Enhanced Investments - Financial Portal

Published: 2021-05-12












		AVINO SILVER & GOLD MINES LTD.


		Condensed Consolidated Interim Financial Statements

		For the three months ended March 31, 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 March 31, 2021, and for the periods ended

March 31, 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

May 12, 2021


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

				March 31, 2021		December 31,
			Note		(unaudited)		2020

ASSETS
Current assets
Cash									$				27,030	$	11,713
Amounts receivable													668		529
Taxes recoverable			4					5,196		5,044
Prepaid expenses and other assets													832		757
Inventory			5					1,734		1,659
Total current assets													35,460		19,702
Exploration and evaluation assets			7					10,270		10,052
Plant, equipment and mining properties			9					34,539		34,846
Long-term investments			6					4,277		4,176
Other assets												4		4
Total assets									$				84,550	$	68,780

LIABILITIES
Current liabilities
Accounts payable and accrued liabilities									$				2,262	$	2,068
Amounts due to related parties			10(b)					150		154
Taxes payable												-		7
Current portion of term facility			11					1,673		2,513
Current portion of equipment loans													18		72
Current portion of finance lease obligations													137		208
Total current liabilities													4,240		5,022
Finance lease obligations													262		278
Warrant liability			12					1,530		2,295
Reclamation provision			13					791		808
Deferred income tax liabilities													931		1,369
Total liabilities													7,754		9,772

EQUITY
Share capital			14		127,325		108,303
Equity reserves													10,441		9,951
Treasury shares (14,180 shares, at cost)													(97)		(97)
Accumulated other comprehensive loss													(4,716)		(4,810)
Accumulated deficit										(56,157)	(54,339)
Total equity													76,796		59,008
Total liabilities and equity									$				84,550	$	68,780


Commitments – Note 17

Subsequent Events – Note 21

Approved by the Board of Directors on May 12, 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)
INCOME STATEMENT
				Three months ended March 31,
			Note			2021	2020
Revenue from mining operations			15				$	29		$	7,116
Cost of sales			15		709				6,273
Mine operating income (loss)					(680)				843

Operating expenses:
General and administrative expenses			16		934				808
Share-based payments			14		616				168
Loss before other items					(2,230)				(133)

Other items:
Interest and other income					22				173
Loss on long-term investments												(68)	(293)
Fair value adjustment on warrant liability			12		788				919
Realized loss on warrants exercised					(1,005)				-
Unrealized foreign exchange gain (loss)					283				(770)
Finance cost					(21)				(87)
Accretion of reclamation provision			13		(11)				(27)
Interest expense					(2)				(10)
Loss from continuing operations before income taxes					(2,244)				(228)

Income taxes:
Current income tax expense					(12)				(51)
Deferred income tax recovery					438				47
Income tax recovery (expense)					426				(4)
Net loss					(1,818)				(232)

Other comprehensive income (loss):
Currency translation differences					94				(898)
Total comprehensive loss							$	(1,724)		$	(1,130)
Loss per share			14(e)
Basic							$	(0.02)		$	(0.00)
Diluted							$	(0.02)		$	(0.00)
Weighted average number of common
shares outstanding			14(e)
Basic				96,204,148							77,267,533
Diluted				96,204,148							77,267,533
	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 services				675,145						-		-	-	-	-				-
Issuance costs									-	(84)		-	-	-	-	(84)
Options cancelled or expired									-	-	(194)					-	-						194	-
Share-based payments									-	-	168					-	-	-	168
Net loss for the period									-	-		-	-	-						(232)	(232)
Currency translation differences									-	-		-	-								(898)	-	(898)
Balance, March 31, 2020				77,267,533	$ 96,312	$ 9,365		$ (97)				$ (5,461)	$ (47,242)	$ 52,877
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	9,050,000	17,244								-	-	-	-	17,244
															Exercise of warrants	14	912,562	1,724								-	-	-	-	1,724
															Exercise of options	14	264,000							364	(126)					-	-	-	238
Issuance costs									- (310)			-	-	-	- (310)
Share-based payments			14						-	-	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


	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		2021	2020

Cash generated by (used in):

Operating Activities
Net loss				$ (1,818)				$ (232)
Adjustments for non-cash items:
Deferred income tax recovery				(438) (47)
Depreciation and depletion				492			649
Accretion of reclamation provision				11			27
Loss on investments				68			293
Unrealized foreign exchange loss (gain)				(234) 375
Unwinding of fair value adjustment				(7) (17)
Fair value adjustment on warrant liability				(788) (919)
Realized loss on warrants exercised				1,005		-
Share-based payments				616			168

				(1,093) 297

Net change in non-cash working capital items			18	(152) (870)

				(1,245) (573)


Financing Activities
Shares and units issued for cash, net of issuance costs				17,892		(84)
Term facility payments				(833)		(833)
Finance lease payments					(91)	(310)
Equipment loan payments					(54)	(54)

				16,914		(1,281)

Investing Activities
Exploration and evaluation expenditures					(219)	(64)
Additions to plant, equipment and mining properties					(185)	(399)
Proceeds from sale of long-term investments				-			1,255
Purchase of long-term investments				-		(1,177)

					(404)	(385)

Change in cash					15,265	(2,239)

Effect of exchange rate changes on cash					52	(688)

Cash, Beginning					11,713	9,625

Cash, Ending				$ 27,030				$ 6,698



	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 three months ended March 31, 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 the 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 three months ended March 31, 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 three months ended March 31, 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 three months ended March 31, 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 March 31, 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 three months ended March 31, 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.

			March 31,		December 31,
				2021		2020
		VAT recoverable					$	2,596 $			2,328
		GST recoverable		26		16
		Income taxes recoverable	2,574			2,700
							$	5,196 $			5,044

5. INVENTORY

			March 31,		December 31,
				2021		2020
		Process material stockpiles					$	394 $		373
		Concentrate inventory		36		64
		Materials and supplies	1,304			1,222
							$	1,734 $			1,659

		The amount of inventory recognized as an expense for the three months ended March 31, 2021 total ed
		$709 (March 31, 2020 – $6,273). 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			March 31,

											2020	exchange for the period	2021
Talisker Resources Common
Shares								$	4,176	$					-	$	49	$	(60)	$	4,165
Silver Wolf Exploration Ltd.
Common Shares											-	41	-	(3)						38
Silver Wolf Exploration Ltd.
Warrants											-	76	-	(2)						74
								$	4,176	$ 117					$	49	$ (65)		$ 4,277

	- 9 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2021 and 2020
(Expressed in thousands of US dollars, except where otherwise noted)

		During the three months ended March 31, 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				289			-	289
		Assessments and taxes				45			-	45
		Effect of movements in exchange rates			1		-		1
		Option income			(117)		-		(117)

		Balance, March 31, 2021	$			10,269 $	1 $	10,270


	- 10 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2021 and 2020
(Expressed in thousands of US dollars, except where otherwise noted)

		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.

		(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, Silver Wolf received Avino 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 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
	- 11 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2021 and 2020
(Expressed in thousands of US dollars, except where otherwise noted)

		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.

		(iii) Santiago Papasquiaro property

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

		(iv) Unification La Platosa properties

		The Unification La Platosa properties, consisting of three leased concessions in addition to the leased
		concession described in note (i) above, are situated within the Avino mine area property near the
		towns of Panuco de Coronado and San Jose de Avino and surrounding the Avino Mine.
		In February 2012, the Company’s wholly-owned Mexican subsidiary entered into a new agreement
		with Minerales de Avino, S.A. de C.V. (“Minerales”) whereby Minerales has indirectly granted to the
		Company the exclusive right to explore and mine the La Platosa property known as the “ET zone”.
		The ET zone includes the Avino Mine, where production at levels intended by management was
		achieved on July 1, 2015.

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

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

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

			(b) 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 March 31, 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 three months ended March 31, 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	53		7	3						-	-	103	166
																Effect of movements in
																exchange rates	3		4	-						-	-	14	21
Balance at March 31, 2021		13,205		574	350							12,955			17,483	11,380	55,947


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	55		26	10		13	324	66	494
																Effect of movements in
																exchange rates	-		-	-						-	-	-			-
Balance at March 31, 2021		8,698		213	266							4,920			5,621	1,690	21,408

NET BOOK VALUE
At March 31, 2021		4,507		361	84							8,035			11,862	9,690	34,539
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 three months ended March 31, 2021 and 2020
(Expressed in thousands of US dollars, except where otherwise noted)

		Included in Buildings above are assets under construction of $5,739 as at March 31, 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 March 31, 2021, plant, equipment and mining properties included a net carrying amount of $442
		(December 31, 2020 - $442) for mining equipment under equipment loan, and $1,007 (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 months ended March 31, 2021
		and 2020 is as follows:
			Three months ended March 31,
				2021	2020
		Salaries, benefits, and consulting fees				$	235		$	170
		Share‐based payments		488	187
						$	723		$	357

		(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,
							2021	2020
		Oniva International Services Corp.				$	108		$	106
		Directors		42	48
						$	150		$	154

(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 three months ended March 31, 2021 and 2020
(Expressed in thousands of US dollars, except where otherwise noted)

		The transactions with Oniva during the three months ended March 31, 2021 and 2020 are summarized
		below:

			March 31,		March 31,
				2021		2020
		Salaries and benefits					$	191			$	181
		Office and miscellaneous		105		96
							$	296			$	277

		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, 2021, the
		Company paid $59 (March 31, 2020 - $56) to ICC.

11. TERM FACILITY

		In July 2015, the Company entered into a ten million 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, with 6 remaining payments as at March
		31, 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 is as follows:

							March 31,	December 31,
									2021		2020
		Balance at beginning of the period							$	2,513			$	5,897
		Repayments								(833)				(3,333)
		Unwinding of fair value adjustment								(7)				(51)
		Balance at end of the period								1,673				2,513
		Less: Current portion								(1,673)				(2,513)
		Non-current portion							$	-			$	-


	- 15 -

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

			March 31,		December 31,
				2021		2020
		Balance at beginning of the period	$	2,295		$	1,579
		Fair value adjustment		(788)		650
		Effect of movement in exchange rates		23		66
		Balance at end of the period	$	1,530		$	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					(912,562)	$0.80
		Warrants outstanding and exercisable, March 31, 2021					2,068,212	$0.80

					All Warrants
								Outstanding and Exercisable
								Exercise Price	March 31,		December 31,
		Expiry Date						per Share	2021		2020
		September 25, 2023							$0.80	2,068,212		2,980,774
								2,068,212		2,980,774

		As at March 31, 2021, the weighted average remaining contractual life of warrants outstanding was 2.48
		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:

			March 31,		December 31,
			2021			2020
		Weighted average assumptions:
		Risk-free interest rate	0.23%			0.20%
		Expected dividend yield		0%		0%
		Expected warrant life (years)	2.49			2.73
		Expected stock price volatility	83.12%			73.93%
		Weighted average fair value	$0.74			$0.77

		During the three months ended March 31, 2021, the Company recorded a realized loss on the exercise of
		warrants of $1,005, as result of the exercise of 912,562 warrants for the issuance of 912,562 common
		shares.
	- 16 -

AVINO SILVER & GOLD MINES LTD.

Notes to the unaudited condensed consolidated interim financial statements

For the three months ended March 31, 2021 and 2020

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

13. RECLAMATION PROVISION

Management’s estimate of the reclamation provision at March 31, 2021, is $791 (December 31, 2020 –

$808), and the undiscounted value of the obligation is $1,234 (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 is as follows:

March 31,

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

(28)

(78)

Balance at end of the period

791 $

808

14. 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 9,050,000 common shares in

in at-the-market offering under prospectus supplement for gross proceeds of $17,732. The Company

paid a 2.75% cash commission of $488 on gross proceeds, for net proceeds of $17,244, and

incurred additional $310 in issuance costs during the period.

During the three months ended March 31, 2021, the Company issued 912,562 common shares

following the exercise of 912,562 warrants. As a result, $1,724 was recorded to share capital,

representing cash proceeds of $730, fair value of the warrants on the date of exercise (see Note 12

for valuation methodology of $US denominated warrants) of $1,005, and movements in foreign

exchange of $(11).

During the three months ended March 31, 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 $238 and the fair value upon issuance of $126.

(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.

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.

- 17 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2021 and 2020
(Expressed in thousands of US dollars, except where otherwise noted)

		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
Stock options outstanding, March 31, 2021					3,219,000		$1.82
Stock options exercisable, March 31, 2021					2,369,000		$1.89

		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 2, 2021								$2.95			360,000	0.42			360,000	0.42
September 20, 2022								$1.98			880,000	1.47			880,000	1.47
August 28, 2023								$1.30			105,000	2.41			105,000	2.41
August 21, 2024								$0.79			174,000	3.39			174,000	3.39
August 4, 2025								$1.64			1,700,000	4.35			850,000	4.35
														3,219,000	3.01		2,369,000	2.53

	- 18 -

AVINO SILVER & GOLD MINES LTD.

Notes to the unaudited condensed consolidated interim financial statements

For the three months ended March 31, 2021 and 2020

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

During the three months ended March 31, 2021, the Company charged $231 (three months ended

March 31, 2020 - $(11)) 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, 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

RSUs outstanding, March 31, 2021

2,874,000

$1.28

The fol owing table summarizes information about the RSUs outstanding at March 31, 2021:

Issuance Date

Price (C$)

Number of RSUs Outstanding

August 28, 2018

$1.31

288,000

August 21, 2019

$0.79

1,105,000

August 4, 2020

$1.64

1,481,000

2,874,000

During the three months ended March 31, 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 three months ended March 31, 2021, the Company charged $385 (March 31, 2020 - $179) 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.

- 19 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2021 and 2020
(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,
				2021	2020
		Net loss for the period				$ (1,818) $ (232)
		Basic weighted average number of shares outstanding 96,204,148 77,267,533 Effect of dilutive share options, warrants, and RSUs
							-	-
		Diluted weighted average number of shares outstanding 96,204,148 77,267,533
		Basic loss per share				$ (0.02) $ (0.00)
		Diluted loss per share				$ (0.02) $ (0.00)

15. REVENUE AND COST OF SALES

		The Company’s revenues for the three months ended March 31, 2021 and 2020 are all attributable to
		Mexico, from shipments of concentrate from the Avino Mine, and processing of Historical Above Ground
		Stockpiles.
			March 31,						March 31,
				2021	2020
		Concentrate sales				$	-			$	7,570
		Provisional pricing adjustments				29 (454)
						$	29			$	7,116

		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,
				2021	2020
		Production costs				$	-			$	5,654
		Stand-by costs		246	-
		Depreciation and depletion		463	619
						$	709			$	6,273


	- 20 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2021 and 2020
(Expressed in thousands of US dollars, except where otherwise noted)

16. GENERAL AND ADMINISTRATIVE EXPENSES

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

			March 31,		March 31,
				2021		2020
		Salaries and benefits					$	337			$	370
		Office and miscellaneous		156		49
		Management and consulting fees		155		122
		Investor relations		24		50
		Travel and promotion		8		32
		Professional fees		143		86
		Directors fees		42		39
		Regulatory and compliance fees		40		30
		Depreciation		29		30
							$	934			$	808

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:

			March 31,		December 31,
			2021			2020
		Not later than one year					$	245 $		20
		Later than one year and not later than five years		13		14
		Later than five years		2		3
							$	260 $		37

Office lease payments recognized as an expense during the three months ended March 31, 2021, total ed
$12 (March 31, 2020 - $11).

18. SUPPLEMENTARY CASH FLOW INFORMATION

			March 31,		March 31,
			2021			2020
		Net change in non-cash working capital items:
		Inventory					$	(74) $	141
		Prepaid expenses and other assets							(68) 81
		Taxes recoverable							(165) (62)
		Taxes payable							(7) (46)
		Accounts payable and accrued liabilities							308	(1,578)
		Amounts receivable							(140) 709
		Other liabilities							- (140)
		Amounts due to related parties							(6) (25)
							$ (152) $	(870)


	- 21 -

AVINO SILVER & GOLD MINES LTD.

Notes to the unaudited condensed consolidated interim financial statements

For the three months ended March 31, 2021 and 2020

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

March 31,

2021

2020

Interest paid

34 $

129

Taxes paid

136 $

188

Equipment acquired under finance leases and

equipment loans

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 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, 2021, 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, 2021, in the amount

of $27,030 and working capital of $31,220 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.

- 22 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2021 and 2020
(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, 2021,
		are summarized as fol ows:
			Less Than	More Than 5
			Total	1 Year	1-5 years		Years
		Accounts payable and
		accrued liabilities				$ 2,262	$ 2,262	$ -	$ -
		Amounts due to related
		parties	150						150	-	-
		Minimum rental and lease
		payments	30						15	13	2
		Term facility	1,691	1,691						-	-
		Equipment loans	19						19	-	-
		Finance lease obligations	430						151	279	-
		Total				$ 4,582	$ 4,288	$ 292	$ 2

		(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, 2021	December 31, 2020
						MXN	CDN	MXN	CDN
		Cash								$	9,230 $	2,402 $	36,896 $	2,831
		Long-term investments	-	5,379						-	5,317
		Reclamation bonds	-						6	-	6
		Amounts receivable	-						33	-	20
		Accounts payable and
		accrued liabilities				(28,547)	(396)	(22,972)		(157)
		Due to related parties	-	(189)						-	(196)
		Finance lease obligations	(77)	(421)	(1,543)		(448)
		Net exposure				(19,394)	6,814	12,381		7,373
		US dollar equivalent								$	(941) $	5,418 $	620 $	5,791

	- 23 -

AVINO SILVER & GOLD MINES LTD.

Notes to the unaudited condensed consolidated interim financial statements

For the three months ended March 31, 2021 and 2020

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

Based on the net US dol ar denominated asset and liability exposures as at March 31, 2021, a 10%

fluctuation in the US/Mexican and Canadian/US exchange rates would impact the Company’s earnings

for the three months ended March 31, 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 March 31, 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 approximately $1 (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 March 31, 2021, a 10% change in market prices would

have an impact on net earnings (loss) of approximately $428 (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.

(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, 2021:

Level 1

Level 2

Level 3

Financial assets

Cash

27,030 $

- $

Amounts receivable

668

Long-term investments

4,203

Total financial assets

$ 31,233 $ 668 $

Financial liabilities

Warrant liability

(1,530)

Total financial liabilities

$ - $

- $

(1,530)

- 24 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2021 and 2020
(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,
		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, 2020 and 2019, 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 three months ended March 31, 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 March 31, 2021, using
		the following assumptions:

			March 31, 2021 March 11, 2021
		Weighted average assumptions:
		Risk-free interest rate					0.23%		0.26%
		Expected dividend yield					0%		0%
		Expected life (years)					2.95		3.00
		Expected stock price volatility					139.99%	129.51%
		Weighted average fair value at grant date					C$0.31		C$0.32

20. SEGMENTED INFORMATION

		The Company’s revenues for the three months ended March 31, 2021 of $29 (March 31, 2020 - $7,116)
		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,
					2021	2020

		Silver	$ 15	$ 2,852
		Gold						5 2,254
		Copper						9 3,803
		Penalties, treatment costs and refining charges						- (1,793)

		Total revenue from mining operations	$ 29	$ 7,116


		For the three months ended March 31, 2021, the Company had one customer (March 31, 2020 – three
		customers) that accounted for total revenues as follows:

			March 31,	March 31,
					2021	2020

		Customer #1	$		29	$		3,969
		Customer #2			-	3,165
		Customer #3			-		-
		Customer #4			-		-
		Customer #5			-	(18)

		Total revenue from mining operations	$		29	$		7,116



	- 25 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the three months ended March 31, 2021 and 2020
(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,
				2021		2020
		Exploration and evaluation assets - Mexico					$	10,269	$	10,051
		Exploration and evaluation assets - Canada		1		1
		Total exploration and evaluation assets					$	10,270	$	10,052

			March 31,		December 31,
				2021		2020
		Plant, equipment, and mining properties - Mexico					$	34,184	$	34,475
		Plant, equipment, and mining properties - Canada		355		371
		Total plant, equipment, and mining properties					$	34,539	$	34,846

21. SUBSEQUENT EVENTS

		Warrant Exercises – Subsequent to March 31, 2021, the Company issued 72,800 common shares
		through the early exercise of share purchase warrants for proceeds of $58 at an average price per share of
		$0.80.

		At-The-Market Sales – Subsequent to March 31, 2021, the Company issued 1,000,000 common shares in
		at-the-market offerings under prospectus supplement for gross proceeds of $1,289. The Company paid a
		2.75% cash commission of $35 on gross proceeds, for net proceeds of $1,254.

	- 26 -