expanding silver production, reserves and resources in mexico
TRANSCRIPT
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Expanding Silver Production,
Reserves and Resources in
Mexico
January 2010
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Cautionary Note: Forward Looking Statements
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 future performance, including silver and gold
production, reserves and resources, timing and expenditures to expand mine and plant capacities and develop
new mines, metal grades and recoveries, cash costs and capital expenditures. 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 metal prices
and currency markets (particularly the Mexican peso, Canadian dollar and U.S. dollar); changes in national and
local governments, legislation, policies, taxation, regulations; political or economic developments in Canada and
Mexico; management, operating or technical risks, hazards or difficulties in exploration, development and
mining activities; 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, diminishing quantities
or grades of mineral reserves as properties are mined; the ability to successfully integrate acquisitions; risks in
obtaining necessary licenses and permits, 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 and Annual
Information Form filed with the S.E.C. and Canadian securities regulatory authorities. 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. 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. We Seek Safe Harbor.
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Introduction: Who is Endeavour?
• Endeavour Silver Corp: One of North America’s fastest
growing silver mining companies
• Core Assets: Two high grade silver-gold mines in Mexico;
Guanacevi Mine in Durango State and Guanajuato
Mine in Guanajuato State
• Goal: Become a top mid-tier (5-10 million oz per year)
primary silver producer within two years
Silver vs. Gold
Silver typically lags gold, then plays catch-up, resulting in highly
leveraged investment opportunities. Silver: gold ratio - 61:1
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Highlights: Why Own Endeavour
Pure Silver Leverage
The Mexico Advantage
Quality Core Assets
Experienced Management Team
Proven Track Record
Strong Organic Growth
Additional Acquisition Growth
Attractive Market Capitalization
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Share Capital: Leverage To Growth
• Exchange Listings: EXK: NYSE-Amex
EDR: TSX
EJD: DB-Frankfurt
EDR.WT: TSX
• Shares Issued: 60.5 Million
• Warrants/Options/Debt: 21.2 Million
• Fully Diluted: 81.7 Million
• Share Price: (January 12, 2010) US$ 3.97
• Market Cap: US$ 240 Million
• Daily Volume: 946,754 Shares
• Largest Shareholder: Fresnillo PLC 5%
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Company Profile: At A Glance
• Working Capital: US$38 Million
• Convertible Debt: US$12 Million
• Silver Hedge: Nil
• Silver Reserves: 7.8 Million Oz
• Silver Resources: 39.0 Million Oz
• Silver-Equiv. Res-Res: 62.1 Million Oz
• 2008 Silver Production: 2.3 Million Oz
• 2009 Silver Production: 2.6 Million Oz
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Core Assets: Two Producing Silver Mines,
Two Exploration Projects
Business Model:
• Acquire under-
explored mines in
historic silver districts
that are built,
permitted and about
to close
• Invest the capital and
expertise needed to
discover new ore-
bodies and re-open
the mines
• Consolidate district
land-holdings and
expand silver
resources, reserves
and production
Exploring prospective silver mines
close to existing infrastructure.
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Guanacevi: A Top 5 Mexican Silver District
District Highlights:
• Located in the Sierra Madre
Occidental gold-silver belt
• Produced over 450 million oz silver
historically
• Multiple silver veins span 10 km x 5
km area
• Classic epithermal ore-bodies in
Lower Tertiary andesites
• Accessed by paved state highway 4
½ hours NW of Durango City
• On state power grid, ample labour
and water available
• Porvenir Mine now in production,
three more ore-bodies being
developed
• District is ripe for consolidation to
ensure long mine life
Guanacevi: Underground, Mechanized,
Ramp Access Mine
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Q4, 2009 Summary
Reserves:
P+P: 6.1 million oz Ag
Indicated: 16.0 million oz Ag
Inferred: 12.7 million oz Ag
Production: 587,000 oz Ag
Throughput: 750 tonnes per day
Recoveries: 79% Ag
90% Au
Operations: North Porvenir
Porvenir Dos
Development: 2,000 m
Porvenir is the largest mine operating in the
Guanacevi district.
Guanacevi: Upgrading the Plant to
1200 TPD Capacity
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Capital Projects:
Expand milling circuit
Expand leach circuit
Re-habilitate flotation
circuit
New Merrill Crowe circuit
New silver refinery
New lab, warehouse,
security
• Expand tailings pond (in
progress )
• Expand crushing circuit (in
progress)
Currently operating at 800 tpd
Targeting 1000 tpd capacity by 2010
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Guanacevi: Reserves/Resources
Longitudinal Section
Endeavour Discovered Four New Silver Deposits In Three Years
December 31, 2008 NI 43-101 Reserves & Resources:
Red: P+P Reserves: 0.53 million tonnes @ 353 gpt Ag, 0.49 gpt Au= 6.1 million oz Silver
Blue: Ind. Resources: 1.74 million tonnes @ 285 gpt Ag, 0.51 gpt Au= 15.9 million oz Silver
Tan: Inf. Resources: 1.1 million tonnes @ 258 gpt Ag, 0.46 gpt Au= 9.1 million oz Silver
Guanacevi: Recent Discovery At Porvenir Cuatro
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New high grade silver-gold mineralization at Porvenir Cuatro.
Hole Vein FromTrue
WidthSilver Gold
(m) (m) (gpt) (gpt)
PC49-1
Santa Cruz
Vein
252.6
01.80 297 1.12
Including254.0
00.21 1,070 5.29
PC50-1Santa Cruz
Vein
225.7
52.42 13 0.06
PC50-2
Santa Cruz
Vein
305.5
05.67 713 3.85
Including307.6
50.31 3,250 39.70
Including309.2
00.23 1,310 2.60
Including311.3
00.46 1,040 3.79
PC51-1
Santa Cruz
Vein
142.0
52.07 66 0.35
Including142.0
50.33 101 0.07
PC51-2
Santa Cruz
Vein
211.5
04.94 293 0.88
Including211.5
00.38 829 3.07
PC52-1Santa Cruz
Vein148.0
01.50 8 <0.05
PC52-2
Santa Cruz
Vein
177.5
52.22 389 2.29
Including179.3
00.75 726 4.79
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Guanajuato: The 2nd Largest Silver
District In Mexico
District Highlights:
• Located in the Sierra Madre
silver belt
• Produced over 1.2 billion oz
silver historically
• Three main silver vein systems
span 20 km x10 km area
• Classic epithermal ore-bodies
in Lower Tertiary andesites
• Accessed by all-weather road
½ hour NW of Guanajuato City
• On state power grid, ample
labour and water available
• Cebada and Bolanitos Mines
now in production, new ore-
bodies recently discovered
• Multiple exploration targets
and acquisition opportunities
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Guanajuato: Underground, Mechanized and
Track, Shaft Access Mines
The Bolanitos Mines were operated by
Penoles from the 1970’s to the 1990’s
Q4, 2009 Summary
Resources:
Probable: 1.7 Million Oz Ag
Indicated: 1.9 Million Oz Ag
Inferred: 5.8 Million Oz Ag
Production : 192,000 Oz Ag
Throughput: 550 tpd
Recoveries: 80% Ag
82% Au
Operations: Bolanitos/Lucero/Cebada
Development: 1,500 m
Guanajuato: Only Ten Years Old,
550 TPD Plant Capacity
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Currently operating at 550 tpd – on a 6 day per week basis
Capital Projects:
Rehabilitate conveyors
Rehabilitate cone crusher
Re-configure flotation
circuit
New concentrate load-out
Expand tailings pond
New assay lab
New security
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Guanajuato: Reserves/Resources
Longitudinal Sections
Drill targets
Drill targets
Drill targets
Lucero
Santa Maria
Bolanitos
3785
Vetas La Luz, Mina Bolanitos
Veta Madre, Mina Cebada
Guanajuato: Several Recent Discoveries
in Cebada and Bolanitos Areas
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Recent Drill ResultsHole Length Silver Gold
(#) (m) (gpt) (gpt)
MV-1 1.8 312 2.03
SJS-1 9.5 374 3.14
incl. 1.9 1,147 1.33
incl. 0.6 1,160 3.97
incl. 0.6 917 15.6
CE378-1 1.80 194 3.59CE378-2 1.70 316 4.54
CE-378-3 1.25 599 6.4
2009 Drill Program: 15,000 m
High grade silver-gold vein mineralization discovered in five prospect areas, including
the new Lucero vein (SJS-1)
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
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Silver Production: Seven-Fold Growth
Over Five Years
2004 2005
Annual Silver Production (million oz’s)
2006 2007 2008 2009
GC
VI
0.35
0.95
1.35
2.14
2.34
2.6
Capacity 4.5
GJT
O
0
10
20
30
40
50
60
70
80
90
100
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Reserves/Resources: Ten Year Mine-Life at
Plant Capacity
Total Silver Equivalent Reserves and Resources (million oz’s)
2005 2006 20072004
16
4653
Target: 100
2008
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Note: Silver equivalents based on 70:1 silver: gold ratio, base metals are not included
Cash Costs: Reducing Costs – Six
Consecutive Quarters
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0
2
4
6
8
10
12
14
16
18
0
2
4
6
8
10
12
14
16
18
Cash
Costs
Per
Ounce
Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09
HL
EXK/EDR
GPR
CDE
HOC
PAAS
FR
Relative Valuations – Senior Producers
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HOC
CDE
HL
FRES
SLW
EXK/EDR
0
50
100
150
200
250
300
350
400
0 1 2 3 4 5 6 7 8
PAAS
Adjusted Market Cap Divided by Silver Reserves + Resources
Adjusted
Market Cap
Divided
By
Projected
(2009)
Silver
Production
Relative Valuations – Junior Producers
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Adjusted Market Cap Divided by Silver Reserves + Resources
Adjusted
Market Cap
Divided
By
Projected
(2009)
Silver
Production
GPR
FREXN
FVI
SPM
0
25
50
75
100
125
150
0 1 2 3 4 5 6 7 8 9 10 11
EXK/EDR
Beta Response Relative To Other Producers Since
March 2008
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Cash Flow Leverage For A $1/oz. Change In The Silver
Price
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Social Responsibility
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Endeavour Silver strives to improve
the quality of life in the Mexican
communities in which it works.
Safety: Safety is a priority. We
operate continuous training
programs, develop active mine
rescue teams, and have hired new
safety staff plus built a new safety
building.
Environment: More green areas
added, more trees planted, water
recycled, mineral waste disposed in
an environmentally responsible
manner.
Community: Donated construction
materials to maintain sustainability
of the community, supported local
sport teams, supported local
festivities.
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Management Team: A Wealth of Experience
• Bradford Cooke, M.Sc, P.Geo. - Chairman and CEO - Professional Geologist with 30+ years
experience in exploration management and financing including Shell, Chevron, Noranda
and Canarc.
• Godfrey Walton, M.Sc, P.Geo. - President and COO - Professional Geologist with 30+ years
mine exploration and development including Chevron, Hemlo Gold, Canarc, others
• Dan Dickson, CA, CFO - Chartered Accountant with 7 years experience in audit and accounting
including 5 years with KPMG
• David Howe, M.Sc., - VP, Operations - Professional Geologist with 20+ years experience,
primarily in Latin America, with Hecla, St. Ann Jamaica Bauxite
• Barry Devlin, M.Sc., P.Geo. - VP, Exploration, Professional Geologist with 25+ years experience in
mine exploration and project management, including Hecla, US Borax, others
• Hugh Clarke - VP, Corporate Communications, Communications specialist with 30+ years
experience in corporate finance, development, investor marketing and communications
• Miguel Ordaz, Ing. - Projects Director and Legal Representative, Mexico Geological Engineer
with 30+years experience Mexican mineral exploration and mine management
• Len Harris, P.Eng. - Director, Metallurgical Engineer - Former President of Newmont Peru
responsible for development of the huge Yanacocha gold mine.
• Geoff Handley, B.Sc. - Director, Geologist with over 30 years experience in global exploration,
acquisitions, planning, most recently Executive VP, Strategic Development, Placer Dome
• Mario Szotlender, B.IR. - Director, Businessman specializing in financing and managing new
business ventures for numerous private and public companies over the past 20 years
• Rex McLennan, B.Sc., M.B.A.,-Director, Over 25 years industry experience including CFO and
Executive VP with Placer Dome Inc. until 2005
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Value Proposition
• Our goal is to become one of the top mid-tier producers of silver
(5-10 million oz per year)
• We’ve already grown silver production 7 fold in our first 5 years
(2.6 million oz in 2009)
• Organic potential to significantly increase silver production over
next 2 years by expanding the mines to fill the plants
• Acquisition potential to double silver production and attract
mid-tier silver market multiple
• We have the mines, management, and share structure to
deliver out-performance
• Endeavour offers excellent value compared to its peer group
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Contact Us
Endeavour Silver Corp.
#301-700 West Pender Street
Vancouver, BC, V6C 1G8
Canada
www.edrsilver.com
Phone: 1-604-685-9775 Fax: 1-604-685-9744
Canada and US Toll-Free: 1-877-685-9775