Endeavour Silver Corp.: Form 6-K - Filed by newsfilecorp.com

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NI 43-101 TECHNICAL REPORT
RESOURCE AND RESERVE
ESTIMATES
FOR THE
GUANACEVÍ MINES PROJECT
DURANGO STATE
MEXICO

Endeavour Silver Corp.
301 – 700 West Pender Street
Vancouver, B.C., Canada, V6C 1G8

The purpose of this Technical Report is to support Endeavour Silver Corp’s (EDR) public disclosure related to the resource estimate for the Guanaceví Mines property. This Technical Report conforms to National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101) and as EDR is a producer issuer in accordance with section 5.3.2 of National Instrument (NI 43-101) regulations. The mineral resource estimates for this deposit were completed in-house by EDR personnel.

EDR is a mid-tier silver mining company engaged in the exploration, development, and production of mineral properties in Mexico. EDR is focused on growing its production and reserves and resources in Mexico. Since start-up in 2004, EDR has posted nine consecutive years of growth of its silver mining operations. In addition to the Guanaceví Mines property, EDR owns and operates the El Cubo Mine, and the Bolañitos Mine, both located near the city of Guanajuato in Guanajuato State, Mexico.

This report follows the format and guidelines of Form 43-101F1, Technical Report for National Instrument 43-101, Standards of Disclosure for Mineral Projects, and its Companion Policy NI 43-101 CP, as amended by the CSA and which came into force on June 30,201 1.

This report has an effective date of December 31, 2013. The mineral resource and reserve estimates reported in this report comply with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) standards and definitions, as required under Canadian National Instrument 43-101 (NI 43-101) regulations.

The term Guanaceví Property, in this report, refers to the entire area covered by the mineral license, while the term Guanaceví Project refers to the area within the mineral license on which the current mining and exploration programs are being conducted.

This report includes technical information which requires subsequent calculations or estimates to derive sub-totals, totals and weighted averages. Such calculations or estimations inherently involve a degree of rounding and consequently introduce a margin of error. The QP does not consider such errors to be material to the calculations presented here.

The conclusions and recommendations in this report reflect the QP's best independent judgment in light of the information available to him at the time of writing.

The Guanaceví Mines Project is located within the Municipality of Guanaceví in the State of Durango near its northern border with the state of Chihuahua. The town of Guanaceví is located 260km northwest of Durango. The road from Durango to Guanaceví is paved and accessible year round.

Durango has a modern airport with daily flights to and from Mexico City and at the time of this report flights to Houston, Texas. The Guanaceví Mines Project is located on the edge of the Sierra Madre, a series of rugged mountains with higher points reaching 3,300 metres above sea level.

The Guanaceví mining district covers an area measuring approximately 5 km northeast southwest by 10 km northwest-southeast and contains more than 50 silver/gold mines. Although only three of the mines are presently operating, there is considerable mining experience available in the area.

Water for the operations is supplied from dewatering of the mines and the Guanaceví processing plant recycles all water.

Power to the Guanaceví Mines project is available from the regional grid (Comisión Federal de Electricidad).

Telephone and internet communications are integrated into the national land-based telephone system and provides reliable service.

The area has a rich tradition of mining and there is an ample supply of skilled personnel sufficient for both the underground mining operations and the surface facilities.

Endeavour Silver holds the Guanaceví Mines Project through its 100% owned Mexican subsidiary Endeavour Gold Corporation S.A. de C.V. (Endeavour Gold). Endeavour Gold holds the project through its two 100% owned subsidiaries Minera Plata Adelante S.A. de C.V. (Minera Plata Adelante) and Refinadora Plata Guanaceví S.A. de C.V. (Refinadora Plata Guanaceví). At present, the Project is comprised of 51 mineral concessions. The mineral concessions are not all contiguous and vary in size, for a total Property area of 4,096.1056 ha.

In June, 2011, Endeavour Silver acquired an option on the La Brisa and La Brisa 2 Properties (90 ha), located approximately 10 km southeast of Endeavour Silver’s active Porvenir silver/gold mine in the Guanaceví district.

The option agreement requires Endeavour Silver to make US $220,000 in cash payments over a 3 year period.

The La Brisa concession optioned in the southern part of the Guanaceví district is different from the La Brisa concession of the same name, acquired along with Porvenir Cuatro in 2010.

In addition to the mineral rights, Endeavour Silver has agreements with various private ranch owners and local ejidos (El Hacho and San Pedro) that provide access for exploration and exploitation purposes.

It is not known if the indigenous peoples or the Spanish colonists first began mining in the Guanaceví district but mining extends back to at least 1535 when the mines were first worked by the Spanish. By the start of the 18th century, Guanaceví had become an important mining centre in the Nueva Vizcaya province of Nueva España (New Spain), as reported by Alexander von Humboldt in his travels through Nueva España. However, the Guanaceví mining district is not as well known today.

The Guanaceví mining district and the Guanaceví Mines Project area are riddled with mine openings and old workings, in a somewhat haphazard fashion near surface, representing the earliest efforts at extraction, and more systematic at depth, which is indicative of later, better organized and engineered mining. Associated with these openings and workings is a number of ruins, which represent the mine buildings, chapels and residences of the inhabitants and indicate the wealth of the mining district during its past. The vast bulk of the material which has been extracted from underground operations through the tunnels, shafts and winzes is scattered over the hillsides in waste dumps and beneath the foundations of the ruins and modern buildings. Historically, individual veins or deposits had separate owners and, in the case of some of the larger veins or deposits, had several owners along the strike length which resulted in a surfeit of adits and shafts and very inefficient operations.

During the late sixteenth century silver production accounted for 80% of all exports from Nueva España, although, by the mid-seventeenth century, silver production collapsed when mercury, necessary to the refining process, was diverted to the silver mines of Potosí in present day Bolivia. Collapse of the seventeenth century mining led to widespread bankruptcy among the miners and hacienda owners; however, in the latter half of the seventeenth century silver mining began to recover in Nueva España. By the start of the 18th century, Guanaceví had become an important mining centre in the Nueva Vizcaya province.

The peasant uprisings of 1810 to 1821 were disastrous to the Mexican mining industry with both the insurgents’ soldiers and royalist troops all but destroying the mining production in Mexico, and the Guanaceví mining district was not spared during this period.

The district has experienced several periods of bonanza-grade production, including the operation of a mint in 1844. The Guanaceví mining district, however, reached its greatest period of activity at the start of the 20th century, when five processing plants were in operation and more than 15 mines were in production.

J.R. Southworth, in his 1905 volume entitled “The Mines of Mexico”, mentions that Guanaceví is a very rich district and “that many of the largest capitalists of New York have enormous interests in its mines”. Southworth mentions that the Barradán, Hacienda Wilson, El Carmen, Nueva Australia and Hacienda Avila were all good mines and properties within the Guanaceví mining district. However, Southworth also mentioned that “considering the large number of once famous properties in Guanaceví, there are comparatively few now in operation. The cessation of development has been due to various causes, though usually not from lack of ore.”

The vast majority of production came prior to the 1910 Mexican Revolution with the Guanaceví mining district being known for its high silver grades. Previous reports noted that the official production records indicate that a total value of 500 million pesos, or approximately 500 million ounces of silver and silver equivalents, with a present day value of about US $3.25 billion, had been extracted from this mining district. This makes the Guanaceví district one of the top five silver mining districts in Mexico on the basis of past production.

The extent of historical exploration on the property is relatively unknown. Prior to management by Endeavour Silver, production was coming from three mines without the benefit of any systematic exploration drilling, geological mapping or mine planning.

The rock types of the district can be grouped into three principal stratigraphic groups based on Consejo de Recursos Minerales stratigraphic studies. The Guanaceví conglomerate at the base overlain by the Lower Volcanic Unit which in turn is overlain by the Upper Volcanic Unit.

The Guanaceví conglomerate, the oldest unit in the district (Upper Jurassic or Lower Cretaceous), is a 450m thick polymictic basal conglomerate composed of angular to subangular fragments of quartz and metamorphic rocks set in a sandy to clayey matrix within sericitic and siliceous cement.

The Guanaceví conglomerate is overlain by the package of intermediate volcanics, the Lower Volcanics, a loosely-defined package of andesitic flows and volcaniclastic sediments correlated with Eocene volcanism. As observed in rocks that host Porvenir and Santa Cruz mine workings, the andesite occurs as a pale green to nearly black volcanic flow. The sequence of rock types in the Lower Volcanics is a coarsening-upward series of volcaniclastic sediments capped by an andesite flow.

Rhyolite is the Upper Volcanic Unit and caps the lower volcanic andesite. The thickness of the Upper Volcanic unit appears to exceed 300m.

The Guanaceví mineral deposits occur as an epithermal low sulphidation, quartz-carbonate, fracture-filling vein hosted by a structure that trends approximately N45°W and dips 55° southwest. The fault and vein comprise a structural system referred to locally as the Santa Cruz vein structure or Santa Cruz vein fault. The Santa Cruz vein itself has been traced for 5 km along the trend and averages approximately 3.0 m in width. High-grade mineralization in the system is not continuous, but occurs in steeply northwest-raking shoots up to 200 m in strike length. A second vein is located sub-parallel and subjacent (located in the footwall) to the Santa Cruz vein but is less continuous. The footwall vein is economically significant in the Porvenir Dos zone and in the northern portion of deep North Porvenir.

The Santa Cruz vein is a silver-rich structure with lesser amounts of gold, lead and zinc. Based on historic production, mineralization has averaged 500 grams per tonne (g/t) silver and 1 g/t gold over a 3 m true width. The minerals encountered are argentite-acanthite with limited gold, galena, sphalerite, pyrite and manganese oxides. Gangue minerals noted are barite, rhodonite, rhodochrosite, calcite, fluorite and quartz. The mineralization down to Level 6 in the Santa Cruz mine is mainly oxidized with a transition zone of oxides to sulphides occurring between Levels 6 to 8, although some sulphide ore was mined above Level 6. Mineralization exhibits evidence of episodic hydrothermal events which generated finely banded textures. High-grade mineralization in the district is commonly associated with multiple phases of banding and brecciation. In the Porvenir Dos area and in the deeper portion of North Porvenir, a footwall-hosted vein is associated with the Santa Cruz vein structure. In both areas, this footwall vein is either within Guanaceví Formation footwall rocks or is at the structural contact between the Guanaceví Formation and Lower Volcanic Sequence andesite. It is banded to brecciated quartz plus carbonate and contains local scatterings (< 1%) of sulphides (pyrite>sphalerite >galena>chalcopyrite) and rare pods (< 50 cm) of sulphides.

Since taking over in 2004 and to December 31, 2013, Endeavour Silver has completed 608 diamond drill holes totalling 169,242m and 22 reverse circulation drill holes totalling 2,977 m on the entire Guanaceví Mines Project. More than 46,555 samples have also been collected and submitted for assay.

Of this total, approximately 125,843m of diamond drilling in 422 holes have been completed on the Santa Cruz vein structure. Holes were drilled from both surface and underground drill stations.

Underground drilling in 2013 was limited to definition drilling within the Santa Cruz Mine.

In 2013, Endeavour Silver spent US $1,814,212 (including property holding costs) on exploration activities mainly in the Milache area. Twenty surface core holes were drilled for 10,437m and 1,928 samples were submitted for assay.

During 2013, surface geological mapping and sampling was conducted by Endeavour Silver on the Guanaceví Property, focusing, from North to South, in the San Pedro (El Cambio-PP), Milache, El Rocio and Santa Cruz South.

Regionally, a total of 17 Regional Exploration Targets were defined in a radius of approximately 70 km around the Guanaceví Mines Project, to review the potential of mineralization in the municipalities of Guanaceví, Tepehuanes, San Bernardo and El Oro.

In 2014, in order to reinforce the operating areas, Endeavour Silver plans to develop the surface diamond drilling program in the Santa Cruz South Zone, and also to explore the zone between Porvenir North and Santa Cruz with an underground drilling program. Also detailed mapping and sampling activities are planned for the footwall of the Santa Cruz vein zone, between the Pelayo and Rocio veins. Regionally, several new prospective targets near the Guanaceví District will continue to be investigated.

Table 1-1 summarizes the planned 2014 exploration budget for the Guanaceví Mines Project.

The mineral resources for the Guanaceví Mines Project as of December 31, 2013 are summarized in Table 1-2. Resources are exclusive of the mineral reserves.

Table 1-2
Mineral Resource Estimate, Effective Date December 31, 2013
Michael Munroe, SME Registered Member

Resources are diluted to a minimum mining width of 1.80m. Assumed metal prices are $1420 per ounce for gold and $24.20 per ounce for silver. Resource blocks above a cut-off of 100 g/t silver equivalent are considered for inclusion in resources. Silver equivalent is calculated with a factor of 60:1 gold:silver.

Resources for the mining areas (Santa Cruz, Porvenir North and Porvenir Cuatro) of the Guanaceví Mines Project were estimated using both 2D polygonal and 3D modeling techniques, specifically inverse distance cubed (ID3). Blocks within the developed mine were estimated using 2D polygonal methods rather than 3D models Areas defined by drilling were estimated using 3D models.

Resources for the exploration areas (San Joaquin, La Blanc-Mi Niña and Epsilon-Soto) have been carried forward from the December 15, 2013, estimates, as there has been no change since that time. Resources for the Milache Project were estimated by Endeavour Silver using the 3D IDW modeling technique.

Mineral resources were classified on the basis of the location of blocks relative to the data used to estimate the grade according to the following criteria.

For resources based on chip sample data, Measured Resources are projected a maximum of 10m from sample data or halfway to adjacent data points, whichever is less.

For polygonal based drillhole defined resources, (exploration holes), Measured Resources are based on drill intercepts spaced at between 10 and 25m. There are currently no Measured Resource blocks defined only by drilling at Guanaceví dude to sample spacing Indicated Resources are projected a maximum of 35m from sample data or halfway to adjacent data points, including development, chip samples or drill hole intercepts, whichever is less.

For polygonal based drillhole defined resources, (exploration holes), Indicated Resources are defined as the area based on a 25m radius around a drill hole.

Inferred mineral resources are those blocks/areas where confidence in the estimate is insufficient to enable an evaluation of the economic viability worthy of public disclosure.

Inferred Resources within operational areas are outlined and estimated based on the mine's interpretation and confidence in the historical sampling results. Inferred resources are based on drill intercepts spaced at between 35 and 70m depending on the structural complexity and geological continuity.

For polygonal based drillhole defined resources, (exploration holes), Inferred are defined as the area based on a 50m radius around a drill hole.

The mineral reserves for the Guanaceví Mines project as of December 31, 2013 are summarized in Table 1-3.

Table 1-3
Mineral Reserve Estimate, Effective Date December 31, 2013,
Michael Munroe, SME Registered Member

Resource blocks are diluted to a minimum mining width of 1.8m. Assumed metal prices are $1320 per ounce for gold and $22 per ounce for silver. Resource blocks above a cut-off of 217 g/t silver equivalent are considered for inclusion in resources. Dilution is applied at a constant 15% after being diluted to the minimum mining width. Silver equivalent is calculated with a factor of 60:1 gold:silver. Silver and gold recoveries are 74.7% and 82.1% respectively.

Mineral reserves are derived from measured/indicated resources after applying the economic parameters stated above. The Guanaceví reserves have been derived and classified according to the following criteria:

Since January 1, 2007, Endeavour Silver has been in control of the day-to-day mining operations at the Guanaceví Mines Project. Endeavour Silver assumed control of the mining operations from a local mining contractor in order to allow for more flexibility in operations and to continue optimizing the costs.

On December 31, 2013, the Guanaceví Mines Project had a roster of 446 employees. The mine operates on two 10-hour shifts, 7 days a week, whereas the mill operates on a 24/7 schedule.

A conventional cut and fill mining method is employed with the stopes generally 150m long and 20m high. Access to the stoping areas is provided by a series of primary and secondary ramps located in the footwall. The ramps have grades from minus 15% to plus 12%, with plus or minus 12% as standard. The cross-sections are 4m by 4m for the primary ramps and 3.5m by 3.5m for the secondary ramps.

In the lower parts of the mine, stope access is by 90 m long cross-cuts to the vein/stope. The cross-cuts are generally 3.0m by 3.5m in cross-section and are driven at plus 1% to intersect the stope (for water drainage). As the stope advances up-dip on the vein, the back is taken down in these cross-cuts to maintain access until the cross-cut reaches a maximum inclination of plus 15%.

For the year ending December 31, 2013, silver production was 2,772,227 oz and gold production was 6,784 oz. Plant throughput for 2013 was 435,922 tonnes at an average grade of 253 g/t silver and 0.60 g/t gold. In 2013, mill recoveries averaged 78.2% for silver and 80.7 % for gold.

The mill was originally built in 1970 by the Mexican government and designed to custom mill ores from various mines in the district. The mill has undergone a number of upgrades since 1970, and further upgrades since Endeavour Silver took over the day-to-day operations.

In 2013 the mill processed ore from the mines of Porvenir Cuatro, Porvenir Dos, Porvenir North, and Santa Cruz, as well as purchased (third party) ore. In 2011, the grinding circuit had an average capacity of 1,000 t/d. The metallurgical complex continued to process the Guanajuato flotation concentrate in 2011, 2012, and during the first quarter of 2013. In 2013, the grinding circuit had an average capacity of 1,200 t/d.

Endeavour Silver has no contracts or agreements for mining, smelting, refining, transportation, handling or sales, that are outside of normal or generally accepted practices within the mining industry. Endeavour Silver has a policy on not hedging or forward selling any of its products. Endeavour Silver produces doré silver-gold bars which it then ships for further refining at Penoles facility in Torreon. Then the refined metal is sold through Auramet on the London metal exchange.

Endeavour Silver holds all necessary environmental and mine permits to conduct planned exploration, development and mining operations on the Guanaceví Mines Project.

The cash operating cost of silver produced at the Guanaceví Mines project in fiscal year 2013 was $ 14.32 per oz, compared to $12.25 in 2012. Cash operating cost per ounce of silver is calculated net of gold credits and royalties. On a per tonne of ore processed basis, the cash operating costs in 2013 averaged US $ 110.93 per tonne, compared to US $103.82 in 2012 and US $100.35 in 2011.

For 2014, Endeavour Silver is forecasting production of 2,617,747 ounces of silver and 7,702 ounces of gold from the Guanaceví Mines project. Plant throughput for 2014 is forecast at 443,300 t at an estimated average grade of 246 g/t silver and 0.66 g/t gold. Recoveries are forecast to average 74.7 % and 82.1% for silver and gold, respectively. Plant throughput is based on production from the Porvenir North, Porvenir Cuatro and Santa Cruz mines.

The property has substantial resource potential. Beyond 2014, Endeavour Silver believes that continued exploration and development will lead to the discovery of new resources.

Endeavour Silver actively continues acquiring rights to new properties in the Guanaceví district.

The QP considers the Guanaceví resource and reserve estimates presented in this report follow the current CIM standards and definitions for estimating resources and reserves, as required under NI 43-101 “Standards of Disclosure for Mineral Projects.” These resources and reserves form the basis for Endeavour Silver’s ongoing mining operations at the Guanaceví Mines Project.

The QP is unaware of any significant technical, legal, environmental or political considerations which would have a negative effect on the extraction and processing of the resources and reserves located at the Guanaceví Mines Project. Mineral resources which have not been converted to mineral reserves, and do not demonstrate economic viability, shall remain mineral resources.

The QP considers that the mineral concessions in the Guanaceví mining district controlled by Endeavour Silver are highly prospective both along strike and down dip of the existing known mineralization, and that further resources could be converted into reserves with additional exploration and development especially in and around the Santa Cruz Mine.

Endeavour’s Regional Exploration unit has at their disposal modern exploration techniques that were not available to previous exploration and mining companies that worked the district. With many new discoveries in the area, some of which are currently in production, Endeavour has shown that applying modern concepts and techniques greatly enhances the likelihood of success.

Therefore, the QP is of the belief that with Endeavour’s continued commitment to regional exploration within the district, the potential for the discovery of deposits of similar character and grade, as those that are currently in operation, along with those past producers remains optimistic.

Exploration in the Guanaceví District is ongoing. Endeavour’s exploration programs have been successful over the past several years outlining several new resources of which the Milache resource is the most recent. The QP recommends that exploration continue and that budgeted exploration plans discussed in Section 26.1 be executed.

The QP recommends that modeling parameters and procedures be regularly reviewed to develop better estimation plans.

This technical report is an update of the mineral resource estimates for the mines and exploration properties that are part of the Guanaceví Mines Unit of Endeavour Silver Corp. in Guanaceví, Durango State, Mexico.

This report forms an update to the report titled “NI 43-101 Technical Report Resource and Reserve Estimates for the Guanaceví Mines Project Durango State Mexico” dated March 20 2013. This report was prepared by Micon International Limited in Toronto, Ontario, Canada.

This Technical Report has been prepared by Endeavour Silver Corp. (EDR) in accordance with the disclosure requirements of Canadian National Instrument 43-101 (NI 43-101) to disclose recent information about the Guanaceví Mines Project. This information has resulted from additional underground development, sampling, exploration drilling, and includes updated Mineral Resource and Reserve estimates.

Endeavour Silver Corp. is a Canadian based mining and exploration company active in Mexico. Endeavour is based in Vancouver, British Columbia with management offices in Leon, Mexico and is listed on the Toronto (TSX:EDR), New York (NYSE:EXK) and Frankfurt (FSE:EJD) stock exchanges. The company operates three units consisting of several independent mines, the Guanaceví Unit in northwest Durango State, The Bolañitos Unit and the Del Cubo Unit both located in Guanajuato State near the city of Guanajuato.

Total 2013 metal production from Endeavour Silver Corp’s operations was 6,813,069 oz Ag, 75,578 oz Au, from 1,537,984t of ore equating to 11,347,749 oz AgEq at a consolidated cash cost of US $7.87/oz Ag.

Endeavour Silver Corp. has been a “producing issuer” since 2004. Pursuant to section 5.3.2 of National Instrument (NI 43-101), Endeavour Silver Corp., as a “producing issuer”, with respect to mineral resource and mineral reserve reporting to Canadian securities authorities, the company is not required to commission an independent Qualified Person to write the technical report.

The mines located at EDR’s Guanaceví Unit is the subject of this technical report. The primary purpose of this new Technical Report is to describe the updated Mineral Resources and Reserves as of December 31, 2013 as well as to detail production at the mine during 2013.

The Qualified Person (QP), as defined in NI 43–101 and in compliance with Form 43–101F1 Technical Report, responsible for the preparation of the Report is Mr. Michael J. Munroe, Registered Member, Society of Mining Engineers #4151306RM.

Mr. Munroe acted as project manager during preparation of this report, and is responsible for report Sections 1 through 28.

Endeavour Silver staff provided input to the report, under the supervision of Mr. Munroe.

Drill data and information on the mining operation is current to 31 December, 2013.

There were no material changes to the data, models or technical information on the Guanaceví Mines Property between the effective date and the signature date of the Report.

All currency amounts are stated in US dollars or Mexican pesos (MXP), as specified, with costs and commodity prices typically expressed in US dollars.

Quantities are generally stated in Système International d’Unités (SI) units, the standard Canadian and international practice, including metric tons (tonnes, t) and kilograms (kg) for weight, kilometres (km) or metres (m) for distance, hectares (ha) for area, grams (g) and grams per metric tonne (g/t) for gold and silver grades (g/t Au, g/t Ag). Wherever applicable, any Imperial units of measure encountered have been converted to SI units for reporting consistency. Precious metal grades may be expressed in parts per million (ppm) or parts per billion (ppb) and their quantities may also be reported in troy ounces (ounces, oz), a common practice in the mining industry. Base metal grades may be expressed as a percentage (%). Table 2-1 provides a list of the various abbreviations used throughout this report. Appendix A contains a glossary of mining terms.

The exchange rate as of the Report effective date of December 31, 2013 was approximately US$1.00 equal to MXP13.10.

Name	Abbreviations	Name	Abbreviations
arithmetic average of group of samples	mean	Milligram(s)	mg
atomic absorption	AA	Millimetre(s)	mm
BSI Inspectorate	BSI	Million metric tonnes per year	Mt/y
Canadian Institute of Mining, Metallurgy and Petroleum	CIM	Million ounces	Moz
Canadian National Instrument 43-101	NI 43-101	Million tonnes	Mt
Carbon-in-leach	CIL	Million years	Ma
Centimetre(s)	cm	Minera Capela S.A de C.V.	Minera Capela
Comisión de Fomento Minero	Fomento Minero	Minera Planta Adelente S.A. de C.V.	Minera Planta Adelente
Copper	Cu	Minera Santa Cruz y Garibaldi S.A. de C.V.	Minera Santa Cruz
Copper	Cu	Minera Santa Cruz y Garibaldi S.A. de C.V.	Minera Santa Cruz
Cubic feet per minute	cfm	Nearest Neighbor	NN
Day	d	Net present value	NPV
Degree(s)	o	Net smelter return	NSR
Degrees Celsius	oC	North American Datum	NAD
Digital elevation model	DEM	Not available/applicable	n.a.
Dirección General de Minas	DGM	Ordinary Kriging	OK
Dirección General de Minas	DGM	Ordinary Kriging	OK

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	UNIDAD GUANACEVI
	DURANGO, DGO, MEXICO
	NI 43-101 TECHNICAL REPORT

Dollar(s), Canadian and US	$, CDN $ and US $	Ounces (troy)	oz
Endeavour Silver Corp	Endeavour Silver	Ounces per year	oz/y
Endeavour Silver Gold S.A de C.V.	Endeavour Silver Gold	Parts per billion	ppb
Feet = 0.3048 metre	ft. or (')	Parts per million (= g/t)	ppm
Global Positioning System	GPS	Percent(age)	%
Gold	Au	Potassium-Argon (referring to age date technique)	K-Ar
Gram (1g = 0.001 kg)	g	Pounds per square inch	psi
Grams per metric tonne	g/t	Qualified Person	QP
Greater than	>	Quality Assurance/Quality Control	QA/QC
Grupo Peñoles	Peñoles	Range Consulting Group, LLC	Range Consulting
Hectare(s)	ha	Robust relative standard deviation	RSD
Horsepower	hp	Rock Quality Designation	RQD
Inches, 2.42 cm	in or (")	Second	s
Internal rate of return	IRR	Silver	Ag
Inverse Distance Weighted	IDW	Specific gravity	SG
Kilogram(s)	kg	SRK Consulting Limited	SRK
Kilometre(s)	km	Standard Reference Material	Standard
Kilovolt-amps	Kva	System for Electronic Document Analysis and Retrieval	SEDAR
Lead	Pb	Système International d’Unités	SI
Less than	<	Tonne (metric)	t
Litre(s)	l	Tonnes (metric) per day	t/d, tpd
Megawatt	Mw	Tonnes (metric) per month	t/m
Metalurgica Guanaceví S.A. de C.V.	Metalurgica Guanaceví	Universal Transverse Mercator	UTM
Metalurgica Guanaceví S.A. de C.V.	Metalurgica Guanaceví	Universal Transverse Mercator	UTM
Metre(s)	m	Year	y
Mexican Peso	mxp	Zinc	Zn

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	UNIDAD GUANACEVI
	DURANGO, DGO, MEXICO
	NI 43-101 TECHNICAL REPORT

2.5

Information Sources and References

Information used to support this Technical Report is based on previously published material, historical documents, professional opinion, geological maps and reports, technical papers and published government reports listed in Section 27, (References) of this Technical Report, Endeavour Silver’s history and experience as a producer in Mexico, as well as unpublished material provided by Endeavour Silver.

Sources of data include diamond drilling, downhole surveys, underground chip sampling and underground survey data.

Sources of data also include actual and historic mining and processing production.

2.6

Previous Technical Reports

Endeavor Silver has filed the following technical reports for the Guanaceví Unit:

Lewis, W.J., Murahwi, C., and San Martin, A,J., (2013), NI 43-101 Technical Report Resource and Reserve Estimates for the Guanaceví Mines Project, Durango State, Mexico: unpublished NI 43-101 technical report prepared by Micon International for Endeavour Silver, effective date December 15, 2012.

Lewis, W.J., Murahwi, C., and San Martin, A,J., (2012), NI 43-101 Technical Report Resource and Reserve Estimates for the Guanaceví Mines Project, Durango State, Mexico: unpublished NI 43-101 technical report prepared by Micon International for Endeavour Silver, effective date December 31, 2011.

Lewis, W.J., Murahwi, C., Leader, R.J. and Mukhopadhyay, D.K., (2011), NI 43-101 Technical Report Audit of the Resource and Reserve Estimates for the Guanaceví Mines Project, Durango State, Mexico: unpublished NI 43-101 technical report prepared by Micon International for Endeavour Silver, effective date December 31, 2010.

Lewis, W.J., Murahwi, C., Leader, R.J. and Mukhopadhyay, D.K., (2010), NI 43-101 Technical Report Audit of the Resource and Reserve Estimates for the Guanaceví Mines Project, Durango State, Mexico: unpublished NI 43-101 technical report prepared by Micon International for Endeavour Silver, effective date December 31, 2009.

Lewis, W.J., Murahwi, C., Leader, R.J. and Mukhopadhyay, D.K., (2009), NI 43-101 Technical Report Audit of the Resource and Reserve Estimates for the Guanaceví Mines Project, Durango State, Mexico: unpublished NI 43-101 technical report prepared by Micon International for Endeavour Silver, effective date December 31, 2008.

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	UNIDAD GUANACEVI
	DURANGO, DGO, MEXICO
	NI 43-101 TECHNICAL REPORT

Devlin, B.D., (2008), NI 43-101 Technical Report on the Resource and Reserve Estimates for the Guanaceví Mines Project, Durango State, Mexico: unpublished NI 43-101 technical report prepared by B. Devlin, V.P. Exploration for Endeavour Silver, effective date December 31, 2007.

Lewis, W.J. Leader, R.J. and Mukhopadhyay, D.K., (2007), NI 43-101 Technical Report Audit of the Resource and Reserve Estimates for the Guanaceví Mines Project, Durango State, Mexico: unpublished NI 43-101 technical report prepared by Micon International for Endeavour Silver, effective date December 31, 2006.

Olson, A. E., (2006), Technical Report, Mineral Resource and Minera Reserve Estimate, Guanaceví Mines Project, Durango, Mexico for Endeavour Silver, : unpublished NI 43-101 technical report prepared by Range Consulting for Endeavour Silver, effective date March 31, 2006.

Spring, V., (2005), A Technical Review of the North Porvenir Zone, Santa Cruz Mine, Guanaceví Mines Project in Durango State, Mexico: unpublished NI 43-101 technical report prepared by Watts, Griffis, McOuat for Endeavour Silver, effective date May 10, 2005.

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3.0

RELIANCE ON OTHER EXPERTS

This report has been prepared in-house by Endeavour Silver. The information, conclusions, opinions, and estimates contained herein are based on:

	•	Internal information available at the time of preparation of this report,
	•	Assumptions, conditions, and qualifications as set forth in this report, and
	•	Data, reports, and other information available from the Guanaceví Mines operations and other third party sources.

The QP, while taking full responsibility for the report content, recognizes the support of:

	•	Luis Castro, VP Exploration,
	•	Elkin Ceballos, Chief Geologist,
	•	Abyl Sydykov, Corporate Metallurgist.

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4.0

PROPERTY DESCRIPTION AND LOCATION

Since January, 2005, the Guanaceví Mines Project has been owned and operated by wholly owned subsidiary companies of Endeavour Silver of Vancouver, Canada.

4.1

Location

The Guanaceví Mines Project is located in the northwest portion of the Mexican state of Durango near its border with the state of Chihuahua, as shown in Table 4-1. The project is located 3.6 km from the town of Guanaceví, approximately 260 km northwest of the city of Durango, which is the state capital. The town of Guanaceví also gives its name to the mining district which surrounds it.

The Guanaceví Mines Project is located at the approximate UTM coordinates of 401250 east and 2866500 north in zone 14 NAD 27, or 105°58'20"W longitude and 25°54'47"N latitude.

4.2

Ownership and Property Description

The Guanaceví Mines Project consists of an industrial complex that includes underground silver-gold mines and a cyanidation ore processing plant in the Guanaceví mining district, Durango State, México.

The Guanaceví Mines Project is located in the Guanaceví mining district which covers an area measuring approximately 5 km northeast-southwest by 10 km northwest-southeast and contains more than 50 silver-gold mines. Although only three of the mines are presently operating, there is considerable mining experience available in the area.

Currently, the Guanaceví Mines Project operates at 1300 t/d. This Technical Report describes current operating conditions and future projections as planned by Endeavour Silver. Since acquiring the property, Endeavour Silver has initiated an aggressive program of exploration, mine preparation, cyanidation plant improvement and equipment replacement.

Endeavour Silver’s primary short-term goal at Guanaceví is to invest in mine development and plant improvements in order to steadily increase production. Endeavour Silver’s longer term goals are to invest in exploration, find new higher grade orebodies and, if successful, evaluate the potential for further plant expansion.

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Endeavour Silver’s management recently prepared a 2014 production and exploration forecast, based on a new mine plan and new exploration targets.

4.3

Mineral Tenure

Endeavour Silver holds the Guanaceví Mines project through its 100% owned Mexican subsidiary Endeavour Gold Corporation S.A. de C.V. (Endeavour Gold). Endeavour Gold holds the project through its two 100% owned subsidiaries Minera Plata Adelante S.A. de C.V. (Minera Plata Adelante) and Refinadora Plata Guanaceví S.A. de C.V. (Refinadora Plata Guanaceví). At present, the project is comprised of 51 mineral concessions. See Figure 4-1 for a concession map of the Guanaceví Mines Project and Table 4-1 for relevant information regarding the individual concessions. The mineral concessions are not all contiguous and vary in size, for a total property area of 4,096.1056 ha. The annual 2014 concession tax for the Guanaceví Properties is estimated to be approximately 407,856 Mexican pesos (pesos), which is equal to about US $31,374 at an exchange rate of 13.00 pesos to US $1.00.

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Figure 4-1 Guanaceví Mines Project, Mineral Concessions Map

Table 4-1
Guanaceví Mines Concessions Controlled by Endeavour Silver

Concession Name	Title Number	Term of Mineral Concession		Hectares	2014 Annual Taxes (pesos)
		From	To		1st Half	2nd Half
		From	To		1st Half	2nd Half
Santa Cruz Dos	191773	19/12/1991	18/12/1941	113.5387	16,996	16,996
El Pelayo Y Anexas	193392	19/12/1991	18/12/1941	56.2519	8,420	8,420
Unif. Santa Cruz	186577	24/04/1990	23/04/1940	28.5896	4,279	4,279
San Guillermo	179601	11/12/1986	10/12/1936	5	749	749
Unificacion Flora	189233	5/12/1990	4/12/1940	36.5506	5,471	5,471
San Marcos	185486	14/12/1989	13/12/1939	5.5469	830	830
San Vicente	187020	29/05/1990	28/05/1940	8	1,198	1,198
Nuestra Senora	185412	14/12/1989	13/12/1939	5.6	839	839
San Pedro Uno	191143	29/04/1991	28/04/1941	49.8437	7,461	7,461
El Porvenir Dos	161449	10/4/1975	9/4/2025	30	4,491	4,491
La Sultana	162915	8/8/1978	7/8/2028	11.5889	1,735	1,735
El Milache	163509	10/10/1978	9/10/2028	42.8866	6,420	6,420
Veronica	167013	11/8/1980	10/8/1980	11.7648	1,762	1,762
El Desengaño	187018	29/05/1990	28/0540	19.4747	2,915	2,915
El Calvario	191733	19/12/1991	18/12/1941	1.3098	196	196
Elizabeth	180568	13/06/1987	12/6/1937	16.9973	2,544	2,544
El Rocio	227665	28/07/2006	27/07/1956	51.2334	4,358	4,358
La Brisa 3	236564	16/07/2010	15/07/1960	715.8666	15,136	15,136
La Gloria	238353	23/09/2011	22/09/1961	309.9369	3,169	3,169
La Brisa 4	240296	16/05/2012	15/05/1962	1584.4986	16,200	16,200
La Brisa 4, Fracc.	239873	29/02/2012	28/02/1962	51.8008	530	530
La Brisa 5	239874	29/02/2012	28/02/1962	214.6744	2,195	2,195
Ampl. Al Bajo Del Nvo. P.	184074	15/02/1989	14/02/1939	7.3062	1,093	1,093
La Mazatleca	186475	2/4/1990	1/4/1940	14.1797	2,123	2,123
La Guirnalda	187771	17/09/1990	16/09/1940	46.7611	7,000	7,000
La Guirnalda 2	219707	3/4/2003	2/4/1953	5.9915	896	896
San Pablo	216716	28/05/2002	27/05/1952	3.3972	509	509
Ana Maria	214167	18/08/2001	17/01/1951	3.232	484	484
El Martir	215925	2/4/2002	1/4/1952	8.8675	1,327	1,327
Ampl. Del Soto	191987	19/12/1991	18/12/1941	3.9998	599	599
IDA	191659	19/12/1991	18/12/1941	4.9086	734	734
Epsilon	195079	25/08/1992	24/08/1942	7.0622	1,057	1,057
El Terremoto	193869	19/12/1991	18/12/1941	12	1,796	1,796
Alajaa	183881	23/11/1988	22/11/1938	11.205	1,678	1,678
Barradon 7	214162	18/08/2001	17/01/1951	37.1376	5,560	5,560
Santa Isabel	204725	25/04/1997	24/04/1947	84	12,574	12,574
Noche Buena	167563	26/11/1980	25/11/1930	79.8962	11,959	11,959
El Porvenir Cuatro	168105	13/02/1981	12/2/1931	30	4,491	4,491
La Brisa	224158	19/04/2005	18/04/1955	25.5518	2,173	2,173
El Cambio	205475	17/09/1997	16/09/1947	11.9962	1,796	1,796
La Onza	211502	30/05/1991	29/05/1941	18.2376	2,730	2,730
San Nicolas	191543	19/12/1991	18/12/1941	4.4838	671	671
Ampl. de San Nicolas	191675	19/12/1991	18/12/1941	2.5934	388	388
La Brisa	231786	22/04/2008	23/04/1958	33	1404	1404
La Brisa 2	234301	12/6/2009	12/6/1959	57	1,205	1,205
Santa Cruz Ocho	215911	19/03/2002	18/03/1952	165.628	24,793	24,793
El Pelayo	219709	3/4/2003	2/4/1953	5.8881	881	881
El Aguaje De Arriba	170158	17/03/1982	16/03/1932	5	749	749
A. El Aguaje De Arriba	170159	17/03/1982	16/03/1932	7	1,048	1,048
La Plata	170156	17/03/1982	16/03/1932	2	300	300
La Prieta	148479	29/10/1967	28/10/2017	7	1,048	1,048
San Fernando	160545	23/08/1979	22/08/2029	19.8279	2,968	2,968
Totals				4,096.11	203,928	203,928

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In Mexico, since 2005 there is only one type of mining concessions which is valid for 50 years and is extendable provided that the application is made within the five-year period prior to the expiry of the concession and the bi-annual fee and work requirements are in good standing. All new concessions must have their boundaries orientated astronomically north-south and east-west, and the lengths of the sides must be one hundred metres or multiples thereof, except where these conditions cannot be satisfied because they border on other mineral concessions. The locations of the concessions are determined on the basis of a fixed point on the land, called the starting point, which is either linked to the perimeter of the concession or located thereupon. Prior to being granted a concession, the company must present a topographic survey to the Dirección General de Minas (DGM) within 60 days of staking. Once this is completed, the DGM will usually grant the concession. Most of the exploitation concessions which comprise the Guanaceví Mines Project are surveyed but do not have their boundaries orientated astronomically north-south and east-west because the concessions predate the introduction of this legislation.

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For the concessions to remain in good standing, a bi-annual fee must be paid (January and July) to the Mexican government and two reports must be filed in January and May of each year which covers production and any work accomplished on the property between January and December of the preceding year.

4.3.1

Property Agreements

Endeavour Silver has executed a number of agreements regarding the acquisition of the mineral properties, mining rights and processing facility which comprise Guanaceví Mines Project. The details of the agreements were extensively reported in the April 16, 2007, April 15, 2008, March 18, 2009, March 15, 2010, March 15, 2011, March 30, 2012 and March 27, 2013 Micon Technical Reports, along with the March 31, 2006, Technical Report by Range Consulting.

All obligations of these agreements have been completed, with the exception of the La Brisa Agreement.

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4.3.1.1.

La Brisa and Brisa 2 Option Agreement

The option agreement requires Endeavour Silver to make US $220,000 in cash payments over a 3 year period.

The La Brisa concession optioned in the southern part of the Guanaceví district is different from the La Brisa concession of the same name, acquired along with Porvenir Cuatro in 2010.

4.3.1.2.

Royalties

Due to the different agreements that Endeavour Silver made to obtain the mining concessions that comprises the Guanaceví Property, to date the following royalties are current:

Table 4-2
Summary of Endeavour Silver’s Royalties

Agreement	NSR	Concession Name	Title Number	Hectares
Minera Las Albricias	1%	Ampl. Al Bajo Del Nvo. P.	184074	7.3062
		La Mazatleca	186475	14.1797
		La Guirnalda	187771	46.7611
		La Guirnalda 2	219707	5.9915
		San Pablo	216716	3.3972
		Ana María	214167	3.232
		El Martir	215925	8.8675
		Ampl. Del Soto	191987	3.9998
		Ida	191659	4.9086
		Epsilon	195079	7.0622
		El Terremoto	193869	12
		Alajaa	183881	11.205
		Barradon 7	214162	37.1376
		Santa Isabel	204725	84
		Noche Buena	167563	79.8962
Minera Capela	3%	Santa Cruz Dos	191773	113.5387
Minera Capela	3%	El Pelayo y Anexas	193392	56.2519
		Unif. Santa Cruz	186577	28.5896
		San Guillermo	179601	5
		Unificación Flora	189233	36.5506
		San Marcos	185486	5.5469
		San Vicente	187020	8
		Nuestra Señora	185412	5.6
		San Pedro Uno	191143	49.8437

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4.3.2

Access Agreements

In addition to the mineral rights, Endeavour Silver has agreements with various private ranch owners and two local ejidos (El Hacho and San Pedro) that provide access for exploration and exploitation purposes. Table 4-3 summarizes the surface access rights as at December 31, 2013.

Table 4-3
Summary of Endeavour Silver’s Surface Access Rights

Owner	Area Name	Validity	Term	Drill Pads (pesos)	Annual Payment (pesos)


Comunidad De San Pedro	San Pedro	4 Years	10/10/2012 - 2016	8,000	None
Ejido Arroyo Del Hacho	Guanaceví	15 Years	27/11/2005 - 2020	None	10000
Ejido La Soledad	La Brisa	5 Years	26/06/2011 - 2016	6,000	None
Alfonso Flores Varela	La Brisa	5 Years	15/06/2011 - 2016	7000	None
Taurino Cisneros Haros	La Brisa	5 Years	16/06/2011 - 2016	7,000	None

4.4

Licenses, Permits and Environment

Endeavour Silver reports that it is in compliance with monitoring environmental aspects and with applicable safety, hygiene and environmental standards.

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4.5

Environment

Endeavour Silver holds all necessary environmental and mine permits to conduct planned exploration, development and mining operations on the Guanaceví Mines Project. Further details are covered in Section 20 of this report.

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5.0

ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE, AND PHYSIOGRAPHY

5.1

Accessibility

The Guanaceví Property is readily accessible from the city of Durango, capital of the Mexican state of Durango, via paved roads. Access is primarily gained by taking Mexican State Highway 45 north to the town of Canatlan, then continuing along the paved highway that connects to Santiago Papasquiaro, then to Tepehuanes, and ending at the town of Guanaceví. The total distance between Durango and the town of Guanaceví is approximately 260 km and requires about four and one half hours to drive. Guanaceví has a small unmaintained airport with a 1,000 m long dirt airstrip located a few kilometres south of the town and capable of handling light aircraft.

The city of Durango is an old colonial city (founded in 1563) which served as the political and ecclesiastical capital of the Nueva Vizcaya province of New Spain until 1823. Minerals are the chief product but the city is also an agricultural, commercial and tourist centre. The city has approximately 631,712 inhabitants (2010) and is the closest major population centre to Guanaceví. Durango has an international airport with numerous regional flights to other major Mexican cities as well as international flights to Houston.

The Guanaceví Properties lie 3.6 km from the town of Guanaceví which was founded in 1535. From the town of Guanaceví, a well-conditioned dirt road leads southwards a few kilometres to the flotation and cyanidation plant and the Endeavour Silver offices and then an additional 5 km further to the Santa Cruz and Porvenir mines. Figure 5-1 is a view of part of the town of Guanaceví from the road leading to the Santa Cruz and Porvenir mines.

The population of Guanaceví is approximately 2,087 (2005), and the town has all modern amenities, including primary schools and a secondary school (high school), various stores, restaurants and a three star hotel. Although the town does not have a bank, it does have a casa de cambio (foreign exchange house) and an ATM machine. The town, mine and plant are connected to the national land-based telephone system that provides reliable national and international direct dial telephone communications, as well as stable internet connections and satellite television.

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Although various people are engaged in town services, the town is economically dependent on the mining and milling operations within the district.

Figure 5-1 Partial View of the Town of Guanaceví

5.2

Climate

The dry season is from October through June with the wet season from July to September. The total average annual rainfall varies from about 65 to 105 mm. Winter temperatures vary from a maximum of 15°C to a minimum of -14°C, while summer temperatures range from a minimum of 20°C to a maximum of 30°C. The climate poses no limitations to the length of the operating season. Freezing temperatures can occur overnight but quickly warm to above freezing during daylight hours. Occasional snow does occur in the area but quickly melts on all but the most protected slopes.

5.3

Local Resources and Infrastructure

The industrial water for the plant is recycled, with the make-up water (60,000 m³/y of fresh water) being obtained from a nearby underground mine. Electrical power from the Federal Power Authority (34 kV) supplies both the plant and mine. In 2011, Endeavour Silver completed an upgrade of the power to the mine and mill sites by installing a second line into main power supply.

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An upgrade to the tailings dam was completed in 2010 and began dry staking tailings. There is currently sufficient capacity for many years of production.

At each of the mine sites, the water required is supplied from the dewatering of the mines. The tailings facility at the plant is set up to recycle all water back into the ore processing plant.

Apart from offices, warehouses and other facilities, Endeavour Silver also provides dormitories and limited housing facilities for employees working on a rotational work schedule. Much of the labour work force lives in Guanaceví and nearby communities. The area has a rich tradition of mining and there is an ample supply of skilled personnel sufficient for both the underground mining operations and the surface facilities.

5.4

Physiography

The town of Guanaceví is located on the altiplano at about 2,170 m elevation, east of the Sierra Madre Occidental mountain range within low, rounded mountains showing a relief of about 650 m from the valley bottoms near 2,100 m to the crests at 2,750 m.

The mountains are covered with predominately scrub oak and pine trees, and occasional cactuses, with the pine trees more prevalent at the higher elevations.

Wildlife in the area consists of deer, badger, foxes, coyotes, squirrels, rabbits and mice.

5.5

Sufficiency of Surface Rights

Endeavour has negotiated access and the right to use surface lands sufficient for many years of operation. Sufficient area exists at the property for all needed surface infrastructure related to the life-of-mine plan, including processing, maintenance, fuel storage, explosives storage and administrative offices. There exists sufficient capacity in existing tailing impoundments for tailings disposal.

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Endeavour Silver holds all necessary environmental and mine permits to conduct planned exploration, development and mining operations on the Guanaceví Mines Project.

5.6

Comments on Section 5

Mining at the Guanaceví Project operates on a year-round basis. Details regarding surface rights for mining operations, availability of power sources, potential tailings storage areas, potential waste disposal areas, and potential processing plant sites, are discussed in the relevant sections of this report on mining methods, recovery methods and project infrastructure.

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6.0

HISTORY

6.1

Guanaceví Mining District and the Guanaceví Property

Mining has played an important role in Mexico since pre-historic times, but it entered a period of rapid expansion after the Spanish conquest when rich mineral deposits were found.

The wealth found in these early mines served as an incentive for the early colonizers to locate to remote and barely accessible portions of the county.

6.2

Historical Exploration

At the start of the 1960’s, Engineer Mejorado of Peñoles Mining Company recommended more exploration to prove up the resource estimate of 360,000 t grading 500 g/t silver at the time. Engineer P. Sanchez Mejorado mapped and sampled the mine underground and recommended diamond drilling below Level 13. This drilling was completed in 1983, with a reported additional 229,000 t outlined grading 1.20 g/t gold and 525 g/t silver, over an average thickness of 4.66 m.

Watts, Griffis and McOuat Limited (WGM) noted in its 2005 Technical Report that “The exploration works conducted by Peñoles consisted of channel sampling across the mineralized zone coupled with short lateral Winke diamond drill holes (diameter approximately 1 inch) from the vein structure workings and detailed surveying and geological mapping of the underground workings. The limited exploration by Peñoles was well conducted, and blocked out several areas of potential resources.” However, WGM stated further that it believed that more than half of the areas of potential resources, except for those below the water table (below Level 13), had been mined out.

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Pan American Silver Corp. (Pan American) conducted an eight-month evaluation program in 2003 that consisted of an extensive, systematic, underground channel sampling and surveying program and the drilling of three diamond drill holes in the North Porvenir area, holes SSC-01, SSC-02 and SSC-03.

Of this total, approximately 125,843m of diamond drilling in 422 holes have been completed on the Santa Cruz vein structure (Table 6-1). Holes were drilled from both surface and underground drill stations.

Table 6-1
Drilling Summary for Santa Cruz Vein Structure at Guanaceví Mines Project (through
December, 2013)

Project	Diamond Drill Holes	Metres


North Porvenir	193	56,702
Porvenir Dos	24	5,062
Porvenir Cuatro	31	9,176
La Prieta	12	2,627
Santa Cruz	84	18,731
Alex Breccia	27	8,614
Milache	51	24,931
Total	422	125,843

Endeavour’s exploration programs up to the end of 2012 have been described in previous Technical Reports by Micon. The 2013 program is discussed in Sections 9 and 10. To provide continuity, a brief description of the 2012 exploration program is included below.

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In 2012, exploration activities were focused to the north part of the Santa Cruz System, in the Milache area; and also a surface drilling program was conducted in the La Brisa area, at south of the Guanaceví District.

In the Milache area, a total of 20 holes were completed (sections 1S to 5), totaling 9,807.65 m, the presence of a mineralized zone was confirmed (Figure 6-1).

Figure 6-1 Milache Longitudinal Section (Looking Northeast) showing Intersection Points on the Santa Cruz Vein

In the La Brisa area a total of 2,829.25 m in 8 holes were completed over the Brisa, Lupita and Leona veins (Figure 6-2), but it was not possible to locate any mineralized bodies.

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Figure 6-2 Surface Map Showing Completed Holes in the La Brisa Area

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6.3

Historical Mining and Production

6.3.1

Mining

Historic mining was reported in the previous Micon Technical Reports and is reproduced here for the sake of continuity.

The vast bulk of the material which has been extracted from underground operations through the tunnels, shafts and winzes is scattered over the hillsides in waste dumps and beneath the foundations of the ruins and modern buildings. Historically, individual veins or deposits had separate owners and, in the case of some of the larger veins or deposits, had several owners along the strike length which resulted in a surfeit of adits and shafts and very inefficient operations.

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Figure 6-3 Old Mine Waste Dump Located alongside the Road to the Santa Cruz and Porvenir Mines

The mines within the Guanaceví mining district have been developed primarily by using open stope/shrinkage and cut and fill underground mining methods. Both the ground conditions, which vary from good to poor, and the deposit geometries tend to favour the higher cost, cut and fill mining method, with development waste used for backfill.

6.3.2

Production

Mining in the Guanaceví district extends back to at least 1535 when the mines were first worked by the Spanish. During the late sixteenth century silver production accounted for 80% of all exports from Nueva España (New Spain), although, by the mid-seventeenth century silver production collapsed when mercury, necessary to the refining process, was diverted to the silver mines of Potosí in present day Bolivia. Collapse of the seventeenth century mining led to widespread bankruptcy among the miners and hacienda owners; however, in the latter half of the seventeenth century silver mining began to recover in Nueva España. By the start of the 18th century, Guanaceví had become an important mining centre in the Nueva Vizcaya province. The peasant uprisings of 1810 to 1821 were disastrous to the Mexican mining industry with both the insurgents’ soldiers and royalist troops all but destroying the mining production in Mexico, and the Guanaceví mining district was not spared during this period.

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The district has experienced several periods of bonanza-grade production including the operation of a mint in 1844. The Guanaceví mining district, however, reached its greatest period of activity at the start of the 20th century when five processing plants were in operation and more than 15 mines were in production.

In an article by George Wilson in the July, 1882 copy of The Engineering and Mining Journal, he states the following: “…a Canadian company has forty stamps en route for Guanaceví, while two American companies are now negotiating for mines at Guanaceví to put up 100 stamps. This last-named camp has been worked by Mexicans for one hundred years, beneficiating the ores in arrastras and patio, at a cost of about $30 per ton; but by American machinery and processes, the cost of mining, hauling to mill, and beneficiating, will not exceed from $15 to $18 per ton, all told; while the average yield in the arrastras and patio of all the ores worked in the district is over 70 ounces of silver and half an ounce of gold per ton. Many of the shafts are down 300 feet, and the ores have so far invariably increased in width and yield with depth. They are true fissure veins and of great permanence, being distinctly traceable and worked on for an extension of over twelve miles from north to south. There are enough workings now open to supply ore for 500 stamps, breasts of ore six, eight, ten, and twelve feet wide being usual.” A second article by George Wilson in the same journal mentioned that “....a sale of mines at Guanaceví was closed; the price is kept private, but believed to be in the neighbourhood of $300,000. The buyers made a very careful examination of the property Their average samples of the mines assayed 342 ounces, 265 ounces, 145 ounces, 115 ounces, and 78 ounces silver per ton.”

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Guanaceví was named as one of the most important districts in Western Durango in a 1908 article on the silver mines in Mexico contained in the “Transactions of the American Institute of Mining Engineers”, but only a description of the silver veins and the host rock in given and no mention is made of the actual silver production.

Since the 1910 Revolution, production has been sporadic. The Guanaceví Mining Company operated from the 1930’s until production ceased in 1942. Daily output was approximately 110 t/d.

In the 1970’s, the Comisión de Fomento Minero (Federal Mining Commission) (Fomento Minero), a Federal government agency charged with the responsibility of assisting the small scale Mexican mining industry, constructed a 400 t/d flotation plant, now the MG plant. The plant has been expanded over time to its present capacity of 1,000 t/d for the cyanide circuit.

In the early 1990’s, Fomento Minero started construction of a 600 t/d cyanide leach plant but construction ceased when it was only 30% complete due to the lack of funding.

In 1992, MG, a private company, purchased the Fomento Minero facilities and completed the construction of the leach plant. During 2002, total plant production included 170 t/d to 250 t/d coming from the three mines: Santa Cruz, Barradón and La Prieta mines, with approximately 700 to 800 t/d of additional feed purchased from other small scale operations.

Prior to Endeavour Silver management, production was coming from three mines without the benefit of any systematic exploration drilling, geological mapping or mine planning. During the 1920’s, Peñoles purchased several mines including the Santa Cruz mine, where from 1921 to 1924, the 330 m inclined shaft and several kilometres of underground workings on Levels 6, 7, 8, 10, 11 and 13 were developed that partially explored the vein ore shoots.

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However, the exploration results gave little promise to Peñoles at that time. The mine entered into a passive state and Peñoles rented the mines to various contractors who, up to 2005, slowly mined the more accessible mineralization.

In 2004, Endeavour Silver completed a final agreement with the Mexican partner that owned the Metalurgica Guanaceví plant and shareholders of Minera Santa Cruz y Garibaldi S.A. de C.V. (Minera Santa Cruz) to take over the Santa Cruz mine. Ramping was initiated in 2004 to intersect the area where Pan American had drilled three holes in the North Porvenir – El Porvenir area. In six months, diamond drilling was initiated to outline the area, the ramp was driven and approximately 10,000 t were mined from this new zone. Through 2005, approximately 1,524 m of ramping, 1,122 m of drifting and 466 m of raising were completed and 102,617 t were milled.

While it is evident that historical production has occurred in the Guanaceví mining district since pre-colonial times and early production records from the Spanish colonial period probably exist in the Archive of the Indies (Archivo des Indies), in Seville, Spain, in the records of the Viceroyalty of Mexico or in the records for Vizcaya province of Nueva España.

Historical production for the years 1991 to 2003, at the Guanaceví Mines Project, prior to Endeavour Silver’s involvement, is roughly estimated in Table 6-2.

Table 6-2
Summary of the Production for the Guanaceví Property (1991 to 2003)

Year	Tonnes	Silver (g/t)	Gold (g/t)
1991 (from July)	2,306 (est.)	470 (est.)	1.0 (est.)
1992	10,128	340 (est.)	1.3 (est.)
1993	12,706	320 (est.)	0.8 (est.)
1994	18,256	190 (est.)	0.5 (est.)
1995 (until May)	5,774	280 (est.)	0.5 (est.)
1996	11,952	315	0.74
1997	13,379	409	0.87
1998	11,916	550	0.92
1999	6,466	528	0.84
2000	18,497	538	1.01
2001	13,150	510	1.09
2002	NA	NA	NA
2003	1,531	550	1

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A summary of the production for the years 2005 through to 2013, after Endeavour Silver became involved, is presented in Table 6-3.

Table 6-3
Summary of Production for the Guanaceví Property (2005 through 2013)

Year	Tonnes	Silver (g/t)	Gold (g/t)	Oz Silver Recovered	Oz Gold Recovered	Recovery Silver (%)	Recovery Gold (%)
Year	Tonnes	Silver (g/t)	Gold (g/t)	Oz Silver Recovered	Oz Gold Recovered	Recovery Silver (%)	Recovery Gold (%)
2005	102,617	385	0.88	948,323	2,332	74.7	80.5
2006	117,255	449	0.90	1,352,661	2,493	80.0	73.0
2007	226,295	375	0.70	1,907,795	3,957	69.4	75.7
2008	255,656	318	0.58	1,852,969	3,845	70.9	80.7
2009	230,632	322	0.80	1,873,833	5,243	78.4	88.8
2010	312,087	323	0.73	2,448,826	6,272	75.5	85.2
2011	363,076	311	0.69	2,659,956	6,845	73.3	84.8
2012	418,278	249	0.76	2,549,533	8,971	74.6	88.1
2013	435,922	253	0.60	2,772,227	6,784	78.2	80.7
Total	2,461,818	310	0.71	18,366,123	46,742

For the year ending December 31, 2013, silver production was 2,772,227 oz compared to 2,549,533 oz in 2012, an increase of 8.7%, with gold production of 6,784 oz compared to 8,971 oz in 2012, a decrease 24.4% . Plant throughput for 2013 was 435,922 t at an average grade of 253 g/t silver and 0.60 g/t gold, as compared to 418,278 t at an average grade of 249 g/t silver and 0.76 g/t gold during 2012. In 2013, recoveries averaged 78.2% and 80.7% for silver and gold, respectively.

6.4

Mineral Resources and Mineral Reserves

Historical resource and reserve estimates which were conducted prior to Endeavour Silver‘s involvement with the Guanaceví Mines Project will not be discussed in this report as, for the most part, they are historical estimates which were not conducted according to the CIM Standards for reporting mineral resources and reserves. In addition, since Endeavour Silver acquired ownership of the mine’ the resources and reserves have been revised every year based on both mining and exploration conducted during the year. These reports were posted to the SEDAR website by Endeavour Silver.

The last Technical Report to present a mineral resource and reserve estimate for the Guanaceví Mines Project was dated March 27, 2013, but the effective date of the estimate was December 15, 2012. The resource and reserve estimate complies with the current CIM standards and definitions for estimating resources and reserves as required by NI 43-101 regulations.

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Since the last estimate was reported, Endeavour Silver has conducted further diamond drilling and underground development and has completed a new resource and reserve estimate for the Guanaceví Mines Project. A discussion of Resources can be found in Section 14. .

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7.0

GEOLOGICAL SETTING AND MINERALIZATION

The geological setting and mineralization of the Guanaceví Property is described in detail in the Range (March, 2006) and Micon (2007, 2009, 2010, 2011, 2012 and 2013) Technical Reports. The following description of the geological setting and mineralization has been largely excerpted from the March, 2013 Micon report.

7.1

Regional Geology

The rock types of the district can be divided into three principal stratigraphic groups based on stratigraphic studies by the Consejo de Recursos Minerales and Endeavour Silver drill core-based observations during its exploration programs.

7.1.1

Guanaceví Formation

The oldest unit in the district is the Guanaceví Formation, a polymictic basal conglomerate composed of angular to sub-angular fragments of quartz and metamorphic rocks set in a sandy to clayey matrix within sericitic and siliceous cement. It is assigned to the Upper Jurassic or Lower Cretaceous on the basis of biostratigraphic indicator fossils mentioned but not detailed in the Durango State Geological Reference Report (1993). At least 450 m of thickness has been reported in the Guanaceví area for this basal unit, the lower contact of which has not been observed. In most areas, the upper contact is structural on high-angle normal faults but, in the San Pedro area, the upper contact is abrupt from Guanaceví conglomerate rocks to fairly fresh, dark coloured andesitic flows of the Lower Volcanic Sequence that appear conformable to the underlying Guanaceví Formation. The Jurassic assignment of the Guanaceví Formation has been in question, and at least two reports in the 1990’s consider it to be Tertiary (Durning and others, unpublished reports). A Tertiary age for the unit mitigates the idea of a transitional unit persisting through the Cretaceous; alternatively, it is possible that paraconformities in the package may be present but unreported to date.

Regional studies in Mexico demonstrate that Mesozoic rocks basal to the Tertiary section are strongly deformed with the development of sericitic alteration, shearing and microfolding in local shear zones and stronger deformation associated with overthrust nappe folds of Laramide age (late Cretaceous to end of the Paleocene). This type of strong deformation is not visible in the Guanaceví Formation, further raising questions about the validity of a Mesozoic assignment for this unit.

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The Guanaceví Formation has been structurally defined as a horst, occupying the central portion of the northwest trending Guanaceví erosional window and flanked by sets of northwest striking normal faults that offset the Upper and Lower Volcanic Sequences down to the southwest and northeast on corresponding sides of the window. Mineralization within the horst is hosted by the conglomerate, both as dilatational high-angle fracture-filled structures and, in the San Pedro area, as manto-like replacement bodies below the upper contact of the conglomerate with overlying andesitic units of the Lower Volcanic Sequence.

7.1.2

Lower Volcanic Sequence

Using an inherited stratigraphic framework for the area, andesitic rocks and associated sedimentary units are placed in a loosely-defined package of flows and volcaniclastic sediments correlated with Eocene volcanism throughout the Sierra Madre of Mexico. No radio isotope age determinations have been made on volcanic units of the Guanaceví district, and lithological correlations to the Lower Volcanic Sequence appear to be reasonable for the andesitic flows and associated volcaniclastic units.

It has been observed in the rocks that host the Porvenir and Santa Cruz mine workings that the andesite occurs as a pale green to nearly black volcanic flow ranging from aphyric to plagioclase-hornblende phyric. Plagioclase is the common phenocryst type with crystals ranging from 1 to 2 mm up to 10 mm. Hornblende phenocrysts are 1 mm to 4 mm in length. In porphyritic andesites, feldspar phenocryst abundance approaches 5%, and hornblende abundance is generally less than 3%.

The sequence of rock types in the Lower Volcanic Sequence, as presently understood, is a coarsening-upward series of volcaniclastic sediments capped by an andesite flow as described above. The sedimentary lithologies are siltstones overlain by sandstone with minor intercalations of conformable conglomerate beds. The siltstone-sandstone sequence becomes transitionally dominated by conglomeratic beds at the top of the volcaniclastic package. Overall thickness of the siltstone-sandstone beds is up to 120 m. Conglomerate beds of the Lower Volcanic Sequence are from a few centimetres to 150 m thick at the top of the package, and differ from the conglomerates of the Guanaceví Formation in that Lower Volcanic Sequence clasts are mainly andesite of varying textural types.

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7.1.3

Upper Volcanic Sequence

The Upper Volcanic Sequence consists of rhyolite crystal-lapilli tuff units unconformably overlying the andesites which are generally structurally disrupted and altered by oxidation and silicification. The rhyolite is strongly argillically-altered with silicification overprinting argillic alteration in the immediate hanging wall of quartz veins and other silicified structures. The rhyolite commonly contains rounded quartz ‘eyes’ up to 4 mm in diameter, and the matrix consists of adularia, kaolinite and quartz. Local concentrations of biotite crystals up to 2 mm are not uncommon. The rhyolite has variable textures from thin-bedded ash flows to coarse lapilli tuffs with lithic clasts of andesite or rhyolite up to 50 cm in diameter. These latter commonly exhibit alteration rims indicating high temperatures and fluids in the volcanic environment. The thickness of the rhyolite tuff assemblage has not been measured at this time, but appears to exceed 300 m.

Geochemically, the lower portion of the rhyolites has been demonstrated by rare earth element (REE) data, from a series of samples taken from East Santa Cruz drilling, to be magmatically linked to the underlying andesites. The similarity between REE patterns of the rhyolite crystal-lapilli tuff and the andesitic rock units in this data set suggests a common source for the two volcanic packages that is difficult to reconcile with the idea of many millions of years of volcanic quiescence (from Lower Volcanic to Upper Volcanic Sequences). This raises the possibility that regional correlations for Guanaceví rhyolite based on radio isotope age determinations may result in assignment of the rhyolite (of the Santa Cruz/Porvenir mine area) to the Lower Volcanic Sequence rather than the Upper. In the San Martin de Bolaños district of Jalisco and also in the Topia district of Durango State, uppermost volcanic lithologies of the Lower Volcanic Sequence are rhyolitic and directly associated with mineralization. This may be true for the Guanaceví mining district as well.

See Figure 7.1 for a map of the regional geology in the area surrounding the Guanaceví mining district. See Table 7-1 for a generalized stratigraphic column in the Guanaceví mining district.

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Table 7-1
Generalized Stratigraphic Column in the Guanaceví Mining District

Geological Age		Stratigraphic Units and Lithologies	Thickness (m)

Tertiary	Oligocene	Upper Volcanic Sequence Rhyolitic tuffs and ignimbrites	+ 300


	Eocene	Lower Volcanic Sequence Andesite porphrytic flow Andesite conglomerate Volcanic sandstone/siltstone	< 70 < 150 < 120



Jurassic (?)	(Late) ?	Guanaceví Formation	+ 450

Note: Table reproduced from the March, 2006 Technical Report by Range Consulting

7.1.4

Structural Setting

Figure 7.1, shows major faults of the Guanaceví mining district on a simplified geologic map of the region. The map pattern constitutes an erosional window caused by crustal uplift apparently centred about 3 km west of Guanaceví. With some exceptions, fracture-filling vein mineralization is localized on the flanks of the uplift centre, suggesting a genetic relationship between uplift and mineralization. The three principal trends of high-angle normal faults that characterize the region are as follows:

	•	The dominant structural trend in the region is northwest, with significant north-northeast faults in a likely conjugate relationship. This generation of structures hosts most of the mineralization in the district.

	•	Northeast faults postdate the mineralized structures.

	•	East-west faults appear last.

This pattern sequence would appear to indicate an early extension in a northeast-southwest direction, followed by a later extension in an east-northeast–west-southwest direction, followed by a northwest-southeast extension and finally ending with the latest extension in a north-south direction. This clockwise evolution of principal stress directions is similar to that of other regions in the American Cordillera, including the Sierra Madre of Mexico.

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Figure 7-1 Regional Geology Map for the Guanaceví Mining District

Timing of uplift of the Guanaceví window is constrained by the following considerations:

•

Dilatational fractures flanking the uplift are dominantly northwest trending, with subordinate north and north-northeast components. Northeast and east-west fractures are not significant in controlling the uplift pattern. Thus, uplift is early in the structural evolution described above.

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	•	The northeast-southwest extension in Mexico is generally associated with opening of the Gulf of California, and dated as Oligocene to Miocene.

	•	Uplift therefore may be coeval with the onset of silicic volcanism of the Upper Volcanics, which are considered Oligocene in age.

It is reasonable to conclude that uplift occurred at the onset of Upper Volcanic Sequence eruptions (Oligocene), northeast-southwest extension, and was coeval with mineralization. The cause of uplift, however, is left unexplained by these considerations. Alternative explanations include magmatic upwelling at depth, resurgent doming within a cryptic caldera, or tectonic transpression resulting from large-scale lateral displacement

7.2

Project Geology

The Santa Cruz mine property, which forms part of the main portion of the Guanaceví Mines Project, covers about a 3.0 km strike length of the Santa Cruz fault/vein system. The Santa Cruz vein is similar in many respects to other veins in the Guanaceví district, except that it is the only one to lie on the west side of the horst of Guanaceví Formation and associated facies, and it dips west instead of east. See Figure 7.2 for the Guanaceví Mines Project geology map.

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Figure 7-2 Guanaceví Mines Project Geology Map

In the Porvenir Dos area and the Deep Santa Cruz mine workings, a low angle rhyolite crystal-lapilli tuff and andesitic contact occurs high in the hanging wall of the Santa Cruz vein indicating a fault contact with Guanaceví Formation, which obviously cuts the contact.

7.2.1

Local Structure

The Santa Cruz vein, the principal host of silver and gold mineralization, is located on the west side of the horst of the Guanaceví Formation. The mineralized vein is part of a major fault system that trends northwest and principally places the Guanaceví Formation in the footwall against andesite and/or rhyolite in the hanging wall. The vein/fault presents a preferred strike of N45°W with dips from 45° to 70° to the southwest. From La Prieta to Porvenir Dos, it extends a distance of 5 km and averages approximately 3 m in width.

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The broader and higher-grade mineralized ore shoots tend to occur along flexures in the Santa Cruz vein structure, where sigmoidal loops are developed both along strike and down dip. The vein in Deep Santa Cruz for instance splays into two, three or four separate mineralized structures with the intervening wallrocks also often well mineralized, giving mining widths up to 20 m in some places. These sigmoidal loops tend to develop with some regularity along strike and all of the ore shoots at the Santa Cruz mine have about a 60° plunge to the northwest. A shallow northwest plunging striation, raking at 15°- 30°, is noted on a number of fault planes within the Santa Cruz structure; these striations appear to be consistent with an observed sinistral movement seen on minor faults which produce small offsets of the Santa Cruz vein.

Particularly around the peripheral ore zones the vein is observed to develop imbricate structures, either as imbricate lenses shallowly oblique to the principal Santa Cruz trend or as vein segments offset by similarly trending minor faults. The trend of these structural features is generally slightly more westerly than the Santa Cruz vein/fault trend and steeper dipping. Veining is also often affected by north-south structures, which rarely seem to offset the main fault but do cause minor jogs in the vein; often the north-south structures are associated with manganese oxide concentrations and elevated silver grades.

7.2.2

Alteration

The sedimentary and volcanic rocks are hydrothermally altered with propylitization (chlorite) the most widespread, up to 150 m from the veins, with narrower bands of potassic and argillic alteration (kaolinite and adularia) typically up to 25 m thick in the hanging wall and with silicification near the veins. Phyllic alteration, however, is absent in the Guanaceví district.

7.3

Mineralization

The mineralization of the Guanaceví Property is described in detail in the Range (2006) and Micon (2007, 2009, 2010, 2011, 2012 and 2013) Technical Reports. The following description of the mineralization has been excerpted from the March, 2013, Micon report.

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The principal mineralization within the Santa Cruz-Porvenir mines is an epithermal low-sulphidation, quartz-carbonate, fracture-filling vein hosted by a fault-structure that trends approximately N45°W and dips 55° southwest. The fault and vein comprise a structural system referred to locally as the Santa Cruz vein structure or Santa Cruz vein fault. The Santa Cruz vein structure has been traced for 5 km along the trend and averages about 3 m in width. Mineralization in the system is not continuous, but occurs in steeply northwest-raking shoots up to 200 m in strike length. A second vein, sub-parallel to the Santa Cruz vein but less continuous, is economically significant in the Porvenir Dos zone and in the northern portion of deep North Porvenir. It is referred to in both areas as the “Footwall vein”, although in Porvenir Dos, the term “Conglomerate vein” has also been employed.

7.3.1

Santa Cruz Vein

The Santa Cruz vein is a silver-rich structure with lesser amounts of gold, lead and zinc. Mineralization has averaged 500 g/t silver and 1 g/t gold over 3 m true width. The minerals encountered are argentite-acanthite, limited gold, galena, sphalerite, pyrite and manganese oxides. Gangue minerals noted are barite, rhodonite, rhodochrosite, calcite, fluorite and quartz. The mineralization down to Level 6 in the Santa Cruz mine is mainly oxidized, with a transition zone of oxides to sulphides occurring between Levels 6 to 8, although some sulphide ore was mined above Level 6.

Mineralization exhibits evidence of episodic hydrothermal events which generated finely banded textures. The higher grade mineralization in the district is commonly associated with multiple phases of banding and brecciation. The first phase, deposition of white quartz, white calcite and pyrite in stockwork structures, often exhibits horse-tail structures bifurcating both in the horizontal and vertical sense to form imbricate pods. The second phase deposited semi translucent quartz with argentite, scarce gold, and oxides of manganese (2%) and rare lead and zinc sulphide (4%), the latter particularly in the lower part of the hydrothermal system. The second phase was accompanied by the deposition of barite, rhodonite, rhodochrosite, fluorite and calcite.

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This second phase comprises multiple pulses of mineralization expressed in the vein structures as bands of massive, banded or brecciated quartz. Massive and massive-to-banded quartz are commonly associated with carbonate which is predominantly manganoan calcite and calcitic rhodochrosite. Rhodonite is much less abundant than carbonates but is not uncommon.

According to results obtained through diamond drilling, the lead and zinc mineralization occurs more commonly in the vein below the water table which, in the Santa Cruz mine, is just below the 13 Level.

7.3.2

Footwall Veins

In the Porvenir Dos area and in the deeper portion of North Porvenir, a footwall-hosted vein lies in the footwall of the Santa Cruz vein structure. In both areas, this footwall vein is either within Guanaceví Formation footwall rocks or is at the structural contact between Guanaceví Formation and Lower Volcanic Sequence andesite. It is banded to brecciated quartz plus carbonate and contains local scatterings (<1%) of sulphides (pyrite>sphalerite> galena>chalcopyrite) and rare pods (<50 cm) of sulphides. It appears likely from drill sections that these footwall vein occurrences are splays of the main Santa Cruz vein structure and are largely sympathetic to it. At the north end of North Porvenir, on Section 19, the footwall vein attains a true width of over 7 m with silver grades of approximately 400 g/t in some areas. In Porvenir Dos, the footwall vein is narrower than the Santa Cruz vein and is overall a lower-grade vein, although one high grade intercept (uncapped) has been recorded in drill hole PD 36-3, at 2,548 g/t silver over 1.25 m.

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8.0

DEPOSIT TYPES

The deposit types of the Guanaceví Property are described in detail in the Range (March, 2006) and Micon (April, 2007, March, 2009, March, 2010, March, 2011 and March 2012) Technical Reports. The following description was excerpted from the March, 2012, Micon report.

The Guanaceví silver-gold district comprises classic, high-grade silver-gold, epithermal vein deposits, characterized by low sulphidation mineralization and adularia-sericite alteration. The Guanaceví veins are typical of most other epithermal silver-gold vein deposits in Mexico in that they are primarily hosted in the Tertiary Lower Volcanic series of andesite flows, pyroclastics and epiclastics, overlain by the Upper Volcanic series of rhyolite pyroclastics and ignimbrites. Evidence is accumulating in the Guanaceví mining district that the mineralization is closely associated with a pulse of silicic eruptions that either signaled the end of Lower Volcanic Sequence magmatism or the onset of Upper Volcanic Sequence activity.

Low-sulphidation epithermal veins in Mexico typically have a well-defined, sub-horizontal ore horizon about 300 m to 500 m in vertical extent where the bonanza grade ore shoots have been deposited due to boiling of the hydrothermal fluids. Neither the top nor the bottom of the Santa Cruz ore horizon has yet been found but, given that high-grade mineralization occurs over a 400 m vertical extent from the top of the Garibaldi shaft (south of the Santa Cruz mine) to below Level 13 in Santa Cruz, it is likely that erosion has not removed a significant extent of the ore horizon.

Low sulphidation deposits are formed by the circulation of hydrothermal solutions that are near neutral in pH, resulting in very little acidic alteration with the host rock units. The characteristic alteration assemblages include illite, sericite and adularia that are typically hosted by either the veins themselves or in the vein wall rocks. The hydrothermal fluid can travel either along discrete fractures where it may create vein deposits or it can travel through permeable lithology such as a poorly welded ignimbrite flow, where it may deposit its load of precious metals in a disseminated deposit. In general terms, this style of mineralization is found at some distance from the heat source. Figure 8.1 illustrates the spatial distribution of the alteration and veining found in a hypothetical low-sulphidation hydrothermal system.

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Figure 8-1 Alteration and Mineral Distributions within a Low Sulphidation Epithermal Vein System

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9.0

EXPLORATION 2013

9.1

2013 Exploration Activities

9.1.1

Drilling

During 2013, drilling activities were conducted from January through July; Endeavour Silver completed 10,437.40 m in 20 surface diamond drill holes at the Guanaceví Mines Project. A total of 1,928 samples were collected and submitted for assays. Surface exploration drilling undertaken during 2013 is summarized in Table 9-1.

Table 9-1
Exploration Drilling Activities in 2013

Project Area	Number of Holes	Total Metres	Number of Samples Taken


Milache	20	10,437.40	1928
Total	20	10,437.40	1,928

Surface diamond drilling was conducted by Layne de Mexico, S.A. de C.V. (Layne), a wholly-owned subsidiary of the USA-based Layne Christensen Company (Layne Christensen). Neither Layne nor Layne Christensen hold an interest in Endeavour Silver and both are independent of the company.

9.2

General Exploration and Drilling

9.2.1

2013 Mine Exploration

Little mine exploration was done in 2013. Most drilling was definition based in the Santa Cruz area.

In 2014 an underground exploration drilling program has been designed and approved to test the area between Santa Cruz and Porvenir North. This program is discussed in Section 26.

9.2.2

2013 Surface Exploration and Drilling

In 2013, Endeavour Silver spent US $1,814,212 (including property holding costs) on exploration activities mainly on the Milache area, as detailed in Table 9-2.

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Table 9-2
Summary of the 2013 Expenditures for the Guanaceví Surface Exploration Program

Area	Description	US$
Nuestra Señora	TAXES	110
San Marcos	TAXES	109
San Vicente	TAXES	157
San Pedro Uno	TAXES	969
Porvenir Dos	TAXES	2,384
Las Sultana	TAXES	227
San Guillermo	TAXES	98
Subtotal		4,053
Unificación Flora	ASSAYS	1,642
	FIELD	897
	FOOD	1,702
	OFFICE SUPPLIES & EQUIPMENT	406
	GEOLOGY AND ENGINEERING PERSONNEL	11,498
	TAXES	716
	SALARIES (SUBTOTAL)	4,975
	TRAVEL & LODGING	466
	GAS	7,744
	REPAIR & MAINTENANCE	2,246
	NO DEDUCIBLES	232
Subtotal		32,523
Unificación Santa Cruz	TAXES	560
Santa Cruz Dos	TAXES	2,223
El Pelayo y Anexas	TAXES	1,101
Subtotal		3,884
Milache	ASSAYS	70,609
	CONSULTANTS	1,133
	DIAMOND DRILLING	1,083,479
	FIELD	21,865
	HOUSING	4,986
	FOOD	11,203
	OFFICE SUPPLIES & EQUIPMENT	196
	GEOLOGY AND ENGIENEERING PERSONNEL	236,762
	TAXES	1,452
	RECLAMATION	2,126
	MILACHE-RODADS AND DRILL PADS	39,200
	SALARIES (SUBTOTAL)	77,674
	TRAVEL & LODGING	4,895
	GAS	4,928
	REPAIR & MAINTENANCE	12,404
	EXPENSES NON DEDUCTIBLE	34,322
Subtotal		1,607,235
San Fernando	TAXES	257
Porvenir Cuatro	TAXES	587
San Pedro	TAXES	6,461
Calvario / Elizabeth	TAXES	358
La Brisa	TAXES	3,561
La Brisa	CONTRACT PAYMENTS & FEES	64,933
El Cambio, La Onza, San Nicolás, Ampliación de San Nicolas	TAXES	731
	CONTRACT PAYMENTTS & FEES	89,629
Subtotal		166,517
Grand Total		1,814,212

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9.2.3

Other Surface Exploration Activities

9.2.3.1.

Surface Geological Mapping and Sampling

During 2013, surface geological mapping and sampling was conducted by Endeavour Silver in the Guanaceví Properties, focused, from North to South, in the San Pedro (El Cambio-PP), Milache, El Rocio and Sant ta Cruz South.

Regionally, a total of 17 Regional Exploration Targets were defined in a radius of approximately 70 km around the Guanaceví Mines Project, in order to review the potential of mineralization in the municipalities of Guanaceví, Tepehuanes, San Bernardo and El Oro.

San Pedro

During September and October, geo ological mapping and sampling was conducted at El Cambio area and at the NW part of the PP Vein, located in the San Pedro area (Figure 9-1).

A total of 115 rock samples were collected and submitted for assays (Table 9-3 and Table 9-4).

The El Cambio structure it’s considered the North extension of the Soto-Epsilon Vein, explored by Endeavour Silver a few years ago. In this area the structure has a preferential trend of NE30º-50º/55º-70ºSE and some outcrops N-S. The host rock is andesite with occasional veinlets of Calcite, rarely with Quartz; with incipient FeOx; the thickness of the structure is irregular (Figure 9-2 and Figure 9-3).

The PP Structure was traced for about 600 m, including outcrops, workings and alteration zones (Figure 9-4 through Figure 9-6).

Page 9-3

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Table 9-3
Significant Assays for Rock sampling in the El Cambio Area.

Sample ID	Structure	Width (m)	Au (ppm)	Ag (ppm)	Cu (%)	Pb (%)	Zn (%)	AgEq
LSP-1069	Vn perpendicular a Vn el Cambio	0.15	0.04	0.7	0.0025	0.0003	0.0015	3
LSP-1075	En tiro hundido	0.4	0.01	5.3	0.0054	0.0059	0.0189	6
LSP-1079	Vn perpendicular a Vn el Cambio	0.2	0.01	1.6	0.0009	0.001	0.0051	2
LSP-1082	Vn perpendicular a Vn el Cambio	0.3	0.02	16.4	0.0013	0.0021	0.0103	17
LSP-1086	Entrada a frente vieja	0.3	0.01	1.6	0.0016	0.0027	0.0264	2
LSP-1088	Estruct. Paralela a Vn Cambio	0.15	0.01	0.4	0.0018	0.001	0.0052	1
LSP-1092	Estruct. Paralela a Vn Cambio	0.2	0.01	0.2	0.0003	0.0004	0.0043	1
LSP-1095	Estruct. Paralela a Vn	0.2	0.02	3	0.0042	0.002	0.0145	4
	Cambio
LSP-1098	Estruct. Paralela a Vn	0.2	0.02	2.8	0.0113	0.002	0.0123	4
	Cambio
LSP-1103	Vn el cambio	0.4	0.01	8.1	0.0012	0.005	0.0117	8
LSP-1106	Vn el cambio	0.2	0.01	3.5	0.002	0.0027	0.0067	4
LSP-1112	Vn perpendicular a Vn el Cambio	0.2	0.01	0.2	0.0041	0.0013	0.0171	0
LSP-1115	Vn el cambio	0.2	0.01	0.7	0.0003	0.0006	0.0035	1
LSP-1118	Vn el cambio	0.2	0.03	1.5	0.0006	0.0021	0.003	3
LSP-1121	Vn el cambio	0.2	0.08	7.4	0.0013	0.0019	0.0031	11
LSP-1124	Vn el cambio	0.3	0.05	7.6	0.0009	0.0084	0.0038	10
LSP-1128	Vn perpendicular a Vn el Cambio	0.2	0.02	4.4	0.0012	0.0009	0.007	5
LSP-1132	Vn perpendicular a Vn el Cambio	0.2	0.02	0.2	0.0005	0.0024	0.0076	1
LSP-1135	Paralela a Vn-Cambio o Vn-Cambio?	0.4	0.01	0.6	0.0057	0.0019	0.0026	1
LSP-1138	Estruct. Paralela a Vn Cambio	0.3	0.01	1.4	0.0005	0.0017	0.0014	2
LSP-1142	Estruct. Paralela a Vn Cambio	0.4	0.02	0.2	0.0006	0.0003	0.004	1
LSP-1145	Estruct. Paralela a Vn Cambio	0.2	0.01	1.2	0.0025	0.0007	0.0024	2
LSP-1148	Vein	0.3	0.01	0.2	0.0002	0.0005	0.0065	0.5
LSP-1151	Vn perpendicular a Vn el Cambio	0.2	0.02	4.3	0.0107	0.0041	0.0052	5
LSP-1154	Vn perpendicular a Vn el Cambio	0.2	0.01	1.5	0.0031	0.0107	0.0014	1.8

Page 9-4

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Table 9-4
Significant Assays for Rock sampling in the PP Area.

Sample ID	Structure	Width (m)	Au (ppm)	Ag (ppm)	Cu (%)	Pb (%)	Zn (%)	AgEq
LSP-1156	Possible Vn PP?	0.25	0.01	0.3	0.0015	0.0019	0.0066	1
LSP-1159	Vn PP	0.4	0.01	2.1	0.023	0.0016	0.0243	2
LSP-1162	Vn PP	0.3	0.01	19.6	0.0009	0.0111	0.0095	20
LSP-1165	Vn PP	0.6	0.01	14.7	0.0276	0.0261	0.0335	15
LSP-1166	Vn PP, No se observo dato estructural	0.3	0.01	0.6	0.0027	0.0024	0.0032	1
LSP-1171	Estructura perpendicular a Vn-PP	0.2	0.01	2.1	0.0004	0.0015	0.0014	3
LSP-1173	Estructura perpendicular a Vn-PP	0.7	0.01	0.2	0.0007	0.0021	0.0056	0.5
LSP-1174	FRACTURAMIENTO	1.6	0.01	0.4	0.0012	0.0019	0.0078	1
LSP-1177	FRACTURAMIENTO	0.35	0.01	0.2	0.0004	0.0023	0.0063	0.5
LSP-1179	Estructura perpendicular a Vn-PP	0.3	0.01	0.2	0.0006	0.0029	0.0138	0.5

Page 9-5

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Figure 9-1 Surface Map showing analyzed Targets in the San Pedro area

Page 9-6

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Figure 9-2 Surface Map of the El Cambio Area

Figure 9-3 Photograph showing outcrop of Vein in the El Cambio Claim (NE30ºSW/57ºSE)

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Figure 9-4 Surface Maps of the PP Area

Figure 9-5 Photograph showing the plane of the structure in the PP area

Figure 9-6 Photograph showing the possible trace of the PP vein structure

Page 9-8

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Milache

During May and June, a trenching program was conducted in the Milache area (Figure 9-7 and Figure 9-8). Trenches were made to identify the contact zone between the Tertiary (Rhyolites or Dacites) and the Cretaceous (Andesites) Rock.

A total of 21 trenches were made and 87 samples collected and submitted for assays (Table 9-5).

Table 9-5
Significant Assays for Rock sampling in trenches of the Milache Area

Trench	SampleID	Width(m)	Description	ALSLab.
Trench	SampleID	Width(m)	Description	Au (ppm)	Ag (ppm)	Cu (%)	Pb (%)	Zn (%)
MCH-00	TMCH-1	0.35	Rxcoloramarilloverdoso detexturaSa/FgdeCca (Qzoescaso)conFeO (limonita-Mn),presenta Argilizacionmoderada (andesita)	<0.005	<0.2	0.0002	0.0014	0.0222
	TMCH-2	0.3	RxFg-FagdeCca-Qzocon FeO(Mnprincipalmente) PresentaArg-Propdebil	<0.005	<0.2	0.001	0.0022	0.0304
	TMCH-3	0.3	Rxdetonalidadbca-rosada deQzo-Rod?c/FeO (limonita-Mn)nose observansulf	<0.005	0.4	0.0001	0.0027	0.0094
	TMCH-4	0.3	RxBco-amarillodeQzoc/ FeO(limonita-Mn),trazas dePy	0.009	0.3	<0.0001	0.0009	0.0027
	TMCH-5	0.25	Rxrosada,arcillosa silicificadaconFeO(Hem- Limonita-Mn),seobservan trazasdePy	0.023	0.5	0.0001	0.0014	0.0024
	TMCH-6	0.35	Rxverde-rosadaaspectoTu deQzoc/FeO(Hem)se observasilicificada(Riolita	<0.005	0.4	<0.0001	0.0018	0.0018
MCH-03	TMCH-18	0.4	RxverdeclaroFgc/FeO argilizacionmoderada	<0.005	0.9	<0.0001	0.0018	0.0067
	TMCH-19	0.25	RxverdedeCca-trazasde Qzoc/FeO(liminita), argilizadamoderada	<0.005	0.5	0.001	0.0027	0.01
	TMCH-20	0.35	RxverdedeCcacontrazas deFeO	<0.005	1.5	0.0016	0.0025	0.0066
	TMCH-21	0.45	Rxblanca-amarilladeQzo c/FeO	<0.005	3.8	0.0004	0.0036	0.005
MCH-05	TMCH-28	0.4	RxblancaarsillosadeQzo c/FeOfuertemente argilizada	<0.005	2.7	<0.0001	0.0007	0.0014
MCH-05	TMCH-29	0.25	Rxblanca-rosadadeQzo c/FeO,presenta argilizacionM-S	<0.005	2.1	0.0001	0.0019	0.0052

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	TMCH-30	0.45	RxFg-FagdeCca-Qzocon FeO(Mn-limonita)	<0.005	1.7	0.0011	0.0078	0.0154
	TMCH-31	0.4	RxFgverde-caféc/FeO (limonita-Mn)	<0.005	0.3	0.0034	0.0022	0.0105
MCH-06	TMCH-32	0.4	RxblancaverdosaFgc/FeO limonita	<0.005	0.2	<0.0001	0.002	0.0056
	TMCH-33	0.4	RxamarillaSac/FeO (limonita)	<0.005	0.2	<0.0001	0.0025	0.007
	TMCH-34	0.25	RxamarillaSac/FeO (limonita-Mn)	<0.005	0.2	<0.0001	0.0019	0.0066
	TMCH-35	0.17	Rxbalnca-verdosaSac/FeO	<0.005	0.3	<0.0001	0.0018	0.0046
	TMCH-36	0.28	Rxverde(Fag)c/FeO escaso(limonita	<0.005	0.5	<0.0001	0.0028	0.0046
	TMCH-37	0.18	RxverdeopacoSac/FeO	<0.005	0.6	0.0006	0.0017	0.0056
	TMCH-38	0.47	RxverdeopacoSac/FeO	<0.005	0.5	0.0005	0.0013	0.0048
MCH-07	TMCH-39	0.35	RxamarilladeQzoc/FeO, argilizacionmoderada	<0.005	0.3	0.0009	0.0024	0.0068
	TMCH-40	0.35	RxamarilladeQzoc/FeO, argilizacionfuerte	<0.005	0.3	0.0011	0.0022	0.0073
	TMCH-41	0.18	Rxamarillaverdec/FeO limonita(Fag?)	<0.005	0.7	0.0013	0.0021	0.0052
	TMCH-42	0.29	Rxverde-amarillac/FeO limonita	<0.005	<0.2	0.0011	0.0023	0.0068
	TMCH-43	0.5	Rxverde-amarillac/FeO limonita	<0.005	0.3	0.001	0.0022	0.0082

Page 9-10

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Figure 9-7 Surface Map of the Milache area

Figure 9-8 Photograph of trenches on the Milache area

Page 9-11

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El Rocio

During November and December, geological mapping and sampling was conducted in the footwall zone of the Santa Cruz Vein, between the Pelayo and Porvenir Cuatro areas, in the El Rocio and La Brisa Claims (Figure 9-9). A total of 217 rock samples were collected and submitted for assays (Table 9-6 and Table 9-7).

In the area were located 3 main structures (Rocio, Cata Rica and Brisa), including mine workings such as: trenches, shafts and adits.

The Rocio Vein was traced for about 1000 km, and 500 m are inside of Endeavour Sivler Properties, the width varies from 0.40 to 1.45 m; and consisted of a quartz vein, with brecciated and banded texture, withIron Oxide. The preferential trend of the structure is NE20º/NW78º (Figure 9-10 through Figure 9-14).

Also it was located the Cata Rica Vein, consisting mainly by Quartz (white), with brecciated texture and presence of Iron oxide; the structure intercepted the JKcog, occasionally at the footwall or hangingwall its located a stock work zone with banded texture and presence of Ox-FeO. The width of the structure varies from 0.3 to 1.30 m, with approximately 250 m long with continuity and other 150 m manifested not continuously. The preferential trend of the structure is NE15-20º/NW70-80º (Figure 9-10 and Figure 9-13).

The Brisa Vein with a preferential trend NE50º-65º/NW65º-75º, with mineralization of Quartz (white), brecciated texture; occasional disseminated Pyrite 1-2% and abundant Ox-FeOx. With around 400 m long and the width varies from 0.30 to 0.90 m (Figure 9-14 and Figure 9-15).

Some samples were collected in Dumps; the results of these samples were good, indicating that the mineralization it’s present to depth (Table 9-8).

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Table 9-6
Significant Composites for channel sampling in the Rocio-Cata Rica Area

Channel_ID	Structure	Width (m)	Au (ppm)	Ag (ppm)	Cu (%)	Pb (%)	Zn (%)
Rc-08	Vn paralela a Vn-Rocio	0.2	0.42	12	0.0108	0.0461	0.0465
Rc-16	Veta El Rocio	1.15	0.31	33	0.0035	0.0031	0.0064
Rc-21	Veta El Rocio	1.1	2.55	179	0.0023	0.0498	0.0006
Rc-22	Veta Cata Rica	0.8	0.05	14	0.0035	0.0019	0.0008
Rc-23	Veta Cata Rica	1.45	0.76	213	0.0041	0.0382	0.0052
Rc-24	Veta Cata Rica	0.9	0.11	34	0.0026	0.012	0.0011
Rc-25	Veta Cata Rica	0.3	0.15	12	0.0022	0.0068	0.0049
Rc-26	Veta Cata Rica	0.3	0.16	35	0.0005	0.0219	0.0006
Rc-27	Veta El Rocio	0.65	0.18	41	0.0024	0.0079	0.0041
Rc-28	Veta El Rocio	0.4	0.03	20	0.0006	0.0058	0.0035
Rc-29	Veta El Rocio	0.3	0.01	10	0.0019	0.0062	0.0005
Rc-31	Veta El Rocio	0.3	0.01	12	0.0014	0.0015	0.0019
Rc-32	Veta El Rocio	1.6	0.13	175	0.0019	0.0431	0.0025

Table 9-7
Significant Composites for channel sampling in the Brisa Area

Channel_ID	Structure	Width (m)	Au (ppm)	Ag (ppm)	Cu (%)	Pb (%)	Zn (%)
BSA-01	Vn-perpendicular a Brisa	1.6	0.46	153	0.0245	0.1093	0.0608
BSA-01	Vn-perpendicular a Brisa	1.6	0.46	153	0.0245	0.1093	0.0608
BSA-02	Vn-Brisa	2.6	0.2	143	0.004	0.0576	0.0018
BSA-03	Vn-Brisa	0.5	0.22	87	0.0114	0.0514	0.0152
BSA-04	Vn-Brisa	0.4	0.05	70	0.0178	0.0139	0.0403
BSA-05	Vn-Brisa	1.75	0.11	123	0.0072	0.0219	0.008
BSA-06	Vn-Brisa	0.8	1.33	293	0.0466	0.1964	0.0793
BSA-07	Vn-Brisa	1.15	0.17	421	0.0108	0.0185	0.0009
BSA-08	Vn-Brisa	0.6	0.14	436	0.0174	0.031	0.0075
BSA-10	Vn-Brisa	0.85	1.45	151	0.0175	0.0474	0.0232
BSA-11	Vn-Brisa	1.25	0.17	186	0.0082	0.0293	0.0011
BSA-12	Vn-Brisa	0.6	0.14	373	0.0091	0.0848	0.0599
BSA-13	Vn-Brisa	0.6	0.23	227	0.0111	0.1338	0.0161
BSA-18	Vn-Perpendicular Brisa	1.5	0.19	61	0.0027	0.0086	0.0141
BSA-19	Vn-Perpendicular Brisa	1.3	0.66	98	0.0059	0.0188	0.0126
BSA-20	Vn-Perpendicular Brisa	1.25	0.21	101	0.0066	0.0152	0.0019
BSA-23	Vn-Perpendicular Brisa	1.45	0.45	270	0.0083	0.1907	0.0261
BSA-24	Vn-Perpendicular Brisa	0.3	0.33	59	0.0065	0.0163	0.0234
BSA-28	Vn-Perpendicular Brisa	0.8	0.25	76	0.0057	0.1126	0.0433
BSA-30	Vn-Perpendicular Brisa	0.65	0.56	210	0.0126	0.0697	0.0177
BSA-31	Vn-Perpendicular Brisa	0.8	0.12	90	0.0038	0.008	0.0098

Page 9-13

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Table 9-8
Assays for Dump samples collected in the Brisa Area

Channel_ID	Sample__ID	Width (m)	Au (pppm)	Ag (ppm)	Cu (%)	Pb (%)	Zn (%)
BSA-25	BSA-83	Terrero	0.08	11.8	0.002	0.0072	0.0232
BSA-29(1)	BSA-95	Terrero	1.6	577	0.0218	0.124	0.111
	BSA-96	Terrero	0.8	399	0.029	0.0955	0.121
	BSA-97	Terrero	0.5	401	0.0211	0.0595	0.0835
BSA-31(1)	BSA-100	Terrero	2.58	326	0.0231	0.0937	0.0463
BSA-31(1)	BSA-101	Terrero	1.87	592	0.0393	0.0913	0.1315

Figure 9-9 Surface Map showing analyzed Targets in the Rocio-Brisa-Cata Rica area

Page 9-14

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Figure 9-10 Surface Map of the Rocio-Cata Rica area

Figure 9-11 Surface Map of the Rocio area

Page 9-15

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Figure 9-12 Photograph showing the Rocio vein

Figure 9-13 Photograph showing the Cata Rica Vein

Page 9-16

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Figure 9-14 Surface Map of the La Brisa area

Figure 9 15 Photograph showing systematic sampling on existent workings
(outcrop of a main vein) in the La Brisa area.

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Santa Cruz South

During August and September, geological mapping and sampling was conducted in order to follow the trace of the Santa Cruz Vein at the Santa Cruz South area (Figure 9-16). A total of 313 rock samples were collected and submitted for analysis. Significant assays are shown in Table 9-9.

The Santa Cruz Structure trends NW20º-30ºSE/60º-70ºSW, and at the south part deflects and reduces the width until it’s no longer visible (Figure 9-17).

Also reconnaissance mapping was conducted on the Abundancia Vein, the preferential trend is NW14º-38ºSE/SW and deflects at the central part to NE14ºSW/54ºNW; and consisted of white-pinky quartz, with brecciated aspect and FeOx (Figure 9-18 and Figure 9-19).

Table 9-9
Significant Composites for channel sampling in the Santa Cruz South Area

Channel_ID	Samples	Structure	Width (m)	Au (ppm)	Ag (ppm)	Cu (%)	Pb (%)	Zn (%)
Channel_ID	Samples	Structure	Width (m)	Au (ppm)	Ag (ppm)	Cu (%)	Pb (%)	Zn (%)
CSCS-06	SCS-19 to SCS-21	alteracion zone	1.23	0.46	149	0.0047	0.1215	0.1838
CSCS-07	SCS-22 to SCS-31	ABUNDANCIA VEIN	2.55	0.18	106	0.0096	0.2745	0.1751
CSCS-08	SCS-32 to SCS-36	ABUNDANCIA VEIN	1.35	0.2	91	0.0081	0.3109	0.3243
CSCS-09	SCS-37 to SCS-41	ABUNDANCIA VEIN	1.75	1.23	735	0.0086	0.1736	0.5808
CSCS-10	SCS-42 to SCS-47	ABUNDANCIA VEIN	3.95	0.25	110	0.0037	0.088	0.3173
CSCS-11	SCS-48 to SCS-55	ABUNDANCIA VEIN	3.6	0.68	170	0.0071	0.1977	0.3174
CSCS-13	SCS-58 to SCS-62	ABUNDANCIA VEIN	1.5	0.52	76	0.0028	0.0736	0.1711
CSCS-15	SCS-71 to SCS-77	Vn (N69°W/56SW)	1.15	0.73	347	0.0181	0.2918	0.2957
CSCS-16	SCS-78 to SCS-84	SANTA CRUZ VEIN	1.15	0.15	406	0.0199	0.7459	0.4917
CSCS-25	SCS-143 to SCS-146	Vn- paralelas a SCS- BAUNDANCIA	3.8	0.1	65	0.0108	0.2023	0.2007
CSCS-25	SCS-143 to SCS-146	Vn- paralelas a SCS- BAUNDANCIA	3.8	0.1	65	0.0108	0.2023	0.2007
CSCS-34	SCS-180 to SCS-183	STA CRUZ VEIN	1.8	0.19	226	0.0043	0.0314	0.1526
CSCS-38	SCS-199 to SCS-200	STA CRUZ VEIN	2.2	0.8	177	0.0014	0.0025	0.0048
CSCS-40	SCS-202 to SCS-203	STA CRUZ VEIN	1.2	0.07	118	0.0014	0.0021	0.0107
CSCS-41	SCS-204 to SCS-212	ABUNDANCIA VEIN	6	0.43	161	0.0047	0.3703	0.5882
CSCS-44	SCS-218 to SCS-227	ABUNDANCIA VEIN	7.6	0.18	66	0.0053	0.1369	0.2878
CSCS-45	SCS-228 to SCS-230	ABUNDANCIA VEIN	0.3	0.13	118	0.0029	0.0314	0.109
CSCS-46	SCS-231 to SCS-233	ABUNDANCIA VEIN	0.2	0.12	100	0.0037	0.0383	0.236
CSCS-47	SCS-234 to SCS-237	ABUNDANCIA VEIN	2	0.24	106	0.0162	0.4162	0.2712
CSCS-48	SCS-238 to SCS-243	ABUNDANCIA VEIN	4.1	1.12	91	0.0109	0.24	0.3495
CSCS-49	SCS-244 to SCS-248	ABUNDANCIA VEIN	4.1	0.53	235	0.011	0.539	0.591
CSCS-53-B	SCS-259	ABUNDANCIA VEIN	Socavon	1.7	1180	0.0556	0.605	0.375
CSCS-54	SCS- 261 to SCS- 263	Vn- paralelas a SCS- BAUNDANCIA	1.9	0.09	77	0.0033	0.1215	0.009
CSCS-54	SCS- 261 to SCS- 263	Vn- paralelas a SCS- BAUNDANCIA	1.9	0.09	77	0.0033	0.1215	0.009
CSCS-55	SCS- 264 to SCS- 268	Vn- paralelas a SCS- BAUNDANCIA	0.7	1.79	794	0.0059	0.0333	0.1043
CSCS-55	SCS- 264 to SCS- 268	Vn- paralelas a SCS- BAUNDANCIA	0.7	1.79	794	0.0059	0.0333	0.1043
CSCS-56	SCS-269 to SCS-272	STA CRUZ VEIN	2.1	0.14	149	0.0102	0.1816	0.121
CSCS-57	SCS-273 to SCS-277	STA CRUZ VEIN	2.6	0.39	365	0.0342	0.39	0.3503
CSCS-58	SCS-278 to SCS-282	STA CRUZ VEIN	2.3	0.67	310	0.0057	0.2437	0.0946
CSCS-59	SCS-283 to SCS-287	STA CRUZ VEIN	3.6	0.31	144	0.0022	0.0264	0.1366

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Figure 9-16 Surface Map of the Santa Cruz South area

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Figure 9-17 Photographs showing the Santa Cruz Structure and a small shaft NW-SE30B:/70B:SW

Figure 9-18 Photographs showing the Abundancia Structure

Figure 9-19 Photograph showing the Abundancia Vein at the North (NE14ºSW/54ºNW) and South (NW13ºSE/48ºSW) part.

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10.0

DRILLING

Endeavour Silver’s previous drilling programs on the Guanaceví Mines project have been described detail in the previous Technical Reports. This section discusses the general drilling and core logging procedures, as well as focusing on the 2013 drilling programs.

10.1

Drilling Procedures and Core Logging

The drilling and core logging procedures, usually accepted and established in the Procedures Manual of Exploration are summarized below.

10.1.1

Drilling Procedures

	•	All drilling must be reviewed and approved by the management of Endeavour Silver.

	•	To develop this program it’s necessary to have the approval of the environmental authorities (Semarnat).

	•	The drill pads are marked and constructed according to a drilling program that previously was approved.

	•	Drill holes are typically drilled from the hanging wall, perpendicular to and passing through the target structure, into the footwall. No drilling is designed for intercept angles less than about 30º.

	•	Drill holes must pass through the target zone and are extended an average of 50m to avoid possible changes on the dip of the structure.

	•	Drill holes are typically HW to NW size in diameter.

	•	The drill rig it’s located under a strict control by the staff of Endeavour Silver, registering the azimuth, inclination and relative position to the drilling program.

	•	During the drilling advance, the trajectory of the drill hole it’s controlled through an electronic instrument equipped with a pair of accelerometers that measure the azimuth and inclination of the drill hole (Reflex), these survey measurements are made at 50 m intervals from the collar to the bottom and one extra in the mineralized zone. The survey data are sent to the office and thence to the Vulcan mine planning software and AutoCAD databases so that the hole can be accurately plotted while it is in progress.

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	•	True thicknesses are estimated from the measured inclination of the drill hole intercept and the interpreted dip of the vein.

	•	Drill core is collected daily and carried to the core logging facilities, always under supervision of the Endeavour Silver’s geologist.

	•	The core storage facilities at Guanaceví are well protected by high level security fences and are under 24 hours surveillance by security personnel. This arrangement minimizes any possibility of tampering with the dill cores.

10.1.2

Core Logging Procedures

In 2013, Endeavour Silver continued using its drill hole data collection and data management system for its exploration projects. In which all the geological and mechanical characters are collected and saved, with the purpose that this data it’s converted in a permanent and reliable information.

The configuration setup by Century Systems Technologies Inc. was previously selected for this purpose (Figure 10-1). Century was chosen because it directly interfaces with other software such as Vulcan, MapInfo and ArcGIS. The configuration selected was as follows:

DHLogger for drill hole data collection, management and reporting, which runs on a Windows XP or Windows 7 computer.

DHLite for drill hole data collection, which runs on a handheld Windows mobile computer. Fusion Client to move data back and forth between the local computer and the server(s).

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Figure 10-1 Century’s Configuration for Drill Hole Data Collection for the Guanaceví Mines Project

In 2008, Endeavour Silver established logging codes and other database organization and implemented the Century data collection and data management system at Guanaceví.

Each project is captured into a DHLogger stand-alone database. The database comes in two files that can be easily co opied to the office for backup and d sharing of the data.

Only one person can be adding data to a project’’s database at a given time in DHLogger but many people can be logging drill holes on DHLite at the same time.

The data are captured at the Project or in the office and the database files can be posted to a secure area in the office for others to copy to their computer and view.

10.2

2013 DRILLING PROGRAM AND RESULTS

10.2.1

2013 Surface Drilling Program

In 2013, Exploration Drilling at Guanaceví focused on exploring the Santa Cruz vein structure to the north of the Porvenir mine, in the Milache Claim.

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10.2.1.1.

2013 Milache Surface Diamond Drilling Program and Results

Early January, 2013, surface diamond drilling resumed on the Milache Claim to follow up silver-gold intercepts previously obtained on the Santa Cruz vein structure. One drill rig provided by Layne was in n operation. At the end of the program, Endeavour Silver had completed a total of 10,437.40 m in 20 holes (Table 10-1 and Figure 10-2).

Table 10-1
Summary for the Milache 2013 Surface Diamond Drilling Program (as at July, 2013)

Hole	Azimuth	Dip	Diameter	Total Depth (m)	Start Date	Finish Date


MCH-32	14 º	-89 º	HQ	527.1	29/11/2012	10/12/2012
MCH-33	50 º	-70 º	HQ	396.2	7/1/2013	19/01/2013
MCH-34	50 º	-61 º	HQ	429.9	19/01/2013	28/01/2013
MCH-35	50 º	-69 º	HQ	434.8	28/01/2013	6/2/20133
MCH-36	50 º	-77 º	HQ	472.8	6/2/2013	14/02/2013
MCH-37	54 º	-83 º	HQ	530.8	14/02/2013	23/02/2013
MCH-38	42 º	-62 º	HQ	390.4	23/02/2013	1/3/2013
MCH-39	42 º	-78 º	HQ	503.2	2/3/2013	12/3/2013
MCH-40	45 º	-59 º	HQ	539.7	12/3/2013	22/03/2013
MCH-41	45 º	-71 º	HQ	603.9	22/03/2013	3/4/2013
MCH-42	45 º	-63 º	HQ	606.3	3/4/2013	15/04/2013
MCH-43	40 º	-72 º	HQ	680.2	15/04/2013	27/04/2013
MCH-44	40 º	-70 º	HQ	563.8	28/04/2013	12/5/2013
MCH-45	41 º	-70 º	HQ	430.1	12/5/2013	20/05/2013
MCH-46	43 º	-78 º	HQ	506.3	20/05/2013	31/05/2013
MCH-47	41 º	-66 º	HQ	454.5	1/6/2013	10/6/2013
MCH-48	41 º	-63 º	HQ	402.6	11/6/2013	18/06/2013
MCH-49	41 º	-79 º	HQ	655.5	18/06/2013	2/7/2013
MCH-50	41 º	-74 º	HQ	602.2	3/7/2013	14/07/2013
MCH-51	37 º	-76 º	HQ	707.7	15/07/2012	30/07/2013
			Total	10,437.4

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Figure 10-2 Surface Map showing completed drill holes in the Milache Area

The purpose of this program was to explore the NW part of the Milache Concession, in order to check the continuity of the mineralization.

The drilling program was developed through sections 5 to 19, including Drill Holes MCH-34 through MCH-51, but only one of these Drill Holes had economical values, concluding that the mineralized zone its only located in the SE part of the concession, between Sections 1S through 7; the mineralization its located between elevations 1,900 and 2,200 masl even though its open to depth.

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Drilling highlights for Santa Cruz vein included 150 g/t silver & 0.52 g/t gold over 1.85 m true width (including 1,045 g/t silver & 4.11 g/t gold over 0.17 m true width) in drill hole MCH-32; 669 g/t silver & 1.79 g/t gold over 1.60 m true width (including 2,640 g/t silver & 9.38 g/t gold over 0.15 m true width) in drill hole MCH-33; and 299 g/t silver & 0.83 g/t gold over 3.78 m true width (including 1,565 g/t silver & 3.71 g/t gold over 0.18 m true width) in drill hole MCH-36.

Drilling results are summarized in Table 10-2 and the Santa Cruz vein intercepts are shown on the longitudinal section in Figure 10-3.

Figure 10-4 and Figure 10-5 depict typical cross-sections showing several of the holes drilled to test the Santa Cruz vein structure in the Guanaceví Mines Project.

Table 10-2
Summary of the 2013 Milache Diamond Drilling Results

Drill Hole ID	Structure	Mineralized Interval				Assay Results
		From (m)	To (m)	Core Length (m)	True Width (m)	Silver (g/t)	Gold (g/t)


MCH-32	Santa Cruz Vein	457.65	459.10	1.45	0.83	267	1.00
	Santa Cruz Composite	456.50	459.70	3.20	1.85	150	0.52
	Including	458.80	459.10	0.30	0.17	1,045	4.11
MCH-33	Santa Cruz Vein	328.90	331.15	2.25	1.72	596	1.59
	Santa Cruz Composite	328.90	330.90	2.00	1.60	669	1.79
	Including	329.45	329.65	0.20	0.15	2,640	9.38
MCH-34	Santa Cruz Vein	324.00	324.35	0.35	0.32	3	0.02
MCH-35	Santa Cruz Vein	353.50	356.05	2.55	2.12	6	0.03
MCH-36	Santa Cruz Vein	392.80	399.60	6.80	4.81	239	0.66
	Santa Cruz Composite	393.20	398.55	5.35	3.78	299	0.83
	Including	393.80	394.05	0.25	0.18	1,565	3.71
MCH-37	Santa Cruz Vein	469.90	471.40	1.50	0.92	12	0.02
MCH-38	Santa Cruz Vein	338.40	340.45	2.05	1.78	8	0.02
MCH-39	Santa Cruz Vein	404.50	405.65	1.15	0.88	3	0.02
MCH-40	Santa Cruz Vein	483.10	484.65	1.55	1.43	10	0.02
MCH-41	Santa Cruz Vein	552.15	553.05	0.90	0.74	23	0.04
MCH-42	Santa Cruz Vein	542.20	543.00	0.80	0.71	156	0.29
	Santa Cruz Composite	541.30	543.00	1.70	1.51	78	0.15
	Including	542.45	542.75	0.30	0.19	337	0.64
MCH-43	Santa Cruz Vein	609.55	609.80	0.25	0.21	8	0.01
MCH-44	Santa Cruz Vein	490.50	492.25	1.75	1.34	20	0.07
MCH-45	Santa Cruz Vein	389.65	394.20	4.55	3.63	5	0.02
MCH-46	Santa Cruz Vein	460.70	461.55	0.85	0.60	3	0.02
MCH-47	Santa Cruz Vein	387.10	389.15	2.05	1.79	22	0.07
MCH-48	Santa Cruz Vein Projection	316.30	318.35	2.05	1.83	0.4	0.01
MCH-49	Santa Cruz Vein	585.90	586.15	0.25	0.17	6	0.04
MCH-50	Santa Cruz Vein Zone	549.90	560.90	11.00	8.19	7	0.05
MCH-51	Santa Cruz Vein	647.40	647.80	0.40	0.29	3	0.01

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Figure 10-3 Surface Map showing completed drill holes in the Milache Area

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Figure 10-4 Cross-Section through Holes MCH-31, MCH-32 & MCH-33 Drilled to Test the Santa Cruz Vein in the Milache area.

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Figure 10-5 Cross-Section through Holes MCH2-1, MCH-34, MCH-35, MCH-36 &
MCH-37 Drilled to Test the Santa Cruz Vein in the Milache area.

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10.3

Comments on Section 10

The QP has reviewed the 2013 exploration programs and notes that the programs were conducted according to the Exploration Best Practices Guidelines as outlined by the CIM and with a good QA/QC program in place. There are no drilling, sampling, or recovery factors that could materially impact the accuracy and reliability of the results.

The QP concludes that the data acquired by Endeavour Silver through its exploration programs is suitable for use in estimating the mineral resources and ultimately the mineral reserves for the Guanaceví Mines Project.

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11.0

SAMPLE PREPARATION, ANALYSES, AND SECURITY

11.1

Sampling Method and Approach

A description of Endeavour Silver’s sampling method and approach for the Guanaceví Mines project was provided in previous Technical Reports by Range (2006) and Micon (2007, 2009, 2010, 2011, 2012 and 2013). Endeavour Silver personnel have made no material changes to the sampling method and approach since the publication of the March, 2013 report by Micon. For completeness of this report, the description from the March, 2013 report has been excerpted, edited and updated where appropriate.

11.1.1

Sampling Intervals

Sampling intervals range from about 0.3m to 2.5m, with most in the 0.5m to 1.5m range. The Endeavour Silver geologist use geological criteria to select sample intervals. Quartz vein material is separated from hanging wall and footwall horizons, and internal vein samples are broken out by texture type. Three principal types of vein textures are recognized: (a) massive, (b) banded and (c) brecciated. As much as possible, vein samples are selected to represent mineralization episodes.

11.1.2

Underground Sampling Methodology

Mine samples are collected principally for grade control purposes but are also used to build up a channel sample database for resource estimation purposes. Samples are collected from sills and in stopes. Sill samples are taken from the development face on a blast-by-blast basis. All sampling starts from the footwall and proceeds towards the hanging wall, with sample limits based on geological contacts. In stopes, and in sills if time permits, samples are taken from the back and footwall side-wall. In general, footwall waste samples are not taken systematically, although at least one footwall sample is normally taken in a sampling session, depending on wherever the footwall is veined or sulphide rich. If the vein is present in the footwall side-wall, it is sampled. Side-wall channel samples are measured vertically, whilst back samples are measured horizontally. Channel sampling is generally at 2.5 m intervals but can be increased to 5 m intervals in areas where the geology and grade distribution are well known. Samples are taken using a hammer and chisel; if the back is too high, a scaling bar is also used to chip the sample off.

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Sample locations underground are measured from a known reference point, usually an identified control point installed by Endeavour Silver surveyors. All grade control samples are bagged in heavy duty polyurethane bags with a commercially prepared sample ticket inserted in the bag, and the sample number marked on the bag exterior with marker pen. All sample information is noted in a field notebook and later transferred to daily information sheets in the office. Basic sample information is also noted on sample ticket slips which are stored in the mine geology department office.

11.2	Density Determinations

11.2.1	Exploration Samples

Density determinations from previous drilling programs were used for converting volumes to tonnes for the 2013 year-end resource estimates.

11.2.2

Mine Samples

Bulk density samples were previously collected from the mines in the Guanaceví operation throughout 2010. The majority of samples came from Porvenir North and Porvenir Dos. There was no collection of density samples in 2013. Earlier samples were sent for analysis to the Stewart Group laboratory facility in Zacatecas, Mexico. The results for the 179 samples collected are summarized in Table 11-1. A specific gravity value of 2.55, based on past production data, was used for converting volumes to tonnes for the year-end 2013 resources. This value is within the acceptable range based on the results to date.

Table 11-1
Bulk Density Determinations for Mine Samples from Porvenir North/Dos/Cuatro and Santa Cruz

Statistics	Porvenir North	Porvenir Dos	Porvenir Cuatro	Santa Cruz
Statistics	Porvenir North	Porvenir Dos	Porvenir Cuatro	Santa Cruz
Number of Data	134	35	4	6
Mean	2.53	2.50	2.59	2.51
Median	2.52	2.49	2.59	2.52
Standard Deviation	0.088	0.124	0.023	0.070
Sample Variance	0.008	0.015	0.001	0.005
C.V.	0.035	0.049	0.009	0.028
IQR	2.47 - 2.57	2.46 - 2.54	2.58 - 2.61	2.45 - 2.56
Minimum	2.26	2.29	2.56	2.43
Maximum	2.94	3.00	2.61	2.60
Range	0.68	0.72	0.05	0.17

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11.3

Quality Control / Quality Assurance (QA/QC) program

In order to monitor the sampling, preparation and assaying process Endeavour Silver has established a QA/QC program, on an effort to control or minimize possible errors, including the use of duplicate, blanks, standards and cross checks.

11.3.1

Sampling

11.3.1.1.

Mine Channel Samples

Mine chip channel samples and mill feed belt samples are prepared and analyzed at the Metalurgica Guanaceví (MG) laboratory, Endeavour Silver’s in-house laboratory located at the process plant site of the Guanaceví Mines project.

Grade control channel samples, which are used for stope based reserve estimates, are prepared and analyzed at the in-house laboratory. The sample preparation procedure for samples is as follows: Samples are received and checked in by laboratory staff; moist samples are dried for 2 to 4 hours; otherwise samples are crushed to -½ inch in a primary jaw crusher; samples are split using a 1 inch or ½ inch Jones splitter; 100 to 150 g of sample is retained for pulverizing and is put in a metal tray, along with a pulp envelope; remaining coarse rejects are returned to their original bag along with the sample ticket and stored; the 150 g crushed sample is then dried at a temperature of 100° C. The dried sample is pulverized in a ring pulverizer to -80 mesh; the pulverized sample is stored in a numbered envelope. The procedures for the mine channel sample preparatiion have been the same since 2008.

11.3.1.2.

Exploration Core Samples

All exploration drill core is transported under supervision of the Endeavour Silver’s geologist to the secure core storage facility at the Santa Cruz mine site. Sampling procedures typically begin with splitting by either a wheel-driven manual splitting device or an electric diamond-bladed core saw. The wheel-driven manual splitting device is generally used only when the core is badly broken-up and cannot be effectively cut by the diamond-bladed core saw. One half of the core is replaced in the original core box with depth markers, and the other half is bagged with sample tickets and recorded in the sample record. Once samples are bagged, they are transported to an outside laboratory.

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Since 2009, all drill core samples were sent to ALS-Chemex (ALS). ALS maintains a preparation facility in Chihuahua, where 50 g pulps are prepared and shipped to Vancouver, Canada for analysis. ALS emails assay data results to Endeavour Silver geologists and then returns the pulps to Guanaceví for storage at the core building at the Santa Cruz mine site. ALS is assessed against the international standard EN ISO/IEC 17025:2005 and is independent of Endeavour Silver.

All of Endeavour Silver’s drill core samples are bagged and tagged at the Guanaceví Mines project. Upon arrival at the laboratory, all samples are logged into the laboratory’s tracking system. Then the entire sample is weighed, dried and fine crushed to better than 70% passing 2 mm. A sample split of up to 250 g is then taken and pulverized to 85% passing 75 microns.

Sampling procedures and assay results are considered to be reasonably representative of the mineralization of the deposits and may be used with acceptable confidence in the estimation of the resources and reserves.

11.3.2

Analysis

11.3.2.1.

Mine/Grade Control Samples

At the MG laboratory, a 20 g sample is removed from the 100 g pulp and subjected to fire assay determination of gold and silver contents. Subsequent splits of the pulp are used for lead, zinc, copper, manganese and iron analyses by atomic adsorption (AA). Pulp and rejects are returned to the geology department within 1 to 3 days. The geology department selects pulps and rejects to be returned for re-assay. This methodology became fully operational in June, 2009, and has been maintained throughout 2013.

11.3.2.2.

Exploration Samples

All of Endeavour Silver’s exploration samples of rock and drill core were bagged and tagged at the Guanaceví warehouse and shipped to the ALS preparation facility in Chihuahua, Mexico. After preparation, the samples were shipped to the ALS laboratory in Vancouver, Canada, for analysis.

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Upon arrival at the ALS preparation facility, all of the samples are logged into the laboratory’s tracking system (LOG-22). Then the entire sample is weighed, dried if necessary, and fine crushed to better than 70% passing 2 mm (-10 mesh). The sample is then split through a riffle splitter and a 250 g split is then taken and pulverized to 85% passing 75 microns (-200 mesh).

In order to obtain less variability in the results and to favour the lower grade exploration samples, in 2013 Endeavour Silver continues using two phases in the analysis of the samples.

First phase:

Gold it’s assayed through fire assay followed by an atomic adsorption (AA) analysis. A 30 g nominal pulp sample weight is used. The detection range for the gold assay is 0.005 to 10 ppm.

The analytical procedure for Silver and Multi-elements is through an aqua regia digestion followed by inductively Coupled Plasma-Atomic Emission Spectroscopy (ICP-AES). The detection range for the silver assay is 0.2 ppm to 100 ppm.

Second phase:

The assays for evaluation of higher-grade silver (+/- gold) mineralization were also optimized for accuracy and precision at higher concentrations. All Endeavour Silver samples originally assaying >20 ppm silver are then re-assayed using a fire assay followed by a gravimetric finish. A 30 g nominal pulp sample weight is used. The detection ranges are 0.05 to 1,000 ppm for the gold assay and 5 to 3,500 ppm for the silver assay.

As an economical tool for first pass exploration geochemistry, the pulps are sometimes subjected to aqua regia digestion and inductively coupled plasma (ICP) multi-element analysis. The data reported from an aqua regia leach are considered to represent the leachable portion of the particular analyte. These analytical methods are optimized for low detection limits. Over-limits (>10,000 ppm) determined for lead and zinc by ICP are re-analyzed using atomic emission spectroscopy (AES). The analytical procedure is an aqua regia digestion followed by an ICP-AES finish. The detection ranges are 0.001% to 20% for lead and 0.001% to 30% for zinc.

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ALS is an independent analytical laboratory company which services the mining industry around the world. ALS is also an ISO-certified laboratory that employs a rigorous quality control system in its laboratory methodology as well as a system of analytical blanks, standards and duplicates. Details of its accreditation, analytical procedures and QA/QC program can be found at http://www.alsglobal.com/.

In 2013, the average turn-around tim me required for analyses was around 2 weeks.

11.3.3

QA/QC Program

11.3.3.1.

Mine Channel Sampling

The QA/QC protocol for production samples involves repeat assays on pulp and reject assays, along with in-house prepared blanks and control samples. No commercially available standards were used in 2013. Endeavour Silver creates standards in-house using selected pulp rejects which are prepared by a third party laboratory. Roughly 3% to 5% of production grade control sample are submitted for re-assay.

In August, 2009, the geology department began collecting and sending blanks along with production samples. This practice has continued through to the end of 2013. Currently, blanks are inserted at a frequency of 1 to 2 samples per day. Blanks are collected as run-of-mine material from waste headings such as the development ramps. These samples are usually of sufficiently low silver grade to be useful in detecting laboratory errors such as sample swaps and contamination, however, there is always the possibility that the samples will contain anomalous values. Blanks are submitted blind, that is, they are inserted into the sample stream using the same sample sequence and identifiers as any other sample collected.

Results of the blank assays are shown in Figure 11-1 and Figure 11-2. Approximately 5% of the 460 samples sent for assay in 2013 returned silver grades greater than 20 times the detection for silver and 15% were between 5 and 20 times the detection limit for silver. Sample values less than 100 g/t (5x detection) are considered acceptable.

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Figure 11-1 Silver r grade mine blanks

Figure 11-2 Gold grade mine blanks

Gold values were slightly better with only 2% of the 459 samples sent for assay returning gold grades greater than 20 times the detection, and 7% between 5 and 20 times the detection limit for gold. Sample values less than 0.60 g/t (5x detection) are considered acceptable.

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Maximum-minimum scatter plots for duplicate samples are shown in Figure 11-3 through Figure 11-8. In general, results of the duplicate re-assays indicate a good correlation for silver and moderate to poor correlation for gold. Acceptable failure rate for pulps duplicates is 10%. Silver pulps show a 13% failure rate while gold shows an 18% failure rate. Acceptable failure rate for reject duplicates is 20%. Silver pulps show a 36% failure rate while gold shows a 27% failure rate. Finally, failure rate for mine duplicates is 30%. Silv ver pulps show a 34% failure rate while gold shows a 28% failure rate.

The higher gold failure rate may be caused by low precision near the origin. Eliminating pairs that are close to detection will also reduce the failure rate. Overall the results are acceptable but perhaps could be improved.

Figure 11-3 Max-Min plot for silver pulps duplicates

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Figure 11-4 Max-Min plot for gold pulps duplicates

Figure 11-5 Max-Min plot for gold reject duplicates

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Figure 11-6 Max-Min plot for gold reject duplicates

Figure 11-7 Max-Min plot for silver mine duplicate samples

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Figure 11-8 Max-Min plot for gold mine duplicate samples

11.3.3.2.

Surface Exploration

Drilling in 2013, was supported by a QA/QC program to monitor the integrity of all assay results. Each batch of 20 samples inclu uded one blank, one duplicate and one standard. Check assaying is also conducted at a frequency of approximately 5%. Discrepancies and inconsistencies in the blank and duplicate data are resolved by re-assaying either the pulp or reject or both.

A total of 2,012 samples, including control samples, were submitted during Endeavour Silver’s surface drilling program at Guanaceví in 2013, as shown in Table 11-2.

A total of 101 pulps were also submitted for check k assaying.

Endeavour Silver’s sampling process, including handling of samples, preparation and analysis, is shown in the quality control flow sheet, Figure 11-9.

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Table 11-2
Summary of Control Samples Used for the 2013 Surface Exploration Program

Samples	No. of Samples	Percent (%)
Samples	No. of Samples	Percent (%)
Standards	95	4.7%
Duplicates	98	4.9%
Blanks	97	4.8%
Normal	1,722	85.6%
Total	2,012	100.0%

Figure 11-9
Flow Sheet for Core Sampling, Sample Preparation and Analysis

11.3.4

Surface Exploration Blank Samples

Blank samples were inserted to monitor possible contamination during the preparation process and analysis of the samples in the laboratory. The blank material used was commercial bentonite purchased for Endeavour Silver’s drilling programs on the Guanaceví Mines project. The bentonite used was Enviroplug Coarse (1/4”). Blank samples are inserted randomly into the sample batch and given unique sample numbers in sequence with the other samples before being shipped to the laboratory.

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Blank samples were inserted at an average rate of approximately 1 for each 20 original samples. Only a limited number of blank samples returned assay values above the detection limits for gold and silver. Blank samples were also assayed for copper, lead and zinc but little or no contamination was observed for these metals.

Based on the results obtained from the blank samples, it is considered that the assay results for the drilling programs are for the most part free of any significant contamination (Figure 11-10 and Figure 11-11).

Figure 11-10 Control Chart for Gold Assay from the Blank Samples Inserted into the Sample Stream.

Figure 11-11 Control Chart for Silver Assay from the Blank Samples Inserted into the Sample Stream.

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11.3.5

Surface Exploration Duplicate Samples

Duplicate samples were used to monitor (a) potential mixing up of samples and (b) variability of the data as a result of laboratory error or the lack of homogeneity of the samples.

Duplicate core samples were prepared by Endeavour Silver personnel at the core storage facility at the Guanaceví Mines project. Preparation first involved randomly selecting a sample interval for duplicate sampling purposes. The duplicates were then collected at the time of initial sampling. This required first splitting the core in half and then crushing and dividing the half-split into two portions which were sent to the laboratory separately. The duplicate samples were ticketed with the consecutive number following the original sample. One duplicate sample was collected for each batch of 20 samples.

Discrepancies and inconsistencies in the duplicate sample data are resolved by re-assaying either the pulp or reject or both.

For the duplicate samples, graphical analysis shows reasonable correlation coefficients for gold and silver in the majority of the samples. The correlation coefficients are 0.60 to 0.85 respectively (Figure 11-12 and Figure 11-13).

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Figure 11-12 Scatter Plot for Duplicate Samples for Gold

Figure 11-13 Scatter Plot for Duplicate Samples for Silver

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11.3.6

Surface Exploration Standard Reference Material

Endeavour Silver uses commercial reference standards to monitor the accuracy of the laboratories. Standard reference material (SRM) has been purchased from CDN Resource Laboratories Ltd. Each reference standard was prepared by the vendor at its own laboratories and shipped directly to Endeavour Silver, along with a certificate of analysis for each standard purchased.

In 2013, standard reference control samples were submitted at an average frequency of 1 for each batch of 20 samples. Reference standards were ticketed with pre-assigned numbers in order to avoid inadvertently using numbers that were being used during logging.

Two different standards were submitted and analyzed for gold and silver. The reference standards used during Endeavour Silver’s drilling programs are described in Table 11-3.

For the process to establish the control limits of the SRM, in 2013 Endeavour Silver modify the protocols, until 2012 the used value was the recommended for the SRM (Certificate), and the control limits were defined as a function of the standard deviation resulting from the round robin (the assays of a SRM at various laboratories). This has to do with precision, not with accuracy, which is the control that is wanted with the use of this material (“Simon, M.A. 2011”), therefore the mean used is the product of the ALS assays; also it was established a limit for this mean to have an statistical weight, which is 25 samples, in other words, if the reference material has more than 25 results the mean of the ALS assays its used, otherwise its used the recommended value in the SRM Certificate.

For graphical analysis, results for the standards were scrutinized relative to the mean or control limit (CL), and a lower control limit (LL) and an upper control limit (UL), as shown in Table 11-4.

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Table 11-3
Reference Standards Used for Endeavour Silver’s Drilling Programs

Reference Standard	Reference Number	Reference Source	Reference Standard Assays (Certificate)		Reference Standard Assays (Calculated)

			Gold (g/t)	Silver (g/t)	Gold (g/t)	Silver (g/t)


EDR-28	CDN-ME-7	CDN Resource Laboratories	0.22	151	0.22	146
EDR-30	CDN-GS-5J	CDN Resource Laboratories	4.9	73	5	75

Table 11-4
Basis for Interpreting Standard Sample Assays

Limit	Value
UL	Plus 2 standard deviations from the mean
CL	Recommended or calculated value (mean) of standard reference material)
LL	Minus 2 standard deviations from the mean

Endeavour Silver’s general rules for a batch failure are as follows:

	•	A reported value for a standard greater than 3 standard deviations from the mean is a failure.

	•	Two consecutive values of a standard greater than 2 standard deviations from the mean is a failure.

	•	A blank value over the acceptable limit is a failure.

	•	Results are reported to Endeavour Silver’s Qualified Person every month.

Results of each standard are reviewed separately. Most values for gold and silver were found to be within the control limits, and the results are considered satisfactory. The mean of the ALS assays agrees well with the mean value of the standard. Examples of control charts generated by Endeavour Silver are shown in Figure 11-14 to Figure 11-17 for the standard reference materials.

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Figure 11-14 Control Chart for Gold Assays from the Standard Reference Sample EDR-28

Figure 11-15 Control Chart for Silver Assays from the Standard Reference Sample EDR-28

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Figure 11-16 Control Chart for Gold Assays from the Standard Reference Sample EDR-30

Figure 11-17 Control Chart for Silver Assays from the Standard Reference Sample EDR-30

11.3.6.1.

Surface Exploration Check Assaying

To evaluate the accuracy of the primary laboratory, Endeavour Silver periodically conducts check analyses. Random pulps are selected from original core samples and send to a second laboratory to verify the original assay and monitor any possible deviation due to sample handling and laboratory procedures. Endeavour Silver uses the BSI-Inspectorate laboratory in Durango, Mexico, for check analyses.

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Correlation coefficients are high (>0.99) for both silver and gold, showing a high level of agreement between the original ALS assay and the BSI-Inspectorate check assay. Figure 11-18 and Figure 11-19 show the correlation between the values of Gold and Silver.

Figure 11-18 Scatter plot of Check Assays for Gold

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Figure 11-19 Scatter plot of Check Assays for Silver

11.3.6.2.

Mine Area Surface and Underground Exploration Drilling Program

Endeavour Silver’s sampling process for the mine’s exploration program, including handling of samples, preparation and analysis, is the same as shown in the quality control flow sheet presented as Figure 11-9.

11.4

Metalurgica Guanaceví (MG) laboratory

The assay lab (Figure 11-20) of the Guanaceví Mines Property is located within the processing plant area and consists of the following areas:

	•	Sample preparation area
	•	Fluxing and Fire assaying area
	•	Balance room
	•	Acid digestion room
	•	AAS room

In October 2012, the MG assay lab received ISO 9001-2008 certification.

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The lab currently processes about 7,000 samples per month from which about 4,600 samples are ore control (mine) samples and the remaining 2,400 samples are from the mill and metallurgical lab.

Silver and gold are assayed by fire assaying with AA finish for gold. Cu, Pb, Zn, Fe and Mn are analyzed by acid digestion and subsequent AA measurement of each metal.

Figure 11-20 MG Lab Guanaceví Mine

In addition to sending check samples to commercial laboratories, Endeavour Silver’s MG lab uses various quality controls assaying procedures including:

	•	Duplicate samples,
	•	Blanks
	•	Commercial reference standards, and
	•	Check assaying of selected pulps at different laboratories.

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11.4.1

MG Laboratory QA/QC and Charts

11.4.1.1.

MG Blank Samples

Blanks were used by the MG lab in 2013. The QP did not receive this dataset in time to be included in this report. The blank data was not reviewed by the QP.

11.4.1.2.

Pulp and Reject Duplicate Sampling

Duplicate assay checks were used by the MG lab in 2013. A maximum-minimum scatter plot for silver duplicate samples is shown in Figure 11-21. In general, results of the duplicate re-assays show a good correlation combined with acceptable failure rate of 2%. No data for gold was supplied.

Figure 11-21 Max-Min plot for silver pulps duplicates

11.4.1.3.

Control Samples

The MG lab uses commercial reference standards to monitor the accuracy of the laboratories. The standard reference material (SRM) was purchased from CDN Resource Laboratories Ltd. Each reference standard was prepared by the vendor at its own laboratories and shipped directly to Endeavour Silver, along with a certificate of analysis for each standard purchased.

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In 2013, standard reference control samples were submitted at an average frequency of 1 for each batch of 20 samples.

Three different standards were submitted and analyzed silver. The reference standards used at the MG lab described in Table 11-5. Gold assay data was not provided.

Table 11-5
Reference Standards Used at Endeavour Silver’s MG Lab.

Reference Standard	Reference Number	Reference Source	Reference Standard Assays (Certificate)
			Gold (g/t)	Silver (g/t)


	CDN-FCM-6	CDN Resource Laboratories	2.15 ± 1616	156.8 ± 167.9
	CDN-FCM-4	CDN Resource Laboratories	2.61 ± 160.30	402 ± 1625
	CDN-FCM-18	CDN Resource Laboratories	0.512 ± 160.07	58.2 ± 165.1

A total of 4,923 individual standard control samples were analyzed in 2013. For graphical analysis, results for the standards were scrutinized relative to the mean, also referred to as the control limit (CL), and a lower control limit (LL), defined as 2 standard deviations from the mean, and an upper control limit (UL), defined as 3 standard deviations from the mean.

Results of each standard were reviewed separately. The results are considered satisfactory and most values for silver were found to be within the specified control limits. The median value of the MG assay agrees well with the mean value of the specific standard. However, there is a tendency for the MG assay to be lower than the certified values for each standard tested. Examples of the silver control charts for the standard reference materials are shown in Figure 11-22 to Figure 11-24.

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Figure 11-22 Control Chart for Silver Assays from the Standard Reference Sample CDN-FCM-18.

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Figure 11-23 Control Chart for Silver Assays from the Standard Reference Sample CDN-FCM-6.

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Figure 11-24 Control Chart for Silver Assays from the Standard Reference Sample CDN-FCM-4.

11.5

Comments on Section 11

Endeavour Silver’s sampling protocols for evaluation purposes (underground and surface drill cores) follow the current CIM exploration best practice guidelines and this provides a degree of confidence regarding the validity and integrity of the database used for the resource and reserve estimates.

For production scheduling, biases in chip sampling rarely attain a perfectly representative sample due to the preferential sampling of soft material leading to over or under representation of mineralized material leading to over or under estimation of grade. Also, chip samples rarely represent 100% of the sample space and may lead to an added bias. However, chip sampling in underground mines is a popular and for the most part, accepted practice around the world.

The fact that chip sampling is done on a closely y spaced intervals (3-5m), the practice tends to generate very large datasets, and in most cases, due to the large sample size, these datasets are statistically representative of the material being sampled.

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Endeavour Silver’s underground sampling procedure conforms to current industry practices and standards, and is essentially being used for grade control and ore-waste differentiation practices.

Endeavour Silver’s evaluation drilling samples can be considered representative. Endeavour uses HQ (NQ when needed) core size which yields close to 100% core recovery within the target zone and provides a sufficiently large sample size. There are no known factors that may result in sample biases.

The quality of the bulk density samples collected is demonstrated by the results being consistent with previous determinations. No drilling, sampling or recovery factors have been identified that could result in sampling bias or otherwise materially impact the accuracy and reliability of the assays and, hence, of the resource database.

Tables of the significant drilling assay results for the Milache drilling are included in Section 10, as part of the discussion of the results of the 2013 drilling program. The results will not be reproduced here. No table of significant underground sampling assay results is included here as the underground assays are part of the mine grade control program.

The QP has reviewed the QA/QC program in place and considers that both the regional exploration and mine department drilling and sampling programs are adequate and adhere to commonly used practices in the industry.

The QP considers the sample preparation and sample security are adequately implemented.

The QP considers that the QA/QC monitoring is applied at a sufficient level to assure that the results are reasonably accurate.

The QP considers the data collected appropriate for use in estimating the resources and reserves for the project.

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12.0	DATA VERIFICATION

12.1	Database Verification for the Mineral Resource Estimate

12.1.1	Review of the In-House Data Protocols

12.1.1.1.

Database Construction

Endeavour Silver conducts a validation process on the underground sampling and surface exploration data generated from its Guanaceví Mines project. The data verification procedures generally involve the following:

Visually checking the data for the following:

	•	Any non-conforming assay information, such as duplicate and missing sample numbers.

	•	Verifying collar elevations against survey information for each drill hole.

	•	Verifying collar coordinates against survey information for each drill hole.

	•	Verifying the dip and azimuth against survey information for each hole.

	•	Comparing the database interval against the original assay certificate for drill hole/channel samples.

	•	Verifying survey information for location of underground channel samples used in reserve estimation.

Using Vulcan software to check for data errors and 3D visualization for vein continuity.

The assay information comes directly from the laboratory in an electronic format and is merged into the database using sample numbers. Once the laboratory has finalized assays, they are put into a dedicated database directory.

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The data are in a format that is directly importable to the company’s Vulcan modelling software. The export format is an Excel spreadsheet, so all data are also readily importable for use in spreadsheets or a different database.

Senior project personnel have portable versions of the drill hole database on their laptop computers. This allows them access to the data at all times. The portable databases are only up-to-date to the point that the master database is copied onto the laptop. Through day-to-day use of the database, staff personnel are constantly verifying and rechecking data.

Channel sample assay data are entered into individual Excel spreadsheets used for day-to-day grade control purposes; in addition assay data on sample orientation and location are also entered. All location data are relative to a local surveyed reference point. Channel samples are plotted onto plans prepared on the basis of most up-to-date survey information. If survey data for a particular stope cut are not available, the sample location is estimated on the basis of the most recent survey pick-up. Coordinates are recorded manually and then entered into an Excel spreadsheet. The process of plotting data onto plans ensures that most field recording errors are identified and corrected.

The channel survey and assay data are then merged on the basis of sample numbers to produce the final database for resource estimation. For data collected in late 2007 and early 2008, the merging of data was done using assay plans prepared in AutoCAD, as field data were not routinely plotted up and coordinates recorded at the time. The merging of data initially encountered numerous problems of data duplication. Problems of channel data duplication were filtered using Excel spreadsheets and also Vulcan software. Problems of errors with sample location were identified using Vulcan 3D software. Duplicated channel data are removed, with the oldest data being accepted as the original information. In some cases (evaluated on a case-by-case basis) duplicated data were accepted or rejected on the basis of sample number sequences. Given the large number of channels that were available for use in the channel sample database, the general approach was to exclude any channels/samples with data issues. Much of this process of data elimination is manual and extremely time consuming; due to the quantity of data some errors may still exist in the channel sample database, but the relatively small number means they will have an insignificant effect on the overall resource estimates. A final channel database for resource estimation in an Excel spreadsheet is in a format compatible for import into a Vulcan database.

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Assay data and information generated by both operations and exploration are currently transmitted manually and the entire paper trail is accessible and available for inspection.

12.1.1.2.

QA/QC on Assay Data

In addition to using accredited commercial laboratories, Endeavour Silver’s exploration division has imposed and maintains various quality controls on sampling and assaying procedures including:

	•	Duplicate samples.

	•	Blanks.

	•	Reference standards.

	•	Check assaying of selected pulpps at different laboratories.

12.1.2

Validation of Data and In-House Protocols

The QP has visited the Guanaceví Mines property regularly during 2013 and has performed the following validation tasks during those visits:

	•	Review of the property geology and the state of geological/mineralization knowledge.

	•	Review of the evaluation/exploration practices, specifically drilling, underground channel sampling, drill core handling and sampling procedures and sample security arrangements.

	•	Review of on-site laboratory facilities.

	•	General review of QA/QC monitoring reports and charts.

	•	Review of database integrity/back-up and storage procedures.

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12.1.2.1.

State of Geological / Mineralization Knowledge

Endeavour Silver site geologists base their geological model on a clear understanding of the geology of the deposit. That understanding comes from the intelligent interpretation of accurate observations of surface, underground and drilling exposures. Testing of the geological model is achieved through a thorough review of the geological mapping of the surface and underground openings, as well as auditing the logging and recording of geological observations from drill holes. Endeavour Silver conducts underground development and continuous level back mapping to guide development sampling crews and to facilitate the interpretation of the sampling results.

The surface exploration procedures are enhanced by the use of drill core orientation techniques (Ballmark Oriented Core System) which provide vital information on geological structure and mineralization continuity, influencing the geological model used in the resource estimation

The QP is satisfied that the geology teams at Guanaceví have acquired a good understanding of the geology and mineralization controls which have an important bearing on resource estimates and future exploration efforts. Thus, the resource estimation process is well supported by a good geological/mineralization model.

12.1.2.2.

Review of Exploration Practices

The QP is satisfied that the drilling procedures s are in accordance with the current CIM Exploration Best Practices Guidelines. On the drill site, surveys are conducted to obtain collar coordinates, elevation of the site and its surroundings, inclination and azimuth of the drill hole. This is important for accuracy in the production of maps, sections and plans. As drilling progresses, the inclination and azimuth of the drill hole are monitored by conducting down-hole surveys. As the targeted drill hole depth is approached, the hole is surveyed using a Reflex down-hole survey instrument in multi-shot mode.

Endeavour Silver aims for HQ and NQ core sizes for surface and underground drilling, respectively. The bigger the sample, the more representative it is. The slightly smaller underground core is due to the lower capacity of the rigs as compared to surface rigs. Core logging is by bar-coding systems with a minimum of descriptive content. This is good practice which provides a check list, minimizes data transcription errors and assists in maintaining consistency in logging.

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In summary, the quality of Endeavour Silver’s diamond drilling is assured by good survey control, NQ and HQ core sizes which yield representative samples, good core recoveries which yield whole intercepts in targeted potential ore zones, and target intersection angles as near to perpendicular as possible. The core storage facilities at Guanaceví are well protected by a high level security fence and are located in an area under 24-hour surveillance by security personnel.

12.1.2.3.

On-site Laboratory Inspection

The QP has visited the laboratory facilities at Guanaceví several times during 2013. The laboratory in-house QA/QC protocols are in accordance with the CIM best practices guidelines. These include regular calibration of measuring instruments, tight controls/supervision in the sample preparation room to avoid contamination between samples and use of internal certified standards. Currently, the laboratory takes care of all production samples for the mine.

12.1.2.4.

Database Check

The QP reviewed the database used for the Milache resource estimate and found no apparent errors on drill collar coordinates, down-hole deviations, lithology and assay data. Given these observations it is the QP’s option that the Milache database has been reasonably constructed.

12.2

Comments

The QP satisfied that the database was generated in a credible manner and that it is representative of the mineralization encountered at the Guanaceví Mines project.

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The QP considers the data suitable to support mineral resource estimation.

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13.0	MINERAL PROCESSING AND METALLURGICAL TESTING

13.1	Metallurgical Testing

13.1.1	Mineralogy

Several ore and cyanide leach residues were analyzed at the University of San Luis Potosi in 2012:

	•	Mill feed combined ore

	•	Porvenir North ore and cyanide leach residue

	•	Porvenir 2 ore and cyanide leach residue

The most abundant silver mineral was Argentite (Ag2S). The less frequent minerals were Stromeyerite, not specified Sulfosalts, native silver and gold in various sizes and occluded in quartz or Mn-oxides. The size of silver and gold mineral grains varies from less than 1 micrometer (native gold and silver) up to 120 micrometers (Argentite) (Table 13-1). Metal sulfides were found (Pyrite, Sphalerite, Galena, and Arsenopyrite) (Table 13-2).

Table 13-1
Silver and gold distribution in ore and leach residue samples

Mill feed ore Ag 295 gpt Au 2.1 gpt	Porvenir 2 ore Au 1.6 gpt Ag 261 gpt	Porvenir 2 Leach residue Au 0.30 gpt Ag 132 gpt	Porvenir 4 ore Au 2.1 gpt Ag 234 gpt	Porvenir 4 Leach residue Au 0.6 gpt Ag 53 gpt





100% of silver as Argentite Ag₂S from which 80% is liberated, size from 9 to 20 μm, and 20% is locked in quartz	96% of silver as Argentite Ag₂S from which 85% is liberated, size from 35 to 120 μm, and 15% is associated with Stromeyerite, Galena and Pyrite as particles with size <3μm;	100% of silver as native silver in particles smaller than <1μm.	Argentite (Ag₂S) grains smaller than 10 μm and locked in Mn,Ca- oxides.	Argentite Ag₂S particles smaller than 5 μm









	4% of silver as Stromeyerite (Ag,Cu)₂S and associated with Argentite		Stromeyerite, (Ag,Cu)₂S, particles smaller than 10 μm and locked in Mn,Ca- oxides	As native gold in particles smaller than 1μm






			Ag-sulfosalts granes smaller than 10 μm and locked in Mn,Ca- oxides

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Table 13-2
Summary of mineralogical analysis of ore and leach residue samples

Mineral	Mill feed ore	Porvenir 2 ore	Porvenir 2 Leach residue	Porvenir 4 ore	Porvenir 4 Leach residue


	%	%	%	%	%
Ag-minerals	0.035	0.03	0.01	0.037
Sphalerite	0.27	0.08	0.08
Arsenopyrite		0.019
Galena	0.1	0.028
Pb-minerals			0.03
Pyrite	0.88	2.88	1.34	1.2	1.18
Fe-oxides	1.1		1
Mn-oxides	1.2		1	2.5
Mn-minerals		1.2
Quartz	57.5	90	90	80.5	83
K-Feldspar	37.2	5
Ca,Fe-silicates				14	14
Caolinite			6.04
Barite			0.5
Others	1.66	0.76		1.8	1.82

13.1.2

Flotation

Flotation of Santa Cruz ore recovered 75% of silver and 82% of gold obtaining a saleable concentrate with silver grade 11 kg/t. However the flotation recovery is lower than by cyanide leaching and in addition the concentrate sale costs are considerably higher than Dore selling costs. Both lower recovery and higher sale costs make flotation less economic option than cyanide leach.

13.1.3

Hot cyanide leach

Hot cyanide leach tests showed faster leaching rate. An economic evaluation is required.

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13.1.4

Leach tests of exploration samples (Milache)

Bottle roll tests resulted in relatively high metal recoveries (Table 13-3).

Table 13-3
Results of bottle roll tests on Milache ore samples

Sample	Head grade		Au Recovery
	Au g/t	Ag g/t	% Au	% Ag
	Au g/t	Ag g/t	% Au	% Ag
MCHT-01	1.53	434	98.00%	92.40%
MCHT-02	0.89	375	96.50%	90.80%
MCHT-03	0.9	292	98.90%	92.10%
MCHT-04	2.52	1105	98.70%	96.30%

13.2

Process Plant

The process plant is discussed in Section 17.2.

13.3

Comments on Section 13

The QP is unaware of any processing factors or deleterious elements that could impact the potential economic extraction of metal from the Guanaceví Mines ore.

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14.0	MINERAL RESOURCE ESTIMATES

14.1	Terms of Reference

The mineral resource estimates presented here were prepared according to the guidelines of the Canadian Securities Administrators' National Instrument 43-101 (Aug, 2011), Form 43-101F1 (Aug, 2011), and CIM Estimation of Mineral Resource and Mineral Reserves Best Practices Guidelines (2003). Mineral resource classifications comply with CIM Definition Standards for Mineral Resources and Mineral Reserves (November 27, 2010).

The process of mineral resource estimation includes technical information which requires subsequent calculations or estimates to derive sub-totals, totals and weighted averages. Such calculations or estimations inherently involve a degree of rounding and consequently introduce a margin of error. Where these occur they are not considered to be material. This observation also applies to the mineral reserve estimate discussed in Section 15.

This section presents updated mineral resource estimates for the Guanaceví mines unit based on technical data and information available as of December 31, 2013. Previous mineral resource estimates for the Guanaceví unit were reported by Watts, Griffis and McOuat (2005), Range Consulting (2007), Micon International (2007, 2009, 2010, 2011 and 2012) and Endeavour Silver (2008). These estimates are discussed in Section 6.4 of this report. The current mineral resource estimates were prepared by Guanaceví mine staff and the author based on the results of underground chip, along with surface and underground drill hole sampling.

Calculations required during the resource estimating process arrive at totals and weighted averages with some variability in precision. Rounding to normalize to significant digits has resulted in minor apparent discrepancies in some tables, and these discrepancies are not material in the opinion of the author.

The December 31, 2013 mineral resource estimate of the producing mines and audit of the resources in the exploration areas of the Guanaceví Property supersede the December 15, 2012, resource estimate and audit which was published in the March 27, 2013 Technical Report.

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14.1.1

CIM MINERAL RESOURCE DEFINITIONS AND CLASSIFICATIONS

All mineral resources presented in a Technical Report must follow the current CIM definitions and standards for mineral resources and reserves. The latest edition of the CIM definitions and standards was adopted by the CIM council on November 27, 2010, and includes the resource definitions reproduced below:

“Mineral Resource”

"A Mineral Resource is a concentration or occurrence of diamonds, natural solid inorganic material, or natural solid fossilized organic material including base and precious metals, coal, and industrial minerals in or on the Earth's crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge."

"The term Mineral Resource covers mineralization and natural material of intrinsic economic interest which has been identz3ed and estimated through exploration and sampling and within which Mineral Reserves may subsequently be defined by the consideration and application of technical, economic, legal, environmental, socio-economic and governmental factors. The phrase "reasonable prospects for economic extraction" implies a judgment by the Qualified Person in respect of the technical and economic factors likely to influence the prospect of economic extraction. A Mineral Resource is an inventory of mineralization that under realistically assumed and justifiable technical and economic conditions might become economically extractable. These assumptions must be presented explicitly in both public and technical reports. "

“Inferred Mineral Resource"

"An 'Inferred Mineral Resource' is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes."

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"Due to the uncertainty that may be attached to Inferred Mineral Resources, it cannot be assumed that all or any part of an Inferred Mineral Resource will be up-graded to an Indicated or Measured Mineral Resource as a result of continued exploration. Confidence in the estimate is insufficient to allow the meaningful application of technical and economic parameters or to enable an evaluation of economic viability worthy of public disclosure. Inferred Mineral Resources must be excluded from estimates forming the basis of feasibility or other economic studies."

“Indicated Mineral Resource"

"An 'Indicated Mineral Resource' is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics, can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed."

"Mineralization may be classified as an Indicated Mineral Resource by the Qualified Person when the nature, quality, quantity and distribution of data are such as to allow confident interpretation of the geological framework and to reasonably assume the continuity of mineralization. The Qualified Person must recognize the importance of the Indicated Mineral Resource category to the advancement of the feasibility of the project. An Indicated Mineral Resource estimate is of sufficient quality to support a Preliminary Feasibility Study which can serve as the basis for major development decisions."

"Measured Mineral Resource"

"A 'Measured Mineral Resource' is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity."

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"Mineralization or other natural material of economic interest may be classified as a Measured Mineral Resource by the Qualified Person when the nature, quality, quantity and distribution of data are such that the tonnage and grade of the mineralization can be estimated to within close limits and that variation from the estimate would not significantly affect potential economic viability. This category requires a high level of confidence in, and understanding of, the geology and controls of the mineral deposit.”

14.2

December 31, 2013 Resource Estimates

Resources in the lower Santa Cruz have been estimated using IDW interpolation.

Resources for remaining developed areas of Porvenir North, Porvenir Cuatro and Santa Cruz have been estimated using a polygonal method.

Resources for the exploration areas (San Joaquin, La Blanca-Mi Nina and Epsilon-Soto) have been carried forward from the December 15, 2012, estimates, as there has been no change since that time. The resources for these areas were estimated by Endeavour Silver as of the end of 2011, using the polygonal method, and were verified by Micon in 2011. Figure 14-2 to Figure 14-8 are longitudinal sections showing the current resources estimated for Epsilon-Soto, San Joaquin and La Blanca-Mi Niña.

14.3

Previous Estimates

Information on previous estimates of mineral resources is given in Section 6.4. The QP has not relied on previous estimates and they should not be considered current.

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14.4

Database

The master database at the mine is contained in a Vulcan Isis^® database.

Chip sampling data accounts for the bulk of the resource database. The samplers, under supervision of the geologists, record the sample numbers and location information in sample ticket books. These are returned to the mine office for processing by the geologists and data entry clerks. Data necessary to estimate resources is generally maintained in electronic form as spreadsheets. The data is not centrally stored, and resides on various computers and compact discs in the geology office. Composite grades are calculated using a standard format for subsequent presentation on CAD-generated longitudinal sections.

Longitudinal sections are the principal tool for displaying the resource blocks and the sample averages used to generate them. Each vein at Guanaceví has its own long section, comprising 11 separate resource estimates.

14.5

Sample Capping

The capping levels used in the 2013 resource were 1,482 g/t Ag and 2.20 g/t Au. These levels were used for capping channel assays in all veins.

The QP reviewed capping levels for 2013 based on quantiles analysis combined with probability plots and histograms and considers the capping values used in 2013 to be acceptable.

It is an industry standard practice to use capping to prevent the unreasonable over-projection of extreme grades (outliers) during resource modeling. Outliers can represent data belonging to a separate geologic domain and if possible should be separated from the existing population and treated independently (Sinclair, 2002 p167). The idea to statistically examine the outliers within a population and to trim them to a lower grade value based on the results of the analyses. The coefficient of variation (CV) were examined for Au and Ag the Guanaceví data. The CVs range from 1.41 to 3.15 suggesting that the data will be influenced by the presence of outliers. Capping is done to lessen the influence of these outliers. The procedure is performed on high grade values that are considered outliers and that cannot be correlated to another geologic domain. In the case of Guanaceví, the gold and silver populations were examined using decile analysis, histograms and probability plots.

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The use of these methods allows for a more objective approach to capping threshold selection. Following the guidelines of Parrish (1997), a decile analysis was performed on the grade distributions of Ag and Au for each vein domain to determine if special treatment of outliers was necessary.

Histograms and probability plots are review to examine the nature of the upper tail of the distribution. A possible capping threshold is chosen from the probability plot at the location where the plot becomes erratic and discontinuous as higher grades depart from the main distribution.

Calculated capping thresholds for various capping methods are listed in Table 14-1 for silver and Table 14-2 for gold.

For each vein, the silver capping threshold used at Guanaceví (1,482 g/t) is within a lower boundary defined as the 95% percentile and a threshold based on a visual inspection of the probability graph. The capping value is located in the upper portion of the range where the upper limit is based on visual inspection of the probability graph.

The gold capping threshold used at Guanaceví (2.20 g/t) is within a lower boundary defined as the 95% percentile and an upper boundary based on visual inspection of the probability graph. The capping threshold selected for gold is considered acceptable however it is recommended that capping levels be revisited for future resource work.

Table 14-1
Summary of Silver Chip Sample Capping Thresholds for the Veins at Guanaceví

Zone	Silver (g/t)
	Silver (g/t)
	CV	p95	Mean + 2SD	Probplot
Porvenir North	2.05	741	1,149	2,430
Porvenir Cuatro	1.41	1,076	1,263	2,400
Santa Cruz	2.33	801	1,181	3,000

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Table 14-2
Summary of Gold Chip Sample Capping Thresholds for the Veins at Guanaceví

Zone	Gold (g/t)
	Gold (g/t)
	CV	p95	Mean + 2SD	Probplot
Porvenir North	3.15	1.86	4.07	7.00
Porvenir Cuatro	1.73	3.50	4.42	8.00
Santa Cruz	2.82	1.41	2.63	5.00

14.6

Tonnage

The Guanaceví Mines project uses a specific gravity of 2.5 to estimate tonnage. This is considered reasonable for this type of deposit and is based on a number of tests on samples collected from the property.

14.7

Assumptions and Key Parameters

Resources are diluted to a minimum mining width of 2.0m. Assumed metal prices are $1420 per ounce for gold and $24.20 per ounce for silver. Resource blocks above a cut-off of 100 g/t silver equivalent are considered for inclusion in resources. Silver equivalent is calculated with a factor of 60:1 gold:silver.

14.8

Methodology

For the year ended December 31, 2013, two different methodologies have been employed for the estimation of resources for the Guanaceví Mines Property, 2D polygonal estimates and 3D Inverse Distance Methods. Each method as relates to the Guanaceví project is reviewed in the following sections.

14.8.1

2D Polygonal Resource Estimates

The 2D polygonal method is based on the use of a longitudinal section to estimate mineral resources. This method has been used herein for estimating the resources within the Porvenir North, Porvenir Cuatro and the upper part of Santa Cruz mines. This method is also used for the resources defined by exploration drilling.

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14.8.1.1.

Blocks within the operating Mine

The mineral resource estimates presented in this report are estimated by polygonal methods using fixed-distance vertical projections from chip sample lines in the development drifts and stopes. The average grade of a sample line is the weighted average of the capped assays and the assay length.

The lateral resource block limits are defined by the geologists who review grade trends in the chip sample lines. Chip sample lines with similar grades above the resource cut-off are grouped together to form the resource blocks.

The area of a block is the length in section multiplied by the vertical projection. The volume is obtained by multiplying the area by y the average width of the vein as sampled.

Volume is converted to tonnage by multiplying the block volume by a global bulk tonnage factor of 2.5 tonnes/m³

Blocks that are determined to have reasonable potential for economic extraction are tabulated in an Excel spreadsheet and classified by grade and distance-to-nearest-data criteria.

Figure 14-1 shows a portion of a typical resource longitudinal section for the Porvenir North Mine. Orange and light blue blocks are classified as Measured and Indicated resources respectively. Red and green blocks meet reserve criteria and are respectively classified as Proven and Probable reserves. Mined-out areas are shown as solid gray.

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Figure 14-1 Portion of typical resource long section (Porvenir North) showing examples of resource and reserve blocks as explained in text.

14.8.1.2.

Blocks based on Drilling

Mineral resource blocks are defined by drawing a polygon around each drill intercept on a longitudinal section. A 25 m projection from the centroid of the drill intercept is then made for indicated resource blocks. When the continuity of mineralization is determined, an additional 25 m projection is made for inferred resources. The area of the polygon is multiplied by the average horizontal width of the composited drill intercept to estimate the volume.

The 2D classic polygonal method is appropriate in areas tested by a limited number of drill holes and has been successfully used by Endeavourr Silver’s exploration division for the past several years. The method is confirmed as appropriate by the extent to which Indicated resources have been upgraded to reserves.

The resources for Noche Buena, San Joaquin, La Blanca-Mi Niña and Epsilon-Soto have been carried forward from 2011 since there was no additional work/exploration conducted in these areas during 2012.

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Figure 14-2 Longitudinal Section showing the Resources for the Epsilon-Soto Vein

Figure 14-3 Longitudinal Section showing the Resources for the Footwall Soto Vein

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Figure 14-4 Longitudinal Section showing the Resources for the Hanging Wall Soto Vein

Figure 14-5 Longitudinal Section showing the Resources for the Epsilon Vein

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Figure 14-6 Longitudinal Section showing the Resources for the San Joaquin Vein

Figure 14-7 Longitudinal Section showing the Resources for the La Blanca Vein

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Figure 14 8 Longitudinal Section showing the Resources for the Mi Niña Vein

14.8.2

Block Modelling

Resources for the Santa Cruz Mine were estimated using 3D modelling and Inverse Distance Weight (IDW) as the interpolator. The database comprised surface and underground diamond drill holes.

Compositing database were generated in Vulcan using a run length option, choosing 1.8 m as the maximum composite length.

The block models were based on wireframes for the three main veins at the Santa Cruz Mine, which in turn were used to flag the composites database.

The block model descriptions are as follows:

The block model of the three veins covers a 3D volume in UTM coordinates from 400,364 to 401,532 east, 2,865,742 to 2,866,910 north, and 1680m to 2491m elevation. The lower limit was defined by the influence of the deepest drill hole. The upper limit was defined by the influence of the upper most drill hole.

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Based on the geometry of the deposit and drill hole spacing, a parent block size of y = 5m, x = 5m and a nominal z = 200 m was selected to fill the mineralization envelope, and subblocks of z=0.05 m (along true width direction) were used to get an accurate volume representation.

A volume check of the block model versus the mineralization envelopes revealed a good representation of the volumes of the three solids.

Drill hole intercept data were composited over the geological width of the vein. Grade estimation was done using an inverse distance interpolator with a power of 3 and an isotropic search. The minimum number of samples used in the grade estimation of a block was 3 and the maximum 6.

The search parameters applied for grade interpolations are summarized in Table 14-3.

Table 14-3
Search Ellipsoid Parameters for the Guanaceví Resource Models

The interpolated models were loaded into custom Excel spreadsheets for tabulation. The Excel spreadsheets applied dilution and tabulated the resources based on the specified cut- off. Each block was first diluted to a 1.8m minimum mining width and then had additional over break dilution applied.

14.9

Classification

Mineral resources were classified on the basis of the location of blocks relative to the data used to interpolate the block grade according to the following criteria.

Measured mineral resources apply to those resource blocks where grade, density, shape and physical characteristics are so well established to allow the appropriate application of technical and economic parameters, to support production planning.

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For a resource based on chip sample data, Measured resources are projected up to 10 m from sample data or halfway to adjacent data points, whichever is less. For a resource defined by drilling only, Measured resources are based on drill intercepts spaced at between 10 and 25m depending on the structural complexity and geological continuity. There are currently no Measured resource blocks defined only by drilling at Guanaceví due to sample spacing.

Indicated mineral resources refer to those resource blocks (polygons) where the geological framework, continuity and grade of mineralization are sufficiently understood to support a preliminary feasibility study which will serve as the basis for major development decisions. For the mining operations, this is applicable to those blocks which have had the historical mine sampling superseded by Endeavour Silver's subsequent channel sampling programs which, in conjunction with the confidence gained from the historical reconciliations, provide an acceptable level of confidence in the sample grades and resultant block estimates. All of the modelled Indicated resource blocks for the existing operations are within a maximum distance of 35 m from any data point including development, chip samples or drill hole intercepts.

For the exploration division's polygonal resource estimates, a 25 m search radius is used in the definition of Indicated resources.

Inferred mineral resources are those blocks/areas where confidence in the estimate is insufficient to enable an evaluation of the economic viability worthy of public disclosure. For the mining operations, these are outlined and estimated based on the mine's interpretation and confidence in the historical sampling results. Inferred resources are based on drill intercepts spaced at between 35 and 70m depending on the structural complexity and geological continuity.

For the exploration division's polygonal resource estimates, a 50 m search radius is used in the definition of Inferred resources.

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14.10

Block Model Validation

The Guanaceví resource estimation models were validated by the following methods:

	•	Comparison of the global mean grades from the IDW model and composite data,

	•	Inspection of the IDW block model grades in plan and sectional views in comparison to the drill hole and chip composite grades, and

	•	Swath plot comparisons of composites, NN and OK models.

14.10.1

Global Comparison

The global block model estimation for the IDW method compared to the global composite means is shown in Table 14-4.

Table 14-4
Global Means by Vein Structure

Vein	Model			Composites*			Rel. Diff. (CMP-MOD)/MOD
	Model			Composites*			Rel. Diff. (CMP-MOD)/MOD
	No.	Ag (g/t)	Au (g/t)	No.	Ag (g/t)	Au (g/t)	Ag	Au
1	5438	97	0.24	118	103	0.25	7%	6%
2	1239	140	0.26	33	140	0.27	-1%	3%
3	236	391	0.82	20	449	0.84	15%	2%

*Residuals removed

The relative difference between the global model means and the composite means are between 1% and 15%. Vein 1 shows a relative difference of 7% for silver and 6% for gold. Ideally we would like these differences to be less than 5%. The difference is greatest with Vein 3. This vein represents a small high grade structure with little data. Given the size of the data set this difference is considered acceptable.

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14.10.2

Visual Comparison

A visual comparison of block grades with chip composite grades was made in both long section and cross sectional views. A vertical longitudinal section of the three Santa Cruz veins with corresponding block model is shown in Figure 14-9. Visual comparison between drillholes and blocks show a reasonable correlation. Examples shown in Figure 14-10 to Figure 14-12 show the colour coded IDW block model grades and drillhole composite grade.

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Figure 14-9 Vertical Longitudinal Section of Santa Cruz showing block model draped over vein wireframes.

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Figure 14-10 Horizontal Section, Santa Cruz, Elevation 2040m showing block model and drillhole composite information.

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Figure 14-11 Horizontal Section, Santa Cruz, Elevation 1940m showing block model and drillhole composite information.

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Figure 14-12 Santa Cruz Vertical Section showing block model and drillhole composite information.

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14.11 Assessment of Reasonable Prospects for Economic Extraction

To assess reasonable prospects of economic extraction as required by the definition of Mineral Resource in the CIM Definition Standards for Mineral Resources and Mineral Reserves, the following assumptions were used to determine an economic resource cut-off:

	•	Mining Cost $54/t mined,

	•	Silver Price: $24.20/oz,

	•	Gold Price: $1450/oz,

	•	Ag:Au ratio of 60:1 (silver equivalent)

The silver-equivalent calculation is based on long-term average gold and silver metal prices. To keep consistent with prior reporting, a gold to silver ratio of 60 to 1 was used to establish the silver-equivalent value. Silver-equivalent calculations for resources reflect gross metal content and are not adjusted for metallurgical recoveries or relative processing and smelting costs. Silver-equivalent grades were used for establishing cut-off grades.

Based on these assumptions, ore grading 100 g/t silver equivalent should return operating costs. Therefore there are reasonable prospects for economic extraction at a base case 100 g/t silver equivalent cut-off grade. A 100 g/t silver equivalent cut-off grade has been traditionally used to declare resources for similar vein-hosted silver deposits and by other producers in the area.

14.12

Mineral Resource Statement

The Measured and Indicated mineral resources for the Guanaceví project as of December 31, 2013 are summarized in Table 14-5. The resources are exclusive of the mineral reserves.

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Table 14-5
Mineral Resource Estimate, Guanaceví Project¹, Effective Date December 31, 2013, Michael Munroe, SME Registered

Description	Tonnes	Silver (g/t)	Gold (g/t)	Silver (oz)	Gold (oz)	Silver Eq. (oz)
Description	Tonnes	Silver (g/t)	Gold (g/t)	Silver (oz)	Gold (oz)	Silver Eq. (oz)
Measured
Porvenir North	52,400	179	0.23	301,000	400	325,000
Santa Cruz	79,600	186	0.33	476,200	900	530,200

Sub-total Measured	132,000	183	0.29	777,200	1,300	855,200
Indicated
Porvenir North	546,700	168	0.27	2,953,200	4,800	3,241,200
Santa Cruz	365,200	196	0.51	2,306,400	6,000	2,666,400
Porvenir Cuatro	39,300	211	0.47	266,400	600	302,400
Milache	580,000	329	0.91	6,135,000	17,000	7,155,000
La Blanca-Mi Nina	64,000	267	0.61	549,600	1,200	621,600
Epsilon-Soto	106,000	297	0.55	1,010,800	1,900	1,124,800

Sub-total Indicated	1,701,200	242	0.57	13,221,400	31,500	15,111,400

Total Measured and Indicated	1,833,200	238	0.55	13,998,600	32,800	15,966,600

1. Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues.

The Inferred mineral resources for the Guanaceví Mines project as of December 31, 2013 are summarized in Table 14-6. The resources are exclusive of the mineral reserves.

Table 14-6
Inferred Mineral Resource Estimate, Guanaceví Project²,
Effective Date December 31, 2013, Michael Munroe, SME Registered Member

Description	Tonnes	Silver (g/t)	Gold (g/t)	Silver (oz)	Gold (oz)	Silver Eq. (oz)
Description	Tonnes	Silver (g/t)	Gold (g/t)	Silver (oz)	Gold (oz)	Silver Eq. (oz)
Porvenir North	302,700	163	0.32	1,583,500	3,100	1,769,500
Santa Cruz	87,400	198	0.49	556,700	1,400	640,700
Alex Breccia	381,000	257	0.35	3,148,100	4,300	3,406,100
Milache	110,000	159	0.52	562,300	1,800	670,300
San Joaquin	51,000	184	0.05	301,700	100	307,700
La Blanca-Mi Nina	7,000	190	0.43	42,700	100	48,700
Epsilon-Soto	216,000	459	0.90	3,189,700	6,300	3,567,700

Total Inferred	1,155,100	253	0.46	9,384,700	17,100	10,410,700

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2. There has been insufficient exploration to define the inferred resources as an indicated or measured mineral resource. It is uncertain if further exploration will result in upgrading them to an indicated or measured mineral resource category.

At present time there are no known environmental, permitting, legal, title, taxation, socio-economic, marketing or political issues which could adversely affect the mineral resources estimated above.

14.13

Note on Rounding

Most organizations and agencies responsible for overseeing the classification and reporting of reserves and resources require that reports round the estimated results to a level that does not imply unrealistic levels of precision. This can create apparent arithmetic inconsistencies in summations and quotients that are difficult to completely eliminate. In this report many of the subdivisions of the deposit are rounded to thousands of tons and ounces.

Factors which may affect the calculation of mineral resources, and therefore the Mineral Resource estimates include changes to the following assumptions and parameters:

14.14

Factors That May Affect the Mineral Resource Estimate

	•	Commodity price assumptions,

	•	Mineralization limits used to constrain the estimates,

	•	Assignment of SG values.

There is no assurance that mineral resources will be converted into mineral reserves. Mineral resources are subject to further dilution, recovery, lower metal price assumptions, and inclusion in a mine plan to demonstrate economics and feasible of extraction.

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Changes in taxation and royalties that may apply to the project, will affect the estimated and actual operating costs used to help define the most appropriate cut-off grade for assessment of reasonable prospects of economic extraction.

December 2013, the Mexican President passed tax reform legislation that will be effective January 1, 2014. The tax reform includes, among other items, an increase of the Mexican corporate tax rate from 28% to 30%, removal of the flat tax regime, a Special Mining Duty of 7.5% on taxable revenues, less allowable deductions excluding interest and capital depreciation and an 0.5% Environmental Tax on gold and silver revenues. The tax reform is expected to have a material impact on the Company’s future earnings and cash flows.

14.15

Comments on Section 14

The QP believes that the mine operations and exploration QA/QC procedures and protocols used at the Guanaceví Mines Project are rigorous enough to ensure that the sample data are appropriate for use in mineral resource and reserve estimations.

A review of the MC lab QA/QC data and procedures did not suggest any background sample contamination that would materially affect results.

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15.0	MINERAL RESERVE ESTIMATES

15.1	Terms of Reference

Having established a resource estimate for the mineralization contained in the veins at the Guanaceví Mines project, Endeavour Silver has prepared a production schedule for the extraction of the measured and indicated mineral resources contained within readily accessible underground areas.

The reserve estimate is compliant with the current CIM standards and definitions specified by NI 43-101. This estimate supersedes the December 15, 2012 reserve estimate for the Guanaceví Mines project and has an effective date of December 31, 2013.

The process of mineral reserve estimation includes technical information which requires subsequent calculations or estimates to derive sub-totals, totals and weighted averages. Such calculations or estimations inherently involve a degree of rounding and consequently introduce a margin of error. Where these occur, the QP does not consider them to be material.

15.1.1

CIM Mineral Reserve Definitions and Classifications

All resources and reserves presented in a Technical Report must follow the current CIM definitions and standards for mineral resources and reserves. The latest edition of the CIM definitions and standards was adopted by the CIM council on November 27, 2010, and includes the reserve definitions reproduced below.

“Mineral Reserve”

“Mineral Reserves are sub-divided in order of increasing confidence into Probable Mineral Reserves and Proven Mineral Reserves. A Probable Mineral Reserve has a lower level of confidence than a Proven Mineral Reserve.”

“A Mineral Reserve is the economically mineable part of a Measured or Indicated Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A Mineral Reserve includes diluting materials and allowances for losses that may occur when the material is mined.”

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	NI 43-101 TECHNICAL REPORT

“Mineral Reserves are those parts of Mineral Resources which, after the application of all mining factors, result in an estimated tonnage and grade which, in the opinion of the Qualified Person(s) making the estimates, is the basis of an economically viable project after taking account of all relevant processing, metallurgical, economic, marketing, legal, environment, socioeconomic and government factors. Mineral Reserves are inclusive of diluting material that will be mined in conjunction with the Mineral Reserves and delivered to the treatment plant or equivalent facility. The term ‘Mineral Reserve’ need not necessarily signify that extraction facilities are in place or operative or that all governmental approvals have been received. It does signify that there are reasonable expectations of such approvals.”

“Probable Mineral Reserve”

“A ‘Probable Mineral Reserve’ is the economically mineable part of an Indicated and, in some circumstances, a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified.”

“Proven Mineral Reserve”

“A 'Proven Mineral Reserve’ is the economically mineable part of a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction is justified.”

“Application of the Proven Mineral Reserve category implies that the Qualified Person has the highest degree of confidence in the estimate with the consequent expectation in the minds of the readers of the report. The term should be restricted to that part of the deposit where production planning is taking place and for which any variation in the estimate would not significantly affect potential economic viability.”

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	NI 43-101 TECHNICAL REPORT

15.1.2

Conversion Factors from Mineral Resources to Mineral Reserves

The parameters used for the Guanaceví mineral reserves are as follow:

	•	Cut-off grade - 217 g/t Ag.

	•	Dilution - 15% after being diluted to a minimum mining width.

	•	Minimum width – 1.80 m.

	•	Silver equivalent - 60:1 for silver to gold

	•	Gold price - US $1,320 per oz

	•	Silver price - US $22 per oz.

	•	Gold recovery (overall) – 74.7%.

	•	Silver recovery (overall) – 82.1%.

15.2

Dilution and Recovery

Dilution is applied to Measured and Indicated resource blocks depending on the mining method chosen. For blocks to be exploited using conventional cut and fill methods, dilution was applied in the amount of 15% at a grade of zero. Mining recovery applied to converted resources is estimated at 95%.

There is no supporting documentation to support these dilution or mining recovery estimates. It is the QP’s recommendation that individual dilution and recovery studies be performed on various veins and types of reserve blocks to refine the global estimates used for dilution and mining recovery.

The global dilution and mining recovery factors at Guanaceví have varied over time depending on company philosophy and experience in reconciling estimated mine production with mill sampling. Dilution and mining recoveries are functions of many factors including workmanship, design, vein width, mining method, extraction, and transport. Currently, there is limited information upon which to measure actual dilution and recovery in the stopes, and transport system. The majority of stoping is now done using longhole methods. Without a cavity measuring survey instrument, measuring dilution in these types of stopes is problematic.

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Misclassification of ore and waste also contributes to variations in dilution and mining recovery.

15.3

Cut-off Grade

The mining breakeven cut-off grade is applied to fully diluted resources in order to determine if they warrant inclusion in the mine plan. The data presented in Table 15-1 are from the 2014 budget.

Table 15-1
Mining Cost per Tonne Milled Guanaceví Property, 2014 Budget

Mining	Plant	G&A	Operating Cost	Production Cost

$54.41	$35.14	$23.72	$89.55	$113.27

The production cost data, reserve price assumptions, and mill recoveries are used to calculate the reserve breakeven cut-off grade. The parameters used for the calculation are presented in Table 15-2:

Table 15-2
Mineral Reserve Breakeven Cut-off Inputs for the Guanaceví Property

Description	GCV
Description	GCV
Silver price ($US)	$22.00
Gold price ($US)	$1,320
Mill Recovery (Ag)	0.750
Mill Recovery (Au)	0.821
Production Cost ($/tonne milled)¹	$113.27
Cut-off Grade	217

1. 2014 Budget.

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	DURANGO, DGO, MEXICO
	NI 43-101 TECHNICAL REPORT

The cut-off is stated as silver equivalent since the ratio between gold and silver is variable and both commodities are sold. These cut-offs are applied to the resource blocks, and those that exceed these grades are considered for inclusion in the mine plan and for reporting as reserves. The average cut-off grade used for the Guanaceví property is 217 g/t Ag equivalent. Silver equivalent grade is calculated as the silver grade + (gold grade * 60), taking into account gold and silver prices and expected mill recoveries.

15.4

Production Depletion

Mineral reserves reported here reflect mining depletion to December 31, 2013. For existing areas at the time of compilation of the reserve statement where survey data was not updated, depletion in these areas was estimated with a conservative mining recovery factor applied, and any blocks whose production status was in doubt were removed from consideration as reserves.

15.5

Reconciliation of Mineral Reserves to Production

Geology staff prepared a reconciliation of reserve blocks Life of Mine plan (LOM) to actual production from sampling for the 12-month period, January to December, 2013.

The reconciliation compared the adjusted LOM prepared in 2012 for the 2013 production estimate with geology estimates from chip sampling and plant estimates based on head grade sampling. Reconciliation estimates a negative variance on tonnes for both geology and plant estimated tonnage as compared to the LOM (Table 15-3). Estimated tonnage was 16% lower for geology and 12% lower for the plant than specified in the LOM.

Reconciliation of LOM silver grade with geology and plant show a positive variance of 4% for geology and 2% for the plant. This represents a grade difference of 5-10 g/t and is considered acceptable.

Reconciliation of LOM gold grade with geology and plant show a negative variance of -4% for geology and a 14% positive variance for the plant. This represents a grade difference of 0.2 g/t for geology and 0.7 g/t for gold. Given the erratic nature and low grade values for gold, these variances are considered acceptable.

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	NI 43-101 TECHNICAL REPORT

Table 15-3
Reconciliation of 2012 Adjusted LOM to 2013 geology estimates and plant head grade.

Month	Adjusted LOM			Geology (Chip Samples)			Plant (Head Samples)
Month	Tonnes	Ag (g/t)	Au (g/t)	Tonnes	Ag (g/t)	Au (g/t)	Tonnes	Ag (g/t)	Au (g/t)
Jan	35,104	241	0.45	33,275	251	0.31	32,123	212	0.27
Feb	44,630	255	0.46	28,406	242	0.50	31,903	218	0.26
Mar	39,536	254	0.43	36,338	260	0.51	40,767	246	0.32
Apr	39,578	264	0.46	39,371	221	0.46	33,012	210	0.54
May	37,230	225	0.45	34,554	215	0.48	32,229	247	0.66
Jun	37,613	222	0.43	31,133	241	0.55	33,070	236	0.66
Jul	36,418	219	0.47	34,039	266	0.53	33,701	237	0.62
Aug	35,039	248	0.57	35,356	308	0.60	39,207	294	0.76
Sep	36,026	238	0.61	21,150	223	0.40	32,672	250	0.60
Oct	34,978	264	0.56	24,881	243	0.47	26,935	257	0.69
Nov	35,453	250	0.63	27,409	271	0.46	26,232	265	0.67
Dec	36,480	255	0.53	31,130	316	0.45	32,086	321	0.83
Total	448,085	245	0.50	377,041	255	0.48	393,937	250	0.57

One possible explanation that would result in a negative variance on tonnage and a positive variance on grade when compared to the LOM, would be a reduction in planned dilution and better mining practices.

It is common practice in the industry to apply a mine call factor (MCF) to compensate for negative mine-mill reconciliations. This factor compares the in situ tonnes and grade estimated by geology with the tonnes and grade reported by the plant.

The MCF adjusts actual sampling data and is used to provide more realistic forecasts of expected tonnage and grade. It is important however, to understand whether the adjustment is related to sampling, density determination, dilution, outliers, or poor mining and milling performance.

A mine call factor if not properly understood can disguise the source of the errors causing the difference. Actions should be taken to minimize the error between estimates and actual production by identifying and resolving the issues that cause a poor reconciliation in place of applying an MCF.

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	NI 43-101 TECHNICAL REPORT

Reserves should reflect expectations of performance over the life of the mine. The current reserves at Guanaceví apply a MCF of 1.0. Further investigation of the reconciliation will be needed to whether this MCF is appropriate for future use.

15.6

Reserve Classification

Mineral reserves are derived from measured and indicated resources after applying the economic parameters as stated Section 1.7.3 above. The Guanaceví project reserves have been derived and classified according to the following criteria:

Proven mineral reserves are the economically mineable part of the Measured resource for which mining and processing / metallurgy information and other relevant factors demonstrate that economic extraction is feasible. For Guanaceví project, this applies to blocks located within approximately 10m of existing development and for which Endeavour Silver has a mine plan in place.

Probable mineral reserves are those Measured or Indicated mineral resource blocks which are considered economic and for which Endeavour Silver has a mine plan in place. For the Guanaceví mine project, this is applicable to blocks located a maximum of 35m either vertically or horizontally from development.

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	DURANGO, DGO, MEXICO
	NI 43-101 TECHNICAL REPORT

Figure 15-1 Santa Cruz Vein resource and reserve section showing Proven Reserves in red, Probable Reserves in green; Measured Resources in orange, Indicated Resources in blue; Mined areas are shown in gray.

15.7

Mineral Reserve Statement

The Proven and Probable mineral reserves for the Guanaceví mines operation as of December 31, 2013 are summarized in Table 15-4. The reserves are exclusive of the mineral resources reported in Table 14-5 and Table 14-6.

Table 15-4
Proven and Probable Mineral Reserves, Effective Date December 31, 2013, Michael Munroe, SME Registered Member

Description	Tonnes	Silver (g/t)	Gold (g/t)	Silver (oz)	Gold (oz)	Silver Eq. (oz)
Description	Tonnes	Silver (g/t)	Gold (g/t)	Silver (oz)	Gold (oz)	Silver Eq. (oz)
Proven
Porvenir North	56,300	232	0.42	419,100	800	467,100
Santa Cruz	64,100	252	0.47	518,700	1,000	578,700
Porvenir Cuatro	109,600	373	0.61	1,313,500	2,100	1,439,500
Stockpile	97,800	226	0.46	710,600	1,400	794,600

Sub-total Proven	327,800	281	0.51	2,961,900	5,300	3,279,900
Probable
Santa Cruz	20,300	300	0.56	196,100	400	220,100
Porvenir Cuatro	14,300	402	0.31	184,700	100	190,700

Sub-total Probable	34,600	342	0.46	380,800	500	410,800

Total Proven and Probable	362,400	287	0.51	3,342,700	5,800	3,690,700

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	NI 43-101 TECHNICAL REPORT

	*Notes to Table 15-4:
	1. Average cut-off grade for Guanaceví is 217 g/t Ag equivalent
	2. Minimum mining width for mineral reserves is 1.8 meters
	3. Dilution is 15% of in situ tonnes
	4. Mining recovery of 95% applied to mineral reserves
	5. Silver equivalent is 60:1 for gold:silver
	6. Mineral reserve price assumptions are $1320 and $22 per troy ounce for gold and silver, respectively
	7. Mineral reserves take into account metallurgical recovery assumptions of 74.7% and 82.1% for gold and silver, respectively.
	8. Mineral reserves are exclusive of mineral resources.
	9. Figures in table are rounded to reflect estimate precision; small differences generated by rounding are not material to estimates.

15.8

Factors That May Affect the Mineral Reserve Estimate

The Guanaceví operation is an operating mine with a relatively long history of production. The mine staff possess considerable experience and knowledge with regard to the nature of the orebodies in and around the Guanaceví property. Mine planning and operations need to continue to assure that the rate of waste development is sufficient to maintain the production rates included in the mine plan.

It is unlikely that there will be a major change in ore metallurgy during the life of the current reserves, as nearly all of the ore to be mined will come from veins with historic, recent, or current production.

The process of mineral reserve estimation includes technical information which requires subsequent calculations or estimates to derive sub-totals, totals and weighted averages. Such calculations or estimations inherently involve a degree of rounding and consequently introduce a margin of error. The QP does not consider these errors to be material to the reserve estimate.

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	NI 43-101 TECHNICAL REPORT

Areas of uncertainty that may materially impact the Mineral Reserves presented in this report include the following:

	•	Mining assumptions,

	•	dilution assumptions,

	•	exchange rates,

	•	variations in commodity price,

	•	metallurgical recovery, and

	•	processing assumptions

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	NI 43-101 TECHNICAL REPORT

16.0	MINING METHODS

16.1	Mining Operations

Since January 1, 2007, Endeavour Silver has been in control of the day-to-day mining operations at the Guanaceví Mines project. Endeavour Silver assumed control of the mining operations from a local mining contractor in order to allow for more flexibility in operations and to continue optimizing the costs.

On December 31, 2013, the Guanaceví Mines project had a roster of 446 employees and an additional 313 contractors. The mine operates on two 10-hour shifts, 7 days a week, whereas the mill operates on a 24/7 schedule. The miners are skilled and experienced in vein mining and are currently not unionized. There is an incentive system in place rewarding personnel for good attendance, safety and production. Technical services and overall supervision are provided by Endeavour Silver staff. The mine employs geology, planning and surveying personnel and has detailed production plans and schedules. All mining activities are being conducted under the direct supervision and guidance of the mine manager.

16.2

Ground Conditions

The Porvenir mine is a high grade silver-gold, epithermal vein deposit, characterized by low sulphidation geochemistry and adularia-sericite alteration. The Santa Cruz vein is the host of the silver and gold mineralization. It is oriented northwest and occurs principally within the Guanaceví Formation, with a preferred strike of N45°W and dips of between 50° and 55° to the southwest.

The footwall is an unaltered andesite that has rock quality determinations (RQD) ranging from 80 to 100. This is competent ground that only occasionally requires additional support such as 6-foot spilt-set bolts or shotcrete.

The vein is a classic quartz vein that varies from 1 to 5m wide, with an average width of approximately 3m. The footwall contact is defined by a clear change of rock type from vein material to unaltered andesite. The hanging wall contact is typically defined by a clear structural boundary between the vein and the hanging wall rocks, with the contact usually defined as the Santa Cruz fault, a normal fault characterized by striations and fault gouge. The gouge material is typically white clay that can range from 5mm up to 1m or 2m in thickness. The vein is generally self-supporting over the entire width and requires no mechanical supports. When vein widths increase beyond 5m, some local support in the form of split-set bolts and welded wire mesh may be required. In some areas post-mineral movement of the fault has caused some fracturing along the vein.

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In the Porvenir Deep zone, mineralization is hosted both in the vein and in altered and weakly to moderately oxidized wall rocks. The vein and argillic altered andesitic hosts to mineralization are moderately fractured with RQDs ranging from <20% locally to typically 50 to 80%. Mine workings in the lower levels have openings up to 12m in width without experiencing serious ground problems, but requiring ground support. Typically, the wider mineralized zones are not close to the hanging wall fault and are less prone to the hanging wall instability issues seen in some other parts of the mine.

The footwall to the Porvenir Deep zone in its central part consists of oxidized and argillic altered andesite with a number of faults, the latter generally requiring support in the form of split sets. The immediate footwall zone is moderately competent but, from about 10 m to 40 m from the vein, systematic ground support is required, consisting of both split sets and wire mesh. One major fault zone requires more extensive support in the form of timber or steel sets due to water lubrication of the clay-filled fault plane.

The hanging wall is an andesite with adularia-sericite alteration which varies locally from very weak to very strong, depending on the amount of argillic phases. In the zones of intense argillic hanging wall alteration, ground support such as 1.8 m Split set bolts and welded mesh support straps are required on a 1.5 m by 1.5 m spacing to maintain stability. In these areas there is always a risk of greater dilution and the mine accounts for this when estimating the reserves. Occasionally, a thin cap of vein material is left on the hanging wall to prevent weathering of the clay and assist with stability.

16.3

Mining Method

A conventional cut and fill mining method is employed, with the stopes generally 150m long and 20m high. Access to the stoping areas is provided by a series of primary and secondary ramps located in the footwall. The ramps have grades from minus 15% to plus 12%, with plus or minus 12% as standard. The cross-sections are 4 m by 4 m for the primary ramps and 3.5 m by 3.5 m for the secondary ramps.

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In the upper parts of the mine, stope access is by short (10m to 40m) cross-cuts from the ramp to the vein/stope. These cross-cuts are generally 3.5m by 3.5m in cross-section and are usually driven down at minus 18% to intersect with the stope. As the stope advances up-dip on the vein, the back is taken down in these cross-cuts to maintain access until the cross-cut reaches a maximum inclination of 15%.

In the lower parts of the mine (below the water table) stope access is by 90m long cross-cuts to the vein/stope. The cross-cuts are generally 3.0m by 3.5m in cross-section and are driven at plus 1% to intersect the stope (for water drainage). As the stope advances up-dip on the vein, the back is taken down in these cross-cuts to maintain access until the cross-cut reaches a maximum inclination of plus 15%.

Mining in the stopes is done with jackleg drills. Back cuts are taken 2m to 2.5m high via vertical up-hole drilling or by breasting. The broken material is mucked out using scooptrams (2 yard or 3.5 yard depending on vein width). Waste fill from mine development is placed in the stope by the same scooptrams to within 2 m to 2.5 m of the back. When the vein is less than minimum mining width, the footwall is slashed to provide adequate width. This slashing is done during the fill cycle and the slashed material remains in the stope as fill.

In 2013 there was a move to using longhole methods in the narrower parts of the mine. The longhole method increases production heights from typically 1.8m to up to 15m and at a reduced cost. Dilution and hanging wall failure is controlled using cemented 11m long fortifying cable bolts.

Mining dilution has been estimated by Endeavour Silver as variable with a minimum of 0.4m of over break dilution and a minimum operational width of 2.2m. Additional dilution is derived from the footwall especially in sill development, from occasional hanging wall failure and from re-mucking of floor fill. In general, dilution is estimated at being between 15% and 32%, while unrecoverable ore is estimated at approximately 5%. The dilution material in almost all cases is mineralized and, therefore, it is difficult to estimate its impact on the final grades of the mined ore, particularly as reliable reconciliation is very difficult to achieve.

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Sill development that have high-grade ore in the floor are candidates for installing a concrete pillar. The sill is filled with one metre of cemented rock fill when stoping begins which allows for recovery of the sill pillar. The cemented rock fill consists of development waste mixed with 5% by weight ordinary Portland cement which is placed over a 5mm steel welded mesh on the sill floor. The cemented rock fill is mixed in a muck bay adjacent to the stope by the same scooptrams that place it into the stope. The cemented rock fill is placed into the sill starting at the entrance so that the scooptram is driving on top of the fresh fill to provide compaction. This method works well and is common in Mexico.

Ore and waste transportation is by scooptram and truck haulage. Ore and waste haulage is performed using two TORO EJC 522 15 tonne underground trucks which are complemented with four nine tonne capacity diesel highway trucks rented from local contractors. For stope and development mucking, Endeavour has six 2-yard scooptrams and eight 3.5 -yard scooptrams. Three single boom jumbo drills and jacklegs are used for development headings and conventional cut and fill stope drilling is by jackleg and longhole stopes using one pneumatic longhole machine (Stope Mate). A scissor lift truck is used for services including bolting, and installing piping and ventilation. Complete maintenance and service facilities for the underground mobile equipment are located near the mine portal and two underground shops one in Porvenir North and the other in Santa Cruz.

16.4

Production Areas

Currently in the deep Porvenir North Mine, development of the ramp continues in order to access deeper areas for mineral production. During 2013, the development of the ramp allowed the mine to access the 3134, 3135 and 3136 levels, and begin mineral production immediately. At the end of 2013, the ramp is in position to access the 3137 level.

In the Central Porvenir Mine development of the 4114 ramp is finished. The last production level accessed was the 3149 level.

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In the Santa Cruz mine, the development of the main ramp to access the deepest levels is currently taking place. During 2013 development was being done to access the XC-7, XC-9 and 3359 levels. Access to the vein structure is currently underway on these three levels. The ramp is still under development and has about 90 metres of development needed to reach the 3360 level. During 2013 on structure development in ore was done on the 3352-3, 3354, 3355 and 3356 levels. Each level has multiple vein structures.

At Porvenir Cuatro, development of the main ramp continued to reach the deepest production zones. During 2013, access to the 3507 was started. At the end of 2013, the ramp was still being developed with 80 metres remaining to reach the 3508 level. Development of the access ramp in the upper mine reached the 3598 level. On structure development in 2013 was on the 3505, 3506 and 3598 levels.

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17.0	RECOVERY METHODS

17.1	Production

17.2

Mineral Processing

The mill was originally built in 1970 by the Mexican government and designed to custom mill ores from various mines in the district. Figure 17-1 is a partial view of the mill.

In 2010, the Guanaceví mill processed ore from the Porvenir mine (North Porvenir and El Porvenir), Porvenir 2 and the metallurgical complex also processed the Guanajuato flotation concentrate. In 2010, grinding had an average capacity of 855 t/d. In 2011 and 2012, the mill processed ore from the mines of Porvenir Cuatro, Porvenir Dos, Porvenir North, and Santa Cruz, as well as purchased (third party) ore. In 2011, the grinding circuit had an average capacity of 1,000 t/d. The metallurgical complex continued to process the Guanajuato flotation concentrate in 2011, 2012, and during the first quarter of 2013.

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The flotation circuit had a capacity of approximately 420 t/d and was shut down since October 2008 due to insufficient feed. In 2012 the flotation circuit was completely dismantled and some cells were used in the expansion of the Bolañitos flotation plant in Guanajuato.

The cyanide leach circuit capacity was 1,194 tpd in average during the 2013.

The tailings filtration circuit was commissioned in May 2012 and producing dry stackable tailings with moisture from 14% to 18%. The circuit consists of 2 filter presses supplied by DIEMME and each filter has 131 plates of size 2,000x2,000 mm. The filtration circuit is operated continuously with shutdowns only for maintenance.

The plant consists of the following circuits:

	•	Crushing: ore bins, conventional crushing with a 30"x42" jaw crusher, 24”x36” jaw crusher, a 4-foot secondary cone and 3-foot tertiary cone crushers, a 5’x10’ vibrating screen (-½” to -5/8”).

	•	Grinding: 5 ball mills, a 10.5’x12’ Hardinge, two 7’x7.5’ Denver, a 5’x 6’ Fimsa ball mill and an Allis-Chalmers 5’x4’.




	•	Cyanidation and counter-current decantation (CCD) circuit: 16 leach tanks in two series (12 tanks of 20’x20’ and 4 tanks of 30’x30’).

	•	Merrill-Crowe circuit with 2 leaf clarifiers and one de-aeration tower.

	•	Refinery: two gas fired furnaces.

	•	Filtration: two filter presses, each with 131 plates of size 2,000x2,000 mm. Figure 18-3 is a view of a new filter presses in operation.

Oxidized ore is crushed, ground and pumped to a 50-foot diameter thickener, where it is thickened to 40-45% solids. The thickened slurry is split between 3 series of agitated leach tanks (two series of 6 leach tanks of 20’x20’ and one series of 4 leach tanks of 30’x30’) that are arranged for gravity flow from tank to tank. Sodium cyanide is added to the slurry at a ratio of 1.58 kg per tonne of solids. After commissioning of the filtration plant the cyanide consumption dropped from 2.7 kg/t to 1.58 kg/t owing to the less solution loss in the final tailings. The solution from the leaching tanks is processed in a counter-current decantation circuit through five thickeners. The pregnant solution goes to the Merrill-Crowe plant for clarification and precipitation of the silver and gold. The retention time in the leaching plant is about 72 hours.

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By the end of 2008, silver recovery had improved from 68 to 70% to 78% by increasing the cyanide concentration from 2.5 g/L to 3.5 -4 g/L of NaCN in the leaching slurry. Oxygen injection was scaled down from August, 2008, and completely stopped in November, 2008, with no detrimental effect on metal recovery.

In 2009, hydrated lime was switched to quicklime to reduce the consumption and reduce flocculent and diatomaceous earth consumptions in the pregnant solution clarification stages. There was not much improvement and flocculent and diatomaceous earth consumption did not decrease significantly.

In the refinery, two gas furnaces smelts the precipitate to produce Doré bars, which typically averages 92% silver and are shipped for final refining at the Peñoles Met-Mex facility in Torreón. The refined gold and silver is sold through Auramet in London, England. In the second half of 2013 the Guanaceví refinery circuit was operated every other day to reduce costs.

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The assay laboratory utilizes wet assaying, fire assaying and atomic absorption methods. The laboratory does all of the assaying required for mill processing, as well as assaying mine and exploration samples. Duplicates and blanks are run on a regular basis, as well as check assays at outside laboratories. An external audit was carried out by the Stewart Group and a remodeling of the old sample preparation area was completed, along with the installation of a dust collection system. During the December, 2011 site visit, Endeavour Silver was in the process of reviewing and changing a number of the laboratory procedures and operations in order to increase the efficiency of the laboratory and the confidence in its assaying procedures. The procedural and operational changes have been discussed in Section 11 of this report. The assay lab has fulfilled the ISO 9001 standard and obtained a certification in October 2012. A program for audits and certificate renewal is in place.

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18.0

PROJECT INFRASTRUCTURE

Endeavour Silver has all of the necessary mine and mill infrastructure to operate the Guanaceví Mines project efficiently and to all regulatory standards imposed on the project by the various government agencies. Figure 18.1 is a panoramic view of the primary mining infrastructure between the Santa Cruz and Porvenir mines. Figure 18-1 is view of the portal of the Porvenir Cuatro mine.

18.1

Mine Pumping, Ventilation and Electrical

At shallower depths in the Porvenir mine, drainage and pumping was minimal as very little ground water was encountered. Water was also brought in from the surface for drilling and dust control. As mining proceeded to depth, a second pump station was built at the bottom of the second ventilation borehole to handle water produced from below the water table; the mine is currently pumping to surface between 1,500 and 2,000 gallons per minute, utilizing two pump stations. A third pump station is located in the Santa Cruz area and is pumping 2,000 to 2,500 gallons per minute to surface.

Principal mine ventilation is provided by one 500 HP exhaust fan, located on surface at the top of a 292m long by 2.4m diameter borehole. Two exhaust fans of 100 HP are located 400 m away on a second ventilation borehole, 292m long and 2.4m diameter. Fresh air is drawn down the principal ramp and Santa Cruz area, through the workings and exhausted out to the surface through the boreholes. This circuit is moving approximately 210,000 cfm of air. A third ventilation borehole, 285m long and 2.4m diameter, is located to the south in the Santa Cruz mine. Secondary ventilation is by conventional axial-vane mine fans that are from 24 to 36 inches in diameter and range in size from 25 HP to 50 HP. These fans blow fresh air into the workings through ventilation ducting.

Electrical power for the mine is distributed by a series of substations connected to the public power grid, with additional underground transformers added as required. Backup substations are also available.

Electric power arrives at the mine site via 34.5 kV overhead transmission lines and is reduced by a 2,000 kVA transformer to 13.2 kV and distributed to the Santa Cruz mine surface, the Porvenir mine (ramp 4114), surface compressor station and secondary pump station transformers. The power is taken underground at the Porvenir mine at 13.2 kV via the ventilation borehole to the principal underground transformer. Power is then distributed to portable underground mine transformers, where it is reduced further to 480 V. The Porvenir mine also has 2,000 kW diesel generators capable of maintaining pumping, secondary ventilation and a compressor in case of any power outage. There is a 350 kW diesel generator in Porvenir 4 and a 950 kW diesel generator in Robbins 1 (Table 18-1).

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Figure 18-1 Portal for the Porvenir Cuatro Mine

Table 18-1
Stand-by Electrical Generator Capacity

Equipment	Type	Capacity	Location
Generator 1	Caterpillar 3508	950 kW	Porvenir North (Robbins 1)
Generator 2	Caterpillar 3516	2,500 kW	Porvenir North (Robbins 2)
Generator 3	Caterpillar 3516	2,500 kW	Porvenir North (Robbins 2)
Generator 4	Caterpillar 3406	350 kW	Porvenir 4
Generator 5	Kholer 2000 Reozm	2,000 kW	Porvenir North (Robbins 2)

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Compressed air is provided by eight electric compressors installed on the surface. Compressed air is brought into the mine by a six-inch diameter pipe that passes down the principal ventilation borehole and then branches up and down the ramps in four inch diameter airlines, reducing two inch airlines that enter the individual working places (Table 18-2).

Table 18-2
Compressor Capacity

Equipment	Type	Capacity	Location
Compressor 1	IR SSR-EP150	670 CFM	Porvenir North (Robbins 1)
Compressor 2	IR IRN200HCC	900 CFM	Porvenir North (Robbins 1)
Compressor 3	Twistair Joy (Denver) D25	1,200 CFM	Porvenir North (Robbins 1)
Compressor 4	IR SSR 1500 LAAM55	1,500 CFM	Porvenir 2
Compressor 5	IR SSR 650R-AA15	670 CFM	Porvenir 4
Compressor 6	Atlas Copco GA807	670 CFM	Porvenir 2
Compressor 7	IR SSR 1500 LAAM55	1,500 CFM	Porvenir North (Robbins 1)
Compressor 8	SSR-EPE 300	1,363 CFM	Porvenir 4

Complete maintenance and service facilities for the underground mobile equipment are located near the Porvenir North mine portal.

18.2

Tailings Dam

The mill lies adjacent to historic tailings dams which are not utilized in current operations. Endeavour Silver has sampled the old tailings and it is believed that re-treatment of the tailings could possibly add to the economics of the Guanaceví Mines Project in the future.

The new tailings dam currently in use (Figure 18-2) was constructed using the centreline method and is completely lined. The process water is recycled back to the mill.

In 2010, a new access road around the tailings pond was completed. Construction began in 2011 on the installation of two filter presses with a capacity of 1,350 tonnes each to dry the tailings (Figure 18-3). Dry stacking of tailings will increase the life of the tailings pond.

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A new storm water pond with a capacity 10,000 m³ was built on the top of old tailings dam Rosario, located to the South of the cyanide leach plant (Figure 18-6).

Figure 18-2 Aerial View of the Plant and Tailings Facilities of the Guanaceví Mines Project

Figure 18-3 New filtration circuit building (left); Two Diemme filter presses (right). The pictures taken on January 2014.

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Figure 18-4 Updated satellite photo of Guanaceví tailings dam. The Rosario storm water pond (10,000 m³) was built on the top of old tailings to the South of the Cyanide Leach Plant.

Figure 18-5 View of the new Rosario tailings water pond with capacity 10,000 m³ (on the left); View of the dry stack tailings dam from the North-West to South-East (on the right).

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Figure 18-6 View to water extraction wells (left); and to the South, water pond (right)

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19.0

MARKET STUDIES AND CONTRACTS

Endeavour Silver produces silver doré bars which it then ships for further refining. Silver is a widely traded commodity in the world markets and Endeavour Silver has not conducted any market studies for silver.

Table 19-1 summarizes the high and low average annual London PM gold and silver price per ounce from 2000 to 2013.

Table 19-1
Average Annual High and Low London PM Fix for Gold and Silver from 2002 to 2013 (prices expressed in US$/oz)

Year	Gold Price (US$/oz)			Silver Price (US$/oz)
	High	Low	Average	High	Low	Average
	High	Low	Average	High	Low	Average
2000	312.70	263.80	279.12	5.45	4.57	4.95
2001	293.25	255.95	271.04	4.82	4.07	4.37
2002	349.30	277.75	309.67	5.10	4.24	4.60
2003	416.25	319.90	363.32	5.97	4.37	4.88
2004	454.20	375.00	409.16	8.29	5.50	6.66
2005	536.50	411.10	444.45	9.23	6.39	7.31
2006	725.00	524.75	603.46	14.94	8.83	11.55
2007	841.10	608.40	695.39	15.82	11.67	13.38
2008	1,011.25	712.50	871.96	20.92	8.88	14.99
2009	1,212.50	810.00	972.35	19.18	10.51	14.67
2010	1,421.00	1,058.00	1,224.52	30.70	15.14	20.19
2011	1,895.00	1,319.00	1,571.52	48.70	26.16	35.12
2012	1,791.75	1,540.00	1,668.98	37.23	26.67	31.15
2013	1,693.75	279.40	1,257.42	32.23	5.08	21.26

Source: www.kitco.com

Over the period from 2000 to 2013, world silver and gold prices have increased significantly. This had a favourable impact on revenue from production of most of the world’s silver mines, including the Guanaceví Project.

Endeavour Silver has no contracts or agreements for mining, smelting, refining, transportation, handling or sales, that are outside normal or generally accepted practices within the mining industry. Endeavour Silver has a policy on not hedging or forward selling any of its products.

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In addition to its own workforce, Endeavour Silver has a number of contract mining companies working on its mine sites such as Porvenir Cuarto and Santa Cruz.

The doré produced by the Guanaceví mill typically averages 93.5% silver. The doré is shipped for final refining at the Peñoles Met-Mex facility in Torreón. The refined gold and silver is sold through Auramet in London, England.

Table 19-2 is a general summary of the contracts that Endeavour Silver has in place at the Guanaceví Mines Project.

Table 19-2
Summary of Contracts at the Guanaceví Mines Project

Contract Description	Contracting Company	Contract Expiry or Renewal date

Mining works	MGA Contratista Minera	30-Oct-12
Fire systems	Grupo 10 Ingenieria	29-Feb-12
Diesel supply	Distribuidora de combustibles Laguna	30-Aug-16
Drilling services	Corebeil	2-Feb-12
Electrical substation installation	SEISA	12-Apr-11
Road irrigation	Marisol Vazquez	30-May-12
Portable sanitary cleaners	Federico Cassio	31-Jul-12
Addendum Riego de caminos	Marisol Vázquez Rivera	31-May-13
Convenio modificatorio limpieza sanitarios mobiles	Griselda sandoval Ortíz	31-Jul-13
Tanque estacionario	Distribuidorra de Combustibles Laguna, S.A. de C.V.	30-Aug-16
Renta bulldozer	Alejandro Cazarez	27-Feb-16
Barrenación Superficie 5000 m	Versa
Addenda barrenación interior 3000 m	Versa
Maquina Termita	Versa
Servicios de seguridad privada	Cops supply Seguridad privada, S. de R.L. de C.V.	29-Jun-13
Renta cargador P4	Arrenadmiento de Maquinaria de Durango, S.A. de C.V.	30-Jun-13
Acarreo superficie	Marisol Vázquez, Roberto Arzola, Alejandro Cazares, Silvia M. Alanís, Juan armando Flores, José Rivera	24-Aug-15
Servicio Escoltas	Goca Seguridad privada addendum	30-Dec-13
Acarreo Superficie planta	Noel olivas, Jose gabriel velazquez, alonso eleno nuñez, jose evaristo rivera, edgar ruben velazquez, luis antonio rivera	29-Nov-15
Trabajos interior mina	MGA Contratista Minera	30-Jan-14
Cargador Porvenir Norte	Arrenadmiento de Maquinaria de Durango, S.A. de C.V.	30-Aug-13
Servicios acarreo interior mina	Francisco Arzola, Roberto Arzola, Alejandro Cazares, Silvia M. Alanís, Juan armando Flores, José Rivera	29-Dec-15
Obra Minera subterranea P4	Servicios Ingenieros TGC	1-Jun-14

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Table 19-3
List of outstanding contracts as of December 31, 2013

Contract Description	Contracting Company	Contract Expiry or Renewal Date
Tanque estacionario	Distribuidorra de Combustibles Laguna, S.A. de C.V.	30/08/2016
Renta bulldozer	Alejandro Cazarez	27/02/2016
Barrenación Superficie 5000 mts	Versa
Addenda barrenación interior 3000 mts	Versa
Maquina Termita	Versa
Acarreo superficie	Marisol Vázquez, Roberto Arzola, Alejandro Cazares, Silvia M. Alanís, Juan armando Flores, José Rivera	24/08/2015
Acarreo Superficie planta	Noel olivas, Jose gabriel velazquez, alonso eleno nuñez, jose evaristo rivera, edgar ruben velazquez, luis antonio rivera	29/11/2015
Trabajos interior mina	MGA Contratista Minera	30/01/2014
Servicios acarreo interior mina	Francisco Arzola, Roberto Arzola, Alejandro Cazares, Silvia M. Alanís, Juan armando Flores, José Rivera	29/12/2015
Obra Minera subterranea P4	Servicios Ingenieros TGC	6/1/2014

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20.0	ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY IMPACT

20.1	Environmental Studies and Permitting

As part of the mine site reclamation activities, trees were planted in the areas impacted by exploration and operations.

Fruit trees were donated to the schools in the communities surrounding the project in order to create an environmental awareness among students.

In 2013 the Clean Industry Certificate issued by PROFEPA was revoked due to inspection infractions. Endeavour is in the process of correcting each infraction. The recertification process will be initiated in early 2014. The environmental licence issued by SEMARNAT indicates that Endeavour Silver complies with the current environmental regulations in Mexico.

Endeavour Silver has always supported a safe working environment. In 2011, another ambulance for the mine and 6 complete sets of firefighting equipment were acquired (Figure 20-1 and Figure 20-2). These devices can also be used for any emergency in the community and are available if needed.

Endeavour Silver holds all necessary environmental and mine permits to conduct planned exploration, development and mining operations on the Guanaceví Mines project.

20.2

Social or Community Impact

Endeavour Silver supports the community of Guanaceví and other communities within the municipality.

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Figure 20-1 New Mine Ambulance Purchased in 2011

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Figure 20-2 2011 New Fire Fighting Equipment

Endeavour Silver has offered support to the community in the following areas:

	•	Rehabilitation of schools and religious places.
	•	Economic support to government institutions.
	•	Support for sports.
	•	Donation of materials such as computers to the schools.
	•	Donations of reusable materials to the community.
	•	Support for community celebrations.
	•	Food support.
	•	Assistance with some transportation.
	•	Guided tours of school classes to the plant.
	•	Health support (vaccinations and wheelchairs).
	•	General cultural support.

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Endeavour Silver continues to support the communities and the social aspirations of the citizens of the area surrounding the mine, in order to improve the health and well-being of not only its employees and their families but of the community in general.

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21.0

CAPITAL AND OPERATING COSTS

In 2011, the plant expansion and upgrade program was completed at the Guanaceví Mines project. During the year, emphasis was on expanding plant capacity.

Capital projects completed in 2013 included:

	•	Mine development, 7,580 m.

	•	New access road around tailing pond.

	•	Pump stations.

	•	Electrical power substations.

	•	Robbins drill for Porvenir Cuatro.

	•	Robbins drill for Santa Cruz.

For 2014, Endeavour Silver has budgeted nearly US $ 11.7 million for capital projects at the Guanaceví Mines project (Table 21-1). This budget includes all planned capital expenditure for Guanaceví with the exception of Regional Exploration. An additional US $963,000 is planned on exploration drilling at Guanaceví.

Table 21-1
2014 Capital Cost Estimates for the Guanaceví Mines Project

Description	Cost (US $)
Mine Development	4,971,933
Mine Infrastructure	3,253,537
Mine Exploration	1,100,000
Underground Equipment	238,906

Plant Infrastructure	1,341,448
Plant Equipment	392,000

Office and IT	106,459
Buildings	257,472
TOTAL	11,661,755

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21.1

Operating Costs

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22.0	ECONOMIC ANALYSIS

22.1	Introduction

Endeavour Silver is a producing issuer. The operation at the Guanaceví Mines property have been in continuous operation since 2005. Since no material expansion to production is planned this section has largely been excluded. The mine life is based upon a continued plant throughput of 443,300 t, forecast for 2014.

22.2

2014 Production Forecast

Figure 22-1 through Figure 22-7.

The property has a substantial undeveloped resource potential. Beyond 2014, Endeavour Silver believes that continued exploration and development will lead to the discovery of new resources.

Endeavour Silver actively continues acquiring rights to new properties in the Guanaceví district.

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Figure 22-1 Longitudinal Section of the Deep Porvenir North Mine (Looking Northeast) showing the Mine and Development Plans through December, 2014. Mined areas shown in solid gray hatch.

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Figure 22-2 Longitudinal Section of the Central Porvenir North Mine (Looking Northeast) showing the Mine and Development Plans through December, 2014. Mined areas shown in solid gray hatch.

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Figure 22-3 Longitudinal Section of the Santa Cruz A-12 Mine (Looking Northeast) showing the Mine and Development Plans through December, 2014. Mined areas shown in solid gray hatch.

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Figure 22-4 Longitudinal Section of the Santa Cruz A-13 Mine (Looking Northeast) showing the Mine and Development Plans through December, 2014. Mined areas shown in solid gray hatch.

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Figure 22-5 Longitudinal Section of the Santa Cruz Alto Mine (Looking Northeast) showing the Mine and Development Plans through December, 2014. Mined areas shown in solid gray hatch.

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Figure 22-6 Longitudinal Section of the Santa Cruz Bajo Mine (Looking Northeast) showing the Mine and Development Plans through December, 2014. Mined areas shown in solid gray hatch.

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Figure 22-7 Longitudinal Section of the Porvenir Cuatro Mine (Looking Northeast) showing the Mine and Development Plans through December, 2014. Mined areas shown in solid gray hatch.

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23.0

ADJACENT PROPERTIES

Endeavour Silver’s property sits within the Guanaceví mining district which has a long history and has hosted several past producers, a number of which are located on the property. The majority of the past producers in the district are located on silver bearing quartz veins that are similar to or related to those found on the Endeavour’s property. There are no immediately adjacent properties which directly affect the interpretation and evaluation of the mineralization or anomalies found on the Endeavour’s Guanaceví property. The geology, nature of the mineralization, historical production over the last two centuries and the limited use of modern exploration concepts and technology on the property to identify new areas of mineralization are all ingredients which make the various veins and mineralized areas within Endeavour’s Guanaceví property good targets for exploration and potential expansion of current operations.

23.1

Other Silver/Gold Production Activity in the Guanaceví Mining District

The MG plant performs custom milling and processing for several small mines in the Guanaceví district. These mines include the La Anima Chica mine owned by Saul y Noel Olivas, the San Martin mine owned by Gerardo Rivera, the Capuzaya mine owned by Roberto Velazquez, the El as de Oros mine owned by Efrain Macho and a handful of other smaller operations. The cumulative tonnage from these operations runs between 1,500 and 2,000 tonnes per month, and the material from each mine is run through the MG plant separately in batch mode. Each mine exploits quartz-carbonate veins similar in character to the Santa Cruz mineralization, but with varying amounts of base metals.

There are two other plants in the district. One is owned by Cesar Loera and is treating about 100 t/d. The other is located at the San Rafael Property and processes about 50 t/p.

The prominent mineral properties and mines within the Guanaceví mining district are shown on Figure 23-1.

Figure 23-2 is a view of a small privately owned head frame located just off of Endeavour Silver’s property.

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Figure 23-1 Adjacent Mineral Properties/Mines in the Guanaceví Mining District

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Figure 23-2 Small Privately Owned Head frame Located just off the Endeavour Silver Property

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24.0

OTHER RELEVANT DATA AND INFORMATION

Endeavour Silver completed this Technical Report on the Guanaceví property titled “NI 43-101 Technical Report Resource and Reserve Estimates for the Guanaceví Mines Project, Durango State, Mexico” in February 2014. This report summarizes all relevant work and data completed as of December 31, 2013 by, or on behalf of Endeavour Silver. The report describes the development of the mineral resources and mining reserves, describes the mining methods, processing plants and economics of the Guanaceví Mines Project based on an estimate of costs and metal prices.

To the knowledge of the QP, there is no other relevant data and other information regarding the Guanaceví property that has not already been discussed in the appropriate sections of this report.

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25.0	INTERPRETATION AND CONCLUSIONS

25.1	Interpretation

Endeavour Silver’s Guanaceví Mines Project has an extensive mining history with well-known silver and gold bearing vein systems. Ongoing exploration has continued to demonstrate the potential for the discovery of additional resources at the project and within the district surrounding the mine.

Since Endeavour took control of the Guanaceví Mines Property, new mining areas have enabled Endeavour Silver to increase production by providing additional sources of mill feed. Furthermore, Endeavour Silver has continued to implement measures in a number of areas which have culminated in seven consecutive years of increased production. Endeavours operations management team continues to search for improvements in efficiency, lowering costs and researching and applying low-cost mining techniques. These measures should allow mining to be expanded beyond the boundaries of previously mined areas and extended into new areas.

In 2013 Guanaceví produced 2,772,227 oz of silver and 6,784 oz of gold. Plant throughput was 435,922 tonnes at an average grade of 253 g/t silver and 0.60 g/t gold. Mill recoveries averaged 78.2% for silver and 80.7% for gold.

Risks associated with the current resources and reserves include lost revenue due to negative variances in reserve grade and metal prices used to classify resources. A substantial drop in metal price could have a large impact on resources and recoverable reserves.

25.1.1

December 31, 2013 Mineral Resource Estimate

The mineral resources for the Guanaceví Mines Project, as of December 31, 2013, are summarized in Table 25-1.

Table 25-1
Mineral Resource Estimate, Effective Date December 31, 2013 Michael Munroe, SME Registered Member

Description	Tonnes	Silver (g/t)	Gold (g/t)	Silver (oz)	Gold (oz)	Silver Eq. (oz)



Measured	132,000	183	0.29	777,200	1,300	855,200
Indicated	1,701,200	242	0.57	13,221,400	31,500	15,111,400
Total Measured and Indicated	1,833,200	238	0.55	13,998,600	32,800	15,966,600

Total Inferred	1,155,100	253	0.46	9,384,700	17,100	10,410,700

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For year-end 2013 there was a significant decrease in Indicated Resources at Guanaceví. The biggest impact came from the Porvenir Cuatro Mine where the vast majority of remaining Indicated Resources were upgraded to Proven and Probable Reserves. Porvenir Cuatro is in the final stages of mine life. Mining has reached the legal boundaries in the north and limit of economic mineralization to the south.

Similarly in Porvenir North, mining development has tested the limit of mineralization to the north and on structure development has reached the lowest levels of the mine.

25.1.2

December 31, 2013 Mineral Reserve Estimate

The mineral reserves for the Guanaceví Mines project as of December 31, 2013 are summarized in Table 25-2.

Table 25-2
Mineral Reserve Estimate, Effective Date December 31, 2013
Michael Munroe, SME Registered Member

Description	Tonnes	Silver (g/t)	Gold (g/t)	Silver (oz)	Gold (oz)	Silver Eq. (oz)
Description	Tonnes	Silver (g/t)	Gold (g/t)	Silver (oz)	Gold (oz)	Silver Eq. (oz)
Proven	327,800	281	0.51	2,961,900	5,300	3,279,900
Probable	34,600	342	0.46	380,800	500	410,800
Total Proven and Probable	362,400	287	0.51	3,342,700	5,800	3,690,700

The QP believes that the significant decrease in reserves, as compared to those as of December 15, 2012, are the result of three significant factors all of which affect block classification;

Changes in cut-off grade, 158 g/t Ag in 2012 versus 217 g/t Ag equivalent in 2013.

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Changes in metal prices,

	•	US$ 31/oz Ag in 2012 versus US$ 22/oz Ag in 2013, and
	•	US$ 1550/oz Ag in 2012 versus US$ 1320/oz Ag in 2013.

Changes in actual mining areas versus geologic model combined with error in the interpretation. Optimistic interpretations from past geologic models in Porvenir North were found to be different once actual development opened the areas resulting in new interpretation of the northern flank of Porvenir North.

Much of the mineralization in the lower sections of Porvenir North does not meet the requirements of viable economic extraction due to the higher cut-off grade applied to reserves and lower metal prices.

In the short to medium term, more reserves are expected to be generated in the immediate surroundings of the current reserve blocks based on continued development especially in the central portion of the Santa Cruz Vein just north of the Santa Cruz Mine. For the long-term, sustainability will require maintaining the current levels of exploration activities and budgets, and the current levels of exploration success.

25.2

Conclusions

The QP considers the Guanaceví resource and reserve estimates presented here to conform to the current CIM standards and definitions for estimating resources and reserves, as required under NI 43-101 “Standards of Disclosure for Mineral Projects.” These resources and reserves form the basis for Endeavour Silver’s ongoing mining operations at the Guanaceví Mines Project.

The QP is unaware of any significant technical, legal, environmental or political considerations which would have an adverse effect on the extraction and processing of the resources and reserves located at the Guanaceví Mines Project. Mineral resources which have not been converted to mineral reserves, and do not demonstrate economic viability, shall remain mineral resources.

The QP considers that the mineral concessions in the Guanaceví mining district controlled by Endeavour Silver continue to be highly prospective both along strike and down dip of the existing mineralization, and that further resources could be converted into reserves with additional exploration and development especially in and around the Santa Cruz Mine.

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Endeavour’s Regional Exploration unit has at their disposal modern exploration techniques that were not available to previous exploration and mining companies that worked the district. With many new discoveries, some currently in production, Endeavour has shown that applying these modern concepts and techniques greatly enhances the likelihood of success.

25.2.1

Future Potential

In 2014 mine exploration efforts will focus on the area between the Santa Cruz Mine and the Porvenir Mine. This area has great potential as minor development in the upper areas has intersected robust vein with economic grades. Surface exploration will investigate the untested area south of the Santa Cruz Mine at depth. Exploration success in one or both of these areas would provide new development opportunities for Endeavour Silver at the Guanaceví Mines Project, however, there is no assurance that this exploration will be successful in delineating additional resources and which in turn would eventually be converted to reserves.

The QP believes that the 2014 exploration program for the Guanaceví Mines Project proposed by Endeavour Silver is both reasonable and necessary for the continued successful long life of the project.

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26.0	RECOMMENDATIONS

26.1	Budget for Further Work

In 2014, Endeavour Silver plans an exploration program focused on surface drilling, south of the Santa Cruz Mine and underground drilling, north of the Santa Cruz Mine.

Endeavour Silver will also continue to conduct regional exploration reconnaissance and investigate several new prospective targets within the district. The primary long-term goal of this program is to expand reserves and resources and to identify properties for potential acquisition in the Guanaceví district for future growth.

Table 26-1 summarizes the approved 2014 exploration budget for the Guanaceví Mines Project.

Table 26-1
Guanaceví Exploration Priority Targets – 2014

Project Area	2014 Program		Budget
	Metres	Samples	US $
	Metres	Samples	US $
Surface Exploration Drilling
Santa Cruz South	4,500	1,500	709,920
Guanaceví Regional Exploration		900	253,260
Subtotal	4,500	2,400	963,180
Mine Operations Exploration Drilling
Porvenir North	5,000	1500	1,100,000
Subtotal	5,000	1,500	1,100,000

Total (mine +exploration division)	9,500	3,900	2,063,180

26.1.1

Surface Exploration Program

The 2014 surface exploration program is planned to include 4,500m of core in approximately 10 diamond drill holes to test the Santa Cruz vein on the south side of the Santa Cruz Mine. Budgeted cost of the program is US $710,000 (Table 26-1).

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26.1.2

Underground Exploration Program

The 2014 underground exploration program is planned to include 5,000m of core in approximately 20 diamond drill holes to test the Santa Cruz vein on the north side of the Santa Cruz Mine towards the Porvenir Mine. Budgeted cost for the program is US $1.1 million (Table 26-1).

26.1.3

Comments

Some of the known characteristics of the mineralization in the Santa Cruz structure include;

	1)	known strike length of more than 5,500m NW-SE along on the Santa Cruz structure from north of Milache to south of La Prieta Mine,

	2)	mineralized zones in the Santa Cruz, Alex Breccia and La Prieta areas that are open at depth, and

	3)	the down-dip potential of the Santa Cruz, Porvenir, Porvenir Dos, Alex Breccia and La Prieta areas does not appear to be constrained by an increase in base-metal to silver and gold ratios,

Given the above characteristics it is reasonable to infer that further exploration has the potential to yield additional mineralized areas which could have a beneficial effect on the resources and possibly reserves at the Guanaceví Mines Project.

The QP has reviewed the proposal for further exploration on the Guanaceví Mines Property and recommends that that the programs be carried out as planned.

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The QP believes that the surface drilling program for exploration on the Guanaceví Mines Project is warranted and justified. As noted above, there is solid potential for the discovery of additional resources.

The focus of the proposed exploration programs will be on outlining of new resources for 2014 and beyond in areas adjacent to the operating Santa Cruz Mine.

26.2

Geology, Block Modeling, and Mineral Resources

The QP recommends that modelling parameters and procedures be regularly reviewed to develop better estimation plans.

26.3

Further Recommendations

The following recommendations are in addition to the ones listed above.

	4)	The QP recommends that future budgets should include modern-day technology improve the quality of the underground samples used for resource evaluation.

	5)	The QP recommends the continued development of an effective reconciliation plan for the Guanaceví Mines Project. Stope-by-stope reconciliations are difficult in mines where material from different stopes or even mines is regularly mixed. However, reconciliation of ore mined and milled on a long-term basis to the resource model and the LOM can be useful tools. Reconciliation to production data can be used in the calibration of future resource models.

	6)	The QP recommends that mine geology reactivate the collection of representative samples of the various types of wall rock dilution and ore types for bulk density determinations.

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27.0

REFERENCES

Berger, B.R., and Eimon, P.L., (1983), Conceptual Models of Epithermal Precious Metal Deposits, in Shanks, W.C. III, ed., Cameron Volume on Unconventional Mineral Deposits: New York, American Institute of Mining, Metallurgy and Petroleum Engineering, and Society of Mining Engineers, p. 191-205.

Bordeaux, Albert F.J., (1908), The Silver Mines of Mexico, Transactions of the American Institute of Mining Engineers, Volume XXXIX (1908) 1909, pages 357 to368.

Buchanan, L. J., (1981), Precious Metal Deposits Associated with Volcanic Environments in the Southwest, Arizona Geologic Society Digest, Vol. XIV, Relations of Tectonics to Ore Deposits in the Southern Cordillera, ed. By Dickenson, W. R. and Payne, W. D.

Corbett, G.J., Leach, T.M., (1996), Southwest Pacific Rim Gold - Copper Systems: Structure, Alteration and Mineralization, Workshop manual, 185 p

Devlin, B.D., (2008) NI 43-101 Technical Report on the Resource and Reserve Estimates for the Guanaceví Mines Project, Durango State, Mexico.

Endeavour Silver, (2008), Endeavour Silver Corp. Management Discussion and Analysis for the Year Ended December 31, 2007, Draft Copy, 23 p.

Hollister, F.V. 1985, Discoveries of Epithermal Precious Metal Deposits: AIME, Case Histories of Mineral Discoveries, V.1, pp. 168.

Lewis, W.J. Leader, R.J. and Mukhopadhyay, D.K., (2007), NI 43-101 Technical Report Audit of the Resource and Reserve Estimates for the Guanaceví Mines Project, Durango State, Mexico, 103 p.

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Lewis, W.J., Murahwi, C., and San Martin, A,J., (2012), NI 43-101 Technical Report Resource and Reserve Estimates for the Guanaceví Mines Project, Durango State, Mexico, 258 p.

Lewis, W.J., Murahwi, C., and San Martin, A,J., (2013), NI 43-101 Technical Report Resource and Reserve Estimates for the Guanaceví Mines Project, Durango State, Mexico, 258 p.

Olson, A. E., (2006), Technical Report, Mineral Resource and Minera Reserve Estimate, Guanaceví Mines Project, Durango, Mexico for Endeavour Silver, 122 p.

Parrish, I. S. (1997). Geologist's Gordian Knot: To cut or not to cut. Mining Engineering, 49(4), 45-49.

Ramírez, Santiago, (1884), Noticia Histórica de la Riqueza Minera De México Y de Su Actual Estado de Explotación, 768 p.

Salas, G.P., et al, (1991), Economic Geology, Mexico, Volume P-3 of the Geology of North America, in The Decade of North American Geology Project series by The Geological Society of America, Inc., 438 p.

Sinclair, A. J., & Blackwell, G. H. (2002). Applied mineral inventory estimation. Cambridge University Press.

Southworth, J.R., (1905), Las Minas de México (Edición Ilustrada) Historia, Geologia, Antigua Mineria y Descipción General de los Estados Mineros de la República Mexicana, En Español y Inglés, 260 p.

Spring, V., (2005), A Technical Review of the North Porvenir Zone, Santa Cruz Mine, Guanaceví Mines Project in Durango State, Mexico for Endeavour Silver Corp. 67 p.

Wilson, G., (1882), Mexico As A Field For Miners, Engineering and Mining Journal, Volume 34, page 7.

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Wilson, G., (1882), Mining Progress in Mexico, Engineering and Mining Journal, Volume 34, page 55.

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28.0

CERTIFICATES

CERTIFICATE OF QUALIFIED PERSON

I, Michael Munroe SME-RM, am employed as Geologist with Endeavour Silver Corp. of Vancouver, British Columbia, Canada.

This certificate applies to the technical report titled “NI 43-101 Technical Report Resource and Reserve Estimates for the Guanaceví Mines Project Durango State Mexico” effective December 31, 2013 and dated 27 March 2014 (the “technical report”).

I am a Registered Member of the Society for Mining, Metallurgy, and Exploration (SME, #4151306RM).

I graduated from the Acadia University, Nova Scotia, Canada, with a Bachelors of Science with Specialization (B.Sc.S) degree in Geology in 1989. I have completed the Citation Program in Applied Geostatistics at the Centre for Computational Geostatistics (CCG) at the University of Alberta in 2006 followed by a Master of Science degree in Mining Engineering (Geostatistics) in 2012.

With the exception of my time at the University of Alberta (2007-2008) obtaining my Masters degree, I have practiced my profession continuously since 1986. I have been directly involved in narrow vein gold and silver exploration and mining operations in Canada, Mexico, United States, and Venezuela.

As a result of my experience and qualifications, I am a Qualified Person as defined in National Instrument 43–101 Standards of Disclosure for Mineral Projects (NI 43–101).

I visited the Guanaceví Property on a regular basis during 2013. I last visited the property on December 16 through December 18, 2013.

I am responsible for all sections of the technical report..

I am not independent of Endeavour Silver Corp. as independence is described in Section 1.5 of NI 43-101.

I have been involved with the Guanaceví Property since November 2012 performing geological and model review and validation.

I have read NI 43–101 and the technical report has been prepared in compliance with that Instrument.

As of the effective date of the technical report, to the best of my knowledge, information and belief, the technical report contains all scientific and technical information that is required to be disclosed to make the technical report not misleading.

Dated: 27 March 2014

“Signed and sealed”
__________________________

Michael Munroe, SME-RM

Endeavour Silver Corp.
301-700 West Pender Street
Vancouver, BC V6C 1G8
Phone: (604) 685-9775
Fax: (604) 685-9744	www.edrsilver.com

Page 28-1

1.0	SUMMARY			1-1
	1.1	Location and Property Description		1-2
	1.2	Ownership		1-3
	1.3	History		1-3
	1.4	Geology and Mineralization		1-5
		1.4.1	Geology	1-5
		1.4.2	Mineralization	1-6
	1.5	Exploration		1-7
		1.5.1	Underground Drilling	1-7
		1.5.2	Surface Drilling	1-7
		1.5.3	Other Activities	1-7
		1.5.4	2014 Exploration Program	1-7
	1.6	2013 Mineral Resource Estimate		1-8
		1.6.1	Mineral Resource Statement	1-8
		1.6.2	Assumptions and Key Parameters	1-9
		1.6.3	Methodology	1-9
		1.6.4	Classification	1-9
	1.7	2013 Mineral Reserve Estimate		1-10
		1.7.1	Mineral Reserve Statement	1-10
		1.7.2	Mineral Reserve Parameters	1-11
		1.7.3	Definitions and Classifications	1-11
	1.8	Development and Operations		1-11
	1.9	Conclusions and Recommendations		1-13
		1.9.1	Conclusions	1-13
		1.9.2	Recommendations	1-14
2.0	INTRODUCTION			2-1
	2.1	Terms of Reference		2-1
	2.2	Qualified Persons		2-2
	2.3	Effective Dates		2-2
	2.4	Units and Currencies		2-2
	2.5	Information Sources and References		2-5
	2.6	Previous Technical Reports		2-5
3.0	RELIANCE ON OTHER EXPERTS			3-1
4.0	PROPERTY DESCRIPTION AND LOCATION			4-1
	4.1	Location		4-1
	4.2	Ownership and Property Description		4-1
	4.3	Mineral Tenure		4-2
		4.3.1	Property Agreements	4-5
		4.3.2	Access Agreements	4-7
	4.4	Licenses, Permits and Environment		4-7
	4.5	Environment		4-8

5.0	ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE, AND PHYSIOGRAPHY			5-1
	5.1	Accessibility		5-1
	5.2	Climate		5-2
	5.3	Local Resources and Infrastructure		5-2
	5.4	Physiography		5-3
	5.5	Sufficiency of Surface Rights		5-3
	5.6	Comments on Section 5		5-4
6.0	HISTORY			6-1
	6.1	Guanaceví Mining District and the Guanaceví Property		6-1
	6.2	Historical Exploration		6-1
	6.3	Historical Mining and Production		6-5
		6.3.1	Mining	6-5
		6.3.2	Production	6-6
	6.4	Mineral Resources and Mineral Reserves		6-10
7.0	GEOLOGICAL SETTING AND MINERALIZATION			7-1
	7.1	Regional Geology		7-1
		7.1.1	Guanaceví Formation	7-1
		7.1.2	Lower Volcanic Sequence	7-2
		7.1.3	Upper Volcanic Sequence	7-3
		7.1.4	Structural Setting	7-4
	7.2	Project Geology		7-6
		7.2.1	Local Structure	7-7
		7.2.2	Alteration	7-8
	7.3	Mineralization		7-8
		7.3.1	Santa Cruz Vein	7-9
		7.3.2	Footwall Veins	7-10
8.0	DEPOSIT TYPES			8-1
9.0	EXPLORATION 2013			9-1
	9.1	2013 Exploration Activities		9-1
		9.1.1	Drilling	9-1
	9.2	General Exploration and Drilling		9-1
		9.2.1	2013 Mine Exploration	9-1
		9.2.2	2013 Surface Exploration and Drilling	9-1
		9.2.3	Other Surface Exploration Activities	9-3
10.0	DRILLING			10-1
	10.1	Drilling Procedures and Core Logging		10-1
		10.1.1	Drilling Procedures	10-1
		10.1.2	Core Logging Procedures	10-2
	10.2	2013 DRILLING PROGRAM AND RESULTS		10-3
		10.2.1	2013 Surface Drilling Program	10-3
	10.3	Comments on Section 10		10-10
11.0	SAMPLE PREPARATION, ANALYSES, AND SECURITY			11-1

	11.1	Sampling Method and Approach		11-1
		11.1.1	Sampling Intervals	11-1
		11.1.2	Underground Sampling Methodology	11-1
	11.2	Density Determinations		11-2
		11.2.1	Exploration Samples	11-2
		11.2.2	Mine Samples	11-2
	11.3	Quality Control / Quality Assurance (QA/QC) program		11-3
		11.3.1	Sampling	11-3
		11.3.2	Analysis	11-4
		11.3.3	QA/QC Program	11-6
		11.3.4	Surface Exploration Blank Samples	11-12
		11.3.5	Surface Exploration Duplicate Samples	11-14
		11.3.6	Surface Exploration Standard Reference Material	11-16
	11.4	Metalurgica Guanaceví (MG) laboratory		11-21
		11.4.1	MG Laboratory QA/QC and Charts	11-23
	11.5	Comments on Section 11		11-27
12.0	DATA VERIFICATION			12-1
	12.1	Database Verification for the Mineral Resource Estimate		12-1
		12.1.1	Review of the In-House Data Protocols	12-1
		12.1.2	Validation of Data and In-House Protocols	12-3
	12.2	Comments		12-5
13.0	MINERAL PROCESSING AND METALLURGICAL TESTING			13-1
	13.1	Metallurgical Testing		13-1
		13.1.1	Mineralogy	13-1
		13.1.2	Flotation	13-2
		13.1.3	Hot cyanide leach	13-2
		13.1.4	Leach tests of exploration samples (Milache)	13-3
	13.2	Process Plant		13-3
	13.3	Comments on Section 13		13-3
14.0	MINERAL RESOURCE ESTIMATES			14-1
	14.1	Terms of Reference		14-1
		14.1.1	CIM MINERAL RESOURCE DEFINITIONS AND CLASSIFICATIONS	14-2
	14.2	December 31, 2013 Resource Estimates		14-4
	14.3	Previous Estimates		14-4
	14.4	Database		14-5
	14.5	Sample Capping		14-5
	14.6	Tonnage		14-7
	14.7	Assumptions and Key Parameters		14-7
	14.8	Methodology		14-7
		14.8.1	2D Polygonal Resource Estimates	14-7
		14.8.2	Block Modelling	14-13
	14.9	Classification		14-14
	14.10	Block Model Validation		14-16
		14.10.1	Global Comparison	14-16

	14.10.2	Visual Comparison		14-17
	14.11	Assessment of Reasonable Prospects for Economic Extraction		14-22
	14.12	Mineral Resource Statement		14-22
	14.13	Note on Rounding		14-24
	14.14	Factors That May Affect the Mineral Resource Estimate		14-24
	14.15	Comments on Section 14		14-25
15.0	MINERAL RESERVE ESTIMATES			15-1
	15.1	Terms of Reference		15-1
		15.1.1	CIM Mineral Reserve Definitions and Classifications	15-1
		15.1.2	Conversion Factors from Mineral Resources to Mineral Reserves.	15-3
	15.2	Dilution and Recovery		15-3
	15.3	Cut-off Grade		15-4
	15.4	Production Depletion		15-5
	15.5	Reconciliation of Mineral Reserves to Production		15-5
	15.6	Reserve Classification		15-7
	15.7	Mineral Reserve Statement		15-8
	15.8	Factors That May Affect the Mineral Reserve Estimate		15-9
16.0	MINING METHODS			16-1
	16.1	Mining Operations		16-1
	16.2	Ground Conditions		16-1
	16.3	Mining Method		16-2
	16.4	Production Areas		16-4
17.0	RECOVERY METHODS			17-1
	17.1	Production		17-1
	17.2	Mineral Processing		17-1
18.0	PROJECT INFRASTRUCTURE			18-1
	18.1	Mine Pumping, Ventilation and Electrical		18-1
	18.2	Tailings Dam		18-3
19.0	MARKET STUDIES AND CONTRACTS			19-1
20.0	ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY IMPACT			20-1
	20.1	Environmental Studies and Permitting		20-1
	20.2	Social or Community Impact		20-1
21.0	CAPITAL AND OPERATING COSTS			21-1
	21.1	Operating Costs		21-2
22.0	ECONOMIC ANALYSIS			22-1
	22.1	Introduction		22-1
	22.2	2014 Production Forecast		22-1
23.0	ADJACENT PROPERTIES			23-1
	23.1	Other Silver/Gold Production Activity in the Guanaceví Mining District		23-1
24.0	OTHER RELEVANT DATA AND INFORMATION			24-1

25.0	INTERPRETATION AND CONCLUSIONS			25-1
	25.1	Interpretation		25-1
		25.1.1	December 31, 2013 Mineral Resource Estimate	25-1
		25.1.2	December 15, 2013 Mineral Reserve Estimate	25-2
	25.2	Conclusions		25-3
		25.2.1	Future Potential	25-4
26.0	RECOMMENDATIONS			26-1
	26.1	Budget for Further Work		26-1
		26.1.1	Surface Exploration Program	26-1
		26.1.2	Underground Exploration Program	26-2
		26.1.3	Comments	26-2
	26.2	Geology, Block Modeling, and Mineral Resources		26-3
	26.3	Further Recommendations		26-3
27.0	REFERENCES			27-1
28.0	CERTIFICATES			28-1

Table	1-1	Guanaceví Exploration Priority Targets – 2014	1-8
Table	1-2	Mineral Resource Estimate, Effective Date December 31, 2013, Michael Munroe, SME Registered Member	1-8
Table	1-3	Mineral Reserve Estimate, Effective Date December 31, 2013, Michael Munroe, SME Registered Member	1-10
Table	2-1	List of the Abbreviations	2-3
Table	4-1	Guanaceví Mines Concessions Controlled by Endeavour Silver	4-3
Table	4-2	Summary of Endeavour Silver’s Royalties	4-6
Table	4-3	Summary of Endeavour Silver’s Surface Access Rights	4-7
Table	6-1	Drilling Summary for Santa Cruz Vein Structure at Guanaceví Mines Project (through December, 2013)	6-2
Table	6-2	Summary of the Production for the Guanaceví Property (1991 to 2003)	6-9
Table	6-3	Summary of Production for the Guanaceví Property (2005 through 2013)	6-10
Table	7-1	Generalized Stratigraphic Column in the Guanaceví Mining District	7-4
Table	9-1	Exploration Drilling Activities in 2013	9-1
Table	9-2	Summary of the 2013 Expenditures for the Guanaceví Surface Exploration Program	9-2
Table	9-3	Significant Assays for Rock sampling in the El Cambio Area	9-4
Table	9-4	Significant Assays for Rock sampling in the PP Area	9-5
Table	9-5	Significant Assays for Rock sampling in trenches of the Milache Area	9-9
Table	9-6	Significant Composites for channel sampling in the Rocio-Cata Rica Area	9-12
Table	9-7	Significant Composites for channel sampling in the Brisa Area	9-12
Table	9-8	Assays for Dump samples collected in the Brisa Area	9-13
Table	9-9	Significant Composites for channel sampling in the Santa Cruz South Area	9-17
Table	10-1	Summary for the Milache 2013 Surface Diamond Drilling Program (as at July, 2013)	10-4
Table	10-2	Summary of the 2013 Milache Diamond Drilling Results	10-6
Table	11-1	Bulk Density Determinations for Mine Samples from Porvenir North/Dos/Cuatro and Santa Cruz	11-2
Table	11-2	Summary of Control Samples Used for the 2013 Surface Exploration Program	11-12
Table	11-3	Reference Standards Used for Endeavour Silver’s Drilling Programs	11-17
Table	11-4	Basis for Interpreting Standard Sample Assays	11-17
Table	11-5	Reference Standards Used at Endeavour Silver’s MG Lab	11-24
Table	13-1	Silver and gold distribution in ore and leach residue samples	13-1
Table	13-2	Summary of mineralogical analysis of ore and leach residue samples	13-2
Table	13-3	Results of bottle roll tests on Milache ore samples	13-3
Table	14-1	Summary of Silver Chip Sample Capping Thresholds for the Veins at Guanaceví	14-6
Table	14-2	Summary of Gold Chip Sample Capping Thresholds for the Veins at Guanaceví	14-7
Table	14-3	Search Ellipsoid Parameters for the Guanaceví Resource Models	14-14
Table	14-4	Global Means by Vein Structure	14-16
Table	14-5	Mineral Resource Estimate, Guanaceví Project¹, Effective Date December 31, 2013, Michael Munroe, SME Registered	14-23
Table	14-6	Inferred Mineral Resource Estimate, Guanaceví Project², Effective Date December 31, 2013, Michael Munroe, SME Registered Member	14-23
Table	15-1	Mining Cost per Tonne Milled Guanaceví Property, 2014 Budget	15-4

Table	15-2	Mineral Reserve Breakeven Cut-off Inputs for the Guanaceví Property	15-4
Table	15-3	Reconciliation of 2012 Adjusted LOM to 2013 geology estimates and plant head grade.	15-6
Table	15-4	Proven and Probable Mineral Reserves, Effective Date December 31, 2013, Michael Munroe, SME Registered Member	15-8
Table	18-1	Stand-by Electrical Generator Capacity	18-2
Table	18-2	Compressor Capacity	18-3
Table	19-1	Average Annual High and Low London PM Fix for Gold and Silver from 2002 to 2013 (prices expressed in US$/oz)	19-1
Table	19-2	Summary of Contracts at the Guanaceví Mines Project	19-2
Table	19-3	List of outstanding contracts as of December 31, 2013	19-3
Table	21-1	2014 Capital Cost Estimates for the Guanaceví Mines Project	21-1
Table	25-1	Mineral Resource Estimate, Effective Date December 31, 2013, Michael Munroe, SME Registered Member	25-1
Table	25-2	Mineral Reserve Estimate, Effective Date December 31, 2013, Michael Munroe, SME Registered Member	25-2
Table	26-1	Guanaceví Exploration Priority Targets – 2014	26-1

Figure	4-1	Guanaceví Mines Project, Mineral Concessions Map	4-3
Figure	5-1	Partial View of the Town of Guanaceví	5-2
Figure	6-1	Milache Longitudinal Section (Looking Northeast) showing Intersection Points on the Santa Cruz Vein	6-3
Figure	6-2	Surface Map Showing Completed Holes in the La Brisa Area	6-4
Figure	6-3	Old Mine Waste Dump Located alongside the Road to the Santa Cruz and Porvenir Mines	6-6
Figure	7-1	Regional Geology Map for the Guanaceví Mining District	7-5
Figure	7-2	Guanaceví Mines Project Geology Map	7-7
Figure	8-1	Alteration and Mineral Distributions within a Low Suphidation Epithermal Vein System	8-2
Figure	9-1	Surface Map showing analyzed Targets in the San Pedro area	9-6
Figure	9-2	Surface Map of the El Cambio Area	9-7
Figure	9-3	Photograph showing outcrop of Vein in the El Cambio Claim (NE30ºSW/57ºSE)	9-7
Figure	9-4	Surface Maps of the PP Area	9-8
Figure	9-5	Photograph showing the plane of the structure in the PP area	9-8
Figure	9-6	Photograph showing the possible trace of the PP vein structure	9-8
Figure	9-7	Surface Map of the Milache area	9-10
Figure	9-8	Photograph of trenches on the Milache area	9-10
Figure	9-9	Surface Map showing analyzed Targets in the Rocio-Brisa-Cata Rica area	9-13
Figure	9-10	Surface Map of the Rocio-Cata Rica area	9-14
Figure	9-11	Surface Map of the Rocio area	9-14
Figure	9-12	Photograph showing the Rocio vein	9-15
Figure	9-13	Photograph showing the Cata Rica Vein	9-15
Figure	9-14	Surface Map of the La Brisa area	9-16
Figure	9-15	Photograph showing systematic sampling on existent workings (outcrop of a main vein) in the La Brisa area.	9-16
Figure	9-16	Surface Map of the Santa Cruz South area	9-18
Figure	9-17	Photographs showing the Santa Cruz Structure and a small shaft NW-SE30º/70ºSW .	9-20
Figure	9-18	Photographs showing the Abundancia Structure	9-20
Figure	9-19	Photograph showing the Abundancia Vein at the North (NW36ºSE/71ºSW), Central (NE14ºSW/54ºNW) and South (NW13ºSE/48ºSW) part	9-20
Figure	10-1	Century’s Configuration for Drill Hole Data Collection for the Guanaceví Mines Project	10-3
Figure	10-2	Surface Map showing completed drill holes in the Milache Area	10-5
Figure	10-3	Surface Map showing completed drill holes in the Milache Area	10-7
Figure	10-4	Cross-Section through Holes MCH-31, MCH-32 & MCH-33 Drilled to Test the Santa Cruz Vein in the Milache area.	10-8
Figure	10-5	Cross-Section through Holes MCH2-1, MCH-34, MCH-35, MCH-36 & MCH-37 Drilled to Test the Santa Cruz Vein in the Milache area.	10-9
Figure	11-1	Silver grade mine blanks	11-7

Figure	11-2	Gold grade mine blanks	11-7
Figure	11-3	Max-Min plot for silver pulps duplicates	11-8
Figure	11-4	Max-Min plot for gold pulps duplicates	11-9
Figure	11-5	Max-Min plot for gold reject duplicates	11-9
Figure	11-6	Max-Min plot for gold reject duplicates	11-10
Figure	11-7	Max-Min plot for silver mine duplicate samples	11-10
Figure	11-8	Max-Min plot for gold mine duplicate samples	11-11
Figure	11-9	Flow Sheet for Core Sampling, Sample Preparation and Analysis	11-12
Figure	11-10	Control Chart for Gold Assay from the Blank Samples Inserted into the Sample Stream	11-13
Figure	11-11	Control Chart for Silver Assay from the Blank Samples Inserted into the Sample Stream	11-13
Figure	11-12	Scatter Plot for Duplicate Samples for Gold	11-15
Figure	11-13	Scatter Plot for Duplicate Samples for Silver	11-15
Figure	11-14	Control Chart for Gold Assays from the Standard Reference Sample EDR-28	11-18
Figure	11-15	Control Chart for Silver Assays from the Standard Reference Sample EDR-28	11-18
Figure	11-16	Control Chart for Gold Assays from the Standard Reference Sample EDR-30	11-19
Figure	11-17	Control Chart for Silver Assays from the Standard Reference Sample EDR-30	11-19
Figure	11-18	Scatter plot of Check Assays for Gold	11-20
Figure	11-19	Scatter plot of Check Assays for Silver	11-21
Figure	11-20	MG Lab Guanaceví Mine	11-22
Figure	11-21	Max-Min plot for silver pulps duplicates	11-23
Figure	11-22	Control Chart for Silver Assays from the Standard Reference Sample CDN-FCM-18.	11-25
Figure	11-23	Control Chart for Silver Assays from the Standard Reference Sample CDN-FCM-6.	11-26
Figure	11-24	Control Chart for Silver Assays from the Standard Reference Sample CDN-FCM-4.	11-27
Figure	14-1	Portion of typical resource long section (Porvenir North) showing examples of resource and reserve blocks as explained in text.	14-9
Figure	14-2	Longitudinal Section showing the Resources for the Epsilon-Soto Vein	14-10
Figure	14-3	Longitudinal Section showing the Resources for the Footwall Soto Vein	14-10
Figure	14-4	Longitudinal Section showing the Resources for the Hanging Wall Soto Vein	14-11
Figure	14-5	Longitudinal Section showing the Resources for the Epsilon Vein	14-11
Figure	14-6	Longitudinal Section showing the Resources for the San Joaquin Vein	14-12
Figure	14-7	Longitudinal Section showing the Resources for the La Blanca Vein	14-12
Figure	14-8	Longitudinal Section showing the Resources for the Mi Niña Vein	14-13
Figure	14-9	Vertical Longitudinal Section of Santa Cruz showing block model draped over vein wireframes	14-18
Figure	14-10	Horizontal Section, Santa Cruz, Elevation 2040m showing block model and drillhole composite information.	14-19
Figure	14-11	Horizontal Section, Santa Cruz, Elevation 1940m showing block model and drillhole composite information.	14-20
Figure	14-12	Santa Cruz Vertical Section showing block model and drillhole composite information	14-21
Figure	15-1	Santa Cruz Vein resource and reserve section showing Proven Reserves in red, Probable Reserves in green; Measured Resources in orange, Indicated Resources in blue; Mined areas are shown in gray.	15-8
Figure	17-1	View of Leach Tanks and CCD circuits (January 2014)	17-1

Figure	18-1	Portal for the Porvenir Cuatro Mine	18-2
Figure	18-2	Aerial View of the Plant and Tailings Facilities of the Guanaceví Mines Project	18-4
Figure	18-3	New filtration circuit building (left); Two Diemme filter presses (right). The pictures taken on January 2014.	18-4
Figure	18-4	Updated satellite photo of Guanaceví tailings dam. The Rosario storm water pond (10,000 m³) was build on the top of old tailings to the South of the Cyanide Leach Plant.	18-5
Figure	18-5	View of the new Rosario tailings water pond with capacity 10,000 m³(on the left); View of the dry stack tailings dam from the North-West to South-East (on the right). 18-14	18-5
Figure	18-6	View to water extraction wells (left); and to the South, water pond (right)	18-6
Figure	20-1	New Mine Ambulance Purchased in 2011	20-2
Figure	20-2	2011 New Fire Fighting Equipment	20-3
Figure	22-1	Longitudinal Section of the Deep Porvenir North Mine (Looking Northeast) showing the Mine and Development Plans through December, 2014. Mined areas shown in solid gray hatch.	22-2
Figure	22-2	Longitudinal Section of the Central Porvenir North Mine (Looking Northeast) showing the Mine and Development Plans through December, 2014. Mined areas shown in solid gray hatch.	22-3
Figure	22-3	Longitudinal Section of the Santa Cruz A-12 Mine (Looking Northeast) showing the Mine and Development Plans through December, 2014. Mined areas shown in solid gray hatch.	22-4
Figure	22-4	Longitudinal Section of the Santa Cruz A-13 Mine (Looking Northeast) showing the Mine and Development Plans through December, 2014. Mined areas shown in solid gray hatch.	22-5
Figure	22-5	Longitudinal Section of the Santa Cruz Alto Mine (Looking Northeast) showing the Mine and Development Plans through December, 2014. Mined areas shown in solid gray hatch.	22-6
Figure	22-6	Longitudinal Section of the Santa Cruz Bajo Mine (Looking Northeast) showing the Mine and Development Plans through December, 2014. Mined areas shown in solid gray hatch.	22-7
Figure	22-7	Longitudinal Section of the Porvenir Cuatro Mine (Looking Northeast) showing the Mine and Development Plans through December, 2014. Mined areas shown in solid gray hatch.	22-8
Figure	23-1	Adjacent Mineral Properties/Mines in the Guanaceví Mining District	23-2
Figure	23-2	Small Privately Owned Headframe Located just off the Endeavour Silver Property	23-3

Project Area	2014 Program		Budget US $
	Metres	Samples
	Metres	Samples
Surface Exploration Drilling
Santa Cruz South	4,500	1,500	709,920
Guanaceví Regional Exploration		900	253,260
Subtotal	4,500	2,400	963,180
Mine Operations Exploration Drilling
Porvenir North	5,000	1500	1,100,000
Subtotal	5,000	1,500	1,100,000

Total (mine +exploration division)	9,500	3,900	2,063,180

	2)	The continued development of an effective reconciliation plan for the Guanaceví Mines Project. Stope-by-stope reconciliations are difficult in mines where material from different stopes or even mines is regularly mixed. However, reconciliation of ore mined and milled on a long-term basis to the resource model and the LOM can be useful tools. Reconciliation to production data can be used in the calibration of future resource models.

	3)	That mine geology reactivate the collection of representative samples of the various types of wall rock dilution and ore types for bulk density determinations.