President's Message

President’s Message

Dear Fellow Shareholders,

Last year at this time I shared my enthusiasm as we delivered several key objectives for our strategic growth. Today, I am writing with even greater optimism as we were successful in achieving several significant milestones in 2023 as we continued our growth path with strong determination.

In 2023 we clarified our strategy for targeted growth within a 5-year time frame. Our belief is that we will accomplish this by remaining committed to the principles by which we operate, and by being diligent in our execution in alignment with our strategy.

Our focus is to mine responsibly with a firm commitment of support, knowledge and education for the communities close to our operations in Durango, Mexico. To strengthen our support, we added additional personnel to our CSR (Corporate Social Responsibility) team to continue to maintain strong ties and increase communications with all the nearby communities.

The Company’s value proposition is our project portfolio and our path for growth which includes the Avino Mine as a cornerstone asset and provides significant upside opportunity with La Preciosa, and the Oxide Tailings Project.

As we reflect on the milestones achieved and challenges of 2023, I am pleased to be able to share with you the progress and objectives during the year. Despite the fluctuation and uncertainties in the current resource market, Avino remains steadfast in its commitment to delivering value to our shareholders. Throughout 2023, we worked diligently to manage inflationary pressures and a rising cost environment, and we look to bring that same mindset into 2024. Controlling costs remains a key priority for Avino.

We required patience from our shareholders as we tirelessly negotiated with community groups for the development of La Preciosa. In 2022, we completed the acquisition of La Preciosa and added it to our project portfolio for several reasons, including that it hosts one of the largest undeveloped primary silver resources in Mexico and is located 19 kilometres from our Avino Mine production operations. This has an operating 2,500 tpd mill facility and all the necessary infrastructure to allow for mineral processing from La Preciosa.

Our patience was finally rewarded in early January 2024, when 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 moved one crucial step closer to putting La Preciosa into production. With the long-term land-use agreement in place, we were able to commence hauling of old surface stockpiles to our Avino mill. In addition, we submitted our application for the environmental permit to allow underground extraction. Pending regulatory approval, we will start developing the ramp down to our initial target of the high-grade Gloria vein. The La Preciosa mine represents a key pillar in our transformational growth strategy, as well as hosting a large endowment of silver and gold resources which we expect to process for years to come. We are delighted to work with our local community stakeholders to come to this amicable and cooperative result.

In 2023, we achieved several important milestones starting with an updated mineral resource estimate which included the Elena Tolosa (“ET”) deposit, the San Gonzalo deposit, and the Oxide Tailings deposit. Inaugural MREs (Mineral Resource Estimate) have also been included on the Guadalupe and La Potosina deposits. Together with the previously reported mineral resources on our new La Preciosa property, the updated consolidated mineral resources as of February 2023 totaled 368 million silver equivalent ounces in the measured, indicated, and inferred categories.

We completed our planned and budgeted deep drilling  program by completing 7,545 metres in 13 drill holes, which included the best intercept in Avino’s 56-year history, and Hole ET-23-09 returned values of  296 AgEq g/t over 57 metres true width, including 407 AgEq g/t over 37 metres true width and 2,866 AgEq g/t over 3.43 metres true width of mineralization, which certainly caused some excitement with our teams in Mexico and Vancouver! Our geologists are implementing recommendations made by our consulting structural geologists to further study the potential of the entire mineralization. The Company’s budgeted exploration and evaluation expenditures for 2024 will be focused on regional exploration and further understanding of the structural geology below the current Avino Mine production area, with no drilling planned.

Also, we advanced the Oxide Tailings Project to the Pre-Feasibility study level, and we were extremely pleased to have announced the completion of this study with positive economic results in early February 2024. Our mineral resources increased to total371 million silver equivalent ounces across all properties and for the first time in Avino’s history, we have proven and probable mineral reserves of 6.7 million tonnes at a silver and gold grade of 55 g/t and 0.47 g/t respectively, having successfully converted measured and indicated resources to mineral reserves on the Oxide Tailings.

Production from the Avino Mine was within internal production estimates for 2023. The estimate was between 2.4 and 2.7 million silver equivalent ounces, with actual production coming in at 2,415,232 silver equivalent ounces, which was slightly lower than 2022 full year production of 2,655,502 silver equivalent ounces. Production in 2023 was impacted by sequentially planned mining in lower grade areas, which also contributed to lower recovery rates. However, as we moved into higher grade mining blocks our production levels increased. In addition, we made improvements in the mechanical equipment of the mill and expect recovery rates to improve along with grades as we moved into higher grade zones in line with the projected mining sequence.  

With the rearrangement of our handling of tailings as a result of the completed dry-stack tailings facility, the prior method of wet tailings deposition is no longer in use. We have provided educational information and videos to the communities and further information on our tailings management system is also available on our corporate website.

We are committed to our communities, and one of the top priorities for Avino is to provide jobs with the goal of fostering generations of enthusiastic and dedicated ambassadors of Avino. Our ambition is to educate a younger population to their backyard, to encourage them to see the benefits of mining, and consider a future where they can have a mining career close to home.

We take the view that it is our responsibility to play a part in improving the lives of the people in our communities, and to be good corporate citizens. Making significant contributions to the communities through information technology and communication provides new opportunities and ways to improve the lives of our community members, and as part of this, Avino has donated dozens of Samsung Galaxy tablets and televisions to the schools this past year.

Currently, we provided 448 direct jobs which include the workers at the mine site and in our Durango offices. This number of jobs will typically translate to three times the number of indirect jobs for services, consultants and suppliers in the surrounding communities and the Durango area.

In August 2023, Avino, for the second year received the ESR Award “Empresa Socialmente Responsible ESR 2023”. This award 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 continues to view its social responsibility with importance and care for our communities. As I mentioned at the beginning of this letter, we are firmly committed to the communities, and we take our supportive role seriously.

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 to intermediate producer status. The fourth quarter of 2023 generated our highest quarterly revenue for the year, and we were able demonstrate positive movements on the cost side, which translated to improved operating margins from the Avino mine. Also in the fourth quarter, per ounce metrics improved, with cash costs and all-in sustaining cash costs decreasing compared to Q3 and Q2 and we continued to generate additional operating cash flow.

Most importantly, our working capital position improved significantly, with working capital up to around $10 million dollars at year end, almost doubling from where we were at the end of the second quarter.

The entire Avino team is working to achieve our growth plan and are committed to our shared culture of discipline, flexibility and teamwork while pursuing initiatives that truly make us stronger as a Company. It is our belief that Avino is undervalued and well positioned to capitalize on the current positive outlook for silver prices. The investment community is beginning to understand our intentions to progress to intermediate producer level with La Preciosa being an important and prominent addition to our project portfolio. In addition, we think that silver demand will continue to grow in 2024. During the last month alone both silver and gold have made significant upward moves. As is there is a record demand for silver industrial fabrication and a surge in investment demand for physical silver.

We are all looking forward to 2024 with the progress and achievements we are tracking. Several key milestones have already been delivered in the first quarter and include the aforementioned signed long-term land-use agreement with the communities near La Preciosa. Additionally, the completion of the Pre-Feasibility study on the Oxide Tailings Project, which provides mineral reserves and additional resources, contributes to a strong long-term outlook. La Preciosa is one of our near-term top priorities, and we will provide updates throughout the year with our progress.

Operationally, we are targeting a solid year going forward. We are well into our 56th year, and we are driven by the highlighted events and plans for transitional growth. Avino’s longevity demonstrates a commitment to maintaining our mission, vision and values. Our Clear Path for Transformational Growth guides us from junior producer to intermediate status within a target of 5 years! We thank you for your ongoing support and confidence as we continue to provide shareholder value at Avino Silver & Gold Mines Ltd.

President and Chief Executive Officer




Subscribe to our Email List

* indicates required