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Avino Silver & Gold Mines Ltd
Symbol C : ASM
Shares Issued 65,015,845
Close 2019-05-08 C$ 0.68
Recent Sedar Documents

Avino Silver loses $610,000 (U.S.) in Q1

2019-05-08 17:05 ET - News Release

Mr. David Wolfin reports

AVINO REPORTS Q1 2019 FINANCIAL RESULTS

Avino Silver & Gold Mines Ltd. has released its consolidated financial results for the company's first quarter ended March 31, 2019. The financial statements and management discussion and analysis (MD&A) can be viewed on the company's website, on SEDAR and on EDGAR.

First quarter 2019 highlights:

  • Generated revenues of $6.7-million from the sale of concentrates;
  • Mine operating income of $56,000;
  • Net loss after taxes of $600,000 or one cent per share;
  • Silver equivalent production of 615,019 ounces (oz) (1), including 268,399 ounces of silver, 1,813 ounces of gold and 1,062,702 pounds of copper;
  • Total consolidated cash cost (2) was $11.44 per silver equivalent (AgEq) payable ounce (1);
  • Consolidated all-in sustaining cost (AISC) (2) was $13.81 per silver payable equivalent ounce (1);
  • Working capital of $10.5-million;
  • Earnings before interest, taxes, depreciation and amortization (EBITDA) were $49,000;
  • Cash of $2.5-million was on hand at the end of the quarter.

(1) In Q1 2019, AgEq was calculated using metals prices of $15.57 per ounce silver (Ag), $1,304 per ounce gold (Au) and $2.82 per pound (lb) copper (Cu). In Q1 2018, AgEq was calculated using metals prices of $16.77 per ounce Ag, $1,330 per ounce Au and $3.16 per pound Cu.

(2) The company reports non-IFRS (international financial reporting standards) measures, which include cash cost per silver equivalent ounce, all-in sustaining cash cost per ounce and cash flow per share. These measures are widely used in the mining industry as a benchmark for performance but do not have a standardized meaning, and the calculation methods may differ from methods used by other companies with similar reported measures.

"As a result of the ongoing depressed metals market environment, together with the planned seven-day upgrade to the crushing circuit, in which all mill circuits were off-line, earnings during the first quarter of 2019 were affected," said David Wolfin, president and chief executive officer. "On a positive note, the installation of a tailings thickener commenced, which should be completed on schedule and ready for start-up in May, 2019. In addition, engineering work is ongoing for a new tailings storage facility in the historic open pit, which is already permitted. Furthermore, we are confident that our decision to pursue the mill expansion in 2018 was the right move to position ourselves for the future. I'm proud of our diligent approach to trimming our G&A expenses with a 38-per-cent reduction this quarter compared to Q1 2018. We will continue to focus on profitable ounces and keeping costs controlled company wide."

                                     OPERATIONAL HIGHLIGHTS
                                                                 First quarter 2019  First quarter 2018

Tonnes milled                                                               197,687             140,817 
Silver ounces produced                                                      268,399             309,927 
Gold ounces produced                                                          1,813               2,065   
Copper pounds produced                                                    1,062,702             970,165 
Silver equivalent ounces (1) produced                                       615,019             656,699 
Concentrate sales and cash costs                                     
Silver equivalent payable ounces sold (2)                                   522,626             566,157
Cash cost per silver equivalent payable ounce (1) (2)                        $11.44               $9.63
All-in sustaining cash cost per silver equivalent payable ounce (1) (2)      $13.81              $11.74

(1) In Q1 2019, AgEq was calculated using metals prices of $15.57 per ounce Ag, $1,304 per ounce Au and
$2.82 per pound Cu. In Q1 2018, AgEq was calculated using metals prices of $16.77 per ounce Ag, $1,330 
per ounce Au and $3.16 per pound Cu.

(2) Silver equivalent ounces sold, for the purposes of cash costs and all-in sustaining costs, consists 
of the sum of silver ounces, gold ounces and copper tonnes sold multiplied by the ratio of the average 
spot gold and copper prices to the average spot silver price for the corresponding period.   

                                 FINANCIAL HIGHLIGHTS
                (in thousands of U.S. dollars, except per-share amounts)   

                                                      First quarter 2019  First quarter 2018

Financial                                                                                      
Revenues                                                        $  6,711            $  8,156
Mine operating income                                                 56               1,856
Net income (loss)                                                   (610)                818  
Cash                                                               2,526               2,340
Working capital                                                   10,507              11,558
EBITDA (1)                                                            49               1,687
Adjusted EBITDA (1)                                                    -               1,501
Per-share amounts                                                                              
Earnings (loss) per share (EPS) -- basic                        $  (0.01)           $   0.02 
Cash flow per share (year to date) (1) -- basic                 $   0.00            $   0.02 

(1) The company reports non-IFRS measures, which include cash cost per silver equivalent 
payable ounce, all-in sustaining cash cost per payable ounce, EBITDA, adjusted EBITDA and 
cash flow per share. These measures are widely used in the mining industry as a benchmark 
for performance but do not have a standardized meaning, and the calculation methods may 
differ from methods used by other companies with similar reported measures. 

Financial results

The company generated revenues of $6.7-million during Q1 2019, which was 18 per cent lower than Q1 2018. The lower revenues are a result of lower production and lower realized metals prices.

Mine operating income was $56,000 during Q1 2019, compared with $1.9-million in the same period of 2018. The decrease is reflective of lower realized metal prices, lower grades achieved, depletion at San Gonzalo as well as the planned seven-day upgrade to the crushing circuit, in which all mill circuits were off-line.

During Q1 2019, the company reported a net loss of $600,000 or one cent per share, compared with net income of $800,000 or two cents per share in Q1 2018.

Operational results

Silver equivalent production for Q1 2019 decreased by 6 per cent to 615,019 ounces (1), compared with 656,699 ounces (1) in Q1 2018. Silver production for Q1 2019 decreased 13 per cent to 268,399 ounces (1), compared with 309,927 ounces (1) in Q1 2018. Gold production for Q1 2019 decreased by 12 per cent to 1,813 ounces, compared with 2,065 ounces in the corresponding period of 2018. Copper production increased by 10 per cent to 1,062,702 pounds, compared with 970,165 pounds in Q1 2018. Total mill feed processed during Q1 2019 increased 40 per cent to 197,687 dry tonnes, which comprised 100,922 tonnes from Avino, 17,901 tonnes from San Gonzalo and 78,864 tonnes from AHAG stockpiles.

Production results for the quarter are reflective of lower grades that were part of the planned mining sequence as well as the planned seven-day upgrade that was mentioned above. The upgrades to the crushing circuit will ensure that the processing facility will realize more consistent throughput from the crusher during the rainy season in Mexico.

The mill circuit configuration in Q1 2019 was the same as Q4 2018, where mill circuit 1 processed material from the San Gonzalo mine, mill circuit 2 processed material from the San Luis area of the Avino mine, mill circuit 3 processed material from Elena Tolosa and mill circuit 4 processed material from the AHAG stockpiles.

At the Avino mine, silver equivalent ounces (1) produced during Q1 2019 totalled 379,798, compared with 480,315 during Q1 2018, a decrease of 21 per cent. The decrease is due to the mill throughput from Avino mine material, which was down 16 per cent on a quarterly basis, primarily due to the shutdown of all mill circuits. The downtime was offset by increased efficiencies gained on mill circuit 3, as the company continues to further refine its production process.

On a quarterly basis, copper feed grade increased by 14 per cent, while silver and gold feed grades decreased by 27 per cent and 17 per cent, respectively. The change in grades was due to the mining sequence at the Elena Tolosa and San Luis areas.

Recovery rates for Q1 2019 showed improvement compared with Q1 2018, with increases of 4 per cent in silver, gold and copper recovery rates.

As a result of the items mentioned above, overall production was down on a silver equivalent basis by 21 per cent, when comparing Q1 2019 with Q1 2018.

At the San Gonzalo mine, silver equivalent ounces (1) produced during Q1 2019 totalled 86,406, representing a decrease of 51 per cent compared with 176,384 in Q1 2018.

During Q1 2019, silver and gold feed grades at San Gonzalo declined by 29 per cent and 50 per cent, respectively, compared with Q1 2018. This, along with a decrease in both silver and gold recovery, resulted in a 51-per-cent decrease in silver equivalent ounces produced compared with Q1 2018.

San Gonzalo is approaching its end of life, and the grades, recoveries and production have begun to decline. This is in line with the company's internal expectations, and the results are indicative of both the decline and the previously mentioned planning upgrades to the crushing circuit. Upon closure, the company will plan to transition some of the workers from San Gonzalo to the San Luis area.

In Q1 2019, mill circuit 4 processed 78,864 tonnes of the AHAG stockpiles, representing a 14-per-cent increase in throughput compared with Q4 2018, with no comparative figures for Q1 2018, as the company commencing processing AHAG stockpiles in May, 2018.

During Q1 2019, silver and copper feed grades increased by 2 per cent and 17 per cent, respectively, compared with Q4 2018. Gold feed grade compared with Q4 2018 declined by 7 per cent.

Costs and capital expenditures

Consolidated cash costs per AgEq ounce (2) during Q1 2019 were $11.44, while the all-in sustaining cash costs per AgEq ounce (2) during Q1 2019 were $13.81, compared with $9.63 and $11.74, respectively, during Q1 2018, an increase of 19 per cent for cash costs and a 18-per-cent increase in the all-in sustaining cash costs, due to grade variation in the current mining areas of the Avino mine and lower ounces sold as a result of declining grades at San Gonzalo.

All-in sustaining cash costs (2) at San Gonzalo during Q1 2019 were $14.21 per AgEq ounce (1), compared with $10.69 during Q1 of 2018.

All-in sustaining cash costs (2) at Avino during Q1 2019 were $13.94, compared with $12.14 realized during Q1 2018, the increases attributable to the higher costs mentioned above.

All-in sustaining cash costs (2) for AHAG stockpiles during Q1 2019 were $12.23, and are compared with Q4 2018 at $7.14, as there are no comparative figures for Q1 2018, as the company commenced processing AHAG stockpiles in May, 2018.

Capital expenditures during the three months ended March 31, 2019, were $2.5-million, compared with $3.6-million for the corresponding period of 2018.

Capital expenditures mainly relate to the upgrades to the crushing circuit, which includes all four mill circuits, as well as the installation of the thickener.

(1) In Q1 2019, AgEq was calculated using metals prices of $15.57 per ounce Ag, $1,304 per ounce Au and $2.82 per pound Cu. In Q1 2018, AgEq was calculated using metals prices of $16.77 per ounce Ag, $1,330 per ounce Au and $3.16 per pound Cu.

(2) The company reports non-IFRS measures, which include cash cost per silver equivalent ounce, all-in sustaining cash cost per ounce and cash flow per share. These measures are widely used in the mining industry as a benchmark for performance but do not have a standardized meaning, and the calculation methods may differ from methods used by other companies with similar reported measures

Bralorne mine update

Avino continued its exploration and drilling campaign at Bralorne in the first quarter of 2019 using flow-through funds that were raised in April of 2018. These funds are available to be used by Dec. 31, 2019. An estimated $4.4-million (Canadian) will be spent on diamond drilling to target new discoveries in unexplored portions of the property. Phase 1 of the drilling proceeded from Q4 2018 to Q1 2019 and targeted underexplored portions of known veins. Phase 2 of the drilling will continue from Q1 to Q4 2109 and will be targeting new discoveries in unexplored portions of the property.

Detailed results from phase 1 can be found in news releases dated Dec. 17, 2018, and April 1, 2019, on the Avino website under the news tab or on the company's profiles on SEDAR and EDGAR. Preliminary results from phase 2 are also outlined in the April 1, 2019, news release.

Conference call

In addition, the company will be holding a conference call and webcast on Thursday, May 9, 2019, at 8 a.m. PDT (11 a.m. EDT).

Shareholders, analysts, investors and media are invited to join the webcast and conference call by logging in or by dialling in five to 10 minutes prior to the start time.

Toll-free Canada and the United States:  1-800-319-4610

Outside of Canada and the U.S.:  1-604-638-5340

No passcode is necessary to participate in the conference call or webcast; participants will have the opportunity to ask questions during the question-and-answer portion.

The conference call and webcast will be recorded and the replay will be available on the company's website later that day.

Qualified persons

Jasman Yee, PEng, Avino director, and Peter Latta, PEng, MBA, senior technical adviser, both of whom are qualified persons within the context of National Instrument 43-101, have reviewed and approved the technical data in this document. Avino's Bralorne project is under the supervision of Fred Sveinson, BA, BSc, PEng, senior mining adviser, who is a qualified person within the context of NI 43-101.

We seek Safe Harbor.

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