Endeavour Silver lifts cash flow as 2026 costs stay elevated

By Tom Whitfield

$95 million: Endeavour Silver's third-quarter mine operating cash flow before taxes surged 139% as stronger metal prices and better performance at Terronera offset operating disruptions. Revenue rose 29% to $185 million, but higher costs and unresolved development constraints leave the 2026 plan sensitive to execution.

What did Endeavour produce and earn?

Endeavour produced 2 million ounces of silver and 10,000 ounces of gold in the third quarter, up 19% and 39%, respectively, from a year earlier. Realized average prices were $62 per silver ounce and $4,290 per gold ounce.

Mine operating earnings rose to $69 million from $16 million, while earnings before taxes reached $40 million, versus a $38 million loss a year earlier. The year-on-year swing came amid stronger metal prices, though stoppages prevented uninterrupted performance.

Takeaway: Stronger prices reversed the prior-year loss, but operating interruptions prevented uninterrupted performance.

What changed in the 2026 outlook?

Endeavour revised its 2026 production forecast to 7.8 million to 8.1 million ounces of silver and 42,000 to 43,500 ounces of gold, equivalent to 13.7 million to 14.3 million silver-equivalent ounces. CEO Dan Dickson said the update "reflects results to date and fourth-quarter expectations," leaving much of the forecast dependent on a stable fourth quarter.

Terronera suspended operations for 12 days in August while Endeavour addressed local community concerns. At Guanaceví, a trunnion crack cut capacity during the final nine days of the quarter. Dickson said the replacement "was completed on schedule," and the company hopes to recover some production in the fourth quarter.

Guanaceví's silver grades remained below plan throughout the year. Dickson attributed the shortfall partly to natural variability in the ore body and partly to mining lower-grade material made economic by higher metal prices. The strategy may recover more ounces from existing resources and potentially extend mine lives.

Annual direct operating cost guidance now stands at $170 to $180 per ton at Terronera and $155 to $165 per ton on a consolidated basis. Dickson said first-half costs were too significant to overcome, despite the recent downward trend.

Takeaway: The revised targets require a stable fourth quarter, while elevated costs absorb part of the price benefit.

Can Terronera keep cutting costs?

Consolidated direct operating costs fell to $152 per ton in the third quarter from $162 in the second and $187 in the first. Terronera's cost declined to $156 per ton from $169 and $195, respectively.

Dickson said Terronera's grades have risen during the year and recoveries have reached feasibility-study targets. He expects further operational gains, but future cost reductions will likely be smaller than the recent quarter-to-quarter declines.

Terronera completed its liquefied natural gas plant during the third quarter and enabled a switch from diesel power generation. Dickson estimated that the change reduced costs by $8 to $10 per ton, depending on fuel use.

A new waste dump near Portal 4 could shorten hauling distances in the fourth quarter. The Mexican peso's exchange rate remains a significant cost variable. Terronera's fourth-quarter grades could stay roughly flat with the third quarter, before higher grades are expected in 2027 from a high-grade chute.

The timing of production from the La Luz vein remains under assessment. Quarterly cash costs were $16.55 per payable silver ounce, net of byproducts, down 9% year over year; all-in sustaining costs fell 3% to $29.54 per ounce.

Dickson said Endeavour deliberately did not provide updated consolidated or Terronera cash-cost and all-in-sustaining-cost guidance. That omission leaves no formal numerical target against which to test further cost progress.

Takeaway: Terronera's cost trend is improving, but smaller expected savings and exchange-rate exposure limit confidence in further gains.

What must happen before Pitarrilla starts?

Endeavour ended September with $288 million in cash and $247 million in working capital. It converted its project loan into a $25 million secured revolving credit facility, with an option to expand the facility by up to $75 million.

Dickson said the Pitarrilla feasibility study was nearing completion, with a news release expected within roughly 10 days. The key condition for a construction decision is a tailings dam permit. Endeavour has submitted its application and expects the permit in the first or second quarter of 2027, with a construction decision potentially around midyear.

Dickson said Endeavour believes it can fund Pitarrilla with cash flow and its credit facility, depending on metal prices, while continuing to consider other financing mechanisms. Early work, including road improvements and power-line planning, has moved more slowly than expected because some design criteria awaited study completion.

The company is working toward a potential first-quarter 2030 production timeline, contingent on a mid-2027 construction decision. New resource estimates for Terronera, Guanaceví and Kolpa are expected early in the new year, and Endeavour plans to issue 2027 guidance in January.

Endeavour Silver is a Canadian mining company founded in 2004 that acquires, explores, develops and operates silver and gold properties. It focuses on producing precious metals and expanding its portfolio through mine development and exploration. Its work centers on Mexico, including Guanaceví, Bolañitos and Terronera, and Peru, where the acquired Kolpa mine produces silver, lead, zinc and copper.

Takeaway: Pitarrilla appears financeable, but the permit, final study, construction decision and schedule still carry execution risk.