Letter to Shareholders

Dear Shareholder,

In many respects, fiscal 2004 was a remarkable year for Endeavour Silver.

Thanks mainly to our successful acquisition of the producing Santa Cruz silver mine and Guanacevi process plant, Endeavour now enjoys operating income strongly leveraged to both our rapidly growing production and rising silver prices. 

After announcing the acquisition in January 2004, we were able to raise CA$10 million and close the acquisition by May 2004. Field work commenced last June and in a scant six months, we started an exploration drilling program, discovered the high grade North Porvenir silver ore-body, drilled out an initial 8.6 million oz silver resource, drove a 600 m access ramp into it and developed the new North Porvenir mine into production.

No other primary silver mining company can lay claim to such a strong operating performance in 2004. Yet our work at Santa Cruz has really only just begun.

We are now forecasting a tripling of production to 1.3 million oz silver in fiscal 2005, and a further tripling by 2007 to 4.0 million oz silver per year, just to fill the capacity of the plant. That should allow Endeavour to join the ranks of top primary silver producers worldwide.

In fiscal 2005, management plans to aggressively expand its landholdings in Guanacevi, effectively consolidating the district. Endeavour will also expand its exploration drilling programs to facilitate our resource and production growth. 

Our success at discovering a brand new, high grade silver ore-body within the same vein as, and only one km away from, a 400 year old historic Spanish mine leads us to believe there is much more potential for new silver discoveries throughout the Guanacevi district.

Regarding silver, the new secular bull market is only 21 months old and its fundamentals remain strong. Demand in 2004 once again exceeded supply for the 16th consecutive year, led by strong growth in consumption for electronics (up 36%) and higher off-take for investment (up four-fold).

Although both silver and Endeavour appreciated only 5% on the year, to US $7.35 per oz and CA $1.85 per share respectively, both substantially outperformed their peer groups. From a technical point of view, the stock charts of both silver and Endeavour remain firmly entrenched in strong up-trends.

To enhance shareholder liquidity in 2005, we will look at listing Endeavour's shares on the TSX and Frankfurt stock exchanges, as well as filing with the SEC to become a fully registered foreign issuer in the U.S.A.

In 2004, Endeavour significantly strengthened its senior management with a number of key additions to the team. We are particularly appreciative of the hard work and dedication of our Mexican staff under the leadership of Miguel Ordaz and our employees at head office in Vancouver.

I would also like to take this opportunity to thank you for your continuing support as a shareholder. The current year is shaping up to be just as rewarding as 2004.

On Behalf of the Board of Directors,

Bradford J. Cooke
Chairman and CEO

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