Avino set to restart mill at Mexican mine

Vancouver – After nearly three decades of production followed by several years sitting idle Avino Silver and Gold Mines’ (ASM-V, ASGMF-Q, GV6-F) namesake Mexican mine will soon be operational again.

Louis Wolfin, who is still chief executive, opened the Avino mine in 1973 but shut it down in 2001 when silver was selling at around US$4.40 per oz. and gold at about US$270 per oz. Now David Wolfin, who has taken over running the company as president from his father, is looking to restart the mill sometime this May.

All that remains are “a few odds and ends” such as receiving the reagents, extra crusher liners and supplies for the assay lab, according to the younger Wolfin.

Once operational, the company will use the 250-tonne-per-day mill to start processing the 30,000-tonne stockpile that was deemed too low grade to be processed when the mine was last operating. Avino will then use the mill to process a 10,000-tonne bulk sample from the San Gonzalo vein, discovered in a 2006-2007 drill program.

The original mine concentrated around the Avino vein, but the focus is now on San Gonzalo, according to Wolfin.

“There’s the old Avino vein, which is what we mined for 27 years – there’s several million tonnes left in there but it’s lower grade and requires a lot of work because we have to dewater the extended decline and put in four new levels,” he said. “So San Gonzalo is priority number one because it starts right on the surface, doesn’t require all that work and it’s just going to be cheaper to get up and running.”

The bulk sampling is currently underway using shrinkage and stope methods and the company expects the decline to go about 240 metres before hitting the San Gonzalo vein, which should happen in the next few weeks. The company has contracted out the work, which should include about a kilometre of total development including the decline, crosscuts and raises. Wolfin expects the mill, which could be scaled-up to 1,200 tonnes per day, will start processing the bulk sample in a few months, once the stockpile has been processed.

The company owns 99.28% of the Avino mine after taking control of the project in 2006. At the time the company was talking about processing the 5 million tonnes of tailings at the site, but that plan is still down the road, according to Wolfin.

“It’s definitely on the radar, but logistically it’s a big job,” said Wolfin. “We just thought: with the meltdown in 2008, let’s just concentrate on the high grade San Gonzalo, get it up and running, get the cash flow and then we’ll go back and look at that.”

The Avino mine produced 16 million oz. silver, 96,000 oz. gold, and 24 million lbs. copper during 27 years of operation.

Avino also holds several properties in Canada, the most active of which is the Eagle project in the Yukon. The company recently released results from drilling conducted by Mega Precious Metals (MGP-V) on the property. Mega had been working towards earning ownership of the Keno City silver mining camp project but recently returned the project to Avino to concentrate efforts on its Red Lake gold camp in northern Ontario.

Highlights of the drilling include hole 1 that cut 23.7 metres grading 47.1 grams silver per tonne, 0.38% lead, 3.85% zinc and 37.1 grams indium per tonne, including 1.3 metres averaging 284.3 grams silver, 3.16% lead, 7.11% zinc and 57.9 grams indium; and hole 11 that returned 2 metres averaging 145 grams silver, 1.03% lead, 3.17% zinc and 20.3 grams indium.

With Mega no longer involved, Wolfin said the company will sit on the property and look to do something with it down the road.

Avino’s share price was up a penny on the bulk sampling update to close at 67¢. The company has a 52-week share price range between 38¢ and 99¢ and has 20.6 million shares outstanding.