Enhanced Investments - Financial Portal

Published: 2023-05-10

AVINO SILVER & GOLD MINES LTD.

Condensed Consolidated Interim Financial Statements

For the three months ended March 31, 2023 and 2022

(Unaudited)


AVINO SILVER & GOLD MINES LTD.
Condensed Consolidated Interim Statements of Financial Position - Unaudited
(Expressed in thousands of US dollars)

				March 31,		December 31,
			Note		2023		2022

ASSETS
Current assets
Cash								$		2,697	$	11,245
Amounts receivable										2,015		2,672
Taxes recoverable			5		4,363		3,737
Prepaid expenses and other assets										1,689		1,671
Inventory			6		7,670		6,260
Total current assets									18,434			25,585
Exploration and evaluation assets			8	50,094			49,804
Plant, equipment and mining properties			10	48,608			44,056
Long-term investments			7		1,466		1,746
Other assets										4		5
Total assets								$	118,606		$	121,196

LIABILITIES
Current liabilities
Accounts payable and accrued liabilities								$	10,922		$		9,469
Amounts due to related parties			11(b)		67		28
Taxes payable										28		895
Note payable			12		-		4,926
Warrant liability			13		771		475
Current portion of equipment loans										165		-
Current portion of finance lease obligations										1,372		971
Total current liabilities									13,325			16,764
Equipment loans										316		-
Finance lease obligations										1,306		745
Reclamation provision			14		505		445
Deferred income tax liabilities										5,207		5,221
Total liabilities									20,659			23,175

EQUITY
Share capital			15	146,229			145,515
Equity reserves										9,679		9,852
Treasury shares (14,180 shares, at cost)										(97)		(97)
Accumulated other comprehensive loss									(5,486)			(5,223)
Accumulated deficit									(52,378)			(52,026)
Total equity									97,947			98,021
Total liabilities and equity								$	118,606		$	121,196

Commitments – Note 18






Approved by the Board of Directors on May 10, 2023:
								Peter Bojtos Director		David Wolfin Director
	The accompanying notes are an integral part of the condensed consolidated interim financial statements

		- 2 -


AVINO SILVER & GOLD MINES LTD.
Condensed Consolidated Interim Statements of Operations and Comprehensive Income (Loss)
(Expressed in thousands of US dollars, except per share amounts - Unaudited)
INCOME STATEMENT
				Three months ended March 31,
			Note			2023	2022
Revenue from mining operations			16				$	9,825		$	11,050
Cost of sales			16		7,974				6,306
Mine operating income					1,851				4,744

Operating expenses:
General and administrative expenses			17		1,184				1,116
Share-based payments			15		339				200
Income before other items					328				3,428

Other items:
Interest and other income (loss)					209				(7)
Loss on long-term investments												(319)	(686)
Fair value adjustment on warrant liability			13		(293)				233
Unrealized foreign exchange loss					(136)				(605)
Project evaluation expenses					-				(81)
Finance cost					(74)				(13)
Accretion of reclamation provision			14		(11)				(10)
Interest expense					(45)				(21)
Income (loss) before income taxes					(341)				2,238

Income taxes:
Current income tax expense					(25)				(140)
Deferred income tax recovery (expense)					14				(1,452)
Income tax expense					(11)				(1,592)
Net income (loss)					(352)				646

Other comprehensive income (loss):
Currency translation differences					(263)				357
Total comprehensive income (loss)							$	(615)		$	1,003
Income (loss) per share			15(e)
Basic							$	(0.00)		$	0.01
Diluted							$	(0.00)		$	0.01
Weighted average number of common
shares outstanding			15(e)
Basic				118,572,700				103,819,481
Diluted				122,602,929				107,234,957
	The accompanying notes are an integral part of the condensed consolidated interim financial statements

		- 3 -



AVINO SILVER & GOLD MINES LTD.
Condensed Consolidated Interim Statements of Changes in Equity
(Expressed in thousands of US dollars - Unaudited)
EQUITY STATEMENT
				Number of	Share		Accumulated Other
				Common	Capital	Equity			Treasury	Comprehensive	Accumulated
			Note	Shares	Amount	Reserves			Shares	Income (Loss)	Deficit	Total Equity
Balance, January 1, 2022				102,243,211	$ 129,953	$ 9,573			$ (97)					$ (4,969)	$ (55,953)	$ 78,507

Common shares issued:
Exercise of options													48,000	46	(15)					-	-	-			31
Common shares issued for acquisition
of La Preciosa				14,000,000	13,650									-	-	-	- 13,650
Share-based payments										-	-	200					-	-	-	200
Net income for the period										-	-			-	-	-							646	646
Currency translation differences										-	-			-	-									357	-	357
Balance, March 31, 2022				116,291,211 $ 143,649	$ 9,758			$ (97)				$ (4,612)	$ (55,307)	$ 93,391
Balance, January 1, 2023				118,349,090 $ 145,515	$ 9,852			$ (97)				$ (5,223)	$ (52,026)	$ 98,021

Common shares issued:
At the market issuances			15	253,700	207									-	-	-	-	207
Carrying value of RSUs exercised			15	592,667	512	(512)				-	-	-				-
Issuance costs			15							-	(5)			-	-	-	-				(5)
Share-based payments			15							-	-	339					-	-	-	339
Net loss for the period										-	-			-	-	-							(352) (352)
Currency translation differences										-	-			-	-									(263)	- (263)
Balance, March 31, 2023				119,195,457 $ 146,229	$ 9,679			$ (97)				$ (5,486)	$ (52,378)	$ 97,947


	The accompanying notes are an integral part of the condensed consolidated interim financial statements

		- 4 -

AVINO SILVER & GOLD MINES LTD.
Condensed Consolidated Interim Statements of Cash Flows
(Expressed in thousands of US dollars - Unaudited)


				Three months ended March 31,
			Note		2023	2022

Cash generated by (used in):

Operating Activities
Net income (loss)				$ (352)				$ 646
Adjustments for non-cash items:
Deferred income tax recovery				(14) 1,452
Depreciation and depletion				705			490
Accretion of reclamation provision				11			10
Loss on investments				319 686
Unrealized foreign exchange loss (gain)				(161)				392
Unwinding of fair value adjustment				74				9
Fair value adjustment on warrant liability				293			(233)
Share-based payments				339			200
				1,214				3,652

Net change in non-cash working capital items			19	(766) (202)
Cash provided by operating activities				448				3,450

Financing Activities
Shares and units issued for cash, net of issuance costs				202				30
Finance lease payments					(280)	(320)
Equipment loan payments					(88)	-
Cash used in financing activities				(166)				(290)

Investing Activities
Exploration and evaluation expenditures					(389)	(85)
Additions to plant, equipment and mining properties					(3,450)	(853)
Acquisition of La Preciosa			4, 12	(5,000)		(15,308)
Cash used in investing activities					(8,839)	(16,246)

Change in cash					(8,557)	(13,086)

Effect of exchange rate changes on cash					9	7

Cash, Beginning					11,245	24,765

Cash, Ending				$ 2,697				$ 11,686



	Supplementary Cash Flow Information (Note 19)

	The accompanying notes are an integral part of the condensed consolidated interim financial statements

		- 5 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2023 and 2022
(Expressed in thousands of US dollars, except where otherwise noted - Unaudited)

1. NATURE OF OPERATIONS

		Avino Silver & Gold Mines Ltd. (the “Company” or “Avino”) was incorporated in 1968 under the laws of the
		Province of British Columbia, Canada. The Company is engaged in the production and sale of silver, gold,
		and copper and the acquisition, exploration, and advancement of mineral properties. The Company’s head office and principal place of business is Suite 900, 570 Granvil e Street, Vancouver,
		BC, Canada. The Company is a reporting issuer in Canada and the United States, and trades on the Toronto
		Stock Exchange (“TSX”), the NYSE American, and the Frankfurt and Berlin Stock Exchanges. The Company operates the Avino Mine which produces copper, silver and gold at the historic Avino property
		in the state of Durango, Mexico. The Company also holds 100% interest in Proyectos Mineros La Preciosa
		S.A. de C.V . (“La Preciosa”), a Mexican corporation which owns the La Preciosa Property. The Company
		also owns interests in mineral properties located in British Columbia and Yukon, Canada.

2. BASIS OF PRESENTATION

		Statement of Compliance

		These unaudited condensed consolidated interim financial statements have been prepared in accordance
		with International Accounting Standard (“IAS”) 34 – Interim Financial Reporting under International Financial
		Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”). These
		unaudited condensed consolidated interim financial statements fol ow the same accounting policies and
		methods of application as the most recent annual audited consolidated financial statements of the Company.
		These unaudited condensed consolidated interim financial statements do not contain al of the information
		required for full annual consolidated financial statements. Accordingly, these unaudited condensed
		consolidated interim financial statements should be read in conjunction with the Company’s December 31,
		2022, annual consolidated financial statements, which were prepared in accordance with IFRS as issued by
		the IASB.

		These unaudited condensed consolidated interim financial statements are expressed in US dol ars and have
		been prepared on a historical cost basis except for financial instruments that have been measured at fair
		value. In addition, these unaudited condensed consolidated interim financial statements have been
		prepared using the accrual basis of accounting on a going concern basis. The accounting policies set out in
		the December 31, 2022, annual consolidated financial statements are applied consistently to all periods
		presented in these unaudited condensed consolidated interim financial statements as if the policies have
		always been in effect.

		Significant Accounting Judgments and Estimates

		The Company’s management makes judgments in its process of applying the Company’s accounting policies
		to the preparation of its unaudited condensed consolidated interim financial statements. In addition, the
		preparation of financial data requires that the Company’s management make assumptions and estimates of
		the impacts on the carrying amounts of the Company’s assets and liabilities at the end of the reporting period
		from uncertain future events and on the reported amounts of revenues and expenses during the reporting
		period. Actual results may differ from those estimates as the estimation process is inherently uncertain.
		Estimates are reviewed on an ongoing basis based on historical experience and other factors that are
		considered to be relevant under the circumstances. Revisions to estimates and the resulting impacts on the
		carrying amounts of the Company’s assets and liabilities are accounted for prospectively.

		The critical judgments and estimates applied in the preparation of the Company’s unaudited condensed
		consolidated interim financial statements for the three months ended March 31, 2023, are consistent with
		those applied and disclosed in Note 2 to the Company’s audited consolidated financial statements for the
		year ended December 31, 2022.

	- 6 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2023 and 2022
(Expressed in thousands of US dollars, except where otherwise noted - Unaudited)

		Basis of Consolidation

		The unaudited condensed consolidated interim financial statements include the accounts of the Company
		and its Mexican subsidiaries as follows:

					Nature of
		Subsidiary	Ownership Interest	Jurisdiction	Operations
		Oniva Silver and Gold Mines S.A.	100%	Mexico	Mexican
		de C.V.			operations and
					administration

		Nueva Vizcaya Mining, S.A. de	100%	Mexico	Mexican
		C.V.			administration

		Promotora Avino, S.A. de C.V.	79.09%	Mexico	Holding
		(“Promotora”)			company

		Compañía Minera Mexicana de	98.45% direct	Mexico	Mining and
		Avino, S.A. de C.V.	1.22% indirect (Promotora)		exploration
		(“Avino Mexico”)	99.67% effective

		La Luna Silver & Gold Mines Ltd.	100%	Canada	Holding
					company
		La Preciosa Silver & Gold Mines	100%	Canada	Holding
		Ltd.			company
		Proyectos Mineros La Preciosa	100%	Mexico	Mining and
		S.A. de C.V.			exploration
		Cervantes LLP	100%	U.S.	Holding
					company

		Intercompany balances and transactions, including unrealized income and expenses arising from
		intercompany transactions, are eliminated in preparing the unaudited condensed consolidated interim
		financial statements.

3. RECENT ACCOUNTING PRONOUNCEMENTS

		Future Changes in Accounting Policies Not Yet Effective as at March 31, 2023:
		Certain new accounting standards and interpretations have been published that are not mandatory for the
		current period and have not been early adopted. These standards are not expected to have a material
		impact on the Company in the current or future reporting periods.

	- 7 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2023 and 2022
(Expressed in thousands of US dollars, except where otherwise noted - Unaudited)

4. ACQUISITION OF LA PRECIOSA

On March 21, 2022, the Company closed the acquisition with Coeur Mining Inc. (“Coeur”) of all of the issued and
outstanding shares of Proyectos Mineros La Preciosa S.A de C.V, a Mexican corporation, and Cervantes LLC, a
Delaware LLC, that together hold the La Preciosa property in Mexico (“La Preciosa”).

Total consideration paid to Coeur was comprised of:
a) Cash consideration of $15.3 mil ion paid;
b) A promissory note for $5 mil ion in favour of Coeur, payable without interest on or before March 21, 2023;
c) 14,000,000 common shares of Avino, with a value of 13.65 mil ion on issuance;
d) 7,000,000 share purchase warrants with a total value at $2.24 mil ion exercisable at $1.09 per share until
		September 21, 2023, representing a 25% premium to Avino’s 20-day volume weighted average trading
		price as of October 26, 2021;

Additionally, Avino issued the fol owing consideration for which payment is contingent on a future event and due
to acquisition date uncertainty these are valued at Nil. A liability for these contingent payments wil be recognized
when related activity and events occur.

e) An additional cash payment of $8.75 mil ion, to be paid no later than 12 months after initial production at La
		Preciosa, up to one-half of which may be paid in common shares of Avino (provided Coeur’s total
		shareholdings cannot exceed 19.9% of the Company’s total issued and outstanding shares);
f) A 1.25% net smelter returns royalty on the Gloria and Abundancia areas of La Preciosa, and a 2.00%
		gross value royalty on al other areas of La Preciosa; and
g) A payment of $0.25 per silver equivalent ounce (subject to inflationary adjustment) of new mineral reserves
		(as defined by NI 43-101) discovered and declared outside of the current mineral resource area at La
		Preciosa, subject to a cap of $50 mil ion, and any such payments wil be credited against any existing or
		future payments owing on the gross value royalty.

The transaction has been accounted for as an asset acquisition as La Preciosa is in the exploration and
evaluation stage and had not demonstrated technical feasibility, commercial viability, or the ability to provide
economic benefits. La Preciosa did not have the workforce, resources and/or reserves, mine plan, or financial
resources to the meet the definition of a business for accounting purposes.

	- 8 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2023 and 2022
(Expressed in thousands of US dollars, except where otherwise noted - Unaudited)

The purchase consideration has been assigned based on the relative fair values of the assets acquired and
liabilities assumed and is summarized as fol ows:


		Cash paid								$		15,301
		Note payable					4,665
		Common shares					14,630
		Share purchase warrants					2,240
		Total purchase consideration					36,836
		Transaction costs			270
		Total acquisition cost								$		37,106

		Cash								$	168
		Other current assets									471
		Plant and equipment										1,621
		Exploration and evaluation assets										37,618
		Accounts payable										(2,772)
		Net assets acquired								$		37,106

5. TAXES RECOVERABLE

		The Company’s taxes recoverable consist of the Mexican I.V.A. (“VAT”) and income taxes recoverable and
		Canadian sales taxes (“GST/HST”) recoverable.

						March 31,	December 31,
								2023	2022
		VAT recoverable	$					1,826 $	1,385
		GST recoverable		39	25
		Income taxes recoverable						2,498	2,327
			$					4,363 $	3,737

6. INVENTORY

						March 31,	December 31,
				2023			2022
		Process material stockpiles	$					2,662 $	2,788
		Concentrate inventory						2,654	1,617
		Materials and supplies						2,354	1,855
			$					7,670 $	6,260

		The amount of inventory recognized as an expense for the three months ended March 31, 2023 total ed
		$7,794 (March 31, 2022 – $6,598). See Note 16 for further details.


	- 9 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2023 and 2022
(Expressed in thousands of US dollars, except where otherwise noted - Unaudited)

7. LONG-TERM INVESTMENTS

		The Company classifies its long-term investments as designated at fair value through profit and loss under
		IFRS 9. Long-term investments are summarized as follows:

		For the three months ended March 31, 2023:

			Fair Value	Movements	Fair value	Fair Value
			January 1, Net Additions	in foreign	adjustments	March 31,

							2023	exchange for the period					2023
Talisker Resources Common
Shares			$				1,640	$						-	$				2	$				(293)	$	1,349
Silver Wolf Exploration Ltd.
Common Shares							51		41	(3)	(10)	79
Endurance Gold Corp							55		-	(1)	(16)	38
			$				1,746	$ 41			$				(2)	$ (319)	$ 1,466

		Silver Wolf Exploration Ltd

		During the three months ended March 31, 2023, the Company received 500,000 common shares as part of
		the terms in the Option Agreement with Silver Wolf Exploration Ltd.. Upon acquisition, the fair value of these
		common shares and share purchase warrants were recorded as “Option Income” as a credit to exploration
		and evaluation assets (see Note 8). Any subsequent revaluation under IFRS 9 at fair value through profit and
		loss wil be recorded as a gain or loss on long-term investments.

		For the year ended December 31, 2022:

			Fair Value	Movements	Fair value	Fair Value
			January 1, Net Additions	in foreign	adjustments	December 31,

							2022	Exchange for the period					2022
Talisker Resources Common
Shares			$				3,880	$						-	$				(134)	$	(2,106)	$	1,640
Silver Wolf Exploration Ltd.
Common Shares			59						30	(35)	(3)	51
Endurance Gold Corp			-						53	(4)	6	55
			$				3,939	$ 83			$				(173)	$	(2,103)	$ 1,746

		During the year ended December 31, 2022, the Company received 250,000 common shares as part of the
		terms in the Option Agreement with Silver Wolf Exploration Ltd. Upon acquisition, the fair value of these
		common shares and share purchase warrants were recorded as “Option Income” as a credit to exploration
		and evaluation assets (see Note 8). Any subsequent revaluation under IFRS 9 at fair value through profit
		and loss wil be recorded as a gain or loss on long-term investments.

		Endurance Gold Corp.

		During the year ended December 31, 2022, the Company received 200,000 common shares as part of the
		terms of the Option Agreement with Endurance Gold Corp. Upon acquisition, the fair value of these common
		shares were recorded as “Other Income” on the statement of profit and loss. Any subsequent revaluation
		under IFRS 9 at fair value through profit and loss wil be recorded as a gain or loss on long-term
		investments. See Note 8 for full details of the Option Agreement.
	- 10 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2023 and 2022
(Expressed in thousands of US dollars, except where otherwise noted - Unaudited)

8. EXPLORATION AND EVALUATION ASSETS

		The Company has accumulated the fol owing acquisition, exploration and evaluation costs which are not
		subject to depletion:
					British
						Columbia &
	Avino,		La Preciosa,		Yukon,
	Mexico			Mexico	Canada		Total

		Balance, January 1, 2022						$ 11,052	$				-	$				1	$	11,053

Costs incurred during 2022:
		Acquisition costs – Note 4							-	37,618						-		37,618
		Drilling and exploration							719		296					-		1,015
		Assessments and taxes							94						61						-	155
		Effect of movements in exchange rates	(30)							-					-		(30)

		Option income – Note 9(a)(i )							(7)						-						-	(7)

		Balance, December 31, 2022						$ 11,828	$ 37,975		$			1	$	49,804

		Costs incurred during 2023:
		Drilling and exploration							168		183					-		351
		Assessments and taxes							56						23						-	79
		Effect of movements in exchange rates	10			(109)					-	(99)
		Option income – Note 9(a)(i )	(41)							-					-		(41)

		Balance, March 31, 2023						$ 12,021	$ 38,072		$			1	$	50,094

(a) Avino, Mexico

Option Agreement – Silver Wolf Exploration Ltd. (formerly Gray Rock Resources Ltd.) (“Silver Wolf”)

On March 11, 2021, the Company was informed that Silver Wolf received TSX Venture Exchange approval on
the previously-announced entrance into an option agreement to grant Silver Wolf the exclusive right to acquire a
100% interest in the Ana Maria and El Laberinto properties in Mexico (the “Option Agreement”). In exchange,
Avino received Silver Wolf share purchase warrants to acquire 300,000 common shares of Silver Wolf at an
exercise price of C$0.20 per share for a period of 36 months from the date of the TSX Venture Exchange’s final
acceptance of the Option Agreement (the “Approval Date”). In order to exercise the option, Silver Wolf will:

1. Issue to Avino a total of C$600 in cash or common shares of Silver Wolf as fol ows:

		a. C$50 in common shares of Silver Wolf within 30 days of March 8, 2021 (received on March 26, 2021 –
		see Note 7 for details);
		b. A further C$50 in cash or shares of Silver Wolf at Avino’s discretion on or before March 8, 2022
		(received on March 30, 2022 – See Note 7 for details);
		c. A further C$100 in cash or shares of Silver Wolf at Avino’s discretion on or before March 8, 2023
		(received on March 13, 2023 – See Note 7 for details);
		d. A further C$200 in cash or shares of Silver Wolf at Avino’s discretion on or before March 8, 2024; and
		e. A further C$200 in cash or shares of Silver Wolf at Avino’s discretion on or before March 8, 2025; and

	- 11 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2023 and 2022
(Expressed in thousands of US dollars, except where otherwise noted - Unaudited)

2. Incur a total of C$750 in exploration expenditures on the properties, as fol ows:

		a. C$50 on or before March 8, 2022;
		b. A further C$100 on or before March 8, 2023; and
		c. A further C$600 on or before March 8, 2025.

Al exploration expenditure requirements on the properties have been met as of March 31, 2023

Under the Option Agreement, all share issuances wil be based on the average volume weighted trading price of
Silver Wolf’s shares on the TSX Venture Exchange for the ten (10) trading days immediately preceding the date
of issuance of the shares, and the shares wil be subject to resale restrictions under applicable securities
legislation for 4 months and a day from their date of issue.

The Option Agreement between the Company and Silver Wolf is considered a related party transaction as the
two companies have directors in common.

Unification La Platosa properties

The Unification La Platosa properties, consisting of three leased concessions in addition to the leased
concession described in note (i) above, are situated within the Avino mine area property near the towns of
Panuco de Coronado and San Jose de Avino and surrounding the Avino Mine.

In February 2012, the Company’s whol y-owned Mexican subsidiary entered into a new agreement with
Minerales de Avino, S.A. de C.V. (“Minerales”) whereby Minerales has indirectly granted to the Company the
exclusive right to explore and mine the La Platosa property known as the “ET zone”. The ET zone includes the
Avino Mine, where production at levels intended by management was achieved on July 1, 2015.

Under the agreement, the Company has obtained the exclusive right to explore and mine the property for an
initial period of 15 years, with the option to extend the agreement for another 5 years. In consideration of the
granting of these rights, the Company issued 135,189 common shares with a fair value of C$250 during the
year ended December 31, 2012.

The Company has agreed to pay to Minerales a royalty equal to 3.5% of net smelter returns (“NSR”). In
addition, after the start of production, if the minimum monthly processing rate of the mine facilities is less than
15,000 tonnes, then the Company must pay to Minerales a minimum royalty equal to the applicable NSR royalty
based on the processing at a monthly rate of 15,000 tonnes.

Minerales has also granted to the Company the exclusive right to purchase a 100% interest in the property at
any time during the term of the agreement (or any renewal thereof), upon payment of $8 mil ion within 15 days
of the Company’s notice of election to acquire the property. The purchase would be subject to a separate
purchase agreement for the legal transfer of the property.

(b) La Preciosa, Mexico

On March 21, 2022, the Company received approval for the closing of the acquisition of the La Preciosa
property from Coeur Mining Inc. (“Coeur”). See Note 4 for further details

(c) British Columbia & Yukon, Canada

Eagle Property - Yukon

The Company has a 100% interest in 14 quartz leases located in the Mayo Mining Division of Yukon, Canada,
which col ectively comprise the Eagle property.

During the three months ended March 31, 2023, the Company sold to a subsidiary of Hecla Mining Company
(“Hecla”) the Eagle Property for cash consideration of C$250. The claims were transferred on March 28, 2023,
and subsequent to March 31, 2023, cash proceeds were received.
	- 12 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2023 and 2022
(Expressed in thousands of US dollars, except where otherwise noted - Unaudited)

Minto and Olympic-Kelvin properties – British Columbia

On May 2, 2022, the Company has granted Endurance Gold Corporation the right to acquire an option to earn
100% ownership of the former Minto Gold Mine, Olympic and Kelvin gold prospects contained within a parcel of
crown grant and mineral claims (the “Olympic Claims”).

Under the terms of the letter agreement, Endurance can earn a 100% interest in the Olympic Claims if they pay
Avino a total cash consideration in the aggregate amount of C$100, issue up to a total of 1,500,000 common
shares (“Shares”) of Endurance and incur exploration expenditures in the aggregate amount of C$300; al of
which is to be incurred by December 31, 2024. In the event that Endurance earns the 100% interest, the
Olympic Claims wil be subject to a 2% net smelter return royalty (“NSR”), of which 1% NSR can be purchased
by the Endurance for C$750 and the remaining balance of the NSR can be purchased for C$1,000.

As part of the final requirement to earn its interest, Endurance agreed to grant to Avino 750,000 share purchase
warrants (“Warrants”) by December 31, 2024, that offer Avino the option to purchase additional shares in the
Company for a period of three years from the date of issuance. The exercise price of the Warrants wil be set at
a 25% premium to the 20-day VWAP share price at the issuance date. During the Option, if Endurance is
successful in defining a compliant mineral resource of at least 500,000 gold-equivalent ounces on the Olympic
Claims then Endurance wil be obliged to pay Avino a C$1,000 discovery bonus.

The Option agreement is subject to the TSX Venture Exchange acceptance, and any Shares or Warrants to be
issued wil be subject to a four-month hold period on issuance as per the policies of the TSX Venture Exchange.

During the year ended December 31, 2022, Endurance granted 200,000 common shares and paid C$25
as per the terms of the agreement, which required payment upon signing of a letter agreement between
the two parties.

As of March 31, 2023, Endurance was in compliance with all terms of the Option agreement.

9. NON-CONTROLLING INTEREST

		At March 31, 2023, the Company had an effective 99.67% (December 31, 2022 - 99.67%) interest in its
		subsidiary Avino Mexico and the remaining 0.33% (December 31, 2022 - 0.33%) interest represents a non-
		controlling interest. The accumulated deficit and current period income attributable to the non-control ing
		interest are insignificant and accordingly have not been recognized in the unaudited condensed consolidated
		interim financial statements.
	- 13 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2023 and 2022
(Expressed in thousands of US dollars, except where otherwise noted - Unaudited)

10. PLANT, EQUIPMENT AND MINING PROPERTIES

							Mine machinery
					Office equipment,			and	Mil machinery	Buildings and
		Mining			furniture, and	Computer	transportation		and processing	construction in
			properties	fixtures		equipment	equipment		equipment	process	Total
		$		$		$		$				$	$	$
COST
Balance at January 1, 2022		13,038		595	335							14,240			18,613	11,778	58,599
																Additions / Transfers	1,649		185	441		2,383		4,781	2,907	12,346
																Writedowns Ef ect of
																movements in												(1,692)				(100)	-	(1,792)
																Effect of movements in
																exchange rates		-		(17)	(2)		(1)		-	8	(12)
Balance at December 31, 2022		14,687		763	774							14,930			23,294	14,693	69,141
																Additions / Transfers	698		46	12		1,998		2,429	62	5,245
																Effect of movements in
																exchange rates	-		-	-									-	-	4				4
Balance at March 31, 2023		15,385		809	786							16,928			25,723	14,759	74,390


ACCUMULATED DEPLETION
AND DEPRECIATION
Balance at January 1, 2022		8,856		294	267							4,944			6,667	1,896	22,924
																Additions / Transfers	250		147	331		1,616		146	1,133	3,623
																Effect of movements in
																exchange rates	-		-	-		(1,382)		(80)	-	(1,462)
Balance at December 31, 2022		9,106		441	598							5,178			6,733	3,029	25,085
																Additions / Transfers	85		29	14		24		475	70	697
																Effect of movements in
																exchange rates	-		-	-									-	-	-				-
Balance at March 31, 2023		9,191		470	612							5,202			7,208	3,099	25,782

NET BOOK VALUE
At March 31, 2023		6,194		339	174							11,726			18,515	11,660	48,608
At December 31, 2022		5,581		322	176							9,752			16,561	11,664	44,056
At January 1, 2022		4,182		301	68							9,296			11,946	9,882	35,675
	- 14 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2023 and 2022
(Expressed in thousands of US dollars, except where otherwise noted)

		Included in Buildings above are assets under construction of $3,966 as at March 31, 2023 (December 31,
		2022 - $3,817) on which no depreciation was charged in the periods then ended. Once the assets are
		available for use, they wil be transferred to the appropriate class of plant, equipment and mining
		properties.

		As at March 31, 2023, plant, equipment and mining properties included a net carrying amount of $4,507
		(December 31, 2022 - $2,417) for mining equipment and right of use assets under finance lease and
		equipment loan.

11. RELATED PARTY TRANSACTIONS AND BALANCES

		Al related party transactions are recorded at the exchange amount which is the amount agreed to by the
		Company and the related party.

		(a) Key management personnel

		The Company has identified its directors and certain senior officers as its key management personnel.
		The compensation costs for key management personnel for the three months ended March 31, 2023
		and 2022 is as follows:
			Three months ended March 31,
				2023	2022
		Salaries, benefits, and consulting fees				$	284		$	439
		Share‐based payments		321	157
						$	605		$	596

		(b) Amounts due to/from related parties

		In the normal course of operations the Company transacts with companies related to Avino’s directors
		or officers. Al amounts payable and receivable are non-interest bearing, unsecured and due on
		demand. The following table summarizes the amounts were due to related parties:

			March 31,				December 31,
							2023	2022
		Oniva International Services Corp.				$	100		$	100
		Silver Wolf Exploration Ltd.		(77)				(72)
		Directors Fees		44	-
						$	67		$	28

		For services provided to the Company as President and Chief Executive Officer, the Company pays
		Intermark Capital Corporation (“ICC”), a company controlled by David Wolfin, the Company’s president
		and CEO and also a director, for consulting services. For the three months ended March 31, 2023, the
		Company paid $71 (March 31, 2022 - $126) to ICC.

(c) Other related party transactions

		The Company has a cost sharing agreement with Oniva International Services Corp. (“Oniva”) for office
		and administration services. Pursuant to the cost sharing agreement, the Company wil reimburse Oniva
		for the Company’s percentage of overhead and corporate expenses and for out-of-pocket expenses
		incurred on behalf of the Company. David Wolfin, President & CEO, and a director of the Company, is
		the sole owner of Oniva. The cost sharing agreement may be terminated with one-month notice by
		either party without penalty.


	- 15 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2023 and 2022
(Expressed in thousands of US dollars, except where otherwise noted)

		The transactions with Oniva during the three months ended March 31, 2023 and 2022 are summarized
		below:

			March 31,		March 31,
				2023		2022
		Salaries and benefits					$	245			$	220
		Office and miscellaneous		133		97
							$	378			$	317

12. NOTE PAYABLE

		On March 21, 2022, the Company closed the acquisition of the La Preciosa property from Coeur Mining
		Inc. (see Note 4 for further details). As part of the agreement, the Company issued a promissory note
		payable of $5 mil ion due on or before March 21, 2023. The present value of $4,665 of the note payable
		was calculated using a discount interest rate of 6.71%.

		Prior to March 21, 2023, the Company repaid the promissory note payable in ful .

		The continuity of the note payable is as follows:

							March 31,	December 31,
									2023		2022
		Balance at beginning of the period							$	4,926			$	-
		Additions								-				4,665
		Repayments								(5,000)				-
		Unwinding of fair value adjustment								74				261
		Balance at end of the period								-				4,926
		Less: Current portion								-				(4,926)
		Non-current portion							$	-			$	-


	- 16 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2023 and 2022
(Expressed in thousands of US dollars, except where otherwise noted)

13. WARRANT LIABILITY

		The Company’s warrant liability arises as a result of the issuance of warrants exercisable in US dollars. As
		the denomination is different from the Canadian dollar functional currency of the entity issuing the
		underlying shares, the Company recognizes a derivative liability for these warrants and re-measures the
		liability at the end of each reporting period using the Black-Scholes model. Changes in respect of the
		Company’s warrant liability are as fol ows:

			March 31,		December 31,
				2023		2022
		Balance at beginning of the period	$	475	$	741
		Warrants issued		-		2,240
		Fair value adjustment		293		(2,935)
		Effect of movement in exchange rates		3		(111)
		Balance at end of the period	$	771	$	475

		Continuity of warrants during the periods is as follows:
							Underlying	Weighted Average
							Shares	Exercise Price
		Warrants outstanding and exercisable, January 1, 2022					1,950,412	$0.80
		Granted					7,000,000	$1.09
		Warrants outstanding and exercisable, December 31, 2022,
		and March 31, 2023					8,950,412	$1.03

					All Warrants
								Outstanding and Exercisable
								Exercise Price	March 31,		December 31,
		Expiry Date						per Share	2023		2022
		September 21, 2023							$1.09	7,000,000		7,000,000
		September 25, 2023							$0.80	1,950,412		1,950,412
								8,950,412		8,950,412

		As at March 31, 2023, the weighted average remaining contractual life of warrants outstanding was 0.48
		years (December 31, 2022 – 0.73 years).

		Valuation of the warrant liability requires the use of highly subjective estimates and assumptions including
		the expected stock price volatility. The expected volatility used in valuing warrants is based on volatility
		observed in historical periods. Changes in the underlying assumptions can materially affect the fair value
		estimates. The fair value of the warrant liability was calculated using the Black-Scholes model with the
		following weighted average assumptions and resulting fair values:

			March 31,		December 31,
			2023			2022
		Weighted average assumptions:
		Risk-free interest rate	3.78%			4.07%
		Expected dividend yield		0%		0%
		Expected warrant life (years)	0.48			0.73
		Expected stock price volatility	49.96%			56.80%
		Weighted average fair value	$0.09			$0.05

14. RECLAMATION PROVISION

		Management’s estimate of the reclamation provision at March 31, 2023, is $505 (December 31, 2022 –
		$445), and the undiscounted value of the obligation is $1,598 (December 31, 2022 – $1,454).

	- 17 -

AVINO SILVER & GOLD MINES LTD.

Notes to the unaudited condensed consolidated interim financial statements

For the three months ended March 31, 2023 and 2022

(Expressed in thousands of US dollars, except where otherwise noted)

The present value of the obligation was calculated using a risk-free interest rate of 9.09% (December 31,

2022 – 9.65%) and an annual inflation rate of 6.04% (December 31, 2022 – 7.82%). Reclamation activities

are estimated to begin in 2025 for the San Gonzalo Mine and in 2041 for the Avino Mine.

A reconciliation of the changes in the Company’s reclamation provision is as follows:

March 31,

December 31,

2023

2022

Balance at beginning of the period

445 $

726

Changes in estimates

(364)

Unwinding of discount related to continuing operations

Effect of movements in exchange rates

Balance at end of the period

505 $

445

15. SHARE CAPITAL AND SHARE-BASED PAYMENTS

(a) Authorized: Unlimited common shares without par value.

(b) Issued:

(i) During the three months ended March 31, 2023, the Company issued 253,700 common shares in an

at-the-market offering under prospectus supplement for gross proceeds of $207. The Company paid

a 2.75% cash commission of $5 on gross proceeds, for net proceeds of $202.

During the three months ended March 31, 2023, the Company issued 592,667 common shares upon

exercise of RSUs. As a result, $512 was recorded to share capital.

(ii) During the year ended December 31, 2022, the Company issued 14,000,000 common shares as part

of the acquisition of La Preciosa from Coeur Mining Inc.. As a result, $13,650 was recorded to share

capital, and exploration and evaluation assets as acquisition costs, representing the closing price on

the Toronto Stock Exchange on March 21, 2022, the date of the issuance and closing.

The Company further issued 1,075,000 common shares as payment for services provided during the

acquisition, and as a result $980 was recorded to share capital and exploration and evaluation

assets as acquisition costs.

During the year ended December 31, 2022, the Company issued 48,000 common shares following

the exercise of 48,000 options. As a result, $46 was recorded to share capital, representing cash

proceeds of $31 and the fair value upon issuance of $15.

During the year ended December 31, 2022, the Company issued 982,879 common shares upon

exercise of RSUs. As a result, $899 was recorded to share capital.

The Company has a stock option plan to purchase the Company’s common shares, under which it may

grant stock options of up to 10% of the Company’s total number of shares issued and outstanding on a

non-diluted basis. The stock option plan provides for the granting of stock options to directors, officers,

and employees, and to persons providing investor relations or consulting services, the limits being

based on the Company’s total number of issued and outstanding shares per year. The stock options

vest on the date of grant, except for those issued to persons providing investor relations services, which

vest over a period of one year. The option price must be greater than or equal to the discounted market

price on the grant date, and the option term cannot exceed ten years from the grant date.

- 18 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2023 and 2022
(Expressed in thousands of US dollars, except where otherwise noted)

		Continuity of stock options is as follows:

				Underlying	Weighted Average
				Shares	Exercise Price (C$)

Stock options outstanding, January 1, 2022			2,839,000					$1.68
		Granted	2,390,000					$1.20
		Exercised		(48,000)				$0.79
		Expired		(880,000)				$1.98
		Cancelled / Forfeited		(45,000)				$1.40
Stock options outstanding, December 31, 2022				4,256,000				$1.36
		Granted		2,395,000				$1.12
Stock options outstanding, March 31, 2023				6,651,000				$1.27
Stock options exercisable, March 31, 2023				4,249,750				$1.36

		The fol owing table summarizes information about the stock options outstanding and exercisable at
		March 31, 2023:

										Outstanding					Exercisable
													Weighted	Weighted
													Average	Average
													Remaining	Remaining
												Number of	Contractual	Number of	Contractual Life
	Expiry Date										Price (C$)		Options	Life (Years)	Options		(Years)
August 28, 2023									$1.30			105,000	0.41			105,000	1.41
August 21, 2024									$0.79			126,000	1.39			126,000	2.39
August 4, 2025									$1.64			1,660,000	2.35			1,660,000	3.35
March 25, 2027									$1.20			2,340,000	3.99			2,340,000	3.99
May 4, 2027									$0.92			25,000	4.10			18,750	4.10
March 29, 2028									$1.12			2,395,000	5.00		-		4.99
															6,651,000	3.84		4,249,750	3.18

		Valuation of stock options requires the use of highly subjective estimates and assumptions including the
		expected stock price volatility. The expected volatility used in valuing stock options is based on volatility
		observed in historical periods. Changes in the underlying assumptions can materially affect the fair value
		estimates. The fair value of the stock options was calculated using the Black-Scholes model with the
		following weighted average assumptions and resulting fair values:

						March 31,	December 31,
						2023		2022
		Weighted average assumptions:
		Risk-free interest rate				3.05%		2.49%
		Expected dividend yield			0%		0.0%
		Expected option life (years)				5.00		5.00
		Expected stock price volatility				61.05%		59.98%
		Expected forfeiture rate				17%	20%
		Weighted average fair value				$0.61		$0.63

		During the three months ended March 31, 2023, the Company charged $62 (three months ended March
		31, 2022 - $32) to operations as share-based payments for the fair value of stock options granted.


	- 19 -

AVINO SILVER & GOLD MINES LTD.

Notes to the unaudited condensed consolidated interim financial statements

For the three months ended March 31, 2023 and 2022

(Expressed in thousands of US dollars, except where otherwise noted)

(d) Restricted Share Units:

On April 19, 2018, the Company’s Restricted Share Unit (“RSU”) Plan was approved by its

shareholders. The RSU Plan is administered by the Compensation Committee under the supervision of

the Board of Directors as compensation to officers, directors, consultants, and employees. The

Compensation Committee determines the terms and conditions upon which a grant is made, including

any performance criteria or vesting period.

Upon vesting, each RSU entitles the participant to receive one common share, provided that the

participant is continuously employed with or providing services to the Company. RSUs track the value of

the underlying common shares, but do not entitle the recipient to the underlying common shares until

such RSUs vest, nor do they entitle a holder to exercise voting rights or any other rights attached to

ownership or control of the common shares, until the RSU vests and the RSU participant receives

common shares.

Continuity of RSUs is as fol ows:

Underlying

Weighted Average

Price (C$)

RSUs outstanding, January 1, 2022

1,439,477

$1.32

Granted

1,799,000

1.19

Exercised

(982,879)

$1.18

Cancelled / Forfeited

(64,932)

$1.40

RSUs outstanding, December 31, 2022

2,190,666

$1.27

Granted

1,809,000

$1.12

Exercised

(592,667)

$1.19

RSUs outstanding, March 31, 2023

3,406,999

$1.21

The fol owing table summarizes information about the RSUs outstanding at March 31, 2023:

Issuance Date

Price (C$)

Number of RSUs Outstanding

August 4, 2020

$1.64

412,666

March 25, 2022

$1.19

1,185,333

March 29, 2023

$1.12

1,809,000

3,238,477

During the three months ended March 31, 2023, 1,809,000 RSUs (year ended December 31, 2022,

1,799,000) were granted. The weighted average fair value at the measurement date was C$1.12

(December 31, 2022 – C$1.19), based on the TSX market price of the Company’s shares on the date

the RSUs were granted.

During the three months ended March 31, 2023, the Company charged $277 (March 31, 2022 - $168) to

operations as share-based payments for the fair value of the RSUs vested. The fair value of the RSUs

is recognized over the vesting period with reference to vesting conditions and the estimated RSUs

expected to vest.

- 20 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2023 and 2022
(Expressed in thousands of US dollars, except where otherwise noted)

(e) Earnings (loss) per share:

		The calculations for basic earnings (loss) per share and diluted earnings (loss) per share are as follows:

			Three months ended March 31,
				2023	2022
		Net income (loss) for the period				$ (352) $ 646

		Basic weighted average number of shares outstanding	118,572,700					103,819,481
		Effect of dilutive share options, warrants, and RSUs	4,030,229		3,415,476
		Diluted weighted average number of shares outstanding 122,602,929 107,234,957
		Basic loss per share				$ (0.00) $		0.01
		Diluted loss per share				$ (0.00) $		0.01

16. REVENUE AND COST OF SALES

		The Company’s revenues for the three months ended March 31, 2023 and 2022, are al attributable to
		Mexico, from shipments of concentrate from the Avino Mine.
			March 31,					March 31,
				2023	2022
		Concentrate sales				$	9,992			$	9,789
		Provisional pricing adjustments				(167) 1,261
						$	9,825			$	11,050

		Cost of sales consists of changes in inventories, direct costs including personnel costs, mine site costs,
		energy costs (principally diesel fuel and electricity), maintenance and repair costs, operating supplies,
		external services, third party transport fees, depreciation and depletion, and other expenses for the periods.
		Direct costs include the costs of extracting co-products.

		Cost of sales is based on the weighted average cost of inventory sold for the periods and consists of the
		following:
			March 31,					March 31,
				2023	2022
		Production costs				$	7,304			$	5,847
		Depreciation and depletion		670	459
						$	7,974			$	6,306

17. GENERAL AND ADMINISTRATIVE EXPENSES

		General and administrative expenses on the condensed consolidated interim statements of operations
		consist of the following:
			March 31,					March 31,
				2023	2022
		Salaries and benefits				$	395		$	438
		Professional fees		239	208
		Office and miscellaneous		192	174
		Management and consulting fees		106	116
		Investor relations		81	52
		Travel and promotion		54	10
		Directors fees		44	41
		Regulatory and compliance fees		38	47
		Depreciation		35	30
						$	1,184		$	1,116
	- 21 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2023 and 2022
(Expressed in thousands of US dollars, except where otherwise noted)

18. COMMITMENTS

The Company has a cost sharing agreement to reimburse Oniva for a percentage of its overhead expenses,
to reimburse 100% of its out-of-pocket expenses incurred on behalf of the Company, and to pay a
percentage fee based on Oniva’s total overhead and corporate expenses. The agreement may be
terminated with one-month notice by either party. Transactions and balances with Oniva are disclosed in
Note 11.

The Company and its subsidiaries have various operating lease agreements for their office premises, use of
land, and equipment. Commitments in respect of these lease agreements are as follows:

			March 31,		December 31,
				2023		2022
		Not later than one year					$	103 $	105
		Later than one year and not later than five years		347		347
		Later than five years		375		398
							$	825 $	850

Office lease payments recognized as an expense during the three months ended March 31, 2023, total ed
$4 (March 31, 2022 - $16).

19. SUPPLEMENTARY CASH FLOW INFORMATION

				March 31,		March 31,
					2023	2022
		Net change in non-cash working capital items:
		Inventory	$	(1,419) $		339
		Prepaid expenses and other assets	(18)			(327)
		Taxes recoverable	(625)			210
		Taxes payable	(867)			(28)
		Accounts payable and accrued liabilities	1,466 (1,013)
		Amounts receivable	843			(1,394)
		Amounts due to related parties	39			(15)
			$ (582) $ (202)

				March 31,		March 31,
					2023	2022
		Other non-cash supplementary information:
		Interest paid	$		42 $			20
		Taxes paid			5			-
			$		47 $			20

				March 31,		March 31,
					2023	2022
		Non-cash investing and financing activities:
		Acquisition of La Preciosa, net of cash & transaction costs	$		- $	21,535
		Shares acquired under terms of option agreements			41			31
		Transfer of share-based payments reserve upon exercise of RSUs			512			-
		Transfer of share-based payments reserve upon option exercise			-			15
		Equipment acquired under finance leases and equipment loans			1,808	1,101
			$		2,361 $	22,682

	- 22 -

AVINO SILVER & GOLD MINES LTD.

Notes to the unaudited condensed consolidated interim financial statements

For the three months ended March 31, 2023 and 2022

(Expressed in thousands of US dollars, except where otherwise noted)

20. FINANCIAL INSTRUMENTS

The fair values of the Company’s amounts due to related parties and accounts payable approximate their

carrying values because of the short-term nature of these instruments. Cash, amounts receivable, long-

term investments, and warrant liability are recorded at fair value. The carrying amounts of the Company’s

term facility, equipment loans, and finance lease obligations are a reasonable approximation of their fair

values based on current market rates for similar financial instruments.

The Company’s financial instruments are exposed to certain financial risks, including credit risk, liquidity

risk, and market risk.

(a) Credit Risk

Credit risk is the risk that one party to a financial instrument wil cause a financial loss for the other party

by failing to discharge an obligation. The Company has exposure to credit risk through its cash, long-

term investments and amounts receivable. The Company manages credit risk, in respect of cash and

short-term investments, by maintaining the majority of cash and short-term investments at highly rated

financial institutions.

The Company is exposed to a significant concentration of credit risk with respect to its trade accounts

receivable balance because all of its concentrate sales are with two (December 31, 2022 – two)

counterparty (see Note 21). However, the Company has not recorded any al owance against its trade

receivables because to-date all balances owed have been settled in ful when due (typically within 60

days of submission) and because of the nature of the counterparties.

The Company’s maximum exposure to credit risk at the end of any period is equal to the carrying

amount of these financial assets as recorded in the unaudited condensed consolidated interim

statement of financial position. At March 31, 2023 and December 31, 2022, no amounts were held as

collateral.

(b) Liquidity Risk

Liquidity risk is the risk that the Company wil encounter difficulty in satisfying financial obligations as

they become due. The Company manages its liquidity risk by forecasting cash flows required by its

operating, investing and financing activities. The Company had cash at March 31, 2023, in the amount

of $2,697 and working capital of $5,109 in order to meet short-term business requirements. Accounts

payable have contractual maturities of approximately 30 to 90 days, or are due on demand and are

subject to normal trade terms. The current portions of note payable and finance lease obligations are

due within 12 months of the condensed consolidated interim statement of financial position date.

Amounts due to related parties are without stated terms of interest or repayment.

The maturity profiles of the Company’s contractual obligations and commitments as at March 31, 2023,

are summarized as fol ows:

Less Than

More Than 5

Total

1 Year

1-5 years

Years

Accounts payable and

accrued liabilities

$ 10,922

$ -

Amounts due to related

parties

Minimum rental and lease

payments

849

105

346

398

Equipment Loans

481

165

316

Finance lease obligations

2,925

1,523

1,402

Total

$ 15,244

$ 12,782

$ 2,064

$ 398

- 23 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2023 and 2022
(Expressed in thousands of US dollars, except where otherwise noted)

		Market risk consists of interest rate risk, foreign currency risk and price risk. These are discussed further
		below.

		Interest Rate Risk Interest rate risk consists of two components: (i) To the extent that payments made or received on the Company’s monetary assets and liabilities are
		affected by changes in the prevailing market interest rates, the Company is exposed to interest rate
		cash flow risk.
		(ii) To the extent that changes in prevailing market rates differ from the interest rates on the Company’s
		monetary assets and liabilities, the Company is exposed to interest rate price risk.

		In management’s opinion, the Company is exposed to interest rate risk primarily on its outstanding term
		facility, as the interest rate is subject to floating rates of interest. A 10% change in the interest rate
		would not a result in a material impact on the Company’s operations.

		Foreign Currency Risk

		Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument wil
		fluctuate due to changes in foreign exchange rates. The Company is exposed to foreign currency risk to
		the extent that the fol owing monetary assets and liabilities are denominated in Mexican pesos and
		Canadian dollars:

			March 31, 2023	December 31, 2022
			MXN		CDN	MXN		CDN
		Cash					$	5,063 $					219 $	4,097 $	250
		Due from related parties	1,402					- 1,402	-
		Long-term investments	-				1,984					-	2,365
		Reclamation bonds	-							6		-	4
		Amounts receivable	1,549					302		-	34
		Accounts payable and
		accrued liabilities	(76,052)					(54)	(85,486)					(108)
		Due to related parties	-							(195)		-	(135)
		Finance lease obligations	(880)					(331)	(161)					(343)
		Net exposure	(68,918)		1,931	(80,148)		2,067
		US dollar equivalent					$	(3,811) $		1,426 $	(4,136) $		1,526

		Based on the net US dol ar denominated asset and liability exposures as at March 31, 2023, a 10%
		fluctuation in the US/Mexican and Canadian/US exchange rates would impact the Company’s earnings
		for the three months ended March 31, 2023, by approximately $251 (year ended December 31, 2022 -
		$275). The Company has not entered into any foreign currency contracts to mitigate this risk.

		Price Risk

		Price risk is the risk that the fair value or future cash flows of a financial instrument wil fluctuate due to
		changes in market prices, other than those arising from interest rate risk or foreign currency risk.

		The Company is exposed to price risk with respect to its amounts receivable, as certain trade accounts
		receivable are recorded based on provisional terms that are subsequently adjusted according to quoted
		metal prices at the date of final settlement. Quoted metal prices are affected by numerous factors
		beyond the Company’s control and are subject to volatility, and the Company does not employ hedging
		strategies to limit its exposure to price risk. At March 31, 2023, based on outstanding accounts
		receivable that were subject to pricing adjustments, a 10% change in metals prices would have an
		impact on net earnings (loss) of approximately $17 (December 31, 2022 - $65).
	- 24 -

AVINO SILVER & GOLD MINES LTD.

Notes to the unaudited condensed consolidated interim financial statements

For the three months ended March 31, 2023 and 2022

(Expressed in thousands of US dollars, except where otherwise noted)

The Company is exposed to price risk with respect to its long-term investments, as these investments

are carried at fair value based on quoted market prices. Changes in market prices result in gains or

losses being recognized in net income (loss). At March 31, 2023, a 10% change in market prices would

have an impact on net earnings (loss) of approximately $143 (December 31, 2022 - $175).

The Company’s profitability and ability to raise capital to fund exploration, evaluation and production

activities is subject to risks associated with fluctuations in mineral prices. Management closely monitors

commodity prices, individual equity movements, and the stock market to determine the appropriate

course of action to be taken by the Company.

(d) Classification of Financial Instruments

IFRS 7 Financial Instruments: Disclosures establishes a fair value hierarchy that prioritizes the inputs to

valuation techniques used to measure fair value as follows:

Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset or liability,

either directly (i.e., as prices) or indirectly (i.e., derived from prices); and

Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable

inputs).

The fol owing table sets forth the Company’s financial assets and financial liabilities measured at fair

value on a recurring basis by level within the fair value hierarchy as at March 31, 2023:

Level 1

Level 2

Level 3

Financial assets

Cash

2,697 $

- $

Amounts receivable

2,015

Long-term investments

1,466

Total financial assets

$ 4,163 $ 2,015 $

Financial liabilities

Warrant liability

(771)

Total financial liabilities

$ - $

- $

(771)

- 25 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2023 and 2022
(Expressed in thousands of US dollars, except where otherwise noted)

		The Company uses Black-Scholes model to measure its Level 3 financial instruments. As at March 31,
		2023, the Company’s Level 3 financial instruments consisted of the warrant liability.

		For the Company’s warrant liability valuation and fair value adjustments during the three months ended
		March 31, 2023 and the year ended December 31, 2022, see Note 13.

21. SEGMENTED INFORMATION

		The Company reviews its segment reporting to ensure it reflects the operational structure of the Company
		and enables the Company's Chief Operating Decision Maker (the Company’s CEO) to review operating
		segment performance. We have determined that each producing mine represents an operating segment, of
		which there is one as of March 31, 2023.

		The Company’s revenues for the three months ended March 31, 2023 of $9,825 (March 31, 2022 -
		$11,050) are al attributable to Mexico, from shipments of concentrate produced by the Avino Mine.

		On the condensed consolidated interim statements of operations, the Company had revenue from the
		following product mixes:

			March 31,		March 31,
				2023		2022

		Silver					$ 3,608	$ 3,896
		Gold							3,135 2,442
		Copper							4,689 7,053
		Penalties, treatment costs and refining charges							(1,607) (2,344)

		Total revenue from mining operations					$ 9,825	$ 11,050


		For the three months ended March 31, 2023, the Company had two customers (March 31, 2022 – four
		customer) that accounted for total revenues as follows:

			March 31,		March 31,
				2023		2022

		Customer #1					$	9,225		$	8,985
		Customer #2		600		-
		Other customers		-	2,065

		Total revenue from mining operations					$	9,825		$	11,050



	- 26 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2023 and 2022
(Expressed in thousands of US dollars, except where otherwise noted)

		Geographical information relating to the Company’s non-current assets (other than financial instruments) is
		as follows:

			March 31,		December 31,
				2023		2022
		Exploration and evaluation assets - Mexico					$	50,093	$	49,803
		Exploration and evaluation assets - Canada		1		1
		Total exploration and evaluation assets					$	50,094	$	49,804

			March 31,		December 31,
				2023		2022
		Plant, equipment, and mining properties - Mexico					$	48,368	$	43,812
		Plant, equipment, and mining properties - Canada		240		244
		Total plant, equipment, and mining properties					$	48,608	$	44,056


	- 27 -