Endeavour Silver (EXK) Q3 2026 earnings review
Endeavour Silver profits and cash climb, but outages slow output
Endeavour Silver, a silver and gold miner in Mexico and Peru, generated higher profit and cash flow even as temporary mine outages slowed its production ramp-up. Excluding the Bolañitos mine sold in January, revenue jumped 50% from a year ago to $184 million by our math, driven by the new Terronera mine and a 62% rise in realized silver prices. Operating cash flow reached $77 million after Mexico refunded $50 million in value-added taxes, while all-in sustaining costs dropped 20% from last quarter to $29.54 per ounce.
| Revenue excluding sold Bolañitos mine | $184.5M +50% from a year ago by our math |
|---|---|
| Realized silver price | $62.42/oz +62% from a year ago |
| All-in sustaining cost per ounce | $29.54 -20% from last quarter by our math |
| Full-year production outlook | Unchanged middle of the range: 8.6M silver oz |
⚖️ Verdict: 🟢 Bullish
The story got better because Terronera proved its low-cost profile and tax refunds plus hedge settlements repaired the balance sheet. Terronera posted negative $0.20 cash costs per silver ounce after gold credits, and Endeavour Silver finished settling its silver price collars in July. One caution: an 11-day August shutdown at Terronera and a trunnion replacement at Guanaceví held back volume, while part of the Pitarrilla growth spending will slip into 2027.
The question now is whether the mines can run without interruption in the fourth quarter to hit the full-year production and cost targets. By our math, reaching the middle of the annual silver plan requires fourth-quarter output to jump 28% from the third quarter, while nine-month all-in sustaining costs of $34.32 per ounce remain well above the $27.00 to $28.00 annual target. Fourth-quarter production volumes and unit costs will tell.
🐂 Bull Case
Terronera and Silver Prices Lifted Operating Margin
Endeavour Silver, a precious metals miner in Mexico and Peru, expanded its mine operating margin by 26.3 percentage points from a year ago to 37.2%, by our math. Direct production costs — the expense of mining and milling ore — dropped by 21.1 percentage points of revenue to 44.7%, because its new Terronera mine in Mexico ramped up alongside surging metal prices.
- Terronera mine operating earnings: $34.8 million, compared to a $3.6 million loss a year ago
- Terronera cash cost per silver ounce: negative $0.20, after crediting $7,157 ounces of gold by-product
- Consolidated all-in sustaining cost (AISC), total ongoing mining and capital cost per ounce: $29.54, down 19.9% from last quarter by our math
- Revenue excluding the sold Bolañitos mine: up 50.4% from a year ago to $184.5 million, by our math
That cost drop matters because nine-month AISC still sits at $34.32 per ounce, above the company's earlier $27.00 to $28.00 full-year target. Terronera's gold credits lowered consolidated cash costs after by-product credits by 8.5% from a year ago to $16.55 per ounce, proving the new mine can bring company-wide unit costs down when it runs.
What to watch: Terronera's quarterly cash cost and gold grades in the fourth-quarter report. Sustained sub-zero cash costs at Terronera would pull full-year consolidated AISC closer to the company's target range.
Tax Refunds and Hedge Settlements Strengthened Cash
The Canadian-listed miner has struggled with cash tied up in Mexican value-added tax, known as Impuesto al Valor Agregado (IVA), and heavy derivative liabilities from project financing hedges. In August 2026, Mexican tax authorities refunded $50.2 million in IVA claims and interest, cutting total IVA receivables more than in half since December to $30.1 million.
Those tax refunds boosted operating cash flow to $76.5 million, or $35.2 million excluding the IVA working capital inflow by our math. Meanwhile, Endeavour Silver finished settling its 968,000 ounces of silver price collar contracts in July and paid $21.9 million in cash during the quarter to settle derivative liabilities. Cash reached $287.9 million, exceeding loans and convertible notes by $37.2 million.
What to watch: quarterly derivative cash settlements over the next three quarters. Once the remaining gold swaps expire in July 2027, operating cash flow will stop funding hedge losses and can fund the Pitarrilla development project.
🐻 Bear Case
Mine Outages and Lower Grades Slowed Production
Endeavour Silver aims to become a senior silver producer through its new Terronera mine and expanded Kolpa mine in Peru. However, quarterly output hit operational snags due to a "suspension of operations at Terronera from August 12 to August 23, 2026, and temporary reduction of capacity at Guanaceví from September 21 to October 13, 2026 in order to replace the primary mill head and trunnion", the company said.
At Guanaceví, silver grades dropped 24% from a year ago to 257 grams per tonne, which management attributed to "ore extraction conducted outside the planned mining areas to preserve reserves and maximize the long-term exploitation potential of the mine". Consequently, Guanaceví silver production fell 31% to 702,972 ounces, and consolidated revenue fell 13.0% from the second quarter to $184.5 million, by our math.
These outages challenge the full-year production plan. With 5.92 million silver ounces produced in the first nine months, Endeavour Silver must produce 2.68 million ounces in the fourth quarter to reach the 8.6 million ounce middle of its annual target, by our math — a 28% jump from the third quarter despite Guanaceví running at reduced capacity until October 13.
What to watch: fourth-quarter mill throughput and silver grades at Terronera and Guanaceví. Any further unplanned downtime will leave full-year silver production below the 8.3 million ounce bottom of the company's target range.
Ore Purchases and Labor Pressured Site Costs
While Terronera lowered company-wide unit costs, site expenses rose at the other two mines. At Guanaceví, local third-party ore purchases reached 33% of mill feed (29,707 tonnes), doubling purchase costs to $146.01 per milled tonne because ore prices track silver prices. Combined with lower grades, Guanaceví cash costs rose 48% from a year ago to $33.97 per ounce.
At Kolpa in Peru, expanding the plant to 2,500 tonnes per day lifted quarterly ore processed by 31% to 256,052 tonnes. Yet the mine fed lower-grade ore into the larger mill, cutting silver grades by 12% to 92 grams per tonne and keeping silver equivalent output flat at 1.29 million ounces. Kolpa also faced "increasing labor costs resulting from a shortage of skilled mining personnel as well as increased employee participation costs", the company wrote.
What to watch: Kolpa's silver grades as underground mine development and camp upgrades progress. If the mine cannot access higher-grade zones to match its 2,500-tonne daily mill capacity, unit production costs per ounce will keep rising.
Gold Hedges and Pitarrilla Delays Weigh on 2027
Two forward overhangs remain on the balance sheet and project pipeline. First, Endeavour Silver still holds 26,229 ounces of gold forward swap contracts locked in at $2,311 per ounce through July 2027, compared to a realized gold price of $4,290 per ounce this quarter. Those swaps sit as a $49.6 million current liability and caused $61.6 million in realized cash losses over the first nine months.
Second, the Pitarrilla project in Mexico — the cornerstone development asset for the miner's long-term growth plan — is running behind its spending schedule. Management noted in its forward-looking disclosures that "planned expenditures at Pitarrilla will not be incurred in 2026 in full, with project and activities expected to shift into 2027", after spending $10.5 million on exploration, evaluation and development this quarter.
What to watch: the completion date of the Pitarrilla feasibility study and the updated 2027 capital budget. Shifting spending into 2027 delays the construction timeline for Endeavour Silver's next major mine.
👓 Other Themes
Metal Prices Outpaced a Stronger Mexican Peso
Market prices moved sharply in both directions for the miner. Realized silver prices jumped 62% from a year ago to $62.42 per ounce, and realized gold prices rose 21% to $4,290 per ounce, lifting revenue across all three mines. Offsetting part of that gain, an 11% stronger Mexican peso over the first nine months inflated US-dollar labor costs in Mexico, while higher metal prices automatically increased government royalty expenses.
💲 Other KPIs
Cash spending on mineral properties, plant and equipment fell 21.3% from a year ago and dropped from 24.3% of revenue to 14.8%, by our math. Capital spending has slowed over the past three quarters ($37.9 million in Q1, $29.1 million in Q2, $27.3 million in Q3) following the completion of Terronera construction, lifting quarterly free cash flow to $49.2 million.
Short-term customer and other receivables rose 76.2% from $26.0 million at year-end 2025, by our math, pulling $7.9 million of working capital in the third quarter. Trade receivables from concentrate sales — unrefined metal shipments whose final price settles months after delivery — reached $37.7 million, boosted by $17.0 million in positive provisional pricing adjustments as silver prices climbed.
Diluted weighted average shares increased 12.3% from 291.4 million a year ago, by our math, but stayed unchanged from the first quarter's 327.0 million. The increase stems from 28.1 million shares underlying the $350 million convertible senior notes issued in December 2025, which now count toward diluted earnings per share because the silver producer is profitable.
🔮 Guidance
Unchanged. The full-year target calls for about 8.6 million ounces of silver at the middle of the range, up 32.6% from 2025. By our math, producing 5.92 million ounces in the first nine months leaves 2.68 million ounces for the fourth quarter — up 32.2% from a year ago and 28.0% above the third quarter.
Unchanged. The annual plan targets 47,000 ounces of gold at the middle of the range, a 26.5% increase over 2025. By our math, after producing 32,340 ounces in the first nine months, the precious metals group needs 14,660 ounces in the fourth quarter, which is 6.3% above last year's fourth quarter and 44.8% above the third quarter.
Unchanged. The full-year cost target sits at $27.50 per payable silver ounce at the middle of the range, down from $31.52 in 2025. Nine-month AISC averaged $34.32 per ounce, and even third-quarter AISC of $29.54 per ounce stayed above the top of the annual range due to higher royalty and third-party ore costs at higher silver prices.
❓ Key Questions
What caused the 12-day August shutdown at Terronera?
The MD&A discloses a suspension of operations at Terronera from August 12 to August 23, 2026, without stating the cause in the production overview. Investors need to know if this was a recurring electrical issue or a one-time mechanical repair.
How much Pitarrilla capital spending shifts into 2027?
Management raised the 2026 Pitarrilla budget to $65.8 million last quarter, but now states that planned 2026 expenditures will not be spent in full and will shift into 2027. Quantifying the deferred dollar amount will clarify 2026 free cash flow and the project's timeline.
Can Q4 production reach the 8.3M oz silver floor?
Reaching the bottom of the 8.3 to 8.9 million ounce silver target requires 2.38 million ounces in Q4, up 14% from Q3, even though Guanaceví ran at reduced capacity until October 13 for mill head and trunnion replacement.
How long will Guanaceví mine outside planned reserve areas?
Guanaceví extracted lower-grade ore outside planned areas to take advantage of high silver prices and preserve reserves, pushing site cash costs to $33.97 per ounce. Investors need to know what silver price threshold keeps this lower-grade strategy in place.