Avino plans bulk sample for Mexican mine

Louis Wolfin, the founder of Avino Silver & Gold Mines (ASM-V), was at a cocktail reception in Beverly Hills, chatting it up with the heads of technology companies when a Mexican man overheard him say he had a thing for mining.

It was the late 1960s and Wolfin, then a stockbroker, was looking for new companies to list on the now defunct Vancouver Stock Exchange.

“You like mining?” the Mexican asked. “I just bought a library from the government of all the geology reports that they were about to destroy.”

Wolfin’s first thought was to send a geologist to go over all of the reports, paying special attention to ones that had closed around the time of the Mexican revolution in the early 1900s.

And that’s exactly what they did. The geologist liked the Avino mine the most; it was discovered by the Spanish Conquistadors about 500 years ago, who claimed to have found a mountain of silver. They formed the city of Durango and Avino was mined on and off over the following centuries.

The 1960s was one of those off periods, but once Wolfin had negotiated a 49% interest in the Avino property, it didn’t take long to get things going again. The mine along with a new mill, were up and running by the early 1970s and didn’t stop operating until the late 2001 due to depressed metals prices; silver was at US$4.40 per oz., gold about US$270 per oz.

At close, the mine had grown to an operating rate of 1,000 tonnes per day from the Elena Tolosa vein, producing a total of 16 million oz. of silver, 96,000 oz. of gold an and 24 million lbs. of copper over 27 years of commercial production.

The passion for the mining business didn’t stop then; as metals prices began to rise, Wolfin’s son David, now the president of Avino, could see that the Avino mine hadn’t had its last run.

In 2006, he managed to convince their Mexican subsidiary partners to sell, leaving Avino with all but 10.5% ownership of the mine property (the remainder is held in an estate that is being contested in court).

Since then, Avino has drilled more than 28,000 metres with a new focus on the San Gonzolo vein, which will be the site of a 10,000-tonne bulk sample program this fall.

“Once the bulk sample is done, we will just keep mining if everything is going well,” the younger Wolfin says.

Right now the company is awaiting the results of a resource estimate for the San Gonzolo zone. With metallurgical test results that showed recoveries of 89-90% for gold and 92-93% for silver, the company is eager to get things going.

Avino has done 80 km of IP geophysics (in 2-km lines), taken 800 soil samples, drilled old workings and is now compiling a data base. The company is also doing satellite imagery and 3D modeling.

The company says the mill and recovery plant, which have been on care and maintenance since 2001, are still in excellent condition. For the bulk sample, the company plans to refurbish part of the processing circuit to accommodate 250 tonnes per day from San Gonzolo.

The end goal is for a seamless transition from the bulk sample to commercial production at the San Gonzalo, bringing the ET zone on line sometime in 2009.

Wolfin says that because the way that many Mexican mines operate having only a few years of mine life blocked out at a time leaves lots of upside for Avino.

“It wasn’t in their best interest to block out a 100 million oz. of silver because it would take 20 years to mine it,” Wolfin explains. “That has created opportunity for us today because the property is vastly underexplored.”