Endeavour Silver – Operating Cost Profile Expected to Improve in the Second Half

Second quarter 2021 results. Endeavour reported second quarter 2021 net income of $6.7 million, or $0.04 per share, compared to a loss of $3.3 million, or $(0.02) per share during the prior year period. Excluding a gain on the sale of the El Cubo mine, the company generated net income of $0.8 million, or $0.01 per share. We had projected net income of $6.9 million or $0.04 per share. Revenue was in line with our estimates although operating costs were higher than expected due to inflationary pressures, including increased labor costs. Cash costs per silver ounce and all-in sustaining costs per ounce increased to $13.03 and $25.30, respectively, compared to $7.86 and $19.94 in the first quarter of 2021. Updating estimates. We have trimmed our 2021 EPS and EBITDA estimates to $0.03 and $47.5 million from $0.06 and $52.5 million, respectively. Our 2022 EPS and EBITDA estimates are $0.18 and $75.5 million, respectively. While our 2022 estimates are largely unchanged, our 2021 estimates reflect second quarter results although we anticipate some margin improvement in the second half of the year. There were some costs in the second quarter that won’t repeat in the second half, and management is confident they will be able to achieve tonnage and grade targets for Guanacevi and Bolanitos. Terronera feasibility study. Endeavour ended the quarter with cash of $125.2 million. The company expects to complete a feasibility study for the Terronera project during the third quarter and believes the equity portion of the project’s funding is secure with $60 million to $100 million expected to be project financed. Rating is Market Perform. While the company continues to work on reducing its operating cost profile, we think it is making the right moves to position the company for growth. In addition to the Terronera mine project, Endeavour recently agreed to acquire the Bruner gold exploration project in Nevada from Canamex Gold Corp. for $10 million. The transaction requires the approval of Canamex shareholders. Senior Analyst: Mark Reichman Contact at: mreichman@noblecapitalmarkets.com REPORT ATTACHED if you experience difficulties obtaining the report, please, contact Director of Research at: mkupinski@noblecapitalmarkets.com Read More >>