Avino Silver & Gold Delivers Record Q3 and Lays Path to Triple Production Assets Organically

• Avino Silver & Gold operates one producing mine in Mexico generating 2.5-2.8 million ounces silver equivalent annually, with plans to expand to three producing assets within five years through organic growth.
• Q3 2025 achieved record revenues of $21 million with 9.9m gross profit and $5 million free cash flow, while all-in sustaining costs remained in the low $20s per ounce.
• La Preciosa mine commenced production one month ahead of schedule, shipping 6,700+ tons of development ore with grades significantly exceeding feasibility study estimates (787 g/t silver intercepts versus 200 g/t resource grade).
• The company holds 277 million ounces of silver equivalent in measured and indicated resources, with institutional ownership rising from under 10% to 32% organically over two years.
• Multiple growth catalysts include oxide tailings project ($50 million capex, $10 all-in sustaining costs), mill expansion plans, doubled exploration budget targeting 20-30,000 meters of drilling, and Q1 2026 reserve estimates.

Avino Silver & Gold Mines Limited, a company with roots stretching back to 1968, stands at an inflection point in its corporate evolution. Operating as a small-cap to growing mid-cap silver and gold producer, the company has distinguished itself through operational execution and a clear strategy for transformational growth. With one producing asset in Mexico currently generating between 2.5 and 2.8 million ounces of silver equivalent annually, Avino's management has articulated an ambitious vision to triple its producing asset base within five years - entirely through organic development of properties it already owns.

President and CEO David Wolfin's recent discussion provides comprehensive insight into the company's operational achievements, expansion strategy, and resource potential. The conversation reveals a mining company successfully navigating the transition from single-asset producer to diversified growth story, backed by strong cash generation and an expanding institutional shareholder base.

Record Financial Performance Drives Growth Capital

Avino's third quarter 2025 results demonstrated the financial strength underpinning its expansion plans. The company achieved record revenues of $21 million USD, representing significant growth driven by both production volume and favourable metal prices. Gross profit margins reached $9.9 million, while the operation generated approximately $5 million in free cash flow during the quarter.

Cost control remains a competitive advantage, with all-in sustaining costs maintained in the low $20s per ounce. This cost structure becomes particularly compelling in the current price environment, as Wolfin noted that silver reached $60 per ounce, creating substantial operating margins. The revenue composition reflects a diversified metals portfolio: 49% from silver, 19% from gold, and 31% from copper - a mix that provides natural hedging against individual commodity price volatility.

The company's strengthened financial position has attracted attention from lending institutions. According to Wolfin, "The bankers are knocking down our door every day right now. Take our money" However, management has adopted a disciplined approach to capital structure, preferring to grow the balance sheet organically from operational cash flow while utilising an at-the-market (ATM) equity facility to raise capital at premium prices without dilutive warrant issuance.

La Preciosa Exceeds Schedule with Superior Grades

The La Preciosa project, located 19 kilometers from the existing Avino mill, represents the most immediate catalyst for production growth. Remarkably, within six months of commencing initial surface ramp development, the operation began extracting ore - one month ahead of schedule. During the recent quarter, La Preciosa shipped over 6,700 tons of material to the Avino mill for processing.

While current production consists of development ore rather than stope mining material, early results have exceeded expectations established by previous operators. The property came to Avino through acquisition from Coeur Mining, which had conducted a feasibility study focused on a large open-pit scenario. That study indicated a resource grade of 200 grams per ton of silver, but Avino's targeted drilling of the La Gloria and Abundancia veins - narrow vein structures that come directly to surface - has revealed significantly higher grades.

Wolfin detailed some impressive intercepts: 

"There was an intercept of 787 grams of silver and half a gram of gold over 5.22 meters. There was 3 kilograms of silver and a gram of gold over 0.8 meter." 

These results, representing multiple high-grade hits, suggest the actual mining grades will substantially exceed the diluted open-pit resource estimate. The geological characteristics also present mining flexibility.

The company is currently developing a decline ramp system, with 350 meters of development piercing both veins and crosscuts extending in both directions. This infrastructure will enable multiple-level mining as the operation ramps down to access deeper ore zones. Management expects to release updated resource and reserve estimates for both La Preciosa and Avino in the first quarter of 2026, having crossed the regulatory threshold of $90 million in revenue that qualifies the company to publish reserves under National Instrument 43-101 standards.

Avino Mine Exploration Targets Depth Extensions

The flagship Avino mine continues as the financial engine of the company, but significant upside remains through systematic exploration. The operation's lengthy history - dating back to private family ownership in the 1970s and 1980s, means past operators focused development narrowly on the highest-grade, most accessible portions of the deposit to minimise infrastructure costs. Wolfin explained the historical constraint: 

"They kept it right down the heart of the ore deposit. All those areas on the sides are available and we're going back and exploring them." 

Additionally, areas to the west remained unexplored because they sit beneath a former tailings pond. With that facility now decommissioned and dried, blast testing has confirmed ground stability, opening previously restricted exploration targets.

Deeper drilling below Level 17, the current bottom of development, has returned encouraging results. Copper grades - already contributing 31% of revenues - trend higher at depth, consistent with the geological model for this deposit type. The company has more than doubled its exploration budget for 2026, planning 20,000 to 30,000 meters of drilling divided between La Preciosa and Avino. As Wolfin stated: 

"We'll prioritise based on grade. If we can get a higher grade, then that will be top priority for us going forward."

Interview with David Wolfin, CEO, Avino Silver & Gold

Oxide Tailings Project Offers Attractive Economics

Avino's third potential producing asset comes from reprocessing historical oxide tailings located adjacent to the current operation. A completed prefeasibility study provides high-level certainty on the project economics, with proven and probable reserves totalling 6.7 million tons. At the metal prices used in the study ($23.45 silver, $1840 gold), the project showed a post-tax net present value of $61 million. At current spot prices, Wolfin estimates the NPV at approximately $250 million.

The capital requirement of less than $50 million positions this as the most accessible expansion project, and the economics are particularly compelling. All-in sustaining costs are projected around $10 per ounce once operational, well below current precious metals prices. The processing facility will feature enclosed leaching tanks housed in a building, creating a modern, low-impact operation adjacent to existing infrastructure.

Given Avino's cash generation and the relatively modest capital requirement, the project could be entirely debt-financed if management chose that route. However, the company maintains strategic flexibility in its approach to funding this and other expansion initiatives.

Mill Expansion Maximises Existing Infrastructure

Beyond developing additional ore sources, Avino is evaluating expansion of its existing mill capacity. The current five-year plan contemplates increasing throughput by 1,000 to 1,500 tons per day, with an independent engineering firm assessing optimal configurations. Rather than constructing a new mill at La Preciosa, management is examining how to maximise production at the existing Avino facility by processing ore trucked from the satellite operation.

This consolidation strategy offers multiple advantages: capital efficiency through utilization of existing infrastructure, minimised environmental footprint, and enhanced employment opportunities in the existing community. The approach aligns with Avino's operational philosophy of measured, systematic growth rather than aggressive expansion that might strain financial or operational capabilities.

Third-quarter results showed 21% higher mill throughput compared to the prior year, though with somewhat lower average grades as the operation processes development ore from La Preciosa and navigates planned mine sequencing at Avino. Wolfin characterised the grade variation as temporary, noting that copper grades in particular will increase as mining progresses to deeper levels where drilling has confirmed higher copper content.

Strategic Capital Allocation Strengthens Balance Sheet

Avino's improved financial position has enabled more aggressive capital deployment toward growth initiatives. The company recently repurchased certain royalty packages on its properties, increasing shareholder leverage to production growth. Management has also maintained equipment renewal without significant cash drains by utilising credit facilities with Caterpillar and Sandvik, keeping the mining fleet modern while preserving capital flexibility.

The strengthened balance sheet has attracted institutional capital, with ownership by institutions rising from less than 10% two years ago to 32% currently. Notably, this transition occurred entirely through open-market purchases rather than directed placements, reflecting organic discovery of the Avino story by professional investors. The stock now trades in 10 different exchange-traded funds focused on junior silver exploration and production, contributing to daily trading volumes measured in millions of shares.

Wolfin attributes part of the valuation recovery to technical factors. A previous shareholder - Coeur Mining - held 14 million Avino shares while facing debt obligations exceeding half a billion dollars. As Coeur liquidated non-core assets, including its Avino position, short interest built up and pressured the stock. When that overhang cleared in October 2023, Avino's valuation began reflecting operational fundamentals rather than technical selling pressure.

The Investment Thesis for Avino Silver & Gold

• Organic Growth Without Acquisition Risk: Plans to triple producing assets from one to three within five years using 100%-owned properties, eliminating integration challenges and acquisition premiums associated with external growth strategies.
• Near-Term Production Catalysts: La Preciosa already producing one month ahead of schedule with grades significantly exceeding feasibility study assumptions; Q1 2026 reserve updates expected to quantify upside across both properties.
• Strong Cash Generation Funding Expansion: Record Q3 revenues of $21 million with $5 million free cash flow and all-in sustaining costs in low $20s create self-funding growth capability without shareholder dilution.
• Multiple Low-Risk Development Options: Oxide tailings project offers $10 all-in sustaining costs with $50 million capex; mill expansion leverages existing infrastructure; doubled exploration budget targets high-grade extensions at both properties.
• Institutional Validation: Organic increase in institutional ownership from under 10% to 32% over two years; inclusion in 10 ETFs; millions of shares daily trading volume demonstrates growing recognition of growth story.
• Diversified Revenue Stream: Revenue split of 49% silver, 19% gold, 31% copper provides natural commodity price hedging while maintaining leverage to precious metals in current macro environment.

Macro Thematic Analysis

The precious metals sector is experiencing a structural shift as silver approaches $60 per ounce, driven by industrial demand from solar energy and electronics converging with traditional monetary demand amid persistent inflation concerns. Avino Silver & Gold is uniquely positioned within this environment, operating profitable production at all-in sustaining costs in the low $20s while simultaneously developing multiple expansion vectors that will triple its asset base organically. 

The company's 277 million ounces of silver equivalent resources provide substantial operating leverage to sustain higher prices, while its diversified revenue stream - including 31% from copper - captures the broader electrification and energy transition trends. 

For investors seeking exposure to precious metals with embedded operational growth rather than pure price speculation, Avino presents a compelling risk-adjusted proposition backed by demonstrated execution, strengthening fundamentals, and multiple near-term catalysts.

"We have a clear path to transformational growth. It's clear because we own the assets that are going to drive our growth organically. So we're going to go from one producing asset to three within 5 years."

TL;DR

Avino Silver & Gold operates a profitable Mexican mine generating record $21 million quarterly revenues with $5 million free cash flow, while executing an aggressive organic growth strategy to triple producing assets within five years. La Preciosa mine commenced production ahead of schedule with grades significantly exceeding previous estimates, while the $50 million oxide tailings project offers $10 all-in sustaining costs. Trading at 1.2x P/NAV, the company targets 6-10 million annual ounces with institutional ownership rising from under 10% to 32% organically.

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