Thank you for standing by. This is the conference operator. Welcome to Endeavour Silver Corp. Full Year 2022 Financial Results 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 one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Galina Meleger, Vice President of Investor Relations. Please go ahead. Thank you, operator. Good day, everyone. Before we get started, I ask that you view our MD&A 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. With us on today's call is Dan Dickson, Endeavour Silver CEO, Christine West, our Chief Financial Officer, Don Gray, Endeavour's COO. Following Dan's formal remarks, we will open up the call for questions. Now over to Dan. Thank you, Galina. Welcome everyone. I will keep today's call as brief as possible, as all the details were published in today's news release, but make sure I hit some of the key points for our investors. Endeavour Silver had a solid 2022 in what can be categorized as a challenging cost environment. Our production exceeded guidance, which helped alleviate the upward pressure on costs. Inflationary pressures across the entire spectrum of the inputs were felt across the entire mining sector. It was no different for us. We continued to de-risk and advance Terronera We continue to be excited about the acquisition of the Pitarrilla Overall, the mill performed well, with recoveries averaging just under 86% for silver and just below 90% for gold, demonstrating consistency and stability at the slightly higher throughput. The performance of our operating mine, Bolañitos, remained steady. There was increased silver production offset by lower gold production. We continue to evaluate opportunities to increase mine life at Bolañitos and are cognizant of Bolañitos in the current landscape. The operating team has done a good job meeting their targets. Our strong operating performance enabled robust financial results, particularly in Q4. Gold and silver prices strengthened, we were able to take advantage of the higher prices by selling most of the silver inventory. Revenue rose by 27%, marking a 10-year best, bolstered mostly by volume. The higher revenue translated into increased cash flow with mine operating earnings of $51.5 million, up 42% from 2021. Operating cash flow before working capital changes was $54 million, again, up 68% compared to 2021. Specifically at the site level, Guanaceví City delivered mine free cash flow before taxes of $30 million, and Bolañitos contributed just over $1 million. Our earnings for the year were $6.2 million or $0.03 per share. I'm particularly pleased that we're able to deliver operating costs on a per-ounce basis that are relatively in line with guidance despite the industry-wide inflationary pressures. We ended the year with cash costs of $10.65 per ounce, which is about 7% over our guidance, and all-in sustaining costs of $19.97 per ounce, which is below the lower-end guidance of $20 per ounce. Industry-wide inflation has been and continues to be challenging. Our direct costs per tonne were up 16% compared to the previous year as we saw cost increases in a lot of our key inputs. Fortunately, the increased quantity grades offset the increases in direct costs, but cost control will continue to be a key focus for the company going forward. Our financial performance led to a strong balance sheet at the year-end. We had cash on hand of $84 million with no long-term debt aside from normal course leases for equipment. Working capital total about $94 million, which includes unsold bullion held at cost of $6 million but has a market value of $50 million. This past year, we were very busy and productive at Terronera, preparing the site for full-scale product construction. We spent $41 million on initial development using our own existing cash while we continue to confirm a viable debt package. During the year, the project team delivered several achievements. The full mobile mining fleet is now on site, comprised of 30 units. All the major plant equipment has been pre-ordered, with the majority of the equipment scheduled to arrive in the first half of 2023. Upgrades to the road access, totaling 7 km, are well advanced. This work will improve slope stabilization and drainage, as well as enhance transportation access. We commenced construction of the permanent camp, we commenced excavation of the plant site, and we commenced first portal access. We are optimistic and excited to provide the market with full details of the financing package in the near future and to announce a formal construction decision. The board has approved an additional $26 million in development expenditures for Q1 2023, while we continue to advance the project. At the outset of 2022, we began executing on our three-year sustainability strategy, which is anchored on three pillars: people, planet, and business. We launched or expanded many initiatives to further embed sustainable practices across our organization and create real value for our stakeholders. We took several steps to increase employee development, engagement, and inclusion, with positive re-results across the company. We amplified our community investments in Mexico, aligned with our priority areas of education and employability. Over the past year, we devoted a significant amount of time and effort across our organization to better understand the potential risks and opportunities related to climate change. These are discussed in our first climate disclosure report that will be published next week, aligning with the TCFD framework. It's still early days on integrating climate initiatives, we are trying to be thoughtful and diligent in determining the most effective steps for us as we deepen our understanding of the impact of climate change initiatives on our company. Our view of climate change is not solely fixed on risk. There are also great opportunities in front of us. The world is beginning to realize the importance of metals to support the transition to a low carbon economy. The products we provide sit at the very beginning of the supply chain for essentially everything needed and used in modern society. I encourage you to read our climate report when it's published next week. For 2023, our production outlook continues to be strong with another year of robust grades from Juanicipio. We are targeting to produce between 8.6 and 9.5 million ounces of silver equivalent, a midpoint which marks a fourth consecutive year of production growth. The combination of higher consolidated throughput and produced ounces allows for a projected unit cost of $10-$11 per ounce for cash costs and $19-$20 per ounce for all-in sustaining costs, similar to 2022. At Juanicipio and Bolañitos, we have plans to invest more than $35 million in sustaining capital to optimize performance and maximize output. Of course, as everyone knows, this company has been built through the drill bit, we are aiming to invest $10 million into exploration for 2023, with the largest portion, $3 million, being allocated to Pitarrilla while Parral has a one and a half million dollar budget. I want to emphasize how excited we are about the notion of unlocking value through exploration and advance both Pitarrilla and Parral. Both are expected to advance through economic studies early next year. The scale and impact of Pitarrilla will be very significant for us. In December, we confirmed an indicated resource of nearly 600 million ounces of silver, plus material amounts of lead and zinc. This year, we plan to extend a historical ramp to better understand the feeder structures we identified in the deposit. With continued exploration success, we ultimately hope to identify a business case to model an underground operation at. In closing, it's gonna be another busy year. I'm very excited about our outlook as we continue to exercise on our growth pipeline, particularly at a time when silver demand is beginning to strengthen. I think that wraps up my formal comments for today. Let's open up the lines for questions. Operator? Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. We will pause a moment as the callers join the queue. The first question comes from Heiko Ihle from H.C. Wainwright. Please go ahead. Hi, everyone. This is Marcus Giannini calling in for Heiko. Thanks for taking our questions. Marcus, I can't hear you. Yeah, yeah. Oh, thanks a lot. You talked about cost control being a key focus for this year and in particular business improvements. Given that we're now in March, can you provide a bit of color as to where exactly you expect efficiencies and how much of that has already been incorporated year to date? Maybe if you could just touch on any cost improvements that you've already seen, that would be great. Thanks. Yeah, I mean, it's a difficult question because we saw costs increase across the board last year. I mean, cyanide power costs were significant contributors in steel. At Bolañitos, it was TCs and RCs power costs. For us, it really comes down to making sure that on a daily basis, a weekly basis, on a monthly basis, we're reviewing our cost reports, reviewing the inputs that are going in, particularly at Guanaceví. We have significant pumping that happens at Guanaceví that uses and costs effectively a lot of power and money. We have seen a little bit of a decrease from a kilowatt hour costs up at Guanaceví and Bolañitos. When it comes to actual improvements, we think we do a really good job at Bolañitos. It's Guanaceví where we can be better at waste management, managing our waste, managing the tons, being more efficient on a productivity basis of moving tons. I don't know if we've seen that come through yet, here March 1, 2023. It's something that will take time through the year. There's not big cuts that can be had. The inputs that we need are the inputs that we need. The inflationary pressures on that have been there. We have seen that slow down in Q4. Hopefully that continues through 2023. It's our job as management to continue to look at it and continue to cut costs where we can. Okay, awesome. Yeah, thanks for the color. Obviously, a lot of moving parts there. Then switching over to Terronera. You're sitting on over $80 million in cash, just under $94 million of working capital. You know, how far down would you be willing to take your balance sheet if it means minimizing, you know, capital raise and building out Terronera? Yeah, I mean, I think the key part to that is the fact that we are looking for a debt financing package. That debt package would be anywhere between $100 million-$120 million. The initial feasibility study for Terronera is $175 million. We recognize and when we do have that debt package, we'll likely update the market of where that capital costs are. To answer your question, ultimately, what we want to see and kind of have on hand just for the two operating assets, somewhere between $30 million-$40 million as a cushion. I think we can get there if we get that debt put in place. Excellent. Yeah, just one last quick one. Seeing as you incurred $3 million in smelting and refining costs, any thoughts on where you see these costs trending in 2023? I'm assuming the prices are set in advance under contract. We renew our concentrate contracts or off-take agreements on an annualized basis. I think the key component there is they're relatively similar, a little bit lower for Bolañitos. The key component of all that when it comes down to is the energy costs at refineries. As those kind of oscillate, it does impact us. I think for the year, Like I say, it's about similar to a little bit lower at Bolañitos. Of course, at Guanaceví, we produce a doré bar that ship. Gotcha. Okay, awesome. Thanks for taking my questions. I'll hop back in queue. Thanks, Marcus. The next question comes from Jake Sekelsky from Alliance Global Partners. Please go ahead. Hey, Dan and team. Thanks for taking my questions. No problem, Jake. Nice to hear from you. You as well. Dan, you touched on moving Pitarrilla and Parral for the economic study stage. Do you guys have any visibility on the timeline there for those? Yeah, I mean, part of that visibility also depends on our exploration program. At Pitarrilla, we have a plan to do 5,000 m, really that drill meters will happen when the ramp extension is complete, which we expect it to be done mid-year, so the start of Q3, then we'll drill. Ultimately for Pitarrilla, the studies would happen in 2024, just because of the scale and scope of Pitarrilla. For Parral, we'd actually had a plan put in place to start economic studies in 2022. just with the acquisition of Pitarrilla, that pushed it back a bit. This year we're drilling close to 3,000 m at Parral, when that drilling's done, our expectation is we move towards economic studies at Parral. Start that, those studies at the end of the year, possibly with publishing early 2024. Okay, that's helpful. Just on inventory management for this year, I mean, obviously you guys did a good job of taking advantage of higher silver prices in the fourth quarter of last year. Silver prices have come down this quarter. Do you guys expect to take a similar approach? Yeah inventory management? A similar approach is probably the right way to say it. I think as we get into the build with Terronera, we get less flexibility just depending on where our balance sheet is. We made some sales at the beginning of the year here when we hit into the 24 on silver, but as you say, we've come down into the 20 handle. We'll see how it goes here in March. Obviously, our balance sheet's in great shape, so we do have that flexibility kind of for the first six months. As, like I say, as we move through the year, we'll see how we do it. Got it. Okay. That's all from me. Thanks again. Thanks, Jake. Good questions. The next question comes from Craig Hutchison from TD Cowen. Please go ahead. Hi, good morning, guys. Morning, Craig. Just a question on Terronera. Once the financing package is in place, just based on the work you guys have done to date and the commitment to spend here in Q1, what's the timing to first production? How long will the construction period take? Yeah. Ultimately, in the feasibility study, the production period or the construction period's a two-year process. Our goal with being able to advance it is still to be commissioning at the end of 2024. 4 years production effectively in 2025. Hopefully, if things go well, knock on wood, we could have first pour obviously back half of 2024, maybe commercial production at the end of 2024. Okay, great. Can you color, in terms of the timing of the amended permits and anything happening there? You know, Yeah. Our permit team and a lot of our listeners, investors know Terronera is fully permitted and with the feasibility study. We have the permits to start construction, which obviously we've advanced a lot of the things. There are amended permits for operational flexibility, we don't particularly need the permits to construct. Over the 12-year mine life, we want various flexibility. One being a staging area that we wanna push out 300 m. We've submitted a lot of the stuff. We actually still have some things that we need to submit. We've actually had very good communication with the pertinent departments, the different authorities, 'cause there's a number that we have to go through, SEMARNAT Over the last, I'd say three months, we've gotten approval for smaller permits. All that keeps going. I'd reiterate that we have all the permits to start construction and ultimately go into operations. It's just amending permits for operation flexibility. Are those amendment permits, is that a consideration in terms of the due diligence that's being done by the financing groups? Yeah. Yeah, they are. Okay. Just that, With respect to the royalties are obviously quite high in Q4, can we expect kind of similar levels of, you know, dollar amount royalties kind of for the balance of this year, just given that you are kind of back into those same areas in the fourth year, et cetera? Yeah. I'll be careful with that a little bit. The Q4 has an elevated royalties just on what we sold in the quarter. Okay. On absolute basis, we had sold over 1 million ounces of silver. There's royalties that would be recognized on sale as per the contract. Today, where we sit, $20 silver, between $20 and $25 silver, we pay a 13% royalty. That aligning with when it's produced doesn't necessarily line up when it's sold. Q4 has an elevated royalty, but on an annualized basis, we're producing similar amount from that area, which we call El Pulso, which is subject to that sliding scale royalty with Frisco. Maybe just one last question. With respect to Bolañitos, how confident are you with respect to kind of reserve extensions to be able to mine at a similar rate next year at Bolañitos? For 2024? Yeah, just. Yeah. How long you think the reserve life's gonna be extended here? Yeah. We have resources that we can convert into reserves. I mean, clearly right now with Bolañitos, it's effectively operating at breakeven. There's a number of reasons to operate a mine at breakeven. Firstly and obviously, the optionality to Bolañitos and to that production. The second is its proportional allocation of our costs. Thirdly, we have talent there that ultimately, if one day Bolañitos doesn't operate, we wanna make sure we can keep that talent and move them to Terronera, that would come in. We do expect and have confidence that we can extend Bolañitos' life. We are getting to the point where we're getting to concession boundaries, so we're not discovering three years or two years. We're finding three months or six months at a time. Our exploration team continues to have some success. We've just got more work to do on that exploration. Level of confidence, I'm confident. I wouldn't say I'm jumping up with joy, and I'm not depressed. Somewhere in the middle of all that. Right. We've never had more than a two-year reserve life at Bolañitos for the last 16 years. I'd say our exploration team's done a very good job there. There's a lot of concessions that surround us that have a lot of opportunities still, and we just have to work through that. Okay, great. Thanks, guys. Thanks, Craig. Good questions. The next question comes from Mark Reichman from Noble Capital Markets. Please go ahead. Yeah, just a couple questions. You know, you've already laid out your guidance for 2023, and, you know, from a production standpoint, it looks relatively flattish compared to 2022. It seems to me that grade and prices will make the big difference. When you think about next year in terms of whether it's going to end up lower or higher than 2022, what do you see as kind of the key variables in terms of getting that cost down? You know, you've already laid out your guidance on the cash costs and the all-in sustaining costs. You know, if you do this financing package and the interest rates have come up, so you would have, you know, the additional interest expense. What would be the variables that you think that could drive a better year in 2023? Yeah, of course, we put out the range of 8.6-9.5. I think for us, the ability to exceed that plan or hit the high end of that range really comes down to our operating team at Guanaceví and ultimately our operating team at Bolañitos for that matter. The El Curso and the Yolanda area of Guanaceví, I don't know if we're going to beat grades like we did in 2022. I think there's an opportunity to stay a little bit above those grades or at those grades. I think we're set up really well. We did a lot of development in 2022, though, will give us some efficiencies this year. At the end of the day, the reason we put out our 2023 guidance is because we expect that's where we're going to be at. I would point to 2021 and 2022. We've revised guidance upwards two years in a row, and we actually exceeded those revised upwards guidance. We'll see how this year unfolds. Well, I think a lot of people are looking at Terronera. You know, you talked about a production a construction decision in the coming months. When you're talking about the financing package, what's the, what's the biggest hold up there, the biggest hurdle to clear? Is it, you know, getting an acceptable rate? Is it those permitting issues? What do you think would be the breakthrough in securing that financing package? How early in the year do you think you would incur more debt? Yeah. I mean, at the end of the day, it's project loan financing. The key aspect to the project loan financing is ESG and ultimately getting commercial banks or big banks on side from an ESG standpoint. What's required for that is an Equator Principles and ESAP report that includes over 100 and change of different specific reports. We've spent over the last year documenting a lot of that and building processes and procedures to meet those Equator Principles. So it's not about terms. We know what those terms would be. It's about timeline and getting through that due diligence. A project loan financing bank will typically hire an external engineering firm to do that due diligence and write reports and effectively pull apart our feasibility study or our plans. That's all happened, and that's been completed. Like I say, I won't get into what happened necessarily this past year at this point, but there's things that were out of our hands. It's been moving forward. Our team's done actually a really good job on it. I expect, like I said in my outset, clarity in relatively short order on that. Okay. Thank you very much. That's really helpful. No, thanks, Mark. Good to hear from you. Once again, if you have a question, please press star then one. The next question comes from Lucas Pipes from B. Riley Securities. Please go ahead. Thank you very much, operator. Good morning, Dan. Good morning, everyone. Morning, Lucas. Dan, I also wanna follow up on Terronera. I believe the 2021 feasibility study pointed to $175 million of CapEx. Obviously, things unfortunately changed quite a bit from 2021. I think you mentioned there could be some offsets to inflation, but just order of magnitude, is it $200? Is it two handle the light ballpark to think about, or do you think you can keep it below that? Thank you very much for any color. Yeah. Lucas, I mean, that's a very fair question. The $2 handle. Quick answer is $2 handle is the right ballpark, but I'll get maybe a little bit more detail into that. Ultimately, we completed that report in March of 2021, I think it's dated July of 2021, we published it and ultimately filed it in September of 2021. I think our engineering team and our development team with the external engineers did a good job capturing some of that inflationary stuff that we started to see in 2021. Of course, nobody's perfect with that. I say that because our mobile fleet is entirely on-site with 30 units. If you compare what we paid compared to what was in that feasibility study, we're right on point. The 12 key components that we've purchased for the plant are relatively in line to what we saw in our feasibility study. There are changes though, and there are things that we haven't locked in. Ultimately, what we've been looking at over the last year and a half, as we push through this financing package and advance Terronera, is optimizing from that feasibility study. Going from a 1,700 ton per day to 2,000 ton per day has been looked at, and it's been looked at over time. That can offset some of the inflationary costs that we've seen, A, coming from a capital standpoint and coming from an operating on a per ton basis standpoint as well. We have been leaning towards a larger plant, ultimately more output from the mine to offset some of that inflationary costs. When we have a detailed financing package in place, we will provide the market with where we expect the capital to be, what type of size that Terronera will be. It's not significantly different. As you say, higher throughput will help offset some of the inflationary pressures that we've seen. Very helpful, Dan. I appreciate that. One of the earlier questions touched on 2024 all-in sustaining cost, and I wanted to follow up on that and maybe be slightly more pointed. I know it's early, but directionally should we expect all-in sustaining cost to come down in 2024, or is the current level maybe the best ballpark for the coming years? Thank you very much. Yeah. I mean, at the end of the day, Lucas, we put out 2023 guidance 'cause we have clarity on that. For 2024 all-in sustaining costs, it's highly dependent on where we sit with Terronera. Guanaceví and Bolañitos, they're mature assets. We kinda know where their costs have been. They were very similar for about 12 years until the last couple of years, they've really picked up. And like I say, I don't think that's specific to Endeavour Silver. I think that's what we've seen across the whole mining space. I'm trying not to put guidance out for 2024. I always just would say for... you point to Guanaceví and Bolañitos would be similar. We know what we have, we know where we're at. There are things that go into that on an all-in sustaining cost per ounce grade that Guanacevi will be important. Of course, our resource grades are very similar to what we have in reserve, so that might continue. If Terronera can come online at the end of 2024, and the timing of that comes online in 2024, will be highly dependent on our consolidated all-in sustaining costs. I think when we come next year, we would probably give guidance on our existing operations and then guide Terronera separately depending on when we see the end of construction or we expect the end of construction. That's probably the best way I can answer you at this point, for next year. Let's see how we perform this year. Hopefully, we can be in line or even beat it. If we can, that will bode well for 2024. That is very helpful and very clear. Dan, I really appreciate the color and to you and the team, best of luck. Thanks, Lucas. This concludes the question and answer session. I would like to turn the conference back over to Dan Dickson for any closing remarks. Thanks, operator, thanks to all our investors and listeners today. Again, as I said in my formal comments, I think 2023 is gonna be a very busy year for Endeavour Silver. Of course, pushing forward at Pitria and Parral is important for our pipeline. If we can get to a formal construction decision on Terronera in relatively short order, I think that would be the next catalyst for everyone. Thanks a lot and have a good day. This concludes today's conference call. You may disconnect your lines. Thank you for participating. Have a pleasant day.