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The Avino mine is located in the Durango region of North Central Mexico in the heart of the Sierra Madre Silver Belt. The property covers 3,215 acres and has access to water, grid power, is easily accessible by road and is an important part of the local community from where we are able to attract economical skilled workers. The Avino mine was once described by Spaniards as "a mountain of silver." The mine first opened in the 1500s and reportedly supplied considerable wealth to Spain for hundreds of years. It has operated intermittently ever since, including for 27 years under Avino Silver & Gold Mines beginning in 1974. During the three decades that the mine was in production under Avino, silver grades averaged from 3 to 7 ounces per ton with more than 16 Moz of silver, 96,000 oz of gold and 24Mlb of copper produced through both open pit and underground mining. The mine shut down in 2001 due to low silver prices and closure of a key smelter. As metals prices are once again favorable, Avino has successfully resumed production on the property through exploration and development of high potential zones close in proximity to its 1250 tpd mill. San Gonzalo zone The San Gonzalo zone is located 2 km from the original Avino mine and beneath the shallow workings of an old mine from the colonial period. In 2007-08 Avino conducted a 42-hole, 9,204 meter drill program that produced very encouraging results, including 3908 g/t silver and 13.71 g/t gold over 1.45m. In late 2008, Orequest Consultants completed an NI 43-101 resource calculation for San Gonzalo, and estimated that the currently explored portion of the vein zone contained 4.75 million ounces of silver and 37,300 ounces of gold. The Inferred resource was calculated as follows:
Based on the results, Avino conducted a 10,000 tonne bulk sampling program to assess the economics of the zone and confirm mineral grades obtained through diamond drilling. The first decline was driven by our mining contractor in December 2009. The bulk sample program was completed during the first quarter of 2011 and a contract for the sale of concentrate was completed in June 2011. The results are based on the metallurgical balance provided below:
The overall bulk sample feed grade was 261g/t Ag and 0.9g/t Au. Silver and gold recoveries were 76% and 59% respectively. Operating costs relating for the bulk sample program were US$7.62 per ounce silver equivalent. Included in these costs are development mining costs for the raises and stopes. Cost per tonne was $53.91 resulting in a profit of US $120 per tonne produced. Avino Vein and the Elena Tolosa Zone The Avino vein served as Avino's primary source of ore during the 27 years of production. The vein is 1.6km long and 60M wide on the surface and has yet to be mined at depth. To date, the deepest level mined was at the 2,070m level (330m below surface). Currently, the company is evaluating options to begin re-developing the Elena Tolosa or ET zone that has a target potential of 2Mt with grades historically averaging over 100 g/t silver. The Mill Since operations were halted in 2001, the plant has remained in a state of temporary closure. Prior to 2001, the mill was configured to operate at 1000 tonnes per day. To accommodate ore from the high-grade San Gonzalo zone, an existing 250 tonne per day circuit has been re-conditioned along with extensive upgrading and repairs throughout the rest of the mill. In the second half of 2010 Avino tested the newly re-furbished mill by processing stockpiled ore left behind from previous mining of the ET Zone. Milling of this copper rich ore was followed by more test milling using development material from San Gonzalo itself leading up to the bulk sample. Exploration Avino is continuing to explore the San Gonzalo zone as well as other high-potential targets on the property to expand known resources and the mines output. Historic near- to-surface mining on the property has left many clues as to where mineralization hot spots are located. Using modern technology to integrate, manage and interpret more than 80 km of Induced Polarization (IP) Geophysics, 1,500 soil samples, satellite imagery, data from ongoing drilling and historic data, the company is seeking to define new high potential targets that were not visible or accessible in the past. In 2011 Avino is underway drilling over 7,000 meters through 250 holes to both expand the San Gonzalo zone and explore other mineralized areas of the property. Initial results have been promising as both mineable grades and widths have been encountered at the "Guadalupe Zone" (see news release July 18, 2011) Tailings Resource We continue to explore options for exploiting the mine's large tailings resource. This asset includes both oxide and sulphide tailings, with each requiring separate treatment methods. In a 2006 study , Wardrop Engineering concluded the oxide tailings held a silver and gold resource with an implied value of US43.7 million and estimated net revenue of $31.4 million. These values were calculated using a silver price of US$8.00 per ounce for silver and $500 per ounce for gold, so today's values will likely be higher. In April 2011, Avino hired Wardrop to re-visit the 2006 scoping study to assess the viability of a heap leach operation or a new technology known as "Continuous Vat Leaching". | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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