Thank you for standing by. This is the conference operator. Welcome to the Endeavour Silver 2019 Year-End Conference Call [Operator Instructions]. I would now like to turn the conference over to Galina Meleger, the Director of Investor Relations. Please go ahead.

Thank you, operator. Good morning, everyone. And welcome to the Endeavour Silver 2019 fourth quarter and year-end financial results conference call. With me on the line today we have the company's Chief Executive Officer, Brad Cooke; our Chief Financial Officer, Dan Dickson and our Chief Operating Officer, Godfrey Walton. Before we get started, I'm required to remind you that certain statements on today's call will contain forward-looking information within the meaning of applicable securities laws. These may include statements regarding Endeavour's anticipated performance in 2020 and future years, including revenue and cost figures, silver and gold production, grades and recoveries and the timing and expenditures required to develop new silver mines in mineralized zones. We do not intend to and do not assume any obligation to update such forward-looking information other than as required by applicable law. So on behalf of Endeavour Silver, I'd like to thank you again for joining our call. And I'll now turn it over to our CEO, Brad Cooke.

Thank you, Galina. And welcome everyone to our year-end financials call. A pretty mixed bag 2019, which really was our most challenging in our 15-year history, both operationally and financially. Our financial performance last year was negatively impacted by significant operating issues and higher costs at each of the mine. As a result, our gross revenue declined to $121.7 million on the year based on the sale of 4.1 million ounces of silver and 39,000 ounces of gold. Our cash flow declined to negative $8.9 million and we recorded a net year loss of $48.1 million. The losses were mainly due to the accumulation of higher than historic operating costs, higher general and administrative costs, higher exploration costs and very significant depreciation depletion charges due to our short mine lives. We were able to come out of the year with a relatively clean balance sheet of $23.4 million of cash and $38.4 million of working capital and the only term liabilities are related to loans for equipment. Our metal production was 4 million ounces of silver and 39,000 ounces of gold and our operating costs for the year were on a cash basis $12.85 per ounce of silver net of the gold credits and the all-in sustaining costs were $21.19 per ounce of silver net of the gold credits. So that was a pretty tough year. Our response to a terrible start to the year last year was basically sweeping changes throughout all of our operations. And we literally cleaned house, so we have new site management at each of the operations. We purchased or leased and also rented new equipment so that we could have full equipment availability. We changed the mine plans, which unfortunately put us behind the [eight-wall] in terms of our mine developments compared to the…

We will now begin the question-and-answer session [Operator Instructions]. Our first question comes from Joseph Reagor with ROTH Capital Partners. Please go ahead.

I guess first thing, just thinking about the overall process of the turnaround that you guys are in. Is may be feeling of what inning you're in and maybe what steps are left to get you to the finish line with these mines?

Given we started the turnaround at Guanacevi in April I think it's safe to say we're pretty close to the ninth inning on that one. But Godfrey where would you say we're at on Bolanitos?

I would say we're probably around about the fourth to fifth inning in Bolanitos. We still have a lot of work to do ahead of us.

And then further on Bolanitos with obviously your resource grade is quite a bit higher than the production grade expectations? Is this related to more towards mine sequencing, is it related to the issues with the high arsenic ore, and what can be done to kind of bring the average grade up closer to resource grade?

Last year, we had a lot of issues with the arsenic and we're looking at the plant and also at the mine is just how we could sequence that properly. I think we've got through that, we found some solutions in the plant and we'll also change where we're actually mining in the mine. So that's changing mine plan, changing the plant processing. At this point, we're a little bit behind where we should be in development. And so once we can get back on track on the development, I think you'll find that the grades will come back and be closer to our reserve resource grades.

And Joe, specifically it was the arsenic issue that forced us to change the mine plan, because the concentrate off takers once we saw more than 1% arsenic in the cons, they basically said we're not going to take that. So we actually had to stop mining our main stope for 2019 and try and quickly access other stopes which were lower grade and of course falling throughput, falling grades, higher unit costs, we made all of the other changes in Q3. So new management, new equipments, new mine plan and we're only halfway through this new mine plan. We're still starving for high-grade and only mine development, accelerated mine development will get us back on plan. And so that's why I said look to the end of Q2 for Bolañitos to emerge from this process.

And then one final one, if I could, just on the debt financing for Terronera. Can you give us any additional details of what you think that might look like given things keep changing in the overall market?

We were invited to look at the eurobond market last year and we spent a lot of time and money looking at an offering of $100 million bond offering. As it turns out the broker didn't clearly understand what the market was prepared to do for us and so we didn't do that deal. And we're back looking at really two things, either some consortium of secured debt, subordinated debt and/or convertible debt, or the possibility to just go to full feasibility to reduce our cost of capital. We already have an estimate that it could be done this year and for not a big cost. Well that's jumping ahead and we want our Project Manager to really do a full top to bottom review of Terronera and come back to us this quarter with his own personal recommendations. We know we have a GAAP analysis on things that still haven't been optimized. We know that the CapEx seems high compared to what we did at El Cubo seven years ago. So there is still some work to do on final optimization and the feasibility study might be the path to that, but let's wait until we get his recommendations.

[Operator Instructions]. Our next question comes from Chris Thompson with PI Financial. Please go ahead.

I just want to dig into some details here, just looking at the operations. And just correct me if I'm wrong. But I wanted to, I guess you're currently producing at about a 1,000 tonne a day in the Q4, the intention is to pick that up, so about 1,200 tonne a day. And your costs right now are about $132 per tonne milled. When can we see the turnaround? Can you be a little bit more specific on a quarter?

Chris, Dan here. We had a direct production costs in 2019 about $135 per tonne. I think we've touched on this previously even with yourself and on previous calls, historically, we've been down in the $95 to $100 range. Never thought we'd get there. Some of the things that went through on Q4 were still $132 despite getting up to 1,000 tonnes per day, just some additional costs and our mobilization. We've had some success at the Porvenir Cuatro extension land that we acquired or concessioned that rates we acquired from a neighbor of ours, Frisco. So we ended up expensing a lot of development into P4E, because we didn't have reserves and resources there. As of December 31st, we ended up having a total resource base of 495,000 tonnes per day. So we'll be able to capitalize those developments going forward. And what we've already guided out in our 2020 guidance is the cash costs and ultimately consolidated direct costs per tonne. And inside that direct cost per tonne kind of back down to the $110 range, which is what we've seen historically. So we expect that to come. Now we do have a royalty on the P4 extension with Frisco that's going to drive up our operating costs a little bit if we end up doing more production out of there, but ultimately the margins out of that area be significantly higher than those additional costs.

I'm going to ask the same sort of question for Bolanitos, Dan, I think we have discussed this before but just a little -- I mean, where do we stand on the tonnes and where do we stand on the costs there? I know there are little -- I guess, you're a little short on there, is it 1,250 tonnes a day expectation there for this year at some point and then your costs are still a little high here?

Yes. No, absolutely, and you'll see at Bolanitos and anyone that's followed us, will see from Q1 to Q4 our costs rose each quarter at Bolanitos and ultimately, we ended up at the $80 mark, which is the highest in the history of Bolanitos. Historically, we've always run in the mid 60s kind of reached into the 70s here and there, but ultimately drove back down into the $65, $68. On an absolute like gross basis we spent actually a little bit less than we budgeted in 2019, but ultimately, again it comes down to how many tonnes are going through the plant and driving that. And we dipped to below 1,000 tonnes per day in 2019. I think in Q3, we were just over 800 in Q4 we are close to 900, but ultimately not at that 1,000 tonne or 1,100 tonne average which we expected last year. Q2 or Q3, we should be hitting the 1,200 tonne, 1,250 tonne, and ultimately we budgeted out about 1,100 tonnes per day over the course of the year and that's going to drive us back down into the low 70s and ultimately hopefully into the high 60s for 2020.

And then just I guess finally on Compas, you seem to be there on the tonnes, correct me if I'm wrong. But I guess 250 tonne per day mark there but costs are -- I mean, what is the current comparable, what do you see as far as steady state sort of operating costs per tonne?

Originally in our economic study, we are always around $110 range. This year we will be between $110 and $120 is what we expect. I mean our first nine months of production at Compas wasn't as smooth maybe as we hope, we got to that throughput but there's always these little issues that we're working through with any new mine. We did switch out the contractor halfway through the year, their mobilization fees with that. And we are going from a cut and fill method to a semi-long haul method in 2020, ultimately reducing contractors and increasing employee operated from the mine site. We did a lot of still development in 2019 so we'll be moving more to regular like I say, semi-long hauling which should benefit us and just less troubleshooting. We've moved gentlemen out of the plants as well and we think we have a team in place now that we can operate where we expected to operate from our economic studies, going into this operation.

This concludes the question-and-answer session. I would like to turn the conference back over to CEO, Bradford Cooke, for any closing remarks.

Thank you, operator and thanks all for tuning in today. We obviously had a challenging year last year. We hope that this is the last of the bad news we have to report. And as we go forward, shifting our marks for this year, we feel is critically important to seeing the stock perform. We have many other drivers of value but clearly, bouncing back from last year's operating underperformance is tops of our list. Secondly, obviously, we have the best organic growth profile in the silver sector and getting Terronera through the next steps and through the debt financing, so we can break ground would be to create value for stockholders, both short and long-term. And then ultimately and the latter half of this year, we hope to get back to drilling in Chile where we have world-class prospects. And the idea in Chile is that instead of finding more relatively small high grade ore bodies as we've done in Mexico, our attempts in Chile are to try and crack open a game changer discovery, if you will, something that would secure long-term mine life for the company. So we are looking optimistically at 2020 and then we certainly have a tailwind in the metal prices. Thank you all for tuning in and that's all from me.

This concludes today’s conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.