NYSE - MKT: ASM
TSX-V: ASM
FSE:
GV6
VANCOUVER, Aug. 2, 2017 /CNW/ - Avino Silver & Gold Mines Ltd. (ASM: TSX-V,
ASM: NYSE–MKT, GV6: FSE, "Avino" or "the Company") is pleased
to announce the consolidated financial results for the Company's
second quarter ended June 30, 2017.
The financial statements and the management discussion and analysis
can be viewed on the Company's web site at www.avino.com, on SEDAR
at www.sedar.com and on EDGAR at www.sec.gov.
Effective January 1, 2017, the
Company changed its presentation currency to US dollars from
Canadian dollars. As a result, all dollar amounts in this news
release are expressed in US dollars, unless otherwise noted.
"We are pleased to have achieved another productive quarter with
strong financial and operational results. Our focus continues to be
our expansion plans at the Avino mine with the addition of Mill
Circuit 4, as well as a planned underground drill program at the
Bralorne Mine to better define the resources above and below the
800 level. We are confident that the implementation of these
important plans will continue to support the Company's growth
efforts. We appreciate the support and dedication of our teams in
Mexico and Canada, who continue to maintain efficiencies
at our operations."
- David Wolfin, President, CEO
& Director, Avino Silver &
Gold Mines Ltd.
SECOND QUARTER 2017 HIGHLIGHTS – IN $USD
- Revenues of $7.9 million from the
sale of concentrates
- Mine operating income of $2.5
million, which is consistent with the second quarter of
2016
- Net income after taxes of $1.2
million or $0.02 per
share
- Working capital of $17.7 million,
an increase of 18% from the second quarter of 2016
- Cash of $5.9 million and short
term investments of $7.5 million at
the end of the quarter
- Produced 698,174 silver equivalent ounces¹, including 386,002
ounces of silver, 1,954 ounces of gold and 1,113,161 pounds of
copper
- Consolidated all-in sustaining cost ("AISC")2 was
$10.42 per payable silver equivalent
ounce
- Average realized selling prices for silver and gold were
US$17.09 and US$1,259 per ounce, respectively, and copper was
$5,643 per tonne
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HIGHLIGHTS
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Second
Quarter
2017
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Second
Quarter
2016
|
Change
|
Operating
|
|
|
|
Tonnes
Milled
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137,493
|
131,612
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4%
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Silver Ounces
Produced
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386,002
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380,620
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1%
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Gold Ounces
Produced
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1,954
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1,509
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29%
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Copper Pounds
Produced
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1,133,161
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1,054,935
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7%
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Silver Equivalent
Ounces1 Produced
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698,174
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629,780
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11%
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Concentrate Sales
and Cash Costs
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|
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Silver Equivalent
Ounces Sold2
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542,002
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626,837
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-14%
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Cash Cost per Silver
Equivalent Ounce2,3
|
$
|
8.90
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$
|
9.61
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-7%
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All-in Sustaining
Cost per Silver Equivalent Ounce2,3
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$
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10.42
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$
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10.97
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-5%
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Average Realized
Silver Price per Ounce
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$
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17.09
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$
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16.99
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1%
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Average Realized Gold
Price per Ounce
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$
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1,259
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$
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1,262
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-%
|
Average Realized
Copper Price per Tonne
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$
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5,643
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$
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4,706
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20%
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Financial
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Revenues
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$
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7,911,388
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$
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9,017,929
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-12%
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Mine Operating
Income
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$
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2,481,779
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$
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2,459,477
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1%
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Net Income
(Loss)
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$
|
1,151,549
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$
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(336,748)
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N/A
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Cash
|
$
|
5,914,408
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$
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8,256,627
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-28%
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Working
Capital
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$
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17,686,701
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$
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15,041,997
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18%
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Shareholders
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|
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Earnings (Loss) per
Share ("EPS") – Basic
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$
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0.02
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$
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(0.01)
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N/A
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Cash Flow per Share
(YTD)3
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$
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0.06
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$
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0.06
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-%
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1. For comparison
purposes, the silver equivalent ratio has been calculated using
metal prices of $17.26 oz Ag, $1,257 oz Au and $2.57 Lb
Cu. Mill production figures have not been reconciled and are
subject to adjustment with concentrate sales. Calculated
figures may not add up due to rounding.
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Metal production
is expressed in terms of silver equivalent ounces, (oz Ag Eq), the
formula for which depends on the copper, gold and silver metal
prices used in each period and hence are only
indicative.
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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.
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3. 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.
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Financial
Results
The Company generated revenues of $7.9
million during the second quarter of 2017; a 12% decrease
compared to the second quarter of 2016. The decrease is a result of
fewer ounces sold from the San Gonzalo mine and remaining inventory
at the end of the quarter.
Mine operating income was $2.5
million during the second quarter of 2017, which is
consistent with the comparable quarter of 2016.
During the second quarter of 2017, net income increased to
$1.2 million or $0.02 per share, from a net loss of $0.3 million or a $0.01 basic and diluted per share during the
corresponding period of 2016. The increase is mainly due to
operational efficiencies achieved at the Avino Mine and the San
Gonzalo Mine.
Operational Results
Silver equivalent production for the second quarter of 2017
increased by 11% to 698,174 oz1 compared to 629,780
oz1 in the second quarter of 2016. Silver production for
the second quarter of 2017 increased 1% to 386,002 oz compared to
380,620 oz in the second quarter of 2016. Gold production for the
second quarter of 2017 increased by 29% to 1,954 oz compared to
1,509 oz in the corresponding period of 2016. Copper production
increased by 7% to 1,133,161 lbs compared to 1,054,935 lbs in the
second quarter of 2016. Total mill feed processed during the second
quarter of 2017 was 137,493 dry tonnes compared to 131,612 dry
tonnes during the second quarter of 2016, an increase of 4%.
At the Avino Mine, silver equivalent ounces1 produced
during the second quarter of 2017 totalled 512,237 compared to
341,521 during the second quarter of 2016, an increase of 50%. The
higher production is due to higher feed grades realized during the
quarter.
At the San Gonzalo Mine, silver equivalent ounces1
produced during the second quarter of 2017 totalled 185,937
representing a decrease of 35% compared to 288,259 in the second
quarter of 2016 mainly due to the lower tonnage processed due to
Mill Circuits 2 and 3 being used exclusively for the Avino mine
material.
Costs and Capital Expenditures
Consolidated all-in sustaining cash costs per AgEq
ounce1 during the second quarter of 2017 were
$10.42 compared to $10.97 during the corresponding period of 2016, a
decrease of 5%.
All-in sustaining cash costs at San Gonzalo during the second
quarter of 2017 were $9.99 per AgEq
ounce1 compared to $10.89
during the second quarter of 2016, a decrease of 8%. All-in
sustaining cash costs at Avino during the second quarter of 2017
were $10.56, compared to $11.01 during the second quarter of 2016, a
decrease of 4%.
Capital expenditures during the six months ended June 30, 2017, were $4,497,122 compared to $7,383,020 for the corresponding period of
2016.
Capital expenditures in the current period relate to the Avino
mine advancement, mining and production equipment (including Mill
Circuit 4) to advance operations at the San Gonzalo, Avino, and
Bralorne mines.
Bralorne Mine Update
At Bralorne, we continued to review strategic operating plans,
and on July 10, 2017, we published a
comprehensive news release outlining our plans and can be found on
our website at the following link:
http://www.avino.com/s/news.asp?ReportID=795059. Our new plan
involves opening the mine at a higher throughput rather than our
original plans to scale up the operations to reach the desired
throughput level. We are currently planning an underground drill
program to expand and improve confidence in our resource base which
is scheduled to be followed by the construction of a new tunnel at
the 800 level, large enough to accommodate the new mechanized
equipment for the proposed long hole retreat mining method.
In addition, the Company also received notification that funding
to hold our third annual underground mining training contingent was
approved. This year we are planning to hold the training in the
Pemberton Valley to accommodate community members from N'Quatqua
and other communities associated with the Lower St'at'imc Tribal
Council. For more information please see our news release dated
July 10, 2017 which is listed
above.
Environmental & Permitting Progress
The Company's senior management and site personnel continue to
work closely with the MEM and MOE, and recently met with the Chief
Inspector and Deputy Chief Inspector to discuss environmental and
permitting.
Permitting has taken longer than expected, and is partly a
result of the government taking a more rigorous approach to
environmental requirements and having many projects at the
permitting stage in British
Columbia.
Second Extension of Concentrates Prepayment Agreement with
Samsung C&T
The Company has further extended the concentrates prepayment
agreement with Samsung C&T U.K. Ltd. ("Samsung") for one year
for repayment between July 2018 and
July 2019.
Pursuant to a new amending agreement (the "Amendment"), Avino
will sell silver concentrates on an exclusive basis to Samsung
until December 31, 2021.
Samsung has previously advanced to Avino the sum of US$10 million as prepayment of such concentrates,
of which Avino has repaid US$1,333,332 for a net amount owing of
US$8,666,668 (the "Facility"), and
the Facility will be repaid with interest. This extension will
allow Avino to defer the payments and repay the balance with
interest by 13 monthly instalments, commencing July 2018 and ending July
2019. Other material terms of the Facility remain
unchanged. Interest on the Facility is payable monthly at
LIBOR plus 4.75%. The Company is pleased to take advantage of the
extension of the concentrate sales agreement and revised repayment
arrangement, as this ensures a steady long term contract for the
sale of the Company's silver concentrates.
Eagle Property Option Agreement
An option agreement dated July 18,
2017 between Avino and Alexco Resource Corp. ("Alexco") has
granted Alexco the right to acquire a 65% interest in 14 quartz
mining leases located in the Mayo District, Yukon Territory, Canada, known as the "Eagle
Property". To exercise the option, Alexco must pay Avino a total of
$70,000 in instalments over 4 years,
issue Avino a total of 70,000 Alexco common shares in instalments
over 4 years, incur $550,000 in
exploration work by the second anniversary of the option agreement
date, and a further $2.2 million in
exploration work on the Eagle Property by the fourth anniversary of
the option agreement date.
In the event that Alexco earns its 65% interest in the Eagle
Property, Alexco and Avino will form a joint venture for the future
exploration and development of the Eagle Property, and may
contribute towards expenditures in proportion to their interests
(65% Alexco / 35% Avino). If either company elects to not
contribute its share of costs, then its interest will be
diluted. If either company's joint venture interest is
diluted to less than 10%, its interest will convert to a 5.0% net
smelter returns royalty, subject to the other's right to buy-down
the royalty to 2.0% for $2.5 million.
The Eagle Property was previously inactive and held by Avino as a
non-essential asset to its current operations.
Non-IFRS Measures
The financial results in this news release include references to
cash flow per share, cash cost per silver equivalent ounce, and
all-in sustaining cash cost per silver equivalent ounce, all of
which are non-IFRS measures. Cash flow per share, cash cost per
ounce, and all-in sustaining cash cost per ounce are measures
developed by mining companies in an effort to provide a comparable
standard of performance. However, there can be no assurance that
our reporting of these non-IFRS measures is similar to that
reported by other mining companies. Cash flow per share, cash cost
per silver equivalent ounce, and all-in sustaining cash cost per
silver equivalent ounce are measures used by the Company to manage
and evaluate operating performance of the Company's mining
operations, and are widely reported in the silver and gold mining
industry as benchmarks for performance, but do not have
standardized meanings prescribed by IFRS, and are disclosed in
addition to the prescribed IFRS measures provided in the Company's
financial statements and MD&A.
Conference Call
Avino will be holding a conference call for analysts and
investors on Thursday, August 3,
2017, at 8:00 am Pacific Daylight
Time (11:00 am Eastern Daylight
Time).
Conference Call Numbers:
- Toll Free Canada & USA:
1-800-319-4610
- Outside of Canada &
USA: 1-604-638-5340
No pass-code is necessary to participate in the conference call;
participants will have the opportunity to ask questions during the
Q&A portion of the call.
Participants should dial in 10 minutes prior to the conference.
The conference call will be recorded and the replay will be
available on the Company's website within one hour following the
conclusion of the call.
Qualified Person(s)
Avino's Mexican projects are under the supervision of Mr.
Jasman Yee, P.Eng, Avino director,
and Avino's Bralorne Mine project is under the supervision of
Fred Sveinson, B.A., BSc, P.Eng,
Avino Senior Mining Advisor. These individuals are qualified
persons ("QP") within the context of National Instrument 43-101.
The respective QP's have reviewed and approved all the applicable
technical data in this press release.
Outlook
Avino is a silver and gold producer with a diversified pipeline
of gold, silver and base metals properties in Mexico and Canada employing approximately 500
people. Avino produces from its wholly owned Avino and San
Gonzalo Mines near Durango,
Mexico, and is currently planning for future production at
the Bralorne Gold Mine in British
Columbia, Canada. The Company's gold and silver production
remains unhedged.
Avino's mission is to create shareholder value through
profitable organic growth at the Avino Property and the strategic
acquisition and advancement of mineral exploration and mining
properties. We are committed to expanding our operations and
managing all business activities in an environmentally responsible
and cost-effective manner while contributing to the well-being of
the communities in which we operate.
The Company remains focused on the following key objectives:
- Maintain and improve profitable mining operations while
managing operating costs and achieving efficiencies;
- Complete the Mill Circuit 4 expansion to increase Avino Mine
production;
- Conduct a successful underground drill program in 2017 to
increase and improve confidence in our resource base at
Bralorne;
- Continue mine expansion drilling and explore regional targets
on the Avino property;
- Follow the recommendations made in the 2017 PEA on the oxide
tailings resource at the Avino Mine, and assess the potential for
processing the oxide tailings resource.
On Behalf of the Board
"David Wolfin"
________________________________
David Wolfin
President & CEO
Avino Silver & Gold Mines
Ltd.
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, and timing, establishment, and extent of resource
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 with certain other
projects; the absence of dividends; currency fluctuations;
competition; dilution; the volatility of 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 the 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.
SOURCE Avino Silver & Gold
Mines Ltd.