Endeavour Silver Corp. (EXK) Q2 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call highlights mixed results: the Terronera project is nearing commercial production, but the company reported a net loss due to operating losses and increased expenses. The Q&A revealed concerns about integration and operating costs at Minera Kolpa, and management's unclear responses on some issues. While there is optimism about future production and cost alignment, current financials and uncertainties suggest a neutral sentiment for stock price movement.
Key Financial Performance
Silver Production 1.5 million ounces of silver produced in Q2 2025, a 13% increase compared to Q2 2024, due to the inclusion of the new mine in Peru, Kolpa.
Gold Production 7,800 ounces of gold produced in Q2 2025, contributing to a total of 2.5 million silver equivalent ounces, a 13% increase compared to Q2 2024, due to the inclusion of Kolpa.
Revenue $85 million in Q2 2025, a 46% increase compared to Q2 2024, driven by higher precious metal prices and increased production.
Mine Operating Cash Flow Increased by 21% year-over-year in Q2 2025, while operating costs remained below guidance.
Cash Costs $15.35 per ounce of payable silver in Q2 2025, with all-in sustaining costs at $25.16 per ounce net of byproduct credits, relatively flat compared to the same period last year.
Mine Operating Earnings Decreased to $7.7 million in Q2 2025 from $10.2 million in Q2 2024, impacted by a $6 million loss at Terronera during commissioning and increased depreciation.
Net Loss $20 million in Q2 2025, primarily due to Terronera's operating losses during commissioning, increased G&A expenses related to the Kolpa acquisition, a $10 million noncash loss on derivatives, increased depreciation, and tax expenses.
Cash Position $52 million as of June 30, 2025, with a negative working capital. Excluding noncash derivatives, there is a $14 million surplus, designed for Terronera nearing commercial production.
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Operating Highlights
Terronera commissioning: The company is advancing towards commercial production at Terronera, with throughput averaging 1,900-2,000 tonnes per day and silver and gold recoveries at 71% and 67% respectively. Higher-grade material will be introduced to enhance recoveries and sustain throughput.
Kolpa acquisition: The integration of Kolpa is progressing well. The company is validating and updating historical resources and expects a similar production profile to Kolpa's 2024 annual production of 5 million silver equivalent ounces. Kolpa is planning towards a 2,500 tonne per day operation.
Revenue growth: Revenue increased by 46% year-over-year to $85 million, driven by higher precious metal prices and increased production.
Production increase: Silver production rose to 1.5 million ounces and gold to 7,800 ounces, totaling 2.5 million silver equivalent ounces, a 13% increase compared to Q2 2024.
Cost management: Cash costs were $15.35 per ounce of payable silver, and all-in sustaining costs were $25.16 per ounce, remaining below guidance. Direct operating costs per ton were flat year-over-year.
Net loss: The company reported a net loss of $20 million, primarily due to Terronera's commissioning losses, increased G&A expenses from the Kolpa acquisition, and a $10 million noncash loss on derivatives.
Pitarrilla project: Exploration is focused on upgrading inferred resources to indicated, and engineers are working on studies for tailings dam permits and an economic study.
Production outlook: Endeavour aims to achieve an annualized production profile of 20 million silver equivalent ounces by 2026, with contributions from Terronera, Kolpa, Guanacevi, and Bolanitos.
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Risk or Challenges
Terronera Operating Losses: The company reported a $6 million loss at Terronera during the commissioning phase, which significantly impacted mine operating earnings.
Net Loss and Financial Strain: The company reported a net loss of $20 million for the period, driven by Terronera's operating losses, increased G&A expenses related to the Kolpa acquisition, a $10 million noncash loss on derivatives, and higher depreciation and tax expenses.
Negative Working Capital: As of June 30, the company's cash position was $52 million, but working capital was negative, indicating potential liquidity challenges.
Kolpa Integration Uncertainty: The company is unable to provide production guidance for Kolpa until a current 43-101 resource exists, creating uncertainty around its contribution to future production.
Ramp-Up Challenges at Terronera: Throughputs and recoveries at Terronera are still being optimized, with silver and gold recoveries averaging below expectations at 71% and 67%, respectively, during the second half of July.
Increased Operating Costs: While operating costs remained below guidance, the all-in sustaining costs were relatively high at $25 per ounce, which could pressure margins if metal prices decline.
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Guidance & Outlook
Terronera Mine: The company is focused on achieving commercial production at Terronera. Throughputs are averaging between 1,900 and 2,000 tonnes per day, with silver and gold recoveries at 71% and 67% respectively during the second half of July. Higher-grade material will be introduced to enhance recoveries and sustain the design throughput of 2,000 tonnes per day. Terronera is expected to add a long-term asset to the portfolio and reinforce the company's position as a leading mid-tier silver producer.
Kolpa Mine: The integration of Kolpa is progressing well. The company is validating and updating historical resources and expects a similar production profile to Kolpa's 2024 annual production of 5 million silver equivalent ounces. Plans are underway to achieve a 2,500 tonne per day operation, with additional capital allocated to reach these production levels next year.
Annualized Production Profile: Endeavour is on track to achieve an annualized production profile of 20 million silver equivalent ounces by 2026, combining output from Guanacevi, Bolanitos, Terronera, and Kolpa.
Pitarrilla Project: Exploration work is focused on upgrading inferred resources to indicated resources. Engineers are working on studies to support tailings dam permits and an economic study.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Can you provide an update on the commercial production at Terronera, including recent silver and gold recoveries and throughput rates?
A:Management stated that they are targeting commercial production by July 31 and are close to achieving it. They aim for recoveries of 88%-89% for silver and 76%-78% for gold, as per the optimized plan. Gold recoveries have reached the target, but silver grades are slightly lower due to processing lower-grade ore. Efforts are focused on achieving the designed grind size to improve silver recoveries.
Q:Is the ramp-up at Terronera progressing faster than expected?
A:Management indicated that the ramp-up is progressing as planned, with a focus on achieving the designed grind size and recoveries. They did not explicitly state whether it is faster than expected.
Q:How is the integration of Minera Kolpa affecting the management team's capacity to pursue additional acquisitions?
A:Management acknowledged that the integration of Minera Kolpa has taken up significant executive time. However, they are not ruling out future acquisitions but need a breather to focus on achieving commercial production at Terronera, improving cash flow, and strengthening the balance sheet.
Q:What is the current status of Terronera's tonnage and recoveries, and are there any other impediments to announcing commercial production?
A:Management confirmed that tonnage is over 90% of design capacity for July. The main focus is on optimizing recoveries and achieving the designed grind size. There are no other significant impediments to announcing commercial production.
Q:Why are operating costs at Minera Kolpa higher this quarter compared to the past two years under the previous operator?
A:The higher costs are attributed to integration expenses, inflationary pressures, and adjustments to accounting policies. Management expects costs to align with historical levels in 2024 as operations stabilize.
Q:What is the estimated capital required for the expansion at Minera Kolpa to 2,500 tonnes per day, and what permits are needed?
A:The incremental capital required is $12.5 million, which includes installing flotation cells and a mill. Permits for expansion are in place, but an operating permit is still needed.
Q:What is the company's approach to hedging precious metals, and how does it impact financial statements?
A:The company currently has some hedge contracts, including 68,000 ounces of gold sold at $2,325 for March 2024 and collars for 990,000 ounces of silver. Management prefers not to hedge precious metals long-term and aims to reduce hedging as cash flow improves.
Q:How should we think about working capital for the second half of 2025?
A:Working capital is expected to improve as Terronera achieves commercial production and generates positive cash flow. Management anticipates improvements over the next two to three quarters.
Q:Has throughput at Bolanitos normalized after component replacements?
A:Yes, throughput has returned to 1,200 tonnes per day after replacing parts in the crusher and a motor on one of the mills. Management expects costs to normalize in Q3 and Q4.
Q:What are the exploration plans and potential at Minera Kolpa?
A:Management is reorganizing the exploration group to adopt a more systematic approach, including surface work and geochem/geophysics. They plan to spend $12 million on exploration over the next 24 months and expect to release results by mid-September.
Q:When can we expect an updated technical report for Minera Kolpa?
A:An updated technical report is expected by mid-2026, as work is ongoing to validate historical resources and align them with current expectations.
Q:What is the status of the updated study for Pitarrilla?
A:The updated study for Pitarrilla is delayed and is now expected later than early 2024. The focus is on tailings dam site work and permitting.
Q:How are the filter presses at Terronera performing?
A:The filter presses are performing well, with commissioning completed for both presses. They are meeting expectations for moisture content and redundancy.
Q:Review of Unclear Management Responses
A:Management avoided providing a direct answer to whether the ramp-up at Terronera is progressing faster than expected, stating only that it is progressing as planned. Additionally, they did not provide a clear timeline for the updated study for Pitarrilla, citing delays and ongoing work.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Alexander Terentiew
Allison Lauren
Bank Financial
CEO Dickson
CEO Director
CFO Endeavor
Co LLC
Conference Instructions
Corp Research
Cowen Research
Craig Philip
Dickson CEO
Dickson CFO
Director Gray
Division Conference
Division Craig
Division Heiko
Division Philip
Division Wayne
ET conference
Endeavor COO
Endeavour Silver
Felix Ihle
Financial Corp
Financial Inc
Heiko Felix
Inc Research
Ker Ventum
LLC Research
Lauren Pettit
Ltd Research
Research Division
EXK Transcript
Endeavour Silver Corp. (EDR:CA) Q1 2026 Earnings Call Transcript
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The earnings call highlighted record production and revenue, along with strong cash flow, indicating solid financial performance. The Kolpa plant expansion and Terronera operations are progressing well, supporting growth. However, the lack of strategic initiatives discussion and cautionary language on forward-looking statements slightly temper the optimism. Overall, the positive operational updates and financial results are likely to drive a 2% to 8% stock price increase over the next two weeks.
Endeavour Silver Corp. (EDR:CA) Q4 2025 Earnings Call Transcript
Unknown2-27
The earnings call presents a mixed picture. Financial performance and business updates show improvements, especially with operational efficiencies and strategic investments. However, uncertainties in grade profiles, cost management challenges, and vague responses on key issues create concerns. The Q&A highlights potential risks but also optimism for future improvements. These factors balance out to a neutral sentiment.
Endeavour Silver Corp. (EDR:CA) Q3 2025 Earnings Call Transcript
Unknown11-7
The earnings call presents a mixed picture. Positive elements include steady performance at Terronera and Kolpa, expected free cash flow, and strategic expansion plans. However, lower grades, unclear guidance on Kolpa's expansion, and unresolved gold hedge issues create uncertainties. The lack of shareholder return plans and mixed financial results add to the neutral sentiment.
Endeavour Silver Corp. (EXK) Q2 2025 Earnings Call Transcript
Unknown8-13
The earnings call highlights mixed results: the Terronera project is nearing commercial production, but the company reported a net loss due to operating losses and increased expenses. The Q&A revealed concerns about integration and operating costs at Minera Kolpa, and management's unclear responses on some issues. While there is optimism about future production and cost alignment, current financials and uncertainties suggest a neutral sentiment for stock price movement.
EXK Report
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