EXK!!!
Endeavour Silver Reports Record Financial and Operating Results in 2009
Press Release Source: Endeavour Silver Corp. On Wednesday March 24, 2010, 9:00 am
VANCOUVER, BRITISH COLUMBIA--(Marketwire - 03/24/10) - Endeavour Silver Corp. (TSX:EDR - News)(TSX:EDR.WT - News)(AMEX:EXK - News)(DBFrankfurt: EJD) announced today record financial and operating results for the fourth quarter and fiscal year ended December 31, 2009. For the fifth consecutive year, Endeavour set new Company standards for silver and gold production, reserves and resources.
The financial results are expressed in US dollars ("US$") and are based on Canadian generally accepted accounting practices (Canadian "GAAP"). For a more detailed review, shareholders are referred to the 2009 Audited Financial Statements, Management Discussion and Analysis ("MD&A") and Annual Information Form ("AIF") at the Company's website, www.edrsilver.com or on the SEDAR website, http://www.sedar.com/ and to the SEC Form 40F filed on EDGAR at http://www.sec.gov/edgar.shtml.
Highlights Fiscal Year 2009 (Compared to Fiscal Year 2008)
- Sales Revenues climbed 29% to $50.8 million
- Mine Operating Cash-flow jumped 85% to $21.3 million
- EBITDA turned positive from $8.6 million loss to earnings of $14.9 million
- Net Earnings (Loss) improved from ($18.0 million) to ($1.9 million)
- Cash costs fell 33% to $6.04 per oz of silver produced, net of by product gold credits
- Silver production increased 11% to 2.6 million oz
- Gold production rose 66% to 13,298 oz
- Silver and Equivalents production escalated 20% to 3.4 million oz
- Silver Proven and Probable reserves up 113% to 16.6 million oz
- Silver Indicated resources up 21% to 23.6 million oz
- Silver Inferred resource down 6% to 18.3 million oz
Highlights Fourth Quarter 2009 (Compared to Fourth Quarter 2008)
- Sales Revenues climbed 206% to $24.2 million
- Realized price averaged $17.95 and $1,108 for silver and gold, respectively
- Mine Operating Cash-flow jumped to $13.0 million from less than $1.0 million
- Net Earnings turned positive from $5.2 million loss to earnings of $3.1 million
- Cash costs fell 33% to $4.96 per oz of silver produced, net of by product gold credits
- Silver production increased 12% to 779,344 oz
- Gold production rose 90% to 4,591 oz
- Silver and Equivalents production escalated 26% to 1.1 million oz
Bradford Cooke, Chairman and CEO, commented, "We are gratified to report that Endeavour delivered another year of record financial and operating performance in 2009. Sales revenues were up for the fourth consecutive year thanks not only to our rising silver and gold production and higher precious metal prices, but also due to our metal sales strategy which beat the market average by 5%. Cash costs fell and profit margins rose for the second year in a row with EBITDA turning positive for the first time in Endeavour's five year operating history. Clearly, our capital expansion programs continue to bear fruit."
"The Company successfully opened two new mines during the year, one in each of our two operating districts, Guanacevi and Guanajuato, thereby facilitating the next phase of growth at both operations. New high grade silver-gold discoveries were made in both Guanacevi and Guanajuato, thereby confirming once again the prolific exploration potential of these two historic mining districts. New property acquisitions helped Endeavour's exploration performance in 2009 and should do so again this year."
"In 2010, management is forecasting Endeavour's sixth consecutive year of growing silver production, up another 20% to the 3.1 million oz range. Cash costs are expected to drop into the US$5.50 per oz range. Assuming a US$16 average silver price in 2009, Endeavour should generate in the order of US$31 million in mine operating cash-flow this year."
To view a video of Chairman Bradford Cooke and his commentary on these results, click here: http://www.edrsilver.com/i/video/pressreleases/2010-03-24.html.
Financial Results (Consolidated Statement of Operations appended below)
For the year ended December 31, 2009, the Company generated Sales Revenues totalling $50.8 million (2008 - $39.3 million) at an average sale price of $15.49 per oz (2008 - $14.51 per oz) on its silver production. After Costs of Sales of $29.5 million (2008 - $27.8 million), Mine Operating Cash-flows amounted to $21.3 million (2008 - $11.5 million) from its mining and milling operations in Mexico. After Depreciation and Depletion of $11.3 million (2007 - $8.4 million), Mine Operating Earnings were $10.0 million (2008 - $3.1 million) in 2009. Operating Earnings were break-even (2008 - $12.9 million loss) and the Company incurred a Net Loss for the year ended December 31, 2009 of $1.9 million (2008 - $18.0 million). Cash costs were $6.04 per oz silver produced (2008 - $9.03), net of gold by-product credits.
Endeavour invested US$18.0 million on capital projects in 2009, including US$12.3 million on mine development, US$1.4 million on plant improvements and US$4.3 million on equipment, vehicles and buildings. The main focus was on Guanacevi ($12.4 million) where over 4 km of mine development was completed, including the new Porvenir Dos mine, 50% advancement of the Santa Cruz access ramp, and the North Porvenir pump station, electrical substations and ventilation raise. At Guanajuato, capital expenditures ($4.7 million) focused on the development of the Lucero and Bolanitos mines, including over 2.7 km of mine development and installing a new cone crusher to increase by 20% the capacity of the plant.
Endeavour is well-positioned for both organic and acquisition growth in 2010, with year-end working capital of $38.8 million, including $26.7 million in cash and cash equivalents. Working capital and 2010 mine operating cash flows will be used to complete an aggressive 2010 capital program to push mine development ($16.0 million), expand the crushing circuit at Guanacevi to 1,200 tonne per day ($6.0 million) and upgrade our fleet of mining equipment ($7.0 million). The Company expects that 2010 will be the last year of major capital investments needed to run both operations at capacity.
Operating Results (Consolidated Table of Operations appended below)
In 2009, Endeavour achieved two important milestones in its silver mining operations: the Company recorded its fifth consecutive year of growing silver production, up 11% from 2008 to 2,572,534 payable ounces (oz) silver; and cash costs declined for the second consecutive year, down 33% to $6.04 in 2009.
Like 2008, silver production in 2009 was relatively flat in the first two quarters, as management focused primarily on the capital investment programs at the Guanacevi Mines in Durango State, and the Guanajuato Mines in Guanajuato State. As a result of completing the capital projects, consolidated silver production rose from approximately 573,000 oz in Q1, 2009 to approximately 779,000 oz in Q4, 2009. Consolidated cash operating costs of production fell from US$7.56 per oz silver in Q1, 2009 to US$4.96 per oz silver in Q4, 2009.
At Guanacevi, plant throughput increased from 570 tpd in Q1, 2009 to 770 tpd in Q4, 2009. Silver grades remained relatively constant in 2009, around 322 grams per tonne (gpt) silver, but gold grades increased significantly to 0.80 gpt gold compared to previous years. At Guanajuato, plant throughput rose 60% year over year to 492 tpd, operating on a 6 day work week, with Q4 throughput achieving 565 tpd as the plant benefitted from the new cone crusher. Ore grades increased to 187 gpt silver and 2.13 gpt gold in 2009.
Exploration Results
In 2009, Endeavour drilled approximately 18,000 meters in 61 drill holes, made two new high grade silver-gold discoveries and substantially increased the Company's reserves and resources. Please visit Endeavour's website or refer to the Company's March 3rd, 2010 press release for December 31, 2009 updated reserves and resources table and for more information on the 2009 exploration program and 2010 exploration outlook refer to the Company's January 26, 2010 press release.
2010 Outlook
In 2010, Endeavour expects to deliver its sixth consecutive year of silver production growth, up by about 20% to the 3.1 million oz range with approximately 15,000 oz gold as a by-product. Similar to 2009, the first two quarters of silver production are scheduled to be relatively flat, as we focus on mine development and capital programs. However, silver production is scheduled to increase in Q3 and Q4 as the new ore-bodies under development during the first half of the year enter into production in the second half. Cash costs should continue to decline to the $5.50 per oz range.
Management has planned one more year of major capital investments totalling $29 million in order to unfold the full production capacities at Guanacevi and Guanajuato. Thereafter, capital requirements at both mining operations should decline to sustaining levels. Upon completion of the 2010 capital expansion projects, the Guanacevi mines production is scheduled to reach 1,000 tonnes per day (tpd), and the Guanajuato mines production is scheduled to reach 600 tonnes per day (tpd). The final phase of organic growth currently planned for Guanacevi and Guanajuato should see the mine and plant capacities rise to 1,200 tonnes per day (tpd) at Guanacevi and 800 tonnes per day (tpd) at Guanajuato in 2011-2012.
In 2010, the Company will strive once again to replace reserves and expand resources at both mining operations. An aggressive 36,000 meter, 125-hole exploration drill program will be focused on following up on the new discoveries in both districts, testing several new prospective targets within these two districts, and exploring properties acquired in new districts.
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