Avino Silver's Upbeat News Clashes with DeepValue's Caution on Valuation and Silver Dependency

What happened

A new Zacks article compares Hecla Mining and Avino Silver, noting that ASM is lifting production and earnings outlook. However, the DeepValue master report reveals that ASM's recent financial performance is heavily driven by record-high silver prices, not meaningful volume growth, with production flat at around 2.6M AgEq oz in 2024-2025. Despite meeting 2025 guidance and advancing La Preciosa, the stock trades at 72x P/E and 86x EV/EBITDA, embedding aggressive expectations for flawless project execution and sustained silver prices above $90/oz. Critical risks include potential mean-reversion in silver prices and delays in La Preciosa's ramp-up, which could compress multiples sharply, as highlighted in the report's base case value of $8.00 versus the current $10.36 price. Thus, while the news portrays operational momentum, the underlying valuation and cyclical exposure suggest limited upside from current levels.

Implication

The positive news on production does not justify ASM's premium multiples, which discount perfect execution and high silver prices, leaving little margin for error. Any silver price normalization toward $60-75/oz could slash earnings and stock value, as per the base case $8.00 estimate. Key monitoring points include 2026 guidance clarity, La Preciosa's transition to production mining, and potential equity dilution from the active F-10 shelf. While the strong cash balance offers some downside protection, it is insufficient to offset valuation risks at current levels. Prudent investors should consider trimming exposure or waiting for a pullback to the $7.00 attractive entry point before adding new positions.

Thesis delta

The new article does not materially shift the investment thesis for Avino Silver. It reinforces operational progress, but the DeepValue report's concerns about overvaluation, silver price dependency, and project execution risks remain fully intact. Investors should maintain a cautious stance, as the thesis still hinges on avoiding dilution and achieving aggressive growth targets in a volatile market.