Enhanced Investments - Financial Portal

Published: 2022-05-11












		AVINO SILVER & GOLD MINES LTD.


		Condensed Consolidated Interim Financial Statements

		For the three months ended March 31, 2022 and 2021

MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING

The condensed consolidated interim financial statements of Avino Silver & Gold Mines Ltd. (the “Company”) are

the responsibility of the Company’s management. The condensed consolidated interim financial statements are

prepared in accordance with International Financial Reporting Standards as issued by the International

Accounting Standards Board, and reflect management’s best estimates and judgments based on information

currently available.

Management has developed and is maintaining a system of internal controls to ensure that the Company’s

assets are safeguarded, transactions are authorized and properly recorded, and financial information is reliable.

The Board of Directors is responsible for ensuring that management fulfil s its responsibilities. The Audit

Committee reviews the results of the annual audit and reviews the condensed consolidated interim financial

statements prior to their submission to the Board of Directors for approval.

The condensed consolidated interim financial statements as at March 31, 2022, and for the periods ended

March 31, 2022 and 2021, have not been audited by the Company’s independent auditors.

“David Wolfin”

“Nathan Harte”

David Wolfin

Nathan Harte, CPA

President & CEO

Chief Financial Officer

May 11, 2022


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

				March 31, 2022		December 31,
			Note		(unaudited)		2021

ASSETS
Current assets
Cash									$					11,686	$	24,765
Amounts receivable														2,602		1,208
Taxes recoverable			5					4,246		3,364
Prepaid expenses and other assets														1,297		962
Inventory			6					4,832		5,179
Total current assets														24,663		35,478
Exploration and evaluation assets			8					44,685		11,053
Plant, equipment and mining properties			10					38,727		35,675
Long-term investments			7					3,332		3,939
Other assets													6		133
Total assets									$	111,413	$	86,278

LIABILITIES
Current liabilities
Accounts payable and accrued liabilities									$					4,609	$		3,260
Amounts due to related parties			11(b)					151		163
Taxes payable													4		31
Note payable			12					4,674		-
Current portion of finance lease obligations														697		389
Total current liabilities														10,135		3,843
Finance lease obligations														1,123		680
Warrant liability			13					2,773		741
Reclamation provision			14					758		726
Deferred income tax liabilities														3,233		1,781
Total liabilities														18,022		7,771

EQUITY
Share capital			15		143,649		129,953
Equity reserves														9,758		9,573
Treasury shares (14,180 shares, at cost)														(97)		(97)
Accumulated other comprehensive loss														(4,612)		(4,969)
Accumulated deficit										(55,307)		(55,953)
Total equity														93,391		78,507
Total liabilities and equity									$	111,413	$	86,278

Commitments – Note 18

Subsequent Events – Note 21


Approved by the Board of Directors on May 11, 2022:
	Gary Robertson 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			2022	2021
Revenue from mining operations			16				$	11,050			$	29
Cost of sales			16		6,306				709
Mine operating income (loss)					4,744				(680)

Operating expenses:
General and administrative expenses			17		1,116				934
Share-based payments			15		200				616
Income (loss) before other items					3,428				(2,230)

Other items:
Interest and other					(7)				22
Loss on long-term investments												(686)	(68)
Fair value adjustment on warrant liability			13		233				788
Realized loss on warrants exercised					-				(1,005)
Unrealized foreign exchange gain (loss)					(605)				283
Project evaluation expenses					(81)				-
Finance cost					(13)				(21)
Accretion of reclamation provision			14		(10)				(11)
Interest expense					(21)				(2)
Income (loss) from continuing operations before income taxes					2,238				(2,244)

Income taxes:
Current income tax expense					(140)				(12)
Deferred income tax recovery (expense)					(1,452)				438
Income tax recovery (expense)					(1,592)				426
Net income (loss)					646				(1,818)

Other comprehensive income (loss):
Currency translation differences					357				94
Total comprehensive income (loss)							$	1,003		$	(1,724)
Income (loss) per share			15(e)
Basic							$	0.01		$	(0.02)
Diluted							$	0.01		$	(0.02)
Weighted average number of common
shares outstanding			15(e)
Basic				103,819,481							96,204,148
Diluted				107,234,957							96,204,148
	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, 2021				89,568,682	$108,303	$ 9,951				$ (97)					$ (4,810)	$ (54,339)	$ 59,008

Common shares issued for cash:				675,145							-		-	-	-	-				-
At the market issuances				9,050,000	17,244								-	-	-	-	17,244
Exercise of warrants				912,562	1,724								-	-	-	-	1,724
Exercise of options				264,000							364	(126)					-	-	-	238
Issuance costs										- (310)			-	-	-	-	(310)
Share-based payments										-	-	616					-	-	-	616
Net loss for the period										-	-		-	-	-						(1,818) (1,818)
Currency translation differences										-	-		-	-								94	- 94
Balance, March 31, 2021				99,795,244	$ 127,325	$ 10,441			$ (97)				$ (4,716)	$ (56,157)	$ 76,796
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	14,000,000	13,650								-	-	-	- 13,650
Share-based payments			15							-	-	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


	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		2022	2021

Cash generated by (used in):

Operating Activities
Net income (loss)				$ 646				$ (1,818)
Adjustments for non-cash items:
Deferred income tax recovery				1,452			(438)
Depreciation and depletion				490			492
Accretion of reclamation provision				10			11
Loss on investments				686			68
Unrealized foreign exchange loss (gain)				392			(234)
Unwinding of fair value adjustment				9			(7)
Fair value adjustment on warrant liability				(233) (788)
Realized loss on warrants exercised				-			1,005
Share-based payments				200			616

				3,652			(1,093)

Net change in non-cash working capital items			19	(202) (152)

				3,450			(1,245)


Financing Activities
Shares and units issued for cash, net of issuance costs				30			17,892
Term facility payments				-			(833)
Finance lease payments					(320)	(91)
Equipment loan payments				-		(54)

				(290) 16,914

Investing Activities
Exploration and evaluation expenditures					(85)	(219)
Additions to plant, equipment and mining properties					(853)	(185)
Acquisition of La Preciosa				(15,308) -

					(16,246)	(404)

Change in cash					(13,086)	15,265

Effect of exchange rate changes on cash					7	52

Cash, Beginning					24,765	11,713

Cash, Ending				$ 11,686				$ 27,030



	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, 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 materially 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 three months ended March 31, 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 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, 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 three months ended March 31, 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 three months ended March 31, 2022 and 2021
(Expressed in thousands of US dollars, except where otherwise noted - Unaudited)

		Future Changes in Accounting Policies Not Yet Effective as at March 31, 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 three months ended March 31, 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					13,650
		Share purchase warrants					2,240
		Total purchase consideration					35,856
		Transaction costs			175
		Total acquisition cost								$		36,031

		Cash								$	168
		Other current assets										1,121
		Plant and equipment										1,621
		Exploration and evaluation assets										33,449
		Accounts payable										(328)
		Net assets acquired								$		36,031

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,
								2022	2021
		VAT recoverable	$					1,573 $	790
		GST recoverable		25	26
		Income taxes recoverable						2,648	2,548
			$					4,246 $	3,364

6. INVENTORY

						March 31,	December 31,
				2022			2021
		Process material stockpiles	$					1,356 $	1,083
		Concentrate inventory						1,656	2,467
		Materials and supplies						1,820	1,629
			$					4,832 $	5,179

		The amount of inventory recognized as an expense for the three months ended March 31, 2022 total ed
		$6,598 (March 31, 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 three months ended March 31, 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 the three months ended March 31, 2022 are summarized as fol ows:

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

							2022	exchange	for the				2022
							period
Talisker Resources Common
Shares			$				3,880	$						-	$			48	$	(689)	$	3,239
Silver Wolf Exploration Ltd.
Common Shares							59		31	-	3	93
			$				3,939	$ 31			$				48	$ (686)	$ 3,332

		During the three months ended March 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.

		For the year ended December 31, 2021:

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

							2021	exchange for the period					2021
Talisker Resources Common
Shares			$				4,176	$						-	$			21	$	(317)	$	3,880
Silver Wolf Exploration Ltd.
Common Shares	-								109	2	(52)	59
			$				4,176	$ 109			$				23	$ (369)	$ 3,939

		During the year ended December 31, 2021, the Company received 131,718 common shares as part of the
		terms in the Option Agreement with Silver Wolf Exploration Ltd., as wel as 300,000 share purchase
		warrants at an exercise price of C$0.20. On October 21, 2021 the Company exercised the 300,000 share
		purchase warrants. 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.

		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 three months ended March 31, 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							-	33,449					-		33,449
		Drilling and exploration							123					-						-	123
		Assessments and taxes							71					-						-	71
		Effect of movements in exchange rates	14							-				-		14
		Option income	(25)							-				-		(25)

		Balance, March 31, 2022						$ 11,235	$ 33,449		$		1	$	44,685

		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 three months ended March 31, 2022, 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
	- 12 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2022 and 2021
(Expressed in thousands of US dollars, except where otherwise noted - Unaudited)

		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, 2023
			(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, 2024;
		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.

		(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.
	- 13 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2022 and 2021
(Expressed in thousands of US dollars, except where otherwise noted - Unaudited)


		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 three months ended March 31, 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.

		(c) British Columbia, Canada

		(i) Minto and Olympic-Kelvin properties

		Subsequent to March 31, 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.

		(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 March 31, 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.
	- 14 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 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 January 1, 2021		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	73		9	240		1,202	420	1,937	3,881
																Effect of movements in
																exchange rates	8		4	-						-	-	(6)			6
Balance at March 31, 2022		13,119		608	575							15,442			19,033	13,709	62,486


ACCUMULATED DEPLETION
AND DEPRECIATION
Balance at January 1, 2021		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	54		39	209		126	317	90	835
																Effect of movements in
																exchange rates	-		-	-						-	-	-			-
Balance at March 31, 2022		8,910		333	476							5,070			6,984	1,986	23,759

NET BOOK VALUE
At March 31, 2022		4,209		275	99							10,372			12,049	11,723	38,727
At December 31, 2021		4,182		301	68							9,296			11,946	9,882	35,675
At January 1, 2021		4,506		376	91							8,048			12,186	9,639	34,846
	- 15 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2022 and 2021
(Expressed in thousands of US dollars, except where otherwise noted)

		Included in Buildings above are assets under construction of $6,798 as at March 31, 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 March 31, 2022, plant, equipment and mining properties included a net carrying amount of $2,321
		(December 31, 2021 - $1,306 for mining equipment and right of use assets under finance 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 months ended March 31, 2022
		and 2021 is as follows:
			Three months ended March 31,
				2022	2021
		Salaries, benefits, and consulting fees				$	439		$	235
		Share‐based payments		157	488
						$	596		$	723

		(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,
							2022	2021
		Oniva International Services Corp.				$	108		$	107
		Directors		43	56
						$	151		$	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 three months ended March 31, 2022, the
		Company paid $126 (March 31, 2021 - $59) 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.


	- 16 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2022 and 2021
(Expressed in thousands of US dollars, except where otherwise noted)

		The transactions with Oniva during the three months ended March 31, 2022 and 2021 are summarized
		below:

			March 31,		March 31,
				2022		2021
		Salaries and benefits					$	220			$	191
		Office and miscellaneous		97		105
							$	317			$	296

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:

							March 31,	December 31,
									2022		2021
		Balance at beginning of the period							$	-			$	-
		Additions								4,665				-
		Repayments								-				-
		Unwinding of fair value adjustment								9				-
		Balance at end of the period								4,674				-
		Less: Current portion								(4,674)				-
		Non-current portion							$	-			$	-


	- 17 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 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 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,
				2022		2021
		Balance at beginning of the period	$	741	$	2,295
		Warrants issued	2,240			-
		Fair value adjustment		(233)		(1,581)
		Effect of movement in exchange rates		25		27
		Balance at end of the period	$	2,773		$	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, March 31, 2022					8,950,412	$1.03

					All Warrants
								Outstanding and Exercisable
								Exercise Price	March 31,		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 March 31, 2022, the weighted average remaining contractual life of warrants outstanding was 1.48
		years (December 31, 2021 – 1.73 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,
			2022			2021
		Weighted average assumptions:
		Risk-free interest rate	2.17%			0.91%
		Expected dividend yield		0%		0%
		Expected warrant life (years)	1.48			1.73
		Expected stock price volatility	73.94%			83.13%
		Weighted average fair value	$0.34			$0.38

		During the three months ended March 31, 2022, the Company recorded no realized loss on the exercise of
		warrants (March 31, 2021 - $1,005, as result of the exercise of 912,562 warrants for the issuance of
		912,562 common shares).
	- 18 -

AVINO SILVER & GOLD MINES LTD.

Notes to the unaudited condensed consolidated interim financial statements

For the three months ended March 31, 2022 and 2021

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

14. RECLAMATION PROVISION

Management’s estimate of the reclamation provision at March 31, 2022, is $758 (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 8.41% (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:

March 31,

December 31,

2022

2021

Balance at beginning of the period

726 $

808

Changes in estimates

(105)

Unwinding of discount related to continuing operations

Effect of movements in exchange rates

(24)

Balance at end of the period

758 $

726

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, 2021, 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, representing the closing price on the NYSE American on March 21, 2022, the date

of the issuance and closing.

During the three months ended March 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.

(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.

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

- 19 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2022 and 2021
(Expressed in thousands of US dollars, except where otherwise noted)

		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		2,365,000				$1.20
		Exercised		(48,000)				$0.79
Stock options outstanding, March 31, 2022				5,156,000				$1.47
Stock options exercisable, March 31, 2022				2,791,000				$1.70

		The fol owing table summarizes information about the stock options outstanding and exercisable at
		March 31, 2021:

										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	0.47			880,000	0.47
August 28, 2023									$1.30			105,000	1.41			105,000	1.41
August 21, 2024									$0.79			126,000	2.39			126,000	2.39
August 4, 2025									$1.64			1,680,000	3.35			1,680,000	3.35
March 25, 2027									$1.20			2,365,000	4.99		-		4.99
															5,156,000	3.55		2,791,000	2.33

		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,
						2022		2021
		Weighted average assumptions:
		Risk-free interest rate				2.49%	-%
		Expected dividend yield			0%		-%
		Expected warrant life (years)				5.00	-
		Expected stock price volatility				59.97%	-%
		Expected forfeiture rate				20%	-%
		Weighted average fair value				$0.63	-

	- 20 -

AVINO SILVER & GOLD MINES LTD.

Notes to the unaudited condensed consolidated interim financial statements

For the three months ended March 31, 2022 and 2021

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

During the three months ended March 31, 2022, the Company charged $32 (three months ended March

31, 2021 - $231) 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

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

RSUs outstanding, March 31, 2022

3,238,477

$1.25

The fol owing table summarizes information about the RSUs outstanding at March 31, 2022:

Issuance Date

Price (C$)

Number of RSUs Outstanding

August 21, 2019

$0.79

539,733

August 4, 2020

$1.64

899,744

March 23, 2022

$1.19

1,799,000

3,238,477

During the three months ended March 31, 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 three months ended March 31, 2022, the Company charged $168 (March 31, 2021 - $385) 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.

- 21 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2022 and 2021
(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,
				2022	2021
		Net income (loss) for the period				$ 646 $ (1,818)
		Basic weighted average number of shares outstanding	103,819,481 96,204,148
		Effect of dilutive share options, warrants, and RSUs	3,415,476				-
		Diluted weighted average number of shares outstanding 107,234,957 96,204,148
		Basic loss per share				$ 0.01 $ (0.02)
		Diluted loss per share				$ 0.01 $ (0.02)

16. REVENUE AND COST OF SALES

		The Company’s revenues for the three months ended March 31, 2022 and 2021, are al attributable to
		Mexico, from shipments of concentrate from the Avino Mine, and processing of Historical Above Ground
		Stockpiles.
			March 31,					March 31,
				2022	2021
		Concentrate sales				$	9,789		$	-
		Provisional pricing adjustments				1,261 29
						$	11,050		$	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 three months ended March 31, 2021.

		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,
				2022	2021
		Production costs				$	5,847		$	-
		Stand-by costs		-	246
		Depreciation and depletion		459	463
						$	6,306		$	709


	- 22 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 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:

			March 31,		March 31,
				2022		2021
		Salaries and benefits					$	438			$	337
		Office and miscellaneous		174		156
		Management and consulting fees		116		155
		Investor relations		52		24
		Travel and promotion		10		8
		Professional fees		208		143
		Directors fees		41		42
		Regulatory and compliance fees		47		40
		Depreciation		30		29
							$	1,116			$	934

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,
			2022			2021
		Not later than one year					$	94 $		96
		Later than one year and not later than five years		336		330
		Later than five years		454		462
							$	884 $		888

Office lease payments recognized as an expense during the three months ended March 31, 2022, total ed
$16 (March 31, 2021 - $12).

19. SUPPLEMENTARY CASH FLOW INFORMATION

			March 31,		March 31,
			2022			2021
		Net change in non-cash working capital items:
		Inventory					$	339	$	(74)
		Prepaid expenses and other assets							(327) (68)
		Taxes recoverable							210 (165)
		Taxes payable							(28) (7)
		Accounts payable and accrued liabilities							1,013	308
		Amounts receivable							(1,394) (140)
		Amounts due to related parties							(15) (6)
							$ (202) $	(152)


	- 23 -

AVINO SILVER & GOLD MINES LTD.

Notes to the unaudited condensed consolidated interim financial statements

For the three months ended March 31, 2022 and 2021

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

March 31,

2022

2021

Interest paid

20 $

Taxes paid

- $

136

Equipment acquired under finance leases and

equipment loans

1,101

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)

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, 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, 2022, in the amount

of $11,686 and working capital of $14,528 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.

- 24 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2022 and 2021
(Expressed in thousands of US dollars, except where otherwise noted)

		The maturity profiles of the Company’s contractual obligations and commitments as at March 31, 2022,
		are summarized as fol ows:
			Less Than	More Than 5
			Total	1 Year	1-5 years		Years
		Accounts payable and
		accrued liabilities				$ 4,609	$ 4,609	$ -	$ -
		Amounts due to related
		parties	151						151	-	-
		Minimum rental and lease
		payments	884						94	336	454
		Note payable	5,000	5,000						-	-
		Finance lease obligations	1,936						771	1,165		-
		Total				$ 12,580	$ 10,625	$ 1,501	$ 454

		(c) Market Risk

		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, 2022	December 31, 2021
						MXN	CDN	MXN	CDN
		Cash								$	3,096 $	1,039 $	3,576 $	1,450
		Long-term investments	-	4,164 -			4,976
		Reclamation bonds	-						6 -	6
		Amounts receivable	499						31 -	33
		Accounts payable and
		accrued liabilities				(12,574)	(464)	(57,604)		(211)
		Due to related parties	-	(188)						-	(206)
		Finance lease obligations				(2,766)	(342)	(1)		(394)
		Net exposure				(11,745)	4,246	(54,029)		5,654
		US dollar equivalent								$	(587) $	3,398 $	(2,363) $	4,054

		Based on the net US dol ar denominated asset and liability exposures as at March 31, 2022, a 10%
		fluctuation in the US/Mexican and Canadian/US exchange rates would impact the Company’s earnings
	- 25 -

AVINO SILVER & GOLD MINES LTD.

Notes to the unaudited condensed consolidated interim financial statements

For the three months ended March 31, 2022 and 2021

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

for the three months ended March 31, 2022, by approximately $250 (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 March 31, 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 $84 (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 March 31, 2022, a 10% change in market prices would

have an impact on net earnings (loss) of approximately $333 (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).

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, 2022:

Level 1

Level 2

Level 3

Financial assets

Cash

11,686 $

- $

Amounts receivable

2,602

Long-term investments

3,332

Total financial assets

$ 15,018 $ 2,602 $

Financial liabilities

Warrant liability

(2,773)

Total financial liabilities

$ - $

- $

(2,773)

- 26 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2022 and 2021
(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,
		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 three months ended
		March 31, 2022 and the year ended December 31, 2021, see Note 13.

21. SEGMENTED INFORMATION

		The Company’s revenues for the three months ended March 31, 2022 of $11,050 (March 31, 2021 - $29)
		are al attributable to Mexico, from shipments of concentrate produced by the Avino Mine and processed
		material from the Avino Historic Above Ground stockpiles.

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

			March 31,		March 31,
				2022		2021

		Silver					$ 3,896	$ 15
		Gold							2,442 5
		Copper							7,053 9
		Penalties, treatment costs and refining charges							(2,344) -

		Total revenue from mining operations					$ 11,050	$ 29


		For the three months ended March 31, 2022, the Company had four customers (March 31, 2021 – one
		customer) that accounted for total revenues as follows:

			March 31,		March 31,
				2022		2021

		Customer #1					$	8,985		$	-
		Customer #2	1,232			-
		Customer #3		844		-
		Customer #4		(11)		29

		Total revenue from mining operations					$	11,050		$	29



	- 27 -

AVINO SILVER & GOLD MINES LTD.

Notes to the unaudited condensed consolidated interim financial statements

For the three months ended March 31, 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:

March 31,

December 31,

2022

2021

Exploration and evaluation assets - Mexico

44,684

11,052

Exploration and evaluation assets - Canada

Total exploration and evaluation assets

44,685

11,053

March 31,

December 31,

2022

2021

Plant, equipment, and mining properties - Mexico

38,444

35,390

Plant, equipment, and mining properties - Canada

283

285

Total plant, equipment, and mining properties

38,727

35,675

22. SUBSEQUENT EVENTS

Option agreement – Subsequent to March 31, 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.

Share issuance for advisory services – Subsequent to March 31, 2022, the Company issued 1,075,000

common shares as settlement of accrued advisory services provided by Cantor Fitzgerald Canada

Corporate for the completion of the acquisition of La Preciosa.

- 28 -