Endeavour Silver's Record Revenue Clouded by Deep Losses and Operational Risks

VANCOUVER, British Columbia – February 27, 2026 – Endeavour Silver Corp. (NYSE: EXK; TSX: EDR) today announced year-end financials that paint a picture of a company in a dramatic, high-stakes transition. While hailing 2025 as a “transformative year” with record revenues and explosive production growth, the celebration is muted by a staggering $119.1 million net loss, soaring costs, and mounting geopolitical risks at its newest flagship mine.

Fueled by the commissioning of its Terronera mine in Mexico and the acquisition of the Kolpa mine in Peru, Endeavour's revenue more than doubled to $467.5 million, a 115% increase from 2024. Silver equivalent production surged by 48% to 11.2 million ounces, driven by these new assets and exceptionally strong realized metal prices of $40.73 per ounce for silver and $3,591 per ounce for gold. “2025 was a transformative year for Endeavour, marked by robust production growth, record revenues and key strategic milestones that have propelled the Company forward,” said CEO Dan Dickson in a statement.

However, a deeper dive into the financial statements reveals a far more complex reality, where the fruits of this aggressive expansion are being consumed by significant financial headwinds and operational challenges.

A Tale of Two Ledgers: Record Revenue, Deeper Losses

The stark contrast between Endeavour’s operational success and its bottom-line result is the central story of its 2025 performance. The $119.1 million net loss for the year is nearly four times the $31.5 million loss reported in 2024. The primary driver of this deficit was not operational failure, but a massive $126.2 million loss on derivative contracts.

These financial instruments, including gold forward swaps and silver collar contracts, were implemented as part of the company's risk management and project financing strategy. Ironically, the very surge in precious metal prices that boosted revenues also caused the paper value of these hedging liabilities to soar. In the fourth quarter alone, the company recorded a $25.4 million loss on gold swaps and a $17.0 million loss on silver collars. These instruments, designed to protect against price drops, effectively capped the company's upside and created significant non-cash losses as market prices far exceeded the hedged levels.

Compounding the issue were sharply rising costs across the board. The company’s All-In Sustaining Cost (AISC)—a critical industry metric for total production cost—jumped 32% to $31.52 per silver ounce. This increase was attributed to higher operating costs, significant sustaining capital expenditures related to the ramp-up of the new Terronera mine, and increased corporate expenses.

Terronera: A Cornerstone's Costly Commissioning

The Terronera mine in Jalisco, Mexico, is the cornerstone of Endeavour’s growth strategy, having commenced commercial production on October 1, 2025. The mine contributed significantly to fourth-quarter production, producing over 352,000 ounces of silver and 8,100 ounces of gold. However, its initial months have been fraught with challenges.

The press release noted that throughput was impacted by “several disruptions related to the start up of new operations,” including electrical issues. Research indicates these problems stemmed from the mine operating on temporary, high-cost diesel generators, leading to inconsistent power and processing. This resulted in exceptionally high direct operating costs at Terronera of $222.57 per tonne during the quarter, well above the company's consolidated average.

Management has outlined a clear path to address these inefficiencies. The most critical step is the planned transition from diesel to more cost-effective liquefied natural gas (LNG) power, which is anticipated in the second quarter of 2026. This move, along with other operational optimizations, is expected to significantly lower the mine's cost profile and improve its contribution to profitability as the year progresses.

Geopolitical Tremors: Security Halts Mexican Operations

Beyond technical ramp-up issues, Endeavour's operations faced a stark reminder of the volatile environment in which it operates. The company confirmed that operations at Terronera were temporarily paused in late February due to “security concerns and temporary blockades in the Jalisco area.”

While operations resumed on February 25, the context of this event is critical. The shutdown coincided with a government-issued “Code Red” in Jalisco, which urged civilians to shelter in place following a major security incident: the reported killing of the notorious leader of the Jalisco New Generation Cartel (CJNG). The ensuing retaliatory violence by the cartel involved highway blockades and attacks across the region, directly impacting supply routes and personnel safety for companies like Endeavour.

This incident highlights the escalating geopolitical risk for miners in Mexico. According to industry analysts, criminal organizations are increasingly involved in extortion, theft, and kidnapping, forcing mining companies to dedicate substantial portions of their budgets—in some cases up to 20% of operational expenses—to security. While the disruption at Terronera was brief, it serves as a potent case study of the jurisdiction risk that investors must weigh, especially amid warnings that such unrest could spread to other key mining states like Zacatecas and Chihuahua.

Strategic Reshuffle for Senior Producer Ambitions

Against this backdrop of financial and operational turbulence, Endeavour executed a significant strategic overhaul of its asset portfolio in 2025, positioning itself for long-term growth. The company completed the acquisition of the Huachocolpa Uno Mine in Peru from Compañia Minera Kolpa for $145 million, marking its first major diversification outside of Mexico.

The Kolpa acquisition is expected to add approximately 5.1 million silver equivalent ounces to Endeavour's annual production, providing a new stream of cash flow from a different jurisdiction. To fund this and streamline its portfolio, the company simultaneously divested its smaller, aging Bolañitos mine in Mexico to Guanajuato Silver for $40 million plus potential contingent payments.

This strategic reshuffle allows Endeavour to focus its capital and management attention on its core growth assets: the new Terronera mine, the newly acquired Kolpa mine, and the advancement of its large-scale Pitarrilla development project in Mexico. With a strong cash position of $215.4 million at year-end, bolstered by a $350 million convertible notes offering, the company appears well-capitalized to pursue this ambitious growth plan, even as it navigates the significant costs and risks that have defined its transformative, yet challenging, year.