Endeavour Silver Corp. (NYSE:EXK) Q1 2019 Earnings Conference Call Transcript

May 06, 2019 • 01:00 pm ET


Endeavour Silver Corp. (NYSE:EXK) Q1 2019 Earnings Conference Call Transcript


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Thank you for standing by. This is the conference operator. Welcome to the Endeavour Silver First Quarter Financial Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. (Operator Instructions)

I would now like to turn the conference over to Galina Meleger, Director of Investor Relations. Please go ahead.

Galina Meleger

Thank you, Operator. Good morning, everyone, and welcome to the Endeavour Silver Corp 2019 First Quarter Financial Results Conference Call. With me on the line today, we have the company's CEO, Bradford Cooke; as well as our President and Chief Operating Officer, Godfrey Walton; and our Chief Financial Officer, Dan Dickson.

Before we get started, I'm required to remind you that certain statements on this call will contain forward-looking information within the meaning of applicable securities laws. These may include statements regarding Endeavour's anticipated performance in 2019 and future years, including revenue and cost forecasts, silver and gold production, grades and recoveries and the timing and expenditures required to develop new silver mines in mineralized zones. We do not intend to and do not assume any obligation to update such forward-looking information other than as required by applicable law.

With that and on behalf of Endeavour Silver, I'd like to thank you again for joining our call today. And I will now turn it over to our CEO, Bradford Cooke.

Bradford Cooke

Thanks, Galina, and welcome everyone to this first quarter financial results conference call on Endeavour Silver. As you have already seen, we had a pretty tough quarter in Q1 2019. We got a very slow start to the year in our operations and that has really impacted our financial performance in Q1. Bolanitos and El Cubo, two of our mines continued to be profitable in the quarter, but Guanacevi, our first mine continued to struggle and incurred almost half of the net loss incurred during the quarter.

We have initiated additional detailed reviews of the mine plan alternatives for Guanacevi, including ways to improve the viability of mining the main Santa Cruz ore body and accelerating the development of the two new ore bodies at Milache and Santa Cruz Sur, but clearly, we need to do more than that. So management has actually implemented multiple measures to improve our operating and financial performance. We've basically initiated cost cuts across the entire range of the company's activities. And so we're dealing with the tough hand we dealt ourselves in Q1 and I'm confident that we'll get through it.

So, the highlights from the first quarter financially were a significant drop in net earnings to a $13 million loss. Cash flow from operations dropped to around $2 million. Mine operating cash flow was around $4.5 million. Revenue decreased to $29 million. That was on the back of lower silver, gold and silver equivalent production respectively 1.07 million ounces of silver, 10,000 ounces of gold for 1.9 million ounces of silver equivalents.

With regard to what we're