Why 4 Analysts Like This Gold and Silver Miner

Avino Silver & Gold Mines Ltd. (ASM:TSX.V; ASM:NYSE.MKT; GV6:FSE) has the attention of at least four analysts who rate it Buy. Here are the factors they believe make the company a compelling investment.

Avino's operations cover the mining trifecta: exploration, development, and production. The British Columbia-based company is producing silver, gold, and copper at its Avino project, which spans 1,104 hectares (1,104 ha) in Durango, Mexico, and is ripe for exploration.

Also, Avino is developing nearby La Preciosa, which is comprised of 15-plus concessions over 6,011 ha. Further, the company owns interests in mineral properties in Mexico, British Columbia and the Yukon.

"We expect the Avino mine to continue to operate at a steady state in a cash flow positive manner at current metals prices as management continues to focus on the significant growth opportunity at La Preciosa," wrote Jake Sekelsky, an analyst at Global Alliance Partners, in a May 13 research note. "La Preciosa presents the company with the opportunity to transition from a junior silver producer to an intermediate producer — driving a rerating of shares over the next year."

La Preciosa, the company's "primary path to transformational growth," according to Sekelsky, could more than double Avino's current production to more than 8,000,000 ounces of silver equivalent (8 Moz of Ag eq) per year. By using the existing Avino processing facility for both projects, the company could keep capex for La Preciosa low.

""We believe Avino Silver & Gold Mines has turned a corner and is poised to demonstrate production growth,"  Jake Sekelsky of Global Alliance Partners added.

"Avino is in the unique position of being a producing silver company with extensive exploration potential, particularly at La Preciosa, that provides a path to mid-tier status," Sekelsky added.

His price target on Avino implies a 102% return.

During Q2/24, the Canadian producer processed, through the Avino mill, the first ore from the surface stockpile at La Preciosa, Joe Reagor, managing director at Roth MKM, wrote in a July 17 report. A total of 9,951 tons of material was processed. This boosted the overall amount of silver produced during the quarter.

"We believe Avino Silver & Gold Mines has turned a corner and is poised to demonstrate production growth," Sekelsky wrote.

Going forward, the company should benefit from rising metals prices, purported Reagor. Roth recently raised its copper price estimates, and this led to a 28% increase in its price target on Avino, reflecting a potential investment gain of 43%.

With respect to La Preciosa, H.C. Wainwright & Co. analyst Heiko Ihle noted on July 17 that the processing of ore from La Preciosa's surface stockpiles in Q2/24 produced 30,085 ounces of silver at an average head grade of 133 grams per ton. It also resulted in a sellable high-grade concentrate. 

Also of note, the grades of the three metals produced during the quarter were better than a year earlier. The grades of silver, gold and copper were up 42%, 9% and 4%, respectively.

Currently, Avino is in the process of obtaining the necessary permits to start construction and mining at La Preciosa. This new project will lead to growth, he wrote.

"Avino remains well-positioned to experience significant longer-term growth, which should be further exacerbated by ongoing strength in metal pricing," wrote H.C. Wainwright & Co. analyst Heiko Ihle.

Another of Avino Silver & Gold Mines' assets is its oxide tailings project, which Ihle values at about $35 million, he wrote, plus potential synergies to be realized between it and the company's other operations.

"Avino remains well-positioned to experience significant longer-term growth, which should be further exacerbated by ongoing strength in metal pricing," wrote Ihle.

His price target on the Vancouver-based miner implies a 34% return.

Likewise, Matthew O'Keefe of Cantor Fitzgerald highlighted that Avino is executing its strategic growth plan. Silver production alone in Q2/24 was up 17% quarter over quarter and 26% year over year.

In H1/24, the miner produced 1.25 Moz of Ag eq. Sourcing from both the Avino mine and La Preciosa, the company is on track to meet full-year 2024 production guidance of 2.5–2.8 Moz of Ag eq, O'Keefe wrote.

Further, Avino aims to be producing 7.5–9 Moz of Ag eq annually by 2028.

The company offers 84% upside, as indicated in this analyst's price target on it.

The Catalysts

Investors have several events to watch for with this company, analysts said. They include receipt of two necessary permits for La Preciosa, one environmental, the other for construction of the "portal and haulage ramp to access fresh ore from the high-grade Gloria and Abundancia veins," O'Keefe explained. Management anticipates receiving approval for these permits in Q3/24.

Other catalysts are Avino meeting its 2024 production guidance and conducting additional exploration work.

Within a year's time, Sekelsky wrote, production will be underway at La Preciosa, which will transition the company into an intermediate producer from a junior silver producer.

Ownership and Share Structure

According to Refinitiv, management and insiders own 2.28%, or 3.08 million (3.08M) shares, of Avino Silver & Gold Mines. The top five, all insiders, are our Chief Operating Officer Carlos Rodriguez Moreno with 0.85% or 1.16M shares, Director Jasman Yee with 0.4% or 0.54M shares, Chief Financial Officer Nathan Harte with 0.33% or 0.45M shares, Director Ronald Andrews with 0.32% or 0.43M shares, and Chairman and Independent Director Peter Bojtos with 0.2% or 0.27M shares.

A total of 32 institutions hold 6.85% or 9.23M shares. The top 3 are Tidal Investments LLC with 2.27% or 3.06M shares, ETF Managers Group LLC with 1.88% or 2.53M shares, and Perritt Capital Management Inc. with 0.59% or 0.8M shares.

Retail investors own the remaining 90.87%.

In terms of structure, Avino Silver & Gold Mines has 134.76M outstanding shares and 131.68M free float traded shares.

The company has a market cap of CA$137.18 million. Over the past 52 weeks, it has traded between CA$0.57 and CA$1.54 per share.

Important Disclosures:

1. Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
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