Avino Silver & Gold Mines - Q4 2023

Transcript

Operator (participant)

Thank you for standing by. This is the conference operator. Welcome to the Avino Silver & Gold Mines fourth quarter and full year 2023 conference call and webcast. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Jennifer North, Head of Investor Relations. Please go ahead.

Jennifer North (Head of Investor Relations)

Thank you, operator. Good morning, everyone, and welcome to the Avino Silver & Gold Mines Ltd. fourth quarter and year-end 2023 financial results conference call and webcast. To join this webcast and conference call, there is a link in our news release dated March 14, 2024, and in our news release of yesterday's date, which can be found on our website under News 2024. In addition, a link can be found on the homepage of the Avino website. On the call today, we have the company's President and CEO, David Wolfin, our Chief Financial Officer, Nathan Harte, our Chief Operating Officer, Carlos Rodriguez, and our VP Technical Services, Peter Latta. Before we get started, please note that certain statements made today on this call by the management team may include forward-looking information within the meaning of applicable securities laws.

Forward-looking statements are subject to known and unknown risks, uncertainties, and other factors that may cause the actual results to be materially different than those expressed by or implied by such forward-looking statements. The company does not intend to and does not assume any obligation to update such forward-looking statements or information other than as required by applicable law. For more information, we refer you to our detailed cautionary note in the presentation related to this call or on our press release of yesterday's date. Please note that the full financial statements and MD&A are now available on our website under the Investors tab, then click on Financial Statements, as well as the full statements are available on Avino's profile, on SEDAR+, and on EDGAR. I would like to remind everyone that this conference call is being recorded and will be available for replay later today.

Replay information and the presentation slides from this conference call and webcast will be available on our website. Also, please note that all figures stated are in U.S. dollars unless otherwise noted. Thank you. I will now hand over the call to Avino's president and CEO, David Wolfin. David?

David Wolfin (President and CEO)

Thanks, Jen. Good morning, everyone, and welcome to Avino's Q4 year-end 2023 financial results conference call and webcast. We will cover the highlights of our financial and operating performance, and then we will go over the work that we are currently performing, followed by Q&A. I will start with the discussion on operations, and then I will turn it over to Nathan Harte, Avino's CFO, to discuss the financial performance for the period. Then Jennifer North, our head of investor relations, will present an overview of Q4 ESG initiatives. Please turn to slide 5 as we go through the production results. Our Q4 and year-end production results were released in mid-January and are as follows. Silver equivalent production was 558,000. Silver production was 225,000 ounces. Copper production was 1.3 million pounds. Gold production 1,400 ounces. Mill throughput was just under 144,000 tons.

For the full year, our silver equivalent production reached a total of 2.4 million ounces of silver equivalent. Although the grades and recovery rates were slightly lower than 2022, we did see positive increases as we moved into other blocks at the mine. We have made improvements in the mechanical equipment of the mill and expect recovery rates to improve along with grades as we move into higher grade zones in line with the projected mining sequence. December production saw a noticeable increase in grade and recovery, and that the trend has continued into Q1 2024. For 2024, approximately 700-750 thousand tons are planned for mill processing and will be sourced from both the Avino Mine and stockpiles from La Preciosa. Based on the current metal prices, the company expects to produce between 2.5-2.8 million ounces of silver equivalent.

Our five-year growth plan takes us from production of 2.5-2.8 million ounces of silver equivalent in 2024 to between 8 and 10 million ounces of silver equivalent by 2029. Continuing on to slide 6, we will take a look at additional operational highlights. The total drilling completed in 2023 included 7,545 meters and 13 drill holes. Of particular note was our results reported in July, where we announced the best drill intercepts in company history. Hole ET 2309 highlighted 296 grams of silver equivalent over 57 meters of true width, including 407 grams of silver equivalent over 37 meters of true width, and 2,866 silver equivalent grams over 3.43 meters true width of mineralization. The company budget exploration and evaluation expenditures for 2024 will be focused on regional exploration and further understanding of structural geology below the current Avino Mine production area with no drilling planned.

The Dry Stack Facility is fully operational and is currently transporting the pressed dry tailings to the disused Avino open pit area. Moving on to slide 7, we provide an update on our recent milestones. Firstly, the pre-feasibility study on the Oxide Tailings Project was completed and released in early February. This was an important key milestone for Avino on our path for growth. Additional highlights include a net present value of $98 million pre-tax and $61 million post-tax at a 5% discount rate, and an IRR of 35% pre-tax and 26% post-tax. The study also highlighted proven and probable mineral reserves, a first in Avino's long history of 6.7 million tons of silver and gold grades of 55 grams per ton and 0.47 grams per ton, respectively. The Oxide Tailings Project is considered one of our three catalysts for growth as the future gold and silver production asset.

Next steps include community engagement and environmental impact studies. However, La Preciosa is our absolute top priority. Secondly, after the end of the year, we are extremely pleased to announce that we had signed a long-term land use agreement with the local community for the development of La Preciosa in Durango, Mexico. This achievement was pivotal for us and signals the start of a new era for Avino and the communities adjacent to the mine, and we are on a crucial step closer to putting La Preciosa into production. We were able to commence hauling of old surface stockpiles to our mill at the Avino Mine for processing. The La Preciosa mine represents a key pillar in our transformational growth strategy, as well as hosting a large endowment of silver and gold, which we expect to process for years to come.

Capital cost for La Preciosa in 2024 is expected to be between $3 million-$4 million and will include surface works and equipment procurement intended for the first phase of mine development for the Gloria and Abundancia Veins. Avino also has mining equipment necessary to commence operations at La Preciosa. The application for the environmental permit has been submitted by the company to the relevant authorities. A further permit will be submitted shortly after receipt of the environmental permit, which is required to commence construction of the portal, haulage ramp, and mining of the Gloria and Abundancia Veins. Avino anticipates receiving these permits sometime in 2024. A press release dated February 28th is available on our website and includes a full list of updates. At this time, I will hand it over to Nathan Harte, Avino's CFO, to present Avino's Q4 and year-end financial results. Nathan?

Nathan Harte (CFO)

Thank you, David. It's my pleasure to be on the call, and I would like to welcome everyone who has joined us and is viewing our presentation today. Turning to slide 8 now for a summary of the key financial highlights for the fourth quarter and full year 2023. The fourth quarter generated our highest quarterly revenue for the year, and we were able to demonstrate positive movements on the cost side, which translated to improved operating margins from the Avino Mine. We had positive net income of $500,000, and adjusted earnings came in at $2 million or $0.02 per share, both improved over previous quarters for 2023. Per ounce metrics also improved, with cash costs and all-in sustaining cash costs decreasing compared to Q3 and Q2, and we continued to generate additional operating cash flow from operations.

Most importantly, our working capital position has improved significantly, with working capital up to around $10 million at the end of the year, almost doubling from where we were at the end of the second quarter. Coming to slide 9, I'll walk you through the details of our financial results, some of which I did touch on in the highlights. Revenues came in at $12.5 million. This was down from our Q4 2022 record of $14.6 million. However, as mentioned, it was the highest quarterly revenues for this current year. Revenues on the year were just shy of $44 million, very similar to 2022. Avino generated mine operating income of $2.6 million for the quarter, including non-cash, depreciation, and depletion, compared to $4.4 million in Q4 of 2022.

The decrease is a result of lower revenues as well as a strong pace of the US dollar rate when compared to fourth quarter in 2022. On a cash basis, mine operating income in the current quarter was $3.6 million and represented a 29% cash operating margin. On the year, we generated $7.8 million in mine operating income, which translated to $11 million on a cash basis, for a cash operating margin of 25% for the full year 2023. Avino reported net income after taxes of $0.6 million for Q4 compared to $1.3 million in Q4 2022. Annual net income after taxes was $0.5 million compared to $3.1 million for the full year 2022. Earnings per share came flat for both the quarter and the year, decreasing from $0.01 in Q4 and $0.03 in the full year, both for 2022.

EBITDA was $1.1 million for the quarter, and adjusted earnings was $2 million, both showing increases from Q2 and Q3 2023, albeit lower than the fourth quarter in 2022. For the full year, EBITDA was $2.5 million, down from $10 million in 2022. Adjusted earnings paints a similar picture, with improvements on the quarter coming to the rest of 2023 at $0.02 per share generated in Q4 and $4.6 million or $0.04 per share generated on the year. Cash flow from operations for Q4 was $2.2 million before working capital adjustments, compared to $3.1 million in Q4 2022. On the full year, $6.3 million was generated from operations before working capital adjustments, compared to $10.8 million in 2022.

Here on slide 10, you can see our cash costs for silver equivalent payable ounce for the fourth quarter did show improvement, coming in at $15, with the average on the full year being $1,561. This is a modest decrease from the $1,690 we saw in the third quarter and the $1,633 in the second quarter, with signs of stabilization materializing. All-in Sustaining Cash Costs for silver equivalent payable ounce followed a similar trend, coming in at $2,167 and the full year being $2,187 per ounce. Again, the fourth quarter improved on higher costs seen in second and third quarters. The Mexican peso has appreciated by 15%-20% when comparing the 2023 to the 2022 average.

While we have seen some stabilization on this front, this has had an impact on our costs throughout 2023 as the majority of our expenditures are incurred in Mexico with local suppliers, employees, and contractors. As I highlighted on our third quarter call, we've put a number of measures in place for cost reduction, including lowering haulage rates to match mill throughput as we have generated a large ore stockpile over the last few months. As well, we have made certain administrative and auxiliary personnel reductions. This has had a positive impact on our fourth quarter results, and we expect that to continue into 2024. Coming to slide 11, you can see our cash cost per ton processed for the quarter came in above the yearly average at $61 per ton. All-in sustaining cost per ton processed was up as well for the quarter, coming in above the yearly average.

Increases on a per-ton milled basis are primarily a result of higher mining and haulage rates, as we did mine 15% more tons than we milled in the fourth quarter. In the first quarter of 2024, we have slowed mining rates to match the mill and have seen cost savings as a result on a per-ton basis, as well as overall. Our expectation is that unit costs will continue to be lower in Q1 2024 and moving forward for the rest of the year. At this point, I will now turn it over to Jennifer North, Head of Investor Relations, for an overview of our Q4 ESG and CSR initiatives.

Jennifer North (Head of Investor Relations)

Thank you, Nathan. Moving on to slide 12, we have listed the ESG/CSR initiatives that were completed in the fourth quarter of 2023. We added members to the CSR team in Durango during the third quarter, and since then, Ana and her team assembled to improve and strengthen their relationship with our neighboring communities and with each of our stakeholders. Avino follows the ESG standards and the United Nations Sustainable Development Goals, the SDGs, that work together to address the most pressing challenges facing the world. One of our major objectives is to make a positive impact on our communities and society. Maintaining a friendly dialogue is key to learning, improving, and maintaining strong relationships and developing trust as responsible corporate citizens.

During Q4, the CSR team focused in the areas of education, infrastructure, and environment, and following the guidelines of the SDG, the team was able to accomplish the following. Firstly, they held meetings with government offices, mining chambers, and associations, and local Durango authorities, keeping the lines of communication open. Moving on to slide 13, you will see that the company delivered TV screens and tablets to the community schools for educational purposes and also provided road maintenance and repairs. For the benefit of the women in the communities and to help develop economic benefit for the family, workshops in wreath making, food preparation, and other handiwork were held that culminated in a Christmas bazaar in mid-December, where the women then sold their handmade crafts and food. For the benefit of the environment, Avino delivered trees, recycled containers, took water samples, and provided health and well-being education in the communities.

These initiatives aligned with the SDG guidelines of partnerships for the goals, peace, justice, and strong institutions, quality education, industry innovation and infrastructure, no poverty, zero hunger, life on land, and clean water sanitation. Corporate office personnel visited the communities in November, December, and most recently in January and will be there again in April, reiterating our commitment to social responsibility. One of the top priorities for Avino is to provide jobs to those in the surrounding communities with the goal of fostering generations of enthusiastic and dedicated ambassadors of Avino. Our ambition is to educate a younger population to their backyard, to encourage them to see the benefits of mining and dream of a future where they can have a real career close to home. Currently, we have 448 direct jobs, which includes the workers at the mine site and in our Durango offices.

This number of jobs will typically translate to three x the number of indirect jobs for services, consultants, and suppliers in the surrounding communities and the Durango area. I will now turn it back over to David to continue on with the presentation, providing our plans for the coming quarter. David?

David Wolfin (President and CEO)

Thanks, Jen. Moving to slide 14, we are well into the first quarter of 2024, and our current focus is moving forward with our plans for the Gloria Vein and Abundancia Vein at La Preciosa, with community engagement ongoing as we ready ourselves to begin development work. Lastly, our goal is to replenish the treasury through cash flow generation from the Avino Mine as we look to future development of our 100%-owned La Preciosa property. As shown on slide 15, we want to reemphasize the company's plans for growth. We have three assets within a 20-kilometer footprint totaling hundreds of millions of silver equivalent mineral resources on the same area. We have an operating mill complex, which is currently producing from our Avino Mine.

Additionally, access to water, power, and tailings storage, all ingredients to grow organically without major capital investment required that we'd expect if we were starting from scratch. As you can see on the slide, our goal is to scale up by 2029 through production from these three assets. We would now like to move the call to question and answer portion. Operator?

Operator (participant)

Thank you. We will now begin the question and answer session. To join the question queue, you may press star, then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then two. We will pause for a moment as callers join the queue. Our first question comes from Jake Sekelsky of Alliance Global Partners. Please go ahead.

Jake Sekelsky (Managing Director)

Hey, David, Nathan, and team. Thanks for taking my questions.

Nathan Harte (CFO)

Hey, Jake.

Jake Sekelsky (Managing Director)

Nathan, so you mentioned the impact of a stronger peso during 2023. Can you just touch on your exposure here going forward and maybe what FX rate you're using in this year's budget?

Nathan Harte (CFO)

Yeah, it's a fair question. I think given what we've seen throughout 2023, obviously, we've seen some stabilization in the peso, although some recent little movements or littler movements compared to what we saw last year. We're forecasting and using our budgeting for 2024. We were hoping for a bit better, and it is an election year in Mexico, but we've adjusted our expectations, and we're using fairly close to what is the current rates and making sure that we're protected and ready to deal with the impact of the peso given all of the operations in Mexico.

Jake Sekelsky (Managing Director)

Okay, that's helpful. And then just on timing at La Preciosa, can you maybe walk us through the ramp-up and timeline to processing fresh material once those environmental permits are in hand and maybe just on the longer-term throughput target?

Nathan Harte (CFO)

Timeline on La Preciosa? Is that what you said?

Yeah. Yeah. Sorry, Jake. You're coming in a little quiet.

David Wolfin (President and CEO)

Yeah, it's a little muffled. I mean, we're hoping, if all goes well, with the permitting and the ramp going to level 2 of Gloria and Abundancia, possibly by the end of the year, we could have fresh ore coming out of the mine. So we're very optimistic. And then you can see in the graph the contribution that we're expecting going forward.

Jennifer North (Head of Investor Relations)

Jake, just a comment on that as well. We will be processing stockpiles that we've moved. So there is a substantial amount of material that we moved from La Preciosa to Avino, and we've been running test work on that, and we will be processing that, hopefully, in Q2. So that's really exciting from our standpoint because we get a chance to run the actual material through the mill, see how it performs, and get some revenue from it.

David Wolfin (President and CEO)

Yeah. Both sample.

Jennifer North (Head of Investor Relations)

Yeah. As we mentioned in our 2024 outlook, we have not budgeted for any fresh production from La Preciosa. We're hopeful of it, but we've just budgeted for processing of the stockpiles.

Jake Sekelsky (Managing Director)

Okay. So anything that comes in for 2024 as far as fresh material would be incremental to what you guys are looking at right now?

Jennifer North (Head of Investor Relations)

Yeah. Yeah, that's fair to say.

Jake Sekelsky (Managing Director)

Okay. Very good. That's all for me. Thanks, Jen.

Nathan Harte (CFO)

Thank you.

David Wolfin (President and CEO)

Thank you.

Operator (participant)

Our next question comes from Heiko Ihle of H.C. Wainwright. Please go ahead.

Heiko Ihle (Analyst)

Hey there. Can you hear me all right?

Nathan Harte (CFO)

Yeah. All right.

Heiko Ihle (Analyst)

I'm coming in good. Perfect. Thanks for taking my questions, and also thanks to Jen for the ESG overview. I think it often gets forgotten how many indirect jobs mining provides to local communities across the globe, quite frankly. We were doing a little bit of longer-term cost analysis on a ton basis today. I mean, with costs in the queue trending lower, I want to see if you have a bit of guidance in regards to the longer-term estimates for costs and how sticky you think this current pricing is in 2025 and beyond. In other words, if you think how much more you can gain from cost advantages in the longer term.

Nathan Harte (CFO)

Yeah. I think, Heiko, that's probably a question for me. Are you talking about metal prices specifically or the foreign exchange rates or inflation, or is it all the above?

David Wolfin (President and CEO)

All-in sustaining. Yeah.

Heiko Ihle (Analyst)

I meant all of the above, but if you're able and willing to break it down by line item, that'd be even better.

Nathan Harte (CFO)

I mean, we could maybe do that one offline, but I think in general terms, we're moving forward with the cost that we're seeing now from our suppliers, for labor, etc., from the impact of the peso. We're hopeful for improvements. We think the peso will probably have some fluctuations throughout the year. Again, I mentioned being an election year, then offset maybe by the nearshoring going on with Mexico. But from a long-term cost perspective, I think La Preciosa, we expect to change our cost profile, and I think we've made that message pretty clear to the market that once we're able to get in and develop and start production mining, there's going to be some economies of scale realized on the cost front. It's a bit tough to look further beyond 2025, 2026.

I think we do provide some rough looks in our presentation of where we think it's going to go, but we do expect costs from a consolidated basis, on a per-ounce basis, to come down over the next two, three years for sure, especially as we move and mix La Preciosa into our mill.

David Wolfin (President and CEO)

Yeah. If you look at the grades, well, when we do the bulk sample, you'll see the grades are probably 20% higher than what we're mining now. I mean, we won't be doubling the tonnage, but there'll be a mix in there going forward. So expect that to lower our costs.

Nathan Harte (CFO)

Yeah. As David mentions, we've got this higher-grade silver mine that's going to come online fairly quickly here, and mixing that into our current mill feed mix, that should help on the cost side as well as both the ounce production side.

Heiko Ihle (Analyst)

Very comprehensive answer. Thank you. Then just building on that a little bit, you expect $3 million-$4 million in capital costs at La Preciosa this year. As per your release, this is mostly surface works and equipment procurement for the first phase of mine development. It also states that you have the needed equipment already. I assume it's just sitting around the Avino Mine. Two quick questions on this. Can you break down the $3 million-$4 million into the different components? How much of that is equipment procurement? How much of that is surface works? And also, moving on what I was just saying, is this equipment actually sitting around at the Avino Mine? I remember once I was at a site visit down there, and they essentially had a new drill bit sitting in a storage area just waiting to be used.

Is there something like that at site right now where you're keeping equipment just waiting?

Nathan Harte (CFO)

So maybe I'll take the second question first. We don't have equipment sitting idle. I think that's not kind of what we were intuiting by that. We have equipment that's in use at Avino that can be moved over to La Preciosa to start the development and the first phase of production mining. However, once we want to ramp up with throughput and try and increase the tonnage, we will need more equipment, and we have to start that procurement process over the next number of months in order to make sure that we get the lead times in for when we hope to start production mining at a bit of a higher scale. So no, to answer that question, there is not equipment sitting around idle. I think we're obviously processing a lot of tons at Avino, and that does require a fair bit of equipment these days.

So hopefully, that answers that question. And moving back to the first one, $3 million-$4 million and how that's broken out, I would say not a lot of it is equipment procurement. We're getting some pretty favorable terms on our leased equipment through our good partners at Caterpillar and other partners as well. They're providing favorable terms such as no deposits, nothing paid upfront, and perhaps even not paying for a number of months. So that does help. So I would say the majority of it is going to be for the development.

David Wolfin (President and CEO)

I'd just like to add that we have not unused, but underutilized Oldenburg development jumbos. We're not using them so much because we're mining. So we have mining jumbos, which we'll need at some point at La Preciosa, but right now, we've got Oldenburgs we can send over there.

Jennifer North (Head of Investor Relations)

Yep. So hopefully, that answers the question, Heiko.

Heiko Ihle (Analyst)

Very helpful. Yep. No, that's it. Thank you very much. I'll get back in queue.

Operator (participant)

Our next question comes from Joseph Reagor of Roth MKM. Please go ahead.

Joseph Reagor (Analyst)

Morning, David and team. Thanks for taking the questions.

David Wolfin (President and CEO)

Morning, Joe.

Joseph Reagor (Analyst)

So the other guy speaking to me asked a question about La Preciosa, so I'm just going to ask some boring accounting questions. Looking at kind of the Q4 results, how much of kind of the revenue upside there was related to inventory drawdown versus provisional pricing adjustments? And there seems to be a bit of volatility around revenue quarter to quarter outside of treatment charges and whatnot, but just from that inventory swing that occurs and the provisional pricing. Is there any way for you guys to provide, what I would say, maybe better sales numbers with your production results to make the numbers more accurate into the quarter?

Nathan Harte (CFO)

Yeah. I think we saw some of that variability in the first couple of quarters, but I think Q3 and Q4 were fairly flat and didn't see quite as much variability. Obviously, if there were some decent swings in metal prices throughout the last six months too, both up and down, obviously, so that's when provisional pricing comes in and has a bit more of an impact. But I think from a volume and a tonnage and a total revenue, I mean, the last couple of quarters were fairly consistent, and based on our expected sales volumes for 2024, I think we're expecting consistent quarters.

Joseph Reagor (Analyst)

Okay. And I think one of the things you guys provide is ounces produced versus payable silver equivalent ounces sold, and there was a bit of a positive variance there this quarter. Is that just normal quarter-to-quarter timing of sales?

Nathan Harte (CFO)

Yeah, a little bit. I think in the previous quarter, we had it go in the other way, or especially in Q2, we had it go in the other way. And so yeah, like you mentioned, there is a bit of movement there sometimes, and some of that is a result of final settlement.

Joseph Reagor (Analyst)

Okay. All right. Thanks for the color on that. I'll turn it back over.

Operator (participant)

Our next question comes from Matthew O'Keefe of Cantor Fitzgerald. Please go ahead.

Matthew O'Keefe (VP)

Thanks, operator. Good morning. Two questions for me. First up on the 2024 guidance. I mean, you put out a little bit ago, you gave some rough guidance of 2.5-2.8 million ounces for 2024. That'll be up a fair chunk from what you ended this year with. So could you break down how much of that'll be from the La Preciosa broken ore and how much of that will be from the Avino Mine, presumably increased grades and throughput? And what's really changing there? Is it expected to be grades or throughput?

Nathan Harte (CFO)

Yeah. I'll take that one. I think it's going to be mostly Avino. I think we're not expecting a huge contribution from La Preciosa. We're using the stockpiles to better understand how it's going to go through our mill, but also, obviously, we're going to get some revenues and some positive ounces out of that as well too and some cost recovery. But I think we're expecting 90%-95% of that to come from Avino. And I think we put out our tonnage guidance as well too, and you can see between 700,000 and 750,000, and we produced about 615 last year or milled 615,000. So we are expecting improvements there.

That just comes with some better equipment on site to deal with breaking ore, us having a fairly larger stockpile at the end of the year, which I think we talked about throughout the call as well too, and just expecting that we're going to produce closer to that 2,500 tons per day run rate and get up to 700,000-750,000 tons throughout the year. So grade in some months is better than others, but overall, throughout the year, we're not expecting a huge movement from last year.

Matthew O'Keefe (VP)

Okay. Thanks.

Nathan Harte (CFO)

On that note, Matt sorry, Matt. On that note, last year was the first time we ran the full mill throughput with ET material. So it was a bit of a learning curve for us last year, and we hope to take those learnings and apply it to this year, which explains some of the increase.

Matthew O'Keefe (VP)

Got it. Okay. Thanks. And then, just, did you pass some pretty significant milestones this year, I would say. You produced the oxide tailings PFS, which was very positive and more to come on that. And then with La Preciosa, you now have your land use agreement. You'll be able to access ore, which I guess we'll see more contribution from that next year. Are we still looking for sort of a five-year plan to expand production to the 7.5-nine million ounce silver equivalent range?

David Wolfin (President and CEO)

Absolutely.

Joseph Reagor (Analyst)

Okay. Yeah. I just didn't hear mention of that.

David Wolfin (President and CEO)

Where was the main? The main focus is La Preciosa right now, get that up and running, and then community engagement on oxide tailings, environmental studies, and that kind of thing. So that will be the last expansion. But you'll see a big impact from La Preciosa, and hopefully, we get the permits soon.

Matthew O'Keefe (VP)

Okay. And will there be, I guess, you'll produce more guidance as to what to expect from La Preciosa proper throughout 2024 or into 2025? Is that a fair timeframe?

Nathan Harte (CFO)

Yeah. That's fair to say. I think we want to get, obviously, all the ducks in a row with permitting and everything in place and then start the development decline and get into production. And then we'll provide a bit more color on the expected tonnages and ounces for and I think that'll be closer for moving for 2025 projections because, as we mentioned, 2024, we're not actually budgeting for any fresh ore production.

David Wolfin (President and CEO)

Sure. The permitting dictates the timing.

Nathan Harte (CFO)

Yep. That's correct.

Matthew O'Keefe (VP)

That's going okay?

David Wolfin (President and CEO)

It's going fine.

Matthew O'Keefe (VP)

All right. Okay. Thanks very much.

David Wolfin (President and CEO)

Yep.

Operator (participant)

Once again, if you have a question, please press star, then one. Our next question comes from Rod Douglas, private investor. Please go ahead.

Speaker 8

David, would it be safer to say that the land-use permit was easier to get than the environmental permit?

David Wolfin (President and CEO)

The land-use permit was easier.

Speaker 8

You mean the community engagement, the community support, the community approval, you mean?

Jennifer North (Head of Investor Relations)

At La Preciosa.

Speaker 8

At La Preciosa. Is that correct?

Jennifer North (Head of Investor Relations)

Yeah. That's right.

David Wolfin (President and CEO)

I wouldn't say.

Nathan Harte (CFO)

Either way.

Speaker 8

Either way. I mean, how do I know what's easier? I mean, these things take time. We don't expect any delays on the permitting.

Nathan Harte (CFO)

Yeah. I think the land-use agreement took a long time, obviously, just with we wanted to get things right for the long term. That's it.

David Wolfin (President and CEO)

We had to explain to them we weren't planning a giant open pit that Coeur was planning. It took a while to go around to the various communities and let them know what our impact is, and it's going to be a very low impact.

Nathan Harte (CFO)

Yep. So they're.

Jennifer North (Head of Investor Relations)

I guess they're.

Nathan Harte (CFO)

Sorry, to answer your questions. They're different groups of people, and they require kind of a different approach.

Jennifer North (Head of Investor Relations)

Right. You don't really expect any problems. You think that this is going to proceed smoothly. You don't see any. The reason why I made the investment in Avino is because I am encouraged by the underground. I live in Mexico, so I see the problems other operators have getting permits for open pit.

David Wolfin (President and CEO)

Yep. Agreed. It's a satellite deposit, so it's a very small footprint. The locals, we were in there. Management was in there from headquarters, and we've met with the leaders, and they're thrilled about the potential of the economic impact of that region.

Speaker 8

Yeah. Well, like I said, it seems like that is everything, right?

David Wolfin (President and CEO)

Having the Ejido agreements is the key to getting the environmental permit because the environmental authorities want to know that the local region is in favor, and they are.

Jennifer North (Head of Investor Relations)

Yeah. Well, that's why I made my investment in Avino because I've seen you've been around for a long time, and you've spent a lot of money on the ESG, which in the end, you can't underestimate that. It's not an easy thing to do.

David Wolfin (President and CEO)

Absolutely.

Speaker 8

Thank you. We appreciate the confidence.

David Wolfin (President and CEO)

Thank you for your investment.

Operator (participant)

This concludes the question-and-answer session. I would like to turn the conference back over to David Wolfin for any closing remarks.

David Wolfin (President and CEO)

Thank you, everybody, for your time today. We're excited about the future of Avino. The shares have already started to creep up. Metal prices are looking strong. The Coeur block is behind us now and redistributed into strong hands. We've got a silver ETF that picked up several million shares, so you can see that translated in our liquidity. So it's translating into a very productive year. And with La Preciosa coming online, hopefully, very soon, that's going to really help. So thank you again, and have a great day.

Operator (participant)

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.