Honing Performance; Growing Margins NYSE: EXK TSX: EDR May 2014 European Gold Forum 1
Cautionary Note This presentation contains “forward -looking statements” within the meaning of the United States private securities litigation reform act of 1995 and “forward -looking information” within the meaning of applicable Canadian securities legislation. Such forward-looking statements and information herein include, but are not limited to, statements regarding Endeavour’s anticipated performance in 2014 and future years, including revenue, cash cost and capital cost forecasts, silver and gold production, timing and expenditures to develop new silver mines and mineralized zones, silver and gold grades and recoveries, cash costs per ounce, capital expenditures and sustaining capital and the use of the Company’s working capital. The Company does not intend to, and does not assume any obligation to update such forward-looking statements or information, other than as required by applicable law. Forward-looking statements or information involve known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Endeavour and its operations to be materially different from those expressed or implied by such statements. Such factors include, among others: fluctuations in the prices of silver and gold, fluctuations in the currency markets (particularly the Mexican peso, Canadian dollar and U.S. dollar); fluctuations in the price of consumed commodities, changes in national and local governments, legislation, taxation, controls, regulations and political or economic developments in Canada and Mexico; operating or technical difficulties in mineral exploration, development and mining activities; risks and hazards of mineral exploration, development and mining (including environmental hazards, industrial accidents, unusual or unexpected geological conditions, pressures, cave-ins and flooding); inadequate insurance, or inability to obtain insurance; availability of and costs associated with mining inputs and labour; the speculative nature of mineral exploration and development, reliability of calculation of mineral reserves and resources and precious metal recoveries, diminishing quantities or grades of mineral reserves as properties are mined; risks in obtaining necessary licenses and permits, global market events and conditions and challenges to the Company’s title to properties; as well as those factors described in the section “risk factors” contained in the Company’s most recent form 40F/Annual Information Form filed with the S.E.C. and Canadian securities regulatory authorities. Forward-looking statements are based on assumptions management believes to be reasonable, including but not limited to: the continued operation of the Company’s mining operations, no material adverse change in the market price of commodities, mining operations will operate and the mining products will be completed in accordance with management’s expectations and achieve their stated production outcomes, and such other assumptions and factors as set out herein. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or information, there may be other factors that cause results to be materially different from those anticipated, described, estimated, assessed or intended. There can be no assurance that any forward-looking statements or information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements or information. Accordingly, readers should not place undue reliance on forward-looking statements or information. 2
Introduction A mid-tier silver miner focused on accretive Endeavour Silver Corp: growth to build real value for stakeholders Three high grade silver-gold mines in Mexico, Core Assets: Guanaceví, Bolañitos and El Cubo, and an emerging new discovery at San Sebasti á n We acquire underperforming mines in large historic districts, then apply our expertise Operational Excellence: to turn around and expand them By conducting modern exploration in historic Organic Growth: districts, we make new discoveries that can be fast-tracked to production Build a premier senior silver producer (+10 Near-Term Goal: million oz per year) through continued organic growth and strategic acquisitions 3
Market Snapshot EXK Shares: Leverage to Precious Metals Shares Issued: 101.2 million Fully Diluted: 106.6 million Recent Price (May 1/14): US$4.53 Market Cap (May 1/14): US$458million 52-week high-low: US$5.98-$2.88 Exchange Listings: NYSE:EXK TSX:EDR Daily Volume: 2.0 million shares Cash Position (Dec 31/13): $35 million LOC Available (Dec 31/13): $17 million 4
Core Assets Exploration Mines San Sebasti á n Guanaceví Pánuco Bolañitos Parral El Cubo Guadalupe y Calvo El Inca Three producing mines and seven exploration projects Arroyo Seco Lourdes 5
Strategic Acquisitions El Cubo Bolañitos Guanaceví 2012 2007 2004 • Acquired Guanaceví in 2004 • Acquired Bolañitos in 2007 • Acquired El Cubo in 2012 • Processing 100 tpd of old • Processing 50 tpd of old minefill • Processing 1,100 tpd of low tailings into a 600 tpd plant into a 500 tpd plant grade ore into a leased plant • Discovered six orebodies to date • Discovered six orebodies to date • Discovered one orebody to date • Rebuilt and expanded the plant • Upgraded and expanded plant • Rebuilt and expanded the plant • Developed five new mines, • Developed one new mine, three • Turned around operations and Milache ready for development old mines, including Asuncion developing new V-Asuncion • Today produces 1,200 tpd of • Today produces 1,600 tpd of mine high grade ore high grade ore • Today produces 1,200 tpd of medium grade ore – ramping up to 1,550 tpd by year end 6
Organic Resource Growth Silver and Silver Equivalent Reserves and Resources (million oz) 250 206 200 191 2012 Acquired El Cubo 150 142 Silver Equivalents Millions 123 121 2007 100 90 88 Acquired Bolañitos 76 71 Silver 62 59 53 47 2004 46 50 41 41 Acquired Guanaceví 16 14 5.4 4.7 0 Other 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Note: Silver equivalents based on 50:1 silver:gold ratio; no base metals 7
Consistent Production Growth Silver and Silver Equivalent Annual Production 12 11.3 10 2012 millions of ounces Acquired 8 El Cubo 6.8 6.4 6 Silver Equivalents 4.9 4.5 4.3 2007 4 Acquired 3.7 3.3 Bolañitos 3.3 2.8 Silver 2.6 2.5 2.35 2004 2.15 2 Acquired Guanaceví 1.35 1.5 1.1 0.95 0.4 0.35 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Note: Silver equivalents based on 50:1 silver:gold ratio; no base metals 8
Strong Financial Performance Operating Cash Flow per Share (1) Revenue per Share $2.77 $0.89 $3.00 $1.00 $0.82 $0.80 $2.50 $2.23 $0.54 $0.60 $2.00 $0.40 $1.46 $0.40 $1.50 $0.66 $0.80 $0.84 $1.07 $0.20 $1.00 $0.20 -$0.05 -$0.09 $0.50 $0.00 $0.00 -$0.20 2007 2008 2009 2010 2011 2012 2013 2007 2008 2009 2010 2011 2012 2013 Cash Costs net of By-products (3) Adjusted Earnings per Share Endeavour Cash Costs Peer Group Cash Costs $10.00 $0.60 $8.90 $9.38 $0.29 $0.37 $0.43 $9.03 $0.40 $8.00 $7.50 $7.92 $0.20 (2) $6.83 $0.11 $7.33 $0.03 $0.00 $6.00 $6.04 $5.71 $/oz -$0.09 -$0.20 $5.08 $4.85 -$0.27 -$0.37 $4.00 -$0.40 $4.13 $2.59 $2.44 -$0.60 2007 2008 2009 2010 2011 2012 2013 $2.00 1. Before changes in working capital 2. Includes $0.18 per share for deferred Mexican tax liability $- 3. Peers include: AXR, CDE, FR, FVI, GPR, HL, PAA, SSO and SVM; for 2013 does not include AXR 2007 2008 2009 2010 2011 2012 2013 9
Market Multiples: Attractive Peer Comparisons P/E (adjusted; trailing 4Q) P/CF (trailing 4Q) 40 nmf nmf 100 30 80 60 20 40 10 20 0 0 nmf = not meaningful EV/oz Resources EV/oz 2013 Production (Ag Eq.) 6 (Ag Eq., excluding base metals) 150 4 100 2 50 0 0 10
EBITDA Leverage to Silver Price 2014 Impact on Precious metal price Change (+/-) from Impact on annual cash costs EBITDA (2) current spot prices (1) assumptions ($/oz Ag) $21 silver/$1,260 gold $1silver/$60 gold $0.61 $11.4 million (1) Silver equivalents based on 60:1 silver:gold ratio (2) Assuming 2014 production guidance Consolidated EBITDA (includes new Mexican Taxes), Cash Costs and AISC Sensitivities Using 60:1 Silver:Gold Ratio $25.00 140 Cash Costs, net gold by-product All In Sustaining Costs Annual EBITDA Millions 120 $20.00 100 $15.00 80 60 $10.00 40 $5.00 20 $- - $18 $19 $20 $21 $22 $23 $24 $25 $26 $27 $28 11
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