Endeavour Silver Sets New Production Records in 4th Quarter, 2011; Silver Production up 25% to 1,120,780 oz, Gold Output up 45% to 7,045 oz

Endeavour Delivers its 7th Consecutive Year of Production Growth in 2011; Silver Production up 14% to 3,730,127 oz, Gold Output up 23% to 21,810 oz

VANCOUVER, BRITISH COLUMBIA--(Marketwire -01/10/12)- Endeavour Silver Corp. (TSX: EDR.TO - News)(NYSE: EXK -News)(Frankfurt: EJD.F - News) announced today record-setting silver and gold production from the Company's two operating silver mines in Mexico, the Guanacevi Mine in Durango State and the Guanajuato Mine in Guanajuato State for the Fourth Quarter, 2011.

In Q4, 2011, silver production was up 25% to 1,120,780 ounces (oz) and gold production was up 45% to 7,045 oz compared to the Fourth Quarter, 2010.

Production Highlights - Fourth Quarter, 2011 (Compared to Fourth Quarter, 2010)

 

--  Silver production up 25% to 1,120,780 oz
--  Gold production up 45% to 7,045 oz
--  Silver and equivalents production up 29% to 1.4 million oz (at a 45:1
    silver:gold ratio)
--  Revenues down 39% to US$17.5 million due to reduced metal sales (see
    below)
--  Metal held in inventory at year-end included 980,000 oz silver and 5,400
    oz gold

Due to the correction in metal prices in the 4th quarter 2011, Endeavour management elected to hold a significant portion of the Q4 silver and gold production in inventory rather than sell at the lower prices. Management plans to monitor the metal prices closely and sell some or all of the silver and gold in inventory at appropriately higher metal prices, or if the need arises for more cash.

As a result, the Company sold only 400,000 oz silver and 4,000 oz gold in Q4, 2011 and metal inventories rose to 812,000 silver oz and 3,000 gold oz in bullion and another 168,000 oz silver and 2,400 oz gold recoverable from concentrate as of December 31, 2011. Therefore, revenues dipped 39% in the 4th quarter to US$17.5 million and Endeavour's 4th quarter and 2011 annual earnings will not reflect the ounces withheld from sale and currently in inventory.

Endeavour delivered its seventh consecutive year of production growth and exceeded its production guidance of 3.7 million oz silver and 19,000 oz gold for the year. Silver production rose 14% to 3,730,127 oz silver and gold output escalated 23% to 21,810 oz compared to 2010.

Production Highlights - 2011 (Compared to 2010)

 

--  Silver production up 14% to 3,730,127 oz
--  Gold production up 23% to 21,810 oz
--  Silver and equivalents production up 15% to 4.7 million oz (at a 45:1
    silver:gold ratio)
--  Revenues up 48% to US$128 million
--  Annual realized silver price up 82% to US$35.61 per oz sold
--  Annual realized gold price up 27% to US$1,570 per oz sold

Bradford Cooke, Chairman and CEO, commented, "Our operations team is to be congratulated for doing yet another outstanding job in 2011. Thanks to the successful completion of our Guanajuato mine and plant expansion to 1000 tonnes per day (tpd) on time and budget, Endeavour continued its track record of meeting its production guidance and delivering growth for its shareholders.

"Our exploration team is also to be congratulated for discovering multiple new high grade veins at Guanajuato such as the thick, high grade Daniela vein. As a result of these discoveries, management was able to open the new Lucero South mine in 2010 and expand the Guanajuato plant capacity to 1600 tpd in 2011, thereby leaving the door open for future mine expansion."

Production Table - Fourth Quarter, 2011

 

----------------------------------------------------------------------------
                      Tonnes  Grade  Grade
              Tonnes     per     Ag     Au Recovery Recovery    Silver  Gold
Mine        Produced     day    g/t    g/t     Ag %     Au %        Oz    Oz
----------------------------------------------------------------------------
Guanacevi     98,716   1,073    320   0.56     74.2     87.2   753,353 1,551
----------------------------------------------------------------------------
Guanajuato    85,665     931    173   2.48     77.1     80.3   367,428 5,494
----------------------------------------------------------------------------
Consolidated 184,381   2,004    252   1.45     75.0     82.0 1,120,780 7,045
----------------------------------------------------------------------------

Production Table - 2011

 

----------------------------------------------------------------------------
                     Tonnes Grade   Grade
              Tonnes    per    Ag      Au Recovery Recovery    Silver   Gold
Mine        Produced    day   g/t     g/t     Ag %     Au %        Oz     Oz
----------------------------------------------------------------------------
Guanacevi    363,076    995   311    0.69     73.9     85.4 2,682,035  6,867
----------------------------------------------------------------------------
Guanajuato   238,797    654   183    2.51     74.7     77.5   367,428 14,943
----------------------------------------------------------------------------
Consolidated 601,873  1,649   260    1.41     74.1     79.8 3,730,127 21,810
----------------------------------------------------------------------------

Endeavour plans to release an update on its 2011 exploration results and 2012 exploration program in mid-January; our 2012 production guidance in late January; the annual update of NI 43-101 reserves and resources in early March; and the 2011 audited financial results and 2012 outlook in late March, 2012.