Avino acquires 100% of La Preciosa, cuts royalties

Executive Summary

• Avino Silver & Gold Mines Ltd. purchased all outstanding royalties and contingent payment obligations on its La Preciosa project, achieving 100 % ownership.
• The transaction required a $13.25 million upfront cash payment plus an $8.75 million deferred payment due within one year of first production (targeted late‑2025).
• Full royalty extinguishment is expected to lower La Preciosa’s operating cost profile, improve project economics and enhance shareholder value.

Key Details

• Consideration: $13.25 M cash upfront; additional $8.75 M cash payable no later than 12 months after initial production (contingent payment already reflected in prior royalty agreement).
• Financing: Up‑front amount funded from Avino’s existing cash balance of approximately $48 M; deferred portion to be financed with cash on hand when due.
• Royalty Terms Eliminated:
• 1.25 % net smelter returns (NSR) royalty on Gloria and Abundancia veins.
• 2.00 % gross value returns (GVR) royalty on all other La Preciosa areas.
• Contingent Obligations Removed:
• $8.75 M production‑linked payment (now mirrored by the deferred cash component).
• 25 ¢ per silver‑equivalent ounce of new reserves discovered outside current resource area, capped at $50 M, with credit against existing GVR royalty.
• Impact on Liquidity: Upfront cash outlay represents a modest portion of Avino’s cash position; deferred payment aligns with projected cash flows from La Preciosa production.
• Project Timeline: First production at La Preciosa targeted for late 2025; contingent payment due by end‑2026.
• Development Update (July 22 2025 press release):
• 360‑m San Fernando main access decline under construction; jumbo drill advancing on the ramp.
• Surface drilling ongoing through October, feeding underground mine planning and 3‑D modelling.
• Upcoming mineral resource update and first mineral reserve estimate to be released concurrently with NI 43‑101 producing issuer qualification.
• Qualified Person: Peter Latta, PEng, MBA – Vice‑President of Technical Services, qualified under NI 43‑101.

Notable Quotes

“Avino has seized upon a unique opportunity to buy back all the royalties on La Preciosa… By eliminating the royalty burden immediately prior to commencing production, we believe we will generate meaningful returns on our investment by lowering La Preciosa's operating cost profile…” – David Wolfin, President & CEO.