EXK - Endeavour Silver (EXK)(EDR:CA) - Keeping an Eye on Terronera
Fourth quarter and full year 2021 results. Endeavour reported adjusted fourth quarter and full year 2021 losses per share of $(0.00) and ($0.05) per share, respectively, compared to fourth quarter and full year 2020 EPS of $0.13 and $0.01. We had forecast fourth quarter earnings of $0.03 per share and a full year loss of $(0.01) per share. Adjusted fourth quarter and full year EBITDA were $11.5 million and $36.0 million, respectively. While revenue was largely in line with our estimates, costs were higher. At quarter end, Endeavour held 1,028,340 ounces of silver and 1,044 ounces of gold in bullion inventory, and 54,270 ounces of silver and 2,630 ounces of gold in concentrate inventory.Updating estimates. We are maintaining our 2022 and 2023 EPS estimates of $0.14 and $0.16, respectively. We forecast 2022 and 2023 EBITDA of $57.5 million and $67.9 million, respectively. While we had previously assumed the company sells down its inventory in 2022, the timing could accelerate within quarters due to recent strength in commodity prices.Terronera financing. Endeavour ended the quarter with $103.3 million of cash. The company expects to fund Terronera mine development with a combination of cash on hand, operating cash flow, and debt financing. Management has been working with banks to provide a debt facility with $80 million to $100 million of capacity and expects to receive committed financing shortly. Once financing is in place, the Board will approve construction which is expected to take 24 months with Terronera still expected to achieve commercial production in the first half of 2024.Rating is Market Perform. We think investors will remain focused on how the company’s intermediate and long-term growth pipeline develops, along with the company's ability to manage costs. We think near-term risk and reward is balanced given steady production levels in 2022 and 2023 and a relatively high operating cost profile which could improve when Terronera goes into commercial production. Read More >>