Avino Silver & Gold Mines Ltd. (ASM) Q3 2026 earnings review
Avino's new mine lifts silver output, but unit costs rise
Avino Silver & Gold Mines, a Mexican silver, gold and copper miner, grew sales on higher silver prices and its new La Preciosa mine while taxes and unit costs cut net profit. Revenue jumped 59% from a year ago as realized silver prices climbed 66% and La Preciosa lifted silver output. However, net income fell 21% because taxes doubled and currency contracts lost value.
| Revenue | $33.4M +59% from a year ago |
|---|---|
| Silver ounces produced | 303,189 +15% from a year ago |
| All-in sustaining cost per ounce | $34.71 +44% from a year ago |
| Profit per share, excluding one-offs | $0.08 +14% from a year ago |
⚖️ Verdict: 🟢 Bullish
The story got better because La Preciosa scaled tonearly a third of silver output and returned total metal production to growth after three shrinking quarters. The bad news: processing costs per tonne rose 34% across the business, showing that cost inflation is no longer just a quirk of how silver-equivalent ounces are counted.
The question now is whether shifting La Preciosa from development tunneling to regular underground mining will bring unit costs down. Either richer ore grades and higher daily volume lower per-tonne costs toward the main mine's rate, or underground support and hauling keep costs elevated. Fourth-quarter cash cost per tonne at La Preciosa will tell.
🐂 Bull Case
La Preciosa Lifts Silver Production 15%
Avino is developing La Preciosa, a property in Mexico that it describes as "hosting one of the largest undeveloped primary silver resources in Mexico". Chief executive David Wolfin aims to process 500 tonnes of rock per day from this new site to turn the single-mine operator into a multi-asset producer.
In the third quarter, the Mexican miner milled 30,239 tonnes from La Preciosa, or about 329 tonnes per day by our math. That material yielded 91,441 ounces of silver and generated $6.8 million in sales, up 82% from the second quarter by our math.
This ramp-up matters because output at the older Avino Mine is falling. Total silver production rose 15.2% from a year ago to 303,189 ounces only because La Preciosa supplied nearly a third of the metal, lifting total silver-equivalent output by 1.9% after three quarters of declines.
What to watch: daily tonnes milled from La Preciosa in the fourth-quarter report. Reaching the 500-tonne daily goal would show the underground ramp can offset lower copper and gold output at the main mine.
Higher Silver Prices and Lower Smelter Fees Lift Profit
Avino leaves its metal sales unhedged, so higher commodity prices flow straight to revenue. In the third quarter, its average realized silver price jumped 65.7% from a year ago to $63.33 per ounce, driving a 58.7% revenue increase to $33.4 million even though payable ounces sold fell 5.4%.
- Silver revenue: $18.3 million, or 54.9% of total sales, up from $9.2 million a year ago
- Smelter treatment and refining deductions: $97 thousand, down from $981 thousand a year ago
- Operating margin: 35.8% of revenue, up 3.0 percentage points from 32.8% last year
Gross margin slipped 2.7 percentage points to 44.4% because direct production costs rose 3.0 points of revenue. However, operating profit still outpaced sales because general overhead and employee stock compensation fell by 2.6 and 3.0 percentage points of revenue, while better smelter contract terms reduced treatment deductions to 0.3% of metal sales.
What to watch: treatment and refining deductions as a share of gross metal sales in the fourth quarter. Keeping deductions near 0.3% would confirm that the renegotiated smelter terms hold as La Preciosa volume grows.
Avino Paid Off Royalty Debt and Kept Buying Shares
Last year Avino bought back the third-party royalties on La Preciosa to keep all future metal revenue from the project. This quarter the miner paid the final $8.75 million deferred bill for those rights, leaving no debt on the balance sheet outside of $7.6 million in equipment loans and leases.
At the same time, the Vancouver-based group bought back and cancelled 276,732 shares in the third quarter by our math, and another 249,943 shares after the quarter ended. Even after the royalty payment, $8.0 million in capital spending by our math, and the buybacks, cash stood at $138.2 million.
What to watch: share buyback volume and at-the-market share sales in the fourth quarter. Continued repurchases with zero new share sales would show the company is reversing the 11.1% share dilution from earlier stock offerings.
🐻 Bear Case
Unit Costs Keep Rising Across Both Mines
On prior calls, finance chief Nathan Hart attributed rising per-ounce costs to silver's price rally — which shrinks how many silver-equivalent ounces gold and copper count for "for the purposes of cash costs and all-in sustaining costs" — and to early La Preciosa rock, while pointing to steady per-tonne costs.
- All-in sustaining cost (AISC), the total cost to produce an ounce: $34.71, up 44.3% from a year ago
- Cash cost per tonne milled: $71.40 across the group, up 34.3% from $53.18 a year ago
- Cash cost per tonne by mine: $133.92 at La Preciosa and $59.60 at the Avino Mine
The per-tonne figures cut against the claim that underlying costs are stable. Even excluding La Preciosa's expensive development rock, the main Avino Mine cost $59.60 per tonne to process, up 12.1% from the company's $53.18 rate a year ago. Consolidated AISC of $34.71 per ounce also sits well above the $31.81 full-year budget reference reported in the second quarter.
What to watch: La Preciosa cash cost per tonne in the fourth quarter. A drop from $133.92 toward the main mine's $59.60 rate would show that moving from development tunneling to regular mining brings the promised cost relief.
Taxes and Derivative Losses Cut Net Income 21%
Avino uses foreign-currency contracts to hedge its Mexican peso costs and holds shares in junior miners. While operating profit jumped 73.0% from a year ago to $12.0 million, bottom-line net income fell 20.8% to $6.1 million, and diluted profit per share dropped 40.0% to $0.03.
Two non-operating swings caused the drop. First, currency derivatives and equity investments lost $1.4 million in value, compared with a $2.5 million gain a year earlier. Second, income tax expense doubled to $6.1 million — a 50.0% effective tax rate by our math, up from 28.1% last year — as deferred taxes swung to a $1.8 million charge.
What to watch: the effective tax rate in the fourth quarter. A return toward the 29.7% nine-month rate would show the third-quarter deferred tax charge was a one-off adjustment rather than a permanent tax drag in Mexico.
Copper and Gold Shrank and Ounces Sold Fell
Avino produces copper and gold alongside silver at its main Elena Tolosa operation, which it calls the Avino Mine. In the third quarter, total tonnes milled at the Avino Mine dropped 15.2% from a year ago to 160,140 tonnes as the mill dedicated circuits to La Preciosa rock.
Because La Preciosa produces almost no copper and very little gold, company-wide gold production fell 10.5% to 1,732 ounces and copper output fell 8.0% to 1.20 million pounds. In addition, payable silver-equivalent ounces sold fell 5.4% from a year ago to 532,274 ounces, trailing the 582,836 ounces produced as unsold concentrate built up in inventory.
What to watch: payable silver-equivalent ounces sold versus ounces produced in the fourth quarter. Selling down the concentrate stockpile would turn this quarter's unshipped production into fourth-quarter revenue.
💲 Other KPIs
Cash from operations rose 52.5% from a year ago, or 68.9% before working-capital changes to $12.3 million. It stepped down slightly from $13.3 million in the second quarter and $13.6 million in the first. After $8.0 million of capital spending by our math, free cash flow was $4.7 million, or 14.0% of sales.
Inventory rose 26.8% from year-end 2025. Concentrate inventory — processed metal waiting to be sold — jumped 51.4% over the nine months to $6.4 million, while rock stockpiles fell 22.4% to $2.3 million. Meanwhile, customer receivables dropped 65.8% from year-end to $4.1 million, releasing $7.9 million in cash over the nine months.
The diluted weighted average share count rose 11.1% from 157.1 million a year ago, after the miner issued 3.1 million shares through its at-the-market stock offering program and 5.0 million shares from option exercises and employee stock awards earlier in the year. Compared with the second quarter's 175.5 million shares, the count fell 0.6% on buybacks.
🔮 Guidance
Unchanged from earlier in 2026. The company did not publish a formal outlook table in the third-quarter report, but disclosed its board-approved 2026 budget metal prices used to calculate silver-equivalent production. Realized silver prices of $63.33 per ounce in the third quarter and $70.57 year-to-date ran well above the $45.20 budget baseline.
❓ Key Questions
What are the feed grades and recovery rates by mine?
The operational highlights table in the supplied excerpt does not show silver, gold, and copper feed grades or mill recovery rates for the third quarter. Knowing whether La Preciosa grades rose from the first half will tell if underground mining is reaching higher-grade veins.
Where does full-year unit cost stand at budget metal prices?
In the first two quarters, Avino provided a full-year reference of $24.07 for cash cost and $31.81 for all-in sustaining cost per ounce at budget metal prices. Actual third-quarter AISC was $34.71, so investors need the budget-price figure to judge underlying cost control.
How many meters were drilled in the third quarter?
Management planned 30,000 meters of exploration drilling across Avino and La Preciosa in 2026 and had completed 6,591 meters by the end of June. The financial statements show zero capitalized exploration drilling in the first nine months, leaving the expensed drilling pace unclear.
Why did the effective tax rate jump to 50%?
Income tax expense took half of pre-tax profit in the third quarter as deferred taxes swung to a $1.8 million charge, even though the company paid $16.4 million in cash taxes over the first nine months. Management has not explained what drove the deferred charge.