Q3 2025 Endeavour Silver Corp Earnings Call

Thank you for standing by. This is the conference operator. Welcome to the Endeavour Silver Corp. third quarter 2025 financial results conference call.

As a reminder, all participants are in listen-only mode, and the conference is being recorded.

After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. If you need assistance during the conference call, you may signal an operator by pressing star then 0.

I would now like to turn the conference over to Allison Pettit, Vice President of Investor Relations. Go ahead.

Allison Pettit: Thank you, operator. Good morning, everyone. Before we get started, I ask that you view our MD&A for cautionary language regarding forward-looking statements and 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 Chief Executive Officer, Elizabeth Senez, our Chief Financial Officer, and Donald Gray, Endeavour Silver's Chief Operating Officer. Following Dan's formal remarks, we will open the call for questions. Now over to Dan.

Thank you, operator. Good morning, everyone. Before we get started, I ask that you view our MD&A for cautionary language regarding forward-looking statements.

and the risk factors pertaining to these statements. Our MD&A and financial statements are available on our website at EDRsilver.com.

Dance formal remarks. We will open the call for questions, and now over to Dance.

Dan Dickson: Thank you, Allison, and welcome everyone. Q3 has been a transformational quarter at Endeavour Silver. With Terronera now in commercial production and Kolpa's first full quarter under our production profile, we have significantly expanded our operational capabilities and strengthened our position in the market. This progress sets the stage for continued growth and improved performance as we move forward. In Q3, Endeavour produced 1.8 million ounces of silver, 7,300 ounces of gold, totaling approximately 3 million silver equivalent ounces. This does not include Terronera and represents an 88% increase compared to Q3 2024, primarily due to the addition of the Kolpa Mine and full quarter production from Guanacevi.

Thank you, Alison, and welcome, everyone.

It has been a transformational quarter at Endeavour Silver.

With Taran, Aaron. Now in commercial production and culpa, our first full quarter under production, we have significantly expanded our operational capabilities and strengthened our position in the market.

This progress sets the stage for continued growth and improved performance as we move forward.

Dan Dickson: We reported revenue of $111 million, an increase of 109% compared to the prior year, benefiting from the higher precious metal prices and increased production profile. Mine operating cash flow before working capital changes rose by 102%, while cash costs increased to $18 a payable silver ounce. The increase is driven by the impact of higher royalties, higher profit participation, and higher cost of third-party mineralized material during the quarter, coupled with lower grades processed at Guanacevi and Bolañitos. All-in sustaining costs increased from the same quarter in 2024 to $30.53 per ounce, net of byproduct credits due to a number of factors, including elevated exploration at Kolpa to validate historical resources, initial capital investment to upgrade facilities, and an increase in treatment and refining charges.

In Q3 2025, Endeavour produced 1.8 million ounces of silver and 7,300 ounces of gold, totaling approximately 3 million silver equivalent ounces. This does not include Tinira and represents an 88% increase compared to Q3 2024, primarily due to the addition of the Culpa mine and full quarter production from Guanacevi.

We reported revenue of $111 million, representing an increase of 109% compared to the prior year, benefiting from higher precious metal prices and an increased production profile.

Mine offering cash flow before working capital changes rose by 102%.

Well, cash costs increased to $18 per payable silver ounce.

The increase is driven by the impact of higher royalties.

Higher profit participation and higher cost of third-party mineralized material during the quarter, coupled with lower grades processed at Guano City and Bolanos.

All-in sustaining costs increased from the same quarter in 2024 to $30.53 per ounce.

Net of byproduct credits, due to a number of factors including elevated expiration at Kulpa, develop to validate historical resources.

Initial capital investment.

Dan Dickson: All-in sustaining costs include $2.3 million of mark-to-market charge in the quarter for deferred share units granted in previous periods within G&A. Mine operating earnings increased to $15.6 million from $12.5 million in Q3 2024 due to the higher operating earnings out of Bolañitos and Guanacevi, as well as $3.9 million in operating earnings from Kolpa, offset by Terronera's mine operating loss of $3.6 million during the commissioning period. The company reported a net loss of $37.5 million for the period after a loss on derivative contracts of $39 million. As previously reported, the company entered into forward gold sales as part of the project loan facility in March 2024, when gold was trading at $2,325.

To upgrade facilities and an increase in treatment and refining charges.

All-in sustaining costs include $2.3 million of mark-to-market charges in the quarter for deferred share units granted in previous periods within G&A.

mine offering earnings increased to 15.6 million from 12 and a half million in Q3 2024 due to the higher operating earnings out of Bonito and Guana Civ as well as 3.9 million in operating needs from kopa,

Offset by the Terin mine operating loss of $3.6 million during the commissioning period.

The company reported a net loss of $37.5 million for the period after a loss on derivative contracts of $39 million.

As previously reported, the company entered into four gold sales as part of the project loan facility in March 2024, when gold was trading at $2,325.

Dan Dickson: As of September 30, the company's cash position was $57 million. On October 16, the company announced that Terronera was officially reached commercial production following a successful commissioning phase. During commissioning, the operation performed at an average of 90% of its design capacity of 2,000 tons per day, while also achieving at least 90% of its projected metal recoveries. This achievement not only underscores a transformational milestone for the company, but also represents a pivotal moment in our corporate strategy, further strengthening our position as a leading mid-tier silver producer. The company forecasts throughput of approximately 350,000 tons over the next 6 months, with average grades estimated to be about 120 grams per ton silver and 2.5 grams per ton gold. These higher grades zones are scheduled to be accessed in mid-2026.

As of September 30th, the company's cash position was $57 million.

On October 16th, the company announced that Turan was officially reached commercial production, following a successful commissioning phase. During commissioning, the operation performed at an average of 90% of its design capacity of 2,000 tons per day, while also achieving at least 90% of its projected metal recoveries. This achievement not only underscores a transformational milestone for the company, but also represents a pivotal moment in our corporate strategy, further strengthening our position as a leading mid-tier silver producer.

The company forecasts throughput of approximately 350,000 tons over the next 6 months, with average grades estimated to be about 120 grams per tonne of silver.

2.5 grams per tonne gold.

Dan Dickson: During this period, the operating team will be working to refine and optimize the operating processes, incrementally improving throughput, recoveries, and our operating processes and efficiencies. In January 2026, the company will issue annualized 2026 production and cost guidance for Terronera with our consolidated guidance. Since completing the Minera Kolpa acquisition on 1 May, the integration of the asset and the team has progressed smoothly. On 25 September, the company announced positive drill results from its ongoing exploration program at Kolpa, demonstrating outstanding potential. The exploration program is designed to target potential, while also completing work to validate historical resource estimates. Part of the acquisition agreement includes $12 million of exploration spend to validate the historical resources over 24 months. In Q3, we incurred $1.5 million, which is included for infill and step out drilling.

This higher-grade zone is scheduled to be accessed in mid-2026. During this period, the operating team will be working to refine and optimize the operating processes incrementally, improving throughput, recoveries, and our operating processes and efficiencies. In January of 2026, the company will issue annualized 2026 production and cost guidance for Terra, along with our consultant guidance.

Since completing the Maricopa Axis acquisition on May 1st, the integration of the asset and the team has progressed smoothly. On September 25th, the company announced positive, drill results from its ongoing exploration program at Kopa, demonstrating outstanding potential. The expert exploration program is designed to target potential. We will also complete work to validate historical resource estimates. Part of the acquisition agreement includes $12 million of exploration spend to validate the historical resources over 24 months.

In Q3, we incurred $1.5 million, which is included in for infill and step-out drilling.

Dan Dickson: In Q3 2025, Kolpa produced 1.3 million silver equivalent ounces, including its base metals, continuing to remain on track to align with Kolpa historical performance benchmarks of 5 million silver equivalent ounces. Grades were marginally lower than expected. Throughput was slightly higher, resulting in slightly higher cash cost per ounce than the historical site trend and management's expectations. Investments are being made to modernize some parts of the plant and surrounding infrastructure to support a potential increase in production. The mine received permits to increase throughput to 2,500 tons per day, the team is executing improvements in the mill and the mine to support an expansion. Management expects to complete its evaluation of an expanded operation late this quarter.

1.3 million silver ounces at Silver Cove. Announcements, including its base metals, continue to remain on track to align with Kulpa. Its historical performance benchmarks of 5 million silver equivalent ounces.

Grades were marginally lower than expected power. Throughput was slightly higher.

Resulting in slightly higher cash costs per ounce than the historical site trend and management's expectations.

Additionally, investments are being made to modernize some parts of the plan and surrounding infrastructure to support a potential increase in production.

The mine received permits to increase throughput to 2,500 tons per day, and the team is executing improvements in the mill and the mine to support an expansion.

Dan Dickson: Lastly, before we open the call to questions, we continue to advance Pitarrilla and are excited for the next chapter as we move this project forward. Focusing on upgrading the inferred resources to indicated, while engineers are working on various studies to support a tailings dam permit and a feasibility study to be published mid-2026. With that, operator, I'd like to open up to questions.

Management expects to complete its evaluation of an expanded operation late this quarter.

Lastly, before we open the call to questions, we continue to advance pit 3A and are excited for the next chapter as we move to the project. This project forward focusing on the upgrading the inferred resources to indicate. It will Engineers are working on various studies to support a talented Zam, permit, a feasible, and a feasibility study to be published mid 2026.

With that operator, I’d like to open up to questions.

Operator: Thank you. We will now begin the question-and-answer session. The first question comes from Heiko Ihle with H.C. Wainwright. Please go ahead.

Thank you.

We will now begin the question-and-answer session. To join the question queue, you may press star, then 1 on your telephone keypad. You will hear a tone acknowledging your request.

If you're using a speakerphone, please pick up your handset before pressing any keys to answer the question. Please press star, then 2.

The first question comes from Holay with 8C main, right? Please go ahead.

Heiko Ihle: Hey, Dan team, thanks so much for taking my questions.

Hey, down at Team. Thanks so much for taking my question.

Dan Dickson: Hey, Heiko. Hope all is well.

Hey ho, hope all is well.

Heiko Ihle: Oh, yeah, very much so. Hey, you hinted at some of this a bit earlier on the call, but maybe walk us through what you've been seeing with Kolpa versus expectations. I know you just talked about grades and costs, the obvious ones, but also, you know, like labor relations, equipment uptime, work you've seen with the communities. Other unexpected impacts, you know, actual versus anticipated 12 months ago, either better or worse than pre-acquisition.

Oh yeah, very much. So hey, um, you're here today. Some of this a bit earlier on the call, but maybe you could walk us through what you've been seeing with culpa versus expectations. And I know you just talked about grades and costs, the obvious ones, but also, you know, like labor relations, equipment, uptime work. You see what the community is, other unexpected impacts, you know, actual versus anticipated, 12 months ago, either better or worse than the pre-acquisition.

Dan Dickson: Yeah, there's a lot in there. I mean, obviously, the key drivers for a lot of our cost profile, it comes down to throughput. Our throughput was above 2,000 tons per day. Obviously, it's designed to be 2,000 tons per day. Grades were just slightly lower. I mean, obviously, we're seeing a higher price environment, and there's always opportunities to go into some lower grade areas. I think we, as management, have to be very mindful that we're balancing that to extend mine life versus cash flow today. Obviously, when we took control as of May first, we had some standards that we wanna keep as a company with regards to what our assets and our facilities are, and we started some of those programs.

Yeah, there's a lot in there. I mean, obviously the key drivers for a lot of our costs profile and it becomes down to throughput. Uh, or through Footwear is above 2,000 tons per day, obviously it's designed to be 2,000 tons per day and and grades were just slightly lower. And I mean obviously we're seeing higher price environment and there's always opportunities to go into some lower grade areas and I think we as management have to be very mindful that

Dan Dickson: A big chunk is that we're spending on exploration as well. As I said, in early September, we put out results, and we'll continue to put out results as we go through our exploration program to really validate these historical resources. I think it's very important that we get that 43-101 estimate up to date and published, so we can speak to guidance and cost profiles on the forward basis, as opposed to always looking at benchmarks going back. Labor relations, community relations, we did a lot of work on that going into the acquisition of Kolpa, and those align to what we saw. They've got very good community relations, very good labor relations. I think we're very impressed with the operating team.

We're balancing that to extend my life, uh, versus cash flow today. And obviously, when we took control as May 1st, we have um, some standards that we want to keep as a company with regards to what our assets and our facilities are and we start some of those programs. And uh, and then a big chunk that we're spending on expiration as well. So the expiration has gone as expected if not better. As I said in early September, we put out results and we'll continue to put out results as we go through our expiration program to really validate these historical resources. I think it's very important that we get that 43101 estimate up to date uh and published so we can speak to guidance and cost profiles on the uh forward basis as opposed to always looking at benchmarks going back.

Labor relations and community relations. We did a lot of work on that going into the acquisition of Coba, and those aligned with what we saw. They've got very good community relations and very good labor relations.

Dan Dickson: They're very gung ho to try to push this 2,500 ton per day plant and expansion forward. We're still trying to go through some of the cash flows and the ultimate benefits in ensuring that there's gonna be economies of scale to really push that 2,500. Whether we have that capacity or how we push that to an underground mine is very important. Again, it's been 1 quarter. Our expectation is that we will be delivering cash flow from Kolpa. If you look at it from a mine free cash flow, because of the investments we've made in improvements in the plant and exploration, it's higher than or lower than what we want it. Ultimately, I think it'll deliver us good cash flow in 2026 and beyond.

I think we're very impressed with the operating team, they're very gungho, uh, to try to push this 2500 ton per day plant, um, and expansion forward. We're still trying to go through some of the, uh, cash flows and, and the ultimate benefits and ensuring that there's going to be economies of scale to really push that 2500. So whether we have that capacity or how we push that for an underground line,

Is very important. But again, it's it's been 1 quarter. Our expectations that we will be delivering cash flow from from kulpa. Uh, if you look at it from a mind, free cash flow, um, because of the Investments, we've made in, in improvements in the plant and expiration, it's higher than, or lower than what we want. It, but ultimately, I think it will Deliver Us good cash flow in 2026 and Beyond.

Heiko Ihle: Fair enough. I promise the next one's a lot less loaded. Just a quick clarification. Terronera seems to have had 8 days of downtime in Q3. What happened? Also we're halfway through Q4 at this point. Has there been any downtime this quarter so far? Same question, if so, what happened?

Dan Dickson: Yeah, I mean, that's a very fair question. We had very good results, I think, leading into September. July, we did close to 2,000 tons per day. In August, we brought that back to around 1,800 to focus on recoveries or even 1,600 tons per day to focus on recoveries. Did very well till about September 22, September 23, somewhere around that timeline. We had a shutdown for 7 days. Obviously, we expected to announce commercial production on 1 October, just getting through September with that consistency. Being shut down, and it was electrical issue, and we had to get some specific resistors, which is a very small investment, but ultimately something we didn't have on hand. They're made to order, so it wasn't that they're available off the shelf either.

Fair enough uh, I promise the next 1's, a lot less loaded uh and and just a quick clarification Tara seems to have had 8 days of downtime in Q3 uh what happened. And and also we're halfway through Q4 at this point. Has there been any downtime, uh, this quarter so far? And and same question. If so what happened?

Very good results. I think leading into September, August, and July, we did close to 2,000 tons per day in August. We brought that back to around 1,800 tons per day to focus on recoveries, or even 1,600 tons per day to focus on recoveries.

And then, and and did very well till about September 22nd. September 23rd, somewhere around that time, we had a shutdown for 7 days, and obviously we expect to announce commercial production on October 1st. Just getting through September with that consistency and.

Dan Dickson: We had to wait for that, and it took a little bit longer, a couple of days longer than what we expected. Nonetheless, we started up that plant late September again and got going. Since October, we haven't had any up, down days. In November here, we're about a week into November. We had a half day, a day and a half. We have had intermittent, so we're not gonna be running fully at 2,000. It's more like what we saw in Q3, which is still a great rate, above 90%. Ultimately, we are in that kinda honeymoon phase now of, hey, we're in commercial production, we really need to hit our targets and our throughputs. Like I say, over the next 6 months, it's gonna involve refining and optimizing that plant.

Being shut down and it was electrical issue. And we had to get some specific resistors, which is a very small investment, but ultimately, something we didn't have on hand and they're made to order. So it wasn't that they, that they're available off the shelf either and we had to wait for that. And and it took a little bit longer a couple days longer than what we expected. But nonetheless we uh, started up that plant late September again and got going uh since October, we haven't had any out down days. In November here, we're about a week into November, we had a half day, um, a day and a half, we have had intermittent so we're not going to be running fully at 2,000. It's more like what we saw on Q3 which is still a great rate above 90%.

um,

Dan Dickson: We're still refining little things, but again, above what our threshold was for commercial production or declaring commercial production.

Ultimately, we are in that kind of honeymoon phase now of, "Hey, we're in commercial production. We really need to hit our targets and our throughputs." And like I say, over the next 6 months, it's going to involve refining and optimizing that plant. We're still refining little things. But again, above what our threshold was for commercial production or declaring commercial production.

Heiko Ihle: Very fair. As you know, I'm quite positive on the assets, so it's nice to see it all come together and actually, you know, seeing it in person last week. I'll get back in queue. Thank you guys very much, and have a great weekend.

Dan Dickson: Thanks for the questions, Heiko.

They already here um as you know I'm I'm quite positive on the assets so it's it's nice to see it all come together and actually you know, seeing it in person last week, I'll get back into you. Thank you guys very much and have a great weekend.

Thanks for the questions IO.

Operator: The next question comes from Wayne Lam with TD Securities. Please go ahead.

The next question comes from Wayne Lab with KD Security. Please go ahead.

Wayne Lam: Yeah, thanks, guys. Maybe just following up on Heiko's question, maybe at Terronera, do you have an update on maybe how the performance has gone in the month of October? Just curious what kind of stockpile you might have ahead of the mill. Maybe just in terms of the grades. The mine plan in the early years had around double the initially guided grades here. Just wondering what you're seeing in terms of access to those higher grade zones and reconciliation to date versus plan.

Yeah, thanks guys. Um,

Maybe just following up on Hiko's question. Uh, maybe a Terra.

do you have an uh, update on, maybe how the performance has gone, uh, in the month of October and just curious, what kind of stockpile you might have ahead of the mill and then maybe just in terms of the grade, uh, the mine plan in the early years had around double the initially, uh, guided grades here. So just wondering what you're seeing in terms of uh access to those higher grade zones and and uh reconciliation to date versus plan.

Dan Dickson: Yep, sure. Lots in there again. Thanks for the question, Wayne. For stockpile, and this we've been saying for a long time, we have room for about 60,000 tons. We can kind of push that to 80,000 tons. Because of the topography at Terronera and where we have laydown yards, we don't have the ability to carry 6 months of stockpile in front of us. It's about making sure we have sufficient stopes available underground and be able to go from underground rig to the crusher. Grades thus far, we're in an area where it's lower grade, and that's just a function ultimately, in our initial mine plans or feasibility study, it's both focused on IRR payback period. Ultimately, when you're kind of going through these refinements, nothing's perfect yet in that plant.

Dan Dickson: We wanna make sure we're not putting metal into our tailings dam and getting the best recoveries we can on some of that higher grade material. Now, we've had pretty decent recoveries, but again, there are still some minor issues that we work. Might be down for half an hour or an hour, and we wanna make sure we don't have those surges. We designed now that the plunge of the resource, the Terronera plunge, which is basically the middle chute, we're about 100 meters away from that area. Ultimately, we have plans that comes in mid-2026. Right now we're putting through lower grade, what we would deem to be lower grade.

Yep. Sure. Lots in there, again. Thanks for the question Wayne, um, for stockpile. And this, we've been saying for a long time and we have we have room for about 60,000 tons. Uh, we can kind of push that to 80,000 tons because of the topography at tinira and where we have lay down yards. Uh, we don't have the ability to carry 6 months of stockpile in front of us so it's about making sure we have sufficient soaps available underground and be able to go from underground, right? To the crusher. Uh, grades thus far, we're in an area where it's lower grade and that's just a function in our ultimately, in our, uh, initial mind, plans or feasibility, study, uh, I spoke focus on irr, Payback, period. And ultimately, when you're kind of going through these refinements, nothing's, perfect, yet in that plant, uh, we want to make sure we're not putting metal into our tailings dam and getting the best recoveries. We can on some of the higher grade material. Now we've had pretty decent recoveries, but again, there are still some minor issues that we work might be down for half an hour or an hour and we want to make sure

Dan Dickson: As I said earlier on the call, about 2.5 grams gold, 120 grams silver is our expectations for that next six months. We bring La Luz, which is a high-grade deposit in that's about a kilometer away, to supplement what's coming out of Terronera. Again, mid-year next year, we're gonna see those grades pick up to what you're gonna see with Q3, Q4, Q1, Q2. We should start seeing that in Q2, Q3. Ultimately, grade reconciliation, there's a couple things that have been happening that we've seen. A, on the vein, our grade reconciliation's relatively in line. We're getting a lot of stockwork. For those on the call that aren't familiar, stockwork would be the mineralization between veins.

we don't have those surges. So we designed now that the plum of the resource, the Terran Plum, which is, uh, basically the middle shoot or about 100 meters away from that area. Uh and ultimately we have plans that that comes in mid 2026, uh, so right now we're putting through lower grade, what we would need to be lower grades. So as I said on earlier, on the call about 2 and a half grams goal. 120 gram, silver is our expectations for that next 6 months and then we bring lusts which is a high

Grade deposit in that's about a kilometer away.

Dan Dickson: We have a hanging wall, footwall vein on Terronera, and in between we have what grades to be about 150 to 200 grams silver equivalents. Obviously, that has a lot of value. We moved from either longitudinal stoping or cut and fill stoping, doing some transverse stoping. In these areas that we should have been a little bit higher grade, we're bringing in lower grade, but we're getting more tons, more ounces, and ultimately extend mine life. We are in no position to update resources. It's still relatively early days in it, and it's a question of how long these stock works continue on. As we get into that main chute with the higher grade, bigger widths, we don't expect that stock work. We expect those grades to come through.

So in these areas that we should have been a little bit higher grade, we're bringing in lower grade, but we're getting more tons, more oz.

Dan Dickson: Otherwise, to answer that question, our grades have aligned relatively well to what our resource model has. As far as October has been a pretty steady month. Not any huge events, knock on wood. It's kinda continuing on. Again, we wanna make sure we refine and optimize what we can do in the plant and then really focus on driving down costs next year. The big push to get us through into commercial production. I commend our team on doing that. Now it's really focusing on operating efficiencies and processes and making sure we hit our marks.

And ultimately extend mine life and we are in no position to update resources, it's still relatively early days in it and it's a question of how long these stock Works continue on. As we get into that main shoot with the higher grade bigger widths, we don't expect that stock work. Um, so we expect those grades to come through. Um, but otherwise, the answer that question, our grades have aligned relatively well to what our resource model has and then as far as October October has been a pretty steady month. Um, not any huge events knock on wood. So it's kind of continuing on. And again uh, we want to make sure we refine and optimize what we can do in the plant and then really focus on driving down costs. Next year, there's a big push to get us through into commercial production and the commend our team on doing that. And now, it's really focusing on operating efficiencies and processes and making sure we hit our marks.

Wayne Lam: Okay, perfect. That was great detail, Dan. Maybe just wondering on the balance sheet, with Terronera now having declared commercial production, have you continued to execute on the ATM over the past month? Now that you're commercial, would you be able to refinance that facility for a larger amount, and what could be the timeline on that?

Elizabeth Senez: Sure, Wayne, I'll take that. This is Elizabeth Senez, the CFO. In terms of your first question on the ATM, no, we've not used the ATM in the past month. You can see in our Q3s that we used $15 million during Q3. Since the end of September, we've not used the ATM. Regarding your second question on the project finance, and our plans, what to do with that now that we're in commercial production, yes, we are evaluating our options with how to refinance now that we are in commercial production. We anticipate doing that in the next 6 months.

Okay, perfect. That was a great detail, Dan. Um, I’m just wondering about the balance sheet. With Tara now having declared commercial production, have you continued to execute on the ATM over the past month? And now that you’re commercial, would you be able to refinance that facility for a larger amount? And what could be the timeline beyond that?

Sure. Wayne. I'll take that. This is Elizabeth sis with CFO. Um, so in terms of your first question on the ATM. Uh, no, we've not used the ATM in the past month. You. You can see in our Q3 that we used 15 million uh, during Q3. Uh, but since the end of September, we've not use the ATM, uh, and then regarding your second question on the project Finance, um, and our plans, what to do with that now that we're in commercial production. Yes, we are, uh, evaluating our options, uh, with how to refinance. Now, that we are in commercial production, um, we anticipate doing that in the next 6 months.

Wayne Lam: Okay, that's great. Maybe just one last one for me. Just on the balance sheet flexibility, you guys were in a bit of a negative working capital position the past quarter. Do you have enough in terms of supplies and spares available at the various sites to mitigate or have any buffer to some of the any potential hiccup?

Okay, that's great. And maybe just, uh, one last one for me, just on the balance sheet flexibility. Um, you guys were in a bit of a negative working capital position the past quarter. Do you have enough in terms of supplies and spares available at the various sites to mitigate or have any buffer to some of the potential pickup?

Dan Dickson: Yeah, I'll take that, Wayne. Ultimately, we believe so. You'll see our warehouse inventory is a healthy number. Obviously, going into a new operation, min-maxes has to be determined, and as you get that experience and what those trends are, we have the idea that we have sufficient inventory and warehouse inventory to be able to work through that, giving us effectively that flexibility. I say that and know that there's always something out there that will come up, and that's our job as management to kinda make sure that we manage that properly if there's something that we've not seen and comes up in that sense. We feel like we have lots of flexibility. You're right about the negative working capital on our balance sheet for the last 2 quarters.

Uh, yeah, I'll take that, Wayne. Ultimately, we believe. So you'll see our warehouse inventories are a healthy number. Um, obviously going into a new operation, Min and Maxes have to be determined and we need to get that experience and see what those trends are. We have the idea that we have sufficient inventory and warehouse inventory to be able to work through that, giving us effectively that flexibility.

Dan Dickson: A big portion of that's actually our derivative liabilities. Again, I touched on the $39 million derivative liability based on the hedges that we put in from the project loan financing that we did in 2024, we put those hedges in. Again, we've seen gold prices come from $4,500 down to $4,000. That's reduced that a little bit. Ultimately, our goal is now to get our balance sheet in a strength position, and we have positive working capital. Hopefully, you see that sooner rather than later.

Uh, I say that and know that there's always something out there that will come up and that's our job as management to kind of make sure that, uh, we manage that properly. If there's something that we've we've, uh, not seen and and comes up in that sense, but we feel like we have lots of flexibility. You're right about the negative working capital, and our balance sheet for the last 2 quarters. A big portion of that is actually our derivative liabilities. Uh, again, I touched on the 39 million derivative liability based on the hedges that we put in from the project loan. Um, financing that we did in 2024. We put those edges in. So again, we've seen gold prices come from 4500 down to 4,000. That's reduced that a little bit, but ultimately our goal is now to get our balance sheet in a strength position and we have positive working capital and hopefully we see that sooner rather than later.

Wayne Lam: Okay, great. Thanks for taking my questions. Best of luck over the coming months.

Dan Dickson: Thanks, Wayne. Those are good questions.

Okay. Great. Thanks for taking my questions and best of luck over the coming months.

Thanks, Dwayne. Those are good questions.

Operator: Next question comes from Alex Deuch with National Bank. Please go ahead.

The next question comes from Alex. Turn 2 with National Bank. Please go ahead.

Alex Deuch: Hey, guys. Thanks for taking my questions here. Just got a couple questions on spending and, first one really just on CapEx. It looks like CapEx spending so far this year, you know, relative to guidance has been a bit lower than planned. Am I correct in assuming, you know, we could see a bit of a catch-up in Q4, or is just spending a little bit below planned here? That's my first question.

Dan Dickson: No, that's a very good question. I think you're gonna see pretty consistent at Bolañitos and Guanacevi. Obviously at Kolpa, it probably will end up being a little bit similar as we finish off some of these projects going into the end of the year. For Terronera, we haven't put out specific guidance around sustaining capital and what we need for mine development, but I don't see it being outsized. I think mostly to answer that question, it comes down to the existing operations. It's what we've seen is what you'll get in Q4.

Hey guys. Uh thanks for taking my questions here. Just got a couple questions on on spending and uh uh. First of all really just a capex. It looks like capex uh um spending so far this year, you know, relative to to guidance has been a bit lower than planned. Am I correct in? Assuming, you know, we could see a bit of a catch up in Q4 or is just a is spending a little bit below planned here. That's my first question. Yeah. No, that's a very good question. I think you're going to

Be pretty consistent at all. I need those and go on a civ.

Uh, obviously at Sculplla, it probably will end up being a little bit similar as we finish off some of these projects going into the end of the year. Uh,

Alex Deuch: Okay. Just sticking with Kolpa, I mean, I know you guys are working towards, you know, evaluating that underground expansion. You know, in the past, you did give some guidance on spending there, but can you give us any color, kind of maybe even over the next 6 months or, you know, a little bit how we can think about spending on that? I know you have the permit to construct. Obviously, you're doing some underground development as well. You know, I think it's from my view, it seems like it's pretty clear that you would go ahead, but until you officially made that decision, I guess you can't say so. I mean, any clarity on spending plans for the next 6 months?

For Terra, we haven't put out specific guidance around sustaining capital and what we need for mine development, but I don't see it being outside. I think mostly to answer that question, it comes down to the existing operations. It's what we've seen is what you'll get in Q4.

Expansion. Um,

Dan Dickson: Well, yeah, part of that for the next six months is difficult to say 'cause we're coming through that budget season. That's part of that evaluation aspect of it. Ultimately, we really need to know what that capital is, and that's gonna be all part of our guidance that will come out in January. I don't wanna jump the gun on what it necessarily is.

You know, can you, you know, in the past you did give some guidance on spending there, but can you give us any color kind of maybe even over the next 6 months or, you know, a little bit how we can think about spending on that? Um, I know you have the permit to construct. Obviously, you're you're doing some underground development as well. Um, you know, I think, uh, it's from my, from my view it seems like it's pretty clear that you would go ahead. But, uh, until you officially made that decision, I guess you're, you can't say so. But I mean, any Clarity on spending plans for the next 6 months?

Alex Deuch: Sure.

Dan Dickson: A little bit of the background on that Kolpa and the expansion of 2,500, they'd applied for the expansion prior to our acquisition, and they'd actually made some commitments on that expansion. For example, a ball mill, a 2,500 ton ball mill was already committed to and on-site when we kind of acquired it. Our concern just comes down to ensuring that there's sufficient economies of scale, not through the plant, not through the indirect costs, so the camps and support on-site. It's really down into the mine. Do we need to open up more stopes and have more labor, more equipment and not get economies of scale? Are there some areas where we can get better tons out and be more efficient and actually see that benefit of economies of scale?

Well yeah, part of that for the next 6 months, it's difficult to say because we're coming through that budget season that's part of that evaluation aspect of it. And ultimately, we really need to see know what that capital is and that's going to be all part of our guidance that will come out in January. I don't want to jump the gun on what it is necessarily is and a little bit of the background on that Co and the expansion of 2500, they had applied for the expansion, prior to our acquisition and and they'd actually made some commitments on that expansion. For example, ball mill, 2500 ton, ball mill was already committed to you and on-site. Um, when we kind of acquired it and our concern just comes down to the ensuring that there's sufficient, economies of scale, not through the plant, not through the indirect costs. So the camps and and support on site, it's really down into the mine. And are we going to be able? Do we need to open up more soaps and have more labor, more equipment and not get economies of scale? Or is there some areas where we can get better tons out and be more efficient?

Dan Dickson: That's a process. Like I say, we're kind of in the next 2 months. Hopefully, we can make a final decision on that and then move forward. Again, that's part of all the trade-off studies of understanding what that total capital spend is on. Like I say, should have that done by December and hopefully out in everybody's hands or minds by January or in January.

...and actually see the benefit of the economies of scale, and that's...

Uh, a process. Like I say we're kind of in the next 2 months. Hopefully, we can make a final decision on that and and and then move forward. And again, that's part of all the trade-off studies of understanding what that to Total Capital spend is. And and like, I say, should have that done by December and hopefully out in everybody's hands or or Minds by January or in January.

Alex Deuch: Okay.

Dan Dickson: Sorry, can't give you any more than that right now.

Alex Deuch: No, no. I understand. I know it's the time of year and, I was just pressing my luck and asking anyway. Last question, just on Kolpa. Q3 G&A, $2.245 million, I think was the number there, and I know just that the deal closed in Q2. Is that kind of a number we should be expecting going forward on a quarter basis, or do you think that can come down a little?

Okay. Sorry, I can't give you any more than that right now. No, no, I understand. I know it's the time of year and, uh, I was just pressing my luck and asking. Anyway, um, last question just on Kopa, um, Q3 G&A, um, $2.245 million I think was the number there, and I know just the deal closed in Q2. Um, is that kind of a number we should be expecting going forward on a quarterly basis, or do you think that can come down a little?

Elizabeth Senez: Hi, Alex. It's Elizabeth. I'll take that question. On the Q3 G&A, it was higher than anticipated because of the share price increase, which affected the revaluation of our DSUs. It was $2.7 million of expense during the quarter related to the DSUs. If you exclude that from the quarterly G&A number, that's our run rate going forward on corporate G&A.

Dan Dickson: I think it's a very good question on that, Alex, 'cause that flows into Kolpa. Well, we had the internal discussions of, we have G&A out of Vancouver, and we've given out these DSUs historically that get marked to market. In itself, when you look at the all-in sustaining costs for Kolpa, that includes those DSUs being allocated. How we do our allocation is a weighted calculation in how we distribute the cost out of Vancouver to that. That G&A is not cost at Kolpa. Kolpa's G&A cost is in their indirect costs and on a per ton basis. Obviously there's no right or wrong answer to how you allocate those answers. That's how we've done it. That's how it'll consistently be.

Hi Alex, it's Elizabeth. I'll take that question. So, uh, on the Q3 G&A, it was higher than anticipated because of the share price increase, which affected the revaluation of our DSU. So it's $2.7 million of expense during the quarter related to the DSU. If you exclude that from the quarterly G&A number, then that's our run rate going forward on corporate G&A.

I think it's a very good question on that, Alex, because that flows into culpa. We had the internal discussions of, well, we have GNA out of Vancouver, and we've given out these dietes historically that get marked to market.

Dan Dickson: It's a non-cash item, we do include that as it is an expense that historically goes through. Again, not reflective of Kolpa's performance, just an allocation on that all-in sustaining cost.

In itself, when you look at the all-in sustaining costs for Kulpa, that includes the DSUs being allocated and how we do our allocations—a way to calculate and how we distribute the cost out of Vancouver to that. So that G&A is not cost at Coupa; Copas G&A cost in their indirect costs and on a per ton basis. So, um, obviously there's no right or wrong answer to how you allocate those answers; that's how we've done it, and that's how consistently we've done it.

Um, it's a non-cash item, but we do include that as it is an expense that historically goes through. So again, it's not reflective of Pulp plus performance, just an allocation on that all-in sustaining cost.

Alex Deuch: Okay, that makes sense. Perfect. Okay, that's it for me. Thanks.

Dan Dickson: Thanks for those questions, Alex. Good questions. Thank you.

Okay, that makes sense. Perfect. Okay, that's it for me. Thanks.

Thanks for all those questions out. Good questions. Thank you.

Operator: The next question comes from Soundarya Iyer with B. Riley Securities. Please go ahead.

The next question comes from Soundarya. It is with security, please. Go ahead.

Soundarya Iyer: Hi, Dan and team. Thanks for taking my question. I just wanted to follow up on the sustaining CapEx question asked earlier. At Guanacevi, you spent about $13 million of the $19 million planned, and there is a considerable amount of development being done. How critical is completing this development to maintaining, you know, production levels at Guanacevi? What's the current pace of advancement over there?

Hi, Jen and Dean. Thanks for taking my question. Uh I just wanted to follow up on the sustaining cap. Next question asked earlier, so I'd go on to say we, uh, you spend about 13 million of the 19 million plan and there is a considerable amount of development being done.

Dan Dickson: Yeah. No, fair. That's a very good question. As you pointed out, we've spent $13 million year to date, so we're in the 9 months, which is just about $3 million, just over $3 million per quarter, and that's what we were here in Q3. Again, we don't have a big catch-up in Q4. A lot of the Guanacevi sustaining capital is mine development. We will always wanna stay ahead from mine development. That's ultimately underground mining. We have sufficient development to continue on, obviously we try to always try to get a bit ahead. I think we're always a little bit ambitious on our total capital, so $19 million, but we come in at $16 million. I think it's positive.

So how critical is completing this development to maintaining, you know, production levels at Govi? And what's the current pace of advancement over there?

Yeah, no, fairly. It's a very good question. So, as you pointed out, we spent $13 million year to date. So we're at 9 months, which is just about $3 million, just over $3 million per quarter. And that's what we were here in Q3. Again, we don't have a big catch-up in Q4.

Dan Dickson: We've got the meters that we've needed to get this year thus far, and we expect that to come. Typically, what we see in Mexico is December slows down a little bit because of the Christmas. We focus on ore extraction, is less on mine development because of the kind of a 2-week period around Christmas. At Bolañitos, similarly, we did have some mine equipment that we purchased early Q3, but most of the work that we do at Bolañitos is mine development. Again, if you look at guidance, we're slightly behind on what we expect to spend, but we're hitting our meters. We don't see an expected change in our, in our operating profile because of mine development at either of those operations.

That's ultimately underground mining. We have sufficient development to continue on um and obviously we try to always try to get a bit ahead and uh I think we're always a little bit of ambitious on our total Capital so 19 million when we come in the 16th we've got the the meters that we've needed to get this year thus far, and we expect that to come typically what we see in Mexico is December slows down a little bit because of the Christmas. So we focus on or extraction is less on mind development because of that kind of a 2 week period around Christmas at Bonito. Similarly, uh, we did have some mine equipment that we purchased early this, uh, or early Q3, but most of the work that we do at bowling, you know, is mind development. And again, if you look at guidance for slightly behind on what we accept spend, but we're hitting our meters. So we don't have see an expected change in our in our operating profile because of Mind development at either of those operations.

Soundarya Iyer: No, that makes sense. Thank you. Thank you for that. Just one more on this third-party ore purchases that has gone up and increased the cash cost. Could you just provide some context on the economics of this purchases and how does that fit into, like, your own ore extracted at the mine versus this third-party ore?

Uh, know that makes sense. Thank you, thank you for that. And just one more on this. Um, this third-party or purchases that is...

Gone up, uh, and increased the cash cost. So could you just provide some context on the economics of these purchases and how that fits into like your own ore extracted at the mine versus this third party? Or...

Dan Dickson: Yeah. Happy to give detail on that. We do have some third-party ore at Kolpa, which is a lot more, lower impact ultimately to ounces and cost. At Guanacevi, it's about 15% of our throughput now. The Guanacevi plant was built in 1980 or 1981 by the Mexican government. Under that, original, when it was passed on to who we bought it from, there's a requirement that 10%, at least 10% of throughput can go through to local miners. In our district of Guanacevi, there's a lot of small local miners, and obviously with higher prices, there's actually a lot more ore that's coming to our plant asking to be tolled.

Dan Dickson: The way we pay out, ultimately, we buy that tolled ore for a percentage, around 70%, and we have margins between 20% and 25%, depending on the group, depending on recoveries and ultimately where prices end up. It does displace our own ore, obviously, but at the same time, it extends life at Guanacevi. As the price has gone up, that cost per ton, when we're buying that ore ton, it's higher because of what it contains of silver and gold. With the price increases, we've gotten similar grades, sometimes lower grades, but the actual cost for that ore ton is higher. How we incorporate that in is purchase ore. It's higher cost than our mine tons, but again, displaces ours, and we are making a profit somewhere around 20% to 25%. We'll continue to do that.

Yeah, happy to give detail on that. We do have some third-party ore, which has a lot more impact ultimately on ounces and costs. But in terms of iguanas, it's about 15% of our throughput now. They want us to be aware that the plant was built in 1980 or 1981 by the Mexican government, and under the original agreement, when it was passed on to who we bought it from, there's a requirement that at least 10% of throughput can go through to local miners. In our district of Guana City, there are a lot of small local miners, and obviously with higher prices, there's actually a lot more ore that's coming to our plant asking to be processed.

The way we pay out, ultimately we buy that toll for a percentage around 70%, and we have margins between 20% and 25% depending on the group, depending on recoveries, and ultimately where prices end up.

It does displace our own ore, obviously. But at the same time, it extends the life that goes on for us to be. As the price has gone up, the cost per ton when we're buying that ore is higher because of what it contains in silver and gold. So as prices increase, we've encountered similar grades, sometimes lower grades, but the actual costs for that ore are higher. How we incorporate that in is purchasing, so it's a higher cost in our mined tons. But again, it displaces ours, and we are making a profit somewhere around 20% to 25%.

Dan Dickson: Again, more and more tolled ore is coming to Guanacevi, and again, we're required to take at least 10%, and we've been taking a higher than that. I hope that answers your question.

So, we'll continue to do that. Again, more and more told, or is coming to go on a Slovenian and get more required. Take at least 10%, and we've been taking higher than that.

Soundarya Iyer: Yeah. Thank you. I'll get back. Thank you.

I hope that answers your question.

Yeah, thank you. I'll get back.

Thank you.

Dan Dickson: Okay.

Operator: Once again, if you have a question, please press star then one. The next question comes from Cosmos Chiu with CIBC. Please go ahead.

Once again, if you have a question, please press star, then 1. The next question comes from Kosmosu with CIBC. Please go ahead.

Cosmos Chiu: Thanks, Dan and team, thanks for a lot of good details on this call today. Overall, I guess my question is, Dan, you know, when should we start expecting the company to generate positive free cash flow?

Dan Dickson: Yeah.

Cosmos Chiu: In Q3, you know, based on prices now, when would you expect, you know, is it next year? You know, clearly we're hitting an inflection point for the company, but when can we expect positive free cash flow?

Thanks, uh, again, and team, and thanks for a lot of good details on this call today. Uh, but overall, I guess my question is, Dan, um, you know, when should we start expecting the company to generate positive free cash flow? You got close to being Q3, but, you know, based on prices now, when would you expect, you know, is it next year? You know, clearly,

Dan Dickson: Yeah, it's very fair. I mean, obviously we averaged $38 on silver. This quarter, we're up in the $48 range, so I would fully expect free cash flow in Q4. It's all predicated now that Terronera is going from commissioning to commercial production. We hit our numbers in Q4. Q1, we're gonna have free cash flow out of Terronera. I think it's easier always to speak it separately. Guanacevi and Bolañitos and Cosmos, you know, I've had this conversation, they're mature assets. I think where they are in their life cycles, we gotta make sure that the grades that we're pulling out are the grades that make free cash flow at this point in time. We can always go into back old areas and trade dollars, but it's also about harvesting. What our job as a management team is to deliver rate of return, right?

Dan Dickson: Rate of return on investment. Guanacevi and Bolañitos have done a phenomenal job for us to build our company. They are gonna be high-cost assets going forward. The transition that we've gone through over the last 2 years, and it's been a bit of a heavy lift some days, is trying to find assets that are long life, low cost. Terronera in itself completely changes our profile. As we go through Q4, Q1, Q2, it's gonna be our job to work to get those cost profiles down to what we expected in the feasibility study. It's not gonna be $88 that we have there. We've seen inflation 25%, 30%. If we can be around $120 to $130, I think that's gonna be good.

We're heading into the collection point for the company. But blank, can we expect a positive free cash flow? Yeah, it's very fair. I mean, obviously we averaged $38 on silver this quarter; we're up in the $48 range, so I would fully expect free cash flow in Q4. It's all predicated on Taner going from commissioning to commercial production. We hit our numbers in Q4 and Q1. We're going to have free cash flow out of Tinira. I think it's easier to always speak about separately going to see Ballito and Cosmos. You know, I've had this conversation that mature assets and I think where they are in their life cycle. We've got to make sure that the grades that we're pulling out are the grades that make free cash flow at this point in time. We can always go into back-all areas and trade dollars, but it's also about Aronstein and what our job is as a management team is to deliver a rate of return, right? Rate of return on investment. I wanted to see B have done a phenomenal job for us to build our company. They are going to be high-cost assets going forward. The transition that we've gone through over the last 2 years.

Trying to find assets that are long-life, low-cost, and in turn, completely changes our profile.

Dan Dickson: Of course, we want it to be 88, the world's changed. Right now, we have aspects around Terronera that's making our costs higher. We're running diesel gen sets because we're waiting for a permit from Mexican government, the power arm, to ultimately let us start using our LNG plant that's completed. We've had the construction permit, now we're waiting for our vaporization plant permit. Be able to take the LNG, turn it into liquid. We expect that relatively soon. We didn't have any setbacks. In Mexico, there was a LNG truck that exploded in Mexico City. It required everybody to put in an emergency response plan. Hopefully, we get that before the year's out, that's out of our control. That diesel cost versus LNG cost, you're talking about $0.33 per kilowatt hour compared to LNG, our expectation of $0.17.

As we go through Q4, Q1, and Q2, it's going to be our job to work to get those cost profiles down to what we expected in the feasibility study. It's not going to be $88 that we have there. We've seen inflation of 25 to 30 percent, so we can be around $120 to $130. I think that's going to be good. Of course, we want it to be $88, but the world has changed right now. We have aspects around Tanara that are making our costs higher. We're running diesel gen sets because we're waiting for a permit from.

Dan Dickson: Big savings that comes from that. Ultimately, we're trucking some waste, trucking some ore further than we want. Part of that is our MIA regional permit that we received. We have our CUS, some CONAGUA stuff. Again, great dialogue through the authorities. We expect that to come. All that to say, to answer your question on free cash flow, we expect it soon, and we expect those costs at Terronera to really improve partly from some of these permits, partly from our operational efficiencies. Q4, Q1, free cash flow. Again, Kolpa is gonna be in a great position again, and we'll get that stuff out, and you'll see that in January. I hope that helps to answer the question, Cos.

The Mexican government, the power arm, has ultimately allowed us to start using our LNG plant, which is completed. We’ve received the construction permit, and we are now waiting for our vaporization plan permits to take the LNG and turn it into electricity. We expect that relatively soon. We didn’t encounter any setbacks in Mexico. There was an LG truck that exploded in Mexico City, which required everyone to implement an emergency response plan. Hopefully, we will receive the necessary permits before the year is out, but that is out of our control. However, regarding the diesel costs versus LNG costs, we are talking about 33 cents per kilowatt-hour compared to our expectation of 17 cents for LNG, which represents significant savings.

Uh, ultimately, we're Trucking some waste, Trucking some or for the way we want part of that is our Mia Regional permit that we received. We have our cous, some cago stuff again, great dialogue through the authorities. We expect that to come all that to say over the next to answer, your question, on free cash flow. We expect it soon and we expect those costs at Turner to really improve over the partly from some of these permits partly from our operational. Efficiencies so Q4 q1, free cash flow. Again, kopa is going to be in a great position again and we'll get that stuff out. And you'll see that in January.

Cosmos Chiu: Yeah. Yeah, that does. I do have a follow-up.

Dan Dickson: Perfect.

Cosmos Chiu: If Q4 and Q1, positive free cash flow, when can I start asking about capital returns in terms of, you know, potentially a dividend, share buybacks, or, you know, a reverse ATM, and other sort of capital return policies like that? Instead of me asking you about, you know, are you using your ATM, I can, you know, potentially ask you about share buyback.

Dan Dickson: Yeah. No, it's very fair, I think we're still in that transition, right? We're excited about what Terronera is going to deliver to us from a cash flow standpoint. I can understand when you look at those numbers, it comes down dividends. What we haven't really talked about today is the opportunity with Pitarrilla. Pitarrilla, 600 million ounces in the ground, half that sulfides. Obviously, I touched that we have a feasibility study out next year. There's the envelope numbers that you can look at for Pitarrilla, and it's a very compelling asset. We foresee any of the cash flow that we have Terronera going into pushing on Pitarrilla. Our goal is to produce 30 million ounces by 2030. 30 by 30.

I hope that answer the question cause yeah. Yeah, yeah. That that does. And I do have a follow-up and, uh, you know, to Q4 and q1, uh, positive free cash flow. When can I start asking you about Capital return in terms of, uh, you know, potentially a dividend share BuyBacks or, you know, a reverse ATM and, uh, other sort of capital return policies have gone is that we ask you about, you know, are you using your ATM? I can, you know, potentially ask you about share BuyBacks.

Yep. No, I think it's very fair, and I believe we're still in that transition, right? So, we're excited about what Tanir is going to deliver to us from a cash flow standpoint. I can understand when you look at those numbers, it comes down to dividends. So, what we haven't really talked about today is the opportunity with Titaria. Titaria has 600 million oz in the ground and has those sulfides. Obviously, I touched on that.

Feasibility study out next year. Are we? There's the envelope numbers that you can look at for Peter, and it's a very compelling asset.

Cosmos Chiu: Oh.

Dan Dickson: We think Pitarrilla being between 3,000, 4,000 tons per day operation. The grades run around 300 grams silver equivalent, 60% of that silver. It could have a mine life of 10, 15, 20, 25 years, but ultimately being a low cost asset. Roundabout saying that cash flow that we're gonna generate, it's gonna go into Pitarrilla and completely transform Endeavour Silver. Then we can start talking about returning cash to our shareholders. I think it's very important that we deliver it here at Terronera and hit our marks. That will give us the ability to go up and build Pitarrilla. I really think the numbers that we're gonna see on the Pitarrilla feasibility study are gonna be compelling and allow us to invest at that operation or that development project.

We foresee any of the cash flow. We have Tara going into pushing on Pitaria; our goal is to produce 30 million ounces by 2030, 30X, 30.

Cosmos Chiu: Investing in Pitarrilla will likely come first before capital return?

We think that 3F will be between 3,000 and 4,000 tons per day operation. The grades run around 300 grams of silver equivalent, with 60% of that being silver. It could have a mine life of 10, 15, 20, or even 25 years, ultimately being a low-cost asset. So, we're talking about cash flow that we're going to generate, which is going to go into Pizzeria and completely transform Endeavour Silver. Then we can start discussing returning cash to our shareholders. I think it's very important that we deliver a tier-one asset and hit our marks, as that will give us the ability to go out and build Pitaria. I really believe that the numbers we will see from the Pit 3 feasibility study are going to be compelling and will allow us to invest in that operation or development project.

Dan Dickson: Yes.

So, investing in a pit area will likely come first before capital return.

Cosmos Chiu: Okay. How about, you know, as you mentioned, Dan, you had to do it, but you had to put in some forward sales contracts in place, some hedges in place for part of your gold production.

Dan Dickson: Yeah.

Cosmos Chiu: You know, gold prices have now since done a lot better, and it's created some volatility for you in terms of accounting. Also, you know, mark to market, you're selling gold at lower price now. Any thoughts in terms of buying those back?

Yes. Okay. Um, but how about, you know, as you mentioned and, uh, you had to do it, but you had to put in some for sales contracts. Um, in place some hedges in place for part of your gold production. And, uh, you know, gold prices have now since

You've done a lot better, and it's created some volatility for you in terms of counting. Also, you know, mark-to-market, you're selling gold at a lower price. Now, any thoughts in terms of buying those back?

Dan Dickson: Yeah. We talk about it all the time. Ultimately, as Libby said in an earlier question, we have project loan facility right now, and we're always looking to try to improve our cost profile, of course. That's our job as management. Taking that project loan and trying to get it refinanced and put it at the corporate level is something that we're looking at. Obviously, part of that whole discussion and security around everything is those hedge contracts that sit with those project loan providers. That's part of our discussion. We haven't made any decision on how to handle those hedges going forward, whether we leave them fully in, fully take them out or partial. When we figure that out, obviously, we'll announce that to the market.

Dan Dickson: We don't have one way or the other at this point in our heads.

Cosmos Chiu: Okay. Sounds good. Maybe one last question.

Project loan um providers and that's part of our discussion. We haven't made any any decision on how to handle those? I just going forward whether we leave them fully in fully take them out, or, or partial. And when we figure that out, obviously, we'll announce that to the market. We don't have 1 way or the other at this point in our heads.

Dan Dickson: Yeah, for sure.

Cosmos Chiu: Number one, I didn't know that Guanacevi was older than you, the mill, but hopefully it's aged okay. On that, you know, as you mentioned, Q3 throughput, higher grade, lower. How should we look at, you know, at throughput and grade into Q4? Bolañitos, as you mentioned, both throughput and grade were lower in Q3. How should we look at Q4 as well?

Dan Dickson: Yeah. Throughput would be similar. I mean, we know they're pretty steady state between 1,100, 1,200 tons per day for both operations. Ultimately, grades have continued in October to be slightly lower. We always look at the trend for the year.

Dan Dickson: I know for the year we've trended relatively on plan. If you look at our production profile that we put out for guidance at Guanacevi Bolañitos, we're kinda trending towards the bottom end of that guidance, and that's because of the grades that we're seeing really out of Bolañitos and a little bit lower grades out of Guanacevi. Mostly the lower gold grades out of Bolañitos. I expect that to continue here in Q4.

Okay. Sounds good. And then maybe 1 last question. Uh yeah. For sure. I didn't. I didn't know that going to be was older than you a mil but uh hopefully it's aged. Okay. Um but on that uh you know, as you mentioned Q3 throughput uh, higher, great lower. How should we look at, you know, at, uh, 3 point and grade into Q4 and then bought a net that you mentioned, both throughput and grade were lower in Q3. How should we look at Q4? Yeah, throughput would be similar. I mean, we know, they're pretty steady state between 1100 and 1200 tons per day for both operations. Ultimately, um, grades have continued in October to be slightly lower, we always look at the trend for the year. Uh, and I know for the year we've trended relatively on plan. If you look at our production profile that we put out for guidance at Guaranty Bolanos, we're kind of trending towards the the bottom end of that guidance. And that's because the the grades that we're seeing really out of balling dose, and a little bit lower grades out of cornos to be. But most

The lower gold grades of out of Balamos. I expect that to continue here in Q4.

Cosmos Chiu: Great. Thanks, Dan, for answering all my questions. That's all I have. Have a good weekend.

Dan Dickson: No, I appreciate all those questions, Cos. Thank you.

Cosmos Chiu: Thank you.

Great. Uh, thanks, Dan, for answering all my questions. That's all I have. Have a good weekend. No, I appreciate all those questions, Caused. Thank you. Thank you.

Operator: The next question comes from Trevor Ward, Private Investor. Please go ahead.

The next question comes from Trevor Ward, private investor. Please go ahead.

Trevor Ward: Hey, Dan. Thanks for taking my call.

Dan Dickson: Happy to take your call, Trevor.

Trevor Ward: Thanks, buddy. It's been quite some time since I last spoke, almost two years ago. Obviously, a lot has changed in two years. I will say, you know, obviously, like I mentioned earlier, obviously, these other talking heads, it sounds to me for the most part, a lot of them represent clients, whereas myself, being a personal investor, obviously it's rather disappointing to see my portfolio, which I'm mostly exposed with Endeavour Silver. You know, to fall so hard, so fast in one month and I think it's almost 30% or thereabout. Just two questions in terms of going forward. Obviously, a big another big loss in this Q3.

Hey Dan, uh, thanks for taking my call. Um,

Thanks, buddy. Uh, it’s been quite some time since I last spoke—almost 2 years ago. Obviously, a lot has changed in 2 years. Um, I will say, um, you know, like I mentioned earlier, um, obviously, um, these other Talking Heads.

It sounds to me, for the most part, a lot of them represent clients. Whereas, myself being a personal investor, obviously it's all disappointing to see my portfolio, which I'm mostly exposed with Endeavour.

Trevor Ward: If I'm correct, I think I heard you say initially that this Q3 you didn't include Terronera?

Um, so, you know, to fall. So so hard so fast in 1 month and it's, I think it's almost 30% or thereabouts. So just a couple of questions in terms of going forward. Um, obviously, uh, a big, another big loss in this, uh, third quarter. And if I'm correct, uh, I think I heard you say initially that this third quarter, you didn't didn't include Tara,

Dan Dickson: Correct.

Correct.

Trevor Ward: The Terronera did. When you say you didn't include Terronera in Q3, it obviously didn't make any money, or you just included the losses from there into Q3?

Dan Dickson: No. Let me clarify that then, Trevor. Ultimately, in our income statement, Terronera is included, and it was going through the commissioning phase. We actually recognized the revenue, we recognized the cost sales. Obviously, we incur it, sits on our balance sheet. The working capital numbers sit on our balance sheet. Where Terronera has not been included is in our production profile metrics. As we've gone through construction into commissioning and commissioning now into commercial production, going forward, our cash costs are all-in sustaining costs. Our production profile will include Terronera's numbers. Prior to that, it's unfair to kind of throw those in because they're so volatile. We've got days we're operating, not operating. We're testing different things. It's not reflective of what we see going forward at Terronera.

Dan Dickson: It's just not in our operating metrics when we report that or speak to that. We're speaking to numbers that aren't reflective of what we see going forward. I hear you from a standpoint on losses, a significant loss coming through on Q3. I'm appreciative of that. A big function of that, Trevor, is the loss derivatives that we're recognizing on a mark-to-market basis under accounting rules, under IFRS. Ultimately, it was $39 million this quarter. That's a reflection of gold price going from $2,300 or $2,325 when we entered into these hedges. At the end of the quarter, I think gold sat around $4,400. That delta of $2,000 plus times 68,000 ounces of gold, we recognize that immediately as it's happening.

The Terry Terry Nero did. So um, I did. So when you say you didn't include Tyrion error in the third quarter, it didn't obviously it didn't make any money or you just included the losses from there into the third quarter, know. So let me clarify that then Trevor. Yeah, ultimately in our, in our, um, income statement, Turan error is included, and it was going through the commissioning Pace. We actually recognize the revenue, we recognize the cost sales. Obviously, we incur it sits on our balance sheet. The working capital numbers, sit on our balance sheet, where taran's not been included, as in our production profile metrics. So as we've gone through construction into commissioning and commissioning. Now, in commercial production, going forward, our cash costs are all in sustaining costs. Our production profile will include toranas numbers prior to that. It's unfair to kind of throw those in because they're so volatile. We've got days where operating not offering, we're testing different things. It's not reflective of what we see going forward at toranas, so it's just not in our operating metrics. When we report that or

Or or speak to that because we're speaking to numbers that aren't reflective of what we see going forward. And I, I, I, I hear you from a standpoint on losses, that a significant loss coming through on Q3 and I'm appreciative of that. And that's a big function of that. Trevor is the loss derivative of that, we're recognizing on, Mark tomarket basis, um, under County rules under IFRS. And ultimately it was 39 million dollars.

Dan Dickson: It creates, and goes to the last question, it creates a lot of noise in that income statement and a lot of volatility. Unfortunately, those are the IFRS rules. We don't change that. It is what it is. We have to report to that. It creates so much noise that sometimes it's nice pulling that out, and that's why you'll have various companies use adjusted earnings or adjusted EPS, et cetera, et cetera, to take away some of that noise or one-time items or mark-to-markets that aren't actually cash. Again, we'd love to have that go the other way, but if that went the other way, that means my revenue number goes down, the value of the company goes down. If you've held Endeavour Silver for 2 years and we talk, I would argue that our share price is a lot higher.

This quarter that's a reflection of gold price going from 2300 or 2325 when we entered into these Hedges and at the end of the quarter I think gold sat around 4,400 so that Delta of thousand dollars plus times 68,000 oz of gold, we recognize that immediately as it's happening and it creates in gauze of the last question. Uh it creates a lot of noise and that income statement and a lot of volatility. And unfortunately those are the IFRS rules, we don't change that. It is what it is. We have to report to that.

So much noise that, sometimes, it's nice to pull that out. That's why you'll have various companies use adjusted earnings or adjusted EPS, etc., to take away some of that noise or one-time items or mark-to-market that aren't actually cash. So, um,

Dan Dickson: I know there's movements over the last 30 days, where silver hit $55, now we're sitting at $48. That's going to be reflected in our share, our share price. Those movements are sometimes hard, but I think the volatility is Endeavour Silver has attracted a lot of different shareholders into us. Over time, I hope our share price appreciates, and you stick with us.

Again, we'd love to have that go the other way, but if that meant the other way, that means my revenue number goes down. The value of the company goes down. If you've held Endeavour for 2 years and we talked, I would argue that our share price is a lot higher. I know there's movements over the last 30 days where silver hit $55. Now we're sitting at $48. That's going to be reflected in our share price.

And those movements are sometimes hard, but I think the volatility that Endeavour experiences is tracked by a lot of different shareholders. Over time, I hope our share price appreciates, and you stick with us.

Trevor Ward: Yeah, sure. The derivatives going forward, I kinda get it. I understand it to some extent, where it went from $23.25, obviously, you having to pay the difference there. I mean, obviously, I suppose you needed the input and you needed the money, you had to take this option, right?

Yes, sure. So these derivatives going forward are kind of uh are kind of get it to understand it to some extent, way to win from 2325. Obviously you having to pay the difference there. I mean, obviously I suppose you needed to you needed the the input and that you needed the money. So you had to take this option, right?

Dan Dickson: Well, that's ultimately it. When we entered into the project loan facility in 2022, all the offers on the table, putting in $6,800 gold hedge. Our gold hedge on 68,000 ounces at $2,300 when gold was at $1,600, $1,700 felt like a good thing. At $4,400, probably feels a little bit differently, obviously.

That's ultimately it when we entered into the project loan facility in 2022. All the offers on the table.

Putting in 6,800 gold hedge. Our gold hedge on the 16th. Oh, at 2300, when gold was at $16,700, it felt like a good thing.

At 4,400.

Probably feels a little bit differently, obviously.

Trevor Ward: Now going forward, what's the exposure to the same scenario happening in the next quarter, the following quarter, these recurring charges in terms of these derivatives? How does that look going forward?

So now going forward, what's the exposure to the same scenario happening in the next quarter? As a following quarter, these recurring charges in terms of this, derivatives.

Dan Dickson: Yeah. Right now we originally entered into $68,000. I think we're sitting on about $57,000 in that. It rolls off over time. We have no interest in entering any other gold hedges. At this that means in Pitarrilla comes, and depending on the market end, depending on how we wanna finance that, we're gonna look at it. Our preference is to stay out of that hedge. If you're gonna invest in Endeavour Silver, you believe in the silver price going up. That's the first hypothesis. I really believe that. We don't wanna take that away from our shareholders. There's times, maybe little things interquarters or whatever have you, that we do things, but fully recognize that you're buying a silver company because you believe silver price is going up.

How does that look going forward?

Yeah. So right now we originally entered into 68,000, I think we're sitting on about 57,000 uh in that. So it rolls off over time we have no interest in answering any other gold edges. Um but at the that means in Tera comes and depending on the market in depending on how we want to finance that we're going to look at it. Our preference is to stay out of that hedge. If you're going to invest in Endeavour silver, you believe in the silver price. Going up. That's the first hypothesis and I really believe that we want.

We don't want to take that away from our shareholders. There are times, maybe little things in their quarters or whatever have you, that we do things. But...

Fully recognize that you’re buying a silver company because you believe the silver price is going up.

Trevor Ward: Sure. Okay. I didn't quite understand that. How long, how much, what are you looking at? Let's just give an average price of this cost in the quarters going forward. I mean, $39 million is a big chunk. I mean, how does that show in real terms on paper or I mean, I don't quite understand that.

Sure. Okay. Um, but I didn't quite understand that. How long, how much, how what are you looking at? Uh, let's just give an average price of this cost in the court going forward. I mean, $39 million is a big chunk. I mean, how does that show in real terms on paper or...?

Dan Dickson: Yeah, maybe I can-

I don't quite understand that.

Trevor Ward: What do you think the cost of the-

Dan Dickson: We have 57,000 ounces sold at $23.25. Over the next 18 months, 20 months, we'll roll out of that. Ultimately, our cash flow coming in is gonna be $23.25, and we recognize that loss, which on a mark-to-market basis, that flows through as the price happens. If gold goes to $5,000 at the end of this quarter, you're gonna see more loss go through, and that's that delta from $4,400 to $5,000. If gold goes from $4,400 to $4,000, like you've seen, you're gonna see a reversal at derivative liability, so you're gonna have a gain in our income statement, $400 times the 57,000. Again, that rolls off. That noise goes away.

Yeah, maybe of course. Yeah. So we have 57,000 Oz sold at 2325 over the next 18 months, 20 months. We'll roll out of that. And so ultimately, our cash flow coming in is going to be 23.25 and we recognize that loss which on a mark to Mark basis that flows through as a price happens. So if gold goes to 5,000 at the end of this quarter you're going to see more loss go through and that's that Delta from 4,400 to 5,000. If gold goes from 4,400 to 4,000 like you've seen, you're going to see a reversal at the liability. So you're going to have a gain in our income statement, 400 dollars times. The 57,000. Um, again that rolls off that noise goes away.

Trevor Ward: Is it not possible? There's no way you can buy yourself out of it or refund it somewhere else in order to.

Dan Dickson: That was Cosmos question previously, can you buy yourself out of it? Again, right now, with where our cash is going, we're not in a position to go spend $90 million to buy out those hedges. Is it the right thing, wrong thing? We haven't made a decision on that at this point in time.

Is it not possible? And you, there's no way you can buy yourself out of it or refund in somewhere else in order to do that with Cosmos question. Previously, can you buy yourself out of it? And again, right now, with where our cash is going, we're not in a position to go spend $90 million to buy out those hedges, and it's the right thing or wrong thing. We haven't made a decision on that at this point in time.

Trevor Ward: Okay. That was because I didn't understand his question, but now I get to see it. Ultimately, the best thing to do would be, hopefully, to find the money somewhere to buy yourself out of the situation, considering that going forward, gold, silver could reach much higher prices. It's going to hurt even more.

Okay, so that was because I didn't understand his question, but now I get to see it. So ultimately, the best thing to do would be to find the money somewhere to buy yourself out of the situation, considering going forward.

Gold and silver could reach much higher prices. It's going to hurt even more.

Dan Dickson: Correct. We just need to produce and deliver into those hedges. We're good. Thanks for the questions today, Trevor. Much appreciated. Thanks for being a shareholder.

Trevor Ward: Okay. Thanks. Okay. Thanks. Bye.

Correct. But we just need to produce and deliver until those hedges, so we're good. Thanks for the questions today, Trevor. Much appreciated, and thanks for being a shareholder. Thanks.

Okay. Thanks. Bye.

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

This includes the question and answer session. I would like to turn the conference back over to Dan Dickson for any closing remarks. Please go ahead.

Dan Dickson: Thank you, operator, and appreciate everybody listening in on our Q3 financial call. Again, a very transformational quarter for Endeavour Silver with us bringing Terronera online. We're very excited about what it's gonna mean for us going forward. Q4, Q1, Q2, and ultimately get out guidance here in January on next year. Again, with where prices are, I'd expect a big and ultimately exciting future for our company. Thanks a lot.

3, uh, Financial call.

Again, uh, very transformational quarter for Endeavour with us bringing Turan online. We're very excited about what it's going to mean for us going forward. Uh.

Q4, Q1, Q2, and ultimately, we will get out guidance here in January for next year. And again, with where prices are expected, a big and ultimately exciting future for our company. Thanks a lot.

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

This brings to a close today's conference call. You may disconnect your line. Thank you for participating, and have a pleasant day.