Avino Silver and Gold Records Strong Quarter Results, Reserve Update Signalling Long Mine Life

• Avino Silver & Gold ended Q2 2026 with $144.2 million in cash and no debt, giving management the option to self-fund a standalone processing plant at La Preciosa without diluting shareholders.
• The company published its first mineral reserve in 57 years of operation in April 2026, totalling 127 million silver equivalent ounces across Avino, La Preciosa and the Oxide Tailings project.
• Recent drill intercepts at La Preciosa, including 7.9 metres grading 1,600 g/t silver, point to underground mining grades that could exceed the historical, open-pit-based resource estimate.
• A pre-feasibility study on a standalone La Preciosa plant is due within 8-10 months and could lead directly to a construction decision, the next major catalyst for the stock.
• Copper output fell 50% year-on-year in Q2 as Avino processed lower-grade oxidised material at its flagship mine, a deliberate sequencing choice management expects to reverse within six to eight months.

Avino Silver & Gold Mines Ltd. (TSX:ASM) is closing in on the decision point to build a standalone processing plant at La Preciosa, its high-grade silver development project in Durango, Mexico. President and CEO David Wolfin's latest update lands after the company posted record second-quarter revenue and its first-ever mineral reserve, at a moment when silver's renewed strength is forcing generalist investors to look past the majors for leverage. For a company that spent 57 years as a single-asset producer, the combination of a fortified balance sheet, a newly reported reserve base, and drill results that are outrunning the historical resource model makes this a pivotal stretch for the investment case.

Record Quarter, Debt-Free Balance Sheet

Avino's Q2 2026 results, revenue reached $26.8 million, up 23% year-on-year, with 54% of that total coming from silver sold at an average realised price of $68.90 per ounce. Net income rose to $10.9 million, more than triple the prior-year quarter, while EBITDA climbed 69% to $12.6 million. The company ended the quarter with $144.2 million in cash and $140.8 million in working capital, debt-free aside from operating equipment leases.

Wolfin framed the balance sheet as a deliberate choice rather than a byproduct of strong prices.

"We're mindful of dilution. We're mindful of debt. We've been through some hard times, and debt is a killer in a hard time, so we're just trying to build the balance sheet as big as possible so when we make the decision, no one will have any doubts," he said.

Costs did rise alongside the cash build: all-in sustaining costs reached $38.75 per silver equivalent ounce for the quarter, up from $20.93 a year earlier, which Wolfin attributed to the expense of developing a new mine at La Preciosa rather than a deterioration in the core operation.

Interview with David Wolfin, CEO of Avino Silver & Gold Mines

From Development Ore to Long-Hole Mining

La Preciosa, acquired from Coeur Mining in 2022, sits 19 kilometres from Avino's existing 2,500-tonne-per-day mill in Durango. The company broke ground last year after securing permits, one of the first companies to do so in Mexico under the current administration, and has since advanced roughly 2,300 metres of underground development. Development and mine-preparation work is nearly complete on Level 3 of the Abundancia and Gloria veins, which Wolfin said clears the way for long-hole production mining to begin alongside continued development. Current throughput sits at 400-500 tonnes per day at La Preciosa, against a 2,500-tonne-per-day capacity at the Avino mill, with the balance of feed still coming from the flagship Avino mine.

Two drills are currently turning at La Preciosa, with 6,591 metres completed toward the 15,000-metre 2026 programme by the end of Q2. Drilling has shifted from infill to exploration and step-out holes at vein intersections and projections, and none of the infill results reported so far have been incorporated into the current reserve estimate.

Reserve Milestone

Avino published its inaugural mineral reserve in April 2026, a threshold the 57-year-old company could only cross once it passed $90 million in trailing revenue under Canadian NI 43-101 reporting rules. The combined reserve across Avino, La Preciosa, and the Oxide Tailings project stands at 127 million silver equivalent ounces in the proven and probable categories, with measured and indicated resources of 301 million ounces. Wolfin said the average reserve mine life across the portfolio, 13 years at Avino and higher at La Preciosa, compares favourably with an 8-year average among primary silver peers.

The reserve grade came largely from historical drilling by the property's previous owner, and Wolfin argued the true picture is better than the numbers suggest.

"We've hit bonanza grades: 7.9 metres of 1,600 grams silver and 2 grams gold. That's a good width for an underground mine. And another one, 6 metres of 550 grams," he said.

Wolfin notes that wider-spaced holes drilled under a prior open-pit scenario likely understate the grade an underground mine will ultimately deliver. Those step-out results are expected to feed into an updated reserve and resource estimate in the first quarter of next year.

Competitive Positioning

The strategic pivot at La Preciosa is from a small-scale operation trucking ore to the Avino mill toward a standalone plant. Wolfin estimated a facility comparable to the existing 2,500-tonne-per-day Avino mill would cost $200-300 million to build, roughly half of which Avino already holds in cash. An independent engineering firm is now running trade-off studies and a pre-feasibility study that Wolfin expects to take 8-10 months, after which the company could move directly to a construction decision without a further study. He argued that hauling material 19 kilometres at a much larger scale would strain both economics and community relations, making a standalone plant the better use of capital once the study is complete.

Risks

The clearest near-term risk is execution timing: La Preciosa's development-ore economics are inherently lower-margin than a mature operation, and much of the near-term grade upside Wolfin points to still sits in step-out drilling that has not yet been converted into the reserve model. Copper production fell 50% year-on-year in Q2 as Avino processed oxidised material from the historical open-pit walls at the flagship mine, a deliberate sequencing decision that Wolfin expects to continue for another six to eight months before copper grades improve at depth. Silver price volatility also cuts both ways: Wolfin noted that sustained high prices could eventually draw industrial users toward substitutes, even as investment demand remains supportive for now.

The Investment Thesis for Avino Silver & Gold

• Debt-free balance sheet funds optionality. $144.2 million in cash gives Avino the flexibility to self-fund a standalone La Preciosa plant without diluting shareholders, and management has signalled a preference for organic balance-sheet growth over external financing.
• Inaugural reserve de-risks the growth story. The April 2026 reserve, Avino's first in 57 years, gives investors a formal, NI 43-101-compliant foundation for the multi-asset growth plan, with a 13-year average mine life against an 8-year peer average.
• Grades are trending above the resource model. Recent intercepts, including 7.9 metres of 1,600 g/t silver, suggest the underground mining grade at La Preciosa could exceed the diluted, open-pit-based resource estimate used historically.
• Standalone decision is the next re-rating catalyst. A pre-feasibility study due in 8-10 months could clear the way for a construction decision on a standalone La Preciosa plant, a step Wolfin has flagged as the highest-return use of the company's cash.
• Watch for the Q1 2027 resource update. Step-out and infill results not yet captured in the current reserve estimate are expected to feed into the next update, with management guiding toward higher average grades.
• Copper drag is temporary. The 50% year-on-year decline in copper output reflects a deliberate mine-sequencing choice rather than a resource problem, with management expecting recovery as mining progresses to deeper, higher-grade copper zones.

Macro Thematic Analysis

Silver's role in investor portfolios has shifted from a purely industrial trade to something closer to a financial instrument competing directly with gold for allocation. Wolfin sees that shift as structural rather than cyclical, tied to policy uncertainty and a broader institutional hunt for diversification.

"There's fewer and fewer pure silver plays out there," Wolfin said. "Markets want diversification. Investors want diversification. If they can't afford gold, they're going to buy silver."

That framing matters for a company like Avino, which has spent the past two years building the fundamentals on permits, a reserve, a debt-free balance sheet to support a re-rating if silver's strength persists. Wolfin pointed to recent acquisitions of silver-predominant peers, several of which were taken out above a 2x price-to-net-asset-value multiple, as a marker for where a de-risked, growing producer like Avino could trade if it continues to execute. Avino currently trades closer to parity on that measure, which Wolfin frames as the gap the standalone La Preciosa decision and the next reserve update are meant to close.

For investors, the read-through is that silver exposure increasingly rewards companies that can demonstrate both scale and executable near-term catalysts, rather than resource size alone. Avino's combination of an operating mine funding growth, a newly reported reserve base, and a clearly sequenced path to a second producing asset positions it to capture that re-rating if the company delivers on its own timeline.

TL;DR

Avino Silver & Gold posted record Q2 2026 revenue of $26.8 million and ended the quarter with $144.2 million in cash, debt-free. The company published its first-ever mineral reserve in April 2026 with 127 million silver equivalent ounces and is now running a pre-feasibility study on a standalone processing plant at La Preciosa, its high-grade silver development project 19 kilometres from the existing Avino mill. Recent drill intercepts, including 7.9 metres of 1,600 g/t silver, suggest underground mining grades could exceed the historical resource model. A construction decision on La Preciosa could follow within 8-10 months.

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