Endeavour Silver Corp (EXK)

[SsMurry]

Negative Financial Results for Endeavour

Endeavour Silver reported what Daniel Earle views as negative Q3/14 financial results yesterday morning – operating results were pre-released October 9.

EPS of -US$0.11 versus consensus of -US$0.05 and Daniel Earle's estimate of -US$0.04 and CFPS of US$0.04 versus consensus of US$0.11 and Eadinel Earle's estimate of US$0.09 on sales lagging production and lower realized prices.

Production was pre-released; cash costs of US$10.70/oz were above Daniel Earle's forecast of US$9.58/oz and AISC were reported at US$20.18/oz due to higher costs at Bolanitos and sales lagging production, which resulted in lower by-product credits.

The company carried 557 koz Ag and 1.5 koz Au in inventory with a quoted market value of US$9.5mm and US$1.8mm, respectively, as of the end of Q3/14. However, Daniel Earle notes spot prices have significantly declined since then.

Mine plan reviews have commenced for each operation, including the possibility of reducing production to optimize their short and long term viability.

Daniel Earle is maintaining his HOLD recommendation, but lowering his target price to $4.25 from $5.50, reflecting lower multiples on the back of the challenging silver price and weaker market sentiment.