Avino Silver & Gold Charts Growth After Record Year

Avino Silver & Gold ((TSE:ASM)) has held its Q4 earnings call. Read on for the main highlights of the call.

Avino Silver & Gold’s latest earnings call struck an upbeat tone, as management highlighted record revenue, strong profitability, and a fortress balance sheet that together overshadowed rising per‑ounce costs and lingering project uncertainties. Executives framed 2025 as a turning point, backing a multi‑asset growth story with solid cash flow and advancing development at La Preciosa.

Record Revenues and Earnings Break Company Highs

Avino reported full‑year 2025 revenue of $92.2 million, with more than $30 million generated in Q4 alone, both company records. Net income reached $26.6 million, or $0.17 per share for the year, while adjusted earnings jumped about 121% year over year to $46.5 million, or $0.29 per share, underscoring a sharp improvement in underlying profitability.

Balance Sheet Strength Underpins Growth Flexibility

The company closed the year with $102 million in cash and $99 million in working capital, giving it substantial financial firepower. With no secured debt beyond equipment leases, Avino has room to self‑fund key capital projects, absorb volatility, and move opportunistically on expansion without immediate reliance on equity or expensive borrowing.

Robust Cash Flow Fuels Capital Plans

Operating cash flow before working capital reached $19 million in Q4 and $35.3 million for the full year, or $0.22 per share, highlighting the asset base’s cash‑generating capacity. Free cash flow, excluding La Preciosa development spending, totaled $15.6 million in Q4 and $24.3 million for 2025, giving the miner internal funding for drilling, studies, and incremental mine development.

Return to Primary Silver and Steady Output

Silver accounted for 54% of Q4 revenue, the first time since before 2020 that it exceeded half of sales, signaling a clear shift back toward primary silver status. Production held steady at around 2.6 million silver‑equivalent ounces, even as total mill feed increased 14% year over year, indicating stable throughput and operational reliability.

La Preciosa Development and High‑Grade Drill Success

At La Preciosa, Avino began extracting and processing development material, running about 11,995 tons through the Avino mill at roughly 200 tons per day in Q4, marking early integration of the project. Drill results showed standout intercepts, including widths grading well above current resource averages, suggesting substantial grade upside and potential to enhance future economics.

Margins Expand on Higher Prices and Cost Control

Fourth‑quarter gross profit climbed to $17.8 million, or roughly $19 million on a cash basis, with gross margins rising to 58% and about 62% excluding non‑cash charges, up sharply from 43% a year earlier. For the full year, mine operating income reached $48.5 million with a 53% margin, reflecting better realized prices and improving operating leverage.

Unit Costs Per Ton Show Resilience

On a throughput basis, Avino kept its cost structure in check, with cash costs per ton improving about 3% to $53.69 in 2025 from $55.43 in 2024. All‑in costs per ton held roughly flat at around $78 year over year, pointing to stable unit economics at the mill even as broader inflation and labor costs remained a headwind.

Market Recognition and Scaling Ambitions

Investors have taken notice, with Avino’s share price up more than 600% over three years to mid‑2025 and market capitalization climbing nearly 780%, driving greater visibility. Inclusion in major mining ETFs and recognition among top TSX performers has broadened liquidity and institutional access, supporting the company’s larger‑scale ambitions.

Large Resource Base Anchors Multi‑Year Growth

Avino now controls a substantial resource base, with 277 million silver‑equivalent ounces in the measured and indicated categories and 94 million inferred. The 2026 plan calls for about 30,000 meters of drilling split between Avino and La Preciosa, updated resource estimates, and inaugural reserves, alongside a ramp at La Preciosa targeting 500 tons per day.

Per‑Ounce Cash Costs Trend Higher

Despite tonnage stability, per‑ounce metrics moved up, with cash cost per silver‑equivalent payable ounce rising 9% to $16.13 from $14.84. All‑in sustaining costs climbed 15% to $23.75, with management pointing to metal mix and silver‑price movements that affect silver‑equivalent calculations, complicating direct comparisons to prior periods and budgets.

Short‑Term Cost Pressure from Development Material

Fourth‑quarter costs were also affected by processing La Preciosa development material through the Avino mill, which is not yet optimized for long‑term production economics from that source. Management stressed that these development‑phase costs are temporary and should not be extrapolated as indicative of steady‑state per‑ounce operating costs once the project is fully ramped.

Record Revenue but Fewer Ounces Sold

The company achieved its revenue record despite selling fewer ounces, underscoring the outsized role of higher metal prices in the year’s financial performance. This dynamic highlights Avino’s leverage to precious‑metal pricing but also underlines exposure to price volatility, as volumes alone did not drive the top‑line surge.

Inflation and Labor Costs Remain a Concern

Management acknowledged significant labor cost increases in the 2024–2025 period following post‑pandemic inflation, even though conditions now appear to be stabilizing. They cautioned that in a rising price environment, ongoing cost creep remains a risk, meaning that productivity gains and careful cost management will be critical to protecting margins.

Capital Deployment Amid Market Volatility

Executives noted they paused the at‑the‑market equity program after market pullbacks and expressed caution on potential M&A, citing heightened market fear. While the strong cash position gives Avino options, decisions on mill expansions and acquisitions are being approached conservatively, introducing some uncertainty around the precise timing of major growth moves.

Project Studies Still Shaping La Preciosa Path

Key design choices at La Preciosa remain under review, with open‑pit versus underground scenarios still being evaluated as earlier feasibility work is now outdated. Ongoing engineering and optimization efforts are needed before Avino commits to a full‑scale development route, delaying definitive capital and production decisions but aiming to de‑risk the project.

Metal Prices Distort Silver‑Equivalent Metrics

Management reminded investors that silver‑equivalent calculations are highly sensitive to movements in silver and other metal prices, which can swing reported unit costs per silver‑equivalent ounce. This means cost and performance metrics may vary from internal budgets and quarter to quarter, even if underlying operational efficiency remains relatively stable.

Guidance: Drilling‑Led Growth and Funded Expansion

Looking ahead to 2026 and beyond, Avino plans roughly 30,000 meters of drilling, split equally between Avino and La Preciosa, to convert resources and define reserves while ramping La Preciosa toward 500 tons per day. Backed by over $100 million in cash, strong margins, and expectations that silver will remain the majority of revenue, the company aims to scale toward 2029 across three nearby assets, maintaining cash costs near the mid‑teens and AISC in the low‑to‑mid‑$20s per ounce.

Avino’s earnings call painted the picture of a silver‑leaning producer in transition from stabilization to measured growth, supported by record financials and a robust balance sheet. While higher per‑ounce costs, inflation, and project uncertainties pose challenges, the company’s strong cash generation, expanding resource base, and disciplined capital stance offer investors a leveraged yet increasingly de‑risked exposure to the silver cycle.