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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the Month of June, 2024
Commission File Number: 001-35254
AVINO SILVER & GOLD MINES LTD. |
Suite 900, 570 Granville Street, Vancouver, BC V6C 3P1
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
☐ Form 20-F ☒ Form 40-F
Explanatory Note
Avino Silver & Gold Mines Ltd. (the “Company”) is furnishing this Form 6-K to provide its financial information for the three and six months ended June 30, 2024, and to incorporate such financial information into the Company’s registration statement referenced below.
Exhibits 99.1 and 99.2 attached hereto are hereby incorporated by reference into the Company’s Registration Statement on Form F-10 (Registration Statement File number 333-270315) to be a part thereof from the date on which this report is submitted, to the extent not superseded by documents or reports subsequently filed.
Exhibits
The following exhibits are filed as part of this Form 6-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| AVINO SILVER & GOLD MINES LTD. | |
| | |
Date: August 13, 2024 | By: | /s/ Jennifer Trevitt | |
| | Jennifer Trevitt | |
| | Corporate Secretary | |
EXHIBIT 99.1
AVINO SILVER & GOLD MINES LTD.
Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2024 and 2023
(Unaudited)
AVINO SILVER & GOLD MINES LTD.
Condensed Consolidated Interim Statements of Financial Position
(Expressed in thousands of US dollars - Unaudited) |
|
| | Note | | | June 30, 2024 | | | December 31, 2023 | |
ASSETS | | | | | | | | | |
Current assets | | | | | | | | | |
Cash | | | | | $ | 5,311 | | | $ | 2,688 | |
Amounts receivable | | | | | | 3,182 | | | | 3,303 | |
Amounts due from related parties | | | 10(b) | | | | - | | | | 167 | |
Taxes recoverable | | | 4 | | | | 5,048 | | | | 6,580 | |
Prepaid expenses and other assets | | | | | | | 2,378 | | | | 1,971 | |
Inventory | | | 5 | | | | 9,881 | | | | 8,826 | |
Total current assets | | | | | | | 25,800 | | | | 23,535 | |
Exploration and evaluation assets | | | 7 | | | | 52,326 | | | | 50,111 | |
Plant, equipment and mining properties | | | 9 | | | | 53,229 | | | | 53,069 | |
Long-term investments | | | 6 | | | | 1,712 | | | | 934 | |
Other assets | | | | | | | 635 | | | | 691 | |
Total assets | | | | | | $ | 133,702 | | | $ | 128,340 | |
LIABILITIES | | | | | | | | | | | | |
Current liabilities | | | | | | | | | | | | |
Accounts payable and accrued liabilities | | | | | | $ | 9,923 | | | $ | 11,867 | |
Amounts due to related parties | | | 10(b) | | | | 173 | | | | - | |
Taxes payable | | | | | | | 297 | | | | 127 | |
Current portion of finance lease obligations | | | | | | | 1,672 | | | | 1,650 | |
Current portion of equipment loans | | | | | | | 165 | | | | 164 | |
Total current liabilities | | | | | | | 12,230 | | | | 13,808 | |
Finance lease obligations | | | | | | | 1,645 | | | | 1,445 | |
Equipment loans | | | | | | | 110 | | | | 195 | |
Reclamation provision | | | 11 | | | | 2,104 | | | | 2,195 | |
Deferred income tax liabilities | | | | | | | 5,388 | | | | 4,696 | |
Total liabilities | | | | | | | 21,477 | | | | 22,339 | |
EQUITY | | | | | | | | | | | | |
Share capital | | | 12 | | | | 156,175 | | | | 151,688 | |
Equity reserves | | | | | | | 11,063 | | | | 11,041 | |
Treasury shares | | | | | | | (97 | ) | | | (97 | ) |
Accumulated other comprehensive loss | | | | | | | (5,332 | ) | | | (5,208 | ) |
Accumulated deficit | | | | | | | (49,584 | ) | | | (51,423 | ) |
Total equity | | | | | | | 112,225 | | | | 106,001 | |
Total liabilities and equity | | | | | | $ | 133,702 | | | $ | 128,340 | |
Commitments – Note 15
Approved by the Board of Directors on August 13, 2024.
| Peter Bojtos | Director | David Wolfin | Director |
The accompanying notes are an integral part of the condensed consolidated interim financial statements
AVINO SILVER & GOLD MINES LTD.
Condensed Consolidated Interim Statements of Operations and Comprehensive Income (Loss)
(Expressed in thousands of US dollars - Unaudited) |
|
| | | | | Three months ended June 30, | | | Six months ended June 30, | |
| | Note | | | 2024 | | | 2023 | | | 2024 | | | 2023 | |
Revenue from mining operations | | | 13 | | | $ | 14,787 | | | $ | 9,218 | | | $ | 27,180 | | | $ | 19,043 | |
Cost of sales | | | 13 | | | | 10,090 | | | | 8,175 | | | | 20,144 | | | | 16,149 | |
Mine operating income | | | | | | | 4,697 | | | | 1,043 | | | | 7,036 | | | | 2,894 | |
| | | | | | | | | | | | | | | | | | | | |
Operating expenses | | | | | | | | | | | | | | | | | | | | |
General and administrative expenses | | | 14 | | | | 1,791 | | | | 1,535 | | | | 3,063 | | | | 2,719 | |
Share-based payments | | | 12 | | | | 647 | | | | 843 | | | | 1,070 | | | | 1,182 | |
Income (loss) before other items | | | | | | | 2,259 | | | | (1,335 | ) | | | 2,903 | | | | (1,007 | ) |
Other items | | | | | | | | | | | | | | | | | | | | |
Interest and other income | | | | | | | 151 | | | | 20 | | | | 154 | | | | 229 | |
Gain (loss) on long-term investments | | | 6 | | | | 223 | | | | (285 | ) | | | 355 | | | | (604 | ) |
Fair value adjustment on warrant liability | | | | | | | - | | | | 751 | | | | - | | | | 458 | |
Unrealized foreign exchange gain | | | | | | | 92 | | | | 552 | | | | 172 | | | | 416 | |
Finance cost | | | | | | | (3 | ) | | | (3 | ) | | | (5 | ) | | | (77 | ) |
Accretion of reclamation provision | | | 11 | | | | (51 | ) | | | (12 | ) | | | (102 | ) | | | (23 | ) |
Interest expense | | | | | | | (81 | ) | | | (72 | ) | | | (171 | ) | | | (117 | ) |
Income (loss) before income taxes | | | | | | | 2,590 | | | | (384 | ) | | | 3,306 | | | | (725 | ) |
Income taxes: | | | | | | | | | | | | | | | | | | | | |
Current income tax recovery (expense) | | | | | | | (576 | ) | | | 559 | | | | (775 | ) | | | 534 | |
Deferred income tax recovery (expense) | | | | | | | (774 | ) | | | 959 | | | | (692 | ) | | | 973 | |
Income tax recovery (expense) | | | | | | | (1,350 | ) | | | 1,518 | | | | (1,467 | ) | | | 1,507 | |
| | | | | | | | | | | | | | | | | | | | |
Net income | | | | | | | 1,240 | | | | 1,134 | | | | 1,839 | | | | 782 | |
| | | | | | | | | | | | | | | | | | | | |
Other comprehensive income (loss) | | | | | | | | | | | | | | | | | | | | |
Currency translation differences | | | | | | | (13 | ) | | | (313 | ) | | | (124 | ) | | | (576 | ) |
Total comprehensive income | | | | | | $ | 1,227 | | | $ | 821 | | | $ | 1,715 | | | $ | 206 | |
Income per share | | | 12(e) | | | | | | | | | | | | | | | | | |
Basic | | | | | | $ | 0.01 | | | $ | 0.01 | | | $ | 0.01 | | | $ | 0.01 | |
Diluted | | | | | | $ | 0.01 | | | $ | 0.01 | | | $ | 0.01 | | | $ | 0.01 | |
Weighted average number of common shares outstanding | | | 12(e) | | | | | | | | | | | | | | | | | |
Basic | | | | | | | 133,622,131 | | | | 119,195,457 | | | | 131,834,975 | | | | 118,887,538 | |
Diluted | | | | | | | 138,948,601 | | | | 123,214,209 | | | | 137,207,540 | | | | 122,907,727 | |
The accompanying notes are an integral part of the condensed consolidated interim financial statements
AVINO SILVER & GOLD MINES LTD.
Condensed Consolidated Interim Statements of Changes in Equity
(Expressed in thousands of US dollars - Unaudited) |
| | Note | | | Number of Common Shares | | | Share Capital Amount | | | Equity Reserves | | | Treasury Shares | | | Accumulated Other Comprehensive Income (Loss) | | | Accumulated Deficit | | | Total Equity | |
Balance, January 1, 2023 | | | | | | 118,349,090 | | | $ | 145,515 | | | $ | 9,852 | | | $ | (97 | ) | | $ | (5,223 | ) | | $ | (52,026 | ) | | $ | 98,021 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common shares issued: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At the market issuances | | | 12 | | | | 837,700 | | | | 586 | | | | - | | | | - | | | | - | | | | - | | | | 586 | |
Carrying value of RSUs exercised | | | 12 | | | | 592,667 | | | | 512 | | | | (512 | ) | | | - | | | | - | | | | - | | | | - | |
Issuance costs | | | 12 | | | | - | | | | (218 | ) | | | - | | | | - | | | | - | | | | - | | | | (218 | ) |
Share-based payments | | | 12 | | | | - | | | | - | | | | 1,182 | | | | - | | | | - | | | | - | | | | 1,182 | |
Net loss for the period | | | | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 782 | | | | 782 | |
Currency translation differences | | | | | | | - | | | | - | | | | - | | | | - | | | | (576 | ) | | | - | | | | (576 | ) |
Balance, June 30, 2023 | | | | | | | 119,779,457 | | | $ | 146,395 | | | $ | 10,522 | | | $ | (97 | ) | | $ | (5,799 | ) | | $ | (51,244 | ) | | $ | 99,777 | |
Balance, January 1, 2024 | | | | | | | 128,728,248 | | | $ | 151,688 | | | $ | 11,041 | | | $ | (97 | ) | | $ | (5,208 | ) | | $ | (51,423 | ) | | $ | 106,001 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common shares issued: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At the market issuances | | | 12(b) | | | | 4,797,748 | | | | 3,616 | | | | - | | | | - | | | | - | | | | - | | | | 3,616 | |
Exercise of options | | | 12(b) | | | | 103,000 | | | | 90 | | | | (31 | ) | | | - | | | | - | | | | - | | | | 59 | |
Carrying value of RSUs exercised | | | 12(d) | | | | 1,197,709 | | | | 1,018 | | | | (1,018 | ) | | | - | | | | - | | | | - | | | | - | |
Issuance costs | | | | | | | - | | | | (237 | ) | | | - | | | | - | | | | - | | | | - | | | | (237 | ) |
Share-based payments | | | 12(c)(d) | | | | - | | | | - | | | | 1,071 | | | | - | | | | - | | | | - | | | | 1,071 | |
Net income for the period | | | 12(e) | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 1,839 | | | | 1,839 | |
Currency translation differences | | | | | | | - | | | | - | | | | - | | | | - | | | | (124 | ) | | | - | | | | (124 | ) |
Balance, June 30, 2024 | | | | | | | 134,826,705 | | | $ | 156,175 | | | $ | 11,063 | | | $ | (97 | ) | | $ | (5,332 | ) | | $ | (49,584 | ) | | $ | 112,225 | |
The accompanying notes are an integral part of the condensed consolidated interim financial statements
AVINO SILVER & GOLD MINES LTD.
Condensed Consolidated Interim Statements of Cash Flows
(Expressed in thousands of US dollars - Unaudited) |
| | | | | Six months ended June 30, | |
| | Note | | | 2024 | | | 2023 | |
| | | | | | | | | |
| | | | | | | | | |
Operating Activities | | | | | | | | | |
Net income | | | | | $ | 1,839 | | | $ | 782 | |
Adjustments for non-cash items: | | | | | | | | | | | |
Deferred income tax expense (recovery) | | | | | | 692 | | | | (973 | ) |
Depreciation and depletion | | | | | | 1,692 | | | | 1,419 | |
Accretion of reclamation provision | | | 11 | | | | 102 | | | | 23 | |
(Gain) loss on investments | | | 6 | | | | (355 | ) | | | 604 | |
Unrealized foreign exchange gain | | | | | | | (243 | ) | | | (499 | ) |
Unwinding of fair value adjustment | | | | | | | - | | | | 74 | |
Fair value adjustment on warrant liability | | | | | | | - | | | | (458 | ) |
Write down of equipment and materials and supplies inventory | | | | | | | 384 | | | | 91 | |
Share-based payments | | | | | | | 1,071 | | | | 1,182 | |
| | | | | | | 5,182 | | | | 2,245 | |
| | | | | | | | | | | | |
Net change in non-cash working capital items | | | 16 | | | | (1,757 | ) | | | (1,295 | ) |
Cash provided by operating activities | | | | | | | 3,425 | | | | 950 | |
| | | | | | | | | | | | |
Financing Activities | | | | | | | | | | | | |
Shares and units issued for cash, net of issuance costs | | | | | | | 3,379 | | | | 368 | |
Proceeds from option exercise | | | | | | | 59 | | | | - | |
Lease liability payments | | | | | | | (924 | ) | | | (634 | ) |
Equipment loan payments | | | | | | | (85 | ) | | | (142 | ) |
Cash provided by (used in) financing activities | | | | | | | 2,429 | | | | (408 | ) |
| | | | | | | | | | | | |
Investing Activities | | | | | | | | | | | | |
Exploration and evaluation expenditures | | | | | | | (1,534 | ) | | | (663 | ) |
Additions to plant, equipment and mining properties | | | | | | | (1,731 | ) | | | (4,920 | ) |
Acquisition of La Preciosa | | | | | | | - | | | | (5,000 | ) |
Cash used in investing activities | | | | | | | (3,265 | ) | | | (10,583 | ) |
| | | | | | | | | | | | |
Change in cash | | | | | | | 2,589 | | | | (10,041 | ) |
| | | | | | | | | | | | |
Effect of exchange rate changes on cash | | | | | | | 34 | | | | 3 | |
| | | | | | | | | | | | |
Cash, beginning | | | | | | | 2,688 | | | | 11,245 | |
| | | | | | | | | | | | |
Cash, ending | | | | | | $ | 5,311 | | | $ | 1,207 | |
Supplementary Cash Flow Information (Note 16)
The accompanying notes are an integral part of the condensed consolidated interim financial statements
AVINO SILVER & GOLD MINES LTD. Notes to the unaudited condensed consolidated interim financial statements For the six months ended June 30, 2024, and 2023 (Expressed in thousands of US dollars, except where otherwise noted) |
1. NATURE OF OPERATIONS
Avino Silver & Gold Mines Ltd. (the “Company” or “Avino”) was incorporated in 1968 under the laws of the Province of British Columbia, Canada. The Company is engaged in the production and sale of silver, gold, and copper and the acquisition, exploration, and advancement of mineral properties.
The Company’s head office and principal place of business is Suite 900, 570 Granville Street, Vancouver, BC, Canada. The Company is a reporting issuer in Canada (except for the province of Quebec) and the United States, and trades on the Toronto Stock Exchange (“TSX”), the NYSE American, and the Frankfurt and Berlin Stock Exchanges.
The Company operates the Elena Tolosa Mine (“ET Mine” or “Avino Mine”) which produces copper, silver and gold at the historic Avino property in the state of Durango, Mexico. The Avino property also hosts the San Gonzalo Mine, which is currently on care and maintenance. The Company also holds 100% interest in Proyectos Mineros La Preciosa S.A. de C.V. (“La Preciosa”), a Mexican corporation which owns the La Preciosa Property. The Company also owns interests in mineral properties located in British Columbia and Yukon, Canada.
2. BASIS OF PRESENTATION
Statement of Compliance
These unaudited condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard (“IAS”) 34 – Interim Financial Reporting under International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”). These unaudited condensed consolidated interim financial statements follow the same accounting policies and methods of application as the most recent annual audited consolidated financial statements of the Company. These unaudited condensed consolidated interim financial statements do not contain all of the information required for full annual consolidated financial statements. Accordingly, these unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s December 31, 2023, annual consolidated financial statements, which were prepared in accordance with IFRS as issued by the IASB.
These unaudited condensed consolidated interim financial statements are expressed in US dollars and have been prepared on a historical cost basis except for financial instruments that have been measured at fair value. In addition, these unaudited condensed consolidated interim financial statements have been prepared using the accrual basis of accounting on a going concern basis. The accounting policies set out in the December 31, 2023 annual consolidated financial statements are applied consistently to all periods presented in these unaudited condensed consolidated interim financial statements as if the policies have always been in effect.
Foreign Currency Translation
Foreign currency transactions
Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on the dates of the transactions. At each financial position reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at the date of the statement of financial position. Non-monetary items that are measured in terms of historical cost in a foreign currency are not re-translated.
Foreign operations
Subsidiaries that have functional currencies other than the US dollar translate their statement of operations items at the average rate during the year. Assets and liabilities are translated at exchange rates prevailing at the end of each reporting period. Exchange rate variations resulting from the retranslation at the closing rate of the net investment in these subsidiaries, together with differences between their statement of operations items translated at actual and average rates, are recognized in accumulated other comprehensive income (loss). On disposition or partial disposition of a foreign operation, the cumulative amount of related exchange difference is recognized in the statement of operations.
AVINO SILVER & GOLD MINES LTD. Notes to the unaudited condensed consolidated interim financial statements For the six months ended June 30, 2024, and 2023 (Expressed in thousands of US dollars, except where otherwise noted) |
Significant Accounting Judgments and Estimates
The Company’s management makes judgments in its process of applying the Company’s accounting policies to the preparation of its unaudited condensed consolidated interim financial statements. In addition, the preparation of financial data requires that the Company’s management make assumptions and estimates of the impacts on the carrying amounts of the Company’s assets and liabilities at the end of the reporting period from uncertain future events and on the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates as the estimation process is inherently uncertain. Estimates are reviewed on an ongoing basis based on historical experience and other factors that are considered to be relevant under the circumstances. Revisions to estimates and the resulting impacts on the carrying amounts of the Company’s assets and liabilities are accounted for prospectively.
The critical judgments and estimates applied in the preparation of the Company’s unaudited condensed consolidated interim financial statements for the six months ended June 30, 2024, are consistent with those applied and disclosed in Note 2 to the Company’s audited consolidated financial statements for the year ended December 31, 2023.
Basis of Consolidation
The audited consolidated financial statements include the accounts of the Company and its Mexican subsidiaries as follows:
Subsidiary | Ownership Interest | Jurisdiction | Nature of Operations |
Oniva Silver and Gold Mines S.A. de C.V. | 100% | Mexico | Mexican administration |
Nueva Vizcaya Mining, S.A. de C.V. | 100% | Mexico | Mexican administration |
Promotora Avino, S.A. de C.V. (“Promotora”) | 79.09% | Mexico | Holding company |
Compañía Minera Mexicana de Avino, S.A. de C.V. (“Avino Mexico”) | 98.45% direct 1.22% indirect (Promotora) 99.67% effective | Mexico | Mining and exploration |
La Luna Silver & Gold Mines Ltd. | 100% | Canada | Holding company |
La Preciosa Silver & Gold Mines Ltd. | 100% | Canada | Holding company |
Proyectos Mineros La Preciosa S.A. de C.V. | 100% | Mexico | Mining and exploration |
Cervantes LLP | 100% | U.S. | Holding company |
Intercompany balances and transactions, including unrealized income and expenses arising from intercompany transactions, are eliminated in preparing the consolidated financial statements.
3. RECENT ACCOUNTING PRONOUNCEMENTS
New and amended IFRS that are effective for the current year:
Certain new accounting standards and interpretations have been published that are either applicable in the current year, or are not mandatory for the current period and have not been early adopted. We have assessed these standards, and they are not expected to have a material impact on the Company in the current or future reporting periods.
AVINO SILVER & GOLD MINES LTD. Notes to the unaudited condensed consolidated interim financial statements For the six months ended June 30, 2024, and 2023 (Expressed in thousands of US dollars, except where otherwise noted) |
4. TAXES RECOVERABLE
The Company’s taxes recoverable consist of the Mexican I.V.A. (“VAT”) and income taxes recoverable and Canadian sales taxes (“GST/HST”) recoverable.
| | June 30, 2024 | | | December 31, 2023 | |
VAT recoverable | | $ | 2,002 | | | $ | 3,231 | |
GST recoverable | | | 30 | | | | 20 | |
Income taxes recoverable | | | 3,016 | | | | 3,329 | |
| | $ | 5,048 | | | $ | 6,580 | |
5. INVENTORY
| | June 30, 2024 | | | December 31, 2023 | |
Process material stockpiles | | $ | 3,857 | | | $ | 4,050 | |
Concentrate inventory | | | 3,289 | | | | 2,448 | |
Materials and supplies | | | 2,735 | | | | 2,328 | |
| | $ | 9,881 | | | $ | 8,826 | |
The amount of inventory recognized as an expense for the three and six months ended June 30, 2024 totalled $9,706 and $19,760 (three and six months ended June, 2023 – $8,084 and $16,058 ). See Note 13 for further details.
During the six months ended June 30, 2024, the Company wrote down Nil of materials and supplies inventory due to obsolescence (year ended December 31, 2023 – 270
AVINO SILVER & GOLD MINES LTD. Notes to the unaudited condensed consolidated interim financial statements For the six months ended June 30, 2024, and 2023 (Expressed in thousands of US dollars, except where otherwise noted) |
6. LONG-TERM INVESTMENTS
The Company classifies its long-term investments as designated at fair value through profit and loss under IFRS 9. Long-term investments are summarized as follows:
| | Fair Value December 31, | | | | | | Movements in foreign | | | Fair value adjustments | | | Fair Value June 30, | |
| | 2023 | | | Net Additions | | | exchange | | | for the period | | | 2024 | |
Talisker Resources Common Shares | | $ | 782 | | | $ | - | | | $ | (25 | ) | | $ | 390 | | | $ | 1,147 | |
Silver Wolf Exploration Ltd. (“Silver Wolf”) Common Shares | | | 71 | | | | 426 | | | | (8 | ) | | | (17 | ) | | | 472 | |
Silver Wolf Exploration Ltd. Warrants | | | - | | | | 30 | | | | - | | | | - | | | | 30 | |
Endurance Gold Corp. Common Shares | | | 81 | | | | - | | | | (1 | ) | | | (18 | ) | | | 62 | |
Other | | | - | | | | 1 | | | | - | | | | - | | | | 1 | |
| | $ | 934 | | | $ | 457 | | | $ | (34 | ) | | $ | 355 | | | $ | 1,712 | |
Silver Wolf
During the six months ended June 30, 2024, the Company received 2,292,000 common shares as part of debt settlement from Silver Wolf for C$458. The Company further acquired, by way of participation in Silver Wolf’s Listed Issuer Financing Exemption private placement, 833,334 units at a purchase price of C$0.15 consisting of 833,334 common shares and 416,667 non-transferable common share purchase warrants at an exercise price of C$0.25 as for a total investment of C$125. The share purchase warrants were recorded at a fair value. Any subsequent revaluation under IFRS 9 at fair value through profit and loss will be recorded as a gain or loss on long-term investments.
7. EXPLORATION AND EVALUATION ASSETS
The Company has accumulated the following acquisition, exploration and evaluation costs which are not subject to depletion:
| | Avino, Mexico | | | La Preciosa, Mexico | | | British Columbia & Yukon, Canada | | | Total | |
Balance, December 31, 2022 | | $ | 11,828 | | | $ | 37,975 | | | $ | 1 | | | $ | 49,804 | |
| | | | | | | | | | | | | | | | |
La Preciosa non-core concessions transfer | | | 2,946 | | | | (2,946 | ) | | | | | | | - | |
Drilling and exploration | | | 877 | | | | 435 | | | | - | | | | 1,312 | |
Assessments and taxes | | | 88 | | | | (930 | ) | | | - | | | | (842 | ) |
Effect of movements in exchange rates | | | 22 | | | | (122 | ) | | | - | | | | (100 | ) |
Option income | | | (63 | ) | | | - | | | | - | | | | (63 | ) |
| | | | | | | | | | | | | | | | |
Balance, December 31, 2023 | | $ | 15,698 | | | $ | 34,412 | | | $ | 1 | | | $ | 50,111 | |
Costs incurred during 2024: | | | | | | | | | | | | | | | | |
Drilling and exploration | | | 101 | | | | 1,047 | | | | - | | | | 1,148 | |
Assessments and taxes | | | 100 | | | | 973 | | | | - | | | | 1,073 | |
Effect of movements in exchange rates | | | (6 | ) | | | - | | | | - | | | | (6 | ) |
| | | | | | | | | | | | | | | | |
Balance, June 30, 2024 | | $ | 15,893 | | | $ | 36,432 | | | $ | 1 | | | $ | 52,326 | |
AVINO SILVER & GOLD MINES LTD. Notes to the unaudited condensed consolidated interim financial statements For the six months ended June 30, 2024, and 2023 (Expressed in thousands of US dollars, except where otherwise noted) |
(a) Avino, Mexico
The Company’s subsidiary Avino Mexico owns 42 mineral claims and leases four mineral claims in the state of Durango, Mexico. The Company’s mineral claims in Mexico are divided into the following two groups:
(i) Avino Mine area property
The Avino Mine area property is situated around the towns of Panuco de Coronado and San Jose de Avino and surrounding the historic Avino mine site. There are four exploration concessions covering 154.4 hectares, 24 exploitation concessions covering 1,284.7 hectares, and one leased exploitation concession covering 98.83 hectares.
(ii) Gomez Palacio/Ana Maria property
The Ana Maria property is located near the town of Gomez Palacio, and consists of nine exploration concessions covering 2,549 hectares, and is also known as the Ana Maria property.
Option Agreement – Silver Wolf Exploration Ltd. (formerly Gray Rock Resources Ltd.) (“Silver Wolf”)
On March 11, 2021, the Company entered into an option agreement to grant Silver Wolf the exclusive right to acquire a 100% interest in the Ana Maria and El Laberinto properties in Mexico (the “Option Agreement”).
All exploration expenditure requirements on the properties have been met as of June 30, 2024, and Silver Wolf is in compliance with the terms of the Option Agreement.
The Option Agreement between the Company and Silver Wolf is considered a related party transaction as the two companies have directors in common.
Unification La Platosa properties
The Unification La Platosa properties, consisting of three leased concessions in addition to the leased concessions situated within the Avino mine area property near the towns of Panuco de Coronado and San Jose de Avino and surrounding the Avino Mine.
In February 2012, the Company’s wholly-owned Mexican subsidiary entered into a new agreement with Minerales de Avino, S.A. de C.V. (“Minerales”) whereby Minerales has indirectly granted to the Company the exclusive right to explore and mine the La Platosa property known as the “ET zone”. The ET zone includes the Avino Mine, where production at levels intended by management was achieved on July 1, 2015.
Under the agreement, the Company has obtained the exclusive right to explore and mine the property for an initial period of 15 years, with the option to extend the agreement for another 5 years. In consideration of the granting of these rights, the Company issued 135,189 common shares with a fair value of C$250 during the year ended December 31, 2012.The Company has agreed to pay to Minerales a royalty equal to 3.5% of net smelter returns (“NSR”). In addition, after the start of production, if the minimum monthly processing rate of the mine facilities is less than 15,000 tonnes, then the Company must pay to Minerales a minimum royalty equal to the applicable NSR royalty based on the processing at a monthly rate of 15,000 tonnes.
Minerales has also granted to the Company the exclusive right to purchase a 100% interest in the property at any time during the term of the agreement (or any renewal thereof), upon payment of $8 million within 15 days of the Company’s notice of election to acquire the property. The purchase would be subject to a separate purchase agreement for the legal transfer of the property.
AVINO SILVER & GOLD MINES LTD. Notes to the unaudited condensed consolidated interim financial statements For the six months ended June 30, 2024, and 2023 (Expressed in thousands of US dollars, except where otherwise noted) |
(b) La Preciosa, Mexico
La Preciosa is a development stage mineral property located in the state of Durango, Mexico, within the municipalities of Pánuco de Coronado and Canatlán. The Project is hosting one of the largest undeveloped primary silver resources in Mexico, and is located adjacent to Avino’s existing operations at the Avino Property in Durango, Mexico. The property covers an area of approximately 1,134 hectares and is located on the eastern flank of the Sierra Madre Occidental mountain range.
(c) British Columbia & Yukon, Canada
Eagle Property - Yukon
The Company has a 100% interest in 14 quartz leases located in the Mayo Mining Division of Yukon, Canada, which collectively comprise the Eagle property. During the year ended December 31, 2023, the Company sold to a subsidiary of Hecla Mining Company (“Hecla”) the Eagle Property for cash consideration of C$250. The gain on sale of the Eagle Property was recorded to “Interest and other income” on the consolidated statements of operations and comprehensive income (loss).
Minto and Olympic-Kelvin properties – British Columbia
On May 2, 2022, the Company granted Endurance Gold Corporation the right to acquire an option to earn 100% ownership of the former Minto Gold Mine, Olympic and Kelvin gold prospects contained within a parcel of crown grant and mineral claims (the “Olympic Claims”).
As of June 30, 2024, Endurance was in compliance with all terms of the Option agreement.
8. NON-CONTROLLING INTEREST
At June 30, 2024, the Company had an effective 99.67% (December 31, 2023 - 99.67%) interest in its subsidiary Avino Mexico and the remaining 0.33% (December 31, 2023 - 0.33%) interest represents a non-controlling interest. The accumulated deficit and current period income attributable to the non-controlling interest are insignificant and accordingly have not been presented separately in the consolidated financial statements.
AVINO SILVER & GOLD MINES LTD. Notes to the unaudited condensed consolidated interim financial statements For the six months ended June 30, 2024, and 2023 (Expressed in thousands of US dollars, except where otherwise noted) |
9. PLANT, EQUIPMENT AND MINING PROPERTIES
| | Mining properties | | | Office equipment, furniture, and fixtures | | | Computer equipment | | | Mine machinery and transportation equipment | | | Mill machinery and processing equipment | | | Buildings and construction in process | | | Total | |
| | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
COST | | | | | | | | | | | | | | | | | | | | | |
Balance at January 1, 2023 | | | 14,687 | | | | 763 | | | | 774 | | | | 14,930 | | | | 23,294 | | | | 14,693 | | | | 69,141 | |
Additions / Transfers | | | 3,716 | | | | 78 | | | | 1,176 | | | | 3,270 | | | | 3,079 | | | | 701 | | | | 12,020 | |
Writedowns | | | - | | | | (6 | ) | | | (22 | ) | | | (629 | ) | | | (141 | ) | | | - | | | | (798 | ) |
Effect of movements in exchange rates | | | (28 | ) | | | 9 | | | | 1 | | | | 2 | | | | - | | | | (24 | ) | | | (40 | ) |
Balance at December 31, 2023 | | | 18,375 | | | | 844 | | | | 1,929 | | | | 17,573 | | | | 26,232 | | | | 15,370 | | | | 80,323 | |
Additions / Transfers | | | 348 | | | | 374 | | | | 11 | | | | 188 | | | | 1,402 | | | | (131 | ) | | | 2,192 | |
Writedowns | | | - | | | | (17 | ) | | | (12 | ) | | | (1,321 | ) | | | (23 | ) | | | (352 | ) | | | (1,725 | ) |
Effect of movements in exchange rates | | | 4 | | | | (2 | ) | | | 1 | | | | (1 | ) | | | - | | | | (3 | ) | | | (1 | ) |
Balance at June 30, 2024 | | | 18,727 | | | | 1,199 | | | | 1,929 | | | | 16,439 | | | | 27,611 | | | | 14,884 | | | | 80,789 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
ACCUMULATED DEPLETION AND DEPRECIATION / IMPAIRMENT | | | | | | | | | | | | |
Balance at January 1, 2023 | | | 9,106 | | | | 441 | | | | 598 | | | | 5,178 | | | | 6,733 | | | | 3,029 | | | | 25,085 | |
Additions / Transfers | | | 367 | | | | 111 | | | | 204 | | | | 676 | | | | 1,170 | | | | 294 | | | | 2,822 | |
Writedowns | | | - | | | | (4 | ) | | | (21 | ) | | | (619 | ) | | | (9 | ) | | | - | | | | (653 | ) |
Balance at December 31, 2023 | | | 9,473 | | | | 548 | | | | 781 | | | | 5,235 | | | | 7,894 | | | | 3,323 | | | | 27,254 | |
Additions / Transfers | | | 209 | | | | 63 | | | | 201 | | | | 1,175 | | | | (156 | ) | | | 155 | | | | 1,647 | |
Writedowns | | | - | | | | (16 | ) | | | (11 | ) | | | (1,146 | ) | | | (23 | ) | | | (145 | ) | | | (1,341 | ) |
Balance at June 30, 2024 | | | 9,682 | | | | 595 | | | | 971 | | | | 5,264 | | | | 7,715 | | | | 3,333 | | | | 27,560 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NET BOOK VALUE | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
At June 30, 2024 | | | 9,045 | | | | 604 | | | | 958 | | | | 11,175 | | | | 19,896 | | | | 11,551 | | | | 53,229 | |
At December 31, 2023 | | | 8,902 | | | | 296 | | | | 1,148 | | | | 12,339 | | | | 18,338 | | | | 12,047 | | | | 53,069 | |
Included in Buildings and construction in process above are assets under construction of $3,186 as at June 30, 2024 (December 31, 2023 - $3,166) on which no depreciation was charged in the periods then ended. Once the assets are available for use, they will be transferred to the appropriate class of plant, equipment and mining properties.
As of June 30, 2024, the Company performed an evaluation of the property plant and equipment and recorded a write-down of $384 (December 31, 2023 - $144) against the carrying value of mine and mill machinery and transportation equipment due to damage and obsolescence.
As at June 30, 2024, plant, equipment and mining properties included a net carrying amount of $6,809 (December 31, 2023 - $5,832) for mining equipment and right of use assets under lease.
AVINO SILVER & GOLD MINES LTD. Notes to the unaudited condensed consolidated interim financial statements For the six months ended June 30, 2024, and 2023 (Expressed in thousands of US dollars, except where otherwise noted) |
10. RELATED PARTY TRANSACTIONS AND BALANCES
All related party transactions are recorded at the exchange amount which is the amount agreed to by the Company and the related party.
(a) Key management personnel
The Company has identified its directors and certain senior officers as its key management personnel. The compensation costs for key management personnel for the three and six months ended June 30, 2024 and 2023 is as follows:
| | Three months ended June 30, | | | Six months ended June 30, | |
| | 2024 | | | 2023 | | | 2024 | | | 2023 | |
Salaries, benefits, and consulting fees | | $ | 320 | | | $ | 296 | | | $ | 613 | | | $ | 580 | |
Share-based payments | | | 507 | | | | 649 | | | | 894 | | | | 970 | |
| | $ | 827 | | | $ | 945 | | | $ | 1,507 | | | $ | 1,550 | |
(b) Amounts due to/from related parties
In the normal course of operations the Company transacts with companies related to Avino’s directors or officers. All amounts payable and receivable are non-interest bearing, unsecured and due on demand.
The following table summarizes the amounts were due to/(from) related parties:
| | June 30, 2024 | | | December 31, 2023 | |
Oniva International Services Corp. | | $ | 100 | | | $ | 102 | |
Directors Fees | | | 50 | | | | - | |
Intermark Capital Corp. | | | 23 | | | | - | |
Silver Wolf Exploration Ltd. | | | - | | | | (269 | ) |
| | $ | 173 | | | $ | (167 | ) |
For services provided to the Company as President and Chief Executive Officer, the Company pays Intermark Capital Corporation (“ICC”), a company controlled by David Wolfin, the Company’s President and CEO and also a director, for consulting services. For the six months ended June 30, 2024, the Company paid $142 (June 30, 2023 - $143) to ICC.
(c) Other related party transactions
The Company has a cost sharing agreement with Oniva International Services Corp. (“Oniva”) for office and administration services. Pursuant to the cost sharing agreement, the Company will reimburse Oniva for the Company’s percentage of overhead and corporate expenses and for out-of-pocket expenses incurred on behalf of the Company, with a 2.5% markup. David Wolfin, President & CEO, and a director of the Company, is the sole owner of Oniva. The cost sharing agreement may be terminated with one-month notice by either party without penalty.
The transactions with Oniva are summarized below:
| | Three months ended June 30, | | | Six months ended June 30, | |
| | 2024 | | | 2023 | | | 2024 | | | 2023 | |
Salaries and benefits | | $ | 242 | | | $ | 244 | | | $ | 496 | | | $ | 489 | |
Office and miscellaneous | | | 114 | | | | 124 | | | | 247 | | | | 257 | |
| | $ | 356 | | | $ | 368 | | | $ | 743 | | | $ | 746 | |
11. RECLAMATION PROVISION
Management’s estimate of the reclamation provision at June 30, 2024, is $2,104 (December 31, 2023 – $2,195), and the undiscounted value of the obligation is $5,214 (December 31, 2023 – $5,491).
The present value of the obligation was calculated using a risk-free interest rate of 9.72% (December 31, 2023 – 9.82%) and an inflation rate of 3.76% (December 31, 2023 – 3.76%). Reclamation activities are estimated to begin in 2025 for the San Gonzalo Mine and in 2042 for the Avino Mine.
AVINO SILVER & GOLD MINES LTD. Notes to the unaudited condensed consolidated interim financial statements For the six months ended June 30, 2024, and 2023 (Expressed in thousands of US dollars, except where otherwise noted) |
A reconciliation of the changes in the Company’s reclamation provision is as follows:
| | June 30, 2024 | | | December 31, 2023 | |
| | | | | | |
Balance at beginning of the period | | $ | 2,195 | | | $ | 445 | |
Changes in estimates | | | - | | | | 1,615 | |
Unwinding of discount related to continuing operations | | | 102 | | | | 49 | |
Effect of movements in exchange rates | | | (193 | ) | | | 86 | |
Balance at end of the period | | $ | 2,104 | | | $ | 2,195 | |
12. SHARE CAPITAL AND SHARE-BASED PAYMENTS
(a) Authorized: Unlimited common shares without par value
(b) Issued:
(i) During the six months ended June 30, 2024, the Company issued 4,797,748 common shares in an at-the-market offering under prospectus supplement for gross proceeds of $3,616. The Company paid a 2.75% cash commission of $99 on gross proceeds, for net proceeds of $3,517. The Company also incurred $138 in share issuance costs related to its base shelf prospectus and prospectus supplement filings.
During the six months ended June 30, 2024, the Company issued 1,197,709 common shares upon exercise of RSUs. As a result, $1,018 was recorded to share capital.
During the six months ended June 30, 2023, the Company issued 103,000 common shares following the exercise of 103,000 options. As a result, $90 was recorded to share capital, representing cash proceeds of $31 and the fair value upon issuance of $59.
(ii) During the year ended December 31, 2023, the Company issued 9,373,825 common shares in an at-the-market offering under prospectus supplement for gross proceeds of $5,648. The Company paid a 2.75% cash commission of $155 on gross proceeds, for net proceeds of $5,493. The Company also incurred $339 in share issuance costs related to its base shelf prospectus and prospectus supplement filings.
During the year ended December 31, 2023, the Company issued 1,005,333 common shares upon exercise of RSUs. As a result, $1,019 was recorded to share capital.
(c) Stock options:
The Company has a stock option plan to purchase the Company’s common shares, under which it may grant stock options of up to 10% of the Company’s total number of shares issued and outstanding on a non-diluted basis. The stock option plan provides for the granting of stock options to directors, officers, and employees, and to persons providing investor relations or consulting services, the limits being based on the Company’s total number of issued and outstanding shares per year. The stock options vest on the date of grant, except for those issued to persons providing investor relations services, which vest over a period of one year. The option price must be greater than or equal to the discounted market price on the grant date, and the option term cannot exceed ten years from the grant date.
Continuity of stock options is as follows:
| | Underlying Shares | | | Weighted Average Exercise Price (C$) | |
| | | | | | |
Stock options outstanding, January 1, 2023 | | | 4,256,000 | | | $ | 1.36 | |
Granted | | | 2,545,000 | | | $ | 1.12 | |
Expired | | | (105,000 | ) | | $ | 1.30 | |
Cancelled / Forfeited | | | (30,000 | ) | | $ | 1.40 | |
Stock options outstanding, December 31, 2023 | | | 6,666,000 | | | $ | 1.27 | |
Granted | | | 2,500,000 | | | $ | 0.78 | |
Exercised | | | (103,000 | ) | | $ | 0.79 | |
Cancelled / Forfeited | | | (190,000 | ) | | $ | 1.26 | |
Stock options outstanding, June 30, 2024 | | | 8,873,000 | | | $ | 1.14 | |
Stock options exercisable, June 30, 2024 | | | 6,979,000 | | | $ | 1.23 | |
AVINO SILVER & GOLD MINES LTD. Notes to the unaudited condensed consolidated interim financial statements For the six months ended June 30, 2024, and 2023 (Expressed in thousands of US dollars, except where otherwise noted) |
The following table summarizes information about the stock options outstanding and exercisable at June 30, 2024:
| | | | | Outstanding | | | Exercisable | |
Expiry Date | | Price (C$) | | | Number of Options | | | Weighted Average Remaining Contractual Life (Years) | | | Number of Options | | | Weighted Average Remaining Contractual Life (Years) | |
August 21, 2024 | | $ | 0.79 | | | | 48,000 | | | | 0.14 | | | | 48,000 | | | | 0.14 | |
August 4, 2025 | | $ | 1.64 | | | | 1,620,000 | | | | 1.10 | | | | 1,620,000 | | | | 1.10 | |
March 25, 2027 | | $ | 1.20 | | | | 2,255,000 | | | | 2.73 | | | | 2,255,000 | | | | 2.73 | |
May 4, 2027 | | $ | 0.92 | | | | 25,000 | | | | 2.84 | | | | 25,000 | | | | 2.84 | |
March 29, 2028 | | $ | 1.12 | | | | 2,300,000 | | | | 3.75 | | | | 2,300,000 | | | | 3.75 | |
July 10, 2028 | | $ | 1.12 | | | | 150,000 | | | | 4.03 | | | | 112,500 | | | | 4.03 | |
March 25, 2029 | | $ | 0.78 | | | | 2,475,000 | | | | 4.74 | | | | 618,750 | | | | 4.74 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | 8,873,000 | | | | 3.26 | | | | 6,979,250 | | | | 2.45 | |
Valuation of stock options requires the use of estimates and assumptions including the expected stock price volatility. The expected volatility used in valuing stock options is based on volatility observed in historical periods. Changes in the underlying assumptions can materially affect the fair value estimates. The fair value of the stock options was calculated using the Black-Scholes model with the following weighted average assumptions and resulting fair values:
| | June 30, 2024 | | | December 31, 2023 | |
Weighted average assumptions: | | | | | | |
Risk-free interest rate | | | 3.51 | % | | | 3.10 | % |
Expected dividend yield | | | 0 | % | | | 0 | % |
Expected warrant life (years) | | | 5 | | | | 5 | |
Expected stock price volatility | | | 60.73 | % | | | 61.10 | % |
Expected forfeiture rate | | | 15 | % | | | 17 | % |
Weighted average fair value | | C$0.43 | | | C$0.60 | |
During the six months ended June 30, 2024, the Company charged $432 (six months ended June 30, 2023 - $524) to operations as share-based payments for the fair value of stock options granted.
(d) Restricted Share Units:
On April 19, 2018, the Company’s Restricted Share Unit (“RSU”) Plan was approved by its shareholders. The RSU Plan is administered by the Compensation Committee under the supervision of the Board of Directors as compensation to officers, directors, consultants, and employees. The Compensation Committee determines the terms and conditions upon which a grant is made, including any performance criteria or vesting period.
AVINO SILVER & GOLD MINES LTD. Notes to the unaudited condensed consolidated interim financial statements For the six months ended June 30, 2024, and 2023 (Expressed in thousands of US dollars, except where otherwise noted) |
Upon vesting, each RSU entitles the participant to receive one common share, provided that the participant is continuously employed with or providing services to the Company. RSUs track the value of the underlying common shares, but do not entitle the recipient to the underlying common shares until such RSUs vest, nor do they entitle a holder to exercise voting rights or any other rights attached to ownership or control of the common shares, until the RSU vests and the RSU participant receives common shares.
Continuity of RSUs is as follows:
| | Underlying Shares | | | Weighted Average Price (C$) | |
| | | | | | |
RSUs outstanding, January 1, 2023 | | | 2,190,666 | | | $ | 1.27 | |
Granted | | | 1,878,320 | | | $ | 1.11 | |
Exercised | | | (1,005,334 | ) | | $ | 1.37 | |
Cancelled / Forfeited | | | (68,943 | ) | | $ | 1.14 | |
RSUs outstanding, December 31, 2023 | | | 2,994,709 | | | $ | 1.03 | |
Granted | | | 1,881,000 | | | $ | 1.02 | |
Exercised | | | (1,197,709 | ) | | $ | 1.15 | |
Cancelled / Forfeited | | | (137,132 | ) | | $ | 1.08 | |
RSUs outstanding, June 30, 2024 | | | 3,540,868 | | | $ | 1.08 | |
The following table summarizes information about the RSUs outstanding at June 30, 2024:
Issuance Date | | Price (C$) | | | Number of RSUs Outstanding | |
March 25, 2022 | | $ | 1.19 | | | | 556,539 | |
March 29, 2023 | | $ | 1.12 | | | | 1,124,288 | |
July 10, 2023 | | $ | 0.94 | | | | 50,000 | |
April 1, 2024 | | $ | 1.02 | | | | 1,810,041 | |
| | | | | | | 3,540,868 | |
During the six months ended June 30, 2024, 1,810,041 RSUs (year ended December 31, 2023 – 1,878,320) were granted. The weighted average fair value at the measurement date was C$1.02, based on the TSX market price of the Company’s shares on the date the RSUs were granted.
During the six months ended June 30, 2024, the Company charged $638 (June 30, 2023 - $658) to operations as share-based payments for the fair value of the RSUs vested. The fair value of the RSUs is recognized over the vesting period with reference to vesting conditions and the estimated RSUs expected to vest.
AVINO SILVER & GOLD MINES LTD. Notes to the unaudited condensed consolidated interim financial statements For the six months ended June 30, 2024, and 2023 (Expressed in thousands of US dollars, except where otherwise noted) |
(e)Earnings per share:
The calculations for basic earnings per share and diluted earnings per share are as follows:
| | Three months ended June 30, | | | Six months ended June 30, | |
| | 2024 | | | 2023 | | | 2024 | | | 2023 | |
Net income for the period | | $ | 1,240 | | | $ | 1,134 | | | $ | 1,839 | | | $ | 782 | |
Basic weighted average number of shares outstanding | | | 133,622,131 | | | | 119,195,457 | | | | 131,834,975 | | | | 118,887,538 | |
Effect of dilutive share options, warrants, and RSUs (‘000) | | | 5,326,470 | | | | 4,018,752 | | | | 5,372,565 | | | | 4,020,189 | |
Diluted weighted average number of shares outstanding | | | 138,948,601 | | | | 123,214,209 | | | | 137,207,540 | | | | 122,907,727 | |
Basic income per share | | $ | 0.01 | | | $ | 0.01 | | | $ | 0.01 | | | $ | 0.01 | |
Diluted income per share | | $ | 0.01 | | | $ | 0.01 | | | $ | 0.01 | | | $ | 0.01 | |
13. REVENUE AND COST OF SALES
The Company’s revenues for the six months ended June 30, 2024 and 2023, are all attributable to Mexico, from shipments of concentrate from the Avino Mine.
| | Three months ended June 30, | | | Six months ended June 30, | |
| | 2024 | | | 2023 | | | 2024 | | | 2023 | |
Concentrate sales | | $ | 14,346 | | | $ | 9,838 | | | $ | 27,020 | | | $ | 19,830 | |
Provisional pricing adjustments | | | 441 | | | | (620 | ) | | | 160 | | | | (787 | ) |
| | $ | 14,787 | | | $ | 9,218 | | | $ | 27,180 | | | $ | 19,043 | |
Cost of sales consists of changes in inventories, direct costs including personnel costs, mine site costs, energy costs (principally diesel fuel and electricity), maintenance and repair costs, operating supplies, external services, third party transport fees, depreciation and depletion, and other expenses for the periods. Direct costs include the costs of extracting co-products.
Cost of sales is based on the weighted average cost of inventory sold for the periods and consists of the following:
| | Three months ended June 30, | | | Six months ended June 30, | |
| | 2024 | | | 2023 | | | 2024 | | | 2023 | |
Production costs | | $ | 8,910 | | | $ | 7,407 | | | $ | 18,143 | | | $ | 14,711 | |
Write down of equipment and materials and supplies inventory | | | 384 | | | | 91 | | | | 384 | | | | 91 | |
Depreciation and depletion | | | 796 | | | | 677 | | | | 1,617 | | | | 1,347 | |
| | $ | 10,090 | | | $ | 8,175 | | | $ | 20,144 | | | $ | 16,149 | |
AVINO SILVER & GOLD MINES LTD. Notes to the unaudited condensed consolidated interim financial statements For the six months ended June 30, 2024, and 2023 (Expressed in thousands of US dollars, except where otherwise noted) |
14. GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses consist of the following:
| | Three months ended June 30, | | | Six months ended June 30, | |
| | 2024 | | | 2023 | | | 2024 | | | 2023 | |
Salaries and benefits | | $ | 459 | | | $ | 291 | | | $ | 855 | | | $ | 686 | |
Office and miscellaneous | | | 577 | | | | 425 | | | | 958 | | | | 617 | |
Management and consulting fees | | | 158 | | | | 97 | | | | 265 | | | | 203 | |
Investor relations | | | 108 | | | | 86 | | | | 181 | | | | 167 | |
Travel and promotion | | | 42 | | | | 39 | | | | 77 | | | | 93 | |
Professional fees | | | 310 | | | | 464 | | | | 469 | | | | 703 | |
Directors fees | | | 46 | | | | 45 | | | | 90 | | | | 89 | |
Regulatory and compliance fees | | | 51 | | | | 53 | | | | 93 | | | | 91 | |
Depreciation | | | 40 | | | | 35 | | | | 75 | | | | 70 | |
| | $ | 1,791 | | | $ | 1,535 | | | $ | 3,063 | | | $ | 2,719 | |
15. COMMITMENTS
The Company has a cost sharing agreement to reimburse Oniva for a percentage of its overhead expenses, to reimburse 100% of its out-of-pocket expenses incurred on behalf of the Company, and to pay a percentage fee based on Oniva’s total overhead and corporate expenses. The agreement may be terminated with one-month notice by either party. Transactions and balances with Oniva are disclosed in Note 10.
The Company and its subsidiaries have various operating lease agreements for their office premises, use of land, and equipment. Commitments in respect of these lease agreements are as follows:
| | June 30, 2024 | | | December 31, 2023 | |
Not later than one year | | $ | 199 | | | $ | 714 | |
Later than one year and not later than five years | | | 1,173 | | | | 1,241 | |
Later than five years | | | 3,747 | | | | 3,965 | |
| | $ | 5,119 | | | $ | 5,920 | |
Office lease payments recognized as an expense during the six months ended June 30, 2024, totalled $