Avino is curently my topp pick among the junior silver miners. Here is why:
- Former producer.
- Comercial production 1 month away?
- All infrastructure in place.
- No debt.
- No hedging.
- Potential for lots of new mineral targets on property (drilling on going).
- Tailings with about 10Moz of Ag
- Cash of about 10M in bank
- Sprott holds about 29%
- Valuation of ~ $65M FD
- Only 26M shares outstanding
This is a very under the radar junior despite the fact that they are ramping up production around the corner. Does anyone on this board own it? Would be nice to get some discussions going.
For the record I hold a position in ASM.
Yes, I have owned it for some time, and it seems to have held up better than most miners in the last 6 weeks, still a gift at these levels in my opinion. Wish I had cash to buy more!!!
I own it. They'll be a million oz producer soon. My reading between the lines of the recent releases is that they basically are up and running right now. Not sitting around waiting on consultants and resource calcs. They did more bulk sample just for kicks. They are proceeding with powerlines, water wells, etc.
Probably not much action in the stock though for a few months yet (still time to buy!) because I expect a lull in the news flow. But later in the year, look out!
Great thread. I stay in touch.
Here's a somewhat recent video with Avinos CEO David Wolfin on the Jay Taylor show confirming some of the points I mentioned in my first post.
Mrgenesis, please let me know what your DD gives!
Mrgenesis, please let me know what your DD gives!
I took a look at Avino. Please keep in mind I'm not an expert, but I have picked a lot of winners (see Kitco's Precious Metal Stock Discussion Group - Bag of Gold's Penny Stock Arcade...... https://www.kitcomm.com/showthread.php?t=68585 ).
My philosophy or goal when picking these stocks is to find the ones with the most upside potential, and the least downside potential, why wouldn't you do that when choosing stocks, especially spec ones?
Looking at Avino, I don't think it has much downside unless silver/gold completely collapse, which I don't think would happen and if did would be temporary, but I don't think the upside potential is huge.
The stocks that see the most appreciation are the ones that can move large amounts of inferred gold/silver to the indicated category, and we're probably talking about at least 2 Mozs of gold or about 75 Mozs of silver or a equivalent combo of both, or obviously companies that have no NI 43-101 and make a big discovery and suddenly have huge amounts of gold and/or silver ounces in the inferred categories.
I don't think Avino falls into that category. I've compared the drill results of Avino with one of my favorites Malbex, and even though Avino has a couple of good drill holes, it doesn't seem like they will prove up some huge deposit, just a decent size one. Malbex however is getting great drill results and is still in the early stages of exploring their property, and looks like they have the potential to discover much more.
So IMO Malbex may have a little more downside, it looks like they have a minimum already to build a small mine so the downside is limited, but with huge upside potential, but Avino has much less downside than Malbex it also has much less upside potential.
I'm in these stocks because they are speculative, not safe, if I wanted safe I would at least be in bigger miners or a different industry, so since my goal is speculative, Malbex fits that criteria better. I still think Avino is a good stock that could increase by 50% or double from here, I just think a company like Malbex could do so much more.
I think there are many stocks that have better upside potential than Avino.
mrgneiss, big thanks for taking your time and posting the results of your DD. I really appreciate it. I think we have a bit of a difference in opinion of what stage Avino is in. I myself have 2 mining portfolios. One with small/mid size producers and the other with what I call emergers. In the emergers portfolio the sizes of my holdings are smaller and I see the risk as severely higher than with my producers.
I put Avino in the producers category (even though we are waiting for an official statement of production). That said I think your comparison with Malbex is like comparing apples and pears. Avino has 2 built mines (Avino and San Gonzales), mining facilities and all other infrastructure in place. They are already making money on their production (sold 2 batches of concentrate) and no more capex costs. I don't know Malbex that well but from my fast glance it seems like they aren't producing and will need a good amount of capex before this happens. They do however have stock valuations that are fairly close and this just amplifies my point that Avino is a clear buy at these levels. We have a small producer with all capex costs covered, 10mil+ in the bank and no debt at a valuation which is clsoe to a lot of emergers. Plus there is the added benefit of ongoing drilling that could hopefully add to the value.
I see your point with the inferred resources not being as large as certain other plays and I think this is a very valid point. But when it comes down to it it's all about making money and that's what Avino is going to be doing right here right now. Also I think the importance of increasing resources is bigger with the emerging miners since this is basically the only way for them to appreciate value (in hope of large resources so that they will be economically favourable to mine). But hopefully we will see some increased resources with Avino anyhow which doesn't feel like a high odds bet considering the property they have and the ongoing drilling.
But to summarize I do agree with your that Malbex has a higher risk and therefore also a higher reward. But like I said Avino is in my producer portfolio and I really appreciate the risk/reward ratio with this one.
I looked at the Kitco link and I like your mix of emergers. I have a few of those myself and will be looking into a few more based on your suggestions. Thanks for the link!
Finally I'd like to ask you what is your reasoning for the system you use where you sell half of your position once it doubles? I know of a few that employ this strategy but for me it makes zero sense. For me all money made is mine 100% so there is no such thing as a freeroll in a stock despite the fact that I sold off what I bought it for. My money is my money and I don't value it less even though its new and fresh. If Waren Buffet used this strategy then he would basically be on a freeroll for almost his entire fortune and could care less about all his money since it was a freebee!? Also, by using this strategy you are in a position where you force yourself to sell half of your holding despite the fact that you still actually think its a great case and therefore force yourself in to buying something that you yourself might actually not think as good of a case. Just my humble opinion but would love to hear what you have to say about it.
Thanks mrgneiss and RRJJ for the fundamental analyses. If we had more people interested in the miners, you guys would get a lot more hat tips - that's for sure!
Not much happening in this thread I see. Guess I'll keep it alive.
Avino released an update this week. https://www.avino.com/s/NewsReleases.asp?ReportID=466138&_Type=News-Rele...
Thus, the bulk sampling is finished and the outcome seems quite positive. We still haven't got the official GO from management yet but imo we are in production.
I'll finish by posting what "Scoris" wrote in the Avino board at Stockhouse. I like this..
"We have just had a positive result from the bulk sample. Avino showed that they are profitable and that the mine and mill works properly.
The recoveries were increasing from the beginning of the bulk sample (read the releases from jan-mars) to the end and the average recovery landed at 76%. I'm pretty sure they were at higher numbers at the end of the program (80-85%?).
The production cost will be in the neighborhood of 8 USD/oz and the annual rate from San Gonzalo will be at ~1Moz Ag.
They will initiate a scoping study to further increase the recovery, lower the costs and optimize the mine site.
Grades and recoveries will increase when they work their way down in the mine (recoveries will increase since the ore is less oxidized as at the surface).
They will now go ahead with developing the 3rd, 4th and 5th level to be able to feed the mill constantly with 250 tpd throughput.
I think Avino will be a smash hit this autumn and I'm looking for a double from here. This is the real deal.
Here's a new follow up interview with Jay Taylor.
Jay Seems a bit out of focus on this one but still relevant new info from CEO David Wolfin.
Avino seems to be showing some relative strength lately!
I talked to David Wolfin a few years back and he was hoping to have Orko's ore to feed Avino's mill.
That never transpired so now it is patching together a resource to get into production status.
ASM have 15 million inferred oz of silver/100k gold oz-which is to say who knows what they have.
The future of this company belongs to ore they do not own and must do a deal for.
The production goal with an inferred resource is 1.1 million oz Ag per year.
Last price $2.06 up .45 (+27.95%)
Market Cap - 55.4 Million, Shares 26.9 M
52 week range: $1.00 - $3.60
From the Avino website:
"Our primary goal is to build a multi-million ounce-per-year silver producer. Our specific objectives are to achieve full time commercial production as soon as possible, expand resources, reserves and the mines output as well as to identify, explore and develop new targets on the property."
"Avino remains in a good financial position; is debt free and well-funded to continue its development plans."
Avino just issued a news release concerning the tailings. https://www.avino.com/s/NewsReleases.asp?ReportID=513240&_Type=News-Rele......
So if I get this right the net cash flow from the tailings resource at todays spot price is worth about 2.5 times the market cap!!