President’s Message
Dear Fellow Shareholders,
2024 was an excellent year for Avino both operationally and financially and was marked by the successful delivery of several key milestones and achievements. As we continue to advance our strategic growth plans, I am pleased to write to you with a growing sense of optimism and excitement that has only strengthened over the past few years. During the year we continued executing on our strategy for targeted growth within a five-year time-frame. We remain confident that by adhering to our guiding principles and maintaining diligent, disciplined execution, we are well-positioned to achieve our goals. The Company’s compelling opportunity and investment appeal lies in our diversified project portfolio and clear path for growth. At its core is the Avino Mine, our cornerstone asset, complemented by the significant upside potential offered by La Preciosa and the Oxide Tailings Project. As we reflect on the milestones achieved and valuable insights gained in 2024, I am pleased to share with you the progress made throughout the year, along with our ongoing and future objectives. In 2024, gold and silver prices experienced significant increases, driven by inflationary pressures, geopolitical uncertainties, strong investor demand for safe-haven assets, and continued gold purchases by central banks amid economic uncertainty. This favorable price environment reinforced the value of responsible resource development and strengthened the economics of mining operations. Silver benefited from growing industrial demand, especially in green technologies. Despite market volatility, our focus on operational efficiency, disciplined capital allocation, and sustainable mining practices has positioned us to capitalize on these trends and create long-term value for our shareholders and stakeholders alike. We continued to request our shareholders’ patience as we engaged with community groups for the development of La Preciosa and navigated the process of securing all necessary permits. We are pleased to see that their patience has ultimately paid off. In early January 2024, we signed a long-term land use agreement with the communities close to the property. This milestone marked the start of a new era for Avino and the communities adjacent to the mine as we took a significant step closer to bringing La Preciosa into production. Also, I am absolutely thrilled to write that underground development at La Preciosa commenced following receipt of all required permits for mining operations in early January, 2025. This milestone achievement is a testament to the dedication and vision of the entire Avino team and underscores our firm commitment to responsible development and transformational growth. The receipt of all permits marks the culmination of lengthy collaboration with Federal and State regulators, as well as meaningful engagement with community leaders. This step marks a significant achievement for Avino, as we move one of Mexico’s largest undeveloped silver deposits forward. La Preciosa represents higher silver grades than currently being mined and processed at Avino. Beyond direct job creation, activities at La Preciosa are expected to drive local economic growth, including the generation of both direct and indirect employment opportunities among local suppliers, subcontractors, and community groups. Avino is committed to operating La Preciosa with a small environmental footprint and in an economically sustainable manner. Another standout achievement for 2024 was Avino’s record financial performance, marked by improvements across key financial metrics and the treasury reaching an all-time high. Records were set on revenues and cash flow generation; our operating margins further strengthened our debt-free balance sheet to record highs. On the cost side, our operating costs decreased and further increased margins, allowing record free-cash flow generation. In addition, the full year production from the Avino mine increased significantly due to overall mill performance and availability. With production of 2,652,4985 million silver equivalent ounces, the Company successfully completed the year within our targeted full-year production goals of 2.5 to 2.8 million silver equivalent ounces. This was despite an unscheduled production stoppage in June following the breakdown of our primary crusher. The mill crew did an excellent job in finding solutions to limit down time. Early in the year, the Company also completed a comprehensive Pre-Feasibility Study on the Oxide Tailings Project, with results demonstrating an after-tax NPV5% of $61 million and an IRR of 26%, with a $49 million initial capex and NPV to capex ratio of 1.25. The financial analysis was performed at prices of $23.45/oz silver and $1,839.51/oz gold and accordingly we expect any actual production to outperform estimates contained in that Pre-Feasibility Study, assuming consistency of current pricing. The project economics are promising, and we look forward to assessing the next steps as we progress along the timeline for growth. As a mining company, one of our fundamental responsibilities is to mine with the highest regard for environmental sustainability, safety, and the well-being of the communities in which we operate. We are committed to constant improvement, always striving to make meaningful changes and enhance our practices. I am pleased to report that for the third consecutive year, Avino received the ESR Award “Empresa Socialmente Responsible ESR 2023”. This designation is granted by the Mexican Center for Philanthropy (El Centro Mexicano para la Filantropia or Cemefi), and the Alliance for Corporate Social Responsibility (Alizanza por la Responsabilidad Social Empresarial or (AliaRSE)). The ESR® Award is obtained through a diagnostic process based on indicators reviewed and endorsed annually by a committee of experts in the various CSR areas, supported with documentary evidence, an assessment differentiated by company size and by maturity levels, and an external verification process. Avino follows the ESG Standards and the United Nations Sustainable Development goals. There are 17 Sustainable Development Goals (SDGs), which were developed as a call to action by all countries developed and developing in a global partnership. The SDGs serve as a blueprint to achieve a better and more sustainable future for all. As a public company, we are committed to our shareholders and strive to bring value not only in the short term but for future value as well. We are making strides to transition the company into intermediate producer status. We believe that our financial and operational success in 2024 is a testament to the collective dedication and shared commitment of our global team. This unified drive to succeed and grow not only fueled our achievements but also fostered a culture of collaboration, innovation, and resilience, enabling us to face any challenges and seize new opportunities. The entire Avino team is united in working toward our growth plan, committed to a shared culture of discipline, flexibility, and teamwork. We are focused on pursuing initiatives that will strengthen the Company. We believe that Avino is currently undervalued and uniquely positioned to capitalize on the positive outlook for metal prices. With strong operational performance at the Avino Mine and a favorable metal price environment, we are optimistic about the remainder of 2025. Avino is well positioned to build on this momentum, strengthen our financial position, and advance our growth initiatives. We remain focused on delivering value to our shareholders while continuing to execute our long-term strategy. I would like to express my gratitude to the entire Avino team, including the Board of Directors, whose support and strategic direction help drive our achievements. Our Clear Path for Transformational Growth guides us from junior producer to intermediate status! We thank you for your ongoing support and confidence as we continue to provide shareholder value at Avino Silver & Gold Mines Ltd.
Sincerely,
DAVID WOLFIN
President and Chief Executive Officer
