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99. Bull, Bear & Beyond – Avino Silver & Gold Mines executive interview
6 Plays6 months ago
In this interview, David Wolfin, president and CEO of Avino Silver & Gold Mines discusses the company's history and its growth prospects. Avino currently produces more than two million silver ounce equivalent per annum and has plans to quadruple its production capacity in the next five years.
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About ‘Bull, Bear & Beyond’
Bull, Bear & Beyond': features candid conversations with senior executives and from our own team of experts from across industries, exploring strategy, innovation, and the opportunities shaping their markets and 60-second pieces are a compressed summary of content designed to convey our message in a single, easily shareable hit.
About Edison:
Edison is a content-led IR business. We believe quality investment content should inform all investors, not just brokers. Our mission: engage and build bigger, better-informed investor audiences for our clients.
Edison covers 50+ investment trusts, read about them here: https://www.edisongroup.com/equities/investment-companies/
Original interview published on 23/06/2025 and reposted as a podcast
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Transcript
00:00:07
Speaker
Hello,
Introduction to Aveeno Silver and Gold Mines
00:00:08
Speaker
I'm Andrew Keane from Edison. It's my pleasure today to welcome David Wolfen, President and CEO of Aveeno Silver and Gold Mines, ah to talk to us today about the company and and its ah its prospects. Aveeno is over 2 million ounce equivalent silver producer with operations in in Mexico and listings in in the US and Canada.
00:00:32
Speaker
and plans to more than quadruple its its production in coming years. ah David, welcome. Thank you for having me, Andrew. David, let's start with a little bit of history, if you will. um You know, Lovina is a very historic name. but It's got a long history as ah as an operation, and your family has history, and you yourself have history. Do you want to start by taking us back to that kind of context of and how it was again? Sure.
00:00:59
Speaker
My
Foundation and Historical Challenges of Aveeno
00:01:00
Speaker
father founded the company in 1968. He was invited down to Mexico to look for mines um that closed around the time of the revolution because he was a a stockbroker mining financier, sent a geologist down there.
00:01:17
Speaker
They looked at a dozen projects and came back and like this one, it was available. So we formed a partnership with the wealthy Mexican family. Aveeno Canada owned 49%, they owned 51%.
00:01:29
Speaker
We built the mill on the old foundations. In the 1800s, Aveeno was owned by the British, was listed on the London Stock Exchange, and had a market cap of a million pounds. But all of that was destroyed, the smelter, everything was destroyed in the early 1900s. And there was no mining there until we got involved. And so we rebuilt the mill in 1974, ran it for 27 years. And then during the first tech bubble, metal prices tanked. Silver was below $4.
00:01:59
Speaker
Gold was below $300. And the mine closed. And so I worked in the mine as a teenager back in the
Strategic Decisions in the 80s
00:02:07
Speaker
80s. And then I worked um in Vancouver on the floor of the Vancouver Stock Exchange in the late 80s and joined my father in the nineties And then so after the mine closed, I approached him and the board and I said, we should buy the other half of the mine. NAFTA is in place. um And I know that our partners, when they were running it, they never did any exploration. So there was huge upside potential.
00:02:33
Speaker
I was appointed president and ah in 2006 got the other half of the mine. We did a whole bunch of drilling, 30,000 meters between 2006 and 2008. And then the global financial crisis happened.
00:02:46
Speaker
But I felt we had enough money in the Treasury to rehab the mill and fire it up. And it took about two years. In 2010, 2011, we got it back up and running and been running all the way up until the pandemic. And then we closed for strategic reasons. But we reopen now.
00:03:04
Speaker
Yeah. it's ah It's a fantastic story. um And you're running it at um don it over 2 million silver equivalent ounces at the moment. um But you've you've got plans to to to take that up really significantly. Can can you take us through that that growth plan?
00:03:24
Speaker
Sure.
Expansion Plans and Increasing Production
00:03:25
Speaker
We have an organic growth plan. um We're going to go from one producing asset to three within five years. We own the assets. The producing of vino mine produces around 2.6 million ounces of silver equivalent. And then Preciosa we bought from Coor Mining in 2022. We had to get the blessing of the local ajitos and get the permits, which we announced this year. And we've already started development on that asset.
Development of La Preciosa Asset
00:03:52
Speaker
And then the third asset is the oxide tailings project. This is when we opened pit mind in the 70s and 80s and had poor recovery rates. So now with new technologies, we can reprocess that material. So we've done a pre-feasibility study on that asset. So so from 2.5 million ounces up between 8 and 10 million ounces is our goal within five years.
00:04:15
Speaker
La Preciosa, it's not very far from Uvino operation. that you share You share some infrastructure and and also you've started developments of that deposit. Definitely, yeah. So it took a while to get the permits, about a year, um but reasonable. And it and our share price has exploded since then because everyone sees that this assets moving forward and um ah and the Mexico's open for business. And so we timed it. So we had all brand new equipment there and we're planning to, ah ah we're we're ah building an underground haulage tunnel right now. It's 350 meters
00:04:58
Speaker
to intersect the ore. So within this year, we're going to be producing. So it's very quick to production, a low cost, under $5 million. dollars And it's 19 kilometers away on a paved road. So we can haul it to our current infrastructure at the Aveeno Mill and process it there. so And we're in a safe jurisdiction. It's in the middle of Durango, which is um a high desert, probably about 1,800 meters. So it's rolling farmland. You're not in some remote area.
00:05:31
Speaker
We produce concentrate. So it's ah it's a safe product. We don't produce bars on site. We truck it to the shipping port in Manzanillo, and it goes on freighter over to Asia to our number one trading partner, which is Samsung, and it goes in their electronics.
Cost Structures and Revenue Sources
00:05:48
Speaker
how does How does La Preciosa compare to a vino in terms of cost structure, and and what does it do to your cost base as it comes on? Well, Avino is a a bulk tonnage, low-grade mine, so but we're we're competitive in our costs. It's under $100 a ton because we're long-hole sub-level caving. At La Preciosa, it's going to be narrower mining, which is more expensive, but the grade is more than double.
00:06:16
Speaker
So it offsets it. um And we're our current ah all in sustaining is around twenty dollars. And we feel um well into next year, once we're we're really mining on the precios, we'll get into the mid teens.
00:06:33
Speaker
Okay. You're getting a, you're a multi-metal producer. You've got some good buy products, you know, in terms of copper and gold credits. Are they helping at that cost base at the moment?
00:06:43
Speaker
Yeah. Copper is really helping. We're producing quite a bit of copper. I think this year, 49% of our revenue comes from silver, 19% from gold and the rest from copper. So copper is a significant contributor.
00:06:57
Speaker
yeah,
Expansion and Strategic Plans
00:06:58
Speaker
and but Next year, it'll go up to close to 60% revenue from silver because of the grade impact from La Preciosa. And our output is going to jump next year without a big capital expenditure because a grade alone. So it's very exciting.
00:07:17
Speaker
And with the oxide tailings treatment, that that comes later, I guess. And what what stage of development are you on on that? Well, when we put this plan together, it was prior to the rally. So we we spaced it out. We're trying to maintain discipline, cost discipline, and use the team we have.
00:07:36
Speaker
So we were focused on La Preciosa, getting that up and running. We're doing community engagement for for the third asset. So we need to get the buy-in, the blessing from the community before we go and try to perm it.
00:07:50
Speaker
ah that project. So we just spread it out. we just We're focusing on Aveeno and La Preciosa primarily. And since the rally is, you know, we're more than a year into this rally since last March. And so now we're looking at possibly expanding Aveeno and La Preciosa.
00:08:08
Speaker
During the permitting process at La Preciosa, we were considering it, but we didn't want to upset the permitting application. Now we're considering amending it and maybe putting in more portals, try to get more of that high-grade material out faster.
00:08:22
Speaker
And at the Aveeno mill, we have four independent circuits so we can keep the material separate because they don't all mingle. Aveeno has copper in it and La Preciosa is just pure silver and gold.
00:08:36
Speaker
Ben, you've got the mine reserve to, to you know, if you're using water to accelerate. 53 million metric tons are measured and indicated, 24 million inferred, so it's 76 million metric tons. Our processing plant can do 750,000 tons on an annual basis. So you're looking at 75 to 100 years of mine life.
00:09:00
Speaker
ah So clearly there's potential for further expansions um down the road. And we've got two drill programs happening right now because we're anticipating we're going to go to an engineering firm at some point to reimagine the both projects.
00:09:17
Speaker
but and ah But until that time, we want to continue to drill the obvious areas. So we're drilling from surface below Aveeno mine, the the developed area, which is level 17. That's the bottom developed area. We're drilling below it. And we've been extending the mineralization at depth significantly. So we're excited about that. And at La Preciosa...
00:09:38
Speaker
um There's 1,500 drill holes there, $90 million spent by Pan American Silver, Coor Mining, and Orco. But all the core that they a lot of the core that they used was used up in all their different um studies.
00:09:56
Speaker
So we're re-drilling some of those areas that are high grade to just confirm it. And there's kilogram hits of silver in there. So we're really excited about that um and the potential for the whole operation. And there's three less silver companies with Gatos, Silvercrest, and Maggonth The spotlight is narrowing down on the companies that are in production that have big resources, and that's Aveeno.
00:10:25
Speaker
Nice it time to be a ah silver producer at the moment. what What
Financial Health and Silver Market Outlook
00:10:28
Speaker
are your thoughts on on on the silver price? Well, we're happy with where it is now. I mean, there's a big ah disconnect on the silver-gold ratio, so there's a potential that it can go higher.
00:10:42
Speaker
But we're making money at current prices. Our margins are over 50%. So we're we're thrilled about where it is now. We hope it goes higher, but we're we're we're building cash in our treasury where where it is now.
00:10:57
Speaker
You don't need to raise capital to fund that growth coming through? No, no. And because we've spread out the Oxide Tailings Project, we want to build our treasury. The Oxide Tailings Project pre-feasibility study has a CapEx of $49 million. dollars um We've got about 33 in the bank and growing. So we're not in any rush to start that project. We want to build our treasury higher and then assess where we're at once we've got La Preciosa firing on all cylinders, and then we'll decide if we want to raise a bit more cash or not to fund that one.
00:11:35
Speaker
Pretty impressive growth profile and a very long history. Once you get to to that sort of more of a mid-tier status, what this you know i mean what what are your thoughts you know in terms of long-run strategy?
00:11:49
Speaker
Well,
Long-term Strategies and Future Growth
00:11:50
Speaker
we've remained disciplined in focus and focused and then not dreaming about what's way, way down there. But I mean, ah pay a dividend, ah potentially um corporate transaction ah or or grow the ah grow the company into a larger company. So there's three options that we'll have and we're we're not really considering them at this time. We're just focused on our expansions.
00:12:18
Speaker
David, thank you for joining us today to talk about Avino and the Avino story. If investors have any further questions, I direct you in the first instance to the Edison website.
00:12:30
Speaker
Thank you.