Avino Silver & Gold ((TSE:ASM)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Avino Silver & Gold’s latest earnings call carried a distinctly upbeat tone, with management emphasizing record revenue, strong cash generation and a landmark reserve declaration that supports a long runway for growth. Cost pressures and project‑execution risks were acknowledged as near‑term headwinds, but executives framed them as temporary and manageable within the company’s expanding production profile.
Record Revenue Underscores Favorable Silver Price Environment
Avino posted quarterly revenue of $39.4 million in Q1 2026, the highest in its history and a clear step‑up from prior periods. Roughly 60% of this total came from silver, boosted by an impressive average realized silver price of $86.42 per ounce, which significantly amplified the impact of modestly higher throughput.
Profit Surges as Earnings Leverage Kicks In
Net income jumped to $15.9 million, or $0.09 per diluted share, up from $5.6 million, or $0.04, a year earlier and 51% above the prior quarter’s $10.5 million. Adjusted earnings were even stronger at $24.3 million, or $0.14 per share, more than doubling year on year and underscoring the company’s growing leverage to metal prices.
Cash Generation and Balance Sheet Reach Record Strength
Operating cash flow before working capital movements reached $18.7 million, supporting free cash flow of $17.2 million once La Preciosa development spending is stripped out. The company finished the quarter with a record $139 million of cash and $140 million of working capital, and it carries no secured debt beyond equipment leases, giving it notable financial flexibility.
Production Growth Supported by Rising Throughput
Total quarterly output reached about 568,000 silver‑equivalent ounces on mill feed of 185,000 tons, an 11% increase versus Q1 2025. La Preciosa began to make a meaningful contribution, providing more than 14,000 tons with average throughput of roughly 200 to 230 tons per day as the new asset moves up its ramp.
Inaugural Reserve and Resource Base Marks a Step Change
A cornerstone of the call was Avino’s first formal mineral reserve estimate, totaling 127 million silver‑equivalent ounces of proven and probable reserves in 27 million tons grading 145 grams per ton. The broader mineral inventory is sizable, with 67 million tons of measured and indicated resources containing 301 million silver‑equivalent ounces and a further 24.8 million tons of inferred resources hosting 87.6 million ounces.
Exploration Program Accelerates Across Key Assets
Management outlined an aggressive 30,000‑meter drill program for 2026, split equally between La Preciosa and Avino. Progress is underway, with about 2,600 meters drilled at La Preciosa and 3,000 meters at Avino so far, and a fifth drill rig is being added to accelerate work and tighten the company’s understanding of its expanding resource base.
High Margins Showcase Operating Leverage to Metals
On a cash basis, Avino reported mine margins of 68% when excluding depreciation and depletion, highlighting strong profitability at current metal prices. Mine operating cash flow before taxes totaled $26.7 million, reinforcing the narrative that relatively modest throughput growth can translate into outsized cash generation when prices are favorable.
Unit Costs Track Guidance on Budget‑Price Basis
Headline consolidated cash costs came in at $24.46 per silver‑equivalent ounce with all‑in sustaining costs of $34.72 per ounce. Management stressed that using 2026 budget metal prices, cash costs would be $19.82 per ounce, within the guided $19 to $21 range, while AISC would be $28.14 per ounce, only slightly above guidance, with per‑ton metrics largely on or better than plan.
Growing Institutional Interest Signals Market Validation
The company noted increased interest from institutional investors and exchange‑traded funds, which is broadening its shareholder base beyond retail holders. Management framed this as an important validation of the business model and a potential catalyst for improved trading liquidity and valuation as execution continues.
Operational and ESG Efforts Support Social License
Avino highlighted continued work on environmental and social initiatives, including water recycling, backfilling underground workings where appropriate and advancing reclamation activities. Low labor turnover and long‑standing relationships with local communities in Durango, Mexico, were emphasized as strategic advantages that help underpin stable operations and project expansions.
Short‑Term Cost Pressures from Development Material
Quarterly unit costs rose sequentially, with cash costs per silver‑equivalent ounce up 16% and AISC up 10%, while cash costs per ton increased 7%. Management attributed much of the pressure to the early processing of lower‑grade development ore from La Preciosa and to silver price movements in Ag‑equivalent calculations, and expects costs to ease as higher‑grade production ore replaces development material.
Depreciation Spike and Execution Risks Temper the Upside
Reported earnings were affected by a one‑time jump in depreciation at the Avino mine, tied to accounting changes following the new reserve estimate, which increased non‑cash charges. Management also acknowledged execution risks around hitting drill‑meter targets, scaling throughput and advancing the oxide tailings project, which remains contingent on successful permitting and community engagement over the coming years.
Guidance Points to Growth Toward Mid‑Tier Scale
Looking ahead, Avino aims to complete its 30,000‑meter drill campaign, ramp La Preciosa throughput from roughly 200 to 230 tons per day toward 500 tons per day and ultimately to 1,000 tons per day per circuit. With 127 million silver‑equivalent ounces in reserves and cost guidance centered on cash costs of about $19 to $21 per ounce and AISC in the high‑$20s, management is targeting mid‑tier status with 8 to 10 million silver‑equivalent ounces of annual production by 2029, while advancing oxide tailing options for potential future growth.
The call painted a picture of a company shifting firmly into a higher gear, with record financials, a robust reserve base and a clear path to scale offset by normal execution and permitting risks. For investors, Avino’s story now hinges on its ability to deliver the planned throughput and exploration milestones while bringing unit costs back toward guidance as development ore gives way to higher‑grade production feed.