Endeavour Silver Corp. (NYSE:EXK) Q3 2019 Earnings Conference Call Transcript

Nov 05, 2019 • 01:00 pm ET

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Endeavour Silver Corp. (NYSE:EXK) Q3 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Thank you for standing by. This is the conference operator. Welcome to the Endeavour Silver Corp 2019 Third Quarter Financial Results 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, Investor Relations. Please go ahead.

Executive
Galina Meleger

Thank you, operator. Good morning, everyone and welcome to the Endeavour Silver 2019 third quarter financial results conference call. With me on the line today, we have the Company's Chief Executive Officer, Bradford Cooke; our Chief Financial Officer, Dan Dickson; and our Chief Operating Officer, Godfrey Walton.

Before we get started, I'm required to remind you that certain statements on today's 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 figures, 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.

On behalf of Endeavour Silver, I'd like to thank you again for joining our call today. And, I'll now turn it over to our CFO, Dan Dickson.

Executive
Dan Dickson

Thank you, Galina, and welcome everybody to our third quarter conference call. As usual, we'll start off with a high level overview of our third quarter performance and then, we'll open it up for Q&A.

Our financial performance was generally lower year-on-year, largely due to our lower production profile operational challenges that we've previously highlighted, leading to our higher unit costs. Our revenue was down 24% to $28.6 million from the sale of 835,000 ounces of silver and 9,375 ounces of gold, averaging the sale price of $17.52 for silver and $1,489 for gold.

On a year-to-date basis, our revenue now totaled $87.1 million. After quarterly cost of sales of $30.3 million, mine operating earnings amounted to negative $1.7 million from our operations in Mexico, which drove our overall net loss to negative $6.8 million or $0.05 a share for the quarter. If we remove the impacts of non-cash items, we declared an EBITDA of $1 million in Q3 and operational cash flow before working capital changes contributed $2.1 million in Q3.

As per our news release this morning, we are now starting to see improvements from the operational challenges we implemented in the second quarter. Following the company's-wide operational review, notwithstanding the recent progress in the operating performance of the mines, we announced in today's news release that management does not expect to meet its 2019 production and cost guidance, and we will not be providing guidance for the balance of the year, as we evaluate alternatives at the El Cubo mine, which includes the possible closure.

We do maintain a strong balance sheet and we finished the quarter with