The El Compas and El Orito veins have the characteristics of a low sulfidation epithermal vein system. They occur in a region characterised by numerous, high silver-grade intermediate sulfidation epithermal vein systems.

At the El Compas concession, northerly trending veins in the Chilitos Formation have finely banded, coliform and crustiform open space fill textures. Bladed quartz after calcite textures are common. Veins in felsic rocks are comprised of saccharoidal to fine-grained quartz, banded veins. Wider veins in felsic rocks are observed in the Cantera pit and at the El Compas shaft. These veins show breccia and bladed quartz-after calcite textures. Calcite is observed in bands in large andesite-hosted quartz veins and in veinlets distal to mineralised zones in very weakly propylitised rocks.

Within the El Compas ramp, the widest calcite veins (>0.75m, both black and white coarse grained calcite) occur as north-west trending veins. Large northerly trending calcite veins have not been observed on surface or in the El Compas ramp; however, thick calciterich quartz veins were intersected by drilling at deeper levels below the mine and elsewhere that appear to correlate with the north-south trending El Compas and other veins. Sulfide abundance in veins rarely exceeds 5%, and is most abundant in the mineralised veins. Pyrite or pyrrhotite are the most common sulfides. Rare sphalerite and exotic copper was observed at the 7th level of the El Compas ramp. Magnetite was identified in panned concentrates from the mineralised veins.

The Potentially Mineable Mineralization for the Compas and Orito Veins extends from the 2,415m to 2,265m elevations, a vertical distance of 150m, and has a lateral extent of approximately 700m. A conceptualized captive cut and fill mining method plan has been laid out to extract the deposit using in-stope micro scooptrams and hand-held pneumatic drills.

Primary access to the mineral deposit will be via a 535m long trackless haulage drift (adit), from the Portal, at the 2265 m Level. The Compas and Orito Vein mineralization are connected by a 407m long haulage drift. Access to the mineralized zones will be via a series of access crosscuts driven at the 2300 and 2265 Levels, at the Compas Vein, and at the base (bottom) of the Orito Vein at the 2285 Level.

An initial 3m high by 2.5m wide drift-in-mineralization will be driven at the base (bottom) of each stope, the full longitudinal extent of mineralization. A minimum two access / ventilation / millhole raises will be driven in the full vertical extent in mineralization, from this drift-in-mineralization to break through on surface. At this point a second 3m high lift will be excavated. Access to the stoping area will be either from above, via the break-through raises to surface, or below, via mill holes / manways constructed in the unconsolidated backfill. Backfill will be dumped into the stopes via the break-through s to surface. Mineralization will be removed from the stoping area via the mill holes.

The mining method envisaged is captive cut and fill using in-stope micro scooptrams and pneumatic hand held drills. The average thickness of the potentially mineable mineralization is estimated to be 2.5m at the Compas Vein and 1.5m at the Orito Vein.

Cut and fill lifts will be excavated 3m high by the width of the mineralized domain. Breasts will be drilled off and blasted either using up-holes (uppers) or horizontal holes, depending on mineral continuity, ground conditions and room in the stoping area. Multiple working faces can be accessed by mining a number of lifts at the same time in a stope via up-and-down ramps constructed in the backfill. There is an estimated 48 - 3m high lifts at the Compas Vein and 38 – 3m high lifts at the Orito Vein. Mining proceeds from the bottom up.

The treatment of the El Compas mineralization will be performed at the La Plata processing facility located 20km from the mine.

The plant will be modified to produce a single gold-silver concentrate which would be sold to smelters and refiners. The process flowsheet will consist of conventional comminution, gravity and froth flotation. Endeavour Silver will upgrade the existing plant so that it can safely and reliably process 250tpd (200tpd from Endeavour Silver mining and 50tpd from toll mining) of mineralization averaging ± 5 g/t Au and ± 96 g/t Ag.

The projected recoveries of gold and silver based on open-circuit rougher and cleaner flotation tests are 83.5% and 73%, respectively. The cleaner concentrate grade will be 868 g/t Au and 12,095 g/t Ag.

The mineralization will be delivered by truck from the mine in 20 tonne loads. Upon arrival at site, each truckload will be weighed on a platform scale. The mineralization will be dumped directly thro ........