Avino Silver & Gold Mines Ltd. (ASM:TSX.V; ASM:NYSE.MKT; GV6:FSE) had its price target price raised by ROTH Capital Partners on higher copper prices despite total Q2/24 production falling short of expectations, reported Managing Director Joe Reagor in a July 17 research note.
ROTH increased its target to $1.60 per share from $1.25, the analyst noted. In comparison, the miner's current share price is about $1.12.
Given these prices, the potential return on investment is 43%.
"Additionally, we lowered our discount rate from 10% to 9% as we believe Avino Silver & Gold Mines has turned a corner and is poised to demonstrate production growth," Reagor wrote.
The company is still rated Buy.
Production shortfall offset
Reagor pointed out that production results in Q2/24 were mixed and explained how. Overall production, at the Avino mine and mill in Mexico, was less than anticipated because a cone crusher had to be repaired during the quarter. This hampered mill throughput.
"Repairs are ongoing, but the company anticipates returning to normal operations shortly," wrote the analyst.
He added that higher silver and copper prices more than offset the underperformance.
Production of the three metals was inconsistent. As for silver, 292,946 ounces were produced, meeting ROTH's expectation. This was due to the company processing material from stockpiles at its adjacent project, La Preciosa, its first time doing so. The amount of La Preciosa ore processed was 9,951 tons, and its head grade was 133 grams per ton silver.
Q2/24 gold and copper production, on the other hand, were misses. Gold production was 1,514 ounces versus ROTH's estimate of 2,200 ounces. Copper production was 1,300,000 pounds versus ROTH's forecast of 1,500,000 pounds.
Copper projection updated
The copper price rose well above ROTH's estimate, remained strong at the start of H2/24 and has a favorable near-term outlook, noted Reagor. Accordingly, the investment bank adjusted its copper price forecast to $4.50 from $3.75.
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