Avino shares 2Q19 financial results

2Q19 highlights

• Generated revenues of US$7.8 million from the sale of concentrates.
• Mine operating income of US$0.3 million.
• Net loss after taxes of US$0.2 million, or Nil per share.
• Silver equivalent production of 599 593 oz, including 246 129 oz of silver, 1609 oz of gold and 1 136 113 lb of copper.
• Total consolidated cash cost2 was $10.89 per silver equivalent payable ounce.
• Consolidated all-in sustaining cost (AISC) was US$13.10 per silver payable equivalent ounce.
• Working capital of US$8.7 million, at June 30, 2019, and US$14.2 million as of today.
• Earnings before interest, taxes, depreciation and amortization (EBITDA) was US$0.6 million.
• Cash of US$3.4 million was on hand at the end of the quarter, and US$7.7 million as of today.

"During the second quarter of 2019, we experienced an unplanned downtime of 5 days due to labour negotiations regarding the closure of the San Gonzalo mine, this, together with a decline in the feed grade at San Gonzalo, had an impact on our earnings during the second quarter of 2019" said David Wolfin, President and CEO.

"However, during the quarter, on a positive note, the commissioning of the tailing's thickener, which began during the first quarter, has been completed on schedule and has transitioned to full operation. In addition, I'm very pleased that our teams in Mexico and Canada continued their diligent approach to reducing our G&A expenses with a 24% reduction this quarter compared to 2Q18 and a 32% reduction year to date. We will continue to focus on profitable ounces and keeping costs controlled company-wide."

Operational results

Silver equivalent production for 2Q19 decreased by 19% to 599 593 oz compared to 738 853 oz in 2Q18. Silver production for 2Q19 decreased 24% to 246 129 oz1 compared to 323 014 oz in 2Q18. Gold production for 2Q19 decreased by 7% to 1609 oz compared to 1734 oz in the corresponding period of 2018. Copper production decreased by 21% to 1 136 113 lb compared to 1 480 830 lb in 2Q18. Total mill feed processed during 2Q19 increased 8% to 200 873 dry t which comprised 96 707 t from Avino, 17 570 t from San Gonzalo and 86 596 t from AHAG Stockpiles.

Production results for the quarter are reflective of the unplanned downtime of five days due to labour negotiations with respect to the closure of the San Gonzalo mine, the expected decline in feed grade at San Gonzalo as the mine approaches the end of its current economic life, and the change of product feed mix to maximise profitable production ounces.

Due to the upcoming closure of the San Gonzalo mine, Avino had previously announced that there would be a transition of some workers from San Gonzalo to the San Luis area of the Avino Mine. The depleting mine material and grades at San Gonzalo have occurred at a time where silver prices remain low, which in turn affects the entire company and its contractors.

The mill circuit configuration in 2Q19 was the same as 1Q19, where Mill Circuit 1 processed material from the San Gonzalo Mine, Mill Circuit 2 processed material from the San Luis area of the Avino Mine, Mill Circuit 3 processed material from Elena Tolosa and Mill Circuit 4 processed material from the Avino Historic Above Ground "AHAG" Stockpiles.

At the Avino mine, silver equivalent ounces1 produced during 2Q19 totalled 362 445 compared to 529 247 during 2Q18, a decrease of 32%.

On a quarterly basis, gold feed grade increased by 6%, while silver and copper feed grades decreased by 23% and 8%, respectively. The change in grades was due to variability in the deposit.

Recovery rates for 2Q19 were down slightly compared with 2Q18, with decreases of 5% in silver, 6% gold, and 6% copper.

 

At the San Gonzalo mine, silver equivalent ounces produced during 2Q19 totalled 61 905 representing a decrease of 57% compared to 143 124 in 2Q18.

During 2Q19, silver and gold feed grades at San Gonzalo declined by 45% and 54%, respectively, compared to 2Q18. This, along with a decrease in both silver and gold recovery, resulted in a 57% decrease in silver equivalent ounces produced compared to 2Q18.

San Gonzalo is approaching its end of life, and the grades, recoveries and production have begun to decline. This is in line with the company’s internal expectations.  

In 2Q19, Mill Circuit 4 processed 86 596 t of the AHAG Stockpiles, which represents a 10% increase in throughput compared to 1Q19, with no comparative figures for 2Q18 as the company commenced processing AHAG Stockpiles in May 2018.

Read the article online at: https://www.globalminingreview.com/finance-business/08082019/avino-shares-2q19-financial-results/