Avino Silver & Gold Mines Ltd. Q2 2026 Earnings Call Summary

Moby Intelligence

Thu, August 13, 2026 at 12:20 AM GMT+3 3 min read

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Avino Silver & Gold Mines Ltd. Q2 2026 Earnings Call Summary - Moby

Strategic Execution and Operational Drivers

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Achieved a transformational milestone with the announcement of an inaugural mineral reserve estimate of 127 million silver equivalent ounces across three assets.
Accelerated La Preciosa development by switching Mill Circuit 2 to process development ore three months ahead of schedule, resulting in a 59% increase in silver production from the project.
Leveraged processing flexibility by mining near-surface oxidized material at the Avino Mine that was outside of current reserves, prioritizing margin over total ounce volume.
Strengthened the corporate structure through the appointment of a new SVP of Corporate Development to oversee the transition from a single-mine operator to a multi-asset producer.
Maintained a 'bulletproof' balance sheet with $144 million in cash to fund organic growth initiatives without the need for secured debt.
Executed a capital allocation strategy that included the repurchase and cancellation of over 500 thousand common shares under a normal course issuer bid.
Benefited from a favorable pricing environment where precious metals accounted for 90% of total revenue, despite volatility in market prices.

Growth Strategy and Outlook

Evaluating the optimization of La Preciosa through trade-off studies comparing long-term hauling to the construction of a potential stand-alone processing facility.
Transitioning exploration focus from infill drilling to step-out holes at high-priority vein intersections to drive future resource expansion.
Targeting a production increase at La Preciosa to 500 tons per day as development mining moves toward commercial production levels.
Anticipating a normalization of costs and grades in subsequent quarters as mine sequencing moves away from lower-grade development material into production long-hole mining.
Progressing toward a long-term strategic goal of 10 million silver equivalent ounces per year supported by existing infrastructure and resource depth.

Financial Adjustments and Risk Factors

Reported a $5 million negative impact from provisional pricing adjustments due to metal price volatility during the quarter.
Noted that the Mexican peso remained 12-15% stronger against the US dollar compared to the prior year, creating a headwind for operating costs.
Clarified that current elevated cash costs per ounce are not indicative of long-term expectations as they reflect processing of low-grade development material that would otherwise be waste.
Identified that increased concentrate inventory at quarter-end temporarily impacted reported revenue and gross margins.

Q&A Highlights

Exploration drill results and resource expansion timing

Management is withholding specific drill results to provide a comprehensive update alongside the next reserve and resource revision scheduled for next year.
Confirmed that the drill holes released in recent press releases for La Preciosa have returned grades above the current average reserve and resource grade.

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Drilling cost trends and equipment availability

Costs have seen standard inflationary increases of a few percent, but long-term contractor relationships have mitigated significant spikes.
The primary constraint on exploration speed is the availability of additional drills rather than cost, with a fifth drill currently being sourced.

Hedging strategy regarding provisional pricing and fuel

The company remains committed to not hedging metals, viewing the M+1 settlement cycle as manageable despite occasional quarterly volatility.
Fuel hedging is not utilized as Mexican energy prices are subsidized and the mill operations are connected to the electrical grid.

Production rebound and mine sequencing

The Q2 production dip was a strategic choice to process near-surface oxidized material that was profitable but lower recovery.
Production is expected to normalize as the mine sequence returns to the ET mine's primary zones and La Preciosa contributes higher-grade ore.

M&A interest in regional projects like Cerro Las Minitas

Management is familiar with the project but stated it is currently too far for hauling to their existing mill.
The company is prioritizing high-priority targets within its current 20-kilometer footprint over stand-alone acquisitions at this time.