Q3 2024 Endeavour Silver Corp Earnings Call

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Operator 2: Thank you for standing by. This is the conference operator. Welcome to the Endeavour Silver Corp Q3 2024 Results Conference Call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there'll be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would now like to turn the conference over to Allison Pettit, Director of Investor Relations. Please go ahead.

Speaker Change: Thank you for standing by. This is the conference operator. Welcome to the Endeavor Silver Corps, third quarter 2024 results conference calls. As a reminder, all participants are endless and they're remote and the conference is being recorded.

Conference Operator: Hustle the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone queue pad. Should you need assistance during the conference call, you may say no on operator by pressing star then zero.

I would now like to turn the conference over to Allison Pettit, Director of Investor Relations. Please go ahead.

Allison Pettit: Thank you, operator. Good morning, everyone. Before we get started, I ask that you view our MD&A precautionary language regarding forward-looking statements. The risk factors pertaining to these statements. Our MD&A and financial statements are available on our website at edrsilver.com. On today's call, we have Dan Dickson, Endeavour Silver's CEO, Elizabeth Senez, our CFO, and Don Gray, Endeavour's COO. Following Dan's formal remarks, we will open the call for questions. Now over to Dan.

Allison Pettit: Thank you operator and good morning everyone.

Allison Pettit: Before we get started, I asked that you view our MDNAs for cautionary language regarding forward looking statements and the risk factors pertaining to these statements. Our MDNA and financial statements are available on our website at edrsilver.com.

On today's call we have Dan Dickson and Deborah Silver CEO, Elizabeth Senes, our CFO and Dawn Gray and Deborah's CEO.

Allison Pettit: Following Dan's formal remarks, we will open the call for questions. And now, over to Dan.

Dan Dickson: Thank you, Allison, and welcome everyone. It's been a busy Q3 at Endeavour Silver. As gold reached new all-time highs and with silver starting to follow, the company's cash flow and financial position should continue to benefit from these higher prices. From an operational standpoint, Q3 brought an unexpected challenge as the company operated at reduced capacity due to a trunnion failure of the primary ball mill at the Guanacevi Mine. Temporary modifications were completed in August, allowing processing to continue at roughly 50% of capacity. The estimated timeline back to full capacity remains at 15 weeks, with the mine being in full operation next month. I would like to extend my thanks to our operations team for their dedicated efforts in mitigating the issue.

Dan: Thank you, Allison, and welcome, everyone.

Dan: It's been a busy third quarter at Endeavor Silver.

Dan: As gold reached new all-time highs, and with silver starting to fall, the company's cash flow and financial position should continue to benefit from these higher prices.

Dan: From an operational standpoint Q3 brought an unexpected challenge as the company operated at reduced capacity due to a trending failure of the primary ball mill at the Guana City mine.

Dan: Temporary modifications were completed in August allowing processing to continue at roughly 50% of capacity.

Dan: The estimated timeline back to full capacity remains at 15 weeks, with the mine being in full operation next month.

Dan: I would like to extend my thanks to our operations team for their dedicated efforts in mitigating the issue.

Dan Dickson: Q3 silver equivalent production totaled 1.6 million ounces or 875,000 ounces of silver and 9,300 ounces of gold, tracking well towards the updated 2024 production guidance of 7.3 to 7.6 million silver equivalent ounces. Silver equivalent grades have been in line with expectations, with gold grades slightly higher and silver grades slightly lower. This is expected to be similar going forward, and we expect the production profile in Q4 to be similar to Q3. At Terronera, substantial progress was made during Q3. Surface construction reached 77% at 30 September, with more than $258 million spent to date. The finish line is in sight as Terronera continues to remain on track for commissioning near the end of the year, and we are excited to have this transformative project added to our production profile in 2025.

Dan: Q3 silver equivalent production totaled 1.6 million ounces or 875,000 ounces of silver and 9,300 ounces of gold tracking well towards the updated 2024 production guidance of 7.3

Dan: to 7.6 million silver equivalent ounces.

Dan: Silver equivalent grades have been in line with expectations, with gold grades slightly higher and silver grades slightly lower. This is expected to be similar going forward, and we expect the production profile in the fourth quarter to be similar to Q3.

Dan: At Terranera, substantial progress was made during the third quarter. Surface construction reached 77% at September 30th, with more than $258 million spent to date.

Dan: The finish line is in sight as Terranera continues to remain on track for commissioning near the end of the year, and we are excited to have this transformative project added to our production profile in 2025.

Dan Dickson: Moving to our financials, we reported top-line revenue of $53 million, up 8% year over year, benefiting from the higher precious metal prices compared to Q3 2023. Cost of sales totals $41 million, a decrease of 12% compared to Q3 2023, driven by lower silver ounces sold in the quarter, as well as cost management measures undertaken at Guanacevi following the trunnion failure, which also includes the termination of a third-party contract mining activities. Direct operating costs on a per-tonne basis and a per-ounce basis were elevated due to the reduced operating capacity at Guanacevi. Because of the reduced operating capacity, management withdrew cost guidance for 2024 in August. The company reported a net loss of $17 million for the three-month period ended 30 September 2024, compared to a $2.3 million loss in Q3 2023.

Dan: Moving to our financials, we reported top-line revenue of $53 million, up 8% year-over-year, benefiting from the higher precious metal prices compared to Q3 2023.

Dan: Cost of sales totals $41 million, a decrease of 12% compared to Q3 2023, driven by lower silver ounces sold in the quarter, as well as cost management measures undertaken at Guantanamo Bay following the Trudy failure.

Dan: which also includes the termination of a third-party contract mining activities.

Dan: Direct operating costs on a per-ton basis and a per-ounce basis were elevated due to the reduced operating capacity at Quanticity.

Dan: Because of the reduced operating capacity, management withdrew cost guidance for 2024 in August.

Dan: The company reported a net loss of $17 million for the three-month period ended September 30, 2024, compared to a $2.3 million loss in Q3 of 2023.

Dan Dickson: Excluding certain non-cash and unusual items and items that are subject to volatility which are unrelated to the company's operations, adjusted income was $1.6 million compared to an adjusted loss of $8.3 million in Q3 2023. As at 30 September 2023, the company's cash position was $55 million and working capital was $29 million. During the quarter, the company completed drawdowns of $25 million from the senior secured debt facility for Terronera. Subsequent to the quarter, the company completed its final drawdown of $35 million. As I mentioned earlier, the overall progress at Terronera reached 77%, with more than $258 million of the project's budget spent to date. Project commitments total $270 million, which is 99% of the $271 million capital budget and remains on track for commissioning near the end of Q4 2024.

Dan: excluding certain non-cash and unusual items and items that are subject to volatility which are unrelated to the company's operations adjusted income was 1.6 million dollars compared to an adjusted loss of 8.3 million in Q3 2023

Dan: As of September 30th, the company's cash position was $55 million and working capital was $29 million.

Dan: During the quarter, the company completed drawdowns of $25 million from the Senior Secure Debt Facility for Terranera, and subsequent to the quarter, the company completed its final drawdown of $35 million.

Dan: As I mentioned earlier, the overall progress at Terranera reached 77%, with more than $258 million of the project's budget spent to date.

Dan: Project commitments total $270 million, which is 99% of the $271 million capital budget, and remains on track for commissioning near the end of Q4 2024.

Dan Dickson: During Q3, 1,050 meters of underground mine development was completed for a cumulative total of 5,550 meters, and the team continued progressing portals 1, 2, and 4, with long hole stopes being developed and initial production planned for Q4. The underground explosive magazines were also completed with the explosive use permit application submitted for approval and anticipated in the new year. On the upper platform, surface mill and infrastructure construction is 90% complete and continues to transition to operations. The coarse ore stockpile reclaim tunnel reached 100% completion, with pre-commissioning testing beginning in Q3, and the primary jaw crusher was commissioned with rock in August, marking a major project milestone. The excavation of the tailings storage facility embankment key trench is 100% complete, with the secondary key at 40% complete.

Dan: During the third quarter, 1,050 meters of underground mine development was completed for a cumulative total of 5,550 meters, and the team continued progressing portals 1, 2, and 4, with long-wall stokes being developed and an initial production plan for Q4.

Dan: The underground explosive magazines were also completed with the explosive use permit application submitted for approval and anticipated in the new year. On the upper platform, surface mill and infrastructure construction is 90% complete and continues to transition to operations.

Dan: The Corsover Stockpile and Reclaimed Tunnel reached 100% completion with pre-commissioning testing beginning in the third quarter, and the primary jaw crusher was commissioned with ROC in August, marking a major project milestone.

Dan: The excavation of the Tailing Storage Facility Embankment Key Trench is 100% complete, with the secondary key at 40% complete. Structural steel columns and beams were erected for the concentration filter building and equipment mechanical structures, and remains on the critical path for commissioning in Q4.

Dan Dickson: Structural steel columns and beams were erected for the concentration filter building and equipment mechanical structures, remains on the critical path for commissioning in Q4. Through 30 September, procurement was 99% complete, the project team continues to expedite pending arrivals. Lastly, from a community relations standpoint, with local community support continuing to be a major commitment. In Q3, the company supported a series of local initiatives and investments such as the inauguration of an early childhood development center, scholarships for university students in Santiago Ixcuintla, municipal road maintenance, workshops for business entrepreneurship for local residents, environmental education programs for primary schools, community tree donations, and summer community workshops for children and youth. For a full construction update at Terronera, I encourage you to visit our website where you'll find our quarterly photo gallery showcasing the latest developments, progress, and information.

Dan: Through September 30th, procurement was 99% complete and the project team continues to expedite pending arrivals.

Dan: And lastly, from a community relations standpoint, with local community support continue to be a major commitment, in Q3 the company supported a series of local initiatives and investments.

Dan: such as the inauguration of an early childhood development center, scholarships for university students in San Diego, Stokelynos, municipal road maintenance, workshops for business entrepreneurship for local residents.

Dan: Environmental Education Programs for Primary Schools, Community Tree Donations, and Summer Community Workshops for Children and Youth.

Dan: For a fulsome construction update at Terranera, I encourage you to visit our website where you'll find our quarterly photo gallery showcasing the latest developments, progress, and information.

Dan Dickson: With that, I'm happy to open up to questions. Operator, please proceed to our Q&A session.

Dan: With that, I'm happy to open up to questions. Operator, please proceed to our Q&A session.

Operator 2: Certainly. We'll now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speakerphone, please pick up the handset before pressing any keys. To withdraw your question, please press star then two. Our first question is from Heiko Ihle with H.C. Wainwright. Please go ahead.

Speaker Change: Certainly. We'll now begin the question and answer session.

Speaker Change: To join the question queue, you may press star then 1 on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speakerphone, please pick up the handset before pressing any keys. To withdraw your question, please press star then 2.

Speaker Change: Our first question is from Heiko Ihle with H.C. Wainwright. Please go ahead.

Heiko Ihle: Hey, Dan, team. I assume you guys can hear me okay.

Dan Dickson: We can hear you really well, Heiko. It's nice to hear from you.

Heiko Ihle: Hey Dan team, I assume you guys can hear me okay?

Heiko Ihle: Perfect. I was going through your 21 October press release regarding Terronera earlier today, again. Just a few follow-ups from the release. You hinted at a few of them earlier on this call. You mentioned that you're recruiting and training team members. How many folks are currently on the payroll, and can you maybe give a trajectory for staffing levels with the timeline from now until full construction at the site?

Speaker Change: We can hear you really well, Iko. It's nice to hear from you.

Heiko Ihle: Perfect. I was going through your October 21st press release regarding Piranera earlier today again. Just a few follow-ups from the release. You hinted at a few of them earlier on this call.

Speaker Change: You mentioned that you're recruiting and training team members. How many folks are currently on the payroll, and can you maybe give a trajectory for staffing levels with the timeline from now until full employment at the site?

Dan Dickson: I can tell you that full employment at the site when we're in operations is about just over 500 people. Currently, we're well over 750 people at site. In fact, we have a second shift coming to help push us to the end of the year here with regards to our tailing filter press. As far as the ramp up of where we're exactly right now compared to where we're going to be when we're in full operations, I think we have about 250 Endeavour Silver employees, and I think there's actually 800 contract workers on site trying to push to get us to the end here.

Speaker Change: I can tell you that full employment at the site when we're in operations is about just over 500 people. Currently, we're well over 750 people at site. In fact, we have a second ship coming to help push us to the end of the year here with regards to our tailings filter press. As far as the ramp up of where we're exactly right now compared to where we're going to be when we're in full operations.

Speaker Change: I think we have about 250 Endeavor Silver employees, and I think there's actually 800 contract workers on site trying to push to get us to the end here.

Heiko Ihle: Wow. Impressive numbers. Building on all of that, again, you had some talking points that preempted some of this in your prepared remarks. Are you seeing community embracement from all of this? There's still a decent amount of local job creation from all of this. What are you seeing? Obviously, you're doing the scholarships and you're doing all sorts of stuff. Is it working? Are they embracing it?

Speaker Change: Impressive numbers.

Speaker Change: building and all of that and again you have some talking points and preempted some of this in your prepared remarks

Speaker Change: Are you seeing community embracement from all of this? I mean, there's still a decent amount of local job creation from all of this. What are you seeing? Can you maybe give some examples of... And obviously you're doing the scholarships and you're doing all sorts of stuff. Is it working? Are they embracing it?

Dan Dickson: I'll touch on it a bit and maybe pass it to Don, who's at site a bit more than I am. Ultimately, we've had a community relations group on site since 2013 when we really acquired the property. I've got to hand it to our explorations team that did a phenomenal job of incorporating things that would help the community benefit from our mine and ultimately incorporating them with understanding what we're doing at Terronera. I'd say over our last four or five years, we've had great engagement with the community. I think Santiago de los Santos will benefit greatly, and I think they're greatly involved. We've hired people there and ultimately brought a lot of direct and indirect jobs to the community.

Speaker Change: Yeah, I'll touch on it a bit, maybe pass it to Don, who's at that site a bit more than I am. But ultimately, we've had a community relations group on site since 2013, when we really acquired the property. And I've got to hand it to our explorations team that's done a phenomenal job of incorporating

Speaker Change: Things that would help the community benefit from our mind and ultimately incorporating them with understanding what we're doing at Ternera. I'd say over our last four or five years, we've had great engagement with the community. I think Santiago de los Pinos.

Speaker Change: will benefit greatly and I think they're greatly involved. We've hired people there and ultimately brought a lot of...

Dan Dickson: As far as the programs that we have, and it's similar to what we've always done at Guanacevi and Bolañitos, we feel like we're neighbors, and to be a good neighbor, you've got to be part of the community and help out where we can. Obviously, I touched on some in my talk with tree donations, community support for various days like Day of the Dead. We're always involved with that, and we're always looking for ways to incorporate ourselves in the community because obviously having a social license to operate has been the foundation of Endeavour, and I think that's going to continue to be the case. Don, I don't know if there's anything else you want to add or other community programs that we're doing that you see as being greatly beneficial.

Speaker Change: direct and indirect jobs in the community.

Speaker Change: As far as the programs that we have, and it's similar to what we've always done at Gowanuski and Bolognitos, I mean, it's...

Speaker Change: We feel like we're neighbours, and to be a good neighbour, you've got to be part of the community and help out where we can. Obviously, I touched on some in my talk, with tree donations, community support.

Speaker Change: for various days like Day of the Dead. We're always involved with that and we're always looking ways to kind of incorporate ourselves in the community because obviously having a social license to operate has been a foundation of Endeavour and I think that's going to continue to be the case.

Speaker Change: Don, I don't know if there's anything else you want to add or other community programs that we're doing that you see has been greatly beneficial

Don Gray: I think I mentioned we have a phased training program for our mill operators, and many of the people in the area don't have experience, and so we're bringing them in for early training. When we first started the program, we had a few vacancies in there, and then as the word got around that the training was good and the company was serious, we filled out all the slots. I think that's a real tribute to our guys putting together good programs and working with the community.

Speaker Change: I think I mentioned on on our we have a phased training program for our mill operators and

Speaker Change: And, you know, many of the people in the area don't have experience. And so we're bringing them in for early training. And when we first started the program, we had a few vacancies in there. And then as the word got around that the training was good and the company was serious,

Speaker Change: We filled out all the slots, so I think that's a real tribute to our guys putting together good programs and working with the community.

Heiko Ihle: Very good. Then just a completely different follow-up on something else. Can you give me some color on where we should model G&A for the remainder of the year and maybe even 2025, assuming the share price stays where it is, given the revaluation of the DSU liabilities, like the cash settled one that you encountered this quarter, please?

Speaker Change: Very good. And then just a completely different follow-up on something else. Can you give some color on where we should model G&A for the remainder of the year, and maybe even 2025, assuming the share price stays where it is, given the revaluation of the DSU liabilities, the cash settled one that you encountered this quarter, please?

Dan Dickson: No, for sure. I'm not going to get too much into 2025, but ultimately, if you look back at the history of Endeavour, our G&A from a cash perspective has always been about $8 to $10 million. Then you can put in the DSUs, the mark-to-market on DSUs or stock-based comp. I don't know why our G&A would ramp up significantly in 2025 compared to 2024. I believe we're tracking right along those lines of $8 to $10 million in cash G&A.

Speaker Change: Yeah, no, for sure. I'm not going to get too much into 2025. But ultimately, if you look back at the history of Endeavor, our G&A from a cash perspective has always been about $8 to $10 million US.

Speaker Change: And then you can put in the DSUs and mark-to-market on DSUs or stock-based comps. I don't know why our G&A would ramp up significantly in 2025 compared to 2024. I believe we're tracking right along those lines of $8 to $10 million in cash G&A.

Heiko Ihle: Very good. I'll get back into you. Thank you so much.

Dan Dickson: Thank you, Heiko, for the questions.

Speaker Change: Very good. I'll get back in queue. Thank you so much.

Speaker Change: Thank you, Aiko, for the questions.

Operator 2: The next question is from Lucas Pipes with B. Riley Securities. Please go ahead.

Allison Pettit: The next question is from Lucas Pipes with B Raleigh Security. Please go ahead.

Nick Giles: Thank you so much, operator. This is Nick Giles asking questions on behalf of Lucas. Dan and team, congrats on all the progress at Terronera so far. Maybe a question for both Dan and Don. Just would love to get a little bit more color about the ramp process, how to think about timing, and ultimately, what would you consider the largest potential bottlenecks during that process? Thank you very much.

Allison Pettit: Thank you so much, operator. This is Nick Giles asking questions on behalf of Lucas, Dan and team. Congrats on all the progress at Terran Air so far.

Allison Pettit: Maybe a question for both Dan and Don. Just would love to get a little bit more color about the ramp process, how to think about timing, and ultimately, what would you consider the largest potential bottlenecks during that process? Thank you very much.

Dan Dickson: Thanks, Nick. I can help out a little bit with Don. Ultimately, we expect a three-month ramp up. We're hoping to go a little bit quicker. I'll leave it to Don what he expects the bottlenecks can be. I'm sure there's many that come through his head. Yeah, you have the normal startup items. We do have much of the upper platform completed. There's a lot of things we can get pre-checked in advance. Where we'll have the focus is especially on the concentrate and the tailing filters there. We want to get one circuit up and running real well. Then we can complete a lot of the commissioning. Our focus will be there. We feel we've brought in the right talent, have the vendor support. We think it'll go along as planned.

Speaker Change: Thanks Nick. I can help out a little bit with Dawn. Ultimately we expect kind of a three-month ramp up. We're hoping to go a little bit quicker and I'll leave it to Dawn. He expects the bottlenecks could be, but I'm sure there's many that come through his head.

Dawn Gray: Yeah, I mean it's normal you have the normal startup items, and we do have much of the upper platform Completed so there's a lot of a lot of things we can get pre-checked In advance where where we'll have the focus

Dawn Gray: is on the, especially on the concentrate and the tailing filters there. You know, we wanna get one circuit up and running real well and then we can complete a lot of the commissioning. So our focus will be there and we feel we brought in the right talent, have the vendor support. So we think it'll go along as planned.

Nick Giles: Don, that's great to hear. I appreciate the color. Any updated view on cash costs or on sustaining, just based on current gold and silver prices?

Speaker Change: Don, that's great to hear. I appreciate the color.

Allison Pettit: Any updated view on cash costs or on sustaining just based on current gold and silver prices?

Dan Dickson: Yeah, I'm guessing, Nick, you're asking for 2025 in relation to Terronera?

Allison Pettit: Yeah, I'm guessing, Nick, you're asking for 2025 in relation to Terranera.

Nick Giles: That's correct.

Dan Dickson: Yeah. Where our plans will be once we get into commissioning and ramp up, we'll come out with 2025 guidance early next year. Ultimately, our feasibility study that came out in 2021, we updated that right prior to start the build or ultimately making our investment decision. Our cost per ton at the time was $81, and we fully understand that we've seen a lot of inflationary pressures over the last 2 years, and we've seen that at our existing operations, Guanacevi and Bolañitos. As we get into going through all our budgeting and making sure our cost drivers right, it'll take a little bit of time, and we want to make sure we understand all the numbers and then the timelines to come out with that. If you can bear with us, we expect them to come out, like I say, in January, February of next year.

Speaker Change: That's correct.

Allison Pettit: Yeah, our plan will be once we get into commissioning and ramp up, we'll come out with 2025 guidance early next year. Ultimately, our feasibility study that came out in 2021, we updated that. Great priority.

Allison Pettit: As we get into going through all our budgeting and make sure our cost driver is right, it will take a little bit of time and we want to make sure we understand all the numbers and then the timelines to come out with that. So if you can bear with us, we expect it to come out, like I said, in January, February of next year.

Nick Giles: Fair enough. No, I appreciate that. If I can squeeze one more in, maybe a question for Elizabeth. It would be great to get your perspective on target liquidity, cash on balance sheet, just as Terronera reaches full run rates.

Speaker Change: Thank you. Thank you. Thank you.

Speaker Change: Fair enough, no, I appreciate that, and if I can squeeze one more and maybe a question for Elizabeth, it would be great to get your perspective on target liquidity, cash on balance sheet, just as Teranera reaches full run rates.

Elizabeth Senez: Yeah. As you saw at the end of September, we had $55 million in cash. Obviously during the month of October, we've been continuing to build Terronera. What we're seeing is that a lot of the deposits that were made in advance with our vendors are now being applied to our activities. The cash burn at Terronera has been slowing down. We do anticipate a smooth cash position as we move into 2025 and start that ramp up process and see cash flows coming in at Terronera early in 2025.

Speaker Change: Yeah, so as you saw at the end of September, we had $55 million in cash and then obviously during the month of October, we've been continuing to build Terranera. But what we're seeing is that a lot of the deposits that were made in advance with our vendors are now being applied to our activities. So the cash burn at Terranera has been slowing down. So we do anticipate a smooth cash position as we move into 2025 and start that ramp up.

Speaker Change: processing to see cash flows coming in at Terra Nera early in 2025.

Nick Giles: Great. That's super helpful. Dan, Elizabeth, Don, to you and the rest of the team, continue. Best of luck. Thanks so much.

Speaker Change: Great, that's super helpful.

Speaker Change: Dan, Elizabeth, Don, to you and the rest of the team, continue best of luck. Thanks so much.

Dan Dickson: Thanks, Nick. Good questions.

Speaker Change: Thanks, Nick. Good questions.

Operator 2: The next question is from Nicholas Clark with TD Cowen. Please go ahead.

Conference Operator: The next question is from Nicholas Clark with TV Cohen. Please go ahead.

Nicholas Clark: Hi, Dan and team. Thanks for taking my questions. Nicholas Clark here asking on behalf of Craig Hutchison. Just one question, if I could circle back on Terronera, maybe this is just a little more clarification, but if we're looking at about 99% of that $271 million budget being committed currently, would it be fair to think of that remaining 23% left on physical completion as being covered by those commitments, or would there be a little bit of a delta there? Thank you.

Nicholas Clark: Hi, Dan and team. Thanks for taking my questions. Nick Clark here asking on behalf of Craig Hutchinson. Just one question if I could circle back on Terranera and maybe...

Speaker Change: This is just a little more verification, but if we're looking at about 99% of that $271 million,

Speaker Change: budget being committed currently. Would it be fair to kind of think about remaining 23% left on a fiscal completion as being covered by those commitments or would there be a little bit of a delta there? Thank you.

Dan Dickson: Yeah, I'm happy to answer that. Libby and Don are sitting right now next to each other. Ultimately, the $270 million committed and the $258 million spent. The $258 million spent includes prepaids and advances that Libby touched on with Nick Giles' question there. Ultimately, with what's left, it's a very dynamic question because we have a lot going on with regards to our LNG vaporization plant. Ultimately, we've been saying the market that's going to be ready in 2025. We're hoping by the end of Q1, we could ultimately be in commercial production before that's completed. We have the embankment on our tailings dam. Originally, it's estimated to be $40 million in that 271, we think we can start up with a lower embankment. Of course, we're trying to hit what our percentage completion was or actual expectation, then mine development.

Speaker Change: Yeah, I'm happy to answer that. I mean, Libby and Don are sitting right now in Mexico. Ultimately, the $270 million committed and the $258 million spent, the $258 million spent includes prepays and advances that Libby touched on with Nick's job question there.

Allison Pettit: ultimately with what's left.

Allison Pettit: and it's a very dynamic question because we have a lot going on with regards to

Allison Pettit: Our LNG vaporization plant, ultimately we've been staying in the market, that's going to be ready in 2025, we're hoping by the end of the...

Allison Pettit: first quarter, but we could ultimately be in commercial production before that's completed. We have the embankment on our tailings dam. Originally, it's estimated to be $40 million in that 2071, and we think we can start up with a lower embankment. Of course, we're trying to hit what our percentage

Dan Dickson: Depending on that commissioning timeline, it's difficult, but we do know we're in the ballpark. We're not coming out with a commitment of exactly what our spend will be. We're on good track right now.

Allison Pettit: completion-wise or actual expectation, and then mine development. And depending on that commissioning timeline, it's difficult, but we do know we're in the ballpark. We're not coming out with a commitment of exactly what our spend will be, but we're on good track right now.

Nicholas Clark: Got it. Okay. Thank you. Just to clarify, if we look at 77% of $271 million, that's around $209 million. That is not suggesting that you guys are $50 million off of where you were hoping to be.

Speaker Change: got it okay thank you so just to clarify if you look at you know 77% of 271 million that's around 209 million but that is not suggesting that you guys are you know 50 50 million off of where you were hoping to be

Dan Dickson: Correct.

Nicholas Clark: Great. Thanks, guys.

Speaker Change: Correct.

Operator 2: The next question is from Jake Sekelsky with Alliance Global Partners. Please go ahead.

Speaker Change: The next question is from Jake Sekelski with Alliance Global Partners. Please go ahead.

Jake Sekelsky: Hey, Dan and team, thanks for taking my question.

Dan Dickson: Happy to take your questions, Jake.

Jake Sekelski: Hey, Dan and team. Thanks for taking my questions.

Jake Sekelsky: Can you just provide a bit of color on the return to steady state at Guanacevi, maybe on the timing and any hiccups you think you might encounter getting back to more normalized levels?

Jake Sekelski: Happy to take your questions, Truett.

Jake Sekelski: So, can you just provide a bit of color on the return to steady state at Guantanamo City, maybe on the timing and any hiccups you think you might encounter getting back to more normalized levels?

Don Gray: Yeah, I'll happily pass that to Don. I think as Dan mentioned in the opening comments, our operating team did a really good job on working on the milling circuit and keeping that going. Also they've done an equally as good a job on the repair work, maintaining close contact with the foundry because we did have to have some things put together. That's continuing like we planned. I think we're in good shape. We have the contractor lined up for when the parts get there and the components, and we don't expect any glitches there.

Speaker Change: Yeah, I'll have Philly pass that to Don.

Speaker Change: working on the milling circuit and keeping that going.

Speaker Change: Also, they've done equally as good a job on the repair work, maintaining close contact with the foundry because we did have to have some things.

Speaker Change: We did have to have some things...

Speaker Change: put together and that that's continuing like we planned so I think we're in we're in good shape we have the contractor lined up for when when the parts get there and the components and and we don't expect any don't expect any glitches there so

Jake Sekelsky: Okay. That's helpful. Just in a broad sense, with where precious metals prices are, I'm just curious, does that cause you guys to revisit any of the near-term or medium-term mine plans or how you're looking at it for the price, knowing that.

Speaker Change: Okay, that's helpful.

Speaker Change: In a broad sense, with where precious metals prices are, I'm just curious, does that cause you guys to revisit any of the near-term or medium-term mine plans or how you're looking at milling at Juan Acevedo?

Dan Dickson: Yeah, that's a good question. It's something that we look at every year. It's that time of year right now, budgeting of mine plans and finalizing those for next year. I would say even at Terronera, it's a dynamic with where prices are. Obviously in our resource models, we have indicated ounces and we have inferred ounces. Often we, as Endeavour, with our underground mining have brought in inferred ounces and indicated ounces into mine plans, sometimes potential ounces that aren't even in our resource. With higher prices, it allows us to go in some areas that we've maybe abandoned in the past. Again, we're going through our resource update for 2024, year-end 2024, and we'll come out with that probably in our MD&A or our information, but our AIF ultimately for year-end.

Allison Pettit: Thank you. Thank you. Thank you.

Speaker Change: Yeah, I mean, that's a good question. It's something that we look at every year, at that time of year right now, budgeting and mind plans and finalizing those for next year and

Speaker Change: I would say even at Terranera, it's a dynamic with where prices are, and obviously in our resource models we have indicated ounces, we have inferred ounces, and often we as Endeavor with our underground mining have brought in inferred ounces and indicated ounces into the mine plans, sometimes potential ounces aren't even in our resource.

Jake Sekelsky: Okay, thanks for that. That's all for me. Thanks again.

Dan Dickson: Thanks for the questions, Jake.

Speaker Change: Okay, thanks for that. That's all for me. Thanks again.

Operator 2: Once again, if you have a question, please press star then one. The next question is from Stephen Soock with Stifel. Please go ahead.

Speaker Change: Thanks for the questions, Jake.

Stephen Soock: Hi, Dan and team. Congrats on a good quarter despite some operational challenges. Kudos to all of you. With the underground at Terronera, has there been any test mining or update on how the ore body underground conditions look compared to expectations now that you're well into it? Maybe just as a follow on, how comfortable are you with the amount of underground development established now that we're just ahead of the start of production?

Speaker Change: Hi Dan and team, congrats on a good quarter despite some operational challenges, so kudos to all of you.

Speaker Change: I just wanted to ask with the underground at Terranera, has there been any test mining or update on how the ore body and or ground conditions look compared to expectations now that you're well into it? And maybe just kind of as a follow on, how comfortable are you with the amount of underground development established now that we're just ahead of the start of production?

Don Gray: Great question, Stephen. I'll let Don respond. Okay. We have developed an area to do a test stope. We're actually close to beginning some blasting in that stope and extracting the ore. The good thing is that area, it'll be a long hole stope. In that area, originally in the feasibility, it was cut and fill. We have seen ground conditions in the mine better than what, in the veins, better than what we anticipated from the feasibility study. We've been looking at that, doing a lot of rock mechanics work, and feel there's some upside there. For the development, because we are finding more areas that we'll put in the mine plan as long hole stoping, that just takes the pressure off of so much development to get the cut and fill stopes ready. We'll be in good shape.

Speaker Change: Great question, Stephen. I'll let Dawn respond.

Speaker Change: OK.

Speaker Change: close to beginning some blasting in that stope and extracting the ore. The good thing is that area, it'll be a long hole stope. In that area, originally in the feasibility, it was cut and filled.

Speaker Change: and we have seen ground conditions.

Speaker Change: in the mind better than what...

Allison Pettit: in the veins better than what we anticipated.

Allison Pettit: from the feasibility study. So we've been looking at that.

Speaker Change: doing a lot of rock mechanics work and feel there's some upside there.

Speaker Change: That just takes the pressure off of so much development to get the cut and fill stokes ready, so we'll be in good shape.

Stephen Soock: That's great to hear and hopefully continues. I know that has really positive implications on your AISC number if you're able to cut down that life of mine development through more long holes. That's great. Just on a bit of a different note, can you just give us a quick update on what's happening at Pitarrilla and maybe just what to look forward to there through 2025 at a high level?

Speaker Change: That's great to hear, and hopefully continues. I know that would have really positive implications on your ASIC number if you're able to cut down that life and mind development through more long holds. So that's great. Maybe just on a bit of a different note, can you just give us a quick update on what's happening at Pitteria, and maybe just what to look forward to there through 2025 at a high level?

Dan Dickson: Yeah, that's a great question, actually, Stephen. Ultimately, which was in our original guidance for the year, we're going to spend about $5 million at Pitarrilla advancing an underground ramp that we had towards what's called our manto zone. Then we feel like there's some feeder structures there. We've been drilling there for the last almost 3 months, and we should have news out on Pitarrilla in the coming weeks to push that forward. Ultimately, we really believe in what we have at Pitarrilla. We think ultimately what we purchased 2 years ago from SSR Mining is a special asset. For those that aren't familiar with Pitarrilla, we have 600 million ounces of silver defined, plus zinc and lead. Ultimately, we've been looking at Pitarrilla as an underground operation or potential for an underground operation.

Speaker Change: Yeah, that's a great question actually, Stephen. Ultimately, which was in our original guidance for the year, we're going to spend about $5 million at Pittsburgh advancing an underground ramp that we had towards what's called our Manto Zone.

Speaker Change: And then we feel like there's some feeder structures there. So we've been drilling there for the last...

Speaker Change: almost three months, and we should have news out on PITREA in the coming weeks.

Speaker Change: to push that forward. Ultimately, we really believe in what we have at Pizzeria. We think ultimately what we purchased two years ago from SSR Mining is a special asset. For those that aren't familiar with Pizzeria, we have 600 million ounces.

Speaker Change: of Silver Defined Plus Zinc and Lead. Ultimately, we've been looking at PIT III as an underground operation or potential for an underground operation. And like I say, we should have some news out on that in the next couple of weeks.

Dan Dickson: Like I say, we should have some news out on that in the next couple weeks. Great timing for that question, Stephen.

Stephen Soock: Perfect. Well, I'll stay tuned. That's it for me, guys. Appreciate the call.

Speaker Change: So, great timing for that question, Stephen.

Stephen: Perfect. Well, I'll stay tuned. That's it for me, guys. Appreciate the call.

Dan Dickson: Thanks for the questions.

Operator 2: This concludes the question and answer session. I would like to turn the conference back over to Dan Dickson for any closing remarks.

Speaker Change: This concludes the question and answer session. I would like to turn the conference back over to Dan Dickson for any closing remarks.

Dan Dickson: Thank you, operator, and thanks for everyone attending our Q3 financial call. Like I said at the beginning of our call today, it was a bit of a challenging quarter with the trending. I think our operating team did a phenomenal job to mitigate that as best we could. Terronera continues to be on track, and we're excited to see what Q4 and 2025 brings for the company. Thank you everyone for attending.

Dan Dickson: Thank you, Operator, and thanks for everyone attending our Q3 financial call. Like I said at the beginning of our call today, it was a bit of a challenging quarter with the trending. I think our operating team did a phenomenal job to mitigate that as best we could.

Speaker Change: Terranera continues to be on track and we're excited to see what Q4 in 2025 brings for the company. Thank you everyone for attending.

Operator 2: This brings to an end today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

Speaker Change: This brings to an end today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.

Speaker Change: [music]