Avino Announces Financial Results for Q4 and Year End 2016
1 The Company reports non-IFRS measures which include cash cost per silver equivalent ounce, all-in sustaining cash cost per ounce, and cash flow per share. These
measures are widely used in the mining industry as a benchmark for performance, but do not have a standardized meaning and th e calculation methods may differ
from methods used by other companies with similar reported measures.
511
NYSE - MKT: ASM
TSX-V: ASM
March 1, 2017 FSE: GV6
Avino Announces Financial Results for Q4 and Year End 2016
Avino Silver & Gold Mines Ltd. (ASM: TSX-V, ASM: NYSE–MKT, GV6: FSE, “Avino” or “the Company”) is
pleased to announce the consolidated financial results for the Company’s fourth quarter and year ended
December 31, 201 6. The financial statements and the management discussion and analysis can be
viewed on the Company's web site at www.avino.com, on SEDAR at www.sedar.com and on EDGAR at
www.sec.gov.
FOURTH QUARTER 2016 HIGHLIGHTS
Generated revenues of $12.0 million from the sale of San Gonzalo and Avino concentrates
Mine operating income amounted to $3.5 million an increase of 141% over the same period of
2015
Net income after taxes amounted to $1.2 million or a Basic EPS of $0.03
Produced 707,775 silver equivalent ounces, including 419,355 ounces of silver, 2,581 ounces
of gold and 755,645 pounds of copper
Total consolidated cash1 cost was $11.50 (US$8.62) per payable silver ounce
Consolidated all-in sustaining cost (“AISC”)1 was $13.36 (US$10.01) per payable silver
equivalent ounce, a 5% increase compared to $12.70 (US$9.51) per ounce in the fourth
quarter of 2015
Average realized selling prices for silver and gold were US$16.69 and US$1,194 per ounce
respectively
Cash of $15.8 million and short term investments consisting of cash of $13.4 million was on
hand at the end of the quarter
2016 HIGHLIGHTS
Generated revenues of $39.9 million from sales of San Gonzalo and Avino concentrates
Mine operating income was $14.5 million, an increase of 79%
Net income after taxes amounted to $2.0 million or a Basic EPS of $0.05
Operating cash flows before movements in working capital to $7.6 million or $0.18 per
share - Basic
Produced 2,679,334 silver equivalent ounces, including 1,612,060 million ounces of silver,
7,119 ounces of gold and 4,206,585 pounds of copper
Total cash cost1 was $11.24 (US$8.48) per silver equivalent ounce
All-in sustaining cost (“AISC”)1 was $13.70 (US$10.34) per payable silver ounce, a 13%
increase compared to $12.14 (US$9.49) per ounce in 2015
Average realized selling prices for silver and gold were US$17.71 and US$1,258 per ounce
respectively
Cash of $15.8 million and short term investments consisting of cash of $13.4 million were on
hand at December 31, 2016
Invested $10.7 million in capital expenditures net of concentrate proceeds of $6.2 million
from the sales of Avino mine concentrates
AVINO SILVER &
GOLD MINES LTD.
T 604.682.3701 Suite 900, 570 Granville Street [email protected]
F 604.682.3600 Vancouver, BC V6C 3P1 www.avino.com
“I am very pleased to report that Avino continued to deliver strong financial and operating results in
2016, with consistent silver equivalent production and solid performance from our Avino and San
Gonzalo mines, our cornerstone assets from which to grow the company from. We continue to meet
management’s expectations, and with stringent cost controls we exite d the year with strong
fundamentals in place. Our steady results are due to the dedication of our teams in both Canada and
Mexico. Our focus for 2017 remains consisten t operating results and moving forward with our plans for
plant and mine expansion to in crease throughput capacity at the processing plant by an estimated 70%,
the advancement of the Oxide Tailings Resource project, continued construction and consideration of
new initiatives regarding tailings storage, and the previously announced three-phased expansion
program at Bralorne.”
- David Wolfin, President, CEO & Director
HIGHLIGHTS
Fourth
Quarter 2016
Fourth
Quarter 2015
Change Year 2016 Year 2015
Change
Operating
Tonnes Milled 134,688 136,817 -2% 544,336 517,887 5%
Silver Ounces Produced 419,355 409,216 2% 1,612,060 1,625,285 -1%
Gold Ounces Produced 2,581 1,588 63% 7,119 7,083 1%
Copper Pounds Produced 755,645 1,271,565 -41% 4,206,585 4,743,691 -11%
Silver Equivalent Ounces1 Produced 707,775 761,767 -7% 2,679,334 3,020,348 -11%
Consolidated San Gonzalo and Avino Sales
Silver Equivalent Ounces Sold2 644,479 241,114 167% 2,035,618 1,140,029 79%
Cash Cost per Silver Equivalent Ounce2 $ 11.50 $ 8.24 40% $ 11.24 $ 8.45 33%
US$ Cash Cost per Silver Equivalent Ounce 2,3 US$ 8.62 US$ 6.17 40% US$ 8.48 US$ 6.61 28%
All-in Sustaining Cost per Silver Equivalent Ounce2,3 $ 13.36 $ 12.70 5% $ 13.70 $ 12.14 13%
US$ All-in Sustaining Cost per Silver Equivalent Ounce2,3 US$ 10.01 US$ 9.51 5% US$ 10.34 US$ 9.49 9%
Average Realized Silver Price per Ounce ($US) US$ 16.69 US$ 14.29 17% US$ 17.71 $ 15.46 15%
Average Realized Gold Price per Ounce ($US) US$ 1,194 US$ 1,092 9% US$ 1,258 $ 1,148 10%
Average Realized Copper Price per Tonne ($US) US$ 5,313 - 100% US$ 4,850 - 100%
Financial
Revenues $ 12,006,667 $ 3,860,109 211% $ 39,895,591 $ 19,082,847 109%
Mine Operating Income $ 3,546,929 $ 1,471,826 141% $ 14,503,700 $ 8,121,153 79%
Net Income $ 1,217,821 $ 370,675 229% $ 1,992,479 $ 483,424 312%
Cash $ 15,816,628 $ 7,475,134 291% $ 15,816,628 $ 7,475,134 291%
Working Capital $ 31,293,019 $ 6,003,557 421% $ 31,293,019 $ 6,003,557 421%
Shareholders
Earnings per Share ("EPS") – Basic $ 0.03 $ 0.01 200% $ 0.05 $ 0.01 400%
Cash Flow per Share 3 – Basic $ 0.06 $ (0.03) 300% $ 0.18 $ 0.01 1700%
1. Metal production is expressed in terms of silver equivalent ounces (oz Ag Eq), In 2016, AgEq was calculated using metals prices of $17.10 oz Ag, $1,248 oz Au and
$2.21 lb Cu. In 2015, AgEq was calculated using $16 oz Ag, $1,150 oz Au and $3.00 lb Cu
2. “Silver equivalent ounces sold” for the purposes of cash costs and all -in sustaining costs consists of the sum of silver ounces, gold ounces and copper tonnes sold
multiplied by the ratio of the average spot gold and copper prices to the average spot silver price for the corresponding per iod.
3. The Company reports non-IFRS measures which include cash cost per silver equivalent ounce, all -in sustaining cash cost per ounce, and cash flow per share. These
measures are widely used in the mining industry as a benchmark for performance, but do not have a standardized meaning and th e calculation methods may differ
from methods used by other companies with similar reported measures.
Financial Results
The Company generated revenues of $39.9 million during 2016; a 109% increase compared with 2015,
due to the Avino Mine entering into production at levels intended by management effective April 1,
2016. In 2015, the Avino mine was in development phase and proceeds from the sale of Avino Mine
Concentrate were classified as a recovery of exploration and evaluation expenditures . Higher metal
prices for silver and gold were also a contributing factor.
1. Metal production is expressed in terms of silver equivalent ounces (oz Ag Eq), In 2016, AgEq was calculated using metals prices of $17.10 oz
Ag, $1,248 oz Au and $2.21 lb Cu. In 2015, AgEq was calculated using $16 oz Ag, $1,150 oz Au and $3.00 lb Cu
2. “Silver equivalent ounces sold” for the purposes of cash cost s and all-in sustaining costs consists of the sum of silver ounces, gold ounces and
copper tonnes sold multiplied by the ratio of the average spot gold and copper prices to the average spot silver price for th e corresponding
period.
3. The Company reports non-IFRS measures which include cash cost per silver equivalent ounce, all -in sustaining cash cost per ounce, and cash
flow per share. These measures are widely used in the mining industry as a benchmark for performance, but do not have a stand ardized
meaning and the calculation methods may differ from methods used by other companies with similar reported measures.
Mine operating income was $ 14.5 million during 2016, an increase of $ 6.4 million or 79% from
$8.1 million in 2015. During the year of 2016, net income increased by $1.5 million to $2.0 million or
$0.05 basic and diluted per share, compared to net income of $0.5 million or $0.01 basic and diluted per
share during 2015. The primary reason for the increase is the ad dition of revenue from the Avino Mine.
The Company continues to maintain efficient and controlled cost models and will continue to evaluate
and optimize tax planning strategies.
Operational Results
Silver equivalent production for 2016 decreased by 11% to 2,679,334 oz1 compared to 3,020,348 oz in
2015. Silver production for 2016 decreased 1% to 1,612,060 oz compared to 2015. Gold production for
2016 increased by 1% to 7,119 oz compared to 7,083 oz in 2015. Copper production for 2016 decreased
by 11% to 4,206,585 lbs compared to 4,743,691 lbs in 2015. Total mill feed processed during 2016 was
544,336 dry tonnes compared to 517,887 dry tonnes during 2015, an increase of 5%.
At the Avino mine, the silver equivalent ounces¹ produced during 2016 totalled 1,606,272 which was a
decrease of 11%, mainly due to a decrease in the grade of the copper in the concentrate, changes in the
feed grades processed , and required maintenance on the Mill Circuit 3 ball mill during the second
quarter of 2016.
At the San Gonzalo Mine, the silver equivalent ounces 1 produced during 2016 totalled 1,073,062
compared to 1,218,351 produced in 2015. This represents a 12% decrease compared to 2015 mainly due
to mining taking place in different areas in 2016, as well as Mill Circuit 2 primarily devoted to processing
Avino Mine material.
Costs and Capital Expenditures
Consolidated all -in sustaining cash costs per AgEq ounce 1 during 2016 were $ 13.70 (US$10.34)
compared to $ 12.14 (US$9.49) during the period of 2015, a n increase of 10% mainly due to grade
fluctuations. As we continue to transition from development mining to production mining we anticipate
achieving lower production costs.
Capital expenditures during 2016, net of concentrate proceeds of $ 6.2 million, were $ 10.7 million
compared to $8.9 million during 2015.
Capital expenditures primarily relate to advancing the Avino Mines which included installation of a new
power line to the mine site, exploration at the Avino Mine, the purchasing of new mining,
milling/processing and transportation equipment , as well as advancing the Bralorne Mine and
exploration and mining equipment.
Bralorne Mine
During 2016, the Company continued to develop a strategic operating plan to achieve a profitable
operation at Bralorne. The company engaged independent engineering professionals to assist in
developing a project execution plan to enable production start -up at 100 TPD with eventual expansion
to 300 TPD. Independent mining engineers were also engaged to develop a long term mine plan which
includes a change to narrow vein long hole mining wherever possible, to replace the historic labou r
intensive shrinkage mining method. Together with their input, the Company has established a three -
phased and disciplined approach to the Bralorne project development which was previously announced
in a news release dated January 23, 2017 and is available on the company’s we bsite at
http://www.avino.com/s/news.asp?ReportID=776401. New mining equipment is being acquired to
replace older equipment and to further mechanize for long hole mining. The first work to be carried out
underground will be to test the long hole mining method.
Additionally, t he Company announced on October 21, 2016 the results of an updated NI 43 -101
resource estimate for the property, the news release and full technical report are available on
the company’s website at http://www.avino.com/i/pdf/nr/2016-10-21_NR-k2iodud98.pdf
and http://www.avino.com/i/pdf/reports/2016_Bralorne_Tech_Report_Final.pdf respectively. The dam
for the Tailings Storage Facility (“TSF”) was raised in October 2015, and additional buttress work was
completed on the tailing’s impoundment during the third quar ter of 2016. The Interim Mine Closure
Plan (“IMCP”) and review process is underway and is expected to be completed in the first quarter of
2017. The new Water Treatment Plant (“WTP”) was enclosed in a new building in November to protect
it from the elements and is ready for freshet in early 2017. The work on the TSF, the IMCP, WTP and the
strategic operating plan are all contributing to the Company’s goal of obtaining the permits from British
Columbia's Ministry of Energy & Mines and Ministry of Environment to resume processing and mining
activities in 2017.
In 2016, in conjunction with North Island College and St’at’imc Government Services, Avino completed a
four-month underground mining training educational cohort for 12 members of the St’at’imc
communities. All 12 students graduated from the program and received a number of industry
certification tickets. The program, funded largely by the provincial government, involved three months
of classroom instruction in Lillooet followed by two weeks of hands on training at the Bralorne Gold
Mine. To view the video on the training program please click here https://vimeo.com/172272150.
A second similar program commenced in November, 2016, and included a state -of-the-art simulator
from Sandvik for advanced traini ng on underground mining equipment. This program finished in
February, 2017, with the graduation to be held on March 3, 2017. Avino is eager to hire graduates from
the programs once the mine re-opens.
Non-IFRS Measures
The financial results in this news release include references to cash flow per share, cash cost per silver
equivalent ounce, and all-in sustaining cash cost per silver equivalent ounce, each of which are non -IFRS
measures. Cash flow per share, c ash cost pe r ounce , and all -in sustaining cash cost per ounce are
measures developed by mining companies in an effort to provide a comparable standard of
performance. However, there can be no assurance that our reporting of these non -IFRS measures is
similar to that reported by other mining companies. Cash flow per share, cash cost per silver equivalent
ounce, and all-in sustaining cash cost per silver equivalent ounce are measures used by the Company to
manage and evaluate operating performance of the Company’s minin g operations, and are widely
reported in the silver and gold mining industry as benchmarks for performance, but do not have
standardized meanings prescribed by IFRS, and are disclosed in addition to the prescribed IFRS measures
provided in the Company’s financial statements and MD&A.
1. Metal production is expressed in terms of silver equivalent ounces (oz Ag Eq), In 2016, AgEq was calculated using metals prices of $17.10 oz
Ag, $1,248 oz Au and $2.21 lb Cu. In 2015, AgEq was calculated using $16 oz Ag, $1,150 oz Au and $3.00 lb Cu
2. “Silver equivalent ounces sold” for the purposes of cash cost s and all-in sustaining costs consists of the sum of silver ounces, gold ounces and
copper tonnes sold multiplied by the ratio of the average spot gold and copper prices to the average spot silver price for th e corresponding
period.
3. The Company reports non-IFRS measures which include cash cost per silver equivalent ounce, all -in sustaining cash cost per ounce, and cash
flow per share. These measures are widely used in the mining industry as a benchmark for performance, but do not have a stand ardized
meaning and the calculation methods may differ from methods used by other companies with similar reported measures.
Conference Call
Avino will be holding a conference call on Thursday, March 2, 2017 at 8 am PST (11 am EST).
To participate in the conference call, please dial the following:
Toll Free Canada & USA: 1-800-319-4610
Outside of Canada & USA: 1-604-638-5340
No pass-code is necessary to participate in the conference call; participants will have the opportunity to
ask questions during the Q&A portion of the call.
Participants should dial in 10 minutes prior to the conference.
The conference call will be recorded and the replay will be available on the Company's web site within
one hour following the conclusion of the call.
Qualified Person(s)
Avino's Mexican projects are under the supervision of Mr. Chris Sampson, P.Eng, BSc, Avino consultant
and Mr. Jasman Yee, P.Eng, Avino director; Avino’s Bralorne Mine project is under the supervision of
Fred Sveinson, B.A., BSc, P.Eng, Avino Senior Mining Advisor. These individuals are qualified persons
(“QP”) within the context of National Ins trument 43 -101. The respective QP’s have reviewed and
approved all the applicable technical data in this MD&A.
Outlook
Avino's mission is to create shareholder value through profitable organic growth at the Avino Property
and the strategic acquisition and advancement of mineral exploration and mining properties. We are
committed to expanding our operations and managing all business activities in an environmentally
responsible and cost-effective manner while contributing to the well -being of the communities in which
we operate.
The Company remains focused on the following key objectives:
1. Maintain and improve profitable mining operations while managing operating costs and
achieving efficiencies;
2. Advance the Bralorne project towards profitable production;
3. Explore regional targets on the Avino Property followed by other properties in our portfolio;
4. Assess the potential for processing the oxide tailings resource from previous milling operations
and;
5. Identify and evaluate potential projects for acquisition.
ON BEHALF OF THE BOARD
“David Wolfin”
________________________________
David Wolfin
President & CEO
Avino Silver & Gold Mines Ltd.
Safe Harbor Statement - This news release contains "forward -looking information" and "forward -looking statements" (together, the "forward-
looking statements") within the meaning of applicable securities laws and the United States Private Securities Litigation Ref orm Act of 1995,
including our belief as to the extent and timing of various studies including the PEA, and explorati on results, the potential tonnage, grades and
content of deposits, and timing, establishment, and extent of resource estimates. These forward -looking statements are made as of the date of
this news release and the dates of technical reports, as applicable. Readers are cautioned not to place undue reliance on forward -looking
statements, as there can be no assurance that the future circumstances, outcomes or results anticipated in or implied by such forward-looking
statements will occur or that plans, intenti ons or expectations upon which the forward -looking statements are based will occur. While we have
based these forward -looking statements on our expectations about future events as at the date that such statements were prepared, the
statements are not a gua rantee that such future events will occur and are subject to risks, uncertainties, assumptions and other factors which
could cause events or outcomes to differ materially from those expressed or implied by such forward-looking statements.
Such factors and assumptions include, among others, the effects of general economic conditions, the price of gold, silver and copper, changing
foreign exchange rates and actions by government authorities, uncertainties associated with legal proceedings and negotiation s an d
misjudgments in the course of preparing forward-looking information. In addition, there are known and unknown risk factors which could cause
our actual results, performance or achievements to differ materially from any future results, performance or achi evements expressed or implied
by the forward -looking statements. Known risk factors include risks associated with project development; the need for additional financing;
operational risks associated with mining and mineral processing; fluctuations in metal prices; title matters; uncertainties and risks related to
carrying on business in foreign countries; environmental liability claims and insurance; reliance on key personnel; the poten tial for conflicts of
interest among certain of our officers, directors or promoters with certain other projects; the absence of dividends; currency fluctuations;
competition; dilution; the volatility of our common share price and volume; tax consequences to U.S. investors; and other risks and uncertainties.
Although we have a ttempted to identify important factors that could cause actual actions, events or results to differ materially from those
described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, es timated or
intended. There can be no assurance that forward -looking statements will prove to be accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly, readers should not place undue rel iance on forward-looking statements. We
are under no obligation to update or alter any forward-looking statements except as required under applicable securities laws.
Cautionary Note to United States Investors - The information contained herein and incorp orated by reference herein has been prepared in
accordance with the requirements of Canadian securities laws, which differ from the requirements of United States securities laws. In particular,
the term "resource" does not equate to the term "reserve". The Securities Exchange Commission's (the "SEC") disclosure standards normally do
not permit the inclusion of information concerning "measured mineral resources", "indicated mineral resources" or "inferred m ineral resources"
or other descriptions of the amoun t of mineralization in mineral deposits that do not constitute "reserves" by SEC standards, unless such
information is required to be disclosed by the law of the Company's jurisdiction of incorporation or of a jurisdiction in whi ch its securities are
traded. U.S. investors should also understand that "inferred mineral resources" have a great amount of uncertainty as to their exi stence and
great uncertainty as to their economic and legal feasibility. Disclosure of "contained ounces" is permitted disclosure under Canadian regulations;
however, the SEC normally only permits issuers to report mineralization that does not constitute "reserves" by SEC standards as in place tonnage
and grade without reference to unit measures.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.