Endeavour Silver(US:EXK)2024-11-05 20:27Financial Data and Key Metrics Changes - The company reported top line revenue of $53 million, an increase of 8% year-over-year, benefiting from higher precious metal prices compared to Q3 2023 [9] - Cost of sales totaled $41 million, a decrease of 12% compared to Q3 2023, driven by lower silver ounces sold and cost management measures [9] - The company reported a net loss of $17 million for Q3 2024, compared to a $2.3 million loss in Q3 2023 [10] - As of September 30, the company's cash position was $55 million, and working capital was $29 million [11] Business Line Data and Key Metrics Changes - Q3 silver equivalent production totaled 1.6 million ounces, consisting of 875,000 ounces of silver and 9,300 ounces of gold, tracking well towards the updated 2024 production guidance of 7.3 million to 7.6 million silver equivalent ounces [7] - Silver equivalent grades were in line with expectations, with gold grades slightly higher and silver grades slightly lower [8] Market Data and Key Metrics Changes - The company faced operational challenges due to a trending failure of the primary ball mill at the Guanacevi mine, operating at reduced capacity of approximately 50% [5][6] - The estimated timeline to return to full capacity is 15 weeks, with full operation expected next month [6] Company Strategy and Development Direction - The company is focused on the Terronera project, which is on track for commissioning near the end of Q4 2024, with surface construction reaching 77% completion and over $258 million spent to date [8][12] - The company aims to maintain strong community relations and has supported various local initiatives, emphasizing the importance of a social license to operate [15][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about cash flow and financial position benefiting from higher precious metal prices, despite operational challenges [5] - The company anticipates a smooth cash position as it moves into 2025 and starts ramping up cash flows from Terronera [34] Other Important Information - The company completed drawdowns of $25 million from the Senior Secure Debt Facility for Terronera during the quarter, with a final drawdown of $35 million completed subsequently [11] - The company is committed to advancing the Pitarilla project, with plans to spend about $5 million on underground ramp development [48] Q&A Session Summary Question: Staffing levels at Terronera - Management indicated that full employment at the site will be just over 500 people, with currently over 750 people on site, including 800 contract workers [18][19] Question: Community engagement and local job creation - Management reported strong community engagement and local job creation, with various initiatives supporting the local community [20][21] Question: General and Administrative (G&A) expenses outlook - Management stated that G&A expenses have historically been around $8 million to $10 million and do not expect significant increases in 2025 compared to 2024 [25] Question: Ramp-up process and potential bottlenecks - Management expects a three-month ramp-up process for Terronera and is focused on ensuring smooth operations during commissioning [28][30] Question: Cash costs and sustaining capital guidance - Management plans to provide 2025 guidance early next year, with current cost per ton at $81, acknowledging inflationary pressures [31][32] Question: Update on underground development at Terronera - Management confirmed positive ground conditions and better-than-expected ore body conditions, with ongoing test mining [46][47] Question: Update on Pitarilla project - Management plans to advance the Pitarilla project with ongoing drilling and expects to release news in the coming weeks [48][49]