Form 6-K ENDEAVOUR SILVER CORP For: Aug 06

August 6, 2020 1:50 PM EDT

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of August 2020

Commission File Number: 001-33153

ENDEAVOUR SILVER CORP.
(Translation of registrant's name into English)

#1130-609 Granville Street
Vancouver, British Columbia, Canada V7Y 1G5

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

[           ] Form 20-F   [ x ] Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [           ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [           ]

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes [           ] No [ x ]

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- _________


 

SUBMITTED HEREWITH

Exhibits

Exhibit   Description
     
99.1   Endeavour Silver Corp Terronera Project Jalisco State, Mexico NI 43-101 Technical Report
     
99.2   Consent of Qualified Person - David Burga
     
99.3   Consent of Qualified Person - Euqene Puritch
     
99.4   Consent of Qualified Person - Eugenio Iasillo
     
99.5   Consent of Qualified Person - Humberto Preciado
     
99.6   Consent of Qualified Person - Michael Levy
     
99.7   Consent of Qualified Person - Michael Petrina
     
99.8   Consent of Qualified Person - Robin Kalanchey
     
99.9   Consent of Qualified Person - Yungang Wu

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

  Endeavour Silver Corp.
  (Registrant)
     
Date: August 6, 2020 By: /s/ Bradford Cooke
    Bradford Cooke
  Title: CEO

 



 

104698-02-RPT-001
Revision Number 00

Endeavour Silver Corp
Terronera Project
Jalisco State, Mexico

 

NI 43-101 Technical Report
Effective Date : July 14, 2020

July 31, 2020

Prepared for: Endeavour Silver Corp.

Prepared by: Ausenco Engineering Canada

Qualified Persons

Robin Kalanchey, P.Eng. - Ausenco Engineering Canada  •  Michael Petrina, P.Eng. - Moose Mountain Technical Services  •  Humberto F. Preciado, P.E. - Wood  •  Eugene Puritch, P.Eng., FEC, CET - P&E Mining Consultants Inc.  •  David Burga, P.Geo. - P&E Mining Consultants Inc.  •  Yungang Wu, P.Geo. - P&E Mining Consultants Inc.  •  Michael Levy, P.Eng. - JDS Energy & Mining Inc.  •  Eugenio Iasillo, P.E. - Process Engineering LLC


TABLE OF CONTENTS

1 Summary 1-1
1.1 Overview 1-1
1.2 Property Description and Location 1-1
1.3 Accessibility, Climate, Local Resources, Infrastructure & Physiography 1-2
1.4 History 1-3
1.5 Geology and Mineralization 1-5
1.6 Deposit Types 1-5
1.7 Exploration 1-5
1.8 Drilling 1-6
1.9 Sample Preparation, Analyses and Security 1-7
1.10 Data Verification 1-7
1.11 Mineral Processing and Metallurgical Testing 1-7
1.12 Mineral Resource Estimate 1-10
1.13 Mineral Reserve Estimate 1-11
1.14 Mining Methods 1-12
1.15 Recovery Methods 1-15
1.16 Project Infrastructure 1-18
1.16.1 Access 1-18
1.16.2 Power 1-18
1.16.3 Tailings Storage Facility 1-18
1.16.4 Accommodation 1-19
1.16.5 Buildings 1-19
1.16.6 Water Management 1-19
1.17 Market Studies and Contracts 1-19
1.18 Environmental Studies, Permitting, and Social or Community Impact 1-20
1.19 Capital and Operating Costs 1-20
1.19.1 Capital Cost 1-20
1.19.2 Operating Cost 1-21
1.20 Economic Analysis 1-22
1.20.1 Financial Model Parameters 1-22
1.20.2 Economic Analysis 1-22
1.20.3 Sensitivity Analysis 1-24
1.21 Conclusions and Recommendations 1-27
1.21.1 Overall 1-27
1.21.2 Exploration 1-27
1.21.3 Mineral Resource Estimations 1-27
1.21.4 Mineral Reserve and Mining Methods 1-28
1.21.5 Metallurgical Testwork 1-28
1.21.6 Recovery Methods 1-29
1.21.7 Site Infrastructure 1-29
1.21.8 Water Management 1-29
1.21.9 Tailings Management Facility 1-30
1.21.10 Environmental, Permitting & Community Relations 1-30
   
2 Introduction 2-1
2.1 Introduction 2-1

104698-02-RX-RPT-001
Rev: A
Date: July 31, 2020




2.2 Terms of Reference 2-1
2.3 Sources of Information 2-1
2.4 Qualified Persons 2-1
2.5 Site Visits and Scope of Personal Inspection 2-2
2.6 Effective Dates 2-2
2.7 Previous Technical Reports 2-2
2.8 Units and Currency 2-3
   
3 Reliance on Other Experts 3-1
3.1 Legal Status 3-1
3.2 Baseline Studies, Environmental, and Permitting 3-1
   
4 Property Description and Location 4-1
4.1 Location 4-1
4.2 Mexican Regulations for Mineral Concessions 4-2
4.3 Property Description and Tenure 4-2
4.4 Surface Rights 4-6
4.5 Water Rights 4-7
4.6 Royalties and Encumbrances 4-7
4.7 Permitting Considerations 4-7
4.8 Environmental Considerations 4-7
4.9 Social License Considerations 4-7
4.10 QP Comments on "Item 4; Property Description and Location" 4-7
   
5 Accessibility, Climate, Local Resources, Infrastructure and Physiography 5-1
5.1 Accessibility 5-1
5.2 Local Resources and Infrastructure 5-1
5.3 Climate 5-1
5.4 Physiography 5-1
5.5 Infrastructure 5-2
   
6 History 6-1
6.1 San Sebastian Del Oeste Mining District 6-1
6.2 Previous Mineral Resource and Mineral Reserve Estimates 6-2
6.3 Past Production History 6-4
7 Geological Setting and Mineralization 7-1
7.1 Regional Geology 7-1
7.2 Local Geology 7-2
7.3 Deposit Geology 7-3
7.4 Structure 7-4
7.5 Alteration 7-4
7.6 Mineralization 7-4
   
8 Deposit Types 8-1
8.1 Low-Sulphidation Epithermal Deposits 8-1
8.1.1 Geological Setting 8-1
8.1.2 Mineralization 8-1
8.1.3 Alteration 8-2
8.2 Applicability of the Low-Sulphidation Model to the Terronera Project 8-2
8.3 QP Comments on "Item 8:  Deposit Types" 8-3
   
9 Exploration 9-1
9.1 Grids and Surveys 9-1

104698-02-RX-RPT-001
Rev: A
Date: July 31, 2020


9.2 2010 to 2016 Endeavour Silver Exploration Programs 9-1
9.3 2017 Exploration Program 9-2
9.4 Terronera NW 9-6
9.5 Quiteria West 9-7
9.6 Los Espinos-La Guardarraya 9-8
9.7 El Jabalí 9-9
9.8 El Fraile 9-11
9.9 Vista Hermosa 9-12
9.10 La Escondida 9-13
9.11 El Armadillo 9-14
9.12 La Atrevida 9-15
9.13 Santana 9-16
9.14 Peña Gorda 9-17
9.15 San Joaquin 9-18
   
10 Drilling 10-20
10.1 2011 to 2016 Drilling 10-20
10.2 2011 Drilling Program 10-20
10.3 2012 Drilling Program 10-20
10.4 2013 Drilling Program 10-21
10.5 2014 Drilling program 10-22
10.6 2015 Drilling Program 10-22
10.7 2016 Drilling Program 10-23
10.8 2017 Drilling Program 10-23
10.9 2018 Drilling Program 10-28
10.10 Terronera 10-28
10.11 La Luz 10-38
   
11 Sample Preparation, Analyses and Security 11-1
11.1 Introduction 11-1
11.2 Sampling 11-1
11.3 Sample Preparation and Analysis 11-1
11.4 Quality Assurance/Quality Control Program 11-2
11.5 Performance of Certified Reference Materials 11-3
11.5.1 Re-Assays 11-8
11.6 Duplicate Samples 11-9
11.7 Performance of Blank Material 11-10
11.7.1 Re-Assays 11-14
11.8 Check Assays 11-17
   
12 Data Verification 12-1
12.1 Database Verification 12-1
12.2 P&E Site Visits and Independent Sampling 12-1
   
13 Mineral Processing and Metallurgical Testing 13-1
13.1 Summary of Historical Metallurgical Testwork 13-1
13.1.1 Metallurgical Samples 13-1
13.1.2 Comminution Testing 13-2
13.1.3 Primary Grind Size and Deleterious Elements 13-3
13.1.4 Solid-Liquid Separation Testing 13-3
13.1.5 New Metallurgical Testing 13-4
13.1.6 Flotation Testwork 13-5

104698-02-RX-RPT-001
Rev: A
Date: July 31, 2020


13.2 New Recovery Model 13-6
   
14 Mineral Resource Estimates 14-1
14.1 Terronera Deposit Mineral Resource Estimate 14-1
14.1.1 Introduction 14-1
14.1.2 Database 14-1
14.1.3 Data Verification 14-3
14.1.4 Domain Interpretation 14-3
14.1.5 Model Rock Code Determination 14-5
14.1.6 Compositing 14-5
14.1.7 Grade Capping 14-6
14.1.8 Semi-Variography 14-11
14.1.9 Bulk Density 14-13
14.1.10 Block Modeling 14-13
14.1.11 Mineral Resource Classification 14-14
14.1.12 Mineral Resource Estimate Cut-off 14-14
14.1.13 Mineral Resource Estimate 14-15
14.1.14 Confirmation of Estimate 14-17
14.1.15 Figures and Maps Pertaining to the Mineral Resource Estimate for the Terronera Deposit 14-20
14.2 La Luz Deposit Mineral Resource Estimate 14-31
14.2.1 Introduction 14-31
14.2.2 Data Verification 14-31
14.2.3 Database 14-31
14.2.4 Domain Interpretation 14-34
14.2.5 Model Rock Code Determination 14-36
14.2.6 Compositing 14-36
14.2.7 Grade Capping 14-37
14.2.8 Semi-Variography 14-38
14.2.9 Bulk Density 14-41
14.2.10 Block Modelling 14-41
14.2.11 Mineral Resource Classification 14-42
14.2.12 Mineral Resource Estimate Cut-off 14-42
14.2.13 La Luz Mineral Resource Estimate 14-43
14.2.14 Confirmation of Estimate 14-45
14.2.15 Figures and Maps Pertaining to the Mineral Resource Estimate for the La Luz Deposit 14-50
   
15 Mineral Reserve Estimates 15-1
15.1 Cut-Off Grade 15-1
15.2 Mining Dilution 15-2
15.3 Mining Recovery 15-3
15.4 Mineral Reserve Table 15-3
15.5 Factors That May Affect the Mineral Reserve Estimate 15-4
   
16 Mining Methods 16-1
16.1 Introduction 16-1
16.2 Geotechnical Considerations 16-6
16.2.1 Geotechnical Characterization 16-6
16.2.2 Geotechnical Domains and Rock Mass Properties 16-6
16.2.3 In-Situ Stresses 16-8
16.2.4 Empirical Stope Design Analysis 16-10
16.2.5 Estimates of Unplanned Dilution 16-13
16.2.6 Backfill Strength Requirements 16-13
16.2.7 Ground Support 16-14

104698-02-RX-RPT-001
Rev: A
Date: July 31, 2020


16.3 Backfill 16-15
16.4 Waste Development 16-16
16.4.1 Lateral Development 16-16
16.4.2 Vertical Development 16-17
16.5 Longhole Retreat Mining with Backfill 16-17
16.6 Mechanized Cut and Fill Mining 16-18
16.6.1 Resue Mining 16-19
16.7 Representative Drawings 16-19
16.8 Schedules 16-20
16.8.1 Development 16-20
16.8.2 Production 16-20
16.9 Services 16-24
16.9.1 Ventilation 16-24
16.9.2 Electrical 16-24
16.9.3 Dewatering 16-24
16.9.4 Compressed Air 16-25
16.9.5 Egresses, Refuges and Additional Underground Infrastructure 16-25
16.10 Equipment 16-25
16.11 Material Handling 16-27
16.11.1 Ore Handling 16-27
16.11.2 Waste Handling 16-27
16.11.3 Backfill Handling 16-28
   
17 Recovery Methods 17-1
17.1 Overall Process Design 17-1
17.2 Process Plant Description 17-3
17.2.1 Process Design Criteria 17-4
17.2.2 Crushing and Stockpiling 17-6
17.2.3 Grinding Circuit 17-6
17.2.4 Flash Flotation 17-6
17.2.5 Flotation and Concentrate Thickening 17-6
17.2.6 Tailings Thickening 17-7
17.2.7 Reagent Handling and Storage 17-7
17.2.8 Power Requirements 17-7
17.2.9 Water Requirements 17-8
   
18 Project Infrastructure 18-1
18.1 Existing Infrastructure 18-1
18.2 Proposed Infrastructure 18-1
18.3 Process Plant 18-1
18.4 Tailings Filter Plant 18-1
18.5 Temporary Waste Rock Storage Facilities 18-3
18.6 Ancillary Buildings 18-3
18.7 Camp Facilities 18-3
18.8 Internal Haul Roads and Mine Access Infrastructure 18-3
18.9 Power Supply and Distribution 18-4
18.10 Water Supply and Distribution 18-4
18.11 Waste Management 18-4
18.12 Surface Water Control 18-4
18.13 Communications 18-4
   
19 Market Studies and Contracts 19-1
19.1 Market Studies 19-1

104698-02-RX-RPT-001
Rev: A
Date: July 31, 2020


19.2 Commodity Prices 19-1
19.3 Contracts 19-2
   
20 Environmental Studies, Permitting and Social or Community Impact 20-1
20.1 Permitting Basis 20-1
20.2 Existing Site Conditions 20-6
20.2.1 Baseline Studies 20-6
20.2.2 Topography 20-7
20.2.3 Meteorology - Air Quality 20-7
20.2.4 Soil 20-7
20.2.5 Geotechnical and Seismic Studies 20-8
20.2.6 Hydrology 20-8
20.2.7 Watershed - Surface Hydrology 20-9
20.2.8 Sub-Surface Hydrology 20-9
20.2.9 Land Use 20-9
20.2.10 Vegetation and Ecosystems 20-9
20.3 Dry-Stack Tailings Storage Facility 20-10
20.3.1 Design Considerations 20-10
20.3.2 TSF Location and Geometry 20-12
20.3.3 TSF Operating Methodology 20-12
20.3.4 Tailings Transport and Deposition 20-12
20.4 Terronera and La Luz Waste Rock Dumps 20-12
20.4.1 Terronera Temporary Waste Dump 20-12
20.4.2 La Luz Temporary WRSF 20-13
20.5 Environmental Considerations for Tailings Storage 20-14
20.5.1 Substances and Residues Used and Produced by the Ore Processing Operations 20-14
20.5.2 Geotechnical Characterization of the Starter Dam Structure and Filtered Tailings Storage 20-14
20.5.3 Environmental Monitoring Program 20-15
20.5.4 Surface Water Management 20-17
20.5.5 Mine Water Discharge 20-17
20.5.6 Groundwater Management 20-17
20.5.7 Air Quality Management 20-18
20.5.8 Soil-Rock Management as Closure Capping Materials 20-18
20.5.9 Solid Waste Disposal 20-18
20.6 Socio-Economic and Community Relations 20-18
20.7 Cultural and Historical Resource Studies 20-18
20.8 Archeological Artifacts and Studies 20-18
20.9 Reclamation and Closure Activities 20-19
20.9.1 Mine Surface Disturbance Closure Activities 20-19
20.9.2 Underground Mine Infrastructure Closure Activities 20-19
   
21 Capital and Operating Costs 21-1
21.1 Capital Cost 21-1
21.1.1 Summary 21-1
21.1.2 Exchange Rates 21-2
21.1.3 Detailed Discipline Direct Costs 21-3
21.1.4 Initial Indirect Capital Costs 21-9
21.1.5 Estimate Provisions 21-11
21.1.6 Exclusions 21-12
21.1.7 Growth (Design) Allowance 21-12
21.2 Sustaining Capital Costs 21-13
21.3 Mine Closure Costs 21-13
21.4 Operating Cost Estimates 21-13

104698-02-RX-RPT-001
Rev: A
Date: July 31, 2020


21.4.1 Summary 21-13
21.4.2 Mine Operating Costs 21-14
21.4.3 Process Plant Operating Costs 21-16
21.4.4 Dry-Stack Tailings Storage Facility Operating Costs 21-19
   
22 Economic Analysis 22-1
22.1 Cautionary Statement 22-1
22.2 Methodology Used 22-2
22.3 Financial Model Parameters 22-2
22.4 Taxes 22-2
22.5 Working Capital 22-3
22.6 Closure Costs & Salvage Value 22-3
22.7 Royalty 22-3
22.8 Economic Analysis 22-3
22.9 Sensitivity Analysis 22-9
   
23 Adjacent Properties 23-1
   
24 Other Relevant Data and Information 24-1
   
25 Interpretation and Conclusions 25-1
25.1 Exploration 25-1
25.2 Drilling 25-1
25.3 Sample Preparation, Analyses & Security 25-1
25.4 Data Verification 25-1
25.5 Resources, Reserves and Mining 25-2
25.5.1 Mineral Resource Estimate 25-2
25.5.2 Mineral Reserve Estimate 25-4
25.5.3 Mine Plan 25-4
25.6 Metallurgical Testwork and Processing 25-4
25.7 Site Infrastructure 25-4
25.8 Environmental Studies, Permitting and Social Impact 25-5
25.9 Capital & Operating Costs 25-5
25.10 Economic Analysis 25-5
25.11 Opportunities 25-5
25.12 Risk 25-6
   
26 Recommendations 26-1
26.1 Drilling 26-1
26.2 Mineral Resource Estimations 26-1
26.3 Mineral Reserve and Mining Methods 26-1
26.4 Metallurgical Testwork 26-2
26.5 Recovery Methods 26-2
26.6 Site Infrastructure 26-3
26.7 Water Management 26-3
26.8 Dry-Stack Tailings Management Facility 26-3
26.9 Environmental, Permitting & Community Relations 26-4
26.10 Costs 26-4
   
27 References 27-1

104698-02-RX-RPT-001
Rev: A
Date: July 31, 2020

LIST OF TABLES

Table 1-1 Summary of Historic Exploration on the San Sebastian Property 1-3
Table 1-2 Bond Ball Mill Work Index Test Results 1-8
Table 1-3 Comminution Testing Results 1-8
Table 1-4 Summary of Fully Automatic Membrane Type Filter Press 1-9
Table 1-5 Terronera Mineral Resource Estimate at a Cut-Off Grade of 150 g/t AgEq(1-6) 1-10
Table 1-6 La Luz Mineral Resource Estimate at a Cut-Off Grade of 150 g/t AgEq(1-5) 1-11
Table 1-7 Terronera and La Luz Probable Mineral Reserve(1-5) 1-11
Table 1-8 Key Process Design Criteria for the Mill 1-15
Table 1-9 Summary of Terronera Capital Cost Estimate 1-20
Table 1-10 Average Annual Operating Costs (US$) 1-21
Table 1-11 Summary of Project Economics 1-23
Table 1-12 Sensitivity to Metal Prices 1-27
Table 1-13 Sensitivity to CAPEX 1-27
Table 1-14 Budget Estimate for Completing the Recommended Work 1-27
Table 2-1 Terminology and Abbreviations 2-3
Table 4-1 Concessions and Taxes on Each Concession 4-2
Table 4-2 Summary of Endeavour Silver's Surface Access Rights 4-6
Table 6-1 Exploration History Summary 6-1
Table 10-1 Terronera Project Surface Drilling in 2017 10-24
Table 10-2 2017 Drill Hole Summary for the La Luz Surface Drilling Program 10-25
Table 10-3 Surface Drill Hole Significant Assay Summary for Mineral Intercepts in the La Luz Vein Area 10-27
Table 10-4 Terronera Surface Drilling in 2018 10-29
Table 10-5 2018 Drill Hole Summary for the Terronera Surface Drilling Program 10-29
Table 10-6 2018 Drill Hole Assay Summary for the Terronera Surface Drilling Program 10-32
Table 11-1 Summary of Control Samples Used for the 2018 Surface Exploration Program 11-2
Table 11-2 Summary of the Reference Standard Material Samples Used During the Terronera Surface Diamond Drilling Program 11-4
Table 11-3 Performance Limits for Standards Used at the Terronera Project 11-4
Table 11-4 Company Protocol for Monitoring Standard Performance 11-4
Table 11-5 Summary of Analysis of CRMs 11-5
Table 11-6 Comparative Table of Original vs. Re-assay Values For Drill Hole TR15-7 11-8
Table 11-7 Comparative Table of Original Vs. Re-Assay Values for Drill Holes TR11-4 and TR11-8 11-13
Table 11-8 Comparative Table of Original vs. Re-assay Values for Drill Holes TR11-4 and TR11-8 11-15
Table 13-1 Samples Characterization and Head Assay, Fire Assay, and Whole Rock Analysis (%) 13-1
Table 13-2 Cyanide Solubility of Composite Sample TR2015-1 13-2
Table 13-3 Bond Ball Mill Work Index Test Results 13-2
Table 13-4 Comminution Testing Results 13-3
Table 13-5 Summary of Fully Automatic Membrane Type Filter Press 13-4
Table 13-6 2020 Test Samples Head Assays 13-5
Table 14-1 Terronera Drill Hole Database Summary 14-1
Table 14-2 Model Rock Code Description and Volume 14-5
Table 14-3 Basic Statistics of All Constrained Assays and Sample Length 14-5
Table 14-4 Composite Summary Statistics 14-6
Table 14-5 Silver Grade Capping Values 14-9
Table 14-6 Gold Grade Capping Values 14-10
Table 14-7 Terronera Block Model Definition 14-13
Table 14-8 Gold and Silver Block Model Interpolation Parameters 14-14
Table 14-9 Terronera Underground AgEq Cut-Off Grade Calculation 14-15
Table 14-10 Terronera Mineral Resource Estimate at a Cut-off Grade of 150 g/t AgEq (1-5) 14-15

104698-02-RX-RPT-001
Rev: A
Date: July 31, 2020


Table 14-11 Terronera Sensitivity of Mineral Resource Estimate to AgEq Cut-off 14-16
Table 14-12 Average Grade Comparison of Composites with Block Model 14-17
Table 14-13 Volumetric Comparison of Block Model with Geometric Wireframes 14-17
Table 14-14 La Luz Model Rock Code Description and Volume 14-36
Table 14-15 Basic Statistics of All Constrained Assays and Sample Length 14-36
Table 14-16 Composite Summary Statistics 14-37
Table 14-17 Grade Capping Values 14-38
Table 14-18 La Luz Block Model Definition 14-41
Table 14-19 Gold and Silver Block Model Interpolation Parameters 14-42
Table 14-20 La Luz Underground AgEq Cut-Off Grade Calculation 14-42
Table 14-21 La Luz Mineral Resource Estimate at a Cut-off Grade of 150 g/t AgEq (1-5) 14-43
Table 14-22 La Luz Sensitivity of Mineral Resource Estimate to AgEq Cut-off 14-44
Table 14-23 Average Grade Comparison of Composites with Block Model 14-45
Table 14-24 Volumetric Comparison of Block Model with Geometric Wireframes 14-46
Table 15-1 Cut-Off Grade Input Parameters 15-1
Table 15-2 Cut-Off Grade Calculations 15-2
Table 15-3 Dilution by Mining Method 15-2
Table 15-4 Terronera and La Luz Probable Mineral Reserve(1-5) 15-3
Table 16-1 Required UCS for Various Stope Widths 16-13
Table 16-2 Estimated Percentage of Ground Types 16-15
Table 16-3 Lateral Waste Development Meter Summary 16-16
Table 16-4 Vertical Waste Development Meter Summary 16-17
Table 16-5 Lateral Waste Development Schedule by Type and Period (m) 16-21
Table 16-6 Production Stopping Schedule by Mining Method 16-23
Table 16-7 Development and Production Mining Equipment 16-25
Table 17-1 Key Process Design Criteria for the Mill 17-4
Table 17-2 Major Equipment at the Terronera Process Mill 17-5
Table 17-3 Reagents and Dosage 17-7
Table 17-4 1,600 tpd Power Demand (kW) 17-8
Table 19-1 Annual High, Low, and Average London PM Fix for Gold and Silver from 2000 to 2020 19-1
Table 19-2 Market Factors Assumed in Economic Analysis 19-2
Table 20-1 Environmental Permits Required for the Terronera Project 20-3
Table 20-2 Return Period Storm Event Precipitation 20-8
Table 21-1 Capital Cost Estimate Summary 21-1
Table 21-2 Estimate Exchange Rates 21-3
Table 21-3 Bulk Earthworks Quantities and Rates 21-4
Table 21-4 Concrete Quantities & Rates 21-4
Table 21-5 Structural Steel Quantities 21-5
Table 21-6 Mechanical Equipment & Packages 21-6
Table 21-7 Platework 21-7
Table 21-8 Pipelines Initial Capex 21-7
Table 21-9 Total Estimate Freight 21-9
Table 21-10 Field Indirects Detail 21-9
Table 21-11 EPCM Summary 21-10
Table 21-12 Vendor Support 21-10
Table 21-13 Spares 21-11
Table 21-14 First Fills 21-11
Table 21-15 Contingency Summary 21-11
Table 21-16 Growth Summary Direct Initial Costs 21-12
Table 21-17 Summary of Sustaining Costs (US$) 21-13
Table 21-18 Unit Operating Costs (US$) 21-13
Table 21-19 LOM and Unit Operating Costs for Terronera and La Luz Mines (US$) 21-14

104698-02-RX-RPT-001
Rev: A
Date: July 31, 2020



Table 21-20 Process Operating Cost Summary (US$) 21-16
Table 21-21 1,600 tpd Power Demand (kW) 21-17
Table 21-22 Reagents and Consumables Operating Costs (US$) 21-17
Table 21-23 Labour Operating Costs (US$ 000's) 21-18
Table 21-24 Dry Tailings Storage Facility Operating Costs (US$) 21-19
Table 22-1 Summary of Project Economics 22-5
Table 22-2 Project Cash Flow on an Annualised Basis 22-7
Table 22-3 Sensitivity to Metal Prices 22-9
Table 22-4 Sensitivity to CAPEX 22-9
Table 22-5 Pre-Tax Sensitivity 22-9
Table 22-6 Post-Tax Sensitivity 22-11
Table 25-1 Terronera Mineral Resource Estimate at a cut-off grade of 150 g/t Ag Eq. (1-6) 25-2
Table 25-2 La Luz Mineral Resource Estimate at a cut-off grade of 150 g/t Ag Eq. (1-4) 25-3
Table 26-1 Estimated Costs for Completing Work 26-4

104698-02-RX-RPT-001
Rev: A
Date: July 31, 2020

LIST OF FIGURES

Figure 1-1 Terronera Project Location Map 1-2
Figure 1-2 View of the Town of San Sebastián from Bufa 1-3
Figure 1-3 Terronera Deposit Longitudinal Projection 1-13
Figure 1-4 La Luz Deposit Longitudinal Projection 1-14
Figure 1-5 Overall Process Flow Sheet 1-17
Figure 1-6 Map of Proposed Mine Surface Facilities Layout 1-18
Figure 1-7 Project Economics Graph 1-23
Figure 1-8 Pre-Tax Sensitivity 1-25
Figure 1-9 Post-Tax Sensitivity 1-26
Figure 4-1 Terronera Project Location Map 4-1
Figure 4-2 Terronera Project Concessions Map 4-5
Figure 5-1 View of Topography Surrounding the Town of San Sebastián 5-2
Figure 7-1 Geology of the San Sebastián del Oeste Area 7-2
Figure 7-2 Terronera Project Geology Showing Mineralized Veins 7-3
Figure 8-1 Alteration and Mineralization Distributions within a Low Sulphidation Epithermal Vein System 8-3
Figure 9-1 Silver Results in the Terronera North, Quiteria West, Los Espinos-Guardarraya, and El Jabalí Areas 9-2
Figure 9-2 Silver Results in El Padre, La Madre, La Luz, Quiteria West, Democrata and El Fraile Area 9-3
Figure 9-3 Silver Results in the Democrata, El Fraile, La Escondida, Vista Hermosa, El Armadillo, La Atrevida, Miguel, Lorenzana, Terronera and Zavala Areas 9-4
Figure 9-4 Silver Results in the Santa Ana Area 9-5
Figure 9-5 Silver Results in the Peña Gorda and Los Tablones 9-6
Figure 9-6 Terronera NW Vein Outcrop Photographs Showing Massive, White Quartz with Values of 1.0 g/t Ag 9-7
Figure 9-7 Terronera NW Vein Photograph Showing the Vertical Displacement of the Vein by Faulting 9-7
Figure 9-8 Los Espinos Vein Photographs with FeO, MnO and Some Sporadic Oxidized Pyrite 9-8
Figure 9-9 Los Espinos Vein Photograph with FeO, MnO and Sporadic Oxidized Pyrite 9-9
Figure 9-10 El Jabalí Surface Map and Photographs Showing the General Zone Trend 9-10
Figure 9-11 Isovalue Diagrams Showing the Trends of the Silver and Lead Anomalies with the Northwest Trend 9-11
Figure 9-12 Isovalue Diagrams Showing Trends of Zinc and Copper Anomalies with the Northwest Trend 9-11
Figure 9-13 El Fraile Vein Photographs Looking Northwest 9-12
Figure 9-14 Mine Working Over the Vista Hermosa Vein, Photographs with White and Crystalline Quartz, 0.90 m Wide Vein 9-13
Figure 9-15 El Ñero Mine Photograph 1 m Wide Vein 9-14
Figure 9-16 El Armadillo Vein Photographs with Sulphides Inside the Vein 9-15
Figure 9-17 Quartz Veinlet Photographs 10 cm Wide Veinlet, with Moderate FeO, Weak Selective Argillization, Small Rhyolite Clasts 9-15
Figure 9-18 Quartz Vein Photographs 9-16
Figure 9-19 Trench Photographs 9-17
Figure 9-20 Panoramic View of the Santana Vein Trace with Evidence of Quartz Veinlets and FeO 9-17
Figure 9-21 Peña Gorda Vein Photographs with Outcrops for Approximately 1.4 km 9-18
Figure 9-22 Outcrop of the Los Tablones Vein (Quartz Vein) 9-19
Figure 10-1 Terronera Surface Map Showing 2017 Completed Drill Holes 10-24
Figure 10-2 Drill Intersections - La Luz Vein Longitudinal Projection 2018 Drilling Program 10-28
Figure 10-3 Terronera Surface Map Showing Completed 2018 Drill Holes 10-31

104698-02-RX-RPT-001
Rev: A
Date: July 31, 2020


Figure 10-4 2018 Drill Intersections - Terronera Vein Longitudinal Projection 10-38
Figure 11-1 Flowsheet for Core Sampling, Preparation and Analysis 11-3
Figure 11-2 Control Chart for Gold Assays from the CRM Sample EDR-41 11-6
Figure 11-3 Control Chart for Silver Assays from the CRM Sample EDR-41 11-6
Figure 11-4 Control Chart for Gold Assays from the CRM Sample EDR-44 11-7
Figure 11-5 Control Chart for Silver Assays from the CRM Sample EDR-44 11-7
Figure 11-6 Performance of Re-assayed ALS Samples for Gold 11-9
Figure 11-7 Performance of Crushed Field Duplicates for Gold 11-10
Figure 11-8 Performance of Crushed Field Duplicates for Silver 11-10
Figure 11-9 Control Chart for Gold Blank Samples 11-12
Figure 11-10 Control Chart for Silver Blank Samples 11-12
Figure 11-11 Performance of Re-assayed ALS Samples for Silver 11-15
Figure 11-12 Performance of SGS Durango Check Assays for Gold 11-18
Figure 11-13 Performance of SGS Durango Check Assays for Silver 11-18
Figure 12-1 Results of La Luz Verification Sampling for Gold by P&E - January 2018 12-2
Figure 12-2 Results of La Luz Verification Sampling for Silver by P&E - January 2018 12-2
Figure 12-3 Results of Terronera Verification Sampling for Gold by P&E - January 2018 12-3
Figure 12-4 Results of Terronera Verification Sampling for Silver by P&E - January 2018 12-3
Figure 12-5 Results of Terronera Verification Sampling for Gold by P&E - October 2018 12-4
Figure 12-6 Results of Terronera Verification Sampling for Silver by P&E - October 2018 12-4
Figure 13-1 High- and Low-grade Grind Size vs 2020 Metallurgical Testwork Recovery 13-5
Figure 13-2 Silver Recovery Model 13-6
Figure 13-3 Gold Recovery Model 13-7
Figure 14-1 Terronera Surface Drill Hole Plan 14-2
Figure 14-2 Terronera Deposit 3-D Domains and Wireframes 14-4
Figure 14-3 Terronera TRV Ag Composite Distribution 14-7
Figure 14-4 Terronera TRV Au Composite Distribution 14-7
Figure 14-5 Terronera HW1 Ag Composite Distribution 14-7
Figure 14-6 Terronera HW1 Au Composite Distribution 14-8
Figure 14-7 Terronera HW2 Ag Composite Distribution 14-8
Figure 14-8 Terronera HW2 Au Composite Distribution 14-8
Figure 14-9 Terronera TR Vein Ag Along Strike Variogram 14-11
Figure 14-10 Terronera TR Vein Ag Across Dip Variogram 14-11
Figure 14-11 Terronera TR Vein Au Along Strike Variogram 14-12
Figure 14-12 Terronera TR Vein Au Down Dip Variogram 14-12
Figure 14-13 Terronera TR Vein Au Across Dip Variogram 14-12
Figure 14-14 Terronera Silver Grade Swath Easting Plot 14-18
Figure 14-15 Silver Grade Swath Northing Plot 14-18
Figure 14-16 Silver Grade Swath Elevation Plot 14-19
Figure 14-17 Silver Grade-Tonne Curve of Terronera Vein by ID3 and NN Interpolation 14-20
Figure 14-18 Silver Equivalent Block Model Section 108 NW, Terronera Deposit 14-21
Figure 14-19 Silver Equivalent Block Model Section 120 NW, Terronera Deposit 14-21
Figure 14-20 Silver Equivalent Block Model Section 132 NW, Terronera Deposit 14-22
Figure 14-21 Silver Equivalent Block Model Section 144 NW, Terronera Deposit 14-22
Figure 14-22 Silver Equivalent Block Model Section 150 NW, Terronera Deposit 14-23
Figure 14-23 Silver Equivalent Block Model Plan 1,600 m Elevation, Terronera Deposit 14-24
Figure 14-24 Silver Equivalent Block Model Plan 1,500 m Elevation, Terronera Deposit 14-24
Figure 14-25 Silver Equivalent Block Model Plan 1,400 m Elevation, Terronera Deposit 14-25
Figure 14-26 Silver Equivalent Block Model Plan 1,300 m Elevation, Terronera Deposit 14-25
Figure 14-27 Classification Block Model Vertical Cross Section 108 NW, Terronera Deposit 14-26
Figure 14-28 Classification Block Model Vertical Cross Section 120 NW, Terronera Deposit 14-27
Figure 14-29 Classification Block Model Vertical Cross Section 132 NW, Terronera Deposit 14-27
Figure 14-30 Classification Block Model Vertical Cross Section 144 NW, Terronera Deposit 14-28

104698-02-RX-RPT-001
Rev: A
Date: July 31, 2020


Figure 14-31 Classification Block Model Vertical Cross Section 150 NW, Terronera Deposit 14-28
Figure 14-32 Classification Block Model Plan 1,600 m Elevation, Terronera Deposit 14-29
Figure 14-33 Classification Block Model Plan 1,500 m Elevation, Terronera Deposit 14-29
Figure 14-34 Classification Block Model Plan 1,400 m Elevation, Terronera Deposit 14-30
Figure 14-35 Classification Block Model Plan 1,300 m Elevation, Terronera Deposit 14-30
Figure 14-36 La Luz Surface Drill Hole Plan 14-33
Figure 14-37 La Luz Deposit 3-D Domains and Wireframes 14-35
Figure 14-38 La Luz Ag Composite Distribution 14-37
Figure 14-39 La Luz Au Composite Distribution 14-38
Figure 14-40 La Luz Ag Omnivariogram 14-39
Figure 14-41 La Luz Ag Along Strike Variogram 14-39
Figure 14-42 La Luz Ag Down Dip Variogram 14-39
Figure 14-43 La Luz Au Omnivariogram 14-40
Figure 14-44 La Luz Au Along Strike Variogram 14-40
Figure 14-45 La Luz Au Down Dip Variogram 14-40
Figure 14-46 La Luz Silver Grade Swath Easting Plot 14-46
Figure 14-47 Silver Grade Swath Northing Plot 14-47
Figure 14-48 Silver Grade Swath Elevation Plot 14-47
Figure 14-49 Gold Grade Swath Easting Plot 14-48
Figure 14-50 Gold Grade Swath Northing Plot 14-48
Figure 14-51 Gold Grade Swath Elevation Plot 14-49
Figure 14-52 Silver Grade and Tonnage Comparisons for ID3 and NN Interpolation 14-49
Figure 14-53 Gold Grade and Tonnage Comparisons for ID3 and NN Interpolation 14-50
Figure 14-54 Silver Equivalent Block Model Section 1,150 W, La Luz Deposit 14-51
Figure 14-55 Silver Equivalent Block Model Section 1,400 W, La Luz Deposit 14-52
Figure 14-56 Silver Equivalent Block Model Section 1,500 W, La Luz Deposit 14-52
Figure 14-57 Silver Equivalent Block Model Plan 1,250 m Elevation, La Luz Deposit 14-53
Figure 14-58 Silver Equivalent Block Model Plan 1,150 m Elevation, La Luz Deposit 14-53
Figure 14-59 Silver Equivalent Block Model Plan 1,100 m Elevation, La Luz Deposit 14-54
Figure 14-60 Classification Block Model Vertical Cross Section 1,150 W, La Luz Deposit 14-55
Figure 14-61 Classification Block Model Vertical Cross Section 1,400 W, La Luz Deposit 14-55
Figure 14-62 Classification Block Model Vertical Cross Section 1,500 W, La Luz Deposit 14-56
Figure 14-63 Classification Block Model Plan 1,250 m Elevation, La Luz Deposit 14-57
Figure 14-64 Classification Block Model Plan 1,150 m Elevation, La Luz Deposit 14-57
Figure 14-65 Classification Block Model Plan 1,050 m Elevation, La Luz Deposit 14-58
Figure 16-1 Terronera Deposit Longitudinal Projection 16-2
Figure 16-2 La Luz Deposit Longitudinal Projection 16-3
Figure 16-3 Terronera and La Luz Plan View 16-5
Figure 16-4 Schematic Section Showing Terronera Geotechnical Domains (Oblique View Looking Southwest) 16-7
Figure 16-5 Distribution of Terronera Rock Mass Quality Parameter Q' 16-8
Figure 16-6 Distribution of La Luz Rock Mass Quality Parameter Q' 16-8
Figure 16-7 Estimated Stress Orientation 16-9
Figure 16-8 Empirical Stope Stability and Dilution Charts for Terronera Longitudinal LH Stopes 16-11
Figure 16-9 Empirical Stope Stability and Dilution Charts for La Luz Longitudinal LH Stopes 16-12
Figure 16-10 Barton's Q Ground Support Chart 16-14
Figure 16-11 Representative Level Drawings 16-20
Figure 17-1 Overall Process Flow Sheet 17-2
Figure 17-2 Overall Process Flow Sheet 17-4
Figure 18-1 Map of Proposed Major Project Infrastructure 18-2
Figure 20-1 Environmental Permitting Steps for Mining Projects in Mexico 20-2
Figure 20-2 Map of the TSF Layout 20-11
Figure 20-3 Proposed Layout of the La Luz Temporary Waste Dump 20-14

104698-02-RX-RPT-001
Rev: A
Date: July 31, 2020


Figure 20-4 Map of the Mondeño Tailings Storage Area Monitoring Well Locations 20-16
Figure 21-1 Total Mine Operating Cost 21-15
Figure 21-2 Operating Cost for Terronera Deposit 21-15
Figure 21-3 Operating Cost for La Luz Deposit 21-16
Figure 22-1 Project Economics Graph 22-4

104698-02-RX-RPT-001
Rev: A
Date: July 31, 2020

Certificates

Robin Kalanchey, P.Eng.

l, Robin Kalanchey, P.Eng. am employed as the Director, Minerals and Metals - Western Canada with Ausenco Engineering Canada Inc. (Canada), with an office at 855 Homer Street, Vancouver, BC V6B 2W2.

This certificate applies to the technical report entitled "Endeavour Silver Corp Terronera Project NI 43-101 Technical Report" prepared for Endeavour Silver Corp. (the "Issuer") that has an effective date of July 14, 2020 (the "Technical Report").

1. I graduated from the University of British Columbia in 1996 with a Bachelor of Applied Science degree in metals and materials engineering.

2. I am a Professional Engineer registered with the Association of Professional Engineers and Geoscientists of Alberta, member number 61986.

3. I have practiced my profession continuously since 1996 and have been involved in: mineral processing and metallurgical testing, metallurgical process plant design and engineering, and metallurgical project evaluations for gold, nickel, cobalt, copper, zinc and molybdenum projects in numerous countries.

4. I have not visited the Terronera Project.

5. As a result of my experience and qualifications, I am a Qualified Person as defined in National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") for those sections of the technical report that I am responsible for preparing.

6. I am independent of the Issuer as defined in Section 1.5 of NI 43-101.

7. I am responsible for sections 1.1, 1.11, 1.15, the introductory paragraph including Figure 1.6 of  1.16, 1.16.1, 1.16.2, 1.16.4, 1.16.5, 1.17 1.19, 1.20, 1.21.1, 1.21.5-1.21.7, 2, 3.1, 13, 17, 18.1-18.4, 18.6-18.10, 18.13, 19, 21.1, 21.2, 21.4, 22, 23, 24, 25.6, 25.7, 25.9-25.12, 26.4-26.6, 26.10 and 27 of the Technical Report,. 

8. I have no previous involvement with the Terronera Project.

9. I have read NI 43-101 and the sections of the Technical Report for which I am responsible have been prepared in compliance with that Instrument.

10. As of the effective date of the Technical Report, to the best of my knowledge, information and belief, the sections of the Technical Report for which I am responsible contain all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.

Dated: July 31, 2020

Signature: [SIGNED AND SEALED]

Name: Robin Kalanchey, P.Eng.

 

 


Michael Petrina, P. Eng., British Columbia (Mining)
Moose Mountain Technical Services
P.O. Box 820, 135 Devonshire Avenue
Iroquois Falls, ON
Canada
P0K 1E0

Telephone: 705-465-4555
Email: [email protected]

I Michael Petrina, P. Eng., British Columbia (Mining) certify that

I am Principal Mining Engineer (Underground) at Moose Mountain Technical Services P.O. Box 820, 135 Devonshire Avenue, Iroquois Falls, ON, Canada, P0K 1E0.

This certificate applies to the Technical Report titled Endeavour Silver Corp Terronera Project NI 43-101 Technical Report” prepared for Endeavour Silver Corp. (the "Issuer") that has an effective date of July 14, 2020 (the "Technical Report").

My qualifications and relevant experiences are that:

1. I graduated with a Bachelor of Science, Mining Engineering from Queen's University in  December 1983.

2. I am a member of the Professional Engineers of British Columbia.

3. I have worked as a in mining engineering  for a total of 30 years.

4. I have read the definition of Qualified Person set out in Nation Instrument 43-101 (NI 43-101) and certify that by reason of my education, affiliation with a professional association and past relevant work experience, I fulfil the requirements to be a Qualified Person for the purposes of NI 43-101.

5. I have not visited the Property.  I am responsible for the preparation of sections 1.13, 1.14, 1.21.4, 15, 16.1, 16.3-16.11, 25.5.2, 25.5.3, 26.3 and 27 of the Technical Report.

6. I am independent of the issuer per Section 1.5 or NI 43-101.

7. I have not had prior involvement with the property that is the subject of the Technical Report.

8. I have read National Instrument 43-101 and the Technical Report has been prepared in compliance with that Instrument.

9. As of the date of the certificate, to the best of my knowledge, information and belief, the Technical Report contains all material scientific and technical information that is required to be disclosed to make the Technical Report not misleading.

Dated: July 31, 2020

Signature: [SIGNED AND SEALED]

Name: Michael Petrina, P.Eng.


Humberto F. Preciado, P.E.
Wood Environment & Infrastructure Solutions, Inc.
2000 S Colorado Blvd
Suite 2-1000
Denver, CO 80222
USA

Telephone:303-630-0782
Facsimile:303-935-6505
Email: [email protected]

I Humberto F. Preciado, P.E. certify that

I am a Senior Associate Geotechnical Engineer at Wood,  2000 S Colorado Blvd, Co 80222, USA

This certificate applies to the Technical Report titled Endeavour Silver Corp Terronera Project NI 43-101 Technical Report” prepared for Endeavour Silver Corp. (the "Issuer") that has an effective date of July 14, 2020 (the "Technical Report").

My qualifications and relevant experiences are that:

1. I graduated with a Doctorate in Civil Engineering from the University of British Columbia.

2. I am a member of the Society for Mining, Metallurgy & Exploration and the Canadian Dam Association. I am a registered Professional Engineer (Civil) in the States of Arizona, Colorado and Nevada.

3. I have worked as a Civil/Geotechnical Engineer for a total of 23 years. During this time I have conducted and reviewed multiple environmental studies, statements, as well as civil and geoenvironmental design of waste storage facilities for infrastructure and mining projects/operations

4. I have read the definition of Qualified Person set out in Nation Instrument 43-101 (NI 43-101) and certify that by reason of my education, affiliation with a professional association and past relevant work experience, I fulfil the requirements to be a Qualified Person for the purposes of NI 43-101.

5. I have visited the Property for a total of 4 days in December 11-14, 2015.

6.  I am responsible for the preparation of Sub-sections 1.16.3, 1.16.6, 1.18, 1.21.7-1.21.10, 3.2, 4.7-4.9, 18.5, 18.11, 18.12, 20, 21.3, 25.8, 26.7-26.10 and 27  of the Technical Report. I am independent of the issuer per Section 1.5 or NI 43-101.

7. I have had prior involvement with the property that is the subject of the Technical Report. The nature of my prior involvement is as a "Qualified Person" for a Technical Report titled "Updated Technical Report for the Terronera Project, Jalisco State, Mexico", (the "Technical Report") with an effective date of Feb 12, 2019.

8. I have read National Instrument 43-101 and the Technical Report has been prepared in compliance with that instrument.

9. As of the date of the certificate, to the best of my knowledge, information and belief, the Technical Report contains all material scientific and technical information that is required to be disclosed to make the Technical Report not misleading.



Dated: July 31, 2020

Signature: [SIGNED AND SEALED]

Name: Humberto Preciado, P.E.

 


Eugene Puritch, P. Eng., FEC, CET

I, Eugene J. Puritch, P. Eng., FEC, CET, residing at 44 Turtlecreek Blvd., Brampton, ON, L6W 3X7, certify that:

1. I am an independent mining consultant and President of P&E Mining Consultants Inc.

2. This certificate applies to the Technical Report titled Endeavour Silver Corp Terronera Project NI 43-101 Technical Report, prepared for Endeavour Silver Corp. (the "Issuer") that has an effective date of July 14, 2020 (the "Technical Report").

3. I am a graduate of The Haileybury School of Mines, with a Technologist Diploma in Mining, as well as obtaining an additional year of undergraduate education in Mine Engineering at Queen's University. In addition, I have also met the Professional Engineers of Ontario Academic Requirement Committee's Examination requirement for Bachelor's Degree in Engineering Equivalency. I am a mining consultant currently licensed by the: Professional Engineers and Geoscientists New Brunswick (License No. 4778); Professional Engineers, Geoscientists Newfoundland and Labrador (License No. 5998); Association of Professional Engineers and Geoscientists Saskatchewan (License No. 16216); Ontario Association of Certified Engineering Technicians and Technologists (License No. 45252); Professional Engineers of Ontario (License No. 100014010); Association of Professional Engineers and Geoscientists of British Columbia (License No. 42912); and Northwest Territories and Nunavut Association of Professional Engineers and Geoscientists (No. L3877). I am also a member of the National Canadian Institute of Mining and Metallurgy. 

I have read the definition of "Qualified Person" set out in National Instrument 43-101 ("NI 43-101") and certify that, by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a "Qualified Person" for the purposes of NI 43-101.

I have practiced my profession continuously since 1978. My summarized career experience is as follows: 

  • Mining Technologist - H.B.M.& S. and Inco Ltd.,  1978-1980
  • Open Pit Mine Engineer - Cassiar Asbestos/Brinco Ltd.,  1981-1983
  • Pit Engineer/Drill & Blast Supervisor - Detour Lake Mine,  1984-1986
  • Self-Employed Mining Consultant - Timmins Area,  1987-1988
  • Mine Designer/Resource Estimator - Dynatec/CMD/Bharti,  1989-1995
  • Self-Employed Mining Consultant/Resource-Reserve Estimator,  1995-2004
  • President - P&E Mining Consultants Inc,   2004-Present

4. I visited the Property that is the subject of this Technical Report on September 11, 2014.

5. I am responsible for co-authoring Sections 1.12, 1.21.3, 14, 25.5.1, 26.2, 26.10 and 27 of the Tech Report.

6. I am independent of the Issuer applying the test in Section 1.5 of NI 43-101.

7. I have had prior involvement with the Project that is the subject of this Technical Report. I was a "Qualified Person" for the following Technical Reports titled: "NI 43-101 Technical Report Preliminary Economic Assessment for the Terronera Project, Jalisco State, Mexico" with an effective date of March 25, 2015; "NI 43101 Technical Report Preliminary Feasibility Study for the Terronera Project, Jalisco State, Mexico" with an effective date of April 3, 2017; "NI 43-101 and NI 43-101F1 Technical Report Updated Mineral Resource Estimate and Updated Preliminary Feasibility Study for the Terronera Project, Jalisco State, Mexico", with an effective date of August 7, 2018; and "Updated Mineral Resource Estimate Technical Report for the Terronera Project, Jalisco State, Mexico", (the "Technical Report") with an effective date of Feb 1, 2019.


8. I have read NI 43-101 and Form 43-101F1. This Technical Report has been prepared in compliance therewith.

9. As of the effective date of this Technical Report, to the best of my knowledge, information and belief, the Technical Report sections co-authored by myself contain all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.

Dated: July 31, 2020

Signature: [SIGNED AND SEALED]

Name: Eugene Puritch, P.Eng., FEC, CET


David Burga, P.Geo.

I, David Burga, P. Geo., residing at 3884 Freeman Terrace, Mississauga, Ontario, do hereby certify that:

1. I am an independent geological consultant contracted by P & E Mining Consultants Inc.

2. This certificate applies to the Technical Report titled Endeavour Silver Corp Terronera Project NI 43-101 Technical Report, prepared for Endeavour Silver Corp. (the "Issuer") that has an effective date of July 14, 2020 (the "Technical Report").

3. I am a graduate of the University of Toronto with a Bachelor of Science degree in Geological Sciences (1997). I have worked as a geologist for over 20 years since obtaining my B.Sc. degree. I am a geological consultant currently licensed by the Association of Professional Geoscientists of Ontario (License No 1836).

4. I have read the definition of "qualified person" set out in National Instrument 43-101 ("NI 43-101") and certify that, by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a "qualified person" for the purposes of NI 43-101.

My relevant experience for the purpose of the Technical Report is:

  • Exploration Geologist, Cameco Gold 1997-1998
  • Field Geophysicist, Quantec Geoscience  1998-1999
  • Geological Consultant, Andeburg Consulting Ltd. 1999-2003
  • Geologist, Aeon Egmond Ltd. 2003-2005
  • Project Manager, Jacques Whitford 2005-2008
  • Exploration Manager - Chile, Red Metal Resources 2008-2009
  • Consulting Geologist 2009-Present

5. I visited the Property that is the subject of this Technical Report on September 11, 2014; October 7, 2014; June 14, 2016, January 9 and October 16, 2018.

6. I am responsible for authoring Sections 1.2-1.10, 1.21.2, 4.1-4.6, 4.10, 5-12, 25.1-25.4, 26.1 and 27 of the Technical Report.

7. I am independent of the Issuer applying the test in Section 1.5 of NI 43-101.

8. I have had prior involvement with the Project that is the subject of this Technical Report. I was a "Qualified Person" for the following Technical Reports titled: "Updated Technical Report for The Terronera Project, Jalisco State, Mexico" with an effective date of February 12, 2019; "NI 43-101 Technical Report Preliminary Economic Assessment for the Terronera Project, Jalisco State, Mexico" with an effective date of March 25, 2015; "NI 43-101 Technical Report Preliminary Feasibility Study for the Terronera Project, Jalisco State, Mexico" with an effective date of April 3, 2017; "NI 43-101 and NI 43-101F1 Technical Report Updated Mineral Resource Estimate and Updated Preliminary Feasibility Study for the Terronera Project, Jalisco State, Mexico", with an effective date of August 7, 2018; and "Updated Mineral Resource Estimate Technical Report for the Terronera Project, Jalisco State, Mexico", (the "Technical Report") with an effective date of Feb 1, 2019.


9. I have read NI 43-101 and Form 43-101F1 and this Technical Report has been prepared in compliance therewith.

10. As of the date of this certificate, to the best of my knowledge, information and belief, the Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.

Dated: July 31, 2020

Signature: [SIGNED AND SEALED]

Name: David Burga, P. Geo.

 


Yungang Wu, P.Geo.

I, Yungang Wu, P. Geo., residing at 3246 Preserve Drive, Oakville, Ontario, L6M 0X3, do hereby certify that:

1. I am an independent consulting geologist contracted by P&E Mining Consultants Inc.

2. This certificate applies to the Technical Report titled Endeavour Silver Corp Terronera Project NI 43-101 Technical Report, prepared for Endeavour Silver Corp. (the "Issuer") that has an effective date of July 14, 2020 (the "Technical Report").

3. I am a graduate of Jilin University, China, with a Master Degree in Mineral Deposits (1992). I am a geological consultant and a registered practising member of the Association of Professional Geoscientist of Ontario (Registration No. 1681).

4. I have read the definition of "Qualified Person" set out in National Instrument 43-101 ("NI 43-101") and certify that, by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a "Qualified Person" for the purposes of NI 43-101.

My relevant experience for the purpose of the Technical Report is as follows:

  • Geologist -Geology and Mineral Bureau, Liaoning Province, China 1992-1993
  • Senior Geologist - Committee of Mineral Resources and Reserves of Liaoning, China 1993-1998
  • VP - Institute of Mineral Resources and Land Planning, Liaoning, China 1998-2001
  • Project Geologist-Exploration Division, De Beers Canada 2003-2009
  • Mine Geologist - Victor Diamond Mine, De Beers Canada 2009-2011
  • Resource Geologist- Coffey Mining Canada 2011-2012
  • Consulting Geologist Present

5. I have not visited the Property that is the subject of this Technical Report.

6. I am responsible for co-authoring Sections 1.12, 1.21.3, 14, 25.5.1, 26.2 and 27 of the Technical Report.

7. I am independent of the Issuer applying the test in Section 1.5 of NI 43-101.

8. I have had prior involvement with the Project that is the subject of this Technical Report. I was a "Qualified Person" for the following Technical Reports titled: "Updated Technical Report for The Terronera Project, Jalisco State, Mexico" with an effective date of February 12, 2019; "NI 43-101 Technical Report Preliminary Feasibility Study for the Terronera Project, Jalisco State, Mexico" with an effective date of April 3, 2017; "NI 43-101 and NI 43-101F1 Technical Report Updated Mineral Resource Estimate and Updated Preliminary Feasibility Study for the Terronera Project, Jalisco State, Mexico", with an effective date of August 7, 2018; and "Updated Mineral Resource Estimate Technical Report for the Terronera Project, Jalisco State, Mexico", (the "Technical Report") with an effective date of Feb 1, 2019.

9. I have read NI 43-101 and Form 43-101F1 and the Technical Report has been prepared in compliance therewith.


10. As of the effective date of this Technical Report, to the best of my knowledge, information and belief, the Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.

Dated: July 31, 2020

Signature: [SIGNED AND SEALED]

Name: Yungang Wu, P. Geo.

 


Michael Levy, P.Eng.

I, Michael Levy, P. Eng., do hereby certify that:

1. I am currently employed as Geotechnical Engineering Manager with JDS Energy & Mining Inc. with an office at Suite 900 - 999 West Hastings St., Vancouver, BC V6C 2W2;

2. This certificate applies to the Technical Report titled “Endeavour Silver Corp Terronera Project NI 43-101 Technical Report” prepared for Endeavour Silver Corp. (the "Issuer") that has an effective date of July 14, 2020 (the "Technical Report").

3. I am a Professional Civil Engineer (P.Eng. #2692) registered with the Association of Professional Engineers Colorado (P.E. #40268).  I am a current member of the Society for Mining, Metallurgy & Exploration (SME) and the American Society of Civil Engineers (ASCE).

4. I hold a bachelor's degree (B.Sc.) in Geology from the University of Iowa in 1998 and a Master of Science degree (M.Sc.) in Civil-Geotechnical Engineering from the University of Colorado in 2004. I have practiced my profession continuously since 1999 and have been involved in a numerous mining and civil geotechnical projects across the Americas;

5. I visited the project on October 8, 2019;

6. I have had no prior involvement with the property that is the subject of this Technical Report;

7. I am responsible for section 16.2 and 27 of the Technical Report;

8. I have read the definition of "Qualified Person" set out in NI 43-101 and certify that by reason of my education, affiliation with a professional association, and past relevant experience, I fulfill the requirements to be a "qualified person" for the purposes of NI 43-101;

9. I am independent of the issuer, Endeavour Silver Corp, as defined in Section 1.5 of NI 43-101;

10. I have read NI 43-101, and the Technical Report has been prepared in compliance with NI 43-101 and Form 43-101F1; and,

11. As of the effective date of the Report, to the best of my knowledge, information and belief, the section of the Technical Report for which I am responsible contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.

Dated: July 31, 2020

Signature: [SIGNED AND SEALED]

Name: Michael Levy, P.Eng.


Eugenio Iasillo, P.E.

This certificate applies to the Technical Report titled “Endeavour Silver Corp Terronera Project NI 43-101 Technical Report” prepared for Endeavour Silver Corp. (the "Issuer") that has an effective date of July 14, 2020 (the "Technical Report").

l, Eugenio Iasillo, P.E. do hereby certify that:

1. I am a Professional Engineer, Principal of Process Engineering LLC. With address 3370 West Crestone Court Tucson, Arizona 85742 USA

2. I am a graduate of University of Michoacan, School of Chemical Engineering with a Bachelor of Science in Chemical Engineering (1970-1975).

3. I am a Professional Engineer registered with the Arizona State Board of Registration with certificate number 28209.

4. I have practiced my profession since 1976 and have been involved in: mineral processing and metallurgical testing, metallurgical process plant design and engineering, and metallurgical project evaluations in the US and around the world.

5. I visited the Terronera property on September 11 and 12, 2014.

6. I have read the definition of "qualified person" set out in National Instrument 43-101. Standards of Disclosure for Mineral Projects ("NI 43-101") and certify that by virtue of my education, affiliation to a professional association and past relevant work experience, I fulfill the requirements to be a "qualified person" for the purposes of NI 43-101.

7. As a qualified person, I am independent of the Issuer as defined in Section 1.5 of NI 43-101.

8. I am a co-author of  section 1.11 and 13 of the Technical Report as well as relevant parts in the Executive Summary and I accept professional responsibility for those sections of the Technical Report.

9. I have had prior involvement with the subject property.

10. As of the date of this certificate, to the best of my knowledge, information and belief, the portion of the Technical Report for which I am responsible contains all scientific and technical information that is required to be disclosed to make the portion of the Technical Report for which I am responsible not misleading.

11. I have read NI 43-101 and Form 43-101 F 1, and the Technical Report has been prepared in compliance with NI 43-101 and Form 43-101 Fl .

Dated: July 31, 2020

Signature: [SIGNED AND SEALED]

Name: Eugenio Iasillo, P.E.


1 Summary

1.1 Overview

Ausenco Engineering Canada Inc. (Ausenco) prepared the Technical Report (the Report) for Endeavour Silver Corp. (Endeavour Silver) to summarise the results of an updated pre-feasibility study (UPFS) on the Terronera Silver Gold Project (the Terronera Project).

In this Report, the term San Sebastián Property refers to the entire area covered by the mining concessions. The term Terronera Project refers to an area within the mining concession and separate surface lands on which the current exploration programs, Mineral Resource and Mineral Reserve estimates are located.

1.2 Property Description and Location

The Terronera Project is located in San Sebastian, a historic silver mining district in Mexico. The property consists of two deposits: Terronera and La Luz. The site is located, approximately 160 km west of Guadalajara and 50 km northeast of Puerto Vallarta, Jalisco State, Mexico and is accessed by paved state highways and maintained all-weather gravel roads. The exploration project was acquired in 2010, the first discovery was made in 2012. 


Source: Terronera NI43-101 Technical Report, April 30, 2019

Figure 1-1 Terronera Project Location Map

1.3 Accessibility, Climate, Local Resources, Infrastructure & Physiography

The project is located in Jalisco State, in the town of San Sebastián del Oeste which is at an elevation of 1,480 m above sea level. The surrounding area is mountainous and heavily forested, mainly with pine trees. The surrounding valleys are occupied by cattle ranches, corn fields and coffee plantations. The weather is predominantly humid in the winter and dry and warm during the spring. The mean annual temperature is 18°C, with a maximum of 25.6°C and a minimum of 11.7°C. The wettest months are June through September.


Source: Terronera NI43-101 Technical Report, April 30, 2019

Figure 1-2 View of the Town of San Sebastián from Bufa

1.4 History

San Sebastián del Oeste is a silver and gold mining town founded in 1605 during the Spanish colonial period. By 1785, more than 25 mines and a number of smelters had been established in the district and, during the peak mining period, the area was considered one of the principal sources of gold, silver and copper for New Spain. The main mines in the district included Real de Oxtotipan, Los Reyes, Santa Gertrudis, Terronera and La Quiteria. As of 2013, the La Quiteria Mine was still active and mined by Minera Cimarrón S.A. de C.V., a private mining company.

Historic exploration performed on the San Sebastian Property is summarized in Table 1-1.


Table 1-1 Summary of Historic Exploration on the San Sebastian Property

Year

Company

Exploration

1921

Various, unknown

After the Mexican Revolution, intermittent small scale mining took place in the areas of Santiago de Los Pinos, Los Reyes and Navidad. All of these areas are currently inactive.

1979

Consejo de Recursos Minerales

Regional and local semi-detailed mapping and exploration activity.

1985

Compañía Minera Bolaños, S.A.

Prospecting activities in the areas of Los Reyes and Santiago de Los Pinos. This work eventually ended and many of the concessions were allowed to elapse.

Late 1980s

IMMSA

Exploration begins in Sebastián del Oeste district.

1992 - 1995

IMMSA

Detailed geological mapping and sampling of outcropping structures including the La Quiteria, San Augustin and Los Reyes veins, as well as other veins of secondary importance. IMMSA assayed more than 200 rock samples from many of the old mines.

1995 - 2010

IMMSA

An initial program of 17 widely-spaced diamond drill holes was completed, mainly at the Terronera Vein. Drilling succeeded in intersecting widespread silver- gold mineralization generally ranging up to 1 g/t gold and from 50 to 150 g/t silver over 2 to 6 m widths.

Drilling was suspended and quantification of mineral resources was not undertaken.

2010

Endeavour Silver / IMMSA

Endeavour Silver acquires option to purchase San Sebastián properties from IMMSA.

2010

Endeavour Silver

Data compilation, geological mapping, rock chip and soil sampling.

2011

Endeavour Silver

Geological mapping, rock chip sampling, topographic surveying.  Core drilling (36 holes; 7,688.25 m).  Resource estimate.

2012

Endeavour Silver

Core drilling (32 holes; 13,237.1 m).  Updated resource estimate.

2013

Endeavour Silver

Geological mapping, trenching, rock chip and trench sampling.  Core drilling (30 holes; 8,573.5 m).  Updated resource estimate.

2014

Endeavour Silver

Geological mapping, trenching, rock chip and trench sampling.  Core drilling (27 holes; 8,204.20 m).

2015

Endeavour Silver

Geological mapping, trenching, soil and trench sampling.  Core drilling (27 holes; 6,133 m.  Updated resource estimate.  Preliminary economic assessment.

2016

Endeavour Silver

Reconnaissance exploration, rock chip and soil sampling.  Core drilling (19 holes; 5,670 m). 

2017

Endeavour Silver

Geological mapping, trenching, rock chip and trench sampling.  Core drilling (47 holes; 2,252 m).  Updated resource estimate.  Pre-feasibility study.  First-time declaration of Mineral Reserves.




Year

Company

Exploration

2018

Endeavour Silver

Core drilling (39 holes; 18,774 m).  Updated resource estimate.

2019

Endeavour Silver

Updates to mine design and production schedule from 2017 pre-feasibility study

2020

Endeavour Silver

UPFS

1.5 Geology and Mineralization

The San Sebastián region cover a classic, low sulphidation, epithermal vein system in four mineralized vein sub-districts named Los Reyes, Santiago de Los Pinos, San Sebastián and Real de Oxtotipan. Each sub-district consists of a cluster of quartz (calcite, barite) veins mineralized with sulphide minerals (pyrite, argentite, galena and sphalerite). Each vein cluster spans approximately 3 km x 3 km in area. In total, more than 50 small mines were developed historically on at least 20 separate veins.

The San Sebastián veins tend to be large and can host high grade silver-gold mineralized deposits. For example, the La Quiteria Vein ranges up to 15 m thick, and the Santa Quiteria Mine averages about 280 g/t silver (Ag) and 0.5 g/t gold (Au) over a 3 m to 4 m width. This high-grade mineralized zone appears to extend into the San Sebastián Properties both along strike and immediately down dip.

1.6 Deposit Types

The San Sebastián del Oeste silver-gold district comprises classic, high grade silver-gold, epithermal vein deposits, characterized by low-sulphidation mineralization and adularia-sericite alteration. The veins are typical of most other epithermal silver-gold vein deposits in Mexico in that they are primarily hosted in volcanic flows, pyroclastic and epiclastic rocks, or sedimentary sequences of mainly shale and their metamorphic counterparts.

Low-sulphidation epithermal veins in Mexico typically have a well-defined, sub horizontal ore horizon about 300 m to 500 m in vertical extent where the bonanza grade mineralization shoots have been deposited due to boiling of the hydrothermal fluids. Neither the top nor the bottom of the mineralized horizons at the Terronera Project have yet been established precisely.

1.7 Exploration

In 2010, Endeavour Silver commenced exploration activities on the Terronera Project. Initial work included data compilation, field mapping, and sampling. Surface mapping was completed on the Real Alto in the southern part of the Project. A soil geochemistry survey was conducted over the Real Alto zone.

Mapping and sampling of structures in the Santiago de Los Pinos area, including La Luz, Los Reyes, El Alcribil, El Orconcito, El Padre, El Izote, La Plomosa, Tierras, Coloradas, Los Cuates, La Yesquilla, and La Ermita Areas, were conducted, as well as mapping and sampling of the Terronera Vein near the town of San Sebastián del Oeste.

2012 exploration activities focused on surface sampling at the Quiteria West (Los Leones and La Cueva), Terronera and La Zavala areas.

In 2013, Endeavour Silver conducted geological mapping, trenching and sampling at the Terronera Project. Mapping mainly focused on the projection south of the Terronera Vein, La Zavala Vein, the Quiteria West structures, and some samples were collected at the extension east of the Real Vein at the Real Alto area.


Exploration activities in 2014 were mainly conducted at the Quiteria West and Terronera NW areas, including sampling at the Terronera, Lupillo, El Salto and La Cascada Mines located over the Terronera Vein and the Resoyadero, La Tapada 2, Otates, Tajo los Cables, El Toro, ZP3, Copales, Mina 03, Mina 04 and Cotete areas/mines at the Quiteria. A West Vein trenching program was also conducted over the projection of the Quiteria West (east and west parts) and Terronera (northwest part) Veins. Regional geological mapping around the Terronera Project was undertaken.

In 2015, Endeavour Silver conducted geological mapping, trenching and a soil geochemical survey at the Terronera Project. Mapping included the Terronera North, La Zavala, El Fraile, El Padre, SE part of Quiteria-Democrata and La Ermita areas. The trenching program was conducted over the Democrata and La Luz veins. The soil geochemical survey was conducted to find the possible east extension of the Democrata and Quiteria veins, while simultaneously conducting geological mapping. Regional exploration continued in concessions located around the Terronera Project.

In 2017, geological mapping, trenching and sampling was conducted at the Terronera Project with the objective of determining the importance of structures located within the Endeavour Silver concessions in order to be considered drilling targets. The analyzed structures include: Terronera NW, Quiteria West, Los Espinos-Guardarraya, El Jabalí, El Fraile, Vista Hermosa, La Escondida, El Armadillo, La Atrevida, Miguel, Santana, Peña Gorda and Los Tablones.

1.8 Drilling

Endeavour Silver conducted the first drill program at the Real Alto (Real, Animas-Los Negros, Escurana and Tajo veins) and Quiteria West Targets in 2011. In 2012, the surface drilling program continued at Real Alto and a single deep drill hole was drilled at Quiteria West.

The drilling program over the Terronera Vein was conducted from early 2012 to the end of 2016, the structure has been tested with 149 drill holes totalling 43,526 m. Additionally seven drill holes were completed at the Terronera North area (2,783 m).

In 2016, exploration activities focused on the definition and evaluation of new drilling targets around the Terronera Project and near the future Mine Operations. Nine drilling objectives were tested, including La Luz.

Between 2011 and 2016, Endeavour Silver had drilled 70,885 m in 248 diamond drill holes over the entire Terronera Project. Holes were drilled from surface and 22,351 samples have been collected and submitted for analysis.

During 2017, a total of 12,252 m drilled in 47 drill holes, mainly conducted at La Luz (to date a total of 41 drill holes have been completed over the structure totalling 9,796 m of drilling), with the objective to add Mineral Resources to the Terronera Project. Eight other structures were also tested (El Muro, Los Espinos, Los Reyes, El Fraile, Vista Hermosa, La Escondida, La Atrevida and Quiteria West). The 2017 drilling program included 2,308 samples.

During 2018, a total of 18,774 m drilled in 39 surface diamond drill holes, were advanced on the Terronera vein including 3,007 samples collected and submitted for analysis

In 2018, Endeavour Silver engaged Knight Piésold Ltd. (KP) to provide geomechanical and hydrogeological support for the proposed underground mine over the La Luz vein of the Terronera Project.


The investigation program consisted of geomechanical drill holes with core orientation and detailed geomechanical logging, a hydrogeological packer testing at approximately 30 m intervals, and a nested vibrating wire piezometer installation.

Three drill holes were completed by the end of 2018, totalling 575 m, and one more drill hole for 215 m was completed in early 2019.

1.9 Sample Preparation, Analyses and Security

Since September, 2014 sampling has coincided with core recovery. Drilling is subject to daily scrutiny and coordination by Endeavour Silver's geologists.

The core storage facilities at Terronera are located at a permanent structure located at the town of Santiago de Los Pinos in the Project area.

All of Endeavour Silver's samples of rock and drill core are bagged and tagged at the Terronera Project warehouse and shipped to the ALS-Chemex (ALS) preparation facility in Guadalajara, Mexico. After preparation, the samples are shipped to the ALS laboratory in Vancouver, Canada, for analysis.

A QA/QC program of blanks, duplicates, reference standards and check assays has been instituted by Endeavour Silver to monitor the integrity of assay results. Drilling on the Terronera Project included a QA/QC program.

A total of 3,007 samples, including control samples, were submitted during Endeavour Silver's surface drilling program at Terronera from March 2018 through August 2018. A total of 148 pulps were also submitted for check assaying.

1.10 Data Verification

P&E conducted verification of the drill hole assay database by comparison of the database entries with the assay certificates, which were sent to P&E in digital format directly from the ALS.

Assay data from June 2016 through August 2018 were verified for the Terronera Project. For the La Luz Deposit, 97.5% of the constrained drilling assay data were checked for both Au and Ag, against the ALS laboratory certificates. No errors were identified in the database. For the Terronera deposit, 97.4% of the constrained drilling assay data for the holes drilled since 2016 were checked for both Au and Ag, against the ALS laboratory certificates. No errors were identified in the database.

Mr. Burga, P.Geo., most recently visited the Terronera Project in January and October of 2018. In January, 2018, he collected twelve core samples from 10 drill holes from the La Luz Vein area, and three core samples from two drill holes from the Terronera Vein area. For the October, 2018 trip, Mr. Burga collected 10 core samples from nine drill holes from the Terronera Vein area. P&E submitted the samples independently and compared them to the sample values obtained by Endeavour Silver. 

Based upon the evaluation of the QA/QC program undertaken by Endeavour Silver and P&E's due diligence sampling, it is P&E's opinion that the results are acceptable for use in the current Mineral Resource Estimate.


1.11 Mineral Processing and Metallurgical Testing

There have been a number of testwork phases conducted between 2017 and 2020.  The 2017-2019 work programs were supervised by Process Engineering LLC.  The 2020 testwork was supervised by Ausenco.

The previous PFS Update for the Terronera Project was completed in February 2019, which was supported by all testwork conducted from 2017-2019. The 2019 study included a program of locked and open cycle flotation testing completed by ALS Metallurgy at its metallurgical testing facility in Kamloops, B.C. As part of the 2020 UPFS, additional metallurgical tests were conducted at the same ALS Metallurgy facility using retained samples from the 2019 PFS testwork.

The metallurgical testing conducted by ALS from 2017-2019 included evaluation of the flotation parameters for one composite representing an average grade (gold and silver grades) of the deposit as well as three variability composite samples representing low, medium and high-grade materials identified in the deposit.

The following lists the samples that were evaluated in the historical metallurgical test program:

 TR2015 - 1                      Average Grade

 TR2016 - 03                    Low Grade

 TR2016 - 01                    Medium Grade

 TR2016 - 02                    High Grade

The 2017-2019 metallurgical test program provided a Bond Ball Mill Work Index (BWi) for four samples (501, 502, 503 and 504 shown in Table 1-2) from various areas of the deposit.  Each sample was tested at a closed size of 100 mesh. In addition, the Bond Ball mill work index was determined for the original average grade composite sample (TR 2015-1) at a closed size of 100 and 200 mesh. The BWi results obtained in previous test program are summarized in Table 1-2.

Table 1-2 Bond Ball Mill Work Index Test Results

Sample

BWi @100 mesh (kWh/t)

501

15.82

502

16.98

503

16.73

504

17.65

TR 2015-1

17.36

Sample

BWi @200 mesh (kWh/t)

TR 2015-1

17.28

Some of the samples listed in Table 1-2 were submitted to Hazen Research for additional comminution testing. The samples were subjected to SMC testing, Bond rod mill work index (RWi), Bond abrasion index (Ai), and Bond impact work index testing (CWi), the results of which are provided in Table 1-3.

Table 1-3 Comminution Testing Results

RWi

(kWh/t)

Ai

(g)

CWi

(kWh/t)

SCSE (kWh/t)

17.2

1.0916

8.3

9.85



Note: SCSE = standard circuit specific energy

The 2019 PFS comminution testing indicated that the material would be classified as hard and highly abrasive.

Pocock Industrial (Pocock) conducted solids liquid separation (SLS) tests on two samples (Flotation Tails and Flotation Concentrate materials) in the year 2016. The testwork was managed by Process Engineering LLC.

Pressure filtration tests examined the effect of cake thickness, and air-dry duration on production rate, and filter cake moisture for the thickened materials. The samples were tested at the solids concentrations expected in the plant.

Summary of the testwork is provided in Table 1-4.

Table 1-4 Summary of Fully Automatic Membrane Type Filter Press

Material

Feed Solids Conc.

Sizing Basis (dry m3/MT)

Cake Thickness (mm)

Design Cake Moisture

Total Cycle Time(min)

Volumetric Production Rate (MTPD/m3)

Area Basis Production Rate (MTPD/m2)

Thickened Flotation Tails

67.0%

0.797

40

12.0%

9.0

167.29

2.92

Thickened Flotation Concentrate

63.5%

0.638

40

15.2%

13.39

140.46

2.45

As part of the UPFS, additional metallurgical testing was completed to support design of the comminution and flotation circuits.The 2020 testwork was completed using the following composite samples: Terronera MC1, Terronera MC2, High S MC, and Low S MC, which were formed based on spatial and sulphur grades. No additional comminution testing was completed as part of the 2020 program. It is anticipated that additional testwork will be completed in the feasibility phase of the project to confirm the results achieved from 2017-2019 and further define the variability of the ore across the deposit.

Primary grind vs recovery tests were completed as part of the 2019/2020 testwork to compare the rougher flotation stage recoveries at three different grind sizes of 80% passing of 70 to 135 μm. The rougher flotation recovery benefits of silver/gold outweigh grinding mill capital and operating cost savings at 70 μm. Thus, the primary grind size of 70 μm was chosen as the basis of design for the 2020 UPFS.

Cleaner flotation circuit confirmation tests were conducted to examine the possibility of removing the regrind mill and reduction of cleaner circuit stages to achieve the minimum target silver grade of 4,500 g/t in the final concentrate. Two cleaner circuit locked cycle tests (LCT), using low- and high-grade samples, achieved concentrate silver grades higher than 4,500 g/t without the aid of a regrind mill. The lower feed grade sample still required two stages of cleaners to achieve the minimum silver target concentrate grade.


In the current study, additional flotation tests were performed to analyze the grind size versus precious metal recovery with the objective of lowering the operating and capital costs by increasing the flotation feed size. Cleaner confirmation tests were done resulting in the removal of the regrind mill from the process design. Two composite samples tests representing low, and high-grade materials were examined. Each composite sample was subjected to rougher flotation testing at three different grind sizes including 80% passing 70, 104 and 130 μm (for high grade) and 80% passing 76, 103 and 135 μm (for low grade).

Deleterious elements detected in the ICP scan conducted on the final concentrate product in the 2017-2019 test programs indicated that Trace amounts of deleterious elements such as arsenic, cadmium, chromium, mercury and antimony were detected that may affect the marketability and price of the final concentrate product. Presence of clay may affect the recovery. Thus, further flotation studies need to be conducted on variability samples to understand the impact of such elements on the metallurgical performance and final concentrate produced.The 2020 testwork resulted in an average Ag recovery of 84.9% and Au recovery of 82.3% with a grind size P80 of 70 μm. The 2017-201,9 and 2020 metallurgical testwork results formed the basis of the 2020 UPFS process design, using the additional metallurgical testing to define primary grind size and flotation circuit design parameters, as well as develop new recovery models.

The process flow sheet includes a three-stage crushing circuit followed by closed grinding circuit with a flash flotation cell to achieve a flotation feed grind size of 80% passing 70 μm.

1.12 Mineral Resource Estimate

Mineral Resources are reported in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards for Mineral Resources (May 2014; the 2014 CIM Definition Standards).

The Mineral Resource estimate was not updated for the UPFS. The Mineral Resource estimate is based on the2019 PFS report from P&E in April 2019. The effective date of the Mineral Resource estimate is February 1, 2019.

The cut-off grade selected for the February 1, 2019 Mineral Resource estimate was 150 g/t silver equivalent (AgEq). A summary of the Mineral Resource estimate for the Terronera deposit is presented in Table 1-5.

Table 1-5 Terronera Mineral Resource Estimate at a Cut-Off Grade of 150 g/t AgEq(1-6)

Classification

Tonnes

(kt)

Ag

(g/t)

Contained Ag

(koz)

Au

(g/t)

Contained Au

(koz)

AgEq

(g/t)

Contained AgEq

(koz)

Indicated

5,275

227.2

38,537

2.35

398

403.4

68,416

Inferred

1,022

212.2

6,970

1.70

56

339.8

11,161

1. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.

2. The Inferred Mineral Resource in this estimate has a lower level of confidence than that applied to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of the Inferred Mineral Resource could be upgraded to an Indicated Mineral Resource with continued exploration.

3. The Mineral Resources in this Updated Technical Report were estimated using the CIM Definition Standards for Mineral Resources and Mineral Reserves.

4. AgEq g/t = Ag g/t + (Au g/t x 75).


5. Historical mined areas were depleted from the Terronera Vein wireframe and Mineral Resource model.

6. Mineral Resources are inclusive of Mineral Reserves.

A summary of the La Luz Mineral Resource estimate at a cut-off grade of 150 g/t AgEq is presented in Table 1-6.

Table 1-6 La Luz Mineral Resource Estimate at a Cut-Off Grade of 150 g/t AgEq(1-5) 

Classification

Tonnes

(kt)

Ag

(g/t)

Contained
Ag

(koz)

Au

(g/t)

Contained
Au

(koz)

AgEq

(g/t)

Contained
AgEq

(koz)

Indicated

126

192

779

13.60

55

1,212

4,904

Inferred

58

145

269

12.15

23

1,060

1,994

1. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues.

2. The Inferred Mineral Resource in this estimate has a lower level of confidence than that applied to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of the Inferred Mineral Resource could be upgraded to an Indicated Mineral Resource with continued exploration.

3. The Mineral Resources in this Updated Technical Report were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by the CIM Council.

4. AgEq g/t = Ag g/t + (Au g/t x 75).

5. Mineral Resources are inclusive of Mineral Reserves.

1.13 Mineral Reserve Estimate

Mineral Reserves are reported in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards for Mineral Reserves (May 2014; the 2014 CIM Definition Standards).

A summary of the Terronera and La Luz Probable Mineral Reserve estimate is given in Table 1-7.

Table 1-7 Terronera and La Luz Probable Mineral Reserve(1-5)

Deposit

Tonnes (kt)

Au (g/t)

Ag (g/t)

AgEq (g/t)

Au

(koz)

Ag

(koz)

AgEq

(koz)

Terronera

5,356

2.08

205

367

358

35,268

63,160

La Luz

207

7.87

112

725

52

745

4,828

Combined

5,563

2,29

201

380 

410

36,013

67,988

1. The Qualified Person for the estimate is Michael Petrina, P.Eng., who is an employee of Moose Mountain Technical Services. Mineral Reserves have an effective date of March 23, 2020.

2. Mineral Reserves are reported using the 2014 CIM Definition Standards.


3. Mineral Reserves are reported using a silver equivalency (AgEq) cut-off formula AgEq g/t = Ag g/t + (Au g/t x 77.94). Depending on mining method the AgEq cut-off can range from 175 g/t AgEq to 230 g/t AgEq. Inputs to the AgEq determination included:  metal prices of US$1,325/oz Au, and US$17.00/oz Ag; metallurgical recovery of 79.8% for gold and 84.9% for silver; payability in concentrate of 98.0% for gold and 97.5% for silver; consideration of refining (US$6/oz), tailings (US$110.00/dmt), transport (US$37.06/dmt), sales (US$5.00/dmt), and concentrate (US$3.48/dmt) costs; transport losses (0.2%), royalties (2% NSR and 0.5% Government); and As penalties payable in the concentrate of US$6.00/dmt.  Historically mined areas were depleted from the Terronera wireframe.

1.14 Mining Methods

The underground operations at Terronera and La Luz mines will both be accessed via ramps.  In the case of Terronera, the ramp accesses will connect to the deposit via:

 A main haulage drift from the north with the portal approximately 200m from the mill.  The ramp will access the deposit at the 1,250m level near the western end of the deposit M1 (see Figure 1-3)

 The West ramp with portal location at the 1,480m elevation for early access to the western blocks of the deposit, as well as early access to the 1,380m elevation footwall access drift

 The M9 ramp, located at the 1,527m elevation for early access to the central and eastern portions of the deposit.

In the case of La Luz, the ramp will connect roughly central to the deposit near the bottom of the upper M7 block (see Figure 1-4).  Ore from both the Terronera and La Luz deposits will be transported via 30-t low profile haul truck to surface.  Terronera has a haulage way for transporting ore from underground directly to a stockpile in front of the process plant area, whereas all material from La Luz deposit is envisioned to be hauled entirely by contractor truck to the same stockpile area. 

Mechanized cut and fill and longhole retreat mining will be used for production at the Terronera deposit, and longhole retreat and resue cut and fill mining will be used for production at La Luz deposit. Both deposits will use backfill comprising either cemented or non-cemented rock fill or later in the mine life, cemented or non-cemented quarry rock fill.  Cement contents will vary from 4% to 8% by mass as required.

Development at both deposits will begin at the same time, the first day of month 8 of Year -2.  The La Luz deposit will be mined as quickly as possible and will provide mill feed to an off-site mill, whilst the Terronera deposit is being brought into production. 

Until the Terronera process plant is complete at the end of Year -1, Month 12, ore from the La Luz deposit will be processed offsite at Endeavour Silver's Bolañitos process plant.  Production from La Luz will average roughly 240 tpd over its life, with the Terronera deposit's production ramping up to 1,600 tpd across the year spanning Year 1, Month 7 through to Year 3. Month 1.  Production will remain at a total 1,600 tpd across both deposits until Year 9. Month 10, when it will gradually decline to roughly 1.270 tpd by the end of mine life at the end of Year 10.


Source: Moose Mountain, June 2020

Figure 1-3 Terronera Deposit Longitudinal Projection


Source: Moose Mountain, June 2020

Figure 1-4 La Luz Deposit Longitudinal Projection


1.15 Recovery Methods

The Terronera mill will be a 1,600 tpd mill which will process run-of-mine (ROM) material from both the La Luz and Terronera mines.

Production of ore from La Luz mine will start approximately 14 months before completion of Terronera mill. During this period, ore from La Luz will be trucked to Endeavour Silver's Bolanitas mill, located approximately 500 kms away and the ore will be processed under a toll milling arrangement. Production from Terronera mine will begin five months before the start of Terronera mill. During the ramp up period, ore from Terronera mine will be stockpiled until an inventory of 70,000 t is built. After commissioning of the Terronera mill, ore from both La Luz and Terronera mines will be blended and processed at Terronera mill achieving a production rate of 1,600 tpd within three months.

The bulk of the testwork was completed on Terronera ore as it is the most significant component of the feed to the mill. Limited testwork was conducted on La Luz ores; however, the available results show higher recoveries than those for Terronera ores, and thus the Terronera material has been used as the basis of the design.

The key process design criteria for the mill are listed in Table 1-8.

Table 1-8 Key Process Design Criteria for the Mill

Design Parameter

Units

Value

Plant Throughput

t/d

1600

Gold Head Grade

g/t

2.1

Silver Head Grade

g/t

204

Crushing Availability

%

65

Mill Availability

%

92

Bond Crusher Work Index (CWi)

kWh/t

18.0

Bond Ball Mill Work Index (BWi)

kWh/t

17.2

Bond Rod Mill Work Index (RWi)

kWh/t

17.3

Axb

-

38.9

Abrasion Index (Ai)

G

0.50

Material Specific Gravity

t/m3

2.61

Moisture

%

4

Plant Silver Recovery

%

84.0

Plant Gold Recovery

%

83.1

ROM F100

mm

500

Primary Cyclone P80

µm

70



Design of the beneficiation plant at Terronera is based on three-stage crushing and single-stage grinding to a target particle size of 80% passing 70 μm. Ground ores will be treated by flash flotation and conventional flotation with two stages of cleaning. On the basis of the testwork, overall recoveries of 84.9% for silver and 82.3% for gold are anticipated for the life-of-mine (LOM) ore.  Precious metal values will be recovered into a flotation concentrate that may be sold in the open market. Flotation tailings are filtered; and stored on surface in a tailings storage facility (TSF).

The plan of operation for the Terronera mill is to achieve the design capacity production rate of 1,600 tpd over a three-month ramp-up period. At this design throughput the LOM for the Project is estimated at 10 years.

The ROM material will be transported to a coarse material storage patio with haul trucks. The crushing circuit is designed to process 1,600 dry tpd in 16 hours of operation. The beneficiation plant will operate continuously 365 days per annum. The beneficiation plant availability is assumed to be 92%. The bulk density of the ROM material is anticipated to be 2.61 t/m3 with average moisture content of 4%. The beneficiation plant will produce a precious metal bearing concentrate as final product.

The processing methodology selected consists of the following processing circuits:

 Stock pile (2,000 t capacity)

 Crushing plant (three stage - closed circuit - 1,600 tpd capacity)

 Fine ore storage (1,600 t capacity)

 Primary grinding (1,600 tpd capacity)

 Flotation (1,600 tpd capacity)

 Flash flotation

 Roughers

 First and second cleaners

 Final concentrate sedimentation and filtration (1,600 tpd capacity)

 Final concentrate storage and shipping (1,600 tpd capacity)

 Tailings sedimentation (1,600 tpd capacity)

 Reclaimed and fresh water systems

 Dry tailings filter plant

 Dry stack TSF.

An overall process flow diagram showing the unit operations in the selected process flowsheet is presented in Figure 1-5.               


Source: Ausenco, June 2020

Figure 1-5 Overall Process Flow Sheet


1.16 Project Infrastructure

The overall site plan in Figure 1-6 shows the location of the proposed major project facilities, such as Terronera and La Luz mines, process plant, TSF, waste rock facilities, power plant, access road, and accommodations camp.

Source: Ausenco, June 2020

Figure 1-6 Map of Proposed Mine Surface Facilities Layout

1.16.1 Access

Existing infrastructure consists of a public access road that connects Puerto Vallarta with the local communities and the Terronera Project site area. The internal existing road will be upgraded to standard driving width. The roads inside the plant area will generally be 6 m wide, made of bulk earthworks pads to ensure drainage. New accesses will be built for infrastructure areas.

1.16.2 Power

The total power requirement at Terronera site is estimated at 4.85 MW for the entire site and an additional 1 MW for the camp (operating load). Power to the entire site, except for the camp, will be supplied through an onsite power generation plant, which comprises both LNG and solar power generation facilities. Power to the camp will be supplied by a power line connected to the local utility.

1.16.3 Tailings Storage Facility

The TSF will store filtered tailings, or "drystack" tailings, to minimize downstream contamination risk and to maximize geotechnical stability in the seismically active coastal area of western Mexico. The location of the TSF is shown in the over site layout in Figure 1-6.


The proposed TSF will be constructed with filter tailings produced by a filter plant that will be located uphill from the TSF. Filter tailings will be transported to the TSF area by 12 m3 haul trucks that will transport the filtered tailings approximately 0.5 km along a proposed newly constructed haul road. A staging area will be provided at the filter plant location, from which the filtered tailings will be loaded onto haul trucks. The filtered material will be dumped and compacted with dozers. The TSF design will accommodate approximately 3.9 million m3 (5.8 million tonnes) of compacted filtered tailings over a 10-year mine life based upon the production rate of 1,600 tpd.

1.16.4 Accommodation

A construction camp will be established near the site to provide accommodation, meals, and ancillary services for construction and operations personnel. The construction camp will be built in a way such that the same camp will be transformed and used as a permanent camp when the mine operations start. The camp is designed for a peak capacity of 400 personnel. The camp will be located in the town of Santiago de los Pinos and is expected that several employees and contractors will be residing in other neighbouring towns.

1.16.5 Buildings

Ancillary buildings necessary to support the Terronera Project include the following: administration building, warehouse/maintenance workshop, mine portal trailer for tagin-tagout, truckshop, first aid station, main gatehouse, fuel station, explosives storage facility, and metallurgical laboratory.

1.16.6 Water Management

The fresh/fire water tank will have a live volume of 50 m3 and will be situated in the process plant next to the concentrate thickener. The fresh/fire water tank will collect and store excess water from the mine or from ground water. This tank water will be the main supply of process water and potable water for the site. Potable water will be treated before consumption. The freshwater requirement is estimated at 15.6 m3/hr which will be supplied through underground ground water.

Diversion channel structures will collect and divert non-contact water to minimize the need for storage of contact water derived from runoff in the tailings and waste rock storage areas. Contact water from these structures will be collected into three ponds (one for each facility), allow for the sediments to settle and monitor water quality before discharging into the local streams or reusing in the process.

1.17 Market Studies and Contracts

Endeavour Silver produces a silver concentrate from its currently operating mines, which is shipped to third parties for further refining before being sold. To a large extent, silver concentrate is sold at the spot price. Endeavour Silver's hedge policy does not allow the Company to enter into long-term hedge contracts or forward sales.

At the Report effective date, Endeavour Silver had not conducted any market studies, since gold and silver are widely traded in world markets and Endeavour Silver can rely on marketing information for similar products from its other operations. Endeavour Silver has no contracts or agreements for mining, smelting, refining, transportation, handling or sales that are outside normal or generally accepted practices within the mining industry. It is expected that any contracts or sales for the Terronera Project would also be within industry norms.


1.18 Environmental Studies, Permitting, and Social or Community Impact

Endeavour Silver submitted a Manifest of Environmental Impact (MIA) to the Mexico environmental permitting authority known as SEMARNAT (Secretaria de Medio Ambiente y Recursos Naturales) in December, 2013. A SEMARNAT permit for the Terronera Project was issued in October, 2014 for a 500 tpd project. In February, 2017 a modified MIA application was issued by SEMARNAT to expand the proposed process rate to up to 1,500 tpd and to establish a future proposed tailings facility to store filtered dry tailings.

The proposed design in this study is based on a 1,600 tpd production rate. A modified MIA application will be submitted as per the revised design. The Terronera Project is designed to comply with the environmental regulations and standards in place in México. The proposed future mining infrastructure and supporting facilities are designed to minimize the impact to the natural environment.

Mexican law requires that an environmental monitoring program of surface and ground water, creek sediments, soil, air, vegetation and wildlife conditions be implemented. The current SEMARNAT regulatory objective is to limit transmission of contaminants such that pre-mining environmental conditions are maintained downstream of the permitted mine perimeter. This program will be required before and during proposed future mining operations and after mine closure.

1.19 Capital and Operating Costs

1.19.1 Capital Cost

The estimate conforms to Class 4 guidelines for a PFS-level estimate with an accuracy range between -20% to +30% according to AACE International.

Table 1-9 provides a summary of the estimate for overall initial capital cost. The costs are expressed in Q2 2020 United States dollars (US$) and include all costs related to the project such as mining, site preparation, process plant, tailings facility, camps, Owners' costs, spares, first fills, buildings, roadworks, and off-site infrastructure.

Table 1-9 Summary of Terronera Capital Cost Estimate

WBS 1

WBS Description

Cost (US$M)

% of Total

1000

Mining

43.9

44.3%

2000

Tailings Management Facility

3.4

3.4%

3000

Ore Crushing & Handling

4.7

4.8%

4000

Mineral Processing Plant

11.0

11.1%

5000

On-Site Infrastructure

9.8

9.9%

6000

Off-Site Infrastructure

0.0

0.0%

 

Total Direct Costs

72.8

73.5%

7000

Project Indirects

10.4

10.5%

9000

Owner Costs 

5.8

5.8%

10000

Contingency

10.0

10.1%




 

Total Indirect Costs

26.2

26.5%

 

Project Total

99.1

100.0%

The estimate is based on an engineering, procurement and construction management (EPCM) execution approach, as outlined in Section 24.

The following parameters and qualifications were considered:

 No allowance has been made for exchange rate fluctuations

 There is no escalation added to the estimate

 A growth allowance was included

 Data for the estimates have been obtained from numerous sources, including:

o Mine schedules

o PFS engineering design

o Topographical information obtained from the site survey

o Geotechnical investigations

o Budgetary equipment quotes

o Budgetary unit costs from local contractors for civil, concrete, steel, electrical, and mechanical works

o Data from similar recently completed studies and projects.

Major cost categories (permanent equipment, material purchase, installation, subcontracts, indirect costs, and Owner's costs) were identified and analysed. A contingency percentage of was allocated to each of these categories on a line-item basis based on the accuracy of the data. An overall contingency amount was derived in this fashion.

1.19.2 Operating Cost

The operating cost estimate was developed to have an accuracy of ±25%. The estimate includes mining, processing, general and administration (G&A), and TSF costs. Table 1-10 summarizes the total average annual operating costs.

Table 1-10 Average Annual Operating Costs (US$)

Summary

Average Annual Costs

(US$)

Unit Costs

(US$ / t)

Percentage

%

Processing

9,888,700

                            17.8

25

Mining

24,832,100

                            44.6

64

TSF

826,500

1.5

2

G&A

3,424,300

6.2

9

Total

38,971,600

70.1

100



1.20 Economic Analysis

An economic model was developed to estimate annual pre-tax and post-tax cash flows and sensitivities of the project based on a 5% discount rate. It must be noted that tax estimates involve complex variables that can only be accurately calculated during operations and, as such, the after-tax results are approximations. A sensitivity analysis was performed to assess the impact of variations in metal prices, initial capital cost, total operating cost, and discount rate.

The results of the economic analyses discussed represent forward-looking information as defined under Canadian securities law. The results depend on inputs that are subject to a number of known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from those presented herein.

1.20.1 Financial Model Parameters

A base case gold price of US$1,419/oz and silver price of US$15.97 based on two-year trailing averages as of 8th July, 2020 were used. The forecasts are meant to reflect the average metal price expectation over the life of the project. No price inflation or escalation factors were considered. Commodity prices can be volatile, and there is the potential for deviation from the forecast.

The economic analysis was performed using the following assumptions:

 Construction starting March 1, 2022

 All construction costs capitalised in Year -2

 Commercial production starting (effectively) on September 1, 2023

 Mine life of 10 years

 Cost estimates in constant Q2 2020 US dollars with no inflation or escalation

 100% ownership with 2% royalty to IMMSA and 0.5% to Mexican government

 Capital costs funded with 100% equity (no financing costs assumed)

 All cash flows discounted to March 1, 2022

 Silver and gold are assumed to be sold in the same year it is produced

 No contractual arrangements for refining currently exist.

The Project has been evaluated on an after-tax basis to provide an approximate value of the potential economics. The tax model was compiled by Endeavour Silver with assistance from third-party taxation experts. The calculations are based on the tax regime as of 8th July, 2020.

1.20.2 Economic Analysis

The economic analysis was performed assuming a 5% discount rate. The pre-tax NPV discounted at 5% is US$205 M; the internal rate of return IRR is 37.6%; and payback period is 2.3 years. On a post-tax basis, the NPV discounted at 5% is US$137.1 M; the IRR is 30.0%; and the payback period is 2.7 years. A summary of project economics is shown graphically in Figure 1-7 and listed in Table 1-11.


Figure 1-7 Project Economics Graph

Table 1-11 Summary of Project Economics

General

LOM Total / Avg.

Gold Price (US$ / oz)

1,419

Silver Price (US$ / oz)

15.97

Mine Life (Years)

10

Total Mill Feed (kt)

5,563

Production

LOM Total / Avg.

Mill Head Grade Au (g / t)

2.29

Mill Recovery Au (%)

82.3

Total Recovered Ounces Au (koz)

336.9

Average Annual Production Au (koz)

33.7

Mill Head Grade Ag (g / t)

201.1

Mill Recovery Ag (%)

84.9

Total Recovered Ounces Ag (koz)

30,602

Average Annual Production Ag (koz)

3,060

Average Ag Eq. Grade (g/t)

404

Operating Cost

LOM Total / Avg.

Mining (US$ / t Milled)

35.6




Mining Lease (US$ / t Milled)

8.2

Processing (US$ / t Milled)

17.8

G&A (US$ / t Milled)

6.2

Capital Cost

LOM Total / Avg.

Initial Capex (US$M)

99.1

Sustaining Capex (US$M)

60.4

Closure Cost net of Salvage (US$M)

2.0

Pre-Tax Financial

LOM Total / Avg.

NPV (5%) (US$M)

205

IRR (%)

37.6

Payback (Years)

2.3

Post-Tax Financial

LOM Total / Avg.

NPV (5%) (US$M)

137

IRR (%)

30.0

Payback (Years)

2.7

Cash Cost (Net by-product per silver oz)

0.004

All-in Sustaining Cost per Ag ounce

8.96

1.20.3 Sensitivity Analysis

A sensitivity analysis was conducted on the base case pre-tax and post-tax NPV and IRR of the Project, using the following variables: metal prices, initial capex, total operating cost, feed grade and discount rate. The analysis concludes that the project is most sensitive to revenue attributes such as gold and silver price, followed by operating cost and capital cost.Source: Ausenco, July 2020

Figure 1-8 shows the project's pre-tax sensitivity and Source: Ausenco, July 2020

Figure 1-9 shows the project's post-tax sensitivity.


Source: Ausenco, July 2020

Figure 1-8 Pre-Tax Sensitivity


Source: Ausenco, July 2020

Figure 1-9 Post-Tax Sensitivity


At current spot prices, the after tax NPV and IRR are most sensitive to metal prices and least sensitive to initial capex and has approximately equal exposure to silver and gold prices.   This information is shown in Table 1.12 and 1.13

Table 1‑12 Sensitivity to Metal Prices

Gold Price  

Silver Price  

After Tax
NPV (US$M)

After Tax IRR 

1,200 

12.00 

49.8 

14.2% 

1,400 

14.00 

107.8 

24.2% 

Base Case 

Base Case 

137.1 

30.0% 

1,600 

16.00 

164.5 

34.9% 

1,800 

18.00 

220.9 

44.4% 

2,000 

20.00 

277.3 

53.9% 

Table 1‑13 Sensitivity to CAPEX

Movement 

OPEX NPV 
(US$M)

OPEX IRR 

Movement 

CAPEX NPV 
(US$M)

CAPEX IRR 

-20% 

173.2 

36.2% 

-20% 

150.4 

38.1% 

-10% 

155.2 

33.1% 

-10% 

143.8 

33.6% 

Base Case 

137.1 

30.0% 

Base Case 

137.1 

30.0% 

10% 

118.9 

26.7% 

10% 

130.4 

26.9% 

20% 

100.7 

23.4% 

20% 

123.7 

24.3% 

 

1.21 Conclusions and Recommendations

1.21.1 Overall

The financial analysis of this UPFS demonstrates that the Terronera Project has robust economics to develop the project through feasibility and detailed engineering. Estimated costs for completing work recommended in Table 1-14.

Table 1-14 Budget Estimate for Completing the Recommended Work

Program Component

Cost Estimate ($M)

Exploratory Drilling

0.25

Mining - Mineral Resource and Reserve Estimate Updates

0.5

Geomechanical Studies

0.25

Site Geotechnical Studies

0.20

Metallurgical Testing

0.5

Hydrogeological Study

0.15

TSF - Advance the design to construction level

0.15

Environmental baseline studies and Social programs

1.0

Optimization Studies

0.3

Engineering Studies

1.5

Total Cost

4.80

1.21.2 Exploration

1.21.2.1 Drilling

Endeavour Silver should continue with the company's infill and exploratory drill program strategies. Infill drilling should be orientated to investigate the continuity of silver-gold mineralisation both along strike and at depth to improve and further validate the confidence in the geological models being used for the deposits. Infill drilling should be considered to increase the volume and tonnage of the current deposits and advance the deposit knowledge toward higher levels of mineral resource classification.

Exploratory drilling should be used in collaboration with geophysical interpretations to test for mineralisation and potential expansion of both Terronera and La Luz deposits.

1.21.3 Mineral Resource Estimations

Based on the work completed for the Mineral Resource estimate, it is recommended that future Mineral Resource estimations further refine the constraining mineralised domains. Endeavour Silver should consider redefining the cut-off grade due to the low-cost mining method adopted and increase in metal prices.

1.21.4 Mineral Reserve and Mining Methods

The following recommendations are made for future mining studies:


 Explore opportunities to increase project value via reductions in planned mining loss and dilution and various ore control strategies:

o Explore impacts to the mine plan of re-blocking resource model

o Explore converting to a block percentage model and applying a manual dilution skin to mineralisation zones; further definition of mineralisation boundaries would be required to execute this strategy

o Explore the impacts of applying ore sorting technologies between the mine and mill

o Further work on comparing mining methods to evaluate costs versus ounces recovered

 Conduct additional hydrogeological fieldwork, including Packer testing, piezometer installation, and development of a 3D hydrogeological model for each deposit

 Execution of the following geotechnical work programs:

o Targeted geotechnical drilling at Terronera and La Luz deposits to increase data confidence for feasibility level engineering

o Ground-truthing of possible major structures

o Additional geomechanical testing leading to an updated Rock Mass Model

o Update the geotechnical models and perform advanced numerical modelling

o Geotechnical analysis of the foundations identified for Terronera and La Luz should be carried out to ensure suitability of site selections presented in this study

 Drill and blast testing to be carried out by drilling vendors and local explosives suppliers by analysing local rock types and conditions to assess the achievable drill penetration rates, optimal explosives mix and target powder factor for use in this operation

 Blasting for improved mine to mill performance can be optimised in future studies. Increased fragmentation can increase the grind capacity in the mill

 Further engagement with potential mining contractors, obtaining updated quotations for services

 Updates to detailed designs of the mines, infrastructure and external haul roads based on information gathered in the above studies

 Explore opportunities to increase project value via alternative deposit development strategies.

1.21.5 Metallurgical Testwork

A full feasibility study level metallurgical testwork program incorporating testwork on major lithological characterisation samples, variability samples, and production composite samples from both Terronera and La Luz deposits is recommended to provide further definition across the resource. Drill cores are available on site for the testwork and the sample selection program is currently in progress. Key recommendations include:

 Ore competency - Given the limited dataset for ore competency, additional JK Tech SMC tests (Axb) are recommended to be conducted over a range of rock types and spatial zones to define distribution and variability of ore competency; PQ core is recommended

 Ore hardness - RWi, BWi index tests should be conducted to define ore hardness distribution and variability

 Abrasion Index - Tests should be conducted to redefine the abrasion index


 Further testwork to optimize the grinding circuit

 Grade-recovery relationship - Flotation testing of additional samples at various grind sizes should be conducted to determine grade-recovery relationship

 Preconcentration - Evaluate preconcentration opportunities such as ore sorting to reduce operating costs and decrease cut-off grades

 Solid-liquid separation - Finalise the tailings deposition route based on optimised flowsheet conditions.

1.21.6 Recovery Methods

The following activities are recommended to support design of the processing plant beyond the UPFS and into the feasibility study:

 Geotechnical site investigations should be carried out at the preferred process plant site locations to characterise the foundation conditions associated with the proposed buildings

 Material flowability testwork should be completed to further develop the crushing and stockpile circuit design.

1.21.7 Site Infrastructure

The following activities are recommended to support the design of the site infrastructure beyond the UPFS and into the feasibility study:

 Geotechnical site investigations should be carried out at the preferred surface infrastructure site locations to characterise the foundation conditions associated with the proposed buildings

 The access road to site should be further analysed, reviewed and engineered, culminating in a detailed work package to be tendered to local contractors

 Alternate sources of power supply should be considered to decrease the footprint and earthworks required

 Conduct studies to define the source of water and requirements for water treatment.

1.21.8 Water Management

The following activities are recommended to support the design of the water management systems beyond the UPFS and into the feasibility study:

 Progress design of de-centralised water management in each complex consisting of sedimentation ponds, berms, drainage ditches and outlet channels

 Maintain adequate component waterbody setbacks to account for regulatory buffers and water management infrastructure

 Identify opportunities to enhance sedimentation pond volumes at select locations

 Continue geochemical testing and assessment of acid rock drainage/metals leaching (ARD/ML) to further refine parameters of potential concern

 Additional hydrogeological data should be collected to accurately estimate the underground pumping requirements

 Conduct a site-wide water balance and develop water disposal strategy to meet the environmental regulations.


1.21.9 Tailings Management Facility

The following activities are recommended to support the design of the tailings storage facility (TSF) beyond the PFS:

  • Optimize TMF area design to minimize waste rock use and maximize its availability for underground mine backfill
  • Conduct a materials handling conceptual tradeoff study between conveying and trucking options, and advance to feasibility level design the selected tailings transport option
  • Consider additional land acquisition to optimize the TMF geometric design and allow for potential storage expansion.

1.21.10 Environmental, Permitting & Community Relations

A revised EIA application should be submitted to the Mexican environmental permitting authority known as SEMARNAT as per the revised production rate of 1,600 tpd.


2 Introduction

2.1 Introduction

Ausenco Engineering Canada Inc. (Ausenco) prepared the Technical Report (the Report) for Endeavour Silver Corp. (Endeavour Silver) to summarise the results of an updated pre-feasibility study (UPFS) on the Terronera Silver Gold Project (the Terronera Project).

2.2 Terms of Reference

This Report supports disclosure by Endeavour Silver in a press release dated July 14, 2020, entitled "Endeavour Silver Announces Robust Economics in Final Pre-Feasibility Study on the Terronera Mine Project in Jalisco State, Mexico".

Moose Mountain Technical Services (Moose Mountain), P&E Mining Consultants Inc. (P&E), JDS Consulting (JDS) and Wood plc (Wood) provided input to the report.

Mineral Resources and Mineral Reserves are reported in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards for Mineral Resources and Mineral Reserves (May 2014; the 2014 CIM Definition Standards).

2.3 Sources of Information

The following sources of information and data were used in preparing this Report:

 Personal inspections of the Terronera site and surrounding area

 Technical information provided by Endeavour Silver

 Information provided by other experts with specific knowledge in their fields as described in Section 3, Reliance on Other Experts

 Additional information obtained from public domain sources

 Documents listed in Section 27 References.

2.4 Qualified Persons

The Qualified Persons responsible for this Report are as follows:

 Robin Kalanchey, P.Eng., Director, Minerals & Metals - Western Canada, Ausenco

 Michael Petrina, P.Eng., Principle Mining Engineer, Moose Mountain

 Humberto Preciado, P.E, Senior Associate Geotechnical Engineer, Wood

 Euqene Puritch, P.Eng., F.E.C., CET, President, P&E Mining Consultants

 David Burga, P.Geo, Geologist, P&E Mining Consultants

 Yungang Wu, P.Geo, Geologist, P&E Mining Consultants

 Michael Levy, P.Eng., Geotechnical Manager, JDS Energy & Mining Inc.

 Eugenio Iasillo. P.E., Principal, Process Engineering LLC


2.5 Site Visits and Scope of Personal Inspection

Site visit dates and scope of personal inspection are as follows:

 Mr Humberto Preciado visited the site from December 11-14, 2015.  During this time, he oversaw a portion of the geotechnical site investigation program in the proposed TSF, and the collection and submittal of waste rock samples to an analytical environmental laboratory in Mexico.

 Mr. Eugene Puritch visited the site on September 11, 2014.  During that visit he inspected drilling sites, drill core, existing infrastructure, access roads, and potential mine portal and waste rock storage locations.

 Mr. David Burga visited the property on September 11, 2014; October 7, 2014; June 14, 2016, January 9 and October 16, 2018. While on site he reviewed representative drill core intervals from several holes at both deposits and observed ground conditions.

 Mr. Michael Levy visited the site from on October 8, 2020. While on site he reviewed representative drill core intervals from several holes at both deposits and observed ground conditions in two existing adits.

 Mr. Eugenio Iasillo visited the site on September 11 and 12, 2014.  During this visit, Mr. Eugenio visited the drilling sites, drill core, existing infrastructure, access roads, and potential mine portal and waste rock storage locations. 

2.6 Effective Dates

The Report has a number of effective dates as follows:

 Date of Mineral Resource estimate for the Terronera deposit:  February 1, 2019

 Date of Mineral Resource estimate for the La Luz deposit:  August 7, 2018

 Date of Mineral Reserve estimate: March 23, 2020 

 Date of economic analysis that supports the Mineral Reserves:  July 08, 2020

The overall Report effective date is the date of the cashflow that supports the Mineral Reserve estimates, and is July 14, 2020.

2.7 Previous Technical Reports

The following technical reports have previously been filed on the Terronera Project:

 Puritch, E., Robinson, D.G., Smith, P.J., Burga, D., Wu, Y., Iasillo, E., Preciado, H., and Peacock, B., 2019:  Updated Technical Report for the Terronera Project, Jalisco State, Mexico:  report prepared by P&E Mining Consultants Inc. for Endeavour Silver Corp., effective date February 12, 2019, 334 p.

 Puritch E., Burga, D., Wu, Y., Iasillo, E., and Preciado, H., 2019:  Updated Mineral Resource Estimate Technical Report for the Terronera Project, Jalisco State. Mexico: report prepared by P&E Mining Consultants Inc. for Endeavour Silver Corp., effective date February 1, 2019, 230 p.

 Smith, P.J., Iasillo, E., Puritch, E., Wu, Y., Burga, D., Peacock, B., and Preciado, H., 2018: NI 43-101 and NI 43-101F1 Technical Report Updated Mineral Resource Estimate and Updated Preliminary Feasibility Study for the Terronera Project Jalisco State, Mexico:  report prepared by Smith Foster and Associates for Endeavour Silver Corp., effective date 7 August, 2018, 317 p.


 Smith, P.J., Iasillo, E., Puritch, E., Wu, Y., Burga, D., Barry, J., Pearson, J., Peacock, B., and Fleming, S., 2017:  NI 43-101 Technical Report Preliminary Feasibility Study for the Terronera Project Jalisco State Mexico:  report prepared by Smith Foster and Associates for Endeavour Silver Corp., effective date April 3, 2017, 341 p.

 Smith, P.J., Iasillo, E., Puritch, E., Sutcliff, R., Burga, D., Barry, J., Routledge, R., Pearson, J., Peacock, B., and Fleming, S., 2015:  NI 43-101 Technical Report Preliminary Economic Assessment for the Terronera Project, Jalisco State, Mexico:  report prepared by Smith Foster and Associates for Endeavour Silver Corp., effective date March 25, 2015, 242 p.

Under the former project name of San Sebastian, the following technical reports were filed:

 Munroe, M.J., 2013:  NI 43-101 Technical Report on the Resource Estimates for the San Sebastian Project, Jalisco State, Mexico:  report prepared by Michael J. Munroe for Endeavour Silver Corp., effective date December 31, 2013, 140 p.

 Lewis, W.J., and Murahwi, C.Z., 2012:  NI 43-101 Technical Report, Audit of the Mineral Resource Estimate for the San Sebastian Project, Jalisco State, Mexico: report prepared by Micon International Limited for Endeavour Silver Corp., effective date December 15, 2012, 128 p.

 Lewis, W.J., and Murahwi, C.Z., 2011:  NI 43-101 Technical Report, Audit of the Mineral Resource Estimate for the San Sebastian Project, Jalisco State, Mexico: report prepared by Micon International Limited for Endeavour Silver Corp., effective date December 21, 2011, 131 p.

2.8 Units and Currency

All measurement units used in this report are metric unless otherwise noted. Currency is expressed in United States (US) dollars (US$). Contained silver metal is expressed as troy ounces (oz), where 1 oz = 28.3495 g. Contained gold metal is expressed as troy ounces (oz), where 1 oz = 31.1035 g. All material tonnes are expressed as dry tonnes (t) unless stated otherwise.

All currency amounts are stated in US dollars, or unless specified Mexican pesos (MXN). The exchange rate is based on a historical average at US$1.00 equal to MXN 20.0.

Quantities are generally stated in Système International d'Unités (SI) units, the standard Canadian and international practice. When applicable, any Imperial units of measure encountered have been converted to SI units for reporting consistency. Precious metal grades may be expressed in parts per million (ppm) and their quantities may also be reported in troy ounces (oz), a common practice in the mining industry. Base metal grades may be expressed as a percentage (%). Table 2-1 provides a list of the abbreviations used.

Table 2-1 Terminology and Abbreviations

Abbreviation

Name / Meaning

$

dollar

%

percent

$M

dollars, millions

>

greater than

<

less than




'

foot

"

inches

°

degrees

°C

degrees Celsius

1/d3

inverse distance cubed

AA

atomic adsorption

AAS

atomic absorption spectrometry

Ag

silver

AgEq

silver equivalent

AGREMIN

Agregados Mineros de Occidente S.A. de C.V.

ALS

ALS Metallurgy or ALS-Chemex or ALS Minerals or ALS laboratory

Ai

bond abrasion index

Au

gold

BWi

bond ball mill work index

CFE

Commission Federal de Electricidad or Comisión Federal de Electricidad

CIM

Canadian Institute of Mining, Metallurgy and Petroleum

CL

control limit

Cm

centimeters

CRM or standards

certified reference material or standard reference material

CSA

Canadian Securities Administrators

Cu

copper

CUS

change of soils use

CWi

bond impact work index testing

DGM

Dirección General de Minas

DTU

Unified Technical Document

EIS

Environmental Impact Statement

Endeavour Silver

Endeavour Silver Corporation

Energold

Energold Drilling Corp.

Energold Mexico

Energold de Mexico, S.A. de C.V.




ETJ

Technical Economic Justification Study

G

grams

G&A

General and Administration

g/t

grams per tonne

H

height

Ha

hectares

HIG

high intensity grind

HPGR

high pressure grinding rolls

ICP

inductively coupled plasma

ID

inverse distance

IMMSA

Industrias Minera México S.A. de C.V.

IRR

internal rate of return

Kg

kilograms

Koz

thousands of ounces

KP

Knight Piésold Ltd.

Kt

thousands of tonnes

kt/y

thousands of tonnes per year

kWh/t

kilowatt hours per tonne

L

litres

Layne

Layne de Mexico, S.A. de C.V.

Layne Christensen

Layne Christensen Company

LHD

load haul dump unit (scooptram)

LL

lower control limit

LNG

liquified natural gas

LOM

life-of-mine

M

meters

M/a

million  per annual

M/y

million per year

max.

maximum

Mean

arithmetic average of group of samples

Mg

milligrams




MIA

Manifestación de Impacto Ambiental or Manifest of Environmental Impact

MIA-P

Manifestación de Impacto Ambiental, particular modality

min.

minimum

Minera Cimarron

Minera Cimarron S.A. de C.V.

Minera Plata

Minera Plata Adelante S.A. de C.V.

Mm

millimeters

MPA

Minera Plata Adelante S.A. de C.V.

Mt

million tonnes

MXN

Mexican pesos

N/A or n/a

not available/applicable

NE

northeast

NI 43-101

National Instrument 43-101

NN

nearest neighbor

No.

number

NPV

net present value

NPV5%

net present value discounted at 5%

NSR

net smelter return

NW

northwest

Oz

Troy ounces

Pb

lead

PFS

pre-feasibility study

Ppb

parts per billion

Ppm

parts per million (= g/t)

Q

quarter

QA

quality assurance

QC

quality control

QPs

Qualified Persons

QMS

quality management system

RWi

bond rod mill work index

San Sebastián

San Sebastian del Oeste

SD

Standard Deviation




SE

southeast

SEDENA

Secretaria de Seguridad Nacional

SEMARNAT

Secretaria Medio Ambiente y Recursos Naturales

SFA

Smith Foster & Associates Inc.

SGS

SGS de México

SOPs

standard operating procedures

SPT

standard penetration testing

Standards

standard reference material

SW

southwest

T

tonnes

Tpd

tonnes per day

TPM

Terronera Precious Metals S.A. de C.V.

TMF

tailings management facility

TSF

tailings storage facility

UCF

unconsolidated rock fill

U/G

underground

UL

upper control limit

UPFS

updated pre-feasibility study

US$ or $

United States dollars

UTM

Universal Transverse Mercator grid system

V

vertical

VTR

vertical intensity grind

W

width

WGS 84

World Geodetic System 1984

Yd

yard, imperial measurement

YR

year

Zn

zinc



3 Reliance on Other Experts

3.1 Legal Status

The QPs have not independently reviewed the legal status of the Terronera Project.  They have fully relied upon, and disclaim responsibility for, information derived from experts retained by Endeavour Silver for the legal status through the following report:

Cereceres Estudio Legal, S.C., 2020: prepared an internal report for Endeavour Silver by Mexico City-based Cereceres Estudio Legal, dated May 10, 2020

3.2 Baseline Studies, Environmental, and Permitting

The QPs have not independently reviewed the basis for, or the information in the baseline studies and application documents used to obtain the Manifestacion de Impacto Ambiental approvals for the Terronera Project.  Humberto Preciado, P.E., of Wood, has fully relied upon the expert statements and representations submitted to SEMARNAT by:

 Ing. José Luis Razura González in the process of achieving the October 2014 SEMARNAT 500 tpd MIA permit for the Project, and,

 The statements and representations of Ing. Roberto Trujillo for the February 2017 1,500 tpd amended MIA permit.

 The statements and representations of Ruben Padilla for the MIA modification requirements and timeline to accommodate a production rate of 1,600 tpd.

Wood has not performed independent investigations to verify the reliability of the representations of Ing. Razura, Ing. Trujillo, Ruben Padilla and their respective consulting entities or associates. However, these are professionals with deep understanding of the environmental regulatory framework in Mexico who continue to work and consult with Endeavour Silver in their current operations.

The Trujillo study was submitted as MIA justification for the mine and process plant, and, as Wood is involved in only the tailings storage facility in the Mondeño area of the Project, Wood did not participate in the generation of or the environmental justification to regulatory authorities of the Trujillo study.  Wood requested and received a copy of the Consultoría Forestal y Ambiental MIA report generated by Ing. Roberto Trujillo for the mine and plant components of the project in April 2017.

This information is used in Section 20 of the Report, and in support of the Mineral Resource estimate in Section 14, the Mineral Reserve estimate in Section 15, and the economic analysis in Section 22.


4 Property Description and Location

4.1 Location

The Terronera Project is located in the northwestern portion of Jalisco State, near its border with the State of Nayarit, Mexico as shown in Figure 1-1.

Source: Terronera NI43-101 Technical Report, April 30, 2019

Figure 4-1 Terronera Project Location Map

The Terronera Project is near the town of San Sebastián del Oeste, which also gives its name to the municipality and mining district which surrounds it.

The Terronera Project is situated between latitude 20° 39' 45" and 21° 02' 30" north and longitude 104° 35' 00" and 104° 51' 00" west which is between WGS 84, UTM coordinates 514,860 and 524,860 east and 2,303,715 and 2,289,120 north in Zone 13Q.


4.2 Mexican Regulations for Mineral Concessions

In Mexico, exploitation concessions are valid for 50 years and are extendable provided that the application is made within the five-year period prior to the expiry of the concession and the bi-annual fee and work requirements are in good standing. All new concessions must have their boundaries orientated north-south and east-west and the lengths of the sides must be one hundred meters or multiples thereof, except where these conditions cannot be satisfied if they border on other mineral concessions. The locations of the concessions are determined on the basis of a fixed point on the land, called the starting point, which is either linked to the perimeter of the concession or located thereupon. Prior to being granted a concession, the company must present a topographic survey to the Dirección General de Minas (DGM) within 60 days of staking. Once this is completed, the DGM will usually grant the concession.

Prior to December 21, 2005, exploration concessions in Mexico were granted for a period of six years and at the end of the six years they could be converted to exploitation concessions. However, as of December 21, 2005 (by means of an amendment made on April 28, 2005 to the Mexican mining law) there is now only one type of mining concession. Therefore, as of the date of the amendment (April 2005), there is no distinction between exploration and exploitation concessions on all new titles granted.

All concessions are now granted for a 50 year period provided that the concessions are kept in good standing. For the concessions to remain in good standing, a bi-annual fee must be paid (January and July) to the Mexican government and two reports must be filed in January and May of each year that cover the production and work completed on the concession between January and December of the preceding year.

4.3 Property Description and Tenure

In February, 2010, Endeavour Silver acquired an option to purchase the San Sebastián concessions in Jalisco State from Industrias Minera México S.A. de C.V. (IMMSA), also known as Grupo Mexico, one of the largest mining companies in Mexico.

Endeavour Silver holds the Terronera Project through its 100% owned Mexican subsidiary, Endeavour Gold Corporation S.A. de C.V. (Endeavour Gold). Endeavour Gold holds the Terronera Project through its 100% owned subsidiaries Terronera Precious Metals S.A. de C.V. (TPM) and Minera Plata Adelante S.A. de C.V. (MPA).

The Terronera Project consists of 24 mineral concessions (Table 4-1), totalling 17,369 ha; see Figure 4-2 for a concession map of the Terronera Project.

Table 4-1 Concessions and Taxes on Each Concession

Concession

Name

Title Number

Term of Mineral Concession

Hectares

2020 Annual Taxes

(MXN)

1st Half

2nd Half

San Sebastián 4

211073

31/03/00 to 30/03/50

22.0000

$3,755

$3,755

San Sebastián 7

213145

30/03/01 to 29/03/51

166.0000

$28,268

$28,268

San Sebastián 6

213146

30/03/01 to 29/03/51

9.8129

$1,680

$1,680




Concession

Name

Title Number

Term of Mineral Concession

Hectares

2020 Annual Taxes

(MXN)

1st Half

2nd Half

San Sebastián 8

213147

30/03/01 to 29/03/51

84.8769

$14,459

$14,459

San Sebastián 5

213528

18/05/01 to 17/05/51

95.0600

$16,192

$16,192

San Sebastián 10

213548

18/05/01 to 17/05/51

16.0000

$2,734

$2,734

San Sebastián 9

214286

06/09/01 to 05/09/51

101.8378

$17,346

$17,346

San Sebastián 2

214634

26/10/01 to 25/10/51

19.5887

$3,345

$3,345

San Sebastián 3

221366

03/02/04 to 02/02/54

63.8380

$10,877

$10,877

San Sebastián 1 R-1

235753

24/02/10 to 07/07/55

2808.8716

$478,164

$478,164

San Sebastian 10 Fracc. 1

238532

23/09/11 to 22/09/61

2075.2311

$200,747

$200,747

San Sebastian 10 Fracc. 2

238533

23/09/11 to 22/09/61

2.9233

$293

$293

San Sebastian 17

243380

12/09/14 to 11/09/64

693.0000

$33,530

$33,530

San Sebastian 18

244668

17/11/15 to 16/11/65

118.1621

$2,852

$2,852

San Sebastian 12

246040

20/12/17 to 19/12/67

650.0000

$7,570

$7,570

San Sebastian 13

246037

20/12/17 to 19/12/67

1022.6114

$11,903

$11,903

San Sebastian 14

246084

20/12/17 to 19/12/67

627.0893

$7,303

$7,303

Cerro Gordo 1

246334

11/05/18 to 10/05/68

499.7041

$5,822

$5,822

Cerro Gordo 2

246335

11/05/18 to 10/05/68

500.0000

$5,825

$5,825

Cerro Gordo 4

246713

31/10/18 to 30/10/68

400.0000

$4,662

$4,662

Cerro Gordo 5

246714

31/10/18 to 30/10/68

399.5386

$4,657

$4,657




Concession

Name

Title Number

Term of Mineral Concession

Hectares

2020 Annual Taxes

(MXN)

1st Half

2nd Half

Los Pinos Fracc. I

227004

11/04/06 to 10/04/56

4821.6775

$820,804

$820,804

Los Pinos Fracc. II

227005

11/04/06 to 10/04/56

14.0093

$2,395

$2,395

La Unica Fracc. I

225184

02/08/05 to 01/08/55

2157.2787

$367,244

$367,244

Total

 

 

17,369.1113

$2,052.427

$2,052.427



Source: Terronera NI43-101 Technical Report, April 30, 2019

Coordinate system: WGS 84 / UTM Zone 13Q

Figure 4-2 Terronera Project Concessions Map

The core group of 10 concessions was owned by IMMSA, totalling 3,388 ha. These concessions cover the main area of the known mining district. In 2013, Endeavour Silver completed the acquisition of a 100% interest in the San Sebastián concessions from IMMSA.

In 2012, Endeavour Silver also filed and received title for two concessions (San Sebastián 10 Fracc. 1 and Fracc. 2) totalling 2,078 ha.


Additionally, in 2013, Endeavour Silver filed a total of seven concessions (San Sebastian 12, San Sebastian 13, San Sebastian 14, San Sebastian 15, San Sebastian 16, San Sebastian 17 and San Sebastian 18) totalling 4,163 ha. To date, five of these concessions have been titled, with the exception of San Sebastian 15 and San Sebastian 16, which were re-filed in November and August 2018 respectively.

In 2015, Endeavour Silver acquired an option to purchase a group of properties (Los Pinos Fracc. I, Los Pinos Fracc. II and La Fundisión 2 Fracc. I, totalling 8,373 ha), surrounding the San Sebastián silver-gold properties, from Agregados Mineros de Occidente S.A. de C.V. (AGREMIN). In 2017 Endeavour Silver also acquired another option from AGREMIN to purchase the La Única Fracc. II (3,538 ha) concession. These properties and the options agreement were transferred by AGREMIN to its affiliate, Compañia Plata San Sebastian S.A. de C.V. On December 2018 Endeavour Silver terminated the option agreement for La Fundision 2 Fracc. I (Title 228866) and La Única Fracc. II (Title 225185) concessions and cancellation is currently in process.

At the end of 2017, Endeavour Silver filed for a total of three concessions at the southern boundary of the San Sebastian Properties, these concessions were called Cerro Gordo 1 (499.7 ha), Cerro Gordo 2 (500 ha) and Cerro Gordo 3 (400 ha). Two of these concessions have been titled, with the exception of Cerro Gordo 3 (filed again in June of 2018). In early 2018, Endeavour Silver filed and received title for two more concessions in the area: Cerro Gordo 4 (400 ha) and Cerro Gordo 5 (399 ha).

In August 2018, Endeavour Silver acquired an exploration and option agreement covering the La Unica Fracc. I (2157 ha) property from Compañia Plata San Sebastian S.A. de C.V.

The annual 2020 concession tax for the Terronera project was MXN 4,104,854 which is equal to US$205,243 (at an exchange rate of 20 MXN to US$1.00). Confirmation of payment and statutory reporting was received in the May 10, 2020 title opinion by Cereceres Estudio Legal, S.C.

The Endeavour Silver concessions surround mining concessions owned by Minera Cimarron S.A. de C.V. (Minera Cimarron), a private Mexican Company. These concessions cover the active La Quiteria Mine, and the historic Los Reyes and San Andres mines. These concessions were included in Figure 4-2.

4.4 Surface Rights

In addition to the mineral rights, Endeavour Silver has agreements with various private ranch owners and three local Ejidos (San Sebastián del Oeste, Santa Ana and Santiago de Los Pinos) that provide access for exploration purposes. Table 4-2 summarizes the surface access rights as at July 21, 2020.

Table 4-2 Summary of Endeavour Silver's Surface Access Rights

Owner

Activity

Validity

Term

Ejido Santiago de Los Pinos (Exploration)

Exploration

3 Years

15/01/2019 - 2022

Ejido San Felipe de Hijar (Exploration)

Exploration

5 Years

15/01/2019 - 2024

Ejido San Sebastian
(Exploration & Operations)

Exploration & Operations

25 Years

05/09/2016 - 2041




Ejido Santiago de Los Pinos
(La Terronera Mine Area)

Mine Operations

25 Years

07/07/2014 - 2039

Ejido Santiago de Los Pinos
(El Portezuelo)

Mine Operations

25 Years

07/07/2014 - 2039

Ejido Santiago de Los Pinos
(El Mondeño)

Mine Operations

25 Years

27/04/2015 - 2040

Ejido Santiago de Los Pinos (Antenas; Telecomunicaciones)

Mine Operations

15 Years

09/08/2016 - 2031

Felipe Santana García de Alba (Telecomunicaciones)

Mine Operations

3 Years

15/07/2016 - 2022

4.5 Water Rights

The Mexican Mining Law states in Article 19 that mining concessions give the right to exploit the water coming from the mine for exploration, exploitation and processing of the minerals or substances obtained and for personal in the project; therefore, a groundwater use concession title is not required, if the supply is guaranteed by mine water.

4.6 Royalties and Encumbrances

IMMSA retains a 2% NSR royalty on mineral production from the San Sebastián concessions. In addition to that, a 0.5% royalty is retained by the government for production of precious metals.

4.7 Permitting Considerations

Permitting is discussed in Section 20.

4.8 Environmental Considerations

The Terronera Project will be a greenfield mine development. Current and past land use has been for agriculture, grazing and forestry purposes. Environmental disturbances for these historical uses include road construction, cattle corrals, and other small farming structures.

Based on surface disturbance, other than the historical adits, no historical mining activities appear to have occurred within the project boundaries. Currently, site disturbance has been limited to mining exploration drilling within La Luz and Terronera mining areas. These areas represent small footprints around the exploration boreholes that are remediated and reclaimed shortly after the drilling campaign is completed. Therefore, being a greenfields mining project, current environmental liabilities of Endeavour Silver are low and limited to localized exploration-disturbed areas.

4.9 Social License Considerations

Social license considerations are discussed in Section 20.

4.10 QP Comments on "Item 4; Property Description and Location"

The QP notes:

 Mineral concessions are valid and in good standing


 IIMSA retains a 2% NSR royalty on mineral production from the San Sebastián concessions

 Government retains a 0.5% royalty on precious metals produced

 Surface rights and access rights have been negotiated with various private ranch owners and three local ejidos in support of exploration activities.  Surface rights to support mining operations remain to be negotiated

 The Mexican Mining law provides the right to use water from the mine for exploration, exploitation, processing and for personnel in the project; therefore, a groundwater use concession title is not required.

To the extent known to the QP, there are no other significant factors and risks that may affect access, title or right or ability to perform work on the Project that are not discussed in this Report.


5 Accessibility, Climate, Local Resources, Infrastructure and Physiography

5.1 Accessibility

The Terronera Project is situated approximately 160 km due west of Guadalajara in Jalisco State and 50 km northeast of Puerto Vallarta. Road access is via paved roads. From Guadalajara, travel by road is via Federal Highway No. 70 that passes through the town of Mascota, about 210 km west of Guadalajara, and then it is another 55 km to San Sebastián del Oeste. Highway 70 continues to Puerto Vallarta on the Pacific coast. Good gravel roads exist within the Terronera Project area, and year-round access is possible, although some difficulties may be experienced during the rainy season.

Recent road improvements have reduced the road transit time from Puerto Vallarta to San Sebastián del Oeste to less than two hours. San Sebastián del Oeste is also served by a paved airfield in excellent condition.

National and international access to Puerto Vallarta and Guadalajara is quite good, with numerous daily flights from major cities in Mexico, the United States and Canada, giving many options for travelling to and from the Terronera Project.

5.2 Local Resources and Infrastructure

The municipality of San Sebastián del Oeste has a population of approximately 5,600 with less than 1,000 living in the town of the same name. The town of San Sebastián del Oeste is well maintained, and tourism is the principal industry with several hotels and restaurants. It receives regular tourist visits from nearby Puerto Vallarta.

Most of the labour and small equipment required for exploration programs can be found in the municipality of San Sebastián del Oeste. Supplies are usually purchased in Puerto Vallarta, Mascota, or Guadalajara.

Additional information on local resources and infrastructure envisaged in the UPFS is provided in Section 18.

5.3 Climate

The climate type reported for the Terronera Project site is subtropical with the rainy season occurring from June to September.  July is typically the wettest month. The weather is predominantly humid in the winter and dry and warm during the spring. The mean annual temperature is 18°C, with a maximum of 25.6°C and a minimum of 11.7°C. Prevailing winds in the area are from the southwest.

Exploration activities can be curtailed by wet weather.  It is envisaged that any future mining operations will be conducted on a year-round basis.

5.4 Physiography

The Terronera Project is located in a mountainous region of Western Mexico with elevations ranging from sea level at the Pacific coast to 2,850 m in the highest elevation in the San Sebastian region of the Sierra Madre Occidental mountain range.  The town of San Sebastián del Oeste is at an elevation of 1,480 m above sea level.


Elevations range from 1,160 m to 1,800 m within the Terronera Project footprint.

The surrounding area is mountainous and heavily forested, mainly with pine trees. The surrounding valleys are occupied by cattle ranches, corn fields and coffee plantations.

5.5 Infrastructure

Source: www.edrsilver.com, Dated July 08, 2020.

Figure 5-1 View of Topography Surrounding the Town of San Sebastián


6 History

6.1 San Sebastian Del Oeste Mining District

The following section is summarized from Lewis and Murahwi (2012) and Munroe (2013). San Sebastián del Oeste is a silver and gold mining town founded in 1605 during the Spanish colonial period. By 1785, more than 25 mines and a number of smelters had been established in the district and, during the peak mining period, the area was considered one of the principal sources of gold, silver and copper for New Spain. The main mines in the district included Real de Oxtotipan, Los Reyes, Santa Gertrudis, Terronera and La Quiteria.

San Sebastián del Oeste was declared a city in 1812 and reached a peak population of more than 20,000 people by 1900. At one time, it was the provincial capital and one of the more important gold and silver mining centres of Mexico. The prosperity of the city declined after the revolution of 1910.

The mines were, in part, responsible for the founding of the city of Puerto Vallarta that supplied those mines with salt. The salt was taken by mules to San Sebastián del Oeste and other mines in the high sierras for use in the metal smelting process. The silver and gold from the mines were sent, again by mule train, through Guadalajara and Mexico City to Veracruz, where it was sent to Spain.

Exploration activities, where known, are summarized in Table 6-1.

Table 6-1 Exploration History Summary

Year

Company

Exploration

1921

Various, unknown

After the Mexican Revolution, intermittent small scale mining took place in the areas of Santiago de Los Pinos, Los Reyes and Navidad. All of these areas are currently inactive.

1979

Consejo de Recursos Minerales

Regional and local semi-detailed mapping and exploration activity.

1985

Compañía Minera Bolaños, S.A.

Prospecting activities in the areas of Los Reyes and Santiago de Los Pinos. This work eventually ended and many of the concessions were allowed to elapse.

Late 1980s

IMMSA

Exploration begins in Sebastián del Oeste district.

1992 - 1995

IMMSA

Detailed geological mapping and sampling of outcropping structures including the La Quiteria, San Augustin and Los Reyes veins, as well as other veins of secondary importance. IMMSA assayed more than 200 rock samples from many of the old mines.




1995 - 2010

IMMSA

An initial program of 17 widely-spaced diamond drill holes was completed, mainly at the Terronera Vein. Drilling succeeded in intersecting widespread silver- gold mineralization generally ranging up to 1 g/t gold and from 50 to 150 g/t silver over 2 to 6 m widths.

Drilling was suspended and quantification of mineral resources was not undertaken.

2010

Endeavour Silver / IMMSA

Endeavour Silver acquires option to purchase San Sebastián properties from IMMSA.

2010

Endeavour Silver

Data compilation, geological mapping, rock chip and soil sampling.

2011

Endeavour Silver

Geological mapping, rock chip sampling, topographic surveying.  Core drilling (36 holes; 7,688.25 m).  Resource estimate.

2012

Endeavour Silver

Core drilling (32 holes; 13,237.1 m).  Updated resource estimate.

2013

Endeavour Silver

Geological mapping, trenching, rock chip and trench sampling.  Core drilling (30 holes; 8,573.5 m).  Updated resource estimate.

2014

Endeavour Silver

Geological mapping, trenching, rock chip and trench sampling.  Core drilling (27 holes; 8,204.20 m).

2015

Endeavour Silver

Geological mapping, trenching, soil and trench sampling.  Core drilling (27 holes; 6,133 m.  Updated resource estimate.  Preliminary economic assessment.

2016

Endeavour Silver

Reconnaissance exploration, rock chip and soil sampling.  Core drilling (19 holes; 5,670 m). 

2017

Endeavour Silver

Geological mapping, trenching, rock chip and trench sampling.  Core drilling (47 holes; 2,252 m).  Updated resource estimate.  Pre-feasibility study.  First-time declaration of Mineral Reserves.

2018

Endeavour Silver

Core drilling (39 holes; 18,774 m).  Updated resource estimate.

2019

Endeavour Silver

Updates to mine design and production schedule from 2017 pre-feasibility study

2020

Endeavour Silver

UPFS

6.2 Previous Mineral Resource and Mineral Reserve Estimates

Lewis and Murahwi (2013) of Micon conducted an audit of Endeavour Silver's Mineral Resource Estimates at the Terronera Project (then called the San Sebastián Project) including the Animas-Los Negros, El Tajo, Real and Terronera Veins. As of December 15, 2012, the estimate for the San Sebastian Project comprised Indicated Mineral Resources totalling 1,835,000 t at a grade of 193 g/t Ag and 1.17 g/t Au and Inferred Mineral Resources of 3,095,000 t at a grade of 196 g/t Ag and 1.39 g/t Au. The Terronera Vein is the largest component of the estimate and was estimated to contain Indicated Mineral Resources of 1,528,000 t at 192 g/t Ag and 1.30 g/t Au and Inferred Mineral Resources of 2,741,000 t at 194 g/t Ag and 1.50 g/t Au. The San Sebastian estimate utilized a 2-D polygonal estimation method for the Animas-Los Negros, El Tajo, and Real veins and 3-D block modelling for the Terronera Vein. Samples were capped at 524 g/t Ag and 2.38 g/t Au for the Animas-Los Negros, El Tajo, and Real Veins and 1,970 g/t Ag and 7.96 g/t Au for the Terronera Vein. The estimate utilized a bulk density of 2.5 t/m3 for all veins and a cut-off grade of 100 g/t AgEq based on metal prices of US$31/oz Ag and US$1,550/oz Au.


Munroe (2014) updated the San Sebastian Project Mineral Resource Estimate with additional drilling data. As of December 31, 2013, Munroe (2014) estimated the San Sebastian Project including the Animas-Los Negros, El Tajo, Real and Terronera Veins to contain Indicated Mineral Resources totalling 2,476,000 t at a grade of 229 g/t Ag and 1.08 g/t Au and Inferred Mineral Resources of 2,376,000 t at a grade of 175 g/t Ag and 1.66 g/t Au. The Terronera Vein was estimated to contain Indicated Mineral Resources of 2,169,000 t at 233 g/t Ag and 1.16 g/t Au and Inferred Mineral Resources of 2,022,000 t at 169 g/t Ag and 1.86 g/t Au. Munroe's parameters were similar to those reported for Lewis and Murahwi (2013), except that the sample capping values were increased in the Terronera Vein to 2,070 g/t Ag and 7.96 g/t Au and the cut-off grade of 100 g/t AgEq was based on metal prices of US$24.20/oz for Ag and US$1,452/oz for Au.

The reader is cautioned that P&E has not verified the Lewis and Murahwi (2013) and Munroe (2014) Mineral Resource Estimates relating to the Terronera Project (formerly known as the San Sebastian Project).

In 2015, P&E updated the Terronera Project Mineral Resource Estimate. As of April 30, 2015, the Terronera Vein was estimated to contain Indicated Mineral Resources of 2.9 Mt at 211 g/t Ag and 1.65 g/t Au and Inferred Resources of 1.2 Mt at 218 g/t Ag and 1.39 g/t Au. The cut-off grade was 100 g/t AuEq, using a 70:1 ratio based on prices of US$18/oz silver and US$1,250/oz gold.

In 2017, P&E updated the Terronera Project Mineral Resource Estimate. As of May 11, 2017, the Terronera Vein was estimated to contain Indicated Mineral Resources of 3,959,000 t at 232 g/t Ag and 2.18 g/t Au and Inferred Mineral Resources of 720,000 t at 309 g/t Ag and 1.48 g/t Au. The cut-off grade was 150 g/t AgEq, using a 70:1 ratio based on US$18/oz silver and US$1,225/oz gold.

In August 2018, P&E updated the Terronera Project Mineral Resource Estimate again. As of August 7, 2018, the Terronera Vein was estimated to contain Indicated Mineral Resources of 4,363,000 t at 239 g/t Ag and 2.53 g/t Au and Inferred Mineral Resources of 1,073,000 t at 252 g/t Ag and 2.38 g/t Au. The cut-off grade was 150 g/t AgEq, using a 75:1 ratio based on US$17/oz silver and US$1,275/oz gold.

The February 2019 Mineral Resource and Mineral Reserve estimates reported in Sections 14 and 15 of this Updated Technical Report supersedes all prior Mineral Resource and Mineral Reserve estimates.

An Initial pre-feasibility study (PFS) was published on the Terronera Project in April 2017 resulting in a Probable Mineral Reserve of 4,061,000 t at 207 g/t Ag and 1.95 g/t Au. The financial model generated a post-tax 21.2% internal rate of return (IRR), 4.3 year payback and an net present value (NPV)5 of $78.1 M.

A second pre-feasibility study was published on the Terronera Project in September 2018 resulting in a Probable Mineral Reserve of 4,701,000 t at 224 g/t Ag and 2.28 g/t Au. The financial model generated a post-tax 23.5% IRR, 5.4 year payback and an NPV5 of $117.8 M.

A third Technical Report was published on the Terronera Project in April 2019 resulting in a Probable Mineral Reserve of 5,587,000 t at 208 g/t Ag and 2.33 g/t Au. The financial model generated a post-tax 23.8% IRR, 3.5 year payback and an NPV5 of $103.0 M.


6.3 Past Production History 

There has reportedly been significant historical production from the San Sebastian del Oeste region spanning the period from 1566 when the Villa de San Sebastian was founded through to the early 20th century. The amount of silver production, however, is unknown since historical production records have not survived the revolutions, passing of the individual owners, closing of the mines, corporate failure, or government seizure of assets (Lewis and Murahwi (2012), Munroe (2013)).


7 Geological Setting and Mineralization

7.1 Regional Geology

The following section is summarized from Lewis and Murawhi (2012) and Munroe (2013). The mining district of San Sebastián del Oeste, shown in Figure 7-1, is situated at the southern end of the Sierra Madre Occidental metallogenic province, a north-northwesterly trending volcanic belt of mainly Tertiary age. This volcanic belt is more than 1,200 km long and 200 to 300 km wide and hosts the majority of Mexico's gold and silver deposits. The volcanic belt is one of the world's largest epithermal precious metal systems.

The oldest rocks in the southern part of the Sierra Madre Occidental are late-Cretaceous to early-Tertiary calc-alkaline, granodiorite to granite batholiths that intrude coeval volcano-sedimentary units of late Eocene to Miocene age.

The Terronera Project lies within the structurally and tectonically complex Jalisco Block at the western end of the younger (early Miocene to late Pliocene) Trans-Mexican Volcanic Belt. Country rocks within the Jalisco Block include Cretaceous silicic ash flows and marine sedimentary rocks deposited between 45 and 115 Ma that are intruded by Cretaceous to Tertiary granite, diorite and granodiorite of the Puerto Vallarta Batholith. The volcanic rocks of the San Sebastián cinder cone field are dated at 0.48 to 0.26 Ma, and are characterized by distinct, high potassium, alkalic compositions and were extruded within the Tepic-Zacoalco Graben that bounds andesitic stratovolcanoes located to the north and northeast.

The area has been affected by strong tectonic activity during the Cretaceous to Recent period, which has resulted in regional northwest-southeast striking transcurrent faults associated with movements of the northern portion of the Jalisco Block.


Source: Lewis and Murahwi, 2013

Figure 7-1 Geology of the San Sebastián del Oeste Area

7.2 Local Geology

The San Sebastián del Oeste area, including the Terronera Project, is underlain by an intermediate to felsic volcanic and volcaniclastic sequence that is correlated with the middle to lower Cretaceous Lower Volcanic Group of the Sierra Madre Occidental geological province. This volcano-sedimentary sequence consists of shale, sandstone and narrow calcareous-clayey interbeds overlain by tuffs, volcanic breccias and lava flows of mainly andesitic composition. The volcano-sedimentary units crop out in the north-central part of the district. Further to the north, granitic to granodioritic intrusive rocks are present.

The sedimentary basin most likely developed along with a volcanic arc which was later intruded by granitic granodiorite intrusions. This magmatism gave rise to andesite flows and pyroclastic eruptions followed by deposition of the rhyolite flows, volcanic breccias, pyroclastic dacites, and basalt which are host to the epithermal veins in the district. A later volcanic event, attributable to the formation of the Trans Mexican Volcanic Belt, resulted in volcanic rocks of mafic alkaline composition. The geology of Terronera Project area is shown in Figure .


Source: Endeavour Silver, 2015

Coordinate system: WGS 84 / UTM Zone 13Q

Figure 7-2 Terronera Project Geology Showing Mineralized Veins

7.3 Deposit Geology

The silver-gold with associated base metal mineralization in the Terronera epithermal veins occurs in structurally controlled quartz and quartz breccia veins. The principal Terronera Vein has been traced by drilling for 1.5 km on strike and from surface to the maximum depth of drilling at 546 m as shown in Figure . The Terronera Vein strikes at approximately 145° and dips 80° east. The true width of the principal Terronera Vein ranges from 1.5m to 15m and averages 3.9m. In addition to the main Terronera Vein, there are additional hanging wall and footwall veins. The veins are primarily hosted in volcanic flows, pyroclastic and epiclastic rocks and associated shales and their metamorphic counterparts (Lewis and Mulahwi (2013), Munroe (2014)).


7.4 Structure

The more important mineralized veins in the San Sebastián del Oeste district are controlled by west-northwest to northwest striking structures related to a transcurrent fault system. An extensive, second order, east-west structural trend is related to extension caused by sinistral movement on the primary structures.

7.5 Alteration

In the San Sebastián del Oeste district, silver and gold mineralization represents the upper portion of an epithermal vein system. Illite, sericite and adularia are characteristic alteration assemblages that typically occur in the veins and in the vein wall rocks. In areas of higher elevation, where limited mining has occurred, such as the El Hundido and Real de Oxtotipan mines, the quartz is amorphous and milky white in colour, indicative of a low temperature environment.

7.6 Mineralization

The silver-gold ± base metal mineralization in the epithermal veins is hosted in structurally controlled quartz and quartz breccia veins.  In addition to the main Terronera Vein, there are additional hanging wall and footwall veins. The veins are primarily hosted in volcanic flows, pyroclastic and epiclastic rocks and associated shales and their metamorphic counterparts.

Metallic minerals include galena, argentite, and sphalerite associated with gangue constituents of quartz, calcite and pyrite. Munroe (2013) reported that elevated Ag and Au values from 2011 sampling of underground workings in the Terronera Vein were primarily obtained from crystalline quartz veins, drusy in places, with limonite and manganese oxides lining boxworks after sulphides and fine-grained disseminated pyrite and traces of dark grey sulphides, probably silver sulphides.

Regionally, known deposits contain polymetallic sulphide mineralization in wide vein structures. The veins at higher elevations may represent the tops of ore shoots containing significant silver and gold mineralization at depth.


8 Deposit Types

The deposits within the San Sebastián del Oeste district are considered to be examples of low-sulphidation epithermal deposits.

8.1 Low-Sulphidation Epithermal Deposits

The following description for low-sulphidation epithermal model is taken from Pantaleyev (1996).

8.1.1 Geological Setting

Low-sulphidation epithermal deposits are formed by high-level hydrothermal systems from depths of ~1 km to surficial hotspring settings.  Deposition is related to regional-scale fracture systems related to grabens, (resurgent) calderas, flow-dome complexes and rarely, maar diatremes.  Extensional structures in volcanic fields (normal faults, fault splays, ladder veins and cymoid loops, etc.) are common; locally graben or caldera-fill clastic rocks are present.  High-level (subvolcanic) stocks and/or dikes and pebble breccia diatremes occur in some areas.  Locally resurgent or domal structures are related to underlying intrusive bodies.

Most types of volcanic rocks can host the deposit type; however, calcalkaline andesitic compositions predominate.  Some deposits occur in areas with bimodal volcanism and extensive subaerial ashflow deposits.  A less common association is with alkalic intrusive and shoshonitic volcanic rocks. Clastic and epiclastic sediments can be associated with mineralization that develops in intra-volcanic basins and structural depressions.

8.1.2 Mineralization

Ore zones are typically localized in structures, but may occur in permeable lithologies.  Upward-flaring ore zones centred on structurally controlled hydrothermal conduits are typical.  Large (> 1 m wide and hundreds of meters in strike length) to small veins and stockworks are common with lesser disseminations and replacements.  Vein systems can be laterally extensive, but ore shoots have relatively restricted vertical extent.  High-grade ores are commonly found in dilational zones in faults at flexures, splays and in cymoid loops. 

Textures typical of low-sulphidation deposits include open-space filling, symmetrical and other layering, crustification, comb structure, colloform banding and multiple brecciation.

Deposits can be strongly zoned along strike and vertically.  Deposits are commonly zoned vertically over 250-350 m from a base metal poor, gold-silver-rich top to a relatively silver-rich base metal zone and an underlying base metal-rich zone grading at depth into a sparse base metal, pyritic zone.  From surface to depth, metal zones can contain: gold-silver-arsenic-antimony-mercury, gold-silver-lead-zinc-copper, or silver-lead-zinc.  In alkalic host rocks, tellurides, vanadium-mica (roscoelite), and fluorite may be abundant, with lesser molybdenite.

Pyrite, electrum, gold, silver, argentite; chalcopyrite, sphalerite, galena, tetrahedrite, silver sulphosalt and/or selenide minerals are the main mineral species.  Quartz, amethyst, chalcedony, quartz pseudomorphs after calcite, calcite; adularia, sericite, barite, fluorite, calcium-magnesium-manganese-iron carbonate minerals such as rhodochrosite, hematite, and chlorite are the most common gangue minerals.


8.1.3 Alteration

Silicification is extensive in ores as multiple generations of quartz and chalcedony are commonly accompanied by adularia and calcite.  Pervasive silicification in vein envelopes can be flanked by sericite-illite-kaolinite assemblages.  Intermediate argillic alteration (kaolinite-illite-montmorillonite (smectite)) can form adjacent to some veins; advanced argillic alteration (kaolinite-alunite) may form along the tops of mineralized zones.  Propylitic alteration dominates peripherally and at depth.

Figure  illustrates the spatial distribution of the alteration and veining found in a hypothetical low-sulphidation hydrothermal system.

8.2 Applicability of the Low-Sulphidation Model to the Terronera Project

Low-sulphidation epithermal veins in Mexico typically have a well-defined, subhorizontal ore horizon about 300 m to 500 m in vertical extent where bonanza grade mineralization shoots have been deposited due to boiling of hydrothermal fluids. Neither the top nor the bottom of the mineralized horizons at the Terronera Project has been precisely established.

The San Sebastián del Oeste silver-gold district hosts high grade silver-gold, epithermal vein deposits, characterized by low-sulphidation mineralization and adularia-sericite alteration. The veins are typical of epithermal silver-gold vein deposits in Mexico in that they are primarily hosted in volcanic flows, pyroclastic and epiclastic rocks, or sedimentary sequences of shale and its metamorphic counterparts.


Source: Lewis and Murahwi, 2012

Figure 8-1 Alteration and Mineralization Distributions within a Low Sulphidation Epithermal Vein System

8.3 QP Comments on "Item 8:  Deposit Types"

The QP is of the opinion that exploration programs that use a low sulphidation deposit model are applicable to the Terronera Project area.


9 Exploration

9.1 Grids and Surveys

The topographical and geographical mapping basis for the Terronera Project uses satellite photogrammetry taken on March 1, 2012 by Photosat Satellite and GIS Data Consultant of Vancouver, Canada.  The topographic resolution for these data generated 1 m contours.  Because the project area has remained relatively undisturbed since the date of this satellite capture, the image and contour data are used as the basis of the UPFS.

9.2 2010 to 2016 Endeavour Silver Exploration Programs

Initial work in 2010 included data compilation, field mapping, and sampling. Surface mapping was completed over the Real Alto zone in the southern part of the Terronera Project. A total of 1,004 rock and soil samples were collected in 2010, mainly from the historic mines in the San Sebastián del Oeste district. A soil geochemistry survey was conducted over the Real Alto zone to potentially delineate buried veins in the area and to map and sample any veins exposed on surface. A total of 735 soil samples were collected in the Real Alto area.

In 2011, geological mapping, rock chip sampling, topographic surveying were conducted. Mapping and sampling of structures in the Santiago de Los Pinos area, including El Alcribil, El Orconcito, El Padre, El Izote, La Plomosa, Tierras, Coloradas, Los Cuates, La Yesquilla, and La Ermita areas, were completed. In early 2011, mapping and sampling was also carried out on the Terronera vein near the town of San Sebastián del Oeste. In late 2011, mapping and sampling was conducted in the La Luz and the Los Reyes areas. A total of 301 rock chip samples were collected in 2011.

In early 2012, exploration activities focused on surface sampling at the Quiteria West (Los Leones and La Cueva), Terronera and La Zavala areas; in total,  24 rock chip samples were collected.

In 2013, Endeavour Silver conducted geological mapping, trenching and sampling. Mapping focused on the southern strike extension of the Terronera Vein, La Zavala Vein, and the Quiteria West structures. Some samples were collected at the eastern extension of the Real vein in the Real Alto area. A total of 350 rock chip samples were collected. The trenching program included 129 rock chip samples collected from 24 trenches excavated in the Terronera and La Zavala areas.

In 2014, geological mapping, trenching and sampling was conducted. at the Quiteria West and Terronera NW areas, including sampling at the Terronera, Lupillo, El Salto and La Cascada mines located over the Terronera vein and the Resoyadero, La Tapada 2, Otates, Tajo los Cables, El Toro, ZP3, Copales, Mina 03, Mina 04 and Cotete areas/mines in the Quiteria area.

A West Vein trenching program was conducted over the projection of the Quiteria West (east and west portions) and Terronera (northwestern area) veins. The program included a total of 1,091 rock chip samples collected from underground, surface and trenching programs. Regional geological mapping was undertaken.

In 2015, Endeavour Silver conducted geological mapping, trenching and a soil geochemical survey. Mapping included the Terronera North, La Zavala, El Fraile, El Padre, SE part of Quiteria-Democrata and La Ermita areas. The trenching program was conducted over the Democrata and La Luz veins. The soil geochemical survey was completed with the objective of locating a possible eastern extension of the Democrata and Quiteria veins, while simultaneously conducting geological mapping over the area. The sampling program included 2,170 rock chip samples (107 of which were collected during the trenching program) and 425 soil/rock chip samples within the soil geochemistry grid.


During 2016, several thousand samples were collected and analysis revealed the Terronera Vein system to extend over a 7 km x 7 km area and identified nine additional veins in the northern half of the Terronera Project area. A soil geochemistry grid (810 samples collected) was completed at the Las Coloradas area with the objective of defining potential buried structures in areas with extensive vegetation cover.

9.3 2017 Exploration Program

In 2017, geological mapping, trenching and sampling was conducted at the Terronera Project with the objective of determining drill targets. This work focused on the Terronera NW, Quiteria West, Los Espinos-Guardarraya, El Jabalí, El Fraile, Vista Hermosa, La Escondida, El Armadillo, La Atrevida, Miguel, Santana, Peña Gorda and Los Tablones areas.

A total of 1,244 rock chip samples and 308 rock chip samples from trenching were collected from Terronera NW, Los Espinos NW, El Fraile, Vista Hermosa, La Escondida, El Armadillo, La Atrevida, and Miguel areas.

Figure  through to Figure  show the results of this work program.

Source: Endeavour Silver, 2017

Coordinate system: WGS 84 / UTM Zone 13Q

Figure 9-1 Silver Results in the Terronera North, Quiteria West, Los Espinos-Guardarraya, and El Jabalí Areas


Source: Endeavour Silver, 2017

Coordinate system: WGS 84 / UTM Zone 13Q

Figure 9-2 Silver Results in El Padre, La Madre, La Luz, Quiteria West, Democrata and El Fraile Area


Source: Endeavour Silver, 2017

Coordinate system: WGS 84 / UTM Zone 13Q

Figure 9-3 Silver Results in the Democrata, El Fraile, La Escondida, Vista Hermosa, El Armadillo, La Atrevida, Miguel, Lorenzana, Terronera and Zavala Areas


Source: Endeavour Silver, 2017

Coordinate system: WGS 84 / UTM Zone 13Q

Figure 9-4 Silver Results in the Santa Ana Area


Source: Endeavour Silver, 2017

Coordinate system: WGS 84 / UTM Zone 13Q

Figure 9-5 Silver Results in the Peña Gorda and Los Tablones

9.4 Terronera NW

At the northwest end of the Terronera vein, there are intermittent outcrops for approximately 800 m (Figure  and Figure ), which suggests an irregular structure displaced by a fault, both laterally and vertically, with widths varying from 0.3 to 0.7 m. The general trend of the structure is N50°W dipping 70° to the northeast.  The structure consists of white quartz, with moderate amounts of iron oxides and traces of manganese oxides.  Sampling indicated isolated anomalous gold and silver.

Samples from a three-trench program returned low gold and silver values.


     

Figure 9-6 Terronera NW Vein Outcrop Photographs Showing Massive, White Quartz with Values of 1.0 g/t Ag

Figure 9-7 Terronera NW Vein Photograph Showing the Vertical Displacement of the Vein by Faulting

9.5 Quiteria West

Exploration activities in the Quiteria West area consisted of detailed mapping to identify drill targets.

In general, the vein consists of white to gray quartz with traces of disseminated sulphides.  It has a 1,300 m strike length and variable widths from 0.5 m up to 2.0 m, a preferential east-west trend, and dips at  60° to the south.


Along the structure are located several small mine workings including the Las Arañas, El Zancudo, and La Cacariza mines.  These exposures show; medium to low temperature quartz textures. Sampling returned gold values that ranged from 0.005 to 0.044 g/t Au and silver values that ranged from 0.5 to 27 g/t Ag. Although these results are not encouraging, reconnaissance drilling is recommended.

9.6 Los Espinos-La Guardarraya

Geological mapping and sampling were conducted at the northwest to western end of the Los Espinos vein, to verify vein continuity. Reconnaissance mapping was conducted at the east end of the structure, to determine if the vein was associated with the La Luz vein system.

The Los Espinos vein is located north of the Quiteria West vein, inside the Los Pinos Fracc. 1 Endeavour Silver Concession.  The vein has approximately 1.1 km of strike length and is a massive, white quartz vein with dendritic manganese and iron oxide zones in fractures (Figure  and Figure ).

Two sub-parallel veins with opposite dips were located. The host quartz vein is very fractured with traces of sulphides, and there were abundant quartz float zones.

The general trend is N75°-80°W, dipping at 75° to the southwest.  Locally 70° cips to the northeast were observed.

Sampling returned gold values that ranged from 0.005 to 0.118 g/t Au and silver values that ranged from 0.2 to 32.2 g/t Ag. The width of the structure varies from 1 to 20 m.  The vein is located along a contact contact between rhyolitic rocks and a volcano-sedimentary sequence.

   

Figure 9-8 Los Espinos Vein Photographs with FeO, MnO and Some Sporadic Oxidized Pyrite


Figure 9-9 Los Espinos Vein Photograph with FeO, MnO and Sporadic Oxidized Pyrite

9.7 El Jabalí

The El Jabalí area is located northeast of the Los Espinos-La Guardarraya veins, within the Los Pinos Fracc. 1 Endeavour Silver Concession(Figure ).

Sampling identified a northwesterly-trending zone of base metal-silver anomalism as shown in Figure  and outlined by the contour plots in Figure .


Source: Endeavour Silver (2017)

Coordinate system: WGS 84 / UTM Zone 13Q

Figure 9-10 El Jabalí Surface Map and Photographs Showing the General Zone Trend



Silver

Coordinate system: WGS 84 / UTM Zone 13Q

Lead

Coordinate system: WGS 84 / UTM Zone 13Q

Figure 9-11 Isovalue Diagrams Showing the Trends of the Silver and Lead Anomalies with the Northwest Trend

Zinc

Coordinate system: WGS 84 / UTM Zone 13Q

Copper

Coordinate system: WGS 84 / UTM Zone 13Q

Figure 9-12 Isovalue Diagrams Showing Trends of Zinc and Copper Anomalies with the Northwest Trend

9.8 El Fraile

The El Fraile vein is located in the San Sebastian 2 and San Sebastian 1-R-1 concessions. The structure generally trends SE60°NW, dipping at 65° to the southwest. The approximate strike length of the structure is 1.0 km, and it has variable widths ranging from 0.6 m to 2.5 m.

The structure consists of white to crystalline quartz, that turns partially grayish due to fine sulphide content.  It has a moderate manganese content. Figure  shows cavities in the vein have been filled by limonite + hematite. The host rock is a sequence of andesites (Kma) and rhyolites (Kmr). Eight trenches have tested the vein. Trench sampling returned gold values that ranged from 0.008 to 2.25 g/t and silver values that ranged from 0.5 to 945 g/t.


     

Figure 9-13 El Fraile Vein Photographs Looking Northwest

Figure  is taken looking to the northwest at the El Fraile vein.  The left image shows white to crystalline quartz (Vn), with open space cavities, weakly developed iron oxides (Lm + Hm), and sporadic and isolated druses filled with manganese oxides (OxMn).  The vein is identified by the red line.  The right image also looks northwest, the strike of the vein is marked by the red line.  The dashed line shows vein fragments.  Samples were taken at the footwall of the vein, and included moderate veinlets of white to crystalline quartz, cavities filled with Mn limonites.  The mine working were buried by overburden accumulates, andesitic rubble and vein fragments.

9.9 Vista Hermosa

The Vista Hermosa structure is located on the hanging wall of the Terronera vein system, inside the San Sebastian 1-R-1 r Concession.  Ithas an inferred strike length of 965 m, a general trend of NW60°SE, and dips from 55° to 70° to the southwest. The vein crops out at its southwest end, where it has a width of up to 3 m.


A secondary parallel structure was located in the area, which consisted of silicified rhyolitic tuff, with abundant veinlets of white to crystalline quartz, considerable hematite filling fractures, sporadic oxidized pyrite, and traces of MnO.

Two historic mine workings were located the first, northwest of the vein, consists of a small adit that is 2.8 m deep.  The working, located to the southeast of the vein, consisted of an adit 7.30 m long, 1.30 m wide and 0.80 m high.  The adit followed the trend of the vein, Figure .

Five trenches were excavated and sampled. Gold values ranged from 0.005 to 1.72 g/t and silver values ranged from 0.2 to 45.9 g/t.

         

Figure 9-14 Mine Working Over the Vista Hermosa Vein, Photographs with White and Crystalline Quartz, 0.90 m Wide Vein

9.10 La Escondida

The structure identified as La Escondida is located inside the San Sebastian 1-R-1 Concession, hosted at the northwest end in rhyolite (Kmr), and at the southeast end in andesite (Kma) and (Kmr). It is a milky quartz vein, with moderate MnO + limonite filling.

Four mine workings, approximately 2 to 8 m deep, with a general trend of SE60°SW and dipping at 40° to 50° to the southwest, are located over the length of the structure. Figure  shows one of the mine workings, the El Ñero Mine.

The excavations indicate that the vein is irregular due to pronounced inflections near faults and/or when it is exposed in creeks. Sub-parallel veins that have irregular widths from 0.15 m to 0.50 m, were observed where the sub-veins join the main structure at depth.

The La Escondida vein has an inferred strike length of about 900 m, and ranges from 0.30 m to 1.0 m in width.

Twelve trenches were excavated and sampled. Gold grades varied from 0.005 to 1.49 g/t and silver grades ranged from 0.2 to 152 g/t.


12 trenches were constructed over the structure in the area. In the area the values of gold vary from 0.005 to 1.49 g/t and silver from 0.2 to 152 g/t.

   

Figure 9-15 El Ñero Mine Photograph 1 m Wide Vein

Figure  shows the El Ñero Mine.  In the left image the vein is about 1.0 m in width, trending SE70°NW/46° SW, and hosted in andesite (Kma). The mine working is about  8 m in length.  The right photograph is of the northwestern portion of the vein, which is about  1.20 m in widthand trends NW50°SE/70°SW.

9.11 El Armadillo

The El Armadillo structure is parallel to the Vista Hermosa vein and is located to the southwest of that vein. The El Armadillo vein consists of an oxidized monomictic breccia/vein, containing rhyolite (Kmr) clasts that may be as large as 3 cm, cemented by white to crystalline quartz.  Greyish zones may reflect areas of elevated sulphide content.  The structure has been mapped for a distance of 225 m.  The average trend is NW70°SE, dipping at 65° to the southwest, with a width that ranges between 0.6 m and 2.4 m, see Figure . The country rock is rhyolite (Kmr),. At the northwest end, the structure is truncated at the contact with the andesitic unit (Kma). Oxidation and argillization were observed.

A total of six trenches were excavated and sampled, primarily at the southeast end of the vein. A historic mine working was located in the area with dimensions of 2 m deep, 0.6 m high and 0.9 m wide.

Gold grades ranged from 0.005 to 0.884 g/t Au and silver grades were from 0.2 to 223 g/t Ag.


   

Figure 9-16 El Armadillo Vein Photographs with Sulphides Inside the Vein

9.12 La Atrevida

The La Atrevida vein is located at the north end of the Terronera vein and south of Quiteria, within the San Sebastian 1-R-1 Concession. The structure consists of crystalline quartz that displays saccaroidal textures, brecciated zones, moderate iron oxide content ( limonite and hematite), and selective argillization(Figure ). The general trend is S75°-80°E, dipping at 75° to the southwest. The approximate strike length of the vein is 550 m, and it has a variable width from 0.30 m to 3.0 m.  Two vein splays were noted, one in the footwall, and the second in the hanging wall of the main vein. The host rock is rhyolite (Kmr).  To the northwest the vein is located on the andesite contact.

Six trenches were excavated and sampled.  Gold grades ranged from 0.005 to 0.715 g/t Au and silver values were from 0.2 to 30.9 g/t Ag.

             

Figure 9-17 Quartz Veinlet Photographs 10 cm Wide Veinlet, with Moderate FeO, Weak Selective Argillization, Small Rhyolite Clasts


9.13 Santana

The Santana structure crops out in the vicinity of  the road to the town of Santana, and may represent the  southeastern end of the Terronera vein. The area consists of a wide zone of well-developed iron oxide alteration (limonite, hematite, and possible jarosite), and moderate to strong argillization.  Quartz within the structure, is crystalline with minor white quartz, which has been re-worked and fractured (Figure  to Figure ). Some portions of the vein display silica replacement.  The vein has a general trend of N70°W, dipping at 80° to the northeast. It has been outlined over a 600 m length, and the alteration zone displays widths from 0.3 to 1.0 m.

In creek exposures, the vein was strongly-silicified structure consisting of crystalline quartz, minor quartz that had moderate iron oxides associated, and finely-disseminated pyrite.

To the northwest, the structure does not crop out; however, there are alteration zones featuring iron oxides and argillization, and minor micro-veinlets in andesites.

At the southeastern end of the vein, intermittent zones were observed that displayed strong iron oxide alteration (limonite, hematite and possible jarosite), and moderate to strong argillization.  Within the altered zone, a system of quartz (crystalline and minor white) t veinlets was observed, together with strongly silicified zones and traces of pyrite. The host rock is andesite.

In the outcropping zones the structure may be as wide as 1 width.  Otherwise, the areas of interest consist of alteration haloes that display iron oxides, argillization, silicification and veinlets. The trend of the alteration is approximately NW70°SE.

The gold and silver values in the collected rock samples are generally low (0.005 to 0.019 g/t Au and 0.2 to 1.8 g/t Ag). However, the area has remaining potential because of the continuous nature of the moderate to strong argillic and iron oxide alteration, which may reflect a buried structure at depth.

Figure 9-18 Quartz Vein Photographs

Figure  Left:  crystalline quartz vein with abundant iron oxides (hematite>limonite), containing minor fragments of silicified rock, with veinlets of quartz, and moderate argillization.

Error! Reference source not found.Figure  Right:  an example of a  quartz veinlet of displayingiron oxidation and strong silicification.


Figure 9-19 Trench Photographs

Trench photographs, Figure , show quartz-crystalline vein with abundant iron oxides (hematite>limonite) that contain minor fragments of silicified rock, with veinlets of quartz, moderate argillization, and intense fracturing.

Figure 9-20 Panoramic View of the Santana Vein Trace with Evidence of Quartz Veinlets and FeO

9.14 Peña Gorda

The vein identified as Peña Gorda is located south of the Real Alto area, at the southern part of the San Sebastian 1-R-1 Concession and the Cerro Gordo 2 r Concession. The structure is oriented east-west, with a general trend of N80°W, dipping at 85° to the southwest. The vein has been traced for around 1.4 km, and may reach as much as 10 m in width. The structure consisted of white to crystalline quartz, with iron and manganeseoxides, and pyrite traces (partially oxidized) in boxwork zones.  No other sulphides were visible (Figure ).


In general, the host rock is of rhyolitic composition, consisting of rhyolitic agglomerate with traces of iron oxides.

The surface sampling program showed anomalous gold values of, associated with areas that displayed moderate oxidation in fractures. Sample results ranged from 0.005 to 0.512 g/t Au and 0.2 to 37.2 g/t Ag.

Although the sample results are not encouraging, additional work is recommended based on the vein proximity to the El Tajo, Los Negros and Real veins.

 Peña Gorda Vein Peña Gorda Vein Outcrops

           

Figure 9-21 Peña Gorda Vein Photographs with Outcrops for Approximately 1.4 km

9.15 San Joaquin

The San Jaoquin vein is oriented east-west. It consists of a white, massive quartz body of (), which can display a  weakly saccharoidal texture, cavities and bladed textures. The structure has a general trend of N65°W, dipping at 80° to the southwest, and displaying a slight inflection towards the west in the northwestern segment(Figure ).

The width of the structure varies from 0.35 m in the southeast up to 4 m in the central area.  the behavior in the west area is as an outcrop of rhyolite with a stockwork of quartz, gradually decreasing until it practically disappears inside the mapped area. The vein is hosted in a rhyolitic unit, which is practically fresh and hydrothermally unaltered, except for development of weak and sporadic veinlets in the hanging wall of the main structure.

Rock samples show values that ranged from 0.006 to 0.324 g/t Au and 0.2 to 28.8 g/t Ag.


   

Figure 9-22 Outcrop of the Los Tablones Vein (Quartz Vein)


10 Drilling

10.1 2011 to 2016 Drilling

The drill programs conducted by Endeavour Silver between 2011 and 2018 are summarized in this Updated Technical Report section.

10.2 2011 Drilling Program

In 2011, Endeavour Silver commenced a surface diamond drilling program on prospective targets within the Terronera Project. Exploration drilling focused on two main areas: 1) The Real el Alto area, exploring the Animas-Los Negros, El Tajo and Real Veins; and 2) The Central area, exploring the extension of the Quiteria Vein, west of the La Quiteria Mine.

By mid-December 2011, Endeavour Silver had completed 7,688.25m of drilling in 36 surface diamond drill holes on the Terronera Project. A total of 2,980 diamond drill core samples were analyzed.

Drilling identified the Animas-Los Negros Vein in the Real el Alto area (Figure 10-1), which was found to be one vein, offset by faulting. The vein is principally hosted in rhyolite and is comprised of quartz with abundant manganese oxides (pyrolusite), minor pyrite and traces of disseminated dark grey and blue sulphides. Highlights include:

 132 g/t Ag and 1.02 g/t Au over a 3.2m true width in hole LN07-1

 144 g/t Ag and 1.21 g/t Au over a 3.6m true width in hole LN08-1

 258 g/t Ag and 0.61 g/t Au over a 4.5m true width was returned for hole LN09-1.

The 2011 drill program also outlined new Mineral Resources on the El Tajo Vein area. El Tajo is believed to be either a brecciated quartz +/- calcite vein or a stockwork zone with weak to moderate veinlets and disseminations of fine pyrite and traces of galena and possible silver sulphides (possibly argentite). Drilling highlights in the El Tajo Vein include:

 107 g/t Ag and 0.10 g/t Au over 1.6m true width within hole TA03-1; and

 169 g/t Ag and 0.63 g/t Au over a 3.0m true width in hole TA04-1.

New Mineral Resources were also outlined on the Real Vein, which is located to the northeast of the Animas-Los Negros and El Tajo Veins. The most significant intercept for the Real Vein was in hole RE04-1 which returned:

 320 g/t Ag and 0.74 g/t Au over a true width of 2.6m.

Drill holes were also advanced on the La Escurana and La Luz Veins but did not return significant gold or silver mineralization.

10.3 2012 Drilling Program

In 2012, Endeavour Silver continued its diamond drilling program on the Terronera Property to expand Mineral Resources defined in the 2011 drill program. Exploration drilling focused on two main areas: 1) The Real el Alto area, exploring the Animas-Los Negros and Real Veins; and 2) The Central area, exploring the extension of the Quiteria Vein, west of the La Quiteria Mine, and the Terronera Vein. Endeavour Silver completed 13,237.10m of drilling in 32 diamond drill holes on the Terronera Property. A total of 3,118 samples were collected for analysis.


Drill holes advanced on the Animas-Los Negros Vein were successful in intercepting the mineralized zone at depth. These drill holes also passed through the La Escurana Vein in the upper part of each drill hole. The Escurana Vein is located in the southernmost part of the Real el Alto area. Two holes were advanced on the Real Vein but did not return significant intersections. Only one hole was drilled on the Quiteria Vein in the La Luz area. The only intersection of note was:

 15 g/t Ag and 0.02 g/t Au over 5.2m in hole QT05-2.

The 2012 drill program discovered a new, high grade, silver-gold mineralized zone in the Terronera Vein. The Terronera Vein mainly consists of brecciated to massive quartz +/- calcite, locally banded and sugary-textured. Sulphide content is typically <1% and predominately fine-grained pyrite.

Drilling highlights in the Terronera Vein include:

 1,489 g/t Ag and 0.85 g/t Au over a 5.66m true width in hole TR02-1; and

 500 g/t Ag and 1.15 g/t Au over an 11.48m true width in hole TR12-1.

 Hole TR09-1 yielded:

o 650 g/t Ag and 1.17 g/t Au over a 5.50m true width; and

o 519 g/t Ag and 0.47 g/t Au over a 9.02m true width.

10.4 2013 Drilling Program

In 2013, Endeavour Silver continued its diamond drilling program on the Terronera Property to expand Mineral Resources defined in the 2012 drill program. Drilling in 2013 focused on the Terronera Vein area.

Endeavour Silver completed 8,573.5m of drilling in 30 drill holes in 2013. The 2013 program was successful in expanding and connecting the two high grade silver-gold mineralized zones, the Central Area and the El Hundido areas, in the Terronera Vein.

Drilling highlights from the Terronera Vein include:

 122 g/t Ag and 2.00 g/t Au over a 5.90m true width in hole TR02-5

 507 g/t Ag and 1.36 g/t Au over a 6.66m true width in hole TR03-1

 915 g/t Ag and 2.33 g/t Au over a 2.47m true width in hole TR03-5

o Including 5,580 g/t Ag and 15.85 g/t Au over a 0.27m true width

 646 g/t Ag and 1.11 g/t Au over a 5.03 m true width in hole TR07.5-1

o  Including 1,650 g/t Ag and 1.82 g/t Au over a 1.04m true width; and

 583 g/t Ag and 0.79 g/t Au over an 8.41m true width in hole TR08.5-1

o Including 4,420 g/t Ag and 2.46 g/t Au over a 0.47m true width.

10.5 2014 Drilling program

In 2014, Endeavour Silver continued its drilling program on the Terronera Property. Endeavour Silver's objective for the drilling campaign was to continue defining the mineralized body and to expand upon Mineral Resources identified in the 2012-2013 drill programs. Endeavour Silver was successful in meeting its objectives for the 2014 drilling program.


As at September 2014, Endeavour Silver completed a total of 8,204.20m in 27 surface diamond drill holes at the Terronera Project. A total of 2,470 samples were collected and submitted for assays.

The 2014 exploration drilling program was conducted with the objective to continue defining the high grade silver-gold mineralized body between sections TR-4S through TR-41, primarily on the Central Area (between sections TR-07 through TR-23).

Drilling highlights for Terronera Vein included:

 499 g/t Ag & 1.4 g/t Au over 2.6m true width in hole TR07-3

o Including 1,660 g/t Ag & 1.3 g/t Au over 0.2m true width

 345 g/t Ag & 0.8 g/t Au over 6.3m true width in hole TR14-3

o Including 1,440 g/t Ag & 1.0 g/t Au over 0.5m true width

 301 g/t Ag & 0.7 g/t Au over 6.7m true width in hole TR15-2

o Including 1,250 g/t Ag & 1.4 g/t Au over 0.4m true width

 788 g/t Ag & 0.8 g/t Au over 3.8m true width in hole TR17-2

o Including 3,620 g/t Ag & 2.0 g/t Au over 0.7m true width

 106 g/t Ag & 5.5 g/t Au over 3.2m true width in hole TR20-1

 272 g/t Ag & 8.5 g/t Au over 3.0m true width in hole TR20-2

 105 g/t Ag & 5.0 g/t Au over 2.6m true width in hole TR21-1

 121 g/t Ag & 3.3 g/t Au over 16.0m true width in hole TR23-1.

Also, significant results were returned for Hanging Wall Terronera Vein 1:

 101 g/t Ag & 4.3 g/t Au over 8.2m true width in hole TR21-1

 114 g/t Ag & 3.9 g/t Au over 4.1m true width in hole TR22-2

 107 g/t Ag & 1.9 g/t Au over 7.9m true width in hole TR23-1.

10.6 2015 Drilling Program

In 2015, Endeavour Silver continued its drilling program on the Terronera Property. Endeavour Silver's objective for the drilling campaign was to continue defining the mineralized body and to expand upon Mineral Resources identified in the 2012-2014 drill programs. Endeavour Silver was successful in meeting its objectives for the 2015 drilling program.

Endeavour Silver completed a total of 6,133m in 27 surface diamond drill holes at the Terronera Project in 2015. A total of 3,756 samples were collected and submitted for assays.

Drilling highlights for the Terronera Vein include:

 1,371 g/t Ag and 1.10 g/t Au (1,448 g/t AgEq) over 6.6m true width

o Including 5,420 g/t Ag

 5.12 g/t Au (5,778 g/t ageq) over 0.3m true width in hole TR 10-4

 508 g/t Ag and 3.25 g/t Au (735 g/t ageq) over 8.2m true width


o Including 6,600 g/t Ag and 22.10 g/t Au (8,147 g/t Ag Eq) over 0.23m true width in hole TR18-5.

10.7 2016 Drilling Program

In 2016, Endeavour Silver continued its drilling program on the Terronera Property in 2016. The aim of the 2016 drilling program was to continue infill drilling within the Terronera Vein system and conducted exploration drilling on the La Luz Vein, located about 2,200m northeast of the Terronera Vein.

Endeavour Silver completed a total of 5,670m in 19 surface diamond drill holes at the Terronera Project in 2016. A total of 1,805 samples were collected and submitted for assays.

Drilling highlights for Terronera Vein include:

 717 g/t Ag and 2.94 g/t Au (923 g/t ageq) over 6.56m true width,

  • Including 4,860 g/t Ag and 2.99 g/t Au (5,069 g/t ageq) over 0.39m true width in hole TR10.5-1; and

 226 g/t Ag and 5.0 g/t Au (576 g/t ageq) over 6.74m true width,

  • Including 527 g/t Ag and 169 g/t Au (1,710 g/t ageq) over 0.7m true width in hole TR09-06.

Drilling on the La Luz Vein outlined a west plunging mineralized zone over 300m by 250m deep starting approximately 100m below surface and still open to surface and to depth. Highlights include:

 408 g/t Ag and 58.6 g/t Au (4,512 g/t ageq) over 1.14m true width,

  • Including 1,365 g/t Ag and 238.0 g/t Au (18,025 g/t ageq) over 0.9m true width in hole LL-02.

10.8 2017 Drilling Program

In 2017, Endeavour Silver drilling programs focused on the definition of potential economical mineralization in several structures located in the northwest and east-west systems of the Terronera Project.

The drilling program included a total of 12,252m drilled in 47 surface diamond drill holes, mainly conducted at La Luz. Eight other structures were tested (El Muro, Los Espinos, Los Reyes, El Fraile, Vista Hermosa, La Escondida, La Atrevida and Quiteria West). The 2017 drilling program included 2,308 samples.

Surface drilling conducted during 2017 is summarized in

Table 10-1 and shown on the map in Figure 10-1.

Table 10-1 Terronera Project Surface Drilling in 2017



Project Area

No. of Holes

Total Length (m)

No. of Samples Taken

La Luz

25

5,760

1031

El Muro

1

226

52

Los Espinos

2

436

169

Los Reyes

6

1,957

646

El Fraile

7

1,749

164

Vista Hermosa

1

642

78

La Escondida

1

360

37

La Atrevida

1

340

11

Quiteria West

3

782

120

Total

47

12,252

2,308

Note:  Completed drill hole are shown in black

Source: Endeavour Silver (2017)

Coordinate system: WGS 84 / UTM Zone 13Q

Figure 10-1 Terronera Surface Map Showing 2017 Completed Drill Holes


Surface diamond drilling was conducted by Energold de Mexico, S.A. de C.V. (Energold Mexico) a wholly owned subsidiary of the Energold Drilling Corp. (Energold) based in Vancouver, British Columbia, Canada, using two man-portable drill rigs. Energold Mexico and Energold do not hold any interest in Endeavour Silver and are independent of the company.

Except for La Luz, the results of the drilling campaigns in the eight other structures were not significant. However, there are still possibilities to locate mineralization at the southeast part of Terronera, deep Quiteria, northwest part of Los Espinos, the new discoveries of Peña Gorda-Los Tablones and over structures at the Real Alto area.

In 2017 follow-up surface diamond drilling resumed on the La Luz Vein area, totalling 25 drill holes with 5,760 m drilled (Table 10-2).

The ultimate objective of the La Luz drilling program conducted in 2017 was to add Mineral Resources to the Terronera Project by defining the high-grade silver-gold mineralized body discovered in 2016, which was expanded to over 600m long by 250m deep starting approximately 100m below surface and still open to surface and to depth. The La Luz Vein mainly consists of quartz (banded, massive and brecciated), white and amethyst quartz, gray silica, traces of chlorite, greenish clays, micro-veinlets of calcite, selective argillization, strong silicification, FeO in fractures, weak to moderate disseminated pyrite and sulphides of Ag in bands and disseminated. The host rock is a volcano-sedimentary sequence from the lower Cretaceous.

 Table 10-2 2017 Drill Hole Summary for the La Luz Surface Drilling Program

Hole No.

Azimuth

Dip

Core Diameter

Total Depth  (m)

Start  Date

Finish Date

LL-17

355 º

-45 º

HTW

169.25

16/01/2017

20/01/2017

LL-18

356 º

˗56 º

HTW

254.65

21/01/2017

26/01/2017

LL-19

356 º

-61 º

HTW/NTW

277.55

26/01/2017

31/01/2017

LL-20

333 º

-48 º

HTW

205.85

01/02/2017

04/02/2017

LL-21

0 º

-45 º

HTW

212.15

05/02/2017

10/02/2017

LL-22

0 º

-53 º

HQ/NQ

326.35

10/02/2017

18/02/2017

LL-23

19 º

45 º

HQ

217.55

25/02/2017

02/03/2017

LL-24

165 º

-69 º

HQ

197.00

03/03/2017

08/03/2017

LL-25

151 º

-53 º

HTW

311.10

08/03/2017

15/03/2017

LL-26

170 º

-64 º

HTW/NTW

340.05

16/03/2017

30/03/2017

LL-27

158 º

-75 º

HQ

305.00

30/03/2017

06/04/2017

LL-28

208 º

-49 º

HTW

216.55

08/04/2017

11/04/2017

LL-29

209 º

-56 º

HQ/NTW

323.30

21/05/2017

27/05/2017

LL-30

144 º

-61 º

HQ/NTW

312.10

27/05/2017

02/06/2017

LL-31

229 º

-62 º

HQ

374.60

03/06/2017

09/06/2017

LL-32

209 º

-46 º

HQ/NTW

250.10

09/06/2017

15/06/2017




Hole No.

Azimuth

Dip

Core Diameter

Total Depth  (m)

Start  Date

Finish Date

LL-33

180 º

-45 º

HQ

118.95

16/06/2017

18/06/2017

LL-34

230 º

-45 º

HTW

163.15

19/06/2017

22/06/2017

LL-35

206 º

-61 º

HQ

130.30

23/06/2017

25/06/2017

LL-36

127 º

-45 º

HQ

91.50

26/06/2017

28/06/2017

LL-37

177 º

-54 º

HQ

111.30

28/06/2017

30/06/2017

LL-38

127 º

-45 º

HQ

176.00

01/07/2017

04/07/2017

LL-39

137 º

-62 º

HQ

193.65

05/07/2017

08/07/2017

LL-40

120 º

-52 º

HQ

227.20

09/07/2017

15/07/2017

LL-41

332 º

-57 º

HQ

254.65

16/07/2017

22/07/2017

Total (25 drill holes)

5,759.85

 

 

Drilling highlights for La Luz Vein include:

 245 g/t Ag and 23.1 g/t Au (1,980 g/t AgEq) over 1.4m true width in hole LL-17

 25 g/t Ag and 14.9 g/t Au (1,146 g/t AgEq) over 1.8m true width in hole LL-18

 63 g/t Ag and 57.0 g/t Au (4,339 g/t AgEq) over 2.2m true width in hole LL-21

  • including 340 g/t Ag and 320.0 g/t Au over 0.3m true width

 45 g/t Ag and 16.2 g/t Au (1,262 g/t AgEq) over 1.7m true width in hole LL-23

 384 g/t Ag and 20.3 g/t Au over 1.1m true width in hole LL-35

  • including 2,600 g/t Ag and 123.5 g/t Au over 0.12m true width

 38 g/t Ag and 16.5 g/t Au (1,273 g/t AgEq) over 1.2m true width in hole LL-36.

Also, significant results were returned for the La Luz HW Vein including:

 25 g/t Ag and 20.9 g/t Au (1,589 g/t AgEq) over 1.3m true width in hole LL-23

 12 g/t Ag and 7.6 g/t Au (580 g/t AgEq) over 1.2m true width in hole LL-39.

Drilling results of La Luz Vein are summarized in Table 10-3 and the La Luz Vein intercepts are shown on the longitudinal projection in Figure 10-2.


Table 10-3 Surface Drill Hole Significant Assay Summary for Mineral Intercepts in the La Luz Vein Area

Drill Hole No.

Structure

Mineralized Interval

Assay Results

From    (m)

To      (m)

Core Length (m)

True Width (m)

Ag  (g/t)

Au    (g/t)

LL-17

La Luz Vein

124.15

127.85

3.7

2.3

164

14.5

La Luz Composite

124.55

126.85

2.3

1.4

245

23.1

Including

124.55

125.40

0.9

0.5

212

47.5

LL-18

La Luz Vein

174.00

178.10

4.1

1.8

25

14.9

Including

177.60

178.10

0.5

0.2

77

48.5

LL-20

La Luz Vein

168.00

172.30

4.3

2.1

39

4.8

La Luz Composite

169.15

172.30

3.2

1.5

40

6.4

Including

171.75

172.30

0.6

0.3

21

12.4

LL-21

La Luz Vein

172.70

174.15

1.5

0.9

137

127.5

La Luz Composite

173.10

176.75

3.7

2.2

63

57.0

Including

173.60

174.15

0.6

0.3

340

320.0

LL-23

La Luz Vein

144.75

147.90

3.2

2.0

39

13.9

La Luz Composite

145.20

147.90

2.7

1.7

45

16.2

Including

147.05

147.40

0.3

0.2

171

45.2

Hw La Luz Vein

154.50

156.20

1.7

1.0

31

26.2

Hw La Luz Composite

154.50

156.70

2.2

1.3

25

20.9

Including

154.50

155.05

0.6

0.3

44

31.6

LL-25

La Luz Vein

215.90

216.65

0.8

0.5

1114

0.6

La Luz Composite

214.65

216.65

2.0

1.4

419

0.2

Including

216.20

216.65

0.5

0.3

1830

1.1

LL-27

La Luz Vein

173.35

175.60

2.3

1.2

71

2.0

Including

173.35

174.30

1.0

0.5

128

4.7

LL-32

La Luz Vein

196.30

197.85

1.5

1.1

91

2.7

Including

197.00

197.85

0.8

0.6

95

4.7




Drill Hole No.

Structure

Mineralized Interval

Assay Results

From    (m)

To      (m)

Core Length (m)

True Width (m)

Ag  (g/t)

Au    (g/t)

LL-35

La Luz Vein

106.65

107.05

0.4

0.2

1699

90.5

La Luz Composite

105.20

107.05

1.8

1.1

384

20.3

Including

106.65

106.85

0.2

0.1

2600

123.5

LL-36

La Luz Vein

57.40

58.15

0.8

0.6

57

2.5

La Luz Composite

57.40

58.75

1.4

1.2

38

16.5

Including

58.15

58.75

0.6

0.5

14

34.0

LL-39

Hw La Luz Vein

146.05

146.40

0.3

0.2

25

26.9

Hw La Luz Composite

146.05

148.45

2.4

1.2

12

7.6

Including

146.05

146.40

0.3

0.2

25

26.9

La Luz Vein

162.05

163.15

1.1

0.5

6

3.2

La Luz Composite

161.80

164.00

2.2

1.1

4

1.6

Including

162.05

162.35

0.3

0.1

12

8.4

Source: www.endeavoursilver.com

Coordinate system: WGS 84 / UTM Zone 13Q

Figure 10-2 Drill Intersections - La Luz Vein Longitudinal Projection 

10.9 2018 Drilling Program

In 2018, Endeavour Silver resumed its drilling program over the Terronera Vein. In addition, at the end of the year, surface diamond drilling was conducted with associated geomechanical and hydrogeological support at the La Luz Vein area.

10.10 Terronera

In 2018, Endeavour Silver conducted an infill surface drilling program over the Terronera Vein, with the objective of filling gaps to upgrade Inferred Mineral Resources to Indicated Mineral Resources and to expand the Inferred Mineral Resources at depth. Mineralization in the Terronera Vein has been intersected over 1,400m long by 500m deep, and it remains open at depth.


The 2018 drilling program included a total of 18,774m drilled in 39 surface diamond drill holes (Figure ), including 3,007 samples collected and submitted for analysis (Table 10-4). The information of these holes is summarized in

Table 10-5.

Table 10-4 Terronera Surface Drilling in 2018

Project Area

Number of Holes

Total Length (m)

Number of Samples Taken

Terronera

39

18,774

3,007

Total

39

18,774

3,007

Table 10-5 2018 Drill Hole Summary for the Terronera Surface Drilling Program

Drill Hole  No.

Azimuth

Dip

Core Diameter

Total Depth (m)

Start           
Date

Finish     
Date

TR7S-1

224 º

-65 º

HQ

766.15

17/03/2018

10/04/2018

TR11-4

229 º

-63 º

HQ

632.35

25/03/2018

11/04/2018

TR11-5

226 º

-59 º

HQ

608.25

11/04/2018

26/04/2018

TR10-5

229 º

-57 º

HQ

522.65

29/04/2018

11/05/2018

TR10-6

229 º

-64 º

HQ

577.50

11/05/2018

23/05/2018

TR14-8

233 º

-73 º

HQ

406.65

23/04/2018

02/05/2018

TR15-7

263 º

-65 º

HQ

391.30

02/05/2018

10/05/2018

TR13-6

197 º

-74 º

HQ

437.80

10/05/2018

19/05/2018

TR08-6

226 º

-66 º

HQ/NQ

391.90

25/04/2018

04/05/2018

TR07-4

207 º

-66 º

HQ/NQ

395.00

05/05/2018

15/05/2018

TR5S-2

249 º

-55 º

HQ/NQ

570.50

01/05/2018 /
15/05/2018

14/05/2018 /
27/05/2018

TR7S-2

225 º

-46 º

HQ

498.50

31/05/2018

14/06/2018

TR10-7

229 º

-68 º

HQ

649.35

23/05/2018

06/06/2018

TR09-7

221 º

-66 º

HQ

609.55

06/06/2018

19/06/2018

TR13-7

208 º

-78 º

HQ

489.00

19/05/2018

31/05/2018

TR12-7

199 º

-80 º

HQ

452.35

01/06/2018

10/06/2018




Drill Hole  No.

Azimuth

Dip

Core Diameter

Total Depth (m)

Start           
Date

Finish     
Date

TR17-6

241 º

-55 º

HQ

401.35

10/06/2018

19/06/2018

TR06-5

189 º

-62 º

HQ/NQ

405.65

16/05/2018

29/05/2018

TR06-6

185 º

-67 º

HQ/NQ

410.20

30/05/2018

10/06/2018

TR09-8

244 º

-68 º

HQ/NQ

394.95

11/06/2018

20/06/2018

TR2S-4

239 º

-65 º

HQ

533.00

16/06/2018

07/07/2018

TR11-7

204 º

-69 º

HQ

351.90

11/07/2018

21/07/2018

TR12-8

213 º

-58 º

HQ

571.35

20/06/2018

04/07/2018

TR12-9

214 º

-62 º

HQ

629.85

05/07/2018

19/07/2018

TR17-7

241 º

-61 º

HQ

435.65

19/06/2018

29/06/2018

TR18-7

254 º

-60 º

HQ

434.10

29/06/2018

10/07/2018

TR16-10

223 º

-61 º

HQ

432.35

11/07/2018

21/07/2018

TR09-9

245 º

-73 º

HQ/NQ

434.60

21/06/2018

30/06/2018

TR01-4

204 º

-66 º

HQ/NQ

353.80

04/07/2018

14/07/2018

TR00-3

183 º

-65 º

HQ/NQ

419.35

15/07/2018

27/07/2018

TR19-7

210 º

-55 º

HQ

375.85

22/07/2018

31/07/2018

TR11-8

186 º

-73 º

HQ

423.00

21/07/2018

02/08/2018

TR13-8

226 º

-59 º

HQ

610.75

19/07/2018

04/08/2018

TR01-5

213 º

-70 º

HQ/NQ

390.40

28/07/2018

07/08/2018

TR19-8

207 º

-63 º

HQ

411.15

31/07/2018

10/08/2018

TR10-8

166 º

-69 º

HQ

427.00

02/08/2018

12/08/2018

TR13-9

224 º

-63 º

HQ

658.10

04/08/2018

18/08/2018

TR19-9

207 º

-68 º

HQ

463.05

10/08/2018

21/08/2018

TR04-6

227 º

-78 º

HQ

407.45

10/08/2018

26/08/2018

Total (39 drill holes)

18,773.65

 

 

Surface diamond drilling conducted by Energold de Mexico, S.A. de C.V. (Energold Mexico) and Layne de Mexico, S.A. de C.V. (Layne).

Energold de Mexico, S.A. de C.V. (Energold Mexico), a wholly owned subsidiary of the Energold Drilling Corp. (Energold) based in Vancouver, British Columbia, Canada, used two drill rigs (one man-portable drill rig). Energold Mexico and Energold do no hold any interest in Endeavour Silver and are independent of the company.


Layne de Mexico, S.A. de C.V. (Layne), a wholly owned subsidiary of the USA-based Layne Christensen Company (Layne Christensen), used two drill rigs. Neither Layne nor Layne Christensen held an interest in Endeavour Silver and both are independent of the Company.

Note:  Completed drill hole are shown in black

Source: Endeavour Silver (2018)

Coordinate system: WGS 84 / UTM Zone 13Q

Figure 10-3 Terronera Surface Map Showing Completed 2018 Drill Holes

Drilling at Terronera fulfilled the objective by intercepting high silver and gold grades and proving continuity of the mineralization along strike and to depth.

Drilling highlights for the Terronera Vein include:

 782 g/t Ag and 0.9 g/t Au (847 g/t AgEq) over 3.3m true width in hole TR10-8, including 9,810 g/t Ag and 8.75 g/t Au over 0.12m true width


 618 g/t Ag and 3.2 g/t Au  (861 g/t AgEq) over 21.2m true width in hole TR11-4, including 4,090 g/t Ag and 4.9 g/t Au over 0.2m true width

 507 g/t Ag and 2.6 g/t Au (699 g/t AgEq) over 6.0m true width in hole TR11-5, including 3,370 g/t Ag and 5.4 g/t Au over 0.4m true width

 783 g/t Ag and 1.2 g/t Au (874 g/t AgEq) over 5.3m true width in hole TR11-7, including 3,880 g/t Ag and 2.6 g/t Au over 0.3m true width

 524 g/t Ag and 0.7 g/t Au (575 g/t AgEq) over 4.2m true width in hole TR11-8

 197 g/t Ag; and 2.4 g/t Au (378 g/t AgEq) over 9.8m true width in hole TR12-8, including 3,420 g/t Ag and 6.6 g/t Au over 0.2m true width

 129 g/t Ag and 4.8 g/t Au (488 g/t AgEq) over 4.4m true width in hole TR13-7

 185 g/t Ag and 7.15 g/t Au (721 g/t AgEq) over 5.6m true width in hole TR13-9

 129 g/t Ag and 2.8 g/t Au (340 g/t AgEq) over 7.2m true width in hole TR14-8.

Also significant results returned for the Terronera FW Vein:

 1,297 g/t Ag and 0.9 g/t Au over 6.1m true width in hole TR11-8, including 6,660 g/t Ag and 1.8 g/t Au over 0.5m true width

 169 g/t Ag and 4.75 g/t Au over 7.7m true width in hole TR12-7.

Drilling results of Terronera Vein are summarized in Table 10-6 and the Terronera Vein intercepts are shown on the longitudinal projection in Figure 10-4.

Table 10-6 2018 Drill Hole Assay Summary for the Terronera Surface Drilling Program

Drill Hole No.

Structure

Mineralized Interval

Assay Results

From  (m)

To      (m)

Core Length (m)

True Width (m)

Ag  (g/t)

Au  (g/t)

TR2S-4

Terronera

451.75

453.40

1.6

0.8

1

0.01

Terronera Composite

450.95

453.40

2.4

1.2

2

0.02

Including

450.95

451.75

0.8

0.4

3

0.03

TR5S-2

Terronera

505.05

505.70

0.6

0.5

0.2

<0.005

Terronera Composite

505.05

506.50

1.4

1.0

0.2

0.01

Including

505.05

505.70

0.6

0.5

0.2

<0.005

TR7S-1

Terronera

558.85

559.25

0.4

0.2

<0.2

0.01

Terronera Composite

557.55

559.25

1.7

1.0

0.2

0.01

Including

558.85

559.25

0.4

0.2

<0.2

0.01

TR7S-2

Terronera

409.00

409.20

0.2

0.2

0.4

0.01

Terronera Composite

409.00

410.25

1.3

1.0

0.3

0.01

Including

409.00

409.20

0.2

0.2

0.4

0.01




Drill Hole No.

Structure

Mineralized Interval

Assay Results

From  (m)

To      (m)

Core Length (m)

True Width (m)

Ag  (g/t)

Au  (g/t)

TR00-3

Terronera

369.15

370.60

1.5

0.6

11

0.63

Terronera Composite

367.80

370.60

2.8

1.2

6

0.34

Including

369.15

369.65

0.5

0.2

22

1.12

TR01-4

Terronera

303.40

307.20

3.8

2.3

147

1.41

Including

303.40

304.30

0.9

0.6

379

0.74

TR01-5

Terronera

327.85

332.10

4.3

2.3

40

0.87

Terronera Composite

328.55

330.90

2.3

1.2

51

1.32

Including

329.40

330.15

0.8

0.4

74

2.61

TR04-6

Terronera

334.20

335.80

1.6

1.0

179

4.42

Terronera Composite

331.45

335.80

4.4

2.8

149

3.39

Including

334.20

334.45

0.3

0.2

209

5.08

TR06-5

Terronera

329.40

332.00

2.6

2.0

25

1.33

Terronera Composite

330.20

331.70

1.5

1.2

26

1.90

Including

330.90

331.70

0.8

0.6

34

2.54

TR06-6

Terronera

349.70

350.75

1.1

0.6

15

0.58

Terronera Composite

348.50

350.75

2.3

1.4

11

0.36

Including

349.70

350.00

0.3

0.2

9

0.98

TR07-4

Terronera

352.60

354.20

1.6

1.2

10

0.16

Including

352.60

353.60

1.0

0.7

8

0.22

TR08-6

Terronera

342.10

345.95

3.8

2.5

49

2.02

Terronera Composite

342.30

346.65

4.3

2.8

54

1.99

Including

342.30

342.80

0.5

0.3

127

4.33

TR09-7

Terronera

556.60

561.50

4.9

2.9

95

3.01

Terronera Composite

556.60

563.00

6.4

3.9

86

2.64

Including

557.35

557.75

0.4

0.2

275

4.49

TR09-8

Terronera

344.75

350.85

6.1

3.5

93

0.67

Terronera Composite

345.40

350.40

5.0

2.9

112

0.81

Including

345.80

346.50

0.7

0.4

136

4.21

TR09-9

Terronera

366.25

372.20

5.9

3.4

136

2.13

Including

371.40

372.20

0.8

0.5

189

5.86




Drill Hole No.

Structure

Mineralized Interval

Assay Results

From  (m)

To      (m)

Core Length (m)

True Width (m)

Ag  (g/t)

Au  (g/t)

TR10-5

Terronera

475.15

476.90

1.8

1.3

467

1.27

Including

476.40

476.90

0.5

0.4

888

0.99

FWTRV

501.50

501.75

0.3

0.2

21

0.19

FWTRV Composite

501.50

502.75

1.3

1.0

14

0.16

Including

501.50

501.75

0.3

0.2

21

0.19

TR10-6

Terronera

531.50

540.60

9.1

5.5

116

2.30

Terronera Composite

535.00

538.75