Mr. David Wolfin reports
AVINO ANNOUNCES Q3 2018 PRODUCTION RESULTS; PROVIDES CORPORATE UPDATE
Avino Silver & Gold Mines Ltd. has released its third quarter 2018 production results from its Avino property near Durango, Mexico.
Consolidated production highlights for third quarter 2018 (compared with third quarter 2017):
Silver equivalent production decreased by 7 per cent to 704,429 ounces (1).Gold production decreased by 18 per cent to 2,204 ounces.Silver production decreased by 7 per cent to 342,151 ounces.Copper production decreased by 10 per cent to 992,271 pounds.
(1) In the third quarter of 2018, AgEq was calculated using metals prices of $15 per ounce silver, $1,213 per ounce Au and $2.77 per pound Cu. In the third quarter of 2017, AgEq was calculated using metals prices of $17.45 per ounce Ag, $1,316 per ounce Au and $2.99 per pound Cu.
"During the third quarter of 2018, our production results were slightly lower than anticipated; however, we are very pleased that we have begun small-scale processing of newly mined material from the San Luis area of the Avino mine through mill circuit 2. We feel this highlights that our expansion was well timed and running smoothly," said David Wolfin, president and chief executive officer. "As we enter into the fourth quarter, we are on pace to achieve our internally projected production levels for the full year, and we remain focused on ensuring that we are ready to run San Luis material through mill circuit 4 in the first quarter of 2019. Additionally, the company has undertaken a number of cost reduction initiatives during this time of low precious metal prices, which are outlined further in this news release."
Production tables for third quarter 2018 and year to date
COMPARATIVE PRODUCTION RESULTS FROM THIRD QUARTER 2018 AND THIRD QUARTER 2017Q3 2018 Q3 20172018 YTD2017 YTDTotal AgEq produced (oz) calculated*704,429 760,756 2,099,980 2,063,573Total gold produced (oz) calculated 2,204 2,673 6,004 6,463Total silver produced (oz) calculated 342,151 368,456 975,073 1,074,526Total copper produced (lb) calculated 992,271 1,106,305 3,443,264 3,264,363* In the third quarter of 2018, AgEq was calculated using metals prices of $15 per ounce silver, $1,213 per ounce Au and $2.77 per pound Cu. In the third quarter of 2017, AgEq was calculated using metals prices of $17.45 per ounce Ag, $1,316 per ounce Au and $2.99 per pound Cu.
Avino mine third quarter 2018 production results
COMPARATIVE FIGURES FOR THIRD QUARTER 2018 AND THIRD QUARTER 2017 FOR THE AVINO MINE Q3 2018Q3 2017 2018 YTD 2017 YTDTotal mill feed (dry tonnes) 81,502117,862279,674351,802Feed grade silver (g/t)58 66 64 68Feed grade gold (g/t)0.52 0.70 0.57 0.58Feed grade copper (%)0.54 0.48 0.60 0.47Recovery silver (%) 84%85%83%85%Recovery gold (%) 67%70%68%69%Recovery copper (%) 88%88%88%89%Total silver produced (kg)3,9356,634 14,881 20,234Total gold produced (g)28,309 57,448108,087139,421Total copper produced (kg)392,365501,8121,486,0581,480,692Total silver equivalent produced (oz) calculated* 360,018542,8461,369,5801,494,245* In the third quarter of 2018, AgEq was calculated using metals prices of $15 per ounce silver, $1,213 per ounce Au and $2.77 per pound Cu. In the third quarter of 2017, AgEq was calculated using metals prices of $17.45 per ounce Ag, $1,316 per ounce Au and $2.99 per pound Cu.
During the third quarter of 2018 material mined from the Avino mine (Elena Tolosa area) was processed using mill circuit 3 as well as mill circuit 2 through mid-July. In the later portion of July, mill circuit 2 transitioned to processing historic above ground stockpiles, and on Sept. 24 mill circuit 2 began processing mined material from the newly developed San Luis area of the Avino mine.
Accordingly, processed tonnage from the Elena Tolosa area of the Avino mine was down by 31 per cent during the quarter which is reflected in the lower silver, gold and copper production during the quarter. Silver and gold feed grades decreased by 12 and 26 per cent, respectively, while the copper increased by 13 per cent. The variances of the metal recoveries were not significant.
Processed tonnage from the San Luis area of the Avino mine is not included in the Avino mine production totals, but is reflected in the consolidated figures. During the final week of September, 3,719 tonnes of San Luis material were processed using mill circuit 2 resulting in the production of 45 tonnes of bulk concentrate containing 119 kg silver, 2,223 g gold and 6,538 kg Copper or 12,583 ounces AgEq.Production totals for the historic above ground surface stockpiles are reflected in a separate table.
At the Avino mine (Elena Tolosa area), underground advancement totalled 931 metres and 118,768 tonnes of material were broken. At the San Luis area of the Avino mine, underground advancement totalled 63 metres and 7,366 tonnes of material were broken.
San Gonzalo mine third quarter 2018 production highlights
COMPARATIVE FIGURES FOR THIRD QUARTER 2018 AND THIRD QUARTER 2017 FOR THE SAN GONZALO MINEQ3 2018Q3 20172018 YTD2017 YTDTotal mill feed (dry tonnes) 19,691 20,33859,70360,579Feed grade silver (g/t) 226281 238 262Feed grade gold (g/t)1.15 1.551.081.31Recovery silver (%) 78%85% 77% 83%Recovery gold (%) 75%82% 75% 78%Total silver produced (kg)3,4614,82610,95913,188Total gold produced (g)17,086 25,69847,93461,603Total silver equivalent produced (oz) calculated* 155,990217,910 475,499 569,328* In the third quarter of 2018, AgEq was calculated using metals prices of $15 per ounce silver, $1,213 per ounce Au and $2.77 per pound Cu. In the third quarter of 2017, AgEq was calculated using metals prices of $17.45 per ounce Ag, $1,316 per ounce Au and $2.99 per pound Cu.
The silver grade at San Gonzalo for the second quarter of 2018 decreased by 20 per cent, and the gold grade decreased by 26 per cent compared with the third quarter of2017, due to lower grades in the areas being mined during the quarter.
Tonnage broken for the quarter was 17,434 tonnes and underground development totalled 765 metres. Plant availability for the second quarter of 2018 was 97 per cent, and there were no shutdowns other than normal scheduled maintenance.
San Gonzalo is nearing the end of its mine life, thus the reduction in grade and metals produced is in line with internal expectations.
HISTORIC ABOVE GROUND STOCKPILESQ3 20182018 YTDTotal mill feed (dry tonnes) 88,733 133,797Feed grade silver (g/t)6257Feed grade gold (g/t)0.450.40Feed grade copper (%)0.150.15Recovery silver (%) 57% 58%Recovery gold (%) 52% 53%Recovery copper (%) 37% 35%Total silver produced (kg)3,127 4,370Total gold produced (g)20,93128,490Total copper produced (kg) 51,18469,244Total silver equivalent produced (oz) calculated* 175,837 242,318* In the third quarter of 2018, AgEq was calculated using metals prices of $15 per ounce silver, $1,213 per ounce Au and $2.77 per pound Cu. In the third quarter of 2017, AgEq was calculated using metals prices of $17.45 per ounce Ag, $1,316 per ounce Au and $2.99 per pound Cu.
During the start-up, testing and commissioning phase of mill circuit 4, which are expected to last through the end of 2018, feed has been and will continue to come from historic above ground Avino mine stockpiles. Once development is complete, mill circuit 4 will transition to processing newly mined mill feed from the San Luis area of the Avino mine.
The historic above ground stockpiles were also processed using mill circuit 2 during the second half of July through Sept. 24, at which time mill circuit 2 transitioned to processing newly mined material from the San Luis area of the Avino mine.
Avino mine expansion (San Luis area)
The San Luis area of the Avino mine is accessed through a separate portal located approximately two km from the main entrance of the Avino mine (Elena Tolosa area). Current resources at San Luis were included in the most recent resource estimate on the Avino property, which can be found in Avino's news release dated Feb. 21, 2018, on Avino's website and under the company's profile on the SEDAR system. The news release was also filed with the SEC on Form 6-K.
Work at San Luis during the third quarter, 2018 currently focused on restoration of the main haulage ramp, which was completed during the quarter. With the haulage ramp now complete, work is under way to begin drifting on levels 6 and 6.5, followed by levels 7, 7.5, 8, 8.5 and 9. Most of these areas were partially developed during the 1980s and 1890s prior to the mine's closure.
Zinc circuit
The company continued its testing program for recovery of precious metals and zinc from the San Gonzalo tailings. In the third quarter, 2018 the company produced 179 dry tonnes of low-grade zinc concentrate grading 670 g/t silver, 3.95 g/t gold and 8.36 per cent zinc, for an additional 8,212 AgEq ounces. So far in 2018 the company has produced 611 dry tonnes of low-grade zinc concentrate grading 1.155 g/t silver, 5.87 g/t gold and 10.03 per cent zinc for a total of 43,582 AgEq ounces. As this product has been marketed and sold, the testing program will continue.
Corporate update
The company recently raised $4.6-million (U.S.) by way of an underwritten public offering during a very difficult precious metals environment.For detailed information on the financing, visit the company's website.
The funds raised have been allocated to alleviate financial constraints that were caused by a variety of items including but not limited to: significantly lower metals prices, the cost of the expansion at the Avino mine which the company has financed using cash reserves rather than debt, cash flow postponement due to an unforeseen delay in shipping of concentrates, and the construction ofbuttresses for the tailings storage facility in Mexico to extend its life by three years, which was not included in the 2018 budget.
Avino has worked to keep production costs and cash costs competitive and the company is committed to vigorously protecting its cost models. Further, while the company continues to experience challenges in the mining sector, management has commenced cost reduction initiatives that span the company, and call for reduction in capital, operating and administrative costs in Mexico, British Columbia and the corporate offices in Vancouver.Cost reduction measures include temporarily postponing exploration in Mexico, postponing the paste backfill decision in Mexico, as well as reducing general and administrative costs through investor relations initiatives and marketing. The fully financed exploration program will continue at Bralorne.
These strategic changes will help to reduce costs in all areas of the business, as well as conserve cash, increase efficiencies and preserve the company's profitable operations.
Quality assurance/quality control
Mill assays are performed at the Avino property's on-site lab. Check samples are sent to SGS Labs in Durango, Mexico, for verification. All concentrate shipments are assayed by one of the following independent third party labs: AHK and Inspectorate in the United Kingdom and LSI in the Netherlands.
Qualified person(s)
Avino's Mexican projects are under the supervision of Jasman Yee, PEng, Avino director, who is a qualified person within the context of National Instrument 43-101. He has reviewed and approved the technical data in this news release.
About Avino Silver & Gold Mines Ltd.
Avino is a silver and gold producer with a diversified pipeline of gold, silver and base metals properties in Mexico and Canada employing approximately 600 people. Avino produces from its wholly owned Avino and San Gonzalo mines near Durango, Mexico, and is currently evaluating the potential economics of possible future production at the Bralorne gold mine in British Columbia, Canada. The company's gold and silver production remains unhedged.
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