Endeavour Silver Provides El Cubo Capital Budget and Operational Update

Engineering consultants and construction contractors have already been appointed for project management, engineering and design, procurement, new plant equipment selection and installation and old plant equipment demolition and reconstruction. Projects already underway include orders for new mine equipment, accelerated mine development, mine exploration drilling, and engineering and permitting for the plant rebuild, new tailings and water storage areas and surface infrastructure.

Endeavour plans to complete the plant, water, tailings and infrastructure projects by the end of April, 2013 so that it no longer has to rely on the lease of the nearby Las Torres plant and surface infrastructure.

Turning to operations, Endeavour's new mine plan initiated over the last 7 weeks has focused on maintaining the tonnage throughput at El Cubo around 1,100 tpd while reducing mine dilution in order to increase the production grades and reduce operating costs. This initiative has gained significant traction and as a result, mine grades have already risen 50% from less than 100 grams per tonne (gpt) silver equivalent (AgEq) grades when Endeavour took possession of El Cubo on July 13, 2012 to better than 150 gpt silver equivalent grades currently.

Specifically, the average ore grade for the month of June was 123 gpt AgEq, for the month of July up until Endeavour took possession of El Cubo the ore grades averaged 81 gpt AgEq, after Endeavour took over El Cubo the average grade for the balance of July was 135 gpt AgEq and in August the average grade was 176 gpt AgEq.

Note: To view the "Silver Equivalent Grades" graph, please click the following link:http://media3.marketwire.com/docs/edr0910.pdf.

Endeavour's current goal is to stabilize these improved ore grades through the end of this year in order to allow mine development to get ahead of mine production. In the new year, management's attention will turn to further increasing the ore grades closer to the reserve grades (another 50% higher still) by steadily reducing ore dilution.

The Company has also reorganized the mine operations team to improve supervision and operating efficiencies, we have improved safety policies, programs and training to reduce lost time accidents and we have created a Mine Rescue Team so that our employees will be able to work in a safer environment.

The Company recently completed a 69 tonne metallurgical batch leach test of the Bolanitos concentrates to determine their suitability for processing at El Cubo instead of trucking them 1000 kilometers for processing at Guanacevi. The results were very positive with silver recoveries slightly higher than those achieved at Guanacevi (89.2% at El Cubo vs. 88.0% at Guanacevi) and gold recoveries slightly lower than those achieved at Guanacevi (93.1% at El Cubo vs. 94.0% at Guanacevi).

As a result, Bolanitos started regular shipments of its concentrates to the El Cubo leach plant on September 1 and Guanacevi should exhaust its concentrate stockpile from Bolanitos by September 30. Our costs for shipping and insuring the concentrate will be substantially reduced with the concentrate now being shipped to the El Cubo plant.

Bradford Cooke, CEO and Director, commented, "We are encouraged by the early success of our initiatives to turn around the El Cubo mine operations and we look forward to delivering more positive results once the new mine equipment is on site, more retraining of the work force is accomplished and additional mine development and exploration is completed."

"Management is also pleased by the smooth launch of the capital investment programs, all of which is being funded out of cash flow. We have a lot of work to do but the early signs are that an operational turn-around is underway and El Cubo is headed in the right direction."