Endeavour Silver Corp.

Condensed Consolidated Interim Financial Statements

Unaudited
Three and Six Months Ended June 30, 2025 and 2024

ENDEAVOUR SILVER CORP.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

(unaudited)

(expressed in thousands of US dollars)

The accompanying notes are an integral part of these consolidated financial statements.

Approved on behalf of the Board:

ENDEAVOUR SILVER CORP.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE EARNINGS (LOSS)

(unaudited)

(expressed in thousands of US dollars, except for shares and per share amounts)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

ENDEAVOUR SILVER CORP.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(unaudited)

(expressed in thousands of US dollars, except for shares and per share amounts)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

ENDEAVOUR SILVER CORP.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

(unaudited)

(expressed in thousands of US dollars)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

1. CORPORATE INFORMATION

Endeavour Silver Corp. (the "Company" or "Endeavour Silver") is a corporation governed by the Business Corporations Act (British Columbia, Canada). The Company is engaged in silver mining in Mexico and Peru and related activities including acquisition, exploration, development, extraction, processing, refining and reclamation. The Company is also engaged in exploration activities in Chile and United States. On May 1, 2025, the Company completed its acquisition of Compañia Minera Kolpa S.A. ("Minera Kolpa")"), which operates the Huachocolpa Uno Mine in Peru (Note 4). The address of the registered office is Suite 3500, 1133 Melville Street Vancouver, BC, Canada V6E 4E5.

2. BASIS OF PRESENTATION

These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting and do not include all of the information required for full annual financial statements and should be read in conjunction with the Company's annual audited consolidated financial statements as at and for the year ended December 31, 2024.

Certain comparative figures have been reclassified to conform with the current period's presentation.

The Board of Directors approved these condensed consolidated interim financial statements for issue on August 12, 2025.

The preparation of consolidated financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

These consolidated financial statements are presented in the Company's functional currency of US dollars and include the accounts of the Company and its subsidiaries all of which are wholly owned including Minera Kolpa for the period May 1, 2025, to June 30, 2025, and as of June 30, 2025. The Company determined that the functional currency of Minera Kolpa is also US dollars. All intercompany transactions and balances have been eliminated upon consolidation of these subsidiaries.

3. MATERIAL ACCOUNTING POLICIES

The accounting policies applied in these condensed consolidated interim financial statements are the same as those applied in  the Company's annual audited consolidated financial statements as at and for the year ended December 31, 2024, except as described below. 

In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Company's accounting policies and the key sources of estimation uncertainty were the same as those that were applied to the annual audited consolidated financial statements for the year ended December 31, 2024, except for:

- Estimates and judgements related to the valuation of assets acquired and liabilities assumed in the acquisition of Minera Kolpa (Note 4), including those related to contingent payment that is part of the consideration (Note 18); and

- Estimates and judgements related to accounting treatment and valuation of the copper stream liability (Note 18).

The accounting policies below have been applied consistently to all periods presented and by all subsidiaries in the group.

Business acquisitions

During the period, the Company completed the acquisition of Minera Kolpa, which was accounted for as a business combination under IFRS 3 - Business Combinations (Note 4) using the acquisition method. The cost of an acquisition is measured as the aggregate of the fair values, at the date of exchange, of assets transferred, liabilities incurred or assumed, and equity instruments issued by the Company in exchange for control of the acquiree the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred. The identifiable assets acquired, and liabilities assumed are recognized at their fair values as of the acquisition date. Acquisition-related costs are expensed as incurred.

The results of Minera Kolpa have been included in the condensed consolidated interim financial statements from May 1, 2025 (the "Acquisition Date"). The purchase price allocation is preliminary and subject to adjustment as the Company completes its assessment of the fair values of the assets acquired and liabilities assumed.

Copper stream liability

The Company has entered into a copper stream agreement effective April 1, 2025 (Note 18). The agreement is outside of the scope of IFRS 15 Revenue from contracts with customers, and the Company has determined that the copper stream represents a hybrid financial liability with embedded derivatives. The entire hybrid copper stream liability is designated as fair value through profit or loss under the fair value option. Fair value is determined using observable copper forward prices corresponding to the estimated production and delivery of copper ounces along with an estimate of credit-risk for similar instruments (level 3).

Restricted share units ("RSUs")

The Company has a Share Units Plan for employees and directors as part of its long-term incentive compensation. RSUs are granted in accordance with this plan and generally vest over a period of up to three years.

RSUs are measured at fair value on the grant date and recognized as a share-based compensation expense over the vesting period, with a corresponding increase in equity. The fair value of RSUs is determined based on the market price of the Company's common shares on the grant date. The number of RSUs expected to vest is estimated at each reporting date, and any changes in estimates are recognized prospectively.

Precious metal prepayments obligation

Precious metal prepayments obligation represents the Company's obligation to transfer goods or services to a customer for which consideration has been received. Prepayments obligations arise primarily from advance payments received in respect of future deliveries of metals.

Precious metal prepayments obligation is recognized when payment is received by the Company and is subsequently recognized as revenue when the related performance obligations to deliver metal are satisfied. The Company classifies precious metal prepayments obligation as current and does not adjust it for the effects of a significant financing component when the timing of payment and performance is less than one year.

4. ACQUISITION OF MINERA KOLPA

On the Acquisition Date, the Company completed its acquisition of Minera Kolpa pursuant to a share purchase agreement entered into in April 2025 (the "Agreement"). As a result of the acquisition, Minera Kolpa became a wholly-owned subsidiary of the Company.

The total consideration for the acquisition was $134,265. The following table summarizes the consideration paid as part of the purchase price:

Contingent payment is payable in cash up to an additional $10,000, in increments of $500 for each 1 million silver ounce equivalent defined above 100 million silver ounce equivalents, across proven, probable, measured, indicated and inferred categories in technical report prepared and filed by Endeavour with respect to Kolpa within 24 months of closing of the acquisition.

Primary reason for the acquisition of Minera Kolpa was to acquire their primary asset - Huachocolpa Uno Mine and related facilities, located in the districts of Huachocolpa and Santa Ana, approximately 490 kilometers southeast of Lima, Peru. Minera Kolpa has been in operation for 25 years and its assets include Huachocolpa Uno Mine, processing infrastructure, permits, and associated working capital. Management has concluded that Minera Kolpa constitutes a business, and therefore, the acquisition is accounted for in accordance with IFRS 3 - Business Combinations.

The Company has consolidated the operating results, cash flows, and net assets of Minera Kolpa from the Acquisition Date. The determination of the fair value of assets acquired and liabilities assumed is based on a detailed valuation utilizing income, market, and cost approaches, conducted with the assistance of an independent third party. The purchase price is allocated on a preliminary basis until the final valuation report is completed. This is based on management's best estimates at the time these condensed consolidated interim financial statements were prepared, using information available as of the Acquisition Date. Any future changes to the purchase price allocation may result in adjustments to identifiable assets and liabilities.

The fair value of assets acquired, and liabilities assumed is subject to change for up to one year from the Acquisition Date. If new information arises that impacts management's assessment of fair value as of the Acquisition Date, any adjustments will be recognized retrospectively, and comparative information will be revised accordingly.

Allocation of Purchase Price

The Company determined the fair value of the mining interest using a discounted cash flow model. This model incorporated estimates of: future silver, lead, zinc, and copper prices; projected ore reserves and mineral resources; and anticipated production costs and capital expenditures, based on the life-of-mine plan as of the Acquisition Date. A discount rate of 15.8% was applied, reflecting the Company's assessment of country risk, project-specific risk, and other relevant factors.

The significant assumptions used in the determination of the fair value of the mining interests were as follows:

Pro Forma Financial Information

The following pro-forma financial information presents consolidated results assuming acquisition occurred on January 1, 2025:

These pro forma amounts have been calculated after applying the Company's accounting policies and adjusting the results of Minera Kolpa to reflect the additional depreciation and depletion that would have been recognized assuming the fair value adjustments to property, plant, and equipment, and mining properties had been applied from January 1, 2025.

5. ACCOUNTS AND OTHER RECEIVABLES

The trade receivables include receivables from concentrate sales. The fair value of receivables arising from concentrate sales that contain provisional pricing mechanisms is determined by using the appropriate period end closing prices from the exchange that is the principal active market for the particular metal. As such, these receivables, which meet the definition of an embedded derivative, are classified within Level 2 of the fair value hierarchy (Note 18).

6. IVA RECEIVABLES

As at June 30, 2025, total Mexican subsidiaries value added tax, Impuesto al Valor Agregado ("IVA") of $55,502 (December 31, 2024 - $36,420) has been allocated between the current portion of $53,959, and the non-current portion of $1,543 (December 31, 2024 - $5,119 and $31,301, respectively). The non-current portion relates to Pitarrilla's claims which will be eligible for submission upon generation of revenue (December 31, 2024 - $1,948). At December 31, 2024, $29,353 of non-current IVA tax receivables were related to Terronera's claims which have become eligible and have been submitted for reimbursement during three months ended June 30, 2025 and have been reclassified to current sales tax receivable. During the current period, the Company has made a change in presentation within its statement of financial position to separately disclose IVA receivables from other receivables, in order to provide greater clarity and disaggregation of tax-related assets. As a result, the comparative figures for IVA receivables as at December 31, 2024 have been reclassified from other receivables to align with the current period presentation.

7. INVENTORIES

The finished goods inventory balance as of June 30, 2025 includes a $1,192 provision for the ending stockpile inventory in Terronera, produced at a cost above net realisable value. 

8. MINERAL PROPERTIES, PLANT AND EQUIPMENT AND OTHER NON-CURRENT ASSETS

Included in mineral properties is $171,010 for acquisition and development costs of development properties (December 31, 2024 - $157,146). During the three and six months periods ended June 30, 2025, the Company capitalized borrowing costs related to the Terronera Debt Facility in the amounts of $3,273 and $6,576 respectively, using a capitalization rate of 11.4%.

Other non-current assets include $3,132 (December 31, 2024 - $18,299) of deposits related to items of property, plant and equipment at Terronera.

9. PRECIOUS METAL PREPAYMENTS OBLIGATION

On June 11, 2025, Refinadora Plata Guanaceví S.A. de C.V. ("Guanaceví"), a subsidiary of the Company entered into a prepayment agreement with Auramet International Inc.("Auramet") for an initial term ending May 31, 2026.

Under the agreement, Auramet advances prepayments of up to $15,000 to the Company in consideration for the future delivery of the Guanaceví's precious metal. The advances are repaid by deliveries adjusted for the interest equivalent to SOFR plus 3.75%. The Company may draw additional amounts under the agreement once prior amounts are settled.

The prepayments amount received is initially recognized as a revenue contract liability and is subsequently being recognized as revenue as control of the metal transfers to Auramet and related shipment's performance obligations have been satisfied.

During the three and six months ended June 30, 2025 the Company has received $19,457 prepayments under this agreement. Of the prepayments received, $5,956 was recognized as revenue and the remaining $13,501 is presented as precious metals prepayments obligation in the statement of financial position at June 30, 2025.

10. LOANS PAYABLE

Terronera Debt Facility

The Debt Facility is secured through corporate guarantees from the Company, certain of the Company's subsidiaries and a first ranking security interest over the Terronera project. The Debt Facility is subject to certain customary covenants and, as at June 30, 2025, the Company was in compliance with these covenants. During the second quarter, the Company entered into an amendment of the Debt Facility agreement, increasing the facility for an additional $15 million to a total of $135 million. The  additional tranche was drawn on June 23, 2025, and will be repayable over the 12 months following the date of the statement of financial position. The key terms of the original tranches of Debt Facility remain unchanged. Funds are to be used for completion and ramp up of the Terronera project.

Equipment Financing

The equipment financing is secured by the underlying equipment purchased and is subject to various non-financial covenants, and as at June 30, 2025, the Company was in compliance with these covenants. As at June 30, 2025, the net book value of equipment included $19,515 (December 31, 2024 - $15,661) of equipment pledged as security for the equipment financing.

Kolpa Loans

As part of the Kolpa acquisition, on May 1, 2025, the Company assumed two syndicated loans originally entered into by Minera Kolpa with Banco BTG Pactual S.A. – Cayman Branch and Banco Santander Perú S.A. As collateral for these loans, Minera Kolpa entered into trust agreements and issued promissory notes to the lender. Loans are subject to certain financial covenants, which are based on the Minera Kolpa’s earnings before interest, taxes, depreciation, and amortization. The loans are structured as follows:

- A loan with original balance of $15 million at a variable interest rate of SOFR plus 5.5% for a period of 4.5 years starting May 5, 2022.

- A loan with original balance of $27 million at a variable interest rate called SOFR plus 5%, for a period of 4 years starting January 9, 2024.

11. SHARE CAPITAL

(a) Common Shares

As of June 30, 2025, the Company had 289,830,993 common shares issued, issuable and outstanding, with no par value (December 31, 2024 - 262,323,863). During the six months period ended June 30, 2025, and in order to finance a portion of cash consideration paid on the acquisition of Minera Kolpa, the Company completed a $45 million bought equity financing. Financing was completed on April 8, 2025, issuing 11,600,000 common shares at $3.88 per share. On April 16, 2025, underwriters exercised their over-allotment option, issuing an additional 1,285,000 common shares at $3.88 per share. The Company has received gross proceeds of $49,994, less commission of $2,792 and recognized $640 of other transaction costs related to the financing as share issuance costs, which have been presented net within share capital.

(b) Stock Options

Subsequent to June 30, 2025, an additional 340,232 common shares were issued on the exercise of 340,232 options, with a weighted average exercise price of CAN$5.31.

During the three and six months ended June 30, 2025, the Company recognized share-based compensation expense of $615 and $820 respectively (June 30, 2024 - $421 and $1,132 respectively) based on the fair value of the vested portion of options.

The weighted-average fair values of stock options granted have been estimated using the Black-Scholes Option Pricing Model with the following assumptions:

(c) Share Units Plan

Performance Share Units (PSUs)

Performance criteria are based on the Company's share price performance relative to a representative group of other mining companies. On March 24, 2025, 163,000 PSUs were cancelled as the performance criteria were not met. Of the outstanding PSUs 320,000 PSUs vest on March 6, 2026, 595,000 PSUs vest on March 13, 2027, and 299,900 will vest on April 2, 2028 once certain performance criteria are met.

During the three and six months ended June 30, 2025, the Company recognized share-based compensation expense of $365 and $675 respectively related to the PSUs (June 30, 2024 - $323 and $763 respectively).

Deferred share units (DSUs) - Equity Settled

During the six months ended June 30, 2025, under the Share Units Plan, there were 130,998 DSUs granted (June 30, 2024 - 212,798). During the three and six months ended June 30, 2025, the Company recognized share-based compensation expense of $526 and $551 respectively related to the DSUs (June 30, 2024 - $418 and $435 respectively).

Restricted Share Units (RSUs)

The Company may award to its directors and employees non-transferable RSUs. The awards typically vest over a three-year period and at the election of the company can be settled in equity upon vesting.

(d) Historical Cash Settled Deferred Share Units 

The Company previously had a deferred share unit plan whereby deferred share units were granted to independent directors of the Company. These cash settled deferred share units vested immediately and are redeemable for cash. They are redeemable based on the market value of the units upon certain circumstances, at the time of a director's retirement. Upon adoption of the share unit plan in March 2021, no new cash settled deferred share units will be granted.

During the three and six months ended June 30, 2025, the Company recognized a mark to market expense on cash-settled Deferred Share Units related to director's compensation, which is included in general and administrative employee costs, of $582 and $1,220 respectively (June 30, 2024 - a mark to market expense of $1,158 and $1,624 respectively) based on the change in the fair value of the cash-settled Deferred Share Units granted in prior years. On June 3, 2025, following the retirement of Ricardo Campoy, 101,576 units were settled. As of June 30, 2025, deferred share units outstanding have a fair market liability value of $5,049 (December 31, 2024 - $3,829) recognized in accounts payable, accrued liabilities and other liabilities.

(e) Diluted loss per Share

As of June 30, 2025, there are total of 5,486,567 stock options, equity settled deferred share units, restricted share units and performance share units that were anti-dilutive and excluded from the diluted earnings per share calculation (June 30, 2024 – 3,322,323).

12. REVENUE

Changes in fair value from provisional pricing are included in silver, gold, lead, zinc and copper sales. During the periods revenue per product was:

Provisional pricing adjustments on sales of concentrate are pricing adjustments made upon finalization of the sales contract. The Company's concentrate sales contracts are initially priced with provisional pricing periods lasting typically one to three months, with provisional pricing adjustments recorded to revenue as market prices vary.

13. EXPLORATION, EVALUATION AND DEVELOPMENT

14. GENERAL AND ADMINISTRATIVE

15. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS

16. SEGMENT DISCLOSURES

The Company's operating segments are based on internal management reports that are reviewed by the Company's executives (the chief operating decision makers) in assessing performance. The Company has three operating mining segments which are located in Mexico (Guanaceví and Bolañitos) and in Peru, (Kolpa) and a development mine segment, Terronera. The Company has Exploration and Corporate segments. The Exploration segment consists of projects in the exploration and evaluation phases in Mexico, Chile and the USA. Exploration projects that are in the local district surrounding a mine are included in the mine's segments.

The Exploration segment included $508 of costs incurred in Chile for the three months ended June 30, 2025 (June 30, 2024 - $207) and $64 of costs incurred in USA (June 30, 2024 - $18).

The Exploration segment included $816 of costs incurred in Chile for the six months ended June 30, 2025 (June 30, 2024 - $635) and $78 of costs incurred in USA (June 30, 2024 - $23).