Q1 2024 Avino Silver & Gold Mines Ltd Earnings Call

Operator: Good day, and welcome to the Avino Silver and Gold Mines Limited first quarter 2024 financial results conference call and webinar. As a reminder, all participants are in a listen-only mode, and this 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. Should you need assistance during a 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.

Good day and welcome to you at the Avino Silver and gold mines limited first quarter 'twenty 'twenty four financial results conference call and webcast.

Jennifer North: As a reminder, all participants are on a listen only mode.

Operator: This conference is being recorded.

Jennifer North: After the presentation, there will be an opportunity to ask questions.

Jennifer North: To join the question queue you May Press Star then one on your telephone keypad.

Operator: Should you need assistance during the conference call you may signal, an operator by pressing star zero.

Operator: I would now like to turn the conference over to Jennifer North head of Investor Relations. Please go ahead Bob.

Jennifer North: Thank you operator, good morning, everyone and welcome to the Avino Silver and gold mines Limited first quarter 2024 financial results conference call and webcast.

Jennifer North: Thank you, operator. Good morning, everyone, and welcome to the Avino Silver and Gold Mines Limited first quarter 2024 financial results conference call and webcast. To join this webcast and conference call, there's a link in our news release dated May the 1st, 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.

Jennifer North: To join this webcast and conference call. There is a link in our news release dated May the first 2024 and in our news release of yesterday's date, which can be found on our website under news 'twenty 'twenty four.

Jennifer North: In addition, a link can be found on the homepage of the Avino 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 the actual results to be materially different from those expressed by or implied by such forward-looking statements. 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.

Jennifer North: 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 beef.

Jennifer North: 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.

Jennifer North: 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.

Jennifer North: 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 Financial Statements. As well, the full statements are available on Avino's profile on CDERplus 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.

Jennifer North: For 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.

Jennifer North: 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, plus and on and car I would like to remind everyone that this conference call is being recorded and will be available for <unk>.

Jennifer North: Play later today replay information and the presentation slides from this conference call and webcast will be available on our website.

Jennifer North: 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 as President and CEO, David Wilson David.

Jennifer North: Thank you. I will now hand over the call to Avino's President and CEO, David Wolfin.

David Wolfin: Thanks, Jen. Good morning, everyone.

David Wolfin: Thanks, Jim Good morning, everyone. Welcome to <unk> Q1, 2024 financial results conference call and webcast.

David Wolfin: We will cover the highlights of our financial and operating performance and then we will go over the work that we're currently performing followed by a Q&A.

David Wolfin: Welcome to Avino's Q1 2024 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 a Q&A. I will start with the discussion of operations, and then I will turn it over to Nathan Harte, Avino's CFO, to discuss the financial performance for this period, and then Jennifer North, our head of investor relations, will present an overview of Q1 ESG initiatives.

David Wolfin: 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 this period, and then Jennifer North our head of Investor Relations will present, an overview of Q1 ESG initiatives.

David Wolfin: Please turn to slide five as we go through the production results. Our Q1 production results were released in mid-April and are as follows. Silver equivalent production was 629,000 ounces.

Nathan Harte: Please turn to slide five as we go through the production results.

David Wolfin: Our Q1 production results were released in mid April and are as follows silver equivalent production was 629000 ounces.

David Wolfin: Silver production was 251,000 ounces, copper production was 1.3 million pounds, gold production was just under 1,800 ounces, and mill throughput was 170,000 tons. 2024 has started strong, and we are on track to meet our production target for the year. In addition, our first quarter production results showed a notable improvement in mil throughput of 18% compared to Q4 2023, which contributed to positive overall results. Additionally, positive developments for Q2 production include the processing of La Preciosa stockpile material through Avino's Mill Circuit No. 2.

Nathan Harte: Silver production was 251000 ounces.

David Wolfin: Copper production was $1 3 billion pounds gold production was just under 1800 ounces mill throughput was 170000 tons.

David Wolfin: 2024 has started strong and we are on track to meet our production target for the year. In addition, our first quarter production results on notable improvement to mill throughput of 18% compared to Q4, 2023, which contributed to positive overall results.

David Wolfin: Positive developments for Q2 production include the processing of blood pretzels to stockpile material through Avino Mill circuit number two supply chain delays that started with the pandemic are improving in addition, we're currently mining Liberals Athene and Athene, It's Elisa, which is expected to yield higher.

David Wolfin: Supply Chain Delays that started with the pandemic are improving. In addition, we are currently mining at level 15 at Elena Tolosa, which is expected to yield higher silver grades. Our five-year plan aims to increase production levels from 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 review Q1 milestones and ongoing initiatives.

David Wolfin: Silver grades.

David Wolfin: Our five year plan aims to increase production levels from 2.5 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 review Q1 milestones and ongoing initiatives beginning with leprosy also we'd like to emphasize that it represents a key pillar in our transformational growth strategy and holds a large endowment of silver and gold resources, which we expect to process for you.

David Wolfin: Beginning with La Preciosa, we'd like to emphasize that it represents a key pillar in our transformational growth strategy and hosts a large endowment of silver and gold resources, which we expect to process for years to come. In early January, a long-term land use agreement was signed with the local community for the development of La Preciosa. This signals the beginning of a new era for Avino and the neighboring communities around La Preciosa. During the quarter, we were also able to commence hauling of old stockpiles from La Preciosa to our mill at Avino for processing.

David Wolfin: There is to come.

David Wolfin: In early January a long term land use agreement was signed in January with the local community or the development of La Presse Yosef.

David Wolfin: This signals the beginning of a new era for avino and the neighboring communities around the press Yosef.

David Wolfin: During the quarter.

David Wolfin: We were also able to commence hauling of old stockpiles from <unk> to our mill at Avino for processing.

David Wolfin: We have submitted the application for an environmental permit, and we have been in communication with. We anticipate that the permit will be issued in the coming year. After we are in receipt of the environmental permit, a further application for a permit will be submitted, which is required to begin construction of the portal, haulage ramp, and mining of the Gloria and Abundancia veins. We anticipate receiving these permits in the coming year.

David Wolfin: We have submitted the application for an environmental permit and we have been in communication with them.

David Wolfin: We anticipate that the permit will be issued in the coming year.

David Wolfin: After we are in receipt of the environmental permit a further application for a permit will be submitted which is required to begin construction of the portal haulage ramp and mining of Gloria and <unk>.

David Wolfin: We anticipate receiving these permits in the coming year.

David Wolfin: Next, I will briefly touch on the pre-feasibility study on the oxide tailings project, which was completed and then announced in early February. We went through the pre-feasibility study on our Q4 call and year-end call, and I won't spend too much time on this. I will highlight the key metrics. If you would like more information, please visit the website where the information and technical report are available. The completion of the Prefeasibility Study was an important key milestone for Avino and outlined the project's economic parameters, expected costs, and potential revenues, offering a roadmap for future implementation.

David Wolfin: Next I will briefly touch on the pre feasibility study on the oxide tailings project, which was completed and then announced in early February.

David Wolfin: We went through the pre feasibility study on our Q4 call.

David Wolfin: And cole and I won't spend too much time on this.

David Wolfin: The key metrics, if you would like more information. Please visit the website, where the information and technical report are available.

David Wolfin: The completion of the pre feasibility study was an important key milestone for avino and outlined the project's economic parameters expected costs and potential revenues offering a roadmap for future implementation.

David Wolfin: Highlights of the PFS include a net present value of 98 million U S pre tax.

David Wolfin: Highlights of the PFS include a net present value of $98 million U.S. pre-tax and $61 million U.S. post-tax at a 5% discount rate and an IRR of 35% pre-tax and 26% post-tax. The study also highlights proven improbable mineral reserves, a first for Avino's long history of 6.7 million tons of silver and gold, graded 55 grams and 0.47 grams, The next step includes community engagement and environmental impact studies. We are committed to prudent planning and strategic growth, and we will use the study to make informed decisions about project execution. Currently, Preciosa is our top priority. At this time, I will now hand it over to Nathan Harte, Avino's CFO, to present Avino's Q1 2024 financial results. Nathan

Nathan Harte: 61 million U S post tax at a 5% discount rate and an IRR of 35% pre tax and 26% post tax.

Nathan Harte: The study also highlight as proven and probable mineral reserves are first for Avino has a long history of $6 7 million tonnes of silver and gold created 55 grams and 0.47 grams respectfully next.

Nathan Harte: Next step includes community engagement and environmental impact studies.

Nathan Harte: We are committed to prudent planning and strategic growth and we will use the study to make informed decisions about project execution.

Nathan Harte: Currently the pressed steels as our top priority.

David Wolfin: At this time I'll now hand, it over to Nathan Harte CFO to present, the Venus Q1, 2024 financial results David.

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: 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. Turning to slide 7 now for a summary of the key financial highlights for the first quarter. The first quarter built off the end-of-the-year results with revenues on budget and improved costs, translating to solid operating margins from the Avino model. We had a positive net income of $0.6M, and adjusted earnings came in at $2.1M, or $0.02 per share.

Nathan Harte: Turning to slide seven now for a summary of the key financial highlights for the first quarter.

Nathan Harte: In the first quarter build off the end of the year results with revenues on budget and improved costs translating to solid operating margins from the Avino mine.

Nathan Harte: We had positive net income of $6 million and adjusted earnings came in at $2 1 million or <unk> <unk> per share both improved over previous quarters in 2023.

Nathan Harte: Both improved over previous quarters in 2019, per ounce metrics improved from the 2023 average, with cash costs and all in sustaining cash costs decreasing, and we continue to generate additional operating cash flows with 2.3 million generated after operating and administration. As highlighted at the end of the year, our working capital position has improved significantly since earlier in 2023, with the balance at just under $10 million at quarter end, or almost double where we were 12 months prior. Coming to slide 8, I will walk you through the details of our financial results, some of which I already touched on in the highlights.

Nathan Harte: Her ounce metrics improved from the 2023 average with cash costs and all in sustaining cash cost decreasing and we continued to generate additional operating cash flows with $2 3 million generated after operating and administrative expenses.

Nathan Harte: As highlighted at the end of the year, our working capital position has improved significantly since earlier in 2023 with the balance at just under $10 million at quarter end or almost double where we were 12 months prior.

Nathan Harte: Coming to slide eight I will walk you through the details of our financial results some of which I already touched on in the highlights.

Nathan Harte: Revenues came in at $12.4 million, up significantly from $9.8 million in Q1 of 2023 with 26% growth and about on pace with last quarter's revenues of $12.5. Avino generated growth profits of $2.3 million for the quarter, including non-cash depreciation and depletion, compared to $1.9 million in Q1 of 2018. The increase is a result of higher sales volumes and higher realized silver prices when compared to Q1 of last year. However, increases in revenues were offset by the impact of the Mexican peso, which did begin to strengthen during Q2 of 2020.

Nathan Harte: Revenues came in at $12 4 million up significantly from $9 8 million in Q1 of 2023 with 26% growth and about on pace with last quarter's revenues of $12 5 million.

Nathan Harte: Avino generated gross profit of $2 3 million for the quarter, including noncash depreciation and depletion compared to $1 9 million in Q1 of 2023.

Nathan Harte: The increase is a result of higher sales volumes and higher realized silver prices when compared to Q1 of last year.

Nathan Harte: Increases in revenues were offset by the impact of the Mexican peso, which did begin to strengthen during Q2 of 2023.

Nathan Harte: On a cash basis, gross profit was $3.1 million and represented a 26% cash increase. Compared to Q4 2023, gross profit did decrease slightly, but was fairly flat on the cash. Avino reported net income after taxes of $0.6M for Q1, compared to a loss of $0.4M in Q1 of 2023, which is a positive swing of $1M. Earnings per share came in at just under $0.01.

Nathan Harte: On a cash basis gross profit was $3 1 million and represented a 26% cash operating margin.

Nathan Harte: Compared to Q4 2023 gross profit did decrease slightly but was fairly flat on a cash basis.

Nathan Harte: Avino reported net income after taxes of <unk> 6 million for Q1 compared to a loss of <unk> 4 million in Q1 of 2023, which is a positive swing of $1 million.

Nathan Harte: Earnings per share came in at just under one for the quarter.

Nathan Harte: EBITDA was $1 7 million for the quarter showing meaningful increases from both Q1, and Q4 of 2023, which were <unk> 3 million and $1 1 million respectively.

Nathan Harte: EBITDA was $1.7 million for the quarter, showing meaningful increases from both Q1 and Q4 2023, which were $0.3 million and $1.1 million, respectively. Adjusted Earnings paints a similar picture with improvements in the quarter compared to the rest of 2023, with 2.1 million or two cents per share generated in Q1. Cash flow from operations for the first quarter was $1.6 million before working capital adjustments compared to $1.2 million in Q1 of 2023 and $2.2 million in Q4.

Nathan Harte: Adjusted earnings paints, a similar picture with improvements in the quarter compared to the rest of 2023 with $2 1 million or <unk> <unk> per share generated in Q1 of 2024.

Nathan Harte: Cash flow from operations for the first quarter was $1 6 million before working capital adjustments compared to $1 2 million in Q1 of 2023 and $2 2 million in Q4.

Nathan Harte: After working capital adjustments, cash flow from operations generated in the first quarter was $2.3 million, as noted on the previous slide. As you can see, we were pre-cash flow positive for the first quarter since 2022, a testament to cost management to the company. We are looking to build off this quarter into the rest of the year, especially with positive movements in all three metals being produced from the Avino mine that came subsequent to its end.

Nathan Harte: After working capital adjustments cash flow from operations generated in the first quarter was $2 3 million as noted on the previous slide.

Nathan Harte: As you can see we were free cash flow positive for the first quarter since 2022, a testament to cost management to companywide.

Nathan Harte: We're looking to build off this quarter into the rest of the year, especially with positive movements in all three metals being produced from the Avino mine that came subsequent to the end of the first quarter.

Nathan Harte: Here on slide nine you can see our cash cost per silver equivalent payable ounce for the first quarter showed meaningful improvement coming in at under $15 at 14 89.

Nathan Harte: Here on slide 9, you can see our cash cost per silver equivalent payable ounce for the first quarter showed meaningful improvement, coming in under $15 at $14.89. As you can see on the chart, this was our lowest quarter for the trailing 12 months and lower than the average for 2023, which was $1561. All in sustaining cash costs for silver equivalent payable ounce improved further, coming in at $20.23, again our lowest quarter for the trailing 12 months and lower than the 2023 average of $21.87.

Nathan Harte: As you can see on the chart. This was our lowest quarter for the trailing 12 months and lower than the average for 2023, which was $15 61.

Nathan Harte: All in sustaining cash cost for silver equivalent payable ounce improved further coming in at $20 23, again, our lowest quarter for the trailing 12 months and lower than the 2023 average of $21 87 per ounce.

Nathan Harte: Coming to slide 10, you can see our cash cost per ton processed for the quarter came in slightly above the yearly average at $53 64 per ton. However, this was much improved on Q3 and Q4 costs.

Nathan Harte: Coming to slide 10, you can see our cash cost per ton process for the quarter came in slightly above the yearly average at $53.64 per ton. However, this was much improved on Q3 and Q4 costs. All in, the Sustaining Cash Cost per Ton Process tells a similar story for the quarter, although this one did come in below the yearly average of $74.16 and well below the previous two. The Mexican peso continues to hold strength, which has impacted our cost structure as the majority of our expenditures are incurred in Mexico with local suppliers, employees, and contractors.

Nathan Harte: All in sustaining cash cost per ton process tell a similar story for the quarter. Although this one did come in below the yearly average of $74 16, and well below the previous two quarters.

Nathan Harte: The Mexican peso continues to hold strength, which has impacted our cost structure as the majority of all expenditures are incurred in Mexico with local suppliers employees and contractors.

Nathan Harte: As we highlighted on our year-end earnings call, we had put in a number of measures in place for cost reduction, which included lowering haulage rates to match mill throughput as we had generated a large ore stockpile over the previous few years. These measures have paid dividends with the first quarter results, with significantly lower unit costs compared to previous quarters, as noted on the graph in this slide and on the previous slide. With the increases in metal prices and the anticipation of La Preciosa, we are looking forward as our focus shifts over to the growth side throughout the rest of. With silver currently above $27 per ounce, copper above $4.50 per pound, and gold above $2,300 per ounce, these prices will have positive impacts on our second quarter results as we look to continue managing costs at Avino and advancing leverage. At this point, I will now turn it over to Jennifer North, Head of Investor Relations, for an overview of our Q1 ESG and CSRA.

Nathan Harte: As we highlighted on our year end earnings call. We had put in a number of measures in place for cost reduction, which included lowering haulage rates to match mill throughput as we had generated a large ore stockpile over the previous few months.

Jennifer North: These measures are paid dividends with these first quarter results with significantly lower unit cost compared to previous quarters as notice on the graph in this slide and on the previous slide.

Jennifer North: The increases in metal prices and the anticipation of low price. So we're looking forward as our focus shifts over to the growth side throughout the rest of 2024.

Jennifer North: With silver currently above $27 per ounce copper above $4 50 per pound and gold above 2300 per ounce. These prices will have positive impacts on our second quarter results as we look to continue managing costs at avino and advancing <unk>.

Jennifer North: At this point I will now turn it over to Jennifer <unk> head of Investor Relations for an overview of our Q1, ESG and CSR initiatives.

Jennifer North: Thank you Nathan moving on to Slide 11, we have listed the ESG CSR initiatives that were completed in the first quarter 2024.

Jennifer North: Thank you, Nathan. Moving on to slide 11, we have listed the ESG CSR initiatives that were completed in the first quarter of 2024. Several members of the corporate team from Vancouver have made trips to Durango over the last six months and spent time visiting the communities. David, Nathan, and Pete were there in November and also in February.

Jennifer North: Several members of our corporate teams from Vancouver had made trips to Durango over the last six months and spent time visiting their communities.

Jennifer North: David Nathan and Pete were there in November and also in temporary myself and Jennifer Trevor or Theyre in December and again in April.

Jennifer North: Myself and Jennifer Trevitt were there in December and again in April. Avino follows the ESG standards and the United Nations Sustainable Development Goals, the SDGs, which 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. Maintaining a friendly dialogue is key to learning, improving, and maintaining strong relationships and developing trust as responsible corporate citizens. In Durango, the CSR team meets regularly with stakeholders in the communities and is focused on the areas of education, infrastructure, and environment. Following the guidelines of the SDG, the team was able to accomplish the following.

Jennifer North: Dino follows the ESG standards, and the United Nations Sustainable development goals, the Stg's debt work together to address the most pressing challenges facing the world.

Jennifer North: One of our major objective is to make a positive impact on communities and society, maintaining a friendly dialogue is key to learning and improving and maintaining strong relationships and developing trust as a responsible corporate citizens.

Jennifer North: In Durango, the CSR team meets regularly with the stakeholders in the communities and is 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 in relation to education Avino considers education of the children and adults of our local communities extremely <unk>.

Jennifer North: In relation to education, Avino considers the education of the children and adults of our local communities extremely important, and several important considerations that we keep in mind are, one, cultural sensitivity. We make an effort to understand and appreciate the culture and traditions of each community. Two, community engagement; we endeavor to foster strong relationships and collaborate with community members, leaders, and stakeholders, involve these groups when appropriate in decision-making processes related to education initiatives to ensure local perspectives are considered. One of the ways we accomplish this is the CSR team regularly communicates with the principals, 3. Broadening the curriculum.

Jennifer North: And several important considerations that we keep in mind, our one cultural sensitivity.

Jennifer North: We make an effort to incorporate information about mining by going into schools regularly to show mining as meaningful and relatable to children as a future potential career. During the first quarter in the communities, Avino continued contributing to the schools in the communities by donating Samsung TVs and tablets. For the benefit of the women in the communities, workshops in embroidery, knitting, and pinata making were held. These workshops not only help them establish their own sense of community and belonging but encourage the women to pursue entrepreneurial ventures, which not only drives some economic growth but also fosters innovation, community engagement, and empowerment.

Jennifer North: Let me make an effort to understand and appreciate the culture and traditions of each community to community engagement, we endeavor to foster strong relationships and collaborate with community members leaders and stakeholders involved these groups when appropriate and decision making processes related to education initiatives to ensure local perspective.

Jennifer North: Is that considered one of the ways. We accomplish this is the CSR team regularly communicates with the principals of the school to see how we as a company can help fulfill certain needs.

Jennifer North: Three broadening the curriculum, we make an effort to incorporate information about mining by going into schools regularly to show mining is meaningful and relatable to children as a future potential career.

Jennifer North: During the first quarter and the communities Avino continued contributing to the schools and the communities by donating Samsung Tvs and tablets for the benefit of the women in the communities workshops in embroidering missing in Pinata, making were held.

Jennifer North: These workshops not only help them establish their own sense of community and belonging that encourage us to women to pursue entrepreneurial ventures and not only drives some economic growth, but also fosters innovation community engagement and empowerment.

Jennifer North: At San Jose de Avino, the company has performed road maintenance and cattle guard installations, and donated lime to paint a town's church for the annual event of its patron saint festivities, which are held every year and are attended by the entire population of the community and surrounding communities.

Jennifer North: At San Jose do you know the company has performed drove maintenance and cattle guard installations generated the lime to paint the town's church for the annual event of its patient St.

Jennifer North: Devotees, which are held every year and are attended by the entire population of the community and surrounding communities.

Jennifer North: Moving to slide 12.

Jennifer North: For the benefit of the environment, Avino delivered recycled containers to the church at San Jose de Avino. Rehabilitation road works were carried out on the main road from Panuco to Coronado to Zaragoza to Avino, and Avino delivered waste wood to Javier Mina. For the benefit of good health and well-being, Avino takes mental health seriously, and our commitment to the community includes giving presentations on the subject to ensure that these matters are okay to talk about, and space is given for those who wish to ask questions about mental health and well-being.

Jennifer North: For the benefit of the environment Aveeno delivered recycled containers to the church at San Jose do you know.

Jennifer North: <unk> Road works were carried out at the main road from Newco to Coronado to Sarah goes out to Avino, and Aveeno delivered way split to heavier Mena.

Jennifer North: For the benefit of good health and wellbeing Avino takes mental health seriously and our commitment to the community also includes giving presentations on the subject to ensure that these matters are okay to talk about in this space just given for those who wish to ask questions about mental health and wellbeing.

Jennifer North: One of Avino's top CSR priorities is to create employment opportunities for residents in nearby communities, aiming to cultivate generations of passionate and committed advocates for Avino, or as we like to say, ambassadors of Avino. We aim to educate the younger generation about local resources, motivating them to appreciate the benefits of mining and envision a future where they can pursue rewarding careers in their own community. Currently, we have 490 direct jobs, which includes workers at the mine site and in our Durango offices.

Jennifer North: One of the venous top CSR priorities is to create employment opportunities for residents in nearby communities.

Jennifer North: Going to cultivate generations of passionate and committed advocates for vino or as we like to say ambassadors of avino, we aimed to educate the younger generation about local resources motivating them to appreciate the benefits of mining and envision a future where they can pursue rewarding careers in their own community.

Jennifer North: Currently we have 490 direct jobs, which includes the workers at the mine site and our Durango offices.

Jennifer North: This number of jobs, so typically translate to three times the number of indirect jobs for services consultants and suppliers and the surrounding communities and the Draggle area.

Jennifer North: 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.

Jennifer North: I will now turn it back over to David to continue on with the presentation, providing a punch in coming quarters David.

David Wolfin: Thanks Jen. Moving on to slide 13. We are well into the second quarter of 2024, and as I mentioned earlier, our ongoing priority is proceeding with our plans for the Gloria in Abundancia veins at La Preciosa. Community engagement is ongoing as we ready ourselves to begin development work. We have hauled the press seals of stockpiles to the Avino Mill circuit number 2 for processing. We're mining higher in Elena Tilosa, and currently, we are now up to level 15, which is expected to yield higher silver grades.

David Wolfin: Thanks, Tien moving to slide 13.

David Wolfin: We are well into the second quarter of 2024, and I mentioned earlier, our ongoing priority is proceeding with our plans for the Gloria now but to answer your veins at the broker community.

David Wolfin: Engagement is ongoing as we ready ourselves to begin development work.

David Wolfin: We have hold the pretzels to stockpiles.

David Wolfin: Mill Circuit number two for processing.

David Wolfin: We were mining higher.

David Wolfin: Elena to looser and currently we are now up to a level of 15, which is expected to yield higher silver grades.

David Wolfin: And lastly, our objective is to bolster our treasury through cash flow generation from the Avino mine as we plan the future development of our wholly owned La Preciosa property. As outlined on slide 14, we want to reemphasize the company's growth plans. 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.

Speaker Change: And lastly, our objective is to bolster our treasury through cash flow generation from the Avino mine as we plan the future development of our wholly owned Loopnet sales of property.

David Wolfin: As outlined on slide 14, we want to reemphasize the company's growth plans, we have three assets within 20 kilometer footprint totaling hundreds of millions of silver equivalent mineral resources on.

David Wolfin: On the same area, we have an operating mill complex, which is currently producing from Urbino mine. Additionally, access to water power and tailing storage all ingredients to grow organically without the major capital investment required that would expect if we were starting from scratch.

David Wolfin: Additionally, access to water, power, and tailing storage. All ingredients to grow organically without the major capital investment required that we would expect if we were starting from scratch. As you can see on this slide, our goal is to scale up by 2029 through production from these three assets. By capitalizing on our existing assets and resources, we can execute our growth plan efficiently and effectively. This approach not only mitigates risks associated with new project development but also positions us for long-term success and value creation. We'd now like to move the call to the question and answer portion operator.

David Wolfin: As you can see on this slide our goal is to scale up by 2029 through production from these three assets by capitalizing on our existing assets and resources, we can execute our growth plan efficiently and effectively.

David Wolfin: This approach not only mitigates risks associated with new project development.

David Wolfin: But also positions us for long term success and value creation.

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 speakerphone, please pick up your handset before pressing any key. To withdraw your question, please press star then two. We'll pause for a moment as callers join the queue. Thank you. Our first question is coming from Heiko Ihle, with HC Wainwright. Your line is live.

Speaker Change: I'd now like to move the call to the question.

Operator: Answer portion operator.

Heiko Felix Ihle: Thank you.

Heiko Felix Ihle: We will now begin the question and answer session.

Heiko Felix Ihle: So joined the question queue you May Press Star then one on your telephone keypad.

Operator: You will hear a tone acknowledging your request.

Heiko Felix Ihle: If you were using speakerphone, please pick up your handset before pressing any Keith.

Heiko Felix Ihle: To withdraw your question. Please press Star then two.

Speaker Change: We will pause for a moment of colors trying to keep.

Operator: Okay.

Heiko Felix Ihle: Thank you.

Heiko Felix Ihle: Our first question is coming from Heiko with.

Heiko Felix Ihle: With H C. Wainwright your line is life.

Heiko Felix Ihle: Hey there, thanks for taking my questions. I assume you can hear me okay?

Heiko Felix Ihle: Hey, there thanks for taking my questions I assume you can hear me okay.

Heiko Felix Ihle: Thanks, Kevin.

unknown: Thank you. Yep. Perfect. A good quarter. Congratulations. Shares are up 10%. So that's, that's nice to see. Hey Nate, one of your quotes in the earnings release states that you had posited that income cash flow generation reduced operating costs. You can probably guess where this question is going, and you're hinting at my answer later in the release, but we're essentially halfway through Q2 at this point. Have you managed to continue reducing operating costs in Q2? And maybe just give us some guidance on where you expect the company to be through the remainder of the year?

Heiko Felix Ihle: Perfect good quarter, congratulations shares are up 10%. So that's that's nice to see.

unknown: Hey, Nate what are your quotes in the earnings release Stacy you had positive net income cash flow generation reduced operating cost you can probably guess, where this question is going and you're hinting at my answer later in the release, but we're essentially halfway through Q2 at this point have you managed to continue reducing operating costs in Q2.

Nate: Maybe just.

Nate: Give us some guidance of where you expect the company to be through the remainder of the year.

Nate: Yes, that's a fair question I think obviously can't say too much at this point, but things.

Nathan Harte: Yeah, that's a fair question. I obviously can't say too much at this point, but things continue to be under control as they were in Q1. I think the team in Mexico has done a great job at managing operating costs given the pace of strength and still being right around 17 to 1. We have seen, I mean, improvement in grade in the second quarter and, as David mentioned on the call, just with where we're mining now on the silver side.

Nathan Harte: Alright, and continue to be under control.

Nathan Harte: We're in Q1 I think the team in Mexico has done a great job in managing operating costs, given the peso strength and still being right around 17 to one <unk>.

Nathan Harte: We have seen an improvement in grade in the second quarter and as David mentioned on the call just with where we're mining now on the silver side.

Nathan Harte: And I think overall, you see I mean everyone's seen the metal price movements. Since April one I think were up over 15% on all three metals that we produce from the mines. So.

Nathan Harte: And I think overall, you see, I mean, everyone's seen the metal price movement since April 1st. I think we're up over 15% on all three metals that we produce from the mine. So even if we were just able to maintain costs, I think we're going to see a very positive swing in our operating cash flow market.

Nathan Harte: Even if we were just able to maintain costs I think we're going to see a pop very positive swing.

Nathan Harte: Our operating cash flow margin.

Speaker Change: Fair enough.

Heiko Felix Ihle: Fair enough. Building on the last question and maybe just a bit of a clarification, you essentially produce 630,000 ounces in Q1. Multiplying that by four gets us to 2.516. Assuming the target is the midpoint of guidance, you're sort of hinting at maybe a slight increase in production in the second half of the year. Am I, or am I just reading too much into this?

Speaker Change: Building on the last question and maybe just a bit of a clarification you essentially produce 630000 ounces in Q1 multiply that by four it gets us to 2.156 to 516 <unk>.

Heiko Felix Ihle: Assuming the target is the mid point of guidance, you're sort of hinting at maybe a slight increase in production in the second half of the year at my or Am I, just reading too much into this.

Speaker Change: Yes, that's fair to say, obviously, we want to be at the mid point or above and then we've also got the potential of Phallocracy ulcer stockpile on the outside chance of fresh ore, but from from what we're expecting right now yes, we're hopeful for some.

Nathan Harte: Yeah, that's fair to say, obviously, we want to be either at the midpoint or above. And then we've also got the potential of La Preciosa stockpiles and the outside chance of fresh ore. But from what we're expecting right now, yes, we're hopeful for some improvements based on our budgeted production later in the year.

Nathan Harte: Some improvements based on our budgeted production later in the year.

Heiko Felix Ihle: That one's good. Thank you very much. I'll get back in to it

Heiko Felix Ihle: That one's good. Thank you very much. I'll get back to you later.

Speaker Change: Sounds good thanks.

Speaker Change: Thank you very much I'll get back in queue.

Speaker Change: Thanks Heiko.

Speaker Change: Thank you.

Operator: Our next question is coming from Jake Sekelsky with Alliance Global Parks. Your line is live.

Heiko Felix Ihle: Our next question is coming from Jake Kautsky with Alliance Global Partners. Your line is life.

Jacob G. Sekelsky: Hi David, Nathan, and team. Thanks for taking my question. Thank you.

Jacob G. Sekelsky: Hi, David Nathan and team Thanks for taking my questions.

Jacob G. Sekelsky: Thank you Jay.

Jacob G. Sekelsky: Building a bit off of Heiko's first question on cost, so we've seen them come down for two consecutive quarters, and it seems like they've stabilized quite a bit. I'm curious how that sort of changed your view on exploration and sort of the budget there going forward with where metals prices are and sort of the positive cash flow outlook at the Avino mine. Any comments there would be helpful.

Jacob G. Sekelsky: Building a bit of Heico's first first question on costs. So we've seen them come down for two consecutive quarters and it seems like they've stabilized quite a bit.

Jacob G. Sekelsky: I'm curious how that sort of changed your view on exploration and sort of the budget, they're going forward with with where metals prices are in sort of the positive cash flow outlook at the Avino mine.

Jacob G. Sekelsky: Any comments there would be helpful.

Nathan Harte: Yeah, that's a pretty fair question, obviously, given the movement in metal prices. As we've said on the previous couple calls, I mean, the focus is La Preciosa. So I think that's where our focus is going to be on any exploration. Obviously, we, you know, as cash flow becomes available for that, we will put that to use, but the focus is La Preciosa and moving that forward first and foremost.

Speaker Change: Yes, that's a pretty fair question, obviously, given the movement in metal prices.

Nathan Harte: As we've said on the previous couple of calls I mean, the focus is left for <unk>.

Nathan Harte: So I think that's where our focus is going to be any exploration obviously.

Nathan Harte: As cash flow becomes available for that we would put that to use but the focus at la <unk> and moving that forward and first and foremost.

Jacob G. Sekelsky: Okay, that's her. And then speaking of La Preciosa, just, you know, looking at the stockpiles or the surface, can you remind us if there are any new modifications that need to be made to accept that, or are you pretty much ready to go once that decision is made?

Nathan Harte: Okay, That's fair and then speaking about Perseus.

Jacob G. Sekelsky: You know looking at the stockpiled ore at surface.

Jacob G. Sekelsky: Can you remind us if there are any mill modifications that need to be need to accept that or.

Jacob G. Sekelsky: Or are you pretty much ready to go once that decision made.

unknown: So, no, there were a few modifications to be done, but luckily, those have been completed now.

Jacob G. Sekelsky: So no there were a few modifications to be done Luckily those have been completed now in is in Q1 actually for processing in Q2.

unknown: Unknown Executive, Joseph Reagor, Jacob Sekelsky, Nathan Harte, Peter Latta, Avino Silver, Nathan So we are working on it.

unknown: So we're already, let's not, we're past that.

unknown: So we're auditing process.

Speaker Change: Got it.

Jacob G. Sekelsky: Okay, perfect. That's all for me. Thanks again.

Speaker Change: Okay perfect. That's all for me Thanks again.

Speaker Change: Thanks Jake.

Jacob G. Sekelsky: Okay.

Operator: Thank you. Excuse me. Our next question is coming from Nathan Lindstrom, who is a private investor. Your line is live.

Speaker Change: Thank you.

Jacob G. Sekelsky: Excuse me. Our next question is coming from Nathan Lindstrom, who is a private investor Your line is nice.

Nathan Lindstrom: Hello, congratulations on a good quarter of execution. I just had a couple of questions that I wanted to see if you could comment on.

Nathan Lindstrom: Hello, Congrats on the good quarter of execution I just had a couple of questions that I wanted to see if you could comment on you mentioned in Q1 that you signed the surface rights agreement was there a payment made for that and was it a prepayment for a number of years of surface rights can you comment on that.

Nathan Lindstrom: Okay.

Nathan Lindstrom: You mentioned in Q1 that you signed the surface rights agreement. Was there a payment made for that? And was it a prepayment for a number of years of surface rights? Can you comment on that?

Nathan Lindstrom: Yeah. So that's a fair question, obviously, it's a long term land use agreement.

Nathan Lindstrom: For 20 years.

Nathan Lindstrom: Some is paid upfront and there are some community improvements that are paid along the way as well too but yeah. So.

Nathan Harte: Yeah, so that's a fair question. Obviously, it's a long-term land use agreement for 20 years. Some is paid up front, and there are some community improvements that are paid along the way as well, but yeah, some payments were made in the first quarter that have already come out of cash.

Nathan Harte: Payments were made in the first quarter that have already come out of cash.

Speaker Change: Okay, Great and one other question I really liked in prior slides that you guys have presented sort of your roadmap for decision making.

Nathan Lindstrom: Okay, great. And one other question. I really liked on the previous slides that you guys presented sort of your roadmap for decision making around sort of the pre-feasibility study that was just done. Can you put out sort of a similar roadmap in terms of how you're thinking about the next, you know, five years of development?

Nathan Lindstrom: Around sort of the pre feasibility study that was done.

Nathan Lindstrom: Can you put out sort of a similar roadmap in terms of how youre thinking about the next five years of development.

Nathan Harte: I think we had something in our corporate presentation, but for the earnings call, just given the time and the size of the presentation, I think we took it out. But I think we can expand on that a bit more offline if that helps. But also, I believe there is something in our corporate presentation that does that. Yeah, the five-year plan. Okay. Okay. Okay. I'll take another look. Thank you.

Nathan Lindstrom:

Speaker Change: I think we had something in our corporate presentation, but for the earnings call just given the time and.

Nathan Harte: And the size of the presentation I think we took it out but I think we.

Nathan Harte: We can we can expand on that a bit more offline if that helps but also I believe there is something in our corporate presentation that does that the five year plan.

Nathan Harte: Okay.

Speaker Change: Thank you.

Speaker Change: Okay. Thank you.

Nathan Harte: Okay.

Speaker Change: Thank you.

Operator: Thank you. We currently have no further questions on the lines at this time, so I will hand it back to Mr. Wolfin for any closing comments he may have.

Nathan Harte: We currently have no further questions on the lines at this time, so I will hand, it back to Mr. Wilson for any closing comments he may have.

David Wolfin: Thank you everyone for your time today. We're looking forward to a good remainder of 2024 with the big milestone of getting the permit for La Preciosa. That's going to be a game changer for the company, so keep an eye out for that.

David Wolfin: Thank you everyone for your time today.

David Wolfin: We're looking forward to a good remainder of 2024 with the big milestone of getting the permit on the prestige also that's going to be a game changer for the company. So keep an eye out for that thanks, again and have a great day.

David Wolfin: Thanks again, and have a great day!

Operator: Thank you, ladies and gentlemen. This does conclude today's event. You may disconnect at this time and have a wonderful day. We thank you for your participation.

Speaker Change: Thank you ladies and gentlemen, this does conclude todays event you may disconnect at this time and have a wonderful day, we thank you for your participation.

Operator: Okay.