Endeavour Silver: CEO Update on High-Grade Drilling, Terronera Ramp-Up, and Progress at Pitarrilla

Key Concepts

• Terronera: Endeavour Silver’s flagship project, currently in commercial production.
• La Luz: A high-grade gold system within the Terronera project.
• Guanaceví: A long-standing mining operation in Northern Mexico.
• Pitarrilla: A large-scale silver, zinc, and lead project currently undergoing economic evaluation.
• Colquijirca (Copa): An exploration and production asset with significant potential below the water table.
• Dry Stack Tailings: A sustainable waste management method being implemented to increase capacity and environmental safety.
• Commercial Production: The phase where a mine operates at a consistent, profitable capacity.

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1. Terronera Project Update

• Drilling Results: After a hiatus since 2020, drilling has resumed at the La Luz system. Results confirm high-grade gold mineralization that is open along the strike and at depth.
• Mine Planning: The company is designing a mine plan utilizing long-hole and cut-and-fill mining methods. Recent drilling at the main Terronera vein successfully extended the ore shoot toward the northwest.
• Strategic Outlook: The current life-of-mine (LOM) is 10 years, with management aiming to extend this to 15–25 years through continued exploration. The high-grade material identified is expected to positively impact the mine plan starting in 2027.

2. Exploration and Development Projects

• Guanaceví: Exploration is focused on the "Malache" zone, moving from the El Porvenir mine. The company is conducting "needle step-outs" at the Guanaceví and Sunset zones to extend mine life beyond 2028.
• Pitarrilla: This is the company’s largest asset, containing over 600 million ounces of silver equivalent. The project is currently in the economic evaluation phase, with a pre-feasibility study (PFS) expected by the end of Q3.
• Copa: A major exploration program is underway with 13,000 meters of drilling planned for the year. The focus is on validating historical resources and exploring mineralization below the water table, which was historically inaccessible.

3. Production Performance and Operational Milestones

• Terronera Ramp-up: Since achieving commercial production on October 1, 2025, the project has shown consistent improvement. Throughput is averaging 2,000–2,300 tons per day.
• Recovery Optimization: The company is fine-tuning grind size to reach feasibility-level silver recoveries of approximately 89–90%. Management expects recoveries to hit these targets in the second half of the year as higher-grade material enters the mill.
• Colquijirca (Copa) Expansion: New crushers and a ball mill were commissioned in March. The facility is currently operating at a capacity of 2,500–2,900 tons per day.
• Tailings Management: The company plans to transition to a dry stack tailings facility by 2027 (with potential to start in 2026) to improve environmental standards and storage capacity.

4. Key Arguments and Perspectives

• Incremental Growth: CEO Dan Dickson emphasizes a "two steps forward, one step back" philosophy, noting that while operational hiccups (such as maintenance shutdowns) occur, the overall trajectory for production and resource expansion remains positive.
• Resource Extension: The company’s primary strategy is to leverage current cash flow from production to fund exploration, thereby extending the life of their assets beyond current reserve estimates.
• Market Hypothesis: The CEO noted that recent drill results confirm the company’s geological hypothesis, providing confidence to investors that the assets have significant untapped potential at depth.

5. Synthesis and Conclusion

Endeavour Silver is currently transitioning from a heavy construction phase at Terronera to a period of operational optimization and aggressive exploration. With commercial production established at Terronera and expanded capacity at Copa, the company is focused on increasing throughput and silver recoveries. The upcoming milestones—including a pre-feasibility study for Pitarrilla and new resource estimates for Copa and Terronera—position the company for potential life-of-mine extensions and sustained production growth over the next 6 to 18 months.