Avino Silver & Gold Mines Ltd. (“Avino” or “TheCompany”) is pleased to announce that its wholly-owned Mexicansubsidiary has entered into a new agreement with Minerales de Avino, S.A. deC.V. (“Minerales”) whereby Minerales has indirectly granted to the Company theexclusive right to explore and mine the La Platosa property known as the “ETzone”.
Avino’s CEO David Wolfin states: “I am very pleased to say that with this keyagreement in place we can now proceed with our plan to become a significantsilver producer. This new long-term agreement marks a significant milestone forthe company; Avino can now proceed with its major expansion plans. We havecommenced work on an application that will allow us to de-water the existingAvino mine workings. To accommodate the new ore, we are implementing a plan tomake the necessary minor modifications to our existing mill in order to bringthe plant back to its full capacity of 1250tpd. Drilling has commenced todefine mineralized zones (four thousand metres through 10 holes are planned for2012.) A new 43-101 resource estimate will be forthcoming once the infilldrilling program is complete.”
Terms of the Agreement
Pursuant to the Agreement, the Company will have the exclusive right to exploreand mine the property for an initial period of 15 years, with the option toextend the agreement for another 5 years. In consideration of the grant ofthese rights, the Company must pay to Minerales the sum of US$250,000, by theissuance of 135,189 common shares of the Company. The Company will have aperiod of 24 months (the “Development Period”) for the development of miningfacilities.
The Company has agreed to pay to Minerales a royalty equal to 3.5% of netsmelter returns (the “NSR Royalty”), at the commencement of commercialproduction from the property. In addition, after the Development Period, if theminimum monthly processing rate of the mine facilities is less than 15,000tonnes, then the Company must pay to Minerales in any event a minimum royaltyequal to the applicable NSR Royalty based on processing at a minimum monthlyrate of 15,000 tonnes.
Minerales has also granted to the Company the exclusive right to purchase a100% interest in the property at any time during the term of the agreement (orany renewal thereof), upon payment of US$8 million within 15 days of theCompany’s notice of election to acquire the property. The purchase would becompleted under a separate purchase agreement for the legal transfer of theproperty.
Avino Mine History
Avino operated its main mine located 80 KM NE of Durango, Mexico from 1974 to2001 producing approximately 5 million tons, containing 16 million ouncessilver, 96,000 ounces gold and 24 million pounds of copper. The mine was closedin November 2001 due to low metal prices (Silver US$4.37/oz, Gold US$283/oz,Copper US$0.65/lb) and the closure of a key smelter.
Production from 1976 to 1992 was from the Tolosa open pit. Subsequentproduction was mostly from a 4x4 meter ramp access underground operation usingsub-level stoping with a sub-vertical increment restricted from 11 to 15m tocounter mine dilution arising from an occasional, semi-incompetenthanging-wall. From 1997 – 2001, the mine operated six days per week, threeshifts per day, averaging 1000 tons per day and achieved up to 1300 tpd.
Remaining resources at the time of the closure in 2001, mostly below level 11(as calculated by mine staff, historic, non NI43-101 compliant) were 1,681,253tons at 100 g/t silver, 0.92 g/t gold and 0.63% copper. Drilling inthe area between 2007 and 2008 will have added to this total which will be madepublic in an upcoming NI-43-101 resource calculation later this year.
Mineral rights on the concessions, Unification La Platosa, totaling an area of98.83 hectares which cover 1300 metres along the main Avino deposit were heldunder an option agreement with a private company (Minerales de Avino SA de SV“Minerales”). That agreement required Avino to pay a 3.5% royalty to Minerales,which expired on October 31, 2010. This new agreement replaces the originalexpired deal.
For more information on Avino Silver & Gold Mines Ltd. Please go to ourwebsite www.avino.com orfollow us on Facebook or Twitter. We are also taking phone calls to communicatewith our existing and future shareholders.
ON BEHALF OF THE BOARD
“David Wolfin”
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David Wolfin
President & CEO
Neither TSX Venture Exchange nor its Regulation Services Provider (as that termis defined in the policies of the TSX Venture Exchange) accepts responsibilityfor the adequacy or accuracy of this release. This release contains statementsthat are forward-looking statements and are subject to various risks anduncertainties concerning the specific factors disclosed under the heading “RiskFactors” and elsewhere in the Company’s periodic filings with Canadiansecurities regulators. Such information contained herein representsmanagement’s best judgment as of the date hereof based on information currentlyavailable. The Company does not assume the obligation to update any forward-lookingstatement.