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To calculate Avino Silver & Gold's potential stock price when silver reaches $100 per oz in 2028, we can follow a structured approach based on the information provided.

Step 1: Revenue Estimation for 2028

1. Production Estimates:

Silver Equivalent Production: 7 million oz (AGEQ)

2. Projected Revenue:

Revenue=Production×Silver Price=7,000,000 oz×100 USD/oz=700,000,000 USD\text{Revenue} = \text{Production} \times \text{Silver Price} = 7,000,000 \, \text{oz} \times 100 \, \text{USD/oz} = 700,000,000 \, \text{USD}Revenue=Production×Silver Price=7,000,000oz×100USD/oz=700,000,000USD

Step 2: Free Cash Flow Estimation

1. Estimated Costs:

Breakeven Costs (AISC): $30 per oz

2. Free Cash Flow Calculation:

FCF=(Revenue−Costs)=(700,000,000−(7,000,000 oz×30))=700,000,000−210,000,000=490,000,000 USD\text{FCF} = (\text{Revenue} - \text{Costs}) = (700,000,000 - (7,000,000 \, \text{oz} \times 30)) = 700,000,000 - 210,000,000 = 490,000,000 \, \text{USD}FCF=(Revenue−Costs)=(700,000,000−(7,000,000oz×30))=700,000,000−210,000,000=490,000,000USD

Step 3: Valuation Based on FCF

Using a 10x multiple on free cash flow for valuation:

Market Cap=FCF×10=490,000,000×10=4,900,000,000 USD\text{Market Cap} = \text{FCF} \times 10 = 490,000,000 \times 10 = 4,900,000,000 \, \text{USD}Market Cap=FCF×10=490,000,000×10=4,900,000,000USD

Step 4: Estimate Stock Price

Assuming Avino Silver & Gold has approximately 57 million shares outstanding (based on the current FD market cap of $102 million at a stock price of about $1.79):

Stock Price Calculation:

Stock Price=Market CapShares Outstanding=4,900,000,00057,000,000≈86.0 USD\text{Stock Price} = \frac{\text{Market Cap}}{\text{Shares Outstanding}} = \frac{4,900,000,000}{57,000,000} \approx 86.0 \, \text{USD}Stock Price=Shares OutstandingMarket Cap=57,000,0004,900,000,000≈86.0USD

Conclusion

If silver reaches $100 per oz by 2028 and Avino successfully produces 7 million oz of silver equivalent, the estimated stock price could be around $86.00 per share. This calculation illustrates the significant upside potential for Avino, especially considering its current market cap of only $101 million.

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Disclaimer

The user RockeTeller has a position in NYSEAM:ASM. Simply Wall St has no position in any of the companies mentioned. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

when silver reaches $100 per oz