<SEC-DOCUMENT>0001477932-18-004247.txt : 20180821
<SEC-HEADER>0001477932-18-004247.hdr.sgml : 20180821
<ACCEPTANCE-DATETIME>20180821170149
ACCESSION NUMBER:		0001477932-18-004247
CONFORMED SUBMISSION TYPE:	F-3
PUBLIC DOCUMENT COUNT:		14
FILED AS OF DATE:		20180821
DATE AS OF CHANGE:		20180821

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:		F-3
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-226963
		FILM NUMBER:		181030825

	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>F-3
<SEQUENCE>1
<FILENAME>avino_f3.htm
<DESCRIPTION>FORM F-3
<TEXT>
<html><head><title>avino_f3.htm</title><!--Document Created by EDGARMaster--></head><BODY spellcheck="true" style="text-align:justify;font:10pt TIMES NEW ROMAN;margin:0px 7%"><p style="MARGIN: 0px 0px 0px 0in" align="center">As filed with the Securities and Exchange Commission on August 21, 2018</p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="right">Registration No. 333-&nbsp;&nbsp;&nbsp; </p> <p style="MARGIN: 0px 0px 0px 0in" align="right">&nbsp;</p><b> <table style="FONT-SIZE: 1px" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td> <div style="HEIGHT: 4px; WIDTH: 100%; BACKGROUND: #000000; MARGIN: 0px 0px 2px" name="hrule"></div> <div style="HEIGHT: 2px; WIDTH: 100%; BACKGROUND: #000000" name="hrule"></div></td></tr></table> <p style="MARGIN: 0px">&nbsp;</p></b> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><font size="3">UNITED STATES</font></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><font size="3">SECURITIES AND EXCHANGE COMMISSION</font></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><font size="3">Washington, D.C. 20549</font></b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><font size="5">Form F-3</font></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><font size="5">&nbsp;</font></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center">REGISTRATION STATEMENT</p> <p style="MARGIN: 0px 0px 0px 0in" align="center">UNDER</p> <p style="MARGIN: 0px 0px 0px 0in" align="center">THE SECURITIES ACT OF 1933</p> <p style="MARGIN: 0px 0px 0px 0in" align="center">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="70%" align="center" border="0"> <tr> <td style="BORDER-BOTTOM: black 1px solid" valign="top"> <p align="center"><font size="5"><b>Avino Silver &amp; Gold Mines Ltd.</b></font></p></td></tr> <tr> <td valign="top"> <p align="center">(Exact Name of Registrant as Specified in Its Charter)</p></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="85%" align="center" border="0"> <tr height="15"> <td style="BORDER-BOTTOM: 1px solid" valign="top" width="45%"> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>British Columbia, Canada</b></p></td> <td valign="bottom" width="10%"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid" valign="top" width="45%"> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Not Applicable</b></p></td></tr> <tr height="15"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="center">(State or other jurisdiction of</p></td> <td valign="bottom"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="center">(I.R.S. Employer</p></td></tr> <tr height="15"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="center">incorporation or organization)</p></td> <td valign="bottom"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="center">Identification Number)</p></td></tr></table> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Suite 900, 570 Granville Street</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Vancouver, British Columbia</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>V6C 3P1, Canada</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><u>604-682-3701</u></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center">(Address and telephone number of Registrant&#8217;s principal executive offices)</p> <p style="MARGIN: 0px 0px 0px 0in" align="center">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Paracorp Incorporated</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>1090 Vermont Ave NW #910</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Washington, DC 20005</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><u>888-272-3725</u></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center">(Name, address and telephone number of agent for service)</p> <p style="MARGIN: 0px 0px 0px 0in" align="center">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><i>Copy to:</i></p> <p style="MARGIN: 0px">&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15"> <td valign="top" width="40%"> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Malcolm Davidson</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Chief Financial Officer</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>570 Granville Street, Suite 900</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Vancouver, British Columbia</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>V6C 3P1, Canada</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Telephone: (604) 682-3701</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Facsimile: (604) 682-3600</b></p></td> <td valign="top" width="40%"> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Daniel B. Eng</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Lewis Brisbois Bisgaard &amp; Smith LLP</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>333 Bush Street, Suite 1100</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>San Francisco, California 94104</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Telephone: (415)&nbsp;362-2580</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Facsimile: (415)&nbsp;434-0882</b></p></td></tr></table> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">Approximate date of commencement of proposed sale to the public: From time to time after this Registration Statement becomes effective.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. <font face="Wingdings">o</font></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. <font face="Wingdings">x</font></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. <font face="Wingdings">o</font></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. <font face="Wingdings">o</font></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">If this Form is registration statement pursuant to General Instruction I.C. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. <font face="Wingdings">o</font></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.C. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. <font face="Wingdings">o</font></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933. </p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="right">Emerging Growth Company <font face="Wingdings">x</font></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities. <font face="Wingdings">o</font></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"> <table style="FONT-SIZE: 1px" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td> <div style="HEIGHT: 2px; WIDTH: 100%; BACKGROUND: #000000; MARGIN: 0px 0px 2px" name="hrule"></div> <div style="HEIGHT: 4px; WIDTH: 100%; BACKGROUND: #000000" name="hrule"></div></td></tr></table></p> <p style="MARGIN: 0px"> <table class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px" align="center">&nbsp;<b>CALCULATION OF REGISTRATION FEE</b></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"> <table style="WIDTH: 100%; TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td style="BORDER-BOTTOM: black 1px solid" valign="bottom"> <p style="MARGIN: 0px 0px 0px 0in"><b>Title of each class of securities to be registered</b></p></td> <td valign="bottom"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="hdcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" colspan="2" align="center"> <p style="MARGIN: 0px 0px 0px 0in"><b>Amount to be registered </b></p> <p style="MARGIN: 0px 0px 0px 0in"><b>(1)(2)(3)(5)(6)(7)</b></p></td> <td valign="bottom"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="hdcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="center"> <p style="MARGIN: 0px 0px 0px 0in"><b>Proposed maximum offering </b></p> <p style="MARGIN: 0px 0px 0px 0in"><b>price per unit (3)</b></p></td> <td valign="bottom"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="hdcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="center"> <p style="MARGIN: 0px 0px 0px 0in"><b>Aggregate maximum offering </b></p> <p style="MARGIN: 0px 0px 0px 0in"><b>price (3)(4)(5)</b></p></td> <td valign="bottom"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="hdcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" colspan="2" align="center"> <p style="MARGIN: 0px 0px 0px 0in"><b>Amount of registration </b></p> <p style="MARGIN: 0px 0px 0px 0in"><b>fee (3)</b></p></td> <td valign="bottom"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Common shares, without par value</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" colspan="2" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" colspan="2" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Warrants</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" colspan="2" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" colspan="2" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Units</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" colspan="2" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" colspan="2" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Debt Securities</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">(7</td> <td valign="bottom" width="1%">)</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" colspan="2" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Total</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%">$</td> <td id="ffcell" valign="bottom" width="9%" align="right">25,000,000</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%">$</td> <td id="ffcell" valign="bottom" width="9%" align="right">3,112.50</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr></table></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">_________</p> <p style="MARGIN: 0px"> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td valign="top" width="3%">(1)</td> <td valign="top">Also includes an indeterminate aggregate principal amount and number of securities of each identified class of securities (except for debt securities which will not exceed $10,000,000) up to a proposed aggregate offering price of $25,000,000, which may be offered by the registrant from time to time in unspecified numbers and at indeterminate prices, and as may be issued upon conversion, redemption, repurchase, exchange or exercise of any securities registered hereunder, including under any applicable anti-dilution provisions. Except as provided in Rule 426(b) under Securities Act of 1933, in no event will the aggregate offering price of all types of securities (except for debt securities which will not exceed $10,000,000) issued by the Registrant pursuant to this registration statement exceed $25,000,000.</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <tr> <td valign="top">(2)</td> <td valign="top">Pursuant to Rule 416 under the Securities Act of 1933, this registration statement also covers any additional securities that may be offered or issued in connection with any stock split, stock dividend or similar transaction.</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <tr> <td valign="top">(3)</td> <td valign="top">Pursuant to General Instruction II.C. of Form F-3, the table lists each of the classes of securities being registered and the aggregate proceeds to be raised, but does not specify by each class information as to the amount to be registered, proposed maximum offering price per unit, and proposed maximum aggregate offering price.</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <tr> <td valign="top">(4)</td> <td valign="top">The proposed maximum aggregate offering price has been estimated solely to calculate the registration fee in accordance with Rule 457(o) under the Securities Act of 1933.</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <tr> <td valign="top">(5)</td> <td valign="top">Includes consideration to be received by the Registrant, if applicable, for registered securities that are issuable upon exercise, conversion or exchange of other registered securities.</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <tr> <td valign="top">(6)</td> <td valign="top">Consisting of some or all of the securities listed above, in any combination, including common shares, warrants and debt securities.</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <tr> <td valign="top">(7)</td> <td valign="top">In no case shall the aggregate amount of debt securities exceed $10,000,000.</td></tr></tr></tr></tr></tr></tr></tr></table></p> <p style="MARGIN: 0px">&nbsp;&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b>The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section&nbsp;8(a), may determine.</b></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px"> <table id="pagebreakae517d1d-31a2-4f5d-9af5-ee416916bd2c" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid"> <p style="MARGIN: 0px" align="center">ii</p></td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>EXPLANATORY NOTE</b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">This registration statement on Form F-3 includes $25,000,000 of our common shares, warrants to purchase common shares, debt securities and units consisting of common shares, warrants or debt securities or any combination of these securities in one or more transactions.</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in">This registration statement contains two prospectuses:</p> <p style="MARGIN: 0px">&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15"> <td width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">a base prospectus which covers the offering, issuance and sale by the Registrant of up to a maximum aggregate offering price of $25,000,000 of common shares, warrants to purchase common shares, debt securities and units consisting of common shares, warrants or debt securities or any combination of these securities; and</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">an at the market sales agreement prospectus covering the offering, issuance and sale by the Registrant of up to a maximum aggregate offering price of $8,000,000 of common shares that may be offered, issued and sold by the Registrant under a sales agreement with Cantor Fitzgerald &amp; Co.</p></td></tr></table> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The base prospectus immediately follows this Explanatory Note. The at the market sales agreement prospectus immediately follows the base prospectus. The common shares that may be offered, issued and sold by the Registrant under the at the market sales agreement prospectus is included in the $25,000,000 of securities, including common shares that may be offered, issued and sold by the Registrant under the base prospectus.</p> <p style="MARGIN: 0px" align="justify">&nbsp;</p> <p style="MARGIN: 0px" align="justify"> <table id="pagebreakb93fc895-9d49-4e29-a92f-f2aa9745128f" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid"> <p style="MARGIN: 0px" align="center">iii</p></td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><font color="red">The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any state where the offer or sale is not permitted.</font></b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><font color="red">Subject to Completion, dated August 21, 2018</font></b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in"><b>PROSPECTUS</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><img src="avino_f3img1.jpg"> </b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>$25,000,000</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Common Shares</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Warrants</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Units</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Debt Securities</b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">From time to time, we may offer up to $25,000,000 of our common shares, warrants to purchase common shares, debt securities and units consisting of common shares, warrants or debt securities or any combination of these securities in one or more transactions.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We will provide specific terms of these offerings and securities in one or more supplements to this prospectus which may include, but is not limited to, an at the market sales agreement prospectus. We may also authorize one or more free writing prospectuses to be provided to you in connection with these offerings. The prospectus supplement, and any documents incorporated by reference, may also add, update or change information contained in this prospectus. You should read this prospectus, the applicable prospectus supplement, any documents incorporated by reference and any related free writing prospectus carefully before buying any of the securities being offered.</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We may offer and sell these securities to or through one or more underwriters, dealers and agents, or directly to purchasers, on a continuous or delayed basis.</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Our common shares are listed on the NYSE American and on the Toronto Stock Exchange under the symbol &#8220;ASM.&#8221; We have registered $25,000,000 of our securities. On July 5, 2018, a date within sixty day of the date of this prospectus, the aggregate market value of our outstanding common shares held by non-affiliates was approximately $69,077,000, based on 55,805,653 common shares outstanding, of which 53,136,599 common shares were held by non-affiliates, and a per share price of $1.30 based on the closing sale price of our common shares on July 5, 2018. On August 17, 2018, the closing price for our common share was $0.92. We have not offered any securities pursuant to General Instruction I.B.5. of Form F-3 during the prior 12 calendar month period that ends on, and includes, the date of this prospectus. We will state on the cover of each prospectus supplement the amount of our public float, the amount of securities being offered, and the amount of securities sold during the prior 12 calendar month period that ends on, and includes, the date of the prospectus supplement.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify"><b>Investing in our securities involves risks. You should review carefully the risks and uncertainties described under the heading &#8220;Risk Factors&#8221; on page 5 and contained in the applicable prospectus supplement and any related free writing prospectus, and under similar headings in the other documents that are incorporated by reference into this prospectus.</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify"><b>Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>The date of this prospectus is&nbsp;&nbsp;&nbsp;&nbsp;, 2018.</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="left">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="left"> <table id="pagebreak04768e63-7cbe-4b68-8179-95cff064b582" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid"> <p style="MARGIN: 0px" align="center">&nbsp;</p></td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b><a name="Toc">TABLE OF CONTENTS</a></b></p> <p style="MARGIN: 0px">&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15" bgcolor="#cceeff"> <td valign="top" width="88%"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS">CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS</a></p></td> <td valign="top" width="1%"></td> <td valign="top" width="1%"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top" width="9%"> <p style="MARGIN: 0px 0px 0px 0in" align="right">1</p></td> <td valign="top" width="1%"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#CAUTIONARY NOTE TO UNITED STATES INVESTORS CONCERNING">CAUTIONARY NOTE TO UNITED STATES INVESTORS CONCERNING ESTIMATE OF MEASURED AND INDICATED MINERAL RESOURCES</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="bottom"> <p style="MARGIN: 0px 0px 0px 0in" align="right">1</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#ABOUT THIS PROSPECTUS">ABOUT THIS PROSPECTUS</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">2</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#ABOUT AVINO SILVER &amp; GOLD MINE LTD.">ABOUT AVINO SILVER &amp; GOLD MINE LTD.</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">3</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#WHERE YOU CAN FIND ADDITIONAL INFORMATION">WHERE YOU CAN FIND ADDITIONAL INFORMATION</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">3</p></td> <td valign="top"></td></tr> <tr height="15" bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#INCORPORATION OF CERTAIN INFORMATION BY REFERENCE">INCORPORATION OF CERTAIN INFORMATION BY REFERENCE</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">3</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#RISK FACTORS">RISK FACTORS</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">5</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#OFFER STATISTICS AND EXPECTED TIMETABLE">OFFER STATISTICS AND EXPECTED TIMETABLE</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">5</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#CAPITALIZATION">CAPITALIZATION</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">5</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#PRICE RANGE OF OUR COMMON SHARES">PRICE RANGE OF OUR SHARES</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">5</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#DESCRIPTION OF SECURITIES WE MAY OFFER">DESCRIPTION OF SECURITIES WE MAY OFFER</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">6</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#DESCRIPTION OF CAPITAL SHARES">DESCRIPTION OF CAPITAL SHARES</a></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">&nbsp;</p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">6</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#DESCRIPTION OF WARRANTS">DESCRIPTION OF WARRANTS</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">8</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#DESCRIPTION OF DEBT SECURITIES">DESCRIPTION OF DEBT SECURITIES</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">10</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#DESCRIPTION OF UNITS">DESCRIPTION OF UNITS</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">11</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#USE OF PROCEEDS">USE OF PROCEEDS</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">12</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#PLAN OF DISTRIBUTION">PLAN OF DISTRIBUTION</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">12</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS">CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATION</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">14</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#MATERIAL CHANGES">MATERIAL CHANGES</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">14</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#LEGAL MATTERS">LEGAL MATTERS</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">15</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#EXPERTS">EXPERTS</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">15</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#ENFORCEABILITY OF CIVIL LIABILITIES">ENFORCEABILITY OF CIVIL LIABILITIES</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">15</p></td> <td valign="top"></td></tr></table> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in"> <table id="pagebreakf5b269ed-1560-40f3-b5c7-2693f613ba4d" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid"> <p style="MARGIN: 0px" align="center">i</p></td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b><a name="CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS">CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS</a></b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Some of the statements in this prospectus and in any prospectus supplement we may file constitute &#8220;forward-looking statements&#8221; within the meaning of Section 27A of the Securities Act of 1933 (&#8220;Securities Act&#8221;) and Section 21E of the Securities Exchange Act of 1934 (&#8220;Exchange Act&#8221;). These statements relate to future events concerning our business and to our future revenues, operating results, and financial condition. In some cases, you can identify forward-looking statements by terminology such as &#8220;may,&#8221; &#8220;will,&#8221; &#8220;could,&#8221; &#8220;would,&#8221; &#8220;should,&#8221; &#8220;expect,&#8221; &#8220;plan,&#8221; &#8220;anticipate,&#8221; &#8220;intend,&#8221; &#8220;believe,&#8221; &#8220;estimate,&#8221; &#8220;forecast,&#8221; &#8220;predict,&#8221; &#8220;propose,&#8221; &#8220;potential,&#8221; or &#8220;continue&#8221; or the negative of those terms or other comparable terminology.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Any forward looking statements contained in this prospectus or any prospectus supplement are only estimates or predictions of future events based on information currently available to our management and management&#8217;s current beliefs about the potential outcome of future events. Whether these future events will occur as management anticipates, whether we will achieve our business objectives, and whether our revenues, operating results, or financial condition will improve in future periods are subject to numerous risks. There are a number of important factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements. These important factors include those that we discuss under the heading &#8220;Risk Factors&#8221; and in other sections of our Annual Report on Form 20-F for the year ended December 31, 2017, as well as in our other reports filed from time to time with the Securities and Exchange Commission (&#8220;SEC&#8221;) that are incorporated by reference into this prospectus. You should read these factors and the other cautionary statements made in this prospectus and in the documents we incorporate by reference into this prospectus as being applicable to all related forward-looking statements wherever they appear in this prospectus or the documents we incorporate by reference into this prospectus. If one or more of these factors materialize, or if any underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from any future results, performance or achievements expressed or implied by these forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.</p> <p style="MARGIN: 0px 0px 0px 0in" align="center">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><a name="CAUTIONARY NOTE TO UNITED STATES INVESTORS CONCERNING">CAUTIONARY NOTE TO UNITED STATES INVESTORS CONCERNING</a></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>ESTIMATE OF MEASURED AND INDICATED MINERAL RESOURCES</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">In Canada, an issuer is required to provide technical information with respect to mineralization, including reserves and resources, if any, on its mineral exploration properties in accordance with Canadian requirements, which differ significantly from the requirements of the SEC applicable to registration statements and reports filed by United States companies pursuant to the Securities Act, or the Exchange Act. As such, information contained in this registration statement concerning descriptions of mineralization under Canadian standards may not be comparable to similar information made public by United States companies subject to the reporting and disclosure requirements of the SEC. In particular, this registration statement and the annual report on Form 20-F incorporated herein includes the terms &#8220;mineral resource,&#8221; &#8220;inferred mineral resource&#8221; &#8220;indicated mineral resource&#8221; and &#8220;measured mineral resource.&#8221; Investors are advised that these terms are defined in and required to be disclosed under Canadian rules by National Instrument 43-101 (&#8220;NI 43-101&#8221;). U.S. Investors are cautioned not to assume that any part of the mineral deposits in these categories will ever be converted into reserves. Further, these terms are not defined terms under SEC Industry Guide 7 and are not permitted to be used in reports and registration statements filed with the SEC by U.S. domestic issuers. In addition, NI 43-101 permits disclosure of &#8220;contained ounces&#8221; of mineralization. In contrast, the SEC only permits issuers to report mineralization as in place tonnage and grade without reference to unit measures.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The definitions of proven and probable reserves used in NI 43-101 differ from the definitions in SEC Industry Guide 7. Under SEC Industry Guide 7, as interpreted by the staff of the SEC, mineralization may not be classified as a &#8220;reserve&#8221; for United States reporting purposes unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. Among other things, all necessary permits would be required to be in hand or issuance imminent in order to classify mineralized material as reserves under the SEC standards.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"> <table id="pagebreak9838b507-2ca5-42a7-b538-0d3dc3d15527" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">1</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">U.S. Investors are cautioned not to assume that any part or all of the mineral deposits identified as an &#8220;indicated mineral resource,&#8221; &#8220;measured mineral resource&#8221; or &#8220;inferred mineral resource&#8221; will ever be converted to reserves as defined in NI 43-101 or SEC Industry Guide 7. Further, &#8220;inferred mineral resources&#8221; have a great amount of uncertainty as to their existence and economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian securities legislation, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, or economic studies. U.S. investors are cautioned not to assume that part or all of an inferred mineral resource exists, or is economically or legally mineable.</p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b><a name="ABOUT THIS PROSPECTUS">ABOUT THIS PROSPECTUS</a></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">This document is called a prospectus and is part of a registration statement that we have filed with the SEC using a &#8220;shelf&#8221; registration process. Under this shelf registration process, we may, from time to time, offer our common shares, various series of warrants to purchase common shares, common shares or warrants either individually or in units, or securities such as debt securities, that may be convertible into our common shares, in one or more offerings, in amounts we will determine from time to time, up to a total dollar amount of $25,000,000.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">This prospectus provides you with a general description of the securities we may offer. Each time we offer a type or series of securities described in this prospectus, we will provide a prospectus supplement, or information that is incorporated by reference into this prospectus, containing more specific information about the terms of the securities that we are offering. We may also authorize one or more free writing prospectuses to be provided to you that may contain material information relating to these offerings and securities. This prospectus, together with applicable prospectus supplement, any information incorporated by reference and any related free writing prospectuses, includes all material information relating to these offerings and securities. We may also add, update or change in the prospectus supplement any of the information contained in this prospectus or in the documents that we have incorporated by reference into this prospectus, including without limitation, a discussion of any risk factors or other special considerations that apply to these offerings or securities or the specific plan of distribution. If there is any inconsistency between the information in this prospectus and a prospectus supplement or information incorporated by reference having a later date, you should rely on the information in that prospectus supplement or incorporated information having a later date. We urge you to read carefully this prospectus, any applicable prospectus supplement and any related free writing prospectus, together with the information incorporated herein by reference as described under the heading &#8220;Where You Can Find Additional Information&#8221; before buying any of the securities being offered.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">You should rely only on the information we have provided or incorporated by reference in this prospectus, any applicable prospectus supplement and any related free writing prospectus. We have not authorized anyone to provide you with different information. No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus, any applicable prospectus supplement or any related free writing prospectus.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify"><b>Neither the delivery of this prospectus nor any sale made under it implies that there has been no change in our affairs or that the information in this prospectus is correct as of any date after the date of this prospectus. You should assume that the information in this prospectus, any applicable prospectus supplement or any related free writing prospectus is accurate only as of the date on the front of the document and that any information we have incorporated by reference is accurate only as of the date of the document incorporated by reference, regardless of the time of delivery of this prospectus, any applicable prospectus supplement or any related free writing prospectus, or any sale of a security.</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">This prospectus contains summaries of certain provisions contained in some of the documents described herein, but reference is made to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein have been filed will be filed or will be incorporated by reference as exhibits to the registration statement of which this prospectus is a part, and you may obtain copies of those documents as described below under &#8220;Where You Can Find Additional Information.&#8221; THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE A SALE OF SECURITIES UNLESS IT IS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"> <table id="pagebreak1e97074b-d41d-497f-8c35-802c2575b49d" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">2</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">In this prospectus, unless the context otherwise requires, references to &#8220;we,&#8221; &#8220;us,&#8221; &#8220;our&#8221; or similar terms, as well as references to &#8220;Avino&#8221; or the &#8220;Company,&#8221; refer to Avino Silver &amp; Gold Mines Ltd.&#8221; Reference to dollars shall mean United States dollars unless otherwise referenced.</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><a name="ABOUT AVINO SILVER &amp; GOLD MINE LTD.">ABOUT AVINO SILVER &amp; GOLD MINE LTD.</a></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We were incorporated by Memorandum of Association under the laws of the Province of British Columbia, Canada on May 15, 1968, and on August 22, 1969, by virtue of an amalgamation with Ace Mining Company Ltd., became a public company whose common shares are registered under the Exchange Act and we changed our name to Avino Mines &amp; Resources Limited. On April 12, 1995, we changed our corporate name to International Avino Mines Ltd. and effected a reverse stock split of one common share for every five common shares outstanding. On August 29, 1997, we changed our corporate name to Avino Silver &amp; Gold Mines Ltd. to better reflect our business of exploring for and mining silver and gold. Our principal executive office is located at Suite 900, 570 Granville Street, Vancouver, British Columbia V6C 3P1, Canada. Our telephone number is (604) 682-3701. Our website is located at www.avino.com. Information contained on, or that can be accessed through, our website is not part of this prospectus.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We are a natural resource company, primarily engaged in the extracting and processing of gold, silver, and copper and the acquisition and exploration of natural resource properties. Our principal business activities have been the exploration for and extracting and processing of silver, gold and copper at a mineral property located in the State of Durango, Mexico (known as the &#8220;Avino Property&#8221;), located near the town of Durango, comprising the &#8220;San Gonzalo Mine&#8221; and the &#8220;Avino Mine&#8221;, both of which are currently in operation. We also own indirectly through our British Columbia subsidiary other exploration and evaluation assets in British Columbia (the &#8220;Bralorne Mine Property&#8221;), a gold exploration property located near Gold Bridge British Columbia, which is currently under development, and nine (9) mineral claims located in the Lillooet Mining Division, British Columbia (the &#8220;BRX Property&#8221;) which are currently inactive, and fourteen (14) quartz mining leases in the Yukon Territory, Canada (the &#8220;Eagle Property&#8221;), which are currently inactive.</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b><a name="WHERE YOU CAN FIND ADDITIONAL INFORMATION">WHERE YOU CAN FIND ADDITIONAL INFORMATION</a></b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We have filed with the SEC a registration statement on Form F-3 under the Securities Act, with respect to the securities covered by this prospectus. This prospectus, which is a part of the registration statement, does not contain all of the information set forth in the registration statement or the exhibits and schedules filed therewith. For further information with respect to us and the securities covered by this prospectus, please see the registration statement and the exhibits filed with the registration statement. A copy of the registration statement and the exhibits filed with the registration statement may be inspected without charge at the Public Reference Room maintained by the SEC, located at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more information about the operation of the Public Reference Room. The SEC also maintains an Internet website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The address of the website is http://www.sec.gov.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We are subject to the information and periodic reporting requirements of the Exchange Act, and, in accordance therewith, we file certain reports and other information with the SEC. Such reports and other information are available for inspection and copying at the Public Reference Room and website of the SEC referred to above. We maintain a website at http://www.avino.com. You may access our Annual Report on Form 20-F filed pursuant to Sections 13(a) or 15(d) of the Exchange Act with the SEC free of charge at our website as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. Our website and the information contained on that site, or connected to that site, are not incorporated into and are not a part of this prospectus.</p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><a name="INCORPORATION OF CERTAIN INFORMATION BY REFERENCE">INCORPORATION OF CERTAIN INFORMATION BY REFERENCE</a></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The SEC allows us to &#8220;incorporate by reference&#8221; the information we file with it, which means that we can disclose important information to you by referring you to those documents. The information we incorporate by reference is an important part of this prospectus, and certain information that we will later file with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below as well as certain filings made with the SEC under Sections 13(a), 13(c), or 15(d) of the Exchange Act from the date of the initial registration statement and prior to the effectiveness of this registration statement, and any filings made after the date of this prospectus until we sell all of the securities under this prospectus, except that we do not incorporate any document or portion of a document that was furnished and deemed by the rules of the SEC not to have been filed:</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px"> <table id="pagebreak86faf246-1e6c-4589-8d86-10a5e1df0c0c" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">3</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15"> <td width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">Our Registration Statement of common shares pursuant to Section 12(b) of the Securities Exchange Act of 1934 on Form 8-A, filed with the SEC on July 26, 2011;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td></td> <td> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">Our Annual Report on Form 20-F for the fiscal year ended December 31, 2017, filed with the SEC on April 3, 2018;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">Exhibit 99.1 to our Form 6-K filed with the SEC on April 10, 2018, containing the Technical Report Resources Update for the Avino Property with the effective date of February 21, 2018;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">Exhibit 99.1 to our Form 6-K for April 2018 filed with the SEC on April 26, 2018 containing our Information Circular dated April 19, 2018 related to our Annual and Special Meeting of Shareholders to held on May 24, 2018;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">Exhibits 99.1 and 99.2 to our Form 6-K filed with the SEC on May 16, 2018, containing our Condensed Consolidated Interim Financial Statements for the three months ended March 31, 2018 and Management Discussion and Analysis;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">Exhibit 99.1 to our Form 6-K filed with the SEC on June 18, 2018 containing information on change of director; and</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">Exhibits 99.1 and 99.2 to our Form 6-K filed with the SEC on August 8, 2018, containing our Condensed Consolidated Interim Financial Statements for the six months ended June 30, 2018 and Management Discussion and Analysis.</p></td></tr></table> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Additionally, all reports and other documents subsequently filed by us pursuant to Sections 13(a), 13(c), and 15(d) of the Exchange Act and incorporated herein after (i) the date of the initial registration statement and prior to effectiveness of the registration statement; and (ii) the date of this prospectus and prior to the termination or completion of this offering, shall be part hereof from the date of filing of such reports and other documents. Any information that we subsequently file with the SEC that is incorporated by reference as described above will automatically update and supersede any previous information that is part of this prospectus.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We hereby undertake to provide without charge to each person, including any beneficial owner, to whom a copy of this prospectus is delivered, upon written or oral request of any such person, a copy of any and all of the information that has been or may be incorporated by reference in this prospectus, other than exhibits to such documents. Requests for such copies should be directed to:</p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px" align="center">Dorothy Chin, Corporate Secretary</p> <p style="MARGIN: 0px" align="center">Avino Silver &amp; Gold Mines, Ltd.</p> <p style="MARGIN: 0px" align="center">570 Granville Street, Suite 900</p> <p style="MARGIN: 0px" align="center">Vancouver, British Columbia V6C 3P1</p> <p style="MARGIN: 0px" align="center">Canada</p> <p style="MARGIN: 0px" align="center">Tel: 604 682-3701</p> <p style="MARGIN: 0px" align="center">Fax: 604 682-3600</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px"> <table id="pagebreak2cd13026-e450-45d1-b26d-3f1076c3b530" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">4</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><a name="RISK FACTORS">RISK FACTORS</a></b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Investing in our securities involves significant risks. You should review carefully the risks and uncertainties described under the heading &#8220;Risk Factors&#8221; contained in, or incorporated into, the applicable prospectus, prospectus supplement and any related free writing prospectus, and under similar headings in the other documents that are incorporated by reference herein or therein. Each of the referenced risks and uncertainties could adversely affect our business, operating results and financial condition, as well as adversely affect the value of an investment in our securities. Additional risks not known to us or that we believe are immaterial may also adversely affect our business, operating results and financial condition and the value of an investment in our securities.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">In addition to the foregoing risks, if we issue debt securities pursuant to a trust indenture, we do not intend to register the trust indenture under the Trust Indenture Act of 1939, as amended (&#8220;Trust Indenture Act&#8221;), pursuant to an exemption. Accordingly, holders of our debt securities, if any, may not receive the same protection that they would otherwise receive if the trust indenture was registered under the Trust Indenture Act including the appointment of a suitable independent and qualified trustee to act for the benefit of the holders of the debt securities and certain substantive provisions for the trust indenture including debt holders&#8217; lists, reports, and duties and responsibilities of the trustee that would be entered into by the trustee and us.</p> <p style="MARGIN: 0px 0px 0px 0in" align="center">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><a name="OFFER STATISTICS AND EXPECTED TIMETABLE">OFFER STATISTICS AND EXPECTED TIMETABLE</a></b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We may sell from time to time pursuant to this prospectus (as may be detailed in prospectus supplements) an indeterminate number of securities as shall have a maximum aggregate offering price of $25,000,000. The actual per share price of the securities that we will offer pursuant hereto will depend on a number of factors that may be relevant as of the time of offer (see "Plan of Distribution" below).</p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><a name="CAPITALIZATION">CAPITALIZATION</a></b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The following table sets forth our capitalization as of June 30, 2018. This table should be read in conjunction with our audited consolidated financial statements as at and for the years ended December 31, 2017 and 2016, and our unaudited interim consolidated financial statements as at and for the six months ended June 30, 2018, which are incorporated by reference in this prospectus.</p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in"><b>As at June 30, 2018 (in 000s)</b></p> <p style="MARGIN: 0px">&nbsp;</p> <table style="WIDTH: 100%; TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Term facility</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%">$</td> <td id="ffcell" valign="bottom" width="9%" align="right">667</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Equipment loans</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">589</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Finance lease obligations</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1,396</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Total liabilities </p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%">$</td> <td id="ffcell" valign="bottom" width="9%" align="right">2,652</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#cceeff"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Equity</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Share capital</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%">$</td> <td id="ffcell" valign="bottom" width="9%" align="right">85,417</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Equity reserves</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">10,603</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Treasury shares (14,180 shares, at cost)</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">(97</td> <td valign="bottom" width="1%">)</td></tr> <tr bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Accumulated other comprehensive loss</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">(5,800</td> <td valign="bottom" width="1%">)</td></tr> <tr bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Accumulated deficit</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">(17,246</td> <td valign="bottom" width="1%">)</td></tr> <tr bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Total equity</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%">$</td> <td id="ffcell" valign="bottom" width="9%" align="right">72,877</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Total capitalization</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%">$</td> <td id="ffcell" valign="bottom" width="9%" align="right">75,529</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr></table> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><a name="PRICE RANGE OF OUR COMMON SHARES">PRICE RANGE OF OUR COMMON SHARES</a></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Our common shares are listed on the NYSE American and TSX under the symbol &#8220;ASM.&#8221; We graduated from the TSX Venture Exchange (&#8220;TSX-V&#8221;) on January 8, 2018. Please see the applicable prospectus, prospectus supplement for a summary of the price range for our common shares. </p> <p style="MARGIN: 0px" align="justify">&nbsp;</p> <p style="MARGIN: 0px" align="justify"> <table id="pagebreak2f3455ba-2b4f-46f8-9182-bd47a8d2fac1" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">5</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><a name="DESCRIPTION OF SECURITIES WE MAY OFFER">DESCRIPTION OF SECURITIES WE MAY OFFER</a></b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We may offer, from time to time, our common shares, warrants to purchase common shares, either individually or in units, and debt securities or other securities that may be converted into our common shares in amounts we will determine from time to time, under this prospectus at prices and on terms to be determined by market conditions at the time of offering. This prospectus provides you with a general description of the securities we may offer. See &#8220;Description of Capital Shares&#8221;, &#8220;Description of Warrants&#8221;, &#8220;Description of Units&#8221; and &#8220;Description of Debt Securities&#8221; below. Each time we offer a type or series of securities, we will provide a prospectus supplement that will describe the specific amounts, prices and other important terms of the securities, including, to the extent applicable:</p> <p style="MARGIN: 0px">&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15"> <td width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">designation or classification;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">aggregate principal amount or aggregate offering price;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">rates and times of payment of interest or dividends, if any;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">redemption, conversion or sinking fund terms, if any;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">voting or other rights, if any;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">conversion prices, if any; and</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">important federal income tax considerations.</p></td></tr></table> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The prospectus supplement and any related free writing prospectus also may supplement, or, as applicable, add, update or change information contained in this prospectus or in documents we have incorporated by reference. However, no prospectus supplement or free writing prospectus will offer a security that is not registered and described in this prospectus at the time of the effectiveness of the registration statement of which this prospectus is a part.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The terms of any particular offering, the offering price and the net proceeds to us will be contained in the prospectus, prospectus supplement, information incorporated by reference or free writing prospectus relating to such offering.</p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b><a name="DESCRIPTION OF CAPITAL SHARES">DESCRIPTION OF CAPITAL SHARES</a></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The description below of our capital shares is a summary and is qualified in its entirety by reference to our Articles of Incorporation (&#8220;Articles&#8221;). For a complete description, you should refer to our Articles, copies of which are on file with the SEC.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Our Articles authorizes the issuance of an unlimited number of common shares, without par value.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b>Common Shares</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Each holder of common shares is entitled to one vote for each share on all matters submitted to a vote of the shareholders, except matters that relate only to one or more of the series of preferred share, and each holder does not have cumulative voting rights. Accordingly, the holders of a majority of the common shares entitled to vote in any election of directors can elect all of the directors standing for election, if they so choose.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Subject to preferences that may be applicable to any then outstanding preferred stock, holders of common shares are entitled to receive ratably those dividends, if any, as may be declared from time to time by the board of directors out of legally available funds. In the event of our liquidation, dissolution or winding up, holders of common shares will be entitled to share ratably in the net assets legally available for distribution to shareholders after the payment of all of our debts and other liabilities and the satisfaction of any liquidation preference granted to the holders of any outstanding preferred shares.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Holders of common shares have no preemptive or conversion rights or other subscription rights, and there are no redemption or sinking fund provisions applicable to the common share. All outstanding common shares are, and the common shares offered by us in this offering, when issued and paid for, will be fully paid and nonassessable. The rights, preferences and privileges of the common shares are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred share which we may designate in the future.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"> <table id="pagebreakeac5a1d2-d8a0-46ce-ad8b-6fa4e88080d7" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">6</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b>Articles Anti-Takeover Provisions</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><i>Issuance of Shares</i></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Our Articles authorizes us to issue an unlimited number of common shares. Shareholder approval is not necessary to issue our common shares. Issuance of these common shares could have the effect of making it more difficult and more expensive for a person or group to acquire control of us, and could effectively be used as an anti-takeover device.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">In addition, the Articles permit the board of directors to: (1) create one or more classes or series of shares, or if none of the shares of a class or series of shares are issued, eliminate that class or series of shares, (2) increase, reduce or eliminate the maximum number of shares that the Company is authorized to issue, (3) subdivide all or any unissued or fully paid issued shares by way of a stock dividend, (4) change any of its unissued or fully paid issued shares without par value into shares with par value, (5) alter the identifying names of any of its shares, or (6) otherwise alter its shares or authorized share capital when required or permitted to do so by the British Columbia <i>Business Corporations Act</i> (the &#8220;BCBCA&#8221;). Any of these powers could be used to make it more difficult for a third party to acquire the company, or to discourage a third party from acquiring the Company.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><i>Size of Board of Directors and Removal of Directors</i></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Our Articles provide that:</p> <p style="MARGIN: 0px">&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15"> <td valign="top" width="4%"></td> <td valign="top" width="4%"> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><font style="FONT-FAMILY: Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">the number of directors will be fixed from time to time exclusively pursuant to a resolution adopted by our board of directors, but must consist of not less than three directors; and</p></td></tr></table> <p style="MARGIN: 0px">&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15"> <td valign="top" width="4%"></td> <td valign="top" width="4%"> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><font style="FONT-FAMILY: Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">vacancies on our board of directors, however the vacancy occurs, may be filled by a majority of directors then in office, even though less than a quorum.</p></td></tr></table> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">As permitted under the BCBCA and the Articles, the board of directors may also be enlarged by the appointment of additional directors only by the then current board of directors, and is limited to up to one-third of the number of directors previously elected or appointed by the shareholders.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The limitations on the removal and appointment of directors and the filling of casual vacancies, could have the effect of making it more difficult for a third party to acquire the Company, or of discouraging a third party from acquiring the company.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><i>Calling of Special Meetings of Shareholders</i></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Our Articles provide that special shareholder meetings for any purpose may generally only be called by our board of directors. However, the BCBCA does contain provisions for shareholders holding at least 5% of the total issued and outstanding shares to requisition shareholder meetings. Upon receiving a shareholder requisition stating in 1,000 words or less the business to be transacted, the directors must send notice of a general meeting to be held within four months from the date the requisition was received to transact the business stated in the requisition. If the directors do not send the notice of meeting within 21 days after the date the requisition was received, then the requisitioning shareholders may send notice of the general meeting to be held to transact the business stated in the requisition. These provisions could have the effect of delaying or discouraging stockholder actions that are favored by a majority of our outstanding voting stock.</p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in"> <table id="pagebreak3f53a9af-1d8d-4511-b01a-41df9db47652" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">7</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><i>Advance Notice Requirements for Director Nominations</i></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Our Articles establish an advance notice procedure for shareholder proposed nominations of candidates for election to the board of directors. Shareholders at an annual meeting may only consider nominations specified in the notice of meeting or brought before the meeting by or at the direction of the board of directors, or by a shareholder of record on the record date for the meeting, who is entitled to vote at the meeting and who has delivered timely written notice in proper form to our secretary of the shareholder&#8217;s intention to nominate any person before the meeting. These provisions could have the effect of delaying until the next shareholder meeting shareholder actions that are favored by the holders of a majority of our outstanding voting stock.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b>Listing</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Our common shares are listed on NYSE American and TSX under the symbol &#8220;ASM.&#8221; We graduated from the TSX Venture Exchange (&#8220;TSX-V&#8221;) on January 8, 2018. </p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b>Transfer Agent and Registrar</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The transfer agent and registrar for our common shares is Computershare, 3rd Floor, 510 Burrard Street, Vancouver, British Colombia V6C 3B9.</p> <p style="MARGIN: 0px 0px 0px 0in" align="center">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b><a name="DESCRIPTION OF WARRANTS">DESCRIPTION OF WARRANTS</a></b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b>General</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We may issue warrants to purchase common shares. We may issue the warrants independently or together with any underlying securities, and the warrants may be attached or separate from the underlying securities. We may also issue a series of warrants under a separate warrant agreement to be entered into between us and a warrant agent. The warrant agent will act solely as our agent in connection with the warrants of such series and will not assume any obligation or relationship of agency for or with holders or beneficial owners of warrants.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The following description is a summary of selected provisions relating to the warrants that we may issue. The summary is not complete. When warrants are offered in the future, a prospectus supplement, information incorporated by reference or a free writing prospectus, as applicable, will explain the particular terms of those securities and the extent to which these general provisions may apply. The specific terms of the warrants as described in a prospectus supplement, information incorporated by reference, or free writing prospectus will supplement and, if applicable, may modify or replace the general terms described in this section.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">This summary and any description of warrants in the applicable prospectus supplement, information incorporated by reference or free writing prospectus is subject to and is qualified in its entirety by reference to all the provisions of any specific warrant document or agreement. We will file each of these documents, as applicable, with the SEC and incorporate them by reference as an exhibit to the registration statement of which this prospectus is a part on or before the time we issue a series of warrants. See &#8220;Where You Can Find Additional Information&#8221; and &#8220;Incorporation of Certain Information by Reference&#8221; above for information on how to obtain a copy of a warrant document when it is filed.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">When we refer to a series of warrants, we mean all warrants issued as part of the same series under the applicable warrant agreement.</p> <p style="MARGIN: 0px" align="justify">&nbsp;</p> <p style="MARGIN: 0px" align="justify"> <table id="pagebreak425b7d84-0235-4cca-9fff-7a74d6caef5b" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">8</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in"><b>Terms</b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The applicable prospectus supplement, information incorporated by reference or free writing prospectus, may describe the terms of any warrants that we may offer, including but not limited to the following:</p> <p style="MARGIN: 0px">&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15"> <td width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">the&nbsp;title of the warrants;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">the total number of warrants;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">the price or prices at which the warrants will be issued;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">the price or prices at which the warrants may be exercised;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">the currency or currencies that investors may use to pay for the warrants;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">the date on which the right to exercise the warrants will commence and the date on which the right will expire;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">whether the warrants will be issued in registered form or bearer form;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">information with respect to book-entry procedures, if any;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">if applicable, the minimum or maximum amount of warrants that may be exercised at any one time;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">if applicable, the designation and terms of the underlying securities with which the warrants are issued and the number of warrants issued with each underlying security;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">if applicable, the date on and after which the warrants and the related underlying securities will be separately transferable;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">if applicable, a discussion of material United States federal income tax considerations;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">if applicable, the terms of redemption of the warrants;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">the identity of the warrant agent, if any;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">the procedures and conditions relating to the exercise of the warrants; and</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;&nbsp;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">any other terms of the warrants, including terms, procedures, and limitations relating to the exchange and exercise of the warrants.</p></td></tr></table> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b>Warrant Agreement</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We may issue the warrants in one or more series under one or more warrant agreements, each to be entered into between us and a bank, trust company, or other financial institution as warrant agent. We may add, replace, or terminate warrant agents from time to time. We may also choose to act as our own warrant agent or may choose one of our subsidiaries to do so.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The warrant agent under a warrant agreement will act solely as our agent in connection with the warrants issued under that agreement. Any holder of warrants may, without the consent of any other person, enforce by appropriate legal action, on its own behalf, its right to exercise those warrants in accordance with their terms.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b>Form, Exchange and Transfer</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We may issue the warrants in registered form or bearer form. Warrants issued in registered form, i.e., book-entry form, will be represented by a global security registered in the name of a depository, which will be the holder of all the warrants represented by the global security. Those investors who own beneficial interests in a global warrant will do so through participants in the depository&#8217;s system, and the rights of these indirect owners will be governed solely by the applicable procedures of the depository and its participants. In addition, we may issue warrants in non-global form, i.e., bearer form. If any warrants are issued in non-global form, warrant certificates may be exchanged for new warrant certificates of different denominations, and holders may exchange, transfer, or exercise their warrants at the warrant agent&#8217;s office or any other office indicated in the applicable prospectus supplement, information incorporated by reference or free writing prospectus.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Prior to the exercise of their warrants, holders of warrants exercisable for shares of common share will not have any rights of holders of common share and will not be entitled to dividend payments, if any, or voting rights of the common share.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"> <table id="pagebreak4fa2c138-d375-4797-81bc-61c69209baed" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">9</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b>Exercise of Warrants</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">A warrant will entitle the holder to purchase for cash an amount of securities at an exercise price that will be stated in, or that will be determinable as described in, the applicable prospectus supplement, information incorporated by reference or free writing prospectus. Warrants may be exercised at any time up to the close of business on the expiration date set forth in the applicable offering material. After the close of business on the expiration date, unexercised warrants will become void. Warrants may be redeemed as set forth in the applicable offering material.</p> <p style="MARGIN: 0px" align="justify">&nbsp;&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Warrants may be exercised as set forth in the applicable offering material. Upon receipt of payment and the warrant certificate properly completed and duly executed at the corporate trust office of the warrant agent or any other office indicated in the applicable offering material, we will forward, as soon as practicable, the securities purchasable upon such exercise. If less than all of the warrants represented by such warrant certificate are exercised, a new warrant certificate will be issued for the remaining warrants.</p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><a name="DESCRIPTION OF DEBT SECURITIES">DESCRIPTION OF DEBT SECURITIES</a></b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in"><b>General</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We may issue debt securities which may or may not be converted into common shares. In no case shall the amount of the debt securities exceed $10,000,000 in the aggregate. We may issue the debt securities independently or together with any underlying securities, and warrants may be attached or separate from the underlying securities. We may also issue a series of debt securities under a separate indenture agreement to be entered into between us and an indenture agent. Such indenture agreement, if any, will not be qualified with the SEC pursuant to an exemption. The indenture agent will act solely as our agent in connection with the warrants of such series and will not assume any obligation or relationship of agency for or with holders or beneficial owners of warrants.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The following description is a summary of selected provisions relating to the debt securities that we may issue. The summary is not complete. When debt securities are offered in the future, a prospectus supplement, information incorporated by reference or a free writing prospectus, as applicable, will explain the particular terms of those securities and the extent to which these general provisions may apply. The specific terms of the debt securities as described in a prospectus supplement, information incorporated by reference, or free writing prospectus will supplement and, if applicable, may modify or replace the general terms described in this section.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">This summary and any description of debt securities in the applicable prospectus supplement, information incorporated by reference or free writing prospectus is subject to and is qualified in its entirety by reference to all the provisions of any specific debt securities document or agreement. We will file each of these documents, as applicable, with the SEC and incorporate them by reference as an exhibit to the registration statement of which this prospectus is a part on or before the time we issue a series of warrants. See &#8220;Where You Can Find Additional Information&#8221; and &#8220;Incorporation of Certain Information by Reference&#8221; above for information on how to obtain a copy of a warrant document when it is filed.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">When we refer to a series of debt securities, we mean all debt securities issued as part of the same series under the applicable indenture.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b>Terms</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The applicable prospectus supplement, information incorporated by reference or free writing prospectus, may describe the terms of any debt securities that we may offer, including but not limited to the following:</p> <p style="MARGIN: 0px">&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15"> <td valign="top" width="4%"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top" width="4%"> <p style="MARGIN: 0px 0px 0px 0in"><font style="FONT-FAMILY: Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">the title of the debt securities;</p></td></tr> <tr height="15"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><font style="FONT-FAMILY: Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">the total amount of the debt securities;</p></td></tr> <tr height="15"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><font style="FONT-FAMILY: Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">the amount or amounts of the debt securities will be issued and interest rate;</p></td></tr> <tr height="15"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><font style="FONT-FAMILY: Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">the conversion price at which the debt securities may be converted;</p></td></tr> <tr height="15"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><font style="FONT-FAMILY: Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">the date on which the right to exercise the debt securities will commence and the date on which the right will expire;</p></td></tr> <tr height="15"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><font style="FONT-FAMILY: Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">if applicable, the minimum or maximum amount of debt securities that may be exercise at any one time;</p></td></tr> <tr height="15"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><font style="FONT-FAMILY: Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">if applicable, the designation and terms of the underlying securities with which the debt securities are issued and the amount of debt securities issued with each underlying security;</p></td></tr> <tr height="15"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><font style="FONT-FAMILY: Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">if applicable, a discussion of material United States federal income tax consideration;</p></td></tr> <tr height="15"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><font style="FONT-FAMILY: Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">if applicable, the terms of the payoff of the debt securities;</p></td></tr> <tr height="15"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><font style="FONT-FAMILY: Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">the identity of the indenture agent, if any;</p></td></tr> <tr height="15"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><font style="FONT-FAMILY: Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">the procedures and conditions relating to the exercise of the debt securities; and</p></td></tr> <tr height="15"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><font style="FONT-FAMILY: Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">any other terms of the debt securities, including terms, procedure and limitation relating to the exchange or exercise of the debt securities.</p></td></tr></table> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in"> <table id="pagebreakf8fb9801-3155-480e-85fe-c0012a13f624" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">10</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in"><b>Debt Securities</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We may issue the debt securities in one or more series under one or more agreements, which may include a trust indenture to be entered into between us and a bank, trust company, or other financial institution as indenture agent, if any.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">In connection with the issuance of any debt securities, we do not intend to issue them pursuant to a trust indenture. However, if a trust indenture is requested by a placement agent, underwriter or broker-dealer as a condition of the financing, we will provide and enter into a trust indenture. If a trust indenture is entered into, we do not intend to register the trust indenture under the Trust Indenture Act of 1939 (&#8220;Trust Indenture Act&#8221;) pursuant to an exemption. Under Section 304(a)(9) of the Trust Indenture Act, the Trust Indenture Act does not apply to any security which is to be issued under an indenture which limits the aggregate principal amount of securities at any time outstanding thereunder to $10,000,000. We do not intend to issue debt securities, if any, pursuant to a trust indenture that will exceed $10,000,000. If a trust indenture is entered into, we will file the trust indenture as an exhibit on Form 6-K before making any offer of debt securities.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The indenture agent under an indenture agreement, if any, will act solely as our agent in connection with the debt securities issued under that agreement. Any holder of debt securities may, without the consent of any other person, enforce by appropriate legal action, on its own behalf, its right to exercise those debt securities in accordance with their terms.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b>Form, Exchange and Transfer</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We may issue the debt securities in registered form or bearer form. Debt securities issued in registered form, i.e., book-entry form, will be represented by a global security registered in the name of a depository, which will be the holder of all the debt securities represented by the global security. Those investors who own beneficial interests in global debt securities will do so through participants in the depository&#8217;s system, and the rights of these indirect owners will be governed solely by the applicable procedures of the depository and its participants. In addition, we may issue warrants in non-global form, i.e., bearer form. If any debt securities are issued in non-global form, debt securities certificates may be exchanged for new warrant certificates of different denominations, and holders may exchange, transfer, or exercise their warrants at the warrant agent&#8217;s office or any other office indicated in the applicable prospectus supplement, information incorporated by reference or free writing prospectus.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Prior to the exercise of their debt securities, holders of debt securities exercisable for shares of debt securities will not have any rights of holders of common share and will not be entitled to dividend payments, if any, or voting rights of the common share.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b>Conversion of Debt Securities</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">A debt security may entitle the holder to purchase for in exchange for the extinguishment of debt an amount of securities at an exercise price that will be stated in the debt security. Debt securities may be converted at any time up to the close of business on the expiration date set forth in the terms of such debt security. After the close of business on the expiration date, debt securities not exercised will be paid in accordance with their terms.</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Debt securities may be converted as set forth in the applicable offering material. Upon receipt of a notice of conversion properly completed and duly executed at the corporate trust office of the indenture agent, if any, or to us, we will forward, as soon as practicable, the securities purchasable upon such exercise. If less than all of the debt security represented by such security is converted, a new debt security will be issued for the remaining debt security.</p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><a name="DESCRIPTION OF UNITS">DESCRIPTION OF UNITS</a></b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We may issue units composed of any combination of our common share, warrants and debt securities. We will issue each unit so that the holder of the unit is also the holder of each security included in the unit. As a result, the holder of a unit will have the rights and obligations of a holder of each included security. The unit agreement under which a unit is issued may provide that the securities included in the unit may not be held or transferred separately, at any time or at any time before a specified date.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"> <table id="pagebreak9d4c384e-f293-4a14-b559-8a4d675e1aae" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">11</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The following description is a summary of selected provisions relating to units that we may offer. The summary is not complete. When units are offered in the future, a prospectus supplement, information incorporated by reference or a free writing prospectus, as applicable, will explain the particular terms of those securities and the extent to which these general provisions may apply. The specific terms of the units as described in a prospectus supplement, information incorporated by reference, or free writing prospectus will supplement and, if applicable, may modify or replace the general terms described in this section.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">This summary and any description of units in the applicable prospectus supplement, information incorporated by reference or free writing prospectus is subject to and is qualified in its entirety by reference to the unit agreement, collateral arrangements and depositary arrangements, if applicable. We will file each of these documents, as applicable, with the SEC and incorporate them by reference as an exhibit to the registration statement of which this prospectus is a part on or before the time we issue a series of units. See &#8220;Where You Can Find Additional Information&#8221; and &#8220;Incorporation of Certain Information by Reference&#8221; above for information on how to obtain a copy of a document when it is filed.</p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in">The applicable prospectus supplement, information incorporated by reference or free writing prospectus may describe:</p> <p style="MARGIN: 0px">&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15"> <td width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">the designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">any provisions for the issuance, payment, settlement, transfer, or exchange of the units or of the securities composing the units;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">whether the units will be issued in fully registered or global form; and</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">any other terms of the units.</p></td></tr></table> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The applicable provisions described in this section, as well as those described under &#8220;Description of Capital Shares&#8221;, &#8220;Description of Warrants&#8221; and &#8220;Description of Debt Securities&#8221; above, will apply to each unit and to each security included in each unit, respectively.</p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><a name="USE OF PROCEEDS">USE OF PROCEEDS</a></b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Unless otherwise indicated in the applicable prospectus, prospectus supplement, information incorporated by reference or free writing prospectus, we intend to use the net proceeds from the sale of securities to fund our growth plans, for working capital, and for other general corporate purposes, including capital expenditures related to our growth. We may also use a portion of the net proceeds to acquire or invest in businesses whom, from time to time, we engage and explore the possibility of strategic partnering or investment.</p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><a name="PLAN OF DISTRIBUTION">PLAN OF DISTRIBUTION</a></b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We may sell the securities offered by this prospectus from time to time in one or more transactions, including without limitation:</p> <p style="MARGIN: 0px">&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15"> <td width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">through agents;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">to or through underwriters;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">through broker-dealers (acting as agent or principal);</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">directly by us to purchasers (including our affiliates and shareholders), through a specific bidding or auction process, a rights offering, or other method;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">through a combination of any such methods of sale; or</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">through any other methods described in a prospectus, prospectus supplement.</p></td></tr></table> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px"> <table id="pagebreak2cf8a41e-7a00-486d-be82-ffa486e7cdb0" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">12</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The distribution of securities may be effected, from time to time, in one or more transactions, including:</p> <p style="MARGIN: 0px">&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15"> <td width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">block transactions (which may involve crosses) and transactions on the NYSE American or TSX or any other organized market where the securities may be traded;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">purchases by a broker-dealer as principal and resale by the broker-dealer for its own account pursuant to a prospectus supplement;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">ordinary brokerage transactions and transactions in which a broker-dealer solicits purchasers;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">sales &#8220;at the market&#8221; to or through a market maker or into an existing trading market, on an exchange or otherwise; and</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">sales in other ways not involving market makers or established trading markets, including direct sales to purchasers.</p></td></tr></table> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The securities may be sold at a fixed price or prices, which may be changed, or at market prices prevailing at the time of sale, at prices relating to the prevailing market prices or at negotiated prices. The consideration may be cash, outstanding debt or another form negotiated by the parties. Agents, underwriters or broker-dealers may be paid compensation for offering and selling the securities. That compensation may be in the form of discounts, concessions or commissions to be received from us or from the purchasers of the securities. Dealers and agents participating in the distribution of the securities may be deemed to be underwriters, and compensation received by them on resale of the securities may be deemed to be underwriting discounts and commissions under the Securities Act. If such dealers or agents were deemed to be underwriters, they may be subject to statutory liabilities under the Securities Act.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We may also make direct sales through subscription rights distributed to our existing shareholders on a pro rata basis, which may or may not be transferable. In any distribution of subscription rights to our shareholders, if all of the underlying securities are not subscribed for, we may then sell the unsubscribed securities directly to third parties or may engage the services of one or more underwriters, dealers or agents, including standby underwriters, to sell the unsubscribed securities to third parties.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Some or all of the securities that we offer through this prospectus may be new issues of securities with no established trading market. Any underwriters to whom we sell our securities for public offering and sale may make a market in those securities, but they will not be obligated to do so and they may discontinue any market making at any time without notice. Accordingly, we cannot assure you of the liquidity of, or continued trading markets for, any securities that we offer.</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Agents may, from time to time, solicit offers to purchase the securities. If required, we will name in the applicable prospectus supplement, document incorporated by reference or free writing prospectus, as applicable, any agent involved in the offer or sale of the securities and set forth any compensation payable to the agent. Unless otherwise indicated, any agent will be acting on a best efforts basis for the period of its appointment. Any agent selling the securities covered by this prospectus may be deemed to be an underwriter of the securities.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">If underwriters are used in an offering, securities will be acquired by the underwriters for their own account and may be resold, from time to time, in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale, or under delayed delivery contracts or other contractual commitments. Securities may be offered to the public either through underwriting syndicates represented by one or more managing underwriters or directly by one or more firms acting as underwriters. If an underwriter or underwriters are used in the sale of securities, an underwriting agreement will be executed with the underwriter or underwriters at the time an agreement for the sale is reached. The applicable prospectus supplement will set forth the managing underwriter or underwriters, as well as any other underwriter or underwriters, with respect to a particular underwritten offering of securities, and will set forth the terms of the transactions, including compensation of the underwriters and dealers and the public offering price, if applicable. This prospectus, the applicable prospectus supplement and any applicable free writing prospectus will be used by the underwriters to resell the securities.</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">If a dealer is used in the sale of the securities, we, or an underwriter, will sell the securities to the dealer, as principal. The dealer may then resell the securities to the public at varying prices to be determined by the dealer at the time of resale. To the extent required, we will set forth in the prospectus supplement, document incorporated by reference or free writing prospectus, as applicable, the name of the dealer and the terms of the transactions.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"> <table id="pagebreak77d9dc8e-3bb1-4ab5-a7a8-a67459ec1e1a" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">13</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We may directly solicit offers to purchase the securities and may make sales of securities directly to institutional investors or others. These persons may be deemed to be underwriters with respect to any resale of the securities. To the extent required, the prospectus supplement, document incorporated by reference or free writing prospectus, as applicable, will describe the terms of any such sales, including the terms of any bidding or auction process, if used.</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Agents, underwriters and dealers may be entitled under agreements which may be entered into with us to indemnification by us against specified liabilities, including liabilities incurred under the Securities Act, or to contribution by us to payments they may be required to make in respect of such liabilities. If required, the prospectus supplement, document incorporated by reference or free writing prospectus, as applicable, will describe the terms and conditions of such indemnification or contribution. Some of the agents, underwriters or dealers, or their affiliates may be customers of, engage in transactions with or perform services for us or our subsidiaries or affiliates in the ordinary course of business.</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Under the securities laws of some states, the securities offered by this prospectus may be sold in those states only through registered or licensed brokers or dealers.</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Any person participating in the distribution of securities registered under the registration statement that includes this prospectus will be subject to applicable provisions of the Exchange Act, and the applicable SEC rules and regulations, including, among others, Regulation M, which may limit the timing of purchases and sales of any of our securities by any such person. Furthermore, Regulation M may restrict the ability of any person engaged in the distribution of our securities to engage in market-making activities with respect to our securities.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">These restrictions may affect the marketability of our securities and the ability of any person or entity to engage in market-making activities with respect to our securities.</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Certain persons participating in an offering may engage in over-allotment, stabilizing transactions, short-covering transactions and penalty bids in accordance with Regulation&nbsp;M under the Exchange Act that stabilize, maintain or otherwise affect the price of the offered securities. If any such activities will occur, they will be described in the applicable prospectus supplement.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">If more than 10% of the net proceeds of any offering of securities made under this prospectus will be received by Financial Industry Regulatory Authority (&#8220;FINRA&#8221;) members participating in the offering or affiliates or associated persons of such FINRA members, the offering will be conducted in accordance with FINRA Conduct Rule 5110(h).</p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">So long as the aggregate market value of our voting and non-voting common equity held by non-affiliates is less than $75,000,000 and so long as required by the rules of the SEC, the amount of securities we may offer hereunder will be limited such that the aggregate market value of securities sold by us during a period of 12 calendar months cannot exceed one-third of the aggregate market value of the voting and non-voting common equity held by non-affiliates.</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">To the extent required, this prospectus may be amended or supplemented from time to time to describe a specific plan of distribution.</p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><a name="CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS">CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS</a></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in">Ownership in our securities and the acquisition and disposition thereof raises certain U.S. federal income tax considerations. Each prospectus supplement will address the summary of certain material U.S. federal income tax considerations applicable to a U.S. Holder.</p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><a name="MATERIAL CHANGES">MATERIAL CHANGES</a></b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Except as otherwise described in our Annual Report on Form 20-F for the fiscal year ended December 31, 2017, in our Reports on Form 6-K filed or submitted under the Exchange Act and incorporated by reference herein and as disclosed in this prospectus, no reportable material changes have occurred since December 31, 2017.</p> <p style="MARGIN: 0px 0px 0px 0in" align="left">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="left"> <table id="pagebreakb9b3a6fa-efb2-43ef-90e2-8c6224d15e18" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">14</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><a name="LEGAL MATTERS">LEGAL MATTERS</a></b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The law firm of Salley Bowes Harwardt Law Corporation has acted as the Company&#8217;s counsel by providing an opinion on the validity of the Securities offered in this prospectus and applicable prospectus supplement and counsel named in the applicable prospectus supplement will pass upon legal matters for any underwriters, dealers or agents. Certain legal matters related to the Securities offered by this prospectus will be passed upon on the Company&#8217;s behalf by Salley Bowes Harwardt Law Corporation, with respect to matters of Canadian law, and Lewis Brisbois Bisgaard &amp; Smith LLP, San Francisco, California with respect to matters of United States law.</p> <p style="MARGIN: 0px 0px 0px 0in" align="center">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><a name="EXPERTS">EXPERTS</a></b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Manning Elliott LLP, independent registered public accounting firm, has audited our consolidated financial statements and schedule included in our Annual Report on Form 20-F for the three years ended December 31, 2017, which is incorporated by reference in this prospectus and elsewhere in the registration statement. Our financial statements and schedule are incorporated by reference in reliance on Manning Elliott LLP&#8217;s report, given on their authority as experts in accounting and auditing.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Information relating to the Company&#8217;s mineral properties in this prospectus and the documents incorporated by reference herein has been derived from reports, statements or opinions prepared or certified by Tetra Tech Canada Inc., QG Australia (Pty) Ltd, Kirkham Geosystems Ltd., and Jasman Yee, P. Eng. and this information has been included in reliance on such persons&#8217; and companies&#8217; expertise.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Tetra Tech Canada Inc., QG Australia (Pty) Ltd, Kirkham Geosystems Ltd., and Jasman Yee, P. Eng and any director, officer, employee or partner thereof, has not received a direct or indirect interest in the property of the Company or of any associate or affiliate of the Company, except that Mr. Yee is a director of the Company and has received compensation for servicing as such.</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><a name="ENFORCEABILITY OF CIVIL LIABILITIES">ENFORCEABILITY OF CIVIL LIABILITIES</a></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The enforcement by investors of civil liabilities under U.S. federal securities laws may be affected adversely by the fact that we are incorporated under the laws of the Province of British Columbia, Canada, that many of our officers and directors are residents of countries other than the United States, that some of the experts named in this prospectus are residents of countries other than the United States, and that some of our assets and the assets of said persons are located outside the United States.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">In particular, it may be difficult to bring and enforce suits against us or said persons under U.S. federal securities laws. It may be difficult for U.S. holders of our common shares to effect service of process on us or said persons within the United States or to enforce judgments obtained in the United States based on the civil liability provisions of the U.S. federal securities laws against us or said persons. In addition, a shareholder should not assume that the courts of Canada (i) would enforce judgments of U.S. courts obtained in actions against us, our officers or directors, or other said persons, predicated upon the civil liability provisions of the U.S. federal securities laws or other laws of the United States, or (ii) would enforce, in original actions, liabilities against us, our officers or directors or other said persons predicated upon the U.S. federal securities laws or other laws of the United States.</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p> <p style="MARGIN: 0px" align="justify"> <table id="pagebreak15382b26-9c17-4f38-9f89-d4a561a3fbe9" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">15</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><img src="avino_f3img2.jpg"> </p> <p style="MARGIN: 0px 0px 0px 0in" align="center">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>$25,000,000</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Common Shares</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Warrants</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Units</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Debt Securities</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="FONT-SIZE: 2px; HEIGHT: 2px; WIDTH: 100%; BACKGROUND: #000000; MARGIN: 0px" name="hrule">&nbsp;</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>PROSPECTUS</b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="FONT-SIZE: 2px; HEIGHT: 2px; WIDTH: 100%; BACKGROUND: #000000; MARGIN: 0px" name="hrule">&nbsp;</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; , 2018</p> <p style="MARGIN: 0px" align="left">&nbsp;</p> <p style="MARGIN: 0px" align="left"> <table id="pagebreak03da7948-d42f-4213-9236-8fa970cc79cc" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid">&nbsp;</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><font color="red">The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any state where the offer or sale is not permitted.</font></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><font color="red"><b>Subject to Completion, dated </b><b>August 21, 2018</b></font></p> <p style="MARGIN: 0px 0px 0px 0in"><b>PROSPECTUS</b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><img src="avino_f3img3.jpg"> </p> <p style="MARGIN: 0px 0px 0px 0in" align="center">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Up to $8,000,000</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Common Shares</b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We have entered into a sales agreement with Cantor Fitzgerald &amp; Co. relating to our common shares offered by this prospectus. In accordance with the terms of the sales agreement, we may offer and sell common shares having an aggregate offering price of up to $8,000,000 from time to time through Cantor Fitzgerald &amp; Co., acting as agent. Unless otherwise indicated, reference to dollars in this prospectus shall mean United States dollars.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Our common shares are listed on NYSE American under the symbol &#8220;ASM.&#8221; On August 17, 2018, the reported sale price of our common shares on NYSE American was $0.92 per share.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Sales of our common shares, if any, under this prospectus may be made in sales deemed to be an &#8220;at the market offering&#8221; as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended (&#8220;Securities Act&#8221;). Cantor Fitzgerald &amp; Co. will act as sales agent on a best efforts basis and use commercially reasonable efforts to sell on our behalf all of the common shares requested to be sold by us, consistent with its normal trading and sales practices, on mutually agreed terms between Cantor Fitzgerald &amp; Co. and us. There is no arrangement for funds to be received in any escrow, trust or similar arrangement.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Cantor Fitzgerald &amp; Co. will be entitled to compensation at a fixed commission rate of 3.0% of the gross sales price per share sold. In connection with the sale of our common shares on our behalf, Cantor Fitzgerald &amp; Co. will be deemed to be an &#8220;underwriter&#8221; within the meaning of the Securities Act and the compensation of Cantor Fitzgerald &amp; Co. will be deemed to be underwriting commissions or discounts.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">As of July 5, 2018, which represents a date within 60 days of the date of this prospectus, the aggregate market value of our outstanding common shares held by non-affiliates was approximately $69,077,000, based on 55,805,653 common shares outstanding, of which 53,136,599 common shares were held by non-affiliates, and a per share price of $1.30 based on the closing sale price of our common shares on July 5, 2018. We have not offered any securities pursuant to General Instruction I.B.5. of Form F-3 during the prior 12 calendar month period that ends on, and includes, the date of this prospectus.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify"><b>Investing in our securities involves a high degree of risk. Before making an investment decision, please read &#8220;Risk Factors&#8221; beginning on page S-7 of this prospectus and any other risk factor included in any accompanying prospectus supplement and in the documents incorporated by reference into this prospectus or any prospectus supplement.</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify"><b>Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.</b></p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><img src="avino_f3img4.jpg"> </p> <p style="MARGIN: 0px 0px 0px 0in" align="center">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center">The date of this prospectus is&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; , 2018.</p> <p style="MARGIN: 0px 0px 0px 0in" align="left">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="left"> <table id="pagebreak1d994b54-885a-4ea5-a4eb-d2356f9df7cd" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid">&nbsp;</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b><a name="Toc1">TABLE OF CONTENTS</a></b></p> <p style="MARGIN: 0px">&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15"> <td style="BORDER-BOTTOM: black 1px solid" valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><b>PROSPECTUS</b></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td style="BORDER-BOTTOM: black 1px solid" valign="top" colspan="2"> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Page</b></p></td> <td valign="top"></td></tr> <tr height="15"> <td valign="top"></td> <td valign="top"></td> <td valign="top" colspan="2"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#cceeff"> <td valign="top" width="85%"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS1">CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS</a></p></td> <td valign="top" width="1%"></td> <td valign="top" width="1%"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top" width="9%"> <p style="MARGIN: 0px 0px 0px 0in" align="right">S-1</p></td> <td valign="top" width="1%"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#CAUTIONARY NOTE TO UNITED STATES INVESTORS CONCERNING1">CAUTIONARY NOTE TO UNITED STATES INVESTORS CONCERNING ESTIMATE OF MEASURED AND INDICATED MINERAL RESOURCES</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="bottom"> <p style="MARGIN: 0px 0px 0px 0in" align="right">S-3</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#ABOUT THIS PROSPECTUS1">ABOUT THIS PROSPECTUS</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">S-3</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#PROSPECTUS SUMMARY1">PROSPECTUS SUMMARY</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">S-5</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#THE OFFERING1">THE OFFERING</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">S-6</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#RISK FACTORS1">RISK FACTORS</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">S-7</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#CAPITALIZATION AND INDEBTEDNESS1">CAPITALIZATION AND INDEBTEDNESS</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">S-20</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#USE OF PROCEEDS1">USE OF PROCEEDS</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">S-21</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#MARKET FOR OUR COMMON SHARES1">MARKET FOR OUR COMMON SHARES</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">S-22</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#PLAN OF DISTRIBUTION1">PLAN OF DISTRIBUTION</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">S-23</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS1">CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">S-25</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#EXPENSES1">EXPENSES</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">S-32</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#MATERIAL CHANGES1">MATERIAL CHANGES</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">S-32</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#LEGAL MATTERS1">LEGAL MATTERS</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">S-32</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#EXPERTS1">EXPERTS</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">S-32</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#ENFORCEABILITY OF CIVIL LIABILITIES1">ENFORCEABILITY OF CIVIL LIABILITIES</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">S-32</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#INCORPORATION OF CERTAIN INFORMATION BY REFERENCE1">INCORPORATION OF CERTAIN INFORMATION BY REFERENCE</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">S-33</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15" bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="#WHERE YOU CAN FIND ADDITIONAL INFORMATION1">WHERE YOU CAN FIND ADDITIONAL INFORMATION</a></p></td> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="right">S-34</p></td> <td valign="top"></td></tr></table> <p style="MARGIN: 0px 0px 0px 0in" align="left">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="left"> <table id="pagebreak7583de9e-42f3-4745-9320-0dd7361843d8" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr"></td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid"> <p style="MARGIN: 0px" align="center">S-i</p></td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><a name="CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS1">CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS</a></b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">This prospectus and the documents we have filed with the Securities and Exchange Commission (&#8220;SEC&#8221;) that are incorporated by reference into this prospectus contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements reflect our current view about future plans, intentions or expectations. These forward-looking statements may be included herein or incorporated by reference in this prospectus and include, in particular, statements about our plans, strategies and prospects and may be identified by terminology such as &#8220;may,&#8221; &#8220;will,&#8221; &#8220;should,&#8221; &#8220;expect,&#8221; &#8220;scheduled,&#8221; &#8220;plan,&#8221; &#8220;intend,&#8221; &#8220;anticipate,&#8221; &#8220;believe,&#8221; &#8220;estimate,&#8221; &#8220;aim,&#8221; &#8220;potential,&#8221; or &#8220;continue&#8221; or the negative of those terms or other comparable terminology. Any forward-looking statements reflect the Company&#8217;s current expectations and assumptions, and are subject to a number of known and unknown risks, uncertainties and other factors which may cause the Company&#8217;s actual results, performance or achievements to be materially different from any anticipated future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements contained or incorporated by reference into this prospectus, or any prospectus supplement, include, without limitation, statements regarding:</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="justify"><font face="Symbol"> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">the future production of silver, gold, and other metals;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">profit, operating costs and cash-flow;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">grade improvements;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">sales volume and selling prices of products;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">capital and exploration expenditures, plans, timing, progress, and expectations for the development of the Company&#8217;s mines and projects;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">progress in the development of mineral properties;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">the timing of production and the cash and total costs of production;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">sensitivity of earnings to changes in commodity prices and exchange rates;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">the impact of foreign currency exchange rates;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">the impact of taxes and royalties;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">expenditures to increase or determine reserves and resources;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">sufficiency of available capital resources;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">titles to mineral properties;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">expansions and acquisition plans; and</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">our future plans and expectations for the Company&#8217;s properties and operations.</td></tr></table>&nbsp;</font>&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">These forward-looking statements are based on a number of factors and assumptions that, while considered reasonable by the Company as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The assumptions made by the Company, which may prove to be incorrect, include, but are not limited to:</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p> <p style="MARGIN: 0px" align="justify"><font face="Symbol"> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">general business and economic conditions;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">the supply and demand for, deliveries of, and the level and volatility of prices of, silver, gold, and other metals;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">expected Canadian dollar, Mexican peso and US dollar exchange rates;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">expected taxes and royalties;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">the timing of the receipt of regulatory and governmental approvals for development projects, expansion of existing facilities and other operations;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">costs of production, and production and productivity levels;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">estimated future capital expenditures and cash flows;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">the continuing availability of water and power resources for operations;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">the accuracy of the information included or implied in the various published technical reports;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">the geological, operational and price assumptions on which such technical reports are based;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">conditions in the financial markets;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">the ability to attract and retain skilled staff;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">the ability to procure equipment and operating supplies and that there are no material unanticipated variations in the cost of energy or supplies;</td></tr></table>&nbsp;</font></p> <p style="MARGIN: 0px"> <table id="pagebreak761bfa22-5698-4568-9bc5-8415ede778ba" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-1</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p><font face="Symbol"> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">the ability to secure contracts for the sale of the Company&#8217;s products (metals concentrates);</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">the execution and outcome of current or future exploration activities;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">the ability to obtain adequate financing for planned activities and to complete further exploration programs;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">the possibility of project delays and cost overruns, or unanticipated excessive operating costs and expenses;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">the Company&#8217;s ability to maintain adequate internal control over financial reporting, and disclosure controls and procedures;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">the ability of contractors to perform their contractual obligations; and</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">operations not being disrupted by issues such as mechanical failures, labor disturbances, illegal occupations or mining, seismic events and adverse weather conditions.</td></tr></table></font> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">This list is not exhaustive of the factors that may affect any of the Company&#8217;s forward-looking statements or information. Forward-looking statements or information are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements or information due to a variety of risks, uncertainties and other factors, including, without limitation:</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p><font face="Symbol"> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">changes in commodity prices;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">changes in foreign currency exchange rates;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">acts of foreign governments;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">political risk and social unrest;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">uncertainties related to title to the Company&#8217;s mineral properties and the surface rights thereon, including the Company&#8217;s ability to acquire, or economically acquire;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">unanticipated operational difficulties due to adverse weather conditions;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">failure of plant or mine equipment and unanticipated events related to health, safety, and environmental matters;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">failure of counterparties to perform their contractual obligations;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">delays in obtaining, or denial of, permits necessary for operations or expansion activities;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">uncertainty of mineral resource estimates; and</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">the deterioration of general economic conditions.</td></tr></table></font> <p style="MARGIN: 0px">&nbsp;&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Any forward looking statements contained in this prospectus or any prospectus supplement are only estimates or predictions of future events based on information currently available to our management and management&#8217;s current beliefs about the potential outcome of future events. Whether these future events will occur as management anticipates, whether we will achieve our business objectives, and whether our revenues, operating results, or financial condition will improve in future periods are subject to numerous risks. There are a number of important factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements. These important factors include those that we discuss above and under the heading &#8220;Risk Factors&#8221; and in other sections of our Annual Report on Form 20-F for the year ended December 31, 2017, as well as in our other reports filed from time to time with the Securities and Exchange Commission (&#8220;SEC&#8221;) that are incorporated by reference into this prospectus. You are further cautioned that the foregoing list of assumptions and risk factors are not exhaustive. You should read these risk factors and the other cautionary statements made in this prospectus and in the documents we incorporate by reference into this prospectus as being applicable to all related forward-looking statements wherever they appear in this prospectus or the documents we incorporate by reference into this prospectus. If one or more of these factors materialize, or if any underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from any future results, performance or achievements expressed or implied by these forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"> <table id="pagebreak7e4cba33-1c8a-43a2-a3be-0cf9c7b3a1ca" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-2</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><a name="CAUTIONARY NOTE TO UNITED STATES INVESTORS CONCERNING1">CAUTIONARY NOTE TO UNITED STATES INVESTORS CONCERNING</a></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>ESTIMATE OF MEASURED AND INDICATED MINERAL RESOURCES</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">In Canada, an issuer is required to provide technical information with respect to mineralization, including reserves and resources, if any, on its mineral exploration properties in accordance with Canadian requirements, which differ significantly from the requirements of the SEC applicable to registration statements and reports filed by United States companies pursuant to the Securities Act, or the Exchange Act. As such, information contained in this registration statement concerning descriptions of mineralization under Canadian standards may not be comparable to similar information made public by United States companies subject to the reporting and disclosure requirements of the SEC. In particular, this registration statement and the annual report on Form 20-F incorporated herein includes the terms &#8220;mineral resource,&#8221; &#8220;inferred mineral resource&#8221; &#8220;indicated mineral resource&#8221; and &#8220;measured mineral resource.&#8221; Investors are advised that these terms are defined in and required to be disclosed under Canadian rules by National Instrument 43-101 (&#8220;NI 43-101&#8221;). U.S. Investors are cautioned not to assume that any part of the mineral deposits in these categories will ever be converted into reserves. Further, these terms are not defined terms under SEC Industry Guide 7 and are not permitted to be used in reports and registration statements filed with the SEC by U.S. domestic issuers. In addition, NI 43-101 permits disclosure of &#8220;contained ounces&#8221; of mineralization. In contrast, the SEC only permits issuers to report mineralization as in place tonnage and grade without reference to unit measures.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The definitions of proven and probable reserves used in NI 43-101 differ from the definitions in SEC Industry Guide 7. Under SEC Industry Guide 7, as interpreted by the staff of the SEC, mineralization may not be classified as a &#8220;reserve&#8221; for United States reporting purposes unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. Among other things, all necessary permits would be required to be in hand or issuance imminent in order to classify mineralized material as reserves under the SEC standards.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">U.S. Investors are cautioned not to assume that any part or all of the mineral deposits identified as an &#8220;indicated mineral resource,&#8221; &#8220;measured mineral resource&#8221; or &#8220;inferred mineral resource&#8221; will ever be converted to reserves as defined in NI 43-101 or SEC Industry Guide 7. Further, &#8220;inferred mineral resources&#8221; have a great amount of uncertainty as to their existence and economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian securities legislation, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, or economic studies. U.S. investors are cautioned not to assume that part or all of an inferred mineral resource exists, or is economically or legally mineable.</p> <p style="MARGIN: 0px 0px 0px 0in" align="center">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><a name="ABOUT THIS PROSPECTUS1">ABOUT THIS PROSPECTUS</a></b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">This prospectus is part of a registration statement that we filed with the SEC utilizing a &#8220;shelf&#8221; registration process. Under this shelf registration statement process, we may from time to time offer to sell up to $25,000,000 of our common shares, warrants to purchase common shares, debt securities and units consisting of common shares, warrants or debt securities or any combination of these securities in one or more transactions.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We provide information to you about this offering of our common shares in two separate documents that are bound together: (1) this at the market sales agreement prospectus, which describes the specific details regarding this offering of common shares; and (2) the accompanying base prospectus which provides general regarding our common shares, warrants to purchase common shares, debt securities and units consisting of common shares, warrants or debt securities or any combination of these securities and other information some of which may not apply to this offering. Generally, when we refer to this &#8220;prospectus,&#8221; we are referring to both documents combined. If information in this at the market sales agreement prospectus is inconsistent with the accompanying base prospectus, you should rely on this prospectus. However, if any statement in one of these documents is inconsistent with a statement in another document having a later date-for example, a document incorporated by reference in this prospectus-the statement in the document having the later date modifies or supersedes the earlier statement as our business, financial condition, results of operations and prospects may have changed since the earlier dates.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"> <table id="pagebreakbb14e639-cf03-41e3-92b6-08b55db250ab" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-3</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">You should read this prospectus, together with the accompanying base prospectus, the documents incorporated by reference in this prospectus and the base prospectus and any free writing prospectus that we have authorized for use in connection with this offering before making an investment decision. You should also read and consider the information in the documents referred to in the sections of this prospectus and the accompanying base prospectus entitled &#8220;Where You Can Find Additional Information&#8221; and &#8220;Incorporation of Certain Information by Reference.&#8221; When we refer to this &#8220;prospectus,&#8221; we are referring to both this at the market sales agreement prospectus and the base prospectus combined.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">You should rely only on the information contained or incorporated by reference in this prospectus or in any free writing prospectus that we have authorized for use in connection with this offering. We have not, and Cantor Fitzgerald &amp; Co. has not, authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We are not making an offer to sell the securities covered by this prospectus in any jurisdiction in which an offer or solicitation is not permitted or in which the person making the offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make an offer or solicitation.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The information appearing in this prospectus, the documents incorporated by reference in this prospectus, and in any free writing prospectus that we have authorized for use in connection with this offering is accurate only as of its respective date, regardless of the time of delivery of the respective document or of any sale of securities covered by this prospectus. You should not assume that the information contained in or incorporated by reference in this prospectus or in any free writing prospectus that we have authorized for use in connection with this offering, is accurate as of any date other than the respective dates thereof.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">In this prospectus, &#8220;we,&#8221; &#8220;us,&#8221; &#8220;our,&#8221; &#8220;the company,&#8221; and &#8220;Avino&#8221; refer to Avino Silver &amp; Gold Mines, Ltd and its subsidiaries, unless the context otherwise requires. Reference to dollars shall mean United States dollars unless otherwise referenced.</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px"> <table id="pagebreakcf40a17a-7769-4fb7-a7f9-11db6b096dc7" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-4</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b><a name="PROSPECTUS SUMMARY1">PROSPECTUS SUMMARY</a></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify"><i>This summary highlights certain information about us, this offering and information appearing elsewhere in this prospectus and in the documents we incorporate by reference in this prospectus. This summary is not complete and does not contain all of the information that you should consider before investing in our securities. After you read this summary, to fully understand our company and this offering and its consequences to you, you should read this entire prospectus and any related free writing prospectus carefully, including the information referred to under the heading &#8220;Risk Factors&#8221; in this prospectus beginning on page S-7</i><b>, </b><i>and any related free writing prospectus as well as the other documents that we incorporate by reference into this prospectus including our financial statements and the exhibits to the registration statement of which this prospectus is a part.</i></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b>Our Company</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We are a natural resource company, primarily engaged in the extracting and processing of gold, silver, and copper and the acquisition and exploration of natural resource properties. Our principal business activities have been the exploration for and extracting and processing of silver, gold and copper at a mineral property located in the State of Durango, Mexico (known as the &#8220;Avino Property&#8221;), located near the town of Durango, comprising the &#8220;San Gonzalo Mine&#8221; and the &#8220;Avino Mine&#8221;, both of which are currently in operation. We also own indirectly through our British Columbia subsidiary other exploration and evaluation assets in British Columbia (the &#8220;Bralorne Mine Property&#8221;), a gold exploration property located near Gold Bridge British Columbia, which is currently under development, and nine (9) mineral claims located in the Lillooet Mining Division, British Columbia (the &#8220;BRX Property&#8221;) which are currently inactive, and fourteen (14) quartz mining leases in the Yukon Territory, Canada (the &#8220;Eagle Property&#8221;), which are currently inactive.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b>Our Strategy</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Over the next few years, we plan to continue to grow organically into a mid-tier silver producer. We intend to achieve this goal by focusing the following key areas:</p> <p style="MARGIN: 0px">&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15"> <td width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><i>Avino Property</i> - Increase profitable mining operations at the Avino mine and improve operating efficiencies. We also intend to continue conduct underground exploration;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><i>Tailings</i> - Continue to review and develop plans to process the oxide tailings resource left from our past milling operations; and</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><i>Exploration</i> - Continue to explore regional targets on the property and consider acquisition opportunities.</p></td></tr></table> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b>Corporate Information</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We were incorporated by Memorandum of Association under the laws of the Province of British Columbia on May 15, 1968, and on August 22, 1969, by virtue of an amalgamation with Ace Mining Company Ltd., became a public company whose common shares are registered under the United States Securities Exchange Act of 1934, as amended, and we changed our name to Avino Mines &amp; Resources Limited. On April 12, 1995, we changed our corporate name to International Avino Mines Ltd. and effected a reverse stock split of one common share for every five common shares outstanding. On August 29, 1997, we changed our corporate name to Avino Silver &amp; Gold Mines Ltd. to better reflect our business of exploring for and mining silver and gold. Our principal executive office is located at Suite 900, 570 Granville Street, Vancouver, British Columbia V6C 3P1, Canada. Our telephone number is 604-682-3701.</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px"> <table id="pagebreak0cc43268-d5f2-4c46-aba0-ded2e43551f7" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-5</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b><a name="THE OFFERING1">THE OFFERING</a></b></p> <p style="MARGIN: 0px">&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15"> <td valign="top" width="28%"> <p style="MARGIN: 0px 0px 0px 0in" align="left">Common shares offered by us</p></td> <td width="2%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">Common shares having an aggregate offering price of up to $8,000,000.</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left">Common shares to be outstanding after this offering</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">Up to 64,548,822 shares, assuming the sale of 8,743,169 common shares in this offering at an offering price of $0.92 per share, which was the reported sale price of our common shares on the NYSE American on August 17, 2018. The actual number of common shares issued will vary depending on the actual sales prices under this offering.</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left">Plan of Distribution</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&#8220;At the market offering&#8221; that may be made from time to time through our sales agent, Cantor Fitzgerald &amp; Co. See &#8220;Plan of Distribution&#8221; on page S-23 of this prospectus.</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left">Use of Proceeds</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">We currently intend to use the net proceeds of this offering primarily for advancing the development of the Avino mine and its operations and production, and to a lesser extent for the exploration and development of the Bralorne Mine Property, and for general working capital. See &#8216;&#8216;Use of Proceeds&#8217;&#8217; on page S-21 of this prospectus.</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left">Risk Factors</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">Investing in our securities involves a high degree of risk. See &#8220;Risk Factors&#8221; beginning on page S-7 of this prospectus for a discussion of factors you should consider carefully when making an investment decision.</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left">NYSE American symbol</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">ASM</p></td></tr></table> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The number of common shares to be outstanding immediately after this offering as shown above is based on 55,805,653 common shares outstanding as of June 30, 2018, but does not include the following:</p> <p style="MARGIN: 0px">&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15"> <td width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top"> <p style="MARGIN: 0px">3,046,000 common shares issuable upon exercise of stock options outstanding under our stock plans, at a weighted average exercise price of $2.15 per share; and</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px"><font style="FONT-FAMILY: Symbol">&#183;</font></p></td> <td> <p style="MARGIN: 0px">3,602,215 common shares issuable upon the exercise of warrants outstanding at a weighted average exercise price of $2.85 per share. </p></td></tr></table> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px"> <table id="pagebreakc04f7722-832b-4def-b46c-b5c14cd038fa" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-6</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><a name="RISK FACTORS1">RISK FACTORS</a></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify"><em>Investing in common shares of the Company involves a significant degree of risk and must be considered speculative due to the high-risk nature of the Company&#8217;s business. You should carefully consider the information included or incorporated herein by reference in this prospectus (including subsequently filed documents incorporated by reference) and the Company&#8217;s historical consolidated financial statements and related notes thereto before making an investment decision concerning the common shares. There are various risks that could have a material adverse effect on, among other things, the operating results, earnings, properties, business and condition (financial or otherwise) of the Company. These risk factors, together with all of the other information included, or incorporated by reference in this prospectus, including information contained in the section entitled &#8220;Cautionary Statement Regarding Forward-Looking Information&#8221; and those contained in &#8220;Part I. Item 3. Key Information &#8211; D. Risk Factors&#8221; of our Annual Report on Form 20-F for the fiscal year ended December 31, 2017, as filed with the SEC on April 3, 2018, as well as any amendment or update to our risk factors reflected in subsequent filings with the SEC. If any of the risks or uncertainties described in our SEC filings actually occurs, our business, financial condition, results of operations or cash flow could be materially and adversely affected. This could cause the trading price of our common shares to decline, resulting in a loss of all or part of your investment. The risks and uncertainties we have described are not the only ones facing us. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business operations.</em></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>We will be required to raise additional capital to mine our properties. </i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The Company is currently focusing on further defining plans to mine its San Gonzalo and Avino mineralized material and on exploring and evaluating the Bralorne mine project. The Company will be required to raise capital to further advance the San Gonzalo and Avino mines and its infrastructure. Our ability to raise funds will depend on several factors, including, but not limited to, current economic conditions, our perceived value for our properties, our prospects, metal prices, businesses competing for financing and our financial condition. In addition, volatile precious metals markets may make it difficult or impossible for the Company to obtain financing on favorable terms, or at all. There can be no assurance that we will be able to raise funds, or to raise funds on commercially reasonable terms. Historically, the Company has raised funds through equity and debt financing and the exercise of options and warrants. On April 27, 2018, we completed the sale of 3,000,000 common shares for aggregate gross proceeds of Cdn$6,000,000. The 3,000,000 common shares qualify as &#8220;flow-through shares,&#8221; as defined in subsection 66(15) of the Income Tax Act (Canada) as the gross proceeds will be used for qualifying Canadian exploration expenses and flow-through mining expenditures on our Bralorne Mine Property, British Columbia. The raising of capital may have a dilutive effect on the Company&#8217;s per share book value. </p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>We have only recently become profitable and no assurances can be given we will continue to be profitable in the future. </i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We began extracting and processing resources at levels intended by management at the San Gonzalo Mine during the fourth quarter of 2012 and at the Avino Mine in the second quarter of 2016. For the years ended December 31, 2017, 2016, 2015, 2014, and 2013, we earned net income of $2,653,461, $1,503,531, $378,087, $2,275,678, and $823,463, respectively. Prior to the 2013 fiscal year, we had not been profitable. There is no assurance that our operations will continue to be profitable in the future. </p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>We have a history of negative operating cash flow.</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">As at December 31, 2017, the Company had net working capital (current assets in excess of current liabilities) of US$16.4 million, including approximately US$4.4 million in cash and cash equivalents. The Company has a history of negative operating cash flow. While the Company considers that it has sufficient capital to support its current operating requirements based on its current capital resources and expected cash flows from ongoing operations, there is a risk that commodity prices decline or other factors may cause the Company to be unable to continue generating sufficient cash flows to sustain operations or to be unable to fund planned capital projects, including expansions and potential acquisitions. In addition, the Company may require additional capital if the costs of its capital projects are materially greater than the Company&#8217;s projections. There is no assurance that the Company will be able to obtain additional capital when required. Failure to obtain additional financing on a timely basis may cause the Company to postpone acquisitions, expansion, development and exploration plans, or even suspend operations. </p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"> <table id="pagebreakbecb3037-583a-43fe-9213-cc695f0e1655" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-7</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>We have no proven or probable reserves, and our decision to commence extracting and processing resources at levels intended by management was not based on a study demonstrating economic recovery of any mineral reserves and is therefore inherently risky.</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We have not established the presence of any proven or probable mineral reserves, as defined by the SEC, at any of our properties. Under Guide 7, the SEC has defined a &#8220;reserve&#8221; as that part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination. Any mineralized material discovered or produced by us should not be considered proven or probable reserves. </p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">In order to demonstrate the existence of proven or probable reserves, it would be necessary for us to perform additional exploration to demonstrate the existence of sufficient mineralized material with satisfactory continuity and obtain a positive feasibility study which demonstrates with reasonable certainty that the deposit can be economically and legally extracted and produced. We have not completed a feasibility study with regard to all or a portion of any of our properties to date. Since we commenced extracting and processing resources of mineralized material at levels intended by management at the San Gonzalo Mine and the Avino Mine without a feasibility study, there is inherent uncertainty as to whether the mineralized material can be economically produced or if so, for what period of time. The absence of proven or probable reserves makes it more likely that our properties may cease to be profitable and that the money we spend on exploration and evaluation may never be recovered.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>We decided to begin extracting and processing resources at levels intended by management at the San Gonzalo Mine and the Avino Mine without preparing a pre-feasibility study or bankable feasibility study which may subject us to more risks.</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We decided to begin extracting and processing resources at levels intended by management at the San Gonzalo Mine and the Avino Mine without preparing a pre-feasibility study or bankable feasibility study which is a more common practice within the mining industry and therefore may subject us to more business risks. Our decision to begin extracting and processing resources at the San Gonzalo Mine and the Avino Mine were based on limited prior historical information, bulk sample drilling programs, small pilot plant and bench scale testing. Therefore, our decision to begin extracting and processing resources at the San Gonzalo Mine and the Avino Mine were based on limited information which may or may not be representative of information regarding the mines had we otherwise prepared a more comprehensive study. In addition, basing our decision to begin extracting and processing resources on limited information may make us susceptible to risks including:</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p> <p style="MARGIN: 0px" align="justify"><font face="Symbol"> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">certain difficulties in obtaining expected metallurgical recoveries when scaling up to extracting and processing activities at levels intended by management from pilot plant scale;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">the preliminary nature of mine plans and processing concepts and applying them to full scale extracting and processing activities at levels intended by management;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">determining operating/capital cost estimates and possible variances associated with constructing, commissioning and operating the San Gonzalo and Avino facilities based on limited information;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">that metallurgical flow sheets and recoveries are based on information at the time and may not be representative of results of the San Gonzalo Mine and/or the Avino Mine; and</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">that we may underestimate capital and operating costs without a comprehensive bankable feasibility study.</td></tr></table></font>&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Inaccuracies in production and cost estimates.</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The Company prepares estimates of future production and future production costs for its operations. No assurance can be given that these estimates will be achieved. Production and cost estimates are based on, among other things, the following: the accuracy of mineral resource estimates; the accuracy of assumptions regarding ground conditions and physical characteristics of mineralization, equipment and mechanical availability, labor, and the accuracy of estimated rates and costs of mining and processing. Actual production and costs may vary from estimates for a variety of reasons, including actual mineralization mined varying from estimates of grade, tonnage, dilution and metallurgical and other characteristics, short-term operating factors relating to the mineral resources, such as the need for sequential development of mineralized zones and the processing of new sources or different grades of mineralization; and the risks and hazards associated with mining described in these risk factors. In addition, there can be no assurance that silver recoveries or other metal recoveries in small scale laboratory tests will be duplicated in larger scale tests under on-site conditions or during production, or that the existing known and experienced recoveries will continue. Costs of production may also be affected by a variety of factors, including: variability in grade or dilution, metallurgy, labor costs, costs of supplies and services (such as, fuel and power), general inflationary pressures and currency exchange rates. Failure to achieve production or cost estimates, or increases in costs, could have an adverse impact on the Company&#8217;s future cash flows, earnings, results of operations and financial condition.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"> <table id="pagebreak97dc63b2-511e-425d-bbb0-c7c16a1b05d7" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-8</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Exploration and development.</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The business of exploration and development for minerals involves a high degree of risk and few properties become producing mines. Unprofitable efforts result not only from the failure to discover mineral deposits, but from finding mineral deposits which, though present, are insufficient in quantity and quality to return a profit from production. There is no assurance that the Company&#8217;s future exploration and development activities will result in any discoveries of commercial bodies of ore. The marketability of minerals acquired or discovered by the Company may be affected by numerous factors which are beyond the control of the Company and which cannot be accurately predicted, such as market fluctuations, the proximity and capacity of mining facilities, mineral markets and processing equipment, and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals, and environmental protection, the combination of which factors may result in the Company not receiving an adequate return on invested capital.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>The mining industry is highly speculative and involves substantial risks. </i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Even when mining is conducted on properties known to contain significant quantities of mineral deposits it is generally accepted in the mining industry that most exploration projects do not result in the discovery of mineable deposits of ore that can be extracted in a commercially economic manner. Mining and mineral exploration involves many risks, which even a combination of experience, knowledge and careful evaluation may not be able to overcome. These risks include but are not limited to:</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p> <p style="MARGIN: 0px" align="justify"><font face="Symbol"> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">limited availability of water, which is essential to milling operation;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">major or catastrophic equipment failures;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">mine failures and slope failures;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">ground fall and cave-ins;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">deleterious elements in the mined resources;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">environmental hazards;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">industrial accidents and explosions;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">unusual or unexpected geological formations;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">labor shortages or strikes;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">civil disobedience and protests;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">natural phenomena such as inclement weather conditions, floods, droughts, rock slides and earthquakes, and</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">interruptions cause by any of the foregoing.</td></tr></table></font>&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The foregoing occurrences could result in environmental damage and liabilities, work stoppages and delayed production, increased production costs, damage to, or destruction of, mineral properties or production facilities, personal injury or death, asset write-downs, monetary losses and other liabilities. In addition, operations are subject to a variety of existing laws and regulations relating to exploration and development, permitting procedures, safety precautions, property reclamation, employee health and safety, air quality standards, pollution and other environmental protection controls. Mining activities are subject to substantial operating hazards, some of which are not insurable or may not be insured for economic reasons. </p> <p style="MARGIN: 0px" align="justify">&nbsp;</p> <p style="MARGIN: 0px" align="justify"> <table id="pagebreakeff10297-df8f-45b3-94d5-47979d98115e" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-9</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>The commercial quantities of ore cannot be accurately predicted. </i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Whether an ore body will be commercially viable depends on a number of factors including the particular attributes of the deposit, such as size, grade and proximity to infrastructure, as well as minerals prices and government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in a mineral deposit being unprofitable.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Metals and mineral prices are subject to dramatic and unpredictable fluctuations.</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">There is no assurance that, even if commercial quantities of mineral resources are discovered, that these can be sold at a profit. Factors beyond the control of the Company may affect the marketability of any mineral occurrences discovered. The prices of silver, gold and copper have experienced volatile and significant movements over short periods of time, and are affected by numerous factors beyond the control of the Company, including international economic and political trends, expectations of inflation, currency exchange fluctuations (specifically, the United States dollar relative to the Canadian dollar and other currencies), interest rates and global or regional consumption patterns (such as the development of gold coin programs), speculative activities and increased production due to improved mining and production methods. If the prices of precious metals and other minerals should drop significantly, the economic prospects of the Company&#8217;s operating mines and projects could be significantly reduced or rendered uneconomic. There is no assurance that even if commercial quantities of ore are discovered, a profitable market may exist for the sale of same. The marketability of minerals is also affected by numerous other factors beyond the control of the Company, including government regulations relating to royalties, allowable production and importing and exporting of minerals, the effect of which cannot be accurately predicted. The Company has not entered into any hedging arrangements for any of its metal and mineral production. The Company may enter into hedging arrangements in the future.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>There are no assurances that we can produce minerals on a commercially viable basis. </i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The Company&#8217;s ability to generate revenue and profit is expected to occur through exploration, evaluation, advancement and operation of its existing properties as well as through acquisitions of interests in new properties. Substantial expenditures will be incurred in an attempt to establish the economic feasibility of mining activities by identifying mineral deposits and establishing ore reserves through drilling and other techniques, developing metallurgical processes to extract metals from ore, designing facilities and planning mining activities. The economic feasibility of a project depends on numerous factors, including the cost of mining and production facilities required to extract the desired minerals, the total mineral deposits that can be mined using a given facility, the proximity of the mineral deposits to refining facilities, and the market price of the minerals at the time of sale. There is no assurance that existing or future exploration programs or acquisitions will result in the identification of deposits that can be mined profitably.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Mining activities and exploration activities are subject to various federal, provincial and local laws and regulations. </i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Laws and regulations govern the development, mining, production, importing and exporting of minerals, taxes, labor standards, occupational health, waste disposal, protection of the environment, mine safety, toxic substances, and other matters. In many cases, licenses and permits are required to conduct mining operations. Amendments to current laws and regulations governing operations and activities of mining companies or more stringent implementation thereof could have a substantial adverse impact on the Company. Applicable laws and regulations will require the Company to make certain capital and operating expenditures to initiate new activity. Under certain circumstances, the Company may be required to suspend an activity once it is started until a particular problem is remedied or to undertake other remedial actions.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Mining activities are inherently risky.</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Mining activities are risky and heavily regulated. Despite our attempts to minimize accidents through strict safety procedures, individuals may be injured or harmed working in our mines. Should any accidents occur, our mine may be partially or fully shut down to aid regulators in their investigation; even if it is determined we are not at fault for the cause of the accident. In this regard, there were two accidental deaths at the Company&#8217;s San Gonzalo mine in March 2016, and an accidental death at the Avino mine complex processing facility in June 2014. We do not believe that we were at fault in these accidents and, unfortunately, believe that the accidents were the result of the employees not following the proper safety protocols. Following the accidents, local authorities allowed us to resume mining activities. Notwithstanding our belief that we were not at fault for the accidents, we may nevertheless be found liable and subject to fines and/or penalties or we may be required to revise and implement new safety procedures that would make it more costly to operate our mines. Currently, we do not have insurance covering accidents, but may obtain insurance in the future.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"> <table id="pagebreak7795fe9e-8bcf-44db-97e9-333cc07efa21" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-10</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Mining operations and uninsured risks.</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Mining operations generally involve a high degree of risk, which even a combination of experience, knowledge and careful evaluation may not be able to overcome. The business of mining and exploration is subject to a variety of risks including, but not limited to, fires, power outages, labor disruptions, industrial accidents, flooding, explosions, cave-ins, landslides, environmental hazards, technical failures, and the inability to obtain suitable or adequate machinery, equipment or labor. Such occurrences, against which the Company cannot, or may elect not to insure, may delay production, increase production costs or result in liabilities. The payment of such liabilities may have a material adverse effect on the Company&#8217;s financial position. The economics of developing mineral properties are affected by such factors as the cost of operations, variations in the grade and metallurgy of the ore mined, fluctuations in mineral markets, costs of processing and equipment, transportation costs, government regulations including regulations relating to royalties, allowable production, importing and exporting of mineral product, and environmental protection rules and regulations.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>The validity of the title to our mining properties may be challenged. </i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">In those jurisdictions where the Company has property interests, the Company undertakes searches of mining records and obtains title opinions from reputable counsel in accordance with mining industry practices to confirm satisfactory title to properties in which it holds or intends to acquire an interest, but does not obtain title insurance with respect to such properties. The possibility exists that title to one or more of its properties, particularly title to undeveloped properties, might be defective because of errors or omissions in the chain of title, including defects in conveyances and defects in locating or maintaining such claims, prior unregistered agreements or transfers, and title may be affected by undetected defects or native land claims. For unsurveyed mineral claims, the boundaries of such mining claims may be in doubt. The ownership and validity of mining claims are often uncertain and may be contested. The Company is not aware of any challenges to the location or area of its mineral claims. There is, however, no guarantee that title to the Company&#8217;s properties will not be challenged or impugned in the future. The properties may be subject to prior unregistered agreements or transfers.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">In Mexico and British Columbia legal rights applicable to mining concessions or mineral claims, as applicable, are different and separate from legal rights applicable to surface lands; accordingly, title holders of mining concessions or mineral claims must accommodate and agree with surface land owners on compensation in respect of mining activities conducted on such land. The Company&#8217;s title may be affected by prior unregistered agreements or transfers or native land claims, and title may also be affected by undetected defects.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Competition. </i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">There is a limited supply of desirable mineral lands available for acquisition, claim staking or leasing in the areas where the Company contemplates expanding its operations and conducting exploration activities. Many participants are engaged in the mining business, including large, established mining companies. There can be no assurance that the Company will be able to compete successfully for new mining properties. The resource industry is intensely competitive in all of its phases, and the Company competes with many companies possessing greater financial resources and technical facilities than itself. Competition could adversely affect the Company&#8217;s ability to acquire suitable producing properties or prospects exploration in the future.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"> <table id="pagebreak1236578a-06b5-4866-9465-de8923f489dd" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-11</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Uncertainty of exploration and evaluation programs. </i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The Company&#8217;s profitability is significantly affected by the costs and results of its exploration and evaluation programs. As mines have limited lives, the Company actively seeks to expand its mineral resources, primarily through exploration, evaluation and strategic acquisitions. Exploration for minerals is highly speculative in nature, involves many risks and is frequently unsuccessful. Among the many uncertainties inherent in any silver, gold, and/or copper exploration and evaluation program are the location of economic ore bodies, the development of appropriate metallurgical processes, the receipt of necessary governmental permits and the construction of mining and processing facilities. Assuming the discovery of an economic deposit, depending on the type of mining operation involved, several years may elapse from the initial phases of drilling until commercial operations are commenced and, during such time, the economic feasibility of extracting and processing resources may change. Accordingly, the Company&#8217;s exploration and evaluation programs may not result in any new economically viable mining operations or yield new mineral resources to expand current mineral resources<i>.</i></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Permitting.</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Existing and possible future environmental legislation, regulations and actions could give rise to additional expense, capital expenditures, restrictions and delays in the activities of the Company, the extent of which cannot be predicted. Regulatory requirements and environmental standards are subject to constant evaluation and may become more restrictive, which could materially affect the business of the Company or its ability to develop its properties. Before production can commence on any of its mineral properties, the Company must obtain regulatory and environmental approvals. There is no assurance that such approvals will be obtained, or if they are obtained, if they will be granted on a timely basis. The cost of compliance with existing and future governmental regulations has the potential to reduce the profitability of operations or preclude entirely the economic development of the Company&#8217;s mineral projects and properties.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Permitting of exploration programs in Mexico requires the completion of agreements with the indigenous communities in the vicinity of the project. The timing for the completion of such agreements is unpredictable. The process of obtaining such agreements is also affected by the two-year election cycle for the councils of the indigenous communities.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Political risk and government regulations.</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The Company&#8217;s mining, exploration and development activities are focused in Mexico and Canada, and are subject to national and local laws and regulations, governing prospects, taxes, labor standards, occupational health, land use, environmental protection, mine safety and others which currently or in the future may have a substantial adverse impact on the Company. In order to comply with applicable laws, the Company may be required to incur significant capital or operating expenditures. Existing and possible future environmental legislation, regulation and action could cause additional expense, capital expenditures, restriction and delays in the activities of the Company, the extent of which cannot be reasonably predicted. Violations may require compensation of those suffering loss or damage by reason of the Company&#8217;s mining activities, and the Company may be fined if convicted of an offence under such legislation.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Mining and exploration activities in Mexico and/or Canada may be affected in varying degrees by political instabilities and government regulations relating to the mining industry. Any changes in regulations or shifts in political conditions are beyond the Company&#8217;s control and may adversely affect the business. Operations may also be affected to varying degrees by government regulations with respect to restrictions on production, price controls, export controls, income taxes, expropriation of property, environmental legislation and mine safety. The status of Mexico as a developing country may make it more difficult for the Company to obtain any required financing for projects. The effect of all these factors cannot be accurately predicted. Notwithstanding the progress achieved in improving Mexican political institutions and revitalizing its economy, the present administration, or any successor government, may not be able to sustain the progress achieved. The Company does not carry political risk insurance.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"> <table id="pagebreakb0c93050-698a-4e38-bf25-e51cc06f4347" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-12</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Mexican foreign investment and income tax laws.</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Under the Foreign Investment Law of Mexico, there is no limitation on foreign capital participation in mining operations; however, the applicable laws may change in a way which may adversely impact the Company and its ability to repatriate profits. Under Mexican Income Tax Law, dividends are subject to a withholding tax. Corporations with their tax residence in Mexico are taxed on their worldwide income. Mexico levies a value-added tax, known as the IVA, which is an indirect tax levied on the value added to goods and services, and it is imposed on corporations that carry out activities within Mexican territory. During 2013, the Mexico Senate passed tax reform legislation, which took effect on January 1, 2014. The tax reform includes an increase in the corporate tax rate from 28% to 30%, the introduction of a special mining royalty of 7.5% on the profits derived from the sale of minerals, and the introduction of a mining royalty of 0.5% on the gross income derived from the sale of gold, silver and platinum. These changes may have a material impact on the Company&#8217;s future earnings and cash flows, and possibly on future capital investment decisions.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Foreign corrupt practices legislation.</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The Company is subject to the Foreign Corrupt Practices Act (the &#8220;FCPA&#8221;), the Corruption of Foreign Public Officials Act (Canada) (&#8220;CFPOA&#8221;), and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by persons and issuers as defined by the statutes, for the purpose of obtaining or retaining business. It is our policy to implement safeguards to discourage these practices by our employees; however, our existing safeguards and any future improvements may prove to be less than effective and our employees, consultants, sales agents or distributors may engage in conduct for which the Company might be held responsible. Violations of the FCPA, CFPOA, and/or other laws may result in criminal or civil sanctions and the Company may be subject to other liabilities, which could negatively affect our business, operating results and financial condition. Beginning with our fiscal year ending December 31, 2016, the Company is also subject to the Extractive Sector Transparency Measures Act (Canada) (&#8220;ESTMA&#8221;), which requires us to maintain records of specific payments (including taxes, royalties, fees, production entitlements, bonuses, dividends, and infrastructure improvements) to all government entities in Canada and abroad, and to publicly disclose payments of $100,000 or more in any payment category on an annual basis within 150 days of our fiscal year end, to increase transparency and deter corruption in the extractive industry sector.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Political or economic instability or unexpected regulatory change. </i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Our primary property is located in a foreign country that may be subject to political and economic instability, or unexpected legislative change, than is usually the case in certain other countries, provinces and states. Our mineral exploration and mining activities could be adversely effected by:</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p> <p style="MARGIN: 0px" align="justify"><font face="Symbol"> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">political instability and violence;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">war and civil disturbances;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">expropriation or nationalization;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">changing fiscal regimes;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">fluctuations in currency exchange rates;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">high rates of inflation;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">underdeveloped industrial and economic infrastructure;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">changes in the regulatory environment governing exploration and evaluation assets; and</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">unenforceability of contractual rights, any of which may adversely affect our business in that country.</td></tr></table>&nbsp;</font>&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>We may be adversely affected by fluctuations in foreign exchange rates. </i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We maintain our bank accounts in Canadian and U.S. Dollars and Mexican pesos. Any appreciation in the currency of Mexico or other countries where we may carry out exploration and mining activities against the Canadian or U.S. Dollar will increase our costs of carrying out operations in such countries. In addition, any increase in the Canadian Dollar against the U.S Dollar will result in a loss on our financial statements to the extent we hold funds in Canadian Dollars. Copper, gold and silver are typically sold in U.S. dollars. As a result, the Company is subject to foreign exchange risks relating to the relative value of the U.S. dollar as compared to the Canadian dollar and the Mexican peso. To the extent that the Company generates revenues at the Avino Mine or San Gonzalo Mine, it will be subject to foreign exchange risks as revenues will be received in U.S. dollars while certain operating and capital costs will be incurred primarily in Mexican pesos. A decline in the U.S. dollar would result in a decrease in the Company&#8217;s revenues and adversely impact the Company&#8217;s financial performance.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"> <table id="pagebreak97b947ee-721f-490b-a03c-dacb7fa7c334" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-13</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Substantial decommissioning and reclamation costs.</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Although variable, depending on location and the governing authority, land reclamation requirements are generally imposed on mineral exploration and mining companies in order to minimize the long term effects of land disturbance. Reclamation may include requirements to control dispersion of potentially deleterious effluents and reasonably re-establish pre-disturbance land forms and vegetation. In order to carry out reclamation obligations imposed on us in connection with our mineral exploration and mining activities we must allocate financial resources that might otherwise be spent on further exploration or acquisition programs. The Company reviews and reassesses its reclamation obligations at each of its mines based on updated mine life estimates, rehabilitation and closure plans. As at December 31, 2017, the Company had a provision for approximately US$11.64 million on its Consolidated Statements of Financial Position for the estimated present value of future reclamation and remediation associated with the expected retirement of its mineral properties, plant, and equipment. The present value of these reclamation provisions may be subject to change as a result of management&#8217;s estimates of ultimate decommissioning and reclamation costs, changes in the remediation technology or changes to applicable laws, regulations and interest rates. Such changes will be recorded in the accounts of the Company as they occur.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The costs of performing the decommissioning and reclamation must be funded by the Company&#8217;s operations. These costs can be significant and are subject to change. The Company cannot predict what level of decommissioning and reclamation may be required in the future by regulators. If the Company is required to comply with significant additional regulations or if the actual cost of future decommissioning and reclamation is significantly higher than current estimates, this could have an adverse impact on the Company&#8217;s future cash flows, earnings, results of operations and financial condition.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Factors beyond the Company&#8217;s control.</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">There are a number of factors beyond the Company&#8217;s control. These factors include, but are not limited to, changes in government regulation, political changes, high levels of volatility in metal prices, availability of markets, availability of adequate transportation and smelting facilities, availability of capital, environmental factors and catastrophic risks, and amendments to existing taxes and royalties. These factors and their effects cannot be accurately predicted.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Environmental and health and safety risks.</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The Company&#8217;s operations are subject to environmental regulations promulgated by government agencies from time to time. There is no assurance that environmental regulations will not change in a manner that could have an adverse effect on the Company&#8217;s financial condition, liquidity or results of operations, and a breach of any such regulation may result in the imposition of fines and penalties.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Environmental legislation is constantly expanding and evolving in ways that impose stricter standards and more rigorous enforcement, with higher fines and more severe penalties for non-compliance, and increased scrutiny of proposed projects. There is an increased level of responsibility for companies, and trends towards criminal liability for officers and directors for violations of environmental laws, whether inadvertent or not. The cost of compliance with changes in governmental regulations has the potential to reduce the profitability of the Company&#8217;s operations.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Exploration activities and/or the pursuit of commercial production from the Company&#8217;s mineral claims may be subject to an environmental review process under environmental assessment legislation. Compliance with an environmental review process may be costly and may delay commercial production. Furthermore, there is the possibility that the Company would not be able to proceed with commercial production upon completion of the environmental review process if government authorities do not approve the proposed mine, or if the costs of compliance with government regulation adversely affect the commercial viability of the proposed mine.</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p> <p style="MARGIN: 0px" align="justify"> <table id="pagebreak92bd3add-868d-453b-bd8f-587e8e458a5f" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-14</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The development and operation of a mine involves significant risks to personnel from accidents or catastrophes such as rock-falls, fires, explosions or collapses. These risks could result in damage or destruction of mineral properties, production facilities, casualties, personal injury, environmental damage, mining delays, increased production costs, monetary losses and legal liability. The Company may not be able to obtain insurance to cover these risks at economically feasible premiums. Insurance against certain environmental risks, including potential liability for pollution and other hazards as a result of the disposal of waste products occurring from production, is not generally available to companies within the mining industry. The Company may be materially adversely affected if it incurs losses related to any significant events that are not covered by its insurance policies.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Risks which cannot be insured.</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The Company maintains appropriate insurance for liability and property damage; however, the Company may be subject to liability for hazards that cannot be insured against, which, if such liabilities arise, could impact profitability and result in a decline in the value of the Company&#8217;s securities. The Company&#8217;s operations may involve the use of dangerous and hazardous substances; however, extensive measures are taken to prevent discharges of pollutants in the ground water and the environment. Although the Company will maintain appropriate insurance for liability and property damage in connection with its business, the Company may become subject to liability for hazards that cannot be insured against or which the Company may elect not to insure itself against due to high premium costs or other reasons. In the course of mining and exploration of mineral properties, certain risks and, in particular, unexpected or unusual geological operating conditions including rock bursts, cave-ins, fires, flooding and earthquakes, may occur. It is not always possible to fully insure against such risks and the Company may decide not to take out insurance against such risks as a result of high premiums or other reasons.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Unauthorized mining.</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The mining industry in Mexico is subject to incursions by illegal miners or &#8220;lupios&#8221; who gain unauthorized access to mines to steal ore mainly by manual mining methods. In addition to the risk of losses and disruption of operations, these illegal miners pose a safety and security risk. The Company has taken security measures at its sites to address this issue, and ensure the safety and security of its employees and contractors. These incursions and illegal mining activities can potentially compromise underground structures, equipment and operations, which may lead to production stoppages and impact the Company&#8217;s ability to meet production goals.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Commercialization risk of development and exploration stage properties and ability to acquire additional commercially mineable mineral rights.</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The Company&#8217;s primary operating mineral properties are the Avino Mine and the San Gonzalo Mine. The San Gonzalo Mine has been in production for more than six years, under the ownership of the Company, and has recently generated positive cash flow from operations. The Avino Mine has recently generated positive cash flow from operations. The commercial viability of these mines and the decision to place them into commercial production was not established by a feasibility study. Mineral exploration involves a high degree of risk. There is no assurance that commercially viable quantities of ore will be discovered at the Bralorne Mine Property, or any of the Company&#8217;s other exploration projects, or that its exploration or development projects will be brought into commercial production. </p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Material changes in commodity prices, mineral resources, grades, dilution or recovery rates, or other project parameters may affect the economic viability of any project. The Company&#8217;s future growth and productivity will depend, in part, on the ability to identify and acquire additional commercially mineable mineral rights, and on the costs and results of continued exploration and potential development programs. Mineral exploration and development is highly speculative in nature and is frequently non-productive. Substantial expenditures are required to:</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p> <p style="MARGIN: 0px" align="justify"><font face="Symbol"> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">Establish mineral resources through drilling and metallurgical and other testing techniques;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">Determine metal content and metallurgical recovery processes to extract metal from the ore;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">Evaluate the economic viability or feasibility; and,</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">Construct, renovate, expand or modify mining and processing facilities.</td></tr></table></font>&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"> <table id="pagebreakc9f4dcb2-6774-44e3-ac7f-8b329db28ff1" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-15</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">In addition, if potentially economic mineralization is discovered, it could take several years from the initial phases of exploration until production is possible. During this time, the economic feasibility of production may change. As a result of these uncertainties, there can be no assurance that the Company will successfully acquire additional commercially mineable (or viable) mineral rights.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Concentration of customers.</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The Company produces concentrates containing silver and gold. Concentrates are the product of the processing of ore mined by the Company at its processing plants. The Company sells its concentrates to metals traders and smelters. During the year ended December 31, 2017, a limited number of customers accounted for all of the Company&#8217;s revenues of which one customer accounted for more than 50% of revenues. The Company believes that a small number of customers will continue to represent a significant portion of its total revenue. However, the Company does not consider itself economically dependent upon any single customer or combination of customers due to the existence of other potential metals traders or smelters capable of purchasing the Company&#8217;s production. There is a risk that the Company could be subject to limited smelter availability and capacity, or it may not be able to maintain its current significant customers or secure significant new customers on similar terms, any of which may have a material adverse effect on the Company&#8217;s business, financial condition, operating results and cash flows.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Risks associated with transportation of concentrate.</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The concentrates produced by the Company have significant value, and are loaded onto road vehicles for transport to smelters in Mexico or to sea ports for export to smelters in foreign markets, such as Europe and Asia, where the metals are extracted. The geographic location of the Company&#8217;s operating mines in Mexico and trucking routes taken through the country to the smelters and ports for delivery, give rise to risks including concentrate theft, road blocks and terrorist attacks, losses caused by adverse weather conditions, delays in delivery of shipments, and environmental liabilities in the event of an accident or spill.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Theft of concentrate.</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The Company may have significant concentrate inventories at its facilities or on consignment at other warehouses awaiting shipment. The Company has taken steps to secure its concentrate, whether in storage or in transit. The Company has insurance coverage for its inventory while in transit; however, recovery of the full market value may not always be possible. Despite these risk mitigation measures, there remains a continued risk that theft of concentrate may have a material impact on the Company&#8217;s financial results.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Credit and counterparty risk.</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Credit risk is the risk of financial loss if a customer or counterparty fails to meet its contractual obligations. The Company&#8217;s credit risk relates primarily to cash and cash equivalents, trade receivables in the ordinary course of business, and value added tax refunds primarily due from the Mexican taxation authorities, and other receivables. The Company sells and receives payment upon delivery of its concentrates primarily through international organizations. These are generally large and established organizations with good credit ratings. Payments of receivables are scheduled, routine and received within the specific terms of the contract. If a customer or counterparty does not meet its contractual obligations, or if they become insolvent, the Company may incur losses for products already shipped and be forced to sell greater volumes of concentrate than intended in the spot market, or there may be no market for the concentrates, and the Company&#8217;s future operating results may be materially adversely impacted as a result.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"> <table id="pagebreakd13e7e1d-dad1-4f72-af8c-46052d037e87" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-16</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Acquisitions the Company may undertake may change our business or expose us to risks.</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">From time to time, the Company undertakes evaluations of opportunities to acquire additional silver and gold mining properties. In pursuit of such opportunities, the Company may fail to select appropriate acquisition candidates or negotiate acceptable arrangements, including arrangements to finance acquisitions or integrate the acquired businesses and their personnel into the Company, and may fail to assess the value, strengths, weaknesses, contingent and other liabilities and potential profitability of acquisition candidates, or to achieve identified and anticipated operating and financial results. Acquisitions may result in unanticipated costs, diversion of management attention from existing businesses, and the potential loss of the Company&#8217;s key employees or of those of the acquired business. The Company cannot assure that it can complete any acquisition or business arrangement that it pursues, or is pursuing, on favorable terms, or that any acquisitions or business arrangements completed will ultimately benefit the Company. Acquisitions may involve a number of special risks, circumstances or legal liabilities. These and other risks related to acquiring and operating acquired properties and companies could have a material adverse effect on the Company&#8217;s results of operations and financial condition. Further, to acquire properties and companies, the Company may be required to use available cash, incur debt, issue additional securities or a combination of any of these. This could affect the Company&#8217;s future flexibility and ability to raise capital, to operate, explore and develop its properties and could dilute existing shareholders and decrease the price of the common shares of the Company. There may be no right or ability for the Company&#8217;s shareholders to evaluate the merits or risks of any future acquisition undertaken by the Company, except as required by applicable laws and regulations.</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">In addition, any acquisitions may be significant in size, may change the scale of the Company&#8217;s business, and may expose the Company to new geographic, political, operating, financial and geological risks. The Company&#8217;s success in its acquisition activities depends on its ability to identify suitable acquisition candidates, acquire them on acceptable terms, and integrate their operations successfully. Any acquisitions would be accompanied by risks, such as a significant decline in the price of silver or gold, the mineralized material proving to be below expectations, the difficulty of assimilating the operations and personnel of any acquired companies, the potential disruption of the Company&#8217;s ongoing business, the inability of management to maximize the financial and strategic position of the Company through the successful integration of acquired assets and businesses, the maintenance of uniform standards, controls, procedures and policies, the impairment of relationships with customers and contractors as a result of any integration of new management personnel and the potential unknown liabilities associated with acquired mining properties. There can be no assurance that the Company would be successful in overcoming these risks or any other problems encountered in connection with such acquisitions.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Current global financial conditions.</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Financial markets globally have been subject to increased volatility. Access to financing has been negatively affected by liquidity crises and uncertainty with respect to sovereign defaults throughout the world. These factors may impact the ability of the Company to obtain loans and other forms of financing in the future and, if obtained, on terms favorable to the Company. If these levels of volatility and market turmoil continue or worsen, the Company may not be able to secure appropriate debt or equity financing when needed, any of which could affect the trading price of the Company&#8217;s securities in an adverse manner. </p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>We will have broad discretion over the use of the net proceeds to us from this offering and may apply them to uses that do not improve our operating results or the value of your securities.</i></b></p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We will have broad discretion to use the net proceeds to us from this offering, including for any of the purposes described in the section titled &#8220;Use of Proceeds,&#8221; and investors will be relying solely on the judgment of our board of directors and management regarding the application of these proceeds. Investors will not have the opportunity, as part of their investment decision, to assess whether the proceeds are being used appropriately. Our use of the proceeds may not improve our operating results or increase the value of the securities being offered hereby. Because of the number and variability of factors that will determine our use of the net proceeds from this offering, their ultimate use may vary substantially from their currently intended use. The failure of our management to use these funds effectively could have a material adverse effect on our business, cause the market price of our common share to decline or delay the development of our properties.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Dilution.</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">There are a number of outstanding securities and agreements pursuant to which common shares of the Company may be issued in the future. If these common shares are issued, this will result in further dilution to the Company&#8217;s shareholders. In addition, depending on the outcome of the Company&#8217;s exploration programs and mining operations, the Company may issue additional shares to finance additional programs and mining operations or to acquire additional properties. In the event that the Company is required to issue additional shares or decides to enter into joint arrangements with other parties in order to raise capital through the sale of equity securities, investors&#8217; interests in the Company will be diluted and investors may suffer dilution in their net book value per share depending on the price at which such securities are sold. The dilution may result in a decline in the market price of the Company&#8217;s shares. </p> <p style="MARGIN: 0px" align="justify">&nbsp;</p> <p style="MARGIN: 0px" align="justify"> <table id="pagebreak9e24c973-2ed8-4183-9769-30f61334408d" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-17</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Dividend policy. </i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We have never paid, and we do not intend to pay, any cash dividends in the foreseeable future. </p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Limited and volatile trading volume. </i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Although the Company&#8217;s common shares are listed on the NYSE American, the Toronto Stock Exchange, referred to as the &#8220;TSX&#8221; (the Company graduated from the TSX Venture Exchange on January 8, 2018), the volume of trading has been limited and volatile in the past and is likely to continue to be so in the future, reducing the liquidity of an investment in the Company&#8217;s common shares and making it difficult for investors to readily sell their common shares in the open market. There can be no assurance that there will be sufficient liquidity of the common shares on the trading market, and that the Company will continue to meet the listing requirements of the TSX or the NYSE American for its common shares, or achieve the listing of its securities on any other public stock exchange.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Volatility of share price. </i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">In recent years, securities markets in general have experienced a high level of price volatility. The market price of many resource companies, particularly those, like the Company, that are considered speculative exploration and mining companies, have experienced wide fluctuations in price, resulting in substantial losses to investors who have sold their shares at a low price point. These fluctuations are based only in part on the level of progress of exploration, and can reflect general economic and market trends, world events or investor sentiment, and may sometimes bear no apparent relation to any objective factors or criteria. These broad market and industry factors may adversely affect the market price of the Company&#8217;s shares, regardless of operating performance. In the past, securities class-action litigation has often been instituted following periods of volatility in the market price of securities of other companies. Such litigation, if instituted against the Company, could result in substantial costs and a diversion of management&#8217;s attention and resources. Significant fluctuation in the Company&#8217;s common share price is likely to continue. </p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>An investment in our common shares may result in the loss of your entire investment.</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">An investment in our common shares is speculative and may result in the loss of your entire investment. Only potential investors who are experienced in high risk investments and who can afford to lose their entire investment should consider an investment in the Company&#8217;s common shares.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Certain provisions of organizational documents may discourage takeovers and business combinations that our shareholders may consider in their best interests, which could negatively affect our stock price. </i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Certain provisions of our Articles of Incorporation (&#8220;Articles&#8221;) may have the effect of delaying or preventing a change in control of our Company or deterring tender offers for our common shares that other shareholders may consider in their best interests. </p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Our Articles authorize us to issue an unlimited number of common shares. Shareholder approval is not necessary to issue our common shares. Issuance of these common shares could have the effect of making it more difficult and more expensive for a person or group to acquire control of us, and could effectively be used as an anti-takeover device. </p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Our Articles provide for an advance notice procedure for shareholders to nominate director candidates for election or to bring business before an annual meeting of shareholders, including proposed nominations of persons for election to our board of directors, and require that special meetings of shareholders be called by the board or shareholders who hold at least 5% of the total issued and outstanding shares. </p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"> <table id="pagebreakcb0534c5-17b5-4756-ae85-0b4422f05aea" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-18</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Conflicts of interest. </i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">There are potential conflicts of interest to which all of the directors, officers, insiders and promoters of the Company will be subject in connection with the operations of the Company. All of the directors, officers, insiders and promoters are engaged in and will continue to be engaged in corporations or businesses which may be in competition with the Company. Accordingly, situations may arise where all of the directors, officers, insiders and promoters will be in direct competition with the Company. The Company has a process to identify and declare any conflicts. Conflicts, if any, will be subject to the procedures and remedies as provided under the Business Corporations Act of British Columbia. The directors and officers of the Company are required by law and the Corporation&#8217;s Code of Business Conduct &amp; Ethics to act in the best interests of the Company. They may have the same obligations to the other companies and entities for which they act as directors or officers. The discharge by the directors and officers of their obligations to the Company may result in a breach of their obligations to these other companies and entities and, in certain circumstances, this could expose the Company to liability to those companies and entities. Similarly, the discharge by the directors and officers of their obligations to these other companies and entities could result in a breach of their obligation to act in the best interests of the Company. Such conflicting legal obligations may expose the Company to liability to others and impair its ability to achieve its business objectives.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Dependence on management. </i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We are dependent on the services of key executives including our President and Chief Executive Officer and other highly skilled and experienced executives and personnel focused on advancing our corporate objectives as well as the identification of new opportunities for growth and funding. Due to our relatively small size, the loss of these persons or our inability to attract and retain additional highly skilled employees required for our activities may have a material adverse effect on our business and financial condition.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Competition for recruitment and retention of qualified personnel. </i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We compete with other exploration and mining companies, many of which have greater financial resources than us or are further in their advancement, for the recruitment and retention of qualified employees and other personnel. Competition for exploration and mining resources at all levels is highly cyclical and can quickly become very intense, particularly affecting the availability of manpower, drill rigs and supplies. Recruiting and retaining qualified personnel in the future is critical to the Company&#8217;s success. As the Company explores its Avino Mine and San Gonzalo Mine and other properties, the need for skilled labor will increase. The number of persons skilled in the exploration of mining properties is limited and competition for this workforce is intense. The exploration and other initiatives of the Company may be significantly delayed or otherwise adversely affected if the Company cannot recruit and retain qualified personnel and/or obtain other exploration and mining resources as and when required.<b><i></i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Officers and directors are indemnified against all costs, charges and expenses incurred by them.</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The Company&#8217;s Articles contain provisions limiting the liability of its officers and directors for all acts, receipts, neglects or defaults of themselves and all of the other officers or directors for any other loss, damage or expense incurred by the Company which happen in the execution of the duties of such officers or directors. Such limitations on liability may reduce the likelihood of derivative litigation against the Company&#8217;s officers and directors and may discourage or deter shareholders from suing the officers and directors based upon breaches of their duties to the Company, though such an action, if successful, might otherwise benefit the Company and its shareholders.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Difficulty for U.S. Investors to effect services of process against the Company. </i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The Company is incorporated under the laws of the Province of British Columbia, Canada. Consequently, it will be difficult for U.S. Investors to affect service of process in the United States upon the directors or officers of the Company, or to realize in the United States upon judgments of United States courts predicated upon civil liabilities under the Exchange Act. The majority of the Company&#8217;s directors and officers are residents of Canada and many of the Company&#8217;s assets are located outside of the United States. A judgment of a United States court predicated solely upon such civil liabilities would probably be enforceable in Canada by a Canadian court if the United States court in which the judgment was obtained had jurisdiction, as determined by the Canadian court, in the matter. There is substantial doubt whether an original action could be brought successfully in Canada against any of such persons or the Company predicated solely upon such civil liabilities.</p> <p style="MARGIN: 0px" align="justify">&nbsp;</p> <p style="MARGIN: 0px" align="justify"> <table id="pagebreak0c94f97e-21d4-42ac-badb-46a67157c5e2" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-19</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b><a name="CAPITALIZATION AND INDEBTEDNESS1">CAPITALIZATION AND INDEBTEDNESS</a></b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">The table below sets forth our capitalization and indebtedness as of June 30, 2018.</p> <p style="MARGIN: 0px">&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15"> <td width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">on an actual basis; and</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">on an as adjusted basis assuming that an aggregate of 8,743,169 common shares are sold at a price of $0.92 per share, the reported sale price of our common shares on the NYSE American on August 17, 2018, for aggregate gross proceeds of approximately $8,000,000 less commissions and estimated aggregate offering expenses.</p></td></tr></table> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in">Table amounts in thousands </p> <p style="MARGIN: 0px">&nbsp;</p> <table style="WIDTH: 100%; TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: black 1px solid" colspan="6"> <p style="MARGIN: 0px" align="center"><b>As of June 30, 2018</b></p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr> <td valign="bottom"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="hdcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" colspan="2" align="center"> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Actual (1)</b></p></td> <td valign="bottom"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="hdcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" colspan="2" align="center"> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>As Adjusted (1)</b></p></td> <td valign="bottom"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" colspan="2" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" colspan="2" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Debt:</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" colspan="2" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" colspan="2" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Term facility</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">667</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">667</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Equipment loans</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">589</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">589</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Finance lease obligations</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1,396</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1,396</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Total long-term debt </p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">2,652</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">2,652</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#cceeff"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Equity:</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Share capital</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">85,417</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">93,052</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Equity reserves</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">10,603</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right"> <p style="MARGIN: 0px">10,603</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Treasury shares (14,180 shares, at cost)</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">(97</td> <td valign="bottom" width="1%">)</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">(97</td> <td valign="bottom" width="1%">)</td></tr> <tr bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Accumulated other comprehensive loss</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">(5,800</td> <td valign="bottom" width="1%">)</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">(5,800</td> <td valign="bottom" width="1%">)</td></tr> <tr bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Accumulated deficit</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">(17,246</td> <td valign="bottom" width="1%">)</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">(17,246</td> <td valign="bottom" width="1%">)</td></tr> <tr bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Total equity</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">72,877</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">80,512</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Total capitalization</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">75,529</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">83,164</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr></table> <p style="MARGIN: 0px">_________________&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15"> <td valign="top" width="4%"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><sup>(1)</sup></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Assumes a sale price of $0.92 per common share, which was the reported closing price of a common share on August 17, 2018 and that all common shares will be sold in the &#8220;at the market offering&#8221;.</p></td></tr></table> <p style="MARGIN: 0px 0px 0px 0in">&nbsp; <table id="pagebreake01051af-8470-4ae7-942c-db67d75e3ac1" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-20</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><a name="USE OF PROCEEDS1">USE OF PROCEEDS</a></b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We cannot assure you that we will receive any proceeds in connection with the common shares offered pursuant to this prospectus. Assuming gross proceeds from the sale of $8,000,000 of our common shares and expenses associated with the offering of sales commissions of $240,000 and other expenses of the offering of $125,000, our estimated net proceeds from the offering will be approximately $7,635,000. We currently intend to use the net proceeds of this offering primarily for advancing the development of the Avino mine and its operations and production; and to a lesser extent for the exploration and development of the Bralorne Mine Property; and for general working capital. </p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Although we intend to use the net proceeds of this offering for the foregoing purposes, the planned expenditures may change significantly and may not be in the order of priority as indicated above. As a result, our management will have broad discretion in the allocation of any net proceeds. Pending use of any net proceeds, we would expect to invest any proceeds in a variety of capital preservation instruments, including short-term, investment-grade, interest-bearing instruments.</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px"> <table id="pagebreak9ca27989-2c82-4808-9d32-c6a865694042" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-21</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b><a name="MARKET FOR OUR COMMON SHARES1">MARKET FOR OUR COMMON SHARES</a></b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Our common shares are listed on the NYSE American and TSX under the symbol ASM. The Company graduated from the TSX Venture Exchange (&#8220;TSX-V&#8221;) on January 8, 2018. The following sets forth the high and low prices expressed in U.S. Dollars on the NYSE American and in Canadian Dollars on the TSX and TSX-V for the past full six months and through August 17, 2018 and for each quarter for the past two fiscal years.</p> <p style="MARGIN: 0px">&nbsp;</p> <table style="WIDTH: 100%; TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td valign="bottom"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="hdcell" valign="bottom" colspan="6" align="center"> <p style="MARGIN: 0px" align="center"><b>NYSE American</b></p></td> <td valign="bottom"> <p style="MARGIN: 0px" align="center">&nbsp;</p></td> <td valign="bottom"> <p style="MARGIN: 0px" align="center">&nbsp;</p></td> <td id="hdcell" valign="bottom" colspan="6" align="center"> <p style="MARGIN: 0px" align="center"><b>TSX and TSX-V</b></p></td> <td valign="bottom"> <p style="MARGIN: 0px" align="center">&nbsp;</p></td></tr> <tr> <td valign="bottom"> <p style="MARGIN: 0px" align="center">&nbsp;</p></td> <td valign="bottom"> <p style="MARGIN: 0px" align="center">&nbsp;</p></td> <td id="hdcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" colspan="6" align="center"> <p style="MARGIN: 0px" align="center"><b>(United States Dollars)</b></p></td> <td valign="bottom"> <p style="MARGIN: 0px" align="center">&nbsp;</p></td> <td valign="bottom"> <p style="MARGIN: 0px" align="center">&nbsp;</p></td> <td id="hdcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" colspan="6" align="center"> <p style="MARGIN: 0px" align="center"><b>(Canadian Dollars)</b></p></td> <td valign="bottom"> <p style="MARGIN: 0px" align="center">&nbsp;</p></td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid" valign="bottom"> <p style="MARGIN: 0px" align="left"><b>Last Six Months</b></p></td> <td valign="bottom"> <p style="MARGIN: 0px" align="center">&nbsp;</p></td> <td id="hdcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" colspan="2" align="center"> <p style="MARGIN: 0px" align="center"><b>High</b></p></td> <td valign="bottom"> <p style="MARGIN: 0px" align="center">&nbsp;</p></td> <td valign="bottom"> <p style="MARGIN: 0px" align="center">&nbsp;</p></td> <td id="hdcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" colspan="2" align="center"> <p style="MARGIN: 0px" align="center"><b>Low</b></p></td> <td valign="bottom"> <p style="MARGIN: 0px" align="center">&nbsp;</p></td> <td valign="bottom"> <p style="MARGIN: 0px" align="center">&nbsp;</p></td> <td id="hdcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" colspan="2" align="center"> <p style="MARGIN: 0px" align="center"><b>High</b></p></td> <td valign="bottom"> <p style="MARGIN: 0px" align="center">&nbsp;</p></td> <td valign="bottom"> <p style="MARGIN: 0px" align="center">&nbsp;</p></td> <td id="hdcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" colspan="2" align="center"> <p style="MARGIN: 0px" align="center"><b>Low</b></p></td> <td valign="bottom"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" colspan="2" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" colspan="2" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" colspan="2" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" colspan="2" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">August 2018 (through August 17, 2018)</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%">$</td> <td id="ffcell" valign="bottom" width="9%" align="right">1.18</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%">$</td> <td id="ffcell" valign="bottom" width="9%" align="right">0.85</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%">$</td> <td id="ffcell" valign="bottom" width="9%" align="right">1.49</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%">$</td> <td id="ffcell" valign="bottom" width="9%" align="right">1.15</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">July 2018 </p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.31</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.08</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.72</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.30</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">June 2018</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.33</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.21</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.74</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.60</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">May 2018</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.46</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.31</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.86</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.68</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">April 2018</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.54</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.37</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.95</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.73</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">March 2018</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.39</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.25</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.78</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.60</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">February 2018</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.43</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.24</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.77</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.58</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">January 2018</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%">$</td> <td id="ffcell" valign="bottom" width="9%" align="right">1.57</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%">$</td> <td id="ffcell" valign="bottom" width="9%" align="right">1.40</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%">$</td> <td id="ffcell" valign="bottom" width="9%" align="right">1.97</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%">$</td> <td id="ffcell" valign="bottom" width="9%" align="right">1.75</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#ffffff"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><b>For the Quarter Ended</b></p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">June 30, 2018</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%">$</td> <td id="ffcell" valign="bottom" width="9%" align="right">1.54</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%">$</td> <td id="ffcell" valign="bottom" width="9%" align="right">1.21</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%">$</td> <td id="ffcell" valign="bottom" width="9%" align="right">1.95</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%">$</td> <td id="ffcell" valign="bottom" width="9%" align="right">1.60</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Through August 8, 2018</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.30</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.14</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.72</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.50</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">March 31, 2018</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.57</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.24</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.97</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.58</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">December 31, 2017</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.62</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.14</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">2.04</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.44</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">September 30, 2017</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.89</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.41</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">2.35</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.85</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">June 30, 2017</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.90</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.39</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">2.53</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.85</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">March 31, 2017</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">2.13</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.32</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">2.80</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.75</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">December 31, 2016</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">2.59</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.12</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">3.45</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.52</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">September 30, 2016</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">3.14</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.91</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">4.05</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">2.53</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">June 30, 2016</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">2.60</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">0.99</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">3.29</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1.30</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">March 31, 2016</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%">$</td> <td id="ffcell" valign="bottom" width="9%" align="right">1.19</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%">$</td> <td id="ffcell" valign="bottom" width="9%" align="right">0.71</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%">$</td> <td id="ffcell" valign="bottom" width="9%" align="right">1.59</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%">$</td> <td id="ffcell" valign="bottom" width="9%" align="right">1.03</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr></table> <p style="MARGIN: 0px 0px 0px 0in" align="center">&nbsp; <table id="pagebreak78ea2a79-e71f-4016-bbe2-3dd9e29c637a" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-22</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><a name="PLAN OF DISTRIBUTION1">PLAN OF DISTRIBUTION</a></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We have entered into a Controlled Equity Offering<sup>SM</sup> Sales Agreement with Cantor Fitzgerald &amp; Co. (&#8220;Cantor&#8221;) under which we may issue and sell our common shares having an aggregate gross sales price of up to $8,000,000 from time to time through Cantor, acting as agent. The sales agreement has been filed as an exhibit to our registration statement on Form F-3 of which this prospectus forms a part.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Upon delivery of a placement notice and subject to the terms and conditions of the sales agreement, Cantor may sell our common shares by any method permitted by law deemed to be an &#8220;at the market offering&#8221; as defined in Rule 415(a)(4) promulgated under the Securities Act. We may instruct Cantor not to sell common shares if the sales cannot be effected at or above the price designated by us from time to time. We or Cantor may suspend the offering of common shares upon notice and subject to other conditions.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We will pay Cantor commissions, in cash, for its services in acting as agent in the sale of our common shares. Cantor will be entitled to compensation at a fixed commission rate of 3.0% of the gross sales price per share sold. Because there is no minimum offering amount required as a condition to close this offering, the actual total public offering amount, commissions and proceeds to us, if any, are not determinable at this time. We have also agreed to reimburse Cantor for certain specified expenses, including the fees and disbursements of its legal counsel in an amount not to exceed $50,000. We estimate that the total expenses for the offering, excluding compensation and reimbursements payable to Cantor under the terms of the sales agreement, and other related expenses, will be approximately $75,000.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"> <table id="pagebreak11a6719d-7649-4c8e-94ea-3864e7c7622b" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-23</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Settlement for sales of common shares will occur on the second business day following the date on which any sales are made, or on some other date that is agreed upon by us and Cantor in connection with a particular transaction, in return for payment of the net proceeds to us. Sales of our common shares as contemplated in this prospectus will be settled through the facilities of The Depository Trust Company or by such other means as we and Cantor may agree upon. There is no arrangement for funds to be received in an escrow, trust or similar arrangement.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Cantor will use its commercially reasonable efforts, consistent with its sales and trading practices, to solicit offers to purchase the common shares under the terms and subject to the conditions set forth in the sales agreement. In connection with the sale of the common shares on our behalf, Cantor will be deemed to be an &#8220;underwriter&#8221; within the meaning of the Securities Act and the compensation of Cantor will be deemed to be underwriting commissions or discounts. We have agreed to provide indemnification and contribution to Cantor against certain civil liabilities, including liabilities under the Securities Act.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The offering of our common shares pursuant to the sales agreement will terminate as permitted therein. We and Cantor may each terminate the sales agreement at any time upon ten (10) days prior notice.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Cantor and its affiliates may in the future provide various investment banking, commercial banking and other financial services for us and our affiliates, for which services they may in the future receive customary fees. To the extent required by Regulation M, Cantor will not engage in any market making activities involving our common shares while the offering is ongoing under this prospectus.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">This prospectus in electronic format may be made available on a website maintained by Cantor and Cantor may distribute this prospectus electronically.</p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp; <table id="pagebreakfcc70828-7244-4bc7-9421-85b788a77c76" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-24</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><a name="CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS1">CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS</a></b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The following is a general summary of certain material U.S. federal income tax considerations applicable to a U.S. Holder (as defined below) arising from the acquisition of common shares pursuant to the Offering and the ownership and disposition of the common shares. This summary applies only to U.S. Holders who hold common shares as capital assets (generally, property held for investment) and who acquire common shares at their original issuance pursuant to the Offering, and does not apply to any subsequent U.S. Holder of a common share.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">This summary is for general information purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal income tax considerations that may apply to a U.S. Holder as a result of the ownership and disposition of common shares. In addition, this summary does not take into account the individual facts and circumstances of any particular U.S. Holder that may affect the U.S. federal income tax consequences to such U.S. Holder, including specific tax consequences to a U.S. Holder under an applicable tax treaty. Accordingly, this summary is not intended to be, and should not be construed as, legal or U.S. federal income tax advice with respect to any particular U.S. Holder. In addition, this summary does not address the U.S. federal alternative minimum, U.S. federal estate and gift, U.S. Medicare contribution, U.S. state and local, or non-U.S. tax consequences of the acquisition, ownership or disposition of common shares. Except as specifically set forth below, this summary does not discuss applicable tax reporting requirements. Each U.S. Holder should consult its own tax advisor regarding all U.S. federal, U.S. state and local and non-U.S. tax consequences of the acquisition, ownership , or disposition of common shares.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">No opinion from U.S. legal counsel or ruling from the Internal Revenue Service (the &#8220;IRS&#8221;) has been requested, or will be obtained, regarding the U.S. federal income tax consequences of the acquisition, ownership or disposition of common shares. This summary is not binding on the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, any position taken in this summary. In addition, because the authorities upon which this summary is based are subject to various interpretations, the IRS and the U.S. courts could disagree with one or more of the positions taken in this summary.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"> <table id="pagebreak9ad8bbcb-cf2a-4687-8487-a959d868305c" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-25</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Scope of This Disclosure</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify"><i>Authorities</i> This summary is based on the Internal Revenue Code of 1986, as amended (the &#8220;Code&#8221;), Treasury Regulations (whether final, temporary, or proposed), published rulings of the IRS, published administrative positions of the IRS, the Convention Between Canada and the United States of America with Respect to Taxes on Income and on Capital, signed September 26, 1980, as amended (the &#8220;Canada-U.S. Tax Convention&#8221;), and U.S. court decisions that are applicable and, in each case, as in effect and available, as of the date hereof. Any of the authorities on which this summary is based could be changed in a material and adverse manner at any time, and any such change could be applied on a retroactive or prospective basis which could affect the U.S. federal income tax considerations described in this summary. This summary does not discuss the potential effects, whether adverse or beneficial, of any proposed legislation that, if enacted, could be applied on a retroactive or prospective basis.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify"><b><i>U.S. Holders</i></b><i>. </i>For purposes of this summary, the term &#8220;U.S. Holder&#8221; means a beneficial owner of common shares that is for U.S. federal income tax purposes:</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p><font face="Symbol"> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">An individual who is a citizen or resident of the U.S.;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">A corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the U.S., any state thereof or the District of Columbia;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">An estate the income of which is subject to U.S. federal income taxation regardless of its source; or</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">A trust that (a) is subject to the primary supervision of a court within the U.S. and the control of one or more U.S. persons for all substantial decisions or (b) has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.</td></tr></table></font> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify"><b><i>Non-U.S. Holders</i></b><i>. </i>For purposes of this summary, a &#8220;non-U.S. Holder&#8221; is a beneficial owner of common shares that is not a partnership (or other &#8220;pass-through&#8221; entity) for U.S. federal income tax purposes and is not a U.S. Holder. This summary does not address the U.S. federal income tax considerations applicable to non-U.S. Holders arising from the acquisition, ownership or disposition of common shares.</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Accordingly, a non-U.S. Holder should consult its own tax advisor regarding all U.S. federal, U.S. state and local, and non-U.S. tax consequences (including the potential application of and operation of any income tax treaties) relating to the purchase of the common shares pursuant to the Offering and the acquisition, ownership or disposition of common shares.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify"><b><i>Transactions Not Addressed</i></b><i>. </i>This summary does not address the tax consequences of transactions effected prior or subsequent to, or concurrently with, any purchase of the securities (whether or not any such transactions are undertaken in connection with the purchase of the securities), other than the U.S. federal income tax considerations to U.S. Holders of the acquisition of common shares and the ownership and disposition of such common shares.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>U.S. Holders Subject to Special U.S. Federal Income Tax Rules Not Addressed</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">This summary does not address the U.S. federal income tax considerations of the acquisition, ownership, or disposition of common shares by U.S. Holders that are subject to special provisions under the Code, including, but not limited to, the following: (a) tax-exempt organizations, qualified retirement plans, individual retirement accounts, or other tax-deferred accounts; (b) financial institutions, underwriters, insurance companies, real estate investment trusts, or regulated investment companies; (c) broker-dealers, dealers, or traders in securities or currencies that elect to apply a &#8220;mark-to-market&#8221; accounting method; (d) U.S. Holders that have a &#8220;functional currency&#8221; other than the U.S. dollar; (e) U.S. Holders that own common shares as part of a straddle, hedging transaction, conversion transaction, constructive sale, or other arrangement involving more than one position; (f) U.S. Holders that acquire common shares in connection with the exercise of employee stock options or otherwise as compensation for services; (g) U.S. Holders that hold common shares other than as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment purposes); (h) U.S. Holders that own directly, indirectly, or by attribution, 10% or more, by voting power or value, of the outstanding stock of the Company; and (i) U.S. Holders subject to Section 451(b) of the Code. This summary also does not address the U.S. federal income tax considerations applicable to U.S. Holders who are: (a) U.S. expatriates or former long-term residents of the U.S.; (b) persons that have been, are, or will be a resident or deemed to be a resident in Canada for purposes of the Tax Act; (c) persons that use or hold, will use or hold, or that are or will be deemed to use or hold common shares in connection with carrying on a business in Canada; (d) persons whose common shares constitute &#8220;taxable Canadian property&#8221; under the Tax Act; or (e) persons that have a permanent establishment in Canada for purposes of the Canada-U.S. Tax Convention. U.S. Holders that are subject to special provisions under the Code, including U.S. Holders described immediately above, should consult their own tax advisors regarding all U.S. federal, U.S. state and local, and non-U.S. tax consequences (including the potential application and operation of any income tax treaties) relating to the acquisition, ownership, or disposition of common shares.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"> <table id="pagebreak2bd1deca-3d0d-4865-a4b9-1d2289ac82a7" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-26</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">If an entity or arrangement that is classified as a partnership (or other &#8220;pass-through&#8221; entity) for U.S. federal income tax purposes holds common shares, the U.S. federal income tax consequences to such partnership and the partners (or other owners) of such partnership of the acquisition, ownership, or disposition of the common shares generally will depend on the activities of the partnership and the status of such partners (or other owners). This summary does not address the U.S. federal income tax consequences for any such partner or partnership (or other &#8220;pass-through&#8221; entity or its owners). Owners of entities and arrangements that are classified as partnerships (or other &#8220;pass-through&#8221; entities) for U.S. federal income tax purposes should consult their own tax advisors regarding the U.S. federal income tax consequences of the acquisition, ownership, or disposition of common shares.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Distributions on Common Shares</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">As stated above, we have never paid a dividend and have no intention of paying a dividend. Subject to the PFIC rules discussed below, a U.S. Holder that receives a distribution, including a constructive distribution, with respect to Common Shares will be required to include the amount of such distribution in gross income as a dividend (without reduction for any Canadian income tax withheld from such distribution) to the extent of the current or accumulated &#8220;earnings and profits&#8221; of the Company, as computed for U.S. federal income tax purposes. To the extent that a distribution exceeds the current and accumulated &#8220;earnings and profits&#8221; of the Company, such distribution will be treated first as a tax-free return of capital to the extent of a U.S. Holder&#8217;s tax basis in the common shares and thereafter as gain from the sale or exchange of such common shares (see &#8220;Sale or Other Taxable Disposition of Common Shares&#8221; below). However, the Company may not maintain calculations of earnings and profits in accordance with U.S. federal income tax principles, and each U.S. Holder should therefore assume that any distribution by the Company with respect to the common shares will be reported to them as a dividend. Dividends received on the common shares generally will not be eligible for the &#8220;dividends received deduction&#8221; available to U.S. corporate shareholders receiving dividends from U.S. corporations. If the Company is eligible for the benefits of the Canada-U.S. Tax Convention, or another qualifying income tax treaty with the United States that includes an exchange of information program which the U.S. Treasury Department has determined is satisfactory for these purposes, or its shares are readily tradable on an established securities market in the U.S., dividends paid by the Company to non-corporate U.S. Holders generally will be eligible for the preferential tax rates applicable to long-term capital gains, provided certain holding period and other conditions are satisfied, including that the Company not be classified as a PFIC in the tax year of distribution or in the preceding tax year. The dividend rules are complex, and each U.S. Holder should consult its own tax advisor regarding the application of such rules.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Sale or Other Taxable Disposition of Common Shares</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Subject to the PFIC rules discussed below, upon the sale or other taxable disposition of common shares, a U.S. Holder generally will recognize a capital gain or loss in an amount equal to the difference between the amount of cash plus the fair market value of any property received and such U.S. Holder&#8217;s tax basis in the common shares sold or otherwise disposed of. Such capital gain or loss will generally be a long-term capital gain or loss if, at the time of the sale or other taxable disposition, the U.S. Holder&#8217;s holding period for the common shares is more than one year. Preferential tax rates apply to long-term capital gains of non-corporate U.S. Holders. Deductions for capital losses are subject to significant limitations under the Code. A U.S. Holder&#8217;s tax basis in common shares generally will be such U.S. Holder&#8217;s U.S. dollar cost for such common shares.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>PFIC Status of the Company</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Because the Company is producing revenue from its mining operations, the Company does not believe that it was classified as a PFIC for its taxable year ended December 31, 2017. However, the Company has not performed an analysis of whether or not it will be deemed a PFIC for its current taxable year. If the Company is or becomes a PFIC, the foregoing description of the U.S. federal income tax consequences to U.S. Holders of the acquisition, ownership and disposition of Common Shares will be different. The U.S. federal income tax consequences of owning and disposing of common shares if the Company is or becomes a PFIC are described below under the heading &#8220;Tax Consequences if the Company is a PFIC.&#8221;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"> <table id="pagebreak475ded49-e542-4171-97da-85126208895f" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-27</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">A non-U.S. corporation is a PFIC for each tax year in which (i) 75% or more of its gross income is passive income (as defined for U.S. federal income tax purposes) (the &#8220;income test&#8221;) or (ii) 50% or more (by value) of its assets (based on an average of the quarterly values of the assets during such tax year) either produce or are held for the production of passive income (the &#8220;asset test&#8221;). For purposes of the PFIC provisions, &#8220;gross income&#8221; generally includes sales revenues less cost of goods sold, plus income from investments and from incidental or other operations or sources, and &#8220;passive income&#8221; generally includes dividends, interest, certain rents and royalties, certain gains from commodities or securities transactions and the excess of gains over losses from the disposition of certain assets which product passive income. If a non-U.S. corporation owns at least 25% (by value) of the stock of another corporation, the non-U.S. corporation is treated, for purposes of the income test and asset test, as owning its proportionate share of the assets of the other corporation and as receiving directly its proportionate share of the other corporation&#8217;s income.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Under certain attribution and indirect ownership rules, if the Company is a PFIC, U.S. Holders will generally be deemed to own their proportionate share of the Company&#8217;s direct or indirect equity interest in any company that is also a PFIC (a &#8220;Subsidiary PFIC&#8221;), and will be subject to U.S. federal income tax on their proportionate share of (a) any &#8220;excess distributions,&#8221; as described below, on the stock of a Subsidiary PFIC and (b) a disposition or deemed disposition of the stock of a Subsidiary PFIC by the Company or another Subsidiary PFIC, both as if such U.S. Holders directly held the shares of such Subsidiary PFIC. In addition, U.S. Holders may be subject to U.S. federal income tax on any indirect gain realized on the stock of a Subsidiary PFIC on the sale or disposition of common shares. Accordingly, U.S. Holders should be aware that they could be subject to tax even if no distributions are received and no redemptions or other dispositions of the Company&#8217;s common shares are made.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The Company does not believe that it was classified as a PFIC for its taxable year ended December 31, 2017, but has not made a determination as to whether it will or will not be a PFIC in the current tax year or in subsequent tax years. The determination of PFIC status is inherently factual, is subject to a number of uncertainties, and can be determined only annually at the close of the tax year in question. Additionally, the analysis depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing interpretations. There can be no assurance that the Company will or will not be determined to be a PFIC for the current tax year or any prior or future tax year, and no opinion of legal counsel or ruling from the IRS concerning the status of the Company as a PFIC has been obtained or will be requested. U.S. Holders should consult their own U.S. tax advisors regarding the PFIC status of the Company.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Tax Consequences if the Company is a PFIC</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">If the Company is a PFIC for any tax year during which a U.S. Holder holds common shares, special rules may increase such U.S. Holder&#8217;s U.S. federal income tax liability with respect to the ownership and disposition of such common shares. If the Company is a PFIC for any tax year during which a U.S. Holder owns common shares, the Company will be treated as a PFIC with respect to such U.S. Holder for that tax year and for all subsequent tax years, regardless of whether the Company meets the income test or the asset test for such subsequent tax years, unless the U.S. Holder makes a &#8220;deemed sale&#8221; election with respect to the common shares. If the election is made, the U.S. Holder will be deemed to sell the common shares it holds at their fair market value on the last day of the last taxable year in which we qualified as a PFIC, and any gain recognized from such deemed sale would be taxed under the PFIC excess distribution regime. After the deemed sale election, the U.S. Holder&#8217;s common shares would not be treated as shares of a PFIC unless the Company subsequently becomes a PFIC. U.S. Holders should consult their own U.S. tax advisors regarding the availability and desirability of a deemed sale election.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Under the default PFIC rules:</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p><font face="Symbol"> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">Any gain realized on the sale or other disposition (including dispositions and certain other events that would not otherwise be treated as taxable events) of common shares (including an indirect disposition of the stock of any Subsidiary PFIC) and any &#8220;excess distribution&#8221; (defined as a distribution to the extent it (together with all other distributions received in the relevant tax year) exceeds 125% of the average annual distribution received during the shorter of the preceding three years or the U.S. Holder&#8217;s holding period for the common shares) received on common shares or with respect to the stock of a Subsidiary PFIC will be allocated ratably to each day of such U.S. Holder&#8217;s holding period for the common shares;</td></tr></table></font> <p style="MARGIN: 0px">&nbsp;&nbsp;</p> <p style="MARGIN: 0px"> <table id="pagebreakc8366d99-67c5-4d05-97b6-1a0b81afbae5" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-28</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p><font face="Symbol"> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">The amount allocated to the current tax year and any year prior to the first year in which the Company was a PFIC will be taxed as ordinary income in the current year;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">The amount allocated to each of the other tax years (the &#8220;Prior PFIC Years&#8221;) will be subject to tax at the highest ordinary income tax rate in effect for the applicable class of taxpayer for that year; and</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"><font style="FONT-FAMILY: Symbol">&#183;</font></td> <td valign="top">An interest charge will be imposed with respect to the resulting tax attributable to each Prior PFIC Year.</td></tr></table></font> <p style="MARGIN: 0px">&nbsp;&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">A U.S. Holder that makes a timely and effective &#8220;mark-to-market&#8221; election under Section 1296 of the Code (a &#8220;Mark-to-Market Election&#8221;) or a timely and effective election to treat the Company and each Subsidiary PFIC as a &#8220;qualified electing fund&#8221; (a &#8220;QEF&#8221;) under Section 1295 of the Code (a &#8220;QEF Election&#8221;) may generally mitigate or avoid the default PFIC rules described above with respect to common shares U.S. Holders should be aware that there can be no assurance that the Company has satisfied or will satisfy the recordkeeping requirements that apply to a QEF or that the Company has supplied or will supply U.S. Holders with information such U.S. Holders require to report under the QEF rules in the event that the Company is a PFIC for any tax year.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">A timely and effective QEF Election requires a U.S. Holder to include currently in gross income each year its pro rata share of the Company&#8217;s ordinary earnings and net capital gains, regardless of whether such earnings and gains are actually distributed. Thus, a U.S. Holder could have a tax liability with respect to such ordinary earnings or gains without a corresponding receipt of cash from the Company. If the Company is a QEF with respect to a U.S. Holder, the U.S. Holder&#8217;s basis in the common shares will be increased to reflect the amount of the taxed but undistributed income. Distributions of income that had previously been taxed will result in a corresponding reduction of basis in the common shares and will not be taxed again as a distribution to a U.S. Holder. Taxable gains on the disposition of common shares by a U.S. Holder that has made a timely and effective QEF Election are generally capital gains. A U.S. Holder must make a QEF Election for the Company and each Subsidiary PFIC if it wishes to have this treatment. To make a QEF Election, a U.S. Holder will need to have an annual information statement from the Company setting forth the ordinary earnings and net capital gains for the year and the Company may not provide this statement, in which case a QEF Election cannot be made. In general, a U.S. Holder must make a QEF Election on or before the due date for filing its income tax return for the first year to which the QEF Election will apply. Under applicable Treasury Regulations, a U.S. Holder will be permitted to make retroactive elections in particular, but limited, circumstances, including if it had a reasonable belief that the Company was not a PFIC and did not file a protective election. If a U.S. Holder owns PFIC stock indirectly through another PFIC, separate QEF Elections must be made for the PFIC in which the U.S. Holder is a direct shareholder and the Subsidiary PFIC for the QEF rules to apply to both PFICs.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify"><b>Each U.S. Holder should consult its own tax advisor regarding the availability and desirability of, and procedure for, making a timely and effective QEF Election (including a &#8220;pedigreed&#8221; QEF election where necessary) for the Company and any Subsidiary PFIC.</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Alternatively, a Mark-to-Market Election may be made with respect to &#8220;marketable stock&#8221; in a PFIC if which is stock that is &#8220;regularly traded&#8221; on a &#8220;qualified exchange or other market&#8221; (within the meaning of the Code and the applicable U.S. Treasury Regulations). A class of stock that is traded on one or more qualified exchanges or other markets is considered to be &#8220;regularly traded&#8221; for any calendar year during which such class of stock is traded in other than de minimis quantities on at least 15 days during each calendar quarter. If the common shares are considered to be &#8220;regularly traded&#8221; within this meaning, then a U.S. Holder generally will be eligible to make a Mark-to-Market Election with respect to its common shares. However, there is no assurance that the common shares will be or remain &#8220;regularly traded&#8221; for this purpose. A Mark-to-Market Election may not be made with respect to the stock of any Subsidiary PFIC. Hence, a Mark-to-Market Election will not be effective to eliminate the application of the default PFIC rules, described above, with respect to deemed dispositions of Subsidiary PFIC stock, or excess distributions with respect to a Subsidiary PFIC.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"> <table id="pagebreak6f361379-f448-4c75-8592-46921f316e20" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-29</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">A U.S. Holder that makes a timely and effective Mark-to-Market Election with respect to common shares generally will be required to recognize as ordinary income in each tax year in which the Company is a PFIC an amount equal to the excess, if any, of the fair market value of such shares as of the close of such taxable year over the U.S. Holder&#8217;s adjusted tax basis in such shares as of the close of such taxable year. A U.S. Holder&#8217;s adjusted tax basis in the common shares generally will be increased by the amount of ordinary income recognized with respect to such shares. If the U.S. Holder&#8217;s adjusted tax basis in the common shares as of the close of a tax year exceeds the fair market value of such shares as of the close of such taxable year, the U.S. Holder generally will recognize an ordinary loss, but only to the extent of net mark-to-market income recognized with respect to such shares for all prior taxable years. A U.S. Holder&#8217;s adjusted tax basis in its common shares generally will be decreased by the amount of ordinary loss recognized with respect to such shares. Any gain recognized upon a disposition of the common shares generally will be treated as ordinary income, and any loss recognized upon a disposition generally will be treated as an ordinary loss to the extent of net mark-to-market income recognized for all prior taxable years. Any loss recognized in excess thereof will be taxed as a capital loss. Capital losses are subject to significant limitations under the Code.</p> <p style="MARGIN: 0px" align="justify">&nbsp;&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Each U.S. Holder should consult its own tax advisor regarding the availability and desirability of, and procedure for, making a timely and effective Mark-to-Market Election with respect to the common shares.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Foreign Tax Credit</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">A U.S. Holder that pays (whether directly or through withholding) Canadian income tax in connection with the ownership or disposition of common shares may (under certain circumstances) be entitled to receive either a deduction or a credit for such Canadian income tax paid generally at the election of such U.S. Holder. Generally, a credit will reduce a U.S. Holder&#8217;s U.S. federal income tax liability on a dollar-for-dollar basis, whereas a deduction will reduce a U.S. Holder&#8217;s income subject to U.S. federal income tax. This election is made on a year-by-year basis and applies to all creditable foreign taxes paid (whether directly or through withholding) by a U.S. Holder during a year.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Complex limitations apply to the foreign tax credit, including the general limitation that the credit cannot exceed the proportionate share of a U.S. Holder&#8217;s U.S. federal income tax liability that such U.S. Holder&#8217;s &#8220;foreign source&#8221; taxable income bears to such U.S. Holder&#8217;s worldwide taxable income. In applying this limitation, a U.S. Holder&#8217;s various items of income and deduction must be classified, under complex rules, as either &#8220;foreign source&#8221; or &#8220;U.S. source.&#8221; Generally, dividends paid by a non-U.S. corporation should be treated as foreign source for this purpose, and gains recognized on the sale of securities of a non-U.S. corporation by a U.S. Holder should be treated as U.S. source for this purpose, except as otherwise provided in an applicable income tax treaty and if an election is properly made under the Code. However, the amount of a distribution with respect to the common shares that is treated as a &#8220;dividend&#8221; may be lower for U.S. federal income tax purposes than it is for Canadian federal income tax purposes, resulting in a reduced foreign tax credit allowance to a U.S. Holder. In addition, this limitation is calculated separately with respect to specific categories of income. The foreign tax credit rules are complex, and each U.S. Holder should consult its own U.S. tax advisor regarding the foreign tax credit rules.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Special rules apply to the amount of foreign tax credit that a U.S. Holder may claim on a distribution, including a constructive distribution, from a PFIC. Subject to such special rules, non-U.S. taxes paid with respect to any distribution in respect of stock in a PFIC are generally eligible for the foreign tax credit. The rules relating to distributions by a PFIC and their eligibility for the foreign tax credit are complicated, and a U.S. Holder should consult its own tax advisor regarding their application to the U.S. Holder.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Receipt of Foreign Currency</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The amount of any distribution or proceeds paid in Canadian dollars to a U.S. Holder in connection with the ownership of common shares, or on the sale or other taxable disposition of common shares will be included in the gross income of a U.S. Holder as translated into U.S. dollars calculated by reference to the exchange rate prevailing on the date of actual or constructive receipt of the payment, regardless of whether the Canadian dollars are converted into U.S. dollars at that time. If the Canadian dollars received are not converted into U.S. dollars on the date of receipt, a U.S. Holder will have a basis in the Canadian dollars equal to their U.S. dollar value on the date of receipt. Any U.S. Holder who receives payment in Canadian dollars and engages in a subsequent conversion or other disposition of the Canadian dollars may have a foreign currency exchange gain or loss that would generally be treated as ordinary income or loss, and generally will be U.S. source income or loss for foreign tax credit purposes. Different rules apply to U.S. Holders who use the accrual method with respect to foreign currency.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Each U.S. Holder should consult its own U.S. tax advisor regarding the U.S. federal income tax consequences of receiving, owning, and disposing of Canadian dollars.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"> <table id="pagebreak8ac7b6d8-3c54-449e-b31a-8e3c747f34a7" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-30</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b><i>Information Reporting; Backup Withholding</i></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Under U.S. federal income tax law, certain categories of U.S. Holders must file information returns with respect to their investment in, or involvement in, a non-U.S. corporation. For example, U.S. return disclosure obligations (and related penalties) are imposed on individuals who are U.S. Holders that hold certain specified foreign financial assets in excess of certain threshold amounts. The definition of &#8220;specified foreign financial assets&#8221; includes not only financial accounts maintained in non-U.S. financial institutions, but also, if held for investment and not in an account maintained by certain financial institutions, any stock or security issued by a non-U.S. person, any financial instrument or contract that has an issuer or counterparty other than a U.S. person and any interest in a non-U.S. entity. A U.S. Holder may be subject to these reporting requirements unless such U.S. Holder&#8217;s common shares are held in an account at certain financial institutions. Penalties for failure to file certain of these information returns are substantial. U.S. Holders should consult with their own tax advisors regarding the requirements of filing information returns on IRS Form 8938, and, if applicable, filing obligations relating to the PFIC rules, including possible reporting on an IRS Form 8621.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Payments made within the U.S. or by a U.S. payor or U.S. middleman of (a) distributions on the common shares, and (b) proceeds arising from the sale or other taxable disposition of common shares generally will be subject to information reporting. In addition, backup withholding, currently at a rate of 24%, may apply to such payments if a U.S. Holder (a) fails to furnish such U.S. Holder&#8217;s correct U.S. taxpayer identification number (generally on IRS Form W-9), (b) furnishes an incorrect U.S. taxpayer identification number, (c) is notified by the IRS that such U.S. Holder has previously failed to properly report items subject to backup withholding, or (d) fails to certify, under penalty of perjury, that such U.S. Holder has furnished its correct U.S. taxpayer identification number and that the IRS has not notified such U.S. Holder that it is subject to backup withholding. Certain exempt persons generally are excluded from these information reporting and backup withholding rules. Backup withholding is not an additional tax. Any amounts withheld under the U.S. backup withholding rules will be allowed as a credit against a U.S. Holder&#8217;s U.S. federal income tax liability, if any, or will be refunded, if such U.S. Holder furnishes required information to the IRS in a timely manner. The information reporting and backup withholding rules may apply even if, under the Canada-U.S. Tax Convention, payments are eligible for a reduced withholding rate.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The discussion of reporting requirements set forth above is not intended to constitute an exhaustive description of all reporting requirements that may apply to a U.S. Holder. A failure to satisfy certain reporting requirements may result in an extension of the time period during which the IRS can assess a tax, and, under certain circumstances, such an extension may apply to assessments of amounts unrelated to any unsatisfied reporting requirement. Each U.S. Holder should consult its own tax advisor regarding the information reporting and backup withholding rules.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><b>THE ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL U.S. TAX CONSIDERATIONS APPLICABLE TO U.S. HOLDERS WITH RESPECT TO THE OWNERSHIP, EXERCISE OR DISPOSITION OF COMMON SHARES. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSIDERATIONS APPLICABLE TO THEM IN THEIR PARTICULAR CIRCUMSTANCES.</b></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px"> <table id="pagebreak3b895596-d39c-4b86-ab2f-0e5160b81552" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-31</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><a name="EXPENSES1">EXPENSES</a></b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We estimate that the total expenses of this offering payable by us, excluding the fees of Cantor and Cantor&#8217;s reimbursable expenses, will be approximately $75,000 as follows. All amounts are estimated except for SEC registration fee and FINRA filing fee. &nbsp;</p> <p style="MARGIN: 0px">&nbsp;</p> <table style="WIDTH: 100%; TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">SEC registration fee </p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%">$</td> <td id="ffcell" valign="bottom" width="9%" align="right">4,250</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">FINRA filing fee</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">3,112</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Transfer agent fees and expenses</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">5,000</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Printer fees and expenses</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">1,500</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Legal fees and expenses</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">50,000</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Accounting fees and expenses</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" valign="bottom" width="9%" align="right">10,000</td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Miscellaneous</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td id="ffcell" style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%" align="right">1,138</td> <td style="PADDING-BOTTOM: 1px" valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Total</p></td> <td valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: black 3px double" valign="bottom" width="1%">$</td> <td id="ffcell" style="BORDER-BOTTOM: black 3px double" valign="bottom" width="9%" align="right">75,000</td> <td style="PADDING-BOTTOM: 3px" valign="bottom" width="1%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr></table> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b><a name="MATERIAL CHANGES1">MATERIAL CHANGES</a></b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Except as otherwise described in our Annual Report on Form 20-F for the fiscal year ended December 31, 2017, in our Reports on Form 6-K filed or submitted under the Exchange Act and incorporated by reference herein and as disclosed in this prospectus, no reportable material changes have occurred since December 31, 2017.</p> <p style="MARGIN: 0px 0px 0px 0in" align="center">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b><a name="LEGAL MATTERS1">LEGAL MATTERS</a></b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Certain legal matters in connection with the securities offered hereby will be passed upon for us by Salley Bowes Harwardt Law Corp., Vancouver, British Columbia, Canada with respect to matters of Canadian law and Lewis Brisbois Bisgaard &amp; Smith LLP, San Francisco, California with respect to matters of United States law. Cantor Fitzgerald &amp; Co. is being represented in connection with this offering by Cooley LLP, New York, New York.</p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b><a name="EXPERTS1">EXPERTS</a></b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The consolidated financial statements of Avino Silver &amp; Gold Mines, Ltd. appearing in Avino Silver &amp; Gold Mines, Ltd. Annual Report on Form 20-F as filed with the SEC on April 3, 2018, have been audited by Manning Elliot LLP, independent registered public accounting firm, as set forth in their report thereon, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing.</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Information relating to the Company&#8217;s mineral properties in this prospectus and the documents incorporated by reference herein has been derived from reports, statements or opinions prepared or certified by Tetra Tech Canada Inc., QG Australia (Pty) Ltd, Kirkham Geosystems Ltd., and Jasman Yee, P. Eng. and this information has been included in reliance on such persons&#8217; and companies&#8217; expertise.</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Tetra Tech Canada Inc., QG Australia (Pty) Ltd, Kirkham Geosystems Ltd., and Jasman Yee, P. Eng and any director, officer, employee or partner thereof, has not received a direct or indirect interest in the property of the Company or of any associate or affiliate of the Company, except that Mr. Yee is a director of the Company and has received compensation for servicing as such.</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b><a name="ENFORCEABILITY OF CIVIL LIABILITIES1">ENFORCEABILITY OF CIVIL LIABILITIES</a></b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The enforcement by investors of civil liabilities under U.S. federal securities laws may be affected adversely by the fact that we are incorporated under the laws of the Province of British Columbia, Canada, that many of our officers and directors are residents of countries other than the United States, that some of the experts named in this prospectus are residents of countries other than the United States, and that some of our assets and the assets of said persons are located outside the United States.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"> <table id="pagebreakaaea9383-5c79-41fd-8aca-addaeb75ed5b" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-32</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">In particular, it may be difficult to bring and enforce suits against us or said persons under U.S. federal securities laws. It may be difficult for U.S. holders of our common shares to effect service of process on us or said persons within the United States or to enforce judgments obtained in the United States based on the civil liability provisions of the U.S. federal securities laws against us or said persons. In addition, a shareholder should not assume that the courts of Canada (i) would enforce judgments of U.S. courts obtained in actions against us, our officers or directors, or other said persons, predicated upon the civil liability provisions of the U.S. federal securities laws or other laws of the United States, or (ii) would enforce, in original actions, liabilities against us, our officers or directors or other said persons predicated upon the U.S. federal securities laws or other laws of the United States.</p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b><a name="INCORPORATION OF CERTAIN INFORMATION BY REFERENCE1">INCORPORATION OF CERTAIN INFORMATION BY REFERENCE</a></b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The SEC allows us to &#8220;incorporate by reference&#8221; the information we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus and information we file later with the SEC will automatically update and supersede this information. The documents we are incorporating by reference as of their respective dates of filing are:</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15"> <td width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">Our Registration Statement of common shares pursuant to Section 12(b) of the Securities Exchange Act of 1934 on Form 8-A, filed with the SEC on July 26, 2011;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">Our Annual Report on Form 20-F for the fiscal year ended December 31, 2017, filed with the SEC on April 3, 2018;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">Exhibit 99.1 to our Form 6-K filed with the SEC on April 10, 2018, containing the Technical Report Resources Update for the Avino Property with the effective date of February 21, 2018;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">Exhibit 99.1 to our Form 6-K for April 2018 filed with the SEC on April 26, 2018 containing our Information Circular dated April 19, 2018 related to our Annual and Special Meeting of Shareholders to held on May 24, 2018;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">Exhibits 99.1 and 99.2 to our Form 6-K filed with the SEC on May 16, 2018, containing our Condensed Consolidated Interim Financial Statements for the three months ended March 31, 2018 and Management Discussion and Analysis;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">Exhibit 99.1 to our Form 6-K filed with the SEC on June 18, 2018 containing information on change of director; and</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">Exhibits 99.1 and 99.2 to our Form 6-K filed with the SEC on August 8, 2018, containing our Condensed Consolidated Interim Financial Statements for the six months ended June 30, 2018 and Management Discussion and Analysis.</p></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">All subsequent annual reports on Form 20-F filed by us and all subsequent reports on Form 6-K filed by us that are identified by us as being incorporated by reference shall be deemed to be incorporated by reference into this prospectus and deemed to be a part hereof after the date of this prospectus but before the termination of the offering by this prospectus.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Any statement contained in a document incorporated by reference herein shall be deemed to be modified or superseded for all purposes to the extent that a statement contained in this prospectus, or in any other subsequently filed document which is also incorporated or deemed to be incorporated by reference, modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.</p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in"> <table id="pagebreak88bcec9d-7108-4bca-a7d0-b7c4a558789e" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-33</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td><i><a href="#Toc1">Table of Contents</a></i></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in">Each person, including any beneficial owner to whom this prospectus is delivered, may request, orally or in writing, a copy of these documents, which will be provided at no cost, by contacting:</p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center">Dorothy Chin, Corporate Secretary</p> <p style="MARGIN: 0px 0px 0px 0in" align="center">Avino Silver &amp; Gold Mines, Ltd.</p> <p style="MARGIN: 0px 0px 0px 0in" align="center">570 Granville Street, Suite 900</p> <p style="MARGIN: 0px 0px 0px 0in" align="center">Vancouver, British Columbia V6C 3P1</p> <p style="MARGIN: 0px 0px 0px 0in" align="center">Canada</p> <p style="MARGIN: 0px 0px 0px 0in" align="center">Tel: 604 682-3701</p> <p style="MARGIN: 0px 0px 0px 0in" align="center">Fax: 604 682-3600</p> <p style="MARGIN: 0px 0px 0px 0in" align="center">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b><a name="WHERE YOU CAN FIND ADDITIONAL INFORMATION1">WHERE YOU CAN FIND ADDITIONAL INFORMATION</a></b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">This prospectus is part of a registration statement on Form F-3 that we filed with the SEC relating to the securities offered by this prospectus, which includes additional information. You should refer to the registration statement and its exhibits for additional information. Whenever we make reference in this prospectus to any of our contracts, agreements or other documents, the references are not necessarily complete and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreements or other document.</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We are subject to the informational requirements of the Exchange Act applicable to foreign private issuers. We, as a &#8220;foreign private issuer,&#8221; are exempt from the rules under the Exchange Act prescribing certain disclosure and procedural requirements for proxy solicitations, and our officers, directors and principal shareholders are exempt from the reporting and &#8220;short-swing&#8221; profit recovery provisions contained in Section 16 of the Exchange Act, with respect to their purchases and sales of shares. In addition, we are not required to file annual, quarterly and current reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. However, we anticipate filing with the SEC, within four months after the end of each fiscal year, an annual report on Form 20-F containing financial statements audited by an independent accounting firm.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">You may read and copy any materials we file or furnish with the SEC at the SEC&#8217;s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. You can review our SEC filings and the registration statement by accessing the SEC&#8217;s internet site at http://www.sec.gov. We also maintain a website at www.avino.com, through which you can access our SEC filings. The information on our web site is not incorporated by reference into this prospectus and should not be considered to be a part of this prospectus.</p> <p style="MARGIN: 0px" align="left">&nbsp;</p> <p style="MARGIN: 0px" align="left"> <table id="pagebreak57c0eac0-ea13-444f-b01f-fae9c4104afa" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">S-34</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><img src="avino_f3img5.jpg"> </p> <p style="MARGIN: 0px 0px 0px 0in" align="center">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Up to $8,000,000</b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>Common Shares</b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="FONT-SIZE: 2px; HEIGHT: 2px; WIDTH: 100%; BACKGROUND: #000000; MARGIN: 0px" name="hrule">&nbsp;</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>PROSPECTUS</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center">&nbsp;</p> <p style="FONT-SIZE: 2px; HEIGHT: 2px; WIDTH: 100%; BACKGROUND: #000000; MARGIN: 0px" name="hrule">&nbsp;</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><img src="avino_f3img6.jpg"> </p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center">, <b>2018</b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in"> <table id="pagebreak6ebcc466-1b60-4176-a105-79551d2e2abc" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid">&nbsp;</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>PART II</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>INFORMATION NOT REQUIRED IN PROSPECTUS</b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in"><b>Item 8. Indemnification of Directors and Officers</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Our Articles of Incorporation provide that we must indemnify a director, former director or alternate director of the Company and his or her heirs and legal personal representatives against all judgment, penalty or fine awarded or imposed to which such person is or may be liable, by reason of the eligible party being or having been a director or alternate director of the Company. We may indemnify any person under our Articles of Incorporation. We may, and do, maintain a policy of insurance for the benefit of directors, officers and employees against liability incurred by such individual acting in their capacity as a director, officer or employee.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We are subject to the provisions of the Business Corporations Act (British Columbia) (the &#8220;Act&#8221;). Under Section 160 of the Act, we may, subject to Section 163 of the Act, indemnify an individual who:</p> <p style="MARGIN: 0px">&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15"> <td width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">is or was a director or officer of our company;</p></td></tr></table> <p style="MARGIN: 0px">&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15"> <td width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">is or was a director or officer of another corporation (i) at a time when such corporation is or was an affiliate of our company; or (ii) at our request; or</p></td></tr></table> <p style="MARGIN: 0px">&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15"> <td width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">at our request, is or was, or holds or held a position equivalent to that of, a director or officer of a partnership, trust, joint venture or other unincorporated entity;</p></td></tr></table> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">and includes the heirs and personal or other legal representatives of that individual (collectively, an &#8220;eligible party&#8221;), against a judgment, penalty or fine awarded or imposed in, or an amount paid in settlement of, a proceeding (an &#8220;eligible penalty&#8221;) in which an eligible party or any of the heirs and personal or other legal representatives of the eligible party, by reason of the eligible party being or having been a director or officer of our company or an associated corporation, or holding or having held a position equivalent to that of a director or officer of, our company or an associated corporation (a) is or may be joined as a party, or (b) is or may be liable for or in respect of a judgment, penalty or fine in, or expenses related to, the proceeding (an &#8221;eligible proceeding&#8221;) to which the eligible party is or may be liable and we may, subject to section 163 of the Act, after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by an eligible party in respect of that proceeding.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Under Section 161 of the Act, and subject to Section 163 of the Act, we must, after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by an eligible party in respect of that proceeding if the eligible party (a) has not been reimbursed for those expenses, and (b) is wholly successful, on the merits or otherwise, in the outcome of the proceeding or is substantially successful on the merits in the outcome of the proceeding.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Under Section 162 of the Act, and subject to Section 163 of the Act, we may pay, as they are incurred in advance of the final disposition of an eligible proceeding, the expenses actually and reasonably incurred by an eligible party in respect of the proceeding, provided that we must not make such payments unless we first receive from the eligible party a written undertaking that, if it is ultimately determined that the payment of expenses is prohibited under Section 163, the eligible party will repay the amounts advanced.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Under Section 163 of the Act, we must not indemnify an eligible party against eligible penalties to which the eligible party is or may be liable or pay the expenses of an eligible party in respect of that proceeding under Sections 160, 161 or 162 of the Act, as the case may be, if any of the following circumstances apply:</p> <p style="MARGIN: 0px">&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15"> <td width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">if the indemnity or payment is made under an earlier agreement to indemnify or pay expenses and, at the time that the agreement to indemnify or pay expenses was made, we were prohibited from giving the indemnity or paying the expenses by our Articles;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">if the indemnity or payment is made otherwise than under an earlier agreement to indemnify or pay expenses and, at the time that the indemnity or payment is made, we are prohibited from giving the indemnity or paying the expenses by our Articles;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px"><font style="FONT-FAMILY: Symbol">&#183;</font></p></td> <td> <p style="MARGIN: 0px">if, in relation to the subject matter of the eligible proceeding, the eligible party did not act honestly and in good faith with a view to the best interests of our company or the associated corporation, as the case may be; or</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px"><font style="FONT-FAMILY: Symbol">&#183;</font></p></td> <td> <p style="MARGIN: 0px">in the case of an eligible proceeding other than a civil proceeding, if the eligible party did not have reasonable grounds for believing that the eligible party&#8217;s conduct in respect of which the proceeding was brought was lawful.</p></td></tr></table> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px"> <table id="pagebreak71e5d54c-3b33-4deb-a582-7198649e989a" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">II-1</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">If an eligible proceeding is brought against an eligible party by or on behalf of the Company or by or on behalf of an associated corporation, we must not either indemnify the eligible party against eligible penalties to which the eligible party is or may be liable, or pay the expenses of the eligible party under Sections 160, 161 or 162 of the Act, as the case may be, in respect of the proceeding.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Under Section 164 of the Act, the Supreme Court of British Columbia may, on application of our company or an eligible party:</p> <p style="MARGIN: 0px">&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15"> <td width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%"> <p style="MARGIN: 0px 0px 0px 0in" align="left"><font face="Symbol">&#183;</font></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">order us to indemnify an eligible party against any liability incurred by the eligible party in respect of an eligible proceeding;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px"><font style="FONT-FAMILY: Symbol">&#183;</font></p></td> <td> <p style="MARGIN: 0px">order us to pay some or all of the expenses incurred by an eligible party in respect of an eligible proceeding;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px"><font style="FONT-FAMILY: Symbol">&#183;</font></p></td> <td> <p style="MARGIN: 0px">order the enforcement of, or payment under, an agreement of indemnification entered into by us;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px"><font style="FONT-FAMILY: Symbol">&#183;</font></p></td> <td> <p style="MARGIN: 0px">order us to pay some or all of the expenses actually and reasonably incurred by any person in obtaining an order under Section 164 of the Act; or</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px"><font style="FONT-FAMILY: Symbol">&#183;</font></p></td> <td> <p style="MARGIN: 0px">make any other order the court considers appropriate.</p></td></tr></table> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Section 165 of the Act provides that we may purchase and maintain insurance for the benefit of an eligible party or the heirs and personal or other legal representatives of the eligible party against any liability that may be incurred by reason of the eligible party being or having been a director or officer of, or holding or having held a position equivalent to that of a director or officer of, the Company or an associated corporation.</p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Under the Act, the Articles may affect our power or obligation to give an indemnity or pay expenses to the extent that the Articles prohibit giving the indemnity or paying the expenses. As indicated above, this is subject to the overriding power of the Supreme Court of British Columbia under Section 164 of the Act.</p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">We believe that the foregoing policies and provisions of our Articles and bylaws are necessary to attract and retain qualified officers and directors. Insofar as indemnification for liabilities arising under the Securities Act may be permitted with respect to our directors, officers or persons controlling the registrant pursuant to the foregoing provisions, the registrant has been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.</p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in"> <table id="pagebreakc0a84c2f-02bb-44d5-8315-f662958e4e2e" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">II-2</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in"><b>Item 9. Exhibits and Financial Statement Schedules</b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in">(a) Exhibits. The following exhibits are included herein or incorporated herein by reference:</p> <p style="MARGIN: 0px">&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15"> <td style="BORDER-BOTTOM: black 1px solid" valign="bottom" width="9%"> <p style="MARGIN: 0px 0px 0px 0in"><b>Exhibit&nbsp;Number</b></p></td> <td valign="top" width="1%"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td style="BORDER-BOTTOM: black 1px solid" valign="bottom"> <p style="MARGIN: 0px 0px 0px 0in"><b>Description</b></p></td></tr> <tr height="15" bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">1.1</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">Form of Underwriting Agreement with respect to Common Shares*</p></td></tr> <tr height="15" bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">1.2</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Form of Underwriting Agreement with respect to Warrants*</p></td></tr> <tr height="15" bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">1.3</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">Form of Underwriting Agreement with respect to Units*</p></td></tr> <tr height="15" bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">1.4</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">Form of Underwriting Agreement with respect to Debt Securities*</p></td></tr> <tr height="15" bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">4.1</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">Form of Warrant Agreement (including Form of Warrant Certificate) with respect to Warrants to purchase Common Share*</p></td></tr> <tr height="15" bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">4.2</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">Form of Warrant Agreement (including Form of Warrant Certificate) with respect to Warrants to purchase Units*</p></td></tr> <tr height="15" bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">4.3</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">Form of Unit Agreement (including Form of Unit Certificate)*</p></td></tr> <tr height="15" bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">4.4</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">Form of Debt Security*</p></td></tr> <tr height="15" bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="avino_ex51.htm">5.1</a></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><a href="avino_ex51.htm">Opinion of Salley Bowes Harwardt Law Corporation**</a></p></td></tr> <tr height="15" bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="avino_ex101.htm">10.1</a></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><a href="avino_ex101.htm">Amended and Restated Controlled Equity Offering <sup>SM</sup> Sales Agreement&nbsp;dated as of August 21, 2018 by and between Cantor Fitzgerald &amp; Co. and Avino Silver &amp; Gold Mines, Ltd.**</a></p></td></tr> <tr height="15" bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">23.1</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">Consent of Salley Bowes Harwardt Law Corporation (included in Exhibit 5.1)</p></td></tr> <tr height="15" bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="avino_ex232.htm">23.2</a></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><a href="avino_ex232.htm">Consent of Manning Elliot LLP**</a></p></td></tr> <tr height="15" bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="avino_ex233.htm">23.3</a></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><a href="avino_ex233.htm">Consent of Tetra Tech Canada Inc.**</a></p></td></tr> <tr height="15" bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="avino_ex234.htm">23.4</a></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><a href="avino_ex234.htm">Consent of Ausenco Engineering Canada Inc.**</a></p></td></tr> <tr height="15" bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="avino_ex235.htm">23.5</a></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><a href="avino_ex235.htm">Consent of Kirkham Geosystems Ltd.**</a></p></td></tr> <tr height="15" bgcolor="#ffffff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><a href="avino_ex236.htm">23.6</a></p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify"><a href="avino_ex236.htm">Consent of Jasman Yee, P.Eng.**</a></p></td></tr> <tr height="15" bgcolor="#cceeff"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">24.1</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in" align="justify">Power of Attorney (included in signature page to this Registration Statement)**</p></td></tr></table> <p style="MARGIN: 0px">_____________</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">* If applicable, to be filed as an exhibit to a post-effective amendment to this registration statement or as an exhibit to a report filed on Form 6-K under the Securities Exchange Act of 1934 and incorporated here by reference.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in">** Filed herewith</p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in"> <table id="pagebreak628ce5f3-1c92-4bf9-a8a7-e4b7d37b4ae7" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">II-3</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in"><b>Item&nbsp;10. Undertakings</b></p> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0.75in; TEXT-INDENT: 0px">(a)&nbsp;&nbsp;&nbsp;&nbsp; The undersigned Registrant hereby undertakes:</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 1in" align="justify">(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 1.5in" align="justify">(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933 (&#8220;Securities Act&#8221;);</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 1.5in" align="justify">(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC (&#8220;Commission&#8221;) pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the &#8220;Calculation of Registration Fee&#8221; table in the effective registration statement.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 1.5in" align="justify">(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">Provided, however, that:</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 1.75in" align="justify">(A) Paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the registration statement is on Form S-3 or Form F-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 (&#8220;Exchange Act&#8221;) that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 1in" align="justify">(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"> <table id="pagebreakeea234c3-0663-490e-9740-e074537d6b40" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">II-4</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 1in" align="justify">(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 1in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 1in" align="justify">(4) To file a post-effective amendment to the registration statement to include any financial statements required by &#8220;Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Securities Act need not be furnished, provided that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Act or &#167; 210.3-19 of this chapter if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Exchange Act that are incorporated by reference in the Form F-3.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 1in" align="justify">(5) That, for the purpose of determining liability under the Securities Act to any purchaser:</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 1.5in" align="justify">(i) If the registrant is relying on Rule 430B (&#167; 230.430B of this chapter):</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 1.75in" align="justify">(A) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) (&#167; 230.424(b)(3) of this chapter) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 1.75in" align="justify">(B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) (&#167; 230.424(b)(2), (b)(5), or (b)(7) of this chapter) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) (&#167; 230.415(a)(1)(i), (vii), or (x) of this chapter) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 1.75in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 1.5in" align="justify">(ii) If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 1in" align="justify">(6) That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities:</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify"> <table id="pagebreak45e916e4-7d09-4a53-ae86-1c6aaabd9ad4" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">II-5</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 1.5in" align="justify">(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424 (&#167; 230.424 of this chapter);</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 1.5in" align="justify">(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 1.5in" align="justify">(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 1.5in" align="justify">(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">(b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">(c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.</p> <p style="MARGIN: 0px" align="justify">&nbsp;</p> <p style="MARGIN: 0px" align="justify"> <table id="pagebreakaa0eb837-bb9b-47ca-827f-a4937002749c" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">II-6</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b>SIGNATURES</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing this Form F-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Vancouver, province of British Columbia, Canada, on the 21st day of August, 2018.</p> <p style="MARGIN: 0px">&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top" colspan="3"> <p style="MARGIN: 0px 0px 0px 0in"><b>AVINO SILVER &amp; GOLD MINES, LTD.</b></p></td></tr> <tr height="15"> <td valign="top" width="50%"></td> <td valign="top" width="3%"></td> <td valign="top" width="35%"></td> <td valign="top" width="12%"></td></tr> <tr height="15"> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">By: </p></td> <td style="BORDER-BOTTOM: 1px solid" valign="top"> <p style="MARGIN: 0px 0px 0px 0in"><em>/s/ David Wolfin<u></u></em></p></td> <td valign="top"></td></tr> <tr height="15"> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="bottom"> <p style="MARGIN: 0px 0px 0px 0in">David Wolfin, President,</p></td> <td valign="top"></td></tr> <tr height="15"> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px 0px 0px 0in">Chief Executive Officer</p></td> <td valign="top"></td></tr></table> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in" align="center"><b>POWER OF ATTORNEY</b></p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify"><b>KNOW ALL PERSONS BY THESE PRESENTS</b>, that each person whose signature appears below constitutes and appoints, jointly and severally, David Wolfin and Malcolm Davidson, and each them severally, his true and lawful attorneys-in-fact and agents, each with full power of substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement, and to sign any registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and all post-effective amendments thereto, that are related to the offering covered by this registration statement and to file the same, with all exhibits thereto and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming that each of said attorneys-in-fact and agents or any of them, or his or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.</p> <p style="MARGIN: 0px 0px 0px 0in" align="justify">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in" align="justify">Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the dates indicated.</p> <p style="MARGIN: 0px">&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15"> <td width="3%"> <p style="MARGIN: 0px 0px 0px 0in">By: </p></td> <td style="BORDER-BOTTOM: 1px solid" width="45%"> <p style="MARGIN: 0px 0px 0px 0in"><em>/s/ David Wolfin<u></u></em></p></td> <td width="5%"> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td> <p style="MARGIN: 0px 0px 0px 0in">Date: August 21, 2018</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td> <p style="MARGIN: 0px 0px 0px 0in">David Wolfin,</p></td> <td></td> <td></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td> <p style="MARGIN: 0px 0px 0px 0in">President &amp; Chief Executive Officer and Director</p></td> <td></td> <td></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td> <p style="MARGIN: 0px 0px 0px 0in">(Principal Executive Officer)</p></td> <td></td> <td></td></tr> <tr height="15"> <td></td> <td>&nbsp;</td> <td></td> <td> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px 0px 0px 0in">By:</p></td> <td style="BORDER-BOTTOM: 1px solid"> <p style="MARGIN: 0px 0px 0px 0in"><em>/s/ Malcolm Davidson<u></u></em></p></td> <td> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td> <p style="MARGIN: 0px 0px 0px 0in">Date: August 21, 2018</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td> <p style="MARGIN: 0px 0px 0px 0in">Malcolm Davidson,</p></td> <td></td> <td></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td> <p style="MARGIN: 0px 0px 0px 0in">Chief Financial Officer</p></td> <td></td> <td></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td> <p style="MARGIN: 0px 0px 0px 0in">(Principal Financial and Accounting Officer)</p></td> <td></td> <td></td></tr> <tr height="15"> <td></td> <td>&nbsp;</td> <td></td> <td> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px 0px 0px 0in">By: </p></td> <td style="BORDER-BOTTOM: 1px solid"> <p style="MARGIN: 0px 0px 0px 0in"><em>/s/ Jasman Yee<u></u></em></p></td> <td> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td> <p style="MARGIN: 0px 0px 0px 0in">Date: August 21, 2018</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td> <p style="MARGIN: 0px 0px 0px 0in">Jasman Yee,</p></td> <td></td> <td></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td> <p style="MARGIN: 0px 0px 0px 0in">Director</p></td> <td></td> <td></td></tr> <tr height="15"> <td></td> <td>&nbsp;</td> <td></td> <td> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px 0px 0px 0in">By: </p></td> <td style="BORDER-BOTTOM: 1px solid"> <p style="MARGIN: 0px 0px 0px 0in"><em>/s/ Michael Baybak<u></u></em></p></td> <td> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td> <p style="MARGIN: 0px 0px 0px 0in">Date: August 21, 2018</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td> <p style="MARGIN: 0px 0px 0px 0in">Michael Baybak, Director</p> <p style="MARGIN: 0px 0px 0px 0in">Authorized Representative in the United States</p></td> <td></td> <td> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp; </p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px 0px 0px 0in">By: </p></td> <td style="BORDER-BOTTOM: black 1px solid"> <p style="MARGIN: 0px 0px 0px 0in"><em>/s/ Gary Robertson</em></p></td> <td> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td> <p style="MARGIN: 0px 0px 0px 0in">Date: August 21, 2018</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td> <p style="MARGIN: 0px 0px 0px 0in">Gary Robertson,</p></td> <td></td> <td></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td> <p style="MARGIN: 0px 0px 0px 0in">Director</p></td> <td></td> <td> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp; </p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px 0px 0px 0in">By: </p></td> <td style="BORDER-BOTTOM: black 1px solid"> <p style="MARGIN: 0px 0px 0px 0in"><em>/s/ Peter Bojtos</em></p></td> <td> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td> <p style="MARGIN: 0px 0px 0px 0in">Date: August 21, 2018</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td> <p style="MARGIN: 0px 0px 0px 0in">Peter Bojtos,</p></td> <td></td> <td></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p></td> <td> <p style="MARGIN: 0px 0px 0px 0in">Director</p></td> <td></td> <td></td></tr></table> <p style="MARGIN: 0px 0px 0px 0in">&nbsp;</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 0in"> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cols="1" cellpadding="0" width="100%" align="center" border="0"> <tr> <td style="BORDER-BOTTOM: black 1px solid"> <p style="MARGIN: 0px" align="center">II-7</p></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p></BODY><!--Document Created by EDGARMaster--></html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>2
<FILENAME>avino_ex51.htm
<DESCRIPTION>OPINION OF SALLEY BOWES HARWARDT LAW CORPORATION
<TEXT>
<html><head><title>avino_ex231.htm</title><!--Document Created by EDGARMaster--></head><BODY spellcheck="true" style="text-align:justify;font:10pt TIMES NEW ROMAN;margin:0px 7%"><p style="MARGIN: 0px" align="right"><b>EXHIBIT 5.1</b></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="center"><font size="3">Salley Bowes Harwardt Law Corp.</font></p> <p style="MARGIN: 0px" align="center">Barristers and Solicitors</p> <p style="MARGIN: 0px" align="center">Suite 1750 - 1185 West Georgia Street</p> <p style="MARGIN: 0px" align="center">Vancouver, B.C., Canada</p> <p style="MARGIN: 0px" align="center">V6E 4E6</p> <p style="MARGIN: 0px" align="center">&nbsp;</p> <p style="MARGIN: 0px" align="center">Telephone: (604) 688-0788</p> <p style="MARGIN: 0px" align="center">Fax: (604) 688-0778</p> <p style="MARGIN: 0px" align="center">Website: www.sbh.bc.ca</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px">August 21, 2018</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px">Board of Directors</p> <p style="MARGIN: 0px">Avino Silver &amp; Gold Mines Ltd.</p> <p style="MARGIN: 0px">Suite 900 &#8211; 570 Granville Street</p> <p style="MARGIN: 0px">Vancouver, British Columbia</p> <p style="MARGIN: 0px">V6C 3P1</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px">Dear Sirs:</p> <p style="MARGIN: 0px">&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15"> <td valign="top" width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%"> <p style="MARGIN: 0px">Re:</p></td> <td valign="top"> <p style="MARGIN: 0px" align="justify">Avino Silver &amp; Gold Mines Ltd. (the &#8220;<b>Company</b>&#8221;)</p></td></tr> <tr height="15"> <td valign="top" colspan="2"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px" align="justify"><u>Registration Statement on Form F-3 (the &#8220;<b>Registration Statement</b>&#8221;)</u></p></td></tr></table> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">We have acted as British Columbia counsel for the Company, a British Columbia company. We are furnishing this opinion at your request in connection with the Company&#8217;s Registration Statement filed with the Securities and Exchange Commission (the &#8220;<b>SEC</b>&#8221;) under the Securities Act of 1933, as amended (the &#8220;<b>Securities Act</b>&#8221;) to register (i) common shares, no par value, of the Company (&#8220;<b>Common Shares</b>&#8221;), (ii) warrants to purchase Common Shares (&#8220;<b>Warrants</b>&#8221;), (iii) debt securities of the Company (&#8220;<b>Debt Securities</b>&#8221;), and (iv) units consisting of Common Shares, Warrants or Debt Securities or any combination of these securities (&#8220;<b>Units</b>&#8221;). The Common Shares, Warrants, Debt Securities, and Units are hereinafter referred to collectively as the &#8220;<b>Shelf Securities</b>.&#8221; The Registration Statement includes a base prospectus (&#8220;<b>Base Prospectus</b>&#8221;) and Sales Agreement Prospectus (as defined below). The Shelf Securities may be issued and sold from time to time as set forth in the Registration Statement, any amendment thereto, and the Base Prospectus and any supplements thereto (&#8220;<b>Prospectus Supplement</b>&#8221;) or term sheets to be filed pursuant to the rules and regulations promulgated under the Securities Act. </p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">We have also acted as British Columbia counsel for the Company in connection with the sale in the United States through Cantor Fitzgerald &amp; Co. as the sales agent (the &#8220;<b>Sales Agent</b>&#8221;) from time to time by the Company of Common Shares (the &#8220;<b>Sales Agreement Shares</b>&#8221;) having an aggregate offering price of up to US$8,000,000 pursuant to the Registration Statement, the Base Prospectus and the related prospectus for the sale of the Sales Agreement Shares included in the Registration Statement (the &#8220;<b>Sales Agreement Prospectus</b>&#8221;), and that certain Sales Agreement dated as of August 21, 2018 between the Sales Agent and the Company (the &#8220;<b>Sales Agreement</b>&#8221;). The Sales Agreement Shares, together with the Shelf Securities, are hereinafter referred to as the &#8220;<b>Securities</b>.&#8221;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">The Warrants, either individually, or in combination with other Shelf Securities, may be issued under a separate warrant agency agreement (a &#8220;<b>Warrant Agreement</b>&#8221;) to be entered into between the Company and one or more entities acting as warrant agent. The Debt Securities, either individually, or in combination with other Shelf Securities, may be issued under an indenture (a &#8220;<b>Note Indenture</b>&#8221;) to be entered into between the Company and one or more trustees, if any. The Units will be issued under a unit agreement (the &#8220;<b>Unit Agreement</b>&#8221;) between the Company and a unit agent to be specified therein. The Warrant Agreement, Note Indenture and Unit Agreement are referred to herein collectively as &#8220;<b>Governing Documents</b>&#8221;.</p> <p style="MARGIN: 0px" align="justify">&nbsp; <table id="pagebreak51aebfe5-4205-45cd-a54a-d2d2f3be7f97" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">1</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">In connection with these opinions, we have examined the Registration Statement, the Base Prospectus, Sales Agreement Prospectus, and Sales Agreement and such matters of fact and questions of law as we have considered appropriate for purposes of these opinions. As to certain factual matters, we have relied upon a Certificate of Officers of even date (the &#8220;<b>Officers&#8217; Certificate</b>&#8221;) executed by the President and Chief Executive Officer, and Secretary of the Company, respectively.</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">In addition, in rendering these opinions, we have assumed: (i) the genuineness and authenticity of all signatures on original documents; (ii) the authenticity of all documents submitted to us as originals; (iii) the conformity to originals of all documents submitted to us as copies; (iv) the accuracy, completeness, and authenticity of certificates of public officials; and (v) the due authorization, execution, and delivery of all documents where authorization, execution, and delivery are prerequisites to the effectiveness of such documents.</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">We are qualified to carry on the practice of law in the Province of British Columbia. Our opinions below are expressed only with respect to the laws of the Province of British Columbia and the federal laws of Canada applicable therein. We express no opinion with respect to the laws of any other jurisdiction.</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">Our opinion is expressed in effect on the date of this opinion. We have no responsibility or obligation to (i) update this opinion, (ii) take into account or inform the addressee or any other person of any changes in law, facts or other developments subsequent to this date that do or may affect the opinions we express, or (iii) advise the addressee or any other person of any other change in any matter addressed in this opinion. Nor do we have any responsibility or obligation to consider the applicability or correctness of this opinion to any person other than the addressee.</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">Our opinions expressed herein are based on the following assumptions:</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="justify"> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td valign="top" width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%">(a)</td> <td valign="top">at or prior to the time of the delivery of the Securities, the Registration Statement, including all necessary post-effective amendments, will have become effective under the Securities Act and such effectiveness will not have been terminated or rescinded;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <tr> <td valign="top"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top">(b)</td> <td valign="top">an appropriate Prospectus Supplement with respect to any offered Shelf Securities and the Sales Agreement Prospectus with respect to the Sales Agreement Shares will have been prepared and filed in compliance with the Securities Act and the applicable rules and regulations thereunder;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <tr> <td valign="top"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top">(c)</td> <td valign="top">the Securities will be offered, issued and sold in compliance with applicable United States Federal and State securities laws and in the manner stated in the Registration Statement, the Base Prospectus, the Sales Agreement Prospectus with respect to the Sales Agreement Shares and the appropriate Prospectus Supplement with respect to any other Shelf Securities to be offered in the future;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <tr> <td valign="top"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top">(d)</td> <td valign="top">if the offered Securities are to be sold pursuant to a definitive purchase, subscription, underwriting or similar agreement, such agreement will have been duly authorized, executed and delivered by the Company and the other parties thereto;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <tr> <td valign="top"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top">(e)</td> <td valign="top">at the time of any offering or sale of any Common Shares, Warrants, Debt Securities or Units consisting of Common Shares, Warrants or Debt Securities exercisable, exchangeable or convertible into Common Shares, in whole or in part, (together, &#8220;<b>Convertible Securities</b>&#8221;) and as of the date of the issuance of any Common Shares issuable upon exercise of any Convertible Securities, there will be sufficient Common Shares authorized and unissued under the Company&#8217;s then operative constating documents and not otherwise reserved for issuance;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <tr> <td valign="top"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top">(f)</td> <td valign="top">at the time of issuance and sale of any Common Shares, a sufficient number of shares of Common Shares is authorized and reserved or available for issuance and that prior to any offering and sale of the Common Shares, the Company&#8217;s board of directors (&#8220;<b>Board</b>&#8221;) will duly authorize the price at which the Common Shares are to be issued and sold;</td></tr></tr></tr></tr></tr></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="justify"> <table id="pagebreak105e3b9c-edf9-430b-8de4-0ad694f4c268" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">2</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="justify"> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td valign="top" width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%">(g)</td> <td valign="top">any Common Shares issuable upon exercise of offered Convertible Securities will have been duly authorized, created and reserved for issuance upon such exercise;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <tr> <td valign="top"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top">(h)</td> <td valign="top">at the time of the issuance of any Securities, the Company validly exists and is duly qualified and in good standing under the laws of its jurisdiction of incorporation and has the necessary corporate power and authority to issue such Securities and to execute and deliver any applicable Governing Document;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <tr> <td valign="top"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top">(i)</td> <td valign="top">any applicable Governing Document will have been duly authorized, executed and delivered by the parties thereto (other than the Company), as applicable, and constitutes legally valid and binding obligations of the parties thereto (other than the Company), enforceable against each of them in accordance with its terms;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <tr> <td valign="top"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top">(j)</td> <td valign="top">the terms of the offered Shelf Securities and of their issuance and sale have been duly established in conformity with the Company&#8217;s constating documents, so as not to violate any applicable law or Governing Document, or result in a default under or breach of any agreement or instrument binding upon the Company, and so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over the Company and the parties (other than the Company) to a Governing Document, as applicable;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <tr> <td valign="top"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top">(k)</td> <td valign="top">the Board will have taken all necessary corporate action, including the adoption of a resolution or resolutions of the Board in form and content as required by applicable law, to approve the issuance and terms of the offered Securities, the consideration to be received therefor, the applicable Governing Documents, if any, and the execution thereof, and related matters (the &#8220;<b>Authorization</b>&#8221;);</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <tr> <td valign="top"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top">(l)</td> <td valign="top">the Company will have received the agreed upon consideration for the issuance of the offered Securities and such Securities will have been delivered by or on behalf of the Company against payment therefor; and</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <tr> <td valign="top"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top">(m)</td> <td valign="top">the offered Securities will have been duly authorized, established, certificated, executed, delivered, countersigned and registered, as applicable, in accordance with the provisions of the Company&#8217;s constating documents, applicable law, applicable Governing Documents, if any, and the Authorization.</td></tr></tr></tr></tr></tr></tr></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">Subject to the foregoing and the other matters set forth herein, we are of the opinion that, as of the date hereof:</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">1. With respect to the Common Shares when issued, sold and delivered in the manner and for the consideration stated in the applicable definitive purchase, underwriting or similar agreement approved by the Board, upon payment of the consideration provided therein to the Company, or upon conversion, exchange or exercise of any other security in accordance with the terms of such security or the instrument governing such security providing for such conversion, exchange or exercise as approved by the Board, for the consideration approved by the Board, each of the Common Shares will be validly issued, fully paid and non-assessable.</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">2. The Sales Agreement Shares have been duly authorized for issuance and upon due issuance and delivery of the Sales Agreement Shares in accordance with the Sales Agreement and upon payment of the consideration therefor provided for in the Sales Agreement, the Sales Agreement Shares will be validly issued, fully paid and nonassessable;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">3. With respect to the Warrants, when (a) one or more agreements (incorporating the provisions as are contained in a document which will be filed as an exhibit to or incorporated by reference in the Registration Statement) have been duly executed and delivered by the Company and a warrant agent, and (b) the Warrants have been issued, sold and delivered in the manner and for the consideration stated in the applicable definitive purchase, underwriting or similar agreement as approved by the Board, for the consideration approved by the Board, the Warrants will be valid and binding obligations of the Company enforceable against the Company in accordance with their terms;</p> <p style="MARGIN: 0px" align="justify">&nbsp; <table id="pagebreakb9e487cd-4a9c-4b65-afcb-cd8e9b288f32" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">3</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">4. With respect to the Debt Securities that may be issued under a Note Indenture, when (a) the Debt Securities have been executed and authenticated in accordance with the terms of the Note Indenture, and (b) the Debt Securities have been issued, sold and delivered in the manner and for the consideration stated in the applicable definitive purchase, underwriting or similar agreement approved by the Board, upon payment of the consideration provided therein to the Company, or upon the conversion, exchange or exercise of any other security in accordance with the terms of such security or the instrument governing such security providing for such conversion, exchange or exercise under the Note Indenture, and as approved by the Board, for the consideration approved by the Board, the Debt Securities to be issued under the Note Indenture will be valid and binding obligations of the Company enforceable against the Company in accordance with their terms; and</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">5. With respect to the Units, assuming the (a) taking of all necessary corporate action to authorize and approve the issuance, execution and terms of any Units, the related Unit Agreements and any securities which are components of the Units, the terms of the offering thereof and related matters, (b) due execution, countersignature (where applicable), authentication, issuance and delivery of the Units, the Unit Agreements, and the Shelf Securities that are components of such Units, in each case upon the payment of the consideration therefor provided for in the applicable definitive purchase, underwriting or similar agreement approved by the Board, and otherwise in accordance with the provisions of the applicable (i) Warrant Agreement, in the case of Warrants, and (ii) Note Indenture, in the case of Debt Securities, such Units will be validly issued and will entitle the holders thereof to the rights specified in the Unit Agreements.</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">The opinions expressed above are subject to the following qualifications:</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">&nbsp;</p> <p style="MARGIN: 0px" align="justify"> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td valign="top" width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%">(i)</td> <td valign="top">the enforceability of any agreement may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws now or hereafter in effect relating to creditors&#8217; rights generally;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <tr> <td valign="top"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top">(ii)</td> <td valign="top">the enforceability of the obligations of a party under any agreement is subject to general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity), including, without limitation:</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <tr> <td valign="top"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top">(iii)</td> <td valign="top">concepts of materiality, reasonableness, good faith and fair dealing in performance and enforcement of a contract required of the party seeking its enforcement;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <tr> <td valign="top"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top">(iv)</td> <td valign="top">the discretion exercisable by a court with respect to equitable remedies, such as specific performance and injunction;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <tr> <td valign="top"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top">(v)</td> <td valign="top">the discretion exercisable by a court with respect to stays of enforcement proceedings and execution of judgment;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <tr> <td valign="top"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top">(vi)</td> <td valign="top">the effect of vitiating factors, such as mistake, misrepresentation, fraud, duress or undue influence;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <tr> <td valign="top"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top">(vii)</td> <td valign="top">we express no opinion as to the enforceability of any term providing for the severance of void, illegal or unenforceable provisions from the remaining provisions of an agreement;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <tr> <td valign="top"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top">(viii)</td> <td valign="top">we express no opinion as to the enforceability of any term providing that modifications, amendments or waivers are not binding unless in writing;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <tr> <td valign="top"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top">(ix)</td> <td valign="top">we express no opinion with respect to rights to indemnity and contribution;</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <tr> <td valign="top"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top">(x)</td> <td valign="top">a court may reserve to itself the right to decline jurisdiction in any action if the court is an inconvenient forum to hear the action or if concurrent proceedings are being brought elsewhere, notwithstanding any waiver of the right to raise such objection or defense thereto;</td></tr></tr></tr></tr></tr></tr></tr></tr></tr></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="justify"> <table id="pagebreak18eff3a9-88b8-41e1-9543-507162576940" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">4</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="justify"> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td valign="top" width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%">(xi)</td> <td valign="top">the right to exercise any unilateral or unfettered discretion pursuant to an agreement will not prevent a court from requiring such discretion to be exercised reasonably; and</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <tr> <td valign="top"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top">(xii)</td> <td valign="top">public policy considerations which may limit the rights or parties to obtain remedies.</td></tr></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">This opinion letter has been prepared for your use in connection with the Registration Statement and is expressed as of the date hereof. Our opinion is expressly limited to the matters set forth above and we render no opinion, whether by implication or otherwise, as to any other matters relating to the Company.</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">We hereby consent to the filing of this opinion letter as an exhibit to the Registration Statement and to the reference to this firm on the cover page and under the caption &#8220;<i>Legal Matters</i>&#8221; in the Prospectus. In giving this consent, we do not hereby admit that we are within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the SEC promulgated thereunder.</p> <p style="MARGIN: 0px">&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15"> <td valign="top" width="50%"></td> <td valign="top" width="3%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="35%"> <p style="MARGIN: 0px">Yours truly,</p></td> <td valign="top" width="12%"></td></tr> <tr height="15"> <td valign="top"></td> <td valign="top"></td> <td valign="bottom">&nbsp;</td> <td valign="top"></td></tr> <tr height="15"> <td valign="top"></td> <td valign="top"> <p style="MARGIN: 0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: black 1px solid" valign="top"> <p style="MARGIN: 0px">/s/ Salley Bowes Harwardt Law Corp.</p></td> <td valign="top"></td></tr> <tr height="15"> <td valign="top"></td> <td valign="top"></td> <td valign="top"></td> <td valign="top"></td></tr></table> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px"> <table class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">5</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p></BODY><!--Document Created by EDGARMaster--></html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>3
<FILENAME>avino_ex101.htm
<DESCRIPTION>AMENDED AND RESTATED CONTROLLED EQUITY OFFERING SALES AGREEMENT
<TEXT>
<html><head><title>avino_ex101.htm</title><!--Document Created by EDGARMaster--></head><BODY spellcheck="true" style="text-align:justify;font:10pt TIMES NEW ROMAN;margin:0px 7%"><p style="MARGIN: 0px" align="right"><b>EXHIBIT 10.1</b></p> <p style="MARGIN: 0px" align="center">&nbsp;</p><b> <p style="MARGIN: 0px" align="right"><b><i>Execution Version</i></b></p></b> <p style="MARGIN: 0px" align="center">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b>AVINO SILVER &amp; GOLD MINES LTD.</b></p> <p style="MARGIN: 0px" align="center">Common Shares</p> <p style="MARGIN: 0px" align="center">(no par value)</p> <p style="MARGIN: 0px" align="center">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b>Amended and Restated Controlled Equity Offering<sup>SM</sup></b></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b><u>Sales Agreement</u></b></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="right">August 21, 2018</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="justify">Cantor Fitzgerald &amp; Co.</p> <p style="MARGIN: 0px" align="justify">499 Park Avenue</p> <p style="MARGIN: 0px" align="justify">New York, NY 10022</p> <p style="MARGIN: 0px" align="justify">&nbsp;</p> <p style="MARGIN: 0px" align="justify">Ladies and Gentlemen:</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">Reference is made to the Amended and Restated Controlled Equity Offering<sup>SM</sup> Sales Agreement, dated as of August 4, 2017 (the &#8220;<b><u>Original Agreement</u></b>&#8221;), by and between Avino Silver &amp; Gold Mines Ltd. (the &#8220;<b><u>Company</u></b>&#8221;), a company continued under the <i>Business Corporations Act </i>(British Columbia) (the &#8220;<b><u>BCBCA</u></b>&#8221;), and Cantor Fitzgerald &amp; Co. (the &#8220;<b><u>Agent</u></b>&#8221;), pursuant to which the Company proposed to issue and sell through the Agent, from time to time during the term of the Original Agreement, on the terms and subject to the conditions set forth in the Original Agreement, common shares of the Company, no par value per share (&#8220;<b><u>Common Stock</u></b>&#8221;). The Company and the Agent wish to amend and restate the Original Agreement in its entirety as provided hereby. </p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">The Company confirms its agreement (as such agreement may be amended from time to time, this &#8220;<b><u>Agreement</u></b>&#8221;) with the Agent as follows:</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">1. <u>Issuance and Sale of Shares</u>. The Company agrees that, from time to time during the term of this Agreement, on the terms and subject to the conditions set forth herein, it may issue and sell through the Agent Common Stock; provided, however, that in no event shall the Company issue or sell through the Agent such number or dollar amount of shares of Common Stock (the &#8220;<b><u>Placement Shares</u></b>&#8221;) that (a) exceeds the number or dollar amount of shares of Common Stock registered pursuant to the effective Registration Statement (as defined below) pursuant to which the offering will be made, (b) exceeds the number or dollar amount of shares of Common Stock allowed to be sold under Form F-3 (including Instruction I.B.5. thereof), (c) exceeds the number of authorized but unissued shares of Common Stock or (d) exceeds the number or dollar amount of shares of Common Stock for which the Company has filed a Prospectus Supplement (defined below) (the lesser of (a), (b), (c) and (d), the &#8220;<b><u>Maximum Amount</u></b>&#8221;). Notwithstanding anything to the contrary contained herein, the parties hereto agree that compliance with the limitations set forth in this Section 1 on the amount of Placement Shares issued and sold under this Agreement shall be the sole responsibility of the Company and that Agent shall have no obligation in connection with such compliance. The issuance and sale of Placement Shares through Agent will be effected pursuant to the Registration Statement (as defined below) filed by the Company and which will be declared effective by the Securities and Exchange Commission (the &#8220;<b><u>Commission</u></b>&#8221;), although nothing in this Agreement shall be construed as requiring the Company to use the Registration Statement to issue any Placement Shares.</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreakd6aaf0ec-2ac6-4631-a56b-08b26adc89b6" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-1-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">The Company has filed or will file, in accordance with the provisions of the Securities Act of 1933, as amended (the &#8220;<b><u>Securities Act</u></b>&#8221;) and the rules and regulations thereunder (the &#8220;<b><u>Securities Act Regulations</u></b>&#8221;), with the Commission a registration statement on Form F-3, including one or more base prospectuses, relating to certain securities, including the Placement Shares to be issued from time to time by the Company, and which incorporates by reference documents that the Company has filed or will file in accordance with the provisions of the Securities Exchange Act of 1934, as amended (the &#8220;<b><u>Exchange Act</u></b>&#8221;), and the rules and regulations thereunder. The Company will, if necessary, prepare a prospectus supplement to the base prospectus included as part of the registration statement, which prospectus supplement will specifically relate to the Placement Shares to be issued from time to time by the Company (the &#8220;<b><u>Prospectus Supplement</u></b>&#8221;). The Company will furnish to the Agent, for use by the Agent, copies of the prospectus included as part of such registration statement, as supplemented, if necessary, by the Prospectus Supplement, relating to the Placement Shares to be issued from time to time by the Company. The Company may file one or more additional registration statements from time to time that will contain a base prospectus and related prospectus or prospectus supplement, if applicable (which shall be a Prospectus Supplement), with respect to the Placement Shares. Except where the context otherwise requires, such registration statement(s), including all documents filed as part thereof or incorporated by reference therein, and including any information contained in a Prospectus (as defined below) subsequently filed with the Commission pursuant to Rule 424(b) under the Securities Act Regulations or deemed to be a part of such registration statement pursuant to Rule 430B of the Securities Act Regulations, is herein called the &#8220;<b><u>Registration Statement</u></b>.&#8221; The base prospectus or base prospectuses, including all documents incorporated therein by reference, included in the Registration Statement, as it may be supplemented, if necessary, by the Prospectus Supplement, in the form in which such prospectus or prospectuses and/or Prospectus Supplement have most recently been filed by the Company with the Commission pursuant to Rule 424(b) under the Securities Act Regulations, together with the then issued Issuer Free Writing Prospectus(es), is herein called the &#8220;<b><u>Prospectus</u></b>.&#8221; </p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">Any reference herein to the Registration Statement, any Prospectus Supplement, Prospectus or any Issuer Free Writing Prospectus (defined below) shall be deemed to refer to and include the documents, if any, incorporated by reference therein (the &#8220;<b><u>Incorporated Documents</u></b>&#8221;), including, unless the context otherwise requires, the documents, if any, filed as exhibits to such Incorporated Documents. Any reference herein to the terms &#8220;amend,&#8221; &#8220;amendment&#8221; or &#8220;supplement&#8221; with respect to the Registration Statement, any Prospectus Supplement, the Prospectus or any Issuer Free Writing Prospectus shall be deemed to refer to and include the filing of any document under the Exchange Act on or after the most-recent effective date of the Registration Statement, or the date of the Prospectus Supplement, Prospectus or such Issuer Free Writing Prospectus, as the case may be, and incorporated therein by reference. For purposes of this Agreement, all references to the Registration Statement, the Prospectus or to any amendment or supplement thereto shall be deemed to include the most recent copy filed with the Commission pursuant to its Electronic Data Gathering Analysis and Retrieval system, or if applicable, the Interactive Data Electronic Application system when used by the Commission (collectively, &#8220;<b><u>EDGAR</u></b>&#8221;).</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreak59ac42d7-33e3-471d-93af-881d6b7b24f3" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-2-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">2. <u>Placements</u>. Each time that the Company wishes to issue and sell Placement Shares hereunder (each, a &#8220;<b><u>Placement</u></b>&#8221;), it will notify the Agent by email notice (or other method mutually agreed to in writing by the parties) of the number of Placement Shares to be issued, the time period during which sales are requested to be made, any limitation on the number of Placement Shares that may be sold in any one day and any minimum price below which sales may not be made (a &#8220;<b><u>Placement Notice</u></b>&#8221;), the form of which is attached hereto as Schedule 1. The Placement Notice shall originate from any of the individuals from the Company set forth on Schedule 3 (with a copy to each of the other individuals from the Company listed on such schedule), and shall be addressed to each of the individuals from the Agent set forth on Schedule 3, as such Schedule 3 may be amended from time to time. The Placement Notice shall be effective unless and until (i) the Agent declines to accept the terms contained therein for any reason, in its sole discretion, (ii) the entire amount of the Placement Shares thereunder have been sold, (iii) the Company suspends or terminates the Placement Notice or (iv) this Agreement has been terminated under the provisions of Section 12. The amount of any discount, commission or other compensation to be paid by the Company to Agent in connection with the sale of the Placement Shares shall be calculated in accordance with the terms set forth in Schedule 2. It is expressly acknowledged and agreed that neither the Company nor the Agent will have any obligation whatsoever with respect to a Placement or any Placement Shares unless and until the Company delivers a Placement Notice to the Agent and the Agent does not decline such Placement Notice pursuant to the terms set forth above, and then only upon the terms specified therein and herein. In the event of a conflict between the terms of this Agreement and the terms of a Placement Notice, the terms of the Placement Notice will control. </p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">3. <u>Sale of Placement Shares by Agent</u>. Subject to the provisions of <u>Section 5(a)</u>, the Agent, for the period specified in the Placement Notice, will use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable state and federal laws, rules and regulations and the rules of the NYSE American or any other applicable exchange within the United States (the &#8220;<b><u>Exchange</u></b>&#8221;), to sell the Placement Shares up to the amount specified, and otherwise in accordance with the terms of such Placement Notice. The Agent will provide written confirmation to the Company no later than the opening of the Trading Day (as defined below) immediately following the Trading Day on which it has made sales of Placement Shares hereunder setting forth the number of Placement Shares sold on such day, the compensation payable by the Company to the Agent pursuant to <u>Section 2</u> with respect to such sales, and the Net Proceeds (as defined below) payable to the Company, with an itemization of the deductions made by the Agent (as set forth in <u>Section 5(b)</u>) from the gross proceeds that it receives from such sales. Subject to the terms of the Placement Notice, the Agent may sell Placement Shares by any method permitted by law deemed to be an &#8220;at the market offering&#8221; as defined in Rule 415(a)(4) of the Securities Act Regulations, including sales made directly on or through the Exchange or any other existing trading market for the Common Stock, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices and/or any other method permitted by law. &#8220;<b><u>Trading Day</u></b>&#8221; means any day on which Common Stock is traded on the Exchange.</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">4. <u>Suspension of Sales</u>. The Company or the Agent may, upon notice to the other party in writing (including by email correspondence to each of the individuals of the other party set forth on Schedule 3, if receipt of such correspondence is actually acknowledged by any of the individuals to whom the notice is sent, other than via auto-reply) or by telephone (confirmed immediately by verifiable facsimile transmission or email correspondence to each of the individuals of the other party set forth on Schedule 3), suspend any sale of Placement Shares (a &#8220;<b><u>Suspension</u></b>&#8221;); provided, however, that such suspension shall not affect or impair any party&#8217;s obligations with respect to any Placement Shares sold hereunder prior to the receipt of such notice. While a Suspension is in effect any obligation under Sections 7(l), 7(m), and 7(n) with respect to the delivery of certificates, opinions, or comfort letters to the Agent, shall be waived, provided, however, that such waiver shall not apply for the Representation Date (defined below) occurring on the date that the Company files its annual report on Form 20-F. Each of the parties agrees that no such notice under this Section 4 shall be effective against any other party unless it is made to one of the individuals named on Schedule 3 hereto, as such Schedule may be amended from time to time.</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreaka4460392-8a00-4c10-aca2-60fa5a9a3a90" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-3-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">5. <u>Sale and Delivery to the Agent; Settlement</u>.</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(a) <u>Sale of Placement Shares</u><i>. </i>On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, upon the Agent&#8217;s acceptance of the terms of a Placement Notice, and unless the sale of the Placement Shares described therein has been declined, suspended, or otherwise terminated in accordance with the terms of this Agreement, the Agent, for the period specified in the Placement Notice, will use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable law and regulations to sell such Placement Shares up to the amount specified, and otherwise in accordance with the terms of such Placement Notice. The Company acknowledges and agrees that (i) there can be no assurance that the Agent will be successful in selling Placement Shares, (ii) the Agent will incur no liability or obligation to the Company or any other person or entity if it does not sell Placement Shares for any reason other than a failure by the Agent to use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable law and regulations to sell such Placement Shares as required under this Agreement and (iii) the Agent shall be under no obligation to purchase Placement Shares on a principal basis pursuant to this Agreement, except as otherwise agreed by the Agent and the Company.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(b) <u>Settlement of Placement Shares</u><i>. </i>Unless otherwise specified in the applicable Placement Notice, settlement for sales of Placement Shares will occur on the second (2<sup>nd</sup>) Trading Day (or such earlier day as is industry practice for regular-way trading) following the date on which such sales are made (each, a &#8220;<b><u>Settlement Date</u></b>&#8221;). The Agent shall notify the Company of each sale of Placement Shares no later than the opening of the Trading Day immediately following the Trading Day on which it has made sales of Placement Shares hereunder. The amount of proceeds to be delivered to the Company on a Settlement Date against receipt of the Placement Shares sold (the &#8220;<b><u>Net Proceeds</u></b>&#8221;) will be equal to the aggregate sales price received by the Agent, after deduction for (i) the Agent&#8217;s commission, discount or other compensation for such sales payable by the Company pursuant to <u>Section 2</u> hereof, and (ii) any transaction fees imposed by any Governmental Authority in respect of such sales.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(c) <i></i><u>Delivery of Placement Shares</u>. On or before each Settlement Date, the Company will, or will cause its transfer agent to, electronically transfer the Placement Shares being sold by crediting the Agent&#8217;s or its designee&#8217;s account (provided the Agent shall have given the Company written notice of such designee at least one Trading Day prior to the Settlement Date) at The Depository Trust Company through its Deposit and Withdrawal at Custodian System or by such other means of delivery as may be mutually agreed upon by the parties hereto which in all cases shall be freely tradable, transferable, registered shares in good deliverable form. On each Settlement Date, the Agent will deliver the related Net Proceeds in same day funds to an account designated by the Company on, or prior to, the Settlement Date. The Company agrees that if the Company, or its transfer agent (if applicable), defaults in its obligation to deliver Placement Shares on a Settlement Date, the Company agrees that in addition to and in no way limiting the rights and obligations set forth in Section 10(a) hereto, it will (i) hold the Agent harmless against any loss, claim, damage, or expense (including reasonable legal fees and expenses), as incurred, arising out of or in connection with such default by the Company or its transfer agent (if applicable) and (ii) pay to the Agent any commission, discount, or other compensation to which it would otherwise have been entitled absent such default.</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreakb38b752b-c9d0-4e1a-90fd-22e8cd60f62f" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-4-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(d) <u>Denominations; Registration</u><i>. </i>Certificates for the Placement Shares, if any, shall be in such denominations and registered in such names as the Agent may request in writing at least one full Business Day (as defined below) before the Settlement Date. The certificates for the Placement Shares, if any, will be made available by the Company for examination and packaging by the Agent in The City of New York not later than noon (New York time) on the Business Day prior to the Settlement Date.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(e) <u>Limitations on Offering Size</u><i>. </i>Under no circumstances shall the Company cause or request the offer or sale of any Placement Shares if, after giving effect to the sale of such Placement Shares, the aggregate gross sales proceeds of Placement Shares sold pursuant to this Agreement would exceed the lesser of (A) together with all sales of Placement Shares under this Agreement, the Maximum Amount, (B) the amount available for offer and sale under the currently effective Registration Statement and (C) the amount authorized from time to time to be issued and sold under this Agreement by the Company&#8217;s board of directors, a duly authorized committee thereof or a duly authorized executive committee, and notified to the Agent in writing. Under no circumstances shall the Company cause or request the offer or sale of any Placement Shares pursuant to this Agreement at a price lower than the minimum price authorized from time to time by the Company&#8217;s board of directors, a duly authorized committee thereof or a duly authorized executive committee, and notified to the Agent in writing. Further, under no circumstances shall the Company cause or permit the aggregate offering amount of Placement Shares sold pursuant to this Agreement to exceed the Maximum Amount. </p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">6. <u>Representations and Warranties of the Company</u>. The Company represents and warrants to, and agrees with Agent that as of the date of this Agreement and as of each Applicable Time (as defined below):</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(a) <u>Registration Statement and Prospectus</u>. The Company and the transactions contemplated by this Agreement meet the requirements for and comply with the conditions for the use of Form F-3 under the Securities Act. The Company is a &#8220;foreign private issuer,&#8221; as such term is defined in Rule 3b-4 under the Exchange Act. The Registration Statement has been or will be filed with the Commission and will be declared effective by the Commission under the Securities Act prior to the issuance of any Placement Notices by the Company. The Prospectus Supplement will name the Agent as the agent in the section entitled &#8220;Plan of Distribution.&#8221; The Company has not received, and has no notice of, any order of the Commission preventing or suspending the use of the Registration Statement, or threatening or instituting proceedings for that purpose. The Registration Statement and the offer and sale of Placement Shares as contemplated hereby meet the requirements of Rule 415 under the Securities Act and comply in all material respects with said Rule. Any statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement have been so described or filed. Copies of the Registration Statement, the Prospectus, and any such amendments or supplements and all documents incorporated by reference therein that were filed with the Commission on or prior to the date of this Agreement have been delivered, or are available through EDGAR and SEDAR, to Agent and its counsel. The Company has not distributed and, prior to the later to occur of each Settlement Date and completion of the distribution of the Placement Shares, will not distribute any offering material in connection with the offering or sale of the Placement Shares other than the Registration Statement and the Prospectus and any Issuer Free Writing Prospectus (as defined below) to which the Agent has consented. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and is currently listed on the Exchange under the trading symbol &#8220;ASM.&#8221; The Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act, delisting the Common Stock from the Exchange, nor has the Company received any notification that the Commission or the Exchange is contemplating terminating such registration or listing. To the Company&#8217;s knowledge, it is in compliance with all applicable listing requirements of the Exchange. The Company has no reason to believe that it will not in the foreseeable future continue to be in compliance with all such listing and maintenance requirements. The currently issued and outstanding Common Stock are also listed and posted for trading on the Toronto Stock Exchange (&#8220;<b><u>TSX</u></b>&#8221;) and no order ceasing or suspending trading in any securities of the Company or prohibiting the trading of any of the Company&#8217;s issued securities has been issued and no proceeding for such purpose are pending or, to the knowledge of the Company, threatened;</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreak9b49330b-2ec5-49f8-9fa0-3f1f76e1c6d6" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-5-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(b) <u>No Misstatement or Omission</u>. The Registration Statement, when it became or becomes effective, and the Prospectus, and any amendment or supplement thereto, on the date of such Prospectus or amendment or supplement, conformed and will conform in all material respects with the requirements of the Securities Act. At each Settlement Date, the Registration Statement and the Prospectus, as of such date, will conform in all material respects with the requirements of the Securities Act. The Registration Statement, when it became or becomes effective, did not, and will not, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus and any amendment and supplement thereto, on the date thereof and at each Applicable Time (defined below), did not or will not include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The documents incorporated by reference in the Prospectus or any Prospectus Supplement did not, and any further documents filed and incorporated by reference therein will not, when filed with the Commission, contain an untrue statement of a material fact or omit to state a material fact required to be stated in such document or necessary to make the statements in such document, in light of the circumstances under which they were made, not misleading. The foregoing shall not apply to statements in, or omissions from, any such document made in reliance upon, and in conformity with, information furnished to the Company by Agent specifically for use in the preparation thereof. </p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(c) <u>Conformity with Securities Act and Exchange Act</u>. The Registration Statement, the Prospectus, any Issuer Free Writing Prospectus or any amendment or supplement thereto, and the documents incorporated by reference in the Registration Statement, the Prospectus or any amendment or supplement thereto, when such documents were or are filed with the Commission under the Securities Act or the Exchange Act or became or become effective under the Securities Act, as the case may be, conformed or will conform in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable. Moreover, the Company is a reporting issuer in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Nova Scotia, New Brunswick, Prince Edward Island, and Newfoundland &amp; Labrador, and to the knowledge of the Company is in good standing under applicable laws and regulations in those jurisdictions and the rules and policies of the TSX (collectively, &#8220;<b>Canadian Securities Laws</b>&#8221;); is not in default in any material respect of any requirement of Canadian Securities Laws and is not included in a list of defaulting reporting issuers maintained by the applicable securities regulators in Canada. In particular, without limiting the foregoing, to the knowledge of the Company, the Company is in compliance at the date hereof with its obligations to make timely disclosure of all material changes to its business.</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreakbf9ecfd1-13bf-4ad1-866c-10a893de7d8d" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-6-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(d) <u>Financial Information</u>. The consolidated financial statements of the Company included or incorporated by reference in the Registration Statement, the Prospectus and the Issuer Free Writing Prospectuses, if any, together with the related notes and schedules, present fairly, in all material respects, the consolidated financial position of the Company and the Material Subsidiaries (as defined below) as of the dates indicated and the consolidated statements of comprehensive loss, shareholders&#8217; equity and cash flows of the Company for the periods specified. Such financial statements, schedules, and notes conform in all material respects with International Financial Reporting Standards as issued by the International Accounting Standards Board (&#8220;<b><u>IFRS</u></b>&#8221;), or if applicable, United States generally accepted accounting principles (&#8220;<b><u>GAAP</u></b>&#8221;), applied on a consistent basis during the periods involved; the other financial and statistical data with respect to the Company and the Material Subsidiaries (as defined below) contained or incorporated by reference in the Registration Statement, the Prospectus and the Issuer Free Writing Prospectuses, if any, are accurately and fairly presented in all material respects and prepared on a basis consistent with the financial statements and books and records of the Company; there are no financial statements (historical or pro forma) that are required to be included or incorporated by reference in the Registration Statement, or the Prospectus that are not included or incorporated by reference as required; the Company and the Material Subsidiaries (as defined below) do not have any material liabilities or obligations, direct or contingent (including any off-balance sheet obligations), not described in the Registration Statement (excluding the exhibits thereto), and the Prospectus; and all disclosures contained or incorporated by reference in the Registration Statement, the Prospectus and the Issuer Free Writing Prospectuses, if any, regarding &#8220;non-GAAP financial measures&#8221; (as such term is defined by the rules and regulations of the Commission) comply with Regulation G of the Exchange Act and Item 10 of Regulation S-K under the Securities Act, to the extent applicable. Moreover, the Company is in compliance with the certification requirements contained in National Instrument 52-109 &#8211; <i>Certification of Disclosure in Issuers&#8217; Annual and Interim Filings</i> of the Canadian Securities Administrators with respect to the Company&#8217;s annual and interim filings with the applicable Canadian securities regulators.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(e) <u>Statistical, Industry-Related and Market-Related Data</u>. The statistical, industry-related and market-related data included in the Registration Statement and the Prospectus are based on or derived from sources that the Company reasonably believes are reliable and accurate, and such data agrees with the sources from which they are derived. </p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(f) <u>Conformity with EDGAR Filing</u>. The Prospectus delivered to Agent for use in connection with the sale of the Placement Shares pursuant to this Agreement will be identical to the versions of the Prospectus created to be transmitted to the Commission for filing via EDGAR and SEDAR, except to the extent permitted by Regulation S-T.</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreak536d9805-b073-41fc-9a17-b77729a904e1" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-7-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(g) <u>Organization</u>. The Company and each of its Material Subsidiaries (as defined below) are, and will be, duly organized, validly existing as a corporation and in good standing (where such concept is recognized) under the laws of their respective jurisdictions of organization. The Company and each of the Material Subsidiaries (as defined below) are, and will be, duly licensed or qualified as a foreign corporation for transaction of business and in good standing under the laws of each other jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such license or qualification, and have all corporate power and authority necessary to own or hold their respective properties and to conduct their respective businesses as described in the Registration Statement and the Prospectus, except where the failure to be so qualified or in good standing or have such power or authority would not, individually or in the aggregate, have a material adverse effect or would reasonably be expected to have a material adverse effect on or affecting the assets, business, operations, earnings, properties, condition (financial or otherwise), prospects, stockholders&#8217; equity or results of operations of the Company and the Material Subsidiaries (as defined below) taken as a whole, or prevent or materially interfere with consummation of the transactions contemplated hereby (a &#8220;<b><u>Material Adverse Effect</u></b>&#8221;).</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(h) <u>Subsidiaries</u>. The subsidiaries set forth on Schedule 4 (collectively, the &#8220;<b><u>Material Subsidiaries</u></b>&#8221;), include all of the Company&#8217;s significant subsidiaries (as such term is defined in Rule 1-02 of Regulation S-X promulgated by the Commission). Except as set forth in the Registration Statement and in the Prospectus, the Company owns, directly or indirectly, all of the equity interests of the Material Subsidiaries free and clear of any lien, charge, security interest, encumbrance, right of first refusal or other restriction, and all the equity interests of the Material Subsidiaries are validly issued and are fully paid, non-assessable and free of preemptive and similar rights. No Material Subsidiary is currently prohibited, directly or indirectly, from paying any dividends to the Company, from making any other distribution on such Material Subsidiary&#8217;s capital stock, from repaying to the Company any loans or advances to such Material Subsidiary from the Company or from transferring any of such Material Subsidiary&#8217;s property or assets to the Company or any other Subsidiary of the Company.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(i) <u>No Violation or Default</u>. Neither the Company nor any of the Material Subsidiaries is (i) in violation of its Memorandum or Articles or similar organizational documents; (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of the Material Subsidiaries is a party or by which the Company or any of the Material Subsidiaries is bound or to which any of the property or assets of the Company or any of the Material Subsidiaries are subject; or (iii) in violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority, except, in the case of each of clauses (ii) and (iii) above, for any such violation or default that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. To the Company&#8217;s knowledge, no other party under any material contract or other agreement to which it or any of the Material Subsidiaries is a party is in default in any respect thereunder where such default would have a Material Adverse Effect.</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreak1e629f16-05fd-4ed8-9c03-6f3b061ff6f6" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-8-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(j) <u>No Material Adverse Change</u>. Subsequent to the respective dates as of which information is given in the Registration Statement, the Prospectus and the Free Writing Prospectuses, if any (including any document deemed incorporated by reference therein), there has not been (i) any Material Adverse Effect or the occurrence of any development that the Company reasonably expects will result in a Material Adverse Effect, (ii) any transaction which is material to the Company and the Material Subsidiaries taken as a whole, (iii) any obligation or liability, direct or contingent (including any off-balance sheet obligations), incurred by the Company or any Subsidiary, which is material to the Company and the Material Subsidiaries taken as a whole, (iv) any material change in the capital stock or outstanding long-term indebtedness of the Company or any of the Material Subsidiaries or (v) any dividend or distribution of any kind declared, paid or made on the capital stock of the Company or any Material Subsidiary, other than in each case above in the ordinary course of business or as otherwise disclosed in the Registration Statement or Prospectus (including any document deemed incorporated by reference therein).</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(k) <u>Capitalization</u>. The issued and outstanding shares of capital stock of the Company have been validly issued, are fully paid and nonassessable and, other than as disclosed in the Registration Statement or the Prospectus, are not subject to any preemptive rights, rights of first refusal or similar rights. The Company has an authorized, issued and outstanding capitalization as set forth in the Registration Statement and the Prospectus as of the dates referred to therein (other than the grant of additional options under the Company&#8217;s existing stock option plans, or changes in the number of outstanding shares of Common Stock of the Company due to the issuance of shares upon the exercise or conversion of securities exercisable for, or convertible into, Common Stock outstanding on the date hereof) and such authorized capital stock conforms to the description thereof set forth in the Registration Statement and the Prospectus. The description of the securities of the Company in the Registration Statement and the Prospectus is complete and accurate in all material respects. Except as disclosed in or contemplated by the Registration Statement or the Prospectus, as of the date referred to therein, the Company does not have outstanding any options to purchase, or any rights or warrants to subscribe for, or any securities or obligations convertible into, or exchangeable for, or any contracts or commitments to issue or sell, any shares of capital stock or other securities.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(l) <u>Authorization; Enforceability</u>. The Company has full legal right, power and authority to enter into this Agreement and perform the transactions contemplated hereby. This Agreement has been duly authorized, executed and delivered by the Company and is a legal, valid and binding agreement of the Company enforceable in accordance with its terms, except to the extent that enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors&#8217; rights generally and by general equitable principles.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(m) <u>Authorization of Placement Shares</u>. The Placement Shares, when issued and delivered pursuant to the terms approved by the board of directors of the Company or a duly authorized committee thereof, or a duly authorized executive committee, against payment therefor as provided herein, will be duly and validly authorized and issued and fully paid and nonassessable, free and clear of any pledge, lien, encumbrance, security interest or other claim, including any statutory or contractual preemptive rights, resale rights, rights of first refusal or other similar rights, and will be registered pursuant to Section 12 of the Exchange Act. The Placement Shares, when issued, will conform in all material respects to the description thereof set forth in or incorporated into the Prospectus.</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreak92b6cf4c-a952-4108-b67d-4de3952a833a" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-9-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(n) <u>No Consents Required</u>. No consent, approval, authorization, order, registration or qualification of or with any Governmental Authority is required for the execution, delivery and performance by the Company of this Agreement, the issuance and sale by the Company of the Placement Shares, except for (i) the filing of a prospectus supplement for qualification of the Placement Shares for distribution in the United States with the applicable Canadian securities regulators; and (ii) such consents, approvals, authorizations, orders and registrations or qualifications as may be required under applicable U.S. state securities laws or by the by&#8209;laws and rules of the Financial Industry Regulatory Authority, Inc. (&#8220;<b><u>FINRA</u></b>&#8221;) or the Exchange in connection with the sale of the Placement Shares by the Agent. </p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(o) <u>No Preferential Rights</u>. Except as set forth in the Registration Statement and the Prospectus, (i) no person, as such term is defined in Rule 1-02 of Regulation S-X promulgated under the Securities Act (each, a &#8220;<b><u>Person</u></b>&#8221;), has the right, contractual or otherwise, to cause the Company to issue or sell to such Person any Common Stock or shares of any other capital stock or other securities of the Company, (ii) no Person has any preemptive rights, resale rights, rights of first refusal, rights of co-sale, or any other rights (whether pursuant to a &#8220;poison pill&#8221; provision or otherwise) to purchase any Common Stock or shares of any other capital stock or other securities of the Company, (iii) no Person has the right to act as an underwriter or as a financial advisor to the Company in connection with the offer and sale of the Common Stock, and (iv) no Person has the right, contractual or otherwise, to require the Company to register under the Securities Act any Common Stock or shares of any other capital stock or other securities of the Company, or to include any such shares or other securities in the Registration Statement or the offering contemplated thereby, whether as a result of the filing or effectiveness of the Registration Statement or the sale of the Placement Shares as contemplated thereby or otherwise.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(p) <u>Independent Public Accounting Firm</u>. Manning Elliot LLP (the &#8220;<b><u>Accountant</u></b>&#8221;), whose report on the consolidated financial statements of the Company is filed with the Commission as part of the Company&#8217;s most recent Annual Report on Form 20-F filed with the Commission and incorporated by reference into the Registration Statement and the Prospectus, are and, during the periods covered by their report, were an independent registered public accounting firm within the meaning of the Securities Act and the Public Company Accounting Oversight Board (United States). To the Company&#8217;s knowledge, after due and careful inquiry, the Accountant is not in violation of the auditor independence requirements of the Sarbanes-Oxley Act of 2002 (the &#8220;<b><u>Sarbanes-Oxley Act</u></b>&#8221;) with respect to the Company. Moreover, the Accountant is considered an independent accountant as required under Canadian Securities Laws and there has never been a reportable disagreement (within the meaning of National Instrument 51-102 &#8211; <i>Continuous Disclosure</i>) with the present or former auditors of the Company. The Company&#8217;s audit committee is comprised and operates in accordance with the requirements of National Instrument 52-110 &#8211; <i>Audit Committees of the Canadian Securities Administrators</i>, each member of which is &#8220;independent&#8221; within the meaning of such instrument.</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreakfe693fe3-574c-4479-97d2-09686ab3ac9d" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-10-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(q) <u>Enforceability of Agreements</u>. All agreements between the Company and third parties expressly referenced in the Registration Statement and the Prospectus are legal, valid and binding obligations of the Company enforceable in accordance with their respective terms, except to the extent that (i) enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors&#8217; rights generally and by general equitable principles and (ii) the indemnification provisions of certain agreements may be limited by federal or state securities laws or public policy considerations in respect thereof.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(r) <u>No Litigation</u>. Except as set forth in the Registration Statement or the Prospectus, there are no legal, governmental or regulatory actions, suits or proceedings pending, nor, to the Company&#8217;s knowledge, any legal, governmental or regulatory audits or investigations, to which the Company or a Subsidiary is a party or to which any property of the Company or any of the Material Subsidiaries is the subject that, individually or in the aggregate, if determined adversely to the Company or any of the Material Subsidiaries, would reasonably be expected to have a Material Adverse Effect or materially and adversely affect the ability of the Company to perform its obligations under this Agreement; to the Company&#8217;s knowledge, no such actions, suits or proceedings are threatened or contemplated by any Governmental Authority or threatened by others; and (i) there are no current or pending legal, governmental or regulatory audits or investigations, actions, suits or proceedings that are required under the Securities Act to be described in the Prospectus that are not so described; and (ii) there are no contracts or other documents that are required under the Securities Act to be filed as exhibits to the Registration Statement that are not so filed. </p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(s) <u>Intellectual Property</u>. Except as disclosed in the Registration Statement and the Prospectus, the Company and the Material Subsidiaries own, possess, license or have other rights to use all foreign and domestic patents, patent applications, trade and service marks, trade and service mark registrations, trade names, copyrights, licenses, inventions, trade secrets, technology, Internet domain names, know-how and other intellectual property (collectively, the &#8220;<b><u>Intellectual Property</u></b>&#8221;), necessary for the conduct of their respective businesses as now conducted except to the extent that the failure to own, possess, license or otherwise hold adequate rights to use such Intellectual Property would not, individually or in the aggregate, have a Material Adverse Effect. Except as disclosed in the Registration Statement and the Prospectus (i) there are no rights of third parties to any such Intellectual Property owned by the Company and the Material Subsidiaries; (ii) to the Company&#8217;s knowledge, there is no infringement by third parties of any such Intellectual Property; (iii) there is no pending or, to the Company&#8217;s knowledge, threatened action, suit, proceeding or claim by others challenging the Company&#8217;s and the Material Subsidiaries&#8217; rights in or to any such Intellectual Property, and the Company is unaware of any facts which could form a reasonable basis for any such action, suit, proceeding or claim; (iv) there is no pending or, to the Company&#8217;s knowledge, threatened action, suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property; (v) there is no pending or, to the Company&#8217;s knowledge, threatened action, suit, proceeding or claim by others that the Company and the Material Subsidiaries infringe or otherwise violate any patent, trademark, copyright, trade secret or other proprietary rights of others; (vi) to the Company&#8217;s knowledge, there is no third-party U.S. patent or published U.S. patent application which contains claims for which an Interference Proceeding (as defined in 35 U.S.C. &#167; 135) has been commenced against any patent or patent application described in the Prospectus as being owned by or licensed to the Company; and (vii) the Company and the Material Subsidiaries have complied with the terms of each agreement pursuant to which Intellectual Property has been licensed to the Company or such Subsidiary, and all such agreements are in full force and effect, except, in the case of any of clauses (i)-(vii) above, for any such infringement by third parties or any such pending or threatened suit, action, proceeding or claim as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreake95b0fca-504b-44e9-8ee1-0e12a608dc66" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-11-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(t) <u>Market Capitalization</u>. At the time the Registration Statement will be originally declared effective, and at the time the Company&#8217;s most recent Annual Report on Form 20-F was filed with the Commission, the Company met or will meet the then applicable requirements for the use of Form F-3 under the Securities Act, including but not limited to Instruction I.B.5 of Form F-3. As of the date of this Agreement, the aggregate market value of the outstanding voting and non-voting common equity (as defined in Securities Act Rule 405) of the Company held by persons other than affiliates of the Company (pursuant to Securities Act Rule 144, those that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the Company) (the &#8220;<b><u>Non-Affiliate Shares</u></b>&#8221;), was approximately $69,077,000 (calculated by multiplying (x) the highest price at which the common equity of the Company closed on the Exchange within 60 days of the date of this Agreement times (y) the number of Non-Affiliate Shares). The Company is not a shell company (as defined in Rule 405 under the Securities Act) and has not been a shell company for at least 12 calendar months previously and if it has been a shell company at any time previously, has filed current Form 10 information (as defined in Instruction I.B.5 of Form F-3) with the Commission at least 12 calendar months previously reflecting its status as an entity that is not a shell company.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(u) <u>No Material Defaults</u>. Neither the Company nor any of the Material Subsidiaries has defaulted on any installment on indebtedness for borrowed money or on any rental on one or more long-term leases, which defaults, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect. The Company has not filed a report pursuant to Section 13(a) or 15(d) of the Exchange Act since the filing of its last Annual Report on Form 20-F, indicating that it (i) has failed to pay any dividend or sinking fund installment on preferred stock or (ii) has defaulted on any installment on indebtedness for borrowed money or on any rental on one or more long-term leases, which defaults, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(v) <u>Certain Market Activities</u>. Neither the Company, nor any of the Material Subsidiaries, nor any of their respective directors, officers or controlling persons has taken, directly or indirectly, any action designed, or that has constituted or might reasonably be expected to cause or result in, under the Exchange Act or otherwise, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Placement Shares.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(w) <u>Broker/Dealer Relationships</u>. Neither the Company nor any of the Material Subsidiaries or any related entities (i) is required to register as a &#8220;broker&#8221; or &#8220;dealer&#8221; in accordance with the provisions of the Exchange Act or (ii) directly or indirectly through one or more intermediaries, controls or is a &#8220;person associated with a member&#8221; or &#8220;associated person of a member&#8221; (within the meaning set forth in the FINRA Manual).</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreak4b210e32-f2c8-498a-bb27-0cc5b4c79785" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-12-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(x) <u>No Reliance</u>. The Company has not relied upon the Agent or legal counsel for the Agent for any legal, tax or accounting advice in connection with the offering and sale of the Placement Shares.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(y) <u>Taxes</u>. The Company and each of the Material Subsidiaries have filed all U.S. federal, Canadian, state, provincial, local and foreign tax returns which have been required to be filed and paid all taxes shown thereon through the date hereof, to the extent that such taxes have become due and are not being contested in good faith, except where the failure to so file or pay would not have a Material Adverse Effect. Except as otherwise disclosed in or contemplated by the Registration Statement or the Prospectus, no tax deficiency has been determined adversely to the Company or any of the Material Subsidiaries which has had, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The Company has no knowledge of any federal, state, provincial or other governmental tax deficiency, penalty or assessment which has been or might be asserted or threatened against it which would have a Material Adverse Effect.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(z) <u>Title to Real and Personal Property</u>. Except as set forth in the Registration Statement or the Prospectus, the Company and the Material Subsidiaries have good and marketable title in fee simple to all items of real property owned by them, good and valid title to all personal property described in the Registration Statement or the Prospectus as being owned by them that are material to the businesses of the Company or such Material Subsidiary, in each case free and clear of all liens, encumbrances and claims, except those that (i) do not materially interfere with the use made and proposed to be made of such property by the Company and any of the Material Subsidiaries or (ii) would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. Any real or personal property described in the Registration Statement or the Prospectus as being leased by the Company and any of the Material Subsidiaries is held by them under valid, existing and enforceable leases, except those that (A) do not materially interfere with the use made or proposed to be made of such property by the Company or any of the Material Subsidiaries or (B) would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. Each of the properties of the Company and the Material Subsidiaries complies with all applicable codes, laws and regulations (including, without limitation, building and zoning codes, laws and regulations and laws relating to access to such properties), except if and to the extent disclosed in the Registration Statement or the Prospectus or except for such failures to comply that would not, individually or in the aggregate, reasonably be expected to interfere in any material respect with the use made and proposed to be made of such property by the Company and the Material Subsidiaries or otherwise have a Material Adverse Effect. None of the Company or the Material Subsidiaries has received from any governmental or regulatory authorities any notice of any condemnation of, or zoning change affecting, the properties of the Company and the Material Subsidiaries, and the Company knows of no such condemnation or zoning change which is threatened, except for such that would not reasonably be expected to interfere in any material respect with the use made and proposed to be made of such property by the Company and the Material Subsidiaries or otherwise have a Material Adverse Effect, individually or in the aggregate.</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreak2dd5cb1b-b84b-4f68-b4a3-f6c3d3d1f3e0" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-13-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(aa) <u>Environmental Laws</u>. Except as set forth in the Registration Statement or the Prospectus: </p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 135px">(i) each of the Company and the Material Subsidiaries is in compliance in all material respects with all applicable federal, provincial, state, municipal and local laws, statutes, ordinances, by-laws and regulations and orders, directives and decisions rendered by any ministry, department or administrative or regulatory agency, domestic or foreign (the &#8220;<b>Environmental Laws</b>&#8221;) relating to the protection of the environment, occupational health and safety or the processing, use, treatment, storage, disposal, discharge, transport or handling of any pollutants, contaminants, chemicals or industrial, toxic or hazardous wastes or substance (the &#8220;<b>Hazardous Substances</b>&#8221;);</p> <p style="MARGIN: 0px; TEXT-INDENT: 135px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 135px">(ii) each of the Company and the Material Subsidiaries has obtained all licenses, permits, approvals, consents, certificates, registrations and other authorizations under all applicable Environmental Laws (the &#8220;<b>Environmental Permits</b>&#8221;) necessary as at the date hereof for the operation of the businesses carried on or proposed to be commenced by the Company and the Material Subsidiaries and each Environmental Permit is valid, subsisting and in good standing and to the knowledge of the Company neither the Company nor the Material Subsidiaries is in default or breach of any Environmental Permit which would have a Material Adverse Effect, and no proceeding is pending or, to the knowledge of the Company or the Material Subsidiaries, threatened, to revoke or limit any Environmental Permit;</p> <p style="MARGIN: 0px; TEXT-INDENT: 135px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 135px">(iii) neither the Company nor the Material Subsidiaries has used, except in compliance with all Environmental Laws and Environmental Permits, and other than as may be incidental to mineral resource exploration, development, mining, recovery, processing or milling, any property or facility which it owns or leases or previously owned or leased, to generate, manufacture, process, distribute, use, treat, store, dispose of, transport or handle any Hazardous Substance;</p> <p style="MARGIN: 0px; TEXT-INDENT: 135px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 135px">(iv) neither the Company nor the Material Subsidiaries (including, if applicable, any predecessor companies) has received any notice of, or been prosecuted for an offence alleging, non-compliance with any Environmental Law, and neither the Company nor the Material Subsidiaries (including, if applicable, any predecessor companies) has settled any allegation of non-compliance short of prosecution. There are no orders or directions relating to environmental matters requiring any material work, repairs, construction or capital expenditures to be made with respect to any of the assets of the Company or the Material Subsidiaries, nor has the Company or the Material Subsidiaries received notice of any of the same; and</p> <p style="MARGIN: 0px; TEXT-INDENT: 135px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 135px">(v) neither the Company nor the Material Subsidiaries has received any notice wherein it is alleged or stated that the Company or the Material Subsidiaries is potentially responsible for a federal, provincial, state, municipal or local clean-up site or corrective action under any Environmental Laws. Neither the Company nor the Material Subsidiaries has received any request for information in connection with any federal, state, municipal or local inquiries as to disposal sites.</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreak4a3edd44-6aa9-40e9-964b-f961898e7398" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-14-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(bb) <u>Disclosure Controls</u>. The Company and each of the Material Subsidiaries maintain systems of internal accounting controls applicable under IFRS, or if applicable under GAAP, sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management&#8217;s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management&#8217;s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company&#8217;s internal control over financial reporting is effective and the Company is not aware of any material weaknesses in its internal control over financial reporting (other than as set forth in the Prospectus). Since the date of the latest audited financial statements of the Company included or incorporated by reference in the Registration Statement and the Prospectus, there has been no change in the Company&#8217;s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company&#8217;s internal control over financial reporting (other than as set forth in the Prospectus). The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 and 15d-15) for the Company and designed such disclosure controls and procedures to ensure that material information relating to the Company and each of the Material Subsidiaries is made known to the certifying officers by others within those entities, particularly during the period in which the Company&#8217;s Annual Report on Form 20-F is being prepared or during the period in which financial statements will be filed or furnished with the Commission on Form 6-K. The Company&#8217;s certifying officers have evaluated the effectiveness of the Company&#8217;s controls and procedures as of a date within 90 days prior to the filing date of the Form 20-F for the fiscal year most recently ended (such date, the <b>&#8220;<u>Evaluation Date</u></b>&#8221;). The Company presented in its Form 20-F for the fiscal year most recently ended the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date and the disclosure controls and procedures are effective. Since the Evaluation Date, there have been no significant changes in the Company&#8217;s internal controls (as such term is defined in Item 307(b) of Regulation S-K under the Securities Act) or, to the Company&#8217;s knowledge, in other factors that could significantly affect the Company&#8217;s internal controls.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(cc) <u>Sarbanes-Oxley</u>. There is and has been no failure on the part of the Company or any of the Company&#8217;s directors or officers, in their capacities as such, to comply in all material respects with any applicable provisions of the Sarbanes-Oxley Act and the rules and regulations promulgated thereunder. Each of the principal executive officer and the principal financial officer of the Company (or each former principal executive officer of the Company and each former principal financial officer of the Company as applicable) has made all certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act with respect to all reports, schedules, forms, statements and other documents required to be filed by it or furnished by it to the Commission. For purposes of the preceding sentence, &#8220;principal executive officer&#8221; and &#8220;principal financial officer&#8221; shall have the meanings given to such terms in the Sarbanes-Oxley Act.</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreake69430c7-9e33-41b0-a50d-f6c38753df86" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-15-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(dd) <u>Mining Rights</u>. The Avino mine, San Gonzalo mine and Bralorne Gold mine, each as described in the Registration Statement or included or incorporated by reference in the Prospectus (collectively, the &#8220;<b><u>Material Properties</u></b>&#8221;) are the only material resource properties in which the Company or the Material Subsidiaries have an interest; the Company or through the Material Subsidiaries, hold either freehold title, mining leases, mining concessions, mining claims, exploration permits, prospecting permits or participant interests or other conventional property or proprietary interests or rights, recognized in the jurisdiction in which the Material Properties are located, in respect of the ore bodies and minerals located on the Material Properties in which the Company (through the applicable Material Subsidiary) has an interest under valid, subsisting and enforceable title documents or other recognized and enforceable agreements, contracts, arrangements or understandings, sufficient to permit the Company (through the applicable Material Subsidiary) to explore for and exploit the minerals relating thereto; all leases or claims and permits relating to the Material Properties in which the Company (through the applicable Material Subsidiary) has an interest or right have been validly located and recorded in accordance with all applicable laws and are valid and subsisting; the Company (through the applicable Material Subsidiary) has all necessary surface rights, access rights and other necessary rights and interests relating to the Material Property in which the Company (through the applicable Material Subsidiary) has an interest granting the Company (through the applicable Material Subsidiary) the right and ability to explore for and exploit minerals, ore and metals for development and production purposes as are appropriate in view of the rights and interest therein of the Company or the applicable Material Subsidiary, with only such exceptions as do not materially interfere with the current use made by the Company or the applicable Material Subsidiary of the rights or interest so held, and each of the proprietary interests or rights and each of the agreements, contracts, arrangements or understandings and obligations relating thereto referred to above is currently in good standing in all respects in the name of the Company or the applicable Material Subsidiary; except as disclosed in the Prospectus, the Company and the Material Subsidiaries do not have any responsibility or obligation to pay any commission, royalty, license, fee or similar payment to any person with respect to the property rights thereof;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 90px">(i) the Company or the applicable Material Subsidiary holds direct interests in the Material Properties, as described in the Registration Statement or the Prospectus (the &#8220;<b>Project Rights</b>&#8221;), under valid, subsisting and enforceable agreements or instruments, to the knowledge of the Company and all such agreements and instruments in connection with the Project Rights are valid and subsisting and enforceable in accordance with their terms;</p> <p style="MARGIN: 0px 0px 0px 90px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 90px">(ii) the Company and the Material Subsidiaries have identified all the permits, certificates, and approvals (collectively, the &#8220;<b>Permits</b>&#8221;) which are or will be required for the exploration, development and eventual or actual operation of the Material Properties, which Permits include but are not limited to environmental assessment certificates, water licenses, land tenures, rezoning or zoning variances and other necessary local, provincial, state and federal approvals; and the appropriate Permits have either been received, applied for, or the processes to obtain such Permits have been or will in due course be initiated by the Company or the applicable Material Subsidiaries; and neither the Company nor the applicable Material Subsidiaries know of any issue or reason why the Permits should not be approved and obtained in the ordinary course;</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreakf408766f-5a16-430c-8a6d-26a125aa7eae" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-16-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 90px">(iii) all assessments or other work required to be performed in relation to the material mining claims and the mining rights of the Company and the applicable Material Subsidiary in order to maintain their respective interests therein, if any, have been performed to date and the Company and the applicable Material Subsidiary have complied with all applicable governmental laws, regulations and policies in this regard as well as with regard to legal and contractual obligations to third parties in this regard except in respect of mining claims and mining rights that the Company and the applicable Material Subsidiary intend to abandon or relinquish and except for any non-compliance which would not either individually or in the aggregate have a Material Adverse Effect; all such mining claims and mining rights are in good standing in all respects as of the date of this Agreement;</p> <p style="MARGIN: 0px 0px 0px 90px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 90px">(iv) all mining operations on the properties of the Company and the Material Subsidiaries (including, without limitation, the Material Properties) have been conducted in all respects in accordance with good mining and engineering practices and all applicable workers&#8217; compensation and health and safety and workplace laws, regulations and policies have been duly complied with; </p> <p style="MARGIN: 0px 0px 0px 90px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 90px">(v) there are no environmental audits, evaluations, assessments, studies or tests relating to the Company or the Material Subsidiaries except for ongoing assessments conducted by or on behalf of the Company and the Material Subsidiaries in the ordinary course; </p> <p style="MARGIN: 0px 0px 0px 90px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 90px">(vi) the Company made available to the respective authors thereof prior to the issuance of all of the applicable technical reports relating to the Material Properties (the &#8220;<b>Reports</b>&#8221;), for the purpose of preparing the Reports, as applicable, all information requested, and no such information contained any material misrepresentation as at the relevant time the relevant information was made available; the Company does not have any knowledge of a change in any production, cost, price, reserves or other relevant information provided since the dates that such information was so provided which would have a Material Adverse Effect; and</p> <p style="MARGIN: 0px 0px 0px 90px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 90px">(vii) the Reports accurately and completely set forth all material facts relating to the Material Properties; and since the date of preparation of the Reports, there has been no change that would disaffirm or materially change any aspect of the Reports.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(ee) <u>Finder&#8217;s Fees</u>. Neither the Company nor any of the Material Subsidiaries has incurred any liability for any finder&#8217;s fees, brokerage commissions or similar payments in connection with the transactions herein contemplated, except as may otherwise exist with respect to Agent pursuant to this Agreement.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(ff) <u>Labor Disputes</u>. No labor disturbance by or dispute with employees of the Company or any of the Material Subsidiaries exists or, to the knowledge of the Company, is threatened that could reasonably be expected to have resulted in a Material Adverse Effect.</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreak4e1dae40-83d8-400c-9ed3-e4d98d065214" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-17-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(gg) <u>Local Disputes</u>. Except as disclosed in the Registration Statement and the Prospectus, no dispute between the Company and any local, native or indigenous group exists, or to the Company&#8217;s knowledge, is threatened or imminent with respect to any of the Company&#8217;s properties or exploration activities that could reasonably be expected to have a Material Adverse Effect.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(hh) <u>Investment Company Act</u>. Neither the Company nor any of the Material Subsidiaries is or, after giving effect to the offering and sale of the Placement Shares and the application of the proceeds thereof as described in the Registration Statement and the Prospectus, will be an &#8220;investment company&#8221; or an entity &#8220;controlled&#8221; by an &#8220;investment company,&#8221; as such terms are defined in the Investment Company Act of 1940, as amended (the &#8220;<b><u>Investment Company Act</u></b>&#8221;).</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(ii) <u>Operations</u>. The operations of the Company and the Material Subsidiaries are and have been conducted at all times in compliance with applicable financial record keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the<i> Proceeds of Crime (Money Laundering) and Terrorist Financing Act</i> (Canada), the <i>Corruption of Foreign Public Officials Act</i> (Canada) and applicable rules and regulations thereunder, and the money laundering statutes of all jurisdictions to which the Company or its Subsidiaries are subject, the rules and regulations thereunder and any related or similar applicable rules, regulations or guidelines, issued, administered or enforced by any Governmental Authority (collectively, the &#8220;<b><u>Money Laundering Laws</u></b>&#8221;), except as would not reasonably be expected to result in a Material Adverse Effect; and no action, suit or proceeding by or before any court or Governmental Authority or any arbitrator involving the Company or any of the Material Subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(jj) <u>Off-Balance Sheet Arrangements</u>. There are no transactions, arrangements and other relationships between and/or among the Company, and/or, to the knowledge of the Company, any of its affiliates and any unconsolidated entity, including, but not limited to, any structural finance, special purpose or limited purpose entity (each, an &#8220;<b><u>Off Balance Sheet Transaction</u></b>&#8221;) that could reasonably be expected to affect materially the Company&#8217;s liquidity or the availability of or requirements for its capital resources, including those Off Balance Sheet Transactions described in the Commission&#8217;s Statement about Management&#8217;s Discussion and Analysis of Financial Conditions and Results of Operations (Release Nos. 33-8056; 34-45321; FR-61), required to be described in the Prospectus which have not been described as required.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(kk) <u>Underwriter Agreements</u>. The Company is not a party to any agreement with an agent or underwriter for any other &#8220;at the market&#8221; or continuous equity or debt transaction.</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreakfba2acdd-73e9-4385-934b-1b23d1937b16" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-18-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(ll) <u>ERISA</u>. To the knowledge of the Company, each material employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (&#8220;<u>ERISA</u>&#8221;) or its Canadian or foreign law equivalent, that is maintained, administered or contributed to by the Company or any of its affiliates for employees or former employees of the Company and any of the Material Subsidiaries has been maintained in material compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to ERISA and the Internal Revenue Code of 1986, as amended (the &#8220;<u>Code</u>&#8221;) or its Canadian or foreign law equivalent; no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code or its Canadian or foreign law equivalent, has occurred which would result in a material liability to the Company with respect to any such plan excluding transactions effected pursuant to a statutory or administrative exemption; and for each such plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA or its Canadian or foreign law equivalent, no &#8220;accumulated funding deficiency&#8221; as defined in Section 412 of the Code or its Canadian or foreign law equivalent has been incurred, whether or not waived, and the fair market value of the assets of each such plan (excluding for these purposes accrued but unpaid contributions) exceeds the present value of all benefits accrued under such plan determined using reasonable actuarial assumptions.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(mm) <u>Forward Looking Statements</u>. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) (a &#8220;<b><u>Forward Looking Statement</u></b>&#8221;) contained in the Registration Statement and the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith. The Forward Looking Statements incorporated by reference in the Registration Statement and the Prospectus from the Company&#8217;s Annual Report on Form 20-F for the fiscal year most recently ended (i) are within the coverage of the safe harbor for forward looking statements set forth in Section 27A of the Securities Act, Rule 175(b) under the Securities Act or Rule 3b-6 under the Exchange Act, as applicable, (ii) were made by the Company with a reasonable basis and in good faith and reflect the Company&#8217;s good faith commercially reasonable best estimate of the matters described therein, and (iii) have been prepared in accordance with Item 10 of Regulation S-K under the Securities Act.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(nn) <u>Agent Purchases</u>. The Company acknowledges and agrees that Agent has informed the Company that the Agent may, to the extent permitted under the Securities Act, the Exchange Act and FINRA, purchase and sell Common Stock for its own account while this Agreement is in effect.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(oo) <u>Margin Rules</u>. Neither the issuance, sale and delivery of the Placement Shares nor the application of the proceeds thereof by the Company as described in the Registration Statement and the Prospectus will violate Regulation T, U or X of the Board of Governors of the Federal Reserve System or any other regulation of such Board of Governors.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(pp) <u>Insurance</u>. The Company and each of the Material Subsidiaries carry, or are covered by, insurance in such amounts and covering such risks as the Company and each of the Material Subsidiaries reasonably believe are adequate for the conduct of their properties and as is customary for companies engaged in similar businesses in similar industries. </p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreakc906aa44-daf7-4762-8a20-663fcd79f11e" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-19-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(qq) <u>No Improper Practices</u>. (i) Neither the Company nor, to the Company&#8217;s knowledge, the Material Subsidiaries, nor to the Company&#8217;s knowledge, any of their respective executive officers has, in the past five years, made any unlawful contributions to any candidate for any political office (or failed fully to disclose any contribution in violation of law) or made any contribution or other payment to any official of, or candidate for, any federal, state, provincial, municipal, or foreign office or other person charged with similar public or quasi-public duty in violation of any law or of the character required to be disclosed in the Prospectus; (ii) no relationship, direct or indirect, exists between or among the Company or, to the Company&#8217;s knowledge, any Material Subsidiary or any affiliate of any of them, on the one hand, and the directors, officers and shareholders of the Company or, to the Company&#8217;s knowledge, any Material Subsidiary, on the other hand, that is required by the Securities Act to be described in the Registration Statement and the Prospectus that is not so described; (iii) no relationship, direct or indirect, exists between or among the Company or any Material Subsidiary or any affiliate of them, on the one hand, and the directors, officers, or stockholders of the Company or, to the Company&#8217;s knowledge, any Material Subsidiary, on the other hand, that is required by the rules of FINRA (or Canadian equivalent thereof) to be described in the Registration Statement and the Prospectus that is not so described; (iv) except as described in the Prospectus, there are no material outstanding loans or advances or material guarantees of indebtedness by the Company or, to the Company&#8217;s knowledge, any Material Subsidiary to or for the benefit of any of their respective officers or directors or any of the members of the families of any of them; and (v) the Company has not offered, or caused any placement agent to offer, Common Stock to any person with the intent to influence unlawfully (A) a customer or supplier of the Company or any Material Subsidiary to alter the customer&#8217;s or supplier&#8217;s level or type of business with the Company or any Material Subsidiary or (B) a trade journalist or publication to write or publish favorable information about the Company or any Material Subsidiary or any of their respective products or services, and, (vi) neither the Company nor any Material Subsidiary nor, to the Company&#8217;s knowledge, any employee or agent of the Company or any Material Subsidiary has made any payment of funds of the Company or any Material Subsidiary or received or retained any funds in violation of any law, rule or regulation (including, without limitation, the Foreign Corrupt Practices Act of 1977) and the <i>Corruption of Foreign Public Officials Act</i> (Canada)), which payment, receipt or retention of funds is of a character required to be disclosed in the Registration Statement or the Prospectus.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(rr) <u>Status Under the Securities Act</u>. The Company was not and is not an ineligible issuer as defined in Rule 405 under the Securities Act at the times specified in Rules 164 and 433 under the Securities Act in connection with the offering of the Placement Shares.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(ss) <u>No Misstatement or Omission in an Issuer Free Writing Prospectus</u>. Each Issuer Free Writing Prospectus, as of its issue date and as of each Applicable Time (as defined in <u>Section 26</u> below), did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement or the Prospectus, including any incorporated document deemed to be a part thereof that has not been superseded or modified. The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus based upon and in conformity with written information furnished to the Company by the Agent specifically for use therein.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(tt) <u>No Conflicts</u>. Neither the execution of this Agreement, nor the issuance, offering or sale of the Placement Shares, nor the consummation of any of the transactions contemplated herein and therein, nor the compliance by the Company with the terms and provisions hereof and thereof will conflict with, or will result in a breach of, any of the terms and provisions of, or has constituted or will constitute a default under, or has resulted in or will result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant to the terms of any contract or other agreement to which the Company may be bound or to which any of the property or assets of the Company is subject, except (i) such conflicts, breaches or defaults as may have been waived and (ii) such conflicts, breaches and defaults that would not have a Material Adverse Effect; nor will such action result (x) in any violation of the provisions of the organizational or governing documents of the Company, or (y) in any material violation of the provisions of any statute or any order, rule or regulation applicable to the Company or of any court or of any federal, state or other regulatory authority or other government body having jurisdiction over the Company.</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreakc7eeb2f3-a337-40f2-807a-be93294f0c28" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-20-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(uu) <u>Sanctions</u>. (i) The Company represents that, neither the Company nor any of the Material Subsidiaries (collectively, the &#8220;<b><u>Entity</u></b>&#8221;) nor to the Company&#8217;s knowledge, any director, officer, employee, agent, affiliate or representative of the Entity, is a government, individual, or entity (in this paragraph (uu), &#8220;<b><u>Person</u></b>&#8221;) that is, or is owned or controlled by a Person that is:</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 90px; TEXT-INDENT: 45px" align="justify">(A) the subject of any sanctions administered or enforced by the U.S. Department of Treasury&#8217;s Office of Foreign Assets Control, the United Nations Security Council, the European Union, Her Majesty&#8217;s Treasury, the Office of the Superintendent of Financial Institutions (Canada), or pursuant to the <i>Special Economic Measures Act </i>(Canada) or other relevant sanctions authority or relevant statute, rule, or regulation (collectively, &#8220;<b><u>Sanctions</u></b>&#8221;), nor</p> <p style="MARGIN: 0px 0px 0px 90px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 90px; TEXT-INDENT: 45px" align="justify">(B) located, organized or resident in a country or territory that is the subject of Sanctions (including, without limitation, Cuba, Iran, North Korea, Syria, and the Crimea Region of the Ukraine).</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px" align="justify">(ii) The Entity represents and covenants that it will not, directly or indirectly, use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person:</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 90px; TEXT-INDENT: 45px" align="justify">(A) to fund or facilitate any activities or business of or with any Person or in any country or territory that, at the time of such funding or facilitation, is the subject of Sanctions; or</p> <p style="MARGIN: 0px 0px 0px 90px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 90px; TEXT-INDENT: 45px" align="justify">(B) in any other manner that will result in a violation of Sanctions by any Person (including any Person participating in the offering, whether as underwriter, advisor, investor or otherwise).</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px" align="justify">(iii) The Entity represents and covenants that, except as detailed in the Registration Statement and the Prospectus, for the past 5 years, it has not knowingly engaged in, is not now knowingly engaged in, and will not engage in, any dealings or transactions with any Person, or in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(vv) <u>Corruption</u>. Neither the Company nor the Subsidiaries, nor to the knowledge of the Company and the Subsidiaries, any director, officer, agent, employee or other person associated with or acting on behalf of the Company or the Subsidiaries has: (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the Corruption of Foreign Officials Act (Canada); or (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment;</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreakd91648a1-7318-4e56-8566-94bc02985fa0" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-21-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(ww) <u>Stock Transfer Taxes</u>. On each Settlement Date, all stock transfer or other taxes (other than income taxes) which are required to be paid in connection with the sale and transfer of the Placement Shares to be sold hereunder will be, or will have been, fully paid or provided for by the Company and all laws imposing such taxes will be or will have been fully complied with.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(xx) <u>Compliance with Laws</u>. The Company has not been advised, and has no reason to believe, that it and each of the Material Subsidiaries are not conducting business in compliance with all applicable laws, rules and regulations of the jurisdictions in which it is conducting business, except where failure to be so in compliance would not result in a Material Adverse Effect.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(yy) <u>Exchange Registration</u>. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and is accepted for trading on the NYSE American under the symbol &#8220;ASM&#8221; and the TSX under the symbol &#8220;ASM,&#8221; and the Company has taken no action designed to terminate the registration of the Common Stock under the Exchange Act or delisting the Common Stock from either the NYSE American or the TSX, nor, except as disclosed in the Registration Statement and the Prospectus, has the Company received any notification that the Commission, the applicable Canadian securities regulators or either the NYSE American or the TSX is contemplating terminating such registration or listing. Except as disclosed in the Registration Statement and the Prospectus, the Company has complied in all material respects with the applicable requirements of the NYSE American or the TSX for maintenance of inclusion of the Common Stock thereon. The Company has obtained all necessary consents, approvals, authorizations or orders of, or filing, notification or registration with, the NYSE American or the TSX, the Commission and the applicable Canadian securities regulators, where applicable, required for the listing and trading of the Placement Shares, subject only to satisfying their standard listing and maintenance requirements. The Company has no reason to believe that it will not in the foreseeable future continue to be in compliance with all such listing and maintenance requirements of both the NYSE American or the TSX.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">Any certificate signed by an officer of the Company and delivered to the Agent or to counsel for the Agent pursuant to or in connection with this Agreement shall be deemed to be a representation and warranty by the Company, as applicable, to the Agent as to the matters set forth therein.</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">7. <u>Covenants of the Company</u>. The Company covenants and agrees with Agent that:</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreakca5682b9-a1e3-4793-a4b7-87378714992a" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-22-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(a) <u>Registration Statement Amendments</u>. After the date of this Agreement and during any period in which a Prospectus relating to any Placement Shares is required to be delivered by Agent under the Securities Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act or similar rule), (i) the Company will notify the Agent promptly of the time when any subsequent amendment to the Registration Statement, other than documents incorporated by reference, has been filed with the Commission and/or has become effective or any subsequent supplement to the Prospectus has been filed and of any request by the Commission for any amendment or supplement to the Registration Statement or Prospectus or for additional information, (ii) the Company will prepare and file with the Commission, promptly upon the Agent&#8217;s request, any amendments or supplements to the Registration Statement or Prospectus that, in such Agent&#8217;s reasonable opinion, may be necessary or advisable in connection with the distribution of the Placement Shares by the Agent (provided, however, that the failure of the Agent to make such request shall not relieve the Company of any obligation or liability hereunder, or affect the Agent&#8217;s right to rely on the representations and warranties made by the Company in this Agreement and provided, further, that the only remedy the Agent shall have with respect to the failure to make such filing shall be to cease making sales under this Agreement until such amendment or supplement is filed); (iii) the Company will not file any amendment or supplement to the Registration Statement or Prospectus relating to the Placement Shares or a security convertible into the Placement Shares unless a copy thereof has been submitted to Agent within a reasonable period of time before the filing and the Agent has not objected thereto (provided, however, that the failure of the Agent to make such objection shall not relieve the Company of any obligation or liability hereunder, or affect the Agent&#8217;s right to rely on the representations and warranties made by the Company in this Agreement and provided, further, that the only remedy Agent shall have with respect to the failure by the Company to obtain such consent shall be to cease making sales under this Agreement) and the Company will furnish to the Agent at the time of filing thereof a copy of any document that upon filing is deemed to be incorporated by reference into the Registration Statement or Prospectus, except for those documents available via EDGAR; and (iv) the Company will cause each amendment or supplement to the Prospectus to be filed with the Commission as required pursuant to the applicable paragraph of Rule 424(b) of the Securities Act or, in the case of any document to be incorporated therein by reference, to be filed with the Commission as required pursuant to the Exchange Act, within the time period prescribed (the determination to file or not file any amendment or supplement with the Commission under this Section 7(a), based on the Company&#8217;s reasonable opinion or reasonable objections, shall be made exclusively by the Company).</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(b) <u>Notice of Commission Stop Orders</u>. The Company will advise the Agent, promptly after it receives notice or obtains knowledge thereof, of the issuance or threatened issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, of the suspension of the qualification of the Placement Shares for offering or sale in any jurisdiction, or of the initiation or threatening of any proceeding for any such purpose; and it will promptly use its commercially reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal if such a stop order should be issued. The Company will advise the Agent promptly after it receives any request by the Commission for any amendments to the Registration Statement or any amendment or supplements to the Prospectus or any Issuer Free Writing Prospectus or for additional information related to the offering of the Placement Shares or for additional information related to the Registration Statement, the Prospectus or any Issuer Free Writing Prospectus.</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px"> <table id="pagebreakc79fbea4-111a-42c0-b5ee-99607ed3efea" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-23-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(c) <u>Delivery of Prospectus; Subsequent Changes</u>. During any period in which a Prospectus relating to the Placement Shares is required to be delivered by the Agent under the Securities Act with respect to the offer and sale of the Placement Shares, (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act or similar rule), the Company will comply with all requirements imposed upon it by the Securities Act, as from time to time in force, and to file on or before their respective due dates all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14, 15(d) or any other provision of or under the Exchange Act. If the Company has omitted any information from the Registration Statement pursuant to Rule 430B under the Securities Act, it will use its best efforts to comply with the provisions of and make all requisite filings with the Commission pursuant to said Rule 430B and to notify the Agent promptly of all such filings. If during such period any event occurs as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances then existing, not misleading, or if during such period it is necessary to amend or supplement the Registration Statement or Prospectus to comply with the Securities Act, the Company will promptly notify Agent to suspend the offering of Placement Shares during such period and the Company will promptly amend or supplement the Registration Statement or Prospectus (at the expense of the Company) so as to correct such statement or omission or effect such compliance.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(d) <u>Listing of Placement Shares</u>. During any period in which the Prospectus relating to the Placement Shares is required to be delivered by the Agent under the Securities Act with respect to the offer and sale of the Placement Shares, the Company will use its reasonable best efforts to cause the Placement Shares to be listed on the Exchange.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(e) <u>Delivery of Registration Statement and Prospectus</u>. The Company will furnish to the Agent and its counsel (at the expense of the Company) copies of the Registration Statement, the Prospectus (including all documents incorporated by reference therein) and all amendments and supplements to the Registration Statement or Prospectus that are filed with the Commission during any period in which a Prospectus relating to the Placement Shares is required to be delivered under the Securities Act (including all documents filed with the Commission during such period that are deemed to be incorporated by reference therein), in each case as soon as reasonably practicable and in such quantities as the Agent may from time to time reasonably request and, at the Agent&#8217;s request, will also furnish copies of the Prospectus to each exchange or market on which sales of the Placement Shares may be made; provided, however, that the Company shall not be required to furnish any document (other than the Prospectus) to the Agent to the extent such document is available on EDGAR.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(f) <u>Earnings Statement</u>. The Company will make generally available to its security holders as soon as practicable, but in any event not later than 15 months after the end of the Company&#8217;s current fiscal quarter, an earnings statement covering a 12-month period that satisfies the provisions of Section 11(a) and Rule 158 of the Securities Act.</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreak98a7293e-df01-46e3-99fb-032f942d6fd3" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-24-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(g) <u>Use of Proceeds</u>. The Company will use the Net Proceeds as described in the Prospectus in the section entitled &#8220;Use of Proceeds.&#8221;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(h) <u>Notice of Other Sales</u>. Without the prior written consent of Agent, the Company will not, directly or indirectly, offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of any Common Stock (other than the Placement Shares offered pursuant to this Agreement) or securities convertible into or exchangeable for Common Stock, warrants or any rights to purchase or acquire, Common Stock during the period beginning on the fifth (5th) Trading Day immediately prior to the date on which any Placement Notice is delivered to Agent hereunder and ending on the fifth (5th) Trading Day immediately following the final Settlement Date with respect to Placement Shares sold pursuant to such Placement Notice (or, if the Placement Notice has been terminated or suspended prior to the sale of all Placement Shares covered by a Placement Notice, the date of such suspension or termination); and will not directly or indirectly in any other &#8220;at the market&#8221; or continuous equity transaction offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of any Common Stock (other than the Placement Shares offered pursuant to this Agreement) or securities convertible into or exchangeable for Common Stock, warrants or any rights to purchase or acquire, Common Stock prior to the later of the termination of this Agreement and the sixtieth (60th) day immediately following the final Settlement Date with respect to Placement Shares sold pursuant to such Placement Notice; provided, however, that such restrictions will not be required in connection with the Company&#8217;s issuance or sale of (i) Common Stock, options to purchase Common Stock or Common Stock issuable upon the exercise of options, pursuant to any employee or director stock option or benefits plan, stock ownership plan or dividend reinvestment plan (but not Common Stock subject to a waiver to exceed plan limits in its dividend reinvestment plan) of the Company whether now in effect or hereafter implemented, (ii) Common Stock issuable upon conversion of securities or the exercise of warrants, options or other rights in effect or outstanding, and disclosed in filings by the Company available on EDGAR or otherwise in writing to the Agent and (iii) Common Stock or securities convertible into or exchangeable for shares of Common Stock as consideration for mergers, acquisitions, other business combinations or strategic alliances occurring after the date of this Agreement which are not issued for capital raising purposes.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(i) <u>Change of Circumstances</u>. The Company will, at any time during the pendency of a Placement Notice advise the Agent promptly after it shall have received notice or obtained knowledge thereof, of any information or fact that would alter or affect in any material respect any opinion, certificate, letter or other document required to be provided to the Agent pursuant to this Agreement.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(j) <u>Due Diligence Cooperation</u>. The Company will cooperate with any reasonable due diligence review conducted by the Agent or its representatives in connection with the transactions contemplated hereby, including, without limitation, providing information and making available documents and senior corporate officers, during regular business hours and at the Company&#8217;s principal offices, as the Agent may reasonably request.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(k) <u>Required Filings Relating to Placement of Placement Shares</u>. The Company agrees that on such dates as the Securities Act shall require, the Company will (i) file a prospectus supplement with the Commission under the applicable paragraph of Rule 424(b) under the Securities Act (each and every filing under Rule 424(b), a &#8220;<b><u>Filing Date</u></b>&#8221;), which prospectus supplement will set forth, within the relevant period, the amount of Placement Shares sold through the Agent, the Net Proceeds to the Company and the compensation payable by the Company to the Agent with respect to such Placement Shares, and (ii) deliver such number of copies of each such prospectus supplement to each exchange or market on which such sales were effected as may be required by the rules or regulations of such exchange or market.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(l) <u>Representation Dates; Certificate</u>. (1) Prior to the date of the first Placement Notice and (2) each time the Company:</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreak2aefb6da-8e42-4444-ba20-378448cfe597" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-25-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 45px">(i) files the Prospectus relating to the Placement Shares or amends or supplements (other than a prospectus supplement relating solely to an offering of securities other than the Placement Shares) the Registration Statement or the Prospectus relating to the Placement Shares by means of a post-effective amendment, sticker, or supplement but not by means of incorporation of documents by reference into the Registration Statement or the Prospectus relating to the Placement Shares;</p> <p style="MARGIN: 0px 0px 0px 45px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 45px">(ii) files an annual report on Form 20-F under the Exchange Act (including any Form 20-F/A containing amended financial information or a material amendment to the previously filed Form 20-F;</p> <p style="MARGIN: 0px 0px 0px 45px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 45px">(iii) files its quarterly or six-month reports on Form 6-K under the Exchange Act containing financial statements, supporting schedules or other financial data incorporated by reference into the Registration Statement; or </p> <p style="MARGIN: 0px 0px 0px 45px">&nbsp;</p> <p style="MARGIN: 0px 0px 0px 45px">(iv) files a report on Form 6-K containing amended financial information under the Exchange Act incorporated by reference into the Registration Statement (each date of filing of one or more of the documents referred to in clauses (i) through (iv) shall be a &#8220;<b><u>Representation Date</u></b>&#8221;);&nbsp;the Company shall furnish the Agent (but in the case of clause (iv) above only if the Agent reasonably determines that the information contained in such Form 6&#8209;K is material) with a certificate in the form and substance satisfactory to the Agent and its counsel, substantially similar to the form previously provided to the Agent and its counsel, modified, as necessary, to relate to the Registration Statement and the Prospectus as amended or supplemented. The requirement to provide a certificate under this Section 7(l) shall be waived for any Representation Date occurring at a time a Suspension is in effect, which waiver shall continue until the earlier to occur of the date the Company delivers instructions for the sale of Placement Shares hereunder (which for such calendar quarter shall be considered a Representation Date) and the next occurring Representation Date. Notwithstanding the foregoing, if the Company subsequently decides to sell Placement Shares following a Representation Date when a Suspension was in effect and did not provide the Agent with a certificate under this Section 7(l), then before the Company delivers the instructions for the sale of Placement Shares or the Agent sells any Placement Shares pursuant to such instructions, the Company shall provide the Agent with a certificate in conformity with this Section 7(l) dated as of the date that the instructions for the sale of Placement Shares are issued. </p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(m) <u>Legal Opinions</u>. (1) Prior to the date of the first Placement Notice and (2) within five (5) Trading Days of each Representation Date with respect to which the Company is obligated to deliver a certificate pursuant to Section 7(l) for which no waiver is applicable and excluding the date of this Agreement, the Company shall cause to be furnished to the Agent a written opinion of Lewis Brisbois Bisgaard &amp; Smith LLP and Salley Bowes Harwardt Law Corporation (collectively, &#8220;<b><u>Company Counsel</u></b>&#8221;), or other counsel satisfactory to the Agent, in form and substance satisfactory to Agent and its counsel, substantially similar to the form attached hereto, modified, as necessary, to relate to the Registration Statement and the Prospectus as then amended or supplemented; provided, however, the Company shall be required to furnish to Agent no more than one opinion hereunder per calendar quarter; provided, further, that in lieu of such opinions for subsequent periodic filings under the Exchange Act, counsel may furnish the Agent with a letter (a &#8220;<b><u>Reliance Letter</u></b>&#8221;) to the effect that the Agent may rely on a prior opinion delivered under this Section 7(m) to the same extent as if it were dated the date of such letter (except that statements in such prior opinion shall be deemed to relate to the Registration Statement and the Prospectus as amended or supplemented as of the date of the Reliance Letter).</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreakb9c10ed6-d446-468d-9d17-17a7d170175b" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-26-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(n) <u>Company&#8217;s Title Certificate</u>. (1) Prior to the date of the first Placement Notice and (2) within five (5) Trading Days of the date on which the Company files an annual report on Form 20-F, the Company shall cause to be furnished to the Agent certificate stating that no issues exist with respect to the title, surface rights, subsurface rights, exploration and exploitation rights, as applicable on the Material Properties.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(o) <u>Comfort Letter</u>. (1) Prior to the date of the first Placement Notice and (2) within five (5) Trading Days of each Representation Date with respect to which the Company is obligated to deliver a certificate pursuant to Section 7(l) for which no waiver is applicable and excluding the date of this Agreement, the Company shall cause its independent registered public accounting firm to furnish the Agent letters (the &#8220;<b><u>Comfort Letter</u></b>&#8221;), dated the date the Comfort Letter is delivered, which shall meet the requirements set forth in this Section 7(n); provided, that if requested by the Agent, the Company shall cause a Comfort Letter to be furnished to the Agent within ten (10) Trading Days of the date of occurrence of any material transaction or event, including the restatement of the Company&#8217;s financial statements. The Comfort Letter from the Company&#8217;s independent registered public accounting firm shall be in a form and substance satisfactory to the Agent, (i) confirming that they are an independent registered public accounting firm within the meaning of the Securities Act and the PCAOB, (ii) stating, as of such date, the conclusions and findings of such firm with respect to the financial information and other matters ordinarily covered by accountants&#8217; &#8220;comfort letters&#8221; to underwriters in connection with registered public offerings (the first such letter, the &#8220;<b><u>Initial Comfort Letter</u></b>&#8221;) and (iii) updating the Initial Comfort Letter with any information that would have been included in the Initial Comfort Letter had it been given on such date and modified as necessary to relate to the Registration Statement and the Prospectus, as amended and supplemented to the date of such letter.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(p) <u>Engineer Comfort Letter</u>. (1) Prior to the date of the first Placement Notice and (2) within five (5) Trading Days of the filing of the Form 20-F, the Company shall cause its independent mining engineer to furnish the Agent letters (the &#8220;<b><u>Engineer Comfort Letter</u></b>&#8221;), dated the date the Comfort Letter is delivered, which shall meet the requirements set forth in this Section 7(p); provided, that if requested by the Agent, the Company shall cause a Comfort Letter to be furnished to the Agent within ten (10) Trading Days of the date of occurrence of any material transaction or event. The Comfort Letter from the Company&#8217;s independent mining engineer shall be in a form reasonably acceptable to the Agent.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(q) <u>Market Activities</u>. The Company will not, directly or indirectly, (i) take any action designed to cause or result in, or that constitutes or might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of Common Stock or (ii) sell, bid for, or purchase Common Stock, or pay anyone any compensation for soliciting purchases of the Placement Shares other than the Agent.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(r) <u>Investment Company Act</u>. The Company will conduct its affairs in such a manner so as to reasonably ensure that neither it nor any of the Material Subsidiaries will be or become, at any time prior to the termination of this Agreement, required to register as an &#8220;investment company,&#8221; as such term is defined in the Investment Company Act. </p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreak23d05ef4-9c6f-4361-adea-b607a0d218cc" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-27-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(s) <u>No Offer to Sell</u>. Other than an Issuer Free Writing Prospectus approved in advance by the Company and the Agent in its capacity as agent hereunder, neither the Agent nor the Company (including its agents and representatives, other than the Agent in its capacity as such) will make, use, prepare, authorize, approve or refer to any written communication (as defined in Rule 405 under the Securities Act), required to be filed with the Commission, that constitutes an offer to sell or solicitation of an offer to buy Placement Shares hereunder.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(t) <u>Blue Sky and Other Qualifications</u><i>. </i>The Company will use its commercially reasonable efforts, in cooperation with the Agent, to qualify the Placement Shares for offering and sale, or to obtain an exemption for the Placement Shares to be offered and sold, under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Agent may designate and to maintain such qualifications and exemptions in effect for so long as required for the distribution of the Placement Shares (but in no event for less than one year from the date of this Agreement); <i>provided</i>, <i>however</i>, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject. In each jurisdiction in which the Placement Shares have been so qualified or exempt, the Company will file such statements and reports as may be required by the laws of such jurisdiction to continue such qualification or exemption, as the case may be, in effect for so long as required for the distribution of the Placement Shares (but in no event for less than one year from the date of this Agreement).</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(u) <u>Sarbanes-Oxley Act</u>. The Company and the Material Subsidiaries will maintain and keep accurate books and records reflecting their assets and maintain internal accounting controls and procedures in a manner designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and including those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company, (ii) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of the Company&#8217;s consolidated financial statements in accordance with IFRS or GAAP as may then be applicable, (iii) that receipts and expenditures of the Company are being made only in accordance with management&#8217;s and the Company&#8217;s directors&#8217; authorization, and (iv) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company&#8217;s assets that could have a material effect on its financial statements. The Company and the Material Subsidiaries will maintain such controls and other procedures, including, without limitation, those required by Sections 302 and 906 of the Sarbanes-Oxley Act and those required by applicable Canadian securities laws, and the applicable regulations thereunder that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission&#8217;s rules and forms, including, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company&#8217;s management, including its principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure and to ensure that material information relating to the Company or the Material Subsidiaries is made known to them by others within those entities, particularly during the period in which such periodic reports are being prepared.</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreaka9450eaf-db23-4847-8d73-95f4344a1460" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-28-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(v) <u>Secretary&#8217;s Certificate; Further Documentation</u>. Prior to the date of the first Placement Notice, the Company shall deliver to the Agent a certificate of the Secretary of the Company and attested to by an executive officer of the Company, dated as of such date, certifying as to (i) the Memorandum of the Company, (ii) the Articles of the Company, (iii) the resolutions of the Board of Directors of the Company authorizing the execution, delivery and performance of this Agreement and the issuance of the Placement Shares and (iv) the incumbency of the officers duly authorized to execute this Agreement and the other documents contemplated by this Agreement. Within five (5) Trading Days of each Representation Date, the Company shall have furnished to the Agent such further information, certificates and documents as the Agent may reasonably request.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">8. <u>Payment of Expenses</u>. The Company will pay all expenses incident to the performance of its obligations under this Agreement, including (i) the preparation and filing of the Registration Statement, including any fees required by the Commission, and the printing or electronic delivery of the Prospectus as originally filed and of each amendment and supplement thereto, in such number as the Agent shall deem necessary, (ii) the printing and delivery to the Agent of this Agreement and such other documents as may be required in connection with the offering, purchase, sale, issuance or delivery of the Placement Shares, (iii) the preparation, issuance and delivery of the certificates, if any, for the Placement Shares to the Agent, including any stock or other transfer taxes and any capital duties, stamp duties or other duties or taxes payable upon the sale, issuance or delivery of the Placement Shares to the Agent, (iv) the fees and disbursements of the counsel, accountants and other advisors to the Company, (v) the reasonable fees and expenses of the Agent, including but not limited to the fees and expenses of the counsel to the Agent, payable upon the execution of this Agreement, in an amount not to exceed US$50,000; (vi) the qualification or exemption of the Placement Shares under state securities laws in accordance with the provisions of Section 7(r) hereof, including filing fees, but excluding fees of the Agent&#8217;s counsel, (vii) the printing and delivery to the Agent of copies of any Permitted Issuer Free Writing Prospectus and the Prospectus and any amendments or supplements thereto in such number as the Agent shall deem necessary, (viii) the preparation, printing and delivery to the Agent of copies of the blue sky survey, (ix) the fees and expenses of the transfer agent and registrar for the Common Stock, (x) the filing and other fees incident to any review by FINRA of the terms of the sale of the Placement Shares including the fees of the Agent&#8217;s counsel (subject to the cap, set forth in clause (v) above), and (xi) the fees and expenses incurred in connection with the listing of the Placement Shares on the Exchange.</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">9. <u>Conditions to Agent&#8217;s Obligations</u>. The obligations of the Agent hereunder with respect to a Placement will be subject to the continuing accuracy and completeness of the representations and warranties made by the Company herein, to the due performance by the Company of its obligations hereunder, to the completion by the Agent of a due diligence review satisfactory to it in its reasonable judgment, and to the continuing satisfaction (or waiver by the Agent in its sole discretion) of the following additional conditions:</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreak3559a1bf-6987-433f-b09d-6e1b094104f9" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-29-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(a) <u>Registration Statement Effective</u>. The Registration Statement shall have become effective and shall be available for the (i) resale of all Placement Shares issued to the Agent and not yet sold by the Agent and (ii) sale of all Placement Shares contemplated to be issued by any Placement Notice.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(b) <u>No Material Notices</u>. None of the following events shall have occurred and be continuing: (i) receipt by the Company of any request for additional information from the Commission or any other federal or state Governmental Authority during the period of effectiveness of the Registration Statement, the response to which would require any post-effective amendments or supplements to the Registration Statement or the Prospectus; (ii) the issuance by the Commission or any other federal or state Governmental Authority of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; (iii) receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Placement Shares for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; or (iv) the occurrence of any event that makes any statement of a material fact made in the Registration Statement or the Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue or that requires the making of any changes in the Registration Statement, the Prospectus or documents so that, in the case of the Registration Statement, it will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and, that in the case of the Prospectus, it will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(c) <u>No Misstatement or Material Omission</u>. Agent shall not have advised the Company that the Registration Statement or Prospectus, or any amendment or supplement thereto, contains an untrue statement of fact that in the Agent&#8217;s reasonable opinion is material, or omits to state a fact that in the Agent&#8217;s reasonable opinion is material and is required to be stated therein or is necessary to make the statements therein not misleading.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(d) <u>Material Changes</u>. Except as contemplated in the Prospectus, or disclosed in the Company&#8217;s reports filed with the Commission, there shall not have been any material adverse change in the authorized capital stock of the Company or any Material Adverse Effect or any development that could reasonably be expected to cause a Material Adverse Effect, or a downgrading in or withdrawal of the rating assigned to any of the Company&#8217;s securities (other than asset backed securities) by any rating organization or a public announcement by any rating organization that it has under surveillance or review its rating of any of the Company&#8217;s securities (other than asset backed securities), the effect of which, in the case of any such action by a rating organization described above, in the reasonable judgment of the Agent (without relieving the Company of any obligation or liability it may otherwise have), is so material as to make it impracticable or inadvisable to proceed with the offering of the Placement Shares on the terms and in the manner contemplated in the Prospectus.</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreak4972f6b2-4166-4a5b-bc8a-9f3e11868461" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-30-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(e) <u>Legal Opinions</u>. The Agent shall have received the opinions of Company Counsel required to be delivered pursuant to Section 7(m) on or before the date on which such delivery of such opinion is required pursuant to Section 7(m).</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(f) <u>Comfort Letters</u>. The Agent shall have received the Comfort Letter and Engineer Comfort Letter required to be delivered pursuant to Section 7(o) and Section 7(p) on or before the date on which such delivery of such Comfort Letters is required pursuant to Section 7(o) and Section 7(p).</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(g) <u>Representation Certificate</u>. The Agent shall have received the certificate required to be delivered pursuant to Section 7(l) on or before the date on which delivery of such certificate is required pursuant to Section 7(l).</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(h) <u>No Suspension</u>. Trading in the Common Stock shall not have been suspended on the Exchange or the TSX and the Common Stock shall not have been delisted from the Exchange.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(i) <u>Other Materials</u>. On each date on which the Company is required to deliver a certificate pursuant to Section 7(l) and Section 7(n), the Company shall have furnished to the Agent such appropriate further information, opinions, certificates, letters and other as the Agent may reasonably request. All such opinions, certificates, letters and other documents will be in compliance with the provisions hereof.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(j) <u>Securities Act Filings Made</u>. All filings with the Commission required by Rule 424 under the Securities Act to have been filed prior to the issuance of any Placement Notice hereunder shall have been made within the applicable time period prescribed for such filing by Rule 424.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(k) <u>Approval for Listing</u>. The Placement Shares shall either have been approved for listing on the Exchange and the TSX, subject only to notice of issuance, or the Company shall have filed an application for listing of the Placement Shares on the Exchange or the TSX at, or prior to, the issuance of any Placement Notice.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(l) <u>FINRA</u>. FINRA shall not have raised any objection to the terms of this offering and the amount of compensation allowable or payable to the Agent as described in the Prospectus. </p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(m) <u>No Termination Event</u>. There shall not have occurred any event that would permit the Agent to terminate this Agreement pursuant to Section 12(a).</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">10. <u>Indemnification and Contribution</u>.</p> <p style="MARGIN: 0px; TEXT-INDENT: 105px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px" align="justify">(a) <u>Company Indemnification</u>. The Company agrees to indemnify and hold harmless the Agent, its affiliates and their respective partners, members, directors, officers, employees and agents and each person, if any, who controls the Agent or any affiliate within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act as follows: </p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreak9af41ef5-4838-4075-bafc-9c5e08549bc0" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-31-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 135px" align="justify">(i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, joint or several, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, or arising out of any untrue statement or alleged untrue statement of a material fact included in any related Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;</p> <p style="MARGIN: 0px; TEXT-INDENT: 135px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 135px" align="justify">(ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, joint or several, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any Governmental Authority, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 10(d) below) any such settlement is effected with the written consent of the Company, which consent shall not unreasonably be delayed or withheld; and</p> <p style="MARGIN: 0px; TEXT-INDENT: 135px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 135px" align="justify">(iii) against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any Governmental Authority, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above,&nbsp;<u>provided</u>, <u>however</u>, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made solely in reliance upon and in conformity with the Agent Information (as defined below).</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px" align="justify">(b) <u>Agent Indemnification</u>. Agent agrees to indemnify and hold harmless the Company and its directors and each officer and director of the Company who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in Section 10(a), as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendments thereto) or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with information relating to the Agent and furnished to the Company in writing by the Agent expressly for use therein. The Company hereby acknowledges that the only information that the Agent has furnished to the Company expressly for use in the Registration Statement, the Prospectus or any Issuer Free Writing Prospectus (or any amendment or supplement thereto) are the statements set forth in the seventh and eighth paragraphs under the caption &#8220;Plan of Distribution&#8221; in the Prospectus (the &#8220;<b><u>Agent Information</u></b>&#8221;).</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreak44edf06e-1f5c-4d1a-b5b2-a541a23a14d8" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-32-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px" align="justify">(c) <u>Procedure</u>. Any party that proposes to assert the right to be indemnified under this Section 10 will, promptly after receipt of notice of commencement of any action against such party in respect of which a claim is to be made against an indemnifying party or parties under this Section 10, notify each such indemnifying party of the commencement of such action, enclosing a copy of all papers served, but the omission so to notify such indemnifying party will not relieve the indemnifying party from (i) any liability that it might have to any indemnified party otherwise than under this Section 10 and (ii) any liability that it may have to any indemnified party under the foregoing provision of this Section 10 unless, and only to the extent that, such omission results in the forfeiture of substantive rights or defenses by the indemnifying party. If any such action is brought against any indemnified party and it notifies the indemnifying party of its commencement, the indemnifying party will be entitled to participate in and, to the extent that it elects by delivering written notice to the indemnified party promptly after receiving notice of the commencement of the action from the indemnified party, jointly with any other indemnifying party similarly notified, to assume the defense of the action, with counsel reasonably satisfactory to the indemnified party, and after notice from the indemnifying party to the indemnified party of its election to assume the defense, the indemnifying party will not be liable to the indemnified party for any other legal expenses except as provided below and except for the reasonable costs of investigation subsequently incurred by the indemnified party in connection with the defense. The indemnified party will have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel will be at the expense of such indemnified party unless (1) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying party, (2) the indemnified party has reasonably concluded (based on advice of counsel) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (3) a conflict or potential conflict exists (based on advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party) or (4) the indemnifying party has not in fact employed counsel to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action or counsel reasonably satisfactory to the indemnified party, in each of which cases the reasonable fees, disbursements and other charges of counsel will be at the expense of the indemnifying party or parties. It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than one separate firm (plus local counsel) admitted to practice in such jurisdiction at any one time for all such indemnified party or parties. All such fees, disbursements and other charges will be reimbursed by the indemnifying party promptly as they are incurred. An indemnifying party will not, in any event, be liable for any settlement of any action or claim effected without its written consent. No indemnifying party shall, without the prior written consent of each indemnified party, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding relating to the matters contemplated by this Section 10 (whether or not any indemnified party is a party thereto), unless such settlement, compromise or consent (1) includes an express and unconditional release of each indemnified party, in form and substance reasonably satisfactory to such indemnified party, from all liability arising out of such litigation, investigation, proceeding or claim and (2) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px" align="justify">(d) <u>Settlement Without Consent if Failure to Reimburse</u><i>. </i>If an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for reasonable fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 10(a)(ii) effected without its written consent if (1) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (2) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (3) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreak01d5bb4e-f30d-4c01-875a-cc20f688d099" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-33-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px" align="justify">(e) <u>Contribution</u>. In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in the foregoing paragraphs of this Section 10 is applicable in accordance with its terms but for any reason is held to be unavailable or insufficient from the Company or the Agent, the Company and the Agent will contribute to the total losses, claims, liabilities, expenses and damages (including any investigative, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted) to which the Company and the Agent may be subject in such proportion as shall be appropriate to reflect the relative benefits received by the Company on the one hand and the Agent on the other hand. The relative benefits received by the Company on the one hand and the Agent on the other hand shall be deemed to be in the same proportion as the total net proceeds from the sale of the Placement Shares (before deducting expenses) received by the Company bear to the total compensation received by the Agent from the sale of Placement Shares on behalf of the Company. If, but only if, the allocation provided by the foregoing sentence is not permitted by applicable law, the allocation of contribution shall be made in such proportion as is appropriate to reflect not only the relative benefits referred to in the foregoing sentence but also the relative fault of the Company, on the one hand, and the Agent, on the other hand, with respect to the statements or omission that resulted in such loss, claim, liability, expense or damage, or action in respect thereof, as well as any other relevant equitable considerations with respect to such offering. Such relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Agent, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Agent agree that it would not be just and equitable if contributions pursuant to this Section 10(e) were to be determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, liability, expense, or damage, or action in respect thereof, referred to above in this Section 10(e) shall be deemed to include, for the purpose of this Section 10(e), any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim to the extent consistent with Section 10(c) hereof. Notwithstanding the foregoing provisions of this Section 10(e), the Agent shall not be required to contribute any amount in excess of the commissions received by it under this Agreement and no person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 10(e), any person who controls a party to this Agreement within the meaning of the Securities Act, any affiliates of the Agent and any officers, directors, partners, employees or agents of the Agent or any of its affiliates, will have the same rights to contribution as that party, and each director of the Company and each officer of the Company who signed the Registration Statement will have the same rights to contribution as the Company, subject in each case to the provisions hereof. Any party entitled to contribution, promptly after receipt of notice of commencement of any action against such party in respect of which a claim for contribution may be made under this Section 10(e), will notify any such party or parties from whom contribution may be sought, but the omission to so notify will not relieve that party or parties from whom contribution may be sought from any other obligation it or they may have under this Section 10(e) except to the extent that the failure to so notify such other party materially prejudiced the substantive rights or defenses of the party from whom contribution is sought. Except for a settlement entered into pursuant to the last sentence of Section 10(c) hereof, no party will be liable for contribution with respect to any action or claim settled without its written consent if such consent is required pursuant to Section 10(c) hereof.</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreak22cd7954-9d75-47d4-baae-813b2087a598" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-34-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">11. <u>Representations and Agreements to Survive Delivery</u>. The indemnity and contribution agreements contained in Section 10 of this Agreement and all representations and warranties of the Company herein or in certificates delivered pursuant hereto shall survive, as of their respective dates, regardless of (i) any investigation made by or on behalf of the Agent, any controlling persons, or the Company (or any of their respective officers, directors or controlling persons), (ii) delivery and acceptance of the Placement Shares and payment therefor or (iii) any termination of this Agreement.</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">12. <u>Termination</u>.</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(a) The Agent may terminate this Agreement, by notice to the Company, as hereinafter specified at any time (1) if there has been, since the time of execution of this Agreement or since the date as of which information is given in the Prospectus, any change, or any development or event involving a prospective change, in the condition, financial or otherwise, or in the business, properties, earnings, results of operations or prospects of the Company and the Material Subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, which individually or in the aggregate, in the sole judgment of the Agent has or could reasonably be expected to have a Material Adverse Effect and makes it impractical or inadvisable to market the Placement Shares or to enforce contracts for the sale of the Placement Shares, (2) if there has occurred any material adverse change in the financial markets in the United States or Canada or the international financial markets, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Agent, impracticable or inadvisable to market the Placement Shares or to enforce contracts for the sale of the Placement Shares, (3) if trading in the Common Stock has been suspended or limited by the Commission or the Exchange, or if trading generally on the Exchange has been suspended or limited, or minimum prices for trading have been fixed on the Exchange, (4) if any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market shall have occurred and be continuing, (5) if a major disruption of securities settlements or clearance services in the United States or Canada shall have occurred and be continuing, or (6) if a banking moratorium has been declared by U.S. Federal, Canada or New York authorities. Any such termination shall be without liability of any party to any other party except that the provisions of Section 8 (Payment of Expenses), Section 10 (Indemnification and Contribution), Section 11 (Representations and Agreements to Survive Delivery), Section 13 (Notices), Section 14 (Successors and Assigns), Section 16 (Entire Agreement; Amendment; Severability) Section 17 (Governing Law and Time; Waiver of Jury Trial), Section 18 (Consent to Jurisdiction), Section 19 (Appointment of Agent for Service), Section 20 (Judgment Currency), Section 24 (Absence of Fiduciary Relationship) and Section 25 (Definitions) hereof shall remain in full force and effect notwithstanding such termination. If the Agent elects to terminate this Agreement as provided in this Section 12(a), the Agent shall provide the required notice as specified in Section 13 (Notices).</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreakfdbf7312-2516-4439-9513-54b268ca823c" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-35-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(b) The Company shall have the right, by giving ten (10) days&#8217; notice as hereinafter specified to terminate this Agreement in its sole discretion at any time after the date of this Agreement. Any such termination shall be without liability of any party to any other party except that the provisions of Section 8, Section 10, Section 11, Section 13, Section 14, Section 16, Section 17, Section 18, Section 19, Section 20, Section 24 and Section 25 hereof shall remain in full force and effect notwithstanding such termination.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(c) The Agent shall have the right, by giving ten (10) days&#8217; notice as hereinafter specified to terminate this Agreement in its sole discretion at any time after the date of this Agreement. Any such termination shall be without liability of any party to any other party except that the provisions of Section 8, Section 10, Section 11, Section 13, Section 14, Section 16, Section 17, Section 18, Section 19, Section 20, Section 24 and Section 25 hereof shall remain in full force and effect notwithstanding such termination.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(d) This Agreement shall remain in full force and effect unless terminated pursuant to Sections 12(a), (b) or (c) above or otherwise by mutual agreement of the parties; provided, however, that any such termination by mutual agreement shall in all cases be deemed to provide that Section 8, Section 10, Section 11, Section 13, Section 14, Section 16, Section 17, Section 18, Section 19, Section 20, Section 24 and Section 25 shall remain in full force and effect.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(e) Any termination of this Agreement shall be effective on the date specified in such notice of termination; provided, however, that such termination shall not be effective until the close of business on the date of receipt of such notice by the Agent or the Company, as the case may be. If such termination shall occur prior to the Settlement Date for any sale of Placement Shares, such Placement Shares shall settle in accordance with the provisions of this Agreement.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">13. <u>Notices</u>. All notices or other communications required or permitted to be given by any party to any other party pursuant to the terms of this Agreement shall be in writing, unless otherwise specified, and if sent to the Agent, shall be delivered to: </p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px"> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cols="3" cellpadding="0" width="100%" align="center" border="0"> <tr> <td width="8%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">Cantor Fitzgerald &amp; Co. </p> <p style="MARGIN: 0px" align="justify">499 Park Avenue</p> <p style="MARGIN: 0px" align="justify">New York, NY 10022</p> <p style="MARGIN: 0px" align="justify">Attention: Capital Markets</p> <p style="MARGIN: 0px" align="justify">Facsimile: (212) 307-3730</p></td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr> <td colspan="2"> <p style="MARGIN: 0px">with a copy to</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">Cantor Fitzgerald &amp; Co. </p> <p style="MARGIN: 0px" align="justify">499 Park Avenue</p> <p style="MARGIN: 0px" align="justify">New York, NY 10022</p> <p style="MARGIN: 0px" align="justify">Attention: General Counsel</p> <p style="MARGIN: 0px" align="justify">Facsimile: (212) 829-4708</p></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="justify"> <table id="pagebreak806cdf93-a5b6-42c7-bdcd-ad7bc7c26edb" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-36-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px"> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cols="3" cellpadding="0" width="100%" align="center" border="0"> <tr> <td colspan="2"> <p style="MARGIN: 0px">and with a copy to:</p></td></tr> <tr> <td width="8%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">Cooley LLP</p> <p style="MARGIN: 0px" align="justify">1114 Avenue of the Americas</p> <p style="MARGIN: 0px" align="justify">New York, NY 10036</p> <p style="MARGIN: 0px" align="justify">Attention: Daniel I. Goldberg, Esq.</p> <p style="MARGIN: 0px" align="justify">Facsimile: (212) 479-6275</p></td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr> <td colspan="2"> <p style="MARGIN: 0px">and with a copy to:</p></td></tr> <tr height="15"> <td colspan="2"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">Stikeman Elliott LLP</p> <p style="MARGIN: 0px" align="justify">5300 Commerce Court West</p> <p style="MARGIN: 0px" align="justify">199 Bay Street</p> <p style="MARGIN: 0px" align="justify">Toronto, ON M5L 1B9</p> <p style="MARGIN: 0px" align="justify">Canada</p> <p style="MARGIN: 0px" align="justify">Attention: Martin Langlois or Steven Bennett</p> <p style="MARGIN: 0px" align="justify">Facsimile: (416) 947-0866</p></td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr> <td colspan="2"> <p style="MARGIN: 0px">and if to the Company, shall be delivered to:</p></td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp; </p></td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">Avino Silver &amp; Gold Mines Ltd.</p> <p style="MARGIN: 0px" align="justify">Suite 900, 570 Granville Street</p> <p style="MARGIN: 0px" align="justify">Vancouver, BC V6C 3P1</p> <p style="MARGIN: 0px" align="left">Attention: David Wolfin</p> <p style="MARGIN: 0px" align="justify">Facsimile: (604) 682-3600</p></td></tr> <tr> <td colspan="2"> <p style="MARGIN: 0px">&nbsp; </p></td></tr> <tr> <td colspan="2"> <p style="MARGIN: 0px">and with a copy to:</p></td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp; </p></td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">Lewis Brisbois Bisgaard &amp; Smith LLP </p> <p style="MARGIN: 0px" align="justify">333 Bush Street, Suite 1100</p> <p style="MARGIN: 0px" align="justify">San Francisco, CA 94104 </p> <p style="MARGIN: 0px" align="justify">Attention: Daniel B. Eng</p> <p style="MARGIN: 0px" align="justify">Facsimile: 415-434-0882</p></td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr> <td> <p style="MARGIN: 0px">and:</p></td> <td> <p style="MARGIN: 0px">&nbsp; </p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">Salley Bowes Harwardt Law Corp.</p> <p style="MARGIN: 0px" align="justify">1750-1185 West Georgia Street</p> <p style="MARGIN: 0px" align="justify">Vancouver, BC V6E 4E6</p> <p style="MARGIN: 0px" align="justify">Attention: Paul Bowes</p> <p style="MARGIN: 0px" align="justify">Facsimile: (604) 688-0778</p></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="justify"> <table id="pagebreak1c08d364-6d35-40ce-be24-34251d01a38d" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-37-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">Each party to this Agreement may change such address for notices by sending to the parties to this Agreement written notice of a new address for such purpose. Each such notice or other communication shall be deemed given (i) when delivered personally or by verifiable facsimile transmission (with an original to follow) on or before 4:30 p.m., New York City time, on a Business Day or, if such day is not a Business Day, on the next succeeding Business Day, (ii) on the next Business Day after timely delivery to a nationally-recognized overnight courier and (iii) on the Business Day actually received if deposited in the U.S. mail (certified or registered mail, return receipt requested, postage prepaid). For purposes of this Agreement, &#8220;<b><u>Business Day</u></b>&#8221; shall mean any day on which the Exchange and commercial banks in the City of New York are open for business. </p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">An electronic communication (&#8220;<b><u>Electronic Notice</u></b>&#8221;) shall be deemed written notice for purposes of this Section 13 if sent to the electronic mail address specified by the receiving party under separate cover. Electronic Notice shall be deemed received at the time the party sending Electronic Notice receives verification of receipt by the receiving party. Any party receiving Electronic Notice may request and shall be entitled to receive the notice on paper, in a nonelectronic form (&#8220;<b><u>Nonelectronic Notic</u>e</b>&#8221;) which shall be sent to the requesting party within ten (10) days of receipt of the written request for Nonelectronic Notice.</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">14. <u>Successors and Assigns</u>. This Agreement shall inure to the benefit of and be binding upon the Company and the Agent and their respective successors and the affiliates, controlling persons, officers and directors referred to in Section 10 hereof. References to any of the parties contained in this Agreement shall be deemed to include the successors and permitted assigns of such party. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. Neither party may assign its rights or obligations under this Agreement without the prior written consent of the other party; provided, however, that the Agent may assign its rights and obligations hereunder to an affiliate thereof without obtaining the Company&#8217;s consent.</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">15. <u>Adjustments for Stock Splits</u>. The parties acknowledge and agree that all share-related numbers contained in this Agreement shall be adjusted to take into account any stock split, stock consolidation, stock dividend or similar event effected with respect to the Placement Shares.</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">16. <u>Entire Agreement; Amendment; Severability; Waiver</u>. This Agreement (including all schedules and exhibits attached hereto and Placement Notices issued pursuant hereto) constitutes the entire agreement and supersedes all other prior and contemporaneous agreements and undertakings, both written and oral, among the parties hereto with regard to the subject matter hereof including the Original Agreement. Neither this Agreement nor any term hereof may be amended except pursuant to a written instrument executed by the Company and the Agent. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable as written by a court of competent jurisdiction, then such provision shall be given full force and effect to the fullest possible extent that it is valid, legal and enforceable, and the remainder of the terms and provisions herein shall be construed as if such invalid, illegal or unenforceable term or provision was not contained herein, but only to the extent that giving effect to such provision and the remainder of the terms and provisions hereof shall be in accordance with the intent of the parties as reflected in this Agreement. No implied waiver by a party shall arise in the absence of a waiver in writing signed by such party. No failure or delay in exercising any right, power, or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power, or privilege hereunder.</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreak35a0ee74-7bce-4702-8bff-3f77cddf7c1d" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-38-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px"><b>17. </b><b>GOVERNING LAW AND TIME; WAIVER OF JURY TRIAL.</b><b> THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME. EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.</b></p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">18. <b><u>CONSENT TO JURISDICTION</u>. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH ANY TRANSACTION CONTEMPLATED HEREBY, AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF (CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. TO THE EXTENT THAT THE COMPANY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY (ON THE GROUNDS OF SOVEREIGNTY OR OTHERWISE) FROM THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS WITH RESPECT TO ITSELF OR ITS PROPERTY, THE COMPANY IRREVOCABLY WAIVES, AS AGENTS FOR SUITS, ACTIONS OR PROCEEDINGS HEREUNDER, TO THE FULLEST EXTENT PERMITTED BY LAW, SUCH IMMUNITY IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING.</b></p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">19. <u>Appointment of Agent for Service</u>. The Company has filed with the Commission a Form F-X appointing Paracorp Incorporated (or any successor) as its agent for service of process in any suit, action or proceeding described in Section 18 and agrees that service of process in any such suit, action or proceeding may be made upon it at the office of such agent. The Company waives, to the fullest extent permitted by law, any other requirements of or objections to personal jurisdiction with respect thereto. The Company represents and warrants that such agent has agreed to act as the Company&#8217;s agent for service of process, and the Company agrees to take any and all action, including the filing of any and all documents and instruments, that may be necessary to continue such appointment in full force and effect.</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreak2abbcbee-6fb1-42b3-b7b3-f24906dff8cc" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-39-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">20. <u>Judgment Currency</u>. If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder into any currency other than United States dollars, the parties hereto agree, to the fullest extent permitted by law, that the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Agent could purchase United States dollars with such other currency in The City of New York on the Business Day preceding that on which final judgment is given. The obligation of the Company with respect to any sum due from it to the Agent or any person controlling the Agent shall, notwithstanding any judgment in a currency other than United States dollars, not be discharged until the first Business Day following receipt by the Agent or any person controlling the Agent of any sum in such other currency, and only to the extent that the Agent or controlling person may in accordance with normal banking procedures purchase United States dollars with such other currency. If the United States dollars so purchased are less than the sum originally due to the Agent or controlling person hereunder, the Company agrees as a separate obligation and notwithstanding any such judgment, to indemnify the Agent or controlling person against such loss. If the United States dollars so purchased are greater than the sum originally due to the Agent or controlling person hereunder, the Agent or controlling person agrees to pay to the Company an amount equal to the excess of the dollars so purchased over the sum originally due to the Agent or controlling person hereunder.</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">21. <u>Counterparts</u>. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of an executed Agreement by one party to the other may be made by facsimile or electronic transmission.</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">22. <u>Effect of Headings</u>.&nbsp;The section and exhibit headings herein are for convenience only and shall not affect the construction hereof. References herein to any law, statute, ordinance, code, regulation, rule or other requirement of any Governmental Authority shall be deemed to refer to such law, statute, ordinance, code, regulation, rule or other requirement of any Governmental Authority as amended, reenacted, supplemented or superseded in whole or in part and in effect from time to time and also to all rules and regulations promulgated thereunder.</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreak1316dcc2-fd8b-49fe-853b-3ad8e6b7e751" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-40-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">23. <u>Permitted Free Writing Prospectuses</u>.&nbsp;The Company represents, warrants and agrees that, unless it obtains the prior written consent of the Agent, and the Agent represents, warrants and agrees that, unless it obtains the prior written consent of the Company, it has not made and will not make any offer relating to the Placement Shares that would constitute an Issuer Free Writing Prospectus, or that would otherwise constitute a &#8220;free writing prospectus,&#8221; as defined in Rule 405, required to be filed with the Commission. Any such free writing prospectus consented to by the Agent or by the Company, as the case may be, is hereinafter referred to as a &#8220;Permitted Free Writing Prospectus.&#8221; The Company represents and warrants that it has treated and agrees that it will treat each Permitted Free Writing Prospectus as an &#8220;issuer free writing prospectus,&#8221; as defined in Rule 433, and has complied and will comply with the requirements of Rule 433 applicable to any Permitted Free Writing Prospectus, including timely filing with the Commission where required, legending and record keeping. For the purposes of clarity, the parties hereto agree that all free writing prospectuses, if any, listed in <u>Exhibit 23</u> hereto are Permitted Free Writing Prospectuses.</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">24. <u>Absence of Fiduciary Relationship</u>.&nbsp;The Company acknowledges and agrees that:</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(a) the Agent is acting solely as agent in connection with the public offering of the Placement Shares and in connection with each transaction contemplated by this Agreement and the process leading to such transactions, and no fiduciary or advisory relationship between the Company or any of its respective affiliates, shareholders (or other equity holders), creditors or employees or any other party, on the one hand, and the Agent, on the other hand, has been or will be created in respect of any of the transactions contemplated by this Agreement, irrespective of whether or not the Agent has advised or is advising the Company on other matters, and the Agent has no obligation to the Company with respect to the transactions contemplated by this Agreement except the obligations expressly set forth in this Agreement; </p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(b) it is capable of evaluating and understanding, and understands and accepts, the terms, risks and conditions of the transactions contemplated by this Agreement;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(c) neither the Agent nor any of its affiliates have provided any legal, accounting, regulatory or tax advice with respect to the transactions contemplated by this Agreement and it has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(d) it is aware that the Agent and its affiliates are engaged in a broad range of transactions which may involve interests that differ from those of the Company and the Agent and its affiliates have no obligation to disclose such interests and transactions to the Company by virtue of any fiduciary, advisory or agency relationship or otherwise; and</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 90px">(e) it waives, to the fullest extent permitted by law, any claims it may have against the Agent or its affiliates for breach of fiduciary duty or alleged breach of fiduciary duty in connection with the sale of Placement Shares under this Agreement and agrees that the Agent and its affiliates shall not have any liability (whether direct or indirect, in contract, tort or otherwise) to it in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on its behalf or in right of it or the Company, employees or creditors of Company, other than in respect of the Agent&#8217;s obligations under this Agreement and to keep information provided by the Company to the Agent and the Agent&#8217;s counsel confidential to the extent not otherwise publicly-available.</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreakfda53f1c-fe65-4ff3-a5d8-7b347bede882" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-41-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">25. <u>Definitions</u>.&nbsp;As used in this Agreement, the following terms have the respective meanings set forth below:</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">&#8220;<b><u>Applicable Time</u></b>&#8221; means (i) each Representation Date, (ii) the time of each sale of any Placement Shares pursuant to this Agreement and (iii) each Settlement Date.</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">&#8220;<b><u>Governmental Authority</u></b>&#8221; means (i) any federal, provincial, state, local, municipal, national or international government or governmental authority, regulatory or administrative agency, governmental commission, department, board, bureau, agency or instrumentality, court, tribunal, arbitrator or arbitral body (public or private); (ii) any self-regulatory organization; or (iii) any political subdivision of any of the foregoing.</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">&#8220;<b><u>Issuer Free Writing Prospectus</u></b>&#8221; means any &#8220;issuer free writing prospectus,&#8221; as defined in Rule 433, relating to the Placement Shares that (1) is required to be filed with the Commission by the Company, (2) is a &#8220;road show&#8221; that is a &#8220;written communication&#8221; within the meaning of Rule 433(d)(8)(i) whether or not required to be filed with the Commission, or (3) is exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a description of the Placement Shares or of the offering that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company&#8217;s records pursuant to Rule 433(g) under the Securities Act Regulations. </p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="left">&#8220;<b><u>Rule 164</u></b>,&#8221; &#8220;<b><u>Rule 172</u></b>,&#8221; &#8220;<b><u>Rule 405</u></b>,&#8221; &#8220;<b><u>Rule 415</u></b>,&#8221; &#8220;<b><u>Rule 424</u></b>,&#8221; &#8220;<b><u>Rule 424(b)</u></b>,&#8221; &#8220;<b><u>Rule 430B</u></b>,&#8221; and &#8220;<b><u>Rule 433</u></b>&#8221; refer to such rules under the Securities Act Regulations.</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">All references in this Agreement to financial statements and schedules and other information that is &#8220;contained,&#8221; &#8220;included&#8221; or &#8220;stated&#8221; in the Registration Statement or the Prospectus (and all other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information that is incorporated by reference in the Registration Statement or the Prospectus, as the case may be.</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">All references in this Agreement to the Registration Statement, the Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to EDGAR; all references in this Agreement to any Issuer Free Writing Prospectus (other than any Issuer Free Writing Prospectuses that, pursuant to Rule 433, are not required to be filed with the Commission) shall be deemed to include the copy thereof filed with the Commission pursuant to EDGAR; and all references in this Agreement to &#8220;supplements&#8221; to the Prospectus shall include, without limitation, any supplements, &#8220;wrappers&#8221; or similar materials prepared in connection with any offering, sale or private placement of any Placement Shares by the Agent outside of the United States.</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">26. Supersedes Prior Agreement. (i) This Agreement supersedes all prior agreements entered into between the parties, including but not limited to the Original Agreement. </p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="center">[<b><i>Signature Page Follows</i></b>]</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreak84e5810a-7634-45da-8451-7758157c35bb" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-42-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">If the foregoing correctly sets forth the understanding between the Company and the Agent, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement between the Company and the Agent.</p> <p style="MARGIN: 0px">&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td colspan="2"> <p style="MARGIN: 0px">Very truly yours,</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td colspan="2"> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td></td> <td valign="top" colspan="2"> <p style="MARGIN: 0px" align="left">AVINO SILVER &amp; GOLD MINES LTD.</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td></td> <td valign="top" colspan="2"> <p style="MARGIN: 0px" align="justify">&nbsp; </p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td width="50%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom" width="5%"> <p style="MARGIN: 0px" align="justify">By:</p></td> <td style="BORDER-BOTTOM: 1px solid" valign="bottom" width="35%"><em>/s/ David Wolfin</em></td> <td width="10%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px" align="justify">Name:</p></td> <td valign="top"> <p style="MARGIN: 0px" align="justify">David Wolfin</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom"> <p style="MARGIN: 0px" align="justify">Title: </p></td> <td valign="bottom"> <p style="MARGIN: 0px" align="justify">President and Chief Executive Officer</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr></table> <p style="MARGIN: 0px">&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td colspan="2"> <p style="MARGIN: 0px">ACCEPTED as of the date first-above written:</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr> <td width="50%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td width="5%"> <p style="MARGIN: 0px">&nbsp; </p></td> <td width="35%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td width="10%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td colspan="2"> <p style="MARGIN: 0px" align="justify">CANTOR FITZGERALD &amp; CO.</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td>&nbsp;</td> <td valign="top"> <p style="MARGIN: 0px" align="justify">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom"> <p style="MARGIN: 0px" align="justify">By:</p></td> <td style="BORDER-BOTTOM: 1px solid" valign="bottom"> <p style="MARGIN: 0px"><em>/s/ Mark Kaplan </em></p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top"> <p style="MARGIN: 0px" align="justify">Name: </p></td> <td valign="top"> <p style="MARGIN: 0px">Mark Kaplan </p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="bottom"> <p style="MARGIN: 0px" align="justify">Title: </p></td> <td valign="bottom">Chief Operating Officer </td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr></table> <p style="MARGIN: 0px">&nbsp; <table id="pagebreak45079f5b-15d1-4808-86df-fd1c1e72b25d" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center">-43-</td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b>SCHEDULE 1</b></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="center">______________________</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b>FORM OF PLACEMENT NOTICE</b></p> <p style="MARGIN: 0px" align="center">&nbsp;</p> <p style="MARGIN: 0px" align="center">______________________</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="left"> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td valign="top" width="4%"></td> <td valign="top" width="6%">From:</td> <td valign="top">Avino Silver &amp; Gold Mines Ltd.</td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr> <td></td> <td> <p style="MARGIN: 0px">To: </p></td> <td> <p style="MARGIN: 0px" align="left">Cantor Fitzgerald &amp; Co. </p></td> <tr height="15"> <td></td> <td></td> <td> <p style="MARGIN: 0px">Attention: _____________________</p></td></tr></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="left"> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td valign="top" width="4%"></td> <td valign="top" width="6%">Subject:</td> <td valign="top">Placement Notice</td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">Gentlemen:</p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">Pursuant to the terms and subject to the conditions contained in the Amended and Restated Sales Agreement between Avino Silver &amp; Gold Mines Ltd., a company continued under the <i>Business Corporations Act</i> (British Columbia) (the &#8220;<b><u>Company</u></b>&#8221;), and Cantor Fitzgerald &amp; Co. (&#8220;<b><u>Agent</u></b>&#8221;), dated August 21, 2018, the Company hereby requests that the Agent sell up to ____________ of the Company&#8217;s common shares, no par value per share, at a minimum market price of $_______ per share, during the time period beginning [month, day, time] and ending [month, day, time]. </p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreak4a145a19-1304-4251-a780-579715b857e1" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"></td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b>SCHEDULE 2</b></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="center">__________________________</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b>Compensation</b></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="center">__________________________</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">The Company shall pay to the Agent in cash, upon each sale of Placement Shares pursuant to this Agreement, an amount equal to 3.0% of the aggregate gross proceeds from each sale of Placement Shares.</p> <p style="MARGIN: 0px">&nbsp; <table id="pagebreak8ccf11fd-8b56-41f6-8fd6-6b080108f13e" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"></td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b>SCHEDULE 3</b></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="center">__________________________</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b>Notice Parties</b></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="center">__________________________</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="justify"><u>The Company</u></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="justify">David Wolfin (dwolfin@avino.com)</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="justify">Malcolm Davidson (mdavidson@avino.com)</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="justify"><u>The Agent</u></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="left">Sameer Vasudev (SVasudev@cantor.com)</p> <p style="MARGIN: 0px" align="left">&nbsp;</p> <p style="MARGIN: 0px" align="left">With copies to:</p> <p style="MARGIN: 0px" align="left">&nbsp;</p> <p style="MARGIN: 0px" align="left">CFCEO@cantor.com</p><b style="MARGIN: 0px">&nbsp; <table id="pagebreakf59c2ecc-6b81-4c96-bce3-88ad268ddc71" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"></td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table> <p style="MARGIN: 0px">&nbsp;</p></b> <p style="MARGIN: 0px" align="center"><b>SCHEDULE 4</b></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="center">__________________________</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b>Material Subsidiaries</b></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="center">__________________________</p> <p style="MARGIN: 0px">&nbsp;</p> <table style="BORDER-RIGHT: black 1px solid; BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="2" width="100%" align="center" border="0"> <tr height="15"> <td style="BORDER-TOP: black 1px solid; BORDER-LEFT: black 1px solid" valign="top" width="36%"> <p style="MARGIN: 0px" align="left">Oniva Silver and Gold Mines S.A.</p> <p style="MARGIN: 0px" align="left">de C.V.</p></td> <td style="BORDER-TOP: black 1px solid; BORDER-LEFT: black 1px solid" valign="top" width="20%"> <p style="MARGIN: 0px" align="left">Mexico</p></td> <td style="BORDER-TOP: black 1px solid; BORDER-LEFT: black 1px solid" valign="top" width="22%"> <p style="MARGIN: 0px" align="left">100%</p></td></tr> <tr height="15"> <td style="BORDER-TOP: black 1px solid; BORDER-LEFT: black 1px solid" valign="top" width="36%"> <p style="MARGIN: 0px" align="left">Promotora Avino, S.A. de C.V.</p></td> <td style="BORDER-TOP: black 1px solid; BORDER-LEFT: black 1px solid" valign="top" width="20%"> <p style="MARGIN: 0px" align="left">Mexico</p></td> <td style="BORDER-TOP: black 1px solid; BORDER-LEFT: black 1px solid" valign="top" width="22%"> <p style="MARGIN: 0px" align="left">79.09%</p></td></tr> <tr height="15"> <td style="BORDER-TOP: black 1px solid; BORDER-LEFT: black 1px solid" valign="top" width="36%"> <p style="MARGIN: 0px" align="left">Compa&#241;&#237;a Minera Mexicana de</p> <p style="MARGIN: 0px" align="left">Avino, S.A. de C.V.</p></td> <td style="BORDER-TOP: black 1px solid; BORDER-LEFT: black 1px solid" valign="top" width="20%"> <p style="MARGIN: 0px" align="left">Mexico</p></td> <td style="BORDER-TOP: black 1px solid; BORDER-LEFT: black 1px solid" valign="top" width="22%"> <p style="MARGIN: 0px" align="left">98.45% direct</p> <p style="MARGIN: 0px" align="left">1.22% indirect </p> <p style="MARGIN: 0px" align="left">(Promotora)</p> <p style="MARGIN: 0px" align="left">99.67% effective</p></td></tr> <tr height="15"> <td style="BORDER-TOP: black 1px solid; BORDER-LEFT: black 1px solid" valign="top" width="36%"> <p style="MARGIN: 0px" align="left">Bralorne Gold Mines Ltd.</p></td> <td style="BORDER-TOP: black 1px solid; BORDER-LEFT: black 1px solid" valign="top" width="20%"> <p style="MARGIN: 0px" align="left">British Columbia</p></td> <td style="BORDER-TOP: black 1px solid; BORDER-LEFT: black 1px solid" valign="top" width="22%"> <p style="MARGIN: 0px" align="left">100%</p></td></tr></table> <p style="MARGIN: 0px">&nbsp; <table id="pagebreakfebb9cce-1e6a-45b5-ad45-ea33c3774c0a" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"></td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p><b><u><font size="3"></font></u></b> <p style="MARGIN: 0px" align="center"><b><u>EXHIBIT 6(dd)</u></b></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="justify"> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td valign="top" width="4%"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top" width="4%">1.</td> <td valign="top">Title report dated February 1, 2018 prepared by Bufete Gonz&#225;lez Olgu&#237;n, S.C. on the Avino Property, Mexico.</td></tr> <tr> <td> <p style="MARGIN: 0px">&nbsp; </p></td> <td> <p style="MARGIN: 0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px">&nbsp; </p></td> <tr> <td valign="top"> <p style="MARGIN: 0px">&nbsp;</p></td> <td valign="top">2.</td> <td valign="top">Title report dated April 27, 2018 prepared by Salley Bowes Harwardt Law Corp. on a portion of the Bralorne Mine Property, British Columbia.</td></tr></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px"> <table id="pagebreak99a09dbb-c708-4aff-9632-48a25e868203" class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td class="hpbhr">&nbsp;</td></tr> <tr> <td style="BORDER-BOTTOM: black 1px solid; TEXT-ALIGN: center"></td></tr> <tr> <td> <div style="WIDTH: 100%; PAGE-BREAK-AFTER: always; LINE-HEIGHT: 0px"></div>&nbsp;</td></tr> <tr> <td>&nbsp;</td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b><u>Exhibit 23</u></b></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b>Permitted Free Writing Prospectus</b></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="left">None.</p> <p style="MARGIN: 0px" align="justify">&nbsp;</p> <p style="MARGIN: 0px" align="justify">&nbsp;</p> <p style="MARGIN: 0px" align="justify">&nbsp;</p> <p style="MARGIN: 0px" align="justify">&nbsp;</p> <p style="MARGIN: 0px" align="justify">&nbsp;</p> <p style="MARGIN: 0px" align="justify"> <table class="pagebreak" style="FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td style="BORDER-BOTTOM: black 1px solid"> <p style="MARGIN: 0px" align="center">&nbsp;</p></td></tr></table></p> <p style="MARGIN: 0px">&nbsp;</p></BODY><!--Document Created by EDGARMaster--></html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>4
<FILENAME>avino_ex232.htm
<DESCRIPTION>CONSENT
<TEXT>
<html><head><title>avino_ex232.htm</title><!--Document Created by EDGARMaster--></head><BODY spellcheck="true" style="text-align:justify;font:10pt TIMES NEW ROMAN;margin:0px 7%"><p style="MARGIN: 0px" align="right"><b>EXHIBIT 23.2</b></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="center">Consent of Independent Registered Public Accounting Firm</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="justify">We consent to the incorporation by reference in this Registration Statement on Form F-3 of our report dated April 2, 2018, relating to the consolidated financial statements of Avino Silver &amp; Gold Mines Ltd. appearing in the Annual Report on Form 20-F of Avino Silver &amp; Gold Mines Ltd. for the year ended December 31, 2017, and incorporated by reference to this Registration Statement and to the reference to us under the heading &#8220;Experts&#8221; in the Prospectus, which is a part of this Registration Statement.</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px"><u>/s/ &#8220;Manning Elliott LLP&#8221;</u></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px">Vancouver, Canada</p> <p style="MARGIN: 0px">August 21, 2018 </p> <p style="MARGIN: 0px">&nbsp;</p></BODY><!--Document Created by EDGARMaster--></html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.3
<SEQUENCE>5
<FILENAME>avino_ex233.htm
<DESCRIPTION>CONSENT
<TEXT>
<html><head><title>avino_ex233.htm</title><!--Document Created by EDGARMaster--></head><BODY spellcheck="true" style="text-align:justify;font:10pt TIMES NEW ROMAN;margin:0px 7%"><p style="MARGIN: 0px" align="right"><b>EXHIBIT 23.3</b></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b>CONSENT OF EXPERT</b></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">We hereby consent to the use of our name contained in the technical report entitled &#8220;Avino Silver &amp; Gold Mines Ltd., Resource Estimate Update for the Avino Property, Durango, Mexico with an effective date February 21, 2018&#8221; by Tetra Tech Canada Inc. filed with the SEC on April 10, 2018, on Form 6-K and incorporated by reference to this Registration Statement, and to the reference of us as an expert in the prospectus, which is part of this Registration Statement.</p> <p style="MARGIN: 0px" align="justify">&nbsp;</p> <p style="MARGIN: 0px">Tetra Tech Canada Inc.</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px"><u>/s/ Hassan Ghaffari </u></p> <p style="MARGIN: 0px">Hassan Ghaffari, P.Eng.</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px">Dated: August 21, 2018</p> <p style="MARGIN: 0px">&nbsp;</p></BODY><!--Document Created by EDGARMaster--></html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.4
<SEQUENCE>6
<FILENAME>avino_ex234.htm
<DESCRIPTION>CONSENT
<TEXT>
<html><head><title>avino_ex234.htm</title><!--Document Created by EDGARMaster--></head><BODY spellcheck="true" style="text-align:justify;font:10pt TIMES NEW ROMAN;margin:0px 7%"><p style="MARGIN: 0px" align="right"><b>EXHIBIT 23.4</b></p> <p style="MARGIN: 0px" align="center">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b>CONSENT OF EXPERT</b></p> <p style="MARGIN: 0px" align="justify">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">We hereby consent to the use of our name contained in the technical report entitled &#8220;Avino Silver &amp; Gold Mines Ltd., Resource Estimate Update for the Avino Property, Durango, Mexico with an effective date February 21, 2018&#8221; by Tetra Tech Canada Inc. filed with the SEC on April 10, 2018, on Form 6-K and incorporated by reference to this Registration Statement, and to the reference of us as an expert in the prospectus, which is part of this Registration Statement.</p> <p style="MARGIN: 0px">&nbsp;</p> <table style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr height="15"> <td> <p style="MARGIN: 0px">AUSENCO ENGINEERING CANADA INC.</p></td></tr> <tr height="15"> <td width="92%"> <p style="MARGIN: 0px">&nbsp;</p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px"><u>/s/ Michael O&#8217;Brien</u><u></u></p></td></tr> <tr height="15"> <td> <p style="MARGIN: 0px">Michael O&#8217;Brien, P. Geo</p></td></tr></table> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px">Dated: August 21, 2018</p></BODY><!--Document Created by EDGARMaster--></html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.5
<SEQUENCE>7
<FILENAME>avino_ex235.htm
<DESCRIPTION>CONSENT
<TEXT>
<html><head><title>avino_ex235.htm</title><!--Document Created by EDGARMaster--></head><BODY spellcheck="true" style="text-align:justify;font:10pt TIMES NEW ROMAN;margin:0px 7%"><p style="MARGIN: 0px" align="right"><b>EXHIBIT 23.5</b></p> <p style="MARGIN: 0px" align="center">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b>CONSENT OF EXPERT</b></p> <p style="MARGIN: 0px" align="center">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px" align="justify">We hereby consent to the use of our name contained in the technical report on the Property in the Bralorne of British Columbia, Canada dated October 20, 2016 entitled &#8220;Bralorne Gold Mine, British Columbia Canada&#8221; by Kirkham Geosystems Ltd. and Jasman Yee, P. Eng. and the reference as an expert contained in the Annual Report of Avino Silver &amp; Gold Mines Ltd. on Form 20-F for the fiscal year ended December 31, 2017 and incorporated by reference to this Registration Statement, and also to the reference of us as an expert in the prospectus, which is part of this Registration Statement.</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px">Kirkham Geosystems Ltd. </p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px"><u>/s/ Garth Kirkham </u></p> <p style="MARGIN: 0px">Garth Kirkham, P. Geo</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px">Dated: August 21, 2018 </p> <p style="MARGIN: 0px">&nbsp;</p></BODY><!--Document Created by EDGARMaster--></html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.6
<SEQUENCE>8
<FILENAME>avino_ex236.htm
<DESCRIPTION>CONSENT
<TEXT>
<html><head><title>avino_ex236.htm</title><!--Document Created by EDGARMaster--></head><BODY spellcheck="true" style="text-align:justify;font:10pt TIMES NEW ROMAN;margin:0px 7%"><p style="MARGIN: 0px" align="right"><b>EXHIBIT 23.6</b></p> <p style="MARGIN: 0px" align="center">&nbsp;</p> <p style="MARGIN: 0px" align="center"><b>CONSENT OF EXPERT</b></p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px; TEXT-INDENT: 45px">We hereby consent to the use of our name contained in the technical report on the Bralorne Project, BC, Canada with an effective date of October 20, 2016, and the reference as an expert contained in the Annual Report of Avino Silver &amp; Gold Mines Ltd. on Form 20-F for the fiscal year ended December 31, 2017 and incorporated by reference to this Registration Statement, and also to the reference of us as an expert in the prospectus, which is part of this Registration Statement.</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px"><u>/s/ Jasman Yee </u></p> <p style="MARGIN: 0px">Jasman Yee, P. Eng.</p> <p style="MARGIN: 0px">&nbsp;</p> <p style="MARGIN: 0px">Dated: August 21, 2018</p></BODY><!--Document Created by EDGARMaster--></html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>9
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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
