Enhanced Investments - Financial Portal

Published: 2020-08-11












		AVINO SILVER & GOLD MINES LTD.


		Condensed Consolidated Interim Financial Statements

				For the six months ended June 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 June 30, 2020, and for the periods ended June

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

August 11, 2020

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

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

ASSETS
Current assets
Cash									$				10,386	$	9,625
Amounts receivable													779		1,477
Taxes recoverable			4					5,914		5,483
Prepaid expenses and other assets													438		594
Inventory			5					3,471		5,592
Total current assets													20,988		22,771
Exploration and evaluation assets			7					9,924		9,827
Plant, equipment and mining properties			9					34,986		35,658
Long-term investments			6					5,068		4,311
Other assets												4		4
Total assets									$				70,970	$	72,571

LIABILITIES
Current liabilities
Accounts payable and accrued liabilities									$				3,110	$	4,907
Amounts due to related parties			10(b)					138		156
Taxes payable												-		46
Current portion of term facility			11					3,365		3,384
Current portion of equipment loans													181		199
Current portion of finance lease obligations													397		692
Other liabilities												-		178
Total current liabilities													7,191		9,562
Term facility			11					835		2,513
Equipment loans												-		90
Finance lease obligations													294		442
Warrant liability			12					2,655		1,579
Reclamation provision			13					1,296		1,524
Deferred income tax liabilities													2,778		2,938
Total liabilities													15,049		18,648

EQUITY
Share capital			14		100,195		96,396
Equity reserves													9,214		9,391
Treasury shares (14,180 shares, at cost)													(97)		(97)
Accumulated other comprehensive loss													(5,110)		(4,563)
Accumulated deficit										(48,281)	(47,204)
Total equity													55,921		53,923
Total liabilities and equity									$				70,970	$	72,571


Commitments – Note 17

Subsequent Events – Note 21


Approved by the Board of Directors on August 11, 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 June 30,		Six months ended June 30,
			Note	2020			2019	2020	2019
Revenue from mining operations			15					$	4,840 $			7,813 $	11,956 $	14,524
Cost of sales			15		4,053			7,517	10,326	14,172

Mine operating income											787	296	1,630	352
Operating expenses
General and administrative expenses			16								562	744	1,370	1,472
Share-based payments			14								202	195	370	413
Income (loss) before other items											23	(643)	(110)	(1,533)
Other items
Interest and other income											51	96	224	235
Gain (loss) on long-term investments					1,343			(1)	1,050	1
Fair value adjustment on warrant
liability			12		(2,068)			388	(1,149)	576
Foreign exchange gain (loss)					(485)			66	(1,255)	145
Finance income (cost)											(47)	36	(134)	4
Accretion of reclamation provision			13								(22)	(27)	(49)	(54)
Interest expense											(8)	(18)	(18)	(40)
Loss from continuing operations before
income taxes			(1,213)			(103)	(1,441)	(666)
Income taxes:
Current income tax expense											(11)	(39)	(62)	(183)
Deferred income tax recovery											113	17	160	185
Income tax recovery (expense)											102	(22)	98	2
Net loss from continuing operations					(1,111)			(125)	(1,343)	(664)
Loss from discontinued operations and
on disposal														3	(165)	(41)	(165)	(112)
Net loss					(1,276)			(166)	(1,508)	(776)

Other comprehensive income (loss)
Items that may be reclassified subsequently to income or loss:
Currency translation differences											351	589	(547)	1,175
Total comprehensive income (loss)								$	(925) $			423 $	(2,055) $	399
Loss per share from continuing
operations			14(e)
Basic					$(0.01)			$(0.00)	$(0.02)	$(0.01)
Diluted					$(0.01)			$(0.00)	$(0.02)	$(0.01)
Loss per share			14(e)
Basic					$(0.02)			$(0.00)	$(0.02)	$(0.01)
Diluted					$(0.02)			$(0.00)	$(0.02)	$(0.01)
Weighted average number of
common shares outstanding			14(e)
Basic				78,612,828 65,637,008 77,943,897 64,837,964
Diluted				78,612,828 65,637,008 77,943,897 64,837,964
	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:
												At the market issuances	14	3,275,175	1,879									-	-	-		-	1,879
Issuance costs			14					-	(81)				-	-	-			-	(81)
Options cancelled or expired								-	-	(231)					-	-			231	-
Share-based payments			14					-	-	469					-	-			-	469
Net income for the period								-	-				-	-	-			(776)	(776)
Currency translation differences								-	-				-	-								1,175	-	1,175
Balance, June 30, 2019				66,612,944	$ 89,843	$ 10,087		$ (97)			$ (4,949)	$ (17,050)	$ 77,834
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	5,303,745	3,591									-	-	-		-	3,591
												Exercise of warrants	14	464,122						416	(116)					-	-		-	300
Common shares issued for services			14	675,145					-								-
Issuance costs			14					-	(208)									-	-	-				-	(208)
Options cancelled or expired								-	-	(431)					-	-			431	-
Share-based payments			14					-	-	370					-	-			-	370
Net loss for the period								-	-				-	-	-								(1,508)	(1,508)
Currency translation differences								-	-				-	-								(547)	-	(547)
Balance, June 30, 2020				83,035,400	$ 100,195	$ 9,214		$ (97)			$ (5,110)	$ (48,281)	$ 55,921


	The accompanying notes are an integral part of the condensed consolidated interim financial statements

		- 4 -

AVINO SILVER & GOLD MINES LTD.
Condensed Consolidated Interim Statements of Cash Flows
(Expressed in thousands of US dollars - Unaudited)


				Six months ended June 30,
			Note		2020	2019

Cash generated by (used in):

Operating Activities
Net loss				$ (1,508)			$ (776)
Adjustments for non-cash items:
Deferred income tax (recovery)					(160)	(185)
Depreciation and depletion				1,204		1,467
Accretion of reclamation provision					49	168
Unrealized gain on investments				(1,050)		(1)
Foreign exchange loss					245	13
Unwinding of fair value adjustment					(30)	(101)
Fair value adjustment on warrant liability				1,149		(576)
Share-based payments					370	413

					269	422

Net change in non-cash working capital items			18		(274)	3,413

					(5)	3,835


Financing Activities
Shares and units issued for cash, net of issuance costs				3,383		1,798
Proceeds from warrant exercise					300	-
Term facility payments				(1,667)		-
Finance lease payments					(462)	(334)
Equipment loan payments					(108)	(327)

				1,446		1,137

Investing Activities
Exploration and evaluation expenditures					(91)	(3,219)
Additions to plant, equipment and mining properties					(560)	(1,707)
Proceeds from sale of long-term investments				1,255		-
Purchase of long-term investments				(1,177)		-
Redemption of reclamation bonds					-	88

					(573)	(4,838)

Change in cash					868	134

Effect of exchange rate changes on cash					(107)	19

Cash, Beginning				9,625		3,252

Cash, Ending				$ 10,386			$ 3,405



	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 six months ended June 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 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.

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 six months ended June 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 six months ended June 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.




	- 7 -

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

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

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

		Operating income			-	(17)	-	(5)
		Accretion of reclamation provision			-	58	-	115
		Gain on sale of assets			-	-	-	3
		Other items			-	-	-	(1)
		Loss on disposition			(165)	-	(165)	-
		Net loss before income taxes			(165)	(41)	(165)	(112)
		Income taxes			-	-	-	-
		Net loss from discontinued operations
		and on disposal	$				(165) $ (41) $ (165) $ (112)

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

							Six months ended June 30,
		Cash used in:					2020				2019

		Cash flow provided by operating activities				$	-			$ 5
		Cash flow used in financing activities						-	(129)
		Cash flow used in investing activities						-	(3,129)
		Net cash decrease from discontinued operations					$	-			$ (3,253)

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.
				June 30,						December 31,
				2020				2019
		VAT recoverable				$	3,522					$	2,652
		GST recoverable					10	42
		Income taxes recoverable		2,382				2,789
						$	5,914					$	5,483

5. INVENTORY

				June 30,			December 31,
				2020				2019
		Process material stockpiles				$	370					$	1,079
		Concentrate inventory		1,838				3,055
		Materials and supplies		1,263				1,458
						$	3,471					$	5,592

		The amount of inventory recognized as an expense for the six months ended June 30, 2020 totalled $10,326
		(June 30, 2019 – $14,058), 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 six months ended June 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	June 30,
										2019	(Warrants				exchange for the period				2020
										Exercised)
		Talisker Resources Common
		Shares	$	3,197	$			1,184	$	(164)	$					850	$	5,067
		Talisker Resources Warrants	1,114	(1,114)									-	-	-
		Other	-			-									-	1	1
			$	4,311	$			70	$	(164)	$ 851	$ 5,068

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					50		-						50
		Assessments and taxes					41		-						41
		Effect of movements in exchange rates			6		-						6

		Balance, June 30, 2020	$			9,923 $			1 $	9,924


	- 9 -

AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the six months ended June 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.

		(i ) Gomez Palacio property

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

		(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.


	- 10 -

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

		(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 June 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 six months ended June 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	27		22	5							23	(76)	560	561
		Effect of movements in
		exchange rates	(1)		(18)	(1)							(1)	-	-	(21)
		Balance at June 30, 2020	13,663		528	345							12,941	17,478	9,847	54,802


		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	331		49	22							28	650	124	1,204
		Effect of movements in
		exchange rates	-		-	-													-	8	-		8
		Balance at June 30, 2020	8,397		133	235							4,882	4,671	1,498	19,816

		NET BOOK VALUE
		At June 30, 2020	5,266		395	110							8,059	12,807	8,349	34,986
		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 six months ended June 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 $3,890 as at June
		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 June 30, 2020, plant, equipment and mining properties included a net carrying amount of $464
		(December 31, 2019 - $559) for mining equipment under equipment loan, and $1,844 (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 six months ended June 30,
		2020 and 2019 were as follows:
				Three months ended June 30,	Six months ended June 30,
						2020						2019	2020	2019
			Salaries, benefits, and
			consulting fees	$ 163					$ 185	$ 333				$ 351
			Share-based payments	189					178	376	349
					$ 352					$ 363	$ 709				$ 700


		(b) Amounts due to/from related parties

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

							June 30,					December 31,
							2020	2019
		Oniva International Services Corp.				$	103		$	105
		Directors					35			51
						$	138		$	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 six months ended June 30, 2020 and 2019
(Expressed in thousands of US dollars, except where otherwise noted)

		The transactions with Oniva during the three and six months ended June 30, 2020 and 2019, are
		summarized below:
			Three months ended June 30,	Six months ended June 30,
					2020				2019	2020	2019
		Salaries and benefits	$ 137 $ 132		$ 318			$ 381
		Office and miscellaneous					69	60	165	150
		Exploration and evaluation assets					-	62	-	118
				$ 206			$ 254	$ 483				$ 649

		For services provided to the Company as President and Chief Executive Officer, the Company pays
		Intermark Capital Corporation (“ICC”), a company controlled by David Wolfin, the Company’s president
		and CEO and also a director, for consulting services. For the six months ended June 30, 2020, the
		Company paid $110 (June 30, 2019 - $113) 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 commencing
		ending August 2021, with 15 remaining payments as at June 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:

					June 30,			December 31,
										2020			2019
		Balance at beginning of the period			$	5,897		$	6,901
		Repayments				(1,667)						(834)
		Unwinding of fair value adjustment				(30)						(170)
		Balance at end of the period				4,200						5,897
		Less: Current portion				(3,365)						(3,384)
		Non-current portion			$	835		$	2,513


	- 14 -


AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the six months ended June 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:

			June 30,	December 31,
			2020		2019
		Balance at beginning of the period				$	1,579	$	2,009
		Fair value adjustment	1,149		(520)
		Effect of movement in exchange rates					(73)	90
		Balance at end of the period				$	2,655	$	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				(464,122)	C$0.85
		Warrants outstanding and exercisable, June 30, 2020				7,175,846	$0.80

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

		As at June 30, 2020, the weighted average remaining contractual life of warrants outstanding was 3.24 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:

			June 30,	December 31,
			2020		2019
		Weighted average assumptions:
		Risk-free interest rate	0.57%		1.68%
		Expected dividend yield					0%	0%
		Expected warrant life (years)	3.24		3.57
		Expected stock price volatility	66.50%		61.61%
		Weighted average fair value	$0.37		$0.22


	- 15 -

AVINO SILVER & GOLD MINES LTD.

Notes to the unaudited condensed consolidated interim financial statements

For the six months ended June 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 June 30, 2020, is $1,296 (December 31, 2019 –

$1,524), and the undiscounted value of the obligation is $1,597 (December 31, 2019 – $1,985).

The present value of the obligation was calculated using a risk-free interest rate of 7.04% (December 31,

2019 – 6.86%) and an inflation rate of 0.76% (December 31, 2019 – 3.54%). Reclamation activities are

estimated to begin in 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 follows:

June 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

(277)

392

Balance at end of the period

1,296 $

1,524

14. SHARE CAPITAL AND SHARE-BASED PAYMENTS

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

(b) Issued:

(i)

During the six months ended June 30, 2020, the Company issued 5,303,745 common shares in

an at-the-market offering under prospectus supplement for gross proceeds of $3,591. The

Company paid a 3% cash commission of $108 on gross proceeds and incurred an additional

$100 in issuance costs during the period.

(ii)

During the six months ended June 30, 2020, the Company 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.

(iii)

During the six months ended June 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.

(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.

- 16 -


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

		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.

			(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
Cancel ed / Forfeited					(678,500)		$1.73
Stock options outstanding, June 30, 2020					1,960,000		$1.85
Stock options exercisable, June 30, 2020					1,876,250		$1.89

			The fol owing table summarizes information about the stock options outstanding and exercisable at
			June 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	1.18			370,000	1.18
			September 20, 2022					$1.98		930,000	2.22			930,000	2.22
			August 28, 2023					$1.30		325,000	3.16			325,000	3.16
			August 21, 2024					$0.79		335,000	4.15			251,250	4.15
												1,960,000	2.51			1,876,250	2.44

	- 17 -


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

		During the six months ended June 30, 2020, the Company charged $(4) (six months ended June 30, 2019
		- $56) to operations as share-based payments and capitalized $Nil (six months ended June 30, 2019 -
		$21) 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.

		During the six months ended June 30, 2020, no RSUs (year ended December 31, 2019 – 1,730,500)
		were granted. Al RSUs granted vest one-third annually from the date of the grant until ful y vested at the
		end of the three-year term. For the RSUs issued in the year ended December 31, 2019, the weighted
		average fair value at the measurement date was C$0.79, based on the TSX market price of the
		Company’s shares on the date the RSUs were granted.

		At June 30, 2020, there were 2,277,107 RSUs outstanding (December 31, 2019 – 2,372,875).

		During the six months ended June 30, 2020, the Company charged $374 (June 30, 2019 - $356) to
		operations as share-based payments and capitalized $Nil (June 30, 2019 - $36) 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 June 30,	Six months ended June 30,
			2020		2019	2020	2019
		Net loss from continuing operations
		for the period	$ (1,111)			$	(125)	$ (1,343)					$	(664)
		Net loss for the period	$ (1,276)			$	(166)	$ (1,508)					$	(776)
		Basic weighted average number of
		shares outstanding	78,612,828			65,637,008	77,943,897					64,837,964
		Effect of dilutive share options,
		warrants, and RSUs (‘000)						-	-	-	-
		Diluted weighted average number of
		shares outstanding	78,612,828			65,637,008	77,943,897					64,837,964
		Basic loss from continuing
		operations per share	$	(0.01)					$	(0.00)	$		(0.02)		$	(0.01)
		Diluted loss from continuing
		operations per share	$	(0.01)					$	(0.00)	$		(0.02)		$	(0.01)
		Basic loss per share	$	(0.02)					$	(0.00)	$		(0.02)		$	(0.01)
		Diluted loss per share	$	(0.02)					$	(0.00)	$		(0.02)		$	(0.01)

	- 18 -


AVINO SILVER & GOLD MINES LTD.
Notes to the unaudited condensed consolidated interim financial statements
For the six months ended June 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 six and three months ended June 30, 2020
		and 2019.
				Three months ended June 30,	Six months ended June 30,
				2020					2019	2020	2019
		Concentrate sales		$	4,237 $					7,440 $	11,807 $		14,314
		Provisional pricing adjustments	603					373	149	210
				$	4,840 $					7,813 $	11,956 $		14,524


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

				Three months ended June 30,	Six months ended June 30,

	2020					2019	2020	2019
		Production costs		$	3,525 $					6,628 $	9,179 $	12,606
		Inventory net realizable adjustment							-	114	-	114
		Depreciation and depletion	528					775	1,147	1,452
				$	4,053 $					7,517 $	10,326 $		14,172

16. GENERAL AND ADMINISTRATIVE EXPENSES

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

				Three months ended June 30,	Six months ended June 30,

	2020					2019	2020	2019
		Salaries and benefits		$	282 $					345 $	652 $	657
		Office and miscellaneous	10					41	59	98
		Management and consulting fees	84					87	206	195
		Investor relations	30					52	80	82
		Travel and promotion	4					16	36	42
		Professional fees	56					132	142	240
		Directors fees	34					33	73	70
		Regulatory and compliance fees	35					31	65	73
		Depreciation	27					7	57	15
				$	562 $					744 $	1,370 $	1,472

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.

	- 19 -


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

The Company and its subsidiaries have various operating lease agreements for their office premises, use of
land, and equipment. Commitments in respect of these lease agreements are as follows:

			June 30,	December 31,
			2020		2019
		Not later than one year				$	6 $	1,269
		Later than one year and not later than five years					16	20
		Later than five years					3	5
						$	25 $	1,294

Included in the above amount as at June 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

			June 30,		June 30,
			2020		2019
		Net change in non-cash working capital items:
								Inventory	$	1,802	$	506
								Prepaid expenses and other assets	144		164
								Taxes recoverable	(743)		206
								Taxes payable	(46)		(167)
								Accounts payable and accrued liabilities	(1,545)		457
								Amounts receivable	317		2,971
								Other liabilities	(178)		(158)
								Deferred revenues	-	(573)
								Amounts due to related parties	(25)		7
						$	(274) $		3,413

			June 30,		June 30,
			2020		2019
		Interest paid				$	198	$	244
		Taxes paid				$	292 $		1,457
		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.
	- 20 -

AVINO SILVER & GOLD MINES LTD.

Notes to the unaudited condensed consolidated interim financial statements

For the six months ended June 30, 2020 and 2019

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

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 June 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 June 30, 2020, in the amount of $10,386

and working capital of $13,797 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 June 30, 2020, are

summarized as follows:

Less Than

More Than 5

Total

1 Year

1-5 years

Years

Accounts payable and

accrued liabilities

$ 3,110

$ -

Amounts due to related

parties

138

Minimum rental and lease

payments

Term facility

4,307

3,467

840

Equipment loans

185

Finance lease obligations

739

415

324

Total

$ 8,504

$ 7,321

$ 1,180

$ 3

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.

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

		Foreign Currency Risk

		Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument wil fluctuate
		due to changes in foreign exchange rates. The Company is exposed to foreign currency risk to the extent
		that the following monetary assets and liabilities are denominated in Mexican pesos and Canadian dol ars:

			June 30, 2020	December 31, 2019
			MXN		CDN	MXN		CDN
		Cash					$	3,378 $		4,526 $	2,780 $		5,902
		Long-term investments	-				6,907			-	5,599
		Reclamation bonds	-								6	-		6
		Amounts receivable	-								14	-		54
		Accounts payable and
		accrued liabilities	(59,084)						(167)	(51,307)					(442)
		Due to related parties	-								(188)	-		(202)
		Finance lease obligations	(676)								(491)	(1,037)				(522)
		Net exposure	(56,382)		10,607	(49,564)		10,395
		US dollar equivalent					$	(2,453) $		7,782 $	(2,627) $		8,004

		Based on the net US dollar denominated asset and liability exposures as at June 30, 2020, a 10%
		fluctuation in the US/Mexican and Canadian/US exchange rates would impact the Company’s earnings
		for the six months ended June 30, 2020, by approximately $462 (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 June 30, 2020, 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 $20 (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 June 30, 2020, a 10% change in market prices would have an
		impact on net earnings (loss) of approximately $507 (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.

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

		(d) Classification of Financial Instruments

		IFRS 7 Financial Instruments: Disclosures establishes a fair value hierarchy that prioritizes the inputs to
		valuation techniques used to measure fair value as follows:

		Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;
		Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset or liability,
		either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
		Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable
		inputs).

		The following table sets forth the Company’s financial assets and financial liabilities measured at fair value
		on a recurring basis by level within the fair value hierarchy as at June 30, 2020:

				Level 1	Level 2	Level 3
			Financial assets
			Cash	$			10,386 $				- $	-
			Amounts receivable							-	779				-
			Long-term investments				5,068				-	-
			Total financial assets	$ 15,454									$ 779 $	-
			Financial liabilities
			Warrant liability							-	-	(2,655)
			Total financial liabilities	$ - $							- $	(2,655)


20. SEGMENTED INFORMATION

		The Company’s revenues for the three and six months ended June 30, 2020 of $4,840 and $11,956 (June
		30, 2019 - $7,813 and $14,524) are al 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 June 30,	Six months ended June 30,
	2020						2019	2020	2019
		Silver	$ 1,892			$ 3,592	$ 4,744	$ 6,418
		Copper	2,676						3,219	6,479	6,183
		Gold	1,484						2,563	3,738	4,744
		Penalties, treatment costs and refining
		charges	(1,212)			(1,561)	(3,005)	(2,821)
		Total revenue from mining operations	$ 4,840			$ 7,813	$ 11,956	$ 14,524



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

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

			Three months ended June 30,	Six months ended June 30,
	2020				2019	2020	2019
		Customer #1	$ 4,915				$ 5,502	$ 8,884			$ 10,652
		Customer #2						-	1,631	(18)	2,716
		Customer #3						-	450	-	450
		Customer #4	225				223	225	689
		Customer #5	(300)				7	2,865	7
		Customer #6						-	-	-	10
		Total revenue from mining operations	$ 4,840				$ 7,813	$ 11,956			$ 14,524

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

					June 30,				December 31,
									2020			2019
		Exploration and evaluation assets - Mexico			$	9,923					$	9,826
		Exploration and evaluation assets - Canada		1			1
		Total exploration and evaluation assets			$	9,924					$	9,827

					June 30,				December 31,
									2020			2019
		Plant, equipment, and mining properties - Mexico			$	34,608					$	35,239
		Plant, equipment, and mining properties - Canada		378			419
		Total plant, equipment, and mining properties			$	34,986					$	35,658

21. SUBSEQUENT EVENTS

Share Capital

Warrant Exercises – Subsequent to June 30, 2020, the Company issued 2,752,042 common shares through
the early exercise of share purchase warrants for gross proceeds of $2,202

At-The-Market Sales – Subsequent to June 30, 2020, the Company issued 1,426,309 common shares in at-
the-market offerings under prospectus supplement for gross proceeds of $1,349.

RSU & Option Grant – Subsequent to June 30, 2020, the Company granted 1,700,000 incentive stock
options and 1,481,000 RSUs to its directors, officers, employees and consultants. The stock options are
exercisable for up to five years at a price of $1.64 per share and wil be vested in stages over a 12-month
period with no more than 1/4 of the options vesting in any three-month period from the date of the grant. The
RSUs wil be vested at the rate of 1/3 annually for a period of three years from the date of grant, until ful y
vested. The stock options and the RSUs are non transferable.

Mining Operations

Subsequent to June 30, 2020, the Company reported that members from the Mexican mining union have
blocked the entrance to the Avino Mine. The group includes the Company’s unionized workers. The Company
remains receptive to having good-faith discussions with representatives of the authorized union. As a result
of the strike at the site, the Company has temporarily halted mining and mil processing operations.
	- 24 -