Avino Silver & Gold Targets Intermediate Producer Status with Ambitious Three-Asset Expansion Plan

• Avino is expanding from one to three producing assets within five years, targeting intermediate producer status with clear organic growth potential
• Q2 2025 delivered $21.8M revenue, $10M operating income, and $4.4M free cash flow with all-in sustaining costs of $20.93 per ounce
• La Preciosa mine permitted in Q1 2025, began blasting in April, with high-grade ore (with drill results like 7.9m at 1,600g silver equivalent) set to lower overall production costs
• Company maintains $50M cash position with no debt, having bought back royalties and positioned for self-funded expansion
• 600% stock performance led to TSX30 inclusion and GDXJ index addition, reflecting strong operational execution in rising silver market

Avino Silver & Gold Mines Limited, led by President and CEO David Wolfin, represents an interesting growth story in the precious metals sector. The company has established itself as a junior primary silver producer with what Wolfin describes as "a clear path to transformational growth" toward intermediate producer status within five years. The strategic foundation rests on expanding from one producing asset to three, all owned outright and positioned to drive substantial operational leverage.

The company's market capitalisation has experienced remarkable growth, increasing approximately 700% over a three-year average, attracting attention from larger institutional investors. As Wolfin notes, "the bigger banks are now taking a look at us" due to this expanded market presence and operational performance.

Core Asset Portfolio

Avino Mine - The Cornerstone Operation

The flagship Avino Mine serves as the company's production backbone, generating between 2.5 to 2.8 million ounces of silver equivalent annually. This established operation provides the cash flow foundation supporting the company's expansion strategy while maintaining competitive cost metrics that position Avino favourably in the current precious metals environment.

La Preciosa Development

The La Preciosa asset, acquired from Coeur Mining in 2022, represents the next phase of Avino's growth trajectory. The mine received its permit in Q1 2025 and commenced blasting operations in April, with successful vein intersection already achieved. Wolfin emphasizes that "we're going to see a contribution in our mill this year" from La Preciosa, marking a significant milestone in the expansion plan.

Recent drilling results from La Preciosa have exceeded expectations, with Wolfin highlighting "7.9 meters of 1,600 grams of silver equivalent," substantially higher than the 200-gram resource grid used in the original mine plan. This higher-grade ore will contribute to lower all-in sustaining costs and improved margins when fed into the existing mill infrastructure.

Oxide Tailings - Third Growth Driver

The third asset in Avino's portfolio involves oxide tailings processing, strategically timed to avoid overwhelming the operational team during the multi-asset development phase. This measured approach to expansion demonstrates management's focus on execution quality over speed.

Financial Performance Highlights

Avino's Q2 2025 financial results demonstrate strong operational execution with $21.8 million in revenue, $10 million in operating income, and $4.4 million in free cash flow generation. The company maintains all-in sustaining costs of $20.93 per ounce, positioning it competitively in the current silver price environment.

The integration of La Preciosa's higher-grade ore is expected to drive further cost improvements through economies of scale. Wolfin projects that combining all three assets could achieve "mid-teens to low teens in our all-in sustaining cost," which would represent significant margin expansion in the current pricing environment.

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

Balance Sheet Optimization Strategy

Avino has pursued a counter-cyclical financial strategy, as Wolfin explains: 

"We're doing the opposite of our peers. We're unlevering, unhedging, and buying back the royalty." 

This approach has resulted in a debt-free balance sheet with $50 million in cash, providing substantial financial flexibility for organic growth initiatives.

The company successfully repurchased the royalty on La Preciosa from Deterra, an Australian base metals royalty company, eliminating future royalty obligations on what Wolfin describes as "the high-grade mine that we're building right now." This strategic move enhances the project's long-term economics and demonstrates management's shareholder-focused approach.

Operational Efficiency Advantages

Avino's operational efficiency is reflected in its cost structure, with cost per ton at $73 and cost per ounce at $20.93. The company operates with a lean management structure that Wolfin credits for maintaining competitive costs: 

"We're lean. Look at our cost per ton or cost per ounce... we're a low-cost mining operator."

The existing mill infrastructure provides a significant competitive advantage, allowing La Preciosa ore to be processed without requiring new processing facilities. This infrastructure leverage reduces capital requirements and accelerates the timeline to production contribution.

Reserve Expansion Plans

Under NI 43-101 standards, Avino now qualifies as an operating issuer, enabling the publication of reserves without requiring a feasibility study. The company has deployed three drill rigs and plans to announce reserves in Q1 2026, supporting an expanded growth vision.

Wolfin indicates the company is "going to reimagine our growth strategy," potentially increasing targets from the initial 8-10 million ounce plan to 12-15 million ounces, supported by the strengthened balance sheet and current market conditions. This organic growth approach avoids the complexities and costs associated with acquisitions while maintaining operational control.

Market Recognition Achievements

The company's operational success has translated into significant market recognition. Avino was included in the TSX30 as one of the top-performing companies across all sectors on the Toronto Stock Exchange, ranking fifth with 600% returns. Additionally, inclusion in the GDXJ index enhances institutional accessibility and trading liquidity.

Daily trading volumes of 6-8 million shares on the NYSE American demonstrate improved market liquidity, supporting institutional participation and reducing execution costs for investors.

The Investment Thesis for Avino Silver & Gold Mines

• Operational Leverage: Three-asset expansion strategy with existing mill infrastructure provides significant cost advantages and production scaling potential
• Financial Strength: Debt-free balance sheet with $50M cash enables self-funded growth without equity dilution or debt financing risks
• Cost Leadership: All-in sustaining costs of $20.93/oz with clear path to mid-teen costs through higher-grade La Preciosa integration
• Asset Quality: Royalty-free ownership of high-grade silver assets in mining-friendly jurisdictions with established infrastructure
• Management Execution: Proven track record of operational delivery, financial discipline, and shareholder value creation with aligned interests
• Market Position: Limited number of development-stage silver producers with near-term production growth and intermediate producer pathway
• Valuation Opportunity: Trading at 1.0x P/B ratio compared to recent takeout premiums of 2.2x for comparable high-grade operations

The precious metals sector is experiencing renewed institutional interest driven by monetary policy uncertainties, inflation concerns, and geopolitical tensions. Silver specifically benefits from both investment demand and industrial applications in renewable energy and technology sectors. Avino is positioned to capitalize on this environment through its low-cost production profile and expansion timeline coinciding with potential supply constraints in the silver market.

The company's organic growth strategy provides insulation from the capital allocation challenges facing many mining companies, while its debt-free status offers operational flexibility during commodity price volatility. With limited high-grade silver development projects available for acquisition, Avino's self-funded expansion path represents a differentiated approach in a consolidating sector.

TL;DR

Avino Silver & Gold Mines offers a compelling organic growth story with three producing assets coming online over five years, supported by a debt-free balance sheet and $50M cash position. The company's all-in sustaining costs of $20.93/oz are set to decline further through higher-grade La Preciosa integration, while recent 600% stock performance and index inclusions reflect strong operational execution. With limited high-grade silver development opportunities available, Avino represents a rare pure-play growth opportunity in the consolidating precious metals sector.

FAQ's (AI Generated)

Q: Why is Avino expanding to three assets instead of focusing on acquisitions? 

Organic growth maintains operational control, avoids integration risks, and leverages existing infrastructure. Management can deploy capital more efficiently while maintaining their lean cost structure and proven operational expertise.

Q: When will La Preciosa begin contributing meaningfully to production? 

La Preciosa started blasting in April 2025 and will contribute to mill throughput this year. Higher-grade ore (1,600g vs 200g planned) should improve margins significantly once full integration occurs.

Q: How sustainable are the current low all-in sustaining costs? 

Current $20.93/oz costs are expected to decrease to mid-teens as La Preciosa's higher-grade ore creates economies of scale. The third oxide tailings asset will further reduce per-ounce costs.

Q: How does the debt-free balance sheet impact growth strategy? 

$50M cash with zero debt enables self-funded expansion without dilutive equity raises or debt service obligations. This provides operational flexibility and eliminates refinancing risks during commodity cycles.

Q: What risks could impact the three-asset development timeline? 

Operational execution, permitting delays, and commodity price volatility represent key risks. However, management has demonstrated successful permitting and early operational success at La Preciosa, reducing execution risk.

Q: How does index inclusion in GDXJ benefit shareholders? 

GDXJ inclusion drives institutional buying, improves liquidity, and reduces trading costs. Combined with TSX30 recognition, this enhances Avino's profile among larger institutional investors seeking silver exposure.

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