Endeavour Silver Corp. (EDR:CA) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presents a mixed picture. Financial performance and business updates show improvements, especially with operational efficiencies and strategic investments. However, uncertainties in grade profiles, cost management challenges, and vague responses on key issues create concerns. The Q&A highlights potential risks but also optimism for future improvements. These factors balance out to a neutral sentiment.
Key Financial Performance
Silver equivalent metal production 11 million ounces in 2025, a 48% increase compared to 2024, driven by the acquisition of Kolpa, Terronera achieving commercial production, and higher grades at Bolanitos.
Q4 Silver equivalent production Just shy of 4 million ounces, a 146% increase compared to Q4 2024, due to Kolpa, Terronera, and higher grades at Bolanitos. Excluding Kolpa and Terronera, this was a 27% increase compared to the same period last year.
Revenue $468 million in 2025, up 115% compared to 2024, attributed to increased production and higher metal prices.
Cost of Sales $385 million in 2025, reflecting the expanded production profile.
Mine Operating Earnings $83 million in 2025, supported by increased production and revenue.
Mine Operating Cash Flow Before Taxes $156 million in 2025, a 116% increase year-over-year, driven by higher production and revenue.
Cash Costs $19 per ounce of payable silver in 2025, primarily driven by the substantial changes in the production profile.
Adjusted Net Earnings $4.8 million in Q4 2025, or $0.02 per share, impacted by realized losses from derivative contracts and higher financing costs.
Direct Operating Costs Per Ton Increased by 8% in 2025, primarily due to elevated costs at Terronera during its initial quarter of production.
All-in Sustaining Costs Elevated in Q4 2025 due to higher royalties, duties, third-party ore purchases, corporate G&A, and the addition of Terronera. Terronera's all-in sustaining costs included $16.3 million in capital expenditures for the quarter, equating to approximately $48 per ounce.
Cash Position $215 million as of December 31, 2025, providing financial strength and flexibility for strategic initiatives.
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Operating Highlights
Terronera achieving commercial production: Terronera achieved commercial production in October 2025, contributing to a 48% increase in silver equivalent metal production compared to 2024.
Kolpa acquisition: Acquired Kolpa in May 2025, which added base metal production and contributed to a 146% increase in Q4 silver equivalent production compared to Q4 2024.
Silver and gold market trends: Silver and gold prices have risen significantly, with gold trading above $5,000 and silver above $90, driven by inflation, economic uncertainty, and industrial demand.
Revenue growth: Record revenue of $468 million in 2025, up 115% from 2024, with mine operating earnings of $83 million.
Cost management: Direct operating costs per ton increased by 8% in 2025, but cost reductions are expected in 2026 due to operational optimizations and transitioning to liquefied natural gas.
Production efficiency: Kolpa's plant expansion to 2,500 tonnes per day in Q1 2026 and operational improvements at Terronera are expected to enhance efficiency.
Pitarrilla development: Planned $68 million investment in 2026 for feasibility study, early works, and preparation for a construction decision in 2027.
Bolanitos Mine sale: Sale of Bolanitos Mine completed in January 2025, aligning with strategic shifts.
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Risk or Challenges
Security Events in Mexico: Operations at Terronera were temporarily impacted by security events in Mexico and Jalisco's Code Red mandate, requiring civilians to shelter in place. This caused a pause in operations, highlighting risks related to regional security and supply chain disruptions.
Elevated Operating Costs: Direct operating costs per ton increased by 8% in 2025, driven by elevated costs at Terronera during its initial production phase, higher royalties, duties, and third-party ore purchases. These costs are expected to decrease but currently pose a financial challenge.
All-in Sustaining Costs: All-in sustaining costs were elevated due to higher royalties, duties, third-party ore purchases, corporate G&A, and initial capital expenditures at Terronera. These costs impact profitability and are expected to decrease over time.
Dependency on Metal Prices: Changes in metal prices significantly impact direct costs per ton, with higher costs at operations like Terronera, Kolpa, and Guanacevi. This dependency on volatile metal prices poses a financial risk.
Ramp-up Costs at Terronera: Terronera incurred higher costs during its ramp-up phase, including sustaining capital expenses and operational volatility. These costs are expected to stabilize but currently affect financial performance.
Integration Challenges: The integration of new operations, including Kolpa and Terronera, and the divestiture of Bolanitos have led to elevated corporate G&A expenses, posing challenges in operational and financial management.
Strategic Execution Risks: The company is investing heavily in projects like Pitarrilla, with significant planned expenditures in 2026. Delays or cost overruns in these projects could impact strategic objectives and financial stability.
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Guidance & Outlook
Cost Reduction at Terronera: Direct operating costs are expected to decrease in 2026 as the company transitions from diesel to liquefied natural gas in Q2, completes the demobilization of the construction team, and benefits from workforce and logistics optimization plans.
Kolpa Expansion: Kolpa's plant capacity is expected to increase from 2,000 tonnes per day to 2,500 tonnes per day in Q1 2026, improving cost efficiency and throughput.
Pitarrilla Development: The company plans a $68 million investment in 2026 for Pitarrilla, including completing an NI 43-101 feasibility study by Q3 2026, early works such as construction camp commencement, ramp advancement, and procurement of long lead equipment. A construction decision is targeted for early 2027.
Operational Focus at Terronera: The company aims to transition into higher-grade zones in the second half of 2026, with improvements in throughput, recoveries, and mine output expected to align with designed operating parameters. Direct costs per ton are anticipated to improve as ramp-up costs are eliminated.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Can you discuss the mill availability and what happened with the electrical interruptions at Terronera? Have these issues been resolved in the first two months of this year?
A:The electrical issues have seen significant improvement in January and February. Back in September, resistors had to be replaced, causing delays. Temporary diesel generators caused disruptions, but stability improved in late December. Permits for an LNG plant have been received, and the plant is expected to be operational in Q2, reducing costs from $0.33 to $0.17 per megawatt hour.
Q:Can you provide guidance on the grade profile at Terronera, particularly the split between H1 and H2, and the impact of lower grades?
A:The block model reconciliation has been strong, and lower grades are due to mining lower-grade stockwork. Higher grades are expected in H2 as mining moves into the main shoot of Terronera. The grade profile will gradually improve each quarter. The decision to start with lower-grade ore was intentional to avoid losses during initial production.
Q:When can we expect the higher-grade material (230-280 grams per tonne silver) to be mined and processed at Terronera?
A:The higher-grade material is expected to be mined and processed in 2027.
Q:Does the guided capital spend at Terronera reflect a catch-up on development, and will it drop off substantially as the year progresses?
A:The capital spend reflects some catch-up on development and includes one-time activities like the LNG plant and waste dump development. Sustaining capital expenditures are expected to decrease as the year progresses and stabilize by 2027.
Q:Can you provide an update on operations at Terronera over the last five months since commercial production began?
A:Operations have seen both successes and challenges. The terrain limits storage space, and the team is learning about the ore body to optimize recoveries. Throughput has been good in January and February, and the focus is on achieving steady-state operations.
Q:What is the impact of current silver prices on mining costs and operations across your asset base?
A:Higher silver prices increase royalties, duties, and purchased ore costs, particularly at Guanacevi. Direct operating costs per ton are rising, but margins remain strong. Labor costs have increased by about 6%, and management is working to contain costs.
Q:Can you explain the remaining notional exposure and cash settlement cadence for the derivative hedge, and the risk management strategy for precious metals?
A:The company hedged 68,000 ounces of gold at $2,325 per ounce, with 50,000 ounces remaining as of December 31. The hedge will unwind by Q2 2027. The company avoids hedging silver to retain upside potential and focuses on managing gold as a byproduct.
Q:What is the strategy to manage the impact of Mexican peso appreciation on costs?
A:The company has some peso hedges in place but is cautious about adding more at current rates. Diversification through the addition of Kolpa, which has less peso exposure, helps mitigate the impact.
Q:How will Terronera's costs evolve in 2026, and will they be back-end weighted?
A:Costs are expected to decrease throughout the year as higher grades are mined and the LNG plant becomes operational. Q1 costs will be higher, but each subsequent quarter will see improvements.
Q:Has the volatility in Jalisco necessitated changes in security protocols or supply chain management at Terronera?
A:Security protocols for transportation may be enhanced, but no significant changes are planned for on-site security. The company is monitoring the situation and ensuring adequate supplies of food, water, and diesel.
Q:Are there any accounting impacts from the sale of Bolanitos, and how do Mexican taxes affect cash flow?
A:The sale of Bolanitos will result in an accounting gain in Q1. Historical losses will offset taxes from the sale. Terronera's construction costs create tax losses that will offset taxable profits in 2026.
Q:What is the status of Kolpa's expansion to 2,500 tons per day, and are additional permits required?
A:Kolpa is ahead of schedule, with construction nearly complete and testing expected in March. An operating permit is required after construction, and the mine is expected to reach 2,500 tons per day in Q2.
Q:What are the permitting timelines and plans for advancing Pitarrilla?
A:The tailings storage facility permit is expected in Q1 2027. Engineering and feasibility work are ongoing, and the project is being advanced to align with permitting timelines.
Q:Review of Unclear Management Responses
A:Management avoided providing a direct breakdown of the grade profile split between H1 and H2 at Terronera, citing a lack of specific data. Additionally, the response to the question about the impact of Mexican peso appreciation on costs was somewhat vague, with limited detail on specific hedging strategies.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
CEO CFO
CFO COO
COO remark
Conference Instructions
Dickson Silver
President Investor
Relations Vice
Silver CEO
Silver end
Vice President
conference Instructions
conference Silver
conference Vice
end Financial
today Dickson
EXK Transcript
Endeavour Silver Corp. (EDR:CA) Q4 2025 Earnings Call Transcript
Unknown2-27
The earnings call presents a mixed picture. Financial performance and business updates show improvements, especially with operational efficiencies and strategic investments. However, uncertainties in grade profiles, cost management challenges, and vague responses on key issues create concerns. The Q&A highlights potential risks but also optimism for future improvements. These factors balance out to a neutral sentiment.
Endeavour Silver Corp. (EDR:CA) Q3 2025 Earnings Call Transcript
Unknown11-7
The earnings call presents a mixed picture. Positive elements include steady performance at Terronera and Kolpa, expected free cash flow, and strategic expansion plans. However, lower grades, unclear guidance on Kolpa's expansion, and unresolved gold hedge issues create uncertainties. The lack of shareholder return plans and mixed financial results add to the neutral sentiment.
Endeavour Silver Corp. (EXK) Q2 2025 Earnings Call Transcript
Unknown8-13
The earnings call highlights mixed results: the Terronera project is nearing commercial production, but the company reported a net loss due to operating losses and increased expenses. The Q&A revealed concerns about integration and operating costs at Minera Kolpa, and management's unclear responses on some issues. While there is optimism about future production and cost alignment, current financials and uncertainties suggest a neutral sentiment for stock price movement.
Endeavour Silver Corp. (NYSE:EXK) Q1 2025 Earnings Call Transcript
Unknown5-14
The earnings call reveals financial instability with a net loss of $32.9 million due to hedging impacts and increased operational costs. The cash position and working capital have decreased, indicating liquidity risks. Despite slight improvements in cash costs, the lack of a share buyback program and integration risks from the Kolpa acquisition further contribute to a negative outlook. The Q&A section highlights uncertainties in project ramp-up and cash flow management, exacerbating concerns. Without a market cap, the stock's reaction is uncertain, but the overall sentiment suggests a negative impact.
EXK Report
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