Avino Silver & Gold Mines Q3 2026 Earnings Call Transcript

Avino Silver & Gold Mines (AMEX:ASM) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Avino Silver & Gold Mines reported a 15% year-over-year increase in silver production, driven by contributions from La Preciosa and steady performance at the Avino Mine.

The company generated revenues of $33.4 million, with a gross profit margin of 44%, impacted by a weakened US dollar against the Mexican peso and additional mine preparation costs.

Cash position remained strong at $138 million, with working capital at $142 million, following the final payment to extinguish royalties related to La Preciosa acquisition.

Avino revised its production outlook for the full year to 2.2-2.5 million silver-equivalent ounces, adjusting cost guidance due to increased processing of lower-grade material.

Strategic initiatives include advancing underground development at La Preciosa, ongoing exploration drilling, and evaluating potential for a standalone processing facility.

Exploration programs are on track to complete 15,000 meters of drilling at both La Preciosa and the Avino Mine, with recent results indicating higher grades than expected at La Preciosa.

Avino was named to the TSX 30 for the second consecutive year, with a significant share price increase over the past three years.

Management emphasized operational efficiency, disciplined cost management, and the transition to production mining at La Preciosa for future growth.

Full Transcript

OPERATOR

Good day, ladies and gentlemen, and welcome to the Avino Silver & Gold Mines Third Quarter 2026 Financial Results Conference Call and Webcast. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero.

I would now like to turn the conference over to Jennifer North, Head of Investor Relations. Ma’am, please go ahead.

Jennifer North (Head of Investor Relations and Corporate Communications)

Thank you, operator. Good morning, everyone, and welcome to Avino’s Q3 2026 earnings call and webcast. You may join today with a link in our news release which was disseminated yesterday afternoon and can also be found on our website under Investor Center, then News and Media. In addition, a link can be found on the home page of the Avino website. The full financial statements and MD&A are now available on our website under the Investor Center tab, then Reports and Financials.

In addition, the full statements are available on Avino’s profile on SEDAR+ and on EDGAR. Before we get started, I remind you to view our precautionary language regarding the forward-looking statements and the risk factors pertaining to the statements and note that certain statements made today on this call by the management team may include forward-looking information within the meaning of applicable securities laws. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause actual results to be materially different than those expressed by or implied by such forward-looking statements.

For additional information, we refer you to our detailed cautionary note in the presentation related to this call or in yesterday’s press release. On the call today we have the company’s President and CEO, David Wolfin; our Chief Financial Officer, Nathan Harte; our Chief Operating Officer, Carlos Rodriguez; our Senior Vice President, Technical Services, Peter Latta; and Mark Turcot, Senior Vice President of Corporate Development. I would like to remind everyone that this conference call is being recorded and will be available for replay later today. The replay information and the presentation slides from this conference call and webcast will be available on our website.

Also, please note that all figures stated are in US dollars unless otherwise noted. Thank you. I will now hand over the call to Avino’s President and CEO, David Wolfin. David?

David Wolfin (President and Chief Executive Officer)

Thanks, Jen. Good morning, everyone, and welcome to Avino’s third quarter 2026 earnings call and webcast. Today we will review the highlights of our operational and financial performance, discuss the progress made across our assets, and provide an outlook on our near-term priorities. We will then open the call for questions. I’ll begin with an overview of our operational performance and key developments during the quarter before turning the call over to Nathan Harte, Avino’s CFO, to review our financial results.

Please turn to Slide 5 for operational highlights. During the quarter, Avino continued to build on the progress achieved throughout the year, advancing our growth strategy while maintaining a strong focus on operational discipline and long-term value creation. Our performance was highlighted by a 15% year-over-year increase in silver production, growing contributions from La Preciosa, and steady mill performance at the Avino Mine. At La Preciosa, development activities continued to advance with mining and processing rates exceeding 450 tons per day during the quarter.

With over 3,000 meters of underground development completed, we are approaching an important transition towards production mining at the La Gloria and Abundancia veins. Development and mine preparation work on Level 3 is nearing completion, positioning us to begin longhole production mining. The transition is expected to provide access to higher-grade material compared with the development ore processed to date. Mill Circuits 1 and 2 have been processing La Preciosa development ore for two quarters following earlier-than-planned availability of Circuit Number 2 during the second quarter. This additional processing capacity has supported increased contributions from La Preciosa as we prepare for the next phase of mining. Engineering and technical studies remain ongoing to evaluate optimal mining, hauling, and processing rates over the longer term. We continue to look at the best way to support future production growth at La Preciosa, including the potential for a standalone processing facility, while making the most of our existing infrastructure at Avino.

At the Avino Mine, our focus remains on operational efficiency, disciplined cost management, and maximizing the value of our existing infrastructure. Investments in equipment, automation, and processing equipment continue to support the reliability and flexibility of our operations while providing a strong operating foundation as we advance our broader growth strategy. Turning now to exploration. Exploration remains an important component of our strategy, with active drilling programs underway at La Preciosa and the Avino Mine. At La Preciosa, we added a third drill during the quarter and remain on track to complete our 15,000-meter exploration program by year-end. The program has progressed from infill drilling towards exploration and step-out drilling, targeting high-priority areas along vein intersections and projections.

Last week we announced encouraging results from our latest round of infill drilling at La Preciosa, which continue to support our view of the project’s geological potential. These results provide further evidence that the La Gloria and Abundancia vein structures may be wider and contain higher grades than previously interpreted in certain areas. Importantly, none of the recently reported drill holes, together with the majority of holes drilled in 2025, were incorporated into our current mineral reserve and mineral resource estimates.

In addition, much of the exploration drilling is targeted to areas outside the existing resource model. We believe these results reinforce the opportunity to further define and potentially expand the mineralized system as we continue to evaluate higher-tonnage mining scenarios at La Preciosa. At the Avino Mine, exploration also continued during the quarter with two drills deployed to further evaluate the extent and characteristics of the mineralized system. Drilling has focused on the upper eastern portion of the system as well as extension targets within the Football Breccia zone. We also remain on track to complete 15,000 meters of the planned drilling at the Avino Mine. Together, these programs represent an important investment in the longer-term potential of both assets, supporting our understanding of the mineralized systems and providing opportunities for future resource growth.

Moving to Slide 6, we turn to our consolidated third quarter production results, which were released on October 15th: production of 303,000 silver ounces; just under 2,000 ounces of gold; 1.1 million pounds of copper; for a total of 583,000 silver-equivalent ounces, with total mill feed of approximately 190,000 tons. These results reflect steady operational performance across our processing facilities, with an increasing contribution from La Preciosa development material.

Silver production increased 15% compared with the third quarter of 2025, reflecting the continued importance of silver in our overall production profile. On Slide 7, we highlight production contributions from Avino and La Preciosa. At the Avino Mine, production was 477,000 silver-equivalent ounces, and at La Preciosa, development production increased 5% compared with the second quarter, contributing approximately 106,000 silver-equivalent ounces consisting of 91,000 silver ounces and 166 gold ounces. Year to date, processing of mineralized development material from La Preciosa exceeded our plan primarily due to the earlier-than-scheduled availability of Mill Circuit Number 2 during the second quarter.

While grades remained below plan, elevated silver prices supported the economic processing of additional lower-grade development material. The continued advancement of La Preciosa alongside the established production base at the Avino Mine remains central to our strategy of building a larger, multi-asset silver producer. Turning to Slide 8 for corporate highlights, we were very pleased to announce in September that Avino was named to the Toronto Stock Exchange 2026 TSX 30 for the second consecutive year. Avino once again ranked fifth among top-performing companies on the TSX based on dividend-adjusted share price appreciation over the three-year period. For the three years ended June 30, 2026, Avino share price increased approximately 958%, representing approximately US$1 billion in market capitalization growth over the period.

We have strengthened our financial position, advanced La Preciosa, established our inaugural mineral reserves, and continued investing in long-term potential of our operations in Mexico. At this time, I will now hand it over to Nathan Harte, Avino’s CFO, to review our financial performance for the third quarter. Nathan.

Nathan Harte, CPA (Chief Financial Officer)

Thank you, David. Here on slide nine we have an overview of some key financial and operating highlights, with the full table of results on the next slide. In the third quarter we generated revenues of 33.4 million, with 55% of our revenues coming from silver ounces sold at an average realized price of $63.33 per silver ounce. Gross profit margin was 44% inclusive of non-cash items and 49% on a cash basis excluding depreciation and depletion. Our gross profit margin was impacted this quarter primarily by a weakened US dollar against the Mexican peso, as well as additional mine preparation costs at La Preciosa to accelerate development.

Despite these headwinds, Avino earned $6.1 million in net income, or $0.03 per diluted share, with adjusted earnings coming in at 14.3 million, or $0.08 per share. Operating cash flows and free cash flows are both improved compared to Q3 of last year. We generated operating cash flows of 12.7 million, a 52% improvement from Q3 of last year. This amounted to operating cash flows per share of $0.07. Free cash flow generation was 6 million, excluding La Preciosa exploration and development costs.

This figure includes all the exploration and capital equipment spent at Avino. Moving to liquidity and treasury. Our cash position remains strong at $138 million at the end of the quarter, and working capital was $142 million. These amounts are net of the final $8.75 million payment made in the quarter to extinguish the royalties that were originally issued as part of the acquisition of La Preciosa. Coming to slide 10, we see all other financial metrics for the third quarter and year to date.

As everyone can see, almost all categories saw meaningful increases, highlighting again the continued free cash flow generation coming from Avino, which is more than covering all costs of development at La Preciosa as we continue the transition to production mining methods. Here on slide 11, we have an overview of operating results on a per-ounce and per-ton basis, as well as the margins at our operations. As noted previously, the Mexican peso strength had a negative impact on our margins, with the peso averaging between 7% and 10% stronger compared to the US dollar this quarter versus Q3 of 2025. On the flip side, the US dollar has now strengthened by approximately 15% since the end of the third quarter, which should provide for some tailwinds in our fourth quarter, assuming these rates hold steady in the quarter.

We did see some improvements in cost per ounce and cost per tonne at Avino, as both saw decreases in Q3 compared to Q2. Avino’s cost per tonne is now back in our guidance range for both cash costs and all-in sustaining cash costs per tonne, as a result of considerable effort from our operations team, who have been facing headwinds with increases in consumables and energy costs being seen across the industry. At La Preciosa, we saw an increase in cost per ounce and per ton for a few different reasons this quarter. La Preciosa development was over 30% higher than originally budgeted due to additional equipment and increased productivity. With these additional development and mining preparation costs, as well as our decision to continue processing lower-grade material due to the elevated silver prices, we again want to remind the investment community that these costs for La Preciosa are not indicative of long-term costs per ounce and per ton expectations.

This material is development grade running through the mill that, at lower prices, would have otherwise been considered waste material and put aside. We are in the unique position that a lot of the development at La Preciosa is in ore and allows us to offset these costs associated with the development work that we would have to do regardless. I also want to remind the investment community that La Preciosa is not yet in commercial production, and we are providing these costs inclusive of mine preparation costs for future production mining activities, not just the current development mining activities, and anticipate this to be reflected in future quarters.

As we noted in our news release, we are revising our production outlook for the full year to 2.2 to 2.5 million ounces silver equivalent. As a result, cash costs and all-in sustaining costs per ounce are being revised to a midpoint of $23 and $31 per ounce, respectively. All-in sustaining cost per ton is being revised to a midpoint of $90 per ton. The revision to all-in sustaining cost per ton guidance is a result of more La Preciosa development tons being processed in the year than initially forecasted at the beginning of 2026.

Our consolidated cash cost per tonne figure for the quarter was $71.40, which is well within our consolidated cost guidance, and our cash cost guidance is unchanged for the full year. At Avino, we are below our midpoint at $59.60 in cash cost per ton and within the range at just under $80 per ton on an all-in sustaining cost basis. Flipping back to the revenue side, on slide 12 is our expectation for production and revenue by metal. Moving forward, we expect the silver portion to continue to increase as our grade expectations at La Preciosa improve into 2027. At this point, I will now turn it back over to David to run through upcoming activities and milestones.

David Wolfin (President and Chief Executive Officer)

Thanks, Nathan. Moving to slide 13, our priorities for the remainder of the year remain focused on advancing our operating and growth objectives with both La Preciosa and the Avino Mine. We intend to complete our planned 2026 drilling programs at La Preciosa. We will continue underground development activities with a focus on transitioning towards production mining at the La Gloria and Abundancia veins and achieving our target mining rate of 500 tons per day.

Turning to slide 14, alongside our operational and growth initiatives, we remain committed to responsible mining practices and supporting the communities where we operate. Over many decades, Avino has established strong relationships with our local communities and workforce. These relationships are reflected in our employee retention, the experience and skill of our workforce, and our continued investment in local employment and development. Today, operations are supported by more than 700 employees and contractors, including approximately 580 at the Avino Mine and an additional 127 supporting development activities at La Preciosa.

Avino contributes to the local economy through employment opportunities, workforce training, local procurement, and community initiatives. Moving to slide 15, I’d like to bring our discussion back to Avino’s longer-term growth strategy and opportunities ahead. One of Avino’s key advantages is the proximity of our assets and the infrastructure already in place to support future growth. Within an approximately 20-kilometer area, we have three key assets, including our operating mill complex, which currently processes material from both Avino and La Preciosa. Our established infrastructure, including access to water, power, and tailings management facilities, provides an important foundation as we evaluate opportunities to expand production.

Our longer-term objective of reaching more than 10 million silver-equivalent ounces of annual production is supported by two principal growth opportunities: advancing and scaling up La Preciosa, including evaluating potential for a standalone processing facility, and assessing expansion opportunities at the existing Avino processing plant. We believe the combination of our mineral resource base, existing infrastructure, and strong financial position provides a solid foundation for pursuing these opportunities.

Looking ahead, our priorities remain clear: continue advancing La Preciosa, optimize performance at the Avino Mine, and maintain the financial discipline necessary to support our growth objectives and create long-term shareholder value. On behalf of our leadership, thank you to our entire team for your efforts and contributions. We’d now like to move the call to the question-and-answer portion. Operator.

OPERATOR

Thank you. We will now begin the question and answer session. To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up the handset before pressing any star keys. To withdraw your question, please press star then 2. We will pause for a moment while we allow callers to join the queue. Thank you. Thank you. Our first question is coming from Heiko Ihle with H.C. Wainwright.

Your line is live.

Heiko Ihle (Analyst)

Hey David and team. Sorry, I was muted. I assume you can hear me now, right? You talk about managing production costs, both in the prepared remarks and also in the release here today. Can you maybe give a bit of color on what areas you’ve seen the most success related to that? I mean, as you know, we were at site a few weeks ago, and I saw the efficiency of the operations firsthand. Obviously, in our view La Preciosa is engineered much more professionally — I mean, it was just built with a bigger budget than the Avino mine ever was.

But can you just give a bit of color on what you’re seeing in regards to cost and maybe even peg it asset against asset?

Nathan Harte, CPA (Chief Financial Officer)

Yeah, fair question, Heiko. Nathan here. So as you mentioned, obviously there are some cost pressures in the industry, but how we’re managing it on an asset-by-asset basis — I think with La Preciosa, because I’ll start there since that’s kind of the main focus — we’re doing a lot of development activities for future mining that are hitting our cost-per-ton number there that, in other iterations, maybe wouldn’t be hitting your cost per ton. But because we’re still in development there, we do expect some of those costs to continue to increase.

Having said that, we are transitioning to production mining, so we’ll see an improvement in grade, and that’s an automatic improvement in some of the unit costs, especially on a cost-per-ounce side. And with Avino, I think our team’s done an excellent job with keeping costs in check, and that’s been our main driver at Avino. We know it’s not a high-grade mine, so being able to keep our costs in check on a per-ton basis has been one of our big strengths in the last number of quarters.

Heiko Ihle (Analyst)

Okay, fair enough. As per your release, La Preciosa drilling has shifted from to step-out drilling at various high-priority targets. Can you give a bit of detail which areas you’re focused on, what exactly you’re seeing in these areas, and then maybe even, if I may, what the analyst community should focus on to model out the future of La Preciosa over the longer term.

Peter Latta (Senior Vice President Technical Services)

Yeah, thanks so much, Heiko. This is Peter here. With regards to the drilling and the exploration, we put out that release a couple of weeks ago, and I’d be happy to walk you through the 3D model to show you where we’re drilling and what we’re thinking around it. But really the big takeaway is that the stopes at La Preciosa are both wider and higher grade than what we typically thought, as well as what’s in our current reserve and resource estimate.

So I think we’re going to continue to surprise to the upside on the grade side. And of course we’re going to integrate that into a new resource and reserve model next year. We’re already working on that. But as mentioned in the release, none of those holes — none of the drilling to date — has been integrated into that. And so really what that means is you’ll see that when those reserves come out next year.

Heiko Ihle (Analyst)

Cool, that’s helpful. Thank you, guys. I’ll get back and keep.

David Wolfin (President and Chief Executive Officer)

Thank you.

OPERATOR

Thank you. Our next question is coming from Jake Sokolsky with Alliance Global Partners. Your line is live.

Jake Sokolsky (Analyst)

Hey David, Nathan and Tim, thanks for taking my questions.

Nathan Harte, CPA (Chief Financial Officer)

Yeah, that’s a fair question. And obviously, as we mentioned, we are transitioning to fresh ore and production-style mining. At the current prices, we’ll still continue processing at the same level we always have been, because this development work has to be done anyways. So there’s really two options: put it aside for higher metal prices or process it now and relieve some of the pressure on Avino. And I think we prefer the latter. Having said that, as you mentioned, we are shifting towards longhole mining and other production-style mining at La Preciosa kind of as we speak. So we can expect that from us in the coming quarter.

David Wolfin (President and Chief Executive Officer)

And I’d like to add that Peter and I were there two days ago, and we saw the first stope, and the wall rock, the host rock, is very competent. It looked beautiful. Little dilution.

Nathan Harte, CPA (Chief Financial Officer)

Yeah, absolutely. No, definitely. As the grade goes up, we expect the recoveries to improve at La Preciosa. We’re also implementing a few mechanical improvements. We’re buying some equipment that hopefully will be commissioned very soon, or hopefully in Q1 of next year, that will also help improve recoveries. And of course, our metallurgical team is always working on how to—how can we play around with reagents to squeeze a bit more out. So it’s something that’s always on our mind and something that we’re constantly working on.

OPERATOR

Thank you. Our next question is coming from Joseph Rager with Roth Capital. Your line is live.

Joseph Rager (Analyst)

Hey, David and team, thanks for taking the questions. A couple items on La Preciosa for me. I guess first you mentioned working on a financial study. Can you give us an update on when we might see the release of that and remind us, is that going to be PEA, or given where the resources and development is, it could be PFS level? And then after that, how long or what additional work would you need to do before you can go forward with whatever plan you chose?

Peter Latta (Senior Vice President Technical Services)

Yeah, thanks so much for the question, Joe. This is Peter here. It’s still a bit early to give you any specific dates on what that’s going to look like, but we are looking at a PFS. I think, given the level of detail that’s been studied at La Preciosa, I think that’s what makes sense. And we’re still fine-tuning a lot of the details. There is a lot of data that we can use from previous work, but there’s also data that we have to collect, and we’re in the process of doing that.

So we’re happy to give an update when we’re further down the track with that.

Joseph Rager (Analyst)

Okay. And then post-PFS, would you guys look to immediately go forward with your plan, or is there any permitting that would need to be done for either of the options, either expansion of Avino or standalone mill?

Peter Latta (Senior Vice President Technical Services)

I mean, certainly at Avino, you know, we have all the permits in place, and there’s no limit as far as the extraction rate from either mine. But, you know, if we decided to change strategies at La Preciosa, then there will be some amendments that will need to be made and, of course, engaging the community on that. And like I said, we’re not yet at the stage where we have enough information. We’re still collecting that, doing some trade-off studies, and looking at a lot of the data.

But, you know, definitely that’s all top of mind and happy to provide an update on that in a few weeks.

OPERATOR

Thank you. As a quick reminder, ladies and gentlemen, for any questions, please press star-1 on your telephone keypad. Our next question is coming from Alex Tarantev with National Bank of Canada. Your line is live.

Alex Tarantev (Analyst)

Hey guys, thanks for taking my questions. A lot of good questions already asked, so I’m kind of down to my last couple. Just going back to La Preciosa, grades you noted, you know, should be increasing soon. Can you—just a little bit more color. And I’m just trying to think of, you know, Q4, your revised guidance, and then looking into 2027, you know, the quantity of higher-grade material that we could. On one of your slides there, you’re still saying—I know it’s just an early guesstimate here—but 3 million ounces silver equivalent for next year.

So I’m just wondering, is that the picture still? And how does La Preciosa and grades factor into that number?

Nathan Harte, CPA (Chief Financial Officer)

Hey Alex, Nathan here. Yeah, that’s a fair question. Obviously we’re going through the process right now of evaluating what 2027 is—kind of more of a clear picture of what that’s going to look like on a total ounce basis. But that’s, you know, on La Preciosa, yeah, we’re expecting more contribution, clearly. And that is coming from grade, not necessarily tons, but just the conversion from development to production mining methods. So that’s really the change you’re going to see.

You know, on a specific grade number for Q4, I don’t want to give a specific number there, but you can expect to see improvements.

Alex Tarantev (Analyst)

Okay. But I mean, I guess for next year though, you should be back—or you should be at the, I think it’s around 200 grams a tonne silver and, I don’t know, 0.35 or so gold. Is that kind of the ballpark?

Nathan Harte, CPA (Chief Financial Officer)

Yeah, that’s the expectation, Alex.

Alex Tarantev (Analyst)

Okay, and then just the question, Peter. You know, I think you said that there’s no extraction rate limit at either mine. I know you’re only planning 500 tons a day at La Preciosa, but, you know, depending on how prices move and depending on kind of what your studies suggest over the next little while, is there scope under existing permits and abilities to, you know, say, take La Preciosa up from 500 to, you know, whatever, 750 or 1,000, if the math makes sense, and then dial back Avino?

Peter Latta (Senior Vice President Technical Services)

Yeah, there is scope for that. And just keeping in mind that the way our circuits are configured, we would have to go to 1,000 tons, because that’s kind of the next step up, with two of our bigger circuits at 1,000 tons per day and the two smaller circuits at 250 tons each. So you kind of get that stepwise function. And that’s something that we evaluate as far as the short- and the long-term mine plan is how we dovetail and maximize that, along with the logistics of how we end up hauling it and how that fits into the plan.

So it’s something that’s always on top of mind in terms of optimization. Yeah.

Alex Tarantev (Analyst)

Okay, that’s good. Thanks. That’s it for

Peter Latta (Senior Vice President Technical Services)

me. Thank you. Thanks, Alex.

OPERATOR

Thank you. As a reminder, ladies and gentlemen, if there will be any final questions or comments, please indicate so now by pressing star-1 on your telephone keypad. Okay. As we have no further questions in queue at this time, I would like to hand the call back to Mr. Wolfin for any closing remarks.

David Wolfin (President and Chief Executive Officer)

Thank you again to everyone for joining us today and for your continued interest and support of Avino Silver & Gold Mines. We are encouraged by the results to date. We remain focused on executing our clear path for transformational growth. With continued operational improvements, advancement at La Preciosa, a strong balance sheet, and a disciplined approach to capital allocation, we believe Avino is well positioned to continue creating long-term value for our shareholders.

We look forward to updating you on our progress in the coming quarters. Have a great day.

OPERATOR

Thank you. Ladies and gentlemen, this does conclude today’s call. You may disconnect your lines at this time, and we thank you for your participation.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.