August st 2018 18
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in n 2018 TSX TSX: EDR I NYSE: E: EXK I www.ed .edrs - - PowerPoint PPT Presentation
August st 2018 18 Fore reca casti sting ng 20% % Pro roduct ctio ion n Gro rowth th in n 2018 TSX TSX: EDR I NYSE: E: EXK I www.ed .edrs rsilver ilver.com .com Cautio utiona nary ry Not ote This presentation
TSX TSX: EDR I NYSE: E: EXK I www.ed .edrs rsilver ilver.com .com
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This presentation contains “forward-looking statements” within the meaning of the United States private securities litigation reform act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities legislation. Such forward-looking statements and information herein include, but are not limited to, statements regarding Endeavour’s anticipated performance in 2018 and future years, including revenue, cash flow, operating and capital cost forecasts, silver and gold production, timing and expenditures to explore and develop new silver mines and mineralized zones, silver and gold grades and recoveries, cash and all-in sustaining costs per ounce, initial and sustaining capital expenditures, and the use of the Company’s working capital. The Company does not intend to, and does not assume any obligation to update such forward-looking statements or information, other than as required by applicable law. Forward-looking statements or information involve known and unknown risks, uncertainties and other factors that may cause the actual results, level
Mexican peso, Canadian dollar and U.S. dollar); fluctuations in the price of consumed commodities, changes in national and local governments, legislation, taxation, controls, regulations and political or economic developments in Canada and Mexico; operating or technical difficulties in mineral exploration, development and mining activities; risks and hazards of mineral exploration, development and mining (including environmental hazards, industrial accidents, unusual or unexpected geological conditions, pressures, cave-ins and flooding); inadequate insurance, or inability to obtain insurance; availability of and costs associated with mining inputs and labour; the speculative nature of mineral exploration and development, reliability
mined; risks in obtaining necessary licenses and permits, global market events and conditions and challenges to the Company’s title to properties; as well as those factors described in the section “risk factors” contained in the Company’s most recent form 40F/Annual Information Form filed with the S.E.C. and Canadian securities regulatory authorities Forward-looking statements are based on assumptions management believes to be reasonable, including but not limited to: the continued operation
products will be completed in accordance with management’s expectations and achieve their stated production outcomes, and such other assumptions and factors as set out herein. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward- looking statements or information, there may be other factors that cause results to be materially different from those anticipated, described, estimated, assessed or intended. There can be no assurance that any forward-looking statements or information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements or information. Accordingly, readers should not place undue reliance on forward-looking statements or information.
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Guiding 20% production growth in 2018 to 5.8-6.4 mil
Four high-grade silver-gold mines located in three historic mining districts of Mexico Building new mines to fuel future growth; best
Terronera silver-gold discovery still growing; PFS shows robust economics
1. Silver equivalents based on a 75:1 gold: silver ratio
El Compas acquired in 2016, started development in 2017, commercial production in H2, 2018 Renewed focus on reducing operating costs; new focus on near-term growth
GROWTH WITH INTEGRITY 4 Product duction ion Developmen
Explora ration ion Offi fice Mexic ico Off ffic ice Leon Canada ada
Head Office Vancouver
Mexic ico City
Sierra Madre Occidental Silver & Gold Belt
Terroner era El Cubo
Guanajuato Zacatecas
Lourde des Bolañit ñitos Guanac acev eví Parral
Chihuahua
Guada dalupe pe y y Calvo
Durango Jalisco
Mines Exploration Development Guadalupe y Calvo Parral Lourdes Guanaceví Bolañitos El Cubo Terronera El Compas El Compas pas Chil ile Off ffic ice e Santiag iago Cerro Marquez
5 GROWTH WITH INTEGRITY
5 10 15 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 est. Silver & Equivalent ounces (millions)
2013 Acquired Terronera Gold Silver Silver equivalent
2007 acquired Bolañitos 2004 acquired Guanaceví 2012 acquired El Cubo Ten years of production growth during bull market 2016 Acquired El Compas & Parral Foreca ecast sting ing +20% increase rease in 2018 product duction ion
(1)
Mid-poin int of guidance
Strategic acquisitions during bear market will fuel growth
6
$92.17 $96.81 $95.05 05 $80.18 $72.42 $82.36 36 $82.50
10 20 30 40 50 60 70 80 90 100 110 120
2012 2013 2014 2015 2016 2017 2018 est.
Consolidated Direct Costs (US$/Tonne)
$7.87 $8.31 $8.39 $6.78 $8.06 $6.50
5 10 10
2013 2014 2015 2016 2017 2018 est.
Consolidated Cash Costs(1) , net of gold by- product credits (US$/oz Sold)
$18.31 31 $16.79 $15.62 62 $12.43 $16.96 $15.50
10 10 20 20 30 30
2013 2014 2015 2016 2017 2018 est.
Consolidated AISC(1) , net of gold by-product credits (US$/oz Sold)
Mid-point of guidance (2) Mid-point of guidance(2)
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Mid-point of guidance(2)
7 GROWTH WITH INTEGRITY
H1, 201 018 8 Produc ucti tion Up 16% 6% Y-o-Y Y to 2.7 million oz Ag, 26,882 oz Au (4.7 million oz Ag Eq(1) ), production will rise as El Compas attains commercial production in H2, 2018 Q2, 2018 8 Reven enue ue Up 19% % Y-o-Y Y to $38.8 million but net earnings fell due to higher costs and depreciation at Guanacevi; and FX losses related to the peso Mine e Commis missionin ioning g at El Compas as – on track for commercial production in Q3, 2018; multiple satellite targets could enhance resources and mine life Updati ating ng Terrone nera PFS S for Q3, 2018 8 – received mine and plant permits, awaiting final dumps and tailings permits Positi tive e Drill ll Results lts at Terrone nera – best intercept returned 618 gpt Ag & 3.2 gpt Au over 21.2m (858 gpt Ag Eq) Secur ured ed ATM Finan nancin ing g – up to $35.7 million to advance Terronera Appoin inted ed VP New Projec ects ts – Manuel Echevarria, to
1.2 mil oz
1.3 mil oz
2.2 mil oz
H1, 2018 Revenue ue of $79.1 .1 million
Up 14% Y-o-Y 43% Au
26,474
57% Ag
2.7 million
H1, 2018 Ag Eq Eq Producti
ion oz
El Cubo, 47% Bolanitos, 28% Guanacevi, 25%
(on track to achieve 2018 guidance)
8
Operat ating g Costs Fallin ling g – due to rising production, Cash costs(1) decreased 13% & AISC(1,2) decreased 19% in the first half of this year.
$8.09 $7.05
H1/1 1/17 H1/1 1/18
$19.38 $15.73
H1/1 1/17 H1/1 1/18
Cash Cost t (US$/oz
AISC (US$/ $/oz
d)
Cash costs fell due to improved grades AISC fell due to lowered cash costs & lower capital expenditures
compensation, reclamation, and sustaining capital net of gold credits
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4.0M M oz
4.7M 7M oz
H1/ 17 1/ 17 H2/ 17 / 17 H1/ 18 1/ 18
Guanacevi Bolanitos El Cubo
4.7M oz
Producti uction n Imp mproveme ement nts Under erway ay (3) – El Cubo continues to deliver record performance at record grades.
H2/18 /18 ( (est.) .)
Production expected to rise in H2/18 as El Compas commissions
+5.5M oz
Based on 2018 guidance range
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10
and only mine that produces dore bars
sides of this 5th largest silver mining district in Mexico
Cruz vein since 2004
currently operating at 8-900 tpd
developed to production starting in late 2018 to revitalize the operation by augmenting
line with revised guidance, despite operational challenges and lower throughput
program to improve work force productivity and costs. The 2018 focus is reinforcing
work flows, with mine output expected to increase as a result in H2.
1. Silver equivalents based on a 75:1 gold: silver ratio
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2017 7 Reserv erves es and d Resou
rces (1) Proven and probable 2.4 million oz Ag 5,500 oz Au Measured and indicated 19 million oz Ag 45,700 oz Au Inferred 9.8 million oz Ag 21,600 oz Au Financ ancials ials H1 2018 Cash costs (2) $16.35/oz All-in sustaining costs (2,3) $25.83/oz
compensation, reclamation, and sustaining capital net of gold credits
614,7 ,707 oz
637,492 492 oz
604,8 ,854 54 oz
571,6 ,654 54 oz
811 tpd 912 tpd 877 tpd 783 tpd
600 650 700 750 800 850 900 950
100,000 200,000 300,000 400,000 500,000 600,000 700,000
Q3/17 3/17 Q4/17 /17 Q1/1 1/18 Q2/18 /18
Produc uctiv tivity ity Program ram Underw erway ay
Ag Eq Eq (4) Producti duction (oz
) Throughput t (tpd) )
12
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13
Guanajuato, the 2nd largest silver district in Mexico
significantly exceeded 2017 guidance due to higher Ag & Au grades
Asuncion areas since 2007
+ 1,200 tpd
thick widths and high gold grades
is essentially free
underway to improve recoveries by 4-5%
Asuncsion and Plateros ore bodies to extend the life of the operations.
1. Silver equivalents based on a 75:1 gold: silver ratio
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2017 7 Reserv erves es and d Resou
rces (1) Proven and probable 1.15 million oz Ag 27,800 oz Au Measured and indicated 3.8 million oz Ag 47,400 oz Au Inferred 4.6 million oz Ag 59,200 oz Au Financ ancials ials H1 2018 Cash costs (2) $0.01/oz All-in sustaining costs (2,3) $8.46/oz
743,012 oz
821,0 1,012 12 oz
698,466 ,466 oz
640,24 ,241 oz
1,245 45 tpd 1,350 50 tpd 1,278 tpd 1,192 92 tpd
600 700 800 900 1,000 1,100 1,200 1,300 1,400 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000
Q3/17 3/17 Q4/17 /17 Q1/1 1/18 Q2/18 /18
Operat ration
al Improvem emen ents ts Underw erway ay
Ag Eq Eq (4) Producti duction (oz
) Throughput t (tpd) )
“Non-GAAP” measures found on the company website. Costs are presented in US $, net of by-product credits
compensation, reclamation, and sustaining capital net of gold credits
15
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Guanajuato, the 2nd largest silver mining district in Mexico
area since 2012
was below guidance due to lower than planned Au production
turnaround and is now a core asset
2012 when we bought the mine and $13 per oz in 2016 after the turnaround
currently operating at 1,300-1,500 tpd
underway to improve recoveries by 2-3%
1. Silver equivalents based on a 75:1 gold: silver ratio
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2017 7 Reserv erves es and d Resou
rces (1) Proven and probable 2.9 million oz Ag 27,000 oz Au Measured and indicated 3.4 million oz Ag 45,000 oz Au Inferred 5.1 million oz Ag 73,200 oz Au Financ ancials ials H1 2018 Cash costs (2) $2.50/oz All-in sustaining costs (2,3) $10.63/oz
927,945 945 oz
1,071,7 ,733 oz
1,038,120 ,120 oz
1,169,550 69,550 oz
1,452 52 tpd 1,542 42 tpd 1,463 63 tpd 1,478 tpd
800 900 1,000 1,100 1,200 1,300 1,400 1,500 1,600 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000
Q3/1 3/17 Q4/1 /17 Q1/ 1/18 Q2/1 /18
Operat ration
al Improvem emen ents ts Underw erway ay
Throughput t (tpd pd) ) Ag Eq Eq (4) Producti duction (oz
)
“Non-GAAP” measures found on the company website. Costs are presented in US $, net of by-product credits
compensation, reclamation, and sustaining capital net of gold credits
18
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19
La Plomosa Panuco Vetagrande San Juan Mala Noche Calicanto La Cantera La Parroquia Compas Orito Plant
targeting 2018 production of 100,000 oz silver, 7-8,000 oz gold for 6-800,000 million oz AgEq (1)
Zacatecas, the 3rd largest silver mining district in Mexico
already drilled, in reserves and resources
government plant is leased for 10 years
capacity ultimately 500 tpd so mine is scalable depending on new reserves
silver oz, IRR more than 42%
newly acquired old mines have never been drilled, represent discovery opportunities
impressive intercepts including 269 gpt Ag & 5.5 gpt over 1.1 m (682 gpt Ag Eq)
1. Silver equivalents based on a 75:1 gold: silver ratio
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20
Prelim limina nary y Econo nomic mic Assessmen ment – robust economic returns, very scalable if we discover or purchase additional mineral resources in the Zacatecas district and refurbish the second ball mill to double the plant capacity to 500 tpd Low capex ex – $11.3 million – final construction costs paid in Q2/18 Low opex – $110 per tonne including $69.80 mining, $26.20 processing, $14.00 G&A Total al cash h costs (1
(1) – $9.09 per Ag Eq oz (2) or lower
All-in in sustai aini ning ng costs ts (1,3) – $9.64 per Ag Eq oz or lower Improved ed Operati ating ng Metr trics ics
Resour urces (4)
Clas assifi ificat atio ion Tonne nes (000s) Ag Ag g/t g/t Au g/t g/t Ag Eq g/t Ag oz (000s) Au oz (000s) Ag Eq oz (000s) Indi dicat ated 148.4 104 7.31 652 495 34.9 3.112.5 Inferre red 217 76 5.38 480 530 37.5 3,342.5
Econo nomics mics
Ag Price Au Price IRR NPV Paybac back Perio iod US$16/oz 6/oz US$1,120/oz 29% US$8.0m 2.6 years US$18/oz /oz Base Case US$1,260/oz 42% US$12.6m 2.1 years US$20/o /oz US$1,400/oz 54% US$17.0m 1.8 years
1. Net of by-product credits 2. Silver equivalents based on 75:1 silver:gold ratio 3. All-in sustaining costs (AISC) include mining, processing, direct
compensation, reclamation, and sustaining capital net of gold credits 4. As at Feb 7, 2018 – for full details refer to the table in the appendix
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As expected during ramp up, plant circuits are being modified, configured and fine-tuned to achieve commercial production at the PEA target capacity of 250 tpd in Q3/18. The first shipment of concentrate on July 31, 2018 to Port of Manzanillo. Mining, stockpiling of ore and commissioning was initiated in Q2/18, using low grade ore. A total of 4,900 tonnes of run of mine ore were stockpiled in Q2, however only 1,023 tonnes were processed to test plant circuits.
22
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Terroner ronera Discov covery ery
phase 2 production est. 3.2 million oz silver, 26,000 oz gold for 5.0 million oz AgEq
Sebastian, 50 old mines on 20 known veins, all closed in 1910 Mexican revolution
million oz Ag Eq(1) in reserves and resources , still open for expansion, many other veins to drill
dumps and tailings permits
18 months, initial production to commence end of 2019, double production in 2020-2021
capacity ultimately up to 1,500 tpd so mine is scalable depending on new reserves
high grade La Luz discovery not yet in resources, multiple discovery opportunities
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La Luz Discov covery ery
24
Gold ounces converted to silver equivalent ounces on a 75:1 ratio
Hole Struc uctur ure From True ue width Au Au Ag Ag AgEq (m) (m) (gpt) (gpt) (gpt) LL LL-02* La Luz 207.45 1.1 58.6 408 4,803 Including 208.61 0.3 238.0 1365 19,215 LL LL-13 13 La Luz 131.75 1.5 19.0 407 1,832 Including 132.95 0.4 48.9 680 4,348 LL LL-14 14 La Luz 175.30 1.5 29.5 651 2,864 Including 176.25 0.6 62.9 844 5,562 LL LL-17 17 La Luz 124.55 1.4 23.1 245 1,978 Including 124.55 0.5 47.5 212 3,775 LL LL-21 21 La Luz 173.10 2.2 57.0 63 4,338 Including 173.60 0.3 320.0 340 24,340
Open pen
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Infill ill Drill l Progra ram Step-out
ll Program ram Open pen Open pen
Hole Struc uctur ure
From True width Au Ag AgEq
(m) (m) (gpt) (gpt) (gpt) TR10 10-6 Terronera 535.00 2.3 4.8 222 583 Including 538.00 0.5 6.7 410 910 TR11 11-4 Terronera 546.40 21.2 3.2 618 861 Including 548.65 0.2 4.9 4,090 4,456 TR11 11-5 Terronera 513.25 6.0 2.6 507 699 Including 515.05 0.4 5.4 3,370 3,778 FW Terronera 523.70 1.5 7.1 181 715 Including 523.70 0.3 9.2 279 971 TR13 13-7 Terronera 385.75 4.4 4.7 121 471 Including 390.65 0.5 9.1 376 1,060 KP16 P16-04 04 Terronera 315.80 4.6 4.3 146 467 Including 323.85 0.1 13.6 473 1,493
25
Pre-fea feasibility ibility study – robust economic returns; 750 tpd, expanding to 1,500 tpd in year two, under review Produ
ction
elopment ent deci cision sion –subject to receiving final permits and debt financing Permits its pend ndin ing – MIA (EIS) already approved, mine and plant received Q3, 2017 awaiting tailings and dumps Q3, 2018 Optimi timized zed PFS underw erway ay– Scheduled for release in Q3-2018 Projec ected ted Low Total tal Cash h Costs ts & AISC (2)
$3.44 / Ag oz $4.76 / Ag oz Cash Costs(1) AISC (1)
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information on “Non-GAAP” measures found on the company website. Costs are presented in US $, net of by-product credits
26
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27
Colorada mine produced 4 million oz silver per year before closing in 1990
silver mining district in Mexico
Palmilla and San Patricio veins
Mexico in 1800”s, provided silver to the Mexican mint, open pit potential
polymetallic resource at El Cometa property
economic study in 2018
discovery opportunities
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28
already in place
Colorado historic resource in 2017
Patricio and La Palmilla over next two years
based on extensive sample database
mineralization
quartz-Kspar-calcite veins
mines to the South, Levon’s Cordero project to the NE, Kootenay’s Cigarra project to the West
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29 Issued/Outstanding 128.3 million Exchange Listings NYSE:EXK, TSX:EDR Fully Diluted 134.7 million Working Capital US$58.9 million Recent Price (July 31, 2018) US$3.00 Cash Position US$31.1 million Market Cap (July 31, 2018) US$383 million Major Shareholder Van Eck 9% 52-week High/Low US$3.35/$1.94 Strategic Shareholder Fresnillo 2% 90-day avg Daily Volume +2.0 million Mining Analysts 8 GROWTH WITH INTEGRITY
0.0% 10.0% 20.0% 30.0% Silvercorp Metals Inc. (TSX:SVM) Endeavour Silver Corp. (TSX:EDR) First Majestic Silver Corp. (TSX:FR) Great Panther Silver Limited (TSX:GPR) Fortuna Silver Mines Inc. (TSX:FVI)
~ presented as at June 30, 2018 unless noted otherwise
30
elop two
es at Guanacev naceví – get mine back on plan with rising production, falling costs
ate Terr rron
era PFS - receive final Terronera permits, make production decision, raise debt financing & commence mine development
ain Commerci ercial al Productio
n at El El Compa pas – in Q3, 2018 and enhance the operation
ll Parral al targets gets – grow resources, explore multiple new veins, consolidate land holdings in district, complete PEA
and proj
ect pipelin eline e – accretive mergers and acquisitions
end mine e lives es – aggressive brownfields exploration
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31
MID-TIER PRECIOUS METALS PRODUCER
Four high-grade silver-gold mines in Mexico
STRONG ORGANIC GROWTH PROFILE
Building new mines to increase production and reduce costs
EXPERIENCED MANAGEMENT TEAM
Proven track record with exploration, development and
STRONG BALANCE SHEET
$58.9 million working capital, no debt
(as at 6/30/2018)
PURE SILVER/ GOLD LEVERAGE
No base metals, no hedging & industry leading beta to silver price (60/40 silver gold producer)
Our mission is to create value for our shareholders and become a premier silver producer in the silver mining industry.
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is consumed and the number of industrial uses is multiplying
heat, used in electronics, batteries, solar panels, alloys & coatings, LED & RFID chips, semi-conductors, photography, anti- bacterials, preservatives, medicines
money and its role as a store of value and a hedge against monetary inflation is growing
governments throughout history have “printed” money; eg. falling silver % in the Roman Denarius coin
Indus dustrial al appl plicat ations ns, , 46% Photogr grap aphy hy , , 6% 6% Jewel welry, , 18% Silverwa ware , , 5% 5% Coins ns & Medal als , , 9% 9% Impl plied d net investment nt , , 16%
Silver Demand
Denarius % Silver
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Silver semi-conductor film can hold vast amount of data as holograms Silver nano-particles enhance soil for healthier crops Silver helps produce hydrogen for fuel cells, electricity Silver helps high value chemicals
35
Source: GFMS, Thomson Reuters Moz 2013 2014 2015 15 2016 2017e 7e % % -change hange 2016 % % -change hange 2013 Mine Production 823 868 895 889 852
+4% Total l Suppl ply y 987 1,051 1,044 44 1,009 992 992
2% 0% 0% Jewelry & Silverware 280 288 290 258 268 3%
Coins & Bars 241 234 292 208 151
Industrial Fabrication 605 596 583 577 599 4%
Physica ysical l Demand nd 1,126 26 1,118 18 1,165 1,042 42 1,018 18
2%
1% Physica ysical l Surpl plus us/ Deficit cit
68
21
33
26
7%
1% Annua ual l Avera rage e Silver lver Price ce ($/oz
23.79 .79 19.08 15.6 .68 17.14 14 17.05 0% 0%
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Source: GFMS, Thompson Reuters
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Source: GFMS, Thompson Reuters
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Source: GFMS, Thomson Reuters Primary mary Silver Mines
26% Primar ary Gold d Mines 13% Primar ary Base Metal als s 61%
39
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Source: Solarbuzz; Earth Policy Institute; ITRPV; GFMS, Thompson Reuters
40 GROWTH WITH INTEGRITY
Source: GFMS, Thompson Reuters; Silver Institute
41
Source: Bloomberg, Incrementum AG
42
Source: Incrementum AG, Jesse Felder, Federal Reserve St. Louis
43
Source: Dr. Torsten Dennin, Incrementum AG
44
Source: Fed St. Louis, Federal Reserve Bank New York, Incrementum AG
has led to a recession. Moreover, every day financial crisis was preceded by rate hikes
cycles were followed by recessions. Only three cases turned out to be exceptions to the rule
45
that the current uptrend is still relatively modest in terms of duration and performance.
assume to be the case –quite a bit of upside potential would remain.
as “bearish bull”.
Source: Nowandfutures, TheDailyGold.com, Barrons, Incrementum AG
46 GROWTH WITH INTEGRITY
46
scarcity of primary silver mining companies
silver producers
During bull markets, s, silver r equities es typically ly rise up to double e the gold equitie ies
Source: S&P Global, as of July 30, 2018
One-year ear beta Three ee-year year beta Five-year ear beta End ndeavour eavour 0.09 .09 2.55 55 2.95 95 First Majestic 2.17 3.22 2.75 Fortuna 0.06 2.58 2.84 Wheaton PM 1.51 1.56 1.88 Coeur 0.49 1.19 0.62 Hecla
0.15 0.21 Fresnillo
0.47 0.24 Hochschild
1.81 1.06 Pan American 0.16 1.68 1.89
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48
10 20 30 40 50 60 70 80 90 100 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016
Fal alling ing Rat atio io Gold/S d/Silve ilver- r-Rat atio io
Silver +64% Gold d -21% Silver +203% 3% Silver +37 371% 1% Gold d +77%
Silver? Gold?
Silve ver +18 1811 11% Gold d +595% Silver +159% 9% Gold d +42% Silve ver +60 60% Gold d +8% Silver +60 60% Gold d +9%
During g falling ng gold/s /silv ilver er ratio
rios,
r perform rmed ed very well, howeve ver r silver r always outper erform
entl tly high ratio implies s that t pressure e contin inues ues to build for break-out. t.
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Management
Bradford Cooke, M.Sc., P.Geo. – Founder and CEO Godfrey Walton, M.Sc., P.Geo. – President and COO Dan Dickson, CA – CFO Dale Mah, B.Sc., P.Geo. – VP, Corporate Development Manuel Echevarria, B.Sc. – VP. New Projects Luis Castro, Ing. Geo. – VP, Exploration Christine West – VP, Controller Miguel Ordaz, Ing. Geo. – Mexico Projects Director and Legal Representative Galina Meleger, CIM – Director, Investor Relations Lorena Aguilar, CHRP – Director, Human Resources
Board of Directors
Bradford Cooke, M.Sc., P.Geo. – Company CEO Godfrey Walton, M.Sc., P.Geo. – Company President and COO Geoff Handley, B.Sc. – Independent Director, Chair (1)(2)(3) Rex McLennan, B.Sc., MBA, ICD.D – Independent Director (1)(3)(4) Ricardo Campoy, B.Sc. – Independent Director (1)(2) Ken Pickering, P.Eng. – Independent Director(1)(2)(4) Mario Szotlender, B.IR – Independent Director(2)(3)(4)
(1) Audit Committee (2) Compensation Committee (3) Corporate Governance and Nominating Committee (4) Sustainability Committee
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Partners
Markets
52
$ millions unless otherwi wise stated, US dollar ars
Guanac acev evi i Bolan anit itos El Cubo El Compas as (1) Consol
idated ed
Silve ver Producti duction (M oz
) 2.2 – 2.5 1.0 – 1.1 2.5 – 2.7 0.1 - 0.1 5.8 – 6.4 Gold ld Producti duction (K oz
) 5.0 – 5.5 23.5 – 25.5 22.5 – 24.5 7.0 – 8.5 58.0 .0 – 64.0 .0 Silve ver Eq Eq Producti duction (M oz
) (2) 2.6 – 2.9 2.8 – 3.0 4.2 – 4.5 0.6 – 0.8 10.2 .2 – 11.2 Cash sh Cost sts, s, net t of gold d by-pr product ct credit dits s (US$/oz
) (3),
, (4)
$6.00 .00 - $7.00 .00 AISC, SC, net t of gold d by-pr product duct credits dits (US$/ oz
) (3),
, (4)
$15.00 .00 - $16.00 6.00 Sustain tainin ing Capital pital $41.1 .1 Growth Capit pital l $7.3 $7.3 Explo plorat atio ion Budget $11.1 .1
1. El Compas is scheduled to achieve commercial production by the end of July 2018. 2. Gold ounces converted to silver equivalent ounces on a 75:1 ratio in 2018 3. Cash costs per ounce and AISC per ounce are examples of Non-IFRS measures. See disclosure in quarterly MD&A for information on “Non-GAAP” measures found on the company website. Costs are presented in US dollars, net of by-product credits 4. See EDR News Release dated January 25, 2018 for full disclosure on 2018 Guidance; 2018 costs forecasts reflect an 19:1 Mexican Peso per US Dollar exchange rate, $17/ oz Ag & $1,275/ oz Au price assumption.
Guidan ance Highlig lights
two new orebodies at Guanacevi
towards development Guana nacevi cevi Bolanit lanitos
El Cubo
pas
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2018 Ag Eq Eq Produc ductio ion n by Mine ne (M oz
)
26% 27% 41% 6% 6%
53
Silver-Gold Reserves and Resources
Tonnes (000s) Ag g/t Au g/t Ag Eq g/t Ag oz (000s) Au oz (000s) Ag Eq oz (000s) Proven Guanaceví 82 224 0.49 261 591 1.3 688.5 Bolañitos 154 87 2.48 273 431 12.3 1,353.5 El Cubo 171 184 1.80 319 1,010 9.9 1,752.5 Total Proven 407 155 1.80 290 2,032 23.5 3,794.5 Probable Guanaceví 224 252 0.58 296 1,812 4.2 2,127 Bolañitos 258 86 1.87 226 714 15.5 1,876.5 El Cubo 317 186 1.68 312 1,894 17.1 3,176.5 Terronera 4,061 207 1.95 353 27,027 255 46,152 Total Probable 4,860 201 1.87 341 31,447 291.8 53,332 Total P+P 5,267 198 1.86 337 33,479.4 315.3 57,126.5 Measured Guanaceví 17 299 0.38 328 167 0.2 182 Bolañitos 31 118 2.28 289 118 2.3 290.5 El Cubo 207 184 2.90 402 1,225 19.3 2,672.5 Total Measured 255 184 2.66 384 1,510 21.8 3,145 Indicated Guanaceví 1,650 310 0.80 370 16,449 42.4 19,629 Bolañitos 763 152 1.84 290 3,727 45.1 7,109.5 El Cubo 404 165 1.98 314 2,143 25.7 4,070.5 El Compas 148 104 7.31 652 495 34.9 3,112.5 Guadalupe y Calvo 1,861 119 2.38 298 7,120 142.4 17,800 Parral (new) 37 184 0.27 204 216 0.3 238.5 Total Indicated 4,863 193 1.86 332 30,150 290.8 51,960 Total M&I 5,118 192 1.90 335 31,660 312.6 55,105 Inferred Guanaceví 761 314 0.78 373 7,684 19.1 9,116.5 Bolañitos 945 150 1.95 296 4,556 59.2 8,996 El Cubo 1,100 143 2.07 298 5,058 73.2 10,548 Terronera 1,174 288 2.16 375 10,848 43.7 14,125.5 El Compas 217 76 5.38 480 530 37.5 3,342.5 Guadalupe y Calvo 154 94 2.14 255 465 10.6 1,260 Parral (new) 2,283 262 0.25 281 19,215 18.1 20,572.5 Total Inferred 6,634 227 1.23 319 48,356 261.4 67,961.1
Silver-Gold-Lead-Zinc Resources
Tonnes (000s) Ag g/t Au g/t Ag Eq g/t Ag oz (000s) Au oz (000s) Ag Eq oz (000s) Zn% Pb% Indicated Guanaceví 363 208 0.26 302 2,420.5 3.1 2,653 0.78 1.32 Parral 1,631 49 0.90 117 2,589.9 47.2 6,129 2.87 2.86 Total Indicated 1,994 78 0.78 151 5,010.4 50.3 8,782.9 2.49 2.58 Inferred Guanaceví 488 132 0.16 293 2,076 2.5 2,263.5 1.36 2.54 Parral 1,303 63 0.88 129 2,658.9 36.9 5,456.4 2.55 2.28 Total Inferred 1,791 82 0.68 174 4,710 39.4 7,689.9 2.23 2.35
GROWTH WITH INTEGRITY 54
Notes es
1. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that any or all part of the Mineral Resources will be converted into Mineral Reserves. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues. 2. The Inferred Mineral Resource in this estimate has a lower level of confidence than that applied to an Indicated Mineral Resource and must not be converted to a Mineral
3. The Mineral Resources in this estimate were calculated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council. 4. Mineral Resources are exclusive of and in addition to Mineral Reserves. 5. Mineral Resource and Mineral Reserve cut-off grades are based on a 202 g/t silver equivalent for Guanaceví, 158 g/t silver equivalent for Bolañitos, 152 g/t silver equivalent for Villalpando Ascuncion ore zone of El Cubo and 218 g/t silver equivalent for Santa Cecilia ore zone of El Cubo, and 150 g/t silver equivalent for Terronera, El Compas, Guadalupe y Calvo and Parral Properties. 6. Metallurgical recoveries were 83.0% silver and 85.0% gold for Guanaceví, 84.3% silver and 87.7% gold for Bolañitos, and 87.0% silver and 86.7% gold for El Cubo. 7. Mining recoveries of 92% were applied for Mineral Reserve Estimate calculations. 8. Minimum mining widths were 0.8 metres for Mineral Reserve Estimate calculations. 9. Dilution factors for Mineral Reserve Estimate calculations averaged 26% for Guanaceví, 28% for Bolañitos, and 35% for El Cubo. Dilution factors are calculated based on internal stope dilution calculations and external dilution factors of 15% for cut and fill mining and 30% for long hole mining at Guanaceví, 28% and Bolañitos and 54% for long mining at El Cubo. 10. Silver equivalent grades are based on a 75:1 silver:gold ratio and calculated including only silver and gold. 11. Inferred Mineral Resources for Terronera includes the Terronera and Real Alto Area (Animas-Los Negros, El Tajo & Real veins). 12. The La Colorada structure (Parral) does not contain gold on an economic scale. 13. Price assumptions for Guanaceví, Bolañitos and El Cubo are US$17.26/oz for silver, US$1,232/oz for gold, US$0.82/lb for lead and US$0.90/lb for zinc. 14. Price assumptions for Terronera are US$18/oz for silver, US$1,250/oz for gold. 15. Price assumptions for El Compas are US$18/oz for silver, US$1,225/oz for gold. 16. Figures in the tables are rounded to reflect estimate precision; small differences generated by rounding are not material to the estimates
Godfrey Walton, M.Sc., P.Geo., President and COO of Endeavour, is the Qualified Person who reviewed and approved the technical information contained in these Mineral Reserve and Resource Estimates. A Quality Control sampling program of reference standards, blanks and duplicates has been instituted to monitor the integrity of all assay results. All samples are split at the local field office and shipped to ALS-Chemex Labs, where they are dried, crushed, split and 50 gram pulp samples are prepared for analysis. Gold and silver are determined by fire assay with an atomic absorption (AA) finish. The Mineral Resource Estimates for Terronera, El Compas and Parral were undertaken by Independent Qualified Persons Eugene Puritch, P.Eng., FEC, CET, Yungang Wu, P.Geo., and David Burga, P.Geo of P&E Mining Consultants Inc. Mr. Puritch has reviewed and approved the technical content of this press release with respect to the Terronera vein area, El Compas and new Parral. The Cometa property in Parral which is part of the Lead-Zinc portion of the table is based on a Technical report titled NI 43-101 Technical Report audit of the Mineral Resource Estimate for the Parral Project, Chuhuahua State, Mexico and filed Dec 15, 2010 and authored by William Lewis, B.Sc., Charley Z. Murahwi M.Sc. MAusIMM and Dibya Kanti Mukhopadhyay M.Sc. MAusIMM. This report is separate from the Parral Properties described by P&E Mining Consultants Inc. The resources on the veins (Animas-Negros, Tajo and Real) from the Terronera property were estimated as part of a 43-101 report authored by Michael J. Munroe dated March 27th 2014 and titled NI 43-101 Technical Report audit of the Mineral Resource estimate for the San Sebastian Project, Jalisco State,
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Ore grades es (g/t /t) Recov
ered ounces es Recov
eries es (%) Cost t Analys ysis
Period Plant throughput (tonnes) Silver Gold Silver Gold Silver Gold Cash costs ($/oz Ag) AISC ($/oz Ag) Direct costs ($/tonne)
Q1 - 14 346,525 198 1.92 1,898,999 18,519 86.1 86.6 4.87 12.15 92.93 Q2 - 14 339,276 178 1.59 1,669,609 15,131 86.1 87.4 9.87 20.48 103.58 Q3 - 14 344,393 175 1.48 1,634,294 14,118 84.5 86.3 10.70 20.18 99.02 Q4 - 14 374,212 191 1.49 2,009,172 15,127 87.3 84.4 8.33 15.37 89.63 Total 2014 1,404,406 185 1.62 7,212,074 62,895 86.2 86.1 8.31 16.79 96.11 Q1 - 15 380,792 174 1.53 1,820,050 15,808 85.2 84.5 7.17 13.32 82.67 Q2 - 15 371,745 180 1.32 1,769,741 13,047 82.4 83.0 8.60 16.86 82.93 Q3 - 15 404,878 163 1.39 1,820,282 15,319 85.7 84.9 8.11 15.05 75.09 Q4 - 15 406,387 156 1.40 1,732,765 15,433 84.9 84.3 9.76 17.33 80.39 Total 2015 1,563,802 167 1.41 7,178,666 59,990 85.4 84.7 8.39 15.62 80.18 Q1 - 16 408,553 137 1.50 1,510,065 15,960 83.7 81.0 7.63 11.12 74.26 Q2 - 16 377,198 148 1.58 1,551,851 15,649 86.2 81.9 5.37 10.53 73.01 Q3 - 16 355,611 133 1.55 1,284,646 14,364 84.3 80.8 5.27 11.47 71.18 Q4 - 16 317,555 123 1.35 1,088.845 11,402 87.0 83.0 9.39 20.11 70.72 Total 2016 1,458,917 136 1.50 5,435,407 57,375 85.3 81.7 6.78 12.43 72.42 Q1 - 17 303,222 126 1.41 1,076,974 11,724 87.4 85.2 7.81 18.24 75.77 Q2 - 17 303,943 135 1.58 1,143,788 13,058 86.6 84.6 8.36 20.46 84.01 Q3 - 17 319,038 144 1.53 1,262,064 13,648 84.5 87 8.10 18.71 81.60 Q4 - 17 349,924 152 1.56 1,436,962 14,577 84.1 83.3 7.97 12.70 84.38 Total 2017 1,279,873 140 1.54 4,919,788 53,007 85.4 83.9 8.06 16.96 82.36 Q1 - 18 325,669 148 1.47 1,314,648 12,832 84.6 83.6 6.50 14.18 79.38 Q2 - 18 314,305 156 1.60 1,355,895 13,674 86.2 84.5 7.05 15.73 83.75
56
Ore grades es (g/t /t) Recov
ered ounces es Recov
eries es (%) Cost Analys ysis
Period Plant throughput (tonnes) Silver Gold Silver Gold Silver Gold Cash costs ($/oz Ag) AISC ($/oz Ag) Direct costs ($/tonne)
Q1 - 14 106,813 350 0.77 1,005,781 2,273 83.7 86.0 8.30 11.94 103.90 Q2 - 14 108,822 272 0.55 795,824 1,656 83.6 86.1 12.51 19.18 109.83 Q3 - 14 105,241 278 0.59 761,272 1,627 81.0 82.1 11.99 16.62 105.23 Q4 - 14 102,375 358 0.70 1,024,762 2,085 87.0 90.5 7.28 11.89 96.91 Total 2014 423,251 314 0.65 3,587,639 7,641 84.0 86.4 9.73 14.51 104.06 Q1 - 15 106,106 300 0.63 853,106 1,877 83.4 87.3 8.23 11.16 87.34 Q2 - 15 108,817 325 0.64 958,581 1,946 84.3 86.9 8.14 13.40 92.48 Q3 - 15 111,469 285 0.58 867,292 1,792 84.9 86.2 7.98 12.76 79.15 Q4 - 15 105,039 269 0.61 761,769 1,775 83.9 86.2 10.57 14.67 93.58 Total 2015 431,431 295 0.62 3,440,748 7,390 84.1 85.9 8.66 12.97 88.04 Q1 - 16 98,776 249 0.56 651,731 1,568 82.4 88.5 8.09 12.95 71.92 Q2 - 16 98,756 232 0.49 629,221 1,365 85.4 87.7 10.82 20.11 83.38 Q3 - 16 82,059 235 0.51 542,385 1,163 87.5 86.4 11.12 21.53 93.24 Q4 - 16 87,850 211 0.49 540,708 1,232 90.7 89.0 12.66 26.74 93.60 Total 2016 367,441 232 0.51 2,364,045 5,328 86.3 88.4 10.56 19.07 84.94 Q1 - 17 87,599 213 0.49 530,683 1,192 88.5 86.4 12.85 23.78 94.99 Q2 - 17 74,894 219 0.50 468,741 1,079 88.8 89.5 14.94 27.40 111.42 Q3 - 17 74,649 249 0.57 522,907 1,224 87.5 89.5 13.68 23.47 117.15 Q4 - 17 83,881 241 0.54 544,117 1,245 83.7 85.5 12.39 17.57 99.39 Total 2017 321,113 230 0.53 2,066,448 4,740 87.0 86.6 13.41 22.87 105.13 Q1 - 18 78,971 224 0.63 489,163 1,443 86.0 90.2 15.31 22.62 120.63 Q2 - 18 71,275 225 0.67 464,929 1,423 90.2 92.7 17.46 29.24 139.24
57
Ore grades es (g/t /t) Recov
ered ounces es Recov
eries es (%) Cost Analys ysis
Period Plant throughput (tonnes) Silver Gold Silver Gold Silver Gold Cash costs ($/oz Ag) AISC ($/oz Ag) Direct costs ($/tonne)
Q1 - 14 142,412 144 2.72 572,851 10,640 86.9 85.4 (2.21) 3.85 85.27 Q2 - 14 142,370 152 2.47 623,898 9,980 89.7 88.3 1.20 9.70 93.04 Q3 - 14 137,683 149 2.20 588,159 8,588 89.2 88.2 2.93 11.75 87.98 Q4 - 14 145,408 148 2.03 611,271 7,900 88.3 83.2 5.64 9.44 83.58 Total 2014 567,873 148 2.36 2,396,179 37,108 88.7 86.1 1.94 8.70 87.44 Q1 - 15 136,076 139 2.30 521,117 8,421 85.7 83.7 0.17 5.74 74.00 Q2 - 15 106,148 131 1.72 376,305 4,982 84.2 84.9 4.82 13.80 70.89 Q3 - 15 109,124 105 1.95 300,988 5,397 81.7 78.9 7.68 14.40 70.17 Q4 - 15 103,878 90 1.88 251,363 5,166 83.6 82.3 8.09 18.15 72.31 Total 2015 455,226 118 1.99 1,449,776 23,966 83.9 82.3 4.31 11.79 71.97 Q1 - 16 137,128 94 2.33 334,569 8,449 80.7 82.2 (6.20) (3.55) 60.03 Q2 - 16 136,322 80 2.38 276,885 8,470 79.0 81.2 (7.08) (4.25) 63.94 Q3 - 16 132,686 76 2.30 255,350 7,875 78.7 80.3 (15.17) (11.16) 49.03 Q4 - 16 101,568 71 2.22 185,813 5,926 80.1 81.7 (4.87) 1.02 54.35 Total 2016 507,704 81 2.31 1,052,617 30,720 79.6 81.5 (8.37) (4.77) 57.07 Q1 - 17 94,351 66 2.40 168,723 6,218 84.3 85.4 (10.28) (3.82) 65.18 Q2 - 17 113,875 78 2.27 231,106 6,965 80.9 83.8 (4.78) 3.61 66.60 Q3 - 17 114,526 83 2.09 257,972 6,663 84.4 86.6 (0.52) 3.96 71.52 Q4 - 17 124,172 86 2.18 280,712 7,204 81.8 82.8 (2.73) 1.01 67.04 Total 2017 446,924 80 2.24 934,238 26,910 81.3 83.6 (4.00) 1.62 67.68 Q1 - 18 115,014 82 1.83 238,012 5,578 78.5 82.4 (2.77) 4.20 60.87 Q2 - 18 108,495 91 1.82 248,591 5,222 78.3 82.3 2.87 12.84 65.74
58
Ore grades es (g/t /t) Recov
ered ounces es Recov
eries es (%) Cost t Analys ysis
Period Plant throughput (tonnes) Silver Gold Silver Gold Silver Gold Cash costs ($/oz Ag) AISC ($/oz Ag) Direct costs ($/tonne)
Q1 - 14 97,300 110 2.01 320,367 5,606 93.1 89.2 6.27 27.66 92.08 Q2 - 14 88,084 103 1.44 249,887 3,495 85.7 85.7 22.71 52.07 112.88 Q3 - 14 101,469 102 1.42 284,863 3,903 85.6 84.3 23.10 47.46 107.56 Q4 - 14 126,429 106 1.51 373,139 5,142 86.6 83.8 15.73 35.05 90.70 Total 2014 413,282 105 1.59 1,228,256 18,146 88.0 85.9 16.40 39.49 99.89 Q1 - 15 138,610 113 1.46 445,827 5,510 88.5 84.7 13.24 26.44 87.61 Q2 - 15 156,780 112 1.51 434,855 6,119 77.0 80.4 12.59 26.56 84.14 Q3 - 15 184,285 124 1.54 652,002 8,130 88.7 89.1 8.48 18.48 75.50 Q4 - 15 197,470 131 1.57 719,633 8,492 86.5 85.2 9.45 19.96 77.65 Total 2015 1,563,802 119 1.52 2,288,145 28,634 88.3 86.5 10.56 22.15 80.60 Q1 - 16 172,649 108 1.38 523,765 5,943 87.4 77.6 15.87 18.11 86.91 Q2 - 16 142,120 156 1.56 645,745 5,814 90.6 81.6 5.21 7.20 74.51 Q3 - 16 140,866 128 1.46 486,911 5,326 84.0 80.5 9.16 11.60 79.20 Q4 - 16 128,137 103 1.24 362,324 4,244 85.4 83.1 11.65 19.62 68.01 Total 2016 583,772 136 1.41 2,018,745 21,327 87.4 80.6 10.09 13.32 77.88 Q1 - 17 94,351 111 1.31 377,568 4,314 87.2 84.5 8.52 20.00 70.12 Q2 - 17 115,084 137 1.60 444,031 5,014 87.6 84.7 7.95 21.60 83.38 Q3 - 17 129,863 137 1.60 465,351 5,803 81.4 86.9 6.37 17.95 78.13 Q4 - 17 141,871 157 1.61 612,133 6,128 85.5 83.4 8.78 13.56 90.69 Total 2017 511,836 136 1.55 1,919,102 21,357 85.8 83.7 7.93 17.80 80.90 Q1 - 18 131,684 161 1.65 587,473 5,811 86.2 83.2 2.93 11.22 70.81 Q2 - 18 134,535 171 1.92 642,375 7,029 86.8 84.6 2.09 10.08 75.13
59 GROWTH WITH INTEGRITY 59
for feedback on a full range of interests, and every two years, we conduct a materiality review to rank what is most important both internally and externally to adjust our goals and programs.
below, with Governance as the foundation
2017 marks the 6th consecutive year that we’ve reported on our sustainability initiatives, including the last 5 under the GRI G4 guidelines.
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Who we are re and what at we do:
We find, build and operate quality silver mines in a sustainable way to create real value for all stakeholders Our goal is to continue growing to become a premier, low cost senior producer in the silver mining sector By aim to make a positive difference in people’s lives Doing what’s right and pursuing a sustainable approach to mining are core to building a successful enterprise Pursuing a philosophy of continuous improvement We Value e Integrity grity
We recei eive e annual nual awards for the e way we do busine ness
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GOVERNANCE Sustainability is supported by our executive team and is part of our governance structure RISK MANAGEMENT We assess and manage economic, social and environmental risks relevant to our business BUSINESS ALIGNMENT Our sustainability agenda is aligned with our core business, including operational, development and exploration activities, and relationships with suppliers STAKEHOLDER ENGAGEMENT We use a materiality assessment to identify and address the most important issues to our stakeholders VALUES AND POLICIES Sustainability is enshrined in our values and policies
Embedding Sustainability into
upon which our business is built
establishing our Board and Committee charters and policies on Ethical Code of Conduct, Anti-Bribery and Corruption, Whistle Blower, Disclosure and Advance Notice
Safety, Environment, Community, Diversity and Sustainability
reporting, based on broad engagement with all stakeholders including shareholders, investors, bankers, analysts, employees, communities, ejidos, governments, union, church, contractors, suppliers, small-scale miners and media
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employee health and safety is our #1 priority, governed by extensive safety policies and practices
induction, daily safety procedures, regular refresher courses, job site audits and each mine has award-winning first aid and mine rescue teams
employees including annual medical checkups, disease and occupational health tests, drug and alcohol tests, lifestyle and fitness counselling
governments to provide medical, dental, and
counselling During 2017, Endeavour supported a rescue effort following a Mexican earthquake:
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communities
scholarships in Mexico, and online courses to complete high school diplomas, technical and self-employment courses
unemployed career skills like operating dump trucks, scoop trams, jumbo drills followed by job offers
learning programs
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community and sustainability objectives
acquisition of properties, mines and plants exploration to discover new orebodies in historic mining districts development to open new mines and refurbish and expand old mines, plants and facilities operations to create 1,700 employee jobs and 1,200 contractor jobs direct economic impact on 8,100 people (3:1 ratio) indirect economic impact on another 8,100 people such as suppliers and services; 99% in Mexico
goods and services in Mexico and $16.5 million in taxes
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recycling and disposal and biodiversity
have made major investments to upgrade our tailings facilities to North American standards – dry stack at Guanaceví, a unique drainage system at Bolañitos, and new facilities at El Cubo
disturbed by Endeavour but also historic areas. In 2017, we planted nearly 44,000 trees to reclaim disturbed ground.
water and achieved a 5% reduction in water consumption.
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issues and build sustainable capacity
sponsor sports teams, kids camps and field trips, and an annual 10 km race to promote fitness; we help upgrade local buildings, schools, churches and roads
confections, jewelry, tourist gifts, clothing and mops
supply, to proper sewage disposal, to new community buildings, to tourist mine
Canada, hosted workshops to help employees acquire job ready skills, funded infrastructure projects including roads and bridges and launched scholarship programs.