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Accelerated La Preciosa development by switching Mill Circuit 2 to process development ore three months ahead of schedule, resulting in a 59% increase in silver production from the project. Leveraged processing flexibility by mining near-surface oxidized material at the Avino Mine that was outside of current reserves, prioritizing margin over total ounce volume. Strengthened the corporate structure through the appointment of a new SVP of Corporate Development to oversee the transition from a single-mine operator to a multi-asset producer.
Maintained a 'bulletproof' balance sheet with $144 million in cash to fund organic growth initiatives without the need for secured debt. Executed a capital allocation strategy that included the repurchase and cancellation of over 500 thousand common shares under a normal course issuer bid. Benefited from a favorable pricing environment where precious metals accounted for 90% of total revenue, despite volatility in market prices.
Evaluating the optimization of La Preciosa through trade-off studies comparing long-term hauling to the construction of a potential stand-alone processing facility. Transitioning exploration focus from infill drilling to step-out holes at high-priority vein intersections to drive future resource expansion. Targeting a production increase at La Preciosa to 500 tons per day as development mining moves toward commercial production levels.
Anticipating a normalization of costs and grades in subsequent quarters as mine sequencing moves away from lower-grade development material into production long-hole mining. Progressing toward a long-term strategic goal of 10 million silver equivalent ounces per year supported by existing infrastructure and resource depth. Reported a $5 million negative impact from provisional pricing adjustments due to metal price volatility during the quarter.
Noted that the Mexican peso remained 12-15% stronger against the US dollar compared to the prior year, creating a headwind for operating costs. Clarified that current elevated cash costs per ounce are not indicative of long-term expectations as they reflect processing of low-grade development material that would otherwise be waste. Identified that increased concentrate inventory at quarter-end temporarily impacted reported revenue and gross margins.
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