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Endeavour Silver posts net loss, withholds metal sales in third quarter

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(Kitco News) - Endeavour Silver (NYSE: EXK; TSX: EDR) reported Tuesday that in Q3 2021, the company generated net revenue of $34.6 million, a decrease of 3% compared to $35.6 million in the same period in 2020 due to withholding metal sales during the quarter, which significantly increased finished goods inventory.

Earnings and financial metrics including mine operating cash flows, operating cash flows and EBITDA were also impacted by the increased holding of production inventory, the company said in a statement.

The company added it has significantly increased its finished goods silver and gold inventory to 1,067,404 oz and 3,239 oz, respectively at September 30, 2021 compared to 459,659 oz silver and 2,835 oz gold at June 30, 2021.

According to a statement, net loss was $4.5 million ($0.03 loss per share) compared to net earnings of $0.5 million (loss of $0.00 per share) in Q3 2020. The company explained that the loss was due to the fact that the finished goods inventory was carried at a cost of $18.3 million compared to the estimated fair market value of $29.2 million at quarter end.

CEO Dan Dickson commented, “Since our Q2 reporting, our operating costs have decreased to levels that are closer to our 2021 guidance. We continued to withhold metals sales in Q3, which has dampened our financial performance and Q3 earnings. At quarter end, we held over 1 million ounces of silver and 1,200 ounces of gold bullion. We expect to sell this inventory in the coming months, which will ensure a strong finish to the year.”

Endeavour Silver operates two silver-gold mines in Mexico: the Guanaceví mine in Durango state and the Bolañitos mine in Guanajuato state and has recently suspended operations at the El Compas mine in Zacatecas state.

The company is currently advancing the Terronera mine project towards a development decision, pending financing and final permits and exploring its portfolio of exploration and development projects in Mexico, Chile and the United States to facilitate its goal to become a premier senior silver producer.

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