Welcome, everybody. Pleasure to be here. AVINO is in its 57th year of being in business. We've got close to 40 years of production under our belt, and we're embarking on the biggest expansion in company history. Our tagline is, "A clear path to transformational growth." It's clear because we own the assets that are going to drive our growth. We're a junior silver producer and explorer. The project is in the heart of Mexico in the state of Durango. It's a safe jurisdiction. We have the special distinction of having 100% Mexican labor force right up to our Chief Operating Officer, which makes it a very unique company to say that, because everyone's been sourced in-country. Project portfolio is made up of three key assets. The AVINO Mine, which produces around 2.5 million ounces of silver equivalent on an annual basis.
La Preciosa we acquired from Coeur Mining in 2022. We paid $30 million for it. Coeur paid $350 million buying Orko in 2013. They were planning a giant open-pit mine, and under the current government, they were not giving open-pit licenses, so they decided to go in big with their Nevada project at Rochester, so they were divesting a non-core asset. We acquired that, and we're developing that right now. The third asset is the Oxide Tailings Development Project. When we opened Pit Mine in the 1970s and 1980s, we didn't have the best recovery rates because the material was oxidized and didn't recover well under conventional milling methods. We see an opportunity to reprocess that material. We did a prefeasibility study on that one, and we're considering moving that project forward.
We have a large silver equivalent resource base, 127 million ounces of silver equivalent in the proven and probable category, 300 million ounces of measured and indicated, 87 million ounces of inferred. 70% of that is pure silver. Here's our growth profile. Since we acquired La Preciosa, we got the permit last year in March. We were one of the first companies to get the permit in Mexico, so our stock really took off, and we started developing on La Preciosa. The plan before the rally was to operate it like hub and spoke, put in a decline, mine the material, and haul it 19 km to AVINO. Since our financial position has changed, we are now looking at a standalone operation at La Preciosa, and so we've retained the services of an independent engineering firm.
We expect the prefeasibility study to be ready in June or July next year. You can see here, the production this year is around 2.5 million. Next year, we expect it to go over 3 million, and that's because of grade improvement alone. AVINO Mill is made up of four independent circuits, and the two smaller circuits are handling the development material from La Preciosa right now. The grade is three times higher than what we're mining at AVINO, so it's driving the growth. Here you can see revenue. Last year, 49% was from silver, 20% gold, 31% copper. This year, it's already trending higher because we started developing the La Preciosa material through circuit one and circuit two. We're at 58% and going higher, and this is base case. We think we can even do better than this, but time will tell.
Earlier this year, we published reserves for the first time in company history. There are only two ways to qualify to publish reserves. One is through a feasibility study that was done in 1968, and the other way is under NI 43-101, you need $90 million in revenue. We crossed that threshold in 2024, so now you can see our reserves. There are 13 years of mine life at AVINO and 12 at La Preciosa, and the industry average is eight. You can see the peer groups there who we are comparing to. Here you can see our stock in the dark line. The light line is silver. In 2022, we built a dry stack tailings facility. We were not mandated.
We built it because we are very large shareholders of this company, and we did not want a disaster there, so we wanted to put the best practice in while we build out our plan here. Then you can see what happened in early 2025. As I mentioned earlier, we were one of the first companies to receive a permit in Mexico, and the stock took off, and this was early 2025. Then you see we announced reserves. We were trending higher prior to the silver rally and precious metals rally. A couple of weeks ago, for the second year in a row, we got included in the TSX30, so we got to ring the bell. We were ranked fifth of all companies on the exchange. We were in the top 30, ranked fifth, and we were up 1,000% on a three-year trailing average.
Here you can see financial performance for Q2, $26.8 million for revenue. You go down, and you see $5.6 million of free cash flow. A really good balance sheet, $45 million , no debt other than equipment debt, and we are not financing anymore. We are just buying the equipment outright. Here you can see AVINO. We are in a unique location. It is a volcanic caldera, and it is structurally. All these veins came up over millions of years. It is like a window, a geological window. It is very unique because down at the bottom you have the oldest veins, which is the AVINO Mine, and as you go north to northeast, they are younger. We get into the low-sulfidation, higher- grade vein systems. It is very unique, and we are fortunate to have that. We have a 2,500-ton-per-day processing plant. We have 550 employees at AVINO.
We have 150 at La Preciosa. Here you can see AVINO. A long strike, 1 - 1.5 km of strike below the surface, down to 650 m. There are about 11 million tons of proven and probable. There are about 28 million tons of M&I, and 13 million tons of inferred. A long life still after hundreds of years. This mine was discovered in the 1500s, and we are still mining it, and it is still open at depth. We have had four independent structural geologists there to try to help us model it, and you get four different opinions. There could be a porphyry at depth. There could be a skarn or a VMS. We do not know. We have got two drills turning at AVINO and three at La Preciosa. Here you can see La Preciosa. We are in the high desert. This is a safe jurisdiction.
It's not a contested state by cartels. There's no one fighting there for farmland. We produce concentrate, which is a security feature, as we don't produce doré, so we're not a target. You can see the farms there. We're around 2,000 m above sea level. There's no trees, so you're not in a remote area. Because it's been there for hundreds of years, the infrastructure built up. We've got a 20 km dedicated power line capable of 7.3 MW. Current excess capacity is 2 MW. We're extending the power line over to La Preciosa right now and requesting more power. The CFE has been pretty optimistic that they can deliver more power. High water supply. Because we built dry stack, we're recycling water at AVINO, about 90%, so we're not even using much water.
Moving on to La Preciosa, 2 km of strike between 300-500 m deep. You can see there's about 11 million tons of proven and probable, 33 million tons of measured and indicated, 11 million tons of inferred. Long life asset. What have we done since we got the permit? We put in 3 km of decline. We crosscut along the two veins, La Gloria and Abundancia. We're mining north to south, north to south on level two. We've ramped down to level three. We're doing that now. We've been hauling this development material to our mill and running it through the plant. It's a diluted about 200 g material, making money, paying for itself. We're going to start long holing in Q4, any day now. We're expecting those grades to go up substantially from there.
This asset's been pin cushioned, 1,500 drill holes, 500,000 meters. This was done by Pan American Silver and Coeur Mining and Orko, so it's well understood. You can see it's all red, so a lot of material between 150-500 g of pure silver. These red zones you can see are above 500 g, so there's really a high-grade material in there that we're excited to get to. When we were doing our due diligence and we were in the process of purchasing La Preciosa, we inspected the drill core because we wanted to understand the geology and how we would mine La Gloria and Abundancia. We originally thought they were really narrow veins and we would shrinkage stope mine it. But when we went and twinned some holes and drilled it, we were pleasantly surprised.
7.9 m of 1,600 g silver, 2 g gold, 6.42 m of 544 g silver, 0.5 g Gold. You can see it changed our opinion of Gloria and Abundancia. Now we're looking at long holing it, which we're starting shortly as I mentioned. Global reserves, 127 million ounces of proven and probable. That's by way of 27.19 million tons of P&P, 67.7 million tons of measured and indicated, 25 million tons of inferred. If you add all that up and you take our current capacity of 750,000 tons of processing capacity per year, that's 100 years of mine life. That's a gross value. You could cut it in half, it's still long. This is what's justifying us to wanting to build a standalone operation at La Preciosa. Capital structure, $1 billion , 170 million shares out.
It's actually less than that because we have a normal course issuer bid out there. We've bought half a million shares and canceled them, so we're under 170 million. There's 5 million options and RSUs, no warrants, fully diluted, 175 million. Trades TSX and NYSE American. We trade between 4 million - 6 million shares a day, so it's a liquid stock. 135 institutional holders, predominantly long only. They hold about 30%. Largest shareholder of the company outside of these ETFs. A disciplined silver producer with scale, growth, and financial strength. La Preciosa is one of the largest undeveloped silver assets in Mexico that's fully permitted and scalable. That's what's a special distinction for AVINO. Silver-weighted exposure, growth with execution. We've completed several expansions in the last few years, so we know what we're doing.
Milestones delivered, acquiring La Preciosa, getting the permits, getting long-term agreements with the locals there, TSX30 inclusion, and financial strength, $145 million in the bank, no debt, a lot of ounces in the ground, decades of mine life. That's the end of the story. There's a bit of time left.
Yeah, we do have a few minutes. Thanks, David. If there's any questions from the audience, if you have to take them. We have a gentleman in the front row here. We'll just wait for the mic to come over.
When are you going to get involved in the tailings?
Well, the tailings have been put on hold, the oxide tailings project, because now we're focused on La Preciosa, doing a prefeasibility study that is a longer life, higher payable project. If you look at all three, La Preciosa can probably do 7 or 8 million ounces of silver equivalent on its own. AVINO can do 2 - 3 million, and the oxide tailings could do 2 million. So we can get between 10 - 12 million ounces in the next three to five years. And we see the opportunity to get a premium in our stock. Last year, MAG, SilverCrest, and Gatos all got taken out. Their P/NAVs were over 2x. We're at 1x. So once we can deliver the prefeasibility study, show the market the plans, we think we're going to get a re-rating and a higher valuation. Yes, sir.
Go ahead.
How far are the tailings from the mill?
If you look at the picture, it's right beside it.
Oh. I was going to ask. All right. You don't have to truck it. Okay.
No. We did a prefeasibility study. During COVID, we shut down the mine to build the dry stack. We let it dry out and we grid drilled it. We did 130 holes. We did a PFS. The CapEx is $49 million to build a dynamic leaching operation, so that would be using large thickener tanks to contain it and get higher recovery rates. The AISC at that time was $10, and that was using $20 silver for the base case.
Okay. We still have time for a few more questions. I see one in the back row there.
What size plant are you going to put at La Preciosa and what's the timing?
We're looking at similar size to what we're doing now, because that's what we can manage. So 2,500 ton per day, 3,000 ton. It really depends on the engineering firm as we go through the process with them. Timing, so PFS, mid next year, June, July. If we go to final feasibility study, add another 12 months, so mid-2028. We go to build it, 16 months. So by 2030, we could have it up and running. If you think about it, all the infrastructure is there. The underground development work will be done. So the discount rate will be pretty small. The NAV will be very high because it's been de-risked before we even break ground on surface.
And maybe as a follow-up to that, you have this roadmap of which La Preciosa is a key part. What is the approximate CapEx to execute on this roadmap to 8 -10 million ounces? But then also, what do you think in terms of financing it with your currently strong balance sheet?
Yeah.
What would you look to, how would you finance it?
If there was no infrastructure, it could be around $200 million, but by the time we get to go build the mill part, it could be half that because a lot of the underground work will be done. The power line will be there. We don't have to build a camp to house people. All the infrastructure is there.
So you're thinking maybe debt would be an option for financing?
Potentially. We have many levers. We have cash, we have the debt, offtake. Our biggest offtaker right now is Samsung. We have been dealing with them for 10 years. They want more material. All the traders want more material. There are a few different levers that we could pull to get the best terms for our shareholders.
I think we still have time for another question or two to get more color on this great silver growth story. David, you mentioned the synergies in having the two sites close together in proximity. Do you share labor? What are the extent of, would you envision sharing labor and equipment and so on?
Yeah. Well, we are training up new people at La Preciosa. We had no employees there two years ago. Now we are at 150. Really good equipment with brand-new equipment, so it is really efficient. We just plan to continue to build our labor force locally.
Okay.
Keep the morale up. Although, when you go to site and you look in the parking lot, you see U.S. license plates. I said to Carlos, our Chief Operating Officer, "What is going on?" He says, "They are all coming back because of what is going on in the U.S.
Those were some of the highest skilled labor that we had, got visas and went to work in the U.S., but they're coming home.
You mentioned the M&A precedents in the silver sector, Gatos and others. What attributes do you think that AVINO offers that might make it an attractive takeout target?
Well, pure silver. A lot of silver, pure silver there.
Okay.
Yeah.
Okay, great. Well, thank you very much, David.
Thank you.