Endeavour Silver - Estimates Lowered Following First Quarter Financial Results

First quarter 2021 results. Endeavour reported first quarter 2021 net income of $12.2 million, or $0.07 per share, compared to a loss of $15.9 million, or $(0.11) per share during the prior year period. Excluding the impairment reversal of non-current assets, the company generated a loss of $4.5 million, or $(0.03) per share. We had projected net income of $2.5 million or $0.02 per share. The variance to our estimate was attributed to higher direct production and exploration and evaluation expense. Adjusted EBITDA were $8.3 million compared to $(6.0) million during the prior year period and our estimate of $13.1 million. The company ended the quarter with 523,235 ounces of silver and 1,123 ounces of gold in bullion inventory and 6,582 ounces of silver and 566 ounces of gold in concentrate inventory. Commentary on costs. All in sustaining costs per ounce increased 8.5%, while direct costs per tonne increased 24.2%, respectively. All-in sustaining costs were impacted by higher corporate general and administrative costs and greater capital expenditures at Guanacevi. Direct operating costs were impacted by increased labor costs and greater royalties and special mining duties compared to the prior year period. While costs were modestly elevated during the first quarter, the company has maintained its full year 2021 cost guidance. Updating estimates. We have lowered our 2021 EPS and EBITDA estimates to $0.06 and $52.6 million, respectively, from $0.17 and $75.7 million. Our estimates account for first quarter financial results and modestly increased expense. We forecast 2022 EPS and EBITDA of $0.18 and $73.0 million, respectively. Rating is Market Perform. While we would like to see more progress on the cost front before getting more constructive on the stock, we think the company is making strides toward improving its cost competitiveness. Endeavor expects to complete a feasibility study for the Terronera mine project in the third quarter which could provide a positive catalyst for the stock. Read More >>