Endeavour Silver Corp.

So Dan, thanks again for joining us in this silver session, and here we're stepping into one of the preeminent producers in the group. Maybe just for those of us that aren't familiar with the company, maybe you could just start off with an overview. Talk about maybe the operations, jurisdictions, and a brief history of the business.

Yeah. Endeavour's now been around for over 20 years. I've been with the company close to 20 years. I started in '07, March of '07. And I think a lot of people that are familiar with the Endeavour story over the years would have understood that we built the company through fully built, fully permanent mines that were under explored and brought a lot of geological knowledge, access to capital markets, and really invested in two mines, Guanaceví and Bolanitos. And one of the knocks from an investment standpoint on our company for a lot of years was ultimately short mine lives, higher costs, and a lot of people like to get into the story for that exponential growth on margins when silver price was gonna take off. And it worked well. We got great liquidity, and relatively a good success story. But from running a business standpoint, not having a long mine life, like a 10-year reserve life, was always relatively difficult.

And, again, through our exploration geologists, we made the discovery of Terronera in 2013. Made the decision of going through PEA, PFS, PFS, and then ultimately a feasibility study, construction decision. And then in October of 2025, we put Terronera, which you see up there on the screen, into commercial production. So now we have what we feel with Terronera, one of the lowest cost producing assets in the space. The gold pays for the silver production at Terronera.

And then we've branched out over the years and picked up an asset in Peru, also an underground operation, silver, lead, zinc. First time we bat at base metals. It's gone extremely well, and again, focusing on life of mine, so a mine that we think we're gonna be there ten, 15, 20 years similar to Terronera. In 2022, we picked up an asset called Pitria. And those that are familiar with Pitria, it's one of the world's largest undeveloped silver assets. Close to 600 million ounces of silver has been defined there, and we're pushing that through for a feasibility study. Again, a lot of people are familiar with the open pit 2012 Silver Standard feasibility study. We're looking at it from an underground operation. Lines up with an '09 PFS that they actually did at $11 silver. We should have that out imminently, and always happy to talk about it.

Okay. That's great. Well, that's a nice overview, and it highlights the diversified portfolio and, of course, all the risk mitigating benefits that come with that. But maybe we could dig into each of these assets one at a time, and why don't we start off with the Culpa in Peru?

Sure.

You acquired this in May '25. If you could just tell us maybe how the integration has progressed and also there's a recent expansion to 2,500 tons per day, so if you could comment on how that's performing.

Yeah. No, in our sense, it was lucky. At the time, we were right in the middle of building the Terronera mine, and we were nervous about acquiring an asset. And obviously, the first questions from the investment community is, “What’s wrong with Terronera?” And it really came down to what we liked at Culpa. And it's an asset that, again, we sent our exploration team down and geologists down and say, “Have a look at this.” And ultimately, for the price point that we saw and the potential that was there, we ended up buying it for $145 million. Obviously, compared to some of the other deals at the time in that space, we felt like we were getting a steal.

The integration, it was a company that was owned private equity 60%, 40% into a real estate family out of Lima, so they had a lot of their structure in place in an office in Lima with close to 60 individuals, internal audit, commercial team, obviously accounting group, finance group, et cetera, et cetera. So we saw it as a bolt-on and an ability to really bring it into Endeavour really quickly. Where we thought we could bring a lot of expertise is something that they have been looking at for an expansion of going from wet stack to dry stack tailings, so conventional tailings to dry stack, which we've done at Guanaceví for the last 13 years, and then the exploration opportunity.

The main source of the ore has come off the Benaventurada vein. It's four kilometers long. They keep nibbling to the edges, and ultimately, their mining goes down 200, 250 meters. Mineralization doesn't end. That's where the water table is. And ultimately, they've been hand-to-mouth for about eight years of just continuing to build their mine. So we saw an opportunity, A, for real expansion of resources, and we're pushing through that this year. We have a resource that's gonna come out near the end of the year, maybe into next year, that's ultimately due. There's a historical resource that had 120 million ounce silver equivalents. We expect that to be there, and we owe the vendors another $10 million if we hit that point. We fully expect to hit that point.

As far as the expansion, it's gone as well as an expansion can go, really. They'd start that work themselves. Again, they're going from dry stack to wet, or wet stack to dry stack tailings. Again, our expertise was there, but ultimately, they'd have almost had all the pieces in place. We just helped them execute it for the last eight months, and that went into 2,500 tons in March, and it's gone extremely well since then. So well that we've even pushed beyond a little bit 2,500, and we're trying to rail them back. We don't want too much pressure on the resource and ultimately expansion than we have to do at the tailings dam. So it's been very well integrated into our company. There's always little bumps and stuff like that, but very minor compared to other stories that you can hear.

Yeah. Outstanding, and, well, certainly it sounds like you got a good price on that. And, as with any M&A, some of the true upside is in the drill bit, and it sounds like that's an active program there as well. So then moving through your portfolio, let's shift over to Terronera in Mexico. So maybe you could discuss the ramp-up of the newly constructed mine and how it progresses towards steady state.

Yeah. A similar story this year for us. We told the market for Terronera that ultimately the first six months we were putting low-grade material through. And when I say low-grade, it's all relative. Over the life of the mine, it's 375 grams silver equivalent. We peak around 450, 475 in the first couple of years. We made the decision in 2025, where we were in the mine plan, what we were seeing in the plant. In any feasibility study, you're gonna have the highest grade material go through first, ultimately get your best return metrics that you can get. In practicality, it doesn't work that way. We wanted to put some lower grade material through the plant to ensure that we weren't putting ounces into our tailings facility.

Ultimately, we've been running 2,000 tons per day very consistently since last year. Really, it's working through the optimization and refining of our plant. The most important aspect of Terronera and its recoveries is its grind size, and we worked through some issues and, whether you call optimization, troubleshooting through our SAG mill and ultimately our cyclones that we're working through to get our grind size to get the recoveries that we had. Our feasibility recoveries for silver is 89%, 76% for gold. Ultimately, over the year, we've been pushing up and approaching that 89%, and we're seeing that here in Q3. Similarly, as the grades have come up, that's helped recoveries in itself. So we're seeing the grades come up. We're seeing recoveries come up.

And additionally with that, at the beginning of the year, we said we had some capital programs left to be completed. We moved from our diesel gen sets into our LNG plant to create power. We've got a waste dump permit that we received. Ultimately, it saves us about two kilometers of trucking. So we're seeing our cost per ton come down as well. With the grades going up, our cost per ounce has come down. So everything's lining up with what we explained to the market would happen. So you can't complain exactly. You always wish something happened faster than it does, but it's gone relatively well.

We had a small blockade, we called an illegal blockade in August. I've gotten a lot of questions about that around the conference. Ultimately, we've been in this community. You can see it on the photo there. There's our plant, and you can see Santiago de los Pinos right behind. Ultimately, we share municipal roads. You can take a municipal road right to our camp, right to our plant, right to the mine. They had suggested that there more noise, more activity ultimately through it, and we had a very civil conversation. Took ten days. We were very hard-lined on it. Ultimately, we increased the land that we're gonna ease at, at least effectively off the community, an extra 125 hectares, and they got a little bit more payment, 75,000 per hectare, so about 500,000. With that, I think all their concerns have been alleviated and hopefully off to the races now at Terronera.

Yeah. Well, it's great to hear. It's great to hear that the ramp-up is going well and you guys are doing what you said you'd do and hitting those recoveries and throughput as expected. So then moving over to Pitarrilla then, you've got a feasibility study expected soon. So how could this project reshape the company and as a third asset here reshape and strengthen the overall portfolio?

Yeah. I think Pitarrilla stands on its own. It's been well known in our space for a long time, and again, we're underground miners, so we're going after the underground sulfide portion. The 600 million tons is oxides and sulfides. We're obviously going after the sulfides with an underground operation. What makes Pitarrilla special is ultimately it's not the grades. The grades are gonna run around 250 grams silver equivalent over basically 20 years. We think we can be underground 30 to 40 years. It's the volume. So there's a mantle at the bottom of what was used to be the open pit, and that mantle is 11 million tons. Obviously, you can get bulk mining tons out very quickly. There's three feeder structures that feed the mantle and then ultimately the oxides. Those feeder structures are within 70 meters of each other, so one ramp down, you can access three different veins.

So we feel like we can get volume out at a relatively cheap cost, and it's the volume that's driving the low cost. So for us, again, an extremely long mine life, low cost underground producing asset, but we do not sterilize the 400 million ounces that sit in the oxide and ultimately would have to go through permitting. Pitarrilla right now is permitted underground. The plant's permitted. We're working on a tailings dam permit. With that tailings dam permit, hopefully sometime middle of 2027, we can execute, make a construction decision, start building. So we're pushing, pushing, pushing.

Obviously, as any company grows, right now we're gonna produce 15 million silver equivalent ounces next year. We're gonna increase that with Terronera running full capacity, Culpas running at a higher rate. Pitarrilla comes in 2030, we're approaching 25 million silver equivalent ounces, if not a little bit higher, and ultimately, we think we reach that senior silver producer status. Diversification always helps all investors, and that should be reflected in the share price.

Yeah. That's great, and it's good to hear that on Pitarrilla, some of the major de-risking with respect to permitting is done, and we'll look for the further de-risking with the FS as it comes out. But you mentioned the aggregate production and how its growth trajectory unfolds over the years to come. But I also noticed that the silver revenue is about 66%—

Yeah.

—of the overall revenue. And so relative to peers, this is only a few that are up in that stratosphere, that level approaching 70%. Any comments on that?

Yeah. It's the function of the space. It's difficult to grow in primary silver assets. That's why there's a scarcity in the silver. There's a multiple higher than what we see in gold companies. When you get to a certain scale, there's only so much you can manage, so looking for one, two million silver equivalent or silver ounces that you find in a lot of silver mines, those don't move the needle for the big seniors, so to speak. And we've been lucky in the asset we found. We've been very selective in it. We're always trying to find silver, predominantly silver. The Culpas that we picked up, that's 40% silver. It's a predominant metal, but a little bit lower than that 50, 50% threshold that we're always looking for.

As we grow and bring Pitarrilla on, we do have other silver assets in our portfolio. Scale wouldn't be the same as Pitarrilla, obviously, but you're always looking for that. It's just as Pan American's growing, as Coeur's growing, it's using that multiple to pick up gold assets, so I understand where it's gone. And we just say to people, “If you want exposure to silver, we’ve got one of the highest betas to silver.” And that's a function of 60%, 70% of our revenue coming from silver.

Yeah, it's interesting. And in some of the earlier sessions today, there was comments on the active M&A market in the sector. And of course, we've seen Mag Silver and Silvercrest, Gatos—

Yeah.

—among those taken out recently. And having this high silver percentage probably increases your attractiveness. Can you comment on what your views are in terms of further consolidation of the sector?

Yeah. I'm not making a huge announcement today, that's for sure. Ultimately, I think any CEO, any business wants assets that other people want, especially in the mining space. And that doesn't mean you wanna sell them, it means you wanna operate them too. You're always looking, 'cause you are in the mining space, you're always depleting your resource. So if you're not doing your job, we have a corporate development team that's ultimately down at Beaver Creek last week looking at other assets we can bring in. We love the portfolio that we have, and we think we can unlock that. I think the team that we've developed over the last three to four years can execute our plan for the next five years. So again, you never say never. There's always things that come out, but right now we're focused on delivering on Terrinera this year and ultimately pushing Pitria forward.

Great. So you really painted the picture for this organic growth plan to unfold. But now if we could maybe just dial in on it a little bit and look at 2026.

Yeah.

Maybe if you could just talk about the outlook for this year, some of the key growth drivers, and whether you're tracking production and costs.

Yeah. So our production profile that we put out in January, we guide at 14 and a half million silver equivalent ounces up to 15 million, so the midpoint being 15. One of the things that we always explain to our shareholders and ultimately people that are interested in Endeavour is ultimately when we built out the mine plans for the year, we used a certain silver price. I think we started last year $36 when we started the process in about the summer of 2025. Obviously, a prolific growth in silver price, and that allows us to go into some resources that would've been lower grade. Especially at Terrinera, we did our feasibility study at $17 silver, $1,500 gold. We've gone through, continue to find resources that were outside our resource model. Brings the grades down a little bit, extends mine life, ultimately lower ounces produced. And with that, we're coming in at the lower end of guidance.

We have Q3 coming out next week. We'll have a look at it. As I said, we had the two-week shutdown at Terrinera that impacted higher grade material going through. Recently at Guanaceví, our operation up in Northern Durango, we're lower capacity of 500 tons for about two weeks, a little bit more maybe. So we'll have a look at that when it comes out next week. We're tracking from a production standpoint.

From a cost standpoint, everything's staying relatively tight. Obviously diesel prices are up, which is not a huge cost to us with underground vein mining. But ultimately, it's a cost that increases. Steel cost increases, et cetera, et cetera. For us, we're very clear on what's in our all-in sustaining costs and our cash costs. So we put those metrics out. What's important to understand, not just for Endeavour, for every company, and I'm an accountant by trade, so I can go off on a big tangent on this, but we have royalties, we have special mining duty, we have tolled ore. All those are affected by the price of silver. And with those prices of silver higher, that means those costs go higher. Those go in our all-in sustaining costs. Ultimately, profit sharing goes into our all-in sustaining costs. So as we're more profitable in Peru, that cost shows up in our cost.

So really what I always tell people to really focus on, and we break this out in our guidance, mining costs, processing costs, indirects, things that we can control. Royalties, mining taxes, profit sharing, et cetera, et cetera, that's outside of it, and we try to stay within that band. We're probably a little bit on the high side on a cost per ton for the costs that we can control. But again, Terrinera is gonna drop down in the second half of the year. Q3 is gonna come out, Q4 is coming, come out. So trending on the lower end side of that and higher side of the costs, which isn't probably uncommon in our space right now. We're seeing a lot of pressure, especially pressure around labor.

Yeah. And maybe we'll use that labor as a segue into my next question. You're focusing on what you can control, and that makes sense. Labor to some extent is out of your control. FX is another one, out of your control. What are your strategies with respect to each of these? Are you looking at hedges with FX and how do you manage the labor tightness right now?

Yeah. In Peru, the sol's been relatively flat, and we actually don't manage that particularly. Over time, with various times with FX, we might manage, and we hedge about 20% of the pesos we have. And of our cost profile, about 50% of our Mexican costs are in Mexican peso, biggest factor being the labor. Managing labor, obviously difficult. In Peru, we're seeing a lot of turnover from a miner standpoint with a lot of informal mining popping up and just paying better salaries. And we have unions at all our operations, very friendly unions, never had a strike, never had a work stoppage. Ultimately, we're pretty fair when it comes to our inflationary adjustments at the end of the year.

In Mexico, we negotiate annually on salaries, and every other year of salaries and benefits. Obviously, when January comes, they start with a higher increase, and we go walk through that, and there's all these benchmarkings through Mexico of what's happening. I think the way we treat people, the way our safety programs work, all that proliferal stuff helps us keep our staff. We've got very low turnover in Mexico. And I like to think that people enjoy working for Endeavour. We have a very small company feel, and all that goes a long way. It doesn't mean that we don't have people leave. We wanna support the people that leave and get opportunities at other places. You never know when you're gonna come back and see them, so...

Yeah, that's great. So I see we're coming up to the last couple minutes. Maybe I'll pause here and poll the audience if anybody has any questions, they can just raise their hand. No, well, maybe with that, I'll step back a little bit and, Mexico, as we've seen in this session and across the conference, the sentiment toward Mexico seems to be warming up.

Yeah.

What are your comments on the permitting status and how that logjam's been slowly breaking and what your expectations are for the remaining permits across the sector?

Yeah. Mexico's still one of the best jurisdictions in mining. Obviously, over the last five years with the AMLO term, permits really slowed down and really froze, and we've seen that here in 2026 early on, a number of permits were handed out and I think just recently a bunch. We haven't really been in the permitting process. Ternary, we got our permits in 2016, so we actually got lucky in with how we did it. We had some laydown areas and regional permits that took a long time. We got them in May and it was obviously very frustrating. I think Claudia and through Cami Mex and discussions, they're saying all the right things behind closed doors. It's taken a while. All governments take a while. I think that's pretty something you learn over life.

The words that they’re saying behind closed doors is what you want to hear, but they’re also saying it when they’re out in public as well a little bit more. So I think it’s moving in the right direction. I think things are gonna speed up as a function of all the uncertainty we’re seeing in North America. It’s happening with our North American free trade agreements. I think jobs are gonna become important. Obviously, the taxes that could generate from all these mining activities is substantial and it’s meaningful for Mexico. So I do think it’s moving forward in a positive direction, and you can feel that.

Okay, Dan. Well, thanks again for joining us today. It’s a pleasure to have you, and good luck with the organic growth you have ahead of you.

Awesome. Thanks, Don.