August Forecasting 20% Production Growth in 2018

Transcription

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

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, commercial production in H2, 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 Jalisco Lourdes Guanajuato Mexico City Bolañitos El Cubo Production Development Exploration Office Chile Office Santiago Mines Guanaceví Bolañitos El Cubo El Compas Development 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 Direct Costs (US$/Tonne) $7.87 $92.17 $96.81 $95.05 $80.18 $72.42 $82.36 $ est. Mid-point of guidance (2) Consolidated Cash Costs (1), net of gold byproduct credits (US$/oz Sold) $8.31 $8.39 $6.78 $8.06 $ est. $18.31 $16.79 $15.62 $12.43 $16.96 Mid-point of guidance (2) Consolidated AISC (1), net of gold by-product credits (US$/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 H1, 2018 Highlights H1, 2018 Production Up 16% Y-o-Y to 2.7 million oz Ag, 26,882 oz Au (4.7 million oz Ag Eq (1) ), production will rise as El Compas attains commercial production in H2, 2018 Q2, 2018 Revenue Up 19% Y-o-Y to $38.8 million but net earnings fell due to higher costs and depreciation at Guanacevi; and FX losses related to the peso Mine Commissioning at El Compas on track for commercial production in Q3, 2018; multiple satellite targets could enhance resources and mine life Updating Terronera PFS for Q3, 2018 received mine and plant permits, awaiting final dumps and tailings permits Positive Drill Results at Terronera best intercept returned 618 gpt Ag & 3.2 gpt Au over 21.2m (858 gpt Ag Eq) Secured ATM Financing up to $35.7 million to advance Terronera Appointed VP New Projects Manuel Echevarria, to oversee development of Terronera and other projects H1, 2018 Revenue of $79.1 million Up 14% Y-o-Y 57% Ag 2.7 million oz Ag sold 43% Au 26,474 oz Au sold H1, 2018 Ag Eq Production of 4.7 million oz El Cubo, 47% Bolanitos, 28% Guanacevi, 25% (on track to achieve 2018 guidance) 2.2 mil oz 1.3 mil oz 1.2 mil oz Silver Equivalents based on 75:1 gold:silver ratio 7

8 Higher Production, Lower Unit Costs Operating Costs Falling due to rising production, Cash costs (1) decreased 13% & AISC (1,2) decreased 19% in the first half of this year. Cash Cost (US$/oz Sold) AISC (US$/oz Sold) Production Improvements Underway (3) El Cubo continues to deliver record performance at record grades. Production expected to rise in H2/18 as El Compas commissions +5.5M oz Cash costs fell due to improved grades AISC fell due to lowered cash costs & lower capital expenditures 4.7M oz 4.7M oz 4.0M oz $ % $ % $7.05 $15.73 H1/17 H1/18 H1/17 H1/18 H1/ 17 H2/ 17 H1/ 18 H2/18 (est.) Based on 2018 guidance range 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. Costs are presented in US $, net of by-product credits 2. 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 OPERATING Title MINES GUANACEVĺ DURANGO 9

10 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 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 late 2018 to revitalize the operation by augmenting 2017 Ag Eq Production (1) of 2.4 million oz was inline with revised guidance, despite operational challenges and lower throughput Management initiated an optimization program to improve work force productivity and costs. The 2018 focus is reinforcing operating controls, monitoring systems and work flows, with mine output expected to increase as a result in H2. 1. Silver equivalents based on a 75:1 gold: silver ratio 10

11 Ag Eq (4) Production (oz) Guanaceví Returning to Profitability 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 H Cash costs (2) $16.35/oz All-in sustaining costs (2,3) $25.83/oz Productivity Program Underway 700, , , , , , , ,707 oz 811 tpd 637,492 oz 604,854 oz 571,654 oz 912 tpd 877 tpd 783 tpd Throughput (tpd) 0 Q3/17 Q4/17 Q1/18 Q2/18 1. 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. Costs are presented in US $, 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

12 BOLAÑITOS GUANAJUATO 12

13 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% The Company is investing into the LL- Asuncsion and Plateros ore bodies to extend the life of the operations. 1. Silver equivalents based on a 75:1 gold: silver ratio 13

14 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 H Cash costs (2) $0.01/oz All-in sustaining costs (2,3) $8.46/oz Operational Improvements Underway 900, , , , , , , , ,012 oz 1,278 tpd 743,012 oz 698,466 oz 1,245 tpd 1,350 tpd 1,192 tpd 640,241 oz 1,400 1,300 1,200 1,100 1, Throughput (tpd) 100, Q3/17 Q4/17 Q1/18 Q2/ 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. Costs are presented in US $, 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 14

15 EL CUBO GUANAJUATO 15

16 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 16

17 Ag Eq (4) Production (oz) El Cubo Our Second Mine in Guanajuato 2017 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 H Cash costs (2) $2.50/oz All-in sustaining costs (2,3) $10.63/oz 1,400,000 1,200,000 1,000, , , , ,000 Operational Improvements Underway 1,542 tpd 1,478 tpd 1,452 tpd 1,463 tpd 1,169,550 oz 1,071,733 oz 1,038,120 oz 927,945 oz 1,600 1,500 1,400 1,300 1,200 1,100 1, Throughput (tpd) 0 Q3/17 Q4/17 Q1/18 Q2/18 1. 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. Costs are presented in US $, 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

18 DEVELOPMENT PROJECTS EL COMPAS ZACATECAS 18

19 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 for 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 Recent Calicanto surface drill results returned impressive intercepts including 269 gpt Ag & 5.5 gpt over 1.1 m (682 gpt Ag Eq) 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 19

20 El Compas Commercial Production in Q3 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 final construction costs paid in Q2/18 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, 2018 for full details refer to the table in the appendix 20

21 El Compas Final Mine & Plant Commissioning Mining, stockpiling of ore and commissioning was initiated in Q2/18, using low grade ore. A total of 4,900 tonnes of run of mine ore were stockpiled in Q2, however only 1,023 tonnes were processed to test plant circuits. As expected during ramp up, plant circuits are being modified, configured and fine-tuned to achieve commercial production at the PEA target capacity of 250 tpd in Q3/18. The first shipment of concentrate on July 31, 2018 to Port of Manzanillo. 21

22 TERRONERA JALISCO 22

23 Terronera Large, Low Cost Mine Potential Terronera will become our largest mine, annual phase 2 production est. 3.2 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 23

24 Terronera New Discovery Still Open Open Step-out Drill Program Infill Drill Program Open Open Hole TR10-6 TR11-4 TR11-5 TR13-7 KP16-04 Structure From True width Au Ag AgEq (m) (m) (gpt) (gpt) (gpt) Terronera Including Terronera Including ,090 4,456 Terronera Including ,370 3,778 FW Terronera Including Terronera Including ,060 Terronera Including ,493 Hole Structure From True width Au Ag AgEq (m) (m) (gpt) (gpt) (gpt) LL-02* La Luz ,803 Including ,215 LL-13 La Luz ,832 Including ,348 LL-14 La Luz ,864 Including ,562 LL-17 La Luz ,978 Including ,775 LL-21 La Luz ,338 Including ,340 Gold ounces converted to silver equivalent ounces on a 75:1 ratio 24

25 Terronera Developing Our Fifth Mine Pre-feasibility study robust economic returns; 750 tpd, expanding to 1,500 tpd in year two, under review Production & development decision subject to receiving final permits and debt financing Permits pending MIA (EIS) already approved, mine and plant received Q3, 2017 awaiting tailings and dumps Q3, 2018 Optimized PFS underway Scheduled for release in Q Projected Low Total Cash Costs & AISC (2) $3.44 / Ag oz $4.76 / Ag oz Cash Costs (1) AISC (1) 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. Costs are presented in US $, net of by-product credits 2. Projected cash costs & AISC are based on initial PFS announced on April 3,

26 PARRAL CHIHUAHUA 26

27 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 27

28 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 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 28

29 Shareholder Information Issued/Outstanding million Exchange Listings NYSE:EXK, TSX:EDR Fully Diluted million Working Capital US$58.9 million Recent Price (July 31, 2018) US$3.00 Cash Position US$31.1 million Market Cap (July 31, 2018) US$383 million Major Shareholder Van Eck 9% 52-week High/Low US$3.35/$1.94 Strategic Shareholder Fresnillo 2% 90-day avg Daily Volume +2.0 million Mining Analysts 8 ~ presented as at June 30, 2018 unless noted otherwise 30.0% 20.0% 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) 29

30 Future Catalysts Develop two new ore bodies at Guanaceví 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 Attain Commercial Production at El Compas in Q3, 2018 and enhance the operation 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 30

31 Why Invest? MID-TIER PRECIOUS METALS PRODUCER Four 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 $58.9 million working capital, no debt (as at 6/30/2018) PURE SILVER/ GOLD LEVERAGE No base metals, no hedging & industry leading beta to silver price (60/40 silver gold producer) 31

32 APPENDIX 32

33 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, semi-conductors, 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 Coins & Medals, 9% Silverware, 5% Implied net investment, 16% Jewelry, 18% Silver Demand Photography, 6% Industrial applications, 46% Denarius % Silver 33

34 Recent Silver Research Silver semi-conductor film can hold vast amount of data as holograms Silver nano-particles enhance soil for healthier crops Silver helps produce hydrogen for fuel cells, electricity Silver helps high value chemicals 34

35 Silver Supply & Demand Moz e % -change 2016 % -change 2013 Mine Production % +4% Total Supply 987 1,051 1,044 1, % 0% Jewelry & Silverware % -5% Coins & Bars % -60% Industrial Fabrication % -1% Physical Demand 1,126 1,118 1,165 1,042 1,018-2% -11% Physical Surplus/ Deficit Annual Average Silver Price ($/oz) % -431% % -40% Source: GFMS, Thomson Reuters 35

36 Silver Physical Surplus/Deficit Source: GFMS, Thompson Reuters 36

37 World Silver Mine Production Source: GFMS, Thompson Reuters 37

38 Silver Mine Production Source Primary Base Metals 61% Primary Silver Mines 26% Primary Gold Mines 13% Source: GFMS, Thomson Reuters 38

39 Silver Photovoltaic Fabrication Source: Solarbuzz; Earth Policy Institute; ITRPV; GFMS, Thompson Reuters 39

40 Silver Demand in Automotive Source: GFMS, Thompson Reuters; Silver Institute 40

41 Gold vs Base Money Inflation Source: Bloomberg, Incrementum AG 41

42 Gold vs The Everything Bubble Source: Incrementum AG, Jesse Felder, Federal Reserve St. Louis 42

43 Commodities vs Equities Source: Dr. Torsten Dennin, Incrementum AG 43

44 Rate Hike Cycles And Following Recessions in The US As a long-term chart of the Fed funds rate reveals, the vast majority of rate hike cycles has led to a recession. Moreover, every day financial crisis was preceded by rate hikes The historical evidence is overwhelming in the past 100 years, 16 out of 19 rate hikes cycles were followed by recessions. Only three cases turned out to be exceptions to the rule Source: Fed St. Louis, Federal Reserve Bank New York, Incrementum AG 44

45 Historic Bull Markets in Mining Stocks If one looks at all bull markets in the Barron's Gold Mining Index (BGMI), one notices that the current uptrend is still relatively modest in terms of duration and performance. Should we really be on the cusp of a pronounced uptrend in the sector which we assume to be the case quite a bit of upside potential would remain. Jordan Roy-Byrne, an analyst whom we greatly respect, describes the sector's status as bearish bull. Source: Nowandfutures, TheDailyGold.com, Barrons, Incrementum AG 45

46 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 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 Source: S&P Global, as of July 30,

47 Next Up-leg of Precious Metals Cycle Now Underway 47

48 Gold/ Silver Ratio Compression Silver +1811% Gold +595% Silver +60% Gold +9% Silver? Gold? Silver +159% Gold +42% Silver +60% Gold +8% Silver +64% Gold -21% Silver +203% Silver +371% Gold +77% Falling Ratio Gold/Silver-Ratio During falling gold/silver ratio scenarios, both gold and silver performed very well, however silver always outperforms! The currently high ratio implies that pressure continues to build for break-out. 48

49 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 49

50 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 Dale Mah, B.Sc., P.Geo. VP, Corporate Development Manuel Echevarria, B.Sc. VP. New Projects 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 50

51 Institutional Investors, Analyst Coverage Van Eck Associates Renaissance Technologies Fresnillo Credit Suisse Securities Sprott Asset Management Global X Management Connor Clark & Lunn NinePoint Partners Morgan Stanley AMG Fondsverwaltung UBS Financial Services ETF Managers Konwave AG Stabilitas Ryan Thompson, BMO Cosmos Chiu, CIBC Bhakti Pavani, Alliance Global Partners Ian Parkinson, GMP Securities Mark Reichman, Noble Capital Markets Heiko Ihle, H.C. Wainwright Daniel Earle, TD Chris Thompson, PI Financial 51

52 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. Costs are presented in US dollars, net of by-product credits 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. 52

53 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%

54 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. 54

55 Consolidated Mine Operations Table Period Plant throughput (tonnes) Ore grades (g/t) Recovered ounces Recoveries (%) Cost Analysis Cash AISC Direct costs Silver Gold Silver Gold Silver Gold costs ($/oz ($/oz Ag) ($/tonne) Ag) 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, Q , ,355,895 13,

56 Guanaceví Mine Operations Table Period Plant throughput (tonnes) Ore grades (g/t) Recovered ounces Recoveries (%) Cost Analysis Silver Gold Silver Gold Silver Gold Cash costs ($/oz Ag) AISC ($/oz Ag) Direct costs ($/tonne) 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, Q , ,929 1,

57 Bolañitos Mine Operations Table Period Plant throughput (tonnes) Ore grades (g/t) Recovered ounces Recoveries (%) Cost Analysis Silver Gold Silver Gold Silver Gold Cash costs ($/oz Ag) AISC ($/oz Ag) Direct costs ($/tonne) 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, (2.77) Q , ,591 5,

58 El Cubo Mine Operations Table Period Plant throughput (tonnes) Ore grades (g/t) Recovered ounces Recoveries (%) Cost Analysis Silver Gold Silver Gold Silver Gold Cash costs ($/oz Ag) AISC ($/oz Ag) Direct costs ($/tonne) 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, Q , ,375 7,

59 Sustainability Reporting 2012 Endeavour started GRI 4.0 reporting of its sustainability activities. 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 to adjust our goals and programs. Our reporting is based on the five pillars listed below, with Governance as the foundation 2017 marks the 6 th consecutive year that we ve reported on our sustainability initiatives, including the last 5 under the GRI G4 guidelines. 59

60 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 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 Pursuing a philosophy of continuous improvement We Value Integrity We receive annual awards for the way we do business 60

61 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 Embedding Sustainability into our Organization GOVERNANCE Sustainability is supported by our executive team and is part of our governance structure RISK MANAGEMENT We assess and manage economic, social and environmental risks relevant to our business BUSINESS ALIGNMENT Our sustainability agenda is aligned with our core business, including operational, development and exploration activities, and relationships with suppliers STAKEHOLDER ENGAGEMENT We use a materiality assessment to identify and address the most important issues to our stakeholders VALUES AND POLICIES Sustainability is enshrined in our values and policies 61

62 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 During 2017, Endeavour supported a rescue effort following a Mexican earthquake: Dispatched 12 members of our mine rescue team Donated USD $100,000 62

63 Educating & Training Our People 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 During 2017, We increased learning activities by 48% over 2016 and launched new learning programs 52 hours of training per employee (up from 36 hours) 23 hours of training per contractor (up from 16 hours) 63

64 Economic Impact 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 1,200 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; 99% in Mexico During 2017, invested $40.7 million on employee wages and benefits, spent $66.2 million on goods and services in Mexico and $16.5 million in taxes 64

65 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. In 2017, we planted nearly 44,000 trees to reclaim disturbed ground. During 2017, we recycled and reused over 90% of water to reduce our reliance on fresh water and achieved a 5% reduction in water consumption. 65

66 Community Enrichment We support our local communities in many ways to improve the 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 During 2017, we contributed US$517,000 to strengthen communities across Mexico & Canada, hosted workshops to help employees acquire job ready skills, funded infrastructure projects including roads and bridges and launched scholarship programs. 66