Behind the Scenes with Endeavour Silver CEO Dan Dickson
In our latest episode of "What Your Bank Doesn't Tell You", we’re thrilled to dive into the fascinating world of silver mining with a very special guest: Dan Dickson, CEO of Endeavour Silver. Endeavour Silver is a Canadian-based mining company focused on the discovery, development, and sustainable extraction of silver, with a growing footprint in Mexico and now Peru.
Meet Dan Dickson and Endeavour Silver
Dan warmly joined us to share Endeavour Silver’s journey and growth trajectory. Operating in Mexico for nearly two decades, Endeavour Silver currently produces around 8 million silver equivalent ounces annually, with recent expansions pushing their output to an anticipated 20 million ounces by the end of 2025.
Dan highlighted their recent acquisition of the Kolpa mine in Peru, expected to add 5 million silver equivalent ounces, alongside their ongoing development of the Terronera project, which is projected to contribute another 7 million ounces. This aggressive growth signals a significant scaling up in production and sustainability.
Why Silver? The Undervalued Precious Metal
Dan shared a key insight about silver’s rarity and supply dynamics: only about 30% of silver production comes from primary silver mines, with the majority being a byproduct of other metal mining such as copper and gold. This makes large, dedicated silver mines exceedingly rare.
Moreover, Dan explained the persistent supply and demand gap. Studies by Metal Focus (funded by the Silver Institute, of which Dan is a member) reveal a silver deficit for the past seven years. Industrial demand - especially from sectors like solar panels and electric vehicles - has surged, while mine supply has remained largely flat.
Interestingly, while silver is often overshadowed by gold, it is crucial to note the silver-to-gold price ratio. Historically averaging 65:1, this ratio currently stands above 100:1, signaling potential for silver prices to catch up and possibly exceed previous highs around $50 per ounce. Dan believes the coming years could see silver regain its status as a precious metal, driven by increased industrial use and investment.
Investing in Silver Mining: Understanding the Numbers
For investors, Dan broke down how silver price movements impact mining company valuations. Endeavour’s revenue splits roughly 60% silver and 40% gold, meaning a 1% increase in metal prices generally results in about a 3% increase in their share price due to operational leverage.
He also explained the nuances of mining cost structures. Endeavour’s operations are underground mines requiring significant labor - about 33% of costs are labor related. This contrasts with open-pit mines that have higher capital expenses upfront. Such cost dynamics influence profitability and stock price sensitivity to metal price changes.
The Silver Supply Chain: Who Really Uses Silver?
While Endeavour produces refined silver sold on commodity exchanges, tracing silver’s final end users is complex. Dan noted that a large portion of silver goes into industrial applications like solar panels and electronics, but the supply chain is opaque, spanning manufacturers in China, Taiwan, and the U.S.
Interestingly, the chemical industry, including giants like Dow Chemicals, recycles a significant amount of silver. Defense spending worldwide also indirectly drives demand due to silver’s role in advanced electronics, given its superior electrical conductivity.
Global Silver Production: Key Players
Mexico leads silver production with about 25% of global output (around 200 million ounces annually), followed by China and Peru - both critical jurisdictions for Endeavour Silver. Dan emphasized how mining in these top producing countries offers strategic advantages given their resource bases and mining-friendly environments.
Looking Ahead: The Future of Silver Prices
When asked about silver price predictions, Dan was cautious but optimistic. Currently around $34 per ounce, he highlighted the metal’s volatility and the potential for prices to rise significantly as industrial demand continues growing and supply remains tight.
Final Thoughts
This episode of What Your Bank Doesn’t Tell You offered a rare glimpse into the silver mining industry, delivered by a leading CEO with deep operational and market insights. For investors and enthusiasts alike, understanding the complexities of silver’s supply, demand, and pricing dynamics is crucial in navigating this exciting asset class.
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