Enhanced Investments - Financial Portal

Published: 2020-11-09












		AVINO SILVER & GOLD MINES LTD.


		Condensed Consolidated Interim Financial Statements

		For the nine months ended September 30, 2020 and 2019

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, 2020, and for the periods ended

September 30, 2020 and 2019, 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, 2020

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

				September 30,
					2020		December 31,
			Note			(unaudited)		2019

ASSETS
Current assets
Cash									$	12,493	$	9,625
Amounts receivable										1,044		1,477
Taxes recoverable			4		6,404			5,483
Prepaid expenses and other assets										775		594
Inventory			5		2,223			5,592
Total current assets										22,939		22,771
Exploration and evaluation assets			7		10,010			9,827
Plant, equipment and mining properties			9		34,758			35,658
Long-term investments			6		3,927			4,311
Other assets										4		4
Total assets									$	71,638	$	72,571

LIABILITIES
Current liabilities
Accounts payable and accrued liabilities									$	2,182	$	4,907
Amounts due to related parties			10(b)		147			156
Taxes payable										4		46
Current portion of term facility			11		3,355			3,384
Current portion of equipment loans										127		199
Current portion of finance lease obligations										265		692
Other liabilities										-		178
Total current liabilities										6,080		9,562
Term facility			11		-			2,513
Equipment loans										-		90
Finance lease obligations										284		442
Warrant liability			12		1,550			1,579
Reclamation provision			13		1,350			1,524
Deferred income tax liabilities										2,451		2,938
Total liabilities										11,715		18,648

EQUITY
Share capital			14		108,304			96,396
Equity reserves										9,239		9,391
Treasury shares (14,180 shares, at cost)										(97)		(97)
Accumulated other comprehensive loss										(4,655)		(4,563)
Accumulated deficit										(52,868)		(47,204)
Total equity										59,923		53,923
Total liabilities and equity									$	71,638	$	72,571


Commitments – Note 17

Subsequent Event – Note 21


Approved by the Board of Directors on November 9, 2020:
	Gary Robertson Director		David Wolfin Director
	The accompanying notes are an integral part of the condensed consolidated interim financial statements

		- 2 -


AVINO SILVER & GOLD MINES LTD.
Condensed Consolidated Interim Statements of Operations and Comprehensive Income (Loss)
(Expressed in thousands of US dollars, except per share amounts - Unaudited)

				Three months ended		Nine months ended
					September 30,		September 30,
			Note	2020					2019	2020			2019
Revenue from mining operations			15	$	2,659 $					6,796 $	14,615 $			21,320
Cost of sales			15		2,848					6,973	13,174			21,145
Mine operating income (loss)					(189)					(177)	1,441			175

Operating expenses
General and administrative expenses			16			693			770	2,063			2,242
Share-based payments			14			692			230	1,062			643
Loss before other items					(1,574)					(1,177)	(1,684)			(2,710)
Other items
Interest and other income						8			150	232			385
Gain (loss) on long-term investments					(1,231)					16	(181)			17
Fair value adjustment on warrant
liability			12		1,136					(230)	(13)			346
Realized loss on exercise of warrants					(2,708)					-	(2,708)			-
Foreign exchange loss					(446)					(706)	(1,701)			(562)
Finance costs						(41)			(6)	(175)			(2)
Accretion of reclamation provision			13			(26)			(25)	(75)			(78)
Interest expense						(4)			(13)	(22)			(53)
Loss from continuing operations before
income taxes			(4,886)					(1,991)	(6,327)			(2,657)
Income taxes:
Current income tax expense						(28)			(63)	(90)			(246)
Deferred income tax recovery						327			509	487			694
Income tax recovery (expense)						299			446	397			448
Net loss from continuing operations					(4,587)					(1,545)	(5,930)			(2,209)
Loss from discontinued operations and
on disposal												3			(2)		(97)	(167)		(209)
Net loss					(4,589)					(1,642)	(6,097)			(2,418)

Other comprehensive income (loss)
Items that may be reclassified subsequently to income or loss:
Currency translation differences						455			(318)	(92)			857
Total comprehensive loss												$	(4,134) $				(1,960) $	(6,189) $		(1,561)
Loss per share from continuing
operations			14(e)
Basic & diluted																$(0.05)			$(0.02)	$(0.07)	$(0.03)
Loss per share			14(e)
Basic & diluted					$(0.05)					$(0.02)	$(0.08)			$(0.04)
Weighted average number of
common shares outstanding			14(e)
Basic & Diluted				87,093,054 73,428,820 81,027,129 67,743,695
	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, 2019				63,337,769	$ 88,045	$ 9,849		$ (97)			$ (6,124)	$ (16,505)	$ 75,168
Common shares issued for cash:
												Brokered public offerings	14	7,735,360	4,877								-	-	-		-	4,877
												Less: Issuance costs	14					-	(476)								-	-	-	-	(476)
												At the market issuances	14	4,954,000	2,924								-	-	-		-	2,924
												Less: Issuance costs	14					-	(112)								-	-	-	-	(112)
Options cancelled or expired								-	-	(739)					-	-		739	-
Carrying value of RSUs exercised				565,259					835	(835)					-	-		-	-
Fair value of warrants issued								-	-	116					-	-		-	116
Share-based payments			14					-	-	729					-	-		-	729
Net loss for the period								-	-				-	-	-						(2,418)	(2,418)
Currency translation differences								-	-				-	-								857	-	857
Balance, September 30, 2019				76,592,388	$ 96,093	$ 9,120		$ (97)			$ (5,267)	$ (18,184)	$ 81,665
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


	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		2020	2019

Cash generated by (used in):

Operating Activities
Net loss				$ (6,097)			$ (2,418)
Adjustments for non-cash items:
Deferred income tax recovery					(487)	(694)
Depreciation and depletion					1,779	2,029
Inventory net realizable adjustment					-	387
Accretion of reclamation provision					75	250
Unrealized (gain) loss on investments					181	(17)
Foreign exchange loss					528	581
Unwinding of fair value adjustment					(42)	(153)
Fair value adjustment on warrant liability					13	(346)
Realized loss on exercise of warrants					2,708	-
Share-based payments					1,062	643

					(280)	262

Net change in non-cash working capital items			18		(953)	382

					(1,233)	644


Financing Activities
Shares and units issued for cash, net of issuance costs					4,686	7,329
Proceeds from option exercise					29	-
Proceeds from warrant exercise					3,705	-
Term facility payments					(2,500)	-
Finance lease payments					(596)	(643)
Equipment loan payments					(163)	(434)

					5,161	6,252

Investing Activities
Exploration and evaluation expenditures					(180)	(4,715)
Additions to plant, equipment and mining properties					(889)	(2,553)
Proceeds from sale of long-term investments					1,255	-
Purchase of long-term investments					(1,177)	-
Redemption of reclamation bonds					-	87

					(991)	(7,181)

Change in cash					2,937	(285)

Effect of exchange rate changes on cash					(69)	(86)

Cash, Beginning					9,625	3,252

Cash, Ending				$ 12,493			$ 2,881



	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, 2020 and 2019
(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.

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
		condensed consolidated interim financial statements follow the same accounting policies and methods of
		application as the most recent annual consolidated financial statements of the Company. These condensed
		consolidated interim financial statements do not contain all of the information required for ful annual financial
		statements. Accordingly, these unaudited condensed consolidated interim financial statements should be read
		in conjunction with the Company’s December 31, 2019, 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 condensed consolidated interim financial statements have been prepared using the accrual
		basis of accounting on a going concern basis. The accounting policies set out below have been applied
		consistently to al periods presented in these 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, 2020, are consistent with
		those applied and disclosed in Note 2 to the Company’s audited consolidated financial statements for the year
		ended December 31, 2019.

	- 6 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2020 and 2019
(Expressed in thousands of US dollars, except where otherwise noted)

		Basis of Consolidation

		The condensed consolidated interim financial statements include the accounts of the Company and its
		Canadian and 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. DISPOSITION OF DISCONTINUED OPERATIONS – BRALORNE GOLD MINES LTD.

		On December 13, 2019, the Company completed the sale of its 100% wholly-owned subsidiary Bralorne Gold
		Mines Ltd. (“Bralorne”) to Talisker Resources Ltd. (“Talisker”). The sale was record in the further quarter of
		fiscal 2019 and includes the Bralorne Gold Mine and is part of the Company’s plan to focus on its core mining
		operations in Mexico.

		The consideration included:
		•				C$8.7 mil ion (translated to $6,599) in cash
		•				The issuance of 12,580,000 common shares of Talisker, representing 9.9% on a pro-forma basis
						following the close of the transaction and subsequent financing by Talisker;
		•				The issuance of 6,290,000 share purchase warrants exercisable at C$0.25 per share for a period of
						three years after the closing, subject to acceleration in the event the closing price of Talisker’s common
						shares is great than C$0.35 per share for 20 or more consecutive trading days at any time fol owing
						April 14, 2020;

		The sale includes the Bralorne claims, as well as nine mineral claims covering approximately 2,114 hectares
		in the Lil ooet Mining Division of British Columbia, known as the BRX Property.

		As a result of the sale, net loss for the comparative nine months ended September 30, 2019, have been
		reclassified from continuing operations to discontinued operations:

	- 7 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2020 and 2019
(Expressed in thousands of US dollars, except where otherwise noted)

				Three months ended		Nine months ended
					September 30,		September 30,
				2020				2019	2020			2019
		Revenue from mining operations	$	- $ - $ - $ -
		Cost of sales		-				-	-			-
		Mine operating income (loss)		-				-	-			-

		Operating expenses		-				(40)	-			(35)
		Accretion of reclamation provision		-				(57)	-			(172)
		Gain on sale of assets		-				-	-			(3)
		Other items		-				-	-			1
		Loss on disposition		(2)				-	(167)			-
		Net loss before income taxes		(2)				(97)	(167)			(209)
		Income taxes		-				-	-			-
		Net loss from discontinued operations
		and on disposal	$			(2) $ (97) $ (167) $ (209)

		The results of discontinued operations included in the consolidated statements of cash flows for the nine
		months ended September 30, 2020 and 2019, are as follows:

								Nine months ended September 30,
		Cash used in:									2020	2019

		Cash flow provided by operating activities						$	-	$ (35)
		Cash flow used in financing activities							-			(198)
		Cash flow used in investing activities							-			(4,566)
		Net cash decrease from discontinued operations						$	-	$ (4,799)

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,
											2020	2019
		VAT recoverable						$			3,941	$		2,652
		GST recoverable				15			42
		Income taxes recoverable									2,448	2,789
								$			6,404	$		5,483

5. INVENTORY

								September 30,	December 31,
											2020	2019
		Process material stockpiles						$	368	$			1,079
		Concentrate inventory				581			3,055
		Materials and supplies									1,274	1,458
								$			2,223	$		5,592

		The amount of inventory recognized as an expense for the nine months ended September 30, 2020 total ed
		$12,299 (September 30, 2019 – $21,145), and includes production costs and depreciation and depletion
		directly attributable to the inventory production process.

	- 8 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2020 and 2019
(Expressed in thousands of US dollars, except where otherwise noted)

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	Net Additions				Movements in		Fair value	Fair Value
			December 31,	and		foreign	adjustments	September 30,
										2019	(Warrants				exchange for the period		2020
										Exercised)
		Talisker Resources Common
		Shares	$	3,197	$			1,184	$	(76)	$	(378)	$	3,927
		Talisker Resources Warrants	1,114	(1,114)								-	-	-
		Other	-			(1)								-	1	-
			$	4,311	$			69	$	(76)	$ (377)	$ 3,927

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, 2019	$			9,692 $			37,089 $	46,781

		Costs incurred during 2019:
		Mine and camp costs					-		2,537							2,537
		Drilling and exploration					50		2,333							2,383
		Depreciation of plant and equipment					-		317							317
		Interest and other costs					-		325							325
		Provision for reclamation					-		1,338							1,338
		Assessments and taxes					90		31							121
		Geological and related services			-		116							116
		Assays			-		130							130
		Water treatment and tailing storage facility costs			-		112							112
		Effect of movements in exchange rates					(6)		1,286							1,280
		Disposition of Bralorne Mine (Note 3)					-							(45,613)		(45,613)

		Balance, December 31, 2019	$			9,826 $			1 $	9,827
		Costs incurred during 2020:
		Drilling and exploration					98		-							98
		Assessments and taxes					82		-							82
		Effect of movements in exchange rates			3		-							3

		Balance, September 30, 2020	$			10,009 $			1 $	10,010


	- 9 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2020 and 2019
(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”)

			During the nine months ended September 30, 2020, the Company announced an option agreement in
			which Silver Wolf was granted the exclusive right to acquire an 100% interest in the Ana Maria and El
			Laberinto properties in Mexico (the “Option”), in consideration of the issuance to Avino of share
			purchase warrants to acquire 300,000 common shares of Silver Wolf at an exercise price of $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 $600,000 in cash or common shares of Silver Wolf as fol ows:

			a. $50,000 in common shares of Silver Wolf within 30 days of the Approval Date;
			b. A further $50,000 in cash or shares of Silver Wolf at Avino’s discretion on or before the first
				anniversary of the Approval Date;
			c. A further $100,000 in cash or shares of Silver Wolf at Avino’s discretion on or before the second
				anniversary of the Approval Date;
			d. A further $200,000 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 $200,000 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 $750,000 in exploration expenditures on the properties, as fol ows:

			a. $50,000 on or before the first anniversary of the Approval Date;
			b. A further $100,000 on or before the second anniversary of the Approval Date; and
			c. A further $600,000 on or before the fourth anniversary of the Approval Date.

			Under the Option Agreement, the parties intend that the first two year’s payments ($200,000 in cash or
			shares), and first $150,000 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 is subject to the acceptance for filing
			on behalf of Silver Wolf by the TSX Venture Exchange
	- 10 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2020 and 2019
(Expressed in thousands of US dollars, except where otherwise noted)

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

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

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

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

		(b) 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, 2020, the Company had an effective 99.67% (December 31, 2019 - 99.67%) interest in its
		subsidiary Avino Mexico and the remaining 0.33% (December 31, 2019 - 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 condensed consolidated interim
		financial statements.
	- 11 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2020 and 2019
(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, 2019	12,962		149	358							17,257	17,603	6,710	55,039
		Additions / Transfers	644		381	(6)							(648)	148	2,770	3,289
		Disposals	-		(6)	(12)							(3,723)	(231)	(206)	(4,178)
		Effect of movements in
		exchange rates													31		-	1				33		34	13	112
		Balance at December 31, 2019	13,637		524	341							12,919	17,554	9,287	54,262
		Additions / Transfers	28		33	5							23	(71)	878	896
		Effect of movements in
		exchange rates	(15)		(10)	-							(1)	-	9	(17)
		Balance at September 30, 2020	13,650		547	346							12,941	17,483	10,174	55,141


		ACCUMULATED DEPLETION
		AND DEPRECIATION
		Balance at January 1, 2019	6,102		65	175							6,830	2,416	708	16,296
		Additions / Transfers	1,952		22	49							51	1,619	714	4,407
		Disposals	-		(3)	(11)							(2,040)	(27)	(49)	(2,130)
		Effect of movements in
		exchange rates	12		-	-							13	5	1	31
		Balance at December 31, 2019	8,066		84	213							4,854	4,013	1,374	18,604
		Additions / Transfers	484		75	32							41	962	185	1,779
		Effect of movements in
		exchange rates	-		-	-													-	-	-		-
		Balance at September 30, 2020	8,550		159	245							4,895	4,975	1,559	20,383

		NET BOOK VALUE
		At September 30, 2020	5,100		388	101							8,046	12,508	8,615	34,758
		At December 31, 2019	5,571		440	128							8,065	13,541	7,913	35,658
		At January 1, 2019	6,860		84	183							10,427	15,187	6,002	38,743

	- 12 -


AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2020 and 2019
(Expressed in thousands of US dollars, except where otherwise noted)

		Included in buildings and construction in process above are assets under construction of $4,186 as at
		September 30, 2020 (December 31, 2019 - $3,746) 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, 2020, plant, equipment and mining properties included a net carrying amount of $451
		(December 31, 2019 - $559) for mining equipment under equipment loan, and $1,121 (December 31, 2019 -
		$2,697) for mining equipment under 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, 2020 and 2019 were as follows:
	Three months ended				Nine months ended
				September 30,		September 30,
							2020							2019	2020		2019
			Salaries, benefits, and
			consulting fees	$ 190						$ 176		$ 523	$ 527
			Share-based payments	249						196	625				545
											$ 439					$ 372		$ 1,148	$ 1,072

		(b) Amounts due to/from related parties

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

								September 30,	December 31,
								2020				2019
		Oniva International Services Corp.					$	102	$			105
		Directors			45						51
							$	147	$			156

(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.


	- 13 -


AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2020 and 2019
(Expressed in thousands of US dollars, except where otherwise noted)

		The transactions with Oniva during the three and nine months ended September 30, 2020 and 2019, are
		summarized below:
	Three months ended			Nine months ended
			September 30,		September 30,
							2020					2019	2020			2019
		Salaries and benefits	$ 143 $ 125			$ 461			$ 506
		Office and miscellaneous	43				57	208			207
		Exploration and evaluation assets	-				51	-			169
									$ 186					$ 233	$ 669		$ 882

		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, 2020,
		the Company paid $166 (September 30, 2019 - $169) 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
		Company is currently repaying the remaining balance in 23 equal monthly instalments of $278 ending August
		2021, with 12 remaining payments as at September 30, 2020. The Company is committed to sel ing 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:

							September 30,	December 31,
										2020	2019
		Balance at beginning of the period					$			5,897	$			6,901
		Repayments								(2,500)				(834)
		Unwinding of fair value adjustment								(42)				(170)
		Balance at end of the period								3,355				5,897
		Less: Current portion								(3,355)				(3,384)
		Non-current portion					$			-	$			2,513


	- 14 -


AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2020 and 2019
(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 dol ar functional currency of the entity issuing the underlying
		shares, the Company recognizes a derivative liability for these warrants and re-measures the liability at the
		end of each reporting period using the Black-Scholes model. Changes in respect of the Company’s warrant
		liability are as follows:

			September 30,		December 31,
				2020		2019
		Balance at beginning of the period	$	1,579	$	2,009
		Fair value adjustment		13		(520)
		Effect of movement in exchange rates		(42)		90
		Balance at end of the period	$	1,550	$	1,579

		Continuity of warrants during the periods is as follows:
			Underlying				Weighted Average
			Shares		Exercise Price
		Warrants outstanding and exercisable, January 1, 2019	10,778,061			$1.20
		Issued	464,122			C$0.85
		Expired	(3,602,215)			$1.99
		Warrants outstanding and exercisable, December 31, 2019	7,639,968			$0.79
		Exercised	(4,195,072)			$0.80
		Exercised	(464,122)			C$0.85
		Warrants outstanding and exercisable, September 30, 2020	2,980,774			$0.80

					Al Warrants
									Outstanding and Exercisable
	Exercise Price		September 30,		December 31,
		Expiry Date								per Share	2020	2019
		July 30, 2020								C$0.85	-	464,122
		September 25, 2023						$0.80	2,980,774	7,175,846
									2,980,774	7,639,968

		As at September 30, 2020, the weighted average remaining contractual life of warrants outstanding was 2.99
		years (December 31, 2019 – 3.55 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,
				2020		2019
		Weighted average assumptions:
		Risk-free interest rate		0.31%		1.68%
		Expected dividend yield		0%		0%
		Expected warrant life (years)		2.99		3.57
		Expected stock price volatility		71.14%		61.61%
		Weighted average fair value		$0.52		$0.22


	- 15 -

AVINO SILVER & GOLD MINES LTD.

Notes to the unaudited condensed consolidated interim financial statements

For the nine months ended September 30, 2020 and 2019

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

13. RECLAMATION PROVISION

Management’s estimate of the reclamation provision at September 30, 2020, is $1,350 (December 31, 2019

– $1,524), and the undiscounted value of the obligation is $1,655 (December 31, 2019 – $1,985).

The present value of the obligation was calculated using a risk-free interest rate of 5.55% (December 31,

2019 – 6.86%) and an inflation rate of 2.06% (December 31, 2019 – 3.54%). Reclamation activities are

estimated to begin at the end of 2021 for the San Gonzalo Mine and in 2028 for the Avino Mine.

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

September 30,

December 31,

2020

2019

Balance at beginning of the period

1,524 $

10,799

Changes in estimates

840

Disposition of Bralorne (Note 3)

(10,828)

Unwinding of discount related to Bralorne

217

Unwinding of discount related to continuing operations

104

Effect of movements in exchange rates

(249)

392

Balance at end of the period

1,350 $

1,524

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, 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 and incurred an additional

$106 in issuance costs during the period.

During the nine months ended September 30, 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 $2,708, and

movements in foreign exchange of $48.

During the nine months ended September 30, 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 nine months ended September 30, 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 nine months ended September 30, 2020, the Company issued 48,000 common shares

following the exercise of 48,000 options. As a result, $44 was recorded to share capital,

representing cash proceeds of $29 and the fair value upon issuance of $15.

During the nine months ended September 30, 2020, the Company issued 863,901 common

shares upon exercise of RSUs. As a result, $650 was recorded to share capital.

- 16 -


AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2020 and 2019
(Expressed in thousands of US dollars, except where otherwise noted)

		(ii)	During the year ended December 31, 2019, the Company closed a bought-deal financing, issuing
			5,411,900 common shares at the price of C$0.85, as well as 2,323,460 flow-through shares at
			the price of C$0.99 for gross proceeds of $5,240 (C$6,900). The financing was made by way of
			prospectus supplement in July 2019, so the Company’s existing Canadian short-form base shelf
			prospectus dated December 21, 2018.

			Of the $5,240 total aggregate proceeds raised, $116 was attributed to 464,122 warrants issued
			as commission, leaving a residual amount of $5,124. This amount includes a flow-through
			premium, which represents the difference between the C$0.85 price in which the common shares
			were issued, and the offering price of C$0.99 per share. Based on the C$ to US$ exchange rate
			on the date of the transaction, $247 was recorded as the flow-through premium, for a net share
			capital allocation of $4,877. This premium is presented in “Other liabilities” on the condensed
			consolidated interim statements of financial position as at December 31, 2019.

			The Company paid a 7% cash commission on the gross proceeds in the amount of $367, and
			incurred additional legal and professional costs of $115. Costs of $10 were al ocated to the fair
			value of the warrants and have been reflected in the condensed consolidated interim statements
			of operations as a finance cost, and costs of $472 have been reflected as share issuance costs
			in the condensed consolidated interim statements of changes in equity.

			During the year ended December 31, 2019, the Company issued 4,954,000 common shares in
			an at-the-market offering under prospectus supplement for gross proceeds of $2,924. The
			Company paid a 3% cash commission of $87 on gross proceeds and incurred an additional $75
			in issuance costs during the period,

			During the year ended December 31, 2019, the Company issued 565,259 common shares upon
			exercise of RSUs. As a result, $835 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, 2019					2,917,500		$2.04
		Granted			526,000		$0.79
		Cancelled / Forfeited			(255,000)		$2.09
		Expired			(550,000)		$1.90
Stock options outstanding, December 31, 2019					2,638,500		$1.82
		Granted			1,700,000		$1.64
		Exercised			(48,000)		$0.79
		Cancelled / Forfeited			(678,500)		$1.73
Stock options outstanding, September 30, 2020				3,612,000			$1.76
Stock options exercisable, September 30, 2020					1,912,000		$1.87

	- 17 -


AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2020 and 2019
(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, 2020:

				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				370,000					0.92	370,000								0.92
		September 20, 2022	$1.98				930,000					1.97	930,000								1.97
		August 28, 2023	$1.30				325,000					2.91	325,000								2.91
		August 21, 2024	$0.79				287,000					3.89	287,000								3.89
		August 4, 2025	$1.64				1,700,000					4.85	-								4.85
											3,612,000				3.45	1,912,000			2.22

		Option pricing requires the use of highly subjective estimates and assumptions including the expected
		stock price volatility. The expected volatility used in valuing stock options is based on volatility observed
		in historical periods. Changes in the underlying assumptions can material y affect the fair value estimates.
		The fair value of the options granted during the nine months ended September 30, 2020, was calculated
		using the Black-Scholes model with the fol owing weighted average assumptions and resulting grant date
		fair value:

										2020								2019
Weighted average assumptions:
		Risk-free interest rate								0.30%							1.27%
		Expected dividend yield								0%								0%
		Expected option life (years)								5.00								5.00
		Expected stock price volatility												66.09%						59.01%
Weighted average fair value at grant date										C$0.89							C$0.40

		During the nine months ended September 30, 2020, the Company charged $361 (September 30, 2019 -
		$79) to operations as share-based payments and capitalized $Nil (September 30, 2019 - $37) to
		exploration and evaluation assets for the fair value of stock options vested during the period.

(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.


	- 18 -


AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2020 and 2019
(Expressed in thousands of US dollars, except where otherwise noted)

		Continuity of RSUs is as fol ows:
				Underlying	Weighted Average
				Shares	Exercise Price (C$)

RSUs outstanding, January 1, 2019				1,235,300		$1.62
		Granted		1,730,500		$0.79
		Exercised		(565,259)		$1.96
		Cancelled / Forfeited		(27,666)		$1.35
RSUs outstanding, December 31, 2019				2,372,875		$0.94
		Granted		1,481,000		$1.64
		Exercised		(863,901)		$0.79
		Cancelled / Forfeited		(115,974)		$1.00
RSUs outstanding, September 30, 2020				2,874,000		$1.28

		The fol owing table summarizes information about the RSUs outstanding at September 30, 2020:

		Issuance Date					Price (C$)								Number of RSUs Outstanding
		August 23, 2018	$1.31				288,000
		August 21, 2019	$0.79				1,105,000
		August 4, 2020	$1.64				1,481,000
														2,874,000

		For the RSUs issued during nine months ended September 30, 2020, the weighted average fair value at
		the measurement date was C$1.64 (for year ended December 31, 2019 was C$0.79), 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, 2020, the Company charged $701 (September 30, 2019 -
		$564) to operations as share-based payments and capitalized $Nil (September 30, 2019 - $48) to
		exploration and evaluation assets 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) Loss per share:

		The calculations for basic loss per share and diluted loss per share are as fol ows:

			Three months ended			Nine months ended
							September 30,	September 30,
			2020		2019	2020	2019
		Net loss from continuing operations
		for the period							$ (4,587)	$ (1,545)	$ (5,930)	$ (2,209)
		Net loss for the period							$ (4,589)	$ (1,642)	$ (6,097)	$ (2,418)
		Basic weighted average number of
		shares outstanding							87,093,054	73,428,820			81,027,129	67,743,695
		Effect of dilutive share options,
		warrants, and RSUs					-	-		-		-
		Diluted weighted average number of
		shares outstanding							87,093,054	73,428,820			81,027,129	67,743,695
		Basic and diluted loss from
		continuing operations per share							$	(0.05)						$	(0.02)	$	(0.07)	$	(0.03)
		Basic and diluted loss per share							$	(0.05)						$	(0.02)	$	(0.08)	$	(0.04)
	- 19 -


AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2020 and 2019
(Expressed in thousands of US dollars, except where otherwise noted)

15. REVENUE AND COST OF SALES

		Revenue reflects the sale of silver, gold and copper concentrate from the Avino Mine and from the sale of
		silver and gold concentrate from the San Gonzalo Mine for the three and nine months ended September 30,
		2020 and 2019.
				Three months ended			Nine months ended
				September 30,	September 30,

	2020					2019	2020			2019
		Concentrate sales						$	2,157 $				6,600 $	13,964 $	20,914
		Provisional pricing adjustments	502					196	651		406
								$	2,659 $				6,796 $	14,615 $	21,320

		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 and nine months ended
		September 30, 2020.

		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,

	2020					2019	2020			2019
		Production costs						$	1,428 $				6,144 $	10,607 $	18,750
		Stand-by costs	875					-	875		-
		Inventory net realizable adjustment		-		273	-			387
		Depreciation and depletion	545					556	1,692		2,008

								$	2,848 $				6,973 $	13,174 $	21,145

		During the three months ended September 30, 2020, production costs consisted of costs incurred in
		converting process material stockpiles that were in inventory at June 30, 2020, into concentrate sold during
		the three months ended September 30, 2020.

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,
				2020					2019	2020		2019
		Salaries and benefits						$	269 $				297 $	921 $	954
		Office and miscellaneous	78					36	137		134
		Management and consulting fees	88					108	294		303
		Investor relations	60					67	140		149
		Travel and promotion	5					21	41		63
		Professional fees	69					166	211		406
		Directors fees	53					43	126		113
		Regulatory and compliance fees	41					26	106		99
		Depreciation	30					6	87		21
								$	693 $				770 $	2,063 $	2,242
	- 20 -


AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2020 and 2019
(Expressed in thousands of US dollars, except where otherwise noted)

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,
				2020		2019
		Not later than one year	$	7 $		1,269
		Later than one year and not later than five years		16		20
		Later than five years		3		5
			$	26 $		1,294

Included in the above amount as at September 30, 2020, is the Company’s commitment to incur flow-through
eligible expenditures of $Nil (December 31, 2019 - $1,262 (C$1,639)) that must be incurred in Canada.

18. SUPPLEMENTARY CASH FLOW INFORMATION

			September 30,		September 30,
				2020		2019
		Net change in non-cash working capital items:
							Inventory	$	3,399	$	1,041
							Prepaid expenses and other assets	(187)		33
							Taxes recoverable	(1,266)		680
							Taxes payable	(42)		(150)
							Accounts payable and accrued liabilities	(2,890)		(389)
							Amounts receivable	224		(266)
							Other liabilities	(178)		(3)
							Deferred revenues	-		(573)
							Amounts due to related parties	(13)		9
			$	(953) $		382

			September 30,		September 30,
				2020		2019
		Interest paid	$	256	$	472
		Taxes paid	$	407 $		2,585
		Equipment acquired under finance leases and
		equipment loans	$	-	$	116

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.

	- 21 -

AVINO SILVER & GOLD MINES LTD.

Notes to the unaudited condensed consolidated interim financial statements

For the nine months ended September 30, 2020 and 2019

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

(a) Credit Risk

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

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

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

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

institutions.

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

receivable balance because all of its concentrate sales are with four (December 31, 2019 – six)

counterparties (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 consolidated statement of financial position. At September 30,

2020, 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 September 30, 2020, in the amount of

$12,493 and working capital of $16,859 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,

2020, are summarized as follows:

Less Than

More Than 5

Total

1 Year

1-5 years

Years

Accounts payable and

accrued liabilities

$ 2,182

$ -

Amounts due to related

parties

147

Minimum rental and lease

payments

Term facility

3,423

Equipment loans

129

Finance lease obligations

597

288

309

Total

$ 6,504

$ 6,176

$ 325

$ 3

- 22 -


AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2020 and 2019
(Expressed in thousands of US dollars, except where otherwise noted)

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

				September 30, 2020	December 31, 2019
				MXN		CDN	MXN		CDN
		Cash						$	863 $					3,611 $	2,780 $	5,902
		Long-term investments	-					5,238			-	5,599
		Reclamation bonds	-									6	-		6
		Amounts receivable	-									20	-		54
		Accounts payable and
		accrued liabilities		(43,027)						(234)	(51,307)					(442)
		Due to related parties	-									(196)	-		(202)
		Finance lease obligations	(545)									(471)	(1,037)				(522)
		Net exposure		(42,709)		7,974	(49,564)		10,395
		US dollar equivalent						$	(1,901) $		5,978 $	(2,627) $		8,004

		Based on the net US dol ar denominated asset and liability exposures as at September 30, 2020, 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, 2020, by approximately $353 (year ended December 31, 2019
		- $465). 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, 2020, based on outstanding accounts receivable that
	- 23 -

AVINO SILVER & GOLD MINES LTD.

Notes to the unaudited condensed consolidated interim financial statements

For the nine months ended September 30, 2020 and 2019

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

were subject to pricing adjustments, a 10% change in metals prices would have an impact on net earnings

(loss) of approximately $42 (December 31, 2019 - $70).

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, 2020, a 10% change in market prices would

have an impact on net earnings (loss) of approximately $393 (December 31, 2019 - $467).

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 following table sets forth the Company’s financial assets and financial liabilities measured at fair value

on a recurring basis by level within the fair value hierarchy as at September 30, 2020:

Level 1

Level 2

Level 3

Financial assets

Cash

12,493 $

- $

Amounts receivable

1,044

Long-term investments

3,927

Total financial assets

$ 16,420 $ 1,044 $

Financial liabilities

Warrant liability

(1,550)

Total financial liabilities

$ - $

- $

(1,550)

- 24 -


AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2020 and 2019
(Expressed in thousands of US dollars, except where otherwise noted)

20. SEGMENTED INFORMATION

		The Company’s revenues for the three and nine months ended September 30, 2020 of $2,659 and $14,615
		(September 30, 2019 - $6,796 and $21,320) are all attributable to Mexico, from shipments of concentrate
		produced by the Avino Mine and the San Gonzalo Mine.

		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,
	2020					2019	2020			2019
		Silver	$ 924					$ 2,958		$ 5,668	$ 9,376
		Copper	1,344					2,814	7,823			8,997
		Gold	768					2,562	4,506			7,307
		Penalties, treatment costs and refining
		charges	(377)					(1,538)	(3,382)			(4,360)
		Total revenue from mining operations	$ 2,659					$ 6,796		$ 14,615	$ 21,320


		For nine months ended September 30, 2020, the Company had four customers (September 30, 2019 – six
		customers) that accounted for total revenues as follows:

	Three months ended			Nine months ended
			September 30,		September 30,
	2020					2019	2020			2019
		Customer #1	$ 2,310					$ 5,439		$ 11,194	$ 16,091
		Customer #2	-			370	(18)			3,086
		Customer #3	314					655	3,179			661
		Customer #4	35					313	260			1,003
		Customer #5	-			19	-			469
		Customer #6	-			-	-			10
		Total revenue from mining operations	$ 2,659					$ 6,796		$ 14,615	$ 21,320

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

						September 30,	December 31,
								2020	2019
		Exploration and evaluation assets - Mexico				$			10,009	$			9,826
		Exploration and evaluation assets - Canada						1	1
		Total exploration and evaluation assets				$			10,010	$			9,827

						September 30,	December 31,
								2020	2019
		Plant, equipment, and mining properties - Mexico				$			34,384	$			35,239
		Plant, equipment, and mining properties - Canada						374	419
		Total plant, equipment, and mining properties				$			34,758	$			35,658


	- 25 -


AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the nine months ended September 30, 2020 and 2019
(Expressed in thousands of US dollars, except where otherwise noted)

21. SUBSEQUENT EVENTS

Mining Operations

Subsequent to September 30, 2020, the Company reported that an agreement has been reached with
members from the Mexican mining union who had previously blocked the entrance to the Avino Mine. As a
result, the Company has commenced plans to restart mining and mil processing operations.
	- 26 -