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Endeavour Silver Corp. ("Endeavour" or the "Company") (NYSE:EXK, TSX:EDR) announces that it has entered into a definitive share purchase agreement (the "Agreement") with Guanajuato Silver Company Ltd. ("Guanajuato Silver") (TSXV:GSVR), pursuant to which Guanajuato Silver will acquire the Bolañitos silver and gold mine (the "Bolañitos Mine") from the Company for total consideration of up to US$50 million (the "Transaction"), comprised of upfront consideration of US$40 million payable on closing of the Transaction and contingent consideration of an additional US$10 million. The Transaction is expected to close in January 2026.
"As part of our ongoing strategy to create long-term value for our shareholders, the sale of Bolañitos marks a significant milestone in the rationalization of our portfolio," said Dan Dickson, Chief Executive Officer. "By focusing our resources on our core silver assets, particularly delivering at Terronera and advancing the world-class Pitarrilla project, we are sharpening our operational focus and positioning the company for sustainable growth. We remain committed to maximizing the potential of our silver portfolio and reinforcing our leadership in the sector."
Transaction Details
Pursuant to the terms of the Agreement, Guanajuato Silver will acquire all of the issued and outstanding shares of Mina Bolañitos, S.A. de C.V. ("Mina Bolañitos") from affiliates of the Company. Mina Bolañitos holds the Bolañitos Minein Guanajuato, Mexico.
Total consideration payable on closing of the Transaction is US$40 million (the "Base Consideration"), consisting of US$30 million payable in cash and US$10 million payable in common shares of Guanajuato Silver (the "Base Shares") at a deemed price of US$0.2709413 (C$0.3815) per share, being the volume-weighted average price of Guanajuato Silver's common shares ("Guanajuato Shares") on the TSX Venture Exchange ("TSXV") for the ten consecutive trading days ("10-day VWAP") immediately preceding the date of the Agreement and converted to United States dollars using the average exchange rate posted by the Bank of Canada on November 20, 2025 (being the business day immediately preceding the date of the Agreement).
In addition to the Base Consideration, Guanajuato Silver will make two contingent payments to Endeavour (the "Contingent Payments"), each being US$5 million, upon the production of two (2) million and four (4) million ounces of silver equivalent from the Bolañitos Mine, respectively. Each Contingent Payment will be satisfied 50% in cash and 50% in Guanajuato Shares (the "Contingent Shares"), subject to the Maximum Percentage (as defined herein).
The Contingent Shares will be issued at a deemed price per Contingent Share (the "Contingent Share Issue Price") equal to the greater of (i) the 10-day VWAP of the Guanajuato Shares on the TSXV as at the applicable milestone payment date (the "Market Price"), and (ii) the minimum price permitted by the TSXV after giving effect to the maximum discount permitted thereby, in each case converted to United States dollars using the average exchange rate posted by the Bank of Canada on the business day immediately preceding the applicable milestone payment date. If applicable, Guanajuato Silver will make an additional cash payment to the Company equal to any aggregate shortfall in value between the Market Price and the Contingent Share Issue Price with respect to each Contingent Payment.
The number of Contingent Shares issuable to Endeavour is subject to a maximum ownership percentage of 9.9% of the issued and outstanding Guanajuato Shares (the "Maximum Percentage"). In the event that an issuance of Contingent Shares would result in the Company and its affiliates holding more than the Maximum Percentage, any remaining unpaid portion of the contingent payment amount (after issuing Contingent Shares up the Maximum Percentage) will be payable in cash.
In connection with the Transaction, Endeavour and Guanajuato Silver will enter into an investor rights agreement (the "Investor Rights Agreement") at closing which will include, among other things, participation rights in favour of the Company. Pursuant to the Investor Rights Agreement, the Company has also agreed to vote its Guanajuato Shares in accordance with recommendations of the Guanajuato Silver board of directors in respect of general matters for a period of 12 months and to certain restrictions on transfer on the Base Shares issuable pursuant to the Agreement. All Base Shares will be subject to voluntary restrictions on transfer for a period of 12 months, after which 50% of the Base Shares will be subject to restrictions for an additional two years.
Closing of the Transaction remains subject to the satisfaction or waiver of customary closing conditions, including, among other things, receipt of all required regulatory approvals and entry into the Investor Rights Agreement. The Agreement provides for a reciprocal termination fee of US$2.5 million (the "Termination Fee"), payable by Endeavour or Guanajuato Silver in certain circumstances. The Termination Fee may be satisfied either (i) entirely in cash or, at the election of the applicable payor, (ii) by paying US$1 million in cash and settling the remaining US$1.5 million through the issuance of common shares of the payor, subject to stock exchange approval. Any such shares will be issued at a deemed price equal to the 10-day VWAP on the applicable exchange as of the termination date, converted to U.S. dollars using the Bank of Canada's average daily exchange rate on the business day immediately preceding the termination date.
The Company did not pay any finders' fees in connection with the Agreement.
