We entered 2021 with a renewed sense of optimism and ambition to strengthen and commit to our position and growth in the silver mining sector. The pandemic persisted for a second year along with global uncertainties, and some barriers to operating and conducting business. However, as a company, we learned together, strategized, and adopted new ideas with resilience in mind. During the year, Avino made important advancements in several key areas. The progress made on capital projects throughout the year will be instrumental in shaping future growth. Through building back our workforce, construction of the dry-stack tailings facility, and the acquisition of La Preciosa, we have laid further groundwork on the path towards achieving our goals of intermediate producer status.
The entire Avino team that spans Mexico, Canada and the US committed to our shared culture of discipline, flexibility and teamwork and continued to seek initiatives that truly made us stronger as a Company.
2021 was a busy and exciting year with many highlights to touch on. We updated our mineral resource estimate for the Avino property which showed an increase of 145% in silver equivalent ounces to 116.5 million ounces and included 52.1 million silver ounces, 116,000 copper tonnes, and 486,000 gold ounces The updated mineral resource together with the mineral resources from the recently acquired La Preciosa property provides Avino with a robust long-term outlook.
Speaking of La Preciosa, the announcement of this acquisition was one of the most exciting highlights of 2021 for me. It advances Avino’s long term goal of expanding operations by adding a development stage mineral property to our growth profile and is aligned with our goal of achieving intermediate producer status in the next few years. The transaction closed in March 2022, and we couldn’t be more thrilled with this major milestone for Avino and the addition of 113 million silver equivalent ounces of indicated mineral resources, as well as 24 million silver equivalent ozs of inferred mineral resources. The acquisition grows our large silver resource base to 290 million silver equivalent ounces.
We also planned an ambitious drill program which was increased from 12,000 to just over 30,000 metres, showing confidence in targets on the property. The objectives of the drill program are to locate new mineralized zones within the property and to confirm continuity of mineralization in the current Avino ET production area, on strike to the East & West & below Level 17, the lowest developed level of the mine. We also embarked on drilling of the Tailings Storage Facility #1 (the Oxide Reprocessing Project) to follow up from the 2017 PEA (Preliminary Economic Assessment) recommendations to infill drill the entire area, which was not possible while the storage facility was active. The mine closure during much of 2020 and 2021 allowed the opportunity to carry out the drill program. This program consisted of 110 holes adding to the 57 holes that were drilled in 2015 and 2016. The samples are currently being prepared for metallurgical test work that will form part of the Pre-Feasibility Study. We are absolutely thrilled with the results to date, they have exceeded our expectations.
Another important project that is ongoing at the mine site is Digital Transformation. The idea is to transform communication and processes that should help to reduce costs by streamlining work processes and providing insights at site that will improve efficiencies. Data will be accessed faster which will help with productivity and monitoring for any safety issues. Operations management, the finance team and the executive team will be able to monitor site activity remotely and communicate instantly any risks or changes that need to take place.
A major highpoint of the year was the restart of operations at the Avino Mine which occurred in August, and from that quarter, we generated positive earnings of US$2.6 million. The team in Mexico worked diligently as they prepared the mine-site for commencement of operational activities, which included hiring mine personnel and re-establishing the mill circuits. During operational closure, there were a number of upgrades made to improve recoveries at the mill. As one of the main employers in the area, the restart of operations has played a critical role for the local communities, and it was important to bring a local workforce back. We have trained and hired several female workers for important positions from underground heavy equipment operators to on surface operational jobs.
In line with our strategic plans the Company recently divested of a non-core property which positions management to focused on developing and building Avino by using one management team and maintaining competitive costs while planning to grow our output over the next several years.
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, and as we have made strides to propel the company to intermediate status, we are also extremely pleased to have eliminated our debt during the year and in addition ended the year with a strong balance sheet.
Last year we stated our objective of adopting an inclusive ESG strategy, and we are seeing great progress and are currently working towards making a stronger social responsibility impact. We will endeavor to set environmental and social performance objectives that are relevant and will result in tangible actions. Our goal is to respect our investors’ objectives and provide even greater attention to our communities and their needs. Through the acquisition of La Preciosa with Coeur Mining we have retained the services of several key people including but not limited to a dedicated senior level fulltime ESG Manager to inform local communities on related issues, and a senior level Geologist to oversee the exploration and development at La Preciosa.
Initial mine planning for La Preciosa is well underway with the target of starting surface operations in Q1 2023.
We continue to believe that the outlook for silver is positive, and that silver demand should see solid growth from 2022 onwards and will be driven by record silver industrial fabrication, increase in green technology, and investment demand for physical silver.
All of this bodes well for the silver miners and their shareholders – the best leverage to metals is owing producers, such as Avino.
I wanted to take this opportunity to express my heartful thank you to Gary Robertson, who has announced his retirement as Avino’s Chairman of the Board of Directors. He was appointed to the Board of Directors in August 2005, and as Chairman in June 2010. Gary has been a mentor and friend for many years, and his dedication to the Avino group has been steadfast. Gary’s leadership and collaboration on the board will be greatly missed, and I am deeply grateful for the important, meaningful, and significant contributions he has made. The entire team at Avino will miss his expertise, conversations and insights, and we wish Gary and his family all the best following his retirement.
As we enter our 54th year, we are driven by the highlighted events and developments of 2021 with an energetic approach and positive outlook. Avino’s longevity demonstrates a commitment to maintaining our mission, vision and values. We are developing a growth strategy from junior producer to intermediate status within 5 years! We thank you for your ongoing support and confidence as we continue to build shareholder value at Avino Silver & Gold Mines Ltd.
President and Chief Executive Officer