<SEC-DOCUMENT>0001477932-15-001918.txt : 20150326
<SEC-HEADER>0001477932-15-001918.hdr.sgml : 20150326
<ACCEPTANCE-DATETIME>20150326141234
ACCESSION NUMBER:		0001477932-15-001918
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		9
CONFORMED PERIOD OF REPORT:	20141231
FILED AS OF DATE:		20150326
DATE AS OF CHANGE:		20150326

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			AVINO SILVER & GOLD MINES LTD
		CENTRAL INDEX KEY:			0000316888
		STANDARD INDUSTRIAL CLASSIFICATION:	METAL MINING [1000]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-35254
		FILM NUMBER:		15727231

	BUSINESS ADDRESS:	
		STREET 1:		570 GRANVILLE STREET
		STREET 2:		SUITE 900
		CITY:			VANCOUVER BC CANADA
		STATE:			A1
		ZIP:			V6C 3P1
		BUSINESS PHONE:		6046823701

	MAIL ADDRESS:	
		STREET 1:		570 GRANVILLE STREET
		STREET 2:		SUITE 900
		CITY:			VANCOUVER
		STATE:			A1
		ZIP:			V6C 3P1

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	INTERNATIONAL AVINO MINES LTD
		DATE OF NAME CHANGE:	19950607

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	AVINO MINES & RESOURCES LTD
		DATE OF NAME CHANGE:	19950607
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>avino_6k.htm
<DESCRIPTION>FORM 6-K
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<p style="text-align: center; margin: 0px;"><strong><font style="font-size: 12pt;"></font></strong>&#160;</p>
<p style="text-align: center; margin: 0px;"><strong><font style="font-size: 12pt;">UNITED STATES</font></strong><br /><strong><font style="font-size: 12pt; font-family: times new roman; font-weight: bold; display: inline;">SECURITIES AND EXCHANGE COMMISSION</font></strong></p>
<div style="margin-left: 0pt; display: block; margin-right: 0pt; text-indent: 0pt;" align="center"><strong><font style="font-size: 12pt; font-family: times new roman; font-weight: bold; display: inline;">Washington, D.C. 20549</font></strong></div>
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<div style="margin-left: 0pt; display: block; margin-right: 0pt; text-indent: 0pt;" align="center"><font style="font-size: 18pt; font-family: Times New Roman; font-variant: small-caps; font-weight: bold; display: inline;">FORM 6-K</font></div>
<div style="margin-left: 0pt; display: block; margin-right: 0pt; text-indent: 0pt;" align="justify">&#160;</div>
<div style="margin-left: 0pt; display: block; margin-right: 0pt; text-indent: 0pt;" align="center"><font style="font-size: 10pt; font-family: times new roman; font-weight: bold; display: inline;">REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16</font></div>
<div style="margin-left: 0pt; display: block; margin-right: 0pt; text-indent: 0pt;" align="center"><font style="font-weight: bold; display: inline;">&#160;<font id="TAB2" style="letter-spacing: 9pt;">&#160;&#160;&#160;</font></font><font style="font-size: 10pt; font-family: times new roman; font-weight: bold; display: inline;">UNDER THE SECURITIES EXCHANGE ACT OF 1934</font></div>
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<div style="margin-left: 0pt; display: block; margin-right: 0pt; text-indent: 0pt;" align="center"><font style="font-size: 12pt; font-family: Times New Roman;"><font style="font-size: 12pt; font-family: Times New Roman; font-weight: bold; display: inline;">December 31, 2014</font></font></div>
<div style="margin-left: 0pt; display: block; margin-right: 0pt; text-indent: 0pt;" align="justify">&#160;</div>
<div style="margin-left: 0pt; display: block; margin-right: 0pt; text-indent: 0pt;" align="center"><font style="font-size: 10pt; font-family: Times New Roman; display: inline;">Commission File Number: <font style="font-weight: bold;"><font style="font-weight: normal;"><font style="font-weight: bold;">001-35254</font></font></font></font></div>
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<div style="text-align: center; margin-left: 0pt; display: block; margin-right: 0pt; text-indent: 0pt;"><font style="font-size: 18pt; text-decoration: underline; font-family: Times New Roman; font-weight: bold; display: inline;">AVINO SILVER &amp; GOLD MINES LTD.</font></div>
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<div style="text-align: center; margin-left: 0pt; display: block; margin-right: 0pt; text-indent: 0pt;"><font style="font-size: 10pt; font-family: Times New Roman; display: inline;"><font style="font-size: 10pt; font-family: times new roman; font-weight: bold; display: inline;" size="3">Suite 900, 570 Granville Street, Vancouver, BC V6C 3P1</font></font></div>
<div style="margin-left: 0pt; display: block; margin-right: 0pt; text-indent: 0pt;" align="center"><font style="font-size: 10pt; font-family: Times New Roman; display: inline;">(Address of principal executive offices)</font></div>
<div style="text-align: justify; margin-left: 0pt; display: block; margin-right: 0pt; text-indent: 0pt;">&#160;</div>
<div style="text-align: left; margin: 0in 0px 10pt; display: block; text-indent: 0pt;"><font style="font-size: 10pt; font-family: Times New Roman; display: inline;">Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. </font><font style="font-size: 10pt; font-family: Times New Roman; display: inline;"><font style="display: inline;" face="Wingdings">&#254;</font>&#160;Form 20-F &#160;<font style="display: inline;" face="Wingdings">o</font> Form 40-F</font></div>
<div style="text-align: left; margin: 0in 0px 10pt; display: block; text-indent: 0pt;"><font style="font-size: 10pt; font-family: Times New Roman; display: inline;">Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): <font style="display: inline;" face="Wingdings">o</font></font></div>
<div style="text-align: left; margin: 0in 0px 10pt; display: block; text-indent: 0pt;"><font style="font-size: 10pt; font-family: Times New Roman; display: inline;">Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): <font style="display: inline;" face="Wingdings">o</font></font></div>
<div style="text-align: left; margin: 0in 0px 10pt; display: block; text-indent: 0pt;"><font style="font-size: 10pt; font-family: Times New Roman; display: inline;">Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. </font><font style="font-size: 10pt; font-family: Times New Roman; display: inline;">Yes&#160;<font style="display: inline;" face="Wingdings">o</font> No <font style="display: inline;" face="Wingdings">&#254;</font></font></div>
<div style="text-align: left; margin: 0in 0px 10pt; display: block; text-indent: 0pt;"><font style="font-size: 10pt; font-family: Times New Roman; display: inline;">If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):</font></div>
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<p style="margin: 0px;"><strong>&#160;</strong></p>
<p style="margin: 0px;"><strong>&#160;</strong></p>
<p style="text-align: center; margin: 0px;"><strong>SUBMITTED HEREWITH<br /></strong>&#160;&#160;</p>
<p style="margin: 0px;"><font style="font-size: 10pt; font-family: Times New Roman; font-weight: bold;">Exhibits: </font></p>
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<div style="margin-left: 0pt; display: block; margin-right: 0pt; text-indent: 0pt;" align="left"><font style="font-size: 10pt; font-family: times new roman; display: inline;">99.1</font></div>
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<div style="text-align: left; margin-left: 0pt; display: block; margin-right: 0pt; text-indent: 0pt;"><font style="font-size: 10pt; font-family: times new roman;"><font style="font-size: 10pt; font-family: times new roman; font-weight: bold;"><font style="font-size: 10pt; font-family: times new roman; font-weight: normal;"><font style="font-size: 10pt; font-family: times new roman; font-weight: normal; display: inline;"><font style="font-size: 10pt; font-family: times new roman;"><font style="font-weight: bold;"><font style="font-weight: normal;"><font style="font-size: 10pt; font-family: times new roman; font-weight: normal; display: inline;">Consolidated Financial Statements for the years ended December 31, 2014, 2013 and 2012</font></font></font></font></font></font></font></font></div>
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<td valign="middle" width="87%" align="left"><font style="font-size: 10pt; font-family: times new roman; display: inline;">&#160; </font></td>
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<div style="margin-left: 0pt; display: block; margin-right: 0pt; text-indent: 0pt;" align="left"><font style="font-size: 10pt; font-family: times new roman; display: inline;">99.2</font></div>
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<div style="margin-left: 0pt; display: block; margin-right: 0pt; text-indent: 0pt;" align="left"><font style="font-size: 10pt; font-family: times new roman; display: inline;">Management Discussion and Analysis</font></div>
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<div style="margin-left: 0pt; display: block; margin-right: 0pt; text-indent: 0pt;" align="left"><font style="font-size: 10pt; font-family: times new roman; display: inline;">99.3</font></div>
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<div style="margin-left: 0pt; display: block; margin-right: 0pt; text-indent: 0pt;" align="left"><font style="font-size: 10pt; font-family: times new roman; display: inline;">CEO Certification</font></div>
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<td valign="middle" width="4%" align="left"><font style="font-size: 10pt; font-family: times new roman; display: inline;">&#160; </font></td>
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<div style="margin-left: 0pt; display: block; margin-right: 0pt; text-indent: 0pt;" align="left"><font style="font-size: 10pt; font-family: times new roman; display: inline;">99.4</font></div>
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<div style="margin-left: 0pt; display: block; margin-right: 0pt; text-indent: 0pt;" align="left"><font style="font-size: 10pt; font-family: times new roman; display: inline;">CFO Certification</font></div>
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<div style="margin-left: 0pt; display: block; margin-right: 0pt; text-indent: 0pt;" align="left"><font style="font-size: 10pt; font-family: times new roman; display: inline;">99.5</font></div>
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<div style="margin-left: 0pt; display: block; margin-right: 0pt; text-indent: 0pt;" align="left"><font style="font-size: 10pt; font-family: times new roman; display: inline;">News Release</font></div>
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<div style="text-align: center; margin-left: 0pt; display: block; margin-right: 0pt; text-indent: 0pt;"><font style="font-size: 10pt; font-family: times new roman; font-weight: bold; display: inline;">SIGNATURES</font></div>
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<div style="text-align: justify; margin-left: 0pt; display: block; margin-right: 0pt; text-indent: 0pt;"><font style="font-size: 10pt; font-family: Times New Roman; display: inline;">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.</font></div>
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<td valign="top" width="38%" colspan="2"><font style="font-size: 10pt; font-family: times new roman; display: inline;"><font style="font-weight: bold; display: inline;">AVINO SILVER &amp; GOLD MINES LTD.</font></font></td>
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<div style="margin-left: 0pt; display: block; margin-right: 0pt; text-indent: 0pt;" align="left"><font style="font-size: 10pt; font-family: times new roman; display: inline;">(Registrant)</font></div>
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<div style="margin-left: 0pt; display: block; margin-right: 0pt; text-indent: 0pt;" align="left">Date:&#160;March 25, 2015</div>
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<td valign="bottom" width="35%" nowrap="nowrap" align="left"><font style="font-size: 10pt; font-family: times new roman; display: inline;">Dorothy Chin,</font></td>
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<div style="text-align: center;">3</div>
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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>avino_ex991.htm
<DESCRIPTION>CONSOLIDATED FINANCIAL STATEMENTS
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<p style="text-align: right; margin: 0px;"><b>EXHIBIT 99.1</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><img src="img001.jpg" ></b></p>
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<p style="margin: 0px;" align="center"><font style="font-size: 12pt;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b></font></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;" align="center"><b>Consolidated Financial Statements</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;" align="center"><b>For the years ended December 31, 2014, 2013 and 2012</b></p>
<p style="margin: 0px;" align="center"><b></b>&#160;</p>
<p style="margin: 0px;" align="center"><b></b>&#160;</p>
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<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;" align="center"><b>MANAGEMENT&#8217;S RESPONSIBILITY FOR FINANCIAL REPORTING</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The consolidated financial statements of Avino Silver &amp; Gold Mines Ltd. (the &#8220;Company&#8221;) are the responsibility of the Company&#8217;s management. The consolidated financial statements are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and reflect management&#8217;s best estimates and judgements based on information currently available.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Management has developed and is maintaining a system of internal controls to ensure that the Company&#8217;s assets are safeguarded, transactions are authorized and properly recorded, and financial information is reliable.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Board of Directors is responsible for ensuring that management fulfills its responsibilities. The Audit Committee reviews the results of the annual audit and reviews the consolidated financial statements prior to their submission to the Board of Directors for approval.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The consolidated financial statements as at December 31, 2014 and 2013 and for the years ended December 31, 2014, 2013, and 2012 have been audited by Manning Elliott LLP, an independent registered public accounting firm, and their report outlines the scope of their examination and gives their opinion on the consolidated financial statements.</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em>&#8220;David Wolfin&#8221;</em></p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em>&#8220;Malcolm Davidson&#8221;</em>&#160;</p>
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<tr height="15">
<td>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
</tr>
<tr height="15">
<td>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">David Wolfin&#160;</p>
</td>
<td>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Malcolm Davidson, CA&#160;</p>
</td>
</tr>
<tr height="15">
<td>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">President &amp; CEO&#160;&#160;</p>
</td>
<td>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Chief Financial Officer&#160;</p>
</td>
</tr>
<tr height="15">
<td>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">March 20, 2015&#160;</p>
</td>
<td>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">March 20, 2015&#160;</p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid2" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">1</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="text-align: center; margin: 0px;"><b><img src="img002.jpg" ></b></p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="text-align: left; margin: 0px;"><b>INDEPENDENT AUDITOR&#8217;S REPORT</b></p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">To the Shareholders of&#160;</p>
<p style="margin: 0px;">Avino Silver &amp; Gold Mines Ltd.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">We have audited the accompanying consolidated financial statements of Avino Silver &amp; Gold Mines Ltd. which comprise the consolidated statements of financial position as at December 31, 2014 and 2013, and the consolidated statements of operations and comprehensive income (loss), changes in equity and cash flows for the years ended December 31, 2014, 2013 and 2012, and the related notes comprising a summary of significant accounting policies and other explanatory information.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>Management&#8217;s Responsibility for the Consolidated</b> <b>Financial Statements </b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>Auditors&#8217; Responsibility </b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we comply with ethical requirements and plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company&#8217;s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company&#8217;s internal control. The Company is not required to have, nor were we engaged to perform, an audit of the Company&#8217;s internal control over financial reporting; accordingly we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>Opinion </b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Avino Silver &amp; Gold Mines Ltd. as at December 31, 2014 and 2013, and the results of its operations and its cash flows for the years ended December 31, 2014, 2013 and 2012 in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><i>/s/ Manning Elliott LLP</i></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">CHARTERED ACCOUNTANTS</p>
<p style="margin: 0px;">Vancouver, British Columbia</p>
<p style="margin: 0px;">March 20, 2015</p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid3" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">2</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b></p>
<p style="margin: 0px;">Consolidated Statements of Financial Position&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="fftableid4" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="center"><strong>Note</strong></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31,<br >2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31,<br >2013</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="bottom" align="left">
<p style="margin: 0px;"><b>ASSETS</b></p>
</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="bottom" align="left">
<p style="margin: 0px;"><b>Current assets</b></p>
</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Cash and cash equivalents</p>
</td>
<td width="1%">&#160;</td>
<td id="ffc" valign="bottom" width="9%" align="right">&#160;</td>
<td width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">4,249,794</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">3,839,595</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Amounts receivable</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,568,873</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,431,781</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Sales taxes recoverable</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="text-align: center; margin: 0pt;"><b>6</b></p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,658,617</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">307,101</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Prepaid expenses and other assets</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">812,600</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">713,967</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Inventory</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="text-align: center; margin: 0pt;"><b>7</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">3,804,141</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">1,854,468</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="text-indent: 30px;" valign="bottom"></td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">13,094,025</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">8,146,912</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="text-indent: 30px;" valign="bottom"></td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Exploration and Evaluation Assets</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>8</b></p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">29,909,220</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">15,686,176</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Plant, Equipment and Mining Properties</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>11</b></p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">18,173,513</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">10,564,617</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Investments in Related Companies</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>12</b></p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">33,889</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">94,040</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Investments in Other Companies</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>13</b></p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">60,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">55,000</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Reclamation Bonds</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">145,500</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">5,500</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;" valign="bottom"></td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">61,416,147</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">34,552,245</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="text-indent: 30px;" valign="bottom"></td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr style="background-color: white;" height="15">
<td valign="bottom">
<p style="margin: 0px;"><b>LIABILITIES</b></p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;"><b>Current liabilities </b></p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Accounts payable and accrued liabilities</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3,968,646</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,410,947</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Amounts due to related parties</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0px;" align="center"><b>20(b)</b></p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">222,066</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">156,833</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Current portion of finance lease obligations</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>21</b></p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,292,326</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">585,845</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Taxes payable</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">993,110</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">42,547</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="text-indent: 30px;" valign="bottom"></td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">6,476,148</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,196,172</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="text-indent: 30px;" valign="bottom"></td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Warrant Liability</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>14</b></p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">239,690</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Finance Lease Obligations</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>21</b></p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,007,010</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,090,977</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Reclamation Provision</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>15</b></p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,005,881</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,833,938</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Deferred Income Tax Liabilities</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="text-align: center; margin: 0pt;"><b>27</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">5,637,027</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">4,884,130</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;"><b>Total liabilities</b></p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">16,365,756</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">10,005,217</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="text-indent: 30px;" valign="bottom"></td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;"><b>EQUITY</b></p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Share Capital</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>16</b></p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">58,606,898</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">42,784,832</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Equity Reserves</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">10,797,709</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">10,150,849</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Treasury Shares (14,180 shares, at cost)</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(101,869</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(101,869</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Accumulated Other Comprehensive Income</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,672,009</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">215,680</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Accumulated Deficit</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(25,924,356</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(28,502,464</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;"><b>Total Equity</b></p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">45,050,391</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">24,547,028</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;" valign="bottom"></td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">61,416,147</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">34,552,245</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Commitments &#8211; Note 23</p>
<p style="margin: 0px;">Subsequent Events &#8211; Note 28</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Approved by the Board of Directors on March 20, 2015:</p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid5" style="width: 100%; text-align: left; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td style="border-bottom: black 1px solid;" width="25%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em>Gary Robertson</em>&#160;</p>
</td>
<td width="25%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Director&#160;</p>
</td>
<td style="border-bottom: black 1px solid;" width="25%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em>David Wolfin</em>&#160;</p>
</td>
<td width="25%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Director&#160;</p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;" align="center"><i>The accompanying notes are an integral part of the consolidated financial statements</i></p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid6" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">3</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;"><b>&#160;</b></p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b></p>
<p style="margin: 0px;">Consolidated Statements of Operations and Comprehensive Income (Loss)</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="fftableid7" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="center"><b>Note</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1pt solid;" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1pt solid;" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1pt solid;" valign="bottom" colspan="2" align="center"><b>2012</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;"><b>Revenue from Mining Operations</b></p>
</td>
<td width="1%">&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;"><b>18</b></p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">19,297,953</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">16,094,701</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">2,255,376</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;"><b>Cost of Sales</b></p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="text-align: center; margin: 0pt;"><b>18</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">11,393,404</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">8,968,409</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">1,434,569</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="text-indent: 30px;" valign="bottom"></td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;"><b>Mine Operating Income</b></p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">7,904,549</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">7,126,292</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">820,807</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;"><b>Operating Expenses</b></p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">General and administrative expenses</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>19</b></p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3,220,134</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3,339,069</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,911,338</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Share-based payments</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="text-align: center; margin: 0pt;"><b>17</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">923,382</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">908,362</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">18,408</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;"><b>Operating Earnings (Loss)</b></p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3,761,033</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,878,861</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(1,108,939</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;"><b>Other Items</b></p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Fair value adjustment on warrant liability</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>14</b></p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,055,957</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Foreign exchange gain</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">316,599</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">415,278</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">116,562</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Gain on forgiveness of debt</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">58,967</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Interest and other income</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">41,658</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">145,406</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">45,224</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Unrealized gain on investments in other companies</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>13</b></p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">5,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Accretion of reclamation provision</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(131,787</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Finance cost</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(129,953</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Share of net loss of equity investee</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(90,944</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Unrealized loss on investments in related companies</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>12</b></p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(4,615</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(99,833</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(110,021</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Mineral property option income</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">69,500</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">54,317</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;"><b>Net Income (Loss) Before Income Taxes</b></p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">4,881,915</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3,409,212</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(1,002,857</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;"><b>Income Taxes</b></p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Current income tax expense</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>27</b></p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(1,820,970</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(42,547</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Deferred income tax expense</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="text-align: center; margin: 0pt;"><b>27</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(546,776</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(2,518,453</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(260,321</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;" valign="bottom"></td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(2,367,746</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(2,561,000</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(260,321</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;"><b>Net Income (Loss)</b></p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,514,169</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">848,212</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(1,263,178</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td><strong>Other Comprehensive Income (Loss)</strong></td>
<td></td>
<td valign="bottom" align="right"></td>
<td></td>
<td></td>
<td valign="bottom"></td>
<td valign="bottom" align="right">
<p style="margin: 0pt;">&#160;</p>
</td>
<td valign="bottom"></td>
<td></td>
<td valign="bottom"></td>
<td valign="bottom" align="right">
<p style="margin: 0pt;">&#160;</p>
</td>
<td valign="bottom"></td>
<td></td>
<td valign="bottom" align="left"></td>
<td class="para" valign="bottom" align="right">
<p style="margin: 0pt;">&#160;</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">&#160;</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;">Items that may be reclassified subsequently to income or loss</td>
<td></td>
<td valign="bottom" align="right"></td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;"></td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;"></td>
<td style="border-bottom: black 1px solid;" valign="bottom"></td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">&#160;</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom"></td>
<td style="border-bottom: black 0pt solid;"></td>
<td style="border-bottom: black 1px solid;" valign="bottom"></td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">&#160;</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom"></td>
<td style="border-bottom: black 0pt solid;"></td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">&#160;</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">&#160;</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;">Currency translation differences of foreign operations</td>
<td>&#160;</td>
<td valign="bottom" align="right"></td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">1,456,329</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">545,891</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(67,811</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;"><b>Comprehensive Income (Loss)</b></td>
<td>&#160;</td>
<td valign="bottom" align="right"></td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">3,970,498</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">1,394,103</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(1,330,989</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;"><b>Earnings (Loss) per Share</b></p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Basic</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">0.08</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">0.03</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(0.05</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Diluted</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">0.08</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">0.03</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(0.05</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;"><b>Weighted Average Number of Common Shares Outstanding</b></p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Basic</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">32,333,224</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">27,405,179</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">27,072,053</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Diluted</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">33,273,740</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">27,701,403</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">27,072,053</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;" align="center"><i>The accompanying notes are an integral part of the consolidated financial statements</i></p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid8" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">4</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b></p>
<p style="margin: 0px;">Consolidated Statements of Changes in Equity</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="fftableid9" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1pt solid;" valign="bottom" align="center"><b>Note</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1pt solid;" valign="bottom" colspan="2" align="center"><b>Number of Common Shares</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1pt solid;" valign="bottom" colspan="2" align="center"><b>Share Capital Amount</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1pt solid;" valign="bottom" colspan="2" align="center"><b>Equity Reserves</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1pt solid;" valign="bottom" colspan="2" align="center"><b>Treasury Shares</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1pt solid;" valign="bottom" colspan="2" align="center"><b>Accumulated Other Comprehensive Income<br >(Loss)</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1pt solid;" valign="bottom" colspan="2" align="center"><b>Accumulated Deficit</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1pt solid;" valign="bottom" colspan="2" align="center"><b>Total<br >Equity</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;"><b>Balance, January 1, 2012</b></p>
</td>
<td width="1%">&#160;</td>
<td id="ffc" valign="bottom" width="6%" align="right">&#160;</td>
<td width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;"><b>26,910,227</b></p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;"><b>$</b></p>
</td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;"><b>41,720,083</b></p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;"><b>$</b></p>
</td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;"><b>9,898,186</b></p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;"><b>$</b></p>
</td>
<td id="ffc" class="para" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;"><b>(101,869</b></p>
</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;"><b>)</b></p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;"><b>$</b></p>
</td>
<td id="ffc" class="para" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;"><b>(262,400</b></p>
</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;"><b>)</b></p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;"><b>$</b></p>
</td>
<td id="ffc" class="para" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;"><b>(28,319,741</b></p>
</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;"><b>)</b></p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;"><b>$</b></p>
</td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;"><b>22,934,259</b></p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Common shares issued for cash:</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="text-indent: 30px;" valign="bottom">
<p style="padding-left: 0px; margin: 0px; text-indent: 30px;">Exercise of stock options</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">82,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">75,600</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">75,600</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Shares issued for leased claim payment</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">135,189</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">250,100</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">250,100</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Carrying value of stock options exercised</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">42,320</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(42,320</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Share-based payments</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">18,408</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">18,408</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Options and warrants cancelled or expired</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(124,600</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">124,600</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Net loss for the year</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(1,263,178</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(1,263,178</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Currency translation differences of foreign operations</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(67,811</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(67,811</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;"><b>Balance, December 31, 2012</b></p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;"><b>27,127,416</b></p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;"><b>$</b></p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;"><b>42,088,103</b></p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;"><b>$</b></p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;"><b>9,749,674</b></p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;"><b>$</b></p>
</td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;"><b>(101,869</b></p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;"><b>)</b></p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;"><b>$</b></p>
</td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;"><b>(330,211</b></p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;"><b>)</b></p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;"><b>$</b></p>
</td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;"><b>(29,458,319</b></p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;"><b>)</b></p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;"><b>$</b></p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;"><b>21,947,378</b></p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Common shares issued for cash:</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="text-indent: 30px;" valign="bottom">
<p style="padding-left: 0px; margin: 0px; text-indent: 30px;">Exercise of stock options</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">361,418</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">297,185</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">297,185</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Carrying value of stock options exercised</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">399,544</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(399,544</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Share-based payments</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">908,362</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">908,362</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Options and warrants cancelled or expired</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(107,643</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">107,643</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Net income for the year</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">848,212</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">848,212</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Currency translation differences of foreign operations</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">545,891</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">545,891</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;"><b>Balance, December 31, 2013</b></p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;"><b>27,488,834</b></p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;"><b>$</b></p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;"><b>42,784,832</b></p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;"><b>$</b></p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;"><b>10,150,849</b></p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;"><b>$</b></p>
</td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;"><b>(101,869</b></p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;"><b>)</b></p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;"><b>$</b></p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;"><b>215,680</b></p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;"><b>$</b></p>
</td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;"><b>(28,502,464</b></p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;"><b>)</b></p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;"><b>$</b></p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;"><b>24,547,028</b></p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Common shares issued for cash:</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Brokered public offerings</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>16</b></p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">4,982,677</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">11,461,810</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">11,461,810</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Less share issuance costs</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>16</b></p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(816,537</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(816,537</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Exercise of stock options</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>16</b></p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">266,457</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">307,937</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">307,937</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Carrying value of stock options exercised</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">333,483</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(333,483</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="text-align: left; margin: 0px;">Shares issued for asset acquisition</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>5</b></p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,636,845</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">4,535,373</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">4,535,373</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Share-based payments</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>17</b></p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,044,282</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,044,282</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Options and warrants cancelled or expired</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(63,939</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">63,939</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Net income for the year</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,514,169</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,514,169</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Currency translation differences of foreign operations</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">1,456,329</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">1,456,329</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;"><b>Balance, December 31, 2014</b></p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>35,374,813</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;"><b>$</b></p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>58,606,898</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;"><b>$</b></p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>10,797,709</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;"><b>$</b></p>
</td>
<td id="ffc" class="para" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>(101,869</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" align="left">
<p style="margin: 0pt;"><b>)</b></p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;"><b>$</b></p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>1,672,009</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;"><b>$</b></p>
</td>
<td id="ffc" class="para" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>(25,924,356</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" align="left">
<p style="margin: 0pt;"><b>)</b></p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;"><b>$</b></p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>45,050,391</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="text-align: center; margin: 0px;"><i></i>&#160;</p>
<p style="text-align: center; margin: 0px;"><i>The accompanying notes are an integral part of the consolidated financial statements</i></p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid10" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">5</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b></p>
<p style="margin: 0px;">Consolidated Statements of Cash Flows</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="fftableid11" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1pt solid;" valign="bottom" align="center"><b>Note</b></td>
<td align="left">&#160;</td>
<td valign="bottom" align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1pt solid;" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom" align="left">&#160;</td>
<td valign="bottom" align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1pt solid;" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td valign="bottom" align="left">&#160;</td>
<td valign="bottom" align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1pt solid;" valign="bottom" colspan="2" align="center"><b>2012</b></td>
<td valign="bottom" align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="bottom" align="left">
<p style="margin: 0px;">Cash Provided By (Used In):</p>
</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="bottom" align="left">
<p style="margin: 0px;"><b>Operating Activities</b></p>
</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Net income (loss)</p>
</td>
<td width="1%">&#160;</td>
<td id="ffc" valign="bottom" width="9%" align="right">&#160;</td>
<td width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">2,514,169</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">848,212</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" class="para" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">(1,263,178</p>
</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Adjustments for non-cash items:</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Depreciation and depletion</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,277,752</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">950,013</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">194,453</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Share-based payments</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">982,782</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">908,362</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">18,408</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Deferred income tax expense</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">546,776</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,518,453</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">260,321</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Accretion of reclamation provision</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">131,787</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Share of net loss of equity investee</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">90,944</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Fair value adjustment on warrant liability</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(1,055,957</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Foreign exchange gain</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(111,289</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Gain on forgiveness of debt</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(58,967</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Unrealized loss (gain) on investments</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(385</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">99,833</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">110,021</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Other income</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(88,637</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Sales tax provision recovery</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(46,640</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;" valign="bottom">
<p style="padding-left: 0px; margin: 0px; text-indent: 30px;">Mineral property option income</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(39,500</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(15,000</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="text-indent: 60px;" valign="bottom"></td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">4,317,612</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">5,196,736</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(741,615</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Net change in non-cash working capital items</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="text-align: center; margin: 0pt;"><b>22</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(1,461,655</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(1,213,384</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(718,112</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;" valign="bottom"></td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">2,855,957</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">3,983,352</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(1,459,727</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;"><b>Financing Activities</b></p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Shares and units issued for cash, net of issuance costs</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">12,248,857</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">297,185</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">75,600</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Finance lease payments</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(943,678</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(335,531</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(42,969</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;" valign="bottom"></td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">11,305,179</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(38,346</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">32,631</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;"><b>Investing Activities</b></p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Recovery of exploration costs from concentrate proceeds</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3,428,624</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3,490,581</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Cash from acquisition of subsidiary</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="text-align: center; margin: 0pt;"><b>5</b></p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">92,792</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Exploration and evaluation expenditures</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(11,853,024</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(901,912</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(2,387,771</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Additions to plant, equipment and mining properties</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(5,472,774</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(3,315,192</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(946,286</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Proceeds from sale of equipment</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">88,637</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;" valign="bottom"></td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(13,804,382</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(4,128,467</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">156,524</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;"><b>Change in cash and cash equivalents</b></p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">356,754</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(183,461</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(1,270,572</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="text-indent: 30px;" valign="bottom"></td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;"><b>Effect of exchange rate changes on cash and cash equivalents</b></p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">53,445</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(12,929</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">24,093</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="text-indent: 30px;" valign="bottom"></td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;"><b>Cash and Cash Equivalents, </b><b>Beginning</b></p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">3,839,595</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">4,035,985</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">5,282,464</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;"><b>Cash and Cash Equivalents, E</b><b>nding</b></p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">4,249,794</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">3,839,595</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">4,035,985</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="text-indent: 30px;" valign="bottom"></td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Cash and Cash Equivalents Consist of:</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Bank balances</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">4,249,794</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3,195,349</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,625,185</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Guaranteed investment certificates</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">644,246</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">2,410,800</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom"></td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">4,249,794</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">3,839,595</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">4,035,985</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Supplementary Cash Flow Information (Note 22)</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;" align="center"><i>The accompanying notes are an integral part of the consolidated financial statements</i></p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid12" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">6</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b></p>
<p style="margin: 0px;">Notes to the consolidated financial statements</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="tableid13" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>1. </strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>NATURE OF OPERATIONS</strong></p>
</td>
</tr>
<tr>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="margin-bottom: 0px; margin-top: 0px; margin-right: 0px;">Avino Silver &amp; Gold Mines Ltd. (the &#8220;Company&#8221; or &#8220;Avino&#8221;) 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.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin-bottom: 0px; margin-top: 0px; margin-right: 0px;">The Company&#8217;s head office and principal place of business is Suite 900, 570 Granville Street, Vancouver, BC, Canada. The Company is a reporting issuer in Canada and the United States and trades on the TSX Venture Exchange (&#8220;TSX-V&#8221;), the NYSE MKT, and the Frankfurt and Berlin Stock Exchanges.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin-bottom: 0px; margin-top: 0px; margin-right: 0px;">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 in the state of Durango, Mexico.&#160;</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid14" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>2. </strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>BASIS OF PRESENTATION</strong></p>
</td>
</tr>
<tr>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="margin-bottom: 0px; margin-top: 0px; margin-right: 0px;"><b>Statement of Compliance </b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin-bottom: 0px; margin-top: 0px; margin-right: 0px;">These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (&#8220;IFRS&#8221;) as issued by the International Accounting Standards Board (&#8220;IASB&#8221;).</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin-bottom: 0px; margin-top: 0px; margin-right: 0px;"><b>Basis of Presentation </b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin-bottom: 0px; margin-top: 0px; margin-right: 0px;">These consolidated financial statements are expressed in Canadian dollars and have been prepared on a historical cost basis except for financial instruments that have been measured at fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting on a going concern basis. The accounting policies set out below have been applied consistently to all years presented in these consolidated financial statements as if the policies have always been in effect.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin-bottom: 0px; margin-top: 0px; margin-right: 0px;"><b>Foreign Currency Translation</b>&#160;</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid15" style="width: 100%; text-align: left; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><b><i>Functional currencies</i></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin-bottom: 0px; margin-top: 0px; margin-right: 0px;">The functional and presentation currency of the Company and its Canadian subsidiary is the Canadian dollar. The functional currency of the Company&#8217;s Mexican subsidiaries is the U.S. dollar which is determined to be the currency of the primary economic environment in which the subsidiaries operate.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin-bottom: 0px; margin-top: 0px; margin-right: 0px;"><b><i>Foreign currency transactions</i></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin-bottom: 0px; margin-top: 0px; margin-right: 0px;">Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on the dates of the transactions. At each financial position reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at the date of the statement of financial position. Non-monetary items that are measured in terms of historical cost in a foreign currency are not re-translated.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin-bottom: 0px; margin-top: 0px; margin-right: 0px;"><b><i>Foreign operations</i></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin-bottom: 0px; margin-top: 0px; margin-right: 0px;">Subsidiaries that have functional currencies other than the Canadian dollar translate their statement of operations items to Canadian dollars at the average rate during the year. Assets and liabilities are translated at exchange rates prevailing at the end of each reporting period. Exchange rate variations resulting from the retranslation at the closing rate of the net investment in these subsidiaries, together with differences between their statement of operations items translated at actual and average rates, are recognized in accumulated other comprehensive income (loss). On disposition or partial disposition of a foreign operation, the cumulative amount of related exchange difference is recognized in the statement of operations.</p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid16" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">7</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="tableid17" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>2. </strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>BASIS OF PRESENTATION </strong>(continued)</p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;"><b>Significant Accounting Judgements and Estimates</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company&#8217;s management makes judgements in its process of applying the Company&#8217;s accounting policies to the preparation of its consolidated financial statements. In addition, the preparation of financial data requires that the Company&#8217;s management make assumptions and estimates of the impacts on the carrying amounts of the Company&#8217;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&#8217;s assets and liabilities are accounted for prospectively.<strong>&#160;</strong></p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid18" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>a)</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Critical judgements exercised by management in applying accounting policies that have the most significant effect on the amounts presented in these consolidated financial statements are as follows:</p>
</td>
</tr>

</table>
<table id="tableid19" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid20" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>i.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>Economic recoverability and probability of future economic benefits from exploration and evaluation costs </strong></em></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>&#160;</strong></em></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Management has determined that mine and camp, exploratory drilling, and other exploration and evaluation-related costs that were capitalized have future economic benefits and are economically recoverable. Management uses several criteria in its assessments of economic recoverability and probability of future economic benefits including geologic and metallurgic information, scoping studies, accessible facilities, existing permits, and mine plans.</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>&#160;</strong></em></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>ii.&#160;</strong><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;"><b><i>Commencement of production at levels intended by management&#160;</i></b></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;"><b><i>&#160;</i></b></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;">Prior to reaching production levels intended by management, costs incurred are capitalized as part of the costs of related exploration and evaluation assets, and proceeds from concentrate sales are offset against costs capitalized. Depletion of capitalized costs for mining properties and depreciation of plant and equipment begin when operating levels intended by management have been reached. Management considers several factors in determining when a mining property has reached the intended production levels, including production capacity, recoveries, and number of uninterrupted production days. The results of operations of the Company during the periods presented in these consolidated financial statements have been impacted by management&#8217;s determination that the San Gonzalo Mine had achieved production levels intended by management as of October 1, 2012, and that none of the Company&#8217;s exploration and evaluation assets had achieved production levels intended by management as at December 31, 2014.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid21" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">8</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="tableid22" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>2. </strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>BASIS OF PRESENTATION </strong>(continued)</p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;"><b>Significant Accounting Judgements and Estimates </b>(continued)</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid23" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%"></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">The basis for achievement of production levels intended by management as indicated by technical feasibility and commercial viability is generally established with proven reserves based on a NI 43-101-compliant technical report or a comparable resource statement and feasibility study, combined with pre-production operating statistics and other factors. In cases where the Company does not have a 43-101-compliant reserve report on which to base a production decision, the technical feasibility and commercial viability of extracting a mineral resource are considered in light of additional factors including but not limited to:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid24" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#183;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Installation and consistent operation of all critical capital components. Capital components vary depending on the nature of the resource extraction and mineral processing methods (for example, milling operation or heap leach operation) and are generally included in the technical report for the mineral property;</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top">&#160;</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#183;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Proven ability of the mineral property to produce a saleable product, often evidenced by successful execution of a bulk sampling program;</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top">&#160;</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#183;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Mineral recoveries from sampling programs and test operations at, or above, levels necessary for profitable production;</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top">&#160;</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#183;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Availability of labour for all aspects of a sustainable mining operation, either through the Company&#8217;s own workforce, the use of contractors, or a combination thereof;</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top">&#160;</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#183;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Achievement of consistent levels of resource output (through milling, leaching, or other methods) at a capacity determined by management in consultation with mining specialists to be within design capacity and economic to the mining operation;</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top">&#160;</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#183;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">An operating test period of suitable duration to provide evidence of the mine&#8217;s ability to sustain ongoing uninterrupted production of economic mineralized material.</p>
</td>
</tr>

</table>
<p style="font-size: 10pt; font-family: TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid25" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top" colspan="2">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">When technical feasibility and commercial viability are considered demonstrable according to the above criteria and other factors, the Company performs an impairment assessment and records an impairment loss, if any, before reclassifying exploration and evaluation costs to plant, equipment, and mining properties.</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;"><strong><font face="Times New Roman">&#160;</font></strong></font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;"><strong><font face="Times New Roman">iii.&#160;</font></strong>&#160;</font></p>
</td>
<td valign="top" colspan="2">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong><em>Acquisition of Bralorne Gold Mines Ltd. </em></strong></p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top" colspan="2">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Management has determined that the acquisition of all of the outstanding shares of Bralorne Gold Mines Ltd. on October 20, 2014 was an asset acquisition for accounting purposes as the Bralorne Mine property was in the exploration and evaluation stage and had not demonstrated technical feasibility, commercial viability, or the ability to provide economic benefits.</p>
</td>
</tr>

</table>
<p style="font-size: 10pt; font-family: TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid26" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>b)</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Significant assumptions about the future and other sources of estimation uncertainty that management has made at the statement of financial position date that could result in a material adjustment to the carrying amounts of assets and liabilities in the event that actual results differ from assumptions made relate to, but are not limited to, the following:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid27" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><strong><font style="font-family: TIMES NEW ROMAN;">&#160;</font></strong></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>i.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>Stockpile and concentrate inventory valuations </strong></em></p>
</td>
</tr>
<tr>
<td valign="top"><strong><font style="font-family: TIMES NEW ROMAN;">&#160;</font></strong></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>&#160;</strong></em></p>
</td>
</tr>
<tr>
<td valign="top"><strong><font style="font-family: TIMES NEW ROMAN;">&#160;</font></strong></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;">Concentrate and stockpile mineralized material are valued at the lower of average cost or net realizable value. The assumptions used in the valuation of mineralized material stockpile and concentrate include estimates of silver and gold contained in the stockpile and finished goods assumptions for the amount of silver and gold that is expected to be recovered from the concentrate. If these estimates or assumptions prove to be inaccurate, the Company could be required to write down the recorded value of its mineralized material stockpile and concentrate inventory, which would result in an increase in the Company&#8217;s expenses and a reduction in its working capital.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid28" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">9</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)&#160;</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="tableid29" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>2.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>BASIS OF PRESENTATION </strong>(continued)</p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;"><b>Significant Accounting Judgements and Estimates </b>(continued)</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid30" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><strong><font style="font-family: TIMES NEW ROMAN;">&#160;</font></strong></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>ii.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>Estimated reclamation provisions</strong></em></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><strong><font style="font-family: TIMES NEW ROMAN;">&#160;</font></strong></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>&#160;</strong></em></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><strong><font style="font-family: TIMES NEW ROMAN;">&#160;</font></strong></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;">The Company&#8217;s provision for reclamation represents management&#8217;s best estimate of the present value of the future cash outflows required to settle estimated reclamation and closure costs at the end of the life of the Avino and San Gonzalo mines. The provision reflects estimates of future costs, inflation, movements in foreign exchange rates and assumptions of risks associated with the future cash outflows, and the applicable risk free interest rates for discounting the future cash outflows. Changes in the above factors could result in a change to the provision recognized by the Company.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Changes to reclamation and closure cost obligations are recorded with a corresponding change to the carrying amounts of the related exploration and evaluation assets or mining properties. Adjustments to the carrying amounts of related mining properties result in a change to future depletion expense.<strong><em>&#160;</em></strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><strong><font style="font-family: TIMES NEW ROMAN;">&#160;</font></strong></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><strong><font style="font-family: TIMES NEW ROMAN;">&#160;</font></strong></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>iii.</strong><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;"><strong><em>Valuation of share-based payments&#160;</em></strong>&#160;</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><strong><font style="font-family: TIMES NEW ROMAN;">&#160;</font></strong></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;"><strong><em>&#160;</em></strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><strong><font style="font-family: TIMES NEW ROMAN;">&#160;</font></strong></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;">The Company uses the Black-Scholes Option Pricing Model for valuation of share-based payments. Option pricing models require the input of subjective assumptions including expected price volatility, interest rate and forfeiture rate. Changes in the input assumptions can materially affect fair value estimates and the Company&#8217;s net income or net loss and its equity reserves.</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><strong><font style="font-family: TIMES NEW ROMAN;">&#160;</font></strong></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;"><strong><em>&#160;</em></strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><strong><font style="font-family: TIMES NEW ROMAN;">&#160;</font></strong></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>iv.</strong><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;"><b>&#160;</b><b><i>Impairment of plant and equipment, mining properties, and exploration and evaluation assets&#160;</i></b></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><strong><font style="font-family: TIMES NEW ROMAN;">&#160;</font></strong></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;"><b>&#160;</b></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><strong><font style="font-family: TIMES NEW ROMAN;">&#160;</font></strong></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;">Management considers both external and internal sources of information in assessing whether there are any indications that the Company&#8217;s plant and equipment, mining properties, and exploration and evaluation assets are impaired. External sources of information management considers include changes in the market, economic and legal environments, in which the Company operates, that are not within its control and that affect the recoverable amount of its plant, equipment and mining properties. Internal sources of information that management considers include the manner in which mining properties and plant and equipment are being used, or are expected to be used, and indications of economic performance of the assets.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">In determining the recoverable amounts of the Company&#8217;s plant, equipment, and mining properties, management makes estimates of the undiscounted future pre-tax cash flows expected to be derived from the Company&#8217;s mining properties, and the appropriate discount rate. Reductions in metal price forecasts, increases in estimated future costs of production, increases in estimated future non expansionary capital expenditures, reductions in the amount of recoverable resources and exploration potential, and adverse current economic conditions are examples of factors that could result in a write down of the carrying amounts of the Company&#8217;s plant, equipment, mining properties, and exploration and evaluation assets.<strong>&#160;</strong></p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid31" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">10</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
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</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
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<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>2. </strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>BASIS OF PRESENTATION </strong>(continued)</p>
</td>
</tr>
<tr>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>Significant Accounting Judgements and Estimates </strong>(continued)<strong>&#160;</strong></p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid33" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>v. </strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong><em>Depreciation rate for plant and equipment and depletion rate for mining properties </em></strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong><em>&#160;</em></strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Depreciation and depletion expenses are allocated based on estimates for useful lives of assets. Should the asset life, depletion rates, or depreciation rates differ from the initial estimate, the revised life or rate would be reflected prospectively through profit and loss.<strong><em>&#160;</em></strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong><em>&#160;</em></strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>vi.&#160;</strong><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong><em>Recognition and measurement of deferred tax assets and liabilities</em></strong><strong><em>&#160;</em></strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong><em>&#160;</em></strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;">Estimates of future taxable income are based on forecasted cash flows from operations and the application of existing tax laws in each jurisdiction. Forecasted cash flows from operations are based on projections internally developed and reviewed by management. Weight is attached to tax planning opportunities that are within the Company&#8217;s control, and are feasible and implementable without significant obstacles. The likelihood that tax positions taken will be sustained upon examination by applicable tax authorities is assessed based on individual facts and circumstances of the relevant tax position evaluated in light of all available evidence. Where applicable tax laws and regulations are either unclear or subject to ongoing varying interpretations, it is reasonably possible that changes in these estimates can occur that could materially affect the amounts of deferred tax assets and liabilities.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid34" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">&#160;</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>Basis of Consolidation</strong></p>
</td>
</tr>
<tr>
<td valign="top"></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top"></td>
<td valign="top">
<p style="margin: 0px;">The consolidated financial statements include the accounts of the Company and its Canadian and Mexican subsidiaries as follows:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="fftableid35" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0px;"><strong>Subsidiary</strong></p>
</td>
<td width="1%" align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" width="20%" align="center"><b>Ownership Interest</b></td>
<td width="1%" align="left">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" width="20%" align="left">
<p style="text-align: center; margin: 0px;"><strong>Jurisdiction</strong></p>
</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0px;">&#160;</p>
</td>
<td style="border-bottom: black 1px solid;" valign="bottom" width="25%" align="left">
<p style="text-align: center; margin: 0px;"><strong>Nature of Operations</strong></p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="top">
<p style="margin: 0px;">Bralorne Gold Mines Ltd.</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="text-align: left; margin: 0pt;">100%</p>
</td>
<td valign="bottom"></td>
<td valign="top">
<p style="margin: 0px;">Canada</p>
</td>
<td valign="top">
<p style="margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="margin: 0px;">Mining and exploration</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="top">
<p style="margin: 0px;">Oniva Silver and Gold Mines S.A. de C.V.</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="text-align: left; margin: 0pt;">100%</p>
</td>
<td valign="bottom"></td>
<td valign="top">
<p style="margin: 0px;">Mexico</p>
</td>
<td valign="top">
<p style="margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="margin: 0px;">Mexican operations and administration</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="top">
<p style="margin: 0px;">Promotora Avino, S.A. de C.V. (&#8220;Promotora&#8221;)</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="text-align: left; margin: 0pt;">79.09%</p>
</td>
<td valign="bottom"></td>
<td valign="top">
<p style="margin: 0px;">Mexico</p>
</td>
<td valign="top">
<p style="margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="margin: 0px;">Holding company</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="top">
<p style="margin: 0px;">Compa&#241;&#237;a Minera Mexicana de Avino, S.A. de C.V.</p>
<p style="margin: 0px;">(&#8220;Avino Mexico&#8221;)</p>
</td>
<td>&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="text-align: left; margin: 0px;">98.39% direct</p>
<p style="text-align: left; margin: 0px;">1.27% indirect (Promotora)</p>
<p style="text-align: left; margin: 0px;">99.66% effective</p>
</td>
<td>&#160;</td>
<td style="border-bottom: black 1px solid;" valign="top">
<p style="margin: 0px;">Mexico</p>
</td>
<td valign="top">
<p style="margin: 0px;">&#160;</p>
</td>
<td style="border-bottom: black 1px solid;" valign="top">
<p style="margin: 0px;">Mining and exploration</p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid36" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Intercompany balances and transactions, including unrealized income and expenses arising from intercompany transactions, are eliminated in preparing the consolidated financial statements.</p>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<p style="padding-left: 0px; margin: 0px; text-indent: 0px;">On October 20, 2014, the Company acquired a 100% ownership interest in Bralorne Gold Mines Ltd. (&#8220;Bralorne&#8221;) (Note 5). Bralorne&#8217;s fiscal year end date prior to the acquisition was January 31.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid37" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">11</font></div>
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</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="tableid38" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><strong>2.</strong>&#160;</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>BASIS OF PRESENTATION</strong> (continued)</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><strong>&#160;</strong></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><strong>&#160;</strong></td>
<td valign="top">
<p style="margin-bottom: 0px; margin-top: 0px; margin-right: 0px;"><b>Basis of Consolidation</b> (continued)</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin-bottom: 0px; margin-top: 0px; margin-right: 0px;">On June 4, 2013, the Company converted existing loans advanced to Avino Mexico into new additional shares, resulting in an increase of the Company&#8217;s ownership by 0.38% to an effective 99.66%. The intercompany loans and investments are eliminated upon consolidation of the financial statements. The Company had a pre-existing effective ownership interest of 99.28% in Avino Mexico prior to the 0.38% increase. The issuance of shares to the Company by Avino Mexico on June 4, 2013, resulted in a reduction in the non-controlling interest from 0.72% to 0.34%.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin-bottom: 0px; margin-top: 0px; margin-right: 0px;"><b>Financial Instruments</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin-bottom: 0px; margin-top: 0px; margin-right: 0px;">All financial assets are initially recorded at fair value and classified into one of four categories: held to maturity, available for sale, loans and receivables, or fair value through profit or loss (&#8220;FVTPL&#8221;). All financial liabilities are initially recorded at fair value and classified as either FVTPL or other financial liabilities. Loans and receivables and other financial liabilities are subsequently measured at amortized cost. Financial instruments comprise cash and cash equivalents, amounts receivable, investments in related and other companies, reclamation bonds, accounts payable, amounts due to related parties, warrant liability, and finance lease obligations.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin-bottom: 0px; margin-top: 0px; margin-right: 0px;">The Company has classified its cash and cash equivalents, investments in related and other companies, and warrant liability as FVTPL. Amounts receivable, and reclamation bonds are classified as loans and receivables. Accounts payable, amounts due to related parties, and finance lease obligations are classified as other financial liabilities.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin-bottom: 0px; margin-top: 0px; margin-right: 0px;">Subsequent to initial recognition, financial assets are measured in accordance with the following:<strong>&#160;</strong></p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid39" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(i)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Financial assets classified as fair value through profit or loss are measured at fair value. All gains and losses resulting from changes in their fair value are included in net income (loss) in the period in which they arise.</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(ii)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Held-to-maturity investments and loans and receivables are initially measured at fair value and subsequently measured at amortized cost. Amortization of premiums or discounts and transaction costs are amortized into net income (loss), using the effective interest method less any impairment.</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(iii)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Available-for-sale financial assets are measured at fair value, with unrealized gains and losses recorded in other comprehensive income until the asset is realized, at which time they will be recorded in net income (loss). Other than temporary impairments on available-for-sale financial assets are recorded in net income (loss).</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid40" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">12</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
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<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
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<tr>
<td valign="top" width="3%"><strong>2.</strong>&#160;</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>BASIS OF PRESENTATION</strong> (continued)</p>
</td>
</tr>
<tr>
<td valign="top"><strong>&#160;</strong></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top"><strong>&#160;</strong></td>
<td valign="top">
<p style="margin: 0px;"><b>Financial Instruments </b>(continued)</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Subsequent to initial recognition, financial liabilities are measured in accordance with the following:<strong>&#160;</strong></p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid42" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(i)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Financial liabilities classified as other financial liabilities are initially recognized at fair value less transaction costs. After initial recognition, other financial liabilities are subsequently measured at amortized cost using the effective interest method. The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability or, where appropriate, a shorter period.</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(ii)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Financial liabilities classified as fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as fair value through profit or loss. Fair value changes on financial liabilities classified as fair value through profit or loss are recognized in net income (loss). At December 31, 2014, the Company classified share purchase warrants with an exercise price in U.S. dollars (see Note 14) as financial liabilities at fair value through profit or loss. As these warrants are exercised, the fair value of the recorded warrant liability on date of exercise is included in share capital along with the proceeds from the exercise. If these warrants expire, the related decrease in warrant liability is recognized in net income (loss).</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
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<tr>
<td valign="top" width="3%">&#160;</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><b>Cash and cash equivalents</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Cash and cash equivalents in the statement of financial position comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are readily convertible into a known amount of cash.</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><b>&#160;</b></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><strong>3.</strong></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>SIGNIFICANT ACCOUNTING POLICIES</strong><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><strong>&#160;</strong></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><strong>&#160;</strong></td>
<td valign="top">
<p style="margin: 0px;"><b>Exploration and evaluation assets</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company capitalizes all costs relating to the acquisition, exploration, and evaluation of mineral claims, and recognizes any proceeds received as a reduction of the cost of the related claims. The Company&#8217;s capitalized exploration and evaluation are classified as intangible assets. Such costs include, but are not limited to, geological, geophysical studies, exploratory drilling, and sampling. Incidental revenues and operating costs are included in exploration and evaluation costs prior to demonstrating the technical feasibility and commercial viability of extracting mineral resources. When the technical feasibility and commercial viability of extracting mineral resources has been demonstrated, these costs are assessed for impairment and are reclassified to mining properties and become subject to depletion. All capitalized exploration and evaluation expenditures are monitored for indications of impairment. Where a potential impairment is indicated, assessments are performed for each area of interest. To the extent that exploration expenditures are not expected to be recovered, the expenditures for the area of interest are written down and charged to operations. The aggregate costs related to abandoned mineral claims are charged to operations at the time of any abandonment. An impairment charge relating to a mineral claim may be subsequently reversed if new exploration results or actual or potential proceeds on sale or farm out of the property result in a revised estimate of the recoverable amount, but only to the extent that this does not exceed the original carrying value of the property that would have resulted if no impairment had been recognized.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The recoverability of amounts shown for exploration and evaluation assets is dependent upon the discovery of economically recoverable reserves or resources, the ability of the Company to obtain financing to establish a sustainable mining operation, and on future production or proceeds of disposition.<strong>&#160;</strong></p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
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<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">13</font></div>
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</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
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<tr>
<td valign="top" width="3%"><strong>3.&#160;</strong>&#160;</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>SIGNIFICANT ACCOUNTING POLICIES </strong>(continued)</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><strong>&#160;</strong></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><strong>&#160;</strong></td>
<td valign="top">
<p style="margin: 0px;"><b>Plant, equipment, and mining properties </b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Upon demonstrating the technical feasibility and commercial viability of extracting mineral resources, all expenditures incurred to that date for the mine are reclassified to mining properties. Expenditures capitalized to mining properties include all costs related to obtaining or expanding access to resources including extensions of the haulage ramp and installation of underground infrastructure, and the initial estimate of the reclamation provision. Expenditures incurred with respect to a mining property are capitalized when it is probable that additional future economic benefits will flow to the Company. Otherwise, such expenditures are classified as a cost of production.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Plant and equipment are recorded at historical cost less accumulated depreciation and any accumulated impairment losses. Historical costs include expenditures that are directly attributable to bringing the asset to a location and condition necessary to operate in a manner intended by management. Such costs are accumulated as construction in progress until the asset is available for use, at which point the asset is classified as plant, equipment, and mining properties.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">After the date that management&#8217;s intended production levels have been achieved, mining properties are depleted using the straight-line method over the estimated remaining life of the mine. The Company estimates the remaining life of its producing mineral properties on an annual basis using a combination of quantitative and qualitative factors including historical results, mineral resource estimates, and management&#8217;s intent to operate the property.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company does not have sufficient reserve information to form a basis for the application of the units-of-production method for depreciation and depletion. As at December 31, 2014, 2013, and 2012, the Company estimated a remaining mine life for San Gonzalo of 4.8 years, 5.8 years, and 5.4 years respectively.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Accumulated mill, machinery, plant facilities, and certain equipment are depreciated using the straight-line method over their estimated useful lives, not to exceed the life of the mine for any assets that are inseparable from the mine. When parts of an item of plant and equipment have different useful lives, they are accounted for as separate items (or components) of plant and equipment.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Plant and equipment are depreciated at the following annual rates:<strong>&#160;</strong></p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="fftableid45" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15" bgcolor="#cceeff">
<td valign="top">
<p style="margin: 0px;">Office equipment, furniture, and fixtures</p>
</td>
<td valign="bottom">
<p style="margin: 0px;" align="right">20% declining balance</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="top">
<p style="margin: 0px;">Computer equipment</p>
</td>
<td valign="bottom">
<p style="margin: 0px;" align="right">30% declining balance</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="top">
<p style="margin: 0px;">Mine machinery and transportation equipment</p>
</td>
<td valign="bottom">
<p style="margin: 0px;" align="right">20% declining balance</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="top">
<p style="margin: 0px;">Mill machinery and processing equipment</p>
</td>
<td valign="bottom">
<p style="margin: 0px;" align="right">20 years straight line</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="top">
<p style="margin: 0px;">Buildings</p>
</td>
<td valign="bottom">
<p style="margin: 0px;" align="right">20 years straight line</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
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<tr>
<td valign="top" width="3%">&#160;</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><b>Impairment</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">At each financial position reporting date, the carrying amounts of the Company&#8217;s assets are reviewed to determine whether there is any indication that those assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. Where the asset does not generate cash flows that are independent from other assets, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
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<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">14</font></div>
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</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)&#160;</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
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<tr>
<td valign="top" width="3%"><strong>3.</strong></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>SIGNIFICANT ACCOUNTING POLICIES </strong>(continued)</p>
</td>
</tr>
<tr>
<td valign="top"><strong>&#160;</strong></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top"><strong>&#160;</strong></td>
<td valign="top">
<p style="margin: 0px;"><b>Impairment </b>(continued)</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">An asset&#8217;s recoverable amount is the higher of fair value less costs to sell and value in use. Fair value is determined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset or cash generating unit is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in profit or loss for the period.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, provided the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>Leases</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Leases in which the Company assumes substantially all risks and rewards of ownership are classified as finance leases. Assets held under finance leases are recognized at the lower of the fair value and present value of the minimum lease payments at inception of the lease, less accumulated depreciation and impairment losses. The corresponding liability is recognized as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation to achieve a constant rate of interest on the remaining liability. Finance charges are recorded as a finance expense within profit and loss, unless they are attributable to qualifying assets, in which case they are capitalized.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Operating lease payments are recognized on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed, in which case that systematic basis is used. Operating lease payments are recorded within profit and loss unless they are attributable to qualifying assets, in which case they are capitalized.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>Inventory</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Material extracted from the Company's mine is classified as either process material or waste. Process material represents mineralized material that, at the time of extraction, the Company expects to process into a saleable form and sell at a profit, while waste is considered uneconomic to process and its extraction cost is included in direct mining costs. Raw materials are comprised of process material stockpiles. Process material is accumulated in stockpiles that are subsequently processed into bulk silver, gold, and copper concentrate in a saleable form. The Company has bulk silver, gold, and copper concentrate inventory in saleable form that has not yet been sold. Mine operating supplies represent commodity consumables and other raw materials used in the production process, as well as spare parts and other maintenance supplies that are not classified as capital items.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Inventories are valued at the lower of cost and net realizable value. Cost is determined on a weighted average basis and includes all costs incurred, based on normal production capacity, in bringing each product to its present location and condition. Cost of inventories comprises direct labor, materials and contractor expenses, depletion and depreciation on mining properties, plant and equipment, and an allocation of mine site costs. As mineralized material is removed for processing, costs are removed based on the average cost per tonne in the stockpile. Stockpiled process material tonnages are verified by periodic surveys.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid50" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">15</font></div>
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</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
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<tr>
<td valign="top" width="3%"><strong>3.</strong>&#160;</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>SIGNIFICANT ACCOUNTING POLICIES </strong>(continued)</p>
</td>
</tr>
<tr>
<td valign="top"><strong>&#160;</strong></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top"><strong>&#160;</strong></td>
<td valign="top">
<p style="margin: 0px;"><b>Inventory </b>(continued)</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Net realizable value (&#8220;NRV&#8221;) of mineralized material is determined with reference to relevant market prices less applicable variable selling expenses and costs to bring the inventory into its saleable form. NRV of materials and supplies is generally calculated by reference to salvage or scrap values when it is determined that the supplies are obsolete. NRV provisions are recorded within cost of sales in the consolidated statement of operations, and are reversed to reflect subsequent recoveries where the inventory is still on hand.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>Revenue recognition</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue and costs to sell can be reliably measured. Revenue is measured at the fair value of the consideration received, excluding discounts, rebates, and other sales tax or duty.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Revenue from the sale of concentrate is recognized upon delivery when the risks and rewards of ownership are transferred to the customer and neither continuing managerial involvement nor effective control remains over the goods sold. Revenue is based on quoted market prices of the London Metal Exchange during the quotation period less treatment, refining and smelting charges, and penalties.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Metals contained in bulk concentrate sold to third parties are provisionally invoiced and the price is not settled until a predetermined contractual future date, typically one to three months after delivery to the customer, based on the market price of metals at that time. The Company enters into contracts that provide a provisional payment on delivery based upon provisional assays and quoted metal prices at the time. Revenues are recorded when title passes from the Company to the buyer based on the spot price on date of delivery, and subsequently adjusted to market price based on the date of the final settlement.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Prior to the date that management&#8217;s intended production levels have been achieved, concentrate sales incidental to the exploration of mineral properties are recorded net of production costs as a reduction of capitalized exploration and evaluation costs.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>Share capital</b></p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
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<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><b>a)</b></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><b><i>Common shares</i></b></p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Common shares are classified as equity. Transaction costs directly attributable to the issuance of common shares and equity warrants are recognized as a deduction from equity, net of any tax effects. Transaction costs directly attributable to derivative warrants are charged to operations as a finance cost.</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><b>b)</b></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><b><i>Repurchase of share capital (treasury shares)</i></b></p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">When share capital recognized as equity is repurchased, the amount of the consideration paid, which includes directly attributable costs, net of any tax effects, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares and are presented as a deduction from total equity. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is transferred to accumulated deficit.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid53" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">16</font></div>
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</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="tableid54" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><b>3. </b></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>SIGNIFICANT ACCOUNTING POLICIES </strong>(continued)</p>
</td>
</tr>
<tr>
<td valign="top">&#160;</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><b>&#160;</b></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>Share-based payment transactions </strong></p>
</td>
</tr>
<tr>
<td valign="top">&#160;</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">The Company&#8217;s share option plan allows directors, officers, employees, and consultants to acquire common shares of the Company. All options granted are measured at fair value, and are recognized in expenses as share-based payments over the vesting period with a corresponding increase in equity reserves. An individual is classified as an employee when the individual is an employee for legal or tax purposes (direct employee) or provides services similar to those performed by a direct employee.</p>
</td>
</tr>
<tr>
<td valign="top">&#160;</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">The&#160; fair value of employee options is measured at the grant date, and each tranche is recognized using the graded vesting method over the period during which the options vest. The fair value of the options granted is measured using the Black-Scholes option pricing model taking into account the terms and conditions upon which the options were granted. Share options granted to non-employees or consultants are measured at the fair value of services received or indirectly by reference to the fair value of the options if the fair value of the services cannot be estimated reliably. At each financial position reporting date, the amount recognized as an expense is adjusted to reflect the actual number of share options that are expected to vest.</p>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>Reclamation and other provisions</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Provisions are recognized where a legal or constructive obligation has been incurred as a result of past events, it is probable that an outflow of resources embodying economic benefit will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made. If material, provisions are measured at the present value of the expenditures expected to be required to settle the obligation. The increase in any provision due to the passage of time is recognized as accretion expense.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company records the present value of estimated costs of legal and constructive obligations required to restore mining properties in the period in which the obligation is incurred. The nature of these restoration activities includes dismantling and removing structures, rehabilitating mines and restoration, reclamation and re-vegetation of affected areas.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The fair value of the liability for a rehabilitation provision is recorded when it is incurred. When the liability is initially recognized, the present value of the estimated cost is capitalized by increasing the carrying amount of the related mineral property. Over time, the discounted liability is increased for the change in present value based on the discount rates that reflect current market assessments and the risks specific to the liability, which is accreted over time through periodic charges to income or loss. Additional disturbances, changes in costs, or changes in assumptions are recognized as adjustments to the corresponding assets and reclamation liabilities when they occur.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>Earnings (loss) per share</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company presents basic and diluted earnings (loss) per share data for its common shares, calculated by dividing the earnings (loss) attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the year. Diluted earnings (loss) per share is determined by adjusting the earnings (loss) attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all potentially dilutive common shares.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>Income taxes</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Income taxes in the years presented are comprised of current and deferred tax. Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized as equity.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid55" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">17</font></div>
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<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
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<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>3.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>SIGNIFICANT ACCOUNTING POLICIES</strong> (continued)</p>
</td>
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<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
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<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;"><b>Income taxes </b>(continued)</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Deferred tax is recognized using the statement of financial position asset and liability method, which provides for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax recognized is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the statement of financial position date. A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Deferred tax assets and liabilities are not recognized if the temporary differences arise from the initial recognition of goodwill or an asset or liability in a transaction other than a business combination that affects neither accounting profit nor taxable profit.<strong>&#160;</strong></p>
</td>
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<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;"><b>&#160;</b></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>4.</strong><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;"><strong>RECENT ACCOUNTING PRONOUNCEMENTS&#160;</strong><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;"><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;">The following accounting policies were adopted by the Company during the year:</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><i>IAS 36 &#8211; Impairment of Assets</i></b>&#160;</p>
<p style="margin: 0px;">In May 2013, the IASB issued an amendment to address the disclosure of information about the recoverable amount of impaired assets or a CGU for periods in which an impairment loss has been recognized or reversed. The amendments also address disclosure requirements applicable when an asset&#8217;s or a CGU&#8217;s recoverable amount is based on fair value less costs of disposal.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><i>IFRIC 21 &#8211; Levies</i></b></p>
<p style="margin: 0px;">In May 2013, the IASB issued IFRIC 21, Levies (&#8220;IFRIC 21&#8221;), an interpretation of IAS 37, Provisions, Contingent Liabilities and Contingent Assets (&#8220;IAS 37&#8221;), on the accounting for levies imposed by governments. IAS 37 sets out criteria for the recognition of a liability, one of which is the requirement for the entity to have a present obligation as a result of a past event (&#8220;obligating event&#8221;). IFRIC 21 clarifies that the obligating event that gives rise to a liability to pay a levy is the activity described in the relevant legislation that triggers the payment of the levy.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The following accounting standards were issued but not yet effective as of December 31, 2014:</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><i>IFRS 15 &#8211; Revenue from Contracts with Customers</i></b>&#160;</p>
<p style="margin: 0px;">In May 2014, the IASB issued IFRS 15 &#8211; Revenue from Contracts with Customers ("IFRS 15") which supersedes IAS 11 &#8211; Construction Contracts, IAS 18 &#8211; Revenue, IFRIC 13 &#8211; Customer Loyalty Programmes, IFRIC 15 &#8211; Agreements for the Construction of Real Estate, IFRIC 18 &#8211; Transfers of Assets from Customers, and SIC 31 &#8211; Revenue &#8211; Barter Transactions Involving Advertising Services. IFRS 15 establishes a comprehensive five-step framework for the timing and measurement of revenue recognition. The standard is effective for annual periods beginning on or after January 1, 2017. The Company is currently evaluating the impact the final standard is expected to have on its consolidated financial statements.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><i>IFRS 9 &#8211; Financial Instruments&#160;</i></b></p>
<p style="margin: 0px;">The IASB intends to replace IAS 39 &#8211; Financial Instruments: Recognition and Measurement in its entirety with IFRS 9 &#8211; Financial Instruments (&#8220;IFRS 9&#8221;) which is intended to reduce the complexity in the classification and measurement of financial instruments. In February 2014, the IASB tentatively determined that the revised effective date for IFRS 9 would be January 1, 2018. The Company is currently evaluating the impact the final standard is expected to have on its consolidated financial statements.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
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<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">18</font></div>
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</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="tableid58" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>4.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>RECENT ACCOUNTING PRONOUNCEMENTS</strong> (continued)</p>
</td>
</tr>
<tr>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;"><b>Annual improvements</b><strong>&#160;</strong></p>
<p style="margin: 0px;"><strong></strong>&#160;</p>
<p style="margin: 0px;">In December 2013, the IASB issued the Annual Improvements 2010-2012 and 2011-2013 cycles, effective for annual periods beginning on or after July 1, 2014. In September 2014, the IASB issued the Annual Improvements 2012-2014 cycle, effective for annual periods beginning on or after July 1, 2016. These Annual Improvements made necessary but non-urgent amendments to existing IFRSs. These amendments are not expected to have a significant impact on the Company's consolidated financial statements.</p>
</td>
</tr>
<tr>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;"><b>&#160;</b></p>
</td>
</tr>
<tr>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>5.&#160;</strong><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;"><strong>ACQUISITION OF BRALORNE GOLD MINES LTD.</strong><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;"><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;">In August 2014, Avino and Bralorne Gold Mines Ltd. (&#8220;Bralorne&#8221;) entered into a binding arrangement agreement, whereby Avino would acquire all of the outstanding common shares of Bralorne, which Avino did not already own, by way of a plan of arrangement under the Business Corporations Act (British Columbia).</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">On July 8, 2014, Avino acquired a 33.33% interest in Bralorne from an unrelated party on the open market for cash consideration of $2,660,000 in connection with its intention to acquire all of the outstanding common shares of Bralorne. With the acceptance of the TSX-V, Avino also made a $1,250,000 loan to Bralorne (in three tranches) to provide immediate working capital. The loan carried interest at 12% per annum, and the principal amount and accrued interest were secured by a general security agreement against all of the assets of Bralorne. On October 20, 2014, under the plan of arrangement, Bralorne shareholders received 2,636,845 common shares of Avino, resulting in Bralorne becoming a wholly-owned subsidiary of Avino. Fractional shares of Avino have been rounded down to the nearest lower whole share. All unexercised outstanding stock options of Bralorne have been cancelled. Bralorne&#8217;s common shares have been delisted from the TSX Venture Exchange and the OTCQX.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The transaction has been accounted for as an asset acquisition as the Bralorne Mine property is in the exploration and evaluation stage and had not demonstrated technical feasibility, commercial viability, or the ability to provide economic benefits. Bralorne&#8217;s primary asset, the Bralorne Mine property, did not have the workforce, resources and reserves, mine plan, or financial resources to meet the definition of a business for accounting purposes.<strong>&#160;</strong></p>
<p style="margin: 0px;"><strong></strong>&#160;</p>
<p style="margin: 0px;">The consideration for the acquisition of Bralorne by Avino consists of:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid59" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">-</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">$4,535,373 by issuance of 2,636,845 common shares valued at the closing price of Avino&#8217;s shares of $1.72 per share on the transaction date;</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">-</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">$2,624,592 carrying value of the equity interest in Bralorne (9,679,149 common shares) immediately before the transaction date;</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">-</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">$986,825 of transaction costs incurred by Avino, including investment advisor fees, legal and accounting fees, directors&#8217; fees for the special committees of Avino and Bralorne, independent fairness opinions, and other acquisition-related costs.</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" colspan="2">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"></p>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">The purchase consideration is summarized as follows:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="fftableid59" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15" bgcolor="#cceeff">
<td valign="bottom" align="left">
<p style="margin: 0px;">2,636,845 Avino shares at their fair value of $1.72 per share</p>
</td>
<td width="1%" align="left">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">4,535,373</p>
</td>
<td valign="bottom" width="1%" align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Carrying value of equity interest in Bralorne (9,679,149 common shares)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,624,592</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Transaction costs</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">986,825</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;" valign="bottom"></td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">8,146,790</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid61" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">19</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="tableid62" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><strong>5.&#160;</strong>&#160;</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>ACQUISITION OF BRALORNE GOLD MINES LTD. </strong>(continued)</p>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<p style="margin: 0px;">The purchase consideration has been assigned based on the relative fair values of the assets acquired and liabilities assumed as follows:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="fftableid62" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15" bgcolor="#cceeff">
<td valign="bottom" align="left">
<p style="margin: 0px;">Cash</p>
</td>
<td width="1%" align="left">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">92,792</p>
</td>
<td valign="bottom" width="1%" align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Amounts receivable</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">13,293</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Sales taxes recoverable</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">42,543</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Amounts due from related parties</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,118</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Reclamation bonds</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">140,000</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Exploration and evaluation assets</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">9,752,300</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Equipment</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">88,534</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Loan payable</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(1,271,633</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Accounts payable and accrued liabilities</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(614,157</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Reclamation provision</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(98,000</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;" valign="bottom"></td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">8,146,790</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid64" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>6. </strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>SALES TAXES RECOVERABLE</strong></p>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong></strong>&#160;</p>
<p style="margin: 0px;">The Company&#8217;s sales taxes recoverable consist of the Mexican I.V.A. (&#8220;VAT&#8221;) and Canadian sales taxes (&#8220;GST/HST&#8221;) recoverable.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="fftableid64" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="top" align="left">&#160;</td>
<td valign="bottom" align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1pt solid;" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom" align="left">&#160;</td>
<td valign="bottom" align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1pt solid;" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td valign="bottom" align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="top">
<p style="margin: 0px;">VAT recoverable</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">1,510,812</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">292,242</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="top">
<p style="margin: 0px;">GST/HST recoverable</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">147,805</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">14,859</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="top">
<p style="margin: 0px;">Sales taxes recoverable</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">1,658,617</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">307,101</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid66" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>7. </strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>INVENTORY</strong></p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="fftableid66" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="top" align="left">&#160;</td>
<td valign="bottom" align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1pt solid;" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom" align="left">&#160;</td>
<td valign="bottom" align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1pt solid;" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td valign="bottom" align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="top">
<p style="margin: 0px;">Concentrate inventory</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">349,627</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">448,019</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="top">
<p style="margin: 0px;">Process material stockpiles</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,730,816</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,041,994</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="top">
<p style="margin: 0px;">Materials and supplies</p>
</td>
<td>&#160;</td>
<td style="border-bottom: black 1pt solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1pt solid;" valign="bottom" align="right">
<p style="margin: 0pt;">723,698</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td style="border-bottom: black 1pt solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1pt solid;" valign="bottom" align="right">
<p style="margin: 0pt;">364,455</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="top"></td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">3,804,141</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">1,854,468</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid68" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">The amount of inventory recognized as an expense for the year ended December 31, 2014 totalled $11,393,404 (2013 &#8211; $8,968,409; 2012 - $1,434,569), and includes production costs and depreciation and depletion directly attributable to the inventory production process.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid69" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">20</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="tableid70" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>8. </strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>EXPLORATION AND EVALUATION ASSETS</strong></p>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong></strong>&#160;</p>
<p style="margin: 0px;">The Company has accumulated the following acquisition, exploration and evaluation costs which are not subject to depletion:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="fftableid70" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="bottom" align="left">
<p style="margin: 0px;">&#160;</p>
</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Durango,<br >Mexico </b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>British<br >Columbia,<br >Canada </b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Yukon,<br >Canada </b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Total </b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Balance, January 1, 2013</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">12,828,198</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">3</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">1</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">12,828,202</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="text-indent: 30px;" valign="bottom"></td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Costs incurred during 2013:</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Assessments and taxes</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">181,048</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">181,048</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Drilling and exploration</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">524,433</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">524,433</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Reclamation provision</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,500,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,500,000</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Geological and related services</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">196,431</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">196,431</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Depreciation of plant and equipment</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">240,021</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">240,021</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Effect of movements in exchange rates</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">216,041</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">216,041</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Balance, December 31, 2013</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">15,686,172</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">15,686,176</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="text-indent: 30px;" valign="bottom"></td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Acquisition</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">9,752,300</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">9,752,300</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Costs incurred during 2014:</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Assays</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">16,088</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">16,088</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Assessments and taxes</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">164,127</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">678</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">164,805</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Mine and camp costs</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">4,099,672</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,323,105</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">5,422,777</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Drilling and exploration</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">870,562</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">368,081</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,238,643</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Geological and related services</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">68,328</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">85,425</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">153,753</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Depreciation of plant and equipment</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">495,847</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">495,847</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Effect of movements in exchange rates</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">407,455</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">407,455</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Sale of concentrate</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(2,510,304</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(918,320</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(3,428,624</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom"></td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Balance, December 31, 2014</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">19,281,859</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">10,627,360</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">1</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">29,909,220</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="font-size: 10pt; font-family: TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid72" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Additional information on the Company&#8217;s exploration and evaluation properties by region is as follows:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid73" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(a)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Durango, Mexico</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="margin: 0px;">The Company&#8217;s subsidiary Avino Mexico owns 42 mineral claims and leases 4 mineral claims in the state of Durango, Mexico. The Company&#8217;s mineral claims in Mexico are divided into the following four groups:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid74" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(i)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Avino mine area property</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top" colspan="2">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">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&#8217;s San Gonzalo mine which achieved production levels intended by management as of October 1, 2012, and on that date accumulated exploration and evaluation costs for the San Gonzalo mine were transferred to mining properties.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid75" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">21</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="tableid76" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>8.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>EXPLORATION AND EVALUATION ASSETS</strong> (continued)</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid77" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(a)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Durango, Mexico (continued)</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid78" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(ii)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Gomez Palacio property</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top" colspan="2">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">The Gomez Palacio property is located near the town of Gomez Palacio, and consists of nine exploration concessions covering 2,549 hectares.</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top" colspan="2">
<p style="margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="margin: 0px;">(iii)</p>
</td>
<td valign="top">
<p style="margin: 0px;">Santiago Papasquiaro property&#160;</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top" colspan="2">
<p style="margin: 0px;">The Santiago Papasquiaro property is located near the village of Papasquiaro, and consists of four exploration concessions covering 2,552.6 hectares and one exploitation concession covering 602.9 hectares.</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="margin: 0px;">(iv)</p>
</td>
<td valign="top">
<p style="margin: 0px;">Unification La Platosa properties&#160;</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top" colspan="2">
<p style="margin: 0px;">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 around the towns of Panuco de Coronado and San Jose de Avino and surrounding the formerly producing Avino mine.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">In February 2012, the Company&#8217;s wholly-owned Mexican subsidiary entered into a new agreement with Minerales de Avino, S.A. de C.V. (&#8220;Minerales&#8221;) whereby Minerales has indirectly granted to the Company the exclusive right to explore and mine the La Platosa property known as the &#8220;ET zone&#8221;.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">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 $250,100.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company has agreed to pay to Minerales a royalty equal to 3.5% of net smelter returns (&#8220;NSR&#8221;) at the commencement of production from the property. 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 processing at a monthly rate of 15,000 tonnes.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">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 US$8 million within 15 days of the Company&#8217;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.</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top" colspan="2">
<p style="margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(b)&#160;</p>
</td>
<td valign="top" colspan="2">
<p style="margin: 0px;">British Columbia, Canada</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top" colspan="2">
<p style="margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="margin: 0px;">(i)</p>
</td>
<td valign="top">
<p style="margin: 0px;">Bralorne Mine</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top" colspan="2">
<p style="margin: 0px;"></p>
<p style="margin: 0px;">The Bralorne property consists of 154 Crown granted mineral claims, ten freehold parcels of land, two reverted Crown granted claims, and eight metric unit claims that include the former Bralorne, Pioneer, and King gold mines in the historic Bridge River gold mining camp of southwest British Columbia. The entire Bralorne Gold Mine Property covers approximately 2,490 hectares. The Property is located 160 kilometres due north of Vancouver, British Columbia, Canada. There is an underlying agreement on twelve crown grants in which the Company is required to pay 1.6385% of Net Smelter Proceeds of Production from the claims, and pay fifty cents ($0.50) per ton of ore produced from these claims if the ore grade exceeds 0.75 ounces per ton gold.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid79" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">22</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="tableid80" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>8.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>EXPLORATION AND EVALUATION ASSETS</strong> (continued)</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid81" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(b)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">British Columbia, Canada (continued)</p>
</td>
</tr>

</table>
<p style="font-size: 10pt; font-family: TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid82" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(ii)&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">The Company&#8217;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 Lillooet Mining Division.&#160;</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(c)&#160;</p>
</td>
<td valign="top" width="3%" colspan="2">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Yukon, Canada</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top" width="3%" colspan="2">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top" width="3%" colspan="2">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">The Company has a 100% interest in 14 quartz leases located in the Mayo Mining Division of Yukon, Canada which collectively comprise the Eagle property. In January 2012, the Company entered into an option agreement on the Eagle property, under which the optionee is required to make cash payments, incur exploration expenditures, and issue shares to the Company in order to earn a 75% interest in the property.</p>
</td>
</tr>

</table>
<p style="font-size: 10pt; font-family: TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid83" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>9. </strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>MINERAL PROPERTY OPTION AGREEMENTS</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;">The Company has two option agreements on certain mineral properties included in exploration and evaluation assets. During the year ended December 31, 2014, a total of $Nil was recognized as mineral property option income in respect of payments received under these two option agreements<b> </b>(2013 - $69,500; 2012 - $54,317).</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid84" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(a)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">On July 30, 2012, the Company entered into an option and joint venture agreement with Endeavour Silver Corp. ("Endeavour"), whereby Endeavour was granted the option to acquire up to a 75% interest in the Laberinto property, consisting of approximately 91.7 hectares located in Durango State, Mexico. In order to exercise the option, Endeavour must pay a total of US$200,000 to the Company, and incur a total of US$3,000,000 in exploration work as follows:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="fftableid84" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td align="left"></td>
<td align="left"></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1pt solid;" valign="bottom" colspan="2" align="center"><b>Cash</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1pt solid;" valign="bottom" colspan="2" align="center"><b>Exploration Expenditures</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td style="text-indent: 30px;" align="left"></td>
<td align="left"></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Upon signing July 30, 2012 (received)</p>
</td>
<td width="1%">
<p style="margin: 0px;">&#160;</p>
</td>
<td>
<p style="text-align: center; margin: 0px;">US$</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">20,000</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td>
<p style="text-align: center; margin: 0px;">US$</p>
</td>
<td width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0px;" align="right">&#8211;</p>
</td>
<td width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">On or before July 30, 2013 (received and incurred)</p>
</td>
<td style="text-indent: 30px;"></td>
<td style="text-indent: 30px;"></td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">30,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom"></td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">300,000</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">On or before July 30, 2014 (not received &#8211; option cancelled)</p>
</td>
<td style="text-indent: 30px;"></td>
<td style="text-indent: 30px;"></td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">40,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">500,000</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">On or before July 30, 2015</p>
</td>
<td style="text-indent: 30px;"></td>
<td style="text-indent: 30px;"></td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">50,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,000,000</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">On or before July 30, 2016</p>
</td>
<td style="text-indent: 30px;"></td>
<td style="text-indent: 30px;"></td>
<td>&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">60,000</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="padding-bottom: 1px;">&#160;</td>
<td>&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">1,200,000</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td></td>
<td></td>
<td></td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td></td>
<td>
<p style="margin: 0px;">&#160;</p>
</td>
<td>
<p style="text-align: center; margin: 0px;">US$</p>
</td>
<td>&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">200,000</p>
</td>
<td style="padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="padding-bottom: 3px;">
<p style="text-align: center; margin: 0px;">US$</p>
</td>
<td>&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">3,000,000</p>
</td>
<td style="padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid86" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"></td>
<td valign="top" width="3%"></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Upon Endeavour acquiring its 75% interest, a joint venture will be formed, under which if any party does not contribute its proportionate share of costs, its participating interest will be diluted on a pro rata basis according to the contributions of all parties. If any party's participating interest is reduced to 10% or less, then its interest will be automatically converted into a 2.5% net smelter returns royalty.</p>
</td>
</tr>
<tr>
<td valign="top">&#160;</td>
<td valign="top"></td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top"></td>
<td valign="top"></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">In July 2014, Endeavour opted out of the option agreement. As a result, the Company retains a 100% interest in the Laberinto property, and will not receive further cash payments under the option agreement.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid87" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">23</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>9. MINERAL PROPERTY OPTION AGREEMENTS </b>(continued)</p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid88" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(b)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">In January 2012, the Company entered into an option agreement with Avaron Mining Corp. (&#8220;Avaron&#8221;), a private Canadian company, whereby Avaron can earn the exclusive right and option to acquire a 100% title to and interest in the Company&#8217;s Eagle property located in the Yukon Territory.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid89" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">In April 2013, the option agreement was assigned to Benz Mining Corp. (&#8220;Benz&#8221;), a Canadian public company, pursuant to the terms of an option purchase and assignment agreement dated November 30, 2012. Pursuant to the agreement, Benz acquired all of Avaron&#8217;s interest in the option agreement between Avaron and Avino. As consideration for Avino&#8217;s consent to the agreement, Benz and Avaron issued to Avino 50,000 common shares with a fair value of $14,500 (Note 13) and 250,000 common shares with a fair value of $25,000 respectively. The terms of the agreement allow Benz to earn a 75% interest by making total cash payments of $350,000, issuing 550,000 common shares, incurring exploration costs of $100,000, and drilling 35,000 meters (or incurring exploration costs of up to $7,100,000) as follows:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="fftableid89" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Cash</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Exploration Expenditures</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Number of Shares</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="top">
<p style="margin: 0px;">On approval of the agreement by TSX (received)</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0px;" align="right">&#8211;</p>
</td>
<td width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0px;">&#8211;</p>
</td>
<td width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">50,000</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="top">
<p style="margin: 0px;">On or before January 31, 2014 (incurred)</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0px;" align="right">&#8211;</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom"></td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">100,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0px;" align="right">&#8211;</p>
</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="top">
<p style="margin: 0px;">On or before January 31, 2015</p>
</td>
<td>&#160;</td>
<td valign="bottom"></td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">100,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">625,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0px;" align="right">&#8211;</p>
</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="top">
<p style="margin: 0px;">On or before January 31, 2016</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">100,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,000,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">250,000</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="top">
<p style="margin: 0px;">On or before January 31, 2017</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">50,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,000,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">250,000</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="top">
<p style="margin: 0px;">On or before January 31, 2018</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">100,000</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">3,375,000</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0px;" align="right">&#8211;</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="top"></td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;" valign="top"></td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">350,000</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">7,100,000</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">550,000</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid91" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">After the initial 75% interest is earned, Benz may elect to either form a Joint Venture with the Company, or to earn the remaining 25% interest by paying a series of annual advance royalties and completing other activities as defined in the option agreement.</p>
</td>
</tr>
<tr>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Upon signing the original agreement with Avaron, the Company received a cash payment of $25,000 and 150,000 common shares of Avaron. Of the cash payment $5,143 was recorded as a reduction to the carrying value of the Eagle property, resulting in a carrying value of $1 for the Eagle property within exploration and evaluation assets. The remaining cash proceeds of $19,857 were recorded as option income along with the $15,000 fair value of the 150,000 common shares.</p>
</td>
</tr>
<tr>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Subsequent to the year ended December 31, 2014, Benz opted out of the option agreement. Consequently, the Company retains a 100% interest in the Eagle property.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid92" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>10.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>NON-CONTROLLING INTEREST</strong></p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid93" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">At December 31, 2014, the Company had an effective 99.66% (2013 - 99.66%) interest in its subsidiary Avino Mexico and the remaining 0.34% (2013 - 0.34%) interest represents a non-controlling interest. The accumulated deficit and current year income attributable to the non-controlling interest are insignificant and accordingly have not been recognized in the consolidated financial statements.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid94" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">24</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;&#160;</p>
<p style="margin: 0px;"><b>11.&#160; </b><b>PLANT, EQUIPMENT, AND MINING PROPERTIES</b>&#160;</p>
<p style="font-size: 10pt; font-family: TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="fftableid95" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="top">&#160;</td>
<td>&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" colspan="2">
<p style="text-align: center; margin: 0px;" align="center"><b>Mining</b></p>
<p style="margin: 0px;" align="center"><b>properties </b></p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" colspan="2">
<p style="margin: 0px;" align="center"><b>Office equipment, furniture, and fixtures</b></p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" colspan="2">
<p style="margin: 0px;" align="center"><b>Computer equipment</b></p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" colspan="3">
<p style="margin: 0px;" align="center"><b>Mine machinery and transportation equipment</b></p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" colspan="3">
<p style="margin: 0px;" align="center"><b>Mill machinery and processing equipment</b></p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" colspan="3">
<p style="margin: 0px;" align="center"><b>Buildings</b></p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" colspan="2">
<p style="margin: 0px;" align="center"><b>Total</b></p>
</td>
<td>&#160;</td>
</tr>
<tr height="15">
<td valign="top">&#160;</td>
<td width="1%">&#160;</td>
<td width="1%"><strong>&#160;</strong></td>
<td id="ffc" valign="top" width="7%">
<p style="margin: 0px;" align="center"><strong>$</strong></p>
</td>
<td width="1%"><strong>&#160;</strong></td>
<td width="1%"><strong>&#160;</strong></td>
<td width="1%"><strong>&#160;</strong></td>
<td id="ffc" valign="top" width="7%">
<p style="margin: 0px;" align="center"><strong>$</strong></p>
</td>
<td width="1%"><strong>&#160;</strong></td>
<td width="1%"><strong>&#160;</strong></td>
<td width="1%"><strong>&#160;</strong></td>
<td id="ffc" valign="top" width="7%">
<p style="margin: 0px;" align="center"><strong>$</strong></p>
</td>
<td width="1%"><strong>&#160;</strong></td>
<td width="1%"><strong>&#160;</strong></td>
<td width="1%"><strong>&#160;</strong></td>
<td id="ffc" valign="top" width="7%" colspan="2">
<p style="margin: 0px;" align="center"><strong>$</strong></p>
</td>
<td width="1%"><strong>&#160;</strong></td>
<td width="1%"><strong>&#160;</strong></td>
<td width="1%"><strong>&#160;</strong></td>
<td id="ffc" valign="top" width="7%" colspan="2">
<p style="margin: 0px;" align="center"><strong>$</strong></p>
</td>
<td width="1%"><strong>&#160;</strong></td>
<td width="1%"><strong>&#160;</strong></td>
<td width="1%"><strong>&#160;</strong></td>
<td id="ffc" valign="top" width="7%" colspan="2">
<p style="margin: 0px;" align="center"><strong>$</strong></p>
</td>
<td width="1%"><strong>&#160;</strong></td>
<td width="1%"><strong>&#160;</strong></td>
<td width="1%"><strong>&#160;</strong></td>
<td id="ffc" valign="top" width="7%">
<p style="margin: 0px;" align="center"><strong>$</strong></p>
</td>
<td width="1%">&#160;</td>
</tr>
<tr height="15">
<td valign="bottom">
<p style="margin: 0px;"><b>COST</b></p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="top">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Balance at January 1, 2013</p>
</td>
<td>&#160;</td>
<td></td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0px;" align="right">2,680,320</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td></td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0px;" align="right">21,387</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td></td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0px;" align="right">90,678</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td></td>
<td id="ffc" valign="bottom" colspan="2" align="right">
<p style="margin: 0px;" align="right">1,753,306</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td></td>
<td id="ffc" valign="bottom" colspan="2" align="right">
<p style="margin: 0px;" align="right">2,095,473</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td></td>
<td id="ffc" valign="bottom" colspan="2" align="right">
<p style="margin: 0px;" align="right">331,112</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td></td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0px;" align="right">6,972,276</p>
</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Additions</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">
<p style="margin: 0px;" align="right">607,068</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">
<p style="margin: 0px;" align="right">23,592</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">
<p style="margin: 0px;" align="right">21,852</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">2,894,154</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">1,292,746</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">173,676</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">
<p style="margin: 0px;" align="right">5,013,088</p>
</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Effect of movements in exchange rates</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom">
<p style="margin: 0px;" align="right">145,640</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom">
<p style="margin: 0px;" align="right">1,162</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom">
<p style="margin: 0px;" align="right">4,927</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">95,268</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">113,860</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">17,991</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom">
<p style="margin: 0px;" align="right">378,848</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Balance at December 31, 2013</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">
<p style="margin: 0px;" align="right">3,433,028</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">
<p style="margin: 0px;" align="right">46,141</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">
<p style="margin: 0px;" align="right">117,457</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">4,742,728</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">3,502,079</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">522,779</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">
<p style="margin: 0px;" align="right">12,364,212</p>
</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Additions</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">
<p style="margin: 0px;" align="right">808,713</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">
<p style="margin: 0px;" align="right">15,663</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">
<p style="margin: 0px;" align="right">96,138</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">3,290,323</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">4,252,272</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">117,800</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">
<p style="margin: 0px;" align="right">8,580,909</p>
</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Effect of movements in</p>
<p style="margin: 0px;">exchange rates</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom">
<p style="margin: 0px;" align="right">276,388</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom">
<p style="margin: 0px;" align="right">3,715</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom">
<p style="margin: 0px;" align="right">9,456</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">381,830</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">281,947</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">42,088</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom">
<p style="margin: 0px;" align="right">995,424</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;"><b>Balance at December 31, 2014</b></p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom">
<p style="margin: 0px;" align="right">4,518,129</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom">
<p style="margin: 0px;" align="right">65,519</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom">
<p style="margin: 0px;" align="right">223,051</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">8,414,881</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">8,036,298</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">682,667</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom">
<p style="margin: 0px;" align="right">21,940,545</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="text-align: left;" valign="top"><b>&#160;</b></td>
<td></td>
<td></td>
<td valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" colspan="2"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" colspan="2"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" colspan="2"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom"></td>
<td></td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="text-align: left;" valign="top"><b>ACCUMULATED DEPLETION AND DEPRECIATION</b></td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Balance at January 1, 2013</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">
<p style="margin: 0px;" align="right">94,188</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">
<p style="margin: 0px;" align="right">8,073</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">
<p style="margin: 0px;" align="right">23,633</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">384,513</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">116,379</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">37,010</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">
<p style="margin: 0px;" align="right">663,796</p>
</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Additions</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">
<p style="margin: 0px;" align="right">122,474</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">
<p style="margin: 0px;" align="right">5,097</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">
<p style="margin: 0px;" align="right">11,264</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">510,939</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">98,682</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">351,275</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">
<p style="margin: 0px;" align="right">1,099,731</p>
</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Effect of movements in exchange rates</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom">
<p style="margin: 0px;" align="right">5,117</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom">
<p style="margin: 0px;" align="right">439</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom">
<p style="margin: 0px;" align="right">1,284</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">20,893</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">6,324</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">2,011</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom">
<p style="margin: 0px;" align="right">36,068</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Balance at December 31, 2013</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">
<p style="margin: 0px;" align="right">221,779</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">
<p style="margin: 0px;" align="right">13,609</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">
<p style="margin: 0px;" align="right">36,181</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">916,345</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">221,385</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">390,296</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">
<p style="margin: 0px;" align="right">1,799,595</p>
</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Additions</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">
<p style="margin: 0px;" align="right">533,465</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">
<p style="margin: 0px;" align="right">&#160;</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">
<p style="margin: 0px;" align="right">29,610</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">1,008,949</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">204,881</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">37,990</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">
<p style="margin: 0px;" align="right">1,822,552</p>
</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Effect of movements in exchange rates</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom">
<p style="margin: 0px;" align="right">17,855</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom">
<p style="margin: 0px;" align="right">1,096</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom">
<p style="margin: 0px;" align="right">2,913</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">73,775</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">17,823</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">31,423</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom">
<p style="margin: 0px;" align="right">144,885</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;"><b>Balance at December 31, 2014</b></p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom">
<p style="margin: 0px;" align="right">773,099</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom">
<p style="margin: 0px;" align="right">22,362</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom">
<p style="margin: 0px;" align="right">68,704</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">1,999,069</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">444,089</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">459,709</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom">
<p style="margin: 0px;" align="right">3,767,032</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="top">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;"><b>NET BOOK VALUE </b></p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" colspan="2">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;"><b>At December 31, 2014</b></p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom">
<p style="margin: 0px;" align="right"><b>3,745,030</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom">
<p style="margin: 0px;" align="right"><b>43,157</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom">
<p style="margin: 0px;" align="right"><b>154,347</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right"><b>6,415,812</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right"><b>7,592,209</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right"><b>222,958</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom">
<p style="margin: 0px;" align="right"><b>18,173,513</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">At December 31, 2013</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom">
<p style="margin: 0px;" align="right">3,211,249</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom">
<p style="margin: 0px;" align="right">32,532</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom">
<p style="margin: 0px;" align="right">81,276</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">3,826,383</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">3,280,694</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" colspan="2">
<p style="margin: 0px;" align="right">132,483</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom">
<p style="margin: 0px;" align="right">10,564,617</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid96" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"></td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Plant, equipment, and mining properties includes $892,172 as at December 31, 2014 (December 31, 2013 - $456,414), on which no depreciation was charged in the years then ended.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid97" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">25</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="tableid98" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>12.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>INVESTMENTS IN RELATED COMPANIES</strong></p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid99" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Investments in related companies comprise the following:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="fftableid98" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b>Accumulated Unrealized</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b>Fair Value December 31,</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b>Fair Value December 31,</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Cost</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Gains</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">(a) Bralorne Gold Mines Ltd.</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">57,327</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">(b) Levon Resources Ltd.</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">4,236</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">29,652</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">33,888</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">36,712</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">(c) Oniva International Services Corp.</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">1</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">1</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">1</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;" valign="top"></td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">4,237</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">29,652</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">33,889</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">94,040</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid101" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">During the year ended December 31, 2014, the Company recorded a $4,615 unrealized loss (2013 - $99,833 loss, 2012 - $110,021 loss) on investments in related companies, representing the change in fair value during the period.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid102" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(a)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Bralorne Gold Mines Ltd. (&#8220;Bralorne&#8221;)</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid103" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Bralorne was a public company with common directors. During the year ended December 31, 2014, the Company acquired all outstanding shares of Bralorne that it didn&#8217;t already own, and reclassified its ownership interest as subsidiary (Note 5).</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid104" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(b)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Levon Resources Ltd. (&#8220;Levon&#8221;)</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid105" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">The Company&#8217;s investment in Levon consists of 141,200 common shares with a quoted market value of $33,888 as at December 31, 2014 (December 31, 2013 - $36,712). Levon is a public company with common directors.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid106" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(c)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Oniva International Services Corp. (&#8220;Oniva&#8221;)</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid107" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">The Company and its subsidiary each hold a 1/6 indirect beneficial ownership interests in Oniva, with four other public companies holding equal 1/6 indirect beneficial ownership interests. David Wolfin and Malcolm Davidson, the Company&#8217;s CEO and CFO, serve as directors of Oniva, and certain of the Company&#8217;s directors and officers also serve in those capacities in all five of the other companies. The companies&#8217; interests in Oniva are held in trust by David Wolfin and a family member of Mr. Wolfin. See Note 20(c) for a description of transactions with Oniva and Note 23 for disclosure of the Company&#8217;s commitments with Oniva.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid108" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>13.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>INVESTMENTS IN OTHER COMPANIES</strong></p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid109" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">The Company classifies its investments in other companies as a long-term investment designated at fair value through profit and loss, summarized as follows:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="fftableid108" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b>Accumulated Unrealized</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b>Fair Value December 31,</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b>Fair Value December 31,</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Cost</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Gains</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">(a) Avaron Mining Corp.</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">40,000</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">40,000</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">40,000</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">(b) Benz Capital Corp.</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">14,500</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">5,500</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">20,000</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">15,000</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;" valign="top"></td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">54,500</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">5,500</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">60,000</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">55,000</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;&#160;</p>
<table id="tableid111" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">26</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="tableid112" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>13.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>INVESTMENTS IN OTHER COMPANIES</strong> (continued)</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid113" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(a)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Avaron Mining Corp. (&#8220;Avaron&#8221;)</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid114" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">In January 2012, the Company acquired 150,000 common shares of Avaron at a cost of $15,000. In April 2013, Avino received an additional 250,000 common shares at a cost of $25,000 in accordance with the consent to assign the option agreement on the Eagle property referred to in Note 9(b) from Avaron to Benz Mining Corp.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid115" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(b)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Benz Capital Corp. (&#8220;Benz&#8221;)</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid116" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">In April 2013, the Company acquired 50,000 common shares of Benz as part of the assignment of the option agreement on the Eagle property referred to in Note 9(b). The value assigned to the investment is based on the market price of Benz&#8217;s common shares on the date the agreement was entered into.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid117" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>14.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>WARRANT LIABILITY</strong></p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid118" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">The Company&#8217;s warrant liability arises as a result of the issuance of warrants exercisable in U.S. dollars. As the denomination is different from the Canadian dollar functional currency of the entity issuing the underlying shares, the Company recognizes a derivative liability for these warrants and re-measures the liability at the end of each reporting period using the Black-Scholes model.</p>
</td>
</tr>
<tr>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">A reconciliation of the changes in the warrant liability during the year is as follows:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="fftableid116" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31, 2014</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Balance at beginning of the year</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Recognition upon issuance</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,295,647</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Fair value adjustment</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(1,055,957</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Balance at end of the year</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">239,690</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid120" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Continuity of derivative warrants during the year is as follows:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="fftableid118" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Underlying Shares</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Weighted Average Exercise Price</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Derivative warrants outstanding and exercisable, December 31, 2013</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;" valign="top">
<p style="margin: 0px;">Issued</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">1,033,059</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">US$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">2.87</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom"></td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Derivative warrants outstanding and exercisable, December 31, 2014</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">1,033,059</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;">US$</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0px;" align="right">2.87</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid122" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Derivative warrants outstanding and exercisable as at December 31, 2014 are as follows:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="fftableid120" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" rowspan="2" colspan="2" align="center">
<p style="margin: 0cm 0cm 0pt;"><b>Exercise Price </b><b>per Share</b><b></b></p>
</td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="6" align="center"><b>Derivative Warrants Outstanding and Exercisable</b><b></b><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="bottom" align="left">
<p style="margin: 0px;">Expiry Date</p>
</td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31, 2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31, 2013</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">February 25, 2017</p>
</td>
<td style="border-bottom: black 0pt solid;" width="1%">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">US$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" width="10%" align="right">
<p style="margin: 0pt;">2.87</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" width="1%">&#160;</td>
<td style="border-bottom: black 0pt solid;" width="1%">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" width="1%"></td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" width="10%" align="right">
<p style="margin: 0pt;">1,033,059</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" width="1%">&#160;</td>
<td style="border-bottom: black 0pt solid;" width="1%">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" width="1%"></td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" width="10%" align="right">-</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" width="1%">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid124" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">As at December 31, 2014, the weighted average remaining contractual life of warrants outstanding was 2.14 years.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;&#160;</p>
<table id="tableid125" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">27</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="tableid126" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>14.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>WARRANT LIABILITY </strong>(continued)</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid127" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">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:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="fftableid125" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31, 2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>February 20, 2014 (Date of issuance)</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="bottom" align="left">
<p style="margin: 0px;">Weighted average assumptions:</p>
</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="text-indent: 30px;" valign="bottom">
<p style="margin: 0px;">Risk-free interest rate</p>
</td>
<td>&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">1.00</p>
</td>
<td valign="bottom" width="1%">
<p style="margin: 0pt;">%</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">1.20</p>
</td>
<td valign="bottom" width="1%">
<p style="margin: 0pt;">%</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="text-indent: 30px;" valign="bottom">
<p style="margin: 0px;">Expected dividend yield</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">0</p>
</td>
<td valign="bottom" align="right">
<p style="margin: 0cm 0cm 0pt;">%</p>
</td>
<td valign="bottom" align="right">
<p style="margin: 0cm 0cm 0pt;">&#160;</p>
</td>
<td valign="bottom" align="right">
<p style="margin: 0cm 0cm 0pt;">&#160;</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0cm 0cm 0pt;">0</p>
</td>
<td>%</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="text-indent: 30px;" valign="bottom">
<p style="margin: 0px;">Expected option life (years)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2.14</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3.00</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Expected stock price volatility</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">66.42</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">69.49</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Weighted average fair value</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">0.23</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">1.25</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid129" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>15.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>RECLAMATION PROVISION </strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;">Management&#8217;s estimate of the reclamation provision at December 31, 2014 is $2,005,881 (December 31, 2013 - $1,833,938). The present value of the obligation was calculated using a risk-free interest rate of 7% (December 31, 2013 &#8211; 7%) and an inflation rate of 4.25% (December 31, 2013 &#8211; 4.25%). Reclamation activities are estimated to begin in 2019 for San Gonzalo and in 2023 for the Avino Mine. The undiscounted value of the obligation is $2,269,534 (December 31, 2013 - $2,274,153).</p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;">A reconciliation of the changes in the reclamation provision during the years is as follows:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="fftableid127" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31, 2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31, 2013</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Balance at beginning of the year</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">1,833,938</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">323,140</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Unwinding of discount</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">131,787</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">21,596</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Change in estimates</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(28,648</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Effect of movements in exchange rates</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(57,844</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">17,850</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Provision recognized on acquisition of Bralorne Gold Mines Ltd.</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">98,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Initial recognition of provision for Avino Mine</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">1,500,000</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Balance at end of the year</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">2,005,881</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">1,833,938</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid131" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>16.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>SHARE CAPITAL</strong></p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid132" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(a)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Authorized: Unlimited common shares without par value.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid133" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(b)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Issued:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid134" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(i)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">As at December 31, 2014, the Company sold an aggregate of 375,851 common shares at an average price of $2.26 (US$2.08) per common share for gross proceeds of $850,430 (US$783,117) in an at-the-market offering issued under a prospectus supplement of up to US$25,000,000, which was filed on July 7, 2014.</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="margin: 0px;">&#160;The Company paid 3% cash commission on the gross proceeds in the amount of $25,513 (US$23,493) and incurred additional accounting, legal and regulatory costs of $3,276.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;&#160;</p>
<table id="tableid135" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">28</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="tableid136" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>16.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>SHARE CAPITAL</strong> (continued)</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid137" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(b)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Issued (continued):</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid138" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(ii)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">On February 20, 2014, the Company closed an at-the-market brokered public offering issuing 2,540,709 common shares at an average price of $2.50 (US$2.26) per common share for gross proceeds of $6,340,523 (US$5,741,668).</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="margin: 0px;">The Company paid a 3% cash commission on the gross proceeds in the amount of $190,216 (US$172,250) and incurred additional accounting, legal and regulatory costs of $167,871.</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(iii)</p>
</td>
<td valign="top">
<p style="margin: 0px;">On February 21, 2014, the Company closed a brokered private placement issuing 2,066,117 units at a price of $2.69 (US$2.42) per unit for gross proceeds of $5,566,504 (US$5,000,000). Each unit is comprised of one common share and one-half of a transferrable share purchase warrant. Each share purchase warrant is exercisable at a price of US$2.87 per warrant into one-half of a common share until February 25, 2017. If the volume weighted average closing market price for the Company's common shares on the NYSE MKT is greater than USD$6.85 per share for a period of 20 consecutive trading days, then the Company may deliver a notice to the warrant holder notifying such holder that the warrants must be exercised within 30 days from the date of delivery of such notice, otherwise the warrants will expire on the thirty-first day after the date of delivery of the notice.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Of the $5,566,504 total aggregate proceeds raised in this financing, the $1,295,647 fair value of the warrants was attributed to warrant liability (Note 14) and the residual amount of $4,270,857 was attributed to common shares.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company incurred finance costs of $129,953 (recorded as a charge in the statement of operations) with respect to the issuance of warrants in this private placement and share issuance costs of $426,661 (recorded as a charge to share capital) with respect to the shares issued in this private placement.</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(iv)</p>
</td>
<td valign="top">
<p style="margin: 0px;">During the year ended December 31, 2014, the Company issued 266,457 common shares upon the exercise of stock options for gross proceeds of $307,937.</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">(c)&#160;&#160;</font></td>
<td valign="top" width="3%" colspan="2">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"></p>
<p style="margin: 0px;">Warrants:</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">During the year ended December 31, 2014 there were no warrants exercised, and there were 1,033,059 warrants issued as summarized in Note 14.</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%" colspan="2">
<p style="margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">(d) </font></td>
<td valign="top" width="3%" colspan="2">
<p style="margin: 0px;">Stock options:</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company has a stock option plan to purchase the Company&#8217;s common shares, under which it may grant stock options of up to 10% of the Company&#8217;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 (up to a limit of 5%), and to persons providing investor relations or consulting services (up to a limit of 2%), the limits being based on the Company&#8217;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 five years from the grant date.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid139" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">29</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="tableid140" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>16.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>SHARE CAPITAL</strong> (continued)</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid141" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(d)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Stock options (continued)</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid142" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Continuity of stock options for the years ended December 31, 2014 and 2013 is as follows:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="fftableid143" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Underlying Shares</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Weighted Average Exercise Price</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="top">
<p style="margin: 0px;">Stock options outstanding and exercisable, December 31, 2012</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">2,480,000</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">1.81</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="text-indent: 30px;" valign="top">
<p style="margin: 0px;">Granted</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">650,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1.61</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="text-indent: 30px;" valign="top">
<p style="margin: 0px;">Forfeited</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(55,000</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1.71</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="text-indent: 30px;" valign="top">
<p style="margin: 0px;">Expired</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(70,625</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1.60</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;" valign="top">
<p style="margin: 0px;">Exercised</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(361,418</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">0.82</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="text-indent: 30px;" valign="top"></td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="top">
<p style="margin: 0px;">Stock options outstanding and exercisable, December 31, 2013</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,642,957</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1.16</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="text-indent: 30px;" valign="top">
<p style="margin: 0px;">Granted</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,035,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1.90</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="text-indent: 30px;" valign="top">
<p style="margin: 0px;">Forfeited</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(50,000</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1.15</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;" valign="top">
<p style="margin: 0px;">Exercised</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(266,457</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">1.16</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="top"></td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="top">
<p style="margin: 0px;">Stock options outstanding and exercisable, December 31, 2014</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">3,361,500</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">1.39</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid144" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">As at December 31, 2014, the weighted average remaining contractual life of stock options outstanding was 2.44 years.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid145" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Details of stock options outstanding and exercisable are as follows:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="fftableid146" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="6" align="center"><b>Stock Options Outstanding </b><b></b><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0px;"><strong>Expiry Date</strong></p>
</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Exercise Price</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31, 2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31, 2013</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">January 14, 2015</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">0.81</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">45,000</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">60,000</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">September 10, 2015</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1.05</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">225,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">268,357</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">January 18, 2016</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1.02</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">806,500</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">924,600</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">September 30, 2016</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1.02</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">695,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">760,000</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">February 18, 2018</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1.60</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">195,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">230,000</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">September 9, 2018</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1.62</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">360,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">400,000</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">September 19, 2019</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1.90</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">855,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">December 22, 2019</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">1.90</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">180,000</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;" valign="bottom"></td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">3,361,500</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">2,642,957</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;&#160;</p>
<table id="tableid147" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">30</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="tableid148" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>16.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>SHARE CAPITAL</strong> (continued)</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid149" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(e)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Earnings per share:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid150" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">The calculations for earnings (loss) per share and diluted earnings per share are as follows:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="fftableid151" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2012</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;">
<p style="margin: 0px;">Net income for the year</p>
</td>
<td style="border-bottom: black 0pt solid;" width="1%">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">2,514,169</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" width="1%">&#160;</td>
<td style="border-bottom: black 0pt solid;" width="1%">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">848,212</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" width="1%">&#160;</td>
<td style="border-bottom: black 0pt solid;" width="1%">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">(1,263,178</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Basic weighted average number of shares outstanding</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">32,333,224</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">27,405,179</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">27,072,053</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Effect of dilutive share options</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">940,516</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">296,224</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Diluted weighted average number of shares outstanding</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">33,273,740</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">27,701,403</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">27,072,053</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Basic earnings (loss) per share</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">0.08</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">0.03</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" class="para" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">(0.05</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Diluted earnings (loss) per share</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">0.08</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">0.03</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" class="para" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">(0.05</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid152" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>17.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>SHARE-BASED PAYMENTS </strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;">During the year ended December 31, 2014, the Company granted stock options to directors, officers, employees, directors, and consultants of the Company to purchase up to a total of 1,035,000 common shares at a weighted average exercise price of $1.90 per share pursuant to the Company&#8217;s stock option plan. The options vest on dates ranging from the grant date to September 19, 2015. 855,000 and 180,000 options are exercisable on or before September 19, 2019 and December 22, 2019 respectively. The Company recorded $1,044,282 as share-based compensation for the options vested during the period.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">During the year ended December 31, 2013, the Company granted stock options to directors, officers, employees, directors, and consultants of the Company to purchase up to a total of 650,000 common shares at a weighted average exercise price of $1.61 per share pursuant to the Company&#8217;s stock option plan. The options vest on dates ranging from the grant date to September 9, 2014. The options are exercisable on or before September 9, 2018. The Company recorded $647,762 as share-based compensation for the options vested during the period.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">During the year ended December 31, 2013, the Company re-priced 1,725,000 previously granted incentive stock options to directors, officers, employees, and consultants to a price of $1.02 per share. The incentive stock options had originally been granted at prices of $2.30 and $2.00 per share. The incremental fair value of the re-priced options of $260,600 was charged to share-based compensation.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">During the year ended December 31, 2012, the Company granted stock options to consultants to purchase up to a total of 30,000 common shares at a weighted average exercise price of $2.00 per share pursuant to the Company&#8217;s stock option plan.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">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 materially affect the fair value estimates.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;&#160;</p>
<table id="tableid153" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">31</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="tableid154" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>17.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>SHARE-BASED PAYMENTS</strong> (continued)</p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;">The fair value of the options re-priced and granted to directors, officers, employees, and consultants was calculated using the Black-Scholes model with the following weighted average assumptions and resulting grant date fair value:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="fftableid155" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid; text-align: left; padding-left: 0px; margin-left: 0px; text-indent: 0px;" valign="bottom" colspan="2" align="left">
<p style="text-align: center;" align="right"><strong>2014</strong></p>
</td>
<td style="text-align: left; padding-left: 0px; margin-left: 0px; text-indent: 0px;" align="left"><strong>&#160;</strong></td>
<td style="text-align: left; padding-left: 0px; margin-left: 0px; text-indent: 0px;" align="left"><strong>&#160;</strong></td>
<td id="ffc" style="border-bottom: black 1px solid; text-align: left; padding-left: 0px; margin-left: 0px; text-indent: 0px;" valign="bottom" colspan="2" align="left">
<p style="text-align: center;" align="right"><strong>2013</strong></p>
</td>
<td style="text-align: left; padding-left: 0px; margin-left: 0px; text-indent: 0px;" align="left"><strong>&#160;</strong></td>
<td style="text-align: left; padding-left: 0px; margin-left: 0px; text-indent: 0px;" align="left"><strong>&#160;</strong></td>
<td id="ffc" style="border-bottom: black 1px solid; text-align: left; padding-left: 0px; margin-left: 0px; text-indent: 0px;" valign="bottom" colspan="2" align="left">
<p style="text-align: center;" align="right"><strong>2012</strong></p>
</td>
<td style="text-align: left; padding-left: 0px; margin-left: 0px; text-indent: 0px;" align="left"><strong>&#160;</strong></td>
</tr>
<tr height="15">
<td valign="bottom" align="left">
<p style="margin: 0px;">Weighted average assumptions:</p>
</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="left">&#160;</td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="left">&#160;</td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="left">&#160;</td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="text-indent: 30px;" valign="bottom">
<p style="margin: 0px;">Risk-free interest rate</p>
</td>
<td width="1%">&#160;</td>
<td width="1%"></td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0px;">1.51</p>
</td>
<td valign="bottom" width="1%">
<p style="margin: 0px;">%</p>
</td>
<td width="1%">&#160;</td>
<td width="1%"></td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0px;">1.45</p>
</td>
<td valign="bottom" width="1%">
<p style="margin: 0px;">%</p>
</td>
<td width="1%">&#160;</td>
<td width="1%"></td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0px;">1.06</p>
</td>
<td valign="bottom" width="1%">
<p style="margin: 0px;">%</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="text-indent: 30px;" valign="bottom">
<p style="margin: 0px;">Expected dividend yield</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0px;">0</p>
</td>
<td valign="bottom">%</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0cm 0cm 0pt;">0</p>
</td>
<td>%</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0px;">0</p>
</td>
<td valign="bottom">
<p style="margin: 0cm 0cm 0pt;">%</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="text-indent: 30px;" valign="bottom">
<p style="margin: 0px;">Expected option life (years)</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0px;">5.00</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0px;">3.45</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0px;">0.42</p>
</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px; text-indent: 30px;">Expected stock price volatility</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0px;">67.25</p>
</td>
<td>%</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0px;">68.29</p>
</td>
<td>%</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0px;">50.89</p>
</td>
<td>%</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Weighted average fair value at grant date</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0px;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0px;">0.87</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0px;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0px;">0.55</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0px;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0px;">0.13</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid156" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">During the year ended December 31, 2014, the Company charged $982,782 (2013 - $908,362; 2012 - $18,408) to operations as share-based payment and capitalized $61,500 (2013 - $Nil) to exploration and evaluation assets.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid157" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>18.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>REVENUE AND COST OF SALES</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;">Revenue and the related cost of sales reflect the sale of silver and gold concentrate from the San Gonzalo mine and the historic Avino stockpiles during the year ended December 31, 2014 and December 31, 2013 and for the San Gonzalo mine for the three months ended December 31, 2012.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Cost of sales consists of changes in inventories, direct costs including personnel costs, general and administrative costs, energy costs (principally diesel fuel and electricity), maintenance and repair costs, operating supplies, external services, third party smelting, refining and transport fees, and depreciation related to sales 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 contained or recoverable ounces sold for the periods and consists of the following:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;&#160;</p>
<table id="fftableid158" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2012</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="top">
<p style="margin: 0px;">Direct costs</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">10,074,610</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">8,019,083</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">1,246,309</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="top">
<p style="margin: 0px;">Depreciation and depletion</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,259,394</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">949,326</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">188,260</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="top">
<p style="margin: 0px;">Share-based payments</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">59,400</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;" valign="top"></td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">11,393,404</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">8,968,409</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">1,434,569</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid159" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>19.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>GENERAL AND ADMINISTRATIVE EXPENSES </strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;">General and administrative expenses on the consolidated statements of operations consist of the following:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;&#160;</p>
<table id="fftableid160" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2012</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Depreciation</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">18,358</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">687</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">6,193</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Directors fees</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">81,134</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">155,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">22,500</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Interest expense</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">124,138</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">52,753</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Investor relations</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">239,538</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">194,955</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">247,044</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Management and consulting fees</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">606,941</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">390,510</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">224,532</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Office and miscellaneous</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">275,128</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">722,816</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">434,011</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Professional fees</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">389,681</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">311,193</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">205,578</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Regulatory and compliance fees</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">126,713</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">140,629</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">75,738</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Sales tax write-down provision</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(47,409</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Salaries and benefits</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,148,450</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,204,666</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">561,398</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Travel and promotion</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">210,053</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">165,860</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">181,753</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;" valign="bottom"></td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">3,220,134</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">3,339,069</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">1,911,338</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;&#160;</p>
<table id="tableid161" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">32</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="tableid162" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>20.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>RELATED PARTY TRANSACTIONS AND BALANCES</strong></p>
</td>
</tr>
<tr>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;"><b></b>All related party transactions are recorded at the exchange amount which is the amount agreed to by the Company and the related party.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;&#160;</p>
<table id="tableid163" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><strong><em><font style="font-family: TIMES NEW ROMAN;">&#160;</font></em></strong></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong><em>(a)</em></strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong><em>Key management personnel</em></strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><strong><em><font style="font-family: TIMES NEW ROMAN;">&#160;</font></em></strong></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong><em>&#160;</em></strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong><em>&#160;</em></strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><strong><em><font style="font-family: TIMES NEW ROMAN;">&#160;</font></em></strong></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong><em>&#160;</em></strong></p>
</td>
<td valign="top">
<p style="margin: 0px;">The Company has identified its directors and certain senior officers as its key management personnel. The compensation costs for key management personnel for the years ended December 31, 2014, 2013, and 2012 were as follows:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="fftableid164" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2012</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Salaries, benefits, and consulting fees</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">957,900</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">779,571</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">243,011</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;">
<p style="margin: 0px;">Share-based payments</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">645,750</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">420,450</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;"></td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">1,603,650</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">1,200,021</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">243,011</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;"><b><i></i></b>&#160;</p>
<table id="tableid165" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><em><strong><font style="font-family: TIMES NEW ROMAN;">&#160;</font></strong></em></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>(b)</strong></em></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>Amounts due to/from related parties</strong></em></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><em><strong><font style="font-family: TIMES NEW ROMAN;">&#160;</font></strong></em></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>&#160;</strong></em></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>&#160;</strong></em></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><em><strong><font style="font-family: TIMES NEW ROMAN;">&#160;</font></strong></em></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>&#160;</strong></em></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;In the normal course of operations the Company transacts with companies related to Avino&#8217;s directors or officers. All amounts payable and receivable are non-interest bearing, unsecured and due on demand. Advances to Oniva International Services Corp. of $121,639 (December 31, 2013 - $115,507) for expenditures to be incurred on behalf of the Company are included in prepaid expenses and other assets on the consolidated statements of financial position. As at December 31, 2014 and 2013, the following amounts were due to related parties:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="fftableid166" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31, 2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31, 2013</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="top">
<p style="margin: 0px;">Directors</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">19,259</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">11,870</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="top">
<p style="margin: 0px;">Intermark Capital Corp.</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">21,875</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="top">
<p style="margin: 0px;">Jasman Yee &amp; Associates, Inc.</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">4,032</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">5,040</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="top">
<p style="margin: 0px;">Oniva International Services Corp.</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">171,650</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">135,458</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="top">
<p style="margin: 0px;">Sampson Engineering Inc.</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,840</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="top">
<p style="margin: 0px;">Wear Wolfin Design Ltd.</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">5,250</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">2,625</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;" valign="top"></td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">222,066</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">156,833</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;"><em><strong>&#160;</strong></em></p>
<table id="tableid167" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><em><strong><font style="font-family: TIMES NEW ROMAN;">&#160;</font></strong></em></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>(c)</strong></em></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>Other related party transactions</strong></em></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><em><strong><font style="font-family: TIMES NEW ROMAN;">&#160;</font></strong></em></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>&#160;</strong></em></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>&#160;</strong></em></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><em><strong><font style="font-family: TIMES NEW ROMAN;">&#160;</font></strong></em></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>&#160;</strong></em></p>
</td>
<td valign="top">
<p style="margin: 0px;">The Company has entered into a cost sharing agreement with Oniva International Services Corp. (&#8220;Oniva&#8221;) for office and administration services. Pursuant to the cost sharing agreement, the Company will reimburse Oniva for the Company&#8217;s percentage of overhead and corporate expenses and for out-of-pocket expenses incurred on behalf of the Company. The cost sharing agreement may be terminated with one-month notice by either party without penalty. The transactions with Oniva during the years ended December 31, 2014, 2013, and 2012 are summarized below:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;&#160;</p>
<table id="fftableid168" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2012</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="top">
<p style="margin: 0px;">Salaries and benefits</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">316,281</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">309,816</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">179,555</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="top">
<p style="margin: 0px;">Office and miscellaneous</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">428,019</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">292,008</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">276,201</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="top"></td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">744,300</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">601,824</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">455,756</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid169" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Salaries and benefits above includes $48,424 for key management personnel compensation that has been included in Note 20(a).</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid170" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">33</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="tableid171" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>20.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>RELATED PARTY TRANSACTIONS AND BALANCES</strong> (continued)</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid172" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>(c)</strong></em></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>Other related party transactions</strong></em> (continued)</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>&#160;</strong></em></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>&#160;</strong></em></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>&#160;</strong></em></p>
</td>
<td valign="top">
<p style="margin: 0px;">For services provided to the Company as President and Chief Executive Officer, the Company pays Intermark Capital Corporation (&#8220;ICC&#8221;), a company controlled by David Wolfin, for consulting services. For the years ended December 31, 2014, 2013 and 2012, the Company paid $433,333, $300,000, and $150,000 respectively to ICC.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company pays Jasman Yee &amp; Associates, Inc. (&#8220;JYAI&#8221;), a company whose managing director is Jasman Yee, for operational, managerial, metallurgical, engineering and consulting services related to the Company&#8217;s activities. For the years ended December 31, 2014, 2013, and 2012, the Company paid $74,160, $75,014, and $63,938 respectively to JYAI.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company pays Wear Wolfin Designs Ltd. (&#8220;WWD&#8221;), a company whose director is the brother-in-law of David Wolfin, for financial consulting services related to ongoing consultation with stakeholders and license holders. For the years ended December 31, 2014, 2013 and 2012, the Company paid $30,000, $30,000, and $30,000 respectively to WWD.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid173" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>21.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>FINANCE LEASE OBLIGATIONS</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;">The Company has entered into mining equipment leases expiring between 2015 and 2020 with interest rates ranging from 4.50% to 13.90% per annum. The Company has the option to purchase the mining equipment at the end of the lease term for a nominal amount. The Company&#8217;s obligations under finance leases are secured by the lessor&#8217;s title to the leased assets. Plant and equipment includes a net carrying amount of $5,322,510 (2013 - $2,714,933) for this leased mining equipment.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The contractual maturities and interest charges in respect of the Company&#8217;s finance lease obligations are as follows:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="fftableid174" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31, 2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31, 2013</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Not later than one year</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">1,362,766</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">643,312</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Later than one year and not later than five years</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,216,930</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,146,189</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Less: Future interest charges</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(280,360</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(112,679</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Present value of minimum lease payments</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3,299,336</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,676,822</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Less: Current portion</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(1,292,326</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(585,845</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Non-current portion</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">2,007,010</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">1,090,977</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid175" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">The Company has a $US5,375,400 master credit facility with Caterpillar Finance that is used to acquire equipment necessary for advancing operations at the San Gonzalo Mine and for continuing exploration activity at the Avino Mine. As of December 31, 2014, the Company had $US2,586,974 in available credit remaining under this facility.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;&#160;</p>
<table id="tableid176" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">34</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="tableid177" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>22.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>SUPPLEMENTARY CASH FLOW INFORMATION</strong></p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="fftableid178" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2012</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="bottom" align="left">
<p style="margin: 0px;">Net change in non-cash working capital items:</p>
</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="text-indent: 30px;" valign="bottom">
<p style="margin: 0px;">Accounts payable and accrued liabilities</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">1,943,542</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">265,200</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">822,691</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="text-indent: 30px;" valign="bottom">
<p style="margin: 0px;">Taxes payable</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">950,563</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">42,547</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="text-indent: 30px;" valign="bottom">
<p style="margin: 0px;">Amounts due to related parties</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">125,308</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(17,881</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(29,049</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="text-indent: 30px;" valign="bottom">
<p style="margin: 0px;">Inventory</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(1,949,673</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">371,372</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(2,225,840</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="text-indent: 30px;" valign="bottom">
<p style="margin: 0px;">Sales taxes recoverable</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(1,308,973</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(110,923</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">79,282</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="text-indent: 30px;" valign="bottom">
<p style="margin: 0px;">Amounts receivable</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(1,123,799</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(1,176,017</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">674,824</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;" valign="bottom">
<p style="margin: 0px;">Prepaid expenses and other assets</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(98,633</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(587,682</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(40,020</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom"></td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" class="para" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">(1,461,655</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" class="para" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">(1,213,384</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" class="para" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">(718,112</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="fftableid179" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2012</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Interest paid</p>
</td>
<td style="border-bottom: black 0pt solid;" width="1%">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">90,669</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" width="1%">&#160;</td>
<td style="border-bottom: black 0pt solid;" width="1%">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">28,433</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" width="1%">&#160;</td>
<td style="border-bottom: black 0pt solid;" width="1%">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">1,471</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Taxes paid</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">172,076</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid180" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>23.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>COMMITMENTS</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;">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&#8217;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 20.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">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:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;&#160;</p>
<table id="fftableid181" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31, 2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31, 2013</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Not later than one year</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">301,121</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">254,017</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Later than one year and not later than five years</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">134,291</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">364,827</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Later than five years</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">56,235</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">69,499</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;" valign="top"></td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">491,647</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">688,343</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid182" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Office lease payments recognized as an expense during the year ended December 31, 2014 totalled $90,883 (2013 - $63,126; 2012 - $44,850).</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid183" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>24.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>FINANCIAL INSTRUMENTS </strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;">The fair values of the Company&#8217;s cash and cash equivalents, amounts receivable, amounts due to related party, and accounts payable approximate their carrying values because of the short-term nature of these instruments. The fair values of investments in related and other companies are based on quoted market prices.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company&#8217;s financial instruments are exposed to certain financial risks, including credit risk, liquidity risk, and market risk.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;&#160;&#160;</p>
<table id="tableid184" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">35</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="tableid185" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>24.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>FINANCIAL INSTRUMENTS</strong> (continued)</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid186" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><em><strong><font style="font-family: TIMES NEW ROMAN;">&#160;</font></strong></em></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>(a)</strong></em></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>Credit Risk</strong></em></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><em><strong><font style="font-family: TIMES NEW ROMAN;">&#160;</font></strong></em></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>&#160;</strong></em></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>&#160;</strong></em></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><em><strong><font style="font-family: TIMES NEW ROMAN;">&#160;</font></strong></em></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>&#160;</strong></em></p>
</td>
<td valign="top">
<p style="margin: 0px;">Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Company has exposure to credit risk through its cash and cash equivalents and amounts receivable.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company manages credit risk, in respect of cash and cash equivalents, by maintaining the majority of cash at highly rated financial institutions.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">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 three (2013 &#8211; two) counterparties. However, the Company has not recorded any allowance against its trade receivables because to-date all balances owed have been settled in full when due (typically within 60 days of submission) and because of the nature of the counterparties.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company&#8217;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 December 31, 2014, no amounts were held as collateral.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;&#160;</p>
<table id="tableid187" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><em><strong><font style="font-family: TIMES NEW ROMAN;">&#160;</font></strong></em></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>(b)</strong></em></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>Liquidity Risk</strong></em></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><em><strong><font style="font-family: TIMES NEW ROMAN;">&#160;</font></strong></em></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>&#160;</strong></em></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>&#160;</strong></em></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><em><strong><font style="font-family: TIMES NEW ROMAN;">&#160;</font></strong></em></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>&#160;</strong></em></p>
</td>
<td valign="top">
<p style="margin: 0px;">Liquidity risk is the risk that the Company will 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 and cash equivalents at December 31, 2014 in the amount of $4,249,794 (2013 - $3,839,595) in order to meet short-term business requirements. At December 31, 2014, the Company had current liabilities of $6,476,148 (2013 - $2,196,172). 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 portion of finance lease obligations is due within 12 months of the consolidated statement of financial position date. Amounts due to related parties are without stated terms of interest or repayment.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid188" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><em><strong><font style="font-family: TIMES NEW ROMAN;">&#160;</font></strong></em></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>(c)</strong></em></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>Market Risk</strong></em></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><em><strong><font style="font-family: TIMES NEW ROMAN;">&#160;</font></strong></em></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>&#160;</strong></em></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>&#160;</strong></em></p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><em><strong><font style="font-family: TIMES NEW ROMAN;">&#160;</font></strong></em></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>&#160;</strong></em></p>
</td>
<td valign="top">
<p style="margin: 0px;">Market risk consists of interest rate risk, foreign currency risk and price risk. These are discussed further below.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><i>Interest Rate Risk</i></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Interest rate risk consists of two components:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;&#160;</p>
<table id="tableid189" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(i)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">To the extent that payments made or received on the Company&#8217;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.</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(ii)&#160;&#160;</p>
</td>
<td valign="top">
<p style="margin: 0px;">To the extent that changes in prevailing market rates differ from the interest rates on the Company&#8217;s monetary assets and liabilities, the Company is exposed to interest rate price risk.</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%" colspan="2">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"></p>
<p style="margin: 0px;">In management&#8217;s opinion, the Company is not exposed to significant interest rate cash flow risk as the Company&#8217;s finance lease obligations bear interest at fixed rates.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;&#160;</p>
<table id="tableid190" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">36</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="tableid191" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>24.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>FINANCIAL INSTRUMENTS</strong> (continued)</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid192" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>(c)</strong></em></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>Market Risk (</strong>continued)</em></p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid193" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Foreign Currency Risk</p>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<p style="margin: 0px;">Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will 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 US dollars:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="fftableid194" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="6" align="center"><b>December 31, 2014</b><b></b><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="6" align="center"><b>December 31, 2013</b><b></b><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>MXN</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>USD</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>MXN</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>USD</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Cash and cash equivalents</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">2,532,442</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">3,382,302</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">6,166,837</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">2,508,191</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Amounts receivable</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,350,874</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,897,963</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,197,766</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Accounts payable and accrued liabilities</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(10,805,057</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(786,490</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(8,768,980</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(408,427</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Warrant liability</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(206,611</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Finance lease obligations</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(908,005</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(2,788,356</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(1,579,402</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Net exposure</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">(9,180,620</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">951,719</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">(704,180</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">1,718,128</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Canadian dollar equivalent</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" class="para" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">(722,056</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">1,104,088</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" class="para" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">(57,172</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">1,827,401</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid195" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Based on the net Canadian dollar denominated asset and liability exposures as at December 31, 2014, a 10% fluctuation in the Canadian/Mexican and Canadian/US exchange rates would impact the Company&#8217;s earnings for the year ended December 31, 2014 by approximately $45,188 (2013 - $170,734). The Company has not entered into any foreign currency contracts to mitigate this risk.</p>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<p style="margin: 0px;"><i>Price Risk</i></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices, other than those arising from interest rate risk or foreign currency risk.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company is exposed to price risk with respect to its accounts 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&#8217;s control and are subject to volatility, and the Company does not employ hedging strategies to limit its exposure to price risk. At December 31, 2014, based on outstanding accounts receivable that were subject to pricing adjustments, a 10% change in the market price of silver would have an impact on net earnings of approximately $489,808 (2013 - $383,094), and a 10% change in the market price of gold would have an impact on net earnings of approximately $210,058 (2013 - $125,612).</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company is exposed to price risk with respect to its investments in related companies and its investments in other companies as certain of 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 December 31, 2014, a 10% change in market prices would have an impact on net earnings of approximately $5,389 (2013 - $14,904).</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company&#8217;s profitability and ability to raise capital to fund mineral resource exploration 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.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid196" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">37</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="tableid197" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>24.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>FINANCIAL INSTRUMENTS</strong> (continued)</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid198" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>(d)</strong></em></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><em><strong>Classification of Financial Instruments</strong></em></p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid199" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">IFRS 7 Financial Instruments: Disclosures establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value as follows:</p>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<p style="margin: 0px;">Level 1 &#8211; quoted prices (unadjusted) in active markets for identical assets or liabilities;</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Level 2 &#8211; 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</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Level 3 &#8211; inputs for the asset or liability that are not based on observable market data (unobservable inputs).</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The following table sets forth the Company&#8217;s financial assets and financial liabilities measured at fair value on a recurring basis by level within the fair value hierarchy as at December 31, 2014:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="fftableid200" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Level 1</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Level 2</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Level 3</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="bottom" align="left">
<p style="margin: 0px;"><b>Financial Assets</b></p>
</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Cash and cash equivalents</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">4,249,794</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Investments in related companies</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">33,889</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Investments in other companies</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">60,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;"><b>Financial Liabilities</b></p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Warrant liability</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(239,690</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;" valign="top"></td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">4,343,683</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" class="para" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">(239,690</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid201" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>25.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>CAPITAL MANAGEMENT</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;">The Company&#8217;s objectives when managing capital are to safeguard the Company&#8217;s ability to continue as a going concern in order to pursue the exploration and expansion of its properties and to maintain a flexible capital structure for its projects for the benefit of its stakeholders. In the management of capital, the Company includes finance lease obligations and the components of equity.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust its capital structure, the Company may attempt to incur new debt or issue new shares. Management reviews the Company&#8217;s capital structure on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. The Company is not subject to any externally imposed capital requirements.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;&#160;</p>
<table id="tableid202" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">38</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="tableid203" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>26.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>SEGMENTED INFORMATION</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;">The Company&#8217;s revenues of $19,297,953 (2013 - $16,094,701; 2012 - $2,255,376) are all attributable to Mexico where sales are recorded from shipments of concentrate produced by the San Gonzalo mine and the historic Avino stockpiles. For the year ended December 31, 2014, the Company had one customer that accounted for 80% (2013 &#8211; 88%; 2012 &#8211; 100%) of revenue and another customer that accounted for 20% (2013 &#8211; 12%; 2012 &#8211; 0%) of revenue.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Geographical information relating to the Company&#8217;s non-current assets (other than financial instruments) is as follows:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;&#160;</p>
<table id="fftableid204" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="top">
<p style="margin: 0px;">Exploration and evaluation assets - Mexico</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">19,281,859</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">15,686,172</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="top">
<p style="margin: 0px;">Exploration and evaluation assets - Canada</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">10,627,361</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">4</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="text-indent: 30px;" valign="top"></td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="top">
<p style="margin: 0px;">Total exploration and evaluation assets</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">29,909,220</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">15,686,176</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="fftableid205" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="top">
<p style="margin: 0px;">Plant, equipment, and mining properties - Mexico</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">18,081,291</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">10,561,869</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="top">
<p style="margin: 0px;">Plant, equipment, and mining properties - Canada</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">92,222</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">2,748</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="text-indent: 30px;" valign="top"></td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="top">
<p style="margin: 0px;">Total plant, equipment, and mining properties</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">18,173,513</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">10,564,617</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid206" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>27.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>INCOME TAXES</strong></p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid207" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">a)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Income tax expense</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid208" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Income tax expense included in the consolidated statements of operations and comprehensive income (loss) is as follows:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="fftableid209" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Current income tax expense</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">1,820,970</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">42,547</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Deferred income tax expense</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">546,776</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">2,518,453</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="top"></td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Total income tax expense</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">2,367,746</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">2,561,000</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid210" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">The reconciliation of income taxes calculated at the Canadian statutory tax rate to the income tax expense is as follows:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="fftableid211" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Net income before income taxes</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">4,881,915</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">3,409,212</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Combined statutory tax rate</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">26.00</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">25.75</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="text-indent: 30px;" valign="top"></td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Income tax expense at the Canadian statutory rate</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,269,298</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">877,873</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="text-indent: 30px;" valign="top"></td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="top">
<p style="margin: 0px;">Reconciling items:</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="text-indent: 30px;" valign="top">
<p style="margin: 0px;">Effect of difference in Mexican tax rates</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">223,465</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">176,081</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="text-indent: 30px;" valign="top">
<p style="margin: 0px;">Non-deductible/non-taxable items</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(20,595</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">298,543</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="text-indent: 30px;" valign="bottom">
<p style="margin: 0px;">Change in enacted rates</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">71,526</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="text-indent: 30px;" valign="bottom">
<p style="margin: 0px;">Change in unrecognized benefit of tax losses</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">234,551</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">183,052</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="text-indent: 30px;" valign="bottom">
<p style="margin: 0px;">Impact of foreign exchange</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">622,253</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="text-indent: 30px;" valign="bottom">
<p style="margin: 0px;">Special mining duties</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">292,403</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,163,717</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;" valign="bottom">
<p style="margin: 0px;">Benefit of tax attributes recognized and other items</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(253,629</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(209,792</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="text-indent: 30px;" valign="top"></td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Income tax expense recognized in the year</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">2,367,746</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">2,561,000</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;&#160;</p>
<table id="tableid212" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">39</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="tableid213" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>27.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>INCOME TAXES</strong> (continued)</p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;">In December 2013, the Mexican President passed a bill that increases the effective tax rate applicable to the Company's Mexican operations. The law was effective January 1, 2014, and increases the future corporate income tax rate to 30%, creates a 10% withholding tax on dividends paid to non-resident shareholders (subject to any reduction by an income tax treaty) and creates a new extraordinary mining duty equal to 0.5% of gross revenues from the sale of gold, silver and platinum. In addition, the law requires taxpayers with mining concessions to pay a new 7.5% special mining duty. The extraordinary mining duty and special mining duty will be tax deductible for income tax purposes. The special mining duty will generally be applicable to earnings before income tax, depreciation, depletion, amortization and interest. In calculating the special mining duty, there will be no deductions related to expansion-type costs, but exploration and prospecting costs are deductible when incurred.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company recognized a non-cash expense of $385,057 for the year ended December 31, 2014 (2013 - $1,163,717; 2012 - $Nil) related to the deferred tax impact of the special mining duty.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid214" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">b)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Deferred income tax assets and liabilities</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="fftableid215" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Deferred income tax assets</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">1,540,270</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">2,111,963</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Deferred income tax liabilities</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(7,177,297</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(6,996,093</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="top"></td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;" valign="bottom"></td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" class="para" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">(5,637,027</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" class="para" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">(4,884,130</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid216" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">The approximate tax effects of each type of temporary difference that gives rise to potential deferred income tax assets and liabilities are as follows:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="fftableid217" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Tax losses carried forward</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">767,448</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Reclamation provision</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">715,455</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">694,038</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Inventory</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(169,585</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Exploration and evaluation assets</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(4,704,765</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(3,804,986</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Plant, equipment and mining properties</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(2,302,947</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(3,191,107</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Other deductible temporary differences</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">824,815</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">650,477</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="top"></td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Net deferred income tax liabilities</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" class="para" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">(5,637,027</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" class="para" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">(4,884,130</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid218" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Unrecognized deductible temporary differences:</p>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<p style="margin: 0px;">Temporary differences and tax losses arising in Canada have not been recognized as deferred income tax assets due to the fact that management has determined it is not probable that sufficient future taxable profits will be earned in Canada to recover such assets. Unrecognized deductible temporary differences are summarized as follows:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="fftableid219" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Tax losses carried forward</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">23,213,826</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">7,795,353</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Property, plant and equipment</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">4,552,561</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">211,097</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Investments</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">196,839</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">348,047</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Resource pools</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">8,310,866</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,799,659</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Other deductible temporary differences</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">2,229,401</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">1,523,271</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="top"></td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Unrecognized deductible temporary differences</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">38,503,493</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">11,677,427</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;&#160;</p>
<table id="tableid220" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">40</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>AVINO SILVER &amp; GOLD MINES LTD.</b>&#160;&#160;</p>
<p style="margin: 0px;">Notes to the consolidated financial statements&#160;&#160;</p>
<p style="margin: 0px;">For the years ended December 31, 2014, 2013 and 2012&#160;&#160;</p>
<p style="margin: 0px;">(Expressed in Canadian dollars)</p>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<p style="margin: 0px;">&#160;</p>
<table id="tableid221" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>27.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>INCOME TAXES</strong> (continued)</p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;">The deferred tax liability presented in these consolidated financial statements is due to the difference in the carrying amounts and tax bases of the Mexican mineral properties, mine plant, and equipment which were acquired in the purchase of Avino Mexico. The carrying values of the Mexican mineral properties, mine plant, and equipment includes an estimated fair value adjustment recorded upon the July 17, 2006, acquisition of control of Avino Mexico that was based on a share exchange, while the tax bases of these assets are historical undeducted tax amounts that were nil on acquisition. The deferred tax liability is attributable to assets in the tax jurisdiction of Mexico and is presented net of Mexican tax losses carried forward, where applicable</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company has capital losses of $1,472,210 carried forward and $23,213,826 in non-capital tax losses carried forward available to reduce future Canadian taxable income. The capital losses can be carried forward indefinitely unless used. The Company&#8217;s Canadian non-capital tax losses, if unused, expire as follows:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;&#160;</p>
<table id="fftableid222" style="width: 85%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td id="ffc" style="border-bottom: black 1px solid; text-align: left;" valign="bottom" align="center"><b>Year of Expiry</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Amount</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td id="ffc" valign="bottom" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td id="ffc" style="text-align: left;" valign="bottom" align="right">
<p style="margin: 0pt;">2015</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">1,574,315</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td id="ffc" style="text-align: left;" valign="bottom" align="right">
<p style="margin: 0pt;">2020</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0px;" align="right">&#8211;</p>
</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td id="ffc" style="text-align: left;" valign="bottom" align="right">
<p style="margin: 0pt;">2021</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0px;" align="right">&#8211;</p>
</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td id="ffc" style="text-align: left;" valign="bottom" align="right">
<p style="margin: 0pt;">2025</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0px;" align="right">&#8211;</p>
</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td id="ffc" style="text-align: left;" valign="bottom" align="right">
<p style="margin: 0pt;">2026</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,115,697</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td id="ffc" style="text-align: left;" valign="bottom" align="right">
<p style="margin: 0pt;">2027</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,782,666</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td id="ffc" style="text-align: left;" valign="bottom" align="right">
<p style="margin: 0pt;">2028</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,782,017</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td id="ffc" style="text-align: left;" valign="bottom" align="right">
<p style="margin: 0pt;">2029</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,548,378</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td id="ffc" style="text-align: left;" valign="bottom" align="right">
<p style="margin: 0pt;">2030</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,831,957</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td id="ffc" style="text-align: left;" valign="bottom" align="right">
<p style="margin: 0pt;">2031</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,259,435</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td id="ffc" style="text-align: left;" valign="bottom" align="right">
<p style="margin: 0pt;">2032</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">4,804,428</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td id="ffc" style="text-align: left;" valign="bottom" align="right">
<p style="margin: 0pt;">2033</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,133,934</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td id="ffc" valign="bottom" align="right">
<p style="text-align: left; margin: 0pt;">2034</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">2,380,999</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td id="ffc" style="text-align: left;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">23,213,826</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid223" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">As at December 31, 2014, the Company had no Mexican tax losses available to offset future Mexican taxable income.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;&#160;</p>
<table id="tableid224" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>28.</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>SUBSEQUENT EVENTS</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="3%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>&#160;</strong></p>
</td>
<td valign="top">
<p style="margin: 0px;">Subsequent to the year ended December 31, 2014, the Company issued 13,500 common shares in an at-the-market offering under a prospectus supplement for net proceeds of $22,081 (US$20,577), and issued 106,000 common shares upon the exercise of stock options for gross proceeds of $108,120.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<p style="text-align: center; font: 10pt TIMES NEW ROMAN; margin: 0px;">41</p>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>3
<FILENAME>avino_ex992.htm
<DESCRIPTION>MANAGEMENT DISCUSSION AND ANALYSIS
<TEXT>
<html>
<head></head>
<body style="font: 10pt TIMES NEW ROMAN; text-align: justify; margin: 0px 7% 0px 7%;">
<p style="text-align: right; margin: 0px;"><strong>EXHIBIT 99.2</strong></p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid0" style="width: 100%; text-align: left; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" align="center" border="0">

<tr height="15">
<td>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><img src="img003.jpg" ></p>
</td>
<td valign="bottom" width="46%">
<p style="margin: 0px;"><strong><font style="font-size: 18pt;">&#160; AVINO SILVER &amp;</font></strong></p>
<p style="margin: 0px;"><strong><font style="font-size: 18pt;">&#160; GOLD MINES LTD.</font></strong></p>
</td>
<td valign="bottom" width="50%">
<p style="margin: 0px;" align="right"><font style="font-size: 12pt;"><b>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS</b></font></p>
<p style="text-align: right; margin: 0px;"><font style="font-size: 12pt;"><b>FOR THE YEAR ENDED DECEMBER 31, 2014</b></font></p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The following discussion and analysis of the operations, results, and financial position of Avino Silver &amp; Gold Mines Ltd. (the &#8220;Company&#8221; or &#8220;Avino&#8221;) should be read in conjunction with the Company&#8217;s audited consolidated financial statements as at December 31, 2014 and 2013 and for the years ended December 31, 2014, 2013 and 2012 and the notes thereto.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">This Management&#8217;s Discussion and Analysis (&#8220;MD&amp;A&#8221;) is dated March 20, 2015 and discloses specified information up to that date. Avino is classified as a &#8220;venture issuer&#8221; for the purposes of National Instrument 51-102. The consolidated financial statements are prepared in accordance with International Financial Reporting Standards (&#8220;IFRS&#8221;) as issued by the International Accounting Standards Board (&#8220;IASB&#8221;). Unless otherwise cited, references to dollar amounts are in Canadian dollars.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Throughout this report we refer to &#8220;Avino&#8221;, the &#8220;Company&#8221;, &#8220;we&#8221;, &#8220;us&#8221;, &#8220;our&#8221; or &#8220;its&#8221;. All these terms are used in respect of Avino Silver &amp; Gold Mines Ltd. <b><i>We recommend that readers consult the &#8220;Cautionary Statement&#8221; on the last page of this report.</i></b> Additional information relating to the Company is available on SEDAR at www.sedar.com and on the Company&#8217;s website at www.avino.com.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><strong><u style="line-height: 1;">Business Description</u></strong></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Founded in 1968, the Company is engaged in the production and sale of silver, gold, and copper and the acquisition, exploration and evaluation of mineral properties. The Company holds mineral claims and leases in Durango, Mexico and in British Columbia and the Yukon Territory, Canada. Avino is a reporting issuer in British Columbia and Alberta and a foreign issuer with the Securities and Exchange Commission in the United States. The Company&#8217;s shares trade on the TSX Venture Exchange, Tier 1, under the symbol &#8220;ASM&#8221;, on the NYSE MKT under the symbol &#8220;ASM&#8221;, and on the Berlin and Frankfurt Stock Exchanges under the symbol &#8220;GV6&#8221;.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><u style="line-height: 1;">Overall Performance</u></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">During the year ended December 31, 2014 for the Avino property, the Company produced 4,264 tonnes of bulk silver/gold/copper concentrate and recognized revenues of $19,297,953 on the sale of 3,129 tonnes of bulk silver/gold concentrate for a gross profit of $7,904,549. Metal prices for revenues recognized during the year ended December 31, 2014, weighted by dollar of revenue recognized, averaged US$19.04 per ounce of silver and US$1,266 per ounce of gold.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Cash cost per silver equivalent (&#8220;AgEq&#8221;) ounce for the year ended December 31, 2014 was $9.03 and $10.65 for San Gonzalo and Avino stockpiles, respectively, resulting in a consolidated cash cost per AgEq ounce of $9.29. All-in sustaining cash cost per AgEq ounce for the year ended December 31, 2014, was $11.96 and $13.68 for San Gonzalo and Avino stockpiles, respectively, resulting in consolidated all-in cash cost per AgEq ounce of $12.24. Revenue from the Avino stockpiles decreased during the fourth quarter of 2014 as the Company re-allocated capacity to testing new underground material from the Avino Mine and to start-up commissioning of Circuit 3.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company&#8217;s cash and cash equivalents at December 31, 2014 totaled $4,249,794 compared to $3,839,595 at December 31, 2013, while working capital totaled $6,617,877 compared to $5,950,740 at December 31, 2013.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><u style="line-height: 1;">Board of Directors Composition</u></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">In December 2014, Avino welcomed Ross Glanville to the board of directors. Mr. Glanville has over 45 years of mining and exploration/development experience in many countries, and has been involved in the exploration, financing, development, and operation of a number of mines. Mr. Glanville&#8217;s appointment coincided with the resignation of Andrew Kaplan from the board. Mr. Kaplan resigned from Avino&#8217;s board in order to take on a more active role as Avino&#8217;s capital markets strategist.</p>
<p style="margin: 0px;">&#160;</p>
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</tr>
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<div class="rcpn" align="right"><font size="2" face="Times New Roman, Times, serif">1 | Page</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
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<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
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</table>
<p style="margin: 0px;">&#160;</p>
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<tr height="15">
<td><img src="img003.jpg" ></td>
<td valign="bottom" width="46%">
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; AVINO SILVER &amp;</font></b></p>
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; GOLD MINES LTD.</font></b></p>
</td>
<td valign="bottom" width="50%">
<p style="margin: 0px;" align="right"><font style="font-size: 12pt;"><b>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS</b></font></p>
<p style="text-align: right; margin: 0px;"><font style="font-size: 12pt;"><b>FOR THE YEAR ENDED DECEMBER 31, 2014</b></font></p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><u style="line-height: 1;">Discussion of Operations</u></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company&#8217;s production, exploration, and evaluation activities during the year ended December 31, 2014 have been conducted on its Avino Property and its Bralorne Mine property.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company holds a 99.66% effective interest in Compa&#241;&#237;a Minera Mexicana de Avino, S.A. de C.V. (&#8220;Avino Mexico&#8221;), a Mexican corporation which owns the Avino Property. The Avino Property covers approximately 1,104 hectares (excluding La Potosina) and is located approximately 80 km north-east of the city of Durango. The Avino Property is equipped with a processing facility which presently processes all output from the San Gonzalo and Avino Mines located on the property.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company also holds a 100% interest in in the Bralorne Mine property through its ownership of Bralorne Gold Mines Ltd. The Bralorne Mine property consists of a comprehensive package of mineral claims, land parcels, and equipment and infrastructure assembled during historic mining operations in the Bridge River mining camp of southwest British Columbia.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>Consolidated 2014 Production Highlights</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Comparative production numbers from 2014 and 2013 are presented below:</p>
<p style="margin: 0px;">&#160;</p>
<table id="fftableid2" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td align="left">&#160;</td>
<td valign="bottom" align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom" align="left">&#160;</td>
<td valign="bottom" align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>%<br >Change</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Total Silver Produced (oz) <i>calculated</i></p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%">&#160;</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">969,525</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%">&#160;</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">698,076</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">39</p>
</td>
<td valign="bottom" width="1%">
<p style="margin: 0pt;">%</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Total Gold Produced (oz) <i>calculated</i></p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">5,180</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3,243</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">60</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Total Copper Produced (lbs) <i>calculated</i></p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">305,417</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="text-align: right; margin: 0px;" align="center">N/A</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="text-align: right; margin: 0px;" align="center">N/A</p>
</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom" align="right">
<p style="text-align: left; margin: 0px;">Total Silver Eq. Produced (oz) <i>calculated*</i></p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,342,150</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">900,764</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">49</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><i>For comparison purposes, a silver equivalent ratio of 62.5:1 for silver to gold has been used; additionally, during the third and fourth quarters of 2014 copper production became payable and a ratio of 6.25 lb copper to 1 oz of silver was used to convert copper produced to Ag Eq oz. Mill production figures have not been reconciled and are subject to adjustment with concentrate sales. Calculated figures may not add up due to rounding.</i></p>
<p style="margin: 0px;">&#160;&#160;</p>
<p style="margin: 0px;"><b>Consolidated Fourth Quarter 2014 Production Highlights</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Comparative production numbers from Q4 2014 and Q4 2013 are presented below:</p>
<p style="margin: 0px;">&#160;</p>
<table id="fftableid3" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q4<br >2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q4<br >2013</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>%<br >Change</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Total Silver Produced (oz) <i>calculated</i></p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">296,914</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">184,760</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">61</p>
</td>
<td valign="bottom" width="1%">
<p style="margin: 0pt;">%</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Total Gold Produced (oz) <i>calculated</i></p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,644</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,011</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">63</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Total Copper Produced (lbs) <i>calculated</i></p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">228,436</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="text-align: right; margin: 0px;" align="center">N/A</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="text-align: right; margin: 0px;" align="center">N/A</p>
</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom" align="right">
<p style="text-align: left; margin: 0px;">Total Silver Eq. Produced (oz) <i>calculated*</i></p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">436,235</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">250,948</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">74</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><i>For comparison purposes, a silver equivalent ratio of 62.5:1 for silver to gold has been used; additionally, during the third and fourth quarters of 2014 copper production became payable and a ratio of 6.25 lb copper to 1 oz of silver was used to convert copper produced to Ag Eq oz. Mill production figures have not been reconciled and are subject to adjustment with concentrate sales. Calculated figures may not add up due to rounding.</i></p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid5" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="right"><font size="2" face="Times New Roman, Times, serif">2 | Page</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid6" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td><img src="img003.jpg" ></td>
<td valign="bottom" width="46%">
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; AVINO SILVER &amp;</font></b></p>
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; GOLD MINES LTD.</font></b></p>
</td>
<td valign="bottom" width="50%">
<p style="margin: 0px;" align="right"><font style="font-size: 12pt;"><b>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS</b></font></p>
<p style="text-align: right; margin: 0px;"><font style="font-size: 12pt;"><b>FOR THE YEAR ENDED DECEMBER 31, 2014</b></font></p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>San Gonzalo Mine Fourth Quarter and Year End 2014 Highlights</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">San Gonzalo had a successful year, with mine exploration and advancement including the discovery of significant additional mineralization along strike to the southeast while drifting on level 5. These areas had not previously been considered for mining. The extension of this new mineralized zone is being explored on levels 2 through 6. Previous exploration did not encounter this area as the vein had pinched out and an offset of the vein was not considered at that time. During 2014, San Gonzalo production came primarily from levels 5 and 6 as well as from mined material from the new zone on level 3. Advancement work on level 6 continued throughout the fourth quarter, and by year end the main haulage ramp had progressed past the level 7 elevation of 2,043 metres above sea level towards level 8. At the time of this MD&amp;A, sampling of the vein on level 7 had commenced and the haulage ramp had descended an additional 15 metres to 2,028 metres above sea level between levels 7 and 8.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Comparative figures for Q4 2014 and Q4 2013 as well as the 2014 and 2013 year end totals for the San Gonzalo mine are reported as follows:</p>
<p style="margin: 0px;">&#160;</p>
<table id="fftableid5" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q4<br >2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q4<br >2013</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>%<br >Change</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center">
<p style="margin: 0cm 0cm 0pt;"><b>2014<br ></b><b>Totals</b></p>
</td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2013<br >Totals</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>%<br >Change</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Notes</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Tonnes Mined</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">25,384</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">15,765</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">61</p>
</td>
<td valign="bottom" width="1%">
<p style="margin: 0pt;">%</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">70,525</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">63,559</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">11</p>
</td>
<td valign="bottom" width="1%">
<p style="margin: 0pt;">%</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">1</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">Underground Development (m)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,220</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">967</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">26</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">4,404</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3,193</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">38</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Drilling (m)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,257</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">0</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">100</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3,754</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">0</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">100</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">5</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">Total Mill Feed (dry tonnes)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">19,818</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">19,354</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">79,729</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">78,415</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Feed Grade Silver (g/t)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">329</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">280</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">18</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">337</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">288</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">17</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">Feed Grade Gold (g/t)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1.85</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1.49</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">24</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1.88</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1.34</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">40</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Bulk Concentrate (dry tonnes)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">664</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">617</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">8</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,545</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,431</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">5</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">Bulk Concentrate Grade Silver (kg/t)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">8.32</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">7.44</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">12</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">8.86</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">7.70</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">15</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">4</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Bulk Concentrate Grade Gold (g/t)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">43.5</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">35.0</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">24</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">45.7</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">31.6</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">45</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">4</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">Recovery Silver (%)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">85</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">85</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">0</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom" align="right">
<p style="margin: 0cm 0cm 0pt;">%</p>
</td>
<td valign="bottom">
<p style="margin: 0cm 0cm 0pt;">&#160;</p>
</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">84</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">83</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Recovery Gold (%)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">79</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">75</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">5</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">78</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">73</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">7</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">Mill Availability (%)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">95.5</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">93.9</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">96.5</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">95.2</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Total Silver Produced (kg)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">5,527</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">4,588</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">20</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">22,548</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">18,732</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">20</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">Total Gold Produced (g)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">28,908</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">21,575</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">34</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">116,338</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">76,904</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">51</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Total Silver Produced (oz) <i>calculated</i></p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">177,696</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">147,516</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">20</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">724,931</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">602,233</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">20</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">Total Gold Produced (oz) <i>calculated</i></p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">929</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">693</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">34</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3,740</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,473</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">51</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td align="right">
<p style="text-align: left; margin: 0px;">Total Ag Eq. (oz) <i>calculated*</i></p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">235,783</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">190,829</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">24</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">958,702</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">751,462</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">28</p>
</td>
<td style="padding-bottom: 1px;" valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><em>* For comparison purposes, a silver equivalent ratio of 62.5:1 for silver to gold has been used. Mill production figures have not been reconciled and are subject to adjustment with concentrate sales. Calculated figures may not add up due to rounding.</em></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>2014 Production Highlights</b></p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid8" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">1.</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Tonnage mined and underground development increased by 11% and 38%, respectively, over 2013 due to new equipment acquisitions in 2014.</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">2.</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Both silver and gold feed grades were higher in 2014 compared to 2013 as a result of mining operations progressing to the lower levels where grades were higher.</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">3.</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">The higher grades resulted in higher annual production of silver (kg) and gold (g) by 20% and 51%, respectively.</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">4.</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">The higher feed grades also resulted in higher quality concentrate. Annual silver and gold grades improved by 15% and 45% respectively over 2013.</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">5.</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Exploration drilling resumed in 2014. The objective was to determine the continuity of the mineralization at depth and to the east.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid9" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="right"><font size="2" face="Times New Roman, Times, serif">3 | Page</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid10" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td><img src="img003.jpg" ></td>
<td valign="bottom" width="46%">
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; AVINO SILVER &amp;</font></b></p>
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; GOLD MINES LTD.</font></b></p>
</td>
<td valign="bottom" width="50%">
<p style="margin: 0px;" align="right"><font style="font-size: 12pt;"><b>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS</b></font></p>
<p style="text-align: right; margin: 0px;"><font style="font-size: 12pt;"><b>FOR THE YEAR ENDED DECEMBER 31, 2014</b></font></p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><i>Under National Instrument 43-101, the Company is required to disclose that it has not based its production decisions on NI 43-101-compliant reserve estimates, preliminary economic assessments, or feasibility studies, and historically projects without such reports have increased uncertainty and risk of economic viability. The Company's decision to place a mine into operation at levels intended by management, expand a mine, make other production-related decisions, or otherwise carry out mining and processing operations is largely based on internal non-public Company data, and on reports based on exploration and mining work by the Company and by geologists and engineers engaged by the Company. The results of this work are evident in the Company's discovery of the San Gonzalo resource and the re-opening of the Avino Mine, and in the Company's record of mineral production and financial returns since operations at levels intended by management commenced at the San Gonzalo Mine in 2012.</i></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>Avino Mine Fourth Quarter and Year End 2014 Highlights</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Following several years of rehabilitation, in the fourth quarter of 2014 the Company completed its Avino Mine and mill expansion. This significant milestone represents the first mining activity since the mine closed in 2001 due to low metals prices and the closure of the smelter in San Luis Potosi. Initially, new material from underground at Avino was processed on a limited scale using the existing 250 TPD Mill Circuit 2. By year end, rehabilitation of the 1,000 TPD Mill Circuit 3 had been completed and sufficient material had been stockpiled; on January 1, 2015, full scale testing of both material and equipment commenced. For 2015, Avino has set a capital expenditure budget of approximately $5 million for exploration and advancement at the Avino Mine.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Accordingly, Q4 production figures as well as 2014 year end totals from the Avino Mine are reported as follows:</p>
<p style="margin: 0px;">&#160;</p>
<table id="fftableid8" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q4<br >2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2014<br >Totals</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="center"><b>Notes</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Tonnes Mined</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">19,723</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">19,273</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td id="ffc" valign="bottom" width="9%" align="right">&#160;</td>
<td width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">Underground Development (m)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">665</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">788</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Total Mill Feed (dry tonnes)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">19,482</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">25,990</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">Feed Grade Silver (g/t)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">75</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">77</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="text-align: center; margin: 0pt;">1</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Feed Grade Gold (g/t)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">0.37</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">0.38</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="text-align: center; margin: 0pt;">1</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">Feed Grade Copper (%)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">0.61</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">0.60</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="text-align: center; margin: 0pt;">1</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Copper Concentrate (dry tonnes)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">421</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">607</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">Copper Concentrate Grade Silver (kg/t)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3.03</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2.81</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="text-align: center; margin: 0pt;">3</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Copper Concentrate Grade Gold (g/t)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">13.67</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">13.17</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="text-align: center; margin: 0pt;">3</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">Copper Concentrate Grade Copper (%)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">24.6</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">22.8</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="text-align: center; margin: 0pt;">3</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Recovery Silver (%)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">87</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">86</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="text-align: center; margin: 0pt;">2</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">Recovery Gold (%)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">79</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">81</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="text-align: center; margin: 0pt;">2</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Recovery Copper (%)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">89</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">89</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="text-align: center; margin: 0pt;">2</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">Total Silver Produced (kg)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,276</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,704</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Total Gold Produced (g)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">5,757</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">8,001</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">Total Copper Produced (kg)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">103,617</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">138,535</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Total Silver Produced (oz) <i>calculated</i></p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">41,016</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">54,794</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">Total Gold Produced (oz) <i>calculated</i></p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">185</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">257</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Total Copper Produced (lbs)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">228,436</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">305,417</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td align="right">
<p style="text-align: left; margin: 0px;">Total Ag Eq. (oz) <i>calculated*</i></p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">89,133</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">119,738</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><i>*For comparison purposes, a silver equivalent ratio of 62.5:1 for silver to gold has been used; additionally, during the third and fourth quarters of 2014 copper production became payable and a ratio of 6.25 lb copper to 1 oz of silver was used to convert copper produced to Ag Eq oz. Mill production figures have not been reconciled and are subject to adjustment with concentrate sales. Calculated figures may not add up due to rounding.</i></p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid12" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="right"><font size="2" face="Times New Roman, Times, serif">4 | Page</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid13" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td><img src="img003.jpg" ></td>
<td valign="bottom" width="46%">
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; AVINO SILVER &amp;</font></b></p>
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; GOLD MINES LTD.</font></b></p>
</td>
<td valign="bottom" width="50%">
<p style="margin: 0px;" align="right"><font style="font-size: 12pt;"><b>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS</b></font></p>
<p style="text-align: right; margin: 0px;"><font style="font-size: 12pt;"><b>FOR THE YEAR ENDED DECEMBER 31, 2014</b></font></p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>2014 Production Highlights (September to December)</b></p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid14" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><b>1.</b></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Processed feed grades for copper, silver, and gold were within expectations and similar to the grades prior to the mine&#8217;s closure in 2001.</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><b>2.</b></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Plant recoveries for all three metals were better than expected. The copper recovery rate was expected to be in the lower eighties, while silver and gold recovery rates were expected to be in the mid-seventies. The present flow sheet configuration has resulted in recoveries exceeding those expectations.</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><b>3.</b></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">The quality of the concentrate product is similar to the product produced prior to the 2001 shutdown and the Company has successfully arranged for sale of the product.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<p style="margin: 0px;"><i>Under National Instrument 43-101, the Company is required to disclose that it has not based its project exploration and evaluation decisions on NI 43-101-compliant resource or reserve estimates, preliminary economic assessments, or feasibility studies, and historically projects without such reports have increased uncertainty and risk of economic viability. The Company's decision to place a mine into operation at levels intended by management, expand a mine, make other production-related decisions, or otherwise carry out mining and processing operations is largely based on internal non-public Company data, and on reports based on exploration and mining work by the Company and by geologists and engineers engaged by the Company. The results of this work are evident in the Company's discovery of the San Gonzalo resource and the re-opening of the Avino Mine, and in the Company's record of mineral production and financial returns since operations at levels intended by management commenced at the San Gonzalo Mine in 2012.</i></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>Avino Mine Above Ground Historical Stockpiles Fourth Quarter and Year End 2014 Highlights</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">During 2014, the Avino Mine Historical Stockpiles continued to add economic ounces to Avino&#8217;s production profile. During the year, the stockpiles accounted for approximately 20% of the production output from the Avino Property. The stockpiles were processed for the majority of the year using the 250 TPD Mill Circuit 2. In September 2014, Circuit 2 transitioned to processing new underground material from the Avino Mine. Processing of the stockpiles resumed in mid-November when the material was used for start-up commissioning of Mill Circuit 3. The Stockpiles, along with economic feed material from the San Gonzalo Mine, will continue to be processed using Mill Circuit 2 for the foreseeable future to ensure that the processing plant is running at full capacity.</p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid15" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="right"><font size="2" face="Times New Roman, Times, serif">5 | Page</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid16" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td><img src="img003.jpg" ></td>
<td valign="bottom" width="46%">
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; AVINO SILVER &amp;</font></b></p>
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; GOLD MINES LTD.</font></b></p>
</td>
<td valign="bottom" width="50%">
<p style="margin: 0px;" align="right"><font style="font-size: 12pt;"><b>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS</b></font></p>
<p style="text-align: right; margin: 0px;"><font style="font-size: 12pt;"><b>FOR THE YEAR ENDED DECEMBER 31, 2014</b></font></p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Comparative figures for Q4 2014 and Q4 2013 as well as the 2014 and 2013 year end totals for the Avino Mine Above Ground Historical Stockpiles Operation are reported as follows:</p>
<p style="margin: 0px;">&#160;</p>
<table id="fftableid12" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q4<br >2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q4<br >2013</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>%<br >Change</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2014<br >Totals</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2013<br >Totals</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>%<br >Change</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="center"><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Total Mill Feed (dry tonnes)</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">43,258</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">19,576</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">121</p>
</td>
<td valign="bottom" width="1%">
<p style="margin: 0pt;">%</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">96,032</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">54,136</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">77</p>
</td>
<td valign="bottom" width="1%">
<p style="margin: 0pt;">%</p>
</td>
<td width="1%">&#160;</td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="text-align: center; margin: 0pt;">1</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">Feed Grade Silver (g/t)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">84</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">92</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-9</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">92</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">85</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">8</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Feed Grade Gold (g/t)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">0.58</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">0.94</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-38</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">0.59</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">0.83</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-29</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">Bulk Concentrate (dry tonnes)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">564</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">226</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">149</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,112</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">636</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">75</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Bulk Concentrate Grade Silver (kg/t)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">4.31</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">5.13</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-16</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">5.31</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">4.69</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">13</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">Bulk Concentrate Grade Gold (g/t)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">29.2</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">43.8</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-33</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">33.1</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">37.7</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-12</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Recovery Silver (%)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">67</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">64</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">5</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">67</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">74</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-9</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">Recovery Gold (%)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">66</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">54</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">22</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">65</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">61</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">7</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Total Silver Produced (kg)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2432</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,158</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">110</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">5,903</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,981</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">98</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="text-align: center; margin: 0pt;">2</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">Total Gold Produced (g)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">16,481</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">9,898</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">67</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">36,782</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">23,953</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">54</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="text-align: center; margin: 0pt;">2</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Total Silver Produced (oz) <i>calculated</i></p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">78,201</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">37,244</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">110</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">189,800</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">95,482</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">99</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="text-align: center; margin: 0pt;">2</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">Total Gold Produced (oz) <i>calculated</i></p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">530</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">318</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">67</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,183</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">770</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">54</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="text-align: center; margin: 0pt;">2</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td align="right">
<p style="text-align: left; margin: 0px;">Total Ag Eq. (oz) <i>calculated*</i></p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">111,319</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">57,119</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">95</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">263,710</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">143,778</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">83</p>
</td>
<td valign="bottom">
<p style="margin: 0pt;">%</p>
</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><em>* For comparison purposes, a silver equivalent ratio of&#160;62.5:1 for silver to gold has been used. Mill production figures have not been reconciled and are subject to adjustment with concentrate sales. Calculated figures may not add up due to rounding.</em></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>2014 Production Highlights</b></p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid18" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><b>1.</b></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Tonnage processed in 2014 increased by 77% over 2013 mainly due to the start-up commissioning of the new 1,000 TPD Circuit 3 in November and December 2014.</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><b>2.</b></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">The higher tonnage processed resulted in 99% more silver and 54% more gold produced in 2014 compared to 2013.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<p style="margin: 0px;"><i>Under National Instrument 43-101, the Company is required to disclose that it has not based its production and project exploration and evaluation decisions on NI 43-101-compliant resource or reserve estimates, preliminary economic assessments, or feasibility studies, and historically projects without such reports have increased uncertainty and risk of economic viability. The Company's decision to place a mine into operation at levels intended by management, expand a mine, make other production-related decisions, or otherwise carry out mining and processing operations is largely based on internal non-public Company data, and on reports based on exploration and mining work by the Company and by geologists and engineers engaged by the Company. The results of this work are evident in the Company's discovery of the San Gonzalo resource and the re-opening of the Avino Mine, and in the Company's record of mineral production and financial returns since operations at levels intended by management commenced at the San Gonzalo Mine in 2012.</i></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><u style="line-height: 1;">Avino Mine Oxide Tailings Resource</u></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The oxide and sulphide tailings are situated approximately 500 m west-southwest of the main shaft to the Avino Mine.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Avino Property tailings include oxide and sulphide tailings, each requiring separate treatment methods. The tailings were accumulated between 1976 and 2001 during Avino's previous operation from both open pit (oxide tailings) and later underground (sulphide tailings) mining. Improved metals markets and industry technological advancements now potentially enable Avino to extract the remaining silver and gold in the tailings.</p>
<p style="margin: 0px;">&#160;</p>
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<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; AVINO SILVER &amp;</font></b></p>
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; GOLD MINES LTD.</font></b></p>
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<td valign="bottom" width="50%">
<p style="margin: 0px;" align="right"><font style="font-size: 12pt;"><b>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS</b></font></p>
<p style="text-align: right; margin: 0px;"><font style="font-size: 12pt;"><b>FOR THE YEAR ENDED DECEMBER 31, 2014</b></font></p>
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<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">On July 19, 2013, an updated Technical Report was published on the Avino Property by Tetra Tech, Avino&#8217;s independent engineering consultant, and included a reference to a preliminary economic assessment and resource estimate on the oxide tailings that was prepared in 2012. The report can be viewed on Avino&#8217;s website or on SEDAR.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The existing tailings storage facility is presently being used in connection with the operation of Mill Circuits 1, 2, and 3. In 2015, the Company expects to finalize plans to build a new tailings storage facility which represents the first phase of the plan outlined in the Tetra Tech technical report and is also necessary for the continued operation of the Avino and San Gonzalo Mines. For this project, Avino has allocated approximately $2 million for capital expenditures in its 2015 budget.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company continues to evaluate the Oxide Tailings Project which had an estimated capital expenditure budget of US$29 million, according to the Tetra Tech report. The new tailings storage facility being contemplated by the Company in 2015 would also be used in the treatment of the Oxide Tailings.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><u style="line-height: 1;">Exploration</u></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">In a news release dated June 5, 2014, Avino provided details of its 2014 drill program. As of the date of this MD&amp;A, Avino had completed 3,755 metres of drilling through 16 holes out of a planned 17 hole, 4,000 metre program, both above and below surface in the area around the San Gonzalo Mine. Results will be released once the program is complete.<b></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><u style="line-height: 1;">Strategic Mexican Properties</u></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">In addition to the Avino Property, Avino maintains a 100% interest in five other properties in or near the state of Durango. In the fourth quarter of 2014, Avino engaged a consulting geologist for site visits to profile the other properties. Some of the properties have had recent exploration either by Avino or through joint venture arrangements, and others have had limited activity. The properties were part of a larger land package once controlled by the previous operators of the Avino Property; Avino plans to further explore these properties in the future. For more information on the strategic Mexican properties, please see Avino&#8217;s news release dated January 19, 2015, or visit Avino&#8217;s website.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><u style="line-height: 1;">Termination of Option Agreements</u></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">On July 28, 2014, the Company&#8217;s option and joint venture agreement with Endeavour Silver Corp. (&#8220;Endeavour&#8221;) was terminated. The agreement had provided for Endeavour to earn up to a 75% interest in the Company&#8217;s El Laberinto property by incurring exploration expenditures of US$3,000,000 and making option payments of US$200,000 through July 30, 2016. Up to the termination date, Endeavour had met its obligations by incurring exploration expenditures of at least US$300,000 and making option payments of US$50,000.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Subsequent to December 31, 2014, the Company&#8217;s option purchase and assignment agreement with Benz Mining Corp. (&#8220;Benz&#8221;) was terminated. The agreement had provided for Benz to earn up to a 75% interest in the Company&#8217;s Eagle property by incurring exploration expenditures of $7,100,000 and making option payments of $350,000 and issuing 550,000 shares through January 31, 2017. Up to the termination date, Benz had met its obligations by incurring exploration expenditures of at least $100,000 and issuing 50,000 shares to Avino.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><u style="line-height: 1;">Bralorne Mine</u></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">On August 1, 2014, the Company signed an arrangement agreement with Bralorne Gold Mines Ltd. (&#8220;Bralorne&#8221;) to acquire all of the outstanding shares of Bralorne which the Company did not already own by way of a plan of arrangement under the Business Corporations Act (British Columbia). Bralorne holds an undivided 100% interest in the Bralorne Mine project in British Columbia. On October 20, 2014, this acquisition was completed. (For details on the transaction, please see the section below titled &#8220;Financial Highlights&#8221;).</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Since the acquisition, the Bralorne Mine, which is considered to be in the advanced exploration stage, has produced 690 ounces of gold through the processing of 4,900 dry tonnes of mill feed. During this period, gold grade and recovery averaged 3.97 g/t and 86%, respectively.</p>
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<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; AVINO SILVER &amp;</font></b></p>
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; GOLD MINES LTD.</font></b></p>
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<p style="margin: 0px;" align="right"><font style="font-size: 12pt;"><b>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS</b></font></p>
<p style="text-align: right; margin: 0px;"><font style="font-size: 12pt;"><b>FOR THE YEAR ENDED DECEMBER 31, 2014</b></font></p>
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<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><i>The Bralorne Mine is in the exploration and evaluation stage and proceeds from gold flotation concentrate, gold dore bars and silver contained within the gold dore bars produced during the exploration and evaluation stage are recorded as a component of exploration and evaluation assets. </i></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">As a result of unseasonably high temperatures and rainfall in December 2014, management decided to place the Bralorne mill on care and maintenance until a decision is made with respect to treatment of the tailings, which is expected in the second quarter of 2015. In the interim, extensive exploration drilling is ongoing and maintenance is being conducted on the mill and the underground rail infrastructure. Underground advancement in anticipation of the mill restart is also ongoing. Additionally, two new scoop trams have been ordered and are expected to arrive in time for the mill&#8217;s reopening, and the search is underway for a new surface loader. Strategic planning alternatives, including new mining methods tailored to the attributes of the Bralorne resource, are being evaluated with input from independent engineering firms SNC Lavalin and Entech Mining. The Company has opened lines of communications with First Nations groups and management continues its efforts to build meaningful progressive relationships with its stakeholders. Should exploration drilling lead to potential new resources, Avino will consider expanding the existing mine and mill infrastructure.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><u style="line-height: 1;">Quality Assurance/Quality Control</u></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">At the Avino property, mill assays are performed at the on-site lab. Check samples are sent to Inspectorate Labs in Reno, Nevada for verification. All concentrate shipments are assayed by independent third party labs such as AHK, LSI, Alex Stewart and SGS.<b></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">At the Bralorne Mine, gold production is reconciled to gold contained in flotation and gravity concentrates. Flotation concentrate assays are performed at the ALS Laboratories in North Vancouver, British Columbia or Met-Solve Laboratories Inc. in Langley, British Columbia, both ISO certified independent laboratories. Check samples on composite samples collected are performed by AH Knight in South Carolina, USA and umpire assays are performed by ALS Inspection UK Ltd. in Knowsley, England. Gold produced in gravity concentrate is reconciled from settlement assays received from the refiner. Check assays are performed on duplicate samples of gold dor&#233; by ALS Laboratories in North Vancouver.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><u style="line-height: 1;">Qualified Person(s)</u></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Avino's Mexican projects are under the supervision of Mr. Chris Sampson, P.Eng, BSc, Avino consultant and Mr. Jasman Yee, P.Eng, Avino director; Avino&#8217;s Bralorne Mine project is under the supervision of Dr. Mathew Ball, P.Geo. These individuals are qualified persons (&#8220;QP&#8221;) within the context of National Instrument 43-101. All QP&#8217;s have reviewed and approved the applicable technical data in this MD&amp;A.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><u style="line-height: 1;">Financial Highlights</u></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><i>Acquisition of Bralorne Gold Mines Ltd.</i></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">On October 20, 2014, the acquisition of Bralorne was completed. Under the terms of the arrangement agreement, Bralorne shareholders received 0.14 of an Avino share for each Bralorne share, with any fractions rounded down to the nearest whole share, and with any unexercised options being cancelled in connection with the arrangement. The Company issued 2,636,845 common shares to complete the acquisition of Bralorne. As of October 20, 2014, 100% of Bralorne&#8217;s assets, liabilities, and net income (loss) are included in the consolidated financial statements of the Company.</p>
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<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; AVINO SILVER &amp;</font></b></p>
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; GOLD MINES LTD.</font></b></p>
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<td valign="bottom" width="50%">
<p style="margin: 0px;" align="right"><font style="font-size: 12pt;"><b>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS</b></font></p>
<p style="text-align: right; margin: 0px;"><font style="font-size: 12pt;"><b>FOR THE YEAR ENDED DECEMBER 31, 2014</b></font></p>
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<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><i>Mexican Tax Reform</i></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">In 2013, a new income tax law was enacted in Mexico (&#8220;Mexican Tax Reform&#8221;), which became effective January 1, 2014. The Mexican Tax Reform contains many new provisions that will or may affect the Company immediately or in the future, as follows:</p>
<p style="margin: 0px;">&#160;</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">A new environmental duty of 0.5% of gross income from the sale of silver and gold;</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">A new 7.5% mining duty calculated as taxable revenues (except interest and inflationary adjustment), less allowable deductions for income tax purposes (excluding interest, inflationary adjustment, mining concessions, and depreciation and depletion), less exploration expenses;</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Corporate income tax rate to remain at 30%, eliminating the previously scheduled reduction to 29% in 2014 and a further 1% in 2015 to 28%;</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Elimination of the Business Flat Tax (&#8220;IETU&#8221;).</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Elimination of the option for depreciation of capital assets on an accelerated basis;</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Elimination of 100% deduction on exploration expenses for locating and quantifying new deposits in pre-operating periods. These exploration costs will be amortized on a straight&#8208;line basis over 10 years;</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Reduction of deductibility for various employee fringe benefits; and,</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">A 10% withholding tax on dividends distributed to resident individuals or foreign residents (including foreign corporations). According to the Mexico&#8208;Canada tax treaty, this dividend withholding tax rate may be reduced to 5%.</p>
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<p style="margin: 0px;">The Company has taken the position that the new 7.5% mining duty is an income tax in accordance with IFRS for financial reporting purposes, as it is based on a measure of revenue less certain specified costs. On substantial enactment, a taxable temporary difference arises, as property, plant and equipment and mining assets have a financial reporting value, but no corresponding tax value, for the purposes of the duty. For the year ended December 31, 2014, the Company recognized an accounting charge to the statement of operations of $385,057 in respect of this duty. The Company continues to evaluate tax planning strategies that may have the potential to mitigate certain income tax effects related to its activities. The ultimate impact of such strategies, if and when implemented, is subject to final determination by the relevant taxation authorities.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><u style="line-height: 1;">Outlook</u></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Avino's mission is to create shareholder value through profitable organic growth at the Avino Property and the strategic acquisition and advancement of mineral exploration and mining properties. We are committed to managing all business activities in an environmentally responsible and cost-effective manner while contributing to the well-being of the communities in which we operate.&#160;</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Management remains focused on the following key objectives:</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">1.</font></p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Maintain profitable mining operations while managing operating costs and improving efficiencies;</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">2.</font></p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Integrate Bralorne Gold Mine&#8217;s operations into Avino&#8217;s corporate structure;</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Continue to explore regional targets on the Avino Property followed by other properties in our portfolio; and</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">4.</font></p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Assess the potential for processing the oxide tailings resource from previous milling operations (PEA issued in 2012).</p>
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<p style="margin: 0px;"><b><u style="line-height: 1;">Non &#8211; IFRS Measures </u></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><u style="line-height: 1;">Cash cost per ounce, all-in sustaining cash cost per ounce, and cash flow per share</u></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Cash cost per ounce, all-in sustaining cash cost per ounce, and cash flow per share are measures developed by mining companies in an effort to provide a comparable standard. However, there can be no assurance that our reporting of these non-IFRS measures is similar to that reported by other mining companies. Total cash cost per ounce, all-in sustaining cash cost per ounce, and cash flow per share are measures used by the Company to manage and evaluate operating performance of the Company&#8217;s mining operations, and are widely reported in the silver and gold mining industry as benchmarks for performance, but do not have standardized meanings prescribed by IFRS, and are disclosed in addition to IFRS measures.</p>
<p style="margin: 0px;">&#160;</p>
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<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; AVINO SILVER &amp;</font></b></p>
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; GOLD MINES LTD.</font></b></p>
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<p style="margin: 0px;" align="right"><font style="font-size: 12pt;"><b>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS</b></font></p>
<p style="text-align: right; margin: 0px;"><font style="font-size: 12pt;"><b>FOR THE YEAR ENDED DECEMBER 31, 2014</b></font></p>
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<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Management of the Company believes that the Company&#8217;s ability to control the cash cost per silver equivalent ounce is one of its key performance drivers impacting both the Company&#8217;s financial condition and results of operations. Achieving a low silver equivalent production cost base allows the Company to remain profitable even during times of low commodity prices, and provides more flexibility in responding to changing market conditions. In addition, a profitable operation results in the generation of positive cash flows, which then improves the Company&#8217;s financial condition.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company has adopted the reporting of &#8220;all-in sustaining cash cost per silver equivalent ounce&#8221;. This measure has no standardized meaning throughout the industry. However, it is intended to provide additional information. Avino presents all-in sustaining cash cost because it believes that it more fully defines the total current cost associated with producing a silver equivalent ounce. Further, the Company believes that this measure allows investors of the Company to better understand its cost of producing silver equivalent ounces, and better assess the Company&#8217;s ability to generate cash flow from operations. Although the measure seeks to reflect the full cost per silver equivalent ounce of production from current operations, it does not include capital expenditures attributable to mine expansions, exploration and evaluation costs attributable to growth projects, income tax payments, and financing costs. In addition, the calculation of all-in sustaining cash costs does not include depreciation and depletion expense as it does not reflect the impact of expenditures incurred in prior periods. The Company&#8217;s calculation of all-in sustaining cash costs includes sustaining capital expenditures of $nil for the year ended December 31, 2014 and the year ended December 31, 2013, as substantially all of the mining equipment used at San Gonzalo and at the Avino stockpiles has been newly purchased, refurbished, or was otherwise not subject to sustained use within the most recent two fiscal years. The Company has planned for sustaining capital expenditures in future periods in accordance with mine operating plans and expected equipment utilization levels.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Although this measure is not representative of all of the Company&#8217;s cash expenditures, management believes that it is a useful measure in allowing it to analyze the efficiency of its mining operations.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company also presents cash flow per share as it believes it assists investors and other stakeholders in evaluating the Company's overall performance and its ability to generate cash flow from current operations.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">To facilitate a better understanding of these measures as calculated by the Company, detailed reconciliations between the non-IFRS measures and the Company&#8217;s consolidated financial statements are provided below. The measures presented are intended to provide additional information, and should not be considered in isolation nor should they be considered substitutes for IFRS measures.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><u style="line-height: 1;">Cash Cost per Silver Equivalent Ounce</u></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The following tables provide a reconciliation of cost of sales from the consolidated financial statements to cash cost per silver equivalent ounce sold. In each table, &#8220;silver equivalent ounces sold&#8221; consists of the number of ounces of silver sold plus the number of ounces of gold sold multiplied by the ratio of the average spot gold price to the average spot silver price for the corresponding period.</p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid29" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
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</tr>
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<td>
<div class="rcpn" align="right"><font size="2" face="Times New Roman, Times, serif">10 | Page</font></div>
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<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid30" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td><img src="img003.jpg" ></td>
<td valign="bottom" width="46%">
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; AVINO SILVER &amp;</font></b></p>
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; GOLD MINES LTD.</font></b></p>
</td>
<td valign="bottom" width="50%">
<p style="margin: 0px;" align="right"><font style="font-size: 12pt;"><b>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS</b></font></p>
<p style="text-align: right; margin: 0px;"><font style="font-size: 12pt;"><b>FOR THE YEAR ENDED DECEMBER 31, 2014</b></font></p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="fftableid21" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td valign="bottom">
<p style="margin: 0px;"><b>San Gonzalo</b></p>
</td>
<td>&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" colspan="19" align="center"><b>2014</b></td>
<td style="border-right: black 1px solid;">&#160;</td>
<td>&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" colspan="20" align="center"><b>2013</b></td>
</tr>
<tr height="15">
<td valign="bottom"></td>
<td>&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Year</b></td>
<td style="text-align: right;"><strong>&#160;</strong></td>
<td style="text-align: right;"><strong>&#160;</strong></td>
<td style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q4</b></td>
<td style="text-align: right;"><strong>&#160;</strong></td>
<td style="text-align: right;"><strong>&#160;</strong></td>
<td style="border-bottom: black 1px solid;" valign="bottom" colspan="3" align="center"><b>Q3</b></td>
<td style="text-align: right;"><strong>&#160;</strong></td>
<td style="text-align: right;"><strong>&#160;</strong></td>
<td style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q2</b></td>
<td style="text-align: right;"><strong>&#160;</strong></td>
<td style="text-align: right;"><strong>&#160;</strong></td>
<td style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q1</b></td>
<td style="border-right: black 1px solid; text-align: right;"><strong>&#160;</strong></td>
<td style="text-align: right;"><strong>&#160;</strong></td>
<td style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Year</b></td>
<td style="text-align: right;"><strong>&#160;</strong></td>
<td style="text-align: right;"><strong>&#160;</strong></td>
<td style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q4</b></td>
<td style="text-align: right;"><strong>&#160;</strong></td>
<td style="text-align: right;"><strong>&#160;</strong></td>
<td style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q3</b></td>
<td style="text-align: right;"><strong>&#160;</strong></td>
<td style="text-align: right;"><strong>&#160;</strong></td>
<td style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q2</b></td>
<td style="text-align: right;"><strong>&#160;</strong></td>
<td style="text-align: right;"><strong>&#160;</strong></td>
<td style="border-bottom: black 1px solid;" valign="bottom" colspan="3" align="center"><b>Q1</b></td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Cost of sales</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">9,458,184</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">2,672,150</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" colspan="2" align="right">
<p style="margin: 0pt;">2,205,694</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">2,278,459</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">2,301,881</p>
</td>
<td style="border-right: black 1px solid;" valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">7,516,267</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">1,809,404</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">1,021,852</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">2,235,854</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" colspan="2" align="right">
<p style="margin: 0pt;">2,449,157</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Stock-based compensation</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(59,400</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" colspan="2" align="right">
<p style="margin: 0pt;">(59,400</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-right: black 1px solid;" valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="text-align: left; margin: 0px;">Depletion and depreciation</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(1,153,809</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(289,503</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="right">
<p style="margin: 0pt;">(303,674</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(297,776</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(262,856</p>
</td>
<td style="border-right: black 1px solid; border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(884,993</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(190,856</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(119,346</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(331,085</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="right">
<p style="margin: 0pt;">(243,706</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Cash production cost</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">8,244,975</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,382,647</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="right">
<p style="margin: 0pt;">1,842,620</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,980,683</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,039,025</p>
</td>
<td style="border-right: black 1px solid;" valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">6,631,274</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,618,548</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">902,506</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,904,769</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="right">
<p style="margin: 0pt;">2,205,451</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="text-align: left; margin: 0px;">Silver equivalent ounces sold</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">913,275</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">244,956</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="right">
<p style="margin: 0pt;">196,433</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">235,308</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">236,578</p>
</td>
<td style="border-right: black 1px solid; border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">677,782</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">165,060</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">157,845</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">205,556</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="right">
<p style="margin: 0pt;">149,321</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="text-align: left; margin: 0px;">Cash cost per silver equivalent ounce</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">9.03</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">9.73</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="right">
<p style="margin: 0pt;">9.38</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">8.42</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">8.62</p>
</td>
<td style="border-right: black 1px solid; border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">9.78</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">9.81</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">5.72</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">9.27</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="right">
<p style="margin: 0pt;">14.77</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">During the quarter, the cash cost per silver equivalent ounce at San Gonzalo increased by approximately $0.35. The year on year comparison shows a decrease in cash cost per silver equivalent ounce of $0.75 as a result of more AgEq ounces sold.</p>
<p style="margin: 0px;">&#160;</p>
<table id="fftableid22" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td valign="bottom" align="left"><strong>Avino Stockpiles</strong></td>
<td valign="bottom" align="left">
<p style="margin: 0px;"><b>&#160;</b></p>
</td>
<td style="border-bottom: black 1px solid;" colspan="19" align="left"><b></b><b></b>
<p style="text-align: center; margin: 0px;"><b>2014</b></p>
</td>
<td style="border-right: black 1px solid;" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="14" align="center"><b>2013</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="bottom" align="left"></td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="3" align="center"><b>Year</b><b></b></td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q4</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td style="border-bottom: black 1px solid; text-align: center;" colspan="3" align="left"><b>Q3</b><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q2</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q1</b></td>
<td style="border-right: black 1px solid;" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Year</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q4</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q3</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q2</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Cost of sales</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">1,935,219</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="6%" colspan="2" align="right">
<p style="margin: 0pt;">788,441</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">514,534</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">632,244</p>
</td>
<td style="border-right: black 1px solid;" valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">1,452,142</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">597,890</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">377,699</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">381,905</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Stock-based compensation</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-right: black 1px solid;" valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Depletion and depreciation</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(105,585</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="right">
<p style="margin: 0pt;">(22,130</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(42,846</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(40,609</p>
</td>
<td style="border-right: black 1px solid; border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(64,333</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(13,254</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(7,212</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(7,313</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Cash production cost</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,829,634</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="right">
<p style="margin: 0pt;">766,311</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">471,688</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">591,635</p>
</td>
<td style="border-right: black 1px solid;" valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,387,809</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">584,636</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">432,686</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">370,487</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Silver equivalent ounces sold</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">171,754</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="right">
<p style="margin: 0pt;">55,321</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">47,500</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">68,933</p>
</td>
<td style="border-right: black 1px solid; border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">111,353</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">29,516</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">36,745</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">45,092</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Cash cost per silver equivalent ounce</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">10.65</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="right">
<p style="margin: 0pt;">13.85</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">9.93</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">8.58</p>
</td>
<td style="border-right: black 1px solid; border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">12.46</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">19.81</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">11.78</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">8.22</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">During the quarter the Company did not recognize revenue from the Avino Stockpiles as the proceeds from concentrate sales were capitalized in connection with start-up commissioning of Circuit 3. In the year over year comparison, the Company realised a decrease of $1.81 in cash cost per AgEq ounce sold primarily due to more AgEq ounces sold.</p>
<p style="margin: 0px;">&#160;</p>
<table id="fftableid23" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td valign="bottom" align="left">
<p style="margin: 0px;"><b>Consolidated</b></p>
</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="18" align="center"><b>2014</b></td>
<td style="border-right: black 1px solid;" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="18" align="center"><b>2013</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Year</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q4</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q3</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q2</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q1</b></td>
<td style="border-right: black 1px solid;" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Year</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q4</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q3</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q2</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q1</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="text-align: left;" valign="bottom">
<p style="margin: 0px;">Cost of sales</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">11,393,404</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">2,672,151</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">2,994,135</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">2,792,993</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">2,934,125</p>
</td>
<td style="border-right: black 1px solid;" valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">8,968,409</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">2,407,294</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">1,498,405</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">2,613,553</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">2,449,157</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="text-align: left;" valign="bottom">
<p style="margin: 0px;">Stock-based compensation</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(59,400</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(59,400</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-right: black 1px solid;" valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid; text-align: left;" valign="bottom">
<p style="margin: 0px;">Depletion and depreciation</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(1,259,394</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(289,503</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(325,804</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(340,622</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(303,465</p>
</td>
<td style="border-right: black 1px solid; border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(949,326</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(204,110</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(163,213</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(338,297</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(243,706</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="text-align: left;" valign="bottom">
<p style="margin: 0px;">Cash production cost</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">10,074,610</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,382,648</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,608,931</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,452,371</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,630,660</p>
</td>
<td style="border-right: black 1px solid;" valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">8,019,083</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,203,184</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,335,192</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,275,256</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,205,451</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid; text-align: left;" valign="bottom">
<p style="margin: 0px;">Silver equivalent ounces sold</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">1,085,029</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">244,956</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">251,754</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">282,808</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">305,511</p>
</td>
<td style="border-right: black 1px solid; border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">789,135</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">194,576</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">194,590</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">250,648</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">149,321</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Cash cost per silver equivalent ounce</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">9.29</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">9.73</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">10.36</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">8.67</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">8.61</p>
</td>
<td style="border-right: black 1px solid; border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">10.16</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">11.32</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">6.86</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">9.08</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">14.77</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid34" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="right"><font size="2" face="Times New Roman, Times, serif">11 | Page</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid35" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td><img src="img003.jpg" ></td>
<td valign="bottom" width="46%">
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; AVINO SILVER &amp;</font></b></p>
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; GOLD MINES LTD.</font></b></p>
</td>
<td valign="bottom" width="50%">
<p style="margin: 0px;" align="right"><font style="font-size: 12pt;"><b>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS</b></font></p>
<p style="text-align: right; margin: 0px;"><font style="font-size: 12pt;"><b>FOR THE YEAR ENDED DECEMBER 31, 2014</b></font></p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><u style="line-height: 1;">All-in Sustaining Cash Cost per Silver Equivalent Ounce</u></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The following tables provide a reconciliation of cost of sales from the consolidated financial statements to all-in sustaining cash cost per silver equivalent ounce sold. In each table, &#8220;silver equivalent ounces sold&#8221; consists of the number of ounces of silver sold plus the number of ounces of gold sold multiplied by the ratio of the average spot gold price to the average spot silver price for the corresponding period.</p>
<p style="margin: 0px;">&#160;</p>
<table id="fftableid25" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td valign="bottom" align="left">
<p style="margin: 0px;"><b>San Gonzalo</b></p>
</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="18" align="center"><b>2014</b></td>
<td style="border-right: black 1px solid;" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="18" align="center"><b>2013</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Year</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q4</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q3</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q2</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q1</b></td>
<td style="border-right: black 1px solid;" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Year</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q4</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q3</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q2</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q1</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Cost of sales</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">9,458,184</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">2,672,150</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">2,205,694</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">2,278,459</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">2,301,881</p>
</td>
<td style="border-right: black 1px solid;" valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">7,516,267</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">1,809,404</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">1,021,852</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">2,235,854</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">2,449,157</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Stock-based compensation</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(59,400</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(59,400</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-right: black 1px solid;" valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="text-align: left; margin: 0px;">Depletion and depreciation</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(1,153,809</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(289,503</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(303,674</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(297,776</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(262,856</p>
</td>
<td style="border-right: black 1px solid; border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(884,993</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(190,856</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(119,346</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(331,085</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(243,706</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Cash production cost</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">8,244,975</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,382,647</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,842,620</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,980,683</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,039,025</p>
</td>
<td style="border-right: black 1px solid;" valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">6,631,274</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,618,548</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">902,506</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,904,769</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,205,451</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="text-align: left; margin: 0px;">Operating and administrative expenses</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3,491,377</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">394,970</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,275,149</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">776,533</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,044,725</p>
</td>
<td style="border-right: black 1px solid;" valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3,772,279</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">733,035</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,096,286</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">791,226</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,151,732</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Share-based Payments</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(809,427</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(98,410</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(701,102</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(3,163</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(6,752</p>
</td>
<td style="border-right: black 1px solid; border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(815,742</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(14,846</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(339,230</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(179,753</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(281,913</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Cash operating cost</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">10,926,925</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,679,207</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,416,667</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,754,053</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3,076,998</p>
</td>
<td style="border-right: black 1px solid;" valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">9,587,811</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,336,737</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,659,562</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,516,242</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3,075,270</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Silver equivalent ounces sold</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">913,275</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">244,956</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">196,433</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">235,308</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">236,578</p>
</td>
<td style="border-right: black 1px solid; border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">677,782</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">165,060</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">157,845</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">205,556</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">149,321</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="text-align: left; margin: 0px;">All-in sustaining cash cost per silver equivalent ounce</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">11.96</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">10.94</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">12.30</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">11.70</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">13.01</p>
</td>
<td style="border-right: black 1px solid; border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">14.15</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">14.16</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">10.51</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">12.24</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">20.60</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">During the quarter, all-in sustaining cash cost per silver equivalent ounce at San Gonzalo decreased by $1.36 as a result of more AgEq ounces sold. The year on year comparison also shows a decrease in all-in sustaining cash cost per silver equivalent ounce of $2.19 as a result of more AgEq ounces sold.</p>
<p style="margin: 0px;">&#160;</p>
<table id="fftableid26" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td valign="bottom" align="left">
<p style="margin: 0px;"><b>Avino Stockpiles</b></p>
</td>
<td valign="bottom" align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="18" align="center"><b>2014</b><b></b><b></b><b></b><b></b><b></b></td>
<td style="border-right: black 1px solid;" align="left">&#160;</td>
<td valign="bottom" align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="14" align="center"><b>2013</b><b></b><b></b><b></b><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Year</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q4</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q3</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q2</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q1</b></td>
<td style="border-right: black 1px solid;" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Year</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q4</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q3</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q2</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Cost of sales</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">1,935,219</p>
</td>
<td valign="bottom" width="1%" align="right">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">788,441</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">514,534</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">632,244</p>
</td>
<td style="border-right: black 1px solid;" valign="bottom" width="1%">&#160;</td>
<td width="1%" align="right">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">1,452,142</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">597,890</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">476,553</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">377,699</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Stock-based compensation</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-right: black 1px solid;" valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="text-align: left; margin: 0px;">Depletion and depreciation</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(105,585</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(22,130</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(42,846</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(40,609</p>
</td>
<td style="border-right: black 1px solid; border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(64,333</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(13,254</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(43,867</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(7,212</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Cash production cost</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,829,634</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">766,311</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">471,688</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">591,635</p>
</td>
<td style="border-right: black 1px solid;" valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,387,809</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">584,636</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">432,686</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">374,592</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="text-align: left; margin: 0px;">Operating and administrative expenses</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">633,781</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">202,948</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">173,345</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">257,488</p>
</td>
<td style="border-right: black 1px solid;" valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">474,465</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">140,251</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">168,406</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">165,808</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Share-based Payments</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(113,955</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(111,585</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(706</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(1,664</p>
</td>
<td style="border-right: black 1px solid; border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(92,620</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(2,840</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(52,111</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(37,669</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Cash operating cost</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,349,460</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">857,674</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">644,327</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">847,459</p>
</td>
<td style="border-right: black 1px solid;" valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,769,654</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">722,047</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">548,981</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">498,626</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Silver equivalent ounces sold</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">171,754</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">55,321</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">47,500</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">68,933</p>
</td>
<td style="border-right: black 1px solid; border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">111,353</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">29,516</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">36,745</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">45,092</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="text-align: left; margin: 0px;">All-in sustaining cash cost per silver equivalent ounce</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">13.68</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">15.50</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">13.56</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">12.29</p>
</td>
<td style="border-right: black 1px solid; border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">15.89</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">24.46</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">14.94</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">11.06</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid38" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="right"><font size="2" face="Times New Roman, Times, serif">12 | Page</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid39" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td><img src="img003.jpg" ></td>
<td valign="bottom" width="46%">
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; AVINO SILVER &amp;</font></b></p>
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; GOLD MINES LTD.</font></b></p>
</td>
<td valign="bottom" width="50%">
<p style="margin: 0px;" align="right"><font style="font-size: 12pt;"><b>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS</b></font></p>
<p style="text-align: right; margin: 0px;"><font style="font-size: 12pt;"><b>FOR THE YEAR ENDED DECEMBER 31, 2014</b></font></p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">In April 2013, the Company began processing Avino stockpile material through its refurbished Circuit 2 which has a processing capacity of 250 TPD. The cost to process this material in the year ended December 31, 2014 was $13.68, which is a reduction of $2.21 from the all-in sustaining cash costs of $15.89 for the year ended December 31, 2013. The decrease in costs is primarily due to an increase in processed material. The Company transitioned from processing material sourced from the historical Avino stockpiles on September 1, 2014, when it began using Circuit 2 to process pre-commissioning material from the re-opened Avino Mine, and capitalized proceeds from Avino Stockpiles concentrate sales in connection with start-up commissioning of Circuit 3.</p>
<p style="margin: 0px;">&#160;</p>
<table id="fftableid28" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td valign="bottom" align="left">
<p style="margin: 0px;"><b>Consolidated</b></p>
</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="18" align="center"><b>2014</b></td>
<td style="border-right: black 1px solid;" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="18" align="center"><b>2013</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Year</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q4</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q3</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q2</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q1</b></td>
<td style="border-right: black 1px solid;" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Year</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q4</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q3</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q2</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Q1</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Cost of sales</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">11,393,404</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">2,672,151</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">2,994,135</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">2,792,993</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">2,934,125</p>
</td>
<td style="border-right: black 1px solid;" valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">8,968,409</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">2,407,294</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">1,498,405</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">2,613,553</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="5%" align="right">
<p style="margin: 0pt;">2,449,157</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Stock-based compensation</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(59,400</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(59,400</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-right: black 1px solid;" valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="text-align: left; margin: 0px;">Depletion and depreciation</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(1,259,394</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(289,503</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(325,804</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(340,622</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(303,465</p>
</td>
<td style="border-right: black 1px solid; border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(949,326</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(204,110</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(163,213</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(338,297</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(243,706</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Cash production cost</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">10,074,610</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,382,648</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,608,931</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,452,371</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,630,660</p>
</td>
<td style="border-right: black 1px solid;" valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">8,019,083</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,203,184</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,335,192</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,275,256</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,205,451</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="text-align: left; margin: 0px;">Operating and administrative expenses</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">4,125,158</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">394,970</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,478,097</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">949,878</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,302,213</p>
</td>
<td style="border-right: black 1px solid;" valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">4,246,744</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">873,286</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,264,692</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">957,034</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,151,732</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Share-based Payments</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(923,382</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(98,410</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(812,687</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(3,869</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(8,416</p>
</td>
<td style="border-right: black 1px solid; border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(908,362</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(17,686</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(391,341</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(217,422</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(281,913</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Cash operating cost</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">13,276,386</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,679,208</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3,274,341</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3,398,380</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3,924,457</p>
</td>
<td style="border-right: black 1px solid;" valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">11,357,465</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3,058,784</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,208,543</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3,014,868</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3,075,270</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Silver equivalent ounces sold</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">1,085,029</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">244,956</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">251,754</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">282,808</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">305,511</p>
</td>
<td style="border-right: black 1px solid; border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">789,135</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">194,576</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">194,590</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">250,648</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">149,321</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="text-align: left; margin: 0px;">All-in sustaining cash cost per silver equivalent ounce</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">12.24</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">10.94</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">13.01</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">12.02</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">12.85</p>
</td>
<td style="border-right: black 1px solid; border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">14.39</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">15.72</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">11.35</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">12.03</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">20.60</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">For the year ended December 31, 2014, the Company decreased its consolidated all-in sustaining cash cost per AgEq ounce by $2.15 from $14.39 in 2013 to $12.24 in 2014.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company continues to review its expenditures, and is maintaining cost reduction programs in key areas to achieve lower costs. Further, the Company has improved efficiency at its San Gonzalo Mine by improving efficiencies in the mill and adding experienced mining professionals in Mexico with significant expertise in a variety of extraction and processing operations.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><u style="line-height: 1;">Cash Flow per Share </u></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Cash flow per share is determined based on operating cash flows before movements in working capital, as illustrated in the consolidated statements of cash flows, divided by the basic and diluted weighted average shares outstanding during the period.</p>
<p style="margin: 0px;">&#160;</p>
<table id="fftableid29" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="6" align="center"><b>Three Months Ended December 31,</b><b></b><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="6" align="center"><b>Year Ended December 31,</b><b></b><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Operating cash flows before movements in working capital</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="10%" align="right">
<p style="margin: 0pt;">493,271</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="10%" align="right">
<p style="margin: 0pt;">838,372</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="10%" align="right">
<p style="margin: 0pt;">4,317,612</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="10%" align="right">
<p style="margin: 0pt;">5,196,736</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">Weighted average number of shares outstanding</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Basic</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">34,757,244</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">27,472,002</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">32,333,224</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">27,405,179</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;">
<p style="margin: 0px;">Diluted</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">35,350,521</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">27,788,634</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">33,273,740</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">27,701,403</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;">
<p style="margin: 0px;"><b>Cash Flow per Share &#8211; basic and diluted</b></p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;"><b>$</b></p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>0.01</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;"><b>$ </b></p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>0.03 </b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;"><b>$</b></p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>0.13</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;"><b>$ </b></p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>0.19 </b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid42" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="right"><font size="2" face="Times New Roman, Times, serif">13 | Page</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid43" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td><img src="img003.jpg" ></td>
<td valign="bottom" width="46%">
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; AVINO SILVER &amp;</font></b></p>
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; GOLD MINES LTD.</font></b></p>
</td>
<td valign="bottom" width="50%">
<p style="margin: 0px;" align="right"><font style="font-size: 12pt;"><b>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS</b></font></p>
<p style="text-align: right; margin: 0px;"><font style="font-size: 12pt;"><b>FOR THE YEAR ENDED DECEMBER 31, 2014</b></font></p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><u style="line-height: 1;">Working Capital </u></b></p>
<p style="margin: 0px;">&#160;</p>
<table id="fftableid31" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31,<br >2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31,<br >2013 </b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Current assets</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">13,094,025</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">8,146,912</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Current liabilities</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(6,476,148</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(2,196,172</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;"><b>Working Capital </b></p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">6,617,877</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">5,950,740</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><u style="line-height: 1;">Review of Financial Results</u></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><u style="line-height: 1;">Selected Annual Information</u></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The following financial data is derived from the Company&#8217;s financial statements for the three most recently completed financial years:</p>
<p style="margin: 0px;">&#160;</p>
<table id="fftableid32" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31,<br >2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31,<br >2013</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31,<br >2012</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="center"><b>Note</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Total revenues</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">19,297,953</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">16,094,701</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">2,255,376</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;"><b>1</b></p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">Cost of sales</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">10,134,010</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">8,019,083</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,246,309</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>1</b></p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Depletion and depreciation</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,259,394</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">949,326</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">188,260</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>1</b></p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">Mine operating income</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">7,904,549</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">7,126,292</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">820,807</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>1</b></p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">General and administrative expenses</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">4,143,516</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">4,247,431</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,929,746</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>2</b></p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">Net income (loss)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,514,169</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">848,212</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(1,263,178</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>3</b></p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Earnings (loss) per share</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">0.08</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">0.03</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(0.05</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>3</b></p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">Total assets</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">61,416,147</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">34,552,245</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">26,191,608</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>4</b></p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Total non-current financial liabilities</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,007,010</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,090,977</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">78,732</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>5</b></p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;">Working capital</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">6,617,877</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">5,950,740</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">5,363,372</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid46" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">1.</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Total revenues have increased significantly from 2013 as the Company generated higher revenues from the sale of San Gonzalo concentrate as a result of higher grades and more silver and gold ounces produced.</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">2.</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">General and operating expenses are consistent with the prior year. Prior to production, many general and operating expenses were capitalized to exploration and evaluation activities, consistent with the Company&#8217;s accounting policies for such costs. General operating expenses can also fluctuate due to infrequent one-time events such as share-based payments.</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">3.</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Net income was significantly higher in 2014, primarily due to higher revenues as described above and the recognition of a fair value adjustment on warrant liability. Income before tax was $4,881,915; however, this was reduced by current income tax expense of $1,820,970 and non-cash deferred income tax expense of $546,776. During 2014, the Company utilized the balance of its non-capital tax loss carry forwards in Mexico.</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#160;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">4.</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Total assets increased significantly during the year, primarily due to the addition of several pieces of new equipment, continued exploration and evaluation activities at the Avino Mine, and the acquisition of Bralorne Gold Mines Ltd. The new equipment is used to maintain efficient operations at the San Gonzalo mine and to further prepare the Avino Mine for mining operations, where processing of underground material commenced in September 2014.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid47" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="right"><font size="2" face="Times New Roman, Times, serif">14 | Page</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid48" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td><img src="img003.jpg" ></td>
<td valign="bottom" width="46%">
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; AVINO SILVER &amp;</font></b></p>
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; GOLD MINES LTD.</font></b></p>
</td>
<td valign="bottom" width="50%">
<p style="margin: 0px;" align="right"><font style="font-size: 12pt;"><b>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS</b></font></p>
<p style="text-align: right; margin: 0px;"><font style="font-size: 12pt;"><b>FOR THE YEAR ENDED DECEMBER 31, 2014</b></font></p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><u style="line-height: 1;">Results of Operations</u></b></p>
<p style="margin: 0px;">&#160;<br ><strong>Summary of Quarterly Results</strong></p>
<p style="margin: 0px;">&#160;</p>
<table id="fftableid35" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td valign="top" align="left">&#160;</td>
<td valign="bottom" align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom" align="left">&#160;</td>
<td valign="bottom" align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom" align="left">&#160;</td>
<td valign="bottom" align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom" align="left">&#160;</td>
<td valign="bottom" align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom" align="left">&#160;</td>
<td valign="bottom" align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td valign="bottom" align="left">&#160;</td>
<td valign="bottom" align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td valign="bottom" align="left">&#160;</td>
<td valign="bottom" align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td valign="bottom" align="left">&#160;</td>
<td valign="bottom" align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td valign="bottom" align="left">&#160;</td>
</tr>
<tr height="15">
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0px;"><b>Period ended</b></p>
</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Dec 31<br >Q4</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center">
<p style="margin: 0cm 0cm 0pt;"><b>Sep 30<br ></b><b>Q3</b></p>
</td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Jun 30<br >Q2</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Mar 31<br >Q1</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Dec 31<br >Q4</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Sep 30<br >Q3</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Jun 30<br >Q2</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Mar 31<br >Q1</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;"><b>Revenue</b></p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">3,714,692</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">4,704,213</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">5,104,921</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">5,774,127</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">3,831,123</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">3,821,622</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">4,951,952</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="6%" align="right">
<p style="margin: 0pt;">3,490,004</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="top">
<p style="margin: 0px;"><b>Earnings (Loss) for the period</b></p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">469,145</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">787,805</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(87,097</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">1,344,316</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(1,625,762</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">938,694</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">1,447,301</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">87,978</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="top">
<p style="margin: 0px;"><b>Earnings (Loss) per </b><b>Share - basic</b></p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">0.01</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">0.02</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(0.00</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">0.05</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(0.06</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">0.03</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">0.05</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">0.00</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="top">
<p style="margin: 0px;"><b>Earnings (Loss) per </b><b>Share - diluted</b></p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">0.01</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">0.02</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(0.00</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">0.04</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(0.06</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">0.03</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">0.05</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">0.00</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="top">
<p style="margin: 0px;"><b>Total&#160;</b><b>Assets</b></p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">61,416,147</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">53,291,603</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">49,773,734</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">48,358,440</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">34,552,245</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">30,848,797</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">29,928,165</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">28,114,436</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid50" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#183;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Revenue in Q4 2014 was lower than that of Q3 2014 as a result of lower metals prices and the re-allocation of capacity from Circuit 2 to process new Avino material for commissioning purposes. Revenue in Q1 2014 was higher than the previous quarters due to higher grades, better recoveries, and better contract terms with trading firms. Q2 2013 revenues were higher due to Circuit 2 coming online in April 2013 in addition to slightly higher metals prices and better grades experienced at the Company&#8217;s San Gonzalo mine.</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">&#160;</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">&#183;</font></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Earnings in Q4 2014 were significantly lower due to current income tax expense of $638,601. The increase in current income tax expense is the result of higher earnings and the utilization of non-capital tax loss carry forwards in Mexico. Earnings in Q2 2014 were impacted by a significant foreign exchange loss and a substantial unrealized loss related to the increase in the estimated fair value of the Company&#8217;s warrant liability. In Q4 2014, these effects were largely reversed due to favourable movements in exchange rates and in market variables used to value the warrant liability.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<p style="margin: 0px;">Quarterly results will fluctuate with changes in revenues, cost of sales, general and administrative expenses, including non-cash items such as share-based payments, and other items including foreign exchange, fair value adjustments to the warrant liability, and deferred income taxes.</p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid51" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="right"><font size="2" face="Times New Roman, Times, serif">15 | Page</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid52" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td><img src="img003.jpg" ></td>
<td valign="bottom" width="46%">
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; AVINO SILVER &amp;</font></b></p>
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; GOLD MINES LTD.</font></b></p>
</td>
<td valign="bottom" width="50%">
<p style="margin: 0px;" align="right"><font style="font-size: 12pt;"><b>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS</b></font></p>
<p style="text-align: right; margin: 0px;"><font style="font-size: 12pt;"><b>FOR THE YEAR ENDED DECEMBER 31, 2014</b></font></p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>Consolidated Statements of Operations for the year ended December 31, 2014 compared with the year ended December 31, 2013: </b></p>
<p style="margin: 0px;">&#160;</p>
<table id="fftableid37" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td align="left">&#160;</td>
<td valign="bottom" align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom" align="left">&#160;</td>
<td valign="bottom" align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="center"><b>Notes</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;"><b>Revenue</b><b> from Mining Operations</b></p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">19,297,953</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">16,094,701</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;"><b>1</b></p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;">
<p style="margin: 0px;"><b>Cost of Sales</b></p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">11,393,404</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">8,968,409</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid; text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>2</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;"><b>Mine Operating Income</b></p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">7,904,549</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">7,126,292</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;"><b>Operating</b><b> Expenses</b></p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px; text-indent: 30px;">General and administrative expenses</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3,220,134</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3,339,069</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>3</b></p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;">
<p style="margin: 0px; text-indent: 30px;">Share-based payments</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">923,382</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">908,362</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid; text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>4</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;"><b>Operating earnings</b></p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3,761,033</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">2,878,861</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;"><b>Other Items</b></p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px; text-indent: 30px;">Fair value adjustment on warrant liability</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,055,957</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>5</b></p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px; text-indent: 30px;">Finance costs</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(129,953</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px; text-indent: 30px;">Foreign exchange gain</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">316,599</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">415,278</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>6</b></p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px; text-indent: 30px;">Interest and other income</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">41,658</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">145,406</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px; text-indent: 30px;">Accretion of reclamation provision</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(131,787</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px; text-indent: 30px;">Mineral property option income</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">69,500</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px; text-indent: 30px;">Share of net loss of equity investee</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(90,944</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="text-indent: 30px;">
<p style="margin: 0px;">Unrealized loss on investments in related companies</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(4,615</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(99,833</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px; text-indent: 30px;">Unrealized gain on investments</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">5,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;">
<p style="margin: 0px; text-indent: 30px;">Gain on forgiveness of debt</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">58,967</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid; text-align: center;" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;"><b>Net </b><b>Income </b><b>Before Income Taxes</b></p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">4,881,915</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3,409,212</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;"><b>Income Taxes</b></p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Current income tax expense</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(1,820,970</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(42,547</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>7</b></p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;">
<p style="margin: 0px;">Deferred income tax expense</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(546,776</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(2,518,453</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid; text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>7</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;"></td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(2,367,746</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(2,561,000</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid; text-align: center;" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;">
<p style="margin: 0px;"><b>Net </b><b>Income</b><b> </b></p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">2,514,169</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">848,212</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="border-bottom: black 3px double; text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>8</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="text-indent: 30px;"></td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;"><b>Earnings per Share</b></p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px; text-indent: 30px;">Basic</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">0.08</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">0.03</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>8</b></p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;">
<p style="margin: 0px; text-indent: 30px;">Diluted</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">0.08</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">0.03</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="border-bottom: black 3px double; text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>8</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160; &#160;</p>
<table id="tableid54" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="right"><font size="2" face="Times New Roman, Times, serif">16 | Page</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;&#160;</p>
<table id="tableid55" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td><img src="img003.jpg" ></td>
<td valign="bottom" width="46%">
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; AVINO SILVER &amp;</font></b></p>
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; GOLD MINES LTD.</font></b></p>
</td>
<td valign="bottom" width="50%">
<p style="margin: 0px;" align="right"><font style="font-size: 12pt;"><b>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS</b></font></p>
<p style="text-align: right; margin: 0px;"><font style="font-size: 12pt;"><b>FOR THE YEAR ENDED DECEMBER 31, 2014</b></font></p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid56" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="margin: 0px;">1.</p>
</td>
<td valign="top">
<p style="margin: 0px;">Revenues for the year ended December 31, 2014 were $19,297,953 compared to $16,094,701 for the year ended December 31, 2013, an increase of $3,203,252. The increase is due to higher grades at San Gonzalo and a significant increase in tonnes processed and sold from the historical stockpiles. The increase in grades and tonnes processed were slightly offset by the decrease in the average realized silver and gold prices.</p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid57" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">2.</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">For the year ended December 31, 2014, cost of sales was $11,393,404 compared with $8,968,409 for the year ended December 31, 2013. The increase of $2,424,995 is primarily due to the increase in production at Circuit 2. The Company has also experienced a slight increase in fuel and other production consumables. Further, the Company now accrues a 0.50% environmental royalty on gross revenues as the result of the new Mexican tax legislation that was introduced in 2014.</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">3.</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">General and administrative expenses include management, consulting, and director fees, salaries, office expenses, investor relations, travel, and promotion. For the year ended December 31, 2014 general and administrative expenses were $3,220,134 compared to $3,339,069 for the year ended December 31, 2013. The decrease of $118,935 is primarily due to a reclassification of certain current period expenses related to mining activities.</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">4.</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Share-based payments for the year ended December 31, 2014 were $923,382 compared to $908,362 for the year ended December 31, 2013, an increase of $15,020. Share-based payments for 2014 relate to the issuance of 1,035,000 stock options during the year, while share-based payments expense in 2013 related to the re-pricing of previously-issued stock options and the issuance of 650,000 new options.</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">5.</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">The fair value adjustment on the Company&#8217;s warrant liability relates to the issuance of U.S. dollar denominated warrants in connection with the brokered private placement in February 2014. The warrants are re-valued each reporting period and the value fluctuates with changes in variables under the Black-Scholes model.</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">6.</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Foreign exchange gains or losses result from transactions in currencies other than the Canadian dollar. The strengthening U.S. dollar against the Canadian dollar in the current period led to significant foreign exchange gains on the Company&#8217;s net monetary U.S. dollar assets.</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">7.</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Current income tax of $1,820,970 in the year ended December 31, 2014 compared to $42,547 in the year ended December 31, 2013. Current income tax has increased due to higher earnings, the 7.5% special mining duty in Mexico that became effective in January 2014, and the liability for Mexican tax on current income as a result of utilizing all available tax loss carry forwards in previous years.</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Deferred income tax expense was $546,776 for the year ended December 31, 2014, compared to $2,518,453 in the previous year. In 2013, the Company calculated and disclosed the effects of the changes to Mexican tax legislation that was introduced in 2013 and took effect in January 2014. There were no additional tax reforms during the current year.</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">8.</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">As a result of the foregoing, net income for the year ended December 31, 2014, was $2,514,169, an increase of $1,665,957 compared to the year ended December 31, 2013. The increase in net income has increased basic and diluted earnings per share from $0.03 to $0.08.</p>
</td>
</tr>

</table>
<p style="font-size: 10pt; font-family: TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid58" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="right"><font size="2" face="Times New Roman, Times, serif">17 | Page</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
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<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid59" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td><img src="img003.jpg" ></td>
<td valign="bottom" width="46%">
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; AVINO SILVER &amp;</font></b></p>
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; GOLD MINES LTD.</font></b></p>
</td>
<td valign="bottom" width="50%">
<p style="margin: 0px;" align="right"><font style="font-size: 12pt;"><b>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS</b></font></p>
<p style="text-align: right; margin: 0px;"><font style="font-size: 12pt;"><b>FOR THE YEAR ENDED DECEMBER 31, 2014</b></font></p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>Consolidated Statements of Operations for the quarter ended December 31, 2014 compared with the quarter ended December 31, 2013: </b></p>
<p style="margin: 0px;">&#160;</p>
<table id="fftableid43" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td align="left">&#160;</td>
<td valign="bottom" align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom" align="left">&#160;</td>
<td valign="bottom" align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="center"><b>Notes</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;"><b>Revenue from Mining Operations</b></p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">3,714,692</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">3,831,123</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;"><b>1</b></p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;">
<p style="margin: 0px;"><b>Cost of Sales</b></p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">2,225,316</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">2,407,294</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid; text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>2</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;">
<p style="margin: 0px;"><b>Mine Operating Income</b></p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">1,489,376</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">1,423,829</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid; text-align: center;" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;"><b>Operating Expenses</b></p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px; text-indent: 30px;">General and administrative expenses</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">791,481</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">855,772</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>3</b></p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;">
<p style="margin: 0px; text-indent: 30px;">Share-based payments</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">98,410</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">17,686</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid; text-align: center;" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;"><b>Operating earnings</b></p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">599,485</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">550,371</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;"><b>Other Items</b></p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px; text-indent: 30px;">Fair value adjustment on warrant liability</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">72,706</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>4</b></p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px; text-indent: 30px;">Finance costs</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(129,953</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>4</b></p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px; text-indent: 30px;">Foreign exchange gain</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">424,064</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">100,031</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>5</b></p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px; text-indent: 30px;">Interest and other income</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">21,032</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">97,186</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px; text-indent: 30px;">Accretion of reclamation provision</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(33,643</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px; text-indent: 30px;">Unrealized gain (loss) on investments in related companies</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(2,170</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">8,150</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px; text-indent: 30px;">Unrealized gain (loss) on investments</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(10,000</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">3,500</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;">
<p style="margin: 0px; text-indent: 30px;">Gain on forgiveness of debt</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">58,967</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid; text-align: center;" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;"><b>Net Income Before Income Taxes</b></p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,000,488</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">759,238</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;"><b>Income Taxes</b></p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Current income tax expense</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(638,601</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(42,547</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>6</b></p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;">
<p style="margin: 0px;">Deferred income tax recovery (expense)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">107,258</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(2,342,453</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid; text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>6</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;"></td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(531,343</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(2,385,000</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid; text-align: center;" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;">
<p style="margin: 0px;"><b>Net Income (Loss)</b></p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">469,145</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">(1,625,762</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 3px double;">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double; text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>7</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="text-indent: 30px;"></td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td>
<p style="margin: 0px;"><b>Earnings (Loss) per Share</b></p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td>
<p style="margin: 0px;">Basic</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">0.01</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(0.06</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td id="ffc" style="text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>7</b></p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;">
<p style="margin: 0px;">Diluted</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">0.01</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" class="para" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">(0.06</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 3px double;">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double; text-align: center;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>7</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid61" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="right"><font size="2" face="Times New Roman, Times, serif">18 | Page</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
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<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid62" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td><img src="img003.jpg" ></td>
<td valign="bottom" width="46%">
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; AVINO SILVER &amp;</font></b></p>
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; GOLD MINES LTD.</font></b></p>
</td>
<td valign="bottom" width="50%">
<p style="margin: 0px;" align="right"><font style="font-size: 12pt;"><b>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS</b></font></p>
<p style="text-align: right; margin: 0px;"><font style="font-size: 12pt;"><b>FOR THE YEAR ENDED DECEMBER 31, 2014</b></font></p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid63" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="margin: 0px;">1.</p>
</td>
<td valign="top">
<p style="margin: 0px;">Revenues for the three months ended December 31, 2014 were $3,714,692 compared to $3,831,123 for the three months ended December 31, 2013. The decrease of $116,431 is partially due to re-allocating capacity from Circuit 2 to process material from the Avino Mine for commissioning purposes. Proceeds from sales of concentrate produced during the commissioning period are capitalized to exploration and evaluation activities. Further, the Company experienced lower average silver and gold prices during the quarter.</p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid64" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">2.</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Total cost of sales for the three months ended December 31, 2014 was $2,225,316 compared to $2,407,294 in the comparative period. The decrease of $181,978 is due to a decrease in the processing of historical stockpiles in Circuit 2.</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">3.</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">General and administrative expenses include management, consulting, and director fees, salaries, office expenses, investor relations, travel, and promotion. For the three months ended December 31, 2014, general and administrative expenses were $791,481 compared to $855,772 for the three months ended December 31, 2013.</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">4.</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">The fair value adjustment and finance costs on the Company&#8217;s warrant liability relate to the issuance of U.S. dollar denominated warrants which are re-valued each reporting period, and the value fluctuates with changes in variables under the Black-Scholes model.</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">5.</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Foreign exchange gains or losses result from transactions in currencies other than the Canadian dollar. The strengthening U.S. dollar against the Canadian dollar in the current period led to significant foreign exchange gains on the Company&#8217;s net monetary U.S. dollar assets.</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">6.</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Current income tax of $638,601 in the three months ended December 31, 2014 compared to $42,547 in the three months ended December 31, 2013. The increase reflects higher earnings, the 7.5% special mining duty in Mexico that became effective in January 2014, and the liability for Mexican tax on current income as a result of utilizing all available tax loss carry forwards in the current period.</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="margin: 0px;">Deferred income tax recovery was $107,258 for the three months ended December 31, 2014, compared to an expense of $2,342,453 in the comparative period. In 2013, the Company calculated and disclosed the effects of the changes to Mexican tax legislation that was introduced in 2013 and took effect in January 2014. There were no additional tax reforms during the current year.</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">7.</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">As a result of the foregoing, net income for the three months ended December 31, 2014, was $469,145, an increase of $2,094,907 compared to the three months ended December 31, 2013. The increase in net income has increased basic and diluted earnings per share from a loss of $0.06 for the three months ended December 31, 2013 to earnings of $0.01 for the three months ended December 31, 2014.</p>
</td>
</tr>

</table>
<p style="font-size: 10pt; font-family: TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="tableid65" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="right"><font size="2" face="Times New Roman, Times, serif">19 | Page</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
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<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid66" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td><img src="img003.jpg" ></td>
<td valign="bottom" width="46%">
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; AVINO SILVER &amp;</font></b></p>
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; GOLD MINES LTD.</font></b></p>
</td>
<td valign="bottom" width="50%">
<p style="margin: 0px;" align="right"><font style="font-size: 12pt;"><b>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS</b></font></p>
<p style="text-align: right; margin: 0px;"><font style="font-size: 12pt;"><b>FOR THE YEAR ENDED DECEMBER 31, 2014</b></font></p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>Liquidity and Capital Resources</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company&#8217;s ability to generate sufficient amounts of cash and cash equivalents, in both the short term and the long term, to maintain existing capacity and to fund ongoing exploration is dependent upon the discovery of economically recoverable reserves or resources and the ability of the Company to obtain the financing necessary to complete advancement and sustain profitable operations.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Management expects that the Company&#8217;s ongoing liquidity requirements will be funded from current cash and cash equivalents and from further financing as required in order to fund ongoing exploration activities and meet its objectives, including the commencement of production at the Avino Mine. The Company continues to evaluate financing opportunities to advance its projects. The Company&#8217;s ability to secure adequate financing is in part dependent on overall market conditions, the prices of silver, gold, and copper, and other factors outside the Company&#8217;s control, and there is no guarantee the Company will be able to secure any or all necessary financing in the future. The Company&#8217;s recent financing activities are summarized in the table below:</p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid67" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="4" align="center" border="0">

<tr height="15">
<td style="border-top: black 1px solid; border-bottom: black 1px solid; border-left: black 1px solid;" valign="top" width="50%">
<p style="margin: 0px;"><b>Intended Use of Proceeds</b></p>
</td>
<td style="border: black 1px solid;" valign="top" width="50%">
<p style="margin: 0px;"><b>Actual Use of Proceeds</b></p>
</td>
</tr>
<tr height="15">
<td style="border-bottom: black 1px solid; border-left: black 1px solid;" valign="top">
<p style="margin: 0px;">In February 2014, the Company closed a brokered private placement for gross proceeds of US$5 million and an at-the-market brokered public offering for gross proceeds of US$5,741,668. The Company plans to use the funds for advancing the Avino Mine and for the Company&#8217;s mining operations in Mexico, as well as for general working capital requirements.</p>
</td>
<td style="border-right: black 1px solid; border-bottom: black 1px solid; border-left: black 1px solid;" valign="top">
<p style="margin: 0px;">As of the date of this MD&amp;A, the Company had used, and was continuing to use, the funds as intended. There has been no impact on the ability of the Company to achieve its business objectives and milestones. In advancing the Avino Mine, and in supporting mining operations in Mexico, the Company incurred exploration expenditures of $5,202,689 (excluding depreciation of $495,847 and foreign exchange of $407,455) and acquired property and equipment of $4,665,469 during the year ended December 31, 2014.</p>
<p style="margin: 0px;">The Company also acquired the Bralorne gold mine property during the period for a total purchase price of $8,146,790, of which $3,646,825 was paid in cash. The Company intends to continue to explore the property, subject to market conditions and the ability to continue to obtain suitable financing.</p>
</td>
</tr>
<tr height="15">
<td style="border-bottom: black 1px solid; border-left: black 1px solid;" valign="top">
<p style="margin: 0px;">Since July 2014, the Company received gross proceeds of US$804,330 in connection with a brokered at-the-market offering issued under a prospectus supplement. The Company intends to use the proceeds to advance the exploration of the Bralorne Mine property and the Avino property, and for working capital.</p>
</td>
<td style="border-right: black 1px solid; border-bottom: black 1px solid; border-left: black 1px solid;" valign="top">
<p style="margin: 0px;">As of the date of this MD&amp;A, the Company had used, and was continuing to use, the funds as intended. There has been no impact on the ability of the Company to achieve its business objectives and milestones.</p>
</td>
</tr>
<tr height="15">
<td style="border-bottom: black 1px solid; border-left: black 1px solid;" valign="top">
<p style="margin: 0px;">In December 2014, the Company&#8217;s master credit facility with Caterpillar Finance was renewed for US$5,375,400. The facility is being used to acquire equipment necessary for advancing operations at the San Gonzalo Mine and for continuing exploration activities at the Avino Mine.</p>
</td>
<td style="border-right: black 1px solid; border-bottom: black 1px solid; border-left: black 1px solid;" valign="top">
<p style="margin: 0px;">As of the date of this MD&amp;A, the Company had used, and was continuing to use, the facility as intended, and there was US$2,586,974 in available credit remaining under the facility. There has been no impact on the ability of the Company to achieve its business objectives and milestones.</p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid68" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

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<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="right"><font size="2" face="Times New Roman, Times, serif">20 | Page</font></div>
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<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
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</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid69" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td><img src="img003.jpg" ></td>
<td valign="bottom" width="46%">
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; AVINO SILVER &amp;</font></b></p>
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; GOLD MINES LTD.</font></b></p>
</td>
<td valign="bottom" width="50%">
<p style="margin: 0px;" align="right"><font style="font-size: 12pt;"><b>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS</b></font></p>
<p style="text-align: right; margin: 0px;"><font style="font-size: 12pt;"><b>FOR THE YEAR ENDED DECEMBER 31, 2014</b></font></p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Discussion and analysis relating to the Company&#8217;s liquidity as at December 31, 2014 and December 31, 2013 is as follows:</p>
<p style="margin: 0px;">&#160;</p>
<table id="fftableid48" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0px;"><b>Statement of Financial Position</b></p>
</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31,<br >2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31,<br >2013</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Cash and Cash Equivalents</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">4,249,794</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">3,839,595</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Working Capital</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">6,617,877</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">5,950,740</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Accumulated Deficit</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">(25,924,356</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">(28,502,464</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="fftableid49" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"><strong>Cash Flow</strong></td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31,<br >2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31,<br >2013 </b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Cash generated by operating activities</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">2,855,957</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">3,983,352</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Cash generated by (used in) financing activities</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">11,305,179</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(38,346</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Cash used in investing activities</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(13,804,382</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(4,128,467</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Increase in cash and cash equivalents</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">356,754</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(183,461</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Effect of exchange rate changes on cash and cash equivalents</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">53,445</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(12,929</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Cash and cash equivalents, beginning of year</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">3,839,595</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">4,035,985</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;"><b>Cash and cash equivalents, end of year</b></p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">4,249,794</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">3,839,595</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>Operating Activities:</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Cash generated by operating activities for the year ended December 31, 2014, was $2,855,957 compared to cash generated by operating activities of $3,983,352 for the year ended December 31, 2013. Cash generated by operating activities fluctuates with changes in net income, non-cash items, such as foreign exchange and deferred income tax expenses, and working capital.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>Financing Activities:</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Cash generated by financing activities was $11,305,179 for the year ended December 31, 2014 compared to cash used of $38,346 in the year ended December 31, 2013, an increase of $11,343,525. Cash provided by financing activities for the year ended December 31, 2014, relates to the issuance of common shares and units in three brokered share offerings and upon the exercising of stock options. During the year ended December 31, 2014, the Company issued common shares and units in brokered offerings generating net cash flows of $11,940,920 (2013 &#8211; $nil), and employees, consultants, and directors exercised stock options generating cash flows of $307,937 (2013 &#8211; $297,185). During the year ended December 31, 2014, the Company also made finance lease payments of $943,678 (2013 - $335,531).</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>Investing Activities:</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Cash used in investing activities for the year ended December 31, 2014, was $13,804,382 compared to $4,128,467 for the year ended December 31, 2013. Cash used in investing activities during the year ended December 31, 2014 includes cash expenditures of $5,472,774 (2013 - $3,315,192) on the acquisition of property and equipment. Equipment purchases included new mining, milling and processing, and transportation equipment for the Company&#8217;s San Gonzalo Mine and Avino stockpile operation. In addition, the Company acquired equipment to refurbish Circuit 3 and to advance the dewatering and refurbishment of the Avino underground mine. Cash expenditures on equipment also include down payments on equipment acquired under finance leases. During the year ended December 31, 2014, the Company also incurred cash expenditures of $11,853,024 (2013 - $901,912) on exploration and evaluation activities relating to the Avino Mine, and the acquisition and evaluation of the Bralorne Mine.</p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid72" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="right"><font size="2" face="Times New Roman, Times, serif">21 | Page</font></div>
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<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid73" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td><img src="img003.jpg" ></td>
<td valign="bottom" width="46%">
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; AVINO SILVER &amp;</font></b></p>
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; GOLD MINES LTD.</font></b></p>
</td>
<td valign="bottom" width="50%">
<p style="margin: 0px;" align="right"><font style="font-size: 12pt;"><b>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS</b></font></p>
<p style="text-align: right; margin: 0px;"><font style="font-size: 12pt;"><b>FOR THE YEAR ENDED DECEMBER 31, 2014</b></font></p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><strong>Off-Balance Sheet Arrangements</strong></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company has no off-balance sheet arrangements.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><u style="line-height: 1;">Transactions with Related Parties</u></b></p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid74" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>(a)</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">The Company has identified its directors and certain senior officers as its key management personnel. The compensation costs for key management personnel for the years ended December 31, 2014, 2013 and 2012 are as follows:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="fftableid52" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>2012</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Salaries, benefits, and consulting fees</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">957,900</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">779,571</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">243,011</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Share-based payments</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">645,750</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">420,450</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;" valign="bottom"></td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">1,603,650</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">1,200,021</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">243,011</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid76" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>(b)</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">In the normal course of operations the Company transacts with companies related to Avino&#8217;s directors or officers. At December 31, 2014, the Company had made advances to Oniva International Services Corp. of $121,639 (December 31, 2013 - $115,507). At December 31, 2014 and December 31, 2013 the following amounts were due to related parties:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="fftableid53" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31,<br >2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31,<br >2013</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Directors</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">19,259</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">11,870</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Intermark Capital Corp.</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">21,875</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Jasman Yee &amp; Associates, Inc.</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">4,032</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">5,040</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Oniva International Services Corp.</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">171,650</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">135,458</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Sampson Engineering Inc.</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,840</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Wear Wolfin Design Ltd.</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">5,250</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">2,625</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;" valign="top"></td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">222,066</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">156,833</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid78" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>(c)</strong></p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><strong>Other related party transactions</strong></p>
</td>
</tr>
<tr>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="margin: 0px;">The Company has entered into a cost sharing agreement with Oniva International Services Corp. (&#8220;Oniva&#8221;) for office and administration services. Pursuant to the cost sharing agreement, the Company will reimburse Oniva for the Company&#8217;s percentage of overhead and corporate expenses and for out-of-pocket expenses incurred on behalf of the Company. The Company and its subsidiary each hold a 1/6 indirect beneficial ownership interest in Oniva, with four other public companies holding equal 1/6 indirect beneficial ownership interests. David Wolfin and Malcolm Davidson, the Company&#8217;s CEO and CFO, serve as directors of Oniva, and certain of the Company&#8217;s directors and officers also serve in those capacities in all five of the other companies. The companies&#8217; interests in Oniva are held in trust by David Wolfin and a family member of Mr. Wolfin. The cost sharing agreement may be terminated with one-month notice by either party without penalty. The transactions with Oniva during the years ended December 31, 2014 and 2013 are summarized below:</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<table id="fftableid56" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31,<br >2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31,<br >2013</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31,<br >2012</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Salaries and benefits</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">316,281</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">309,816</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">179,555</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Office and miscellaneous</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">428,019</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">292,008</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">276,201</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;" valign="bottom"></td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">744,300</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">601,824</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">455,756</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px 0px 0px 60px;">Salaries and benefits above include $48,424 for key management personnel compensation that has been included in part (a) above.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px 0px 0px 60px;">For services provided to the Company as President and Chief Executive Officer, the Company pays Intermark Capital Corporation (&#8220;ICC&#8221;), a company controlled by David Wolfin, for consulting services. For the years ended December 31, 2014, 2013 and 2012, the Company paid $433,333, $300,000, and $150,000 respectively to ICC.</p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid80" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
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</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid81" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td><img src="img003.jpg" ></td>
<td valign="bottom" width="46%">
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; AVINO SILVER &amp;</font></b></p>
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; GOLD MINES LTD.</font></b></p>
</td>
<td valign="bottom" width="50%">
<p style="margin: 0px;" align="right"><font style="font-size: 12pt;"><b>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS</b></font></p>
<p style="text-align: right; margin: 0px;"><font style="font-size: 12pt;"><b>FOR THE YEAR ENDED DECEMBER 31, 2014</b></font></p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px 0px 0px 60px;">The Company pays Jasman Yee &amp; Associates Inc. (&#8220;JYAI&#8221;), a company whose managing director is Jasman Yee, for operational, managerial, metallurgical, engineering and consulting services related to the Company&#8217;s activities. For the years ended December 31, 2014, 2013 and 2012, the Company paid $74,160, $75,014, and $63,938 respectively to JYAI.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px 0px 0px 60px;">The Company pays Wear Wolfin Designs Ltd. (&#8220;WWD&#8221;), a company whose director is the brother-in-law of David Wolfin, for financial consulting services related to ongoing consultation with stakeholders and license holders. For the years ended December 31, 2014, 2013 and 2012, the Company paid $30,000, $30,000, and $30,000 respectively to WWD.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><strong><u style="line-height: 1;">Financial Instruments and Risks</u></strong></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The fair values of the Company&#8217;s cash and cash equivalents, amounts receivable, due to and due from related parties, and accounts payable approximate their carrying values because of the short-term nature of these instruments. The fair values of investments in related and other companies are based on quoted market prices.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company&#8217;s financial instruments are exposed to certain financial risks, including credit risk, liquidity risk, and market risk.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><i>(a) </i></b><b><i>Credit Risk</i></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Company has exposure to credit risk through its cash and cash equivalents and accounts receivable.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company manages credit risk, in respect of cash and cash equivalents, by maintaining the majority of cash at highly rated financial institutions.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">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 three (2013 &#8211; two) counterparties. However, the Company has not recorded any allowance against its trade receivables, because to-date all balances owed have been settled in full when due (typically within 60 days of submission), and because of the nature of the counterparties.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company&#8217;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 December 31, 2014, no amounts were held as collateral.</p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid82" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
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</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid83" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td><img src="img003.jpg" ></td>
<td valign="bottom" width="46%">
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; AVINO SILVER &amp;</font></b></p>
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; GOLD MINES LTD.</font></b></p>
</td>
<td valign="bottom" width="50%">
<p style="margin: 0px;" align="right"><font style="font-size: 12pt;"><b>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS</b></font></p>
<p style="text-align: right; margin: 0px;"><font style="font-size: 12pt;"><b>FOR THE YEAR ENDED DECEMBER 31, 2014</b></font></p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><i>(b) </i></b><b><i>Liquidity Risk</i></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Liquidity risk is the risk that the Company will 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 and cash equivalents at December 31, 2014, in the amount of $4,249,794 (2013 - $3,839,595) in order to meet short-term business requirements. At December 31, 2014, the Company had current liabilities of $6,476,148 (2013 - $2,196,172). 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 portion of finance lease obligations is due within 12 months of the consolidated statement of financial position date. Amounts due to related parties are without stated terms of interest or repayment.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><i>(c) </i></b><b><i>Market Risk</i></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Market risk consists of interest rate risk, foreign currency risk and price risk. These are discussed further below.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Interest Rate Risk</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Interest rate risk consists of two components:</p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid84" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(i)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">To the extent that payments made or received on the Company&#8217;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.</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">(ii)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">To the extent that changes in prevailing market rates differ from the interest rate in the Company&#8217;s monetary assets and liabilities, the Company is exposed to interest rate price risk.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<p style="margin: 0px;">In management&#8217;s opinion, the Company is not exposed to significant interest rate cash flow risk as the Company&#8217;s finance lease obligations bear interest at fixed rates.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><i>Foreign Currency Risk</i></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will 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 US dollars:</p>
<p style="margin: 0px;">&#160;</p>
<table id="fftableid60" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="6" align="center"><b>December 31, 2014</b><b></b><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="6" align="center"><b>December 31, 2013</b><b></b><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>MXN</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>USD</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>MXN</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>USD</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Cash and cash equivalents</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">2,532,442</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">3,382,302</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">6,166,837</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">2,508,191</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Amounts receivable</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,350,874</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,897,963</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,197,766</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Accounts payable and accrued liabilities</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(10,805,057</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(786,490</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(8,768,980</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(408,427</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Warrant liability</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom" align="left"></td>
<td id="ffc" class="para" valign="bottom" align="right">
<p style="margin: 0pt;">(206,611</p>
</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Finance lease obligations</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(908,005</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(2,788,356</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(1,579,402</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Net exposure</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">(9,180,620</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">951,717</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left"></td>
<td id="ffc" class="para" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">(704,180</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">1,718,128</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Canadian dollar equivalent</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" class="para" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">(722,056</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">1,104,088</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" class="para" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">(57,172</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">1,827,401</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Based on the net Canadian dollar denominated asset and liability exposures as at December 31, 2014, a 10% fluctuation in the Canadian/Mexican and Canadian/US exchange rates would impact the Company&#8217;s earnings for the year ended December 31, 2014, by approximately $45,188 (December 31, 2013 - $170,734). The Company has not entered into any foreign currency contracts to mitigate this risk.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><i>Price Risk</i></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices, other than those arising from interest rate risk or foreign currency risk.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company is exposed to price risk with respect to its accounts 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&#8217;s control and are subject to volatility, and the Company does not employ hedging strategies to limit its exposure to price risk.</p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid86" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
<div class="rcpn" align="right"><font size="2" face="Times New Roman, Times, serif">24 | Page</font></div>
<div class="hpbhr" style="font-size: 1pt; width: 100%;"></div>
<hr color="#000000" size="1" width="100%" noshade="noshade" >
<div style="width: 100%; page-break-after: always; line-height: 0px;"></div>
</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid87" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td><img src="img003.jpg" ></td>
<td valign="bottom" width="46%">
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; AVINO SILVER &amp;</font></b></p>
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; GOLD MINES LTD.</font></b></p>
</td>
<td valign="bottom" width="50%">
<p style="margin: 0px;" align="right"><font style="font-size: 12pt;"><b>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS</b></font></p>
<p style="text-align: right; margin: 0px;"><font style="font-size: 12pt;"><b>FOR THE YEAR ENDED DECEMBER 31, 2014</b></font></p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">At December 31, 2014, based on outstanding accounts receivable that were subject to pricing adjustments, a 10% change in the market price of silver would have an impact on net earnings of approximately $489,808 (December 31, 2013 - $383,094), and a 10% change in the market price of gold would have an impact on net earnings of approximately $210,058 (December 31, 2013 - $125,612).</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company is exposed to price risk with respect to its investments in related companies and its investments in other companies, as certain of 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 December 31, 2014, a 10% change in market prices would have an impact on net earnings of approximately $5,389 (December 31, 2013 - $14,904).</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company&#8217;s ability to raise capital to fund mineral resource exploration 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.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><i>(d) </i></b><b><i>Classification of Financial instruments</i></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">IFRS 7 <i>Financial Instruments: Disclosures </i>establishes a fair value hierarchy that prioritizes the input to valuation techniques used to measure fair value as follows:</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;</p>
<p style="margin: 0px;">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</p>
<p style="margin: 0px;">Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The following table sets forth the Company&#8217;s financial assets and financial liabilities measured at fair value by level within the fair value hierarchy as at December 31, 2014:</p>
<p style="margin: 0px;">&#160;</p>
<table id="fftableid62" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Level 1</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Level 2</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Level 3</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="bottom" align="left">
<p style="margin: 0px;"><b>Financial Assets</b></p>
</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Cash and cash equivalents</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">4,249,794</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Investments in related companies</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">33,889</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Investments in other companies</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">60,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;"><b>Financial Liabilities</b></p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">&#160;</td>
<td>&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Warrant liability</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" class="para" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">(239,690</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;" valign="top"></td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">4,343,683</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" class="para" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">(239,690</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom" align="left">
<p style="margin: 0pt;">)</p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><strong><u style="line-height: 1;">Commitments</u></strong></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company has a cost sharing agreement with Oniva that may be terminated with one-month notice by either party.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company and its subsidiaries have various lease agreements for their office premises, use of land, and equipment. The Company has commitments in respect of these lease agreements as follows:</p>
<p style="margin: 0px;">&#160;</p>
<table id="fftableid63" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>December 31,<br >2014</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center">
<p style="margin: 0cm 0cm 0pt;"><b>December 31,<br ></b><b>2013</b></p>
</td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Not later than one year</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">301,121</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">254,017</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Later than one year and not later than five years</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">134,291</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">364,827</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Later than five years</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">56,235</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">69,499</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid; text-indent: 30px;" valign="top"></td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">491,647</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">688,343</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid90" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
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</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid91" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td><img src="img003.jpg" ></td>
<td valign="bottom" width="46%">
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; AVINO SILVER &amp;</font></b></p>
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; GOLD MINES LTD.</font></b></p>
</td>
<td valign="bottom" width="50%">
<p style="margin: 0px;" align="right"><font style="font-size: 12pt;"><b>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS</b></font></p>
<p style="text-align: right; margin: 0px;"><font style="font-size: 12pt;"><b>FOR THE YEAR ENDED DECEMBER 31, 2014</b></font></p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><u style="line-height: 1;">Changes in Accounting Standards</u></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The mandatory adoption of the following new and revised accounting standards and interpretations on January 1, 2014, and July 1, 2014, had no significant impact on the Company&#8217;s consolidated financial statements for the periods presented:</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>IAS 36 &#8211; Impairment of Assets</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">In May 2013, the IASB issued an amendment to address the disclosure of information about the recoverable amount of impaired assets or a CGU for periods in which an impairment loss has been recognized or reversed. The amendments also address disclosure requirements applicable when an asset&#8217;s or a CGU&#8217;s recoverable amount is based on fair value less costs of disposal.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>IFRIC 21 &#8211; Levies</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">In May 2013, the IASB issued IFRIC 21, Levies (&#8220;IFRIC 21&#8221;), an interpretation of IAS 37, Provisions, Contingent Liabilities and Contingent Assets (&#8220;IAS 37&#8221;), on the accounting for levies imposed by governments. IAS 37 sets out criteria for the recognition of a liability, one of which is the requirement for the entity to have a present obligation as a result of a past event (&#8220;obligating event&#8221;). IFRIC 21 clarifies that the obligating event that gives rise to a liability to pay a levy is the activity described in the relevant legislation that triggers the payment of the levy.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The following accounting standards were issued but not yet effective as of December 31, 2014:</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>IFRS 15 &#8211; Revenue from Contracts with Customers</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">In May 2014, the IASB issued IFRS 15 &#8211; Revenue from Contracts with Customers ("IFRS 15") which supersedes IAS 11 &#8211; Construction Contracts, IAS 18 &#8211; Revenue, IFRIC 13 &#8211; Customer Loyalty Programmes, IFRIC 15 &#8211; Agreements for the Construction of Real Estate, IFRIC 18 &#8211; Transfers of Assets from Customers, and SIC 31 &#8211; Revenue &#8211; Barter Transactions Involving Advertising Services. IFRS 15 establishes a comprehensive five-step framework for the timing and measurement of revenue recognition. The standard is effective for annual periods beginning on or after January 1, 2017. The Company is currently evaluating the impact the final standard is expected to have on its consolidated financial statements.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>IFRS 9 &#8211; Financial Instruments </b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The IASB intends to replace IAS 39 &#8211; Financial Instruments: Recognition and Measurement in its entirety with IFRS 9 &#8211; Financial Instruments (&#8220;IFRS 9&#8221;) which is intended to reduce the complexity in the classification and measurement of financial instruments. In February 2014, the IASB tentatively determined that the revised effective date for IFRS 9 would be January 1, 2018. The Company is currently evaluating the impact the final standard is expected to have on its consolidated financial statements.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>Annual improvements</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">In December 2013, the IASB issued the Annual Improvements 2010-2012 and 2011-2013 cycles, effective for annual periods beginning on or after July 1, 2014. In September 2014, the IASB issued the Annual Improvements 2012-2014 cycle, effective for annual periods beginning on or after July 1, 2016. These Annual Improvements made necessary but non-urgent amendments to existing IFRSs. These amendments are not expected to have a significant impact on the Company's consolidated financial statements.</p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid92" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
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</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid93" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td><img src="img003.jpg" ></td>
<td valign="bottom" width="46%">
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; AVINO SILVER &amp;</font></b></p>
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; GOLD MINES LTD.</font></b></p>
</td>
<td valign="bottom" width="50%">
<p style="margin: 0px;" align="right"><font style="font-size: 12pt;"><b>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS</b></font></p>
<p style="text-align: right; margin: 0px;"><font style="font-size: 12pt;"><b>FOR THE YEAR ENDED DECEMBER 31, 2014</b></font></p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><strong><u style="line-height: 1;">Outstanding Share Data</u></strong></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company&#8217;s authorized share capital consists of an unlimited number of common shares without par value. As at March 20, 2015, the following common shares, warrants, and stock options were outstanding:</p>
<p style="margin: 0px;">&#160;</p>
<table id="fftableid66" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td valign="bottom" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Number of shares</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Exercise price</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Remaining life (years)</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15">
<td valign="top" align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" valign="bottom" colspan="2" align="center"><b></b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">Share capital</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">35,539,313</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">-</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">Warrants</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1,033,059</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td>&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0px;" align="right">US$2.87</p>
</td>
<td>&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1.93</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Stock options</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">3,210,500</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0px;" align="right">0.81 - $1.90</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0px;" align="right">0.48 &#8211; 4.76</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="bottom">
<p style="margin: 0px;">Fully diluted</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">
<p style="margin: 0pt;">39,782,872</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 3px double;">&#160;</td>
<td id="ffc" style="border-bottom: black 3px double;" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 3px;">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The following are details of outstanding stock options as at December 31, 2014 and March 20, 2015:</p>
<p style="margin: 0px;">&#160;</p>
<table id="fftableid67" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td valign="bottom" align="left">
<p style="text-align: left; margin: 0px;" align="center"><b>Expiry Date</b></p>
</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Exercise Price Per Share </b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Number of Shares Remaining Subject to Options (December 31/14)</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Number of Shares Remaining Subject to Options(March 20/15)</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">January 14, 2015</p>
</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">0.81</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">45,000</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
<td width="1%">&#160;</td>
<td valign="bottom" width="1%"></td>
<td id="ffc" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">0</p>
</td>
<td valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="bottom">
<p style="margin: 0px;">September 10, 2015</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1.05</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">225,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">225,000</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="bottom">
<p style="margin: 0px;">January 18, 2016</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1.02</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">806,500</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">745,500</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="top">
<p style="margin: 0px;">September 30, 2016</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1.02</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">695,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">650,000</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="top">
<p style="margin: 0px;">February 18, 2018</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1.60</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">195,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">195,000</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td valign="top">
<p style="margin: 0px;">September 9, 2018</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1.62</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">360,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">360,000</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td valign="top">
<p style="margin: 0px;">September 19, 2019</p>
</td>
<td>&#160;</td>
<td valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">1.90</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">855,000</p>
</td>
<td valign="bottom">&#160;</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td id="ffc" valign="bottom" align="right">
<p style="margin: 0pt;">855,000</p>
</td>
<td valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="top">
<p style="margin: 0px;">December 22, 2019</p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" align="left">
<p style="margin: 0pt;">$</p>
</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">1.90</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">180,000</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;">180,000</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="top">
<p style="margin: 0px;"><b>Total:</b></p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">&#160;</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>3,361,500</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>3,210,500</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;&#160;</p>
<p style="margin: 0px;">The following are details of outstanding warrants as at December 31, 2014 and March 20, 2015:</p>
<p style="margin: 0px;">&#160;</p>
<table id="fftableid68" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto; border: 0px;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td valign="bottom" align="left">
<p style="text-align: left; margin: 0px;" align="center"><b>Expiry Date</b></p>
</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Exercise Price Per Share </b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Number of Underlying Shares (December 31/14)</b></td>
<td align="left">&#160;</td>
<td align="left">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" colspan="2" align="center"><b>Number of Underlying Shares (March 20/15)</b></td>
<td align="left">&#160;</td>
</tr>
<tr height="15" bgcolor="#cceeff">
<td style="border-bottom: black 0pt solid;" valign="top">
<p style="margin: 0px;">February 25, 2017</p>
</td>
<td style="border-bottom: black 0pt solid;" width="1%">&#160;</td>
<td style="border-bottom: black 1px solid;" width="1%">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" width="9%" align="right">
<p style="text-align: right; margin: 0px;" align="center">US$2.87</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" width="1%">&#160;</td>
<td style="border-bottom: black 0pt solid;" width="1%">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" width="1%"></td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">1,033,059</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" width="1%">&#160;</td>
<td style="border-bottom: black 0pt solid;" width="1%">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom" width="1%"></td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" width="9%" align="right">
<p style="margin: 0pt;">1,033,059</p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom" width="1%">&#160;</td>
</tr>
<tr height="15" bgcolor="#ffffff">
<td style="border-bottom: black 0pt solid;" valign="top">
<p style="margin: 0px;"><b>Total:</b></p>
</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom"></td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">-</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>1,033,059</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
<td style="border-bottom: black 0pt solid;">&#160;</td>
<td style="border-bottom: black 1px solid;" valign="bottom">&#160;</td>
<td id="ffc" style="border-bottom: black 1px solid;" valign="bottom" align="right">
<p style="margin: 0pt;"><b>1,033,059</b></p>
</td>
<td style="border-bottom: black 0pt solid; padding-bottom: 1px;" valign="bottom">&#160;</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><strong><u style="line-height: 1;">Disclosure Controls and Procedures</u><u style="line-height: 1;"> and Internal Controls over Financial Reporting</u></strong></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Under Canadian securities legislation, venture issuers are not required to certify the design and evaluation of their disclosure controls and procedures (&#8220;DC&amp;P&#8221;) and internal controls over financial reporting (&#8220;ICFR&#8221;). Accordingly, the Company has not completed such an evaluation. Inherent limitations on the ability of the CEO and CFO to design and implement on a cost-effective basis DC&amp;P and ICFR for the Company may result in additional risks to the quality, reliability, transparency, and timeliness of interim and annual filings and other reports provided under securities legislation.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The CEO and CFO are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in the Company&#8217;s quarterly and annual venture issuer basic certificates.</p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid97" style="width: 100%; font: 10pt TIMES NEW ROMAN;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
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</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid98" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td><img src="img003.jpg" ></td>
<td valign="bottom" width="46%">
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; AVINO SILVER &amp;</font></b></p>
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; GOLD MINES LTD.</font></b></p>
</td>
<td valign="bottom" width="50%">
<p style="margin: 0px;" align="right"><font style="font-size: 12pt;"><b>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS</b></font></p>
<p style="text-align: right; margin: 0px;"><font style="font-size: 12pt;"><b>FOR THE YEAR ENDED DECEMBER 31, 2014</b></font></p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">If the CEO and the CFO were to complete an evaluation of the Company&#8217;s DC&amp;P and ICFR as at December 31, 2014, as required for certificates issued by non-venture issuers under National Instrument 52-109 <i>Certification of Disclosure in Issuers&#8217; Annual and Interim Filings</i>(NI 52-109), the CEO and the CFO would likely conclude that the Company&#8217;s ICFR and DC&amp;P were ineffective as at December 31, 2014.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Based on their knowledge of the Company&#8217;s ICFR, the CEO and the CFO noted the following material weaknesses:</p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid99" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">a)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><b>Lack of segregation of duties:</b> Due to limited staff resources, the Company believes there are instances where a lack of segregation of duties exists, which may limit controls that are otherwise effective; and</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">b)</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><b>Limited in-house technical accounting and tax expertise:</b> Due to limited staff resources, the Company may not have the necessary in-house knowledge to address complex accounting and tax issues that may arise.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<p style="margin: 0px;">As such, there is a reasonable possibility that the Company&#8217;s ICFR will fail to prevent or detect a material misstatement in the financial statements on a timely basis. These material weaknesses and related risks are not uncommon for a company the size of Avino because of limitations in resources, including the number of staff. To mitigate these risks, the Company hired additional financial reporting personnel, engaged external technical accounting and tax advisors and experts, increased the frequency of on-site visits to and inspections of the accounting records in Mexico, and enhanced the involvement of the Audit Committee and Board of Directors in reviews and consultations where necessary.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Other than the mitigating steps taken to reduce the risks posed by the material weaknesses as indicated above, there have been no other changes in the Company&#8217;s DC&amp;P and ICFR that occurred during the year ended December 31, 2014 that have materially affected, or are reasonably likely to materially affect, the Company&#8217;s DC&amp;P and/or ICFR.<b></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><u style="line-height: 1;">Events Subsequent to December 31, 2014</u></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Subsequent to the year ended December 31, 2014, the Company issued 13,500 common shares in an at-the-market offering under a prospectus supplement for net proceeds of $22,081 (US$20,577), and issued 106,000 common shares upon the exercise of stock options for gross proceeds of $108,120.</p>
<p style="margin: 0px;">&#160;</p>
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<tr>
<td>&#160;</td>
</tr>
<tr>
<td>
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</td>
</tr>
<tr>
<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<table id="tableid101" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr height="15">
<td><img src="img003.jpg" ></td>
<td valign="bottom" width="46%">
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; AVINO SILVER &amp;</font></b></p>
<p style="margin: 0px;"><b><font style="font-size: 18pt;">&#160; GOLD MINES LTD.</font></b></p>
</td>
<td valign="bottom" width="50%">
<p style="margin: 0px;" align="right"><font style="font-size: 12pt;"><b>MANAGEMENT&#8217;S DISCUSSION AND ANALYSIS</b></font></p>
<p style="text-align: right; margin: 0px;"><font style="font-size: 12pt;"><b>FOR THE YEAR ENDED DECEMBER 31, 2014</b></font></p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><u style="line-height: 1;">Approval </u></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Board of Directors of the Company has approved the disclosure contained in this MD&amp;A.</p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid102" style="width: 100%; text-align: left; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="4" align="center" border="0">

<tr height="15">
<td style="border: black 1px solid;">
<p style="margin: 0px;"><b>Cautionary Statement</b></p>
<p style="margin: 0px;"><b>&#160;</b></p>
<p style="text-align: justify; margin: 0px;">This MD&amp;A is based on a review of the Company&#8217;s operations, financial position and plans for the future based on facts and circumstances as of March 20, 2015. Except for historical information or statements of fact relating to the Company, this document contains &#8220;forward-looking statements&#8221; within the meaning of applicable Canadian securities regulations. Forward-looking statements in this document include, but are not limited to, those regarding the economic outlook for the mining industry, expectations regarding metals prices, expectations regarding production output, production costs, cash costs and other operating results, expectations regarding growth prospects and the outlook for the Company&#8217;s operations, and statements regarding the Company&#8217;s liquidity, capital resources, and capital expenditures. There can be no assurance that such statements will prove to be accurate, and future events and actual results could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from our expectations are disclosed in the Company&#8217;s documents filed from time to time via SEDAR with the Canadian regulatory agencies to whose policies we are bound. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made, and we do not undertake any obligation to update forward-looking statements should conditions or our estimates or opinions change, except as required by applicable securities regulations. These statements involve known and unknown risks, uncertainties, and other factors that may cause the Company&#8217;s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.</p>
</td>
</tr>

</table>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">&#160;</p>
<p style="text-align: right; margin: 0px;">29 | Page</p>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.3
<SEQUENCE>4
<FILENAME>avino_ex993.htm
<DESCRIPTION>CEO CERTIFICATION
<TEXT>
<html>
<head></head>
<body style="font: 10pt TIMES NEW ROMAN; text-align: justify; margin: 0px 7% 0px 7%;">
<p style="text-align: right; margin: 0px;" align="center"><b>EXHIBIT 99.3</b></p>
<p style="margin: 0px;" align="center"><b>&#160; </b></p>
<p style="margin: 0px;" align="center"><b>F</b><b>orm 52-109FV1</b></p>
<p style="margin: 0px;" align="center"><b>C</b><b>ertification of annual filings - venture issuer basic certificate</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">I, <b><i>David Wolfin, Chief Executive Officer of Avino Silver &amp; Gold Mines Ltd</i>.<i>, </i></b>certify the following:</p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid0" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">1.</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><b><i>Review: </i></b>I have reviewed the AIF, if any, annual financial statements and annual MD&amp;A, including, for greater certainty, all documents and information that are incorporated by reference in the AIF (together, the &#8220;annual filings&#8221;) of <b><i>Avino Silver &amp; Gold Mines Ltd. </i></b>(the &#8220;issuer&#8221;) for the financial year ended <b><i>December 31, 2014</i></b>.</p>
</td>
</tr>
<tr>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">2.</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><b><i>No misrepresentations: </i></b>Based on my knowledge, having exercised reasonable diligence, the annual filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, for the period covered by the annual filings.</p>
</td>
</tr>
<tr>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">3.</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><b><i>Fair presentation: </i></b>Based on my knowledge, having exercised reasonable diligence, the annual financial statements together with the other financial information included in the annual filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the annual filings.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Date: <b><i>March 23, 2015</i></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><i>&#8220;David Wolfin&#8221;</i></b></p>
<p style="margin: 0px;">____________________________</p>
<p style="margin: 0px;">David Wolfin</p>
<p style="margin: 0px;">Chief Executive Officer</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid1" style="width: 100%; margin: auto; border: #000000 1px solid;" cellspacing="0" cellpadding="3" align="center" border="0">

<tr>
<td valign="top" colspan="2">
<p style="text-align: center; font: 10pt TIMES NEW ROMAN; margin: 0px;"><b><u style="line-height: 1;">NOTE TO READER</u></b></p>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<p style="text-align: justify; font: 10pt TIMES NEW ROMAN; margin: 0px;">In contrast to the certificate required for non-venture issuers under National Instrument 52-109 <i>Certification of Disclosure in Issuers&#8217; Annual and Interim Filings </i>(NI 52-109), this Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures (DC&amp;P) and internal control over financial reporting (ICFR), as defined in NI 52-109. In particular, the certifying officers filing this certificate are not making any representations relating to the establishment and maintenance of</p>
</td>
</tr>
<tr>
<td valign="top" width="4%">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">i)</p>
</td>
<td valign="top">
<p style="text-align: justify; font: 10pt TIMES NEW ROMAN; margin: 0px;">controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and</p>
</td>
</tr>
<tr>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">ii)</p>
</td>
<td valign="top">
<p style="text-align: justify; font: 10pt TIMES NEW ROMAN; margin: 0px;">a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer&#8217;s GAAP.</p>
</td>
</tr>
<tr>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
</tr>
<tr>
<td valign="top" colspan="2">
<p style="text-align: justify; margin: 0px;">The issuer&#8217;s certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in this certificate. Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost effective basis DC&amp;P and ICFR as defined in NI 52-109 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</body>
</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.4
<SEQUENCE>5
<FILENAME>avino_ex994.htm
<DESCRIPTION>CFO CERTIFICATION
<TEXT>
<html>
<head></head>
<body style="font: 10pt TIMES NEW ROMAN; text-align: justify; margin: 0px 7% 0px 7%;">
<p style="text-align: right; margin: 0px;" align="center"><b>EXHIBIT 99.4</b></p>
<p style="margin: 0px;" align="center"><b>&#160;</b></p>
<p style="margin: 0px;" align="center"><b>F</b><b>orm 52-109FV1</b></p>
<p style="margin: 0px;" align="center"><b>C</b><b>ertification of annual filings - venture issuer basic certificate</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="text-align: left; margin: 0px;" align="center">I, <b><i>Malcolm Davidson, Chief Financial Officer of Avino Silver &amp; Gold Mines Ltd</i>.<i>, </i></b>certify the following:</p>
<p style="margin: 0px;">&#160;</p>
<table id="tableid0" style="width: 100%; text-align: justify; font: 10pt TIMES NEW ROMAN; margin: auto;" cellspacing="0" cellpadding="0" border="0">

<tr>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">1.</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><b><i>Review: </i></b>I have reviewed the AIF, if any, annual financial statements and annual MD&amp;A, including, for greater certainty, all documents and information that are incorporated by reference in the AIF (together, the &#8220;annual filings&#8221;) of <b><i>Avino Silver &amp; Gold Mines Ltd. </i></b>(the &#8220;issuer&#8221;) for the financial year ended <b><i>December 31, 2014</i></b>.</p>
</td>
</tr>
<tr>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">2.</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><b><i>No misrepresentations: </i></b>Based on my knowledge, having exercised reasonable diligence, the annual filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, for the period covered by the annual filings.</p>
</td>
</tr>
<tr>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
</td>
<td valign="top">&#160;</td>
</tr>
<tr>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">3.</p>
</td>
<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><b><i>Fair presentation: </i></b>Based on my knowledge, having exercised reasonable diligence, the annual financial statements together with the other financial information included in the annual filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the annual filings.</p>
</td>
</tr>

</table>
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Date: <b><i>March 23, 2015</i></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><i>&#8220;Malcolm Davidson&#8221;</i></b></p>
<p style="margin: 0px;">____________________________</p>
<p style="margin: 0px;">Malcolm Davidson</p>
<p style="margin: 0px;">Chief Financial Officer</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">&#160;&#160;</p>
<table id="tableid1" style="width: 100%; margin: auto; border: #000000 1px solid;" cellspacing="0" cellpadding="3" align="center" border="0">

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<p style="text-align: justify; margin: 0px;"><font style="font-size: 10pt; font-family: times new roman,times;">In contrast to the certificate required for non-venture issuers under National Instrument 52-109 <i>Certification of Disclosure in Issuers&#8217; Annual and Interim Filings </i>(NI 52-109), this Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures (DC&amp;P) and internal control over financial reporting (ICFR), as defined in NI 52-109. In particular, the certifying officers filing this certificate are not making any representations relating to the establishment and maintenance of</font></p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">i)</p>
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<p style="text-align: justify; font: 10pt TIMES NEW ROMAN; margin: 0px;">controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">ii)</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer&#8217;s GAAP.</p>
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<p style="text-align: justify; font: 10pt TIMES NEW ROMAN; margin: 0px;">The issuer&#8217;s certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in this certificate. Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost effective basis DC&amp;P and ICFR as defined in NI 52-109 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.</p>
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<TYPE>EX-99.5
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<FILENAME>avino_ex995.htm
<DESCRIPTION>NEWS RELEASE
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<p style="text-align: right;"><strong>EXHIBIT 99.5</strong></p>
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<p style="margin: 0px;"><font style="font-size: 18pt;"><b>&#160; AVINO SILVER &amp;</b></font></p>
<p style="margin: 0px;"><font style="font-size: 18pt;"><b>&#160; GOLD MINES LTD.</b></font></p>
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<p style="margin: 0px;"><font style="color: #3399ff;"><b>T</b></font> 604.682.3701 Suite 900, 570 Granville Street ir@avino.com</p>
<p style="margin: 0px;"><font style="color: #3399ff;"><b>F</b></font> 604.682.3600 Vancouver, BC V6C 3P1 www.avino.com</p>
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<p style="margin: 0px;">&#160;&#160;</p>
<p style="margin: 0px;" align="right">NYSE - MKT: <b>ASM</b></p>
<p style="margin: 0px;" align="right">TSX-V: <b>ASM</b></p>
<p style="text-align: right; margin: 0px;">&#160;FSE: <b>GV6</b></p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">March 23, 2015</p>
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<p style="text-align: center; margin: 0px;"><b>Avino Reports 2014 Financial Results of $2,514,169, $0.08 Per Share and Cash Flow from Operations of $4.3 million, $0.13 Per Share</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>Avino Silver &amp; Gold Mines Ltd. (ASM: TSX.V, ASM: NYSE &#8211; MKT, GV6: FSE, &#8220;Avino&#8221; or &#8220;the Company&#8221;)</b> is pleased to report its financial results for the year ended December 31, 2014. All financial information, other than non-IFRS measures, is prepared in accordance with IFRS and all dollar amounts are expressed in Canadian dollars unless otherwise specified. The information in this news release should be read in conjunction with the Company's audited consolidated financial statements for the year ended December 31, 2014 and associated management&#8217;s discussion and analysis (&#8220;MD&amp;A&#8221;) which are available on the Company's website at www.avino.com and under the Company's profile on SEDAR at www.sedar.com.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">"Avino is pleased to report another strong year of financial and operating results. We increased our output while maintaining a low cost structure thanks to the hard work of our teams in Mexico and Canada. Avino is well positioned for 2015 with a strong balance sheet and positive cash flows from current operations. We look forward to another year of growth at Avino as we incorporate the re-opened Avino Mine and the recently acquired Bralorne Gold Mines Ltd. into our consolidated operations," stated Malcolm Davidson, CFO.&#160;</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><u style="line-height: 1;">Highlights of Fiscal 2014 (Compared to Fiscal 2013)</u></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>Financial </b></p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Consolidated all-in sustaining cash cost per AgEq ounce was $12.24 in 2014 compared to $14.39 in 2013</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Revenues reported for the year were $19,297,953 compared to $16,094,701 in 2013, an increase of 20%</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Income from mine operations was $7,904,549 in 2014, an increase of $778,257 from 2013</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">General and administrative expenses were $3,220,134 in 2014 compared to $3,339,069 in 2013</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Earnings before income taxes were $4,881,915 in 2014 compared to $3,409,212 in 2013</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Earnings for 2014 were $2,514,169, an increase of $1,665,957 from 2013</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Earnings per share, basic and diluted, was $0.08 in 2014 compared to $0.03 in 2013</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Average realized prices per ounce of silver and gold were US$19.04 and US$1,266 respectively for 2014 and US$22.59 and US$1,342 respectively for 2013</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Cash flow from operations before movements in working capital was $4.3 million for 2014, compared to $5.2 million the previous year</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Cash flow per share<sup>1</sup>, basic and diluted, was $0.13 per share for 2014, compared to $0.19 per share for 2013.</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Raised $12.8M (US$11.5M) through the issuance of 4,982,677 shares at an average price of $2.56 (US$2.31) per share</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
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<p style="margin: 0px;"><i><sup>1</sup></i><i> Silver equivalent ounces sold (&#8220;AgEq ounce&#8221;) consists of the number of ounces of silver sold plus the number of ounces of gold sold multiplied by the ratio of the average spot gold price to the average spot silver price for the corresponding period. Please refer to the information under the heading "Non-IFRS Measures" of this news release for a discussion of cash cost per silver equivalent ounce, all-in sustaining cash cost per silver equivalent ounce, and cash flow per share.</i></p>
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<p style="margin: 0px;"><b>Operational</b></p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Silver equivalent production for 2014 increased 49% to 1,342,150 oz* compared to 2013</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Silver production for 2014 increased 39% to 969,524 oz compared to 2013</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Gold production for 2014 increased 60% to 5,180 oz compared to 2013</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Copper production for 2014 increased 100% to 305,417 lbs compared to 2013</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<p style="margin: 0px;">&#8220;In 2014, we delivered our third consecutive year of production growth. We managed to maintain operating costs and remain cash flow positive despite weaker metal prices. During the year we achieved several significant advancements including the completion of our Avino Mine and Mill Circuit 3 expansion and the acquisition of Bralorne Gold Mines Ltd. Looking ahead, we anticipate that 2015 will be the most productive year the Company has seen in its 46 year history. I would like to thank our excellent staff of well-trained managers, geologists, mining engineers, metallurgists and the rest of the operations team for their continued hard work and dedication.&#8221;</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;" align="right">- David Wolfin, President, CEO &amp; Director</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>Financial Review</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Company generated revenues of $19,297,953 for 2014, a 20% increase compared to 2013. Although 2014 metals prices decreased significantly from those in 2013, the Company reported a higher number of silver equivalent ounces sold as a result of improved grades and recoveries.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">In 2014, net income increased by $1,665,957 to $2,514,169 or $0.08 per share, compared to net income of $848,212 or $0.03 per share during 2013. Mine operating income was $7,904,549, an increase of $778,257 or 11% from $7,126,292 during 2013.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Cash flow from operations before movements in working capital during 2014 was $4.3 million, a decrease of 17% from the $5.2 million generated during 2013.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>Operational Review</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Total silver equivalent production in 2014 increased to 1,342,150 silver equivalent ounces*, an increase of 49% compared to 2013. The production growth was primarily due to higher feed grades and recoveries at the San Gonzalo mine; higher tonnage processed, higher silver feed grade, and an increase in operating period at the Avino Mine stockpile operation; and the addition of Mill Circuit 3 in the fourth quarter.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Total mill feed processed during 2014 was 200,437 dry tonnes compared to 132,551 dry tonnes during 2013, an increase of 51%.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>Costs and Capital Expenditures</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Consolidated all-in sustaining cash costs per AgEq ounce<sup>1</sup> during 2014 were $12.24 compared to $14.39 in 2013, a decrease of 15%.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Capital expenditures at the end of the year were $5.5 million compared to $3.3 million at the end of 2013.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Capital expenditures primarily relate to the Avino mine expansion, the process plant expansion for Circuit 3, and equipment to advance operations at the San Gonzalo mine.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><i>* For comparison purposes, a silver equivalent ratio of 62.5:1 for silver to gold has been used.&#160; Mill production figures have not been reconciled and are subject to adjustment with concentrate sales. Calculated figures may not add up due to rounding.</i></p>
<p style="margin: 0px;"><i><sup>1</sup></i><i> Silver equivalent ounces sold (&#8220;AgEq ounce&#8221;) consists of the number of ounces of silver sold plus the number of ounces of gold sold multiplied by the ratio of the average spot gold price to the average spot silver price for the corresponding period. Please refer to the information under the heading "Non-IFRS Measures" of this news release for a discussion of cash cost per silver equivalent ounce, all-in sustaining cash cost per silver equivalent ounce, and cash flow per share.</i></p>
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<p style="margin: 0px;"><b>Mine Operations</b></p>
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<p style="margin: 0px;"><b><i>San Gonzalo Mine</i></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Silver equivalent ounces* produced during 2014 totalled 958,702. This represents an increase of 28% compared to 2013.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">All-in sustaining cash costs in 2014 were $11.96 per AgEq ounce<sup>1</sup> compared to $14.15 in 2013, a decrease of 15%.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><i>Avino Mine</i></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">On September 1, 2014, Mill Circuit 2 transitioned from processing historical above ground Avino Mine stockpiles to new material taken from underground at the Avino Mine and operated in this manner until December 31, 2014.&#160;</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Silver equivalent ounces* produced during 2014 totalled 119,738. This represents an increase of 100% compared to 2013.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b><i>Avino Mine Stockpiles</i></b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The Avino Mine stockpiles were processed for the majority of the year using the 250 TPD Mill Circuit 2. In September 2014, Mill Circuit 2 transitioned to processing new underground material from the Avino Mine. Processing of the stockpiles resumed in mid-November when the material was used to pre-commission Mill Circuit 3, and therefore no revenues from the sale of concentrate was reported from Avino Mine Stockpiles in Q4 2014.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">A total of 263,710 silver equivalent ounces* was produced during 2014 compared to 143,778 during 2013, an increase of 83%.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">All-in sustaining cash costs during 2014 were $13.68 per AgEq ounce<sup>1</sup> compared to $15.89 during 2013, a decrease of 14%.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>Non-IFRS Measures</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The financial results in this news release include references to cash flow per share, cash cost per silver equivalent ounce, and all-in sustaining cash cost per silver equivalent ounce, each of which are non-IFRS measures. Cash flow per share, cash cost per ounce, and all-in sustaining cash cost per ounce are measures developed by mining companies in an effort to provide a comparable standard of performance. However, there can be no assurance that our reporting of these non-IFRS measures is similar to that reported by other mining companies. Cash flow per share, cash cost per silver equivalent ounce, and all-in sustaining cash cost per silver equivalent ounce are measures used by the Company to manage and evaluate operating performance of the Company&#8217;s mining operations, and are widely reported in the silver and gold mining industry as benchmarks for performance, but do not have standardized meanings prescribed by IFRS, and are disclosed in addition to the prescribed IFRS measures provided in the Company&#8217;s financial statements and MD&amp;A.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><i>* For comparison purposes, a silver equivalent ratio of 62.5:1 for silver to gold has been used.&#160; Mill production figures have not been reconciled and are subject to adjustment with concentrate sales. Calculated figures may not add up due to rounding.</i></p>
<p style="margin: 0px;"><i><sup>1</sup></i><i> Silver equivalent ounces sold (&#8220;AgEq ounce&#8221;) consists of the number of ounces of silver sold plus the number of ounces of gold sold multiplied by the ratio of the average spot gold price to the average spot silver price for the corresponding period. Please refer to the information under the heading "Non-IFRS Measures" of this news release for a discussion of cash cost per silver equivalent ounce, all-in sustaining cash cost per silver equivalent ounce, and cash flow per share.</i></p>
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<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>Conference Call</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Avino will be holding a conference call on Monday, March 23, 2015 at 8 am PST (11 am EST).&#160;</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">To participate in the conference call, please dial the following:</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Toll Free Canada &amp; USA: 1-800-319-4610</p>
<p style="margin: 0px;">Outside of Canada &amp; USA: 1-604-638-5340</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">No pass-code is necessary to participate in the conference call; participants will have the opportunity to ask questions during the Q&amp;A portion of the call.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Participants should dial in 10 minutes prior to the conference.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">The conference call will be recorded and the replay will be available on the Company's web site within one hour following the conclusion of the call.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>Outlook</b></p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Avino's mission is to create shareholder value through profitable organic growth at the historic Avino property near Durango, Mexico, and the strategic acquisition of mineral exploration and mining properties. We are committed to managing all business activities in an environmentally responsible and cost-effective manner, while contributing to the well-being of the communities in which we operate.&#160;</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Management remains focused on the following key objectives:</p>
<p style="margin: 0px;">&#160;</p>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">1.</font></p>
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<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Maintain profitable mining operations while managing operating costs and improving efficiencies;</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">2.</font></p>
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<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Integrate Bralorne Gold Mine&#8217;s operations into Avino&#8217;s corporate structure;</p>
</td>
</tr>
<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">3.</font></p>
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<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Continue to explore regional targets on the Avino Property followed by other properties in our portfolio; and</p>
</td>
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<tr>
<td valign="top" width="60"><font style="font-family: TIMES NEW ROMAN;">&#160;</font></td>
<td valign="top" width="60">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;"><font style="font-size: 10pt; font-family: Symbol;">4.</font></p>
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<td valign="top">
<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">Assess the potential for processing the oxide tailings resource from previous milling operations (PEA issued in 2012).</p>
</td>
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<p style="font: 10pt TIMES NEW ROMAN; margin: 0px;">&#160;</p>
<p style="margin: 0px;"><b>ON BEHALF OF THE BOARD</b></p>
<p style="margin: 0px;"></p>
<p>&#160;<b><i>&#8220;David Wolfin&#8221;<br ></i></b>________________________________<br >David Wolfin<br >President &amp; CEO<br >Avino Silver &amp; Gold Mines Ltd.</p>
<p style="margin: 0px;"><i>&#160;</i></p>
<p style="margin: 0px;"><i>* For comparison purposes, a silver equivalent ratio of 62.5:1 for silver to gold has been used.&#160; Mill production figures have not been reconciled and are subject to adjustment with concentrate sales. Calculated figures may not add up due to rounding.</i></p>
<p style="margin: 0px;"><i><sup>1</sup></i><i> Silver equivalent ounces sold (&#8220;AgEq ounce&#8221;) consists of the number of ounces of silver sold plus the number of ounces of gold sold multiplied by the ratio of the average spot gold price to the average spot silver price for the corresponding period. Please refer to the information under the heading "Non-IFRS Measures" of this news release for a discussion of cash cost per silver equivalent ounce, all-in sustaining cash cost per silver equivalent ounce, and cash flow per share.</i></p>
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<td>&#160;</td>
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<td>
<div class="rcpn" align="center"><font size="2" face="Times New Roman, Times, serif">4</font></div>
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<td>
<div class="hdr" style="font-size: 1pt; width: 100%;"></div>
</td>
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<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Safe Harbor Statement - This news release contains "forward-looking information" and "forward-looking statements" (together, the "forward looking statements") within the meaning of applicable securities laws and the United States Private Securities Litigation Reform Act of 1995, including our belief as to the extent and timing of various studies including the PEA, and exploration results, the potential tonnage, grades and content of deposits, timing and establishment and extent of resource estimates. These forward-looking statements are made as of the date of this news release and the dates of technical reports, as applicable. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the future circumstances, outcomes or results anticipated in or implied by such forward-looking statements will occur or that plans, intentions or expectations upon which the forward-looking statements are based will occur. While we have based these forward-looking statements on our expectations about future events as at the date that such statements were prepared, the statements are not a guarantee that such future events will occur and are subject to risks, uncertainties, assumptions and other factors which could cause events or outcomes to differ materially from those expressed or implied by such forward-looking statements.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Such factors and assumptions include, among others, the effects of general economic conditions, the price of gold, silver and copper, changing foreign exchange rates and actions by government authorities, uncertainties associated with legal proceedings and negotiations and misjudgments in the course of preparing forward-looking information. In addition, there are known and unknown risk factors which could cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. Known risk factors include risks associated with project development; the need for additional financing; operational risks associated with mining and mineral processing; fluctuations in metal prices; title matters; uncertainties and risks related to carrying on business in foreign countries; environmental liability claims and insurance; reliance on key personnel; the potential for conflicts of interest among certain of our officers, directors or promoters with certain other projects; the absence of dividends; currency fluctuations; competition; dilution; the volatility of the our common share price and volume; tax consequences to U.S. investors; and other risks and uncertainties. Although we have attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. We are under no obligation to update or alter any forward-looking statements except as required under applicable securities laws.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Cautionary Note to United States Investors - The information contained herein and incorporated by reference herein has been prepared in accordance with the requirements of Canadian securities laws, which differ from the requirements of United States securities laws. In particular, the term "resource" does not equate to the term "reserve". The Securities Exchange Commission's (the "SEC") disclosure standards normally do not permit the inclusion of information concerning "measured mineral resources", "indicated mineral resources" or "inferred mineral resources" or other descriptions of the amount of mineralization in mineral deposits that do not constitute "reserves" by SEC standards, unless such information is required to be disclosed by the law of the Company's jurisdiction of incorporation or of a jurisdiction in which its securities are traded. U.S. investors should also understand that "inferred mineral resources" have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. Disclosure of "contained ounces" is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute "reserves" by SEC standards as in place tonnage and grade without reference to unit measures.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;">&#160;</p>
<p style="margin: 0px;"><i>* For comparison purposes, a silver equivalent ratio of 62.5:1 for silver to gold has been used.&#160; Mill production figures have not been reconciled and are subject to adjustment with concentrate sales. Calculated figures may not add up due to rounding.</i></p>
<p style="margin: 0px;"><i><sup>1</sup></i><i> Silver equivalent ounces sold (&#8220;AgEq ounce&#8221;) consists of the number of ounces of silver sold plus the number of ounces of gold sold multiplied by the ratio of the average spot gold price to the average spot silver price for the corresponding period. Please refer to the information under the heading "Non-IFRS Measures" of this news release for a discussion of cash cost per silver equivalent ounce, all-in sustaining cash cost per silver equivalent ounce, and cash flow per share.</i></p>
<p style="margin: 0px;">&#160;&#160;</p>
<p style="text-align: center; margin: 0px;">5</p>
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end
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