Avino Silver & Gold Mines .(ASM) - 2023 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Avino achieved production results of just over 587,000 silver equivalent ounces, a slight decrease of 10% compared to Q2 2022 [6][8] - Net revenues for Q2 were $9.2 million, a slight decrease from $9.3 million in the previous year [15] - Cash flow generated from operations before working capital adjustments was $1 million for Q2, bringing the total for 2023 to $2.2 million [14][16] - Net income after taxes was $1.1 million or $0.01 per share for Q2 [16] Business Line Data and Key Metrics Changes - Silver production increased by 3% to 232,000 ounces, while copper production decreased by 12% to 1.45 million pounds [8] - Gold production increased by 13% to 1,520 ounces [8] - Mill throughput increased by 33% to just over 157,000 tonnes [8] Market Data and Key Metrics Changes - The silver price ranged from a low of $22.34 to a high of $26.02 per ounce during Q2 [23] - The London fixed price for gold ranged from $1,899 to $2,048 per ounce in Q2 [23] Company Strategy and Development Direction - The company aims to increase production from 2.8 million to 3 million ounces of silver equivalent to between 8 million and 10 million ounces by 2028 [8] - The prefeasibility study on the Oxide Tailings Project is underway, with results expected in Q4 2023 [24] - The company is focused on community engagement and environmental permit applications for the La Preciosa project [24][37] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for increased financial performance in the second half of the year despite operational challenges in Q2 [14] - The company is confident in decreasing costs per ounce in the second half of the year [17] - Management noted that the demand for silver and other precious metals is expected to increase due to global net-zero policies [24] Other Important Information - The dry stack tailings facility is completed and operational, with the conveyor system transporting dry tailings to the Avino open pit area [7] - The company has 438 direct jobs, which translates to three times the number of indirect jobs in surrounding communities [21] Q&A Session Summary Question: Impact of haulage ramp improvements - The improvements have significantly shifted the bottleneck from being mine-limited to mill-limited, enhancing throughput [30] Question: Foreign exchange impact on operating costs - The Mexican peso appreciated over 15% in Q2, impacting costs, but the company is working with vendors and evaluating hedging options to mitigate risks [32][34] Question: Community engagement feedback for La Preciosa - The community is generally pro-mining, and the company is negotiating with the last Tahito group for permitting [37] Question: Timeline for the prefeasibility study - The prefeasibility study is expected to be released in early December, with potential for slight delays [40] Question: Current mill and haulage capacity - The current mill capacity is just over 2,500 tonnes per day, and haulage capacity is above this figure [43] Question: Capital expenditure outlook - The company expects lower capital expenditures in the second half of the year compared to the first half [50] Question: Cash position and capital access - The company renewed its ATM in June and has options to tap into additional capital if needed [52]