Endeavour Silver Corporation

Thank you for standing by. This is the conference operator. Welcome to the Endeavor Silver Second Quarter 2026 Financial Results Conference Call. As a reminder, all participants are on 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 call, you may reach an operator by pressing star then zero. I would now like to turn the conference over to Allison Pettit, Vice President of Veterans 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 Dickson, Endeavor Silver's CEO, and Elizabeth Senez, our CFO. Following Dan's formal remarks, we will open the call for questions. And now, over to Dan.

Thanks, Allison, and welcome everyone. Endeavor Silver's second quarter performance reflects the strength of our operations, with increased production, record metal sales, and a meaningful improvement in mine operating cash flow. Terranera's ramp-up and the higher throughput achieved at Colva, together with our strong cash position, gives us a solid base to continue advancing our growth plans, Thank you for joining us. with mine operating earnings of $74 million, again higher than the $7 million in Q2 2025, and mine operating cash flow of $100 million before taxes, a 300% increase from Q2 2025. Barola's sustaining costs and identified product credits were $37 this quarter, representing a 47% increase from Q2 2025. Profitability has significantly increased our operating costs with increased royalties, purchased material, profit sharing, and mining taxes. With increased profitability, we continue to invest in sustaining capital costs, especially compared to prior periods. In Q2, Endeavor recognized an adjusted net earnings of $45 million, or an adjusted net earnings per share of 15 cents. Changes in the metal price have a meaningful impact on our direct costs per ton. For example, for every $1 increase in silver ounce, costs per ton rise by about $0.90 at Terran Air, $3.80 if you want us to be, and $0.50 at Colpa. Due to the higher royalties, mining duties, third-party purchase, or and fairly required profit sharing. Direct operating costs per ton were 14% higher this quarter compared to Q2 last year, as the Mexican peso has appreciated and put pressure on inputs, impacting our costs. During the first quarter, Polka installed and commissioned a new three-stage pressure and ball mill, increasing plant capacity to 2,500 tons per day. Additional expansion expenditures remain, along with capital improvement initiatives. including the expansion of the tailings storage facility to accommodate the increased plant capacity, construction of a new water treatment plant, new power substations required to support current and future operating levels, as well as upgrades to the camp accommodations aimed at attracting and retaining skilled miners in Peru. Management continues to evaluate the long-term capital needs of Tulpa and has increased the 2026 budget by $18 million to bring projects forward and meet company and Peruvian recommendations. At Terranera, daily throughput remained consistent as the processing plant focused on metal recoveries. Silver grades were in line with plan for the quarter and are expected to increase during the second half of the year as mining operations access our higher grade areas. Further progress is expected on recoveries as the grinding circuit continues to find efficiencies and to meet the design criteria. With higher grade areas and other ramp-up efficiency initiatives such as the LNG plant commissioning and the waste dump to development, management expects an incremental decrease in turner's cost per ton throughout the second half of the year. Exploration and drilling also restarted at Terranera, making it the first drill program at the mine since 2020, and aimed at expanding and better defining mineralization along strike and depth within the Terranera vein, and defining the limits of mineralization near historical workings to support mine design and long-term planning outlays. For more details, we released initial results on June 18th, and you can find them on our website. who want us to incur higher direct costs per ton this quarter, largely due to the higher volume and cost of third-party material purchased, which will become more expensive on a per-ton basis due to the higher prices. The higher metal prices also drove higher royalties, special mining duty payable for the period. The higher prices have allowed the operating team to mine lower-grade zones, ultimately extending mine life, and we do expect higher-grade areas to come in line in the near future, increasing grades from current levels. Drilling continued throughout Q2 at Guaranty City as well, focusing on underground diamond drilling in deeper parts of the Alondra Corridor Dose and El Malache areas, and we continued to tap Santa Cruz vein and look for additional extensions to the north. As of June 30, 2026, we had a cash position of $236 million, working capital of $214 million, providing a strong and stable foundation to advance our ongoing initiatives. We continue to advance the PIT-3 feasibility study, which is expected at the end of Q3, with economic information being collected with drafts expected shortly for management. In closing, Endeavor delivered a strong second quarter, supported by higher production, record metal sales, improved mine operating cash flow, and strengthened balance sheet. With the full expansion now achieving higher throughput, Thank you for your continued support and engagement. And with that, I'm happy to open up for questions. Operators, please proceed to the Q&A session.