Avino Silver & Gold Mines (TSE:ASM) reported second-quarter 2026 revenue of $26.8 million and net income of $10.9 million, or $0.06 per diluted share, as the company increased development production at its La Preciosa project and continued to advance its multi-asset growth strategy in Mexico.
Chief Financial Officer Nathan Harte said the company’s net income rose from $2.9 million, or $0.02 per share, in the second quarter of the prior year. Adjusted earnings totaled $11.1 million, or $0.06 per share, compared with $8.8 million, or $0.06 per share, a year earlier.
Production and La Preciosa Progress
Consolidated second-quarter production totaled 535,000 silver-equivalent ounces from 185,000 tons of mill feed. La Preciosa development production increased 59% from the first quarter, contributing more than 100,000 silver-equivalent ounces, including nearly 85,000 silver ounces and 182 gold ounces.
President and Chief Executive Officer David Wolfin said development and haulage rates at La Preciosa increased sufficiently for Mill Circuit 2 to switch from ET ore to La Preciosa development ore. Both Mill Circuits 1 and 2 are now processing development material from La Preciosa.
Development and mine preparation work on Level 3 of the Abundancia and Gloria areas is nearly complete, according to Wolfin. The company expects production long-hole mining to begin there, which would provide higher-grade mill feed than the development material processed so far. Development material is subject to additional mining dilution, management said.
Avino is targeting production of 500 tons per day at La Preciosa and said it is close to reaching that level. However, Senior Vice President of Technical Services Peter Latta said the company is evaluating how to optimize the project under the current metal-price environment before providing additional timing details for full production.
The company is also conducting trade-off studies on whether to continue hauling material to its existing facilities or potentially build a standalone processing plant at La Preciosa. Engineering and technical studies are underway to evaluate long-term mining, hauling and processing rates.
Margins, Pricing and Costs
Silver represented 54% of Avino’s revenue during the quarter, with silver sold at an average realized price of $68.90 per ounce. Silver and gold together accounted for more than 90% of revenue.
Gross profit margin was 48% including non-cash items, and 54% on a cash basis excluding depreciation and depletion. Harte said revenue and gross margin were affected by $5 million in provisional pricing adjustments, an increase in concentrate inventory at quarter-end, and a weaker U.S. dollar relative to the Mexican peso.
The Mexican peso averaged between 12% and 15% stronger against the U.S. dollar during the quarter compared with the second quarter of 2025, contributing to cost pressure. The company also processed more development material from La Preciosa, which management said would historically have been considered waste at lower metal prices.
Harte said that material is currently profitable to process but that La Preciosa’s current per-ounce and per-ton costs should not be viewed as representative of long-term costs. The company expects costs to normalize as grades improve under its mine sequence in later quarters and as production mining begins.
Consolidated cash costs were $74.72 per ton, at the high end of Avino’s full-year guidance range, while year-to-date cash costs were just under $70 per ton, around the midpoint of the range. All-in costs were $96 per ton in the quarter, driven largely by the greater proportion of La Preciosa development material, management said.
Reserves, Resources and Exploration
During the quarter, Avino announced its inaugural mineral reserve estimate and an updated mineral resource estimate. The company reported proven and probable reserves of 27 million tons containing 127 million silver-equivalent ounces at a grade of 145 grams per ton across its three assets.
- Measured and indicated resources totaled 67.7 million tons containing 301 million silver-equivalent ounces at a grade of 162 grams per ton.
- Inferred resources totaled 24.8 million tons containing 87.6 million silver-equivalent ounces at a grade of 123 grams per ton.
Wolfin described the reserve estimate as a milestone that establishes reserves across the company’s properties for the first time. He said resource growth was achieved after accounting for depletion from mining activities.
Avino has two drills operating at La Preciosa, where 6,591 meters had been completed by the end of the second quarter as part of a planned 15,000-meter exploration program for 2026. Drilling has shifted from infill work to exploration and step-out targets near vein intersections and projections. Management said completed infill drilling was not included in the latest reserve update and that most exploration holes are outside the current resource model.
At the Avino mine, the company is drilling surface mineralization near current workings that was outside existing reserves. Management said it elected to process the accessible material through one of its larger mill circuits because of low-cost mining, extraction flexibility and current metal prices, though the oxidized material had lower recoveries.
Capital Allocation and Outlook
Avino repurchased and canceled more than 500,000 common shares during the quarter under its Normal Course Issuer Bid, which was announced in April. Wolfin said the program is part of the company’s capital-allocation strategy and is intended to reduce shares outstanding.
The company said it has four drills operating across its properties and plans to add a fifth, though Latta noted that drill availability has become more challenging as industry demand rises. Management said drilling costs have increased modestly but not substantially, citing the company’s long-term relationship with its contractor.
Looking ahead, Avino said it remains focused on advancing La Preciosa, completing 15,000 meters of drilling at both La Preciosa and the Avino mine, and evaluating infrastructure and processing expansion options within its 20-kilometer asset footprint.
About Avino Silver & Gold Mines (TSE:ASM)
Avino is a silver producer from its wholly owned Avino Mine near Durango, Mexico. The Company’s silver, gold and copper production remains unhedged. The Company intends to maintain long-term sustainable and profitable mining operations to reward shareholders and the community alike through our growth at the historic Avino Property and the strategic acquisition of the adjacent La Preciosa which was finalized in Q1 2022. Early in 2024, the Pre-feasibility Study on the Oxide Tailings Project was completed.
