MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE MONTHS ENDED MARCH 31, 2018

This Management Discussion and Analysis (“MD&A”) should be read in conjunction with the condensed consolidated interim financial statements of Endeavour Silver Corp. (“Endeavour” or “the Company”) for the three months ended March 31, 2018 and the related notes contained therein, which were prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). In addition, the following should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2017 and the related MD&A. The Company uses certain non-IFRS financial measures in this MD&A as described under “Non-IFRS Measures”. Additional information relating to the Company, including the most recent Annual Information Form (the “Annual Information Form”), is available on SEDAR at www.sedar.com, and the Company’s most recent annual report on Form 40-F has been filed with the U.S. Securities and Exchange Commission (the “SEC”). This MD&A contains “forward-looking statements” that are subject to risk factors set out in a cautionary note contained herein. All dollar amounts are expressed in United States (“U.S.”) dollars and tabular amounts are expressed in thousands of U.S. dollars unless otherwise indicated. This MD&A is dated as of May 2, 2018 and all information contained is current as of May 2, 2018 unless otherwise stated.

Cautionary Note to U.S. Investors concerning Estimates of Mineral Reserves and Measured, Indicated and Inferred Mineral Resources:

This MD&A has been prepared in accordance with the requirements of the securities laws in effect in Canada, which differ from the requirements of U.S. securities laws. The terms “mineral reserve”, “proven mineral reserve” and “probable mineral reserve” are Canadian mining terms as defined in accordance with Canadian National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) - CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended. These definitions differ materially from the definitions in SEC Industry Guide 7 under the U.S. Securities Act of 1933, as amended.

Under SEC Industry Guide 7 standards, a “final” or “bankable” feasibility study is required to report reserves, the three-year historical average price is used in any reserve or cash flow analysis to designate reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority.

In addition, the terms “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” are defined in and required to be disclosed by NI 43-101; however, these terms are not defined terms under SEC Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into SEC Industry Guide 7 reserves. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable. Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC Industry Guide 7 standards as in place tonnage and grade without reference to unit measures.

Accordingly, information contained in this MD&A contains descriptions of the Company’s mineral deposits that may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the U.S. federal securities laws and the rules and regulations thereunder, including SEC Industry Guide 7.

609 Granville Street, Suite 1130, PO Box #10328, Vancouver, B.C., Canada V7Y 1G5

Phone: 604.685.9775 | Fax: 604.685.9744 | Toll Free: 1.877.685.9775  Email: info@edrsilver.com

www.edrsilver.com

Forward-Looking Statements

This MD&A contains “forward-looking statements” within the meaning of the U.S. Securities Litigation Reform Act of 1995, as amended and “forward-looking information” within the meaning of applicable Canadian securities legislation. Such forward-looking statements and information include, but are not limited to, statements regarding Endeavour’s anticipated performance in 2018, including silver and gold production, timing and expenditures to develop new silver mines and mineralized zones, silver and gold grades and recoveries, cash costs per ounce, capital expenditures and sustaining capital. Forward-looking statements are frequently characterized by words such as “plan”, “expect”, “forecast”, “project”, ”intend”, ”believe”, ”anticipate”, “outlook” and other similar words, or statements that certain events or conditions “may” or “will” occur. Forward- looking statements are based on the opinions and estimates of management at the dates the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements.

The Company does not intend to, and does not assume any obligation to, update such forward-looking statements or information, other than as required by applicable law. Forward-looking statements or information involve known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company and its operations to be materially different from those expressed or implied by such statements. Such factors include, among others: fluctuations in the prices of silver and gold, fluctuations in the currency markets (particularly the Mexican peso, Canadian dollar and U.S. dollar); changes in national and local governments, legislation, taxation, controls, regulations and political or economic developments in Canada and Mexico; operating or technical difficulties in mineral exploration, development and mining activities; risks and hazards of mineral exploration, development and mining (including, but not limited to environmental hazards, industrial accidents, unusual or unexpected geological conditions, pressures, cave-ins and flooding); inadequate insurance, or inability to obtain insurance; availability of and costs associated with mining inputs and labour; the speculative nature of mineral exploration and development, diminishing quantities or grades of mineral reserves as properties are mined; the ability to successfully integrate acquisitions; risks in obtaining necessary licenses and permits, and challenges to the Company’s title to properties; as well as those factors described under “Risk Factors” in the Company’s Annual Information Form. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or information, there may be other factors that cause results to be materially different from those anticipated, described, estimated, assessed or intended. There can be no assurance that any forward-looking statements or information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements or information. Accordingly, readers should not place undue reliance on forward-looking statements or information.

Qualified Person

The scientific and technical information contained in this MD&A relating to the Company’s mines and mineral projects has been reviewed and approved by Godfrey Walton, M.Sc., P.Geo., President and Chief Operating Officer of Endeavour, a Qualified Person within the meaning of NI 43-101.

TABLE OF CONTENTS

Operating Highlights	Page 3	Consolidated Financial Results	Page 14
Consolidated Operations	Page 5	Non IFRS Measures	Page 15
Guanaceví Operations	Page 7	Quarterly Results and Trends	Page 20
Bolañitos Operations	Page 8	Annual Outlook	Page 23
El Cubo Operations	Page 10	Liquidity and Capital Resources	Page 26
Development Activities	Page 11	Changes in Accounting Policies	Page 31
Exploration Results	Page 13	Controls and Procedures	Page 35

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 2

Q1 2018 Highlights	Three Months Ended March 31
	2018	2017	% Change
Production
Silver ounces produced	1,350 ,840	1,0 76,974	25%
Gold ounces produced	13,20 8	11,724	13%
Payable silver ounces produced	1,324,856	1,0 54,110	26%
Payable gold ounces produced	12,944	11,459	13%
Silver equivalent ounces produced(1)	2,341,440	1,956,274	20 %
Cash costs per silver ounce(2)(3)	6.50	7.81	(17%)
Total production costs per ounce(2)(4)	13.70	11.62	18%
All-in sustaining costs per ounce(2)(5)	14.18	18.24	(22%)
Processed tonnes	325,669	30 3,222	7%
Direct production costs per tonne(2)(6)	79.38	75.77	5%
Silver co-product cash costs(7)	10 .76	11.96	(10 %)
Gold co-product cash costs(7)	857	861	(0 %)
Financial
Revenue ($ millions)	40 .3	36.4	11%
Silver ounces sold	1,40 6,143	1,235,594	14%
Gold ounces sold	12,674	11,290	12%
Realized silver price per ounce	16.70	17.79	(6%)
Realized gold price per ounce	1,330	1,280	4%
Net earnings (loss) ($ millions)	2.3	6.0	(61%)
Mine operating earnings ($ millions)	3.3	7.8	(58%)
Mine operating cash flow(8) ($ millions)	13.8	12.0	16%
Operating cash flow before working capital changes (9)	11.6	8.9	30 %
Earnings before ITDA (10)($ millions)	11.1	9.0	24%
Working capital ($ millions)	66.6	81.7	(18%)
Shareholders
Earnings (loss) per share – basic	0 .0 2	0 .0 5	(60 %)
Operating cash flow before working capital changes per share (9)	0 .0 9	0 .0 7	29%
Weighted average shares outstanding	127,488,410	127,0 95,764	0 %

(1)	Silver equivalents are calculated using a 75:1 ratio. 2017 Silver equivalents have been restated from 70:1 to 75:1 for comparative purposes.
(2)	The Company reports non-IFRS measures which include cash costs net of by-products on a payable silver basis, total production costs per ounce, all-in sustaining costs per ounce and direct production costs per tonne, in order to manage and evaluate operating performance at each of the Company’s mines. These measures, some established by the Silver Institute (Production Cost Standards, June 2011), are widely used in the silver mining industry as a benchmark for performance, but do not have a standardized meaning. These measures are reported on a production basis. See Reconciliation to IFRS on page 15.
(3)	Cash costs net of by-products per payable silver ounce include mining, processing (including smelting, refining, transportation and selling costs), and direct overhead, net of gold credits. See Reconciliation to IFRS on page 17.
(4)	Total production costs per ounce include mining, processing (including smelting, refining, transportation and selling costs), direct overhead, amortization, depletion and amortization at the operation sites. See Reconciliation to IFRS on page 17.
(5)	All-in sustaining cost per ounce include mining, processing (including smelting, refining, transportation and selling costs), direct overhead, corporate general and administration, on-site exploration, share-based compensation, reclamation and sustaining capital net of gold credits. See Reconciliation to IFRS on page 18.
(6)	Direct production costs per tonne include mining, processing (including smelting, refining, transportation and selling costs) and direct overhead at the operation sites. See Reconciliation to IFRS on page 17.
(7)	Silver co-product cash cost and gold co-product cash cost include mining, processing (including smelting, refining, transportation and selling costs), and direct overhead allocated on pro-rated basis of realized metal value. See Reconciliation to IFRS on page 18.
(8)	Mine operating cash flow is calculated by adding back amortization, depletion, inventory write-downs and share-based compensation to mine operating earnings. Mine operating earnings and mine operating cash flow are before taxes. See Reconciliation to IFRS on page 15.
(9)	See Reconciliation to IFRS on page 19 for the reconciliation of operating cash flow before working capital changes and page 15 for the operating cash flow before working capital changes per share.
(10)	See Reconciliation of Earnings before interest, taxes, depreciation and amortization on page 16.

The above highlights are key measures used by management, however they should not be the sole measures used in determining the performance of the Company’s operations.

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 3

HISTORY AND STRATEGY

The Company is engaged in silver mining in Mexico and related activities including property acquisition, exploration, development, mineral extraction, processing, refining and reclamation. The Company is also engaged in exploration activities in Chile.

Since 2002, the Company’s business strategy has been to focus on acquiring advanced-stage silver mining properties in Mexico. Mexico, despite its long and prolific history of metal production, appears to be relatively under-explored using modern exploration techniques and offers promising geological potential for precious metals exploration and production.

The Company’s Guanaceví and Bolañitos mines acquired in 2004 and 2007, respectively, demonstrate its business model of acquiring fully built and permitted silver mines that were about to close for lack of ore. By bringing the money and expertise needed to find new silver ore-bodies, the Company successfully re-opened and expanded these mines to develop their full potential. The benefit of acquiring fully built and permitted mining and milling infrastructure is that, if new exploration efforts are successful, the mine development cycle from discovery to production only takes a matter of months instead of the several years normally required in the traditional mining business model.

In 2012, the Company acquired the El Cubo silver-gold mine located in Guanajuato, Mexico. The El Cubo property came with substantial reserves and resources and the mine was already operating at 1,100 tonnes per day (tpd). After acquisition, the Company initiated a two-year operational turn-around and capital investment program aimed at increasing throughput, grade and productivity in order to reduce operating costs and return the operation to profitability.

In addition to operating the Guanaceví, Bolañitos and El Cubo mines, the Company is advancing three exploration and development projects. These projects include the Company’s high grade discovery on the Terronera property in Jalisco state, the permitted El Compas property and the leased La Plata plant in Zacatecas state that were acquired in 2016, and the prospective Parral properties in Chihuahua state that were also acquired in 2016. The Company is also exploring a number of other properties towards achieving its goal to become a premier senior producer in the silver mining sector.

The Company has historically funded its acquisition, exploration and development activities through equity financings, debt facilities and convertible debentures. In recent years, the Company has financed most of its acquisition, exploration, development and operating activities from production cash flows. The Company may choose to undertake equity, debt, convertible debt or other financings, on an as-needed basis, in order to facilitate its growth.

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 4

REVIEW OF OPERATING RESULTS

The Company operates the Guanaceví, Bolañitos and El Cubo mines in Mexico. In addition, the Company is advancing three exploration and development projects in Mexico, including the Company’s high-grade discovery on the Terronera property in Jalisco state, the permitted El Compas property and leased La Plata plant in Zacatecas state, and the prospective Parral properties in Chihuahua state.

Consolidated Production Results for the Three Months Ended March 31, 2018 and 2017

CONSOLIDATED	Three Months Ended March 31
	2018	2017	% Change
Ore tonnes processed	325,669	303,222	7%
Average silver grade (gpt)	151	126	20%
Silver recovery (%)	85.4	87.4	(2%)
Total silver ounces produced	1,350,840	1,076,974	25%
Payable silver ounces produced	1,324,856	1,054,110	26%
Average gold grade (gpt)	1.49	1.41	6%
Gold recovery (%)	84.5	85.2	(1%)
Total gold ounces produced	13,208	11,724	13%
Payable gold ounces produced	12,944	11,459	13%
Silver equivalent ounces produced(1)	2,341,440	1,956,274	20%
Cash costs per silver ounce(2)(3)	6.50	7.81	(17%)
Total production costs per ounce(2)(4)	13.70	11.62	18%
All in sustaining cost per ounce (2)(5)	14.18	18.24	(22%)
Direct production costs per tonne(2)(6)	79.38	75.77	5%
Silver co-product cash costs(7)	10 .76	11.96	(10 %)
Gold co-product cash costs(7)	857	861	(0%)

(1)	Silver equivalents are calculated using a 75:1 ratio. 2017 Silver equivalents have been restated from 70:1 to 75:1 for comparative purposes.
(2)	The Company reports non-IFRS measures which include cash costs net of by-products on a payable silver basis, total production costs per ounce, all-in sustaining costs per ounce and direct production costs per tonne, in order to manage and evaluate operating performance at each of the Company’s mines. These measures, some established by the Silver Institute (Production Cost Standards, June 2011), are widely used in the silver mining industry as a benchmark for performance, but do not have a standardized meaning. These measures are reported on a production basis. See Reconciliation to IFRS on page 15.
(3)	Cash costs net of by-products per payable silver ounce include mining, processing (including smelting, refining, transportation and selling costs), and direct overhead, net of gold credits. See Reconciliation to IFRS on page 17.
(4)	Total production costs per ounce include mining, processing (including smelting, refining, transportation and selling costs), direct overhead, amortization, depletion and amortization at the operation sites. See Reconciliation to IFRS on page 17.
(5)	All-in sustaining costs per ounce include mining, processing (including smelting, refining, transportation and selling costs), direct overhead, corporate general and administration, on-site exploration, share-based compensation, reclamation and sustaining capital net of gold credits. See Reconciliation to IFRS on page 18.
(6)	Direct production costs per tonne include mining, processing (including smelting, refining, transportation and selling costs) and direct overhead at the operation sites. See Reconciliation to IFRS on page 17.
(7)	Silver co-product cash cost and gold co-product cash cost include mining, processing (including smelting, refining, transportation and selling costs), and direct overhead allocated on pro-rated basis of realized metal value. See Reconciliation to IFRS on page 18.

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 5

Consolidated Production

Three months ended March 31, 2018 (compared to the three months ended March 31, 2017)
Consolidated silver production during Q1, 2018 was 1,350,840 ounces (oz), an increase of 25% compared to 1,076,974 oz in Q1, 2017, and gold production was 13,208 oz, an increase of 13% compared to 11,724 oz in Q1, 2017. Plant throughput was 325,669 tonnes at average grades of 151 grams per tonne (gpt) silver and 1.49 gpt gold, compared to 303,402 tonnes grading 126 gpt silver and 1.41 gpt gold in Q1, 2017. Silver production was higher in Q1, 2018 compared to Q1, 2017 due to higher mine output and ore grades at El Cubo and Bolanitos, partly offset by lower mine output at Guanacevi as the mine continues to recover from some operating issues last year. Gold production in Q1, 2018 compared to Q1, 2017 was higher at El Cubo and Guanacevi and lower at Bolanitos due to variations in gold grades at each mine.

Consolidated Operating Costs

Three months ended March 31, 2018 (compared to the three months ended March 31, 2017)
Direct production costs per tonne in Q1, 2018 increased 5% compared with Q1, 2017. The higher production costs per tonne were driven mainly by lower Guanaceví mine output due to mine development falling behind schedule in 2017 and the costs related to a launching a productivity optimization program. The productivity optimization program implemented by a third party launched in January 2018 at Guanacevi aims to review and improve every aspect of operations, from employee culture to people and equipment availability to planning, execution, supervision and reporting. This seven month program is intended to return Guanacevi to normal operations in Q3, 2018.

The higher costs at Guanaceví were offset by lower costs at Bolañitos and increased proportion of production due to higher grades at El Cubo.

The improved grades resulted in 17% lower cash costs per oz, net of by-product credits (a non-IFRS measure and a standard of the Silver Institute). Similarly, all-in sustaining costs (also a non-IFRS measure) which, compared to Q1, 2017, decreased 22% to $14.18 per oz in Q1, 2018. This decrease in all-in sustaining costs was a result of the lower operating costs per oz and the lower capital expenditures in Q1, 2018 compared to Q1, 2017.

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 6

Guanaceví Operations

The Guanaceví operation is currently mining high grade ore from two underground silver-gold mines along a five kilometre (km) length of the prolific Santa Cruz vein. Guanaceví provides steady employment for over 475 people and engages 425 contractors. Guanaceví mine production continues to lag below plant capacity due to the operational issues mentioned under “Guanaceví Production Results”. Management has initiated a seven month mine site training program aimed at significantly improving work force productivity and cutting costs, and will continue to closely monitor the operating performance at Guanaceví. Returning Guanaceví to long-term profitability also lies in developing two new orebodies, Milache and SCS. Underground ramp access is already underway towards Milache and initial production there is expected by year-end. Mine development at SCS is scheduled to commence H1, 2018 with initial production scheduled to coincide with production from Milache.

Production Results for the Three Months Ended March 31, 2018 and 2017

GUANACEVÍ	Three Months Ended March 31
	2018	2017	% Change
Ore tonnes processed	78,971	87,599	(10 %)
Average silver grade (g/ t)	224	213	5%
Silver recovery (%)	87.3	88.5	(1%)
Total silver ounces produced	496,329	530,683	(6%)
Payable silver ounces produced	495,811	529,671	(6%)
Average gold grade (g/ t)	0.64	0.49	31%
Gold recovery (%)	89.0	86.4	3%
Total gold ounces produced	1,447	1,192	21%
Payable gold ounces produced	1,445	1,190	21%
Silver equivalent ounces produced(1)	604,854	620,083	(2%)
Cash costs per silver ounce(2)(3)	15.31	12.85	19%
Total production costs per ounce(2)(4)	28.06	18.94	48%
All in sustaining cost per ounce (2)(5)	22.62	23.78	(5%)
Direct production costs per tonne(2)(6)	120.63	94.99	27%
Silver co-product cash costs(7)	15.58	13.50	15%
Gold co-product cash costs(7)	1,241	971	28%

(1)	Silver equivalents are calculated using a 75:1 ratio. 2017 Silver equivalents have been restated from 70:1 to 75:1 for comparative purposes.
(2)	The Company reports non-IFRS measures which include cash costs net of by-product on a payable silver basis, total production costs per ounce, all-in sustaining costs per ounce and direct production costs per tonne, in order to manage and evaluate operating performance at each of the Company’s mines. These measures, some established by the Silver Institute (Production Cost Standards, June 2011), are widely used in the silver mining industry as a benchmark for performance, but do not have a standardized meaning. These measures are reported on a production basis. See Reconciliation to IFRS on page 15.
(3)	Cash costs net of by-product per payable silver ounce include mining, processing (including smelting, refining, transportation and selling costs), and direct overhead, net of gold credits. See Reconciliation to IFRS on page 17.
(4)	Total production costs per ounce include mining, processing (including smelting, refining, transportation and selling costs), direct overhead, amortization, depletion and amortization at the operation sites. See Reconciliation to IFRS on page 17.
(5)	All-in sustaining cost per ounce include mining, processing (including smelting, refining, transportation and selling costs), direct overhead, corporate general and administration, on-site exploration, share-based compensation, reclamation and sustaining capital net of gold credits. See Reconciliation to IFRS on page 18.
(6)	Direct production costs per tonne include mining, processing (including smelting, refining, transportation and selling costs) and direct overhead at the operation sites. See Reconciliation to IFRS on page 171.
(7)	Silver co-product cash cost and gold co-product cash cost include mining, processing (including smelting, refining, transportation and selling costs), and direct overhead allocated on pro-rated basis of realized metal value. See Reconciliation to IFRS on page 18.

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 7

Guanaceví Production Results

Three months ended March 31, 2018 (compared to the three months ended March 31, 2017)
Silver production at the Guanaceví mine during Q1, 2018 was 496,329 oz, a decrease of 6% compared to 530,683 oz in Q1, 2017, and gold production was 1,447 oz, an increase of 21% compared to 1,192 oz in Q1, 2017. Plant throughput was 78,971 tonnes at average grades of 224 gpt silver and 0.64 gpt gold, compared to 87,779 tonnes grading 213 gpt silver and 0.49 gpt gold in Q1, 2017. Guanacevi, mine output was lower due to mine development falling behind schedule in 2017 and the reallocation of mine personnel to implement a productivity optimization program. The optimization program is designed to re-install sustainable improvements to our mining processes and operating cultures that will ultimately have a positive effect to increase efficiency, lower costs and reduce overall risk. The Q1, 2018 focus was to reenforce operating controls, monitoring systems and work flows, with mine output expected to increase at the end of Q2, 2018 until the end of the program. Silver and gold grades were both higher due to better dilution control, so that silver equivalent production in Q1, 2018 was only slightly lower than Q1, 2017.

Guanaceví Operating Costs

Three months ended March 31, 2018 (compared to the three months ended March 31, 2017)
As a result of a 10% decrease in throughput, and initiation of the optimization program, direct production costs per tonne in Q1, 2018 rose 27% compared with Q1, 2017. The higher costs per tonne was partially offset with higher silver and gold grade ore resulting in 19% higher cash costs per oz, net of by-product credits (a non-IFRS measure and a standard of the Silver Institute). All-in sustaining costs (also a non-IFRS measure) which, compared to Q1, 2017, decreased 5% to $22.62 per oz in Q1, 2018. This decrease in all-in sustaining costs was a result of management significantly decreasing capital investments and exploration expenditures in Q1, 2018 compared to Q1, 2017.

Bolañitos Operations

The Bolañitos operation encompasses three silver-gold mines and a flotation plant. Bolañitos provides steady employment for over 350 people and engages 200 contractors.

Production Results for the Three Months Ended March 31, 2018 and 2017

BOLAÑITOS	Three Months Ended March 31
	2018	2017	% Change
Ore tonnes processed	115,0 14	94,351	22%
Average silver grade (g/ t)	86	66	30 %
Silver recovery (%)	80 .3	84.3	(5%)
Total silver ounces produced	255,441	168,723	51%
Payable silver ounces produced	247,866	161,974	53%
Average gold grade (g/ t)	1.91	2.40	(20 %)
Gold recovery (%)	83.6	85.4	(2%)
Total gold ounces produced	5,90 7	6,218	(5%)
Payable gold ounces produced	5,776	6,0 63	(5%)
Silver equivalent ounces produced(1)	698,466	635,0 73	10 %
Cash costs per silver ounce(2)(3)	(2.77)	(10 .28)	73%
Total production costs per ounce(2)(4)	(1.42)	(7.43)	81%
All in sustaining cost per ounce (2)(5)	4.20	(3.82)	210 %
Direct production costs per tonne(2)(6)	60 .87	65.18	(7%)
Silver co-product cash costs(7)	9.64	9.98	(3%)
Gold co-product cash costs(7)	768	718	7%

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 8

(1)	Silver equivalents are calculated using a 75:1 ratio. 2017. Silver equivalents have been restated from 70:1 to 75:1 for comparative purposes.
(2)	The Company reports non-IFRS measures which include cash costs net of by-products on a payable silver basis, total production costs per ounce, all-in sustaining costs per ounce and direct production costs per tonne, in order to manage and evaluate operating performance at each of the Company’s mines. These measures, some established by the Silver Institute (Production Cost Standards, June 2011), are widely used in the silver mining industry as a benchmark for performance, but do not have a standardized meaning. These measures are reported on a production basis. See Reconciliation to IFRS on page 15.
(3)	Cash costs net of by-product per payable silver ounce include mining, processing (including smelting, refining, transportation and selling costs), and direct overhead, net of gold credits. See Reconciliation to IFRS on page 17.
(4)	Total production costs per ounce include mining, processing (including smelting, refining, transportation and selling costs), direct overhead, amortization, depletion and amortization at the operation sites. See Reconciliation to IFRS on page 17.
(5)	All-in sustaining cost per ounce include mining, processing (including smelting, refining, transportation and selling costs), direct overhead, corporate general and administration, on-site exploration, share-based compensation, reclamation and sustaining capital net of gold credits. See Reconciliation to IFRS on page 18.
(6)	Direct production costs per tonne include mining, processing (including smelting, refining, transportation and selling costs) and direct overhead at the operation sites. See Reconciliation to IFRS on page 17.
(7)	Silver co-product cash cost and gold co-product cash cost include mining, processing (including smelting, refining, transportation and selling costs), and direct overhead allocated on pro-rated basis of realized metal value. See Reconciliation to IFRS on page 18.

Bolañitos Production Results

Three months ended March 31, 2018 (compared to the three months ended March 31, 2017)
Silver production at the Bolañitos mine was 255,441 oz in Q1, 2018, an increase of 51% compared to 168,723 oz in Q1, 2017, and gold production was 5,907 oz in Q1, 2018, a decrease of 5% compared to 6,218 oz in Q1, 2017. Plant throughput in Q1, 2018 was 115,014 tonnes at average grades of 86 gpt silver and 1.91 gpt gold, compared to 94,351 tonnes grading 66 gpt silver and 2.40 gpt gold in Q1, 2017. Silver production increased due to higher throughput and silver grades, while gold production decreased due to the lower gold grades.

Bolañitos Operating Costs

Three months ended March 31, 2018 (compared to the three months ended March 31, 2017)
Direct production costs per tonne in Q1, 2018 decreased 7% to $60.87 per tonne due to increased production. The lower cost per tonne was offset by lower gold grades resulting in higher cash costs per ounce, net of by-product credits (which is a non-IFRS measure and a standard of the Silver Institute), to negative $2.77 per oz of payable silver in Q1, 2018 compared to negative $10.28 per oz in Q1, 2017. Similarly, all-in sustaining costs (also a non-IFRS measure) increased in Q1, 2018 to $4.20 per oz is comparable to negative $3.82 per oz in Q1, 2017 primarily attributed to the lower gold credit and slightly higher capital expenditures.

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 9

El Cubo Operations

Endeavour’s third mine, El Cubo, was acquired in July 2012 as an operational turn around opportunity and offered the potential to become a core asset with a reasonable reserve/resource mine life. El Cubo currently employs over 620 people and engages 425 contractors.

Production Results for the Three Months Ended March 31, 2018 and 2017

EL CUBO	Three Months Ended March 31
	2018	2017	% Change
Ore tonnes processed	131,684	121,272	9%
Average silver grade (g/ t)	164	111	48%
Silver recovery (%)	86.3	87.2	(1%)
Total silver ounces produced	599,070	377,568	59%
Payable silver ounces produced	581,179	362,465	60%
Average gold grade (g/ t)	1.64	1.31	25%
Gold recovery (%)	84.3	84.5	(0 %)
Total gold ounces produced	5,854	4,314	36%
Payable gold ounces produced	5,723	4,20 6	36%
Silver equivalent ounces produced(1)	1,038,120	701,118	48%
Cash costs per silver ounce(2)(3)	2.93	8.52	(66%)
Total production costs per ounce(2)(4)	7.90	9.45	(16%)
All in sustaining cost per ounce (2)(5)	11.22	20.0 0	(44%)
Direct production costs per tonne(2)(6)	70.81	70.12	1%
Silver co-product cash costs(7)	8.75	12.36	(29%)
Gold co-product cash costs(7)	697	889	(22%)

(1)	Silver equivalents are calculated using a 75:1 ratio. Silver equivalents have been restated from 70:1 to 75:1 for comparative purposes.
(2)	The Company reports non-IFRS measures which include cash costs net of by-products on a payable silver basis, total production costs per ounce, all-in sustaining costs per ounce and direct production costs per tonne, in order to manage and evaluate operating performance at each of the Company’s mines. These measures, some established by the Silver Institute (Production Cost Standards, June 2011), are widely used in the silver mining industry as a benchmark for performance, but do not have a standardized meaning. These measures are reported on a production basis. See Reconciliation to IFRS on page 15.
(3)	Cash costs net of by-products per payable silver ounce include mining, processing (including smelting, refining, transportation and selling costs), and direct overhead, net of gold credits. See Reconciliation to IFRS on page 17.
(4)	Total production costs per ounce include mining, processing (including smelting, refining, transportation and selling costs), direct overhead, amortization, depletion and amortization at the operation sites. See Reconciliation to IFRS on page 17.
(5)	All-in sustaining cost per ounce include mining, processing (including smelting, refining, transportation and selling costs), direct overhead, corporate general and administration, on-site exploration, share-based compensation, reclamation and sustaining capital net of gold credits. See Reconciliation to IFRS on page 18.
(6)	Direct production costs per tonne include mining, processing (including smelting, refining, transportation and selling costs) and direct overhead at the operation sites. See Reconciliation to IFRS on page 17.
(7)	Silver co-product cash cost and gold co-product cash cost include mining, processing (including smelting, refining, transportation and selling costs), and direct overhead allocated on pro-rated basis of realized metal value. See Reconciliation to IFRS on page 18 .

El Cubo Production Results

Three months ended March 31, 2018 (compared to the three months ended March 31, 2017)
Silver production at the El Cubo mine was 599,070 oz in Q1, 2018, an increase of 59% compared to 377,568 oz in Q1, 2017, and gold production was 5,854 oz in Q1, 2018, an increase of 36% compared to 4,314 oz in Q1, 2017. Plant throughput in Q1, 2018 was 131,684 tonnes at average grades of 164 gpt silver and 1.64 gpt gold, compared to 121,272 tonnes grading 111 gpt silver and 1.31 gpt gold in Q1, 2017. The higher metal production is a result of higher throughput and grades.

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 10

El Cubo Operating Costs

Three months ended March 31, 2018 (compared to the three months ended March 31, 2017)
Higher throughput was offset by higher contractor costs resulting in similar direct production costs of $70.81 per tonne. An increase in metal grades resulted in 66% reduced cash costs per ounce, net of by-product credits (a non-IFRS measure and a standard of the Silver Institute), decreasing in Q1, 2018 to $2.93 per oz of payable silver compared to $8.52 per oz in Q1, 2017. Similarly, all-in sustaining costs decreased 44% at $11.22 per oz in Q1, 2018 compared to $20.00 per oz in Q1, 2017. The decrease in all-in sustaining costs was a result of the lower operating costs per unit.

Development Activities

Terronera Project

The Terronera project features a newly discovered high grade silver-gold mineralized zone in the Terronera vein, which is now over 1,400 metres long, 400 metres deep, 3 to 16 metres thick, and still open along strike to the southeast and down dip. In April 2017, the Company updated its NI 43-101 Mineral Resource and Reserve Estimates and completed a pre-feasibility study (“PFS”) for the Terronera mine project located 40 kilometres northeast of Puerto Vallarta in the state of Jalisco, Mexico.

The Company retained a number of engineering consulting firms to work with Endeavour’s technical services group in optimizing and updating the PFS. Since filing the PFS in 2017 the following optimal operating parameters have been determined:

• Optimal throughput based on current Mineral Reserves and Resources is 1,500 tonnes per day

• Optimal development plan based on time needed to develop the mine is two stages of 750 tpd each

• Annual production at 1,500 tpd is estimated at 5.0 million oz silver equivalents per year (at a 75:1 silver:gold ratio) based on 300 gpt net payable silver equivalents per tonne (still being optimized)

• Mineral Resource model updated to include the small but very high grade La Luz vein (still being optimized)

• Mine plan is initially 100% cut and fill in the Terronera vein due to perceived weak rock strength in the vein and 100% resuing in the narrow La Luz vein (still being optimized)

• Plant design is crush, grind, flash flotation, regrind and conventional flotation to produce a single bulk sulfide silver-gold concentrate

• Tailings facility is dry stack so that the process water is recycled for minimum water consumption and maximum tailings stability

• Power generation alternatives are electric power grid or compressed natural gas with diesel backup (still being optimized)

• Geotechnical studies were completed for the mine, plant and tailings sites

• Hydrological studies were completed around the mine, plant and tailings sites

• Metallurgical studies were refined to provide a simpler process flowsheet and plant design

• Indigenous studies were completed for the region

• Public road upgrade study was completed in consultation with the local communities

• Project offices and housing site and plan including solar power approved by local community

• Land acquisition agreements completed for the mine, plant and tailings areas

• Final mine and plant permits received August 2017, mine and plant bond posted February 2018

The 2018, 5,400 meter exploration drill program is now underway with one drill rig targeting the southeast extension of the Terronera vein, and a second underground drill rig is planned to test the Quiteria vein at depth below the Quiteria mine. Any new resources defined this year would potentially extend the Terronera mine life and have a positive impact on the project economics.

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 11

A new infill drill program of up to 10,000 meters in up to 25 holes was recently approved to upgrade the inferred resources to indicated resources, mainly at depth in the Terronera vein and to a lesser extent in the La Luz vein, which should benefit the net present value and internal rate of return. One or two more rigs will be added in Q2, 2018 for this infill drill program depending on permitting for drill pads.

The following activities are required to finalize an updated PFS on the Terronera project:

• Complete review of Mineral Reserve and Resource model

• Complete optimization of mine plan

• Complete review of power options

• Complete review of explosives permit alternatives

• Finalize economic model

• Receive dumps and tailings permits

Permitting delays have affected the mine dumps and plant tailings permits. Therefore, management does not expect to break ground on mine development until the end of the first half of 2018, with mine and plant commissioning anticipated to commence in the fourth quarter of 2019.

El Compas Project

The El Compas project is a high quality, permitted gold-silver mine and a leased plant in the historic silver mining district of Zacatecas, with good exploration potential to expand resources and scale up production. There is also potential for the Company to acquire other properties in the area in order to consolidate resources and exploration targets in the district.

Due to the positive economics, low initial capital requirements, and management’s experience in having successfully developed similar mines in Mexico, a decision was made to proceed with development in Q3, 2017. The Company initiated the installation of project infrastructure, collaring the mine access ramp and refurbishing the plant. As previously announced, the development of the main access ramp proceeded using a form of low impact gunpowder and in March 2018 El Compas received its explosives permit, which allowed the mine to accelerate the development of the main access ramp. The main ramp was at 355 metres as of March 31, 2018 and the San Juan vein was intersected allowing a small amount of low grade ore to be stockpiled for plant commissioning. The last plant component, a mobile crushing circuit, arrived on site in March and was installed in April. Commissioning will commence mid May 2018.

Since publishing the PEA, the Company continued to optimize mining methods, the crushing circuit and grinding alternatives and has been successful on a number of fronts in improving the operating metrics. The work index of the ore and the size on the motor allows the capacity of the milling circuit to increase to 325 tpd, which allows for the mining method to be changed to mechanized cut and fill from captive cut and fill. Mechanized cut and fill increases the mining rate but has the same cost profile as captive cut and fill previously disclosed in the PEA.

Additionally, the modified plant flow sheet will allow the Company to increase the ore grind size and produce a single concentrate, while still achieving recoveries similar to those outlined in the PEA, lowering overall power costs and improving the long-term stability of the tailings facility.

As a result of the modified mine plan and plant design and the delay in receiving the explosives permit, the total start up CAPEX has been revised upwards to $11.3 million compared to the previous $10.0 million cost estimated in the PEA. However, the operational benefits of the modified plant design and increased mining rate should improve the overall economics of the project. The Company anticipates achieving commercial production at El Compas in July 2018.

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 12

Highlights of development progress in Q1, 2018:

• Zero lost-time accidents since the start of construction -- safety inductions and training completed with 167 workers on site;

• Plant refurbishment complete -- including grinding, flotation and thickening circuits, power line, electrical, plumbing, and administration office are complete;

• Other plant items completed in April include the mobile crushing unit, conveyors, filters, modified plant lease agreement, laboratory and tailings facility;

• Mine power line and mine portal infrastructure complete, mine access road completed in April, mine development to access ore nearing completion;

• Explosives licence received in March, initial production to start by the end of April, commercial production by July 31, 2018;

• 6,600-metre exploration drill program now underway to follow up Misie-Karla-Karla HW and Calicanto veins discoveries last year.

Highlights of improved operating metrics

• Plant design modified to increase capacity from 250 tonnes per day (tpd) to 325 tpd as a result of the lower work index of the ore and utilizing the existing motor capacity on the mill;

• Mine plan expanded from 200 tpd to 250 tpd using mechanized cut and fill mining method;

• Potential to expand to 500 tpd with further plant refurbishment and more reserves and resources;

• Ore grind size increased while maintaining metal recoveries to improve the tailings stability long term and decrease overall life of mine power costs;

• Higher mine output, plant throughput and grind size should each have a beneficial impact on the El Compas PEA (defined below) project economics;

• Comparing the improved operating metrics with the El Compas PEA, production is expected to rise 25 per cent to 1,175,000 ounces silver equivalent per year (using 75:1 silver:gold ratio);

• Capex (capital expenditures) will rise 13 per cent to $11.3-million;

• Cash costs in the El Compas PEA (preliminary economic assessment) of $9.09 per silver equivalent (AgEq) ounce and all-in- sustaining costs of $9.64 per AgEq oz should improve with expanded production.

Exploration Results

In 2018, the Company plans to drill 44,000 metres and spend $11.1 million on brownfields and greenfields exploration, development engineering, and land payments across its portfolio of properties. At the three existing mines, 17,000 metres of core drilling are planned at a cost of $2.8 million. At the exploration and development projects, expenditures of $8.3 million are planned to drill 27,300 metres, to advance engineering studies and meet property holding obligations. Drilling is now underway at Bolanitos, El Cubo, El Compas, Terronera and Parral.

At El Compas, 6,600 metres are planned to be drilled for $1.0 million primarily on the Calicanto concessions. The 2018 drilling is to further test the new zones of high grade mineralization within the Misie-Karla-Karla HW and Calicanto veins discovered in 2017.

At Terronera, $1.7 million is budgeted to complete an updated PFS and a 5,400 metre drill program. The 2018 drilling will focus on extending mineralization in the Terronera vein to the southeast of the current resource, plus testing other known mineralized veins.

At Parral, $2.2 million is budgeted for drilling 12,000 metres to extend historic and new resource areas and complete a PEA. During Q1, 2018 the Company drilled 1,591 metres at the San Patricio area resulting in continued intersection of mineralized veins. Preparatory work was completed at the historical Veta Colorada mine for drilling in Q2, 2018.

In Chile, the Company has budgeted for a 3,000 metre drill program on one property to explore for bulk tonnage silver-lead-zinc manto mineralization.

In Q1, 2018 at the operating mines, 1,237 metres were drilled at the El Cubo operation testing the north part of the Cubo district and 909 metres were drilled at the Bolanitos operations testing the depth of the La Luz and Plateros veins. Results are pending.

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 13

Consolidated Financial Results

Three months ended March 31, 2018 (compared to the three months ended March 31, 2017)

In Q1, 2018, the Company’s mine operating earnings were $3.3 million (Q1, 2017: $7.8 million) on sales of $40.3 million (Q1, 2017: $36.4 million) with cost of sales of $37.0 million (Q1, 2017: $28.6 million).

In Q1, 2018, the Company had an operating loss of $1.0 million (Q1, 2017: operating income of $2.5 million) after exploration costs of $2.0 million (Q1, 2017: $3.3 million) and general and administrative costs of $2.3 million (Q1, 2017: $2.0 million).

Earnings before taxes in Q1, 2018 were $1.2 million (Q1, 2017: $4.5 million) after finance costs of $0.1 million (Q1, 2017: $0.2 million), a foreign exchange gain of $2.2 million (Q1, 2017: $2.1 million), and investment and other expense of $0.1 million (Q1, 2017: $0.1 million). The Company realized net earnings for the period of $2.3 million (Q1, 2017: $6.0 million) after an income tax recovery of $1.1 million (Q1, 2017 $1.5 million).

Sales of $40.3 million in Q1, 2018 represented an 11% increase over the $36.4 million for the same period in 2017. There was a 14% increase in silver ounces sold, offset by a 6% decrease in the realized silver price resulting in a 7% increase in silver sales. Similarly, there was a 12% increase in gold ounces sold with a 4% increase in realized gold prices resulting in a 17% increase in gold sales. During the period, the Company sold 1,406,143 oz silver and 12,674 oz gold, for realized prices of $16.70 and $1,330 per oz respectively, compared to sales of 1,235,594 oz silver and 11,290 oz gold, for realized prices of $17.79 and $1,280 per oz, respectively, in the same period of 2017. The realized price of silver and gold were within 1% of average silver and gold spot prices during the period of $16.78 and $1,329 respectively, with the differences due to the timing of sales and the mark-to-market adjustments for the concentrate sales that are pending finalization.

The Company decreased its finished goods silver and gold inventory to 160,034 oz and 1,497 oz, respectively at March 31, 2018 compared to 241,321 oz silver and 1,226 oz gold at December 31, 2017. The cost allocated to these finished goods was $3.3 million at March 31, 2018 compared to $4.8 million at December 31, 2017. At March 31, 2018, the finished goods inventory fair market value was $4.6 million compared to the fair value of $5.7 million at December 31, 2017.

Cost of sales for Q1, 2018 was $37.0 million, an increase of 29% over the cost of sales of $28.6 million for the same period of 2017. The 29% increase in cost of sales was primarily due to the sale of 14% more silver ounces during the period and increased depletion at the Guanacevi and El Cubo mines.

Exploration expenses decreased in Q1, 20187 to $2.0 million from $3.3 million in the same period of 2017 primarily due to planned timing of drilling activities for 2018. General and administrative expenses increased by 15% to $2.3 million in Q1, 2018 compared to $2.0 million in the same period of 2017 due to a stronger Canadian dollar during Q2, 2018 compared to Q1, 2017 and also due to increased costs for director’s deferred share units, which are marked to market at each period end. In Q1, 2018 there was a related expense of $11 thousand due to a moderate increase in the company’s share price during the quarter compared to a recovery of $183 thousand due to a decrease in the Company’s share price during Q1, 2017.

The Company experienced a foreign exchange gain of $2.2 million in Q1, 2018 compared to a gain of $2.1 million in Q1, 2017. The $2.2 million gain was primarily due to the strengthening of the Mexican peso against the U.S. Dollar from December 31, 2017 to March 31, 2018, which resulted in higher valuations on the peso denominated cash and receivable amounts.

There was an income tax recovery of $1.1 million in Q1, 2018 compared to a recovery of $1.5 million in Q1, 2017. The $1.1 million tax recovery is comprised of $0.7 million in current income tax expense (Q1, 2017: expense of $0.3 million) and $1.8 million in deferred income tax recovery (Q1, 2017: recovery of $1.8 million). The deferred income tax recovery of $1.8 million is a result of the Mexican peso appreciation and its monetary impact on loss carryforwards related to the Guanacevi mine.

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 14

Non-IFRS Measures

Mine operating cash flow is a non-IFRS measure that does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. Mine operating cash flow is calculated as revenue minus direct production costs and royalties. Mine operating cash flow is used by management to assess the performance of the mine operations, excluding corporate and exploration activities and is provided to investors as a measure of the Company’s operating performance.

Expressed in thousands US dollars		Three Months Ended March 31
		2018		2017
Mine operating earnings	$	3,275	$	7,840
Share-based compensation		37		-
Amortization and depletion		9,759		4,113
Write down (recovery) of inventory to net realizable value		755		-
Mine operating cash flow before taxes	$	13,826	$	11,953

Operating cash flow before working capital adjustment is a non-IFRS measure that does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. Operating cash flow before working capital adjustments is calculated as operating cash flow minus working capital adjustments. Operating cash flow before working capital adjustments is used by management to assess operating performance irrespective of working capital changes and is provided to investors as a measure of the Company’s operating performance.

Expressed in thousands US dollars		Three Months Ended March 31
		2018		2017
Cash from operating activities	$	8,0 19	$	9,667
Net changes in non-cash working capital		(3,536)		771
Operating cash flow before working capital adjustments	$	11,555	$	8,896

Operating cash flow per share is a non-IFRS measure that does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. Operating cash flow per share is calculated by dividing cash from operating activities by the weighted average shares outstanding. Operating cash flow per share is used by management to assess operating performance irrespective of working capital changes and is provided to investors as a measure of the Company’s operating performance.

Expressed in thousands US dollars		Three Months Ended March 31
except for share numbers and per share amounts		2018		2017
Operating cash flow before working capital adjustments	$	11,555	$	8,896
Basic weighted average shares outstanding		127,488,410		127,0 95,764
Operating cash flow before working capital changes per share	$	0 .0 9	$	0 .0 7

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 15

EBITDA is a non-IFRS financial measure, which excludes the following from net earnings:

• Income tax expense;

• Finance costs;

• Amortization and depletion

Adjusted EBITDA excludes the following additional items from EBITDA

• Share based compensation;

• Non-recurring write offs

Management believes EBITDA is a valuable indicator of the Company’s ability to generate liquidity by producing operating cash flow to fund working capital needs, service debt obligations, and fund capital expenditures. Management uses EBITDA for this purpose. EBITDA is also frequently used by investors and analysts for valuation purposes whereby EBITDA is multiplied by a factor or “EBITDA multiple” based on an observed or inferred relationship between EBITDA and market values to determine the approximate total enterprise value of a Company.

EBITDA is intended to provide additional information to investors and analysts. It does not have any standardized definition under IFRS and should not be considered in isolation or as a substitute for measures of operating performance prepared in accordance with IFRS. EBITDA excludes the impact of cash costs of financing activities and taxes, and the effects of changes in operating working capital balances, and therefore is not necessarily indicative of operating profit or cash flow from operations as determined by IFRS. Other companies may calculate EBITDA and Adjusted EBITDA differently.

Expressed in thousands US dollars		Three Months Ended March 31
		2018		2017
Net earnings (loss) for the period	$	2,325	$	6,0 35
Depreciation and depletion – cost of sales		9,759		4,113
Depreciation and depletion – exploration		23		28
Depreciation and depletion – general & administration		55		41
Finance costs		49		236
Current income tax expense		688		299
Deferred income tax expense (recovery)		(1,786)		(1,797)
Earnings before interest, taxes, depletion and amortization	$	11,113	$	8,955
Share based compensation		416		337
Adjusted earnings before interest, taxes depletion and amortization	$	11,529	$	9,292

Cash costs per ounce, total production costs per ounce and direct production costs per tonne are measures developed by precious metals companies in an effort to provide a comparable standard; however, there can be no assurance that the Company’s reporting of these non-IFRS measures are similar to those reported by other mining companies. Cash costs per ounce, production costs per ounce and direct production costs per tonne are measures used by the Company to manage and evaluate operating performance at each of the Company’s operating mining units. They are widely reported in the silver mining industry as a benchmark for performance, but do not have a standardized meaning and are disclosed in addition to IFRS measures. The following tables provide a detailed reconciliation of these measures to the Company’s cost of sales, as reported in its consolidated financial statements.

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 16

		Three Months Ended March 31, 2018								Three Months Ended March 31, 2017
Expressed in thousands US dollars
		Guanaceví		Bolañitos		El Cubo		Total		Guanaceví		Bolañitos		El Cubo		Total
Direct production costs per financial statements	$	10,602	$	6,400	$	8,804	$	25,806	$	10,117	$	5,299	$	8,633	$	24,049
Royalties		303		320		75		698		343		43		54		440
Special mining duty (1)		-		54		175		229		-		94		(87)		7
Opening finished goods		(2,942)		(385)		(387)		(3,714)		(3,948)		-		(385)		(4,333)
Finished goods NRV adjustment		463		-		-		463		-		-		-		-
Closing finished goods		1,100		612		658		2,370		1,809		714		289		2,812
Direct production costs		9,526		7,001		9,325		25,852		8,321		6,150		8,504		22,975
By-product gold sales		(2,166)		(7,448)		(7,238)		(16,852)		(1,924)		(7,041)		(5,491)		(14,456)
Opening gold inventory fair market value		631		681		278		1,590		771		-		253		1,024
Closing gold inventory fair market value		(400)		(921)		(661)		(1,982)		(363)		(774)		(177)		(1,314)
Cash costs net of by-product		7,591		(687)		1,704		8,608		6,805		(1,665)		3,089		8,229
Amortization and depletion		6,799		309		2,651		9,759		3,373		414		326		4,113
Share-based compensation		13		12		12		37		-		-		-		0
Opening finished goods depletion		(1,096)		(8)		(8)		(1,112)		(567)		-		(1)		(568)
NRV cost adjustment		(292)		-		-		(292)		-		-		-		-
Closing finished goods depletion		898		23		231		1,152		422		48		8		478
Total production costs	$	13,913		($351)	$	4,590	$	18,152	$	10,033		($1,203)	$	3,422	$	12,252

		Three Months Ended March 31, 2018								Three Months Ended March 31, 20 17
		Guanaceví		Bolañitos		El Cubo		Total		Guanaceví		Bolañitos		El Cubo		Total
Throughput tonnes		78,971		115,014		131,684		325,669		87,599		94,351		121,272		303,222
Payable silver ounces		495,811		247,866		581,179		1,324,856		529,671		161,974		362,465		1,054,110
Cash costs per ounce	$	15.31		($2.77)	$	2.93	$	6.50	$	12.85		($10.28)	$	8.52	$	7.81
Total production costs per oz	$	28.06		($1.42)	$	7.90	$	13.70	$	18.94		($7.43)	$	9.45	$	11.62
Direct production costs per tonne	$	120.63	$	60.87	$	70.81	$	79.38	$	94.99	$	65.18	$	70.12	$	75.77

(1) Special mining duty is an EBITDA royalty tax presented as a current income tax in accordance with IFRS.

All-in sustaining costs per ounce and all-in costs per ounce are measures developed by the World Gold Council (and used as a standard of the Silver Institute) in an effort to provide a comparable standard within the precious metal industry; however, there can be no assurance that the Company’s reporting of these non-IFRS measures are similar to those reported by other mining companies. These measures are used by the Company to manage and evaluate operating performance at each of the Company’s operating mining units and consolidated group, and are widely reported in the silver mining industry as a benchmark for performance, but do not have a standardized meaning and are disclosed in addition to IFRS measures. The following tables provide a detailed reconciliation of these measures to the Company’s cost of sales, as reported in the Company’s consolidated financial statements.

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 17

Exp ressed in thousan ds US d ollars		Three Months Ended March 31, 2018								Three Months Ended March 31, 2017
		Guanaceví		Bolañitos		El Cub o		Total		Guanaceví	Bolañ itos		El Cubo		Total
Cash costs net of by-product	$	7,591		($687)	$	1,704	$	8,608	$	6,805	($1,665)	$	3,089	$	8,229
Operations stock based compensation		13		12		12		37		-	-		-		-
Corporate general and administrative		496		573		851		1,920		523	514		579		1,616
Corporate stock based compensation		89		102		152		343		96	95		107		298
Reclamation - amortization/ accretion		11		8		19		38		7	4		10		21
Mine site expensed exploration		27		105		210		342		131	103		354		588
Capital expenditures sustaining		2,991		928		3,573		7,492		5,033	330		3,111		8,474
All In Sustaining Costs	$	11,218	$	1,041	$	6,521	$	18,780	$	12,595	($619)	$	7,249	$	19,226
Growth exploration								1,657							2,720
Growth capital expenditures								3,473							802
All In Costs							$	23,910						$	22,748

		Three Months Ended March 31, 2018								Three Months Ended March 31, 2017
		Guanaceví		Bolañitos		El Cub o		Total		Guanaceví	Bolañ itos			El Cubo		Total
Throughput tonnes		78,971		115,014		131,684		325,669		87,599	94,351			121,272		303,222
Payable silver ounces		495,811		247,866		581,179		1,324,856		529,671	161,974			362,465		1,054,110
Silver equivalent production (ounces)		604,854		698,466		1,038,120		2,341,440		620,083	635,073			701,118		1,956,274
Sustaining cost per ounce	$	22.62	$	4.20	$	11.22	$	14.18	$	23.78	($3.82	)	$	20.00	$	18.24
All In costs per ounce							$	18.05							$	21.58

Silver co-product cash costs and gold co-product cash costs are measures used by the Company to manage and evaluate operating performance at each of the Company’ s operating mining units and consolidated group, but do not have a standardized meaning and are disclosed in addition to IFRS measures. The following tables provide a detailed reconciliation of the semeasures to the Company’ s cost of sales, as reported in its consolidated financial statements.

Expressed in thousands US dollars		Three Months Ended M arch 31, 2018								Three Months Ended March 31, 2017
		Guanaceví		Bolañitos		El Cubo		Total		Guanaceví		Bolañitos		El Cub o		Total
Direct production costs per financial statements	$	10,602	$	6,400	$	8,804	$	25,806	$	10,117	$	5,299	$	8,633	$	24,049
Royalties		303		320		75		698		343		43		54		440
Special mining duty (1)		-		54		175		229		-		94		(87)		7
Opening finished goods		(2,942)		(385)		(387)		(3,714)		(3,948)		-		(385)		(4,333)
Finished goods NRV adjustment		463		-		-		463		-		-		-		-
Closing finished goods		1,100		612		658		2,370		1,809		714		289		2,812
Direct production costs		9,526		7,001		9,325		25,852		8,321		6,150		8,504		22,975

		Three Months Ended March 31, 2018								Three Months Ended March 31, 2017
		Guanaceví		Bolañitos		El Cubo		Total		Guanaceví		Bolañitos		El Cubo		Total
Silver production (ounces)		496,329		255,441		599,070		1,350,840		530,683		168,723		377,568		1,076,974
Average realized silver price ($)		16.70		16.70		16.70		16.70		17.79		17.79		17.79		17.79
Silver value ($)		8,288,694		4,265,865		10,004,469		22,559,028		9,440,851		3,001,582		6,716,935		19,159,367
Gold production (ounces)		1,447		5,907		5,854		13,208		1,192		6,218		4,314		11,724
Average realized gold price ($)		1,330		1,330		1,330		1,330		1,280		1,280		1,280		1,280
Gold value ($)		1,924,510		7,856,310		7,785,820		17,566,640		1,525,760		7,959,040		5,521,920		15,006,720
Total metal value ($)		10,213,204		12,122,175		17,790,289		40,125,668		10,966,611		10,960,622		12,238,855		34,166,087
Pro-rated silver costs		81%		35%		56%		56%		86%		27%		55%		56%
Pro-rated gold costs		19%		65%		44%		44%		14%		73%		45%		44%
Silver co-product cash costs	$	15.58	$	9.64	$	8.75	$	10.76	$	13.50	$	9.98	$	12.36	$	11.96
Gold co-product cash costs	$	1,241	$	768	$	697	$	857	$	971	$	718	$	889	$	861

(1) Special mining duty is an EBITDA royalty tax presented as a current income tax in accordance with IFRS.

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 18

Quarterly Results and Trends

The following table presents selected financial information for each of the most recent eight quarters:

Table in thousands of U.S. dollars except for		2018		2017										2016
share numbers and per share amounts		Q1		Q4		Q3		Q2		Q1		Q4		Q3		Q2
Revenue	$	40,330	$	41,640	$	39,782	$	32,636	$	36,441	$	28,650	$	42,066	$	44,510
Direct cost		25,806		28,399		27,400		23,483		24,048		21,044		24,033		26,975
Royalties		698		503		457		340		440		1,216		247		276
Mine operating cash flow		13,826		12,738		11,925		8,813		11,953		6,390		17,786		17,259
Share-based compensation		37		47		63		92		-		-		(208)		230
Amortization and depletion		9,759		4,804		4,394		3,271		4,113		1,893		2,761		4,144
Write down on inventory		755		-		166		-		-		-		-		-
Mine operating earnings (loss)	$	3,275	$	7,887	$	7,302	$	5,450	$	7,840	$	4,497	$	15,233	$	12,885
Basic earnings (loss) per share	$	0.02	$	0.02	$	0.01	$	0.00	$	0.05		($0.04)	$	0.04	$	0.01
Diluted earnings (loss) per share	$	0.02	$	0.02	$	0.01	$	0.00	$	0.05		($0.04)	$	0.04	$	0.01
Weighted shares outstanding		127,488,410		127,486,671		127,456,410		12,318,926		127,095,764		126,676,562		125,277,591		113,236,504
Net earnings (loss)	$	2,325	$	2,669	$	996		($16)	$	6,035		($5,204)	$	5,586	$	1,699
Amortization and depletion		9,837		4,935		4,540		3,333		4,182		1,994		2,834		4,211
Finance costs		49		105		166		208		236		246		345		294
Current income tax		688		2,924		882		545		299		132		2,732		3,480
Deferred income tax		(1,786)		(3,737)		(510)		(403)		(1,797)		991		(693)		459
EBITDA	$	11,113	$	6,896	$	6,074	$	3,667	$	8,955		($1,841)	$	10,804	$	10,143

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 19

The following table presents selected production information for each of the most recent eight quarters:

Highlights		2018		2017								2016
		Q1		Q4		Q3		Q2		Q1		Q4		Q3		Q2
Processed tonnes		325,669		349,924		322,784		30 3,943		303,222		317,555		355,611		377,198
Guanaceví		78,971		83,881		74,649		74,984		87,599		87,850		82,0 59		98,756
Bolañitos		115,0 14		124,172		114,526		113,875		94,351		10 1,568		132,686		136,322
El Cubo		131,684		141,871		133,60 9		115,084		121,272		128,137		140,866		142,120
Silver ounces		1,350 ,840		1,436,962		1,262,064		1,143,788		1,076,974		1,0 88,845		1,284,646		1,551,851
Guanaceví		496,329		544,117		522,907		468,741		530,683		540,70 8		542,385		629,221
Bolañitos		255,441		280,712		253,787		231,016		168,723		185,813		255,350		276,885
El Cubo		599,070		612,133		485,370		444,031		377,568		362,324		486,911		645,745
Silver grade		151		152		144		135		126		123		133		148
Guanaceví		224		241		250		219		213		211		235		232
Bolañitos		86		86		85		78		66		71		76		80
El Cubo		164		157		135		137		111		10 3		128		156
Silver recovery		85.4		84.1		84.5		86.6		87.4		87.0		84.3		86.2
Guanaceví		87.3		83.7		87.2		88.8		88.5		90.7		87.5		85.4
Bolañitos		80 .3		81.8		81.1		80 .9		84.3		80 .1		78.8		79.0
El Cubo		86.3		85.5		83.7		87.6		87.2		85.4		84.0		90.6
Gold ounces		13,208		14,577		13,648		13,0 58		11,724		11,40 2		14,364		15,649
Guanaceví		1,447		1,245		1,224		1,079		1,192		1,232		1,163		1,365
Bolañitos		5,907		7,20 4		6,523		6,965		6,218		5,926		7,875		8,470
El Cubo		5,854		6,128		5,901		5,014		4,314		4,244		5,326		5,814
Gold grade		1.49		1.56		1.58		1.58		1.41		1.35		1.55		1.58
Guanaceví		0.64		0.54		0 .57		0.50		0.49		0.49		0.51		0 .49
Bolañitos		1.91		2.18		2.15		2.27		2.40		2.22		2.30		2.38
El Cubo		1.64		1.61		1.65		1.60		1.31		1.24		1.46		1.56
Gold recovery		84.5		83.3		83.4		84.6		85.2		83.0		80.8		81.9
Guanaceví		89.0		85.5		89.5		89.5		86.4		89.0		86.4		87.7
Bolañitos		83.6		82.8		82.4		83.8		85.4		81.7		80.3		81.2
El Cubo		84.3		83.4		83.3		84.7		84.5		83.1		80.5		81.6
Cash costs per oz	$	6.50	$	7.97	$	8.11	$	8.36	$	7.81	$	9.39	$	5.27	$	5.37
Guanaceví	$	15.31	$	12.39	$	13.68	$	14.94	$	12.85	$	12.66	$	11.12	$	10.82
Bolañitos		($2.77)		($2.73)		($0.52)		($4.78)		($10.28)		($4.87)		($15.17)		($7.08)
El Cubo	$	2.93	$	8.78	$	6.37	$	7.95	$	8.52	$	11.65	$	9.16	$	5.21
Total cost per oz(1)	$	13.70	$	11.38	$	11.74	$	12.02	$	11.62	$	11.31	$	7.28	$	8.30
Guanaceví	$	28.0 6	$	19.92	$	20.48	$	21.63	$	18.94	$	15.84	$	14.15	$	13.87
Bolañitos		($1.42)		($1.47)	$	1.81		($2.0 7)		($7.43)		($3.59)		($13.20)		($1.67)
El Cubo	$	7.90	$	9.38	$	7.13	$	8.78	$	9.44	$	11.92	$	9.99	$	6.97
AISC per oz	$	14.18	$	12.70	$	11.74	$	20.46	$	18.24	$	20.11	$	11.47	$	10.53
Guanaceví	$	22.62	$	17.57	$	23.47	$	27.40	$	23.78	$	26.74	$	21.53	$	20.11
Bolañitos	$	4.20	$	1.01	$	3.96	$	3.61		($3.82)	$	1.02		($11.16)		($4.25)
El Cubo	$	11.22	$	13.56	$	17.95	$	21.60	$	20.00	$	19.62	$	11.60	$	7.20
Costs per tonne	$	79.38	$	84.38	$	84.81	$	84.0 1	$	75.77	$	70 .72	$	71.18	$	73.01
Guanaceví	$	120.63	$	99.39	$	117.15	$	111.42	$	94.99	$	93.60	$	93.24	$	83.38
Bolañitos	$	60 .87	$	67.04	$	71.52	$	66.60	$	65.18	$	54.35	$	49.03	$	63.94
El Cubo	$	70 .81	$	90.69	$	78.13	$	83.38	$	70.12	$	68.0 1	$	79.20	$	74.51

(1) Total Production Cost per ounce

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 20

Key Economic Trends

Precious Metal Price Trends

The prices of silver and gold are the largest single factor in determining profitability and cash flow from operations, therefore, the financial performance of the Company has been, and is expected to continue to be, closely linked to the prices of silver and gold. During Q1, 2018, the average price of silver was $16.78 per ounce, with silver trading between $16.25 and $17.52 per ounce based on the London Fix silver price. This compares to an average of $17.429 per ounce during Q1, 2017, with a low of $15.95 and a high of $18.34 per ounce. During Q1, 2018, the Company realized an average price of $16.70 per silver ounce compared with $17.79 for the corresponding period in 2017.

During Q1, 2018, the average price of gold was $1,329 per ounce, with gold trading between $1,308 and $1,355 per ounce based on the London Fix PM gold price. This compares to an average of $1,219 per ounce during Q1, 2017, with a low of $1,151 and a high of $1,258 per ounce. During Q1, 2018, the Company realized an average price of $1,330 per ounce compared with $1,280 for the corresponding period in 2017.

During 2017, the average price of silver was $17.05 per ounce, with silver trading between a range of $15.22 and $18.56 per ounce based on the London Fix silver price. This compares to an average of $17.14 per ounce during 2016, with a low of $13.58 and a high of $20.71 per ounce. During 2017, the Company realized an average price of $17.24 per ounce compared with $16.84 for 2016.

During 2017, the average price of gold was $1,257 per ounce, with gold trading between a range of $1,146 and $1,346 per ounce based on the London Fix PM gold price. This compares to an average of $1,251 per ounce during 2016, with a low of $1,077 and a high of $1,366 per ounce. During 2017, the Company realized an average price of $1,285 per ounce compared with $1,253 for 2016.

The major influences on precious metals prices from Q3, 2014 to January 2016 included weaker investment demand, selling from precious metal exchange traded funds, as well as strong U.S. equity and bond markets that pulled investments from other asset classes, including precious metals. In addition, precious metal prices were also affected by an expectation of improving economic conditions, which led to the reduction of the U.S. Federal Reserve’s quantitative easing program in 2014 and the anticipation of rising borrowing rates over the past two years. From February 2016, supply concerns, prevailing low to negative interest rates and political uncertainty led to renewed investment demand in precious metals. However, nearing the end of 2016, the U.S. election results revived sentiment in favour of the U.S. economy and U.S. dollar, resulting in both silver and gold prices depreciating against the U.S. currency. In 2017, management believes that investor uncertainty surrounding the effect of the U.S. administration’s policies, particularly escalating signals of implementing tariffs, led to renewed interest in precious metals.

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 21

Currency Fluctuations
The Company’s operations are located in Mexico and therefore a significant portion of operating costs and capital expenditures are denominated in Mexican pesos. The Company’s corporate activities are based in Vancouver, Canada with the significant portion of these expenditures being denominated in Canadian dollars. Generally, as the U.S. dollar strengthens, these currencies weaken, and as the U.S. dollar weakens, these currencies strengthen.

During Q1, 2018, the Mexican peso appreciated against the U.S. dollar. During Q1, 2018, the average foreign exchange rate was $18.72 Mexican pesos per U.S. dollar, with the peso trading within a range of $18.16 to $19.63. This compares to an average of $20.30 during Q1, 2017, with a range of $18.71 to $21.92 Mexican pesos per U.S. dollar.

During the year ended December 31, 2017, the Mexican peso reversed a long negative trend and significantly appreciated against the U.S. dollar until the fourth quarter. During 2017, the average foreign exchange rate was $18.91 Mexican pesos per U.S. dollar, with the peso trading within a range of $17.50 to $21.92. This compares to an average of $18.68 during the year ended December 31, 2016, with a range of $17.17 to $20.82 Mexican pesos per U.S. dollar. The reversal of the trend in the earlier periods of 2017 is attributed to the correction from the sharp fall during the U.S. election and from rising oil prices.

During Q1, 2018, the Canadian dollar slightly depreciated against the U.S. dollar. During Q1, 2018, the average foreign exchange rate was $1.264 Canadian dollar per U.S. dollar, with the Canadian dollar trading within a range of $1.229 and $1.309. This compares to an average of $1.1324 during Q1, 2017, within a range of $1.301 and $1.350 Canadian dollar per U.S. dollar.

During 2017, the Canadian dollar appreciated relative to the U.S. dollar, with significant appreciation in the third quarter. During 2017, the average foreign exchange rate was $1.298 Canadian dollar per U.S. dollar, with the Canadian dollar trading within a range of $1.211 and $1.374. This compares to an average of $1.3251 during 2016, with a range of $1.2533 and $1.4602 U.S. dollar per Canadian dollar.

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 22

Cost Trends

The Company’s profitability is subject to industry wide cost pressures on development and operating costs with respect to labour, energy, consumables and capital expenditures. Underground mining is labour intensive and approximately 33% of the Company’s production costs are directly tied to labour. In order to mitigate the impact of higher labour and consumable costs, the Company focuses on continuous improvement by promoting more efficient use of materials and supplies and by pursuing more advantageous pricing while increasing performance and without compromising operational integrity.

2018 Outlook

Production
In 2018, silver equivalent production is planned to increase by 20% compared to 2017. The Company plans higher silver and gold production at all three existing mines and initial production from the new fourth mine at El Compas by the end of March 2018 with commercial production scheduled for the end of July 2018.

With planned higher production, cash costs and all-in sustaining costs are expected to decline in 2018 compared to the revised guidance in 2017. The total capital budget in 2018 will increase from 2017 due to the development of the new El Compas mine, and two new high grade orebodies at Guanaceví, whereas the exploration budget will decrease as the Company’s focus shifts towards development.

Silver production is anticipated to be in the range of 5.8 -6.4 million ounces and gold production is expected be in the 58,000-64,000 oz range. Silver equivalent production is anticipated to be 10.2 -11.2 million ounces using a 75:1 silver:gold ratio , as shown in the table below.

After resolving several operational issues in 2017, management recently launched a seven-month mine-site training program aimed at significantly improving workforce productivity and cutting costs. Plant throughput should rise from the 900 tpd in Q4, 2017 to 1,050 tpd in Q4, 2018 averaging 1,000 tpd in 2018. Two new orebodies at Milache and SCS are being developed to commence production before year-end in order to reduce the onus on Porvenir Norte and Santa Cruz and increase operational flexibility.

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 23

At Bolañitos, steady mine production and plant throughput are expected at 1,200 tpd (similar to 2017), primarily from the LL-Asunción and Plateros vein orebodies plus some historic mine fill. Silver grades are expected to be higher than 2017 but gold grades will be lower. Improvement in metal recoveries is expected due to modifications in the flotation circuit implemented late last year.

At El Cubo, mine production and plant throughput are also expected to remain steady at 1,400 tpd from the V-Asunción, Dolores, and San Nicolas veins. Ore grades should increase considerably as a higher grade area of the V-Asuncion orebody is scheduled for mining this year. Metal recoveries should rise incrementally after modifications to the flotation circuit late last year.

Mine	Ag (M oz)	Au (K oz)	Ag Eq (M oz)	Tonnes/Day (tpd)
Guanaceví	2.2-2.5	5.0-5.5	2.6-2.9	900-1,050
Bolañitos	1.0-1.1	23.5-25.5	2.8-3.0	1,100-1,250
El Cubo	2.5-2.7	22.5-24.5	4.2-4.5	1,300-1,450
El Compas	0.1-0.1	7.0-8.5	0.6-0.8	0-250
Total	5.8-6.4	58.0-64.0	10.2-11.2	3,300-4,000

Operating Costs
Cash costs, net of gold by-product credits, are expected to be $6.00 -$7.00 per oz of silver produced in 2018. Consolidated cash costs expressed on a co-product basis are anticipated to be $10.00 -$11.00 per oz silver and $750-$800 per oz gold.

All-in sustaining costs (AISC), net of gold by-product credits, in accordance with the World Gold Council standard, are estimated to be $15.00 -$16.00 per oz of silver produced in 2018 reflecting new investments in exploration and development programs. When non-cash items such as stock-based compensation are excluded, AISC is budgeted to be in the $14.50 -$15.50 range. If the investment to develop the SCS and Milache ore bodies into production at Guanaceví was excluded, AISC would decrease by $2.00 per oz to $13.00 -$14.00 per oz.

On a co-product basis, AISC are anticipated to be $15.50 -$16.00 per oz silver and $1,150-$1,200 per oz gold. Direct operating costs are estimated to be in the range of $80-$85 per tonne.

Management has assumed a $17 per oz silver price, $1,275 per oz gold price, and 19:1 Mexican peso per US dollar exchange rate for its 2018 cost estimates.

Capital Investments
In 2018, Endeavour plans to invest $48.4 million on capital projects including $41.1 million in sustaining capital at three currently operating mines and $7.3 million in growth capital at two development projects (including the El Compas project). At management’s assumed metal prices, the sustaining capital investments will be covered by operating cash flow.

Growth capital of $7.2 million is budgeted to complete the construction and commissioning of the El Compas project to commercial production.

At Guanaceví, a capital budget of $25.9 million is planned for 2018, including sustaining capital of $10.3 million to develop 9.2 kilometres of mine access at the North Porvenir and Santa Cruz mines. Additionally, $7.7 million and $5.6 million are budgeted for the development of the Milache and SCS ore bodies, respectively. An additional $2.3 million is planned to support site infrastructure, including plant equipment, office equipment and building improvements.

At Bolañitos, a capital budget of $2.6 million is planned for 2018, including $0.5 million on mine development to access resources in LL-Asunción and Plateros veins, plus mineralized fill from historic stopes not included in resources. An additional $2.1 million is planned to support site infrastructure, including mobile equipment, plant equipment, office equipment and building improvements.

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 24

At El Cubo, a capital budget of $12.6 million is planned for 2018, including 5.9 kilometres of mine development for $7.6 million, $2.0 million for refurbishment of underground mobile equipment, $1.8 million to increase the capacity of the tailings facility and an additional $1.2 million for site infrastructure, including vehicles, plant equipment, office equipment and building improvements.

In 2017, the Company received government environmental permits to build the Terronera mine and plant however, the Company still awaits receipt of the dumps and tailings permits. Upon receipt of the final permits currently anticipated in Q2, 2018, and assuming a positive production decision and appropriate financing, the 2018 growth capital budget will be amended accordingly.

Mine		Mine		Other		Sustaining Capital		Growth		Total
		Development		Capital				Capital		Capital
Guanaceví	$	23.6 million	$	2.3 million	$	25.9 million		-	$	25.9 million
Bolañitos	$	0.5 million	$	2.1 million	$	2.6 million		-	$	2.6 million
El Cubo	$	7.6 million	$	5.0 million	$	12.6 million		-	$	12.6 million
El Compas		-		-		-	$	7.2 million	$	7.2 million
Corporate		-		-		-	$	0.1 million	$	0.1 million
Total	$	31.7 million	$	9.4 million	$	41.1 million	$	7.3 million	$	48.4 million

Exploration Expenditures
In 2018, the Company plans to drill 44,000 metres and spend $11.1 million on brownfields and greenfields exploration, development engineering, and land payments across its portfolio of properties. At the three existing mines, 17,000 metres of core drilling are planned at a cost of $2.8 million. At the exploration and development projects, expenditures of $8.3 million are planned to drill 27,300 metres, to advance engineering studies and meet property holding obligations. Drilling is now underway at Bolanitos, El Cubo, El Compas, Terronera and Parral.

At El Compas, 6,600 metres are planned to be drilled for $1.0 million primarily on the Calicanto concessions. The 2018 drilling is to further test the new zones of high grade mineralization within the Misie-Karla-Karla HW and Calicanto veins discovered in 2017.

At Terronera, $1.7 million is budgeted to complete an updated PFS and a 6,600 metre drill program. The 2018 drilling will focus on extending mineralization in the Terronera vein to the southeast of the current resource, plus testing other known mineralized veins.

At Parral, $2.2 million is budgeted for drilling 12,000 metres to extend historic and new resource areas and complete a PEA.

In Chile, the Company has budgeted for a 3,000 metre drill program on one property to explore for bulk tonnage silver-lead-zinc manto mineralization.

Project	2018 Activity	Drill Metres		Expenditures
Guanaceví	Drilling	6,600	$	0.8 million
Bolañitos	Drilling	5,400	$	1.0 million
El Cubo	Drilling	5,000	$	1.0 million
El Compas	Drilling	6,600	$	1.0 million
Terronera	Drilling/Update PFS	5,400	$	1.2 million
Parral	Drilling/PEA	12,000	$	2.2 million
Guadalupe y Calvo	Mapping	-	$	0.2 million
Chile	Drilling	3,000	$	1.3 million
Mexico	Holding Costs/Land Payment	-	$	2.4 million
Total		44,000	$	11.1 million

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 25

Liquidity and Capital Resources

Cash and cash equivalents (including restricted cash) decreased from $39.3 million at December 31, 2017 to $36.6 million at March 31, 2018. The Company had working capital of $66.6 million at March 31, 2018 (December 31, 2017 - $66.2 million). The $0.4 million increase in working capital is due to cash generated from operating activities.

Operating activities generated cash of $8.0 million during Q1, 2018 compared to $9.7 million of cash during the same period in 2017. The significant non-cash adjustments to the net income of $2.3 million were amortization and depletion of $9.8 million, share-based compensation of $0.4 million, a deferred income tax recovery of $1.8 million, a write down of inventory to net realizable value of $0.8 million and a change in non-cash working capital of $3.5 million. The change in non-cash working capital was primarily due to an decrease in income tax payable, with normal fluctuations in other working capital items.

The Company's Mexican subsidiaries pay value added tax, Impuesto al Valor Agregado ("IVA"), on the purchase and sale of goods and services. The net amount paid is recoverable but is subject to review and assessment by the tax authorities. The Company regularly files the required IVA returns and all supporting documentation with the tax authorities, however, the Company has been advised that certain IVA amounts receivable from the tax authorities are being withheld pending completion of the authorities' audit of certain of the Company's third-party suppliers. Under Mexican law the Company has legal rights to those IVA refunds and the results of the third party audits should have no impact on refunds. A smaller portion of IVA refund requests are from time to time improperly denied based on the alleged lack of compliance of certain formal requirements and information returns by the Company's third-party suppliers. The Company takes necessary legal action on the delayed refunds as well as any improperly denied refunds.

Mangement believes that delays and denials with respect to IVA refunds for Compania Minera del Cubo (“El Cubo”) and Refinadora Plata Adelante S.A. de C.V. (“Guanaceví,”) are improper. At March 31, 2018, El Cubo holds $12.1 million and Guanaceví holds $8.7 million in IVA receivables which the Company and its advisors deem to be recoverable from tax authorities (December 31, 2017 – $10.4 million and $8.8 million respectively). The Company is in regular contact with the tax authorities in respect of its IVA filings and believes that the full amount of its IVA receivables will ultimately be received; however, the timing of recovery of these amounts and the nature and extent of any adjustments to the Company’s IVA receivables remains uncertain. See “Financial Instrument Risk Exposure and Risk Management-Liquidity Risk”.

Investing activities during the period used $11.0 million compared to $9.4 million in the same period of 2017. The investments in 2018 primarily relate sustaining capital at the existing operations and the construction of the El Compas operation.

Capital spending totaled $11.0 million in property, plant and equipment during Q1, 2018. At Guanaceví, the Company invested $3.0 million, with $2.7 million spent on 2.7 kilometres of mine development and $0.3 million on mine equipment and various support items.

At El Cubo, the Company invested $3.6 million, including $3.0 million on 2.0 kilometres of mine development, $0.3 million on mine equipment, $0.1 million on the plant and tailings dam, and $0.2 million on other site equipment. At Bolañitos, the Company invested $0.9 million, including $0.5 million on 0.8 kilometres of mine development and $0.4 on various site equipment.

At El Compas, the Company has spent a total of $3.1 million in developing the El Compas ore body and refurbishment of the plant. $1.4 million was incurred in the quarter on the plant, $1.3 million was incurred on development of the main ore ramp and $0.4 million on various other equipment. See further discussion under Development Activities.

Exploration incurred $0.3 million in holding costs and Corporate expenditures totaled $0.1 million during the quarter.

Management of the Company believes that operating cash flow and existing working capital will be sufficient to cover 2018 capital requirements and commitments. The Company is assessing financing alternatives, including equity or debt or a combination of both to fund future growth, including the development of the Terronera project.

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 26

In April 2018, the Company filed a short form base shelf prospectus (the “Base Shelf”) that qualifies the distribution of up to CDN$ 150 million of common shares, warrants or units of the Company comprising any combination of common shares and warrants (“Securities”). The distribution of Securities may be effected from time to time in one or more transactions at a fixed price or prices, which may vary with market prices prevailing at the time of sale, or at prices related to such prevailing market prices to be negotiated with purchasers and as set forth in an accompanying prospectus supplement, including transactions that are deemed to be at the market distributions. The Base Shelf also provides the Company with the ability to conduct an “At-The-Market” offering through an “At-The-Market” facility (“ATM”) equity distribution agreement.

As at March 31, 2018, the Company’s issued share capital was $450.7 million, representing 127,488,410 common shares, and the Company had options outstanding to purchase 5,792,800 common shares with a weighted average exercise price of CAD$4.00.

Contingencies

Minera Santa Cruz y Garibaldi SA de CV (“MSCG”), a subsidiary of the Company, received a MXN 238 million assessment on October 12, 2010 by Mexican fiscal authorities for failure to provide the appropriate support for certain expense deductions taken in MSCG’s 2006 tax return, failure to provide appropriate support for loans made to MSCG from affiliated companies, and deemed an unrecorded distribution of dividends to shareholders, among other individually immaterial items. MSCG immediately initiated a Nullity action and filed an administrative attachment to dispute the assessment.

In June 2015, the Superior Court ruled in favour of MSCG on a number of the matters under appeal; however, the Superior Court ruled against MSCG for failure to provide appropriate support for certain deductions taken in MSCG’s 2006 tax return. In June 2016, the Company received a MXN 122.9 million ($6.2 million) tax assessment based on the June 2015 ruling. The 2016 tax assessment comprised of MXN 41.8 million in taxes owed ($2.1 million), MXN 17.7 million ($0.9 million) in inflationary charges, MXN 40.4 million ($2.0 million) in interest and MXN 23.0 million ($1.2 million) in penalties. The 2016 tax assessment was issued for failure to provide the appropriate support for certain expense deductions taken in MSCG’s 2006 tax return, failure to provide appropriate support for loans made to MSCG from affiliated companies. If MSCG agrees to pay the tax assessment, or a lesser settled amount, it is eligible to apply for forgiveness of 100% of the penalties and 50% of the interest.

The Company filed an appeal against the June 2016 tax assessment on the basis that certain items rejected by the courts were included in the new tax assessment and a number of deficiencies exist within the assessment. Since issuance of the assessment interest charges of MXN 5.6 million ($0.3 million) and inflationary charges of MXN 8.5 million ($0.4 million) has accumulated.

Included in the Company’s consolidated financial statements, are net assets of $595,000, including $42,000 in cash, held by MSCG. Following the Tax Court’s rulings, MSCG has been in discussions with the tax authorities with regards to the shortfall of assets within MSCG to settle its estimated tax liability. An alternative settlement option would be to transfer the shares and assets of MSCG to the tax authorities. As of December 31, 2017, the Company recognized an allowance for transferring the shares and assets of MSCG amounting to $595,000. The Company is currently assessing MSCG’s settlement options based on ongoing court proceedings and discussion with the tax authorities.

On acquisition of the El Cubo operation, under the terms of the acquired Las Torres lease, the Company was required to provide financial guarantees to the owner of the Las Torres Facility as security against any environmental damages. As at December 31, 2017, there was a $1.0 million letter of credit provided by the Company as security to the owner of the Las Torres facility that expires on August 14, 2018. In March 2018 a payment was made to the owner of the Las Torres Facility for $0.5 million and the letter of credit has been removed.

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 27

Capital Requirements

See 2018 Outlook on page 23 for discussion on planned capital and exploration expenditures.

Contractual Obligations

The Company had the following contractual obligations at March 31, 2018:

Payments due by period (in thousands of dollars)
Contractual Obligations
		Total		Less than 1		1 - 3 years		3 - 5 years		More than
				year						5 years
Capital Assets purchases	$	23	$	23	$	-	$	-	$	-
Operating lease		3,875		432		903		836		1,704
Other Long-Term Liabilities		8,020		-		8,020		-		-
Total	$	11,918	$	455	$	8,923	$	836	$	1,704

Transactions with Related Parties

The Company shares common administrative services and office space with Aztec Metals Corp., which is considered a related party company by virtue of Bradford Cooke being a common director. During 2017 , the Company also shared common administrative services and office space with Canarc Resource Corp., which was considered a related party company by virtue of Bradford Cooke being a common director. From time to time, Endeavour incurs third-party costs on behalf of the related parties, which are charged on a full cost recovery basis. The charges for these costs totaled $2,000 for the three months ended March 31, 2018 (March 31,2017 - $10,000). The Company had a $1,000 net receivable related to administration costs outstanding as at March 31, 2018 (December 31, 2017 – $2,000).

During the period ended March 31, 2018, the Company was charged $37,000 (March 31, 2017 - $11,000) for legal services by Koffman Kalef LLP, a firm in which the Company’s corporate secretary is a partner. The Company has $Nil payable to the legal firm as at March 31, 2018 (December 31, 2017 - $Nil).

Financial Instruments and fair value measurements

As at March 31, 2018, the carrying and fair values of Endeavour’s financial instruments by category were as follows:

		As at M arch 31, 2018				As at December 31, 2017
Expressed in thousands US dollars		Carrying		Estimated		Carrying		Estimated
		value		Fair value		value		Fair value
Financial assets:
Cash and cash equivalents	$	36,560	$	36,560	$	39,277	$	39,277
Other investments		148		148		168		168
Trade receivables		6,466		6,466		8,114		8,114
Other receivables		123		123		360		360
Total financial assets	$	43,297	$	43,297	$	47,919	$	47,919
Financial liabilities:
Accounts payable and accrued liabiities	$	18,285	$	18,285	$	20 ,822	$	20 ,822
Total financial liabilities	$	18,285	$	18,285	$	20 ,822	$	20 ,822

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 28

Fair value measurements

Fair value hierarchy:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy establishes three levels to classify the inputs to valuation techniques used to measure fair value. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability (for example, interest rate and yield curves observable at commonly quoted intervals, forward pricing curves used to value currency and commodity contracts and volatility measurements used to value option contracts), or inputs that are derived principally from or corroborated by observable market data or other means. Level 3 inputs are unobservable (supported by no or little market activity). The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs.

Assets and liabilities measured at fair value on a recurring basis include:

As at March 31, 20 18
Expressed in thousands US dollars		Total		Level 1		Level 2		Level 3
Assets:
Other investments	$	148	$	148	$	-	$	-
Trade receivables		6,466		-		6,466		-
Total financial assets	$	6,614	$	148	$	6,466	$	-
Liabilities:
Deferred share units	$	1,330	$	1,330	$	-	$	-
Share appreciation rights		272		-		272		-
Total financial liabilities	$	1,60 2	$	1,330	$	272	$	-

Other investments
The Company holds marketable securities classified as Level 1 in the fair value hierarchy. The fair values of these other investments are determined based on a market approach reflecting the closing price of each particular security at the reporting date. The closing price is a quoted market price obtained from the stock exchange that is the principal active market for the particular security, being the market with the greatest volume and level of activity for the assets. Changes in fair value on available for sale marketable securities are recognized in income or loss.

Trade receivables
The trade receivables consist of receivables from provisional silver and gold sales from the Bolañitos and El Cubo mine. The fair value of receivables arising from concentrate sales contracts that contain provisional pricing mechanisms is determined using the appropriate quoted closing price on the measurement date from the exchange that is the principal active market for the particular metal. As such, these receivables, which meet the definition of an embedded derivative, are classified within Level 2 of the fair value hierarchy.

Deferred share units
The Company has a Deferred Share Unit (“DSU”) plan whereby deferred share units may be granted to independent directors of the Company in lieu of compensation in cash or stock options. The DSUs vest immediately and are redeemable for cash based on the market value of the units at the time of a director’s retirement. The DSUs are classified as Level 1 in the fair value hierarchy. The liability is determined based on a market approach reflecting the closing price of the Company’s common shares at the reporting date. Changes in fair value are recognized in general and administrative salaries, wages and benefits.

Share appreciation rights
As part of the Company’s bonus program, the Company grants share appreciation rights (“SARs”) to its employees in Mexico and Chile. The SARs are subject to vesting conditions and, when exercised, constitute a cash bonus based on the value of the appreciation of the Company’s common shares between the SARS grant date and the exercise date.

The SARs are classified as Level 2 in the fair value hierarchy. The liability is valued using a Black-scholes option pricing model. Changes in fair value are recognized in salaries, wages and benefits.

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 29

Financial Instrument Risk Exposure and Risk Management
The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board approves and monitors the risk management process. The types of risk exposure and the way in which such exposure is managed is provided as follows:

Credit Risk
The Company is exposed to credit risk on its bank accounts, investments and accounts receivable. Credit risk exposure on bank accounts and short-term investments is limited through maintaining the Company’s balances with high-credit quality financial institutions, maintaining investment policies, assessing institutional exposure and continual discussion with external advisors. Value added tax receivables are generated on the purchase of supplies and services to produce silver, which are refundable from the Mexican government. Trade receivables are generated on the sale of concentrate inventory to reputable metal traders.

Liquidity Risk
The Company ensures that there is sufficient capital in order to meet short-term business requirements. The Company’s policy is to invest cash at floating rates of interest, while cash reserves are to be maintained in cash equivalents in order to maintain liquidity after taking into account the Company’s holdings of cash equivalents, money market investments, marketable securities, receivables and available cash under the Credit Facility. The Company believes that these sources, operating cash flow and its policies will be sufficient to cover expected short-term cash requirements and commitments.

The Company’s Mexican subsidiaries pay value added tax,IVA, on the purchase and sale of goods and services. The net amount paid is recoverable but is subject to review and assessment by the tax authorities. The Company regularly files the required IVA returns and all supporting documentation with the tax authorities, however, the Company has been advised that certain IVA amounts receivable from the tax authorities are being withheld pending completion of the authorities’ audit of certain of the Company’s third-party suppliers. Under Mexican law the Company has legal rights to those IVA refunds and the results of the third party audits should have no impact on refunds. A smaller portion of IVA refund requests are from time to time improperly denied based on the alleged lack of compliance of certain formal requirements and information returns by the Company’s third-party suppliers. The Company takes necessary legal action on the delayed refunds as well as any improperly denied refunds.

Management believes that delays and denials with respect to IVA refunds for El Cubo and Guanaceví are improper. At March 31, 2018, El Cubo holds $12.1 million and Guanaceví holds $8.7 million in IVA receivables which the Company and its advisors deem to be recoverable from tax authorities. The Company is in regular contact with the tax authorities in respect of its IVA filings and believes that the full amount of its IVA receivables will ultimately be received; however the timing of recovery of these amounts and the nature and extent of any adjustments to the Company’s IVA receivables remains uncertain.

Market Risk
The significant market risk exposures to which the Company is exposed are foreign currency risk, interest rate risk, and commodity price risk.

Foreign Currency Risk – The Company’s operations in Mexico and Canada make it subject to foreign currency fluctuations. Certain of the Company’s operating expenses are incurred in Mexican pesos and Canadian dollars; therefore, the fluctuation of the U.S. dollar in relation to these currencies will consequently have an impact upon the profitability of the Company and may also affect the value of the Company’s assets and the amount of shareholders’ equity. The Company has not entered into any agreements or purchased any instruments to hedge possible currency risks.

Interest Rate Risk – In respect of financial assets, the Company’s policy is to invest cash at floating rates of interest and cash reserves are to be maintained in cash equivalents in order to maintain liquidity. Fluctuations in interest rates impact the value of cash equivalents.

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 30

Commodity Price Risk – Gold and silver prices have historically fluctuated significantly and are affected by numerous factors outside of the Company’s control, including, but not limited to, industrial and retail demand, central bank lending, forward sales by producers and speculators, levels of worldwide production, short-term changes in supply and demand because of speculative hedging activities and certain other factors. The Company has not engaged in any hedging activities, other than short-term metal derivative transactions less than 90 days, to reduce its exposure to commodity price risk. At March 31, 2018, there are 173,326 oz of silver and 4,113 oz of gold, which do not have a final settlement price and the estimated revenues have been recognized at current market prices. As at March 31, 2018, with other variables unchanged, a 10% decrease in the market value of silver and gold would result in a reduction of revenue of $0.8 million.

Outstanding Share Data

As of May 2, 2018, the Company had the following securities issued and outstanding:

• 127,488,410 common shares

• 5,792,800 common shares issuable under stock options with a weighted average exercise price of CAD$4.00 per share expiring between November 8, 2017 and May 4, 2022.

The Company considers the items included in the consolidated statement of shareholders’ equity as capital. The Company’s objective when managing capital is to safeguard its ability to continue as a going concern so that it can continue to provide returns for shareholders and benefits for other stakeholders. The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may issue new shares through private placements, prospectus offerings, convertible debentures, asset acquisitions or return capital to shareholders. The Company is not subject to externally imposed capital requirements.

Changes in Accounting Policies and Critical Accounting Estimates

Accounting standards adopted during the period:

Amendments to IFRS 2, Share-based Payment (“IFRS 2”)
On June 20, 2016, the IASB issued amendments to IFRS 2 clarifying how to account for certain types of share-based payment transactions. The amendments provide requirements on the accounting for: the effects of vesting and non-vesting conditions on the measurement of cash-settled share-based payments; share-based transactions with a net settlement feature for withholding tax obligations; and a modification to the terms and conditions of a share-based payment that changes the classification of a transaction from cash-settled to equity settled.

The amendments apply for annual periods beginning on or after January 1, 2018. As a practical simplification, the amendments can be applied prospectively. Retrospective, or early, application is permitted if information is available without the use of hindsight. The Company has adopted the amendments to IFRS 2 in its financial statements for the annual period beginning on January 1, 2018 on a prospective basis with no material impact on the consolidated financial statements.

The Company has Performance Share Units (“PSU”) with a net settlement feature, which permits cash settlement for withholding tax obligations. The expense for the PSUs has previously been bifurcated with the cash settlement portion of the expense recognized as a liability until settlement, and the remaining expense allocated to Contributed Surplus. Upon adoption of the amendments to IFRS 2, the PSU liability at January 1, 2018, the liability classified portion of $38 was reallocated to Contributed Surplus.

IFRS 9 Financial Instruments (“IFRS 9”)
In November 2009, the IASB issued IFRS 9 as the first step in its project to replace IAS 39, Financial Instruments: Recognition and Measurement. On July 24, 2014 the IASB issued the complete IFRS 9. IFRS 9 retains but simplifies the mixed measurement model and establishes two primary measurement categories for financial assets: amortized cost and fair value. The basis of classification depends on an entity’s business model and the contractual cash flows of the financial asset.

Classification is made at the time the financial asset is initially recognized, namely when the entity becomes a party to the contractual provisions of the instrument.

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IFRS 9 amends some of the requirements of IFRS 7, Financial Instruments: Disclosures, including added disclosures about investments in equity instruments measured at fair value in other comprehensive income, and guidance on the measurement of financial liabilities and de-recognition of financial instruments. The mandatory effective date of IFRS 9 is for annual periods beginning on or after January 1, 2018 with early adoption permitted, and must be applied retrospectively with some exemptions permitted.

As a result of the adoption of IFRS 9, we have changed our accounting policy for financial instruments retrospectively.

The change did not result in a change in carrying value of any of our financial instruments on transition date. IFRS 9 introduced a single expected credit loss impairment model, which is based on changes in credit quality since initial recognition. The adoption of the expected credit loss impairment model did not have a significant impact on the Company’s financial statements.

The Company’s financial instruments are accounted for as follows under IFRS 9 as compared to the Company’s previous policy in accordance with IAS 39.

	January 1, 2018
	IAS 39	IFRS 9
Assets
Cash and cash equivalents	Amortized cost	Amortized cost
Restricted cash	Amortized cost	Amortized cost
Trade and other receivables (other than derivatives)	Amortized cost	Amortized cost
Trade receivables (derivative component)	Fair value through profit or loss	Fair value through profit or loss
Marketable securities	Fair value through other comprehensive income	Fair value through profit or loss
Liabilities
Accounts payable and accrued liabilities	Amortized cost	Amortized cost

Under IFRS 9, the Company’s equity marketable securities are designated as financial assets at fair value through profit or loss. For equity instruments not held for trading, we may make an irrevocable election at initial recognition to recognize changes in fair value through other comprehensive income rather than profit or loss. We did not make any such election.

IFRS 9 does not require restatement of comparative periods. Accordingly, the Company has reflected the retrospective impact of the adoption of IFRS 9 due to the change in accounting policy for marketable securities as an adjustment to opening components of equity as at January 1, 2018.

The fair value of marketable securities is $168 under both IAS 39 and IFRS 9 as at January 1, 2018, the date of initial application of IFRS 9, and is presented in Other Investments in the consolidated balance sheet. On adoption, the unrealized gain in fair value of $127, previously recognized in accumulated other comprehensive income has been reallocated to retained earnings.

As a result of the adoption of IFRS 9, the Company’s accounting policy for financial instruments has been updated as follows:

Financial Instruments

The Company recognizes financial assets and financial liabilities on the date the Company becomes party to the contractual provisions of the instruments. A financial asset is derecognized either when the Company has transferred substantially all the risks and rewards of ownership of the financial assets or when cash flows expire. A financial liability is derecognized when the obligation specified in the contract is discharged, cancelled or expired.

We classify and measure financial assets (excluding derivatives) on initial recognition as described below:

• Cash and equivalents and restricted cash include cash and term deposits with original maturities of less than 90 days are classified as financial assets at fair value through profit and loss and are measured at fair value. Unrealized gains and losses related to changes in fair value are reported in income;

• Trade and other receivables are classified as and measured at amortized cost using the effective interest method, less impairment allowance, in any;

• Investments in equity instruments are designated at financial assets through profit or loss and are recorded at fair value on settlement date, net of transaction costs. Subsequent to initial recognition, changes in fair value are recognized in income.

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Derivative financial instruments, including embedded derivatives in trade receivables measured at amortized cost, are recorded in the consolidated balance sheets at fair value. Subsequent to initial recognition, changes in estimated fair value at each reporting date are recognized through profit or loss.

A financial liability is derecognized when the obligation specified in the contract is discharged, cancelled or expired. For financial liabilities, IFRS 9 retains most of the IAS 39 requirements and since we do not have any financial liabilities designated at fair value through profit or loss, the adoption of IFRS 9 did not impact our accounting policies for financial liabilities.

IFRS 15, Revenue from Contracts with Customers (“IFRS 15”)
On May 28, 2014, the IASB issued IFRS 15. The new standard is effective for annual periods beginning on or after January 1, 2018 with early adoption permitted. IFRS 15 will replace IAS 11 Construction Contracts, IAS 18 Revenue, IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfer of Assets from Customers and SIC 31 Revenue – Barter Transactions Involving Advertising Services.

The standard contains a single model that applies to contracts with customers and two approaches to recognizing revenue: at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognized. New estimates and judgmental thresholds have also been introduced, which may affect the amount and/or timing of revenue recognized.

On April 12, 2016 the IASB issued Clarifications to IFRS 15, Revenue from Contracts with Customers, which is effective at the same time as IFRS 15. The clarifications to IFRS 15 provide additional guidance with respect to the five-step analysis, transition, and the application of the standard to licenses of intellectual property.

The Company adopted IFRS 15 and the clarifications effective January 1, 2018 with no material impact on the consolidated financial statements.

Dore sales
IFRS 15 requires that revenue from contracts with customers be recognized upon the transfer of control over goods or services to the customer. The recognition of revenue upon transfer of control to the customer is consistent with our revenue recognition policy as set out in Note 3(l) of the 2017 Annual Financial Statements, as the condition is generally satisfied when title transfers to the customer. As such, upon adoption, this requirement under IFRS 15 resulted in no impact to our financial statements as the timing of revenue recognition on our dore sales is unchanged.

Concentrate sales
We assessed all of our existing concentrate sales agreements and determined that there is no change in the timing of revenue recognition, as control transfers to the smelting companies at the time of delivery, consistent with our current accounting policy as set out in Note 3(l) of the 2017 Annual Financial Statements.

Changes in IFRS not yet adopted:
New standards and amendments have been proposed; however, they do not impact the condensed consolidated interim financial statements and are not anticipated to impact the Company’s annual consolidated financial statements. The nature and impact of each new standard and amendment applicable to the Company are described below:

IFRS 16, Leases (“IFRS 16”)
On January 13, 2016, the IASB published a new standard, IFRS 16, Leases, eliminating the current dual accounting model for lessees, which distinguishes between on-balance sheet finance leases and off-balance sheet operating leases. Under the new standard, a lease becomes an on-balance sheet liability that attracts interest, together with a new right-of-use asset. In addition, lessees will recognize a front-loaded pattern of expense for most leases, even when cash rentals are constant. IFRS 16 is effective for annual periods beginning on or after January 1, 2019, with earlier adoption permitted. The Company has begun a preliminary assessment however, the Company is not able at this time to estimate reasonably the impact that the amendments will have on the financial statements.

ENDEAVOUR SILVER CORP.    MANAGEMENT’S DISCUSSION & ANALYSIS PAGE 33

Critical Accounting Estimates
The preparation of financial statements requires the Company to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant areas requiring the use of management judgment relate to the determination of mineralized reserves, plant and equipment lives, estimating the fair values of financial instruments and derivatives, impairment of non-current assets, reclamation and rehabilitation provisions, recognition of deferred tax assets, and assumptions used in determining the fair value of share-based compensation.

See “Critical Accounting Estimates” in the Company’s annual MD&A for the year ended December 31, 2017 for a detailed discussion of the areas in which critical accounting estimates are made.

Controls and Procedures

Changes in Internal Control over Financial Reporting
Management, including the CEO and CFO, have evaluated the Company’s internal controls over financial reporting to determine whether any changes occurred during the period that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

During the three months ended March 31, 2018 there have been no changes in internal control over financial reporting that that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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