Avino Silver and Gold (ASM.V, NYSEMKT:ASM) announced its plans to acquire all of the outstanding shares of Bralorne Gold Mines (BPM.V) after it already acquired a 34% stake by purchasing a block of shares at C$0.28/share. The current offer on the table is a share swap whereby Avino is offering 0.14 shares of Avino per Bralorne share, which implies a current value of C$0.329 per Bralorne share. We will follow the share prices of both companies closely as buying Bralorne shares could be an interesting way to end up with Avino shares at a discount (if Bralorne continues to trade at a discount to the offer, this discount is currently 12%).
The decision to purchase Bralorne might be surprising at first sight given Avino’s focus on Mexico, but we’re glad the company decided to take on another project which is already in the test-mining phase and is located in a safe region with sufficient judicial safeguards in place. Additionally, Avino actually used to own the Bralorne mine and CEO Wolfin explains that ‘Bralorne has great potential as it once was a world class gold mine. It produced approximately 4.5 million ounces of gold from three mines; The King, Bralorne and Pioneer mines which are all located on the same property. There is great potential to find significant ounces left between the mines and at depth.’
We sat down with CEO David Wolfin in Vancouver last month to get an update on the company’s operations in Mexico, and things are looking really good down there, as we are expecting continuous production increases from here on. We are also expecting Avino to continue the test production at Bralorne and focus on reducing the costs and increasing the production.
Disclosure: The author holds no position in Avino or Bralorne, but is watching share price movements closely. Please see our disclaimer for current positions.
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