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
“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
Second Quarter 2017 Second Quarter 2016 Change Operating
Tonnes Milled 137,493 131,612 4%
Silver Ounces Produced 386,002 380,620 1%
Gold Ounces Produced 1,954 1,509 29%
Copper Pounds Produced 1,133,161 1,054,935 7%
Silver Equivalent Ounces1 Produced 698,174 629,780 11%
Concentrate Sales and Cash Costs
Silver Equivalent Ounces Sold2
542,002 626,837 -14%
Cash Cost per Silver Equivalent Ounce2,3 $ 8.90 $ 9.61 -7%
All-in Sustaining Cost per Silver Equivalent Ounce2,3 $ 10.42 $ 10.97 -5%
Average Realized Silver Price per Ounce $ 17.09 $ 16.99 1%
Average Realized Gold Price per Ounce $ 1,259 $ 1,262 -%
Average Realized Copper Price per Tonne $ 5,643 $ 4,706 20%
Revenues $ 7,911,388 $ 9,017,929 -12%
Mine Operating Income $ 2,481,779 $ 2,459,477 1%
Net Income (Loss) $ 1,151,549 $ (336,748) N/A
Cash $ 5,914,408 $ 8,256,627 -28%
Working Capital $ 17,686,701 $ 15,041,997 18%
Earnings (Loss) per Share ("EPS") – Basic $ 0.02 $ (0.01) N/A
Cash Flow per Share (YTD)3
$ 0.06 $ 0.06 -%
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.
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.
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.
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.
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.
Silver equivalent production for the second quarter of 2017 increased by 11% to 698,174 oz1
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
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
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 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
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
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
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.
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 aremeasures developed by mining companies in an effort to provide a comparable standard ofperformance. 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.
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.
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.
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:
1. Maintain and improve profitable mining operations while managing operating costs and achieving efficiencies;
2. Complete the Mill Circuit 4 expansion to increase Avino Mine production;
3. Conduct a successful underground drill program in 2017 to increase and improve confidence in our resource base at Bralorne;
4. Continue mine expansion drilling and explore regional targets on the Avino property;
5. 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
President & CEO
Avino Silver & Gold Mines Ltd.