Economic Contributions and Impacts //

Our business operations stimulate economic activity and contribute to the national and local economies everywhere we operate – going beyond wages and salaries and contributing to the local and national economy of Mexico. This occurs through taxes and royalties that we pay to the Mexican government to further support regional socio-economic development, through business opportunities we create with local suppliers, and through the infrastructure investments we make. We also create opportunities for social development through our Community Investment Program.

Although metal prices were up, the Mexican peso weakened over 2016 and Endeavour was able to strategically and successfully reduce our operating expenses. In 2016, revenue decreased by approximately $26 million (15%) to $156 million. This decrease coincided with our decisions in January to significantly reduce spending on exploration and development in 2016 at low metal prices, which reduced our overall metal production. This strategy also reduced our operating expenses, salaries, and payroll taxes in 2016 over the previous year. These decisions were reversed at the end of the second quarter when we restarted our exploration and development programs to once again expand resources and access reserves. Our community investment expenditures dropped over the previous year in line with our overall reduction in revenue.

During 2016, Endeavour’s average realized silver price was $16.84 per ounce, up from of $15.70 per ounce during 2015 and approximately 2% below the average London Fix silver price. During 2016, Endeavour’s average realized gold price was $1,253 per ounce, up from of $1,160 per ounce during 2015 and in line with the average London Fix silver price.

As defined by the Global Reporting Initiative, our total economic value generated in 2016 was approximately $156.8M and total economic value distributed was approximately $140.4M; details of which are provided below:

Economic Value Generated2016 (000s)2015 (000s)2014 (000s)
Total economic value generated156,767183,556196,928
Economic Value Distributed
Operating costs (excluding salaries)81,26792,844102,991
Employee wages and benefits39,66743,70246,800
Payments to providers of capital7791,0411,343
Payments to governments(2)   
Mexico – income taxes10,78614,40113,166
Canada – income taxes0335533 
Payroll taxes Mexico6,6097,8388,542
Payroll taxes Canada4541(3)59(3)
Land use payments1,013644585
Community investment193457515
Total economic value distributed140,359161,303(4)174,534[4]
Total economic value retained16,40822,253(4)22,394(4)

(1) As per audited financial statements.
(2) Payments to governments: as a Canadian company, we are compliant with the Extractive Sector Transparency Measures Act, which requires Canadian companies to disclose any payments to governments.
(3) Canadian payroll taxes were not included in the 2015 and 2014 data and are represented for the first time here.
(4) The following figures are re-calculated and re-stated on the basis of the inclusion of payroll taxes in 2015 and 2014. Total Economic Value restated from 161,261 in 2016 and 174,475 in 2014. Total Economic Value Retained restated from 22,295 in 2015 and 22,453 in 2014.

Note: Endeavour receives no financial assistance from any government, nor does any government hold an equity position in the company or its subsidiaries.