Endeavour Silver Completes Acquisition of Minera Kolpa

Rhea-AI Summary

Endeavour Silver (NYSE: EXK) has completed the acquisition of Minera Kolpa and its main asset, the Huachocolpa Uno Mine, for a total consideration of $145 million. The deal includes $80 million in cash and $65 million in Endeavour common shares, plus potential additional contingent payments of up to $10 million and assumption of $20 million in net debt. The acquisition was funded through a $35 million copper stream with Versamet Royalties and a $50 million bought deal equity financing. Kolpa, located in Peru, is a silver-focused operation with over 25 years of continuous production, currently operating at 1,800 tonnes per day with plans to expand to 2,500 tpd. In 2024, the mine produced 2.0 million ounces of silver and other metals, totaling approximately 5.1 million silver-equivalent ounces. The mine recently obtained environmental permits for expansion, with operating permits expected in Q3 2025.

Positive

• Acquisition adds immediate production of 2.0M oz silver annually (5.1M silver-equivalent oz)
• Environmental permit already obtained for expansion from 1,800 tpd to 2,500 tpd
• Strong Q1 2025 production of 567,269 oz silver (1.2M silver-equivalent oz)
• Operating permit for increased production capacity expected in Q3 2025
• Exploration upside with $8M planned exploration program

Negative

• Significant acquisition cost of $145M plus up to $10M in contingent payments
• Addition of $20M in net debt to the balance sheet
• Required substantial financing through copper stream ($35M) and equity ($50M)
• Significant sustaining capital requirements of $13M for remainder of year

Insights

Mining Industry Analyst

Kolpa acquisition adds 5.1M silver-equivalent oz annually with expansion potential, diversifying Endeavour's production beyond Mexico into Peru.

Endeavour Silver's $145 million acquisition of Minera Kolpa marks a strategic expansion adding a producing silver mine with 25 years of operational history. Kolpa currently produces at 1,800 tonnes per day and delivered 2.0 million ounces of silver in 2024, plus significant base metals production, totaling 5.1 million silver-equivalent ounces.

The acquisition's growth potential is evident in the recently secured environmental permit for expansion to 2,500 tpd (a 39% capacity increase), with operating permits expected in Q3 2025. This expansion pathway is already defined, with infrastructure development underway.

Kolpa's production profile includes substantial base metals – 19,820 tonnes of lead, 12,554 tonnes of zinc, and 518 tonnes of copper in 2024 – complementing the silver focus and potentially providing revenue diversification during silver price fluctuations.

The $8 million exploration program aims to define and expand recent discoveries, with plans to publish a resource estimate. This suggests Endeavour sees resource expansion potential beyond current production levels, which could extend mine life or support further throughput increases.

This acquisition expands Endeavour's geographic footprint into Peru, complementing their existing Mexican operations and development projects. The addition of an operating mine with immediate production comes as Endeavour continues development of their cornerstone Terronera project in Mexico.

Financial Analyst

Balanced $145M acquisition financing combines $35M copper stream, $50M equity, with minimal additional debt while adding immediate production.

Endeavour structured this $145 million acquisition with a balanced approach: $80 million in cash (55%) and $65 million in shares (45%), plus potential contingent payments of up to $10 million. The deal includes assuming $20 million in net debt from Minera Kolpa.

The financing strategy leverages multiple capital sources: a $35 million copper stream with Versamet Royalties and a recently closed $50 million equity offering. This approach distributes funding across different mechanisms rather than relying heavily on debt or equity alone.

Kolpa's anticipated capital requirements appear manageable, with $13 million in sustaining capital for 2025 (including $4 million for tailings dam expansion and $3 million for mine infrastructure). The press release indicates these expenditures will be funded from operating cash flows, suggesting the asset is immediately cash generative.

The $8 million exploration program represents an investment in potential resource growth, which could enhance the long-term value proposition beyond the immediate production addition.

Q1 2025 production of 567,269 ounces of silver (approximately 1.2 million silver-equivalent ounces) provides a recent performance indicator, suggesting an annualized rate of 4.8 million silver-equivalent ounces, slightly below 2024's 5.1 million ounces.

The copper stream financing is noteworthy as it leverages Kolpa's copper production, potentially creating a more favorable cost of capital compared to traditional debt while preserving equity. The combination of financing vehicles demonstrates a sophisticated approach to funding this significant acquisition while maintaining financial flexibility.

All dollar amounts are stated in United States (U.S.) Dollars unless otherwise noted.

VANCOUVER, British Columbia, May 01, 2025 (GLOBE NEWSWIRE) -- Endeavour Silver Corp. (“Endeavour” or the “Company”) (NYSE: EXK; TSX: EDR) is pleased to announce the completion of the acquisition of Compañia Minera Kolpa S.A. (“Minera Kolpa”), and its main asset, the Huachocolpa Uno Mine (“Kolpa”), pursuant to the share purchase agreement (the “Agreement”) previously announced in the Endeavour news release on April 1, 2025.

Under the terms of the Agreement, Endeavour acquired all of the outstanding shares of Minera Kolpa, and its main asset, Kolpa, from its shareholders, which are affiliates of Arias Resource Capital Management and Grupo Raffo. The total consideration for the acquisition is $145 million, comprised of $80 million payable in cash and $65 million payable in common shares of Endeavour upon closing. In addition, as part of the transaction, Endeavour has agreed to pay up to an additional $10 million in contingent payments, payable in cash, upon the occurrence of certain events and will also add approximately $20 million in net debt which will remain outstanding and repayable by Minera Kolpa.

The Company is also pleased to announce the closing of the US$35 million copper stream with Versamet Royalties Corporation, which will be used to fund the cash component of the acquisition, along with the $50 million bought deal equity financing, the closing of which was previously announced in the Endeavour news release dated April 16, 2025.

About Kolpa

Minera Kolpa is a long-standing, silver-focused mining operation situated in the districts of Huachocolpa and Santa Ana, roughly 490 kilometers southeast of Lima, Peru. With over 25 years of continuous production, Kolpa currently operates at a capacity of 1,800 tonnes per day (tpd) and offers strong exploration upside, with plans underway to expand throughput to 2,500 tpd. In 2024, the mine produced 2.0 million ounces of silver, along with 19,820 tonnes of lead, 12,554 tonnes of zinc, and 518 tonnes of copper, totaling approximately 5.1 million silver-equivalent ounces. In Q1 2025, the mine produced 567,269 ounces of silver, along with 5,302 tonnes of lead, 3,416 tonnes of zinc, and 72 tonnes of copper, totaling approximately 1.2 million silver-equivalent ounces.

In April, Kolpa obtained an environmental permit to expand the operations capacity to 2,500 tpd and are now working toward obtaining an operating permit for the increased production capacity expected in Q3 2025.

For the remainder of the year, sustaining capital is estimated to be $13 million which includes $4 million expansion of the tailings dam, $3 million has been allocated for mine infrastructure and ramp development and $5 million on various projects.

Additionally, management has an $8 million planned exploration program to further define and potentially expand recent near-mine exploration discoveries, target potential extensions of known mineralization and publish a resource estimate.

The sustaining capital and exploration expenditures are expected to be paid from operating cash flows.

About Endeavour Silver

Endeavour is a mid-tier precious metals company with a strong commitment to sustainable and responsible mining practices. With operations in Mexico and Peru, and the development of its new cornerstone mine in Jalisco state, Terronera, the company aims to contribute positively to the mining industry and the communities in which it operates. In addition, Endeavour has a portfolio of exploration projects in Mexico, Chile and the United States to facilitate its goal to become a premier senior silver producer.

Contact Information

Allison Pettit
Director, Investor Relations
Email: apettit@edrsilver.com

Cautionary Note Regarding Forward-Looking Statements

This news release contains “forward-looking statements” within the meaning of the United States private securities litigation reform act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities legislation. Such forward-looking statements and information herein include but are not limited to statements regarding future payments under the Agreement; the Company’s forecasted operations, expenditures; the Company’s exploration programs, extensions of mineralization and the publishing of future resource estimates; and the timing and results of various related activities. The Company does not intend to and does not assume any obligation to update such forward-looking statements or information, other than as required by applicable law.

Forward-looking statements or information involve known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, production levels, performance or achievements of Endeavour and its operations to be materially different from those expressed or implied by such forward-looking statements. Such factors include but are not limited to changes in expected sustaining capital and exploration costs ; the ongoing effects of inflation and supply chain issues on mine economics; ability to continue to comply with the terms of the project debt facility; changes in national and local governments, legislation, taxation, controls, regulations and political or economic developments in Canada, Chile, the USA and Mexico; timing and content of work programs; results of exploration activities and development of mineral properties; financial risks due to precious metals prices; operating or technical difficulties in mineral exploration, development and mining activities; risks and hazards of mineral exploration, development and mining; the speculative nature of mineral exploration and development; risks in obtaining necessary licenses and permits; fluctuations in the prices of silver and gold, fluctuations in the currency markets (particularly the Mexican peso, Chilean peso, Canadian dollar and U.S. dollar) and challenges to the Company’s title to properties; as well as those factors described in the section “risk factors” contained in the Company’s most recent form 40F/Annual Information Form and the Prospectus Supplement filed with the S.E.C. and Canadian securities regulatory authorities.

Forward-looking statements are based on assumptions management believes to be reasonable, including but not limited to: the forecasted capacity and production estimates for the Kolpa mine, the reliability of mineral resource estimates, the continuation of exploration and mining operations, the continued operation of the Company’s mining operations, no material adverse change in the market price of commodities, forecasted mine economics, mining operations will function and the mining products will be completed in accordance with management’s expectations and achieve their stated production outcomes, resource and reserve estimates, metal prices and such other assumptions and factors as set out herein. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or information, there may be other factors that cause results to be materially different from those anticipated, described, estimated, assessed or intended. There can be no assurance that any forward-looking statements or information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements or information. Accordingly, readers should not place undue reliance on forward-looking statements or information.

FAQ

What is the total cost of Endeavour Silver's (EXK) acquisition of Minera Kolpa?

The total acquisition cost is $145 million, consisting of $80 million in cash and $65 million in Endeavour common shares, plus up to $10 million in contingent payments and assumption of $20 million in net debt.

How much silver does the Kolpa mine produce annually?

In 2024, Kolpa produced 2.0 million ounces of silver, along with other metals, totaling approximately 5.1 million silver-equivalent ounces.

What is the current production capacity of Kolpa mine and its expansion plans?

Kolpa currently operates at 1,800 tonnes per day and has received environmental permits to expand to 2,500 tonnes per day, with operating permits expected in Q3 2025.

How did Endeavour Silver (EXK) finance the Kolpa acquisition?

The acquisition was financed through a $35 million copper stream with Versamet Royalties Corporation and a $50 million bought deal equity financing.

What are the planned capital expenditures for Kolpa mine in 2025?

The mine has planned $13 million in sustaining capital expenditures and an additional $8 million exploration program for 2025.