Endeavour Silver completes updated Terronera PFS

Thursday, August 30, 2018


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VANCOUVER, British Columbia, Aug. 30, 2018 (GLOBE NEWSWIRE) -- Endeavour Silver Corp. (NYSE: EXK, TSX: EDR) has completed an updated Pre-Feasibility Study ("2018 PFS") for its Terronera mine project located 40 kilometres northeast of Puerto Vallarta in the state of Jalisco, Mexico. The 2018 Updated PFS report and the updated Mineral Resource and Reserve Estimates were prepared in compliance with National Instrument 43-101 (NI 43-101) and will be filed on SEDAR and EDGAR within 45 days of this news release. All currency references herein are in US$.

The updated Terronera Mineral Resource and Reserve Estimates that form the basis for the updated 2018 PFS reflect significantly higher tonnes, grades and contained silver, gold and silver equivalent ounces (oz) in each category (Tables 1 and 2 below) due to positive exploration drill results in 2017 and the inclusion of the high grade La Luz vein compared to the previous estimates that were the basis for the 2017 Pre-Feasibility Study ("2017 PFS").

As a result, the 2018 PFS shows significantly higher revenues, EBITDA, free cash flow, mine life and NPV with significantly lower cash costs and all-in sustaining costs per silver oz. The 2018 PFS projects higher annual gold production and slightly lower annual silver production for the same annual silver equivalent production, generating a higher internal rate of return at a moderately lower daily throughput, slightly higher capital investment and lower silver price compared to the 2017 PFS (see Tables 3 and 4 below).

Highlights of Updated Mineral Reserve and Resource Estimate and Updated PFS for Terronera

  • Silver equivalent (1) Probable Mineral Reserves increased 32% to 59.5 million oz with increases in tonnes (16%), silver grades (8%) and gold grades (17%)
  • Silver equivalent Indicated Mineral Resources increased 23% to 60 million oz with increases in tonnes (10%) silver grades (3%) and gold grades (16%)
  • Silver equivalent Inferred Mineral Resources increased 55% to 14.8 million oz with increases in tonnes (49%) and gold grades (61%)
  • The higher Mineral Reserve and Resource Estimates support a longer Mine life of 9.5 years with average annual production of 5.1 million silver equivalent oz in phase 2 (year 3 and onwards)
  • Reduced costs due to higher grades and optimized engineering:

    • Cash cost (2) of $0.15 per Ag oz, net of gold by-product credits
    • All in sustaining cost (2) of $1.36 per Ag oz, net of gold by-product credits;

  • Robust economics including an after-tax 5% NPV of $117.8 million (51% increase from 2017 PFS), Internal Rate of Return of 23.5% and Payback period of 5.4 years

  1. Silver equivalent ounces calculated at a 75:1 gold: silver ratio
  2. Cash costs and all in sustaining costs are examples of non-GAAP measures. Definitions of "Non-IFRS Measures" can be found in the Company's MD&A

Bradford Cooke, CEO of Endeavour Silver, commented, "Our efforts to optimize the Terronera mine project have resulted in significantly improved operating parameters and financial returns for this high grade, district scale exploration and mining project. Multiple engineering trade-off studies and the incorporation of the very high grade La Luz vein Mineral Resources and Reserves into the 2018 PFS in particular helped to improve the outlook for Terronera compared to the 2017 PFS."

"Of special note are the estimated operating costs, expected to be amongst the lowest in the silver mining sector, providing Endeavour with solid free cash flow and a very positive impact on consolidated operating costs. Total cash costs are estimated to be $0.15 per Ag oz net of the gold by-product credit, and all-in-sustaining costs at site are estimated to be $1.36 per Ag oz over the life of the mine."

"But we are not done yet. Our 2018 infill drilling program in the deeper parts of the Terronera vein is generating better than anticipated results and additional engineering studies are underway to further optimize the project. We continue to await the final government permits needed for us to finalize the debt financing and make a development decision. We look forward to when we can give the green light to develop Terronera into our fifth mine."

Updated Mineral Resource and Mineral Reserve Estimates

The updated 2018 Mineral Resource and Mineral Reserve Estimates include drill results for the Terronera vein completed before the November 2017 cut-off date and since the October 31, 2016 cut-off date for the 2017 Mineral Resource and Reserve Estimates. It also includes all drill results for the La Luz vein discovered in 2016 and drilled in 2017.

In 2017, the Company spent $1.9 million on exploration mapping, sampling and drilling on the Terronera project including 25 holes for 5,760 metres on the La Luz vein. The La Luz vein, located 2.2 kilometres northeast of the Terronera vein, is narrower but shallower and much higher grade compared to Terronera, extending for 600 metres in length, 250 metres in depth, and still open to depth.

As shown in Table 1 below, Mineral Resource tonnes and contained oz both rose substantially in 2018 and grades increased incrementally compared to 2017. In 2018, Indicated Mineral Resource tonnes are up 10%, Inferred Mineral Resource tonnes are up 49%, Indicated silver equivalent grade is up 11% and Inferred silver equivalent grade is up 4% compared to 2017.