Avino Silver & Gold to acquire La Preciosa project
Mr. David Wolfin reports
AVINO ACQUIRES NEIGHBORING LA PRECIOSA PROJECT; ADDS SIGNIFICANT PRODUCTION POTENTIAL TO GROWTH PROFILE, AND SUBSTANTIALLY ENHANCES ITS MINERAL RESOURCES
Avino Silver & Gold Mines Ltd. has entered into a share purchase agreement to indirectly acquire through the purchase of the shares of certain holding companies, the La Preciosa property from Coeur Mining Inc. (NYSE: CDE).La Preciosa is a development stage mineral property, hosting one of the largest undeveloped primary silver resources in Mexico, and is located adjacent to Avino's existing operations at the Avino property in Durango, Mexico.
Strategic rationale for the transaction
Key strategic, financial and operational advantages of the transaction include:
Presents unique operational synergies due to La Preciosa's strategic location -- Avino's and La Preciosa's property boundaries are within two kilometres of each other. The existing infrastructure and permitting, as well as excess milling capacity, at the Avino property offer the potential to significantly reduce the required development capital costs at La Preciosa under Avino's ownership. For example, Avino has a 20-kilometre dedicated five-megawatt (MW) power line and only utilizes 2.5 to 3.0 MW. La Preciosa can potentially further benefit from Avino's flexible mill circuit, which is capable of processing at any level up to 2,500 tonnes per day with further expandable production capacity.Positive results from initial metallurgical testwork -- Current metallurgical testwork performed by Avino during the due diligence process achieved 80-per-cent silver recovery and 60-per-cent gold recovery using flotation methods currently used at Avino's mill facility, further enhancing operational synergies.Reduces development timeline and risk -- Utilizing Avino's existing mill and infrastructure in connection with a rapid future potential development of La Preciosa's Gloria and Abundancia veins is expected to result in a shorter development timeline and reduce the overall development risk of La Preciosa.Reduces environmental footprint -- Leveraging Avino's existing infrastructure, which includes a tailings storage facility and fresh water well, will reduce the environmental footprint associated with the future development of La Preciosa.Increases Avino's silver resource base -- The addition of La Preciosa's mineral resource inventory substantially augments Avino's consolidated National Instrument 43-101 mineral resources to over 235 million silver equivalent ounces (AgEq). A technical report for the updated NI 43-101 mineral resource estimate on La Preciosa is expected to be filed within 45 days of this news release.Elevates Avino's potential as a silver producer and developer -- The transaction's impact on Avino's production capabilities and its increase in Avino's combined mineral resources, raises Avino's potential as an intermediate silver producing company.Enhances Avino's land position in Durango -- The acquisition of La Preciosa strengthens Avino's position in Durango, Mexico, by increasing its mineral property ownership interests by over 600 per cent to 7,746 hectares. La Preciosa's land package is adjacent to Avino's and allows Avino to employ its local expertise in mine development and operations.Presents exploration upside potential at La Preciosa -- Over 90 per cent of historic drilling has been within the current mineral resource footprint, which represents only 10 per cent of the total land package. Areas outside the current mineral resource footprint remain open for exploration, including to the east of the Martha vein and other underexplored targets to the south or west of the current mineral resource.
David Wolfin, president and chief executive officer, stated: "We believe this is a transformational transaction for Avino shareholders. I have always believed that Avino and La Preciosa belong under common ownership given the clear synergies and common infrastructure, and I'm delighted that Coeur shares this vision.La Preciosa is an excellent strategic fit within Avino's existing operations and further strengthens our presence in Durango by adding not only a large, high-quality silver development project with near-term production potential to our portfolio, but also increasing our mineral exploration concessions by more than sevenfold to over 7,000 hectares. We are also very pleased to welcome an experienced miner in Coeur as a strategic Avino equity holder. Work is already under way to determine how to best integrate La Preciosa into Avino's production operations, given the proximity to the current processing facilities and infrastructure. We expect a large portion of the existing La Preciosa resource could be mined via an underground operation to potentially improve Avino's production and organic growth profile."