Avino Silver & Gold Mines Ltd. (ASM:CA) Q3 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
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.
Key Financial Performance
Revenue $21 million, up 44% from Q3 of last year. The increase is attributed to improved mill availability and consistent operational discipline.
Gross Profit $10 million (cash basis $11.1 million), with a gross profit margin of 47% (cash basis 53%), up from 39% (cash basis 45%) in Q3 of last year. The improvement is due to operational efficiency and higher revenue.
Net Income $7.7 million or $0.05 per share, significantly up from $1.2 million or $0.01 per share in Q3 of last year. The increase is attributed to higher revenue and improved cost management.
Adjusted Earnings $11.6 million or $0.07 per share, compared to $5 million or $0.04 per share in Q3 of last year, reflecting better operational performance.
Cash Flow from Operating Activities $8.3 million or $0.05 per share, showing improvement from Q3 of last year due to better operational results.
Free Cash Flow $4.5 million (stand-alone basis $5.4 million), up from Q3 of last year, driven by operational improvements and disciplined capital expenditures.
Cash Position $57.3 million, a record high, up $20 million from last quarter and $30 million from the end of the year, due to strong financial performance and operational efficiency.
Working Capital $51 million, increased by over $10 million in the quarter, supported by higher cash reserves.
Cash Cost per Silver Equivalent Ounce $17.06, up 14% from Q3 last year, influenced by changes in silver price relative to gold and copper prices.
All-in Sustaining Cost per Silver Equivalent Ounce $24, up 9% from Q3 of last year, impacted by silver price movements and increased activity from bringing a second mine online.
Cost per Tonne Processed (Cash Basis) $53.18, down 2% compared to Q3 of last year, reflecting better mill availability and solid mining rates.
Cost per Tonne Processed (All-in Basis) 3% reduction per tonne processed for the quarter, showing consistent cost management.
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Operating Highlights
La Preciosa material processing: Started processing La Preciosa's material through Circuit #1 ahead of expectations.
Drilling results: Reported positive assay results from La Preciosa, including high silver and gold grades, significantly higher than current resource grades.
Market recognition: Included in the Toronto Stock Exchange 2025 TSX30, ranking fifth among top-performing companies. Share price increased 610% and market capitalization increased 778% over three years.
Index inclusion: Added to the Market Vectors Junior Gold Miners Index and VanEck Junior Gold Miners ETF (GDXJ).
Operational excellence: Advanced automation and process upgrades, leading to strong mill performance and sustained throughput.
Portfolio optimization: Acquired outstanding royalties and contingent payments on La Preciosa, improving project economics and operational flexibility.
Financial performance: Achieved record cash of $57 million and working capital of $51 million. Generated $21 million in revenues, up 44% from Q3 2024.
Strategic exploration: Commenced drilling programs at La Preciosa and Avino vein to unlock additional resource potential. Integrated AI for data analysis and target generation.
Growth strategy: Focused on transitioning to a multi-asset Mexican mid-tier producer with plans to scale up production by 2029.
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Risk or Challenges
Operational Excellence: While operational upgrades and workforce expansion at La Preciosa have been positive, there is a risk of operational inefficiencies or delays as the company transitions to processing La Preciosa's material. Additionally, the reliance on automation and process upgrades may pose challenges if technical issues arise.
Portfolio Optimization: The acquisition of outstanding royalties and contingent payments on La Preciosa reduces financial complexity, but it also increases financial exposure and operational dependency on this single asset. Any underperformance at La Preciosa could significantly impact the company's financials.
Financial Management and Capital Allocation: Although the company has a strong cash position, rising cash costs per silver equivalent ounce (up 14% year-over-year) and all-in sustaining costs (up 9% year-over-year) could pressure margins, especially if silver prices decline further. The company is also exposed to currency fluctuations between the U.S. dollar and Mexican peso, which could impact costs.
Exploration and Drilling: While exploration results at La Preciosa and Avino have been promising, there is a risk that future drilling may not yield similar high-grade results, potentially impacting resource estimates and production plans. Additionally, reliance on AI for exploration introduces risks if the technology fails to deliver accurate or actionable insights.
Economic and Market Conditions: The company is exposed to fluctuations in silver, gold, and copper prices, which directly impact revenue and profitability. Lower-than-expected metal prices could adversely affect financial performance and the feasibility of ongoing projects.
Regulatory and Tariff Risks: Although there are no direct impacts from tariffs, the company is subject to currency risks due to U.S. dollar and Mexican peso fluctuations. Regulatory changes in Mexico could also pose challenges to operations and cost structures.
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Guidance & Outlook
Operational Excellence: Advancements in automation and process upgrades have led to strong mill performance and sustained throughput. Progress at La Preciosa has been exceptional, with workforce expansion and equipment training to support operational efficiency. Processing of La Preciosa's material through Circuit #1 has started ahead of expectations.
Portfolio Optimization: Acquisition of outstanding royalties and contingent payments on La Preciosa has improved project economics and operational flexibility. This reduces financial and operational complexity, strengthening Avino's overall asset portfolio.
Financial Management and Capital Allocation: Strong financial performance with record cash of $57 million and working capital of $51 million. The company continues to build financial strength.
Strategic Exploration and Drilling: Positive assay results from La Preciosa drill holes, with significantly higher grades than current resource averages. Larger widths encountered at La Gloria and Abundancia highlight potential for underground mining methods.
Market Recognition: Avino was included in the Toronto Stock Exchange 2025 TSX30, ranking fifth among top-performing companies. The company was also added to the Market Vectors Junior Gold Miners Index and VanEck Junior Gold Miners ETF.
Production Estimates: The company maintains its original production estimate of 2.5 million to 2.8 million silver equivalent ounces for 2025.
La Preciosa Development: Processing of La Preciosa's material in Mill Circuit 1 at 200-250 tonnes per day has commenced. The company plans to release an updated resource estimate and its first mineral reserve estimate for La Preciosa in Q1 2026.
Exploration and Drilling: Drilling at Avino vein aims to test down-dip extension and strike extension to the west. Drilling at La Preciosa focuses on confirming prior results and improving grade zonation understanding near scheduled mining areas. Results will inform mine planning and a resource estimate update.
Growth Strategy: The company aims to scale up production from its three key assets within a 20-kilometer footprint by 2029. These assets collectively host 277 million silver equivalent ounces in measured and indicated resources and 94 million in inferred resources.
Cost Management: Cost per tonne processed remains competitive, with reductions in cash and all-in costs per tonne compared to prior periods. The company is managing currency risks through a hedging program.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:What is the targeted throughput rate for La Preciosa over the next few quarters and what does the ramp look like?
A:The company is starting with Circuit 1 and plans to ramp up to filling 2 smaller circuits next year. The goal is to run Circuit 1 and Circuit 2 for the entirety of 2026.
Q:Are there any specific levers that might accelerate the plans for La Preciosa?
A:The company is focusing on starting with Circuit 1 to ensure consistent tonnage and avoid start-stop operations. Development is ongoing in 4 different areas, with the goal of running 1 circuit for the rest of the quarter and 2 circuits into 2026.
Q:What are the drilling results and progress at La Preciosa compared to prior expectations?
A:Drilling results show significant and high-grade hotspots in the deposit, with some areas showing improved widths beyond 5 meters. Ground support is required due to oxidation in higher areas, but this is expected to decrease as mining goes deeper.
Q:What could be accelerated in the company’s longer-term plans and how much would it cost?
A:The company is exploring expansion opportunities at the Avino Mill and other areas but has not finalized plans or costs. They emphasize discipline in spending and will proceed with opportunities that have a strong IRR. No specific cost figures were provided.
Q:What is the company’s stance on foreign exchange gains in Q4?
A:The company realized $1 million in income from hedging between the peso and USD in Q3. They expect continued benefits from hedges over the next 6 months, with a sizable derivative asset on the balance sheet to be realized in Q4 and Q1 next year.
Q:When will La Preciosa be reported as commercial production instead of a CapEx offset?
A:Under IFRS standards, revenue will be offset with costs of sales as soon as sales begin. This will be presented separately in the MD&A.
Q:When will the company provide official financial study or guidance for La Preciosa?
A:The company plans to release reserves next year, which will include grades and recoveries. Guidance for 2026 will include financial details for La Preciosa.
Q:What is the limiting factor for La Preciosa’s development and what is the maximum tonnage per day?
A:The mill is limited to 2,500 tonnes per day across 4 circuits. The company is matching mining and milling rates and is ahead of schedule in development. Long-term plans include potentially filling the entire circuit with La Preciosa ore.
Q:What is the grade potential and expansion drilling plan for La Preciosa?
A:The grade at La Preciosa is high, with significant potential for infill and expansion drilling on various veins. The company plans to pursue this next year.
Q:What is the permit limit for ore extraction at La Preciosa?
A:The permit does not restrict throughput for ore extraction. Engineers are tasked with exploring further expansion and underground development for next year.
Q:Review of Unclear Management Responses
A:Management avoided providing specific cost figures for potential expansion plans, stating that no final plans exist and emphasizing discipline in spending. Additionally, they did not provide a clear timeline or detailed metrics for some of the longer-term plans, such as the exact mining rate or financial study details for La Preciosa.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Avino
CEO Wolfin
CSR
Circuit
Gold Miners
Junior Gold
Slide
access service
approach capital
balance sheet
basis
calculation cost
care
cash flow
community
cost ounce
date figure
drilling resource
driver
excellence
expectation
gold meter
gram gold
gram silver
hole
intercept
ounce date
peso
portfolio
price
resource potential
silver ounce
statement
website
width
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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