Avino Silver & Gold Signals Confident Growth Path

Avino Silver & Gold ((TSE:ASM)) has held its Q1 earnings call. Read on for the main highlights of the call.

Avino Silver & Gold’s latest earnings call struck an upbeat tone, underscored by record revenue, surging profitability and a much‑anticipated inaugural reserve estimate that supports a long‑term growth story. Management acknowledged near‑term cost pressure from lower‑grade development ore and accounting changes, but framed these as temporary as higher‑grade feed and drilling scale up.

Record Revenue and Sales Mix

Avino delivered record quarterly revenue of $39.4 million in Q1 2026, setting a new high-water mark for the company. Roughly 60% of sales came from silver, with an impressive realized price of $86.42 per ounce, amplifying the top‑line benefit from higher production and favorable market conditions.

Strong Profitability and Earnings Momentum

Earnings showed sharp acceleration, with net income rising to $15.9 million, or $0.09 per diluted share, compared with $5.6 million, or $0.04, a year earlier. Adjusted earnings climbed even faster to $24.3 million, or $0.14 per share, underscoring powerful operating leverage to metal prices and improved mine performance.

Cash Generation and Balance Sheet Strength

Operating cash flow before working capital adjustments reached $18.7 million, supporting free cash flow of $17.2 million when excluding La Preciosa development spending. The company ended the quarter with a record $139 million in cash and $140 million of working capital, with no secured debt beyond equipment leases, giving it ample flexibility to fund growth.

Ramping Production and Throughput

Quarterly output totaled about 568,000 silver‑equivalent ounces, supported by total mill feed of 185,000 tons, up 11% year over year. La Preciosa began making a visible contribution, processing over 14,000 tons at an average 200–230 tons per day as the asset moves along its early ramp‑up curve.

Transformational Reserve and Resource Debut

Avino unveiled its inaugural proven and probable reserves of 127 million silver‑equivalent ounces, contained in 27 million tons grading 145 grams per ton across three assets. Measured and indicated resources stand at 67 million tons containing 301 million silver‑equivalent ounces at 162 grams per ton, with a further 87.6 million inferred ounces in 24.8 million tons.

Aggressive 2026 Exploration Campaign

The company is pursuing an ambitious 30,000‑meter drilling program, split evenly between Avino and La Preciosa, to grow and upgrade resources. About 2,600 meters have been drilled at La Preciosa and 3,000 meters at Avino so far, and a fifth drill rig is being added to accelerate meterage and target key expansion zones.

Margin Expansion and Operating Leverage

Cash‑basis margins reached a robust 68% when excluding depreciation and depletion, highlighting strong economics at current metal prices. Mine operating cash flow before taxes of $26.7 million demonstrated the company’s substantial leverage to its primary commodities, with higher prices dropping quickly to the bottom line.

Unit Costs Versus Guidance Benchmarks

Reported consolidated cash cost came in at $24.46 per payable silver‑equivalent ounce and all‑in sustaining cost at $34.72. On the company’s budget price assumptions, cash cost would have been $19.82 per ounce, within guidance, and AISC $28.14 per ounce, slightly above, while per‑ton metrics broadly tracked or modestly exceeded targets.

Growing Market and Institutional Recognition

Management highlighted increasing attention from institutional investors and exchange‑traded funds, reflecting a broader and more sophisticated shareholder base. This growing recognition could support better market liquidity and valuation as Avino continues to deliver on its operating and growth plans.

Operational Discipline and ESG Focus

The company emphasized ongoing community engagement and environmental practices, including water recycling and selective backfilling of underground workings. Low labor turnover and long‑standing relationships in Durango, Mexico, were presented as strategic advantages that help underpin operational stability and project execution.

Short‑Term Unit Cost Inflation

Quarterly unit costs rose versus the prior period, with cash costs per silver‑equivalent ounce up 16% and AISC up 10%, while cash cost per ton increased 7%. Management attributed much of this inflation to the mix shift toward La Preciosa development material and to silver price movements that affect silver‑equivalent calculations.

Impact of Lower‑Grade Development Ore

Processing lower‑grade development ore from La Preciosa early in the quarter led to slightly below‑plan performance and temporarily weaker grades. Extra handling and transport overhead also weighed on costs, but management expects both grades and unit costs to normalize as production mining supersedes development feed.

AISC Running Slightly Above Targets

On a budget‑price basis, AISC of $28.14 per ounce landed just above the company’s high‑$20s target range. Executives argued that as mining transitions to higher‑grade stopes and throughput ramps, fixed and semi‑fixed costs should be absorbed over more ounces, pulling AISC back toward guidance.

One‑Off Depreciation Increase

Depreciation at the Avino operation jumped due to accounting adjustments following the new reserve statement, increasing non‑cash charges for the quarter. Management stressed that this was a one‑time reset tied to the updated life‑of‑mine profile, not a structural change to the underlying cost base.

Execution and Timing Risks in Growth Plan

Avino acknowledged execution risk as it ramps its 30,000‑meter drill campaign and advances development timelines, with drilling only fully ramping from mid‑quarter. Rock conditions and normal operational variability could affect quarterly meterage and throughput, making delivery on its aggressive 15,000‑meter per asset target a key milestone to watch.

Permitting Hurdles for Oxide Tailings Expansion

The company’s longer‑term growth outline includes a potential oxide tailings expansion around 2028, which could materially add to production. However, this project remains contingent on community engagement and securing permits, introducing timing uncertainty around one of Avino’s key future scaling options.

Forward‑Looking Guidance and Growth Ambitions

Management reiterated plans for the 30,000‑meter 2026 drill program, with five rigs supporting 15,000 meters each at La Preciosa and Avino, while La Preciosa throughput is targeted to rise from roughly 200–230 tons per day toward 500 tons. The medium‑term goal is to reach mid‑tier scale of 8–10 million silver‑equivalent ounces per year by 2029, underpinned by the new 127‑million‑ounce reserve base and cost guidance centered on sub‑$21 cash costs and high‑$20s AISC on a per‑ounce basis.

Avino’s earnings call painted a picture of a company moving firmly into a new phase, backed by record financial results and a sizable reserve platform. While near‑term costs are elevated and execution risks remain, management’s growth blueprint, solid balance sheet and expanding institutional interest position the miner as a name to watch for investors seeking leveraged exposure to silver and gold.