Avino Silver & Gold Mines .(ASM) - 2023 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Q3 2023 revenues reached $12.3 million, an increase of over $3 million from the previous quarter and the same quarter in 2022 [15][16] - Mine operating income for Q3 was $2.4 million, with a year-to-date total of $5.3 million [15] - Adjusted earnings for Q3 were $1.6 million or $0.01 per share, with a year-to-date total of $2.6 million or $0.02 per share [16][17] - Working capital increased by $2.8 million or 62%, totaling $7.4 million at the end of Q3 [16] Business Line Data and Key Metrics Changes - Q3 production results included 591,000 silver equivalent ounces, with silver production at 237,000 ounces and gold production increasing by 73% to just under 2,100 ounces [9][15] - Mill throughput was just under 155,000 tons, with an adjusted full-year production estimate of 2.4 million to 2.7 million ounces of silver equivalent [9][10] Market Data and Key Metrics Changes - The Mexican peso appreciated over 15% in Q3 compared to the 2022 average, impacting costs as most expenditures are incurred in pesos [19][42] - Cash costs for silver equivalent payable ounces were $16.90, with all-in sustaining cash costs at $22.69 [18][19] Company Strategy and Development Direction - The company aims to scale production from 2.4 million to 2.7 million ounces of silver equivalent to between 8 million and 10 million ounces by 2028 [9][28] - The prefeasibility study on the oxide tailings project is underway, expected to be completed in Q1 2024 [8][27] - Community engagement is ongoing for the La Preciosa project, with plans for development contingent on obtaining necessary approvals [27][28] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the higher grades expected from La Preciosa, with an anticipated agreement with the Tahito group imminent [34][35] - The company is focused on cash flow generation from the Avino mine to support future developments [28][35] Other Important Information - The company has completed its planned drilling program for the year, totaling 7,545 meters in 13 holes [8][10] - ESG initiatives included community summer courses for children and first aid training for employees, reflecting the company's commitment to social responsibility [21][22][24] Q&A Session Summary Question: Update on La Preciosa asset and cash flow for 2024 - Management confirmed that the timeline for La Preciosa remains on track, with higher grades expected and cash flow anticipated from both La Preciosa and Avino [34][35] Question: Impact of peso strength on costs and hedging plans - Management acknowledged the peso's impact on costs and indicated that they are monitoring foreign exchange rates and considering hedging options for the next year [42][43] Question: Nature of the 207,000 tons hauled to surface - The company clarified that the material is primarily high-grade stockpiles, with improvements in ramp conditions allowing for increased hauling efficiency [49][50] Question: Recovery rates for silver and copper - Management indicated that recovery rates are expected to improve due to the arrival of a rock breaker, which will help process larger boulders and enhance overall recovery [51][52]