Avino Silver & Gold Mines Ltd. (ASM:TSX.V; ASM:NYSE.MKT; GV6:FSE) had its price target price raised by Roth MKM on higher copper prices despite total Q2/24 production falling short of expectations, reported Managing Director Joe Reagor in a July 17 research note.
Roth increased its target to US$1.60 per share from US$1.25, the analyst noted. In comparison, the miner's share price at the time of the report was about US$1.12.
Given these prices, the potential return on investment is 43%.
"Additionally, we lowered our discount rate from 10% to 9% as we believe Avino Silver & Gold Mines has turned a corner and is poised to demonstrate production growth," Reagor wrote.
The company is still rated Buy.
Production Shortfall Offset
Reagor pointed out that production results in Q2/24 were mixed and explained how. Overall production, at the Avino mine and mill in Mexico, was less than anticipated because a cone crusher had to be repaired during the quarter. This hampered mill throughput.
"Repairs are ongoing, but the company anticipates returning to normal operations shortly," wrote the analyst.
He added that higher silver and copper prices more than offset the underperformance.
Production of the three metals was inconsistent. As for silver, 292,946 ounces were produced, meeting Roth's expectation. This was due to the company processing material from stockpiles at its adjacent project, La Preciosa, its first time doing so. The amount of La Preciosa ore processed was 9,951 tons, and its head grade was 133 grams per ton silver.
Q2/24 gold and copper production, on the other hand, were misses. Gold production was 1,514 ounces versus Roth's estimate of 2,200 ounces. Copper production was 1,300,000 pounds versus Roth's forecast of 1,500,000 pounds.
Copper Projection Updated
The copper price rose well above Roth's estimate, remained strong at the start of H2/24 and has a favorable near-term outlook, noted Reagor. Accordingly, the investment bank adjusted its copper price forecast to US$4.50 from US$3.75.
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Disclosures for Roth MKM, Avino Silver & Gold Mines Ltd., July 17, 2024
Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Disclosures: Within the last twelve months, ROTH Capital Partners, or an affiliate to ROTH Capital Partners, has received compensation for investment banking services from Avino Silver & Gold Mines Ltd.. ROTH makes a market in shares of Avino Silver & Gold Mines Ltd. and as such, buys and sells from customers on a principal basis. Shares of Avino Silver & Gold Mines Ltd. may be subject to the Securities and Exchange Commission's Penny Stock Rules, which may set forth sales practice requirements for certain low-priced securities.
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months. The material, information and facts discussed in this report other than the information regarding ROTH Capital Partners, LLC and its affiliates, are from sources believed to be reliable, but are in no way guaranteed to be complete or accurate. This report should not be used as a complete analysis of the company, industry or security discussed in the report. Additional information is available upon request. This is not, however, an offer or solicitation of the securities discussed. Any opinions or estimates in this report are subject to change without notice. An investment in the stock may involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Additionally, an investment in the stock may involve a high degree of risk and may not be suitable for all investors. No part of this report may be reproduced in any form without the express written permission of ROTH. Copyright 2024. Member: FINRA/SIPC.
