Avino Silver & Gold Mines .(ASM) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Avino reported record earnings in Q1 2025, with revenues of CAD 18.8 million, up 52% from Q1 2024, marking the second highest in company history [15] - Gross profit reached a record CAD 10.6 million, with a gross profit margin of 56%, significantly improved from 19% in Q1 2024 [16] - Net income for the quarter was CAD 5.6 million, translating to earnings per share of CAD 0.04, up from CAD 5.1 million in the previous quarter [16][18] - Cash cost per silver equivalent ounce was CAD 12.62, the lowest since 2022, while all-in cash cost was around CAD 20 per ounce, below the 2024 average [17][20] Business Line Data and Key Metrics Changes - Silver equivalent production increased by 8% to 678,000 ounces, driven by improved grades in silver, gold, and copper [9] - Gold production rose by 25% to 2,225 ounces, attributed to a 17% increase in feed grade and a 75% improvement in recoveries [9] - Copper production increased by 19% to 1.6 million pounds, with a 17% improvement in feed grade and recoveries rising to 87% [9][10] - Silver production increased by 6% to 265,681 ounces, with a 10% increase in feed grade [10] Market Data and Key Metrics Changes - The company noted a positive trend in metal prices, with silver and gold showing strength in the market [27] - The cash position at the end of the quarter was CAD 26.6 million, consistent with the previous year-end levels [18] Company Strategy and Development Direction - Avino is focused on organic growth, with a clear strategy to advance its operations and development at La Preciosa [7][8] - The company aims to scale up production by 2029 through its three assets within a 20-kilometer footprint, totaling 371 million silver equivalent mineral resources [28] - Management is exploring opportunities to accelerate expansion plans while remaining disciplined in capital allocation [84] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continuing momentum and growth, with a strong balance sheet and record working capital [8][29] - The company is on track to meet its 2025 annual production guidance of 2.5 to 2.8 million ounces of silver equivalent [11] - Management indicated that meaningful income from La Preciosa is expected in 2026, with potential upside if development progresses faster [51] Other Important Information - The company has initiated several ESG and CSR initiatives, focusing on health, clean energy, and community support [23][24] - A dedicated CSR team has been added to La Preciosa to tailor community engagement efforts [26] Q&A Session Summary Question: Plans to accelerate La Preciosa development - Management is considering increasing ramp development and potentially adding another portal to accelerate plans [34] Question: Expansion of exploration program - The company is continuing drilling at ET and exploring additional targets, pending upgrades to drilling equipment [35] Question: Thoughts on hedging gold or silver - Currently, the company is not considering hedging gold or silver due to market volatility [41] Question: Potential for M&A activity - Management is focused on internal growth plans and not looking at M&A opportunities at this stage [42] Question: Expectations for Q2 operating income - Management expects fluctuations in grades but is optimistic about maintaining strong operating income if metal prices hold [50] Question: Recovery rates for metals - The increase in gold recovery is attributed to mineralogy, while the decrease in silver recovery is explained by variations in mineral composition [70]