TORONTO (miningweekly.com) – Precious-metals producer Avino Silver & Gold Mines has started shipping concentrates produced from the Avino mine, near Durango, in Mexico, to Samsung Construction & Trading (C&T) UK, on schedule.
Under the terms of a $10-million concentrates prepayment agreement with Samsung that had closed in August, Avino used the prepayment to acquire mining equipment, improve the efficiency of its project developments for increased productivity, upgrade its tailings impoundment facilities and for general working capital requirements.
The prepayment agreement with Samsung covered the sale of concentrates produced from the Avino mine only and did not include concentrates produced from the nearby San Gonzalo mine. Under the prepayment agreement, Avino would ship 800 wet metric tons of concentrate a month over the next 24 months.
Samsung would pay for the concentrates at the prevailing metal prices for their silver, copper and gold content around the time of delivery, less treatment, refining, shipping and insurance charges. Interest would be charged on the prepayment amount owing to Samsung from time to time, at a rate of Libor plus 4.75%, excluding a fee for Samsung's due diligence costs of $125 000.
The mill operated on three separate circuits processing feed from the San Gonzalo and Avino mines, as well as stockpiles left from past mining of the Avino vein.
The Avino mine was once described by the Spaniards as "a mountain of silver" and opened in the 1500s, reportedly supplying considerable wealth to Spain for hundreds of years. It had operated intermittently ever since, including for 27 years under Avino, starting in 1974.
During the three decades that the mine was in production under Avino, silver grades averaged from 3 oz/t to 7 oz/t, with more than 16-million ounces of silver, 96 000 oz of gold and 24-million pounds of copper produced through both openpit and underground mining. The mine shut down in 2001 owing to low silver prices and the closure of a key smelter.
With metals prices once again favourable, Avino had managed to successfully resume production on the property through exploration and the development of high-potential zones close to its 1 500 t/d mill.
Avino was working to develop three key zones on the 1 104 ha property to further its goal of becoming a significant primary silver producer in the next few years. Aggressive exploration in search of new mill feed was also ongoing.
The company also owned the Bralorne gold mine, in south-western British Columbia, which had operated under trial production status since 2010. Despite steady, although limited, gold production – including an estimated 3 482 oz in fiscal 2014 – Bralorne remained in the exploration and evaluation stage.