Letter from the Chairman of the Sustainability Committee //

Dear Stakeholders,

We truly believe that a proactive stance on sustainability initiatives and corporate integrity creates value for all our stakeholders in the short, medium, and long term. In this regard, our company has in recent years undergone a considerable internal transformation to view our business through a sustainability lens and make this happen.

Our focus is on people – particularly our employees and local communities – where there is great crossover as we hire locally whenever possible. We listen to community concerns in our quest to be good corporate citizens and we continually seek ways to improve our procedures and performance, and operate our business to have a positive impact on society.

Endeavour’s management team is known for its adeptness and agility in their commitment for organic company growth and providing benefits to all of its stakeholders. In 2016, Endeavour made progress in our sustainability priorities in several areas. Two of our key goals were improving the safety of our employees and reducing our energy consumption in a way that does not affect our production goals.

The Endeavour Board of Directors is increasingly aware of sustainability and its growing importance to the company and to our stakeholders. We are regularly updated to stay informed about sustainability issues, oversee the governance of sustainability, and ensure that these topics are integrated into our overall business strategy. As part of these ongoing efforts, in 2016 we developed a formal internal grievance mechanism for both our employees and contractors, and an external mechanism for community members and other stakeholders, which we intend to fully implement at all sites in 2017. We also amended our Community Investment Policy to align more closely with the needs of our communities as we expand in certain areas and plan for eventual mine closure in others. The revised policy will be rolled-out in 2017 with a funding priority focus on funding education and employability.

Protecting the health and safety of our workers is our highest priority, and our approach of continuous safety empowers our employees to be responsible custodians of their own health and safety, as well as the health and safety of their working companions. Over the year, we were able to reduce our Reportable Injury Frequency rate (RIF) by 6.6%, which was a significant improvement over the previous year and continues a four-year trend for this metric. Our Lost Time Injury Severity rate (LTIS) rate increased by 17% and our Lost Time Injury Frequency rate (LTIF) increased by 37% – both notable set-backs over 2015. We believe this to be the result of a change in health and safety management last year, which affected leadership momentum, however our belief is that with a new regional Health and Safety Manager and the reinforcement of our existing procedures and processes, as well as new initiatives, this should shift back to positive safety performance improvements in 2017.

In 2016, approximately 31% of our employees participated on committees that monitor and advise on Endeavour’s occupational health and safety conditions, procedures, and programs. This represents a 21% increase over the previous year – a metric which we feel is a testament to our commitment and growing safety culture.

Also in 2017, we plan to introduce and implement Visible Felt Leadership – a DuPont Sustainable Solutions concept – to the organization; a program aimed at enhancing the safety skills of leaders and safety professionals throughout an organization. Participants will be trained to set challenging safety standards, provide effective safety coaching and guidance, and remain vigilant regarding safe workplace behavior while reinforcing safety as a core value.

We believe in the importance of providing ongoing training and we know from personal experience that having skilled, highly-motivated people on staff is fundamental to our business success. As of 2016, our employee and contractor training is now closely tracked and monitored in the following classifications of training: induction, occupational safety, mine rescue, safety monitor, and technical.

In a unique 2016 training initiative, because Terronera has moved-up in importance to Endeavour, we started training our next phase of miners for that project. A group of 21 local residents from the Terronera project traveled to the Bolañitos Mine where they were given three months of on-the-job training. In this professional development and capacity-building exercise, participants received over 5,000 hours of training to provide Terronera with a core group of trained local staff upon start-up.

From an environmental standpoint, we achieved good progress in 2016 with respect to the standardization of our water usage and recycling (methodology and measurement), we assessed and/or reinforced all of our tailings storage facilities, reduced our total energy consumption, predominantly from the slow-down at El Cubo, however, also due to Bolañitos moving to the national power grid, and we experienced no environmental incidents at any of our sites.

Environmental permitting for the resource sector is becoming more stringent and somewhat less predictable in terms of timelines. To manage this risk we are adding expertise in this regard to our management team to help facilitate permitting and minimize delays to our development projects.

External feedback is an integral part of how we do business as responsible corporate citizens. In 2016, a formal Community Grievance Mechanism was developed using the standards of the International Finance Corporation (IFC) and the United Nations Guiding Principles on Business and Human Rights, as part of our company-wide commitment to align with our ethic standards and international good practice, and formalize our internal and external grievance methods.

We conducted a social assessment at our operating sites in 2016 to identify the most important needs of the community – and update our Community Investment Policy accordingly – to ensure we are addressing areas in which the company can have the most significant positive social impact. We consulted with our local communities and shifted the community investment model to a more sustainable, capacity-building process to accompany the mine closure process. Every mine ultimately has a finite life, and we plan to leave a positive legacy that will benefit our local communities after mining activities have ceased.

Ken Pickering
Chair, Sustainability Committee
May 2017

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Conducting our business with integrity and in a manner aligned with our commitment to sustainability priorities are both part of our core values. Sustainability, alongside our growth strategy, will be even more important going forward.

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