Q4 2023 Avino Silver & Gold Mines Ltd Earnings Call
Unknown Executive: Thanks for watching! Thank you for standing by.
Thank you for standing by this is the conference operator, welcome to the Avino silver and gold mines fourth quarter and full year 2023 conference call and webcast. As a reminder, all participants are in listen only mode and the conference is being recorded after the presentation there'll be an opportunity to ask questions to join.
Operator: This is the conference operator. Welcome to the Avino Silver and Gold Mines fourth quarter and full year 2023 conference call and webcast. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad.
The question queue. You May Press Star then one on your telephone keypad should you need assistance during the conference call you May signal, an operator by pressing star Zero I would now like to turn the conference over to Jennifer North head of Investor Relations. Please go ahead.
Operator: Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Jennifer North, Head of Investor Relations. Please go ahead.
Sure.
Jennifer North: Thank you, Operator. Good morning, everyone, and welcome to the Avino Silver and Goldmines Limited 4th Quarter and Year-End 2023 Financial Results Conference Call and Webcast. To join this webcast and conference call, there is a link in our news release dated March 14, 2024, and in our news release of yesterday's date, which can be found on our website under News 2024. In addition, a link can be found on the homepage of the Avino website.
Thank you operator, good morning, everyone and welcome to the Avino Silver and gold mines limited fourth quarter and year end 2023 financial results conference call and webcast to join this webcast and conference call. There is a link in our news release dated March 14th 2024, and then our news release of yesterday's date, which can be found on our website under news 2010.
Four in addition, a link can be found on the homepage of <unk> website.
Jennifer North: On the call today, we have the company's President and CEO, David Wolfin, our Chief Financial Officer, Nathan Harte, our Chief Operating Officer, Carlos Rodriguez, and our VP of Technical Services, Peter Latta. Before we get started, please note that certain statements made today on this call by the management team may include forward-looking information within the meaning of applicable securities laws. Forward-looking statements are subject to known and unknown risks, uncertainties, and other factors that may cause actual results to differ.
On the call today, we have the Companys, President and CEO, David Wilson, Our Chief Financial Officer, Nathan Harte, Our Chief operating Officer, Carlos Rodriguez, and our VP Technical services Peter Latta.
Before we get started please note that certain statements made today on this call by the management team May include forward looking information within the meaning of applicable securities laws forward looking statements are subject to known and unknown risks uncertainties and other factors that may cause the actual results to be materially different than those expressed by or implied by such forward looking statements.
Jennifer North: The company does not intend to and does not assume any obligation to update such forward-looking statements or information, other than as required by applicable law. For more information, we refer you to our detailed cautionary note in the presentation related to this call or to our press release of yesterday's date. Please note that the full financial statements and MD&A are now available on our website under the Investors tab. Then click on Finance.
Okay.
The company does not intend to and doesn't assume any obligation to update such forward looking statements or information other than as required by applicable law.
More information, we refer you to our detailed cautionary note in the presentation related to this call or on our press release of yesterday's date.
Please note that the full financial statements and MD&A are now available on our website under the investors tab, then click on financial statements as well the full statements are available on our venous profile on SEDAR and on Edgar.
Jennifer North: The full financial statements, as well as the full statements, are available on Avino's profile, on CDAR+, and on EDGAR. I would like to remind everyone that this conference call is being recorded and will be available for replay later today. Replay information and the presentation slides from this conference call and webcast will be available on our website. Also, please note that all figures stated are in U.S. dollars unless otherwise noted. Thank you. I will now hand over the call to Avino's President and CEO, David Wolfin. David?
I would like to remind everyone that this conference call is being recorded and will be available for replay later today replay information and the presentation slides from this conference call and webcast will be available on our website.
Also please note that all figures are stated are in U S dollars unless otherwise noted. Thank you I will now hand over the call to avino as President and CEO, David Hult David.
David Wolfin: Thank you, Jen. Good morning, everyone, and welcome to Avino's Q4 year-end 2023 financial results conference call and webcast. We will cover the highlights of our financial and operating performance, and then we will go over the work that we are currently performing, followed by Q&A. I will start with the discussion of operations, and then I will turn it over to Nathan Hart, Avino's CFO, to discuss the financial performance for the period. And then Jennifer Norris will be our moderator.
David Wolfin: Thanks, Jen good morning, everyone and welcome to <unk> Q4 year end.
David Wolfin: 2023 financial results conference call and webcast, we will cover the highlights of our financial and operating performance and then we will go over.
David Wolfin: Over the work that we are currently performing followed by Q&A I will start with the discussion on operations and then I will turn it over to Nathan Harte <unk> CFO to discuss the financial performance for the period and then Jennifer North our head of Investor Relations will present, an overview of Q4 ESG.
David Wolfin: And then, as we move north, our head of investor relations will present an overview of Q4 ESG initiatives. Please turn to slide five as we go through the production results. Our Q4 and year-end production results were released in mid-January and are as follows. Silver equivalent production was 558,000 ounces, and silver production was 225,000 ounces.
David Wolfin: Initiatives.
David Wolfin: Please turn to slide five as we go through the production results.
David Wolfin: Our Q4 and year end production results.
David Wolfin: Were released in mid January and are as follows silver equivalent production was 558000 silver production was 225000 ounces.
David Wolfin: Copper production was 1.3 million pounds, and gold production was 1,400 ounces. Mill throughput was just under 144,000 tons.
Nathan Harte: Copper production was $1 3 billion pounds gold production and 1400 ounces mill throughput was just under 144000 tons.
David Wolfin: Yes.
David Wolfin: For the full year, our silver equivalent production reached a total of 2.4 million ounces of silver equivalent. Although the grades and recovery rates were slightly lower than in 2022, we did see positive increases as we moved into other blocks at the mines. We have made improvements in the mechanical equipment of the mill and expect recovery rates to improve along with grades as we move into higher grade zones in line with the projected mining sequence. December production saw a noticeable increase in grade and recovery, and the trend has continued into Q1 2024. For 2024, approximately 700,000 to 750,000 tons of ore are planned for mill processing and will be sourced from both the Avino mine and stockpiles from La Preciosa.
David Wolfin: For the full year, our silver equivalent production reached a total of $2 4 million ounces of silver equivalent, although the grades and recovery rates were slightly lower than 2022, we did see positive increases as we moved into other blocks at the mine.
David Wolfin: We have made improvements in the mechanical equipment of the mill and expect recovery rates to improve along with grades as we move into higher grade zones in line with the projected mining sequence.
David Wolfin: December production saw a noticeable increase in grade and recovery.
David Wolfin: And that trend has continued into Q1 2024.
David Wolfin: For 2020 for approximately 700 to 750000 tons are planned for mill processing and won't be sourced from both the Avino mine stockpiles from our press. He also.
David Wolfin: Based on the current metal prices, the company expects to produce between 2.5 and 2.8 million ounces of silver equivalent. Our five-year growth plan takes us from production of 2.5 to 2.8 million ounces of silver equivalent in 2024 to between 8 and 10 million ounces of silver equivalent by 2029. Continuing on to slide 6, we will take a look at additional operational highlights. The total drilling completed in 2023 included 7,545 meters and 13 drill holes. A particular note was our results reported in July, where we announced the best drill intercept in company history. Hole ET2309 highlighted 296 grams of silver equivalent over 57 meters of true width, including 407 grams of silver equivalent over 37 meters of true width and 2,866. Silver equivalent grams over 3.43 meters is the true width of mineralization.
David Wolfin: Based on the current metal prices the company expects to produce between two five and $2 8 million ounces of silver equivalent.
David Wolfin: Our five year growth plan takes us from production of two five to 2.8 million ounces of silver equivalent in 2024 to between eight and 10 million ounces of silver equivalent by 2029.
David Wolfin: Continuing on to slide six we will take a look at additional operational highlights. The total drilling completed in 2023 included 7545 meters and 13 drill holes.
David Wolfin: A particular note was our results reported in July where we announced the best drill intercepts.
David Wolfin: Best drill intercept in company history.
David Wolfin: Paul E T 20, 309 highlighted.
David Wolfin: 296 grams.
David Wolfin: Grams of silver equivalent over 57 meters of true width, including 407.
David Wolfin: Grams of silver equivalent over 37 meters of true width, and 20 866 silver.
David Wolfin: Silver equivalent grams over 343 meters true width of mineralization.
David Wolfin: The company's budgeted exploration and evaluation expenditures for 2024 will be focused on regional exploration and further understanding of structural geology below the current Avino mine production area with no drilling plant. The dry stack facility is fully operational and is currently transporting the press dry tailings to the drilling plant. The project is currently in the process of developing a new drill system for the Avino open pit area. Moving on to slide seven, we provide an update on our recent milestones. Firstly, the pre-feasibility study on the Oxide tailings project was completed and released in early February. This was an important key milestone for Avino on its path to growth. Additional highlights include a net present value of 98 million U.S. pre-tax and 61 million post-tax at a 5% discount rate and an IRR of 35% pre-tax and 26% post-tax. The study also highlighted proven and probable mineral reserves, a first in Avino's long history of 6.7 million tons of silver and gold grades of 55 grams per ton and 0.47 grams per ton, respectively.
David Wolfin: The company budgeted exploration and evaluation expenditures for 'twenty 'twenty four will be focused on regional exploration and further understanding of structural geology below the current mine production.
David Wolfin: <unk> area with no drilling plant.
David Wolfin: So dry stack facility is fully operational and is currently transporting the press dry tailings to the disk used avino open pit area.
David Wolfin: Moving on to slide seven we provide an update on our recent milestones.
David Wolfin: Firstly, the pre feasibility study on the oxide tailings project was completed and released in early February.
David Wolfin: This was an important key milestone for avino on a path for growth.
David Wolfin: Additional highlights include a net present value of 98 million U S pre tax and 61 million post tax at a 5% discount rate.
David Wolfin: And then I R R, a 35% pretax and 26% post tax.
David Wolfin: The study also highlighted proven and probable mineral reserves at first and nobody knows long history of $6 7 million tonnes of silver and gold grades at 55 grams per tonne.
David Wolfin: 0.47 grams per tonne respectively.
David Wolfin: The Oxide tailings project is considered one of our three catalysts for growth as the future gold and silver production asset. Next steps include community engagement and environmental impact studies. However, La Preciosa is our absolute top priority, and secondly, after the end of the year, we are extremely pleased to announce that we have signed a long-term land use agreement with the local community for the development of La Preciosa in Durango, Mexico.
David Wolfin: The oxide tailings project is considered one of our three catalysts for growth as the future gold and silver production asset.
David Wolfin: Next steps include community engagement and environmental impact studies. However, the press user is our absolute top priority.
David Wolfin: And secondly, after the end of the year. We are extremely pleased to announce that we had signed a long term land use agreement with the local community for the development of La Presse, you also in Durango, Mexico.
David Wolfin: This achievement was pivotal for us and signals the start of a new era for Avino and the communities adjacent to the mine. And we are on a crucial step closer to putting La Preciosa into production. We were able to commence hauling of old surface stockpiles to our mill at the Avino mine for processing.
David Wolfin: This achievement was pivotal for us and signals the start of a new era for avino and the community is adjacent to the mine.
David Wolfin: And we are.
David Wolfin: A crucial step closer to putting la presse seals are into production.
David Wolfin: We were able to commence hauling of old surface stockpiles to our mill at the Avino mine for processing the La Presse yields of mine represents a key pillar in our transformational growth strategy as well as hosting a large and download of silver and gold, which we expect to process for the years to come.
David Wolfin: The La Preciosa mine represents a key pillar in our transformational growth strategy, as well as hosting a large endowment of silver and gold, which we expect to process for the years to come. Capital cost for La Preciosa in 2024 is expected to be between $3 to $4 million U.S., and will include surface works and equipment procurement intended for the first phase of mine development for the Gloria and Abundancia veins. Avino also has the mining equipment necessary to commence operations at La Preciosa. The application for the environmental permit has been submitted by the company to the relevant authorities. A further permit will be submitted shortly after receipt of the environmental permit, which is required to commence construction of the portal, haulage ramp, and mining of the Glorian Abadantia veins.
David Wolfin: Little cost for La Presse Hills in 'twenty 'twenty four is expected to be between three to 4 million U S. And will include surface works and equipment procurement intended for the first phase of mine development for the glory and up and dancing of veins.
David Wolfin: You know also has mining equipment necessary to commence operations at the press Yosef.
David Wolfin: The application for the environmental permit has been submitted by the company to the relevant authorities are further permit will be submitted shortly after receipt of the environmental permit which is required to commence construction of the portal haulage ramp and mining of the glory in <unk>.
David Wolfin: Avino anticipates receiving these permits sometime in 2024. A press release dated February 28th is available on our website and includes a full list of updates. At this time, I will hand it over to Nathan Harte, Avino's CFO, to present Avino's Q4 and year-end financial results.
David Wolfin: Avino anticipates, receiving these permits sometime in 2024.
David Wolfin: A press release dated February 28 is available on our website and includes a full list of updates.
David Wolfin: At this time I will hand, it over to Nathan Harte <unk> CFO to present, the Venus Q4 and year end financial results Nathan.
Nathan Harte: Thank you, David. It's my pleasure to be on the call, and I would like to welcome everyone who has joined us and is viewing our presentation today. Turning to slide 8 now for a summary of the key financial highlights for the fourth quarter and full year 2023. The fourth quarter generated our highest quarterly revenue for the year, and we were able to demonstrate positive movements on the cost side, which translated to improved operating margins from the Avino mine. We had positive net income of half a million, and adjusted earnings came in at two million or two cents per share, both improved over previous quarters for 2023. Per ounce metrics also 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 from operations.
Nathan Harte: Thank you David it's my pleasure to be on the call and I would like to welcome everyone, who has joined US and is viewing our presentation today.
Nathan Harte: Turning to slide eight now for a summary of the key financial highlights for the fourth quarter and full year 2023.
Nathan Harte: The fourth quarter generated our highest quarterly revenue for the year and we were able to demonstrate positive movements on the cost side, which translated to improved operating margins from the Avino mine.
Nathan Harte: We had positive net income of half a million and adjusted earnings came in at $2 million or two cents per share both improved over previous quarters for 2023.
Nathan Harte: Per.
Her ounce metrics also improved with cash costs and all in sustaining cash costs decreasing compared to Q3, and Q2 and we continue to generate additional operating cash cash flow from operations.
Nathan Harte: Most importantly, our working capital position has improved significantly, with working capital up to around $10 million at the end of the year, almost doubling from where we were at the end of the second quarter. On slide 9, I'll walk you through the details of our financial results, some of which I did touch on in the highlights. Revenues came in at $12.5 million.
Nathan Harte: Most.
Our working capital position has improved significantly with working capital up to around $10 million at the end of the year almost doubling from where we were at the end of the second quarter.
Speaker Change: Coming to slide nine I'll walk you through the details of our financial results some of which I did touch on in the Highlands.
Speaker Change: Revenues came in at $12 5 million. This was down from Q4 2022 record of $14 6 million. However, as mentioned it was the highest quarterly revenues for this current year revenues.
Nathan Harte: This was down from our Q4 2022 record of $14.6 million. However, as mentioned, it was the highest quarterly revenue for this current year. Revenues for the year were just shy of $44 million, very similar to 2020. Avino generated mine operating income of $2.6 million for the quarter, including non-cash, depreciation, and depletion, compared to $4.4 million in Q4 of 2022. The decrease is a result of lower revenues as well as a strong pace of the US dollar rate when compared to the fourth quarter of 2020. On a cash basis, mine operating income in the current quarter was $3.6 million and represented a 29% cash operating margin. On the year, we generated $7.8 million in mine operating income, which translated to $11 million on a cash basis, for a cash operating margin of 25% for the full year 2020. Avino reported net income after taxes of $0.6 million for Q4 compared to $1.3 million in Q4 2022. Annual net income after taxes was half a million compared to 3.1 million for the full year 2020.
Speaker Change: Revenues on the year, we're just shy of 44 million very similar to 2022.
Speaker Change: Avino generated mine operating income of $2 6 million for the quarter, including noncash depreciation and depletion compared to $4 4 million in Q4 of 2022.
Speaker Change: The decrease is a result of lower revenues as well as the strong peso to U S dollar rate when compared to fourth quarter in 2022.
Speaker Change: On a cash basis mine operating income in the current quarter was $3 6 million and represented a 29% cash operating margin.
Speaker Change: On the year, we generated $7 8 million in mine operating income, which translated to $11 million on a cash basis for a cash operating margin of 25% for the full year 2023.
Speaker Change: Avino reported net income after taxes of <unk> 6 million for Q4 compared to $1 3 million in Q4 2022.
Speaker Change: Annual net income after taxes was half a million dollars compared to $3 1 million for the full year 2022.
Nathan Harte: Earnings per share came flat for both the quarter and the year, decreasing from $0.01 in Q4 and $0.03 in the full year, both for 2022. IPTA was $1.1 million for the quarter, and adjusted earnings were $2 million, both showing increases from Q2 and Q3 2023, albeit lower than the fourth quarter in 2020. For the full year, EBITDA was $2.5 million, down from $10 million in 2020. Adjusted earnings paint a similar picture with improvements in the quarter coming to the rest of 2023 at $0.02 per share generating Q4 and $4.6 million, or $0.04 per share generated on the year. Cash flow from operations for Q4 was $2.2 million before working capital adjustments, compared to $3.1 million in Q4 2020. For the full year, $6.3 million was generated from operations before working capital adjustments compared to $10.8 million in 2020.
Speaker Change: Earnings per share came flat for both the quarter and the year decreasing from one center in Q4, and three and the full year both for 2022.
Speaker Change: EBITDA was 1.1 million for the quarter and adjusted earnings was $2 million, both showing increases from Q2, and Q3 2023, albeit lower than the fourth quarter in 2022.
Speaker Change: For the full year EBITDA was $2 5 million down from $10 million in 2022.
Speaker Change: Adjusted earnings paints, a similar picture with improvements on the quarter come into the rest of 2023 and <unk> per share generated in Q4, and $4 6 million or four cents per share generated on the year.
Speaker Change: Cash flow from operations for Q4 was $2 $2 million before working capital adjustments compared to $3 1 million in Q4 2022.
Speaker Change: On the full year $6 3 million was generated from operations before working capital adjustments compared to $10 8 million in 2022.
Nathan Harte: Here on slide 10, you can see our cash costs for silver equivalent payable ounce for the fourth quarter did show improvement, coming in at $15, with the average for the full year being $15.61. This is a modest decrease from the $16.90 we saw in the third quarter and the $16.33 in the second quarter, with signs of stabilization material. All unsustaining cash costs per silver equivalent payable ounce followed a similar trend, coming in at $21.67 and the full year being $21.87.
Speaker Change: Here on Slide 10, you can see our cash cost per silver equivalent payable ounce for the fourth quarter did show improvement coming in at $15 with the average on the full year being 15 61.
Speaker Change: This is a modest decrease from the $60 90, we saw in the third quarter and the 16 33 in the second quarter with signs of stabilization materializing.
Speaker Change: All in sustaining cash cost per silver equivalent payable ounce, followed a similar trend coming in at 21, 67, and the full year being 21 87 per ounce again, the fourth quarter improved on higher costs seen in second and third quarters.
Nathan Harte: Again, the fourth quarter improved on higher costs seen in the second and third quarters. The Mexican peso appreciated by 15 to 20% when comparing the 2023 to the 2022 average. While we have seen some stabilization on this front, this has had an impact on our costs throughout 2023 as the majority of our expenditures are incurred in Mexico with local suppliers, employees, and contractors. As I highlighted on our third-quarter call, we have put a number of measures in place for cost reduction, including lowering haulage rates to match mill throughput, as we have generated a large ore stockpile over the last few months. As well, we have made certain administrative and auxiliary personnel redundant.
Speaker Change: The Mexican peso has appreciated by 15% to 20% when comparing the 2023 to the 2022 average.
Speaker Change: While we've seen some stabilization on this front. This has had an impact on our costs throughout 2023 as the majority of our expenditures are incurred in Mexico with local suppliers employees and contractors.
Speaker Change: As I highlighted on our third quarter call. We've put a number of measures in place for cost reduction, including lowering haulage rates to match mill throughput as we have generated a large ore stockpile over the last few months.
Speaker Change: As well, we have made certain administrative and exhilarating personal reductions.
Nathan Harte: This had a positive impact on our fourth quarter results, and we expect that to continue into 2020. On slide 11, you can see our cash cost per ton processed for the quarter came in above the yearly average at $61. All unsustaining costs per ton processed were up as well for the quarter, coming in above the yearly average.
Speaker Change: This has had a positive impact on our fourth quarter results and we expect that to continue into 2024.
Speaker Change: Coming to slide 11, you can see our cash cost per ton processed for the quarter came in above the yearly average at $61 per ton.
Speaker Change: All in sustaining cost per tonne processed was up as well for the quarter coming in above the yearly average.
Nathan Harte: The increases on a per ton milled basis are primarily a result of higher mining and haulage rates, as we did mine 15% more tons than we milled in the fourth quarter. In the first quarter of 2024, we have slowed mining rates to match the mill and have seen cost savings as a result on a per ton basis as well as overall. Our expectation is that unit costs will continue to be lower in Q1 2024 and moving forward for the rest of the year. At this point, I will now turn it over to Jennifer North, Head of Investor Relations, for an overview of our Q4 ESG and CSRN. Thank you, Nathan.
Speaker Change: Increases on a per ton milled basis are primarily a result of higher mining and haulage rates as we did mind, 15% more tons than we milled in the fourth quarter.
Speaker Change: In the first quarter of 'twenty 'twenty four we have slowed mining rates to match the mill and have seen cost savings as a result on a per ton basis as well as overall.
Speaker Change: Our expectation is that unit costs will continue to be lower in Q1, 2018, four and moving forward for the rest of the year.
Speaker Change: At this point I will now turn it over to Jennifer North head of Investor Relations for an overview of our Q4 ESG N CSR initiatives.
Jennifer North: Thank you Nathan moving on to Slide 12, we have listened to ESG CSR initiatives that were completed in the fourth quarter of 2023, we added members to CSR team in Durango during the third corner and since then and then her team assembled to improve and strengthen their relationship with our neighboring communities and with each of our <unk>.
Jennifer North: Moving on to slide 12, we have listed the ESG CSR initiatives that were completed in the fourth quarter of 2023. We added members to the CSR team in Durango during the third quarter, and since then, Anna and her team have worked together to improve and strengthen the relationship with our neighboring communities and with each of our stakeholders. Avino follows ESG standards and the United Nations Sustainable Development Goals, the SDGs, which work together to address the most pressing challenges facing the world.
Jennifer North: Owners and.
Jennifer North: Dino policy ESG standards, and the United Nations Sustainable development goals. The S. D cheese that work together to address the most pressing challenges facing the world one of our major objectives is to make a positive impact on our communities and society.
Jennifer North: One of our major objectives is to make a positive impact on our communities and society. Maintaining a friendly dialogue is key to learning, improving, and maintaining strong relationships and developing trust as responsible corporate citizens. During Q4, the CSR team focused on the areas of education, infrastructure, and environment, and following the guidelines of the SDG, the team was able to accomplish the following. First, they held meetings with government offices, mining chambers and associations, and local AHITO authorities, keeping the lines of communication open. Moving on to slide 13, you will see that the company delivered TV screens and tablets to the community schools for educational purposes and also provided road maintenance and repairs. For the benefit of the women in the communities and to help develop an economic benefit for the family, workshops in wreath-making, food preparation, and other handiwork were held that culminated in a Christmas bazaar in mid-December, where the women then sold their handmade crafts and food.
Jennifer North: Training and friendly dialogue is key to learning improving and maintaining strong relationships and developing trust as a responsible corporate citizens.
Jennifer North: During Q4, the CSR team focused in the areas of education infrastructure and environment and following the guidelines of the S. D. G. The team was able to accomplish the following.
Firstly, they held meetings with government offices mining chambers, and associations and local mojito authorities, keeping the lines of communication open.
Jennifer North: Moving on to Slide 13, you will see that the company delivered TV screens and tablets to the community school for educational purposes, and also provided road maintenance and repairs for.
Jennifer North: For the benefit of the women in our communities and to help develop economic benefit for the family workshops, and ratemaking food preparation and other handiwork were held that culminated in a Christmas bizarre in mid December when the women then sell their hand pass their handmade crafts and food.
Jennifer North: For the benefit of the environment, Avino delivered trees, recycled containers, took water samples, and provided health and well-being education in the communities. These initiatives aligned with the SDG guidelines of partnerships for the goals, peace, justice, and strong institutions, quality education, industry, innovation, and infrastructure, no poverty, zero hunger, life on land, and clean water sanitation. Corporate office personnel visited the communities in November, December, and most recently in January, and will be there again in April, reiterating our commitment to social responsibility. One of the top priorities for Avino is to provide jobs for those in the surrounding communities with the goal of fostering generations of enthusiastic and dedicated ambassadors of Avino. Our ambition is to educate a younger population about their backyard, to encourage them to see the benefits of mining and dream of a better future for the community.
Jennifer North: For the benefit of the environment, and peanuts and living trees recycle containers took water samples and provided health and wellbeing education in the communities.
Jennifer North: These initiatives aligned with the S. T G guidelines as partnerships critical piece Justice and strong institutions quality education industry innovation and infrastructure no poverty zero hunger life on land and clean water sanitation.
Jennifer North: Corporate office personnel visited the communities in November December and most recently in January and will be there again in April reiterating our commitment to social responsibility.
Jennifer North: One of the top priorities for Avino is Japan, I jobs to those in the surrounding communities with the goal of fostering generations have enthusiastic and dedicated ambassadors of the Zeno. Our ambition is to educate a younger population to their backyard to encourage them to see the benefits of mining and Jim have a feature where they can have a real career close to home.
Jennifer North: We want to create a future where they can have a real career close to home. Currently, we have 448 direct jobs, which includes 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. I will now turn it back over to David to continue with the presentation, providing our plans for the coming quarter. David?
Jennifer North: Currently we have 448 direct jobs, which includes the workers at the mine site and then our Durango offices. This number of jobs when typically translate to three times the number of indirect jobs for services consultants and suppliers and the surrounding communities and then triangle area.
Jennifer North: I will now turn it back over to David to continue on with the presentation, providing our plans for the coming quarter David.
David Wolfin: Thanks Jen. Moving on to slide 14. We are well into the first quarter of 2024, and our current focus is moving forward with our plans for the Gloria and Abundancia veins at La Preciosa, with community engagement ongoing as we ready ourselves to begin development work, and lastly, our goal is to replenish the treasury through cash flow generation from the Avino mine as we look to future development of our 100% owned La Preciosa property. As shown on slide 15, we want to We have three assets within a 20-kilometer footprint, totaling hundreds of millions of silver-equivalent mineral resources in the same area. We have an operating mill complex which is currently producing from our Avino mine. Additionally, access to water, power, and tailing storage. All ingredients to grow organically without major capital investment required that we would expect if we were starting from scratch.
David: Thanks, Jan moving to slide 14.
David: We were well into the first quarter of 2024, and our current focus is moving forward with their plans for the Gloria and oven dancy of veins look dressy also with acute community engagement ongoing as we ready ourselves to begin development work.
David: And lastly, our goal is to replenish the treasury through cash flow generation from the Avino mine as we look to future development of our 100% own La Presse Yosef property.
David: As shown on slide 15, we want to reemphasize that the company's plans for growth we.
We have three assets within a.
David: 20 kilometer footprint totaling hundreds of millions of silver equivalent mineral resources.
David: On the same area.
We have an operating mill complex, which is currently producing from our vino mine. Additionally, access to water power and tailing storage all ingredients to grow organically without major capital investment required that would.
David: Expect if we were starting from scratch as you can see on the slide our goal is to scale up by 2029 through production from these three assets.
David Wolfin: As you can see on the slide, our goal is to scale up by 2029 through production from these three assets. We would now like to move the call to the question and answer portion. Operator?
Speaker Change: We would now like to move the call to question and answer portion operator.
Operator: Thank you. We will now begin the question and answer session. To join the question queue, you may press star, then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any key.
Speaker Change: Thank you we will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad, you'll hear a tone acknowledging your request. If you are using a speakerphone. Please pick up your handset before pressing any keys to withdraw your question. Please press Star then two.
Jacob G. Sekelsky: To withdraw your question, please press star, then two. We will pause for a moment as callers join the queue. Our first question comes from Jake Sekelsky of Alliance Global Partners. Please go ahead. Hey, David, Nathan, and the team. Thanks for taking my question.
Speaker Change: We will pause for a moment as callers join the queue.
Speaker Change: Our first question comes from Jake Zukowski of Alliance Global Partners. Please go ahead.
Jake Zukowski: Hey, David Nathan and thanks for taking my questions.
Jake Zukowski: Hi, Jake.
Nathan So you mentioned the impact of a stronger peso.
Nathan Harte: Nathan, you mentioned the impact of a stronger pay-so during 2023. Can you just touch on your exposure here going forward and maybe what FX rate you're using in this year's budget? Yeah, it's a fair question.
Jake Zukowski: During 2023 can you just touch on your exposure here going forward and maybe what FX rate you're using in this year's budget.
Jake Zukowski: Yeah. It's a fair question I think given what we've seen throughout 2023, obviously, you're seeing some stabilization in the peso, although some recent little little movements or little or movements compared to what we saw last year.
Nathan Harte: I think given what we've seen throughout 2023, obviously, we've seen some stabilization in the PACEW, although some recent little movements or littler movements compared to what we saw last year. We're forecasting based on and using our budgeting for 2024. We were hoping for a bit better, and it is an election year in Mexico, but we've adjusted our expectations and we're using fairly close to what the current rates are and making sure that we're, and David Levy. Okay, that's helpful. And then just on timing a lot, Cressio, so can you maybe walk us through the ramp up and timeline to processing fresh material once those environmental permits are in hand, and maybe just on the longer term throughput target? and on left as well.
Jake Zukowski: We're forecasting basically and using our.
Jake Zukowski: Budgeting for 'twenty 'twenty, four we were hoping for a bit better than it is an election year in Mexico, but we've adjusted our expectations and we're using fairly close to what is the current rates and making sure that we're.
Jake Zukowski: Protected and ready to deal with the impact of the peso given all of the operations in Mexico.
Okay. That's helpful.
Jake Zukowski: And then just on the timing of lot Chrusciel. So can you maybe walk us through the ramp up and in timeline, perhaps has been crushed material once those environmental permits are in hand.
Jake Zukowski: And maybe just on the longer term throughput.
Jake Zukowski: Target.
Speaker Change: Yes, yes, yes, sorry, Jacob quiet, yes, its a little muffled.
David Wolfin: Sorry Jake, you're coming in a little quiet. Yeah, it's a little muffled. It looks like, I mean, we're hoping if all goes well with the permitting and the ramp going to level two of Gloria and Appendantia, possibly by the end of the year, we could have fresh ore coming out of the mine. So we're very optimistic, and then you can see in the graph, you know, the contribution that we're expecting going forward. Jake, just to comment on that as well, we are processing, and we will be processing stockpiles that we've moved. So there is a substantial amount of material that we've moved from La Preciosa to Avino, and we've been running test work on that, and we will be processing that, hopefully, in Q2. So that's really exciting from our standpoint because we get a chance to run the actual material through the mill, see how it performs, and get some revenue from it. Yeah, and as we mentioned in our 2024 outlook, we actually are not, and we have not budgeted for any fresh production from La Preciosa.
Jake Zukowski: It looks like I mean.
Speaker Change: We're hoping if all goes well.
Speaker Change: The permitting.
Speaker Change: And the ramp going to.
Speaker Change: Loving to glory.
Speaker Change: Yes, possibly by the end of the year, we could have fresh ore coming out of the mine. So we're very optimistic and.
Speaker Change: And then you can see in the and.
Speaker Change: In the graph you know the contribution that we're expecting going forward.
Speaker Change: Oh, Yeah, Hey, Greg just a comment on that as well we are processing, we will be processing stockpiles that we've moved so there is a substantial amount of material that we've that we've moved from la Presse, Joseph to Avino, and we'd been running test work on that and we will be processing that.
Greg: Hopefully in in Q2, so that's really exciting from from our standpoint, because we get a chance to run the actual material through the mill and see how it performs and get some revenue from it.
Apple: Apple Yeah, and as we mentioned in our in our 'twenty 'twenty four outlook. We actually are not we have not budgeted for any fresh production from leprosy ulcer were hopeful of it but we've just budgeted for.
David Wolfin: We're hopeful of that, but we've just budgeted for processing of the stockpiles. Okay, so anything that comes in for 24 as far as fresh material would be incremental to what you guys are looking at right now. Yeah, that's fair to say.
Apple: Processing of the stockpiles.
Apple: Okay. So anything that comes on for 24 as far as fresh material would be incremental.
Speaker Change: So what you guys are looking at right now yeah, that's fair to say.
Jacob G. Sekelsky: Okay, very good. That's all for me. Thank you. Thank you. Our next question comes from Heiko Ihle of HC Wainwright. Please go ahead. Hey, Derek, can you hear me all right?
Speaker Change: Okay very good that's all for me Thanks Sam.
Sam: Thank you.
Sam: Our next question comes from Heiko Ely of H C. Wainwright. Please go ahead.
Heiko Ely: Hey, there can you hear me all right.
Heiko Felix Ihle: Yeah, you've been doing good. Thank you. Perfect. Thanks for taking my questions and also thanks to Jen for the ESG overview. I think it often gets forgotten how many indirect jobs mining provides to local communities across the globe. We were doing a little bit of longer-term cost analysis on a ton basis today. I mean, costs in the queue are trending lower. I want to see if you have a bit of guidance in regards to the longer-term estimates for costs and how sticky you think this current pricing is in 2025 and beyond. In other words, if you think how much more you can gain from cost advantages in the long run, Yeah, I think, Hegel, that's probably a question for me. Are you talking about metal prices, specifically, or something like foreign exchange rates or inflation, or is it all the above? All in all, sustaining.
Heiko Ely: Yeah I didn't get.
Heiko Ely: Yeah.
Heiko Ely: Perfect. Thanks for taking my questions and also thanks to Jim for the ESG overview I think it's it often gets forgotten how many indirect jobs mining provides to their local communities across the globe quite frankly.
Heiko Ely: We were doing a little bit of longer term cost analysis, although on a ton basis today, I mean cost mchugh trending lower wanted to see if you have a bit of guidance in regards to the Walmart term estimates for costs and how you think this current pricing.
Heiko Ely: In 2025 and beyond in other words, if you'd think about how much more you can gain from cost advantages in the longer term.
Yeah, I think that's probably a question for me are you talking about metal prices, we are especially here like the foreign exchange rates or inflation or is it all all of the above all in sustaining yeah.
Nathan Harte: I meant all of the above, but if you're able and willing to break it down by line item, that'd be even better. I mean we could maybe do that one offline but I think in general terms you know we're moving forward with the cost that we're seeing now from you know from our suppliers for labor etc from the impact of the peso we're hopeful for improvements we think you know the peso will probably have some some fluctuations throughout the year again I mentioned being an election year then offset maybe the near shoring going on with Mexico but from a long-term cost perspective I think you know, La Preciosa, we expect to change our cost profile and I think we've made that message pretty clear to the market that once we're able to get in and develop and start production mining, there's going to be some economies of scale realized on the cost front. It's a bit tough to look further beyond 25, 26.
Speaker Change: All of the above but if you if you are able and willing to break it down by a light item that's even better.
Speaker Change: I mean, we could maybe do that one offline, but I think in general terms.
Speaker Change: You know, where we're moving forward with the costs that we're seeing now from a you know from our suppliers for labor et cetera from the impact of the peso.
Speaker Change: We're hopeful for improvements we think you know the peso will probably have some some fluctuations throughout the year again, I mentioned being an election year, then offset maybe.
Speaker Change: The near shoring going on with Mexico.
Speaker Change: But from a long term cost perspective, I think left.
Speaker Change: <unk>, we expect to change our cost profile and I think we've made that message pretty clear to the market that once we're able to get in and develop and start production mining there is theres going to be some economies of scale realized on the cost front.
Speaker Change: It's a bit tough to look fair.
Speaker Change: Further beyond 'twenty five 'twenty six I think we do provide some some rough.
Nathan Harte: I think we do provide some rough estimates, and So, we're going to see what it looks like in our presentation of where we think it's going to go. But, we do expect costs from a consolidated basis, on a per ounce basis, to come down over the next two, three years for sure, especially as we move and mix La Preciosa into our mill. Yeah, if you look at the grades when we do the bulk sample, you'll see the grades are probably 20% higher than what we're mining now. I mean, we won't be doubling the tonnage, but there'll be a mix in there going forward. So, expect that to lower our costs. Yeah, as David mentions, we've got this higher-grade silver mine that's going to come online fairly quickly here, and mixing that into our current mill feed mix, that should help on the cost side as well as the ounce production side. Very comprehensive answers, thank you.
Speaker Change: Looks in our presentation.
Speaker Change: Where we think it's going to go.
Speaker Change: But we do expect costs from a consolidated basis on a per ounce basis to come down over the next two or three years for sure.
Speaker Change: Especially as we move in mixed slept prescious into our mill Yeah. If you look at the.
Speaker Change: Great well when we do the bulk sample you'll see the grades are.
Speaker Change: Only 20% higher than what we're mining now yeah, and I mean, we won't be doubling the tonnage, but there'll be a mix in there going forward, yes, I would expect you know.
Speaker Change: I had to lower our cost yes, as David mentioned as you know we've got this higher grade silver mine, that's going to come online fairly quickly here and mixing that into our current mill feed mix.
Speaker Change: That should help on the cost side as well as both the ounce production side.
Speaker Change: Okay.
Speaker Change: Very comprehensive answer thank you.
Speaker Change: And then just building on that a little bit you expect three to 4 million in capital costs at Loughborough. She also this year.
Speaker Change: Per your release was mostly surface works and equipment procurement.
Speaker Change: So the first phase of mine development. It also states that you have the needed equipment already I assume interest sitting royalty line.
Two quick questions on this can you breakdown the $3 million to $4 million into the different components, how much of that is equipment procurement how much of the surface works.
Also a moving on what I, what I was saying is this equipment actually sitting here. If you don't mind I remember once I was at a site visit down there and they essentially had a new drill bits you know sitting in the storage area just waiting to be used is there something like that at site right now where youre keeping equipment.
Speaker Change: Waiting.
Speaker Change: So maybe I'll take the second question first.
Speaker Change: We don't have equipment sitting idle I think that's that's not kind of where we were and joining by that.
Speaker Change: Where have equipment. That's in use at Aveeno that can be moved over to <unk> to start the development and the first phase of production mining. However, once we want to wrap up with throughput and move and giant increase the tonnage we will need more equipment and we have to start that procurement process over the next number of months in order to make sure that when you get the get the lead times in.
For when we hope to start production mining at a bit of a higher scale.
Speaker Change: So no to answer that question Theres not equipment sitting around idle I think where obviously we.
Speaker Change: We've got we're processing a lot of tons at avino and that where it does require a fair bit of equipment. These days.
Speaker Change: So hopefully that answers that question I'm moving back to the first one and a $3 million to $4 million and how that's broken out I would say not a lot of it is equipment procurement, we're getting some pretty favorable terms on our or at least the leased equipment through our good.
Speaker Change: Good partners at Caterpillar and other partners as well.
Speaker Change: Theyre, providing favorable terms such as no lock no deposits nothing paid upfront and perhaps even not paying for a number of months so that does help.
Speaker Change: So I would say the most of the majority of it is going to be further development.
Speaker Change: Just like to add that we have.
Speaker Change: Unused underutilized Oedenberg jumped development jumbos, we're not using them so much because we're mining we are mining jumbos.
Speaker Change: Which will need some point suppress yosef, but right now we've got Orenburg, we can send over there.
Speaker Change: Yep.
Speaker Change: That answers the question.
Speaker Change: Yep.
That's it thank you very much I'll get back in queue.
Speaker Change: Our next question comes from Joseph Reagor of Roth MKS. Please go ahead.
Joseph Reagor: Good morning, David.
Joseph Reagor: Questions.
Joseph Reagor: Morning, Joe.
Joseph Reagor: So.
Joseph Reagor: The other guys beat me to your question about what parts here. So I'm just going to have some boring accounting questions I'm looking at kind of the Q4 result.
Joseph Reagor: How much of kind of the revenue upside there was related to inventory drawdown versus provisional pricing adjustments.
Joseph Reagor: And there seems to be a bit of volatility around revenue quarter to quarter.
Joseph Reagor:
Joseph Reagor: Outside of like treatment charges, and whatnot, but just from from that inventory swing there.
Joseph Reagor: You know occurs in the provisional pricing is there any way for you guys could provide.
Joseph Reagor: What I would say maybe a better.
Joseph Reagor: Sales numbers as you know with your production results are you know what it makes the numbers more accurate into the quarter.
Joseph Reagor: Yeah, I think we saw some of that variability in the first couple of quarters, but I think Q3 and Q4 were fairly flat.
Joseph Reagor: And didn't see quite as much variability, obviously with if there were some decent swings in metal prices in the last six months to both up and down obviously.
Joseph Reagor: So that's one theres no pricing comes in and has been more of an impact.
Joseph Reagor: But I think from a from a volume and in it and its a tonnage and and the total revenue.
I mean, the last couple of quarters are fairly consistent.
Joseph Reagor: And we're.
Joseph Reagor: Now based on our expected sales volumes for 2024, I think each we're expecting consistent growth.
Speaker Change: Okay, and I think one of the things you guys provided like ounces produced versus payable silver equivalent ounces sold and.
Speaker Change: There was a bit of a positive variance there this quarter is that just normal quarter to quarter on.
Speaker Change: Quarter to quarter timing of sales.
Speaker Change: Yeah, a little bit.
You know some some I think in the previous quarter, we had it going the other way are especially in Q2, we had to go in the other way and so like you mentioned there is a bit of movement, there, sometimes and some of that as a result of.
Speaker Change: Settlement.
Speaker Change: Okay, alright, thanks for the color on that I'll turn it back over.
Speaker Change: Yes.
Speaker Change: Our next question comes from Matthew O'keefe of Cantor Fitzgerald. Please go ahead.
Matthew O'Keefe: Thanks, operator, and good morning, two questions for me first up on.
Matthew O'Keefe: The 'twenty 'twenty four guidance I mean, you put out a little bit.
Matthew O'Keefe: Gave some rough guidance of two five to $2 8 million ounces for 2024.
Matthew O'Keefe: That'll be up a fair chunk from what you ended this year with so could you break down how much of that will be from the lab dress shoes are broken or and how much of that will be from the avino mine, presumably increased grades and throughput and what what's really changing there would you expect to be grades or.
Matthew O'Keefe: Throughput.
Speaker Change: Yeah, I'll take that one I think.
Speaker Change: It's gonna be mostly avino, I think we're not expecting a huge contribution from the Prestea also reusing the stockpiles to better understand how it's going to go through our mail, but also obviously, we're going to get some revenues and some amount of positive ounces out of that as well too.
And some cost recovery.
Speaker Change: But I think we're expecting.
Speaker Change: 90%, 95% of that to come from Avino.
Speaker Change: We put out our tonnage guidance as well too and you can see between 700000 and 750000 and we produced about 615 last year Mill 615000, So we are expecting improvement.
Speaker Change: And that just comes with them.
Speaker Change: Better equipment on site to deal with break more.
Speaker Change: US having a fairly larger stockpile at the end of the year, which I think we talked about throughout the call as well too.
Speaker Change: And just expecting that we're going to produce.
Closer to that 2500 tons per day run rate and get up to 700 750000 times throughout the year. So great in some months is better than others, but overall throughout the year, we're not expecting a huge movement from last year.
Speaker Change: Okay.
Speaker Change: Matt.
Speaker Change: Sorry, Matt on that note last year was the first time, we ran the full mill throughput with E. T material. So it was a bit of a learning curve for us last year, and we hope to take those learnings and apply it to this year, which as you know.
And some of the increase.
Matt: Got it okay. Thanks.
Speaker Change: Then just hum.
Speaker Change: Some pretty significant milestones this year I would say are.
Speaker Change: You you produce the the oxide tailings PFS, which was very positive.
Speaker Change: More to come on that and then with last press, Yes, you may have.
Speaker Change: Your land use agreement, you'll be able to access or.
Speaker Change: Which while I guess, we'll see more contribution from that next year are we still looking for a sort of a five year plan to expand production to the seven and a half to 9 million ounce.
Speaker Change: Silver equivalent range.
Absolutely.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: You had mentioned.
Speaker Change: The main the main metrics.
Speaker Change: So the main focus is low priced steel so right now to get that up and running and then.
Speaker Change: Community engagement on oxide tailings environmental studies and that kind of thing so that won't be the last expansion.
Speaker Change: But you'll see a big impact from <unk>.
Speaker Change: Hopefully we get the permits soon.
Speaker Change: Okay and will there be a I guess, so you produce more guidance as to what to expect from La Presse Joseph proper.
Speaker Change: Some throughout 2024, and the 25 is that a fair timeframe.
Speaker Change: Timeframe.
Speaker Change: Yeah, that's fair to say I think we want to get obviously, all the ducks in a row with with permitting and everything in place and start the development decline and get into production and then we'll provide a bit more color on the expected tonnages and.
Speaker Change: And the ounces for and I think that'll be closer for moving for 2025 projections because as we mentioned here in 'twenty 'twenty four we're not actually budgeting for any pressure on that.
Speaker Change: Permanent dictates the timing yes.
Speaker Change: That's correct.
Speaker Change: And that's going okay.
Speaker Change: So it's going fine.
Speaker Change: Got it okay. Thanks very much.
Speaker Change: Yes.
Speaker Change: Once again, if you have a question. Please press Star then one our next question comes from Rob Douglas Private Investor. Please go ahead.
Okay.
Rob Douglas: Would it be safer to say that the land use permit was easier to get than the environmental permit.
Rob Douglas: Yes.
Rob Douglas: The land use permit you mean, the community engagement the community support community approval you mean.
Rob Douglas: Looking at doses that Greg.
Yes, that's right.
Rob Douglas: I wouldn't say.
Rob Douglas: Either way, they're way yeah, how do I know, what's easier and mainly these things take time, we don't expect any delays on the permitting.
Rob Douglas: I think the land use agreement took a long time, obviously, just with we wanted to get things right for the long term.
Rob Douglas: But we had to.
<unk> explained to them, we were planning a giant open pit the quota was planning so it took a while to go around to the various communities and let them know what our our impact is and it's going to be a very low impact yes.
Patrick: So Patrick.
Patrick: Sorry to answer your questions are different groups of people and they require kind of a different approach.
Patrick: Right.
Speaker Change: So you don't really expect any any problems do you think that this is gonna proceed smoothly you don't see any.
Speaker Change: The reason why I made the investment in Avino is because I I am encouraged by the underground I see I live in Mexico. So I see the problems other operators are half getting permits for open pit.
Speaker Change: Yeah I agree this is a satellite deposit so it's a very small footprint.
Speaker Change: The locals we were in their management was in there from headquarters.
Speaker Change: And we've met with the leaders and they're thrilled about the potential.
Speaker Change: Of the economic impact of that region.
Speaker Change: Okay.
Yeah Alright.
Ken: Hi, Ken.
Ken: Right.
Ken: Having the <unk> agreement is the key to getting the environmental permit because the environmental authorities want to know the local region is in favor and they are.
Ken: Yeah, well, that's why I made my investment in Avino, because I've seen that you.
Ken: Been around for a long time, and you've spent a lot of money on the ESG, which in the end.
Ken: You can't underestimate it it's not an easy thing to do.
Speaker Change: Absolutely. Thank you we appreciate the confidence and thank you for your investment.
Speaker Change: Okay.
This concludes the question and answer session I would like to turn the conference back over to David Wilson for any closing remarks.
David Wolfin: Thank you everybody for your time today, we're excited about the future of Avino.
David Wolfin: The shares have already started to creep up metal prices are looking strong.
The clearer block is behind us now and redistributed into strong hands, we've got a silver Etfs picked up several million shares. So you can see that translated in our liquidity.
David Wolfin: It's translating into a very productive year and.
David Wolfin: With luck, Chris you also coming online hopefully very soon that's going to really help. So thank you again and have a great day.
This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
David Wolfin: [music].
Okay.
David Wolfin: Okay.
Yes.
David Wolfin: [music].