Industry sign banking alabama ppt online
[Music] welcome ladies and gentlemen to a new edition of our virtual online roadshow series by swiss resource capital and commodity tv my name is john steiger i'm the founder and ceo of swiss resource and also the founder and chief editor of commodity tv and the german ponder rochester of default very warm welcome here to endeavour silver and you see already bradford cook the uh co-founder and ceo of endeavor civil welcome and good morning to vancouver brett how are you hi i'm excellent how are you perfect thank you very much summer is back in switzerland and the snow is gone that is fantastic i know we are like 15 minutes earlier than our normal roadshow maybe uh some participants might wonder that this happened we had just a little error in the send out so apologize for this but i mean we still can talk longer and that is also fine people are checking in before we start with the presentation of course a short question to you bradford because you are also the vice president of the silver institute and we had a lot of emails and phone calls from investors asking about yeah silver squeeze asking about the silver market itself when will it start to rise what is needed like let's say a short squeeze or is it just simply supply demand maybe you can give us some minutes on that please well absolutely let's start with silver you know silver is clearly in a bull market now i think we're two years into a bull market there was a double bottom at the end of 2018 and we've now posted two consecutive years of gains even last year coming from 14 to almost 30 was a spectacular run for the price of silver in the u.s dollars but in most currencies silver is up strongly and to be honest it is truly fundamental supply and demand so let's look at the demand side obviously uh the resurrection of investment demand uh has helped to move the price we saw uh u.s silver coin and bar demand last year quadruple but perhaps far more importantly last year the silver etfs worldwide at the start of the year were holding about 650 million ounces the same as they held really since 2011 and yet uh through the summer last year that number grew by 400 million ounces there's now over a billion ounces held physically by solar etfs worldwide so that is a direct measure of the spike in investment demand last year let's move to industrial demand because silver is both precious metals as well as an industrial metal what we've seen uh just in the last 12 months is a rising appreciation for silver as a green metal i mean silver you can't have electronics without silver it coats every electronic circuit you can't have solar photovoltaic power without silver it coats the uh the photovoltaic panels you can't you can't have a hybrid or electric vehicle without silver again it it coats each of the electronic circuits you can't even have 5g telephony without silver so it is not only a critical high-tech metal it's a critical green metal and there's now a rising appreciation and rising demand if we want to quantify that demand look at the projections for the electric vehicle industry over the next 10 years if you just apply that to the consumption of silver uh the approximately 100 million ounces that went into conventional internal combustion cars last year has to at least double in the next 10 years where is that 100 million ounces of extra demand going to come from where are the mines if you do the same thing on solar photovoltaics you get a similar number there's an extra 100 million ounces of demand strictly for solar power in the next 10 years where is that silver going to come from so whether it's investment demand or industrial demand the demand side is extremely strong and growing let's look towards the supply side you know we've just come off our fourth consecutive year of declining mine supply so why is that well very simply amongst all the metals traded internationally silver is the only one that is primarily a byproduct of other metals a byproduct of copper mines lead zinc bites gold mines and uh in a seven year bear market which we just came through for all commodities uh those big copper led zinc and and even to certain extent gold mines they don't get built so there's a short serious shortfall of byproduct silver which is half of the total uh supply of silver it's 70 percent of the total mine supply of silver uh and you know i think we can reasonably forecast at least a couple more years of declining mine supply before the cycle corrects itself and moves back up and us primary producers we can hardly make a dent on the supply side because we're only 30 percent of of mine supply and and less of total supply so what that adds up to uh joachim is a perfect storm for silver and i've been forecasting this now for the last couple of years we've been in a bull market finally for the last couple of years there's at least a couple more years to go super so very positive outlook on silver of course and i think now everybody had a lot of time to really check in i would suggest that i bring up the presentation and then please the floor is your spread fault well thank you very much and again welcome everybody to this presentation on endeavor silver entitled profitable production compelling growth and i will be making some forward-looking statements today so you are newly cautioned uh for those new to the company endeavour is a mid-tier producer of silver and gold we own and operate three high-grade underground silver gold mines in mexico and there's really four key catalysts to create value for our shareholders short and long term we have had a recent history a very successful history of reducing our operating costs and boosting our free cash flow we'll come back to that perhaps the most obvious way to differentiate endeavor silver from the rest of the silver peer group is our organic growth profile best in sector with not one but two new discoveries that we propose to develop into new minds thirdly you know endeavor lives and dies by the drill bit what i mean by that is that every ore body we've developed every mind we've put into production since inception was as a result of virgin discoveries by our expiration team and that is unique in the solar business uh last but not least from time to time we do acquire key assets typically for pennies on the dollar in the bear market through opportunistic mergers and acquisitions oh and because we're a primary precious metals producer only silver and gold we have a sector leading beta or leverage of our share price to the solar price so headquartered in vancouver bc our core assets located in mexico a portfolio of three world-class exploration projects in northern chile and approximately 2200 people currently work for the company so let's move on to some recent highlights we just came off our best quarter in the last two years producing 2.1 million ounces of silver equivalents in q4 last year up 21 year on year uh even though he had withdrawn last year's production guidance due to the pandemic uh we actually ended up meeting our original guidance of six and a half million ounces silver equivalents despite the two months government mandated suspension of all mines due to the growing pandemic we just released yesterday our year-end financial performance and we had a spectacular q4 reporting 20 million dollars of net earnings off of 60 million dollars of revenues our 2020 cash costs uh were reduced 57 percent to 555 per ounce silver net for the gold credit but our online sustaining cost was down 17 to 1759 per ounce silver our q4 mine operating cash flow jumped almost 300 to 56 million dollars and we started last year with only 23 million dollars cash we finished last year with 61 million dollars cash and working capital 70 million dollars thanks to the profitable operations of our three mines it was another good year of replacing reserves with our brownfields exploration drilling primarily iguana civilian to a lesser extent we just recently updated our reserves and resources posting 86 million ounces of reserves excellent equivalent analysis 44 million ounces of silver equivalent measured and indicated resources and 87 million ounces of silver equivalent inferred resources and once again we are able to improve our safety record with both our long-term incident lost time incident frequency and severity rates continuing to trend down in 2020. you look at the chart right our revenues last year were about 54 slimmer and 46 gold and again uh you can see the reduction in our costs thanks to the improved operations of our mines so i won't go through the the the numbers here but these are the financial metrics over the four quarters last year and you can see uh what a strong performance we had throughout the year plus 300 uh increase in silver margins uh plus 450 percent growth of ebeda plus 300 growth of free cash flow plus 300 percent growth of our cash positions all in all a very solid year notwithstanding the covert pandemic looking forward to 2021 we've announced our our guidance uh production should be slightly higher uh than last year supposed significantly higher due to the lower cost last year and the higher metal prices this year uh cost should be also drifting slightly higher primarily due to higher royalties and uh mining taxes um primarily i want to see obviously the more profits we make we make now the more we pay in royalties and duties last year we completed a pre-feasibility study on our next development project at taranera we're now in the middle of a full feasibility study we expect to receive it mid-year and that should allow us to go to the board for a development decision late summer we're hoping to break ground at terran era this year the second project in our development pipeline morale took a year off from drilling last year but now we have an aggressive drilling program a trillion dollar budget this year focused on expanding our resources at perel and last but not least in the portfolio our early stage high risk high reward projects in chile are now finally being drilled we're drilling the paloma project here in the first quarter and we hope to have the drill permit for our aida project by the fourth quarter this year all right let's have a quick tour of the assets squanasvee is our first mine acquired in 2004 came to production in january of 2005. it's our largest silver mine it's our most silver rich mine and it's the only mine where we produce dory bars and refine them into pure bullion what that does is allow us uh the flexibility to sell what our product on a weekly basis and at guanis avi it had fallen on hard times in 2018-19 we lost money at guanacity and we needed to uh conduct a massive operational turnaround in order to get that mine back into the black well the good news is last year we generated significant free cash flow uh year on year our slower equivalent production was up 49 our grades jumped 32 throughput from the mine to the plant was up 15 if you look at the chart left the blue bars are the tons from the mine ship to the plant we finished off the year in q4 at very close to the 1200 ton plant capacity and the the uh the bar or line above it is the grades per ton uh 312 grams uh some equivalence in q four of 2019 jumping to 412 grams in q4 last year so all of that adds up to rising quarterly production chart rate of course rising production uh means falling costs and you can see that virtually on this chart here with the bonus three cash costs of 10 bucks and all in cost is 17 bucks let's move now to our second minor bolonitos in the famous district of guanajuato acquiring in 2007. well anitos for the better part of ten years was our cash cow uh we pulled over 200 million dollars of free cash flow out of this line from 2009 to 2018 but like guanazavi it also fell on hard times in 2019 and so we had to launch an operational turnaround at molonitos as well the good news we completed that turnaround in q4 last year and as a result our year-on-year solar equivalent production was up 46 our throughput was up 31 we posted the highest gold grades and recoveries in the last three years uh so again the chart left you can see the blue bars are the rising tons from the mines to the plant approaching the plant capacity in q4 and even though the grade bar looks like it's falling it was significantly higher than 2019 and we're forecasting significantly higher grades here in 2021 chart rate just shows the impact on our quarterly production of course rising production means lower costs and because this is largely a gold mine 80 20 gold silver split but take pulls of credit against the cost to produce the silver the costs are significantly negative in other words the gold is worth far more than the cost to run the mine and last but not least our newest our smallest and our most gold rich mine the encompass mine and zecoticus is now two years old and i know compass we had a pretty steady year year-on-year production was up nine percent throughput up three percent gold grades and recoveries were up slightly silver grades and recoveries were down slightly uh all that adds up to a pretty steady production profile slightly rising into your end and a bit of a lumpy cost part because of the rich gold credit here but again it generated free cash flow last year so all three mines generated free cash flow in 2020. so those are the three operating minds if we turn our attention now to the development projects or organic growth profile the first up is our terraria project in jalisco state at jalisco or sorry at tarnera we have a project with large low-cost mine potential it's truly going to be our next core asset when it's up and running it will effectively double our production and half our costs it's a large property spanning the entire san sebastian district 20 000 hectares and we've now mapped and sampled over 50 old spanish mines on numerous numerous ordering baits and yet this project is only a 50 kilometer drive on pavement in the resort city quarterback we're modeling a 6 million ounce per year silver equivalent mine for a minimum 10 years we have a reserve base of 66 million ounces of silver equivalents plus an additional 14 million ounces of of resources and last year we acquired two new properties shown in the green on the map here covering numerous additional veins that have never been drilled the existing reserves and resources are in the two ore bodies shown by the stars taranera and uh la luz thank you we published the final pre-feasibility study last july and uh even at much lower metal prices 16 silver and 1400 gold uh we generated a very robust project economics 137 million dollar net premium present value after tax 30 interval rate of return after tax and a payback period of two point seven years but what's really special about taranera are the costs with a 60 40 silver gold split we're taking the gold as a credit to produce the silver we we estimate that throughout the entire mine life of taranera the cash costs will effectively be zero to produce the salt gold pays for everything even on all unsustaining cost basis including the life of mine operating costs exploration expenditures capital investments g a costs royalties and mining duties uh we expect to produce silver taranera at two dollars and ten cents per ounce it will be one of the lowest cost mines in the entire sector and will single-handedly take our costs down to the lost quartile so our spectacular impact on our both our production profile and our cost profile in fact here's the comparison of our pfs base case spot case and approximately current prices this was taken some time ago when gold was higher and silver was lower and look at the impact on our financial metrics the npv almost triples uh to 350 million dollars irr more than doubles to 65 the payback period more than half to 1.1 years and if you look at the annual average um after tax free cash flow it's 57 million dollars per year so again a pretty special project we found it we proposed to build it here's the 10-year production profile silver and silver bars gold is a silver equivalent in the gold bars and the red dots are the silver equivalent grades of almost 500 grams at the start of the my life still 350 grams even at the end of my life so now that we're in the full feasibility study what are we trying to
accomplish well we've already expanded our property footprint we've resumed drilling to expand our resources we're now evaluating the potential to expand the plant capacity we're optimizing the mining methods hopefully we can use cheaper long-haul mining with more geotech analysis we're optimizing your transport we're now looking at a smaller carbon footprint doing a trade-off study on electric mining equipment versus diesel tweaking the plant recoveries again to reduce the carbon footprint print we're looking at a trade-off study of a slurry pipeline versus hall trucks to take the tailings from the plant to the tinnings facility and sticking with the reduced carbon footprint we're looking at natural gas alternatives to drive our power needs so next steps we want to complete the epcm that is engineering procurement construction management process and appoint a chief engineering contractor to run the project for us in association with our project team which we're still building we've already resumed the expiration we've already extended certain key government permits so that we're as soon as the board says go we're ready to start building we've already ordered some long lead items we've taken possession and paid for the 1500 ton ball mill it's sitting in a warehouse in puerto vallarta we have a nine million dollar budget between now and june to continue ordering long lead equipment our feasibility is study expected mid-year go to the board for approval late summer and between now and then dan and i are working on the debt financing i'll only touch briefly on parallel it's the second project coming up into our development pipeline but it's still really an advanced exploration project it was a formally announced uh pre-order mine until 1990. we have a 40 million ounce resource base at veda colorado san patricio palmia and canada and drilling is resumed this year with a two million dollar budget we'd love to get to 50 60 70 million ounces over the next two years so that when terran air is finally built and running our project team can can come straight to perl and get this one built in 2024 2025 potentially our sixth mine so why chile people ask me that question a lot but you know when you live off of these small high grade underground mine opportunities in mexico there are limits to growth and that business model really started bumping up against those limits in recent years so we decided in the bear market to go shopping for world-class opportunities in northern chile why because the biggest silver belt in the world the largest historic silver mines in the world were actually in bolivia sauropodo si cero rico and that bolivian sewer belt extends down into northern chile so we literally staked massive alteration zones in northern chile in the last six seven years we've spent several years and several million dollars grooming these projects so that they're at drill ready status and we're now finally drilling the paloma project is the left here with a pickup truck and it's a three by two kilometer uh massive alteration anomaly uh with strongly anomalous metals it's uh for arguably a five million ounce gold equivalent high sulfidation epithermal target open pit potentially heat bleach and we're drilling it now results here in the next month or two uh the second project sarah marquez is even bigger it's a six by eight kilometer portfolio copper gold complex because it's copper rich and we're not a copper company we've decided that it's just too big for us so we're shopping for a copper partner we've had several come knocking we've signed confidentiality agreements and our goal this year is to bring in a partner on several markets last but not least upper right with the alpaca this is our eight kilometer by three kilometer alteration zone at aida and we're still waiting for the drill permit we hope to have it by the fourth quarter so we can drill it next year and that's a 200 million ounce silver target so there you have it that's why we're in doing chile world class exploration projects all of this adds up to us leading organic growth strategy with tremendous leverage we have cash flow leverage not only to rising metal prices but to our recently falling costs somewhat unique throughout the sector we do have sector best organic production growth thanks to our terrener and parallel projects and we have sector best leverage to world-class discovery thanks to our chilean assets we currently have 158 million shares issued which we have about a billion dollar u.s market cap and tremendous liquidity about 8 million shares a day uh we're listed on the big board in new york exk and the big board toronto edr working cap have already touched on in cash position there's no long-term debt we have one major shareholder in the vanic gdxj index funnel and six percent and one strategic shareholder world's largest primary solar producer for as neo plc has a two percent toe hold in the stock ten analysts cover the stock and i should actually point out here that um this first two weeks of march or actually the measurement period for addition to two indexes and it appears that it never may qualify for addition to the gdx index the big gold index and in addition we also appear to qualify for the s p t s x 500 index so we're hoping obviously through this measurement period to qualify for these indices if we do it should actually have a significant impact on short-term buying for our stock because the indices have to purchase our stock if we're added to the index and there are many shadow index funds who would also then purchase our stock so that's it basically returning to our catalysts continue to optimize our operations to generate free cash flow advancing taranera through the feasibility study to a production decision and breaking ground this year it's a two-year construction phase including commissioning so we'd be looking for cash flow at the end of 2023 continuing to replace our reserves through brownfields drilling and leverage to make world-class discovery in chile why invest in endeavor what you get with endeavour is a midterm producer run by an experienced management team who simply through the development of our organic growth pipeline of projects expect to become the next senior producer of silver in the space we run a strong balance sheet with no long-term debt and we're a pure silver gold player thank you very much wow super bradford thank you very much that was uh perfectly in time here um and also i want to urge our viewers please to use the chat function for any questions as we will start now with the q and a so let me see okay yeah one of the good questions could endeavor be a takeover target for the right price of course that's speculation but let's talk about mergers and acquisitions in the silver space uh i already mentioned that endeavors driven by expiration success and we're the only silver mining company uh not including the explorers and developers obviously but the only producing solar mining company who always every year focus on grassroots exploration and discovery that's where our bodies all come from uh virgin discoveries by our exploration group and to be honest if you can't buy something you have to find it and we're the finder in the group so are we at takeover target perhaps not right now but ultimately where else can people go yeah exactly yeah when silva really starts to rise then definitely all the producing companies are on the radar for sure because there's so much cheap money out in those markets um i would say we start first with some questions to the company and then become a little bit more to the overall markets because there's a lot with silverbats.com and all those kind of stuff and wall street bets.com and for the short squeeze um yeah there is a question about your fourth quarter where you did like 20 million dollar profit but in the total year 2020 you had 1.2 so that would mean obviously that you did some losses in the quarters before and but i would say this is really giving you now a great foundation um for the future here right the fourth quarter well absolutely if you recall our financial metrics slide uh all four metrics we showed were quite low in q1 and they just consistently rose throughout the year so yes we had operating losses in q1 and a much smaller loss in q2 as we finished off the operational turnaround at guanasavi and even though we had a great q3 and q4 we were still doing the turnaround in bologna until the end of q4 so that's why you saw that dramatic impact on our financial metrics last year okay so would that mean for 2021 if we would extrapolate your q4 um could we say that q4 is a very nice guidance for the next four quarters i would say q3 core q4 combined yes absolutely i say that because we did if you recall in september with wholesome metal from sale when the sewer price tanked it's all the way down to 22 dollars from 29. and we sold that additional metal in q4 so the sales that didn't show up in q3 showed up in q4 therefore if you take the two quarters they're a good guide to this year okay super so as we are talking already about let's say holding back silver sales and gold sales um that means that you are playing a little bit the markets um but are you hedging this is also a question from an investor in hamburg which i received via email before and he also wants to know to whom do you deliver do you sell directly to the comics or directly to etfs or do you sell it let's say or brings is picking it up and it's all insured and you sell it to the to the national bank how does that work we do know no long-term hedging we never have and it's not in our policy to do long-term hedging but we do short-term trading strategies and the one i just mentioned uh was to take advantage of the market and we added several million dollars to the bottom line by withholding some metal from sale at 22 and selling it at 27. um so it's not often you can do that but when it's obvious uh what as we thought it was then we do that with regard to where our metal goes gweno's fee producing bullion is sold into the global markets we don't really know who the end buyers are because there's always and we go through a metal trader and they typically sell it to a bullion bank and it goes into a vault and then the manufacturers come calling and the the banks fill it to the manufacturers so we don't really know who ends up with it but the other two mines produce concentrates and taranera will also produce concentrates and these are bought by metal traders that are very high grade cons are blended with lower quality concentrates and then the metal traders sell those to smelters and we always we always do annual contracts and we always have at least two smelters so that just to keep them honest okay super let's come to tehranera as i think terronera is really the not only the key to success but it is the game changer i would call it for endeavour silver for sure um because it would double your production that's the one thing and on the other hand i saw in your presentation now that we talked only about 100 million us dollars of capex yeah and now we see that you have 61 million in the bank already but i remember that you presented last year a 60 million atm which i think you did not touch yet wouldn't it be quite obvious to say with the cash flow of let's say q1 and q2 we are in such a strong position that we can finance let's say 30 40 million easily by ourselves and then we lend 60 million for example and against a silver loan or a bank credit or something like that so exactly the point there's two things here um how much is the capex and uh where are we going to get it from so the capex in the pre-fees last year was approximately 100 million dollars we do expect that to go higher willingly higher because in last year's model we leased the mining equipment instead of making it an upfront class but now with a much stronger treasury it's actually better use of capital to buy the equipment so i think in our final feasibility study you'll see that we're buying more up front so the capex will be higher but it also generates higher returns down the road i can't give you a number yet probably 120 ish plus or minus but let's see where it ends up in terms of where the money comes from you're absolutely right we we have current liquidity of 130 million dollars that's simply our working capital plus our atm and uh and rising every quarter so uh i i think our focus is clearly debt and we have a fairly traditional view that we should finance this thing approximately 65 debt 35 cash and so i'm working on with dan on the debt side here in the next three months um let's see what the debt markets have for us but do you have already concrete offers or banking consulting stuff like that we have over the last year received indicative term sheets and there are a couple that we thought were worth pursuing which is what we're doing now fantastic great um and so you said cash flow generation end of 2023 for terranera that's the target assuming that we break ground here in the second half of 2021. super um expiration i saw a budget of 10.2 million dollars in your presentation um is that enough to replace the production first question and second question is there included already parallel in chile so yes it includes everything and it was 8 million last year it's been a high of 12 million in past years and if we have another exceptional year of cash flow this year then we'll take a look at spending a bit more we always do a mid-year evaluation of where we are both in our cash flow in our and in our budgets and in a good year we typically invest more than planned and in a bad year typically we invest as planned okay super um then there's a question also from an investor in hamburg again to what amount are positive outcomes of these exploration projects already in your share price meaning now chile as we talked about exploration already and what is your feeling there well i i clearly feel that we're finally getting traction and taranera is well represented in our current share price because it's it's the next project that's so important to the company i don't think perel and chile are in the share price at all okay do you have any plans for further projects aside of chile so we are always looking for m a and it could be buying something in production it could be buying a development asset that we can add it to the pipeline and looking for new exploration opportunities i sent one to our vp of exploration in january to assess in in durango state um you know we look at these things every month you know maybe once a year we pull the trigger on acquiring a new project and so that is a goal for this year okay what is the forecast for royalty texas in mexico well i the president actually came out last week and said that there will be no new mining taxes but that's supposed to be good news uh we have a pretty high tax burden in mexico it's more than 50 uh so it's right up there in the universe of taxation worldwide um but of course mexico has other things that uh justify it as an attractive jurisdiction it's got phenomenal discovery potential even still we've been there 17 years and it still has great discovery potential so that's a good you know there's many reasons to be in mexico notwithstanding the high taxes and i don't think they'll change okay then we have an investor from zurich if adr gets into the jdx then you have to exit of course the gdxj right but uh what what would it would like this rotation for the stock well interestingly enough that's not true many companies are in both indices if you recall going back i can't remember two three years ago there were not enough junior stocks mid-tier stocks to populate the gdxj and so the gdxj actually changed their their mandate to include senior stocks so the senior stocks are still in the gdxj even when they go up to the gdx aha super so that would mean that you stay in the one but you get the demand let's say from the adjustment of the big one right so that would be very positive oh by the way what is management's holding in endeavour silver including our options i think we're somewhere around four percent and i'm half of that so not huge on a percentage basis but a very meaningful uh part of my assets okay yeah i bel
eve that super um yeah then we have a investor from stuttgart um how do you see after the the big rise of the endeavor share price in the last weeks how do you see the valuation to your peer group you know we came from the bottom only two years ago and yes we're in the upper echelon now there are a couple of companies still with higher market multiples than endeavor but we used to be a sector leader and we're very happy to be a sector leader it's a lot easier than being a sector laggard so can we create value as a sector leader obviously being a sector leader means investors think we can create value even with these market multiples why because of our pipeline nobody else has a pipeline like ours okay um we have now question from a great investor from sangalan what are the biggest risks for shareholders beside the silver price and the gold price um uh biggest risks well obviously covet is still a risk i don't know how things are in germany but in switzerland canada is a bit of a laggard in the vaccination program the us has become a leader believe it or not mexico is a horrible laggard i don't even know if there's any vaccines in mexico yet we have been very good at keeping coven away from our workforce but it doesn't mean we're entirely immune because our workers do go home and what we try and do is prevent them from bringing covet through the gates of the mains and we've been very successful at that of the 160 70 people who contacted the disease last year uh almost all of them have fully recovered and reported back to work i think we only had one serious hospitalization so our track record has been very good but it's when you look at the impact of covert on endeavor last year it wasn't so much people going seriously sick or dying it was people taking time off work to recover at home and so we were constantly scrambling uh to fill the gaps in our labor and that is a risk this year um what else could we look at for this year uh obviously the execution risk of taranera building new projects brings a higher level of risk than running existing mines and you know we have a mantra on time on budget so we're dedicated to delivering our feasibility study on time on budget and you know everybody in our group is very aware uh that when we announce what we're going to do we're going to do it okay super then there's a wonderful question when terronera will go in production will you bring us to europe again a new terror nera coin [Laughter] absolutely yes this sounds like an investor who's who's experienced some of our previous coins he has already coined i know him well we typically issue a new coin every time we have a new mine and it's fine it's we're overdue for a new coin absolutely okay super let's come shortly back to the risks with the politics i just see something here on my list um chile politically do you see there any risks because we saw in the big copper mines we saw some strikes in the last yeah i would say 24 to 36 months and also i think chile faced some difficulties socially and politically yeah that was quite an upheaval uh in the last two years in chile of course kovac dampened all that activity uh but there is a vote on a new constitution and um in the meantime uh business carries on in chile it's still i think a very desirable jurisdiction what you know the the features of working in chile it's got tremendous infrastructure there's a widespread acceptance of mining in the culture the the government has positive mining policies uh the taxation rate is is reasonable the two main risks in chile because these are typically world-class projects are electricity and water and our three projects in the far north uh all appear to have the potential to tap local water because if you go downhill towards the ocean there's virtually no farming in the far north of chile it's the high out of the desert uh and as you move further south there's many many valleys uh that rely on agriculture and therefore water coming off of the andes and so many of these big copper mines for instance have to bring the water from the ocean because they they if they were to tap the water table they would deprive the agriculture industry well that's not true that's not true in the far north okay super so all is fine for you in that sense um yeah then let's come to silver in the silver markets because we have a lot of questions here and as i said already you are the vice president of the silver institute so you i would describe you as a heavyweight aside that you are producing silver that long um there is one investor from barbaria asking the may 2021 comic silver open interest is at around 120 000 contracts at close what's your comment on that and i want to put something in addition because uh yeah i really like the idea do you think besides the normal demand is it possible to get an orchestrated short squeeze like gamestop likely to happen to the silver market wow that's that's a lot of questions in one yeah let's talk about the silver market in general and why it's different than most metals as i mentioned earlier in our fundamental supply and demand review silver amongst all the metals is the only one that is primarily a byproduct of other mines not only is a byproduct of copper that sink in gold mines most of those mines are run by diversified global miners who are more than happy to sell forward their byproduct silver production capture that revenue lock in that revenue and remain on hedge to their primary products their primary months so what does that mean in the physical and paper markets for silver well when a copper led zinc or gold producers sell their silver the counterparty is typically a bullion bank but buy in banks are agnostic they typically don't go long or short anything their business is charging fees for their services and if they're going to enter into a contract to take delivery of physical silver from bhp or rio tinto or any other cadelco um they're the same day they're going to position an effective short typically it's a zero cost collar or straddle in the paper market and that's the reason why uh silver's paper market is so out of balance with the physical market compared to other metals you know other metals they have a primary they have a physical market and is approximately balanced by the paper market but because silver is a byproduct of these big metal mines the paper market is much larger because it's reflecting future deliveries as well as current inventories and the banks are not agnostic they balance their physical holdings with paper shorts so it's not actually a naked short it's not like gamestop where you have to borrow the stock and sell it to make money these are covered hedges they're covered by the physical either in the vault or future delivery and so because these are effectively zero-cost collars or straddles every time the price moves up i mean if i i love it when people buy silver i think silver is a great investment and people should have physical as well as as the mining companies absolutely but as the price rises all the bikers do is is collapse their hedge and reset it higher and collapse their heads reset it higher and collapse their heads and reset it higher they will never lose money on this transaction it is not possible or feasible to squeeze the silver shorts because they're covered okay that's interesting so no no silver squeeze in that sense um because we have no naked shorts inside of course um but on the other hand if we look now to supply demand i think we have a very hefty imbalance here and we have a growing deficit so would then a higher silver price come finally from the demand supply side well before i answer that let me finish off on this silver short squeeze idea yeah it is it is possible to force the banks to scramble to to move their their pitch position and it's during those short-term periods when the solar price can rise sharply so i think some people think that's the equivalent of a short squeeze but all the banks do is reset their head at a higher price so i think it's important to realize that that there is a short term like several day disruption as the as the bullion banks reposition their hedges but then it's business as normal and coming to coming to the fundamental supply and demand i mean that's the real reason to own silver we've seen a spike in investment demand and still rising a spike in in etfs buying silver to reflect that investment demand a spike in in silver coin and bar purchases this is great news investors are getting it finally that silver is a tremendous investment opportunity and in the backdrop of all of that is this steadily rising industrial demand and not just for old-fashioned industry we're a green metal silver is a green metal i already touched on electronics on solar photovoltaics on electric vehicles and i think silver is the one great undiscovered metal for a green economy i think that appreciation of silver in a green economy is still coming absolutely so what what would what is your forecast for let's say supply demand this year if you would say i read something like a billion and 25 000 ounces is the demand forecast so from where would come the silver this year well you know i can't remember the exact numbers for the forecast this year but the miners only produce about 850 million ounces a year and yet the demand side is billion ounces so there's already 150 million ounces that have to come from non-mine sources so typically that's whether it's electronic scrap or silverware jewelry and that is price elastic the higher the price goes the more silverware and jewelry comes out of the woodwork so no problem with that but with a billion ounces of demand this year and 850 million ounces of supply and the supply of swelling uh you know that's a pretty big gap to make up and i think that uh both short and medium term uh the only way to fill that gap is for the price to go higher to draw that secondary supply out into the market okay we saw the last two weeks also reports that for example yeah there were some let's call it rumors because i have to be careful what i'm saying now but let's say there are rumors that some etfs actually do not have the amount in the vault they should have due to the buyings what is your thinking on that or do you think they are swapping warehouses back and forth just to show what they have but it's not real is that possible even no the etfs themselves have uh committed silver uh it's the bullion banks where the ets are getting the silver from who may or may not have other buyers for that silver other contracts on that silver and let me explain you know when we put our cash in the bank we think it sits there but it doesn't the bank uses our cash to lend it out several times over that's the definition of fractional banking to a certain degree that happens in the bullion market as well primarily in gold less to a lesser extent silver and how do you create a run on a bank you go to the bank and ask for cash so i think the concept is that you could create a run on silver by going and buying as much physical silver as you can i just think that because the silver paper market is hedges not naked shorts and um there's the short-term delivery problems on coins and bars no question so it causes premiums in the silver price but there's always silver coming to market and so i think there could be short-term disruptions but there's no way you can squeeze a short on summer okay so in that light i mean we we saw uh like groups like this wall street silver bets.com i think it is called yeah and i think as you told me they have even now rent a screen at times square right to do some advertising to buy silver i mean that's that's really crazy um but do you think that groups like this where i think they have now something like 35 to 40 000 uh people now already in that group or let's say members or whatever you want to call that do you think it's possible through stuff like this to really bring let's say the short years and the guys who are i would say not manipulating like but let's say they are playing the market yeah um to bring them under pressure is it possible to disrupt the physical market by by grabbing every single coin and bar uh yes short term measured in days what long term no yeah okay super then let's come to the demand side a bit more in detail um but we we both were talking a lot in the past about solar on the one hand about let's say high-tech about medical devices but now the e-mobility kicks really in and to me it was quite interesting i got the latest um numbers on the e-cars for germany from uh the last quarter last year and also for january and evil even volkswagen is selling more than tesla now and we yeah it's crazy and we we both know that those cars need something between i would say three to four ounces silver easily yeah so do you think that through the e-mobility plus the hybrids of course um do you think there is let's say a possible steady demand which is really needed on the one hand and on the other hand it is stored away for the next 10 15 years so could this bring the market into a physical problem because when you when you want to build an id4 or a tesla or whatever you need to have the silver otherwise you cannot deliver the car the fact is we're in a bull market the fact is demand is rising and supply is still falling silver is a cyclic metal that cycle will correct itself i think there's a couple more years to run in the bull market before supply starts to meet demand where will the supply come from uh short term it'll be scrap secondary jewelry and silverware and electronics uh long-term uh or let's say a medium term it'll be the primary producers like endeavor who are proposing to grow rapidly long-term it'll be the big base level producers who build those new copper leather sync mines and start flirting with silver right at the top of the cycle so um i am a bull i um you know some people may take my comments on the silver short squeeze as uh that i'm not a believer i'm a believer in silver but the reason i own silver is the fundamentals not this idea of a short squeeze could we say that we are in silver now in the same situation like 15 to 80 months ago in copper because when i when i did a chart show like 15 months ago and silver was at 230 240 i said 450 is the target now we had already 425 so we are quite close to that and now as i said silver next target 39 to 41 and afterwards is 55. do you think we are a little bit in that same situation if you look at both markets um yeah i think calver's had a great run and every every move in history is followed by a consolidation so i think that's what's next for copper uh we've just come through the consolidation from last year's move on silver and gold it may not be finished yet but we're very close to the end of this consolidation phase and if you look at what's weighing on gold right now since january we've seen a spike in in bond yields and if you look at the yield chart it's approaching resistance if you look at the bond prices they're falling close to the bottom i don't see how much further these bonds can go uh you know maybe weeks certainly not months and that will be the end of this consolidation phase for gold and silver that's what's weighing on gold right now and then once the the the bond rally uh peters out with prices falling and yields rising once that flattens or reverses uh then gold's gonna be back on again i think absolutely all summer yeah that's great yeah and i think also even the u.s cannot afford three percent interest i think that's impossible with those debts so where do we go from from here on silver i we think 20 anything is wonderful for this year we've already tested last year's high uh i think we'll be back testing that 30 limit here before the end of the year uh i would suggest another 10 the following year and once we get to the the uh all-time high of approximately 50 dollars then all bets are off we could be into a bubble phase i don't know when that will be um you know that's the speculation now but i see a fairly orderly rising market to test the all-time high over the next two years so all-time high in the sense of the 50 dollar we saw in 2011 2012 or the all-time high if we go back to the brother hunt and extrapolate that i think then we are
t 150 160 so that was the bubble top yeah i'm talking about i'm talking about tiptoeing up to 50 bucks and then let's see okay super so there's slightly a chance to get a bubble top right [Laughter] super bradford thank you very much let me check again here that i did not miss a question to make sure we are fine yep that looks fantastic okay done done done also my list is empty yeah super perfect everything is answered we are at the end of the hour so fantastically done thank you very much bradford great presentation and great to answer all those questions on silvo of course as we are facing also a lot of questions on that but it's always perfect to have a long-term industry expert here to explain that and yeah maybe uh one thing comes up to me sorry and we are not finished where from where do you think comes this heavy trading and let's say the drastic faults in gold and silver all of a sudden at 2 30. you know because their bullion bankers maintain a hedge position in the battle days of the last 10 years the several billion banks were caught spoofing the market and uh several of them received very significant fines and exited the entire market scotia got out of gold deutsche bank got out of gold that's why i think the remaining billion bankers are actually behaving themselves but the fact is that there are every month certain trigger dates in the options and futures market which the bankers are fully aware of and in the best position to take advantage of and it's nothing more than that and i don't think they're spoofing anymore it's just that they're they're smarter than us they follow it every minute of every day and and you and i don't that's right yeah it's like like milliseconds trading right super all right bradford thank you very much all the best to you and to vancouver i'm sure you have now some breakfast it's quite early for you yeah wish you all the best talk soon to you and yeah thanks a lot thanks jorgen thank you yeah ladies and gentlemen this is the end of our virtual online roadshow here edition with endeavour silver and bradford cook the co-founder and ceo i think you did a great presentation here and it is really interesting that those silver and gold markets they are really in the imbalance of supply and demand that's the one thing but on the other hand you saw and devil silver really did the turnaround this is the real important message here the first quarter was fantastic already with a 20 million dollar profit i think we can probably yeah prolong this situation for for the next four quarters for 2021 so endeavors on a perfect path here but i also like a lot with the company is that they have no net debt and 61 million of cash so this brings them in a fantastic position um also to develop terronera but also to drill at parallel and to explore the gd projects and of course to replace the depleted production so uh yeah my thinking is and there was silver still a great investment to look at of course the share price appreciated but as bradford showed us in the presentation they have the highest beta of all the producers and when silver really moves to the targets we have just discussed then i think this share price is well in the double digits and this is a fantastic investment because i said with no debt this is always good to have low risks and yeah with terronera this is a great story for the next two years doubling the productions and really to half almost the whole entire costs then for all four minds this is also important for the merchants i think endeavor saver will be a real cash cow check out the company you find this presentation meaning the presentation bradford showed already on our website and the replay will be online tomorrow yeah approximately by 12 o'clock swiss time yeah next week we want to talk with bluestone resources and we hope to see you all there again stay healthy that's the most important thing i'm your host johan schneiger thank you very much that you have participated and enjoyed the evening bye bye from switzerland
