Enhanced Investments - Financial Portal

Published: 2021-11-09












		AVINO SILVER & GOLD MINES LTD.


		Condensed Consolidated Interim Financial Statements

		For the nine months ended September 30, 2021 and 2020

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 September 30, 2021, and for the periods ended

September 30, 2021 and 2020, have not been audited by the Company’s independent auditors.

“David Wolfin”

“Nathan Harte”

David Wolfin

Nathan Harte, CPA

President & CEO

Chief Financial Officer

November 9, 2021


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

				September 30,
					2021		December 31,
			Note			(unaudited)		2020

ASSETS
Current assets
Cash									$	22,341	$	11,713
Amounts receivable										1,513		529
Taxes recoverable			4		3,300			5,044
Prepaid expenses and other assets										779		757
Inventory			5		4,553			1,659
Total current assets										32,486		19,702
Exploration and evaluation assets			7		10,917			10,052
Plant, equipment and mining properties			9		35,398			34,846
Long-term investments			6		3,304			4,176
Other assets										4		4
Total assets									$	82,109	$	68,780

LIABILITIES
Current liabilities
Accounts payable and accrued liabilities									$	3,079	$	2,068
Amounts due to related parties			10(b)		175			154
Taxes payable										5		7
Current portion of term facility			11		-			2,513
Current portion of equipment loans										-		72
Current portion of finance lease obligations										324		208
Total current liabilities										3,583		5,022
Finance lease obligations										733		278
Warrant liability			12		761			2,295
Reclamation provision			13		830			808
Deferred income tax liabilities										360		1,369
Total liabilities										6,267		9,772

EQUITY
Share capital			14		129,965			108,303
Equity reserves										9,494		9,951
Treasury shares (14,180 shares, at cost)										(97)		(97)
Accumulated other comprehensive loss										(4,938)		(4,810)
Accumulated deficit										(58,582)		(54,339)
Total equity										75,842		59,008
Total liabilities and equity									$	82,109	$	68,780


Commitments – Note 17

Subsequent Events – Note 21

Approved by the Board of Directors on November 9, 2021:
	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 Loss
(Expressed in thousands of US dollars, except per share amounts - Unaudited)

		Three months ended			Nine months ended
				September 30,		September 30,
			Note	2021			2020	2021		2020
Revenue from mining operations			15				$	1,881 $				2,659 $	1,910 $		14,615
Cost of sales			15					1,043				2,848	2,769		13,174
Mine operating income (loss)								838				(189)	(859)		1,441

Operating expenses
General and administrative expenses			16					815				693	2,726		2,063
Share-based payments			14					277				692	1,391		1,062
Loss before other items								(254)				(1,574)	(4,976)		(1,684)
Other items
Interest and other income									14	8	143			232
Loss on long-term investments								(1,103)				(1,231)	(1,002)		(181)
Fair value adjustment on warrant
liability			12					516				1,136	1,560		(13)
Realized loss on warrants exercised								-		(2,708)	(1,111)			(2,708)
Foreign exchange gain (loss)								716				(446)	(187)		(1,701)
Finance cost									(8)	(41)	(46)			(175)
Accretion of reclamation provision			13					(13)				(26)	(36)		(75)
Interest expense								(13)				(4)	(15)		(22)
Loss from continuing operations before
income taxes								(145)				(4,886)	(5,670)		(6,327)
Income taxes:
Current income tax expense								(13)				(28)	(25)		(90)
Deferred income tax recovery (expense)								(56)				327	1,009		487
Income tax recovery (expense)								(69)				299	984		397
Net loss from continuing operations								(214)				(4,587)	(4,686)		(5,930)
Loss from discontinued operations and
on disposal																-	(2)	-	(167)
Net loss								(214)				(4,589)	(4,686)		(6,097)

Other comprehensive income (loss)
Items that may be reclassified subsequently to income or loss:
Currency translation differences								(1,235)				455	(128)		(92)
Total comprehensive loss							$	(1,449) $				(4,134) $	(4,814) $		(6,189)
Loss per share from continuing
operations			14(e)
Basic								$(0.00)				$(0.05)	$(0.05)		$(0.07)
Diluted								$(0.00)				$(0.05)	$(0.05)		$(0.07)
Loss per share			14(e)
Basic								$(0.00)				$(0.05)	$(0.05)		$(0.08)
Diluted								$(0.00)				$(0.05)	$(0.05)		$(0.08)
Weighted average number of
common shares outstanding			14(e)
Basic							101,559,946 87,093,054 99,457,201 81,027,129
Diluted							101,559,946 87,093,054 99,457,201 81,027,129
	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, 2020				76,592,388	$ 96,396	$ 9,391			$ (97)					$ (4,563)	$ (47,204)	$ 53,923

Common shares issued for cash:
At the market issuances													14	6,730,054								4,940										-		-		-		-		4,940
Exercise of warrants													14	4,659,194								6,528								(116)					-		-		-		6,412
Exercise of options													14														48,000		44		(15)					-		-		-					29
Common shares issued for services			14											675,145		-				-		-		-		-					-
Issuance costs																14									-		(254)										-		-		-		-		(254)
Options cancelled or expired																					-		-		(433)					-		-											433			-
Carrying value of RSUs exercised														863,901		650		(650)					-		-		-					-
Share-based payments													14								-		-		1,062					-		-		-		1,062
Net loss for the period																					-		-				-		-		-											(6,097)		(6,097)
Currency translation differences									-		-				-		-													(92)		-		(92)
Balance, September 30, 2020				89,568,682						$ 108,304								$ 9,239					$ (97)				$ (4,655)		$ (52,868)		$ 59,923
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	14	10,050,000	18,497										-	-	-	-	18,497
																		Exercise of warrants	14	1,030,362	1,911										-	-	-	-	1,911
																		Exercise of options	14	264,000								364	(127)					-	-	-	237
Issuance costs									- (388)				-	-	-	- (388)
Options cancelled or expired									-	-	(443)					-	-										443	-
Carrying value of RSUs exercised				1,330,167					1,278	(1,278)					-		-		-					-
Share-based payments			14						-	-	1,391					-	-	-	1,391
Net loss for the period									-	-			-	-	-										(4,686) (4,686)
Currency translation differences									-	-			-	-												(128)	- (128)
Balance, September 30, 2021				102,243,211	$ 129,965	$ 9,494		$ (97)				$ (4,938)	$ (58,582)	$ 75,842


	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)


			Nine months ended September 30,
			Note	2021	2020

Cash generated by (used in):

Operating Activities
Net loss								$ (4,686)	$ (6,097)
Adjustments for non-cash items:
Deferred income tax recovery				(1,009)	(487)
Depreciation and depletion				1,338	1,779
Accretion of reclamation provision				36	75
Unrealized loss on investments				1,002	181
Unrealized foreign exchange loss				26	528
Unwinding of fair value adjustment on term facility				(13)	(42)
Fair value adjustment on warrant liability				(1,560)	13
Realized loss on warrants exercised				1,111	2,708
Share-based payments				1,391	1,062

				(2,364)	(280)

Net change in non-cash working capital items			18	(1,045)	(953)

				(3,409)	(1,233)


Financing Activities
Shares and units issued for cash, net of issuance costs				18,110	4,686
Proceeds from option exercise				237	29
Proceeds from warrant exercise				803	3,705
Term facility payments				(2,500)	(2,500)
Finance lease payments				(437)	(596)
Equipment loan payments				(72)	(163)

				16,141	5,161

Investing Activities
Exploration and evaluation expenditures				(981)	(180)
Additions to plant, equipment and mining properties				(1,152)	(889)
Proceeds from sale of long-term investments						-	1,255
Purchase of long-term investments						-	(1,177)

				(2,133)	(991)

Change in cash				10,599	2,937

Effect of exchange rate changes on cash				29	(69)

Cash, Beginning				11,713	9,625

Cash, Ending								$ 22,341	$ 12,493



	Supplementary Cash Flow Information (Note 18)

	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 nine months ended September 30, 2021 and 2020
(Expressed in thousands of US dollars, except where otherwise noted)

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 owns interests in mineral properties located in Durango, Mexico, as well as in British
		Columbia and Yukon, Canada. On October 1, 2012, the Company commenced production of silver and gold
		at levels intended by management at its San Gonzalo Mine, and on July 1, 2015, the Company commenced
		production of copper, silver, and gold at levels intended by management at its Avino Mine; both mines are
		located on the historic Avino property in the state of Durango, Mexico.

		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 nine months ended September 30, 2021 and 2020
(Expressed in thousands of US dollars, except where otherwise noted)

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,
		2020, 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 nine months ended September 30, 2021, are consistent with
		those applied and disclosed in Note 2 to the Company’s audited consolidated financial statements for the
		year ended December 31, 2020.

	- 7 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2021 and 2020
(Expressed in thousands of US dollars, except where otherwise noted)

		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


		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:
		Interest Rate Benchmark Reform – Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS
		16)
		The amendments in Interest Rate Benchmark Reform – Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7,
		IFRS 4 and IFRS 16) introduce a practical expedient for modifications required by the reform, clarify that
		hedge accounting is not discontinued solely because of the IBOR reform, and introduce disclosures that
		allow users to understand the nature and extent of risks arising from the IBOR reform to which the entity is
		exposed to and how the entity manages those risks as wel as the entity’s progress in transitioning from
		IBORs to alternative benchmark rates, and how the entity is managing this transition.
		The amendments were applied effective January 1, 2021, and did not have a material impact on the
		Company’s financial statements.
		Future Changes in Accounting Policies Not Yet Effective as at September 30, 2021:
		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. The Company wil recognize the cumulative
	- 8 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2021 and 2020
(Expressed in thousands of US dollars, except where otherwise noted)

		effect of initial y applying the amendments as an adjustment to the opening balance of retained earnings at
		the beginning of that earliest period presented. This amendment wil impact the Company’s accounting for
		proceeds from mineral sales prior to reaching commercial production at levels intended by management.
		Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)
		The amendments aim to promote consistency in applying the requirements by helping companies determine
		whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date
		should be classified as current (due or potentially due to be settled within one year) or non-current. The
		amendments are applied on or after the first annual reporting period beginning on or after January 1, 2023,
		with early adoption permitted. This amendment is not expected to have a material impact on the Company’s
		financial statements.
4. 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.

			September 30,		December 31,
				2021		2020
		VAT recoverable	$	699 $		2,328
		GST recoverable		23		16
		Income taxes recoverable		2,578		2,700
			$	3,300 $		5,044

5. INVENTORY

			September 30,		December 31,
				2021		2020
		Process material stockpiles	$	854 $		373
		Concentrate inventory		2,237		64
		Materials and supplies		1,462		1,222
			$	4,553 $		1,659

		The amount of inventory recognized as an expense for the nine months ended September 30, 2021 total ed
		$2,769 (September 30, 2020 – $12,299). See Note 15 for further details.

6. 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	September 30,

										2020	Exchange for the period	2021
Talisker Resources Common
Shares							$	4,176	$					-	$	14	$	(951)	$	3,239
Silver Wolf Exploration Ltd.
Common Shares										-	41	(1)	(15)						25
Silver Wolf Exploration Ltd.
Warrants										-	76	-	(36)						40
							$	4,176	$ 117					$	13	$	(1,002)	$ 3,304

	- 9 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2021 and 2020
(Expressed in thousands of US dollars, except where otherwise noted)

		On March 26, 2021, the Company received 131,718 common shares as part of the terms in the Option
		Agreement with Silver Wolf Exploration Ltd,, as well as 300,000 share purchase warrants at an exercise
		price of C$0.20. 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 7). 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 7 for full details of the Option Agreement, and Note 19(d) for valuation methodology for the share
		purchase warrants.

7. EXPLORATION AND EVALUATION ASSETS

		The Company has accumulated the fol owing acquisition, exploration and evaluation costs which are not
		subject to depletion:


			British Columbia
	Durango, Mexico		& Yukon, Canada	Total

		Balance, January 1, 2020	$				9,826 $	1 $	9,827

		Costs incurred during 2020:
		Drilling and exploration					146			-	146
		Assessments and taxes					83			-	83
		Effect of movements in exchange rates					(4)			-	(4)

		Balance, December 31, 2020	$				10,051 $	1 $	10,052
		Costs incurred during 2021:
		Drilling and exploration					910			-	910
		Assessments and taxes					69			-	69
		Effect of movements in exchange rates			3			-		3
		Option income			(117)			-		(117)

		Balance, September 30, 2021	$				10,916 $	1 $	10,917

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

		(a) Durango, 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.


	- 10 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2021 and 2020
(Expressed in thousands of US dollars, except where otherwise noted)

		(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”)

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

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

			a. C$50 in common shares of Silver Wolf within 30 days of the Approval Date (received on March
			26, 2021 – see Note 6 for details);
			b. A further C$50 in cash or shares of Silver Wolf at Avino’s discretion on or before the first
			anniversary of the Approval Date;
			c. A further C$100 in cash or shares of Silver Wolf at Avino’s discretion on or before the second
			anniversary of the Approval Date;
			d. A further C$200 in cash or shares of Silver Wolf at Avino’s discretion on or before the third
			anniversary of the Approval Date; and
			e. A further C$200 in cash or shares of Silver Wolf at Avino’s discretion on or before the fourth
			anniversary of the Approval Date; and

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

			a. C$50 on or before the first anniversary of the Approval Date;
			b. A further C$100 on or before the second anniversary of the Approval Date; and
			c. A further C$600 on or before the fourth anniversary of the Approval Date.

		Under the Option Agreement, the parties intend that the first two year’s payments (C$200 in cash or
		shares), and first C$150 in exploration work wil be firm commitments by Silver Wolf. Al 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.

		(i i) 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.
	- 11 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2021 and 2020
(Expressed in thousands of US dollars, except where otherwise noted)

		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) British Columbia, Canada

		(i) Minto and Olympic-Kelvin properties

		The Company’s mineral claims in British Columbia encompass two additional properties, Minto and
		Olympic-Kelvin, each of which consists of 100% owned Crown-granted mineral claims located in the
		Lil ooet Mining Division.
			(c) 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.

8. NON-CONTROLLING INTEREST

			At September 30, 2021, the Company had an effective 99.67% (December 31, 2020 - 99.67%) interest in its
			subsidiary Avino Mexico and the remaining 0.33% (December 31, 2020 - 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.
	- 12 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2021 and 2020
(Expressed in thousands of US dollars, except where otherwise noted)

9. 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, 2020		13,637		524	341							12,919			17,554	9,287	54,262
																Additions / Transfers	(493)		34	6		36	(71)	1,976	1,488
																Effect of movements in
																exchange rates		5		5	-						-	-	-	10
Balance at December 31, 2020		13,149		563	347							12,955			17,483	11,263	55,760
																Additions / Transfers	-		30	15		1,245	433	436	2,159
																Effect of movements in
																exchange rates	2		-	-						-	-	1			3
Balance at September 30,
2021		13,151		593	362							14,200			17,916	11,700	57,922


ACCUMULATED DEPLETION
AND DEPRECIATION
Balance at January 1, 2020		8,066		84	213							4,854			4,013	1,374	18,604
																Additions / Transfers	577		103	43		53	1,284	250	2,310
																Effect of movements in
																exchange rates	-		-	-						-	-	-			-
Balance at December 31, 2020		8,643		187	256							4,907			5,297	1,624	20,914
																Additions / Transfers	160		81	43		46	1,067	213	1,610
																Effect of movements in
																exchange rates	-		-	-						-	-	-			-
Balance at September 30,
2021		8,803		268	299							4,953			6,364	1,837	22,524

NET BOOK VALUE
At September 30, 2021		4,348		325	63							9,247			11,552	9,863	35,398
At December 31, 2020		4,506		376	91							8,048			12,186	9,639	34,846
At January 1, 2020		5,571		440	128							8,065			13,541	7,913	35,658
	- 13 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2021 and 2020
(Expressed in thousands of US dollars, except where otherwise noted)

		Included in Buildings above are assets under construction of $5,777 as at September 30, 2021 (December
		31, 2020 - $5,327) 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 September 30, 2021, plant, equipment and mining properties included a net carrying amount of $Nil
		(December 31, 2020 - $442) for mining equipment under equipment loan, and $1,290 (December 31, 2020
		- $1,087 for mining equipment and right of use assets under finance lease.

10. 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 nine months ended
		September 30, 2021 and 2020 is as fol ows:

	Three months ended			Nine months ended
			September 30,		September 30,
						2021						2020	2021			2020
		Salaries, benefits, and
		consulting fees	$ 243					$ 190	$ 742				$ 523
		Share-based payments	230					249	1,133				625
									$ 473					$ 439	$ 1,875			$ 1,148

		(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 due to / (from) related parties:

									September 30,	December 31,
							2021				2020
		Oniva International Services Corp.							$	163	$						106
		Directors								43							48
		Silver Wolf Exploration Ltd.								(31)							-
									$	175	$						154

		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 nine months ended September 30, 2021,
		the Company paid $180 (September 30, 2020 - $166) 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.


	- 14 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2021 and 2020
(Expressed in thousands of US dollars, except where otherwise noted)

		The transactions with Oniva during the nine months ended September 30, 2021 and 2020 are
		summarized below:

	Three months ended			Nine months ended
			September 30,		September 30,
						2021						2020	2021			2020
		Salaries and benefits	$ 172 $ 143 $ 550						$ 461
		Office and miscellaneous	91					43	273				208
									$ 263					$ 186	$ 823		$ 669

11. TERM FACILITY

		In July 2015, the Company entered into a ten mil ion dollar term facility with Samsung C&T U.K. Limited
		(“Samsung”). Interest is charged on the facility at a rate of US dol ar LIBOR (3 month) plus 4.75%. The
		agreement was later amended in 2018 to extend the repayment period and modify the monthly payments.
		Other material terms of the facility remained unchanged. The Company is currently repaying the remaining
		balance in monthly instalments of $278 ending September 2021. The Company is committed to selling
		Avino Mine concentrate on an exclusive basis to Samsung until December 31, 2024.

		The facility is secured by the concentrates produced under the agreement and by 33% of the common
		shares of the Company’s wholly-owned subsidiary Compañía Minera Mexicana de Avino, S.A. de C.V.. The
		facility with Samsung relates to the sale of concentrates produced from the Avino Mine only.

		The continuity of the term facility with Samsung for the nine months ended September 30, 2021, and the
		year ended December 31, 2020, is as follows:

						September 30,	December 31,
										2021	2020
		Balance at beginning of the period				$				2,513	$			5,897
		Repayments								(2,500)				(3,333)
		Unwinding of fair value adjustment								(13)				(51)
		Balance at end of the period								-				2,513
		Less: Current portion								-				(2,513)
		Non-current portion				$				-	$			-


	- 15 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2021 and 2020
(Expressed in thousands of US dollars, except where otherwise noted)

12. 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:

			September 30,		December 31,
				2021		2020
		Balance at beginning of the period	$	2,295	$	1,579
		Fair value adjustment		(1,560)		650
		Effect of movement in exchange rates		26		66
		Balance at end of the period	$	761	$	2,295

		Continuity of warrants during the periods is as follows:
			Underlying	Weighted Average
			Shares		Exercise Price
		Warrants outstanding and exercisable, January 1, 2020	7,639,968			$0.79
		Exercised	(4,195,072)			$0.80
		Exercised	(464,122)			C$0.85
		Warrants outstanding and exercisable, December 31, 2020	2,980,774			$0.80
		Exercised	(1,030,362)			$0.80
		Warrants outstanding and exercisable, September 30, 2021	1,950,412			$0.80

					All Warrants
								Outstanding and Exercisable
									Exercise Price	September 30,	December 31,
		Expiry Date							per Share	2021	2020
		September 25, 2023					$0.80	1,950,412	2,980,774
								1,950,412	2,980,774

		As at September 30, 2021, the weighted average remaining contractual life of warrants outstanding was
		1.99 years (December 31, 2020 – 2.73 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:

			September 30,		December 31,
				2021		2020
		Weighted average assumptions:
		Risk-free interest rate		0.52%		0.20%
		Expected dividend yield		0%		0%
		Expected warrant life (years)		1.99		2.73
		Expected stock price volatility		86.88%		73.93%
		Weighted average fair value		$0.39		$0.77

		During the nine months ended September 30, 2021, the Company recorded a realized loss on the exercise
		of warrants of $1,111 as result of the exercise of 1,030,362 warrants for the issuance of 1,030,362 common
		shares.
	- 16 -

AVINO SILVER & GOLD MINES LTD.

Notes to the unaudited condensed consolidated interim financial statements

For the nine months ended September 30, 2021 and 2020

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

13. RECLAMATION PROVISION

Management’s estimate of the reclamation provision at September 30, 2021, is $829 (December 31, 2020

– $808), and the undiscounted value of the obligation is $1,252 (December 31, 2020 – $1,275).

The present value of the obligation was calculated using a risk-free interest rate of 5.96% (December 31,

2020 – 5.96%) and an inflation rate of 3.15% (December 31, 2020 – 3.15%). 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 for the nine months ended

September 30, 2021, and the year ended December 31, 2020, is as fol ows:

September 30,

December 31,

2021

2020

Balance at beginning of the period

808 $

1,524

Changes in estimates

(737)

Unwinding of discount related to continuing operations

Effect of movements in exchange rates

(14)

(78)

Balance at end of the period

830 $

808

14. SHARE CAPITAL AND SHARE-BASED PAYMENTS

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

(b) Issued:

(i) During the nine months ended September 30, 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 $388 in issuance costs during the period.

During the nine months ended September 30, 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 12

for valuation methodology of $US denominated warrants) of $1,111, and movements in foreign

exchange of $(24).

During the nine months ended September 30, 2021, the Company issued 264,000 common shares

following 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 nine months ended September 31, 2021, the Company issued 1,330,167 common shares

upon exercise of RSUs. As a result, $1,278 was recorded to share capital.

(ii) During the year ended December 31, 2020, the Company issued 6,730,054 common shares in an at-

the-market offering under prospectus supplement for gross proceeds of $4,940. The Company paid

a 3% cash commission of $148 on gross proceeds, for net proceeds of $4,792, and incurred an

additional $106 in issuance costs during the period.

During the year ended December 31, 2020, the Company issued 4,195,072 common shares

following the exercise of 4,195,072 warrants. As a result, $6,112 was recorded to share capital,

representing cash proceeds of $3,356, fair value of the warrants on the date of exercise (see Note

12 for valuation methodology for $US denominated warrants) of $2,733, and movements in foreign

exchange of $69.

- 17 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2021 and 2020
(Expressed in thousands of US dollars, except where otherwise noted)

		During the year ended December 31, 2020, the Company also issued 464,122 common shares
		following the exercise of 464,122 broker warrants. As a result, $416 was recorded to share capital,
		representing cash proceeds of $300 and the amount attributed to the warrants upon issuance in
		2019, representing $116.

		During the year ended December 31, 2020, the Company issued 675,145 common shares as
		settlement of accrued advisory services provided by Cantor Fitzgerald Canada Corporate (“Cantor”)
		for the completion of the sale of Bralorne. The value of these shares was accrued at December 31,
		2019; however, the shares were not issued until January 2020.

		During the year ended December 31, 2020, the Company issued 48,000 common shares fol owing
		the exercise of 48,000 options. As a result, $43 was recorded to share capital, representing cash
		proceeds of $28 and the fair value upon issuance of $15.

		During the year ended December 31, 2020, the Company issued 863,901 common shares upon
		exercise of RSUs. As a result, $650 was recorded to share capital.

			(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, 2020					2,638,500		$1.82
			Granted		1,700,000		$1.64
			Exercised		(48,000)		$0.79
			Cancelled / Forfeited		(807,500)		$1.70
Stock options outstanding, December 31, 2020				3,483,000			$1.77
			Exercised		(264,000)		$1.16
			Expired		(360,000)		$2.95
			Cancelled / Forfeited		(20,000)		$1.64
Stock options outstanding, September 30, 2021					2,839,000		$1.68
Stock options exercisable, September 30, 2021					2,839,000		$1.68


	- 18 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2021 and 2020
(Expressed in thousands of US dollars, except where otherwise noted)


		The fol owing table summarizes information about the stock options outstanding and exercisable at
		September 30, 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					0.97	880,000						0.97
August 28, 2023			$1.30			105,000					1.91	105,000						1.91
August 21, 2024			$0.79			174,000					2.89	174,000						2.89
August 4, 2025			$1.64			1,680,000					3.85	1,680,000				3.85
										2,839,000					2.83	2,839,000	2.83

		During the nine months ended September 30, 2021, the Company charged $362 (nine months ended
		September 30, 2020 - $361) 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, 2020													2,372,875	$0.94
		Granted											1,481,000	$1.64
		Exercised										(863,901)				$0.99
		Cancelled / Forfeited										(115,974)				$1.00
RSUs outstanding, December 31, 2020													2,874,000	$1.28
		Exercised											(1,330,167)	$1.22
		Cancelled / Forfeited										(12,000)				$1.64
RSUs outstanding, September 30, 2021													1,531,833	$1.33

		The fol owing table summarizes information about the RSUs outstanding at September 30, 2021:

		Issuance Date				Price (C$)									Number of RSUs Outstanding
		August 21, 2019	$0.79								552,500
		August 4, 2020	$1.64								979,333
									1,531,833
	- 19 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2021 and 2020
(Expressed in thousands of US dollars, except where otherwise noted)

		During the nine months ended September 30, 2021, no RSUs (year ended December 31, 2020 –
		1,481,000) were granted. For the RSUs issued in the year ended December 31, 2020, the weighted
		average fair value at the measurement date was C$1.64, based on the TSX market price of the
		Company’s shares on the date the RSUs were granted.

		During the nine months ended September 30, 2021, the Company charged $1,028 (September 30,
		2020 - $701) 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.

(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		Nine months ended
			September 30,	September 30,
			2021			2020	2021		2020
		Net loss from continuing operations
		for the period				$	(214)	$ (4,587)					$ (4,686)	$ (5,930)
		Net loss for the period				$	(214)	$ (4,589)					$ (4,686)	$ (6,097)
		Basic weighted average number of
		shares outstanding				101,559,946	87,093,054				99,457,201	81,027,129
		Effect of dilutive share options,
		warrants, and RSUs (‘000)	-			-	-		-
		Diluted weighted average number of
		shares outstanding				101,559,946	87,093,054				99,457,201	81,027,129
		Basic loss from continuing
		operations per share				$	(0.00)	$		(0.05)			$	(0.05)	$	(0.07)
		Diluted loss from continuing
		operations per share				$	(0.00)	$		(0.05)			$	(0.05)	$	(0.07)
		Basic loss per share				$	(0.00)	$		(0.05)			$	(0.05)	$	(0.08)
		Diluted loss per share				$	(0.00)	$		(0.05)			$	(0.05)	$	(0.08)

15. REVENUE AND COST OF SALES

		The Company’s revenues for the nine months ended September 30, 2021 and 2020 are al attributable to
		Mexico, from shipments of concentrate from the Avino Mine, and processing of Historical Above Ground
		Stockpiles.
			Three months ended		Nine months ended
			September 30,	September 30,
			2021			2020	2021		2020
		Concentrate sales				$	1,881 $			2,157 $	1,881 $			13,964
		Provisional pricing adjustments	-			502	29		651
						$	1,881 $			2,659 $	1,910 $			14,615

		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 consist of care and maintenance
		costs incurred during the work stoppage at the Avino Mine during the nine months ended September 30,
		2021.

	- 20 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2021 and 2020
(Expressed in thousands of US dollars, except where otherwise noted)

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

			Three months ended		Nine months ended
			September 30,	September 30,
			2021				2020	2021		2020
		Production costs					$	724 $			1,428 $	724 $	10,607
		Stand-by and ramp-up costs	-				875	800		875
		Depreciation and depletion	319				545	1,245		1,692

							$	1,043 $			2,848 $	2,769 $	13,174


16. GENERAL AND ADMINISTRATIVE EXPENSES

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

			Three months ended		Nine months ended
			September 30,	September 30,
			2021				2020	2021		2020
		Salaries and benefits					$	326 $			269 $	1,068 $	921
		Office and miscellaneous	92				78	333		137
		Management and consulting fees	124				88	411		294
		Investor relations	28				60	183		140
		Travel and promotion	10				5	29		41
		Professional fees	103				69	343		211
		Directors fees	43				53	133		126
		Regulatory and compliance fees	55				41	133		106
		Depreciation	34				30	93		87
							$	815 $			693 $	2,726 $	2,063

17. 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 10.

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:

					September 30,	December 31,
								2021	2020
		Not later than one year			$			64 $	20
		Later than one year and not later than five years						83	14
		Later than five years						156	3
					$			303 $	37

Office lease payments recognized as an expense during the nine months ended September 30, 2021,
totalled $11 (September 30, 2020 - $10).

	- 21 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2021 and 2020
(Expressed in thousands of US dollars, except where otherwise noted)

18. SUPPLEMENTARY CASH FLOW INFORMATION

			September 30,		September 30,
				2021		2020
		Net change in non-cash working capital items:
		Inventory	$	(2,896)	$	3,399
		Prepaid expenses and other assets		(22)		(187)
		Taxes recoverable		1,773		(1,266)
		Taxes payable		(2)		(42)
		Accounts payable and accrued liabilities		1,066		(2,890)
		Amounts receivable		(985)		224
		Other liabilities		-		(178)
		Amounts due to related parties		21		(13)
			$	(1,045)	$	(953)

			September 30,		September 30,
				2021		2020
		Interest paid	$	78	$	256
		Taxes paid	$	240 $		407
		Equipment acquired under finance leases and
		equipment loans	$	1,007	$	-

19. 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 one (December 31, 2020 – three)
		counterparty (see Note 20). 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 highly-rated 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 September 30, 2021, no amounts were held as collateral.




	- 22 -

AVINO SILVER & GOLD MINES LTD.

Notes to the unaudited condensed consolidated interim financial statements

For the nine months ended September 30, 2021 and 2020

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

(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 September 30, 2021, in the

amount of $22,341 and working capital of $28,903 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 term facility, equipment loans, 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 September 30,

2021, are summarized as follows:

Less Than

More Than 5

Total

1 Year

1-5 years

Years

Accounts payable and

accrued liabilities

$ 3,079

$ -

Amounts due to related

parties

175

Minimum rental and lease

payments

303

156

Finance lease obligations

1,167

398

769

Total

$ 4,724

$ 3,716

$ 852

$ 156

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 result in a material impact on the Company’s operations.

- 23 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2021 and 2020
(Expressed in thousands of US dollars, except where otherwise noted)

		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:

			September 30, 2021	December 31, 2020
			MXN		CDN	MXN		CDN
		Cash					$	7,017 $		2,655 $	36,896 $		2,831
		Long-term investments	-				4,210			-	5,317
		Reclamation bonds	-								6	-		6
		Amounts receivable	-								29	-		20
		Accounts payable and
		accrued liabilities	(11,775)						(302)	(22,972)					(157)
		Due to related parties	-								(263)				-	(196)
		Finance lease obligations	(582)						(385)	(1,543)					(448)
		Net exposure	(5,340)		5,951	12,381		7,373
		US dollar equivalent					$	(262) $		4,670 $			620 $	5,791

		Based on the net US dol ar denominated asset and liability exposures as at September 30, 2021, a 10%
		fluctuation in the US/Mexican and Canadian/US exchange rates would impact the Company’s earnings
		for the nine months ended September 30, 2021, by approximately $398 (year ended December 31,
		2020 - $589). 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 September 30, 2021, 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 $4 (December 31, 2020 - $2).

		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 September 30, 2021, a 10% change in market prices
		would have an impact on net earnings (loss) of approximately $330 (December 31, 2020 - $418).

		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.


	- 24 -

AVINO SILVER & GOLD MINES LTD.

Notes to the unaudited condensed consolidated interim financial statements

For the nine months ended September 30, 2021 and 2020

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

(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 September 30, 2021:

Level 1

Level 2

Level 3

Financial assets

Cash

22,341 $

- $

Amounts receivable

1,513

Long-term investments

3,304

Total financial assets

$ 25,645

1,513 $

Financial liabilities

Warrant liability

(761)

Total financial liabilities

$ - $

- $

(761)

The Company uses Black-Scholes model to measure its Level 3 financial instruments. As at September

30, 2021, the Company’s Level 3 financial instruments consisted of the Silver Wolf warrants and the

warrant liability.

For the Company’s warrant liability valuation and fair value adjustments during the years ended

December 31, 2021 and 2020, see Note 16 of the consolidated financial statements.

The Company’s Level 3 financial assets, which consists of warrants of Silver Wolf that were acquired

during the nine months ended September 30, 2021 (see Note 6 for long-term investments details and

Note 7 for details of the acquisition). The warrants are measured on acquisition and at September 30,

2021, using the following assumptions:

September 30,

March 11,

2021

Weighted average assumptions:

Risk-free interest rate

0.52%

0.26%

Expected dividend yield

Expected life (years)

2.45

3.00

Expected stock price volatility

128.00%

129.51%

Weighted average fair value at grant date

C$0.17

C$0.32

20. SEGMENTED INFORMATION

The Company’s revenues for the three and nine months ended September 30, 2021 of $1,881 and $1,910

(September 30, 2020 - $2,659 and $14,615) are all attributable to Mexico, from shipments of concentrate

produced by the Avino Mine and processed material from the Avino Historic Above Ground stockpiles.

- 25 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2021 and 2020
(Expressed in thousands of US dollars, except where otherwise noted)

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

	Three months ended			Nine months ended
			September 30,		September 30,
	2021					2020	2021			2020
		Silver	$ 683					$ 924		$ 698	$ 5,668
		Copper	398					1,344	407			7,823
		Gold	1,179					768	1,184			4,506
		Penalties, treatment costs and refining
		charges	(379)					(377)	(379)			(3,382)
		Total revenue from mining operations	$ 1,881					$ 2,659		$ 1,910	$ 14,615


		For the nine months ended September 30, 2021, the Company had one customer (September 30, 2020 –
		three customers) that accounted for total revenues as follows:

	Three months ended			Nine months ended
			September 30,		September 30,
	2021					2020	2021			2020
		Customer #1									$ 1,881	$ 2,310		$ 1,910	$ 11,194
		Customer #2	-			-	-			(18)
		Customer #3	-			314	-			3,179
		Customer #4	-			35	-			260
		Customer #5	-			-	-			-
		Customer #6	-			-	-			-
		Total revenue from mining operations $ 1,881				$ 2,659		$ 1,910	$ 14,615


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

						September 30,	December 31,
								2021	2020
		Exploration and evaluation assets - Mexico				$			10,916	$			10,051
		Exploration and evaluation assets - Canada						1	1
		Total exploration and evaluation assets				$			10,917	$			10,052

						September 30,	December 31,
								2021	2020
		Plant, equipment, and mining properties - Mexico				$			35,089	$			34,475
		Plant, equipment, and mining properties - Canada						309	371
		Total plant, equipment, and mining properties				$			35,398	$			34,846


	- 26 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2021 and 2020
(Expressed in thousands of US dollars, except where otherwise noted)

21. SUBSEQUENT EVENTS

		Acquisition of La Preciosa – On October 27, 2021, the Company announced it has entered into a share
		purchase agreement (the “Transaction”) to indirectly acquire through the purchase of the shares of certain
		holding companies, the La Preciosa Property (“La Preciosa”) from Coeur Mining, Inc. (“Coeur”).

		Consideration of $20 mil ion, of which $15 mil ion is payable at the closing of the Transaction from Avino’s
		cash on hand and the remaining $5 mil ion is payable before the first anniversary of the closing date.

		Additionally, Avino wil issue 14.0 mil ion units (the “Units”), each comprising one common share and one-
		half of a common share purchase warrant (each full warrant, a “Warrant”).

		Contingent cash consideration of US$8.75 mil ion wil be payable by Avino to Coeur within 12 months of
		initial production at La Preciosa. Avino may elect to pay up to half of the contingent cash consideration in
		Avino shares. Coeur wil retain ownership of a 1.25% net smelter return royalty on the Gloria and
		Abundancia areas of La Preciosa, and a 2.00% gross value royalty on al areas of La Preciosa other than
		the Gloria and Abundancia areas.

		So long as Coeur holds 10% or more of the outstanding shares of Avino, Coeur has the option to nominate
		one director for election to the Avino board or designate a board observer. At closing, Coeur has also been
		granted pre-emptive rights to maintain its equity ownership position in Avino and has entered into a voting
		agreement with Avino.

		The completion of the proposed Transaction is subject to a number of customary conditions precedent, as
		well as, the authorization of the Mexican Federal Economic Competition Commission, approval of the
		issuance of the Unit consideration and contingent payment amount by the NYSE American, the Toronto
		Stock Exchange, and any other necessary third party approvals. The Closing of the Transaction is
		expected to occur during Q1 2022.
	- 27 -