VANCOUVER, BRITISH COLUMBIA, May 12, 2014 (Marketwired via COMTEX) — Endeavour Silver Corp. /quotes/zigman/31426/delayed/quotes/nls/exk EXK +2.41% /quotes/zigman/8257/realtime CA:EDR +2.38% is pleased to announce financial results for the period ended March 31, 2014. Endeavour owns and operates three underground silver-gold mines in Mexico: the Guanacevi mine in Durango state, and the Bolanitos and El Cubo mines in Guanajuato state.
The Consolidated Interim Financial Statements and Management’s Discussion & Analysis can be viewed on the Company’s website at www.edrsilver.com , on SEDAR at www.sedar.com and EDGAR at www.sec.gov . All amounts are reported in US$.
Highlights of First Quarter 2014 (Compared to First Quarter 2013)
Financial
-- Net earnings of $4.0 million ($0.04 per share) compared to $14.4 million
($0.14 per share)
-- Adjusted earnings(1) of $5.5 million ($0.05 per share) compared to $12.9
million ($0.13 per share)
-- EBITDA(1) decreased 38% to $19.3 million
-- Cash flow from operations before working capital changes decreased 28%
to $18.3 million
-- Mine operating cash flow before taxes(1) decreased 22% to $25.4 million
-- Revenue decreased 24% to $53.0 million
-- Realized silver price fell 30% to $20.50 per ounce (oz) sold (consistent
with average spot price)
-- Realized gold price fell 19% to $1,306 per oz sold (consistent with
average spot price)
-- Cash costs(1) fell 52% to $4.87 per oz silver payable (net of gold
credits)
-- All-in sustaining costs fell 51% to $12.15 per oz silver payable (net of
gold credits)
-- Cash and equivalents rose 27% to $44.3 million compared to $35.0 million
at year end.
Operations
-- Silver production increased 27% to 1,898,999 oz
-- Gold production increased 23% to 18,519 oz
-- Silver equivalent production increased 26% to 3.0 million oz (at a 60:1
silver:gold ratio)
-- Bullion inventory at quarter-end included 295,839 silver ounces and 421
gold ounces
-- Concentrate inventory at quarter-end included 60,512 silver ounces and
1,113 gold ounces
-- Ore grades and metal recoveries were higher at all three mines
-- Guanacevi in particular had a strong Q1 thanks to sharply higher ore
grades at Porvenir Cuatro
(1) Adjusted earnings, mine operating cash flow, EBITDA, cash costs and all-
in sustaining costs are non-IFRS measures. Please refer to the
definitions in the Company's Management Discussion & Analysis.
Endeavour CEO Bradford Cooke stated: “We delivered another strong quarter of silver and gold production in Q1, 2014, which puts us well ahead of our production plan for the year. Both cash costs and all-in sustaining costs were well below guidance thanks to our cost cutting strategies initiated last year.
However, our earnings were lower due to the sharply lower metal prices, in spite of achieving higher grades and recoveries at all three mines. We continue to work toward optimizing operating costs and improving profit margins given the current low silver and gold prices.”
Financial Results
For the first quarter ended March 31, 2014, the Company generated revenue totaling $53.0 million (2013 – $69.9 million). During the quarter, the Company sold 1,537,665 silver ounces and 16,445 gold ounces at realized prices of $20.50 and $1,306 per ounce respectively, compared to sales of 1,345,832 silver ounces and 13,037 gold ounces at realized prices of $29.38 and $1,613 per ounce respectively in the First Quarter of 2013.
After cost of sales of $41.7 million (2013 – $51.0 million), mine operating earnings amounted to $11.3 million (2013 – $18.9 million) from mining and milling operations in Mexico.
Excluding depreciation and depletion of $14.1 million (2013 – $12.1 million) and stock-based compensation of $0.1 million (2013- $0.1 million), mine operating cash flow before taxes was $25.4 million (2013 – $32.5 million excluding the inventory write down) in the first quarter of 2014. Net earnings were $4.0 million (2013 -$14.4 million).
Net earnings also included a mark-to-market derivative liabilities loss related to share purchase warrants issued in 2009 denominated in Canadian dollars, while the Company’s functional currency is the US dollar. Under IFRS, these warrants are classified and accounted for as a financial liability at fair market value with adjustments recognized through net earnings. The appreciation of these warrants, prior to being exercised in the quarter, resulted in a derivative liability loss of $1.4 million during the first quarter of 2014 (2013 – gain of $1.5 million).
Excluding the mark-to market derivative liabilities gain, adjusted earnings were $5.5 million ($0.05 per share) compared to $12.9 million ($0.13 per share) in the same period of 2013. The drop in precious metals prices was the primary reason for the decrease in the Company’s earnings year over year.
Cost cutting initiatives that commenced in Q2, 2013 are now well established which resulted in a 7% drop in direct production costs to $93 per tonne from Q1, 2013.
Cash costs per ounce, net of by-product credits (a non-IFRS measure and a standard of the Silver Institute) fell 52% to $4.87 per ounce of payable silver, compared to $10.04 per ounce in the same period of 2013. All-in-sustaining costs per ounce (also a non-IFRS measure) fell 51% to $12.15 due in part to lower exploration and mine development expenditures compared to Q1, 2013. Exploration and mine development expenditures fluctuate quarter to quarter, and all-in sustaining costs are expected to increase in the second and third quarters with higher planned exploration and mine development expenditures. Going forward, management expects cash costs per ounce to move closer to guidance as mined grades revert to reported reserve grades.
Annual General Meeting of Shareholders Results
