Enhanced Investments - Financial Portal

Published: 2022-08-10












		AVINO SILVER & GOLD MINES LTD.


		Condensed Consolidated Interim Financial Statements

				For the six months ended June 30, 2022 and 2021


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

				June 30, 2022		December 31,
			Note		(unaudited)		2021

ASSETS
Current assets
	Cash								$					12,791	$	24,765
	Amounts receivable													820		1,208
	Taxes recoverable		5					4,275		3,364
	Prepaid expenses and other assets													1,197		962
	Inventory		6					6,622		5,179
Total current assets														25,705		35,478
Exploration and evaluation assets			8					46,075		11,053
Plant, equipment and mining properties			10					40,547		35,675
Long-term investments			7					2,667		3,939
Other assets													4		133
Total assets									$	114,998	$	86,278

LIABILITIES
Current liabilities
	Accounts payable and accrued liabilities								$					5,107	$		3,260
	Amounts due to related parties		11(b)					125		163
	Taxes payable													566		31
	Note payable		12					4,757		-
	Current portion of finance lease obligations													785		389
Total current liabilities														11,340		3,843
Finance lease obligations														1,040		680
Warrant liability			13					347		741
Reclamation provision			14					769		726
Deferred income tax liabilities														4,118		1,781
Total liabilities														17,614		7,771

EQUITY
Share capital			15		144,616		129,953
Equity reserves														10,620		9,573
Treasury shares														(97)		(97)
Accumulated other comprehensive loss														(4,731)		(4,969)
Accumulated deficit										(53,024)		(55,953)
Total equity														97,384		78,507
Total liabilities and equity									$	114,998	$	86,278

Commitments – Note 18













Approved by the Board of Directors on August 10, 2022:
										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)

				Three months ended June 30,	Six months ended June 30,
			Note	2022		2021	2022	2021
Revenue from mining operations			16	$	9,370 $		- $	20,420 $			29
Cost of sales			16		5,468		1,017	11,774			1,726
Mine operating income (loss)					3,902		(1,017)	8,646	(1,697)

Operating expenses
General and administrative expenses			17		1,356		977	2,472	1,911
Share-based payments			15		862		498	1,062	1,114
Income (loss) before other items					1,684		(2,492)	5,112	(4,722)
Other items
Interest and other income							59	107	52	129
(Loss) gain on long-term investments			7		(596)		169	(1,282)			101
Fair value adjustment on warrant
liability			13		2,373		256	2,606	1,044
Realized loss on warrants exercised							-	(106)	-	(1,111)
Unrealized foreign exchange gain (loss)					123		(1,186)	(482)	(903)
Project evaluation expenses							6	-	(75)	-
Finance cost					(88)		(17)	(101)	(38)
Accretion of reclamation provision			14		(11)		(12)	(21)	(23)
Interest expense					(22)		-	(43)	(2)
Income (loss) before income taxes					3,528		(3,281)	5,766	(5,525)
Income taxes:
Current income tax expense					(360)		-	(500)	(12)
Deferred income tax recovery (expense)					(885)		627	(2,337)			1,065
Income tax recovery (expense)					(1,245)		627	(2,837)			1,053

Net income (loss)					2,283		(2,654)	2,929	(4,472)

Other comprehensive income (loss)
Currency translation differences					(119)		1,013	238	1,107
Total comprehensive income (loss)				$	2,164 $		(1,641) $	3,167 $	(3,365)
Income (loss) per share			15(e)
Basic					$0.02		$(0.03)	$0.03	$(0.05)
Diluted					$0.02		$(0.03)	$0.03	$(0.05)
Weighted average number of common
shares outstanding			15(e)
Basic				117,129,947 100,512,906 110,548,661 98,382,464
Diluted				120,386,601 100,512,906 113,814,123 98,382,464


	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)
INCOME STATEMENTEQUITY 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, 2021				89,568,682 $ 108,303	$ 9,951				$ (97)				$ (4,810)	$ (54,339)	$ 59,008

Common shares issued for cash:										-			-	-	-				-	-
At the market issuances				10,050,000	18,497								-	-	-				-	18,497
Exercise of warrants				1,030,362	1,911								-	-	-				-			1,911
Exercise of options				264,000						364	(127)					-	-				-	237
Issuance costs									-	(389)									-	-	-				-	(389)
Share-based payments									-	-	1,114					-	-				-			1,114
Net loss for the period									-	-			-	-	-								(4,472) (4,472)

Currency translation differences									-	-			-	-										1,107	-		1,107
Balance, June 30, 2021				100,913,044	$ 128,686	$ 10,938			$ (97)			$ (3,703)	$ (58,811)	$ 77,013
Balance, January 1, 2022				102,243,211 $ 129,953	$ 9,573			$ (97)			$ (4,969)	$ (55,953)	$ 78,507

Common shares issued for cash:
																	Exercise of options	15										48,000	46	(15)	-	-	-	31
Common shares issued for acquisition of
La Preciosa			15	15,075,000	14,630								-	-	-				- 14,630
Issuance costs			15						-	(13)			-	-	-				-	(13)
Share-based payments			15						-	-	1,062					-	-				-			1,062
Net income for the period			15						-	-			-	-	-								2,929 2,929
Currency translation differences									-	-			-	-										238	- 238
Balance, June 30, 2022				117,366,211	$ 144,616	$ 10,620			$ (97)			$ (4,731)	$ (53,024)	$ 97,384


	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)


				Six months ended June 30,
			Note		2022	2021

Cash generated by (used in):

Operating activities
Net income (loss)							$ 2,929	$ (4,472)
Adjustments for non-cash items:
Deferred income tax expense (recovery)							2,337 (1,065)
Depreciation and depletion							1,007	985
Accretion of reclamation provision			14				21	23
Gain (loss) on investments			7				1,282 (101)
Unrealized foreign exchange loss							32 1,015
Unwinding of fair value adjustment			12				92 (12)
Fair value adjustment on warrant liability			13				(2,606) (1,044)
Realized loss on warrants exercised							-	1,111
Share-based payments							1,062 1,114
Cash provided by (used in) operating activities before working							6,156 (2,446)
capital items

Net change in non-cash working capital items			19				990 1,284
Cash provided by (used in) operating activities							7,146	(1,162)

Financing activities
Shares and units issued for cash, net of issuance costs							30	19,146
Term facility payments							- (1,667)
Lease liability payments					(674)	(172)
Equipment loan payments							-	(72)
Cash provided by (used in) financing activities							(644)	17,235

Investing activities
Exploration and evaluation expenditures					(597)	(725)
Additions to plant, equipment and mining properties				(2,824)		(228)
Acquisition of La Preciosa							(15,289) -
Cash provided by (used in) investing activities							(18,710)	(953)


Change in cash				(12,208)		15,120

Effect of exchange rate changes on cash					234	(19)

Cash, beginning				24,765		11,713

Cash, ending				$ 12,791				$ 26,814



	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 six months ended June 30, 2022 and 2021
(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 owns interests in mineral properties located in British
		Columbia and Yukon, Canada.

		Risks associated with Public Health Crises, including COVID-19

		The Company's business, operations and financial condition could be material y adversely affected by the
		outbreak of epidemics, pandemics or other health crises, such as the outbreak of COVID-19 that was
		designated as a pandemic by the World Health Organization on March 11, 2020. The international response
		to the spread of COVID-19 has led to significant restrictions on travel, temporary business closures,
		quarantines, global stock market volatility and a general reduction in consumer activity. Such public health
		crises can result in operating, supply chain and project development delays and disruptions, global stock
		market and financial market volatility, declining trade and market sentiment, reduced movement of people and
		labour shortages, and travel and shipping disruption and shutdowns, including as a result of government
		regulation and prevention measures, or a fear of any of the foregoing, all of which could affect commodity
		prices, interest rates, credit risk and inflation. In addition, the current COVID-19 pandemic, and any future
		emergence and spread of similar pathogens could have an adverse impact on global economic conditions
		which may adversely impact the Company's operations, and the operations of suppliers, contractors and
		service providers, including smelter and refining service providers, and the demand for the Company's
		production.

		The Company may experience business interruptions, including suspended (whether government mandated
		or otherwise) or reduced operations relating to COVID-19 and other such events outside of the Company's
		control, which could have a material adverse impact on its business, operations and operating results, financial
		condition and liquidity.

		As at the date of the condensed consolidated interim financial statements, the duration of the business
		disruptions internationally and related financial impact of COVID-19 cannot be reasonably estimated. It is
		unknown whether and how the Company may be affected if the pandemic persists for an extended period of
		time. In particular, the region in which we operate may not have sufficient public infrastructure to adequately
		respond or efficiently and quickly recover from such event, which could have a material y adverse effect on
		the Company's operations. The Company's exposure to such public health crises also includes risks to
		employee health and safety. Should an employee, contractor, community member or visitor become infected
		with a serious il ness that has the potential to spread rapidly, this could place the Company's workforce at risk.


	- 6 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the six months ended June 30, 2022 and 2021
(Expressed in thousands of US dollars, except where otherwise noted - Unaudited)

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,
		2021, 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 below have been
		applied consistently to al 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 six months ended June 30, 2022, are consistent with those
		applied and disclosed in Note 2 to the Company’s audited consolidated financial statements for the year ended
		December 31, 2021.

	- 7 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the six months ended June 30, 2022 and 2021
(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

		Application of new and revised accounting standards:
		Property, Plant and Equipment — Proceeds before Intended Use (Amendments to IAS 16)
		The amendments prohibit deducting from the cost of an item of property, plant and equipment any proceeds
		from selling items produced while bringing that asset to the location and condition necessary for it to be capable
		of operating in the manner intended by management. Instead, an entity recognizes the proceeds from selling
		such items, and the cost of producing those items, in profit or loss. The amendments are applied on or after
		the first annual reporting period beginning on or after January 1, 2022, with early application permitted. The
		amendments are applied retrospectively, but only to items of property, plant and equipment that are brought
		to the location and condition necessary for them to be capable of operating in the manner intended by
		management on or after the beginning of the earliest period presented in the financial statements in which the
		Company first applies the amendments. This amendment wil impact the Company’s accounting for proceeds
		from mineral sales prior to reaching commercial production at levels intended by management.

	- 8 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the six months ended June 30, 2022 and 2021
(Expressed in thousands of US dollars, except where otherwise noted - Unaudited)

		Future Changes in Accounting Policies Not Yet Effective as at June 30, 2022:
		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.
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.


	- 9 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the six months ended June 30, 2022 and 2021
(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									1,121
		Plant and equipment									1,621
		Exploration and evaluation assets									34,524
		Accounts payable									(328)
		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.

							June 30,	December 31,
							2022	2021
		VAT recoverable	$				1,550 $	790
		GST recoverable		89	26
		Income taxes recoverable					2,636	2,548
			$				4,275 $	3,364

6. INVENTORY

							June 30,	December 31,
				2022		2021
		Process material stockpiles	$				2,065 $	1,083
		Concentrate inventory					2,404	2,467
		Materials and supplies					2,153	1,629
			$				6,622 $	5,179

		The amount of inventory recognized as an expense for the six months ended June 30, 2022 totalled $11,774
		(June 30, 2021 – $709). See Note 16 for further details.


	- 10 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the six months ended June 30, 2022 and 2021
(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:

			Fair Value	Movements in		Fair value	Fair Value
			December 31, Net Additions		foreign	adjustments	June 30,

								2021	exchange		for the period				2022
Talisker Resources Common
Shares			$					3,880	$			-	$	(46)	$	(1,248)	$			2,586
Silver Wolf Exploration Ltd.
Common Shares								59		31	(1)							(40)	49
Endurance Gold Corp.
Common Shares								-		26		-	6	32
			$					3,939	$ 57			$	(47)	$ (1,282)	$ 2,667

		Silver Wolf Exploration Ltd.

		During the six months ended June 30, 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 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.

		See Note 8 for ful details of the Option Agreement.

		Endurance Gold Corp.

		During the six months ended June 30, 2022, the Company received 100,000 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 ful details of the Option Agreement.


	- 11 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the six months ended June 30, 2022 and 2021
(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, 2021								$ 10,051	$					-	$			1	$	10,052

		Costs incurred during 2021:
		Drilling and exploration		1,047					-					-		1,047
		Assessments and taxes		68					-					-		68
		Effect of movements in exchange rates	3					-					-		3
		Option income		(117)					-					-		(117)

		Balance, December 31, 2021								$ 11,052	$					-	$			1	$	11,053

		Costs incurred during 2022:
		Acquisition costs – Note 4		-		34,524				-		34,524
		Drilling and exploration		385					71					-		456
		Assessments and taxes		71					-					-		71
		Effect of movements in exchange rates	1					-					-		1
		Option income	(30)					-					-		(30)

		Balance, June 30, 2022								$ 11,479	$ 34,595		$				1	$	46,075


	- 12 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the six months ended June 30, 2022 and 2021
(Expressed in thousands of US dollars, except where otherwise noted - Unaudited)

		Additional information on the Company’s exploration and evaluation properties by region is as fol ows:

		(a) Avino, Mexico

		The Company’s subsidiary Avino Mexico owns 42 mineral claims and leases four mineral claims in the state
		of Durango, Mexico. The Company’s mineral claims in Mexico are divided into the following four groups:

		(i) Avino mine area property

		The Avino mine area property is situated around the towns of Panuco de Coronado and San Jose de Avino
		and surrounding the historic Avino mine site. There are four exploration concessions covering 154.4
		hectares, 24 exploitation concessions covering 1,284.7 hectares, and one leased exploitation concession
		covering 98.83 hectares. Within the Avino mine site area is the Company’s San Gonzalo Mine, which
		achieved production at levels intended by management as of October 1, 2012, and on this date
		accumulated exploration and evaluation costs were transferred to mining properties.

		(ii) Gomez Palacio/Ana Maria property

		The Ana Maria property is located near the town of Gomez Palacio, and consists of nine exploration
		concessions covering 2,549 hectares, and is also known as the Ana Maria property.

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

		During the year ended December 31, 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 follows:

			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;
			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

		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.

		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.
	- 13 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the six months ended June 30, 2022 and 2021
(Expressed in thousands of US dollars, except where otherwise noted - Unaudited)

		(iii) Santiago Papasquiaro property

		The Santiago Papasquiaro property is located near the vil age of Santiago Papasquiaro, and consists of
		four exploration concessions covering 2,552.6 hectares and one exploitation concession covering 602.9
		hectares.

		(iv) 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 wholly-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

		During the six months ended June 30, 2022, the Company received approval for the closing of the acquisition
		of the La Preciosa property from Coeur Mining Inc. (“Coeur”).

		La Preciosa consists of 15 exploration concessions totaling 6,011 hectares located in Durango, Mexico, within
		the municipalities of Panuco de Coronado and Canatlan. The property is located within 20 kilometres of the
		Company’s current Avino mining operations.

		For further details on the transaction, see Note 4.


	- 14 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the six months ended June 30, 2022 and 2021
(Expressed in thousands of US dollars, except where otherwise noted - Unaudited)

		(c) British Columbia, Canada

		(i) Minto and Olympic-Kelvin properties

		During the six months ended June 30, 2022, the Company has granted Endurance Gold Corp.
		(“Endurance”) 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; all 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 six months ended June 30, 2022, Endurance granted 100,000 common shares and paid C$10
		as per the terms of the agreement, which required payment upon signing of a letter agreement between
		the two parties. As of June 30, 2022, Endurance was in compliance with all terms of the Option agreement.

		(ii) Yukon, Canada

		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.

9. NON-CONTROLLING INTEREST

		At June 30, 2022, the Company had an effective 99.67% (December 31, 2021 - 99.67%) interest in its
		subsidiary Avino Mexico and the remaining 0.33% (December 31, 2021 - 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.
	- 15 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the six months ended June 30, 2022 and 2021
(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 December 31, 2020	13,149		563	347							12,955	17,483	11,263	55,760
		Additions / Transfers	(113)		31	(12)							1,285	1,130	508	2,829
		Effect of movements in
		exchange rates													2		1	-						-	-	7	10
		Balance at December 31, 2021	13,038		595	335							14,240	18,613	11,778	58,599
		Additions / Transfers	335		122	411							1,728	1,903	2,805	7,304
		Effect of movements in
		exchange rates	(5)		(4)	-													-	-	(1)	(10)
		Balance at June 30, 2022	13,368		713	746							15,968	20,516	14,582	65,893


		ACCUMULATED DEPLETION
		AND DEPRECIATION
		Balance at December 31, 2020	8,643		187	256							4,907	5,297	1,624	20,914
		Additions / Transfers	213		107	11							37	1,370	272	2,010
		Effect of movements in
		exchange rates	-		-	-													-	-	-		-
		Balance at December 31, 2021	8,856		294	267							4,944	6,667	1,896	22,924
		Additions / Transfers	111		89	298							291	642	991	2,422
		Effect of movements in
		exchange rates	-		-	-													-	-	-		-
		Balance at June 30, 2022	8,967		383	565							5,235	7,309	2,887	25,346

		NET BOOK VALUE
		At June 30, 2022	4,401		330	181							10,733	13,207	11,695	40,547
		At December 31, 2021	4,182		301	68							9,296	11,946	9,882	35,675
		At December 31, 2020	4,506		376	91							8,048	12,186	9,639	34,846
	- 16 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the six months ended June 30, 2022 and 2021
(Expressed in thousands of US dollars, except where otherwise noted)

		Included in Buildings and construction in process above are assets under construction of $8,281 as at June
		30, 2022 (December 31, 2021 - $6,348) on which no depreciation was charged in the periods then ended.
		Once the assets are put into service, they wil be transferred to the appropriate class of plant, equipment and
		mining properties.

		As at June 30, 2022, plant, equipment and mining properties included a net carrying amount of $2,538
		(December 31, 2021 - $1,306) for mining equipment and right of use assets under lease.

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 and six months ended June 30,
		2022 and 2021 is as fol ows:

				Three months ended June 30,	Six months ended June 30,
						2022						2021	2022	2021
			Salaries, benefits, and
			consulting fees	$ 299					$ 265	$ 738				$ 500
			Share-based payments	667					415	824	903
					$ 966					$ 680	$ 1,562				$ 1,403

		(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 fol owing table summarizes the amounts were due to related parties:

					June 30,				December 31,
							2022	2021
		Oniva International Services Corp.				$	105		$	107
		Silver Wolf Exploration Ltd.					(26)			-
		Directors					46			56
						$	125		$	163

		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 six months ended June 30, 2022, the
		Company paid $197 (June 30, 2021 - $120) 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.


	- 17 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the six months ended June 30, 2022 and 2021
(Expressed in thousands of US dollars, except where otherwise noted)

		The transactions with Oniva during the three and six months ended June 30, 2022 and 2021 are
		summarized below:

			Three months ended June 30,	Six months ended June 30,
					2022					2021	2022	2021
		Salaries and benefits	$ 232 $ 187 $ 452						$ 378
		Office and miscellaneous	109				77	206	182
				$ 341				$ 264	$ 658				$ 560

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 the note payable was calculated using a
		discount interest rate of 6.71%.

		The note is unsecured and non-interest bearing assuming that the note is repaid in full on or before March
		21, 2023. If the note is not repaid by March 21, 2023, a sum of $1 mil ion shal be added to the principal
		amount and the note shal bear interest at a rate of 7% per annum and wil be payable on demand.

		The continuity of the note payable is as follows:

					June 30,			December 31,
										2022				2021
		Balance at beginning of the period			$	-			$	-
		Additions				4,665						-
		Repayments				-						-
		Unwinding of fair value adjustment				92						-
		Balance at end of the period				4,757						-
		Less: Current portion				(4,757)						-
		Non-current portion			$	-			$	-


	- 18 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the six months ended June 30, 2022 and 2021
(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 dol ar 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 follows:

			June 30,	December 31,
			2022		2021
		Balance at beginning of the period				$	741	$	2,295
		Warrants issued	2,240		-
		Fair value adjustment	(2,606)		(1,581)
		Effect of movement in exchange rates					(28)	27
		Balance at end of the period				$	347	$	741

		Continuity of warrants during the periods is as follows:
						Underlying	Weighted Average
						Shares	Exercise Price
		Warrants outstanding and exercisable, January 1, 2021				2,980,774	$0.80
		Exercised				(1,030,362)	$0.80
		Warrants outstanding and exercisable, December 31, 2021				1,950,412	$0.80
		Issued				7,000,000	$1.09
		Warrants outstanding and exercisable, June 30, 2022				8,950,412	$1.03

				All Warrants
									Outstanding and Exercisable
	Exercise Price		June 30,	December 31,
		Expiry Date							per Share	2022		2021
		September 21, 2023						$1.09	7,000,000		-
		September 25, 2023						$0.80	1,950,412	1,950,412
									8,950,412	1,950,412

		As at June 30, 2022, the weighted average remaining contractual life of warrants outstanding was 1.23 years
		(December 31, 2021 – 1.73 years).

		Valuation of the warrant liability requires the use of 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 fol owing weighted average
		assumptions and resulting fair values:

			June 30,	December 31,
			2022		2021
		Weighted average assumptions:
		Risk-free interest rate	3.09%		0.91%
		Expected dividend yield					0%	0%
		Expected warrant life (years)	1.23		1.73
		Expected stock price volatility	54.81%		83.13%
		Weighted average fair value	$0.04		$0.38

		During the six months ended June 30, 2022, the Company recorded no realized loss on the exercise of
		warrants (December 31, 2021 - $1,106, as result of the exercise of 1,030,362 warrants for the issuance of
		1,030,362 common shares).
	- 19 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the six months ended June 30, 2022 and 2021
(Expressed in thousands of US dollars, except where otherwise noted)

14. RECLAMATION PROVISION

		Management’s estimate of the reclamation provision at June 30, 2022, is $769 (December 31, 2021 – $726),
		and the undiscounted value of the obligation is $1,313 (December 31, 2021 – $1,252).

		The present value of the obligation was calculated using a risk-free interest rate of 7.78% (December 31,
		2021 – 7.78%) and an inflation rate of 7.36% (December 31, 2021 – 7.36%). Reclamation activities are
		estimated to begin in 2023 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:

			June 30,	December 31,
			2022		2021

		Balance at beginning of the period					$	726 $	808
		Changes in estimates						-	(105)
		Unwinding of discount related to continuing operations						21	47
		Effect of movements in exchange rates						22	(24)
		Balance at end of the period					$	769 $	726

15. SHARE CAPITAL AND SHARE-BASED PAYMENTS

		(a) Authorized: Unlimited common shares without par value, 14,180 treasury shares issued at cost of $97

		(b) Issued:

		(i) During the six months ended June 30, 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 recorded $980 was recorded to share capital and exploration and
						evaluation assets as acquisition costs.

						During the six months ended June 30, 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.

		(ii) During the year ended December 31, 2021, the Company issued 10,050,000 common shares in an
						at-the-market offering under prospectus supplement for gross proceeds of $19,020. The Company
						paid a 2.75% cash commission of $523 on gross proceeds, for net proceeds of $18,497, and incurred
						additional $400 in issuance costs during the period.

						During the year ended December 31, 2021, the Company issued 1,030,362 common shares following
						the exercise of 1,030,362 warrants. As a result, $1,911 was recorded to share capital, representing
						cash proceeds of $824, fair value of the warrants on the date of exercise (see Note 14 for valuation
						methodology of $US denominated warrants) of $1,106, and movements in foreign exchange of $(19).

						During the year ended December 31, 2021, the Company issued 264,000 common shares fol owing
						the exercise of 264,000 options. As a result, $364 was recorded to share capital, representing cash
						proceeds of $237 and the fair value upon issuance of $127.

						During the year ended December 31, 2021, the Company issued 1,330,167 common shares upon
						exercise of RSUs. As a result, $1,278 was recorded to share capital.

	- 20 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the six months ended June 30, 2022 and 2021
(Expressed in thousands of US dollars, except where otherwise noted)

		(c) Stock options:

		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.

		Continuity of stock options is as follows:

				Underlying	Weighted Average
				Shares	Exercise Price (C$)

Stock options outstanding, January 1, 2021			3,483,000			$1.77
		Exercised		(264,000)		$1.16
		Expired		(360,000)		$2.95
		Cancelled / Forfeited		(20,000)		$1.64
Stock options outstanding, December 31, 2021				2,839,000		$1.68
		Granted		2,390,000		$1.20
		Exercised		(48,000)		$0.79
Stock options outstanding, June 30, 2022				5,181,000		$1.47
Stock options exercisable, June 30, 2022				3,382,250		$1.61

		The fol owing table summarizes information about the stock options outstanding and exercisable at
		June 30, 2022:

								Outstanding				Exercisable
												Weighted	Weighted
			Average			Average
												Remaining	Remaining
											Number of	Contractual	Number of	Contractual Life
		Expiry Date							Price (C$)		Options	Life (Years)	Options		(Years)
		September 20, 2022					$1.98				880,000	0.22			880,000	0.22
		August 28, 2023					$1.30				105,000	1.16			105,000	1.16
		August 21, 2024					$0.79				126,000	2.15			126,000	2.15
		August 4, 2025					$1.64				1,680,000	3.10			1,680,000	3.10
		March 25, 2027					$1.20				2,365,000	4.74			591,250	4.74
		May 4, 2027					$0.92	25,000		4.85		-		4.85
														5,181,000	3.30		3,382,250	2.54

		Valuation of stock options requires the use of 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:


	- 21 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the six months ended June 30, 2022 and 2021
(Expressed in thousands of US dollars, except where otherwise noted)

			June 30,	December 31,
			2022		2021
		Weighted average assumptions:
		Risk-free interest rate	2.49%		-%
		Expected dividend yield	0.00%		-%
		Expected warrant life (years)	5.00		-
		Expected stock price volatility	59.98%		-%
		Expected forfeiture rate				20%	-%
		Weighted average fair value	$0.63		-

		During the six months ended June 30, 2022, the Company charged $504 (six months ended June 30,
		2021 - $335) to operations as share-based payments for the fair value of stock options granted.

(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
								Shares		Price (C$)

RSUs outstanding, January 1, 2021								2,874,000	$1.28
		Exercised						(1,330,167)	$1.22
		Cancelled / Forfeited						(104,356)	$1.54
RSUs outstanding, December 31, 2021								1,439,477	$1.32
		Granted						1,799,000	$1.19
		Cancelled / Forfeited						(35,000)		$1.37
RSUs outstanding, June 30, 2022								3,203,477	$1.25

		The fol owing table summarizes information about the RSUs outstanding at June 30, 2022:

		Issuance Date								Price (C$)		Number of RSUs Outstanding
		August 21, 2019	$0.79			539,733
		August 4, 2020	$1.64			885,744
		March 23, 2022	$1.19			1,778,000
											3,203,477

		During the six months ended June 30, 2022, 1,799,000 RSUs (year ended December 31, 2021 – Nil)
		were granted. The weighted average fair value at the measurement date was C$1.19, based on the TSX
		market price of the Company’s shares on the date the RSUs were granted.

		During the six months ended June 30, 2022, the Company charged $558 (June 30, 2021 - $779) to
		operations as share-based payments for the fair value of the RSUs vested. The fair value of the RSUs is
	- 22 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the six months ended June 30, 2022 and 2021
(Expressed in thousands of US dollars, except where otherwise noted)

		recognized over the vesting period with reference to vesting conditions and the estimated RSUs expected
		to vest.

(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 June 30,	Six months ended June 30,

	2022				2021	2022	2021
		Net income (loss) for the period	$	2,283							$ (2,654)	$		2,929		$ (4,472)
		Basic weighted average number of
		shares outstanding	117,129,947 100,512,906 110,548,661						98,382,464
		Effect of dilutive share options,
		warrants, and RSUs (‘000)	3,256,653				-	3,265,461			-
		Diluted weighted average number of
		shares outstanding	120,386,601 100,512,906 113,814,123						98,382,464
		Basic loss per share	$	0.02							$	(0.03)	$		0.03		$	(0.05)
		Diluted loss per share	$	0.02							$	(0.03)	$		0.03		$	(0.05)


16. REVENUE AND COST OF SALES

		The Company’s revenues for the six months ended June 30, 2022 and 2021, are all attributable to Mexico,
		from shipments of concentrate from the Avino Mine.
			Three months ended June 30, Six months ended June 30,
			2022				2021	2022	2021
		Concentrate sales	$	11,189 $				- $	20,978 $			-
		Provisional pricing adjustments	(1,819)				-	(558)	29
			$	9,370 $				- $	20,420 $			29

		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. Stand-by costs consists of care and maintenance
		costs incurred during the work stoppage at the Avino Mine during the six months ended June 30, 2021.

		Cost of sales is based on the weighted average cost of inventory sold for the periods and consists of the
		following:

			Three months ended June 30,	Six months ended June 30,
			2022				2021	2022	2021
		Production costs	$	4,987 $				- $	10,834 $			-
		Stand-by and ramp-up costs								-	554	-	800
		Depreciation and depletion	481				463	940	926
			$	5,468 $				1,017 $	11,774 $			1,726


	- 23 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the six months ended June 30, 2022 and 2021
(Expressed in thousands of US dollars, except where otherwise noted)

17. GENERAL AND ADMINISTRATIVE EXPENSES

		General and administrative expenses on the condensed consolidated interim statements of operations
		consist of the following:


				Three months ended June 30,	Six months ended June 30,
				2022					2021	2022	2021
		Salaries and benefits		$	364 $					405 $	802 $	742
		Office and miscellaneous	420					85	594	241
		Management and consulting fees	119					132	235	287
		Investor relations	98					131	150	155
		Travel and promotion	36					11	46	19
		Professional fees	204					97	412	240
		Directors fees	45					48	86	90
		Regulatory and compliance fees	33					38	80	78
		Depreciation	37					30	67	59
				$	1,356 $					977 $	2,472 $	1,911


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:

					June 30,				December 31,
					2022			2021
		Not later than one year				$	90 $			96
		Later than one year and not later than five years			336			330
		Later than five years			437			462
						$	863 $			888

Office lease payments recognized as an expense during the six months ended June 30, 2022, total ed $8
(June 30, 2021 - $8).


	- 24 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the six months ended June 30, 2022 and 2021
(Expressed in thousands of US dollars, except where otherwise noted)

19. SUPPLEMENTARY CASH FLOW INFORMATION


			June 30,	June 30,
			2022	2021
		Net change in non-cash working capital items:
		Inventory			$	(1,409) $	(405)
		Prepaid expenses and other assets			(243) (199)
		Taxes recoverable			214 (1,676)
		Taxes payable			534 (7)
		Accounts payable and accrued liabilities			1,542	194
		Amounts receivable			388 2
		Amounts due to related parties			(36) 25
					$ 990 $	1,284

			June 30,	June 30,
			2022	2021
		Interest paid			$		48 $	60
		Taxes paid			$	- $		192
		Equipment acquired under finance leases and
		equipment loans			$	1,293			$	-

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 four (December 31, 2021 – two)
		counterparties (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 June 30, 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 June 30, 2022, in the amount of $12,791
	- 25 -

AVINO SILVER & GOLD MINES LTD.

Notes to the unaudited condensed consolidated interim financial statements

For the six months ended June 30, 2022 and 2021

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

and working capital of $14,365 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 June 30, 2022, are

summarized as follows:

Less Than

More Than 5

Total

1 Year

1-5 years

Years

Accounts payable and

accrued liabilities

$ 5,107

$ -

Amounts due to related

parties

125

Minimum rental and lease

payments

863

336

437

Note payable

5,000

Finance lease obligations

1,937

860

1,077

Total

$ 13,032

$ 11,182

$ 1,413

$ 437

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 following monetary assets and liabilities are denominated in Mexican pesos and Canadian dol ars:

- 26 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the six months ended June 30, 2022 and 2021
(Expressed in thousands of US dollars, except where otherwise noted)

			June 30, 2022	December 31, 2021
			MXN		CDN	MXN		CDN
		Cash					$	5,711 $					283 $	3,576 $		1,450
		Long-term investments	-				3,436				-	4,976
		Reclamation bonds	-							6	-	6
		Amounts receivable	-							115	-	33
		Accounts payable and
		accrued liabilities	(19,447)					(84)	(57,604)						(211)
		Due to related parties	-							(195)	-	(206)
		Finance lease obligations	-							(408)	(1)	(394)
		Net exposure	(13,736)		3,153	(54,029)		5,654
		US dollar equivalent					$	(687) $				2,447 $	(2,363) $		(4,054)

		Based on the net US dollar denominated asset and liability exposures as at June 30, 2022, a 10%
		fluctuation in the US/Mexican and Canadian/US exchange rates would impact the Company’s earnings
		for the six months ended June 30, 2022, by approximately $154 (year ended December 31, 2021 - $143).
		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 June 30, 2022, 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 $14 (December 31, 2021 - $26).

		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 June 30, 2022, a 10% change in market prices would have an
		impact on net earnings (loss) of approximately $267 (December 31, 2021 - $330).

		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).


	- 27 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the six months ended June 30, 2022 and 2021
(Expressed in thousands of US dollars, except where otherwise noted)

		The following 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 June 30, 2022:

			Level 1	Level 2	Level 3
		Financial assets
		Cash	$		12,791 $				- $	-
		Amounts receivable						-	820				-
		Long-term investments			2,667				-	-
		Total financial assets	$ 15,458 $ 820 $							-
		Financial liabilities
		Warrant liability						-	-	(347)
		Total financial liabilities	$ - $						- $	(347)

		The Company uses Black-Scholes model to measure its Level 3 financial instruments. As at June 30,
		2022, 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 six months ended June
		30, 2022 and the year ended December 31, 2021, see Note 13.

21. SEGMENTED INFORMATION

		The Company’s revenues for the three and six months ended June 30, 2022 are all attributable to Mexico,
		from shipments of concentrate produced by the Avino Mine, and is considered to be one single reportable
		operating segment.

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


									Three months ended June 30,	Six months ended June 30,
	2022					2021	2022	2021
		Silver	$ 3,372 $ -			$ 7,268	$ 15
		Copper	5,206					-	12,259				9
		Gold	2,389					-	4,831				5
		Penalties, treatment costs and refining
		charges							(1,597)	-	(3,938)			-
		Total revenue from mining operations	$ 9,370		$ - $ 20,420		$ 29


		For the three and six months ended June 30, 2022, the Company had four customers (June 30, 2021 – one
		customer) that accounted for total revenues as follows:

									Three months ended June 30,	Six months ended June 30,
	2022					2021 2022	2021
		Customer #1							$ 8,874	$ - $ 17,859		$ -
		Customer #2							514	- 1,746		-
		Other customers							(18)	- 815		29
		Total revenue from mining operations $ 9,370	$ - $ 20,420		$ 29


	- 28 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the six months ended June 30, 2022 and 2021
(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:

				December 31,
			June 30, 2022		2021
		Exploration and evaluation assets - Mexico	$			46,074	$	11,052
		Exploration and evaluation assets - Canada					1	1
		Total exploration and evaluation assets	$			46,075	$	11,053

			June 30,	December 31,
						2022	2021
		Plant, equipment, and mining properties - Mexico	$			40,242	$	35,390
		Plant, equipment, and mining properties - Canada				305	285
		Total plant, equipment, and mining properties	$			40,547	$	35,675


	- 29 -