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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Endeavour Silver Corp | TSX:EDR | Toronto | Common Stock |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.26 | 4.74% | 5.74 | 5.65 | 5.79 | 5.78 | 5.37 | 5.45 | 610,508 | 21:12:14 |
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Endeavour Silver Corp. (NYSE:EXK)(TSX:EDR) is pleased to announce financial
results for the period ended March 31, 2014. Endeavour owns and operates three
underground silver-gold mines in Mexico: the Guanacevi mine in Durango state,
and the Bolanitos and El Cubo mines in Guanajuato state.
The Consolidated Interim Financial Statements and Management's Discussion &
Analysis can be viewed on the Company's website at www.edrsilver.com, on SEDAR
at www.sedar.com and EDGAR at www.sec.gov. All amounts are reported in US$.
Highlights of First Quarter 2014 (Compared to First Quarter 2013)
Financial
-- Net earnings of $4.0 million ($0.04 per share) compared to $14.4 million
($0.14 per share)
-- Adjusted earnings(1) of $5.5 million ($0.05 per share) compared to $12.9
million ($0.13 per share)
-- EBITDA(1) decreased 38% to $19.3 million
-- Cash flow from operations before working capital changes decreased 28%
to $18.3 million
-- Mine operating cash flow before taxes(1) decreased 22% to $25.4 million
-- Revenue decreased 24% to $53.0 million
-- Realized silver price fell 30% to $20.50 per ounce (oz) sold (consistent
with average spot price)
-- Realized gold price fell 19% to $1,306 per oz sold (consistent with
average spot price)
-- Cash costs(1) fell 52% to $4.87 per oz silver payable (net of gold
credits)
-- All-in sustaining costs fell 51% to $12.15 per oz silver payable (net of
gold credits)
-- Cash and equivalents rose 27% to $44.3 million compared to $35.0 million
at year end.
Operations
-- Silver production increased 27% to 1,898,999 oz
-- Gold production increased 23% to 18,519 oz
-- Silver equivalent production increased 26% to 3.0 million oz (at a 60:1
silver:gold ratio)
-- Bullion inventory at quarter-end included 295,839 silver ounces and 421
gold ounces
-- Concentrate inventory at quarter-end included 60,512 silver ounces and
1,113 gold ounces
-- Ore grades and metal recoveries were higher at all three mines
-- Guanacevi in particular had a strong Q1 thanks to sharply higher ore
grades at Porvenir Cuatro
(1) Adjusted earnings, mine operating cash flow, EBITDA, cash costs and all-
in sustaining costs are non-IFRS measures. Please refer to the
definitions in the Company's Management Discussion & Analysis.
Endeavour CEO Bradford Cooke stated: "We delivered another strong quarter of
silver and gold production in Q1, 2014, which puts us well ahead of our
production plan for the year. Both cash costs and all-in sustaining costs were
well below guidance thanks to our cost cutting strategies initiated last year.
However, our earnings were lower due to the sharply lower metal prices, in spite
of achieving higher grades and recoveries at all three mines. We continue to
work toward optimizing operating costs and improving profit margins given the
current low silver and gold prices."
Financial Results
For the first quarter ended March 31, 2014, the Company generated revenue
totaling $53.0 million (2013 - $69.9 million). During the quarter, the Company
sold 1,537,665 silver ounces and 16,445 gold ounces at realized prices of $20.50
and $1,306 per ounce respectively, compared to sales of 1,345,832 silver ounces
and 13,037 gold ounces at realized prices of $29.38 and $1,613 per ounce
respectively in the First Quarter of 2013.
After cost of sales of $41.7 million (2013 - $51.0 million), mine operating
earnings amounted to $11.3 million (2013 - $18.9 million) from mining and
milling operations in Mexico.
Excluding depreciation and depletion of $14.1 million (2013 - $12.1 million) and
stock-based compensation of $0.1 million (2013- $0.1 million), mine operating
cash flow before taxes was $25.4 million (2013 - $32.5 million excluding the
inventory write down) in the first quarter of 2014. Net earnings were $4.0
million (2013 -$14.4 million).
Net earnings also included a mark-to-market derivative liabilities loss related
to share purchase warrants issued in 2009 denominated in Canadian dollars, while
the Company's functional currency is the US dollar. Under IFRS, these warrants
are classified and accounted for as a financial liability at fair market value
with adjustments recognized through net earnings. The appreciation of these
warrants, prior to being exercised in the quarter, resulted in a derivative
liability loss of $1.4 million during the first quarter of 2014 (2013 - gain of
$1.5 million).
Excluding the mark-to market derivative liabilities gain, adjusted earnings were
$5.5 million ($0.05 per share) compared to $12.9 million ($0.13 per share) in
the same period of 2013. The drop in precious metals prices was the primary
reason for the decrease in the Company's earnings year over year.
Cost cutting initiatives that commenced in Q2, 2013 are now well established
which resulted in a 7% drop in direct production costs to $93 per tonne from Q1,
2013.
Cash costs per ounce, net of by-product credits (a non-IFRS measure and a
standard of the Silver Institute) fell 52% to $4.87 per ounce of payable silver,
compared to $10.04 per ounce in the same period of 2013. All-in-sustaining costs
per ounce (also a non-IFRS measure) fell 51% to $12.15 due in part to lower
exploration and mine development expenditures compared to Q1, 2013. Exploration
and mine development expenditures fluctuate quarter to quarter, and all-in
sustaining costs are expected to increase in the second and third quarters with
higher planned exploration and mine development expenditures. Going forward,
management expects cash costs per ounce to move closer to guidance as mined
grades revert to reported reserve grades.
Annual General Meeting of Shareholders Results
Shareholders voted in favour of all items of business, including the re-election
of each director nominee by show of hands. A total of 63.4 million votes were
submitted by proxy, representing 62.6% of the outstanding common shares as of
the record date. The following is a tabulation of the votes submitted by proxy:
Votes
Director Votes for withheld Percent for Percent withheld
----------------------------------------------------------------------------
Ricardo M. Campoy 27,266,442 668,204 97.61% 2.39%
Bradford J. Cooke 27,149,666 784,980 97.19% 2.81%
Geoffrey A. Handley 27,248,581 686,065 97.54% 2.46%
Rex J. McLennan 27,508,899 425,747 98.48% 1.52%
Kenneth Pickering 27,277,032 657,614 97.65% 2.35%
Mario D. Szotlender 16,406,845 11,527,801 58.73% 41.27%
Godfrey J. Walton 27,663,567 271,079 99.03% 0.97%
Shareholders also voted 76.4% in favour to reconfirm the Shareholders Rights
plan. In addition, shareholders voted to re-appoint KPMG LLP as auditors, and to
authorize the Board of Directors to fix the auditor's remuneration for the
ensuing year.
At the Board of Directors meeting following the AGM, Geoff Handley was
re-appointed Chairman of the Board and Chair of the Corporate Governance and
Nominating Committee; Rex McLennan was re-appointed Chair of the Audit
Committee; Ricardo Campoy was re-appointed Chair of the Compensation Committee;
and Ken Pickering was appointed Chair of the Sustainability Committee.
Conference Call
A conference call to discuss the results will be held on Tuesday, May 13. The
call - formerly scheduled for 10am PDT - will be held at 12pm PDT (3pm EDT). To
participate in the conference call, please dial the following:
Toll-free in Canada and the US: 1-800-319-4610
Local Vancouver: 604-638-5340
Outside of Canada and the US: 1-604-638-5340
No pass-code is necessary to participate in the conference call.
A replay of the conference call will be available by dialing 1-800-319-6413 in
Canada and the US (toll-free) or 1-604-638-9010 outside of Canada and the US.
The required pass-code is 4890 followed by the # sign. The replay will also be
available on the Company's website at www.edrsilver.com.
About Endeavour - Endeavour is a mid-tier silver mining company focused on
growing production, reserves and resources in Mexico. Since start-up in 2004,
Endeavour has posted nine consecutive years of accretive growth of its silver
mining operations. The organic expansion programs now underway at Endeavour's
three silver-gold mines in Mexico combined with its strategic acquisition and
exploration programs should facilitate Endeavour's goal to become a premier
senior silver producer.
Cautionary Note Regarding Forward-Looking Statements
This news release 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 2014 and the timing and results of exploration drill programs.
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, 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; the speculative nature of mineral
exploration and development, risks in obtaining necessary licenses and permits,
and challenges to the Company's title to properties; fluctuations in the prices
of commodities and their impact on reserves and resources 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
forward-looking statements or information, there may be other factors that cause
results to be materially different from those anticipated, described, estimated,
assessed or intended. There can be no assurance that any forward-looking
statements or information will prove to be accurate as actual results and future
events could differ materially from those anticipated in such statements or
information. Accordingly, readers should not place undue reliance on
forward-looking statements or information.
ENDEAVOUR SILVER CORP.
COMPARATIVE HIGHLIGHTS
Three Months Ended March 31
Q1 2014 Highlights
2014 2013 % Change
----------------------------------------------------------------------------
Production
----------------------------------------------------------------------------
Silver ounces produced 1,898,999 1,489,716 27%
Gold ounces produced 18,519 15,032 23%
Payable silver ounces produced 1,844,165 1,459,706 26%
Payable gold ounces produced 17,796 14,787 20%
Silver equivalent ounces produced
(1) 3,010,139 2,391,636 26%
Cash costs per silver ounce(2)(3) 4.87 10.04 (52%)
Total production costs per
ounce(2)(4) 13.07 18.07 (28%)
All -in sustaining costs per
ounce(2)(5) 12.15 24.60 (51%)
Processed tonnes 346,525 376,344 (8%)
Direct production costs per
tonne(2)(6) 92.93 99.63 (7%)
Silver co-product cash costs (7) 10.46 16.20 (35%)
Gold co-product cash costs (7) 666 889 (25%)
----------------------------------------------------------------------------
Financial
----------------------------------------------------------------------------
Revenue ($ millions) 53.0 69.9 (24%)
Silver ounces sold 1,537,665 1,345,832 14%
Gold ounces sold 16,445 13,037 26%
Realized silver price per ounce 20.50 29.38 (30%)
Realized gold price per ounce 1,306 1,613 (19%)
Net earnings (loss) ($ millions) 4.0 14.4 (72%)
Adjusted net earnings (8) ($
millions) 5.5 12.9 (58%)
Mine operating earnings ($
millions) 11.3 18.9 (40%)
Mine operating cash flow(9) ($
millions) 25.4 32.5 (22%)
Operating cash flow before working
capital changes (10) 18.3 25.3 (28%)
Earnings before ITDA (11) 19.3 31.0 (38%)
Working capital ($ millions) 46.4 42.0 10%
----------------------------------------------------------------------------
Shareholders
----------------------------------------------------------------------------
Earnings (loss) per share - basic 0.04 0.14 (71%)
Adjusted earnings per share -
basic (8) 0.05 0.13 (58%)
Operating cash flow before working
capital changes per share (10) 0.18 0.25 (28%)
Weighted average shares
outstanding 100,494,157 99,660,016 1%
----------------------------------------------------------------------------
ENDEAVOUR SILVER CORP.
CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
(expressed in thousands of U.S. dollars)
----------------------------------------------------------------------------
Three Months Ended
March 31, March 31,
2014 2013
----------------------------------------------------------------------------
Operating activities
Net earnings for the period $ 4,037 $ 14,357
Items not affecting cash:
Share-based compensation 459 563
Depreciation and depletion 14,155 12,148
Deferred income tax provision (recovery) (2,274) 2,453
Unrealized foreign exchange loss (gain) (3) (85)
Mark-to-market loss (gain) on derivative
liability 1,434 (1,452)
Mark-to-market loss (gain) on contingent
liability 41 (2,491)
Finance costs 436 117
Write down of inventory to net realizable
value - 1,495
Gain on sale of investments - (1,777)
Net changes in non-cash working capital (1,178) (15,790)
----------------------------------------------------------------------------
Cash from operating activities 17,107 9,538
----------------------------------------------------------------------------
Investing activities
Property, plant and equipment expenditures (9,234) (28,716)
Investment in short term investments - (130)
Proceeds from sale of short term investments - 4,720
----------------------------------------------------------------------------
Cash used in investing activities (9,234) (24,126)
----------------------------------------------------------------------------
Financing activities
Proceeds from (repayments to) revolving
credit facility (1,000) 24,000
Common shares issued on exercise of options
and warrants 2,727 293
Interest paid (311) (42)
----------------------------------------------------------------------------
Cash from financing activities 1,416 24,251
----------------------------------------------------------------------------
Effect of exchange rate change on cash and
cash equivalents 2 85
Increase (decrease) in cash and cash
equivalents 9,289 9,663
Cash and cash equivalents, beginning of period 35,004 18,617
----------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 44,295 $ 28,365
----------------------------------------------------------------------------
----------------------------------------------------------------------------
This statement should be read in conjunction with the condensed consolidated
interim financial statements for the period ended March 31, 2014 and the
related notes contained therein.
ENDEAVOUR SILVER CORP.
CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME
(expressed in thousands of US dollars, except for shares and per share
amounts)
----------------------------------------------------------------------------
Three Months Ended
March 31, March 31,
2014 2013
----------------------------------------------------------------------------
Revenue $ 53,000 $ 69,873
Cost of sales:
Direct production costs 27,220 36,887
Royalties 334 450
Share-based compensation 68 75
Depreciation and depletion 14,073 12,074
Write down of inventory to net realizable
value - 1,495
----------------------------------------------------------------------------
41,695 50,981
Mine operating earnings 11,305 18,892
Expenses:
Exploration 2,168 4,190
General and administrative 2,438 3,130
----------------------------------------------------------------------------
4,606 7,320
Operating earnings 6,699 11,572
Mark-to-market loss/(gain) on derivative
liabilities 1,434 (1,452)
Mark-to-market loss/(gain) on contingent
liability 41 (2,491)
Finance costs 446 247
Other income (expense):
Foreign exchange (257) 1,400
Investment and other income 184 1,978
----------------------------------------------------------------------------
(73) 3,378
Earnings before income taxes 4,705 18,646
Current income tax expense 2,942 1,836
Deferred income tax expense (recovery) (2,274) 2,453
----------------------------------------------------------------------------
668 4,289
----------------------------------------------------------------------------
Net earnings for the period 4,037 14,357
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Other comprehensive income, net of tax
Net change in fair value of available for
sale investments 8 (2,839)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Comprehensive income (loss) for the period 4,045 11,518
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Basic earnings (loss) per share based on net
earnings $ 0.04 $ 0.14
----------------------------------------------------------------------------
Diluted earnings (loss) per share based on net
earnings $ 0.04 $ 0.13
----------------------------------------------------------------------------
Basic weighted average number of shares
outstanding 100,494,157 99,660,016
----------------------------------------------------------------------------
Diluted weighted average number of shares
outstanding 101,435,506 101,507,642
----------------------------------------------------------------------------
This statement should be read in conjunction with the condensed consolidated
interim financial statements for the period ended March 31, 2014 and the
related notes contained therein.
ENDEAVOUR SILVER CORP.
CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
(expressed in thousands of US dollars)
----------------------------------------------------------------------------
March 31, December 31,
2014 2013
----------------------------------------------------------------------------
ASSETS
Current assets
Cash and cash equivalents $ 44,295 $ 35,004
Investments 1,471 1,463
Accounts receivable 21,537 23,749
Inventories 27,160 23,647
Prepaid expenses 2,332 3,341
----------------------------------------------------------------------------
Total current assets 96,795 87,204
Non-current deposits 1,131 1,186
Mineral property, plant and equipment 272,374 278,533
----------------------------------------------------------------------------
Total assets $ 370,300 $ 366,923
----------------------------------------------------------------------------
----------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 15,932 $ 17,221
Income taxes payable 2,484 3,259
Derivative liabilities - 1,491
Revolving credit facility 32,000 33,000
----------------------------------------------------------------------------
Total current liabilities 50,416 54,971
Provision for reclamation and rehabilitation 6,662 6,652
Contingent liability 140 99
Deferred income tax liability 46,778 49,053
----------------------------------------------------------------------------
Total liabilities 103,996 110,775
----------------------------------------------------------------------------
Shareholders' equity
Common shares, unlimited shares authorized, no
par value, issued and outstanding 101,255,314
shares (Dec 31, 2013 - 99,784,409 shares) 364,735 358,408
Contributed surplus 14,620 14,836
Accumulated comprehensive income (loss) (4,073) (4,081)
Deficit (108,978) (113,015)
----------------------------------------------------------------------------
Total shareholders' equity 266,304 256,148
----------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 370,300 $ 366,923
----------------------------------------------------------------------------
----------------------------------------------------------------------------
This statement should be read in conjunction with the condensed consolidated
interim financial statements for the period ended March 31, 2014 and the
related notes contained therein.
FOR FURTHER INFORMATION PLEASE CONTACT:
Endeavour Silver Corp.
Meghan Brown
Director Investor Relations
Toll free: 1-877-685-9775 / 604-640-4804
604-685-9744 (FAX)
mbrown@edrsilver.com
www.edrsilver.com
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