Endeavour Silver Corporation

Thank you for standing by. This is the conference operator. Welcome to the Endeavor Silver 2024 year-end conference call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator for pressing star, then 0. I would now like to turn the conference over to Alison Pettit, Director of Investment Relations. Please go ahead.

Thank you, Operator, and good morning, everyone. Before we get started, I ask that you view our MD&A precautionary language regarding forward-looking statements and the risk factors pertaining to these statements. Our MD&A and financial statements are available on our website at edrsilver.com. On today's call, we have Dan Dixon, Endeavour Silver's Chief Executive Officer, Elizabeth Sinez, our Chief Financial Officer, and Don Bray, Endeavour's Chief Operating Officer. Following Dan's formal remarks, we'll open the call for questions. And now, over to Dan.

Thank you, Alison, and welcome, everyone. As we commence this year's earnings call, it's important to acknowledge the dynamic landscape that shaped the mining sector in 2024. Gold prices surged 27%, closing the year at $2,624 per ounce, the largest annual rise since 2010. Gold hit a record of $2,786 per ounce in October and surpassed $2,900 earlier this year due to global tensions, economic slowdown fears, and concerns over U.S. trade policies. Silver often mirrors gold's movement, and we expect this correlation to continue. Silver's rise has been driven by industrial demand and supply constraints. The global shift to electrification, renewable energy, and electric vehicles is driving demand for silver and solar panels, batteries, and key technologies. At the same time, supply deficits have emerged as new production struggles to keep pace with mine depletion. Rising industrial demand and supply changes continues to put upward pressure on silver prices. We also expect demand as a safe haven asset to have a greater impact on the silver market going forward. Endeavor Silver is well positioned to benefit from these favorable market dynamics. Now let's discuss production in more detail. In 2024, Endeavor Silver produced 7.6 million ounces of silver equivalent, achieving the higher end of the revised guidance range. of 7.3 to 7.6 million ounces. Guidance was lowered in Q3 2024 due to a trunnion failure at the Guanacivi mine, which impacted throughput from August to December. The team worked tirelessly to resolve the issue, and by December, Guanacivi resumed operations at its usual rate of 1,200 tons per day. I'd like to extend my sincere gratitude to our operations team for their swift and effective actions in overcoming this challenge. While Guantanamo had its challenges, Polonidos continued to remain steady with increased gold production driven by higher gold grades, offset by the lower silver production due to slightly lower silver grades. In 2024, the company reported total revenue of $218 million, up 6% compared to 2023, with cost of sales of $176 million, Mine operating earnings at $42 million and mine operating cash flow is $72 million. Endeavor recognized an adjusted net earnings of $8 million or an adjusted earnings per share of 3 cents. After excluding loss on derivative contracts, mark to market deferred share units, gain on disposal and unrealized foreign exchange and investment losses. Cost of sales increased approximately 4% compared to the previous year. While there are a number of drivers, including lower economies of scale from lower throughput, fixed costs incurred during the trend and failure at Guantanamo City and inflationary pressures early in 2024. The company did benefit from the weakening of the Mexican peso in the second half of the year. Direct operating costs per ton were up 8% for the year, primarily due to the lower throughput at Guantanamo City. Consolidated cash costs per ounce net of byproduct credits decreased by 4% to $12.99 in 2024, predominantly driven by higher byproduct gold sales. All in sustaining costs increased by 4% to $23.88 per ounce compared to the prior year. Again, the lower production of silver ounces partially offset by the lower cash costs. As of December 31st, 2024, the company's cash position was $106 million, and we had working capital of $79 million. Cash and working capital saw an increase in Q4 following a $73 million deal of financing aimed at advancing the Pizzeria project and strengthening general working capital. As a reminder, Pizzeria is the company's next major growth project. Located in Durango, Mexico, it's one of the largest undeveloped silver deposits globally with nearly 600 million ounces of silver. The company has allocated a $26 million budget to advance exploration, evaluation efforts, and underground development. This includes drilling and technical studies aimed at supporting an economic assessment by Q1 2026. While progress continues at Pizzeria, the company's primary focus remains on bringing Terra Nera online in Q2 2025. As of December 31, 2024, overall construction at Terra Nera reached 89%, with $302 million allocated budget spent. The total estimated project cost is $332 million, as announced by the company earlier this year. During the fourth quarter, 1.7 kilometers of underground mine development was completed for a total project development of 7.2 kilometers. The underground explosive magazine storage permit was also approved, improving development efficiencies. Most of the upper platform construction was complete, with final punch list items to be addressed before being handed over to the commission operations team. The main area of focus continues to be the lower platform area, which was 42% complete at the end of the fourth quarter. The tailing storage facility's main embankment reached 1,185 meters of elevation, and the tailing filter swing plates were installed, and the first floor concrete was poured. The structural steel installation advanced to the second floor, preparing to install the filter press again at the end of the fourth quarter. The advanced Pondliner was installed and completed in January of this year, and the upper surface water diversion canal was nearly 90% complete. As we approach the wet commissioning phase at Terranera and prepare to bring Endeavour's next operating mine online, key critical path items include the tailing filter presses, which are on track for completion mid-April. 2024 marked a pivotal year for Endeavour. and 2025 promise to be a transformative milestone for the company. We extend our sincere gratitude to our shareholders and stakeholders for their steadfast support as we embark on this new era of growth and operational efficiency. As we advance, we remain committed to delivering sustained value, achieving operational excellence, and fostering a sustainable future for all our partners. For more wholesome construction update at Terranera, I encourage you to visit our website where you'll find our quarterly photo gallery showcasing the latest developments, progress, and information. With that, I'm happy to open this up to questions. Operator, please proceed to our Q&A session.