Avino Silver and Gold Mines Ltd. (TSX VENTURE:ASM)(NYSE MKT:ASM)(FRANKFURT:GV6)
("Avino" or "the Company") is pleased to report its financial results for the
second quarter ended June 30, 2013. All financial information is prepared in
accordance with IFRS and all dollar amounts are expressed in Canadian dollars
unless otherwise specified. The information in this news release should be read
in conjunction with the Company's unaudited condensed interim consolidated
financial statements for the three and six months ended June 30, 2013 and
associated management discussion and analysis ("MD&A") which are available on
the Company's website at www.avino.com and under the Company's profile on SEDAR
at www.sedar.com.
"We are very pleased to report our earnings for Q2 2013, our third quarter of
commercial production at our San Gonzalo Mine. Our financial results are
particularly satisfying given the environment of declining metal prices and
uncertainty in the current markets," stated Malcolm Davidson, CFO. "Our team
continues to control and manage operating costs which has resulted in an average
cash operating cost of $11.72 per silver equivalent ounce and net earnings of
$1,535,280 for six months ended June 30, 2013."
Q2 2013 Financial and Operational Highlights(1)
-- Revenues reported for the quarter $4,951,952
-- Mine operating income $2,338,399
-- General and administrative expenses $957,206
-- Earnings before income taxes $1,532,301
-- Earnings for the period $1,447,301
-- Earnings per share - basic and diluted $0.05
-- Processed ore for Q2 2013 was 19,988 tonnes
-- Silver ounces sold for Q2 2013 was 161,852
-- Gold ounces sold for Q2 2013 was 751
-- Consolidated cash cost per equivalent silver ounce was $11.72
-- Ore stockpile and concentrate inventory value at June 30, 2013 was
$708,173
(1) Comparative periods have not been presented in this news release as the
comparative information is not available nor is it relevant as the
Company was in the exploration stage during the comparable quarter. The
information in this news release should be read in conjunction with the
Company's unaudited condensed consolidated interim financial statements
for the six months ended June 30, 2013 and associated management
discussion and analysis ("MD&A").
Cash Cost of Sales per Silver Equivalent Ounce
The following table provides a reconciliation of cost of sales per the
consolidated financial statements to cash cost per silver equivalent ounce sold:
Three months ended June 30, 2013
Historic
San Gonzalo Stockpiles Total
----------------------------------------------------------------------------
Cost of sales (as reported) $2,231,648 $381,905 $2,613,553
Depletion and Depreciation (330,984) (7,313) (338,297)
----------------------------------------------------------------------------
Cash Production Cost 1,900,664 374,592 2,275,256
Silver ounces sold 161,852 18,277 180,130
Gold ounces sold 751 154 905
Ag:Au ratio(2) 61.14:1 61.14:1 61.14:1
Silver equivalent ounces sold 207,798 27,698 235,496
----------------------------------------------------------------------------
Direct Cash Cost per EAg Ounce(3) $ 9.15 $ 13.52 $ 9.66
----------------------------------------------------------------------------
Six months ended June 30, 2013
Historic
San Gonzalo Stockpiles Total
----------------------------------------------------------------------------
Cost of sales (as reported) $4,680,805 $381,905 $5,062,710
Depletion and Depreciation (574,690) (7,313) (582,003)
----------------------------------------------------------------------------
Cash Production Cost 4,106,115 374,592 4,480,707
Silver ounces sold 285,019 18,277 303,296
Gold ounces sold 1,226 154 1,380
Ag:Au ratio(2) 57.21:1 57.21:1 57.21:1
Silver equivalent ounces sold 355,168 27,093 382,261
----------------------------------------------------------------------------
Direct Cash Cost per EAg Ounce(3) $ 11.56 $ 13.83 $ 11.72
----------------------------------------------------------------------------
The following table provides a reconciliation of cost of sales per the condensed
consolidated interim financial statements to all-in sustaining cash cost per
silver equivalent ounce sold:
Three months ended June 30, 2013
Historic
San Gonzalo Stockpiles Total
----------------------------------------------------------------------------
Cost of sales (as reported) $2,231,648 $381,905 $2,613,553
Depletion and Depreciation (330,984) (7,313) (338,297)
----------------------------------------------------------------------------
Cash Production Cost 1,900,664 374,592 2,275,256
Operating and Administrative
Expenses 791,369 165,836 957,205
Depreciation (142) (30) (172)
Share-based Payments (179,753) (37,669) (217,422)
----------------------------------------------------------------------------
Cash Operating Cost 2,512,137 502,730 3,014,867
Silver equivalent ounces sold 207,798 27,698 235,496
----------------------------------------------------------------------------
All-in sustaining Cash Cost per EAg
Ounce(3) $ 12.09 $ 18.15 $ 12.80
----------------------------------------------------------------------------
Six months ended June 30, 2013
Historic
San Gonzalo Stockpiles Total
----------------------------------------------------------------------------
Cost of sales (as reported) $4,680,805 $381,905 $5,062,710
Depletion and Depreciation (574,690) (7,313) (582,003)
----------------------------------------------------------------------------
Cash Production Cost 4,106,115 374,592 4,480,707
Operating and Administrative
Expenses 1,943,273 165,836 2,109,109
Depreciation (314) (30) (344)
Share-based Payments (461,666) (37,669) (499,335)
----------------------------------------------------------------------------
Cash Operating Cost 5,587,407 502,730 6,090,137
Silver equivalent ounces sold 355,168 27,093 382,260
----------------------------------------------------------------------------
All-in sustaining Cash Cost per EAg
Ounce(3) $ 15.73 $ 18.56 $ 15.93
----------------------------------------------------------------------------
(2) Silver equivalent ounces "EAg" consists of the number of ounces of
silver sold plus the number of ounces of gold sold multiplied by the
ratio of the average spot gold price to the average spot silver price
for the corresponding period.
(3) Cash cost per ounce and total production costs per tonne are measures
developed by mining companies in an effort to provide a comparable
standard; however, there can be no assurance that our reporting of
these non-IFRS measures are similar to that reported by other mining
companies. Total cash cost per ounce and total production cost per
tonne are measures used by the Company to manage and evaluate operating
performance of the Company's mining operations, and widely reported in
the silver and gold mining industry as a benchmark for performance, but
does not have a standardized meaning and is disclosed in addition to
IFRS measures.
Management of the Company believes that the Company's ability to
control the cash cost per silver ounce is one of its key performance
drivers impacting both the Company's financial condition and results of
operations. Achieving a low silver production cost base allows the
Company to remain profitable even during times of declining commodity
prices and provides more flexibility in responding to changing market
conditions. In addition, a profitable operation results in the
generation of positive cash flows, which then improves the Company's
financial condition.
To facilitate a better understanding of this measure as calculated by
the Company, a detailed reconciliation between the cash cost per silver
ounce and the Company's cost of sales as reported in the Company's
Condensed Consolidated Interim Statements of Comprehensive Income
(Loss) is provided.
Outlook
The Company's primary focus for the 2013 fiscal year is to improve and
strengthen the operational efficiency and manage costs of the San Gonzalo mine
operation.
Management remains focused on the following key objectives:
1. Increase profitable mining operations at San Gonzalo by decreasing
operating costs and improving efficiency;
2. Increase mill throughput using the new circuit ("Circuit 2") that went
online in April 2013. See news release dated April 29, 2013;
3. Develop the Avino mine for mineral production commencing in 2014;
4. Continue to review and develop plans to process the oxide tailings
resource from historic milling operations (PEA issued in 2012);
5. Continue to explore regional targets on the property and consider
acquisition opportunities.
Avino
Founded in 1968, Avino's mission is to create shareholder value through
profitable organic growth at the historic Avino property near Durango, Mexico.
We are committed to managing all business activities in an environmentally
responsible and cost-effective manner while contributing to the well-being of
the community in which we operate.
ON BEHALF OF THE BOARD
Malcolm Davidson, Chief Financial Officer
Safe Harbor Statement - This news release contains "forward-looking information"
and "forward-looking statements" (together, the "forward looking statements")
within the meaning of applicable securities laws and the United States Private
Securities Litigation Reform Act of 1995, including our belief as to the extent
and timing of various studies including the PEA, and exploration results, the
potential tonnage, grades and content of deposits, timing and establishment and
extent of resources estimates. These forward-looking statements are made as of
the date of this news release and the dates of technical reports, as applicable.
Readers are cautioned not to place undue reliance on forward-looking statements,
as there can be no assurance that the future circumstances, outcomes or results
anticipated in or implied by such forward-looking statements will occur or that
plans, intentions or expectations upon which the forward-looking statements are
based will occur. While we have based these forward-looking statements on our
expectations about future events as at the date that such statements were
prepared, the statements are not a guarantee that such future events will occur
and are subject to risks, uncertainties, assumptions and other factors which
could cause events or outcomes to differ materially from those expressed or
implied by such forward-looking statements.
Such factors and assumptions include, among others, the effects of general
economic conditions, the price of gold, silver and copper, changing foreign
exchange rates and actions by government authorities, uncertainties associated
with legal proceedings and negotiations and misjudgments in the course of
preparing forward-looking information. In addition, there are known and unknown
risk factors which could cause our actual results, performance or achievements
to differ materially from any future results, performance or achievements
expressed or implied by the forward-looking statements. Known risk factors
include risks associated with project development; the need for additional
financing; operational risks associated with mining and mineral processing;
fluctuations in metal prices; title matters; uncertainties and risks related to
carrying on business in foreign countries; environmental liability claims and
insurance; reliance on key personnel; the potential for conflicts of interest
among certain of our officers, directors or promoters of with certain other
projects; the absence of dividends; currency fluctuations; competition;
dilution; the volatility of the our common share price and volume; tax
consequences to U.S. investors; and other risks and uncertainties. Although we
have attempted to identify important factors that could cause actual actions,
events or results to differ materially from those described in forward-looking
statements, there may be other factors that cause actions, events or results not
to be as anticipated, estimated or intended. There can be no assurance that
forward-looking statements will prove to be accurate, as actual results and
future events could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking
statements. We are under no obligation to update or alter any forward-looking
statements except as required under applicable securities laws.
Cautionary Note to United States Investors - The information contained herein
and incorporated by reference herein has been prepared in accordance with the
requirements of Canadian securities laws, which differ from the requirements of
United States securities laws. In particular, the term "resource" does not
equate to the term "reserve". The Securities Exchange Commission's (the "SEC")
disclosure standards normally do not permit the inclusion of information
concerning "measured mineral resources", "indicated mineral resources" or
"inferred mineral resources" or other descriptions of the amount of
mineralization in mineral deposits that do not constitute "reserves" by SEC
standards, unless such information is required to be disclosed by the law of the
Company's jurisdiction of incorporation or of a jurisdiction in which its
securities are traded. U.S. investors should also understand that "inferred
mineral resources" have a great amount of uncertainty as to their existence and
great uncertainty as to their economic and legal feasibility. Disclosure of
"contained ounces" is permitted disclosure under Canadian regulations; however,
the SEC normally only permits issuers to report mineralization that does not
constitute "reserves" by SEC standards as in place tonnage and grade without
reference to unit measures.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSX Venture Exchange) accepts responsibility
for the adequacy or accuracy of this release.
FOR FURTHER INFORMATION PLEASE CONTACT:
Avino Silver & Gold Mines Ltd.
David Wolfin
604.682.3701
604.682.3600 (FAX)
ir@avino.com
www.avino.com
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