Avino inches closer to production

Avino Silver & Gold Mines (ASM-V, ASM-X) has a long history at the Avino mine in Mexico’s Sierra Madres, but its most recent deal gets it closer to fulfilling its promise of coming full circle at the property.

The company had to shut down its underground mining of the silver rich Avino vein back in 2001 due to low metal prices. At the time of the shut-down a portion of the vein in what is known as the Elena Tolosa area, or the ET zone, hadn’t been mined out yet.

With its latest agreement with the privately held Minerales de Avino, the company says it has achieved a major milestone in getting the property back into full scale production.

The new agreement gives Avino the right to explore and mine the ET zone property for 15 years, with the option to extend the agreement for another 5 years. For that right, Avino will issue 135,189 common shares to Minerales and grant it a 3.5% nets smelter return.

Once the transaction is completed, Avino has 2 years to develop the mining facilities. Avino also has the right to by a 100% interest in the property by paying Minerales US$8 million in cash.

Avino says once de-watering of the adit at the ET zone is finished, very little underground development is needed to get the mine back up and running again. It is currently in the midst of applying for a license to do the de-watering.  

The Avino property already hosts a mill, which the company plans to modify so that it can handle new ore from ET. The modifications and the new source of ore should get the mill back to its full capacity of 1,250 tonnes per day.

Avino says it is also in the midst of a 10 hole, 4,000 metre drill program that will be part a new 43-101 resource estimate for the property.

The Avino mine is located in the Durango region of North Central Mexico, 80-km northeast of the city of Durango in the heart of the Sierra Madre Silver Belt. The property covers 13.2 sq km. and has access to water, grid power, is easily accessible by road.

The historic mine at Avino ran from 1974 to 2001 and turned out roughly 16 million oz. of silver, 96,000 oz. of gold and 24 million lbs of copper. But in November of 2001 lower metal prices and the closure of the smelter that was handling its production, conspired to shut the mine down.  

Early production at the mine came out of the Tolosa open pit, with later production coming from an underground operation.

At the time it closed the mine still had non-compliant resources of 1,681,253 tons grading 100 grams silver, 0.92 grams gold and 0.63% copper.

Avino says drilling done between 2007 and 2008 added to the amount, and those additions will be seen in the upcoming NI-43-101 resource calculation due out later this year.

Drilling in 2008 focused on what is known as the San Gonzalo zone, which sits 20-km from the original Avino mine. The company put 42-holes and 9,204 metre into the zone and reported a highlight intercept of 3,908 grams silver and 13.71 grams gold over 1.45 metres.

In late 2008 Avino did have an inferred resource calculated on the zone, which came in at 444,250 tonnes grading 332 grams silver and 2.61 grams gold for 4.75 million ounces of silver and 37,300 ounces of gold.

In Toronto on Feb. 28 Avino shares were up 17% or 32¢ to $2.17 on 102,000 shares traded.