Great Trades

Great stock trades based on fundamentals and technical analysis.

Wednesday, April 19, 2006


Avino Silver & Gold Mines for the long term

Avino Silver (ASM.V in Canada, ASGMF in the U.S.) is a silver and gold mining company based in Canada with top silver prospects in Mexico and Canada. Avino recently acquired the 51% of its namesake Avino Mine in Mexico that they didn't already have. Avino plans to get silver revenue from 3 different sources to provide for near-term, mid-term, and long-term revenues:
  1. Near term: Tailings from prior production, which they plan to harvest in coming months
  2. Mid term: The previously operating Avino mine that still has lots of silver and should be back in production within a year or two
  3. Long term: "11,000 hectares of highly prospective land around the mine, of which no one inch has been explored by modern exploration methods." (from article linked at bottom)

Avino hasn't moved up nearly as much as some other silver stocks in recent months, and remains cheap relative to the amount of silver they have and how close they are to production. We also like that it can be bought in the U.S. under ASGMF, which sometimes trades at a higher volume than ASM does in Canada.

Avino hit its high on 4/3/06 when silver was in the 11's. With silver having rallied to over $14 and Avino looking to break out of a triangle pattern in an uptrend, we believe Avino represents a great long-term investment. With silver having run up sharply recently, it may be due for a pullback soon, but we believe any pullback in Avino shares represents a good buying opportunity for the long term.

The author of the Silver Stock report likes Avino because it's one of the most highly leveraged silver stocks there is:

Here's a good overview of Avino from October:

nice pick. i have held avino for over a year, but it has taken a beating lately. any thoughts on why it has been hit harder than other silver companies?

check out a site that i write for:
We believe there are 3 reasons Avino has underperformed recently:

1) Some investors perceive Mexico as politically unstable after leftist candidate Lopez Obrador made some noise after losing the presidential election in July and then his appeal earlier this month. As recent polls have shown, Lopez Obrador’s support has dwindled significantly, and his antics have actually increased support for the new pro-business president, Calderon. We think after he and his radical followers fade from the headlines, investors will again regard Mexico as a politically safe area.

2) Avino did a private placement in March at $2.00/share. Some investors from that financing have taken profits in low-volume trading, pressuring the stock in recent months.

3) Investors were hoping for news on the reopening of the Avino mine and the revenue from the tailings. In the absence of such news, some have lost patience and sold.

Once this sector correction is over, we believe the long-term bullish trend for Avino will resume, as the fears about Mexico subside, the last of the private placement sellers finishes selling, and Avino announces progress on the Avino mine and the tailings. Silver and Gold resuming their long-term bull market will help a lot, as junior mining stocks across the board have taken a huge hit on this selloff.
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