Taking Advantage of Time Offline

Q: How has the pandemic affected your business in Mexico?

A: The main impact is the fact that we had to close the mine. Due to the lingering effects of COVID-19, we decided to keep the mine closed and focus on upgrading our infrastructure. This pause gave us the opportunity to concentrate on projects related to the mine’s development that would have been impossible to finish while the mine was operational. We were also able to vaccinate our entire workforce. Now, our team’s morale is quite high and ready for the challenges ahead after reopening the mine in August. 

We embarked on building a new tailings storage facility using state-of-the-art filter presses to dry stack tailings. That project is ongoing, although our current capacity for tailings management is still quite sufficient. We are also developing our mill automation capabilities to increase our efficiency. In addition, we are drilling through our old tailings storage facility to reacquire material from the 1970s and ‘80s that we believe demonstrate significant potential for reprocessing. We could not drill through it before because it was part of an active tailings dam, so putting a drilling rig on top of it was too dangerous.  

Since the pandemic was a global event, our conversations with investors and shareholders were quite reasonable. The decision to close the mine was well received and nobody was too surprised, although some would have preferred for the mine to be reopened at an earlier date. However, we decided that these and other upgrade projects needed to be completed first so as to take full advantage of our time online. In terms of stock price and market behavior, we are doing quite well and continue to be well financed.

Q: How did you maintain your commitments to the communities that you work with while the mine was closed?        

A: We hosted the full-time presence and services of doctors and medical staff who offered testing for the community. We have worked with these doctors for years now. They have their own relationships to the populations of nearby villages, where they offered treatment and medicine regularly before the pandemic began. Our investment in dry stacking tailings was also done out of a commitment to the safety and environmental welfare of this community, given the fact that this is the safest known way in the industry of managing tailings and mine waste byproducts. Our commitment to these communities has been repaid by the commitment of our workforce, which is made up mostly of members of these local communities. Our local content levels have done nothing but increase throughout the pandemic, especially since we have prioritized the health of these communities by minimizing the number of people we bring from out of state so as to prevent unnecessary contagion. We also have kept labor turnover to a minimum; two to three generations of families in these communities have worked with us as a result. We are also providing more training and we are training and hiring more women. Caterpillar has provided us with simulators of their heavy machinery to optimize the training process. As a result, we have hired women to positions in which no woman has been hired before.

Q: How would you describe the ongoing development of your exploration campaigns?

A: There continues to be tremendous exploration potential in our assets. The places we work in have almost 500 years of mining exploration and production history behind them and yet they continue to demonstrate a tremendous capability to surprise us with their geological potential. We are situated in the middle of a volcanic caldera, which is an important geological feature. Prospecting has also proven to be quite easy due to various environmental factors. We drilled a total of about 15,000m this year and we hope to do another 15,000m next year. 

We also announced a major acquisition in October of the La Preciosa mine, located right beside our current location and representing 135 MOZ of silver within trucking distance of our mills and processing facilities. This acquisition checked all the boxes for operational synergies, fast-tracked production and low environmental disturbance, since we will not have to build giant new facilities, which is what the mine’s previous owners were considering in 2014. We are going to generate tremendous amounts of new value at a very low cost, comparatively speaking. 

We might consider ourselves small-scale miners but we believe that through the right optimization study with the right engineering firm, we should be able to expand and scale up our operations successfully and profitably, especially considering the exciting future for minerals, such as copper and silver, in the market. Our goal is to leverage all of this to build Avino into an intermediate producer over the next five years.

Avino is a silver and gold producer with a diversified portfolio of gold, silver and base metals. The company owns the Avino mine and the La Preciosa project in Durango, Mexico.