📄 What This Document Is

This is a Q1 2026 production update from Avino Silver & Gold Mines. Think of it as a "report card" for the first three months of the year, showing how much metal they dug up and how their mines are performing. It's not the full financial report (that comes in May), but it's a crucial leading indicator for investors because production volume directly drives future revenue.

🏢 What The Company Does

👉 In simple terms, Avino digs silver, gold, and copper out of the ground in Mexico. They own and operate the Avino Mine and recently acquired the nearby La Preciosa project. Their big plan is to grow by developing La Preciosa and eventually mining both sites at the same time. They sell their metals unhedged, meaning they get the current market price, which is great when prices are high.

📊 Q1 2026 Production Results

Here’s what they produced from January to March:

• Silver: 263,057 ounces
• Gold: 1,851 ounces
• Copper: 1,343,654 pounds
• Total (Silver Equivalent): 568,112 ounces

👉 The Big Picture: Total production was down about 10% compared to the first quarter of 2025. This was mostly planned—they intentionally mined areas with lower-grade ore to set up for stronger production later in the year. Despite the dip, management says they are on track for their annual goals.

⚙️ Operational Highlights: The Good and The Not-So-Good

👍 The Wins:

• Mill Throughput Up 11%: They crushed and processed 11% more rock than last year. This is thanks to smart upgrades and automation, meaning their "factory" is running more efficiently.
• La Preciosa Contribution: They started processing ore from the new La Preciosa project. It contributed about 50,000 silver ounces, which was slightly ahead of plan.
• Capitalizing on High Prices: With silver prices elevated, they smartly processed some lower-grade material to take advantage of the strong market.

⚠️ The Challenges:

• Lower Grades: The ore they mined had lower concentrations of silver and gold than last year. This was a planned part of their mining sequence.
• Slightly Lower Recovery Rates: They were slightly less efficient at extracting metal from the rock they processed, which is common when dealing with different ore types.

🚀 The Main Growth Engine: La Preciosa

La Preciosa is the company's key expansion project. Think of it as adding a whole new mine next to their existing one.

• Q1 Work: They mined "development ore" (the rock dug while building the mine tunnels) and shipped it to their main mill.
• What's Next: After Q1, they ramped up work at La Preciosa. They've now switched one of their mill's four processing circuits to focus entirely on La Preciosa ore. This is a major step in integrating the new project.
• Future Plans: Engineering teams are now figuring out the best, most profitable way to mine and process both the Avino and La Preciosa deposits together.

🔭 What's Next & Key Dates

• Second-Half Weight: The company expects production to be "weighted to the second half of 2026." This means the work they're doing now is setting them up for a stronger finish to the year.
• New Resource Update: They just published new estimates showing they have 27 million tonnes of mineable ore containing 127 million silver equivalent ounces. This is the blueprint for the mine's future.
• Financials Coming May 13: The full Q1 earnings, with all the dollar amounts, will be released after the market closes on Wednesday, May 13, 2026.
• Conference Call: Investors can hear management discuss results on Thursday, May 14 at 11:00 a.m. ET. Call: 888-506-0062 (Access Code: 389903).

⚖️ Big Picture: Strengths & Risks

👍 Strengths:

• Strong Momentum: Solid mill performance and throughput gains show operational excellence.
• Strategic Positioning: They are deliberately timing production and leveraging high silver prices.
• Clear Growth Path: The La Preciosa integration is actively advancing.

⚠️ Risks to Watch:

• Execution Risk: Successfully running two mines at once is complex. Any hiccups in the La Preciosa ramp-up could impact targets.
• Metal Price Dependency: As an unhedged producer, their profits are directly tied to volatile silver, gold, and copper prices.
• Planned Lower Grades: They are accepting lower production now for a better mine plan later. This strategy relies on strong prices to hold.

🧠 The Analogy

Think of Avino like a restaurant chef who owns two farms. Q1 was about harvesting from the first farm (the existing Avino mine) while spending time preparing the soil and planting in the second new farm (La Preciosa). The total harvest (production) was a bit smaller this quarter, but the kitchen's efficiency (mill throughput) is better than ever. The chef is now ready to start picking early vegetables from the new farm, setting up for a much bigger and more diverse feast in the second half of the year.

🧩 Final Takeaway

Avino's Q1 was a strategic setup quarter. Lower planned production from existing mines is being offset by efficiency gains and the crucial first steps of integrating the growth project, La Preciosa. The story for the rest of 2026 hinges on successfully executing this integration to hit annual targets.