Endeavour Silver Maintained Earnings Despite Inflation in 2022

Mid-tier precious metals mining company Endeavour Silver reported its financial results for 2022, reaching strong earnings despite economic pressure caused by inflation and capital investments. The company said that cost control will be a key aspect to consider when developing its mining operations in 2023. 

Endeavour Silver said that in 2022, production exceeded its original guidance, producing 5,963,445oz of silver and 37,548oz of gold for 9 million oz of AgEq. The company’s guidance was set between 7.6 and 8 million oz of AgEq.

Endeavour said its cost per oz increased during 2022 and slightly surpassed its guidance totalling US$10.65/oz, which is explained by increases in labor, power, consumables and royalties. However, all-in sustaining costs were US$19.97/oz, below cost guidance, due to increased silver production. “We are especially pleased to have delivered against our all-in sustaining cost guidance of less than US$20/oz, despite industrywide inflationary pressures, as a result of our strong production performance. Cost control will continue to be a key focus for the operations group in 2023, as we find pockets of cost moderation and business improvements,” said Dan Dickson, CEO, Endeavour Silver.

The company reported an increased operating cash flow before working capital changes of US$54 million and mining operating cash flows before taxes of US$78.5 million. “As silver prices rebounded in 4Q22, we were able to take advantage of the higher prices by selling almost half of the year’s projected sales towards the end of the year, which resulted in robust cash flow to fund our growth plans,” Dickson added.

Additionally, the company reported net earnings of US$6.2 million, which it said were impacted by inflationary pressures. Endeavour Silver had a healthy balance sheet during 2022 as it reported a cash position of US$83.4 million and US$93.6 million in working capital, but it reported a cash decrease in 4Q22 due to expenses for the development activities of the Terronera mine.

Endeavour Silver considers Terronera, located in Jalisco, to be its next core asset. It is now advancing toward a development decision, although financing and final permits are still pending. According to feasibility studies, the project has the potential to hold high-grade silver and gold mineralization with an estimated production of over 3.3 million oz of silver and 32,874oz of gold per year over 12 years.