Wolfin: Last year was impacted by COVID-19. We had a mandated shutdown and then a strike at the mine that was brought on by the union.
Why that happened was in 2019 we were closing down the San Gonzalo mine [on the Avino property], so we were going to lay off 75 people, so the union was not happy.
So we compromised and moved half of those people over to the Avino mine, but then the demands kept coming from the local union leader and they threatened to strike, and they eventually did last year.
We settled the dispute in October but the agreement hasn’t been ratified because the labor authority office in Mexico City is closed due to COVID-19.
We weren’t rushing back into production because we had other things on our plate.
The other things are building a new tailings storage facility, so we brought in brand new equipment from Italy, giant filter presses.
-We’re putting in dry-stack tailings, it’s called TSF number 2. Also during this time we decided to advance our tailings resource.
Because the mine is not actively operating right now we have the ability to put drill rigs on top of the tailings and drill down.
At the bottom of the tailings we have a resource called the oxide tailings resource, and that is derived from about 3Mt of material that was mined in the open pit in the 1970s and had poor recovery rates.
So we drilled the bottom bench in 2016-17 and did a PEA about reprocessing that material through heap leaching, and we couldn’t advance that project because it was an active tailing dam.
Now that it’s not active we can put a drill rig on that, so we’re moving that forward, we’re going to do a PFS on that.
BNamericas: What are your expectations for 2021?
Wolfin: Last year our financials were impacted by lower production. Obviously this year is impacted but we’re anticipating restarting the mine in the coming weeks and we estimate about 2.4Moz silver equivalent production, which should generate US$30-35mn of revenue.
The sustaining costs are projected to be between US$16-17/oz.
We now have US$20mn in cash and are virtually debt free.
BNamericas: How are community relations around the Avino mine?
Wolfin: We have been there for decades so we have aunts, uncles, cousins and siblings that work for us because we’re the major supplier of work there.
It’s just in rolling farmland. It’s not an area where there are other jobs.
You can see the difference we make in the parking lot. People are able to afford cars, you see cars with US tags on them.
They are able to come home and be with their families and work for us now, so we have got really good relations with them.
The strike was not brought on by the workers but by a rogue union representative, a local leader.
We have received a letter from the local communities with hundreds of signatures denouncing the union leader.
BNamericas: What’s the COVID-19 situation at the mine?
Wolfin: We’re not an international destination so it hasn’t been too bad. They are rolling out the vaccines, so that’s a positive sign.
We have got hundreds of rapid test kits, we have housing onsite so if there’s an outbreak when we get going we can quarantine people, and keep people onsite.
Right now we have been focused on training people from the local community so we don’t need to bring people in from out of state.
BNamericas: Do you see the company diversifying in the foreseeable future?
Wolfin: We’re doing the opposite. Everyone’s following our lead, everyone’s spinning out assets because you spin out the risk.
I understand being diversified, it sounds great as a larger company, but as a smaller company it can really spread out your capabilities.
We’re really focused on Avino and expanding it.
We think we can make it much bigger and more profitable so that’s our primary focus.
We feel managing one mine is easier than 2-3 mines.
BNamericas: How would you view potential takeover bids?
Wolfin: It’s a public company, everything can be bought if the price is right. Being the largest shareholder I would love to see the share price go higher.
We feel we can continue to grow our company.
BNamericas: How do you view Mexico as a mining jurisdiction?
Wolfin: We have been here 53 years, we have seen governments change many times. So we are long term. We have got several decades of mine life ahead of us. The mid-term elections are coming up in June-July so we will see how the people feel about their government.
At the moment it’s a leftist, socialist-type government, and there have been difficulties with the union because the head guy is a senator.
That’s the main challenge, other than that everything has been fantastic.
We haven’t rushed back to open the mine up because we have all the other things to deal with and with COVID-19 running rampant we didn’t see any urgency.