EXK — Endeavour Silver Corp.

Summary of Endeavour Silver's Q2 2026 Earnings Call

1. Key Financial Results and Metrics

• Production: Nearly 2 million ounces of silver and over 10,000 ounces of gold, totaling 3 million silver equivalent ounces, a 36% increase from Q2 2025.
• Revenue: $212 million, up 150% year-over-year.
• Mine Operating Earnings: $74 million, significantly higher than $7 million in Q2 2025.
• Mine Operating Cash Flow: $100 million before taxes, a 300% increase from the previous year.
• Adjusted Net Earnings: $45 million, or $0.15 per share.
• All-In Sustaining Costs (AISC): $37, a 47% increase from Q2 2025, attributed to rising royalties, material costs, and mining taxes.
• Cash Position: $236 million, with working capital of $214 million.

2. Strategic Updates and Business Highlights

• Terronera Mine: Successful ramp-up with consistent daily throughput; exploration drilling restarted to expand mineralization.
• Kolpa Mine: Increased plant capacity to 2,500 tonnes per day; ongoing capital improvements including tailings storage and water treatment facilities.
• Guanacevi Mine: Higher costs due to increased third-party ore purchases; ongoing exploration drilling to extend mine life.
• Pitarrilla Feasibility Study: Expected completion by the end of Q3 2026, with positive economic indicators anticipated.

3. Forward Guidance and Outlook

• Management expects an incremental decrease in costs at Terronera in the second half of the year as higher-grade areas are accessed.
• AISC guidance remains unchanged despite current higher costs, with expectations for improved efficiencies.
• Plans to continue investing in growth initiatives, including the Pitarrilla project, which could require $500-$600 million in capital.

4. Bad News, Challenges, or Points of Concern

• Cost Pressures: AISC significantly higher than anticipated due to inflation, increased royalties, and higher costs of third-party ore.
• Operational Challenges: Delays in permitting for the LNG plant and tailings storage facilities, impacting timelines.
• Market Risks: Fluctuations in metal prices directly affect costs and profitability; potential for continued inflationary pressures.

5. Notable Q&A Insights

• LNG Plant Commissioning: Permitting delays were longer than expected, but commissioning proceeded smoothly.
• Cash Utilization: Management indicated that current cash balances are not earmarked for sustaining capital at existing mines but will support Pitarrilla development.
• Hedging Strategy: No current plans for further metal hedging; focus on managing foreign exchange risks related to operating costs.
• Exploration Plans: Continued drilling at Terronera and Guanacevi with expectations for higher grades in the near future, although high-grade gold from Terronera is not expected until 2027.

Overall, Endeavour Silver reported a strong Q2 2026 with significant production and revenue growth, despite facing cost pressures and operational challenges. The company is well-positioned for future growth with ongoing investments and strategic initiatives.