Endeavour Silver Corporation

Thank you for standing by. This is the conference operator. Welcome to the Endeavor Silver Fourth Quarter and Year-End 2025 Financial Results Conference Calls. 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 one on your telephone keypad. Should you need assistance during the conference calls, you may signal an operator pressing star then zero. I would now like to turn the conference over to Alison Pettit, Vice President, Investor Relations. Please go ahead.

Thank you, Operator, and good morning, everyone. Before we get started, I ask that you view our MD&A for cautionary 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, Endeavor Silver's CEO. Elizabeth Senes, our CFO, and Don Gray, Endeavor's COO. Following Dan's formal remarks, we will open the call for questions. And now, over to Dan.

Thank you, Alison, and welcome, everyone. Before reviewing our 2025 results, I'd like to provide a brief update on Terranera. Operations were temporarily impacted by recent security events in Mexico. and Jalisco's Code Red mandate, which required civilians to shelter in place. To comply with the mandate, the uncertainty surrounding the event, and to ensure the safety of our people, we paused Terran Air's operations Sunday evening. Operations resumed Wednesday, February 25th, once supply routes were confirmed to be secure. We will continue to monitor the developments closely, and the safety of our employees and contractors remain our top priority. With that, I'd like to briefly touch on the current silver and gold market. Over the past year, we've seen exceptional gains in renewed investor interest in precious metals. Driven by inflationary pressures, global economic uncertainty, and ongoing political tensions, silver and gold continue to be viewed as safe haven assets, with silver also benefiting from rising industrial demand, especially in the green energy and technology spaces. This momentum has continued into 2026 as gold trades well above $5,000 and silver is elevated above 90, reflecting ongoing confidence and reinforcing the importance of our strategic initiatives and our commitment to delivering value for our shareholders. We are extremely well positioned to benefit from the current silver prices and believe there is substantial runway remaining in this cycle. Moving over to the specifics of the company, 2025 was a transformational year for Endeavor Silver. We took a major step forward with the acquisition of Colpa in May, Terran Air achieving commercial production in October, and agreed to the sale of the Balanitos mine, which closed in January. In December, we raised $350 million through convertible debt offering, strengthened our balance sheet, and positioned ourselves to advance the pizzeria, development asset. These milestones lay a solid foundation for performance and sustained growth as we look ahead to the future and position ourselves as a stronger company within the industry. In 2025, Endeavor produced 11 million ounces of silver equivalent metal, including base metal production from Colpa, making a 48% increase compared to 2024. In Q4, Endeavor produced 2 million ounces of silver and 14,000 ounces of gold totaling just shy of 4 million silver equivalent ounces. This represents a 146% increase compared to Q4 of 2025 due to the addition of Colpa, Terranera, and the higher grades of Polonitos. Excluding Colpa and Terranera, this was a 27% increase compared to the same period last year. In 2025, the company reported record revenue of $468 million, up 115% compared to 2024, with cost of sales of $385 million, mine operating earnings of $83 million, and mine operating cash flow before taxes of $156 million. Mine operating cash flow before working capital changes rose by 116%, while cash costs increased to $19 per ounce of payable silver, primarily driven by the substantial changes in our production profile. In Q4, Endeavor recognized adjusted net earnings of $4.8 million, or an adjusted earnings of $0.02 per share, due to realized losses from derivative contracts and higher financing costs in relation to the early repayment of the debt facility. Direct operating costs per time increased by 8% this year, primarily driven by elevated costs of tenure during its initial quarter of production. Looking ahead, we anticipate a substantial reduction in these costs as we transition from diesel to liquefied natural gas in Q2 of 2026, complete the demobilization of our construction team, benefit from workforce and logistics optimization plans implemented in January, and maintain a throughput of 2,000 tons per day through 2026. COPA will also be an improved cost efficiency as its plant expands 2,500 tons per day here in Q1. For clarity, our direct offering cost per time include direct input costs associated with mining, milling, and site-level G&A. Our definition of direct cost per time includes royalties, mining duties, and the purchase of third-party material. Changes in the metal price have a meaningful impact on our direct costs per ton. For example, for every dollar increase in silver, our costs per ton rise by about $0.90 at Terranero, $0.50 at Colpa, and $3.80 per ton at Gowanus Elite, mainly due to the higher royalties, duties, and third-party purchase costs. All of the same costs net of byproduct credits were elevated this quarter with higher royalties, duties, third-party board purchases, elevated corporate G&A, and the addition of Terranera. Terranera incurred higher costs due to higher sustaining capital expenses during the first quarter of operations. Terranera's all-in sustaining costs includes capital expenditures of $16.3 million for the quarter, which worked out to approximately $48 all-in sustaining costs per ounce. And this includes one-time investments related to new mining operations, These costs are expected to decrease as we move through 2026. The elevated corporate G&A was impacted by the divestiture of Bolonitos, the appreciation of deferred share units, and the integration of all our new operations. As of December 31st, 2025, the company's cash position stood at $215 million, providing us with the financial strength and flexibility to advance our strategic initiatives. This robust foundation allows us to remain nimble and responsive to new opportunities while staying focused on driving progress at Pizzeria, where we continue to invest in exploration, technical studies, and economic evaluation. As we move through 2026, our attention remains focused on several operational investment priorities across our main operations and projects, each serving as a catalyst for continued success and growth in 2026. At Terranera, our primary focus is discipline execution as we transition into higher-grade zones in the second half of the year. We are seeing gradual improvements towards designed operating parameters, including nameplate throughput, recoveries, and line output. Grades are aligning with plan, and operations are beginning to establish a consistent rhythm rather than the volatility of a typical ramp-up. As we eliminate ramp up or startup costs, we expect direct cost per ton to improve through the year. Secondly, at COLPA, we are actively advancing our expansion initiative, increasing capacity from 2,000 tons per day to 2,500. We anticipate achieving this milestone in the coming weeks, which will enhance our throughput and support our growth objectives. Additionally, we remain focused on delivering a resource estimate later this year. At Pizzeria, the company's next major development project and one of the world's largest undeveloped silver deposits, our commitment remains very strong with a planned $68 million investment in 2026. This includes the completion of an NI43-101 feasibility study targeted for completion in Q3 2026. along with early works such as commencement of the construction camp, continued ramp advancement through the manso, and procurement of long-lead equipment to support the basic and detailed engineering. We are positioning the project to have a well-informed construction decision in early 2027, supporting our strategic strategy of significant organic growth. 2025 marks a defining chapter in our story. As we continue on this exciting path, I want to extend our gratitude to our valued shareholders and stakeholders for your confidence and partnership. We remain committed to creating lasting value, driving operational excellence, and building a premier senior silver company. Thank you for your continued support and engagement. And with that, I'm happy to open this to questions. Operator, please proceed to our Q&A session.