Avino Silver & Gold Mines Ltd. (ASM) Q1 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
Avino reported record revenues and net income, improved operational efficiencies, and a strong cash position with no debt. The company achieved significant revenue growth and reduced cash costs per silver equivalent ounce. While there are competitive pressures and regulatory challenges, the company's financial health and growth plans, including La Preciosa development, are promising. The Q&A highlighted plans for exploration and technological advancements, though some responses lacked clarity. Overall, the financial performance and strategic plans suggest a positive sentiment, likely leading to a stock price increase of 2% to 8%.
Key Financial Performance
Revenue $18.8 million, up 52% from Q1 2024 due to higher realized metal prices and increased production.
Gross Profit $10.6 million, with a gross profit margin of 56%, improved from 90% in Q1 2024 due to lower operating costs and increased production.
Net Income $5.6 million, up significantly from just over $0.5 million in Q1 2024, reflecting improved operational efficiencies and higher revenues.
Cash Flow from Operating Activities $7.4 million before working capital movements, impacted by $6.6 million in working capital changes, including a $2.2 million increase in inventory.
Cash Cost per Silver Equivalent Ounce $12.62, down 15% from Q1 2024, due to improved operational efficiencies.
All-in Cash Cost per Silver Equivalent Ounce $20.08, slightly down from Q1 2024, but up 8% from last quarter due to lower ounces sold.
Cash Position $26.6 million, consistent with the end of the previous year, with working capital increasing by over $6 million.
Capital Expenditures Just under $2 million, with an additional $0.5 million in deposits on equipment for La Preciosa.
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Operating Highlights
Production Results: Silver equivalent production increased 8%, with Avino producing 678,000 silver equivalent ounces in Q1 2025.
Gold Production: Gold production increased 25% to 2,225 ounces, driven by improved feed grade.
Copper Production: Copper production increased 19%, totaling 1.6 million pounds.
La Preciosa Development: Underground development at La Preciosa has commenced, with blasting and construction of a 360-meter decline underway.
Operational Efficiencies: Successful jaw crusher replacement executed while maintaining regular mill operations.
Cost Improvements: Operating costs decreased for another consecutive quarter, enhancing margins.
Growth Strategy: Avino is committed to advancing its growth strategy, aiming for production of 2.5 million to 2.8 million ounces of silver equivalent in 2025.
Five-Year Growth Plan: The company is well positioned to execute its five-year organic growth plan with no debt.
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Risk or Challenges
Competitive Pressures: Tariff discussions continue to create uncertainty in the currencies in which we operate, which may impact costs.
Regulatory Issues: The company has received all necessary permits for mining operations at La Preciosa, but ongoing regulatory compliance remains a challenge.
Supply Chain Challenges: Working capital movements impacted cash flow, primarily due to increases in inventory and concentrate sales receivable.
Economic Factors: The strength of the Mexican Peso compared to the U.S. Dollar affects operational costs and financial performance.
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Guidance & Outlook
Growth Strategy: Avino is committed to advancing its growth strategy, focusing on the development of La Preciosa and leveraging existing assets to scale up production by 2029.
Production Guidance: Avino is on track to meet its 2025 annual production guidance of 2.5 million to 2.8 million ounces of silver equivalent.
Capital Expenditures: Capital expenditures in Q1 were just under $2 million, with additional deposits on equipment for La Preciosa of about $0.5 million.
Organic Growth Plan: Avino is executing a 5-year organic growth plan and is reviewing opportunities for acceleration and increases to the current plan.
Revenue Expectations: Avino generated $18.8 million in revenues for Q1 2025, up 52% from Q1 2024.
Net Income: Net income for Q1 2025 was a record $5.6 million, translating to earnings per share of $0.04.
Gross Profit Margin: Gross profit margin increased to 56% in Q1 2025, significantly improved from previous quarters.
Cash Position: Cash position at the end of Q1 2025 was $26.6 million, with working capital increasing by over $6 million.
Cost Projections: Cash cost per silver equivalent ounce was $12.62, the lowest since 2022, with all-in sustaining cash costs at $20.08.
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Shareholder Return Plan
Cash Position: Avino's cash position was $26.6 million at the end of the quarter.
Working Capital: Working capital increased by over $6 million.
Capital Expenditures: Capital expenditures in Q1 were just under $2 million.
Free Cash Flow: Free cash flow was impacted by working capital market movements of $6.6 million.
Net Income: Avino achieved a record $5.6 million in net income in the first quarter.
Earnings Per Share: Earnings per share was $0.04.
Cash Cost per Silver Equivalent Ounce: Cash cost per silver equivalent ounce was $12.62.
All-in Cash Cost per Silver Equivalent Ounce: All-in cash cost was around $20 per silver equivalent ounce.
Debt Status: The company has no debt, excluding operating equipment.
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Key Q&A
Q:Can you touch on any specific levers that you think you may be able to pull over the next quarter, or so to accelerate development plans at La Preciosa?
A:We're looking into increasing ramp development and potentially adding another portal.
Q:Do you have any plans to expand on the current exploration program given the strong working capital position?
A:Yes, we're continuing to drill at ET below Level 17 and looking at drilling to the West along the fault and at La Preciosa, but we're waiting for one of our drills to be upgraded.
Q:Have you guys given any thought to potentially hedging gold or silver forward?
A:At this time, we considered it, but it's not something we're looking at doing, especially on gold and silver.
Q:Do you think you're in a position now or in the near term to look at rolling up additional assets in Mexico or elsewhere?
A:We're not looking at that at this stage. We're focused on our internal growth plan.
Q:Where should we expect Q2 mine operating income?
A:We expect some fluctuations up and down in grade, but if metal prices hold constant, we would expect to continue where we are.
Q:At what point do you think there will be meaningful sums of mine income coming from La Preciosa?
A:We don't see anything meaningful until potentially the end of the year, but we think it will be good to model anything meaningful in 2026.
Q:Are there any other components in the plan that might take downtime to fix or replace?
A:Nothing that we have planned that will require significant downtime.
Q:Where else might we see uses of the cash?
A:We're looking to allocate a few extra million dollars towards exploration and prioritizing regional exploration targets.
Q:Are you looking at any new technologies for increasing recovery rates?
A:Yes, we're always running test work and doing different things to stay up to date on developments.
Q:Is there a possibility of dividends in the future?
A:At this time, there's no policy plan for dividends in the short-term.
Q:Review of Unclear Management Responses
A:Management avoided giving a direct answer regarding the specific timeline for meaningful income from La Preciosa, stating it could be as late as 2026, which lacks clarity on the potential for earlier income. Additionally, the response about cash allocation was somewhat vague, lacking specific details on other potential uses beyond exploration.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
CSR
Financial
Gold
Head Investor
Investor Relations
Mine
Mines
Nathan
Officer Chief
Peso
Silver
Slide
balance
basis silver
capital movement
cash cost
commitment
community
concentrate
donation
energy
equipment
feed grade
gold copper
grade silver
improvement
increase
inventory
production ounce
record
service
silver gold
silver ounce
statement
sustainability
webcast
website
ASM Transcript
Avino Silver & Gold Mines Ltd. (ASM:CA) Q3 2025 Earnings Call Transcript
Positive11-7
The earnings call highlights strong financial performance with record high cash position and improved net income and adjusted earnings, indicating effective cost management and operational efficiency. Despite increased cash costs per silver equivalent ounce, the company demonstrates strategic focus on growth and disciplined capital management. The Q&A section reveals optimism with high-grade drilling results and ongoing development at La Preciosa. Although some management responses lack specific details, the overall sentiment is positive, supported by strong financial metrics and strategic growth plans.
Avino Silver & Gold Mines Ltd. (ASM) Q2 2025 Earnings Conference Call Transcript
Positive8-14
The earnings call summary reveals strong financial performance with significant revenue and profit growth. Operational efficiencies and cost management improvements are evident, with reduced cash costs and increased production. The strategic initiatives, including the development of La Preciosa and ongoing exploration, indicate a positive outlook. Despite some risks, such as tariff and currency fluctuations, the overall sentiment is positive, supported by optimistic production guidance and improved financial metrics. The lack of specific negative insights from the Q&A session further supports a positive stock price movement prediction.
Avino Silver & Gold Mines Ltd. (AMEX:ASM) Q1 2025 Earnings Call Transcript
Positive5-15
The earnings call presents a positive sentiment overall. Record revenues and increased production, alongside reduced costs, indicate strong financial performance. The development at La Preciosa and a robust five-year growth plan are promising. However, lack of clear guidance on dividends and Q2 income, coupled with regulatory and economic challenges, tempers optimism. The Q&A suggests a proactive approach to exploration and technology, but hesitancy in hedging metals and expanding assets. Given the positive financial metrics and strategic developments, the stock price is likely to react positively in the short term.
Avino Silver & Gold Mines Ltd. (ASM) Q1 2025 Earnings Call Transcript
Positive5-14
Avino reported record revenues and net income, improved operational efficiencies, and a strong cash position with no debt. The company achieved significant revenue growth and reduced cash costs per silver equivalent ounce. While there are competitive pressures and regulatory challenges, the company's financial health and growth plans, including La Preciosa development, are promising. The Q&A highlighted plans for exploration and technological advancements, though some responses lacked clarity. Overall, the financial performance and strategic plans suggest a positive sentiment, likely leading to a stock price increase of 2% to 8%.
ASM Report
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