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Avino Reports Q3 2020 Financial Results

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Avino Reports Q3 2020 Financial Results

 

 

 

 

 

Avino Silver & Gold Mines Ltd. (TSX: ASM) (NYSE American: ASM) (FSE: GV6) released its consolidated financial results for the Company’s third quarter ended September 30, 2020. The Financial Statements and Management’s Discussion and Analysis can be viewed on the Company’s web site at www.avino.com, on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.

 

David Wolfin, President and CEO commented, “Avino’s operating performance for the third quarter was directly impacted due to the strike action at the mine by the Company’s unionized workers, which halted production activities during Q3 2020. In October, we were pleased to announce that an agreement had been reached and the strike at the mine had ended. Currently, we are working towards restarting production and mining operations.

 

I would like to thank all our stakeholders for their support, patience and understanding during the quarter. In addition, I would like to extend my gratitude to the management team in Mexico who negotiated a successful and peaceful resolution.”

 

Third Quarter 2020 Financial Highlights

 

  • Cash balance of $12.5 million
  • Working capital of $16.9 million
  • Reduction in debt liabilities by $2.0 million during the quarter, and $6.1 million for the year to date 2020.
  • Revenues from mining operations of $2.7 million
  • Mine operating losses of $0.2 million, including $0.9 million in standby costs
  • Losses before interest, taxes, depreciation, and amortization2 of $4.3 million
  • Net losses from continuing operations of $4.6 million, or $0.05 per share
  • Adjusted losses2 of $0.7 million
  • Consolidated cash production costs2, net of standby costs, of $12.56 per silver equivalent payable ounce1
  • Consolidated all-in sustaining cash costs, including standby costs (“AISC”)2 of $31.61 per silver payable equivalent ounce1
1. In Q3 2020, AgEq was calculated using metals prices of $24.26 oz Ag, $1,909 oz Au and $2.96 lb Cu. In Q3 2019, AgEq was calculated using metals prices of $16.98 oz Ag, $1,472 oz Au and $2.63 lb Cu.
 
2. “Silver equivalent payable ounces sold” for the purposes of cash costs and all-in sustaining costs consists of the sum of payable silver ounces, gold ounces and copper tonnes sold, multiplied by the ratio of the average spot gold and copper prices to the average spot silver price for the corresponding period.
 
3. The Company reports non-IFRS measures which include cash cost per silver equivalent payable ounce, all-in sustaining cash cost per payable ounce, EBITDA, adjusted earnings/losses, and cash flow per share. These measures are widely used in the mining industry as a benchmark for performance, but do not have a standardized meaning and the calculation methods may differ from methods used by other companies with similar reported measures. See Non-IFRS Measures section for further information and detailed reconciliations.

 

Financial Highlights

 

 

HIGHLIGHTS

(Expressed in 000’s of US$)

Third Quarter
2020
Third Quarter
2019
Change YTD

2020

YTD

2019

 

Change

Financial Operating Performance      
Revenues $ 2,659 $ 6,796 -61% $ 14,615 $ 21,320 -31%
Mine operating income $ (189) $ (177) 7% $ 1,441 $ 175 723%
Net loss from continuing operations $ (4,587) $ (1,545) 197% $ (5,930) $ (2,209) 168%
Net loss including discontinued operations $ (4,589) $ (1,642) 179% $ (6,097) $ (2,418) 152%
Earnings (loss) before interest, taxes and amortization
(“EBITDA”)1
$ (4,250) $ (1,575) 170% $ (4,675) $ (917) 410%
Adjusted earnings1 $ (665) $ (136) 388% $ 1,684 $ 328 414%
Per Share Amounts      
Loss per share from cont. operations  – basic $ (0.05) $ (0.02) -150% $ (0.07) $ (0.03) -133%
Loss per share – basic $ (0.05) $ (0.02) -150% $ (0.08) $ (0.04) -100%
Cash Flow per share1 – basic $ (0.01) $ 0.00 -100% $ (0.00) $ 0.00 -%
HIGHLIGHTS

(Expressed in 000’s of US$)

September 30,
2020
June 30,

2020

Change September 30,
2020
December 31,
2019
Change
Liquidity & Working Capital                    
Cash $ 12,493 $ 10,386 20% $ 12,493 $ 9,625 30%
Working capital $ 16,859 $ 13,797 22% $ 16,859 $ 13,209 28%

 

 
1. The Company reports non-IFRS measures which include cash cost per silver equivalent payable ounce, all-in sustaining cash cost per payable ounce, EBITDA, adjusted earnings/losses, and cash flow per share. These measures are widely used in the mining industry as a benchmark for performance, but do not have a standardized meaning and the calculation methods may differ from methods used by other companies with similar reported measures. See Non-IFRS Measures section for further information and detailed reconciliations.

 

Costs and Capital Expenditures:

 

Capital expenditures for the third quarter of 2020 were $0.4 million compared to $2.3 million for Q3 2019. All necessary capital expenditures continued during the third quarter, as the Company finalized key upgrades to mill equipment to boost gold recoveries, as well as secured deposits on long-lead items for the planned dry-stack tailings storage facility (“TSF #2”).  

 

Operational Highlights and Overview

 

 

HIGHLIGHTS

(Expressed in US$)

Third Quarter
2020
Third Quarter
2019
 

Change

YTD

2020

YTD

2019

 

Change

Operating      
Tonnes Milled 202,664 -100% 204,286 601,224 -66%
Silver Ounces Produced 221,928 -100% 317,299 738,007 -57%
Gold Ounces Produced 1,448 -100% 1,935 4,880 -60%
Copper Pounds Produced 1,381,924 -100% 2,267,939 3,580,739 -37%
Silver Equivalent Ounces1 Produced 570,220 -100% 842,230 1,788,402 -53%
Concentrate Sales and Cash Costs      
Silver Equivalent Payable Ounces Sold2 113,703 503,742 -77% 1,011,657 1,645,263 -39%
Cash Cost per Silver Equivalent Payable Ounce1,2,3 $ 12.56 $ 12.74 -1% $ 10.48 $ 11.63 -10%
All-in Sustaining Cash Cost per Silver Equivalent
Payable Ounce1,2,3
$ 31.61 $ 18.62 70% $ 17.23 $ 16.73 3%
 
1. In Q3 2020, AgEq was calculated using metals prices of $24.26 oz Ag, $1,909 oz Au and $2.96 lb Cu. In Q3 2019, AgEq was calculated using metals prices of $16.98 oz Ag, $1,472 oz Au and $2.63 lb Cu.
 
2. “Silver equivalent payable ounces sold” for the purposes of cash costs and all-in sustaining costs consists of the sum of payable silver ounces, gold ounces and copper tonnes sold, before penalties, treatment charges, and refining charges, multiplied by the ratio of the average spot gold and copper prices to the average spot silver price for the corresponding period.
 
3. The Company reports non-IFRS measures which include cash cost per silver equivalent payable ounce, all-in sustaining cash cost per payable ounce, EBITDA, adjusted earnings/losses, and cash flow per share. These measures are widely used in the mining industry as a benchmark for performance, but do not have a standardized meaning and the calculation methods may differ from methods used by other companies with similar reported measures. See Non-IFRS Measures section for further information and detailed reconciliations.

 

During the quarter no production mining activities took place due to the work stoppage at the Avino Mine.

 

Operational Overview

 

Consolidated Production Tables

 

Q3 2020
Production by Mine Tonnes
Processed
Silver
Oz
Gold
Oz
Copper
Lbs
AgEq
Avino
Historic Above Ground Stockpiles
Consolidated
YTD 2020
Production by Mine Tonnes
Processed
Silver
Oz
Gold
Oz
Copper
Lbs
AgEq
Avino 199,575 312,819 1,916 2,263,082 835,370
Historic Above Ground Stockpiles 4,711 4,481 19 4,857 6,860
Consolidated 204,286 317,299 1,935 2,267,939 842,230

 

 

Q3 2020
Grade & Recovery by Mine Grade
Ag g/t
Grade
Au g/t
Grade
Cu %
Recovery
Ag %
Recovery
Au %
Recovery
Cu %
Avino
Historic Above Ground Stockpiles
Consolidated
YTD 2020
Grade & Recovery by Mine Grade
Ag g/t
Grade
Au g/t
Grade
Cu %
Recovery
Ag %
Recovery
Au %
Recovery
Cu %
Avino 54 0.40 0.58 90% 75% 88%
Historic Above Ground Stockpiles 59 0.31 0.15 50% 41% 31%
Consolidated 54 0.40 0.57 89% 74% 87%

 

Option Agreement – Silver Wolf Exploration Ltd. (formerly Gray Rock Resources Ltd.) (“Silver Wolf”)

 

On August 13, 2020 the Company announced that it had entered into an option agreement with Silver Wolf in which they were granted the exclusive right to acquire an 100% interest in the Ana Maria and El Laberinto properties in Mexico, in consideration of the issuance to Avino of share purchase warrants to acquire 300,000 common shares of Silver Wolf at an exercise price of $0.20 per share for a period of 36 months from the date of the TSX Venture Exchange’s final acceptance of the Option Agreement.

 

By divesting of these non-core two assets, Avino limits the costs of maintaining these properties, and retains exposure to any exploration upside through the issuance of Silver Wolf purchase shares or warrants. In addition, Avino will have a right of first refusal to purchase and process any ore or concentrate extracted from the properties for processing.

 

Exercise of Warrants

 

During the third quarter, the Company received proceeds of over $3 million from the exercise of warrants. The Company will use the proceeds to execute on its operational plans of constructing TSF#2 and on exploration on other areas of the Avino Mine.

 

Non-IFRS Measures

 

The financial results in this news release include references to cash flow per share, cash cost per silver equivalent ounce, and all-in sustaining cash cost per silver equivalent ounce, EBITDA, and adjusted earnings/losses, all of which are non-IFRS measures. These measures are used by the Company to manage and evaluate operating performance of the Company’s mining operations, and are widely reported in the silver and gold mining industry as benchmarks for performance, but do not have standardized meanings prescribed by IFRS, and are disclosed in addition to the prescribed IFRS measures provided in the Company’s financial statements and MD&A.

 

Qualified Person(s)

 

Peter Latta, P.Eng, MBA, Avino’s VP Technical Services, who is a qualified person within the context of National Instrument 43-101 and has  reviewed and approved the technical data in this document.

 

 

 

Posted November 10, 2020

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