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Avino Silver Prepares For Production In Mexico

Avino Silver and Gold Mines Ltd. (TSX.V: ASM) recently started milling stockpiled ore on the Avino property in Durango State, Mexico. The ore is being milled in preparation for a 10,000 tonne bulk sampling program, leading up to the company's goal of full production by Fall 2010. With no debt, high-grade discoveries on the San Gonzalo vein and strong market demand for concentrates, Avino is well on its way to bigger and better things.

The Avino Story
Once described by Spaniards as "a mountain of silver", the Avino mine first opened in the 1500s and reportedly supplied considerable wealth to Spain for hundreds of years. Operating intermittently http://www.midasletter.com/news100728_Avino_silver-prepares-to-go-into-productionthroughout the years, Avino began mining the property's Avino vein in 1974 and continued to do so for 27 years.

The Avino mine shut down in 2001 due to low silver prices and the closure of a key smelter, however, during the 3 decades that the mine was in production under Avino, silver grades averaged from 3 to 7 ounces per ton with more than 16 million ounces of silver, 96,000 ounces of gold and 24 million pounds of copper produced through both open pit and underground mining.

During the shutdown Avino began to focus on other areas of the large property. It was decided to begin development on San Gonzalo for possible production and now, with metal prices and demand once again on the rise, Avino is working ardently to achieve that goal.

Thoroughly Modern Milling
When mining operations were halted at Avino in 2001, so too were milling operations. Prior to that date, the mill was configured to operate at 1000 tonnes per day.

Running once again since May 22nd 2010, the mill has been treating stockpiled copper ore from the main Avino vein that was never processed during past mining. When the stockpile is finished, the mill will begin the 10,000 bulk sampling of the San Gonzalo vein.

To accommodate this ore from the high-grade San Gonzalo zone, a new 250 tonne per day circuit has been added along with extensive upgrading and rehabilitation of the mill.

As of June 15th 2010, a total of 3,106 tonnes of stockpiled material was processed for the production of 104 tonnes of concentrate grading 9.6% copper and 1.08 kilograms silver per tonne. Copper and silver recoveries have ranged from between 25 and 80%, depending on the oxidized condition of the feed.

"Basically, we're going through a commissioning period", commented David Wolfin. "We started up the plant with actual feed on May 22nd and we're identifying any problems, mechanical or electrical, that could pose problems down the line. We have old stockpiles from when we mined in the past that were never processed and they're laying on the surface near the mill. So we've been running that through the mill to tune it up and since we've started up, we've been making adjustments and working on the recovery rates which are starting to come in pretty as good now."

According to a press release issued on June 23rd 2010:

"Initial feed rate to the mill has been set at 8 to 9 tonnes per hour and will be ramped up once the new shipment of grinding balls arrives. It is expected by that time most of the mechanical and electrical issues for the grinding and flotation circuits have been addressed and will have stabilized. Total tonnes processed to June 15 are 3106 tonnes. The operating time was 335.5 hours, representing 86.5% availability. The main cause of the mill downtime was the loss of process water due to pump failure. A new pump and spare have been ordered to ensure this problem will not occur in the future. Likewise spare motors for the flotation cells have been ordered as well. The mill operating schedule is three 8hr shifts per day and five days per week."

Mining Matters
With milling operations running smoothly and within budget constraints, Avino has had time to develop the underground exploration program on the San Gonzalo deposit.

The San Gonzalo zone is located 2 kilometers from the original Avino mine and beneath the shallow workings of an old mine from the colonial period. From 2007 to 2008 Avino conducted a 42 hole, 9,204 meter drill program on San Gonzalo, producing very encouraging results, including 3,908 grams per tonne silver and 13.71 grams per gold over 1.45 meters.

In late 2008, Orequest Consultants completed a National Instrument 43-101 resource estimate for San Gonzalo. The inferred resource was calculated as follows:

Based on this report, Avino began working towards a 10,000 tonne bulk sampling program on the San Gonzalo vein earlier this year to assess the economics of the zone and confirm mineral grades obtained through diamond drilling.

Vein Intersection
On June 4th 2010 the company was happy to announce that the San Gonzalo vein was successfully intersected. Channel samples were taken across the width of the vein over a strike length of 25 metres along the vein. The results read as follows:

"We've taken out about 1000 tonnes already," Wolfin comments, "The idea is to take out 10,000 tonnes so we can do our bulk sample test run. So far, there's roughly 1000 tonnes of this material from the cross cuts in the ore zone that we have stockpiled."

Blue Sky
When Avino completes and analyses the 10,000 tonne bulk sampling program the company will then embark upon the road to production and, considering the tightly run nature of Wolfin's ship, that road shouldn't be too long. Anticipating an annual production rate of 1.2 million ounces of silver equivalent (890,000 ounces silver and 4,500 ounces gold) Avino, a financially sound company, is ready to move to the next level.

"We are really happy with the project." Wolfin concludes, "We got it done on budget and on time… Provided everything stays on track, we'll make a production decision, follow that with commercial production and then, hopefully, positive cash flow. The company is financially sound and has the means to be able to achieve this. So our shareholders will reap the rewards. The thing about Avino is; we have no debt. There are no real negatives for the company. It's all blue sky from here."

DISCLOSURE: A fee has been paid for the production and distribution of this article and as such should be viewed in the context of advertising.

SOURCE: http://www.midasletter.com/news/100728_Avino_silver-prepares-to-go-into-production.php


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