Board-Ansicht
Mix-Ansicht- Avino Silver. Gold? - Phoenix, 04.04.2002, 13:33
- Re: Avino Silver - Hirscherl, 04.04.2002, 13:42
- Re: Avino Silver - Phoenix, 04.04.2002, 16:26
- Re: Avino Silver - Hirscherl, 04.04.2002, 13:42
Avino Silver. Gold?
Der Brief ist schon etwas älter, aber Avino soll ca. 200 Mio. oz an Silber
im Boden liegen haben und etliches an Gold. Scheinbar haben die keine
Wkn. kann nämlich keine finden. Weiß von euch jemand etwas über diese Miene?
WEMMERUS MINING LETTER - JANUARY 1997
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Wemmerus Mining Letter
Monthly Report - January 1997
International Avino Mines is going to be an exciting company to watch in 1997 if you're not watching from the sidelines! In fact, the company's prospects for the coming year are so strong, that the company has been added to our"Must Buy for 1997 Capital Appreciation List".
If I were going to buy only one stock in 1997, International Avino would probably be it! Why? Because, over and above sharply rising fundamentals, International Avino Mines has the real potential of, also, being one of 1997's great"double-barreled" asset plays! Put together the potential for rising fundamentals with the asset plays, and the mining-investor has the chance to hit a"triple-bagger" with International Avino Mines!
International Avino Mines is a Vancouver-based company involved in the exploration, development, and mining of precious and base-metals as well as industrial-minerals in Mexico and western Canada.
Since 1969, the company has owned 49K of Cia Minera. Mexicana de Avino, a mexican mining company, which is the owner and operator of the Avino silver, gold, and copper mine in the State of Durango, in central Mexico. This mine, located 60 miles north of the City of Durango, commenced operation under the Spanish in 1562, was abandoned during the mexican revolution in 1912, and has now, again, been in continuous production since 1974. Last year this mine generated record revenues and profits by producing over 9,253 ounces of gold, 2.7 million pounds of copper, and 1,069,000 ounces of silver! It's rich.
International Avino Mines also owns 50% of the Bralorne-Pioneer Mine, which is now being reopened, and is slated to go on-line and start producing again in early 1997. The Bralorne-Pioneer Mine, historically western Canada's richest gold mine, produced over 4,100,000 ounces of gold between 1928 and 1971! And, in addition, since 1989 International Avino has been acquiring the surrounding and adjacent mines, and mineral properties, to produce a mine with a much increased potential for ore reserve expansion. In fact, the company's past exploration efforts have already yielded at least three new key zones of mineralization. Based on a US$350/oz. price for gold, the Bralorne-Pioneer Mine is projected to generate net income of US$2.7 million in it's first year of production, and an annual net income of US$5.0 million in subsequent years!
Just on the strength of the Bralorne-Pioneer Mine reaching it's first-year production and profitability projections, look for the shares of International Avino, as well as the shares of Bralorne Pioneer Gold Mines Ltd.(VSE:BPN.V/5.53 million shares/C$0.82 bid), her joint-venture partner in the new Bralorne Pioneer mine, to rise sharply in value. However, there are other reasons, both fundamental and asset-play vise, to power the shares of International Avino to much higher levels in my opinion. Let's start with fundamentals...
The fundamentals of International Avino are poised to climb across-the-board
Last year, roughly speaking 1995, International Avino's 49K equity in the earnings of Cia Minera Mexicana de Avino rose almost 40(% to $1,785,657! This is result of the Avino Mine increasing mill throughput, over the last three years, by 50%: increasing silver production by 59%; stepping up gold production by 47%; and increasing copper production by an incredible 31%! These production increases were achieved by an extensive plant overhaul and new milling equipment which resulted in higher recovery rates of 74 to 75%, compared to historical averages of 50 to 65%. They also increased International Avino's earnings, for the year, by over 60% to $0.36 per share!
Despite it's long history, the main orebody of this mine remains virtually untouched, and is expected to produce for many years to come. However, don't think that the management's of either International Avino or Cia Minera are satisfied with those reserves, as Cia Minera has acquired the formerly producing Coneto silver and gold mince which is located approximately 60 miles northwest of the Avino Mine, and along with recently completing a geological survey to determine the mine's near-term production potential and - primary development targets, is presently rehabilitating the mine's existing workings; as well as, refurbishing the mill facility and conducting further sampling. Initial production is slated to begin in 1997, You can understand why when you know that...
Prospectors first mined the high grade gold and silver Coneto surface and near-surface material grading as high as 9.0/OPT of gold and better than 96.00/OPT of silver about 1552; mining it to a depth of only about 265 feet. Recent surveys suggest that less than 10% of the area's potential has been identified; and, the limited work completed to date uncovered more than 12 miles of vein systems some still containing very rich material!
The southeast area of this property also contains a network of veins rich in fluorospar, an industrial mineral that has an increasing demand building in North America; as the mineral yields fluorite, which is a key element in the new ozone-friendly fluorocarbons now under development.
With the further exploration of the Coneto project, plus the Avino Mine's much larger flotation plant and crushing facility that will lower production costs, the fundamentals of reserve and production growth seem to be destined to move higher in the future.
However, in spite of the improvement and upgrading of the Avino Mine's production capacity, this year's -- that is calendar year 1996 -- production and earnings should remain flat due to drought-related production curtailments experienced in the first half of the year. Even this difficulty has been, now, overcame by management with the drilling of a well that has dramatically improved water supplies; and output has risen since July.
Look for 1997 to be a record year for production and earnings for International Avino Mines Ltd. With the Avino Mine's ongoing improvements likely to increase production and profits by 5W, and the Bralorne-Pioneer Mine slated to produce 20,000 ounces of gold in it's first year of production, the operating fundamentals of International Avino's interests are definitely going to be on the rise. And the stock price, too!
The Mining Stock Bonus: International Avino has it!
When you buy a mining stock, you are making a stock market investment. However, you are also making an asset-play; I call it the"mining-stock bonus". This"bonus" is the"extra" increase, you will get, in the price of a mining-stock when the market-value of the metals or minerals that the company mines rises in value. This increase would be over and above any price increase attributable to rising fundamentals, such as rising production.
International Avino mines a lot of silver -- via it's 4% stake in Cia Minera's Avino Mine which produced 1,065,000 ounces of silver in calendar 1995, and will probably equal that in 1996 -- and the silver markets could be the most exciting place to be in 1997!
The story with silver is that stockpiles had been quite high since the early 1980's; but, they have been greatly depleted over the last few years by expanding demand from China, India, and other rapidly expanding economies around the world. In fact, they are being depleted at a rate of 100 to 200 million ounces per year; so, sometime in 1997, or 1998, there could be a very severe supply crunch in the silver markets! Add to that the fact that over 8(7K of all silver produced is a byproduct of copper, gold, lead, or zinc mining; which means on a price spike these miners wouldn't necessarily increase production, as silver represents only a small portion of the value of ore mined. In a tight silver supply and rising silver price scenario, any silver mine or mining company with a substantial part of it's output in silver, would have to mine the shortfall at increasingly profitable prices! Any company like International Avino with it's '49% interest in Mexico's second largest producing silver mine -- the Avino Mine!
International Avino's biggest asset-play: The Bralorne-Pioneer Mine!
International Avino Mines Ltd. is an undervalued stock, when measured either by the company's operating fundamentals or net asset values. This is especially obvious, to this writer, when considering the company's 50% interest in the gold resources/assets and the value as an operating mine, of the Bralorne-Pioneer gold mine. Let me explain......
Using International Avino's second-quarter interim report, for the period ending on July 31, 1996, we find the company has shareholder's equity of $6,206,179; with shares outstanding of 3,580,727. Now, divide the shareholder's equity by the 3.58 million shares outstanding, and we come up with a"hook-value" of approximately $1.73 per share. Most precious-metal mining juniors are trading currently at a share-price of approximately three times book value. This would indicate a fair market-value of $5.00 per share for International Avino. The shares were trading at $1.82 on 12/16/96. The shares are way undervalued using the market capitalization to book-value ratio, like we just did!
During what's roughly calendar 1995, International Avino earned $0.36 per share; an earning-per-share figure that should be well-exceeded in calendar 1997, now that the drought-related curtailments to production in Mexico this year are over and the company is anticipating the additional revenues that will be generated when the new Bralorne- Pioneer gold mine starts producing early in 1997. However, the company should approximately earn that $0.36 per share figure again, this year, due to stepped-up production rates in the latter part of 1996, and better recovery rates in Mexico. Now, most junior miners, those producing under 100,000 ounces of gold per year, are trading at about 33 times per- share earnings; which would indicate that a share of International Avino should be worth about $11 to $12 per share! Again, the share's are grossly undervalued! And there is more to indicate just how much!
One of the most rewarding events for an mining-investor, is probably when an exploration and development-stage company makes the transition into a producing mine. And, International Avino -- through it's 50% interest in the Bralorne-Pioneer gold mine -- is poised to do just that in 1997! However, before I estimate how much a share this event will mean to the investor, let's look aver how much International Avino's 50% interest in the present gold resources of the Bralorne-Pioneer gold mine are worth right now........
The Bralorne-Pioneer gold mine, in the area where initial production is planned, contains what the company calls an"initial resource" of 151,000 ounces of gold -- and there's another 125,000 ounces under that, as well as, other partially-explored areas on the property that the company hasn't developed formal reserve estimates for yet! However, for a share-value estimate, we will just use the"initial resource" figure of 151,000 ounces of gold. Now,"in-the-ground" reserves are currently worth US$40-50 per ounce, or roughly C$53-67 per oz. Using the conservative figure of C$53.00 per ounce, that initial-resource is worth approximately C$8-million -- which means International Avino's 50% is worth about $4-million; or to put it another way, $1.12 per share. If we use the higher figure, in our calculations, we would came up with a value of $1.41 per share -- and these figures don't even take into account the other indirect reserve-value of the Avino mine in Mexico!
If we were to throw back in the 125,000 ounces below the"initial resource", into our calculations, plus the 200,000 to 300,000 ounces believed to be in the Peter Vein on the Bralorne property, you could wage the argument that the Bralorne reserves are worth in the neighborhood of $4-5 per share to the International Avino shareholders!
So far, we've been thinking of gold in the ground -- where it is valued at a huge discount from bullion; which, by the way, has always been the charm, to me, of an exploration company with drill-proven and drill-inferred gold reserves! However, the most exciting time to hold an exploration or development stock is when the company makes the transition to production status; that's because as the mine comes into production you have enormous leverage because the stock will eventually trade at a substantial multiple to it's earnings, or at a market-capitalization-per-ounce-of-production type of valuation.
Now, let's use these two production company type of valuations to estimate the value of a producing Bralorne Mine to the International Avino shareholders, via their 50% interest in the mine. The two companies, which share some common directors, have estimated first-year production at 20,000 to 25,000 ounces of gold and net-income at $2,700,000; and second-year production at 50,000 ounces, with net-income of $5,000,000! Currently, junior-mining companies -- mining companies producing under 100,000 oz./per annum -- are trading at a market-capitalization equal to US$1100 to 1500 dollars per ounce of annual production of gold. That's C$1366 to 2000 per oz. of annual production; which at just the $1366 figure on only a 20,000-ounce first-year, would value the Bralorne Mine at $27.32 million! That first year's production, when valued at C$2,000 equals C$40 million! That means the estimated market-value of International Avino's 50%-interest in the Bralorne Mine, when broken down to a per-share basis, would equal between C$3.82 and C$5.59 per share; and, again, that valuation doesn't include what the markets will value International Avino's 49% interest in the Avino Mine's rising production in calendar-year 199?! And, in addition, these per-share figures can be, at least, doubled in the second year!
If the Bralorne Mine, in it's first year of production, generates the forecasted C$2.7 million of net-income, International Avino's half-interest would equal C$1.35 million, or C$0.38 per share. Now that the drought-related production curtailments are behind them, the Avino Mine with the forecasted 5W increase in production and profits could yield International Avino's shareholders another C$0.54 per share in calendar year 1997; which would translate out to C$0.92 per share earning next year! Trading at a price-to-earnings ratio of 33 times earnings, International Avino could be $30/per share by the end of 1997; and over C$40 per share by the end of 1998, if both the Avino and Bralorne mines achieve their production goals!
Market anomalies create market opportunities!
At this point, the reader is probably speculating on why International Avino would be so undervalued. In my opinion it's investor impatience. With the drought-related delays at the Avino Mine, and the mill and construction at the Bralorne Mine being delayed by a year, investors have become impatient. When investors get impatient, they exit a stock; seldom looking back to see if the news is better. However, sometimes this can be good; as it creates market anomalies for other investors to exploit! Take International Avino for an example. In the last 52 weeks, the stock traded as high as $3.75 per share, and as low as $1.75 per share. Did the intrinsic value of the company change that much? The answer is no. What changed is investors perception of values that didn't change! The existing and future asset values, as well as the promise of improving operating fundamentals, are still there! In fact, one year later, we're even closer to their realization!
International Avino Mines Limited: Mines, Management, and Money
MINES: In short, with the Avino Mine's 200-million ounces of proven and probable silver reserves, the promise of Coneto, and the projected minimum 10-year life-span of a Bralorne Mine producing 50,000 ounces of gold annually, International Avino Mines Ltd. is strong.
MANAGEMENT: International Avino Mines Ltd.(VSE:IVV) is under the seasoned guidance of the veteran Vancouver mining promoter and mining executive Lou Wolfin. He has a long track- record -- aver a quarter-century -- of bringing mines into production. The skill displayed in the acquisition of the many properties and mines that comprise the new Bralorne-Pioneer Gold Mine, executed patiently over many years at modest prices, is indicative of why so many mining-investors who believe in"playing the promoter -- not the story" are attracted to Wolfin-managed companies. In addition, he's backed up by one of the most capable management teams in the business; all seasoned men -- whether on the technical, financial, or management side of the business -- assembled over many years. This company is well-managed.
MONEY: International Avino Mines Ltd.(OTCBB:IVVRF) second-quarter balance-sheet, dated July 31, 1996, displays total-assets of $7,742,741, against total liabilities of $1,536,562 and stockholder's equity of $6,206,179. Current-assets are listed as $301,741, including $233,508 in cash, against current-liabilities of $161,762, indicating a current-ratio of almost 2 to 1, and a quick-ratio of better than 1.44 to l. A clean, solid balance-sheet.
International Avino Mines Limited: Buy for a strong 1997 price run!
Buy International Avino before the markets discounts the rising production and profits that will probably flow forth from the Avino Mine in calendar 1997. Buy the stock before the rich promise of the Coneto Mine is recognized by the market. Buy International Avino before the Bralorne-Pioneer Gold Mine goes through the transition to being a producing mine in early 1997; at which time the company's 5(%-interest will he valued much higher as an operating mine by the markets. Buy International Avino for the additional super- charged price-run that can occur in 1997 in the ever-tightening silver-supply environment.
In my opinion International Avino Mines Ltd.(VSE:IVV) is one of 1997's strongest buys!
For further information on International Avino Mines Limited: Call the company by contacting Jim Baylis, Tyrone Docherty, Ari Glick, or David Wolfin at 1-800-416-0466.
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