenges and lower throughput New productivity optimization program underway to boost production & reduce costs 7 new discoveries along the 8 km long Santa Cruz vein since mines Santa Cruz and Porvenir Norte are currently operating at tpd 2 mines Milache and Santa Cruz Sur are being developed to production starting in H2, Ag Eq production of million oz reflects return to normal operations over the next 3 quarters 1. Silver equivalents based on a 75:1 gold: silver ratio 11

12 Ag Eq (4) Production (oz) Guanaceví A Top 5 Mexican Silver District 2017 Reserves and Resources (1) Proven and probable Measured and indicated Inferred 2.4 million oz Ag 5,500 oz Au 19 million oz Ag 45,700 oz Au 9.8 million oz Ag 21,600 oz Au Financials FY 2017 Cash costs (2,3) $13.41/oz All-in sustaining costs (2,4) $22.87/oz Productivity Program Underway 650, , , , , ,707 oz 549,666 oz 833 tpd 811 tpd 637,492 oz 604,854 oz 912 tpd tpd Throughput (tpd) 400,000 Q2/17 Q3/17 Q4/17 Q1/ At December 31, Refer to tables in the Appendix for full details. 2. Cash costs per ounce and AISC per ounce are examples of Non-IFRS measures. See disclosure in quarterly MD&A for information on Non-GAAP measures found on the company website 3. Net of by-product credits 4. All-in sustaining costs (AISC) include mining, processing, direct overhead, corporate G&A, on-site exploration, share-based compensation, reclamation, and sustaining capital net of gold credits 12

13 BOLAÑITOS GUANAJUATO 13

14 Bolañitos Our Lowest Cost Mine Bolanitos covers the west, north sides of Guanajuato, the 2 nd largest silver district in Mexico 2017 Ag Eq Production (1) of 3.0 million oz significantly exceeded 2017 guidance due to higher Ag & Au grades Multiple new discoveries in Lucero and LL- Asuncion areas since 2007 One mine La Luz currently operating at + 1,200 tpd Most profitable mine due to shallow depths, thick widths and high gold grades Gold production pays for the all-in costs to operate the mine and the silver production is essentially free Further optimization of the plant is underway to improve recoveries by 4-5% 1. Silver equivalents based on a 75:1 gold: silver ratio 14

15 Ag Eq (4) Production (oz) Bolañitos In 2nd Largest Silver District 2017 Reserves and Resources (1) Proven and probable Measured and indicated Inferred 1.15 million oz Ag 27,800 oz Au 3.8 million oz Ag 47,400 oz Au 4.6 million oz Ag 59,200 oz Au Financials FY 2017 Cash costs (2,3) $(-4.00)/oz All-in sustaining costs (2,4) $1.62/oz Operational Improvements Underway 850, ,012 oz 1, , , , , , , , ,391 oz 743,012 oz 1,265 tpd 1,265 tpd 1,300 1,350 tpd 1,278 tpd 698,466 oz 1,200 1,100 1, Throughput (tpd) 450, ,000 Q2/17 Q3/17 Q4/17 Q1/ At December 31, Refer to tables in the Appendix for full details. 2. Cash costs per ounce and AISC per ounce are examples of Non-IFRS measures. See disclosure in quarterly MD&A for information on Non-GAAP measures found on the company website 3. Net of by-product credits 4. All-in sustaining costs (AISC) include mining, processing, direct overhead, corporate G&A, on-site exploration, share-based compensation, reclamation, and sustaining capital net of gold credits 15

16 EL CUBO GUANAJUATO 16

17 El Cubo Our Largest Mine El Cubo controls the east side of Guanajuato, the 2 nd largest silver mining district in Mexico One new discovery in Villapando-Asuncion area since Ag Eq production (1) of 3.5 million oz was below guidance due to lower than planned Au production El Cubo was our biggest operational turnaround and is now a core asset All-in sustaining costs were $42 per oz in 2012 when we bought the mine and $13 per oz in 2016 after the turnaround Two mines, Dolores and Santa Cecilia, currently operating at 1,300-1,500 tpd Further optimization of the plant is underway to improve recoveries by 2-3% 1. Silver equivalents based on a 75:1 gold: silver ratio 17

18 Ag Eq (4) Production (oz) El Cubo Our Second Mine in Guanajuato 2017 Silver Reserves and Resources (1) Proven and probable Measured and indicated Inferred 2.9 million oz Ag 27,000 oz Au 3.4 million oz Ag 45,000 oz Au 5.1 million oz Ag 73,200 oz Au Financials FY 2017 Cash costs (2,3) $7.93/oz All-in sustaining costs (2,4) $17.80/oz 1,200,000 1,100,000 Operational Improvements Underway 1,542 tpd 1,279 tpd 1,463 tpd 1,071,733 oz 1,038,120 oz 1,600 1,500 1,000, , , , ,000 1,279 tpd 820,081 oz 927,945 oz 1,400 1,300 1,200 1,100 1,000 Throughput (tpd) 500, ,000 Q2/17 Q3/17 Q4/17 Q1/ As at December 31, Refer to tables in the Appendix for full details. 2. Cash costs per ounce and AISC per ounce are examples of Non-IFRS measures. See disclosure in quarterly MD&A for information on Non-GAAP measures found on the company website 3. Net of by-product credits 4. All-in sustaining costs (AISC) include mining, processing, direct overhead, corporate G&A, on-site exploration, share-based compensation, reclamation, and sustaining capital net of gold credits 18

19 DEVELOPMENT PROJECTS EL COMPAS ZACATECAS 19

20 El Compas Developing Our Fourth Mine El Compas is our next high grade mine, targeting 2018 production of 100,000 oz silver, 7-8,000 oz gold, 6-800,000 million oz AgEq (1) Endeavour controls the south end of Zacatecas, the 3 rd largest silver mining district in Mexico Two orebodies, El Compas and El Orito, are already drilled, in reserves and resources Mine is already permitted, dormant government plant is leased for 10 years Mine will produce 250 tpd initially but plant capacity ultimately 500 tpd so mine is scalable depending on new reserves Est. all-in sustaining cost less than $10 per silver oz, IRR more than 42% Several exploration targets at El Compas and newly acquired old mines have never been drilled, represent discovery opportunities La Plomosa Panuco Vetagrande Mala Noche San Juan La Parroquia Plant Calicanto La Cantera Orito Compas 1. Silver equivalents based on a 75:1 gold: silver ratio 20

21 El Compas Initial Production in April 2018 Preliminary Economic Assessment robust economic returns, very scalable if we discover or purchase additional mineral resources in the Zacatecas district and refurbish the second ball mill to double the plant capacity to 500 tpd Low capex $11.3 million Low opex $110 per tonne including $69.80 mining, $26.20 processing, $14.00 G&A Total cash costs (1) $9.09 per Ag Eq oz (2) or lower All-in sustaining costs (1,3) $9.64 per Ag Eq oz or lower Improved Operating Metrics Improved plant design to 325 tpd from 250 tpd as a result of lower work index or ore Expanded mine plan from 200 tpd to 250 tpd using mechanized cut and fill method Production expected to rise 25% to million oz Ag Eq per year Resources (4) Classification Tonnes (000s) Ag g/t Au g/t Ag Eq g/t Ag oz (000s) Au oz (000s) Ag Eq oz (000s) Indicated Inferred ,342.5 Economics Ag Price Au Price IRR NPV Payback Period US$16/oz US$1,120/oz 29% US$8.0m 2.6 years US$18/oz Base Case US$1,260/oz 42% US$12.6m 2.1 years US$20/oz US$1,400/oz 54% US$17.0m 1.8 years 1. Net of by-product credits 2. Silver equivalents based on 75:1 silver:gold ratio 3. All-in sustaining costs (AISC) include mining, processing, direct overhead, corporate G&A, on-site exploration, share-based compensation, reclamation, and sustaining capital net of gold credits 4. As at Feb 7,

22 El Compas Commissioning in April Obtained explosives permit in March; ramp advance has crossed the San Juan vein Mine power line, portal infrastructure & tailings dam complete, mine access road 95% complete Mobile crushing unit and conveyors are on site and being installed for testing Plant refurbishment 95% complete plant grinding, flotation, and thickening circuits, power-line, electrical, plumbing, and admin office are complete or nearly complete 22

23 TERRONERA JALISCO 23

24 Terronera Large, Low Cost Mine Potential Terronera will become our largest mine, annual production est. 3.1 million oz silver, 26,000 oz gold for 5.0 million oz AgEq Endeavour controls the entire district of San Sebastian, 50 old mines on 20 known veins, all closed in 1910 Mexican revolution One orebody, Terronera, already drilled, 60 million oz Ag Eq (1) in reserves and resources, still open for expansion, many other veins to drill Mine and plant already permitted, waiting for dumps and tailings permits PFS released in April $70 million capex over 18 months, initial production to commence end of 2019, double production in Mine will produce 750 tpd initially but plant capacity ultimately up to 1,500 tpd so mine is scalable depending on new reserves Est. all-in sustaining cost less than $5 per silver oz Several exploration targets at Terronera, new very high grade La Luz discovery not yet in resources, multiple discovery opportunities Terronera Discovery La Luz Discovery 1. Gold ounces converted to silver equivalent ounces on a 75:1 ratio 24

25 Terronera New Discovery Still Open Open Step-out Drill Program Infill Drill Program Open Open Hole Structure From True width Au Ag AgEq (m) (m) (gpt) (gpt) (gpt) Hole Structure From True width Au Ag AgEq (m) (m) (gpt) (gpt) (gpt) TR09-6* TR10.5-1* TR14-7* TR11-3 KP16-04 Terronera Including ,710 Terronera Including ,860 5,069 Terronera Including ,020 Terronera Including ,490 4,110 Terronera Including ,160 1,259 LL-02* LL-13 LL-14 LL-17 LL-21 La Luz ,512 Including ,025 La Luz ,735 Including ,103 La Luz ,719 Including ,247 La Luz ,865 Including ,537 La Luz ,054 Including ,740 Gold ounces converted to silver equivalent ounces on a 70:1 ratio 25

26 Terronera Developing Our Fifth Mine Pre-feasibility study robust economic returns; 750 tpd, expanding to 1,500 tpd in year two, under review Production decision decision to develop the new Terronera mine subject to receiving final permits and debt financing Permits pending MIA (EIS) already approved, mine and plant received Q3, awaiting tailings and dumps Optimized PFS underway Scheduled for release in Q Projected Low Total Cash Costs & AISC (4) $3.44 / Ag oz $4.76 / Ag oz Cash Costs (1,3) AISC (2,3) 1. Including royalties & duties; net of gold credits 2. Net of gold credits 3. Cash costs per ounce and AISC per ounce are examples of Non-IFRS measures. See disclosure in quarterly MD&A for information on Non-GAAP measures found on the company website 4. Projected cash costs & AISC are based on initial PFS announced on April 3,

27 PARRAL CHIHUAHUA 27

28 Parral Potential Sixth Silver Mine Parral is potentially our 6 th silver mine, Veta Colorada mine produced 4 million oz silver per year before closing in 1990 Endeavour controls much of the historic Parral silver mining district in Mexico 32 million oz historic resource in three orebodies at old Veta Colorada minesite 21 million oz maiden resource in Veta Colorada, Palmilla and San Patricio veins Palmilla was highest grade silver mine in Mexico in 1800 s, provided silver to the Mexican mint, open pit potential Two small plants for sale in district, significant opportunities to buy more old mines Good synergies with existing 2.9 million tonne polymetallic resource at El Cometa property Targeting new resource estimate and economic study in 2018 Several exploration targets at Parral, multiple discovery opportunities 28

29 Parral Abundant High-Grade Targets Exploration permits and land access agreements already in place Will conduct twin, infill drilling to verify Veta Colorado historic resource in 2017 US$2 million exploration commitment at San Patricio and La Palmilla over next two years Many additional vein targets for future exploration based on extensive sample database Drill hole SPD-03 at San Patricio intersected 638 gpt silver over one metre Drill hole PAL-02 at Palmilla intersected 179 g/t AgEq over 11.1 m Classic low-sulfidation epithermal vein mineralization Argentite-galena-sphalerite-chalcopyrite-pyrite in quartz-kspar-calcite veins IMMSA s Santa Barbara and Frisco s San Francisco mines to the South, Levon s Cordero project to the NE, Kootenay s Cigarra project to the West 29

30 Attractive Relative Valuation 12 EV/AgEq PP Reserves 20 EV/AgEq M+I Resources EV/2017A AgEq Production 80 EV/2018E AgEq Production Source: S&P Capital IQ April 4,

31 Shareholder Information Issued/Outstanding (Dec 31, 2017) million Exchange Listings NYSE:EXK, TSX:EDR Fully Diluted (Dec 31, 2017) million Working Capital (Dec 31, 2017) US$66.2 million Recent Price (April 4, 2018) US$2.43 Cash Position (Dec 31, 2017) US$39.3 million Market Cap (April 4, 2018) US$309 million Major Shareholder Van Eck 8% 52-week High/Low (April 4, 2018) US$3.73/$1.94 Strategic Shareholder Fresnillo 2% 90-day avg Daily Volume (April 4, 2018) ~1.9 million Mining Analysts % 10.0% 0.0% -10.0% -20.0% -30.0% -40.0% -50.0% Silvercorp Metals Inc. (TSX:SVM) Endeavour Silver Corp. (TSX:EDR) First Majestic Silver Corp. (TSX:FR) Great Panther Silver Limited (TSX:GPR) Fortuna Silver Mines Inc. (TSX:FVI) SSR Mining Inc. (TSX:SSRM) 31

32 Future Catalysts Complete Guanaceví productivity optimization get mine back on plan with rising production, falling costs Update Terronera PFS - receive final Terronera permits, make production decision, raise debt financing & commence mine development Commission El Compas mine initial production in April, commercial production in July Drill Parral targets grow resources, explore multiple new veins, consolidate land holdings in district, complete PEA Expand project pipeline accretive mergers and acquisitions Extend mine lives aggressive brownfields exploration 32

33 Why Invest? MID-TIER PRECIOUS METALS PRODUCER Three high-grade silver-gold mines in Mexico EXPERIENCED MANAGEMENT TEAM Proven track record with exploration, development and operational expertise STRONG ORGANIC GROWTH PROFILE Building new mines to increase production and reduce costs Our mission is to create value for our shareholders and become a premier silver producer in the silver mining industry. STRONG BALANCE SHEET $66.2 million working capital, no debt (as at 12/31/2017) PURE SILVER/ GOLD LEVERAGE No base metals, no hedging & industry leading beta to silver price (60/40 silver gold producer) 33

34 APPENDIX 34

35 Next Up-leg of Precious Metals Cycle Now Underway 35

36 Why Silver? Silver is an industrial metal: unlike gold, silver is consumed and the number of industrial uses is multiplying Best natural conductor of electricity and heat, used in electronics, batteries, solar panels, alloys & coatings, LED & RFID chips, semiconductors, photography, antibacterials, preservatives, medicines Silver is a precious metal: like gold, silver is money and its role as a store of value and a hedge against monetary inflation is growing Currency debasement is not new governments throughout history have printed money; eg. falling silver % in the Roman Denarius coin Denarius % Silver 36

37 World Silver Supply & Demand Source: GFMS, Thomson Reuters 37

38 Silver Mine Production by Source Metal Source: GFMS, Thomson Reuters 38

39 Solar Demand Silver Powder Production Source: GFMS, Thomson Reuters 39

40 Outlook by GMFS In terms of price GFMS remain moderately optimistic and forecasts average price $18.80 in 2018 Investment demand expected to show signs of recovery, although the next boom will be dependent on the economic backdrop PV demand in solar sector is expected to continue to be the star performer of industrial offtake. Electronics will also be a positive driver. Mine supply is expected to decline in the long run and we believe that 2016 was the beginning of this protracted decline. Meanwhile, scrap will stabilize if not increase marginally on rising IP Above ground stocks are likely to continue to grow, particularly those held in custodian vaults. In the case of lack in significant demand increase, this could dampen sustainable price rises in the next years 40

41 Silver Mining Shares Silver mining shares trade at a premium to gold mining shares due to the scarcity of primary silver mining companies There are only approximately 12 primary silver miners Like senior gold miners, the senior silver miners do not offer growth An attractive alternative to senior silver mining shares are the junior and mid-tier silver producers They offer the best combination of liquidity, leverage and growth 30.0% 20.0% 10.0% 0.0% -10.0% -20.0% -30.0% -40.0% -50.0% -60.0% Endeavour Silver Corp. (TSX:EDR) Coeur Mining, Inc. (NYSE:CDE) Pan American Silver Corp. (TSX:PAAS) Hecla Mining Company (NYSE:HL) Tahoe Resources Inc. (TSX:THO) Wheaton Precious Metals Corp. (TSX:WPM) 41

42 Why Buy Silver Miners Now? Much stronger leverage to silver price than gold miners to gold price One-year beta Three-year beta Five-year beta Endeavour First Majestic Fortuna Wheaton PM Coeur Hecla Fresnillo Hochschild Pan American During bull markets, silver equities typically rise up to double the gold equities Sources: Bloomberg, as at Jan 10,

43 Why Mexico? Largest silver producing country in the world Prolific mineral potential and mining history Close to home, part of NAFTA, low country risk Stable government, diversified economy, modern infrastructure Reasonable tax burden, permitting process, community support Security and social issues are localized, not pervasive 43

44 Management and Board Management Bradford Cooke, M.Sc., P.Geo. Founder and CEO Godfrey Walton, M.Sc., P.Geo. President and COO Dan Dickson, CA CFO Tomas Iturriaga-Hidalgo, B.Sc., Global MBA VP, Operations and Country Manager, Mexico Dale Mah, B.Sc., P.Geo. VP, Corporate Development Luis Castro, Ing. Geo. VP, Exploration Christine West VP, Controller Miguel Ordaz, Ing. Geo. Mexico Projects Director and Legal Representative Galina Meleger, CIM Director, Investor Relations Lorena Aguilar, CHRP Director, Human Resources Board of Directors Bradford Cooke, M.Sc., P.Geo. Company CEO Godfrey Walton, M.Sc., P.Geo. Company President and COO Geoff Handley, B.Sc. Independent Director, Chair (1)(2)(3) Rex McLennan, B.Sc., MBA, ICD.D Independent Director (1)(3)(4) Ricardo Campoy, B.Sc. Independent Director (1)(2) Ken Pickering, P.Eng. Independent Director (1)(2)(4) Mario Szotlender, B.IR Independent Director (2)(3)(4) (1) Audit Committee (2) Compensation Committee (3) Corporate Governance and Nominating Committee (4) Sustainability Committee 44

45 Institutional Investors, Analyst Coverage Van Eck Associates Renaissance Technologies Fresnillo Credit Suisse Securities Global X Management Connor Clark & Lunn NinePoint Partners Morgan Stanley AMG Fondsverwaltung UBS Financial Services ETF Managers Konwave AG Stabilitas Sprott Asset Management Ryan Thompson, BMO Dalton Baretto, Canaccord Genuity Cosmos Chiu, CIBC Bhakti Pavani, Euro Pacific Capital Ian Parkinson, GMP Securities Shane Nagle, National Bank Michael Heim, Mark Reichman Under review, Raymond James Heiko Ihle, H.C. Wainwright Daniel Earle, TD 45

46 Reserves and Resources (Dec 31, 2017) Silver-Gold Reserves and Resources Tonnes Au oz Ag Eq oz Ag g/t Au g/t Ag Eq g/t Ag oz (000s) (000s) (000s) (000s) Proven Guanaceví Bolañitos ,353.5 El Cubo , ,752.5 Total Proven , ,794.5 Probable Guanaceví , ,127 Bolañitos ,876.5 El Cubo , ,176.5 Terronera 4, , ,152 Total Probable 4, , ,332 Total P+P 5, , ,126.5 Measured Guanaceví Bolañitos El Cubo , ,672.5 Total Measured , ,145 Indicated Guanaceví 1, , ,629 Bolañitos , ,109.5 El Cubo , ,070.5 El Compas ,112.5 Guadalupe y Calvo 1, , ,800 Parral (new) Total Indicated 4, , ,960 Total M&I 5, , ,105 Inferred Guanaceví , ,116.5 Bolañitos , ,996 El Cubo 1, , ,548 Terronera 1, , ,125.5 El Compas ,342.5 Guadalupe y Calvo ,260 Parral (new) 2, , ,572.5 Total Inferred 6, , ,961.1 Tonnes (000s) Silver-Gold-Lead-Zinc Resources Ag g/t Au g/t Ag Eq g/t Ag oz (000s) Indicated Guanaceví , , Au oz (000s) Ag Eq oz (000s) Parral 1, , , Total Indicated 1, , , Inferred Guanaceví , , Parral 1, , , Total Inferred 1, , , Zn% Pb%

47 Reserves and Resources (Dec 31, 2017) Notes 1. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that any or all part of the Mineral Resources will be converted into Mineral Reserves. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues. 2. The Inferred Mineral Resource in this estimate has a lower level of confidence than that applied to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of the Inferred Mineral Resource could be upgraded to an Indicated Mineral Resource with continued exploration. 3. The Mineral Resources in this estimate were calculated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council. 4. Mineral Resources are exclusive of and in addition to Mineral Reserves. 5. Mineral Resource and Mineral Reserve cut-off grades are based on a 202 g/t silver equivalent for Guanaceví, 158 g/t silver equivalent for Bolañitos, 152 g/t silver equivalent for Villalpando Ascuncion ore zone of El Cubo and 218 g/t silver equivalent for Santa Cecilia ore zone of El Cubo, and 150 g/t silver equivalent for Terronera, El Compas, Guadalupe y Calvo and Parral Properties. 6. Metallurgical recoveries were 83.0% silver and 85.0% gold for Guanaceví, 84.3% silver and 87.7% gold for Bolañitos, and 87.0% silver and 86.7% gold for El Cubo. 7. Mining recoveries of 92% were applied for Mineral Reserve Estimate calculations. 8. Minimum mining widths were 0.8 metres for Mineral Reserve Estimate calculations. 9. Dilution factors for Mineral Reserve Estimate calculations averaged 26% for Guanaceví, 28% for Bolañitos, and 35% for El Cubo. Dilution factors are calculated based on internal stope dilution calculations and external dilution factors of 15% for cut and fill mining and 30% for long hole mining at Guanaceví, 28% and Bolañitos and 54% for long mining at El Cubo. 10. Silver equivalent grades are based on a 75:1 silver:gold ratio and calculated including only silver and gold. 11. Inferred Mineral Resources for Terronera includes the Terronera and Real Alto Area (Animas-Los Negros, El Tajo & Real veins). 12. The La Colorada structure (Parral) does not contain gold on an economic scale. 13. Price assumptions for Guanaceví, Bolañitos and El Cubo are US$17.26/oz for silver, US$1,232/oz for gold, US$0.82/lb for lead and US$0.90/lb for zinc. 14. Price assumptions for Terronera are US$18/oz for silver, US$1,250/oz for gold. 15. Price assumptions for El Compas are US$18/oz for silver, US$1,225/oz for gold. 16. Figures in the tables are rounded to reflect estimate precision; small differences generated by rounding are not material to the estimates Godfrey Walton, M.Sc., P.Geo., President and COO of Endeavour, is the Qualified Person who reviewed and approved the technical information contained in these Mineral Reserve and Resource Estimates. A Quality Control sampling program of reference standards, blanks and duplicates has been instituted to monitor the integrity of all assay results. All samples are split at the local field office and shipped to ALS-Chemex Labs, where they are dried, crushed, split and 50 gram pulp samples are prepared for analysis. Gold and silver are determined by fire assay with an atomic absorption (AA) finish. The Mineral Resource Estimates for Terronera, El Compas and Parral were undertaken by Independent Qualified Persons Eugene Puritch, P.Eng., FEC, CET, Yungang Wu, P.Geo., and David Burga, P.Geo of P&E Mining Consultants Inc. Mr. Puritch has reviewed and approved the technical content of this press release with respect to the Terronera vein area, El Compas and new Parral. The Cometa property in Parral which is part of the Lead-Zinc portion of the table is based on a Technical report titled NI Technical Report audit of the Mineral Resource Estimate for the Parral Project, Chuhuahua State, Mexico and filed Dec 15, 2010 and authored by William Lewis, B.Sc., Charley Z. Murahwi M.Sc. MAusIMM and Dibya Kanti Mukhopadhyay M.Sc. MAusIMM. This report is separate from the Parral Properties described by P&E Mining Consultants Inc. The resources on the veins (Animas-Negros, Tajo and Real) from the Terronera property were estimated as part of a report authored by Michael J. Munroe dated March 27th 2014 and titled NI Technical Report audit of the Mineral Resource estimate for the San Sebastian Project, Jalisco State, Mexico. The San Sebastian project was renamed the Terronera project. 47

48 Consolidated Mine Operations Table Period Plant throughput (tonnes) Comparative Table of Consolidated Mine Operations Ore grades (g/t) Recovered ounces Recoveries (%) Silver Gold Silver Gold Silver Gold Cash costs ($/oz Ag) AISC ($/oz Ag) Direct costs ($/tonne) Q , ,489,746 15, Q , ,535,396 22, Q , ,855,846 22, Q , ,931,717 17, Total ,537, ,813,069 75, Q , ,898,999 18, Q , ,669,609 15, Q , ,634,294 14, Q , ,009,172 15, Total ,404, ,212,074 62, Q , ,820,050 15, Q , ,769,741 13, Q , ,820,282 15, Q , ,732,765 15, Total ,563, ,178,666 59, Q , ,510,065 15, Q , ,551,851 15, Q , ,284,646 14, Q , , , Total ,458, ,435,407 57, Q , ,076,974 11, Q , ,143,788 13, Q , ,262,064 13, Q , ,436,962 14, Total ,279, ,919,788 53, Q , ,314,648 12, n/a n/a n/a 48

49 Guanaceví Mine Operations Table Period Plant throughput (tonnes) Ore grades (g/t) Recovered ounces Recoveries (%) Silver Gold Silver Gold Silver Gold Cash costs ($/oz Ag) AISC ($/oz Ag) Direct costs ($/tonne) Q , , Q , ,036 1, Q , ,080 1, Q , ,495 2, Total , ,772,227 6, Q , ,005,781 2, Q , ,824 1, Q , ,272 1, Q , ,024,762 2, Total , ,587,639 7, Q , ,106 1, Q , ,581 1, Q , ,292 1, Q , ,769 1, Total , ,440,748 7, Q , ,731 1, Q , ,221 1, Q , ,385 1, Q , ,708 1, Total , ,364,045 5, Q , ,683 1, Q , ,741 1, Q , ,907 1, Q , ,117 1, Total , ,066,448 4, Q , ,163 1, n/a n/a n/a 49

50 Guanaceví Operations Overview 50

51 Bolañitos Mine Operations Table Period Plant throughput (tonnes) Ore grades (g/t) Recovered ounces Recoveries (%) Silver Gold Silver Gold Silver Gold Cash costs ($/oz Ag) AISC ($/oz Ag) Direct costs ($/tonne) Q , ,654 9, (0.06) Q , ,414 15, (2.74) Q , ,734 15, (8.10) (3.29) Q , ,098 10, Total , ,881,816 51, (2.87) Q , ,851 10, (2.21) Q , ,898 9, Q , ,159 8, Q , ,271 7, Total , ,396,179 37, Q , ,117 8, Q , ,305 4, Q , ,988 5, Q , ,363 5, Total , ,449,776 23, Q , ,569 8, (6.20) (3.55) Q , ,885 8, (7.08) (4.25) Q , ,350 7, (15.17) (11.16) Q , ,813 5, (4.87) Total , ,052,617 30, (8.37) (4.77) Q , ,723 6, (10.28) (3.82) Q , ,106 6, (4.78) Q , ,972 6, (0.52) Q , ,712 7, (2.73) Total , ,238 26, (4.00) Q , ,012 5, n/a n/a n/a 51

52 Bolañitos Operations Overview 52

53 El Cubo Mine Operations Table Period Plant throughput (tonnes) Ore grades (g/t) Recovered ounces Recoveries (%) Silver Gold Silver Gold Silver Gold Cash costs ($/oz Ag) AISC ($/oz Ag) Direct costs ($/tonne) Q , ,446 4, Q , ,423 2, Q , ,032 5, Q , ,124 5, Total , ,159,026 17, Q , ,367 5, Q , ,887 3, Q , ,863 3, Q , ,139 5, Total , ,228,256 18, Q , ,827 5, Q , ,855 6, Q , ,002 8, Q , ,633 8, Total ,563, ,288,145 28, Q , ,765 5, Q , ,745 5, Q , ,911 5, Q , ,324 4, Total , ,018,745 21, Q , ,568 4, Q , ,031 5, Q , ,351 5, Q , ,133 6, Total , ,919,102 21, Q , ,473 5, n/a n/a n/a 53

54 El Cubo Operations Overview 54

55 2017 Significant Operating Costs Breakdown 21% 2% 5% 5% 4% Consolidated 32% 11% 17% 3% Labour Re-agents & Grinding Fuel Power Royalties Contractor Refining Explosives tolled Ore 27% 11% 7% 3% El Cubo 38% 14% Labour Re-agents & Grinding Fuel Power Contractor Explosives 20% 3% 4% 8% Guanaceví 29% Labour Re-Agents & Grinding Fuel Power Royalties Contractor 20% 11% 6% Bolañitos 34% Labour Re-agents & Grinding Fuel Power Contractor Refining Refining 5% 17% 2% 12% Explosives Tolled Ore 18% 3% 8% Explosives 55

56 Corporate Social Integrity and Sustainable Development, CSR The Endeavour Way Corporate Social Integrity, The Endeavour Way to CSR or Why Who You Are and What You Do Determine the Strength of Your Community Relationships 56 We receive annual awards for the way we do business

57 Mission, Vision, Values Who we are and what we do: We find, build and operate quality silver mines in a sustainable way to create real value for all stakeholders Our goal is to continue growing to become a premier, low cost senior producer in the silver mining sector By continually improving what we do and how we do it, we aim to make a positive difference in people s lives Doing what s right and pursuing a sustainable approach to mining are core to building a successful enterprise We care about: Ensuring the health and safety of our people Protecting and remediating the environment Building human capacity through education Pursuing a philosophy of continuous improvement We Value Integrity 57

58 Formal Sustainability Policies In 2008 Endeavour started formalizing its sustainable development policies: Corporate governance Economic development Health and safety Education and training Environmental protection 58

59 Corporate Governance Corporate governance lays the foundation upon which our business is built Formalized our approach to doing business by establishing our Board and Committee charters and policies on Ethical Code of Conduct, Anti-Bribery and Corruption, Whistle Blower, Disclosure and Advance Notice Instituted over time policies on Health and Safety, Environment, Community, Diversity and Sustainability Commenced full GRI G4 sustainability reporting, based on broad engagement with all stakeholders including shareholders, investors, bankers, analysts, employees, communities, ejidos, governments, union, church, contractors, suppliers, small-scale miners and media List of Policies: Diversity Policy Sustainability Policy Health and Safety Environmental Policy Community Investment Policy Anti Bribery and Anti Corruption 59

60 Economic Development Investments are essential to generate economic impact and profits are essential to fulfil community and sustainability objectives Our most obvious positive economic impacts have been from investing in acquisition of properties, mines and plants exploration to discover new orebodies in historic mining districts development to open new mines and refurbish and expand old mines, plants and facilities operations to create 1,700 employee jobs and 1,000 contractor jobs direct economic impact on 8,100 people (3:1 ratio) indirect economic impact on another 8,100 people such as suppliers and services; 97% in Mexico taxes 16% IVA, 30% corporate, 7.5% EBITDA, 0.5% gross royalty 60

61 Health and Safety Because mining is a high risk industry, employee health and safety is our #1 priority, governed by extensive safety policies and practices Every employee goes through rigorous safety induction, daily safety procedures, regular refresher courses, job site audits and each mine has award-winning first aid and mine rescue teams We provide regular health programs for employees including annual medical checkups, disease and occupational health tests, drug and alcohol tests, lifestyle and fitness counselling In the communities, we work with state governments to provide medical, dental, and optical services, and lifestyle and addiction counselling 61

62 Education and Training Education and training are important to improving the quality of life in the local communities Endeavour sponsors university scholarships in Mexico and Canada, high school scholarships in Mexico, and online courses to complete high school diplomas, technical and self-employment courses We run mining skills training programs to teach young people, women and the unemployed career skills like operating dump trucks, scoop trams, jumbo drills followed by job offers 62

63 Environmental Protection Protection of our natural environment is paramount for Endeavour We monitor dumps, tailings, water and energy consumption and emissions, waste recycling and disposal and biodiversity In particular, tailings management has been a hot topic recently but from day one we have made major investments to upgrade our tailings facilities to North American standards dry stack at Guanaceví, a unique drainage system at Bolañitos, and new facilities at El Cubo We typically plant tens of thousands of trees and cacti each year, reclaiming areas disturbed by Endeavour but also historic areas 63

64 Community Enrichment We support our local communities in many ways in order to improve their quality of life, resolve issues and build sustainable capacity Endeavour donates our time, funds, food and gifts for cultural and religious celebrations; we sponsor sports teams, kids camps and field trips, and an annual 10 km race to promote fitness; we help upgrade local buildings, schools, churches and roads We also train locals and provide equipment for cottage businesses such as pastry making, confections, jewelry, tourist gifts, clothing and mops Our goal is to complete at least one legacy project at each community, from fresh water supply, to proper sewage disposal, to new community buildings, to tourist mine 64

65 Sustainability Reporting 2012 Endeavour started GRI 4.0 reporting of its sustainability activities, based on stakeholder engagement and materiality assessment Every year, we go to our stakeholders for feedback on a full range of interests, and every two years, we conduct a materiality review to rank what is most important both internally and externally in order to adjust our sustainability goals and programs Governance, economics, people, environment and social are each reported separately in our Annual Review and Sustainability Report, including a review of our progress each year and resetting our goals over both the short and long term 65