Avino Silver & Gold Mines Ltd. (ASM:TSX.V; ASM:NYSE.MKT; GV6:FSE) announced its Q2/24 production results, the highlight of which was increased silver production, reported Heiko Ihle, analyst at H.C. Wainwright & Co., in a July 17 research note.
"Avino remains well-positioned to experience significant longer-term growth, which should be further exacerbated by ongoing strength in metal pricing," Ihle wrote.
34% return potential
The analyst reiterated H.C. Wainwright's Buy rating and $1.50 per share price target on the Canadian miner, the current price of which is about $1.12 per share.
From here, the return to target is 34%.
The company remains a Buy.
Silver production boosted 26%
Ihle reviewed the company's Q2/24 results. Total production from the Avino mine in Mexico was 616,571 ounces of silver equivalent (Ag eq), reflecting a 5% year-over-year (YOY) increase but a 2% quarter-over-quarter (QOQ) decrease. Similarly, throughput of 140,934 tons was lower YOY, by 10%, due to one of the cone crushers being out of operation during the last two weeks of the quarter for repairs.
Silver production during the quarter, however, was up 26% YOY and 17% QOQ at 292,946 oz, noted Ihle. This is attributed in large part to the processing of nearly 10,000 tons of material from the surface stockpiles at Avino's adjacent project, La Preciosa. Along with boosting silver production, these tons produced 30,085 ounces of silver at an average grade of 133 grams per ton and resulted in a sellable high-grade concentrate.
"Avino Silver & Gold Mines remains on track to reach management production guidance of 2,500,000–2,800,000 ounces of Ag eq," Ihle wrote.
Q2/24 gold and copper production were less impressive than silver. Gold production was 1,514 ounces, about the same as a year earlier and 15% lower than in the prior quarter. Copper production was 1,300,000 pounds, 10% lower YOY and 3% lower QOQ.
Grades of all three metals in Q2/24 were higher than in Q2/23. The silver grade was up 42%, the gold grade was up 9% and the copper grade was up 4%.
Near-term catalysts
Avino Silver & Gold Mining expects to soon receive the two permits it needs to advance La Preciosa, reported Ihle. One is an environmental permit. The other is a construction permit for building the portal and haulage ramp needed to access the Gloria and Abundancia veins. For the La Preciosa property alone, H.C. Wainwright has assigned a $35 million ($35M) value.
Infrastructure for processing La Preciosa ore already is in place as the company intends to use the nearby Avino mill, with a 2,500 ton per day capacity, for this.
"We believe the company's future growth is at least in large part dependent on this new asset," the analyst wrote.
Another catalyst is further exploration work at the Avino project.
Eventually, too, the company will realize synergies between its tailings project (which H.C. Wainwright values conservatively at $50M, Ihle wrote) and its other operations.
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