EX-99.2 3 ex99_2.htm EXHIBIT 99.2 Exhibit 99.2
AVINO SILVER & GOLD MINES LTD.
Balance Sheets
(Prepared by Management)
 
   
October 31,
  
January 31,
  
As at:
  
2005
  
2005
  
     $    
$
 
  
 
     (Unaudited
)
  
(Audited
)
ASSETS
              
               
Current
              
Cash and cash equivalents
    
1,868,586
   
2,283,535
 
Accounts receivable
    
32,152
   
33,138
 
Prepaid expenses and deposits
    
3,996
   
22,348
 
               
     
1,904,734
   
2,339,021
 
               
Office Furniture and Equipment 
    
2,909
   
2,823
 
Mineral Properties Interests (Note 3)
    
477,875
   
315,501
 
Investment in Cia Minera Mexicana de Avino, S.A. de C.V. (Note 4)
    
1
   
1
 
Investments in Related Companies 
    
427,084
   
427,084
 
Restricted Cash
    
3,000
   
-
 
               
 
    
2,815,603
   
3,084,430
 
               
LIABILITIES
              
               
Current
              
Accounts payable and accrued liabilities
    
40,655
   
64,529
 
Due to related parties (Note 6(b))
    
57,502
   
141,644
 
               
 
    
98,157
   
206,173
 
               
SHAREHOLDERS' EQUITY
              
               
Share Capital (Note 5)
    
17,501,079
   
17,030,084
 
Contributed Surplus
    
1,042,473
   
502,973
 
Treasury Shares (14,180 Shares, at cost)
    
(101,869
)
  
(101,869
)
Deficit
    
(15,724,237
)
  
(14,552,931
)
               
 
    
2,717,446
   
2,878,257
 
               
 
    
2,815,603
   
3,084,430
 
 
Note 1 - Nature of Operations

Approved by the Board of Directors:
 
“Louis Wolfin” Director    “David Wolfin” Director


AVINO SILVER & GOLD MINES LTD.
Interim Statements of Operations and Deficit
(Unaudited - Prepared by Management)

   
Three months ended
  
Nine months ended
  
   
October 31,
  
October 31,
  
 
  
2005
  
2004
  
2005
  
2004
  
     $    
$
 
    $    
$
 
  
                           
Operating and Administrative Expenses
                          
Amortization
    
190
   
302
   
682
   
907
 
Interest
    
-
   
-
   
-
   
65
 
Management fees
    
15,000
   
21,850
   
45,000
   
62,297
 
Office and miscellaneous
    
22,825
   
12,302
   
81,013
   
50,597
 
Professional fees
    
63,158
   
6,334
   
105,934
   
20,333
 
Regulatory and compliance fees
    
3,378
   
5,451
   
18,386
   
37,265
 
Salaries and benefits
    
17,353
   
24,045
   
55,614
   
41,019
 
Shareholder and investor relations
    
12,302
   
19,404
   
60,365
   
40,160
 
Stock-based compensation
    
53,400
   
-
   
539,500
   
61,156
 
Travel and entertainment
    
19,255
   
7,633
   
54,547
   
45,312
 
                           
Loss from operations
    
(206,861
)
  
(97,321
)
  
(961,041
)
  
(359,111
)
                           
Other Income and Expenses
                          
Interest income
    
11,617
   
9,816
   
32,032
   
28,238
 
Due diligence review of Cia de Minera
                          
Mexicana de Avino, S.A. de C.V
    
(69,830
)
  
(101,937
)
  
(242,297
)
  
(265,036
)
                           
LOSS FOR THE PERIOD
    
(265,074
)
  
(189,442
)
  
(1,171,306
)
  
(595,909
)
                           
DEFICIT, beginning of period
    
(15,459,163
)
  
(13,847,067
)
  
(14,552,931
)
  
(13,440,600
)
                           
DEFICIT, end of period
    
(15,724,237
)
  
(14,036,509
)
  
(15,724,237
)
  
(14,036,509
)
                           
                           
LOSS PER SHARE
    
($0.02
)
  
($0.02
)
  
($0.11
)
  
($0.06
)
                           
WEIGHTED AVERAGE NUMBER OF
                          
SHARES OUTSTANDING
    
10,999,575
   
10,508,775
   
10,790,385
   
10,355,025
 




AVINO SILVER & GOLD MINES LTD.
Interim Statements of Cash Flows
(Unaudited - Prepared by Management)

   
Three months ended
  
Nine months ended
  
   
October 31,
  
October 31,
  
 
  
2005
  
2004
  
2005
  
2004
  
     $    
$
 
    $    
$
 
  
CASH PROVIDED BY (USED IN):
                          
                           
OPERATING ACTIVITIES
                          
Loss for the period
    
(265,074
)
  
(189,442
)
  
(1,171,306
)
  
(595,909
)
Items not affecting cash:
                          
- Amortization
    
190
   
302
   
682
   
907
 
- Stock-based compensation
    
53,400
   
-
   
539,500
   
61,156
 
                           
     
(211,484
)
  
(189,140
)
  
(631,124
)
  
(533,846
)
                           
Net change in non-cash working capital items:
                          
- Accounts receivable
    
(20,703
)
  
(7,395
)
  
986
   
4,751
 
- Prepaid expenses and deposits
    
6,679
   
(2,157
)
  
18,352
   
1,679
 
- Due from related parties
    
26,164
   
2,884
   
-
   
2,884
 
- Accounts payable and accrued liabilities
    
7,177
   
(120,977
)
  
(23,874
)
  
(35,545
)
- Due to related parties
    
49,252
   
(51,811
)
  
(84,142
)
  
(48,462
)
                           
 
    
(142,915
)
  
(368,596
)
  
(719,802
)
  
(608,539
)
                           
FINANCING ACTIVITIES
                          
Shares issued for cash
    
143,890
   
9,600
   
470,995
   
433,190
 
                           
 
    
143,890
   
9,600
   
470,995
   
433,190
 
                           
INVESTING ACTIVITIES
                          
Reclamation bond
    
-
   
-
   
(3,000
)
  
-
 
Purchase of office equipment
    
(768
)
  
-
   
(768
)
  
-
 
Mineral property expenditures
    
(132,711
)
  
(13,096
)
  
(162,374
)
  
(75,520
)
                           
 
    
(133,479
)
  
(13,096
)
  
(166,142
)
  
(75,520
)
                           
Increase (decrease) in cash and
                          
cash equivalents
    
(132,504
)
  
(372,092
)
  
(414,949
)
  
(250,869
)
                           
CASH AND CASH EQUIVALENTS
                          
Beginning of period
    
2,001,090
   
2,953,680
   
2,283,535
   
2,832,457
 
                           
CASH AND CASH EQUIVALENTS
                          
End of period
    
1,868,586
   
2,581,588
   
1,868,586
   
2,581,588
 


 
AVINO SILVER & GOLD MINES LTD.
Interim Notes to Financial Statements
October 31, 2005
(Unaudited - Prepared by Management)
 
Note 1 - Nature of Operations

Avino Silver & Gold Mines Ltd. (“Avino”) was incorporated under the laws of the Province of British Columbia. Its principal business activities include the exploration for and development of mineral properties. The Company owns interests in mineral properties in British Columbia and Yukon, Canada.

Avino is in the exploration stage of its mineral properties interests in Canada and has not yet determined whether these properties contain ore reserves which are economically recoverable.

Avino owns 49% of the issued common shares of Cia Minera Mexicana de Avino, S.A. de C.V. (“Cia Minera”) a company incorporated in Mexico. Cia Minera’s operations involve the mining of commercial ores and resource exploration and development, including the operation of a silver mine in Mexico. The silver mine has been shut down since November 2001, when operations became uneconomical.


Note 2 - Basis of Presentation

These unaudited interim financial statements have been prepared in accordance with the instructions for the preparation of such financial statements contained in the CICA Handbook Section 1751. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such instructions. These unaudited interim financial statements should be read in conjunction with the audited financial statements and accompanying notes thereto for the fiscal year ended January 31, 2005. These interim financial statements have not been reviewed by an auditor.

In the opinion of the Company’s management, all adjustments considered necessary for a fair presentation of these unaudited financial statements have been included and all such adjustments are of a normal recurring nature. Operating results for the nine month period ended October 31, 2005 are not necessarily indicative of the results that can be expected for the year ended January 31, 2006.


 
 
AVINO SILVER & GOLD MINES LTD.
Interim Notes to Financial Statements
October 31, 2005
(Unaudited - Prepared by Management)
Note 3 - Mineral Properties Interests

The following is a summary of mineral property expenditures for the nine months ended October 31, 2005:

Balance, January 31, 2005
        
$
315,501
  
               
Expenditures in the period:
              
Olympic/Kelvin property:
              
Assays
  
$
1,293
        
Exploration
    
4,444
        
Geological
    
1,850
        
Field supply and services
    
797
        
           
8,384
  
Aumax property:
              
Assays
    
271
        
Drilling
    
40,782
        
Exploration
    
7,793
        
Geological
    
2,759
        
           
51,605
  
Minto property:
              
Assays
    
8,833
        
Drilling
    
65,394
        
Exploration
    
13,657
        
Field supply and services
    
458
        
Geological
    
14,043
        
           
102,385
  
               
Balance, October 31, 2005
        
$
477,875
  
 
Note 4 - Investment In Cia De Minera Mexicana De Avino, S.A. De C.V.

 
2005
2004
     
Cia de Minera Mexicana de Avino, S.A. de C.V. (”Cia de Minera”)
$1
$1
     

Avino owns 49% of the issued common shares of Cia de Minera, a private company incorporated in Mexico. Cia de Minera is involved in the mining of commercial ores and resource exploration and development, including the operation of a silver mine in the Province of Durango, Mexico. Cia de Minera ceased operations in fiscal 2002 when the operations of its silver mine became uneconomical.

During the year ended January 31, 2005 Avino signed an agreement to purchase the remaining 51% of the issued common shares of Cia de Minera by issuing 4,000,000 of its common shares. During the quarter ended October 31, 2005 the TSX Venture Exchange had accepted for filing the share purchase agreement. Upon completion of the transaction, Cia de Minera will be a wholly owned subsidiary of the Company and will be recorded as a business combination.

During the period ended October 31, 2005 Avino has incurred due diligence costs of $242,296 which is comprised of $94,601 for assaying, engineering, and metallurgical services and $147,695 for advances to Cia de Minera on account of its operations.

AVINO SILVER & GOLD MINES LTD.
Interim Notes to Financial Statements
October 31, 2005
(Unaudited - Prepared by Management)

Note 5 - Share Capital

(a)     Authorized:  Unlimited common shares without par value

(b)     Issued:

   
2005
  
2004
  
 
  
Shares
  
Amount
  
Shares
  
Amount
  
                   
Balance, January 31
    
10,521,775
  
$
17,030,084
    
9,869,775
  
$
16,574,340
  
                           
Shares issued for cash:
                          
- exercise of stock options
   
-
    
-
    
137,000
    
158,350
  
- exercise of warrants
    
176,380
    
260,804
    
491,500
    
255,580
  
                           
Balance, April 30
    
10,698,155
    
17,290,888
    
10,498,275
    
16,988,270
  
                           
Shares issued for cash:
                          
- exercise of warrants
    
126,920
    
66,301
    
10,500
    
5,460
  
Prior year share subscriptions received
    
-
    
-
    
-
    
10,550
  
                           
Balance, July 31
    
10,825,075
  
$
17,357,189
    
10,508,775
  
$
17,004,280
  
                           
Shares issued for cash:
                          
- exercise of stock options
   
85,000
    
53,150
    
8,000
    
3,250
  
- exercise of warrants
    
174,500
    
90,740
    
-
    
-
  
                           
Balance, October 31
    
11,084,575
  
$
17,501,079
    
10,516,775
  
$
17,007,530
  
 
(c)     Share Purchase Warrants:

   
 
Underlying Shares
  
Weighted Average
Exercise Price
  
               
 
Warrants outstanding, January 31, 2005
    
2,433,250
  
$
1.44
  
Exercised
    
(176,380
)
$
1.48
  
 
Warrants outstanding, April 30, 2005
    
2,256,870
  
$
1.44
  
Exercised
    
(126,920
)
$
0.52
  
 
Warrants outstanding, July 31, 2005
    
2,129,950
  
$
1.49
  
Exercised
    
(174,500
)
$
0.52
  
 
Warrants outstanding, October 31, 2005
    
1,955,450
  
$
1.58
  
 
    The following share purchase warrants were outstanding as at October 31, 2005:

Warrants Outstanding
Expiry Date
Exercise Price
     
1,955,450
December 19, 2005
$1.58


 
 
AVINO SILVER & GOLD MINES LTD.
Interim Notes to Financial Statements
October 31, 2005
(Unaudited - Prepared by Management)
Note 5 - Share Capital (continued)

(d)     Stock Options:

During the three months ended October 31, 2005, the Company granted 70,000 stock options to directors, officers, employees, and consultants of the Company at an exercise price of $1.35 per share. These stock options vested immediately and expire over 5 years. The Company recorded a total of $53,400 for stock-based compensation expense in the period.

A summary of the stock options granted and exercised at the period ended October 31, 2005 is as follows:

   
 
Underlying Shares
  
Weighted Average
Exercise Price
  
           
Stock options outstanding, January 31, 2005
    
450,000
  
$
1.09
  
Granted
    
572,500
  
$
1.35
  
               
Stock options outstanding, April 30, 2005
    
1,022,500
  
$
1.24
  
Granted / Exercised
    
-
    
-
  
               
Stock options outstanding, July 31, 2005
    
1,022,500
  
$
1.24
  
Granted
    
70,000
  
$
1.35
  
Exercised
    
(85,000
)
$
0.66
  
               
Stock options outstanding, October 31, 2005
    
1,007,500
  
$
1.29
  


The following stock options were outstanding as at October 31, 2005:

Stock Options Outstanding
Expiry Date
Exercise Price
     
370,000
October 21, 2008
$1.20
567,500
April 5, 2010
$1.35
70,000
September 26, 2010
$1.35


 

AVINO SILVER & GOLD MINES LTD.
Interim Notes to Financial Statements
October 31, 2005
(Unaudited - Prepared by Management)
 
Note 6 - Related Party Transactions

Balances and transactions with related parties not disclosed elsewhere in these financial statements are as follows:

(a)    During the period the company paid, or made provision for the future payment of the following amounts to related parties:
 
      i)    $122,618 for administrative expenses (rent, salaries, office supplies and other miscellaneous disbursements) to a private company beneficially owned by the Company and a number of other public companies related through common directors;
 
      ii)           $45,000 to a private company controlled by a Director for management fees;
 
         iii)   $22,500 to a private company controlled by a director of a related company for consulting fees.
 
         iv)       $2,236 to a consultant who is related to a Director of the Company
 
          v)   $2,000 to a private company controlled by a director of a related company for consulting fees.

(b)    Amounts due to related parties consist of $3,965 to a public company with common directors and $53,537 to a private company referred to in (a)(i) above.

The amounts due from and due to related parties are non-interest bearing, non-secured and due on demand.
 
Note 7 - Subsequent Event

Subsequent to the period end, the common shares of the Company were accepted for quotation on the OTC Bulletin Board.
 
Note 8 - Commitment

The Company entered into an Investor Relations Agreement with a firm to provide investor relations services in Europe. The Company will pay $1,500 per month for twelve months with the agreement being effective July 1, 2005.
 
Note 9 - Comparative Figures

Certain fiscal 2004 comparative figures have been reclassified to conform to the financial statement presentation adopted for 2005.