----

----

| o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|------------------------------------------------------------------------------------------------|

| x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2013 |
|---|---------------------------------------------------------------------------------------------------------------------------------------|

| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to ________________ |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event requiring this shell company report______________ |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| AVINO SILVER & GOLD MINES LTD.                     |
|--------------------------------------------------------|
| (Exact name of Registrant as specified in its charter) |

| Common Shares, without Par Value |   | NYSE MKT                                  |
|----------------------------------|--------|-------------------------------------------|
| Title of Each Class              |   | Name of Each Exchange on Which Registered |

----

| Large Accelerated Filer | o | Accelerated Filer | o | Non-Accelerated Filer | x |
|-------------------------|---|-------------------|---|-----------------------|---|

|  U.S. GAAP o | International Financial Reporting Standards as issued by the International Accounting Standards Board x |  Other o |
|-------------------|---------------------------------------------------------------------------------------------------------|---------------|

----

----

----

| Introduction                                                                                               |                                                                         |   | 2      |   |
|------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------|--------|--------|--------|
| Currency                                                                                                   |                                                                         |   | 2      |   |
| Forward-looking Statements                                                                                 |                                                                         |   | 2      |   |
| Cautionary Note to United States Investors Concerning Estimate of Measured and Indicated Mineral Resources |                                                                         |   | 3      |   |
| Explanatory Note Regarding Presentation of Financial Information                                           |                                                                         |   | 3      |   |
| Glossary of Mining Terms                                                                                   |                                                                         |   | 4      |   |
| Part I                                                                                                     |                                                                         |   | 6      |   |
| Item 1.                                                                                                    | Identity of Directors, Senior Management and Advisors                        |   |   | 6      |   |
| Item 2.                                                                                                    | Offer Statistics and Expected Timetable                                      |   |   | 6      |   |
| Item 3.                                                                                                    | Key Information                                                              |   |   | 6      |   |
| Item 4.                                                                                                    | Information on the Company                                                   |   |   | 15     |   |
| Item 4A.                                                                                                   | Unresolved Staff Comments                                                    |   |   | 47     |   |
| Item 5.                                                                                                    | Operating and Financial Review and Prospects                                 |   |   | 47     |   |
| Item 6.                                                                                                    | Directors, Senior Management and Employees                                   |   |   | 54     |   |
| Item 7.                                                                                                    | Major Shareholders and Related Party Transactions                            |   |   | 70     |   |
| Item 8.                                                                                                    | Financial Information                                                        |   |   | 72     |   |
| Item 9.                                                                                                    | The Offer and Listing                                                        |   |   | 72     |   |
| Item 10.                                                                                                   | Additional Information                                                       |   |   | 74     |   |
| Item 11.                                                                                                   | Quantitative and Qualitative Disclosures About Market Risk                   |   |   | 84     |   |
| Item 12.                                                                                                   | Description of Securities Other than Equity Securities                       |   |   | 84     |   |
| Part II                                                                                                    |                                                                         |   | 85     |   |
| Item 13.                                                                                                   | Defaults, Dividend Arrearages and Delinquencies                              |   |   | 85     |   |
| Item 14.                                                                                                   | Material Modifications to the Rights of Security Holders and Use of Proceeds |   |   | 85     |   |
| Item 15.                                                                                                   | Controls and Procedures                                                      |   |   | 85     |   |
| Item 16A.                                                                                                  | Audit Committee Financial Expert                                             |   |   | 86     |   |
| Item 16B.                                                                                                  | Code of Ethics                                                               |   |   | 87     |   |
| Item 16C.                                                                                                  | Principal Accountant Fees and Services                                       |   |   | 87     |   |
| Item 16D.                                                                                                  | Exemptions from the Listing Standards for Audit Committees                   |   |   | 88     |   |
| Item 16E.                                                                                                  | Purchases of Equity Securities by the Issuer and Affiliated Purchasers       |   |   | 88     |   |
| Item 16F.                                                                                                  | Change in Registrant’s Certifying Accountant                           |   |   | 88     |   |
| Item 16G.                                                                                                  | Corporate Governance                                                         |   |   | 88     |   |
| Item 16H.                                                                                                  | Mine Safety Disclosure                                                       |   |   | 88     |   |
| Part III                                                                                                   |                                                                         |   | 89     |   |
| Item 17.                                                                                                   | Financial Statements                                                         |   |   | 89     |   |
| Item 18.                                                                                                   | Financial Statements                                                         |   |   | 90     |   |
| Item 19.                                                                                                   | Exhibits                                                                     |   |   | 90     |   |

----

----

----

| agglomeration             | Cementing crushed or ground rock particles together into larger pieces, usually to make them easier to handle; used frequently in heap-leaching operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|---------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| anomalous                 | A value, or values, in which the amplitude is statistically between that of a low contrast anomaly and a high contrast anomaly in a given data set.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| anomaly                   | Any concentration of metal noticeably above or below the average background concentration.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| assay                     | An analysis to determine the presence, absence or quantity of one or more components.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| breccia                   | A rock in which angular fragments are surrounded by a mass of finer-grained material.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| cretaceous                | The geologic period extending from 135 million to 65 million years ago.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| cubic meters or m3        | A metric measurement of volume, being a cube one meter in length on each side.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| cyanidation               | A method of extracting exposed silver or gold grains from crushed or ground ore by dissolving it in a weak cyanide solution.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| diamond drill             | A rotary type of rock drill that cuts a core of rock that is recovered in long cylindrical sections, two centimeters or more in diameter.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| fault                     | A fracture in a rock where there has been displacement of the two sides.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| grade                     | The concentration of each ore metal in a rock sample, usually given as weight percent. Where extremely low concentrations are involved, the concentration may be given in grams per tonne (g/t or gpt) or ounces per ton (oz/t). The grade of an ore deposit is calculated, often using sophisticated statistical procedures, as an average of the grades of a very large number of samples collected from throughout the deposit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| hectare or ha             | An area totaling 10,000 square meters.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| highly anomalous          | An anomaly which is 50 to 100 times average background, i.e. it is statistically much greater in amplitude.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| induced polarization (IP) | A method of ground geophysics surveying employing an electrical current to determine indications of mineralization.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| mineral reserve           | The economically mineable part of a measured or indicated mineral resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of the reporting, that economic extraction can be justified. A mineral reserve includes diluting materials and allowances for losses that may occur when the material is mined. Mineral resources are sub-divided in order of increasing confidence into “probable” and “proven” mineral reserves. A probable mineral reserve has a lower level of confidence than a proven mineral reserve. The term “mineral reserve” does not necessarily signify that extraction facilities are in place or operative or that all governmental approvals have been received. It does signify that there are reasonable expectations of such approvals. |

----

| mineral resource                                      | The estimated quantity and grade of mineralization that is of potential economic merit. A resource estimate does not require specific mining, metallurgical, environmental, price and cost data, but the nature and continuity of mineralization must be understood. Mineral resources are sub-divided in order of increasing geological confidence into “inferred”, “indicated”, and “measured” categories. An inferred mineral resource has a lower level of confidence than that applied to an indicated mineral resource. An indicated mineral resource has a higher level of confidence than an inferred mineral resource, but has a lower level of confidence than a measured mineral resource. A mineral resource is a concentration or occurrence of natural, solid, inorganic or fossilized organic material in or on the earth’s crust in such form and quantity and of such grade or quality that it has reasonable prospects for economic extraction. |
|-------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| mineralization                                        | Usually implies minerals of value occurring in rocks.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| net smelter returns (NSR) royalty                     | Payment of a percentage of net mining profits after deducting applicable smelter charges.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| oxide                                                 | A compound of oxygen and some other element.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| ore                                                   | A natural aggregate of one or more minerals which may be mined and sold at a profit, or from which some part may be profitably separated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| prefeasibility study andpreliminary feasibility study | Each means a comprehensive study of the viability of a mineral project that has advanced to a stage where mining method, in the case of underground mining, or the pit configuration, in the case of open pit mining, has been established, and which, if an effective method of mineral processing has been determined, includes a financial analysis based on reasonable assumptions of technical, engineering, operating and economic factors, and the evaluation of other relevant factors which are sufficient for a qualified person, acting reasonably, to determine if all or part of the mineral resource may be classified as a mineral reserve.                                                                                                                                                                                                                                                                                                                                                  |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| probable mineral reserve                              | The economically mineable part of an indicated, and in some circumstances, a measured mineral resource demonstrated by at least a prefeasibility study. This study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| proven mineral reserve                                | The economically mineable part of a measured mineral resource demonstrated by at least a prefeasibility study. This study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction is justified. The term should be restricted to that part of the deposit where production planning is taking place and for which any variation in the estimate would not significantly affect potential economic viability.                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| quartz                                                | Silica or SiO2, a common constituent of veins, especially those containing silver and gold mineralization.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| tailings                                              | Material rejected from a mill after most of the recoverable valuable minerals have been extracted.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| ton                                                   | Imperial measurement of weight equivalent to 2,000 pounds.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| tonne                                                 | Metric measurement of weight equivalent to 2,205 pounds (1,000 kg)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| tpd                                                   | Tonnes per day.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| trench                                                | A long, narrow excavation dug through overburden, or blasted out of rock, to expose a vein or ore structure.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| veins                                                 | The mineral deposits that are found filling openings in rocks created by faults or replacing rocks on either side of faults.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

----

|                                              |   | Years Ended December 31, |       |
|---------------------------------------------------|--------|--------------------------|------------|
|                                              |   | 2013                     |       |   | 2012 |   |   | 2011 |   |   | 2010 |   |
| Summary of Operations:                            |   |                     |       |   |   |   |   |   |   |   |   |   |
| Revenue                                           |   | $                        | 16,094,701 |   |   | $ | 2,255,376 |   |   | $ | - |   |   | $ | - |   |
| Cost of sales                                     |   |                     | 8,968,409  |   |   |   | 1,434,569 |   |   |   | - |   |   |   | - |   |
| Mine operating income                             |   |                     | 7,126,292  |   |   |   | 820,807 |   |   |   | - |   |   |   | - |   |
| General and administrative expenses               |   |                     | 4,247,431  |   |   |   | 1,929,746 |   |   |   | 4,042,647 |   |   |   | 1,110,643 |   |
| Income (loss) before other items and income taxes |   |                     | 2,878,861  |   |   |   | (1,108,939 | ) |   |   | (4,042,647 | ) |   |   | (1,110,643 | ) |
| Net income (loss)                                 |   |                     | 848,212    |   |   |   | (1,263,178 | ) |   |   | (4,184,351 | ) |   |   | (790,840 | ) |
| Earnings (Loss) per share                         |   |                     |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                             |   | $                        | 0.03       |   |   | $ | (0.05 | ) |   | $ | (0.16 | ) |   | $ | (0.04 | ) |
| Diluted                                           |   | $                        | 0.03       |   |   | $ | (0.05 | ) |   | $ | (0.16 | ) |   | $ | (0.04 | ) |
| Weighted average number of shares outstanding     |   |                     |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                             |   |                     | 27,405,179 |   |   |   | 27,072,053 |   |   |   | 26,795,632 |   |   |   | 21,059,008 |   |
| Diluted                                           |   |                     | 27,701,403 |   |   |   | 27,072,053 |   |   |   | 26,795,632 |   |   |   | 21,059,008 |   |

----

|                       |   | 2013   |       |   | 2012   |   |       | 2011   |   |   | 2010       |   |
|----------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|--------|------------|--------|
| Balance Sheet Data:        |   |   |       |   |   |   |       |   |   |   |       |   |
| Total assets               |   | $      | 34,552,245 |   |   | $      | 26,191,608 |   |   | $      | 26,136,355 |   |   | $ | 26,578,517 |   |
| Cash and cash equivalents  |   |   | 3,839,595  |   |   |   | 4,035,985  |   |   |   | 5,282,464  |   |   |   | 9,051,848 |   |
| Total liabilities          |   |   | 10,005,217 |   |   |   | 4,244,230  |   |   |   | 3,202,096  |   |   |   | 2,662,727 |   |
| Shareholders’ equity |   |   | 24,547,028 |   |   |   | 21,947,378 |   |   |   | 22,934,259 |   |   |   | 23,915,790 |   |
| Share capital              |   |   | 42,784,832 |   |   |   | 42,088,103 |   |   |   | 41,720,083 |   |   |   | 39,193,299 |   |
| Shares issued              |   |   | 27,488,834 |   |   |   | 27,127,416 |   |   |   | 26,910,227 |   |   |   | 26,157,227 |   |

|                                            |   | Year Ended December 31, |       |
|-------------------------------------------------|--------|-------------------------|------------|
| Canadian GAAP                                   |   | 2009                    |       |
| Summary of Operations:                          |   |                    |       |
| Revenue                                         |   | $                       | -          |   |
| Interest income                                 |   |                    | 68,224     |   |
| Expenses                                        |   |                    |       |   |
| Operating and administrative                    |   |                    | 669,178    |   |
| Write-down of exploration and evaluation assets |   |                    | 608,118    |   |
| Mineral property option revenue                 |   |                    | -          |   |
| Future income tax benefit                       |   |                    | 239,562    |   |
| Net loss                                        |   |                    | (987,759   | ) |
| Loss per share                                  |   |                    | (0.05      | ) |
|                                            |   |                    |       |   |
| Weighted average number of shares outstanding   |   |                    | 20,584,727 |   |
|                                            |   |                    |       |   |
|                                            |   | As atDecember 31,       |       |
|                                            |   | 2009                    |       |
| Balance Sheet Data:                             |   |                    |       |   |
| Total assets                                    |   | $                       | 19,206,278 |   |
| Cash and cash equivalents                       |   |                    | 2,829,605  |   |
| Total liabilities                               |   |                    | 2,241,179  |   |
| Shareholders’ equity                      |   |                    | 16,965,099 |   |

----

| United States GAAP               |   |                    |        |   |
|----------------------------------|--------|-------------------------|-------------|--------|
|                             |   |                    |        |   |
|                             |   | Year Ended December 31, |        |
|                             |   |  2009              |        |
| Summary of Operations:           |   |                    |        |   |
| Net loss per Canadian GAAP       |   |                    | (987,759    | )      |
| Adjustments                      |   |                    | (95,108     | )      |
| Net loss per US GAAP             |   |                    | (1,082,867  | )      |
| Loss per share per US GAAP       |   |                    | (0.05       | )      |
|                             |   |                    |        |   |
|                             |   | As at December 31,      |        |
|                             |   |  2009              |        |
| Balance Sheet Data:              |   |                    |        |   |
| Total assets under Canadian GAAP |   |                    | 19,206,278  |   |
| Adjustments                      |   |                    | (14,573,506 | )      |
| Total assets under US GAAP       |   |                    | 4,632,772   |   |
|                             |   |                    |        |   |
| Total equity under Canadian GAAP |   |                    | 16,965,099  |   |
| Adjustments                      |   |                    | (12,879,499 | )      |
| Total equity under US GAAP       |   |                    | 4,085,600   |   |

| Fiscal Year Ended |   | Average |   |   | Period End |   |   | High   |   |   | Low    |   |
|-------------------|--------|---------|--------|--------|------------|--------|--------|--------|--------|--------|--------|--------|
|              |   |    |   |   |       |   |   |   |   |   |   |   |
| 2009              |   |    | 1.1420 |   |       |   | 1.0466 |   |   |   | 1.3000 |   |   |   | 1.0292 |   |
| 2010              |   |    | 1.0299 |   |       |   | 0.9946 |   |   |   | 1.0778 |   |   |   | 0.9946 |   |
| 2011              |   |    | 0.9891 |   |       |   | 1.0170 |   |   |   | 1.0630 |   |   |   | 0.9383 |   |
| 2012              |   |    | 0.9996 |   |       |   | 0.9958 |   |   |   | 1.0299 |   |   |   | 0.9600 |   |
| 2013              |   |    | 1.0301 |   |       |   | 1.0636 |   |   |   | 1.0704 |   |   |   | 0.9838 |   |

----

| Month         |   | High   |   |   | Low    |   |
|---------------|--------|--------|--------|--------|--------|--------|
| October 2013  |   |   | 1.048  |   |   |   | 1.029 |   |
| November 2013 |   |   | 1.062  |   |   |   | 1.042 |   |
| December 2013 |   |   | 1.07   |   |   |   | 1.059 |   |
| January 2014  |   |   | 1.118  |   |   |   | 1.064 |   |
| February 2014 |   |   | 1.114  |   |   |   | 1.095 |   |
| March 2014    |   |   | 1.125  |   |   |   | 1.309 |   |

----

| · | certain difficulties in obtaining expected metallurgical recoveries when scaling up to production scale from pilot plant scale; |
|--------|---------------------------------------------------------------------------------------------------------------------------------|

| · | the preliminary nature of mine plans and processing concepts and applying them to full scale production; |
|--------|----------------------------------------------------------------------------------------------------------|

| · | determining operating/capital costs estimates and possible variances associated with constructing, commissioning and operating the San Gonzalo facilities based on limited information; |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | that metallurgical flow sheets and recoveries are in development and may not be representative of results of the San Gonzalo Mine; and |
|--------|----------------------------------------------------------------------------------------------------------------------------------------|

| · | that we may underestimate capital and operating costs without a comprehensive bankable feasibility study. |
|--------|-----------------------------------------------------------------------------------------------------------|

----

| · | environmental hazards; |
|--------|------------------------|

| · | industrial accidents and explosions; |
|--------|--------------------------------------|

| · | the encountering of unusual or unexpected geological formations; |
|--------|------------------------------------------------------------------|

| · | ground fall and cave-ins; |
|--------|---------------------------|

| · | flooding; |
|--------|-----------|

| · | earthquakes; and |
|--------|------------------|

| · | periodic interruptions due to inclement or hazardous weather conditions. |
|--------|--------------------------------------------------------------------------|

----

----

| · | political instability and violence; |
|--------|-------------------------------------|

| · | war and civil disturbances; |
|--------|-----------------------------|

| · | expropriation or nationalization; |
|--------|-----------------------------------|

| · | changing fiscal regimes; |
|--------|--------------------------|

| · | fluctuations in currency exchange rates; |
|--------|------------------------------------------|

| · | high rates of inflation; |
|--------|--------------------------|

| · | underdeveloped industrial and economic infrastructure; |
|--------|--------------------------------------------------------|

| · | changes in the regulatory environment governing exploration and evaluation assets ; and |
|--------|-----------------------------------------------------------------------------------------|

| · | unenforceability of contractual rights, |
|--------|-----------------------------------------|

----

----

----

----

| · | All major capital expenditures to bring the San Gonzalo Mine into the condition necessary for it to be capable of operating in the manner intended by management had been completed; |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | The Company completed testing of the mine plant for a significant period time and tuned it to a level appropriate for efficient profitable operations; |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | The Company proved the ability to produce a saleable bulk concentrate – this was established by conducting the bulk sample program in 2010 and 2011; |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | The mine is operated by the Company’s own operating personnel with the exception of underground mine development for which it uses a mining contractor to achieve more efficiency; |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | The mill has reached the pre-determined percentage of design capacity which is 250 tpd for processing San Gonzalo ore; |
|--------|------------------------------------------------------------------------------------------------------------------------|

| · | Mineral recoveries are at and above expected production levels; and |
|--------|---------------------------------------------------------------------|

| · | The Company has demonstrated the ability to sustain ongoing production of mineralized material at steady level. |
|--------|-----------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

----

| Company                                          |   | Relationship toAvino Silver & Gold Mines Ltd. |   |   | Effective Ownership ofAvino Mine Property(%) |   |
|--------------------------------------------------|--------|---------------------------------------------------|--------|--------|----------------------------------------------|--------|
| Avino Mexico                                     |   | Subsidiary                                        |   |   |                                         | 98.39  |   |
| Promotora Avino, S.A. de C.V.                    |   | Subsidiary                                        |   |   |                                         | 1.27   |   |
| Total Effective Ownership of Avino Mine Property |   |  -                                           |   |   |                                         | 99.66  |   |
| Estate of Ysita                                  |   | Non-controlling interest                          |   |   |                                         | 0.34   |   |
| Total                                            |   |  -                                           |   |   |                                         | 100.00 |   |

----

| · | Execute work under the terms and conditions established in the mining law; |
|--------|----------------------------------------------------------------------------|

| · | Pay fees to the Secretaria de Economia on a semi-annual basis; |
|--------|----------------------------------------------------------------|

| · | Locate on the ground a starting point (mojonera) for the location of the concession, and maintain the mojonera in good condition; |
|--------|-----------------------------------------------------------------------------------------------------------------------------------|

| · | Begin work on the concession within 90 days of receiving the mining title; |
|--------|----------------------------------------------------------------------------|

| · | File annual reports describing the work completed and the amount spent doing the reported work*; |
|--------|--------------------------------------------------------------------------------------------------|

| · | The Direccion General de Minas (“DGM”) has the right to audit the receipts and verify that reported work was completed in the field; and |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Failure to comply with the obligations or to assist the DGM with an audit will result in cancellation of the mining concession. |
|--------|---------------------------------------------------------------------------------------------------------------------------------|

----

| ConcessionName                                |   | ConcessionNo. |   | ClaimType |   | Location |        | Hectares(ha) |   | DateAcquired |   | ExpirationDate |   | Cost(US$/ha) |   |   | Payment(US$) |   |
|-----------------------------------------------|--------|---------------|--------|-----------|--------|----------|-------------|--------------|--------|--------------|--------|----------------|--------|--------------|--------|--------|--------------|--------|
| Agrupamiento San Jose (Purisma Chica)         |   |          | 155597 |      | Lode   |     | Pánuco |         |   | 136.708      |   | 30/09/1971     |   | 29/09/2021   |   |   | 124.74       |   |   |   | 17,052.91 |   |
| Agrupamiento (San Jose)                       |   |          | 164985 |      | Lode   |     | Pánuco |         |   | 8            |   | 13/08/1979     |   | 12/8/2029    |   |   | 124.74       |   |   |   | 997.92 |   |
| Agrupamiento San Jose (El Trompo)             |   |          | 184397 |      | Lode   |     | Pánuco |         |   | 81.547       |   | 13/10/1989     |   | 12/10/2039   |   |   | 124.74       |   |   |   | 10,172.12 |   |
| Agrupamiento San Jose (Gran Lucero)           |   |          | 189477 |      | Lode   |     | Pánuco |         |   | 161.468      |   | 5/12/1990      |   | 4/12/2040    |   |   | 124.74       |   |   |   | 20,141.57 |   |
| Agrupamiento San Jose (San Carlos)            |   |          | 117411 |      | Lode   |     | Pánuco |         |   | 4.451        |   | 5/2/1961       |   | 16/12/2061   |   |   | 124.74       |   |   |   | 555.16 |   |
| Agrupamiento San Jose (San Pedro Y San Pablo) |   |          | 139615 |      | Lode   |     | Pánuco |         |   | 12           |   | 22/06/1959     |   | 21/06/2061   |   |   | 124.74       |   |   |   | 1,496.88 |   |
| Aguila Mexicana                               |   |          | 215733 |      | Lode   |     | Pánuco |         |   | 36.768       |   | 12/3/2004      |   | 29/06/2044   |   |   | 70.88        |   |   |   | 2,606.12 |   |
| Ampliacion La Malinche                        |   |          | 204177 |      | Lode   |     | Pánuco |         |   | 6.01         |   | 18/12/1996     |   | 17/12/2046   |   |   | 124.74       |   |   |   | 749.72 |   |
| Ampliacion San Gonzalo                        |   |          | 191837 |      | Lode   |     | Pánuco |         |   | 5.85         |   | 19/12/1991     |   | 18/12/2041   |   |   | 124.74       |   |   |   | 729.67 |   |
| Avino Grande Ix                               |   |          | 216005 |      | Lode   |     | Pánuco |         |   | 19.558       |   | 2/4/2002       |   | 1/4/2052     |   |   | 70.88        |   |   |   | 1,386.24 |   |
| Avino Grande Viii                             |   |          | 215224 |      | Lode   |     | Pánuco |         |   | 22.882       |   | 14/02/2002     |   | 13/02/2052   |   |   | 70.88        |   |   |   | 1,621.85 |   |
| El Caracol                                    |   |          | 215732 |      | Lode   |     | Pánuco |         |   | 102.382      |   | 12/3/2002      |   | 28/04/2044   |   |   | 70.88        |   |   |   | 7,256.84 |   |
| El Potrerito                                  |   |          | 185328 |      | Lode   |     | Pánuco |         |   | 9            |   | 14/12/1989     |   | 13/12/2039   |   |   | 124.74       |   |   |   | 1,122.66 |   |
| Fernando                                      |   |          | 205401 |      | Lode   |     | Pánuco |         |   | 72.129       |   | 29/08/1997     |   | 28/08/2047   |   |   | 124.74       |   |   |   | 8,997.33 |   |
| La Estela                                     |   |          | 179658 |      | Lode   |     | Pánuco |         |   | 14           |   | 11/12/1986     |   | 12/12/2036   |   |   | 124.74       |   |   |   | 1,746.36 |   |
| La Malinche                                   |   |          | 203256 |      | Lode   |     | Pánuco |         |   | 9            |   | 28/06/1996     |   | 27/06/2046   |   |   | 124.74       |   |   |   | 1,122.66 |   |
| Los Angeles                                   |   |          | 154410 |      | Lode   |     | Pánuco |         |   | 23.713       |   | 25/03/1971     |   | 24/03/2021   |   |   | 124.74       |   |   |   | 2,957.96 |   |
| Negro Jose                                    |   |          | 218252 |      | Lode   |     | Pánuco |         |   | 58           |   | 17/10/2002     |   | 16/10/2052   |   |   | 70.88        |   |   |   | 4,111.04 |   |
| San Gonzalo                                   |   |          | 190748 |      | Lode   |     | Pánuco |         |   | 12           |   | 29/04/1991     |   | 28/04/2041   |   |   | 124.74       |   |   |   | 1,496.88 |   |
| San Martin De Porres                          |   |          | 222909 |      | Lode   |     | Pánuco |         |   | 30           |   | 15/09/2004     |   | 14/09/2054   |   |   | 70.88        |   |   |   | 2,126.40 |   |
| Santa Ana                                     |   |          | 195678 |      | Lode   |     | Pánuco |         |   | 136.182      |   | 14/09/1992     |   | 13/09/2042   |   |   | 124.74       |   |   |   | 16,987.38 |   |
| Yolanda                                       |   |          | 191083 |      | Lode   |     | Pánuco |         |   | 43.458       |   | 29/04/1991     |   | 28/04/2041   |   |   | 124.74       |   |   |   | 5,420.91 |   |
| Total hectares                                |   |          |   |      |   |     |        |         |   | 1,005.106    |   |           |   |         |   |   |         |   |   |   |   |   |

----

| · | first quarter: payment of 100% of the minimum royalty; |
|--------|--------------------------------------------------------|

| · | second quarter: payment of 75% of the minimum royalty; |
|--------|--------------------------------------------------------|

| · | third quarter: payment of 50% of the minimum royalty; |
|--------|-------------------------------------------------------|

| · | fourth quarter: payment of 25% of the minimum royalty; and |
|--------|------------------------------------------------------------|

| · | in the case of force majeure still in place after one year of payments, payment shall recommence at a rate of 100% of the minimum royalty and shall continue being made as per the quarterly schedule. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|   |   | Average Widths and Assay Values Over Total Length (441.23m) Sampled on Level 5 |   |
|--------|--------|--------------------------------------------------------------------------------|--------|
|   |   | Width (m)                                                                      |   |   | Gold (g/t) |   |   | Silver (g/t) |   |   | Pb % |   |   | Zn % |   |
| Vein   |   |                                                                           | 1.79   |   |   |   | 3.29 |   |   |   | 556 |   |   |   | 0.53 |   |   |   | 1.28 |   |
| Drift  |   |                                                                           | 2.78   |   |   |   | 2.17 |   |   |   | 366 |   |   |   | 0.37 |   |   |   | 0.67 |   |

| Comparison of Vein Widths and Grade (Back Samples): 4th & 5th Levels |   |
|--------------------------------------------------------------------------|--------|
| Width (m)                                                                |   |   | Gold (g/t) |   |   | Silver (g/t) |   |   | Pb % |   |   | Zn % |   |
|                                                                     |   |
| 4th Level: 334.34m Sampled Length                                        |   |
| 1.72                                                                     |   |   |   | 2.05 |   |   |   | 440 |   |   |   | 0.64 |   |   |   | 1.16 |   |
| 5th Level: 441.23m Sampled Length                                        |   |
| 1.79                                                                     |   |   |   | 3.29 |   |   |   | 556 |   |   |   | 0.53 |   |   |   | 1.28 |   |

----

----

| · | To provide an operating 250tpd milling circuit, as much of the existing process equipment was used. The crushing plant was reconfigured for 2 stages of crushing rather than 3 by installing a smaller jaw crusher, repairing the short head cone crusher and the vibrating screen. The 8x6 ball mill was inspected and the necessary mechanical repairs were made to make the mill operational. Two smaller bank of flotation cells were fabricated and installed. In the dewatering section, the existing 20ft thickener was cleaned and the side walls and bottom were reinforced with new steel plates. New filter sectors for the existing filter and a new vacuum pump were purchased and installed. The entire mill was rewired accordingly to meet the electrical code. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Infrastructure. Expenditures in this area included the following: |
|--------|-------------------------------------------------------------------|

|   | 1.   | Water supply from Galeana, La Caricol Dam and the Tailings Reclaim. All of these items required pumps, electrical starters, cable and transformers and repairs to the existing pipelines. |
|--------|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2.   | Clean and reactivate the two existing water storage tanks and install a new 2” pipeline to supply water to San Gonzalo |
|--------|----------------|------------------------------------------------------------------------------------------------------------------------------|

|   | 3.   | Purchase equipment such as a new Varian AA machine for the Assay Laboratory |
|--------|----------------|-----------------------------------------------------------------------------|

|   | 4.   | Two diamond drill core storage sheds |
|--------|----------------|--------------------------------------|

|   | 5.   | Reactivate and calibrate the existing dump truck scale |
|--------|----------------|--------------------------------------------------------|

|   | 6.   | Miners Quarters for approximately 50 contract miners and related services for housing them |
|--------|----------------|--------------------------------------------------------------------------------------------|

|   | 7.   | Mine Office and Maintenance Shop |
|--------|----------------|----------------------------------|

|   | 8.   | Fuel Storage Tank and containment (San Gonzalo) |
|--------|----------------|-------------------------------------------------|

|   | 9.   | Reactivate two secured explosives storage facilities and the guard house |
|--------|----------------|--------------------------------------------------------------------------|

|   | 10.   | Phone and telecommunication systems |
|--------|-----------------|-------------------------------------|

|   | 11.   | New 400kW Power line from the vicinity of the process plant to San Gonzalo |
|--------|-----------------|----------------------------------------------------------------------------|

|   | 12.   | Upgrade the road from San Gonzalo to process plant. A distance of about 1.7km. |
|--------|-----------------|--------------------------------------------------------------------------------|

|   | 13.   | 4 mine dewatering pumps for ET |
|--------|-----------------|--------------------------------|

|   | 14.   | Water Treatment plant |
|--------|-----------------|-----------------------|

|   | 15.   | Lime storage and feeding system for water treatment plant |
|--------|-----------------|-----------------------------------------------------------|

|   | 16.   | 700kW CAT generator for Circuit #2 |
|--------|-----------------|------------------------------------|

|   | 17.   | 2 Diesel fuel storage tanks for Circuit #2 generator |
|--------|-----------------|------------------------------------------------------|

|   | 18.   | Ring and puck Lab pulveriser |
|--------|-----------------|------------------------------|

|   | 19.   | Fire Assay furnace & micro gold balance |
|--------|-----------------|---------------------------------------------|

|   | 20.   | 4 1⁄4 short head cone crusher |
|--------|-----------------|----------------------------------|

|   | 21.   | Ingersoll & Rand air compressor for floatation cells |
|--------|-----------------|----------------------------------------------------------|

| · | Major Surface and Underground Equipment Purchases include: |
|--------|------------------------------------------------------------|

|   | 1.   | 924-H Caterpillar front end loader |
|--------|----------------|------------------------------------|

|   | 2.   | DR-6 Cat Dozer |
|--------|----------------|----------------|

|   | 3.   | 13 light service passenger vehicles |
|--------|----------------|-------------------------------------|

|   | 4.   | 300kW Diesel power generator |
|--------|----------------|------------------------------|

|   | 5.   | 150hp Air compressor |
|--------|----------------|----------------------|

|   | 6.   | 5 yard Scoop from Remag |
|--------|----------------|-------------------------|

----

|   | 7.   | 3 yard Scoop from Caterpillar |
|--------|----------------|-------------------------------|

|   | 8.   | LY-44 Surface and ONRAM 1000/3 Underground diamond drills |
|--------|----------------|-----------------------------------------------------------|

|   | 9.   | Caterpillar 320D combination backhoe and rock breaker |
|--------|----------------|-------------------------------------------------------|

|   | 10.   | Oldenberg single boom jumbo from Caterpillar |
|--------|-----------------|----------------------------------------------|

|   | 11.   | RG 1600 Scoop tram |
|--------|-----------------|--------------------|

|   | 12.   | Energy efficient air compressor |
|--------|-----------------|---------------------------------|

|   | 13.   | 2 San Gonzalo mine dewatering pumps |
|--------|-----------------|-------------------------------------|

|   | 14.   | CAT mini loader for loading concentrate |
|--------|-----------------|-----------------------------------------|

|   | 15.   | Shotcrete machine |
|--------|-----------------|-------------------|

| Circuit # | Operating Throughput (TPD) | Sources of Mill Feed                   | Operating Status |
|-----------|----------------------------|----------------------------------------|------------------|
| 1         | 250                        | San Gonzalo Mine (“SG”)    | Now Online       |
| 2         | 250                        | Avino Mine Stockpiles, SG, Avino Mine* | Now Online       |
| 3         | 1,000                      | Avino Mine*                            | Expected in 2014 |

| · | A 250 TPD circuit (“Circuit 2”) was commissioned in April 2013 and is being used to process remaining aboveground stockpiles at the Avino Mine. After the historic stockpiles have been depleted, this circuit will have the capacity to process mill feed from the San Gonzalo Mine or the Avino Mine once production activity commences. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Circuit 1 is expected to continue to process high-grade mill feed from the San Gonzalo Mine. |
|--------|----------------------------------------------------------------------------------------------|

| · | Circuit 3 is expected to begin processing mineralized material from the Avino Mine in 2014*. |
|--------|----------------------------------------------------------------------------------------------|

|   |   | Exploration and Evaluation Expenditures |       |   | Capital Expenditures |   |      | Operating and Administrative Expenses* |   |   | Total      |   |
|--------|--------|-----------------------------------------|------------|--------|----------------------|--------|-----------|----------------------------------------|--------|--------|------------|--------|
| 2006   |   |                                    | 72,208     |   |                 |   | 18,331    |                                   |   |   | 4,014,734  |   |   |   | 4,105,273 |   |
| 2007   |   |                                    | 2,292,156  |   |                 |   | 777,586   |                                   |   |   | 868,527    |   |   |   | 3,938,269 |   |
| 2008   |   |                                    | 1,764,719  |   |                 |   | 93,492    |                                   |   |   | 1,575,913  |   |   |   | 3,434,124 |   |
| 2009   |   |                                    | 320,100    |   |                 |   | 281,461   |                                   |   |   | 669,178    |   |   |   | 1,270,739 |   |
| 2010   |   |                                    | 1,839,096  |   |                 |   | 324,360   |                                   |   |   | 1,110,643  |   |   |   | 3,274,099 |   |
| 2011   |   |                                    | 4,590,331  |   |                 |   | 1,483,453 |                                   |   |   | 4,042,647  |   |   |   | 10,116,431 |   |
| 2012   |   |                                    | 2,387,771  |   |                 |   | 946,286   |                                   |   |   | 1,929,746  |   |   |   | 5,263,803 |   |
| 2013   |   |                                    | 2,857,974  |   |                 |   | 4,256,137 |                                   |   |   | 4,247,431  |   |   |   | 11,561,542 |   |
| Total  |   |                                    | 16,124,355 |   |                 |   | 8,181,106 |                                   |   |   | 18,458,819 |   |   |   | 42,964,280 |   |

| * | Operating and administrative expenses do not reflect other income or expense or other comprehensive income or loss. |
|---|---------------------------------------------------------------------------------------------------------------------|

----

| Year |   | Operating Expenses |       |   | Capital Expenditures |   |       | TOTAL  |   |
|------|--------|--------------------|------------|--------|----------------------|--------|------------|--------|--------|
| 2014 |   | $                  | 13,000,000 |   |                 | $      | 10,000,000 |   |   | $ | 23,000,000 |   |

----

----

----

| Hole ID |   | Easting (m) |   |   | Northing (m) |   |    | Elevation(m) |   |   | AssayLength(m) |   |   | MeasuredLength(m) |   |
|---------|--------|-------------|--------|--------|--------------|--------|---------|--------------|--------|--------|----------------|--------|--------|-------------------|--------|
| A1      |   |        | 570205 |   |         |   | 2712340 |         |   |   | 2,204          |   |   |              | 5.0    |   |   |   | 5.00 |   |
| A2      |   |        | 570184 |   |         |   | 2712306 |         |   |   | 2,203          |   |   |              | 7.0    |   |   |   | 7.25 |   |
| A3      |   |        | 570192 |   |         |   | 2712267 |         |   |   | 2,203          |   |   |              | 8.0    |   |   |   | 8.00 |   |
| A4      |   |        | 570167 |   |         |   | 2712236 |         |   |   | 2,203          |   |   |              | 9.0    |   |   |   | 9.00 |   |
| A5      |   |        | 570175 |   |         |   | 2712197 |         |   |   | 2,203          |   |   |              | 15.0   |   |   |   | 16.25 |   |
| A6      |   |        | 570152 |   |         |   | 2712167 |         |   |   | 2,202          |   |   |              | 18.0   |   |   |   | 18.00 |   |
| A7      |   |        | 570159 |   |         |   | 2712128 |         |   |   | 2,201          |   |   |              | 16.0   |   |   |   | 16.00 |   |
| A8      |   |        | 570149 |   |         |   | 2712094 |         |   |   | 2,200          |   |   |              | 8.0    |   |   |   | 8.00 |   |
| Z1*     |   |        | 570197 |   |         |   | 2712411 |         |   |   | 2,218          |   |   |              | 9.0    |   |   |   | 9.50 |   |
| Z2*     |   |        | 570176 |   |         |   | 2712365 |         |   |   | 2,218          |   |   |              | 16.0   |   |   |   | 16.00 |   |
| Z3*     |   |        | 570165 |   |         |   | 2712317 |         |   |   | 2,217          |   |   |              | 13.0   |   |   |   | 13.25 |   |
| Z4*     |   |        | 570153 |   |         |   | 2712269 |         |   |   | 2,217          |   |   |              | 13.0   |   |   |   | 13.50 |   |
| Z5*     |   |        | 570142 |   |         |   | 2712221 |         |   |   | 2,216          |   |   |              | 13.0   |   |   |   | 13.00 |   |
| Z6*     |   |        | 570135 |   |         |   | 2712175 |         |   |   | 2,215          |   |   |              | 14.0   |   |   |   | 14.00 |   |
| B1      |   |        | 570132 |   |         |   | 2712365 |         |   |   | 2,217          |   |   |              | 10.0   |   |   |   | 10.00 |   |
| B2      |   |        | 570114 |   |         |   | 2712318 |         |   |   | 2,217          |   |   |              | 19.0   |   |   |   | 19.25 |   |
| B3      |   |        | 570101 |   |         |   | 2712268 |         |   |   | 2,216          |   |   |              | 26.0   |   |   |   | 26.75 |   |
| B4      |   |        | 570079 |   |         |   | 2712207 |         |   |   | 2,216          |   |   |              | 23.5   |   |   |   | 23.50 |   |
| B5      |   |        | 570082 |   |         |   | 2712140 |         |   |   | 2,214          |   |   |              | 18.0   |   |   |   | 18.00 |   |
| C1      |   |        | 570085 |   |         |   | 2712383 |         |   |   | 2,218          |   |   |              | 8.5    |   |   |   | 8.75 |   |
| C3      |   |        | 570077 |   |         |   | 2712354 |         |   |   | 2,217          |   |   |              | 15.0   |   |   |   | 15.00 |   |
| C4      |   |        | 570049 |   |         |   | 2712250 |         |   |   | 2,216          |   |   |              | 24.0   |   |   |   | 24.00 |   |
| C5      |   |        | 570028 |   |         |   | 2712164 |         |   |   | 2,216          |   |   |              | 14.0   |   |   |   | 14.00 |   |
| C6      |   |        | 570017 |   |         |   | 2712117 |         |   |   | 2,216          |   |   |              | 10.0   |   |   |   | 10.00 |   |
| D1      |   |        | 570029 |   |         |   | 2712373 |         |   |   | 2,218          |   |   |              | 13.0   |   |   |   | 13.00 |   |
| D2      |   |        | 570018 |   |         |   | 2712329 |         |   |   | 2,217          |   |   |              | 19.0   |   |   |   | 19.25 |   |
| D3      |   |        | 570003 |   |         |   | 2712273 |         |   |   | 2,218          |   |   |              | 19.5   |   |   |   | 19.50 |   |
| D4      |   |        | 569961 |   |         |   | 2712167 |         |   |   | 2,216          |   |   |              | 6.0    |   |   |   | 6.00 |   |
| E1      |   |        | 569977 |   |         |   | 2712369 |         |   |   | 2,217          |   |   |              | 13.0   |   |   |   | 13.25 |   |
| E2      |   |        | 569960 |   |         |   | 2712311 |         |   |   | 2,216          |   |   |              | 18.5   |   |   |   | 18.50 |   |
| E3      |   |        | 569952 |   |         |   | 2712267 |         |   |   | 2,216          |   |   |              | 12.0   |   |   |   | 12.00 |   |
| F1      |   |        | 569936 |   |         |   | 2712401 |         |   |   | 2,216          |   |   |              | 18.5   |   |   |   | 18.50 |   |
| F2      |   |        | 569926 |   |         |   | 2712364 |         |   |   | 2,216          |   |   |              | 16.0   |   |   |   | 16.00 |   |
| F3      |   |        | 569915 |   |         |   | 2712324 |         |   |   | 2,216          |   |   |              | 15.0   |   |   |   | 15.00 |   |

----

----

| Hole ID  |   | Azimuth(°) |   |   | Dip(°) |   |   | Depth(m) |   |   | Easting(m) |   |   | Northing(m) |   |   | Elevation(m) |   |
|----------|--------|-----------------|--------|--------|-------------|--------|--------|----------|--------|--------|------------|--------|--------|-------------|--------|--------|--------------|--------|
| CH-06-03 |   |            | 338    |   |        |   | -50    |     |   |   | 453.75     |   |   |        | 571013 |   |         |   | 2712796 |   |   |   | 2,208 |   |
| ET-06-01 |   |            | 337    |   |        |   | -55    |     |   |   | 431.20     |   |   |        | 570271 |   |         |   | 2712262 |   |   |   | 2,187 |   |
| ET-06-02 |   |            | 340    |   |        |   | -50    |     |   |   | 416.70     |   |   |        | 570337 |   |         |   | 2712309 |   |   |   | 2,190 |   |
| ET-06-03 |   |            | 339    |   |        |   | -48    |     |   |   | 421.15     |   |   |        | 570457 |   |         |   | 2712361 |   |   |   | 2,194 |   |
| ET-06-04 |   |            | 340    |   |        |   | -50    |     |   |   | 444.05     |   |   |        | 570501 |   |         |   | 2712468 |   |   |   | 2,215 |   |
| ET-07-01 |   |            | 001    |   |        |   | -69    |     |   |   | 298.60     |   |   |        | 570176 |   |         |   | 2712453 |   |   |   | 2,222 |   |
| ET-07-02 |   |            | 358    |   |        |   | -75    |     |   |   | 311.90     |   |   |        | 570206 |   |         |   | 2712467 |   |   |   | 2,224 |   |
| ET-07-03 |   |            | 336    |   |        |   | -71    |     |   |   | 349.50     |   |   |        | 570344 |   |         |   | 2712498 |   |   |   | 2,226 |   |
| ET-07-04 |   |            | 331    |   |        |   | -56    |     |   |   | 318.70     |   |   |        | 570440 |   |         |   | 2712511 |   |   |   | 2,226 |   |
| ET-07-05 |   |            | 333    |   |        |   | -65.5  |     |   |   | 351.50     |   |   |        | 570440 |   |         |   | 2712510 |   |   |   | 2,226 |   |
| ET-07-06 |   |            | 336    |   |        |   | -55    |     |   |   | 320.05     |   |   |        | 570520 |   |         |   | 2712524 |   |   |   | 2,225 |   |
| ET-07-07 |   |            | 330    |   |        |   | -56.5  |     |   |   | 304.85     |   |   |        | 570585 |   |         |   | 2712569 |   |   |   | 2,230 |   |
| ET-07-08 |   |            | 346    |   |        |   | -69    |     |   |   | 399.70     |   |   |        | 570584 |   |         |   | 2712569 |   |   |   | 2,231 |   |
| ET-07-09 |   |            | 336    |   |        |   | -62    |     |   |   | 328.55     |   |   |        | 570629 |   |         |   | 2712604 |   |   |   | 2,235 |   |
| ET-07-10 |   |            | 338    |   |        |   | -62    |     |   |   | 308.65     |   |   |        | 570645 |   |         |   | 2712650 |   |   |   | 2,245 |   |
| ET-07-11 |   |            | 337    |   |        |   | -69    |     |   |   | 329.80     |   |   |        | 570682 |   |         |   | 2712654 |   |   |   | 2,241 |   |
| ET-07-12 |   |            | 337    |   |        |   | -48    |     |   |   | 284.70     |   |   |        | 570735 |   |         |   | 2712654 |   |   |   | 2,234 |   |
| ET-08-01 |   |            | 329    |   |        |   | -45    |     |   |   | 221.45     |   |   |        | 570807 |   |         |   | 2712712 |   |   |   | 2,236 |   |
| ET-08-02 |   |            | 330    |   |        |   | -54    |     |   |   | 234.50     |   |   |        | 570341 |   |         |   | 2712549 |   |   |   | 2,244 |   |
| ET-08-03 |   |            | 333    |   |        |   | -64    |     |   |   | 265.10     |   |   |        | 570341 |   |         |   | 2712549 |   |   |   | 2,244 |   |
| ET-08-04 |   |            | 337    |   |        |   | -65    |     |   |   | 358.65     |   |   |        | 570579 |   |         |   | 2712568 |   |   |   | 2,231 |   |
| ET-08-05 |   |            | 338    |   |        |   | -66    |     |   |   | 371.10     |   |   |        | 570658 |   |         |   | 2712629 |   |   |   | 2,240 |   |
| ET-08-06 |   |            | 338    |   |        |   | -59    |     |   |   | 292.45     |   |   |        | 570676 |   |         |   | 2712654 |   |   |   | 2,243 |   |
| ET-08-07 |   |            | 343    |   |        |   | -70    |     |   |   | 174.40     |   |   |        | 570747 |   |         |   | 2712656 |   |   |   | 2,234 |   |
| ET-08-08 |   |            | 344    |   |        |   | -45    |     |   |   | 269.05     |   |   |        | 570906 |   |         |   | 2712766 |   |   |   | 2,227 |   |
| ET-12-01 |   |            | 332    |   |        |   | -62    |     |   |   | 288.15     |   |   |        | 570354 |   |         |   | 2712501 |   |   |   | 2,226 |   |
| ET-12-02 |   |            | 335    |   |        |   | -53    |     |   |   | 360.90     |   |   |        | 570507 |   |         |   | 2712472 |   |   |   | 2,214 |   |
| ET-12-03 |   |            | 335    |   |        |   | -61    |     |   |   | 367.75     |   |   |        | 570507 |   |         |   | 2712471 |   |   |   | 2,214 |   |
| ET-12-04 |   |            | 335    |   |        |   | -64    |     |   |   | 373.75     |   |   |        | 570544 |   |         |   | 2712497 |   |   |   | 2,216 |   |
| ET-12-05 |   |            | 336    |   |        |   | -62    |     |   |   | 369.20     |   |   |        | 570566 |   |         |   | 2712508 |   |   |   | 2,218 |   |
| ET-12-06 |   |            | 336    |   |        |   | -70    |     |   |   | 396.10     |   |   |        | 570589 |   |         |   | 2712523 |   |   |   | 2,219 |   |
| ET-12-07 |   |            | 336    |   |        |   | -64    |     |   |   | 327.60     |   |   |        | 570678 |   |         |   | 2712594 |   |   |   | 2,227 |   |
| ET-12-08 |   |            | 336    |   |        |   | -72    |     |   |   | 384.35     |   |   |        | 570678 |   |         |   | 2712594 |   |   |   | 2,227 |   |
| ET-12-09 |   |            | 336    |   |        |   | -72    |     |   |   | 395.35     |   |   |        | 570646 |   |         |   | 2712555 |   |   |   | 2,222 |   |

----

| Hole ID  |   | Azimuth(°) |   |   | Dip(°) |   |   | Depth(m) |   |   | Easting(m) |   |   | Northing(m) |   |   | Elevation(m) |   |
|----------|--------|-----------------|--------|--------|-------------|--------|--------|----------|--------|--------|------------|--------|--------|-------------|--------|--------|--------------|--------|
| SG-07-01 |   |            | 050    |   |        |   | -60    |     |   |   | 386.80     |   |   |        | 571713 |   |         |   | 2713982 |   |   |   | 2297 |   |
| SG-07-02 |   |            | 038    |   |        |   | -48    |     |   |   | 323.70     |   |   |        | 571714 |   |         |   | 2713983 |   |   |   | 2297 |   |
| SG-07-03 |   |            | 074    |   |        |   | -43    |     |   |   | 315.00     |   |   |        | 571714 |   |         |   | 2713981 |   |   |   | 2297 |   |
| SG-07-04 |   |            | 053    |   |        |   | -49    |     |   |   | 312.70     |   |   |        | 571651 |   |         |   | 2714059 |   |   |   | 2276 |   |
| SG-07-05 |   |            | 059    |   |        |   | -69    |     |   |   | 137.00     |   |   |        | 571650 |   |         |   | 2714058 |   |   |   | 2276 |   |
| SG-07-06 |   |            | 055    |   |        |   | -58    |     |   |   | 387.20     |   |   |        | 571650 |   |         |   | 2714058 |   |   |   | 2276 |   |
| SG-07-07 |   |            | 044    |   |        |   | -44    |     |   |   | 281.55     |   |   |        | 571578 |   |         |   | 2714117 |   |   |   | 2281 |   |
| SG-07-08 |   |            | 043    |   |        |   | -55    |     |   |   | 383.70     |   |   |        | 571578 |   |         |   | 2714116 |   |   |   | 2281 |   |
| SG-07-09 |   |            | 038    |   |        |   | -45    |     |   |   | 106.60     |   |   |        | 571677 |   |         |   | 2714137 |   |   |   | 2277 |   |
| SG-07-10 |   |            | 053    |   |        |   | -58    |     |   |   | 162.90     |   |   |        | 571677 |   |         |   | 2714136 |   |   |   | 2277 |   |
| SG-07-11 |   |            | 015    |   |        |   | -49    |     |   |   | 158.60     |   |   |        | 571676 |   |         |   | 2714135 |   |   |   | 2277 |   |
| SG-07-12 |   |            | 089    |   |        |   | -53    |     |   |   | 175.45     |   |   |        | 571678 |   |         |   | 2714133 |   |   |   | 2277 |   |
| SG-07-13 |   |            | 055    |   |        |   | -49    |     |   |   | 160.55     |   |   |        | 571770 |   |         |   | 2713993 |   |   |   | 2315 |   |
| SG-07-14 |   |            | 054    |   |        |   | -53    |     |   |   | 295.20     |   |   |        | 571716 |   |         |   | 2713971 |   |   |   | 2297 |   |
| SG-07-15 |   |            | 218    |   |        |   | -49    |     |   |   | 96.20      |   |   |        | 571689 |   |         |   | 2714268 |   |   |   | 2296 |   |
| SG-07-16 |   |            | 219    |   |        |   | -54    |     |   |   | 99.85      |   |   |        | 571552 |   |         |   | 2714354 |   |   |   | 2285 |   |
| SG-07-17 |   |            | 252    |   |        |   | -55    |     |   |   | 69.80      |   |   |        | 571428 |   |         |   | 2714421 |   |   |   | 2268 |   |
| SG-07-18 |   |            | 218    |   |        |   | -65    |     |   |   | 238.05     |   |   |        | 571765 |   |         |   | 2714318 |   |   |   | 2293 |   |
| SG-07-19 |   |            | 257    |   |        |   | -66    |     |   |   | 344.90     |   |   |        | 571763 |   |         |   | 2714320 |   |   |   | 2293 |   |
| SG-07-20 |   |            | 215    |   |        |   | -67    |     |   |   | 247.40     |   |   |        | 571650 |   |         |   | 2714345 |   |   |   | 2281 |   |
| SG-07-21 |   |            | 038    |   |        |   | -53    |     |   |   | 294.00     |   |   |        | 571713 |   |         |   | 2713979 |   |   |   | 2297 |   |
| SG-07-22 |   |            | 218    |   |        |   | -54    |     |   |   | 232.50     |   |   |        | 572007 |   |         |   | 2714128 |   |   |   | 2343 |   |
| SG-07-23 |   |            | 216    |   |        |   | -70    |     |   |   | 303.45     |   |   |        | 572007 |   |         |   | 2714128 |   |   |   | 2343 |   |
| SG-07-24 |   |            | 217    |   |        |   | -53    |     |   |   | 124.40     |   |   |        | 571969 |   |         |   | 2714077 |   |   |   | 2351 |   |

----

| Hole ID |   | Azimuth(°) |   |   | Dip(°) |   |   | Depth(m) |   |   | Easting(m) |   |   | Northing(m) |   |   | Elevation(m) |   |
|---------|--------|-----------------|--------|--------|-------------|--------|--------|----------|--------|--------|------------|--------|--------|-------------|--------|--------|--------------|--------|

| SG-07-25 |   |   | 216 |   |   |   | -65   |   |   |   | 190.45 |   |   |   | 571969 |   |   |   | 2714078 |   |   |   | 2351 |   |
|----------|--------|--------|-----|--------|--------|--------|-------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|------|--------|
| SG-07-26 |   |   | 216 |   |   |   | -69   |   |   |   | 395.40 |   |   |   | 572033 |   |   |   | 2714172 |   |   |   | 2337 |   |
| SG-07-27 |   |   | 218 |   |   |   | -55   |   |   |   | 237.75 |   |   |   | 572078 |   |   |   | 2714077 |   |   |   | 2345 |   |
| SG-07-28 |   |   | 218 |   |   |   | -74   |   |   |   | 319.50 |   |   |   | 572078 |   |   |   | 2714078 |   |   |   | 2345 |   |
| SG-07-29 |   |   | 221 |   |   |   | -43   |   |   |   | 103.55 |   |   |   | 572033 |   |   |   | 2714010 |   |   |   | 2356 |   |
| SG-07-30 |   |   | 221 |   |   |   | -64   |   |   |   | 158.40 |   |   |   | 572034 |   |   |   | 2714010 |   |   |   | 2356 |   |
| SG-07-31 |   |   | 218 |   |   |   | -43   |   |   |   | 71.85  |   |   |   | 571954 |   |   |   | 2714056 |   |   |   | 2352 |   |
| SG-07-32 |   |   | 223 |   |   |   | -70   |   |   |   | 407.95 |   |   |   | 572122 |   |   |   | 2714135 |   |   |   | 2330 |   |
| SG-07-33 |   |   | 211 |   |   |   | -43   |   |   |   | 130.60 |   |   |   | 572069 |   |   |   | 2714009 |   |   |   | 2353 |   |
| SG-07-34 |   |   | 210 |   |   |   | -58   |   |   |   | 183.05 |   |   |   | 572069 |   |   |   | 2714010 |   |   |   | 2353 |   |
| SG-07-35 |   |   | 211 |   |   |   | -68   |   |   |   | 272.15 |   |   |   | 572069 |   |   |   | 2714010 |   |   |   | 2353 |   |
| SG-07-36 |   |   | 215 |   |   |   | -41   |   |   |   | 102.15 |   |   |   | 572050 |   |   |   | 2713959 |   |   |   | 2358 |   |
| SG-07-37 |   |   | 219 |   |   |   | -53   |   |   |   | 154.35 |   |   |   | 572115 |   |   |   | 2713975 |   |   |   | 2351 |   |
| SG-07-38 |   |   | 221 |   |   |   | -66.5 |   |   |   | 214.15 |   |   |   | 572115 |   |   |   | 2713975 |   |   |   | 2351 |   |
| SG-07-39 |   |   | 220 |   |   |   | -73   |   |   |   | 128.05 |   |   |   | 572120 |   |   |   | 2713898 |   |   |   | 2353 |   |
| SG-07-40 |   |   | 220 |   |   |   | -74   |   |   |   | 516.05 |   |   |   | 571899 |   |   |   | 2714211 |   |   |   | 2321 |   |
| SG-08-01 |   |   | 035 |   |   |   | -51   |   |   |   | 210.05 |   |   |   | 571776 |   |   |   | 2713974 |   |   |   | 2314 |   |
| SG-08-02 |   |   | 215 |   |   |   | -57   |   |   |   | 269.05 |   |   |   | 571964 |   |   |   | 2714167 |   |   |   | 2335 |   |
| SG-08-03 |   |   | 215 |   |   |   | -70   |   |   |   | 331.95 |   |   |   | 571964 |   |   |   | 2714168 |   |   |   | 2335 |   |
| SG-08-04 |   |   | 215 |   |   |   | -63   |   |   |   | 269.95 |   |   |   | 572029 |   |   |   | 2714121 |   |   |   | 2343 |   |
| SG-08-05 |   |   | 035 |   |   |   | -55   |   |   |   | 475.25 |   |   |   | 571701 |   |   |   | 2713893 |   |   |   | 2285 |   |
| SG-08-06 |   |   | 048 |   |   |   | -64   |   |   |   | 226.40 |   |   |   | 571679 |   |   |   | 2714137 |   |   |   | 2277 |   |
| SG-11-01 |   |   | 215 |   |   |   | -59   |   |   |   | 100.95 |   |   |   | 571981 |   |   |   | 2714009 |   |   |   | 2357 |   |
| SG-11-02 |   |   | 215 |   |   |   | -63   |   |   |   | 141.15 |   |   |   | 571995 |   |   |   | 2714030 |   |   |   | 2355 |   |
| SG-11-03 |   |   | 215 |   |   |   | -44   |   |   |   | 98.45  |   |   |   | 572020 |   |   |   | 2713994 |   |   |   | 2357 |   |
| SG-11-04 |   |   | 212 |   |   |   | -54   |   |   |   | 176.50 |   |   |   | 571969 |   |   |   | 2714079 |   |   |   | 2351 |   |
| SG-11-05 |   |   | 040 |   |   |   | -43   |   |   |   | 151.40 |   |   |   | 571892 |   |   |   | 2713832 |   |   |   | 2317 |   |
| SG-11-06 |   |   | 189 |   |   |   | -44   |   |   |   | 122.32 |   |   |   | 571732 |   |   |   | 2714379 |   |   |   | 2274 |   |
| SG-11-07 |   |   | 030 |   |   |   | -68   |   |   |   | 74.00  |   |   |   | 572030 |   |   |   | 2713946 |   |   |   | 2358 |   |
| SG-11-08 |   |   | 037 |   |   |   | -67   |   |   |   | 125.35 |   |   |   | 572043 |   |   |   | 2713888 |   |   |   | 2360 |   |
| SG-11-09 |   |   | 181 |   |   |   | -48   |   |   |   | 71.10  |   |   |   | 571585 |   |   |   | 2714366 |   |   |   | 2278 |   |
| SG-11-10 |   |   | 201 |   |   |   | -61   |   |   |   | 78.40  |   |   |   | 571240 |   |   |   | 2714538 |   |   |   | 2235 |   |
| SG-11-11 |   |   | 201 |   |   |   | -61   |   |   |   | 91.95  |   |   |   | 571329 |   |   |   | 2714397 |   |   |   | 2274 |   |
| SG-11-12 |   |   | 218 |   |   |   | -71   |   |   |   | 312.15 |   |   |   | 571811 |   |   |   | 2714288 |   |   |   | 2305 |   |
| SG-11-13 |   |   | 218 |   |   |   | -71   |   |   |   | 345.40 |   |   |   | 571847 |   |   |   | 2714258 |   |   |   | 2310 |   |
| SG-11-14 |   |   | 209 |   |   |   | -61   |   |   |   | 330.50 |   |   |   | 571939 |   |   |   | 2714214 |   |   |   | 2326 |   |
| SG-11-15 |   |   | 211 |   |   |   | -68   |   |   |   | 363.45 |   |   |   | 572030 |   |   |   | 2714172 |   |   |   | 2337 |   |
| SG-11-16 |   |   | 209 |   |   |   | -62   |   |   |   | 334.25 |   |   |   | 572092 |   |   |   | 2714173 |   |   |   | 2331 |   |
| SG-11-17 |   |   | 210 |   |   |   | -70   |   |   |   | 383.10 |   |   |   | 571836 |   |   |   | 2714336 |   |   |   | 2306 |   |
| SG-11-18 |   |   | 218 |   |   |   | -71   |   |   |   | 318.15 |   |   |   | 571765 |   |   |   | 2714321 |   |   |   | 2293 |   |

----

----

|        |   | Weight |   |   | Assay (g/t) |   |   | Contents (kg) |   |   | Contents (oz’s) |   |   | Recovery (%) |   |
|-------------|--------|--------|--------|--------|-------------|--------|--------|---------------|--------|--------|-----------------------|--------|--------|--------------|--------|
|        |   | Tonnes |   |   | Au          |   |   | Ag            |   |   | Au                    |   |   | Ag           |   |   | Au |   |   | Ag |   |   | Au |   |   | Ag |   |
| Feed        |   |   | 10,519 | *      |        |   | 0.9    |          |   |   | 261                   |   |   |         | 99.35  |   |   |   | 2,746.75 |   |   |   | 300.9 |   |   |   | 88,311.70 |   |   |   | 100 |   |   |   | 100 |   |
| Concentrate |   |   | 232    |   |        |   | 23.8   | *             |   |   | 8,998                 | *      |   |         | 55.52  |   |   |   | 2,087.53 |   |   |   | 177.5 |   |   |   | 67,116.90 |   |   |   | 59 |   |   |   | 76 |   |
| Tail        |   |   | 10,287 |   |        |   | 0.4    |          |   |   | 64                    |   |   |         | 33.83  |   |   |   | 659.22 |   |   |   | 123.4 |   |   |   | 21,194.80 |   |   |   | 41 |   |   |   | 24 |   |

| * | These figures have been reconciled to the weighed feed tonnage and the final concentrate assays of the paid shipment. They also have been rounded for clarity. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Total Tonnes to Mill                  |   |    | 2,340,000 |   |
|---------------------------------------|--------|---------|-----------|--------|
| Annual Tonnes to Mill                 |   |    | 500,000   |   |
| Mine Life                             |   | 5 years |      |
| Average Silver Grade (g/t)            |   |    | 91.30 g/t |   |
| Average Gold Grade (g/t)              |   |    | 0.54 g/t  |   |
| Total Silver Production (oz)          |   |    | 4,814,000 |   |
| Total Gold Production (oz)            |   |    | 31,000    |   |
| Average Annual Silver Production (oz) |   |    | 1,028,860 |   |
| Average Annual Gold Production (oz)   |   |    | 6,580     |   |

|                                 |   | Base Case |   |   | Spot Price Case |   |
|--------------------------------------|--------|-----------|--------|--------|-----------------|--------|
| Gold Value (US$)                     |   | $         | 1,256  |   |            | $      | 1,622 |   |
| Silver Value (US$)                   |   | $         | 20.38  |   |            | $      | 28.36 |   |
| IRR                                  |   |      | 54.4   | %      |            |   | 92 | % |
| Payback period                       |   | 1.6 years |   |   | 1.1 years       |   |
| NPV (US$’000) 8% discount rate |   | $         | 38,647 |   |            | $      | 74,186 |   |

| * | Data disclosed in July 25th, 2012 technical report by Tetra Tech: A Technical Report on the Avino Property. Michael O'Brian, M.Sc., Pr.Sci.Nat, FGSSA, FAusIIM, FSAIIM, Hassan Ghaffari, P.Eng., Jacques Ouellet, P.Eng., Ph.D., Monica Danon-Schaffer, Ph.D, P.Eng., Sabry Abdel Hafex, Ph.D., P.Eng and Wayne Stoyko, P.Eng., are the Qualified Persons, as defined under National Instrument 43-101, who supervised and are responsible for the Technical Report on the Avino Property. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | justification for the closure plan considering technical, environmental and legal aspects; |
|--------|--------|--------------------------------------------------------------------------------------------|

|   | · | objectives and how they will be met; |
|--------|--------|--------------------------------------|

|   | · | photo evidence and details of the environmental situation prior to commencing closure activities; |
|--------|--------|---------------------------------------------------------------------------------------------------|

|   | · | schedule of activities; |
|--------|--------|-------------------------|

|   | · | the progressive reclamation of the site during the life of the operation; |
|--------|--------|---------------------------------------------------------------------------|

|   | · | the design of tailings disposal areas; |
|--------|--------|----------------------------------------|

|   | · | the reclamation and re-vegetation of the surface disturbances wherever practicable; |
|--------|--------|-------------------------------------------------------------------------------------|

|   | · | a cost estimate of the work required to close and reclaim the mine; and |
|--------|--------|-------------------------------------------------------------------------|

|   | · | a plan for ongoing and post-closure monitoring and reporting at the site. |
|--------|--------|---------------------------------------------------------------------------|

----

|   | · | Incur Exploration Costs totaling $7.1 million over five years; |
|--------|--------|----------------------------------------------------------------|

|   | · | Make total cash payments of $375,000 over five years to Avino; and |
|--------|--------|--------------------------------------------------------------------|

|   | · | Issue a total of 800,000 common shares of Avaron over five years to Avino. |
|--------|--------|----------------------------------------------------------------------------|

----

----

----

| A. | Operating Results – San Gonzalo Mine |
|----|--------------------------------------------|

|                                  |   |   | Q42013  |   |   |   | Q32013  |   |   |   | Q22013  |   |   |   | Q1 2013 |   |   |   | Q4 2012 |   |   | 2013Total |    |
|---------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|--------------|--------|--------|--------|--------------|--------|--------|-----------|---------|
| Total Mill Feed (dry tonnes)          |   |   | 19,354  |   |   |   | 19,351  |   |   |   | 19,988  |   |   |   | 19,723       |   |   |   | 19,539       |   |   |      | 78,415  |   |
| Average Daily Throughput (tpd)        |   |   | 225     |   |   |   | 217     |   |   |   | 227     |   |   |   | 229          |   |   |   | 222          |   |   |      | 225     |   |
| Days of Operation                     |   |   | 86      |   |   |   | 89      |   |   |   | 88      |   |   |   | 86           |   |   |   | 88           |   |   |      | 349     |   |
| Feed Grade Silver (g/t)               |   |   | 280     |   |   |   | 282     |   |   |   | 280     |   |   |   | 309          |   |   |   | 259          |   |   |      | 288     |   |
| Feed Grade Gold (g/t)                 |   |   | 1.49    |   |   |   | 1.366   |   |   |   | 1.218   |   |   |   | 1.29         |   |   |   | 1.04         |   |   |      | 1.34    |   |
| Bulk Concentrate (dry tonnes)         |   |   | 617     |   |   |   | 610     |   |   |   | 636     |   |   |   | 568          |   |   |   | 538          |   |   |      | 2,431   |   |
| Bulk Concentrate Grade Silver (kg/t)  |   |   | 7.44    |   |   |   | 7.46    |   |   |   | 7.28    |   |   |   | 8.72         |   |   |   | 7.44         |   |   |      | 7,704   |   |
| Bulk Concentrate Grade Gold (g/t)     |   |   | 35      |   |   |   | 32.2    |   |   |   | 28.1    |   |   |   | 31.4         |   |   |   | 26.33        |   |   |      | 31.6    |   |
| Recovery Silver (%)                   |   |   | 85      |   |   |   | 83      |   |   |   | 83      |   |   |   | 81           |   |   |   | 79           |   |   |      | 83      |   |
| Recovery Gold (%)                     |   |   | 75      |   |   |   | 74      |   |   |   | 73      |   |   |   | 70           |   |   |   | 70           |   |   |      | 73      |   |
| Mill Availability (%)                 |   |   | 93.9    |   |   |   | 95.1    |   |   |   | 96.4    |   |   |   | 95.5         |   |   |   | 94.4         |   |   |      | 95.2    |   |
| Total Silver Produced (kg)            |   |   | 4,588   |   |   |   | 4,548   |   |   |   | 4,634   |   |   |   | 4,960        |   |   |   | 4,000        |   |   |      | 18,732  |   |
| Total Gold Produced (g)               |   |   | 21,575  |   |   |   | 19,604  |   |   |   | 17,849  |   |   |   | 17,875       |   |   |   | 14,161       |   |   |      | 76,904  |   |
| Total Silver Produced (oz) calculated |   |   | 147,516 |   |   |   | 146,215 |   |   |   | 149,004 |   |   |   | 159,582      |   |   |   | 128,607      |   |   |      | 602,233 |   |
| Total Gold Produced (oz) calculated   |   |   | 693     |   |   |   | 630     |   |   |   | 574     |   |   |   | 574          |   |   |   | 455          |   |   |      | 2,473   |   |
| Total Silver Equivalent Produced (oz) |   |   | 192,604 |   |   |   | 187,184 |   |   |   | 180,567 |   |   |   | 191,107      |   |   |   | 151,372      |   |   |      | 751,462 |   |

----

| 2012 Quarter |   | Source of Mill Feed |   | Feed Material Processed (tonnes) |   |   | Concentrate Produced (tonnes) |   |   | Ag oz Produced(calculated) |   |   | Au oz Produced(calculated) |   |   | Ag Eq oz Produced*(calculated) |   |
|--------------|--------|---------------------|--------|----------------------------------|--------|--------|-------------------------------|--------|--------|----------------------------|--------|--------|----------------------------|--------|--------|--------------------------------|--------|
| Q1           |   | Historic Stockpiles |   |                             | 14,600 |   |                          |   | 176    |                       |   |   | 17,875                     |   |   |                           | 220    |   |   |   | 28,875 |   |
| Q2           |   | Historic Stockpiles |   |                             | 16,900 |   |                          |   | 134    |                       |   |   | 14,129                     |   |   |                           | 180    |   |   |   | 23,129 |   |
| Q3           |   | Historic Stockpiles |   |                             | 20,015 |   |                          |   | 323    |                       |   |   | 31,024                     |   |   |                           | 381    |   |   |   | 50,074 |   |
| Total        |   | Historic Stockpiles |   |                             | 51,515 |   |                          |   | 633    |                       |   |   | 63,028                     |   |   |                           | 781    |   |   |   | 102,078 |   |

| *: | Silver equivalent was calculated using a 55:1 ratio for silver to gold. Mill production figures have not been reconciled and are subject to adjustment with concentrate sales. Year-to-date and calculated figures may not add up due to rounding. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Avino Mine Stockpiles                     |   |   | Q42013 |   |   |   | Q32013 |   |   |   | Q22013 |   |   | 2013 Total |    |
|-------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|-----------------|---------|
| Total mill feed – (dry tonnes)      |   |   | 19,576 |   |   |   | 18,279 |   |   |   | 16,281 |   |   |            | 54,136  |   |
| Days of Operation                         |   |   | 86     |   |   |   | 87     |   |   |   | 78     |   |   |            | 251     |   |
| Feed grade Silver - g/t                   |   |   | 92     |   |   |   | 84.23  |   |   |   | 78.95  |   |   |            | 85      |   |
| Feed grade Gold - g/t                     |   |   | 0.94   |   |   |   | 0.773  |   |   |   | 0.779  |   |   |            | 0.83    |   |
| Bulk concentrate – (dry tonnes)     |   |   | 226    |   |   |   | 210    |   |   |   | 200    |   |   |            | 636     |   |
| Bulk Concentrate Grade Silver (kg/t)      |   |   | 5.13   |   |   |   | 4.803  |   |   |   | 4.062  |   |   |            | 4,687   |   |
| Bulk Concentrate Grade Gold (g/t)         |   |   | 43.8   |   |   |   | 35.479 |   |   |   | 32.964 |   |   |            | 37.66   |   |
| Recovery Silver (%)                       |   |   | 64     |   |   |   | 65.5   |   |   |   | 63.3   |   |   |            | 74      |   |
| Recovery Gold (%)                         |   |   | 54     |   |   |   | 52.7   |   |   |   | 52.1   |   |   |            | 61      |   |
| Mill availability (%)                     |   |   | 93.3   |   |   |   | 89.24  |   |   |   | 90.07  |   |   |            | 90.9    |   |
| Total Silver Produced (oz) calculated     |   |   | 37,244 |   |   |   | 32,436 |   |   |   | 26,162 |   |   |            | 95,482  |   |
| Total Gold Produced (oz) calculated       |   |   | 318    |   |   |   | 239    |   |   |   | 212    |   |   |            | 770     |   |
| Total Silver Eq. Produced (oz) calculated |   |   | 57,929 |   |   |   | 48,010 |   |   |   | 37,839 |   |   |            | 143,778 |   |

----

----

----

| B. | Liquidity and Capital Resources |
|----|---------------------------------|

| C. | Research and Development, Patents and Licenses, etc. |
|----|------------------------------------------------------|

| D. | Trend Information |
|----|-------------------|

----

| E. | Off-Balance Sheet Arrangements |
|----|--------------------------------|

| F. | Tabular Disclosure of Contractual Obligations |
|----|-----------------------------------------------|

|                              | Payment due by period |      |
|-----------------------------------|-----------------------|-----------|
|                              | Total                 |      |   | <1 year |   |   | 1-3 Years |   |   | 3-5 Years |   |   | More than 5 years |   |
| Trade payables and other payables | $                     | 1,610,327 |   |   | $ | 1,610,327 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Minimum rental and lease payments |                  | 688,344   |   |   |   | 254,017 |   |   |   | 341,932 |   |   |   | 22,896 |   |   |   | 69,499 |   |
| Finance lease obligations         |                  | 1,676,821 |   |   |   | 585,844 |   |   |   | 983,249 |   |   |   | 107,728 |   |   |   | - |   |
| Deferred tax liabilities          |                  | 4,884,130 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 4,884,130 |   |
| Total                             | $                     | 8,859,622 |   |   | $ | 2,450,188 |   |   | $ | 1,325,181 |   |   | $ | 130,624 |   |   | $ | 4,953,629 |   |

| G. | Safe Harbor |
|----|-------------|

----

----

| A. | Directors and Senior Management |
|----|---------------------------------|

| Name and Present Positionwith the Company |   | Principal Occupation                                                                                                                                                                                                                                                                           |   | Director/Officer Since |
|-------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|
| Michael Baybak Director                   |   | A business consultant.                                                                                                                                                                                                                                                                         |   | June 1990              |
|                                      |   |                                                                                                                                                                                                                                                                                           |   |                   |
| Gary Robertson Director                   |   | Certified Financial Planner, Director of Bralorne Gold Mines Ltd., Coral Gold Resources Ltd., Levon Resources Ltd., Great Thunder Gold Corp. and Sage Gold Inc.                                                                                                                                |   | August 2005            |
|                                      |   |                                                                                                                                                                                                                                                                                           |   |                   |
| David Wolfin Director/President/CEO       |   | President and CEO of Avino Silver & Gold Mines Ltd. Also, Director and VP Finance of Berkley Resources Inc., President and Director of Coral Gold Resources Ltd. and Gray Rock Resources Ltd. and Director of Bralorne Gold Mines Ltd., Great Thunder Gold Corp. and Cresval Capital Corp. |   | October 1995           |
|                                      |   |                                                                                                                                                                                                                                                                                           |   |                   |
| Andrew Kaplan Director                    |   | A business consultant, Director of Coral Gold Resources Ltd.                                                                                                                                                                                                                                   |   | September 2011         |
|                                      |   |                                                                                                                                                                                                                                                                                           |   |                   |
| Jasman Yee Director                       |   | Metallurgical Engineer                                                                                                                                                                                                                                                                         |   | January 2011           |
|                                      |   |                                                                                                                                                                                                                                                                                           |   |                   |
| Dorothy Chin Corporate Secretary          |   | Also, Corporate Secretary of Bralorne Gold Mines Ltd., and Levon Resources Ltd.                                                                                                                                                                                                                |   | September 2008         |
|                                      |   |                                                                                                                                                                                                                                                                                           |   |                   |
| Malcolm Davidson Chief Financial Officer  |   | Charted Accountant, Chief Financial Officer of Avino Silver & Gold Mines Ltd; Also Chief Financial Officer of Coral Gold Resources Ltd., Gray Rock Resources Ltd., and Avaron Mining Corporation                                                                                           |   | March 2012             |

----

| B. | Compensation |
|----|--------------|

| 1)   | Compensation Discussion and Analysis |
|----------------|--------------------------------------|

----

| (a) | compensate management in a manner that encourages and rewards a high level of performance and outstanding results with a view to increasing long term shareholder value; |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | align management’s interests with the long term interests of shareholders; |
|-----|----------------------------------------------------------------------------------|

| (c) | provide a compensation package that is commensurate with other comparable companies to enable the Company to attract and retain talent; and |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------|

| (d) | ensure that the total compensation package is designed in a manner that takes into account the Company’s present stage of development and its available financial resources. The Company’s compensation packages have been designed to provide a blend of a non-cash stock option component and a reasonable salary. In addition, extraordinary efforts which enhance shareholder value are rewarded with cash bonuses. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Compensation Element   |   | Description                                                                                                                         |   | Compensation Objectives                                                                                              |
|------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------|
| Annual Base Salary     |   | Salary is market-competitive, fixed level of compensation                                                                           |   | Retain qualified leaders, motivate strong business performance.                                                      |
| Incentive Bonuses      |   | Discretionary cash payment                                                                                                          |   | Reward individual performance in achieving corporate goals                                                           |
| Incentive Stock Option |   | Equity grants are made in the form of stock options. The amount of grant will be dependent on individual and corporate performance. |   | Reward long-term financial and operating performance and align interests of key employees with those of shareholders |

----

| 2)   | Summary Compensation Table |
|----------------|----------------------------|

|   Name and principal position |   | Year   |   | Salary($) |    | Share-based awards($)1 |   | Option-based awards($)2 |      | Non-equity incentive plan compensation($)3 |   | Pensionvalue($)4 |   | All other compensation($)5 |   | Total compensation($) |
|------------------------------------|--------|--------|--------|-----------|---------|------------------------|--------|-------------------------|-----------|-------------------------------------------------|--------|------------------|--------|----------------------------|--------|-----------------------|
| David Wolfin(6)                    |   | 2013   |   |      | 150,000 |                   | NIL    |                    | 30,900    |                                            | NIL    |             | NIL    |                       |   | 150,000               |   | 330,900 |
| President, CEO and       |   | 2012   |   |      | 150,000 |                   | NIL    |                    | NIL       |                                            | NIL    |             | NIL    |                       | NIL    |                  | 150,000 |
| Director                           |   | 2011   |   |      | 145,500 |                   | NIL    |                    | 1,058,200 |                                            | NIL    |             | NIL    |                       |   | 150,000               |   | 1,353,700 |
|                               |   |   |   |      |    |                   |   |                    |      |                                            |   |             |   |                       |   |                  |   |   |
| Malcolm Davidson                   |   | 2013   |   |      | 82,174  |                   | NIL    |                    | 55,650    |                                            | NIL    |             | NIL    |                       |   | 5,000                 |   | 142,824 |
| CFO                                |   | 2012   |   |      | 32,378  |                   | NIL    |                    | NIL       |                                            | NIL    |             | NIL    |                       | NIL    |                  | 32,378 |
|                               |   | 2011   |   |      | N/A     |                   | N/A    |                    | N/A       |                                            | N/A    |             | N/A    |                       |   | N/A                   |   | N/A |

| 1 | The Company does not currently have any share-based award plans. |
|---|------------------------------------------------------------------|

| 2 | The methodology used to calculate the grant date fair value is based on the Black-Scholes Option Pricing Model. There were a total of 650,000new option based awards issued during the year. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | The Company does not have a non-equity incentive plan |
|---|-------------------------------------------------------|

| 4 | The Company does not have any pension plans. |
|---|----------------------------------------------|

| 5 | Discretionary cash payment of incentive bonuses. |
|---|--------------------------------------------------|

| 6 | On June 24, 2010, Mr. David Wolfin was appointed CEO. Mr. David Wolfin’s salary was paid to Intermark Capital Corp., a private BC corporation controlled by David Wolfin. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 3)   | Incentive Plan Awards |
|----------------|-----------------------|

----

|                     |   | Option-based Awards                                    |   | Share-based Awards       |
|--------------------------|--------|--------------------------------------------------------|--------|--------------------------|
| Name                     |   | Number of securities underlying unexercised options(#) |   | Option exercise price($) |   | Option expiration date |   | Value of unexercised in-the-money options($)1 |   | Number of sharesor units of shares that have not vested(#) |   | Market or payout value of share-based awards that have not vested($) |   | Market or payout value of vested share-based awards not paid out or distributed($) |
| David Wolfin             |   | 15,000                                                 |   | $                        | 0.81 |   | Jan 14, 2015 |   | $ | 6,000 |   | Nil |   | Nil |   | Nil |
| President, CEO           |   | 95,000                                                 |   | $                        | 1.05 |   | Sept 10, 2015 |   | $ | 15,200 |   | Nil |   | Nil |   | Nil |
| and Director   |   | 410,000                                                |   | $                        | 1.02 |   | Jan 18, 2016 |   | $ | 77,900 |   | Nil |   | Nil |   | Nil |
|                     |   | 360,000                                                |   | $                        | 1.02 |   | Sept 30, 2016 |   | $ | 68,400 |   | Nil |   | Nil |   | Nil |
|                     |   | 30,000                                                 |   | $                        | 1.62 |   | Sept 9, 2018 |   | Nil |   | Nil |   | Nil |   | Nil |
|                     |   |                                                   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Malcolm Davidson         |   | 9,500                                                  |   | $                        | 1.02 |   | Jan 18, 2016 |   | $ | 1,805 |   | Nil |   | Nil |   | Nil |
| CFO                      |   | 40,000                                                 |   | $                        | 1.02 |   | Sept 30, 2016 |   | $ | 7,600 |   | Nil |   | Nil |   | Nil |
|                     |   | 25,000                                                 |   | $                        | 1.60 |   | Feb 18, 2018 |   | Nil |   | Nil |   | Nil |   | Nil |
|                     |   | 30,000                                                 |   | $                        | 1.62 |   | Sept 9, 2018 |   | Nil |   | Nil |   | Nil |   | Nil |

| 1 | In-the-Money Options are the difference between the market value of the underlying securities at December 31, 2013 and the exercise price of the option. The closing market price for the Company's common shares as at December 31, 2013 was $1.21 per common share. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Name                                     |   | Option-based awards – Value vested during the year($) (1) |   | Share-based awards – Valuevested during the year($) |   | Non-equity incentiveplan compensation – Value earned during the year($) |
|------------------------------------------|--------|-----------------------------------------------------------------|--------|-----------------------------------------------------------|--------|-------------------------------------------------------------------------------|
| David Wolfin President, CEO and Director |   |                                                            | 30,900 |                                                      | Nil    |                                                                          | Nil |
| Malcolm Davidson CFO                     |   |                                                            | 55,650 |                                                      | Nil    |                                                                          | Nil |

| (1) | The aggregate dollar value that would have been realized if the options granted during the year had been exercised on the vesting date. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------|

| 4)   | Pension Plan Benefits |
|----------------|-----------------------|

----

| 5)   | Termination and Change of Control Benefits |
|----------------|--------------------------------------------|

| (a) | by the Consultant electing to give the Company not less than 3 months prior notice of such termination; |
|-----|---------------------------------------------------------------------------------------------------------|

| (b) | by the Company electing to give the Consultant 3 months prior notice of such termination along with a termination payment equal to the annual Consulting Fee; and |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | by the Consultant electing to give the Company notice, in the event that there occurs a Change of Control (as defined below) within six (6) months of the effective date of such Change of Control, and if the Consultant so elects to terminate this Agreement, then the Consultant will be immediately entitled to a termination payment equal to CDN$2 million. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i) | any person, entity or group becomes the beneficial owner of 20% or more of the combined voting power of the Company's then outstanding voting securities entitled to vote generally in the election of directors, and such person, entity or group uses such effective voting control to change a majority of the Board of Directors of the Company, either all at once or through any series of elections and appointments when considered together; or |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii) | completion of the sale or other disposition by the Company of all or substantially all of the Company's assets or a reorganization or merger or consolidation of the Company with any other entity or corporation, other than: |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (A) | a reorganization or merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent, either by remaining outstanding or by being converted into voting securities of another entity, more than 50.1% of the combined voting power of the voting securities of the Company or such other entity outstanding immediately after such reorganization or merger or consolidation; or |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (B) | a reorganization or merger or consolidation effected to implement a recapitalization or reincorporation of the Company (or similar transaction) that does not result in a material change in beneficial ownership of the voting securities of the Company or its successor. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 6) | Director Compensation |
|----|-----------------------|

|    Name |   | Fees earned($) |   | Share-basedawards1($) |   | Option-based awards2($) |   | Non-equity incentive plan compensation3($) |   |  Pension value4($) |   | All other compensation5($) |   |   |  Total($) |   |
|------------------------|--------|----------------|--------|-----------------------|--------|-------------------------|--------|--------------------------------------------|--------|-------------------------|--------|----------------------------|--------|--------|----------------|--------|
| Michael* Baybak        |   |           | 20,000 |                  | NIL    |                    |   | 55,650                                     |   | NIL                     |   | NIL                        |   |   | 18,750         |   |   |   | 94,400 |   |
| Gary* Robertson        |   |           | 20,000 |                  | NIL    |                    |   | 55,650                                     |   | NIL                     |   | NIL                        |   |   | 18,750         |   |   |   | 94,400 |   |
| Jasman Yee             |   |           | 20,000 |                  | NIL    |                    |   | 55,650                                     |   | NIL                     |   | NIL                        |   |   | 18,750         |   |   |   | 94,400 |   |
| Andrew* Kaplan         |   |           | 20,000 |                  | NIL    |                    |   | 55,650                                     |   | NIL                     |   | NIL                        |   |   | 18,750         |   |   |   | 94,400 |   |

| * | Independent and Non-Employee Directors |
|---|----------------------------------------|

| 1 | The Company does not currently have any share-based award plans. |
|---|------------------------------------------------------------------|

| 2 | The aggregate dollar value that would have been realized if the options granted during the year had been exercised on the vesting date. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------|

| 3 | The Company does not have a non-equity incentive plan |
|---|-------------------------------------------------------|

| 4 | The Company does not have any pension plans. |
|---|----------------------------------------------|

| 5 | Discretionary cash payment of incentive bonuses. |
|---|--------------------------------------------------|

| (a)   | any standard arrangement for the compensation of directors for their services in their capacity as Directors, including any additional amounts payable for committee participation or special assignments; |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | any other arrangement, in addition to, or in lieu of, any standard arrangement, for the compensation of Directors in their capacity as Directors except for the granting of stock options; or |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | any arrangement for the compensation of directors for services as consultants or experts. |
|-----------------|-------------------------------------------------------------------------------------------|

----

|           |   | Option-based Awards                                    |    | Share-based Awards |
|----------------|--------|--------------------------------------------------------|---------|--------------------|
| Name (1)       |   | Number of securities underlying unexercised options(#) |    |               | Option exercise price($) |   | Optionexpiration date |   | Value of unexercised in-the-money options($)(2) |   | Number of shares or units of shares that have not vested(#) |   | Market or payout value of share-based awards that have not vested($) |   | Market or payout value of share-based awards not paid out or distributed($) |
| Michael Baybak |   |                                                   | 15,000  |               |   | $ | 0.81 |   | Jan 14, 2015 |   | $ | 6,000 |   | Nil |   | Nil |   | Nil |
|           |   |                                                   | 20,000  |               |   | $ | 1.05 |   | Sept 10, 2015 |   | $ | 3,200 |   | Nil |   | Nil |   | Nil |
|           |   |                                                   | 100,000 |               |   | $ | 1.02 |   | Jan 18, 2016 |   | $ | 19,000 |   | Nil |   | Nil |   | Nil |
|           |   |                                                   | 40,000  |               |   | $ | 1.02 |   | Sept 30, 2016 |   | $ | 7,600 |   | Nil |   | Nil |   | Nil |
|           |   |                                                   | 25,000  |               |   | $ | 1.60 |   | Feb 18, 2018 |   | Nil |   | Nil |   | Nil |   | Nil |
|           |   |                                                   | 30,000  |               |   | $ | 1.62 |   | Sept 9, 2018 |   | Nil |   | Nil |   | Nil |   | Nil |
| Gary Robertson |   |                                                   | 15,000  |               |   | $ | 0.81 |   | Jan 14, 2015 |   | $ | 6,000 |   | Nil |   | Nil |   | Nil |
|           |   |                                                   | 30,000  |               |   | $ | 1.05 |   | Sept 10, 2015 |   | $ | 4,800 |   | Nil |   | Nil |   | Nil |
|           |   |                                                   | 100,000 |               |   | $ | 1.02 |   | Jan 18, 2016 |   | $ | 19,000 |   | Nil |   | Nil |   | Nil |
|           |   |                                                   | 60,000  |               |   | $ | 1.02 |   | Sept 30, 2016 |   | $ | 11,400 |   | Nil |   | Nil |   | Nil |
|           |   |                                                   | 25,000  |               |   | $ | 1.60 |   | Feb 18, 2018 |   | Nil |   | Nil |   | Nil |   | Nil |
|           |   |                                                   | 30,000  |               |   | $ | 1.62 |   | Sept 9, 2018 |   | Nil |   | Nil |   | Nil |   | Nil |
| Jasman Yee     |   |                                                   | 18,357  |               |   | $ | 1.05 |   | Sept 10, 2015 |   | $ | 2,937 |   | Nil |   | Nil |   | Nil |
|           |   |                                                   | 100,000 |               |   | $ | 1.02 |   | Jan 18, 2016 |   | $ | 19,000 |   | Nil |   | Nil |   | Nil |
|           |   |                                                   | 60,000  |               |   | $ | 1.02 |   | Sept 30, 2016 |   | $ | 11,400 |   | Nil |   | Nil |   | Nil |
|           |   |                                                   | 25,000  |               |   | $ | 1.60 |   | Feb 18, 2018 |   | Nil |   | Nil |   | Nil |   | Nil |
|           |   |                                                   | 30,000  |               |   | $ | 1.62 |   | Sept 9, 2018 |   | Nil |   | Nil |   | Nil |   | Nil |
| Andrew Kaplan  |   |                                                   | 5,000   |               |   | $ | 1.02 |   | Jan 18, 2016 |   | $ | 950 |   | Nil |   | Nil |   | Nil |
|           |   |                                                   | 40,000  |               |   | $ | 1.02 |   | Sept 30, 2016 |   | $ | 7,600 |   | Nil |   | Nil |   | Nil |
|           |   |                                                   | 25,000  |               |   | $ | 1.60 |   | Feb 18, 2018 |   | Nil |   | Nil |   | Nil |   | Nil |
|           |   |                                                   | 30,000  |               |   | $ | 1.62 |   | Sept 9, 2018 |   | Nil |   | Nil |   | Nil |   | Nil |

| (1) | For the compensation of David Wolfin, the named executive officer of the Company, see “Incentive Plan Awards” above. |
|-----|----------------------------------------------------------------------------------------------------------------------------------|

| (2) | The in-the-money option value is the difference between the market value of the underlying securities as at December 31, 2013 and the exercise price of the option. The closing market price of the Company’s common shares as at December 31, 2013 was $1.21 per common share. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Name (1)       |   | Option-based awards – Value vested during the year($)(2) |   | Share-based awards – Value vested during the year($) |   | Non-equity incentive plan compensation – Value earned during the year($) |
|----------------|--------|----------------------------------------------------------------|--------|------------------------------------------------------------|--------|--------------------------------------------------------------------------------|
| Michael Baybak |   |                                                           | 55,650 |                                                       | Nil    |                                                                           | Nil |
| Gary Robertson |   |                                                           | 55,650 |                                                       | Nil    |                                                                           | Nil |
| Jasman Yee     |   |                                                           | 55,650 |                                                       | Nil    |                                                                           | Nil |
| Andrew Kaplan  |   |                                                           | 55,650 |                                                       | Nil    |                                                                           | Nil |

| (1)  | For the compensation of David Wolfin, the named executive officer of the Company, see “Incentive Plan Awards” above. |
|-----------|----------------------------------------------------------------------------------------------------------------------------------|

| (2)  | The aggregate dollar value that would have been realized if the options granted during the year had been exercised on the vesting date. |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------|

----

| C. | Board Practices |
|----|-----------------|

----

| ·   | its relationship with and expectation of the external auditors, including the establishment of the independence of the external auditor and the approval of any non-audit mandates of the external auditor; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | determination of which non-audit services the external auditor is prohibited from providing; |
|--------------------|----------------------------------------------------------------------------------------------|

| ·   | the engagement, evaluation, remuneration, and termination of the external auditors; |
|--------------------|-------------------------------------------------------------------------------------|

| ·   | appropriate funding for the payment of the auditor’s compensation and for any advisors retained by the audit committee; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------|

| ·   | its relationship with and expectation of the internal auditor; |
|--------------------|----------------------------------------------------------------|

| ·   | its oversight of internal control; |
|--------------------|------------------------------------|

| ·   | disclosure of financial and related information; and |
|--------------------|------------------------------------------------------|

| ·   | any other matter that the audit committee feels is important to its mandate or that which the board chooses to delegate to it. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------|

----

| i. | manage the corporate governance system for the Board; |
|----|-------------------------------------------------------|

| ii. | assist the Board to fulfill its duty to meet the applicable legal, regulatory and (self-regulatory) business principles and 'codes of best practice' of corporate behaviour and conduct; |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| iii. | assist in the creation of a corporate culture and environment of integrity and accountability; |
|------|------------------------------------------------------------------------------------------------|

| iv. | monitor the quality of the relationship between the Board and management of the Company; |
|-----|------------------------------------------------------------------------------------------|

| v. | review the Chief Executive Officer's succession plan; |
|----|-------------------------------------------------------|

| vi. | recommend to the Board nominees for appointment of the Board; |
|-----|---------------------------------------------------------------|

| vii. | lead the Board's annual review of the Chief Executive Officer's performance; and |
|------|----------------------------------------------------------------------------------|

| viii. | annually review and set an agenda of the Board on an ongoing basis. |
|-------|---------------------------------------------------------------------|

----

| D. | Employees |
|----|-----------|

| E. | Share Ownership |
|----|-----------------|

| Name of Beneficial Owner |   | Number ofShares |    |   | Percent |   |
|--------------------------|--------|-----------------|---------|--------|---------|--------|
|                     |   |            |    |   |    |   |
| Michael Baybak           |   |            | 64,700  |   |    |   | * |   |
| Gary Robertson           |   |            | 177,900 |   |    |   | * |   |
| David Wolfin             |   |            | 381,184 |   |    |   | 1.2 | % |
| Jasman Yee               |   |            | 44,143  |   |    |   | * |   |
| Andrew Kaplan            |   | Nil             |    |   |    | N/A    |   |
| Malcolm Davidson         |   |            | 500     |   |    |   | * |   |

| * | Less than one percent |
|---|-----------------------|

----

|               |   | No. of Shares |    | Date of Grant |           | ExercisePrice |   | Expiration Date |
|--------------------|--------|---------------|---------|---------------|----------------|---------------|--------|-----------------|
| David Wolfin       |   |          | 15,000  |          | Jan 14, 2010   |          | $      | 0.81            |   | Jan 14, 2015 |
| President, CEO and |   |          | 95,000  |          | Sept 10, 2010  |          | $      | 1.05            |   | Sept 10, 2015 |
| Director           |   |          | 410,000 |          | Jan 18, 2011   |          | $      | 1.02            |   | Jan 18, 2016 |
|               |   |          | 360,000 |          | Sept 30, 2011  |          | $      | 1.02            |   | Sept 30, 2016 |
|               |   |          | 30,000  |          | Sept 9, 2013   |          | $      | 1.62            |   | Sept 9, 2018 |
|               |   |          |    |          |           |          |   |            |   |   |
| Malcolm Davidson   |   |          | 9,500   |          | Jan 18, 2011   |          | $      | 1.02            |   | Jan 18, 2016 |
| CFO                |   |          | 40,000  |          | Sept 30, 2011  |          | $      | 1.02            |   | Sept 30, 2016 |
|               |   |          | 25,000  |          | Feb 18, 2013   |          | $      | 1.60            |   | Feb 18, 2018 |
|               |   |          | 30,000  |          | Sept 9, 2013   |          | $      | 1.62            |   | Sept 9, 2018 |
|               |   |          |    |          |           |          |   |            |   |   |
| Michael Baybak     |   |          | 15,000  |          | Jan 14, 2010   |          | $      | 0.81            |   | Jan 14, 2015 |
| Director           |   |          | 20,000  |          | Sept 10, 2010  |          | $      | 1.05            |   | Sept 10, 2015 |
|               |   |          | 100,000 |          | Jan 18, 2011   |          | $      | 1.02            |   | Jan 18, 2016 |
|               |   |          | 40,000  |          | Sept 30, 2011  |          | $      | 1.02            |   | Sept 30, 2016 |
|               |   |          | 25,000  |          | Feb 18, 2013   |          | $      | 1.60            |   | Feb 18, 2018 |
|               |   |          | 30,000  |          | Sept 9, 2013   |          | $      | 1.62            |   | Sept 9, 2018 |
|               |   |          |    |          |           |          |   |            |   |   |
| Gary Robertson     |   |          | 100,000 |          | Jan 18, 2011   |          | $      | 1.02            |   | Jan 18, 2016 |
| Director           |   |          | 60,000  |          | Sept 30, 2011  |          | $      | 1.02            |   | Sept 30, 2016 |
|               |   |          | 25,000  |          | Feb 18, 2013   |          | $      | 1.60            |   | Feb 18, 2018 |
|               |   |          | 30,000  |          | Sept 9, 2013   |          | $      | 1.62            |   | Sept 9, 2018 |
|               |   |          |    |          |           |          |   |            |   |   |
| Jasman Yee         |   |          | 18,357  |          | Sept 10, 2011  |          | $      | 1.05            |   | Sept 10, 2015 |
| Director           |   |          | 100,000 |          | Jan 18, 2011   |          | $      | 1.02            |   | Jan 18, 2016 |
|               |   |          | 60,000  |          | Sept 30, 2011  |          | $      | 1.02            |   | Sept 30, 2016 |
|               |   |          | 25,000  |          | Feb 18, 2013   |          | $      | 1.60            |   | Feb 18, 2018 |
|               |   |          | 30,000  |          | Sept 9, 2013   |          | $      | 1.62            |   | Sept 9, 2018 |
|               |   |          |    |          |           |          |   |            |   |   |
| Andrew Kaplan      |   |          | 5,000   |          | Jan. 18, 2011  |          | $      | 1.02            |   | Jan. 18, 2016 |
| Director           |   |          | 40,000  |          | Sept. 30, 2011 |          | $      | 1.02            |   | Sept. 30, 2016 |
|               |   |          | 25,000  |          | Feb. 18, 2013  |          | $      | 1.60            |   | Feb. 18, 2018 |
|               |   |          | 30,000  |          | Sept. 9, 2013  |          | $      | 1.62            |   | Sept. 9, 2018 |

----

| A. | Major Shareholders |
|----|--------------------|

| B. | Related Party Transactions |
|----|----------------------------|

|                                    |   | 2013   |      |   | 2012   |   |    | 2011   |   |
|-----------------------------------------|--------|--------|-----------|--------|--------|--------|---------|--------|--------|
| Salaries, benefits, and consulting fees |   | $      | 779,571   |   |   | $      | 243,011 |   |   | $ | 362,173 |   |
| Share‐based payments              |   |   | 420,450   |   |   |   | -       |   |   |   | 2,009,400 |   |
|                                    |   | $      | 1,200,021 |   |   | $      | 243,011 |   |   | $ | 2,371,573 |   |

| ii)  | In the normal course of operations the Company transacts with companies related to Avino’s directors or officers. All amounts payable are non-interest bearing and due on demand. As at December 31, 2013 and 2012 the following amounts are due to related parties: |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                               |   | December 31, 2013 |    |   | December 31, 2012 |   |
|------------------------------------|--------|-------------------|---------|--------|-------------------|--------|
| Directors’ fees              |   | $                 | 10,352  |   |              | $      | 24,469 |   |
| Oniva International Services Corp. |   |              | 135,458 |   |              |   | 147,845 |   |
| Sampson Engineering Inc.           |   |              | 1,840   |   |              |   | 2,400 |   |
| Andrew Kaplan                      |   |              | 1,518   |   |              |   | - |   |
| Jasman Yee & Associates, Inc.  |   |              | 5,040   |   |              |   | - |   |
| Wear Wolfin Design                 |   |              | 2,625   |   |              |   | - |   |
|                               |   | $                 | 156,833 |   |              | $      | 174,714 |   |

| iii) | The Company has a cost sharing agreement to reimburse Oniva International Services Corp. (“Oniva”) for its expenses and to pay Oniva a percentage fee as described in Note 20. The transactions with Oniva during the years are summarized below: |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                     |   | 2013   |    |   | 2012   |   |    | 2011   |   |
|--------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Salaries and benefits    |   | $      | 309,816 |   |   | $      | 179,555 |   |   | $ | 151,941 |   |
| Office and miscellaneous |   |   | 292,008 |   |   |   | 276,201 |   |   |   | 240,810 |   |
|                     |   |   |    |   |   |   |    |   |   |   |   |   |
|                     |   | $      | 601,824 |   |   | $      | 455,756 |   |   | $ | 392,751 |   |

| iv) | In the normal course of operations, the company transacts with companies related to Avino’s directors and officers. During the years ended December 31, 2013, 2012, and 2011, the company recorded consulting fees of $75,014 (2012 - $63,938; 2011 – 48,429) from a company controlled by a director, and financial consulting fees of $30,000 (2012 – 30,000; 2011 – 30,000) from a company related to a director. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| C. | Interests of Experts and Counsel |
|----|----------------------------------|

----

| A. | Consolidated Financial Statements and Other Financial Information |
|----|-------------------------------------------------------------------|

| B. | Significant Changes |
|----|---------------------|

| A. | Offer and Listing Details |
|----|---------------------------|

----

|                  |   | NYSE-MKT(United States Dollars) |   |   | TSX-V(Canadian Dollars) |   |
|-----------------------|--------|---------------------------------|--------|--------|-------------------------|--------|
| Last Six Months       |   | High                            |   |   | Low                     |   |   | High |   |   | Low |   |
| April 2014            |   | $                               | 1.70   |   |                    | $      | 1.52 |   |   | $ | 1.88 |   |   | $ | 1.70 |   |
| March 2014            |   | $                               | 2.30   |   |                    | $      | 1.38 |   |   | $ | 2.55 |   |   | $ | 1.53 |   |
| February 2014         |   |                            | 2.84   |   |                    |   | 1.70 |   |   |   | 3.13 |   |   |   | 1.88 |   |
| January 2014          |   |                            | 1.68   |   |                    |   | 1.15 |   |   |   | 1.89 |   |   |   | 1.24 |   |
| December 2013         |   |                            | 1.25   |   |                    |   | 1.06 |   |   |   | 1.34 |   |   |   | 1.11 |   |
| November 2013         |   |                            | 1.45   |   |                    |   | 1.01 |   |   |   | 1.40 |   |   |   | 1.07 |   |
|                  |   |                            |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| For the Quarter Ended |   |                            |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2013     |   | $                               | 1.45   |   |                    | $      | 0.85 |   |   | $ | 1.40 |   |   | $ | 1.01 |   |
| September 30, 2013    |   |                            | 1.60   |   |                    |   | 0.73 |   |   |   | 1.68 |   |   |   | 0.78 |   |
| June 30, 2013         |   |                            | 1.49   |   |                    |   | 0.71 |   |   |   | 1.51 |   |   |   | 0.75 |   |
| March 31, 2013        |   | $                               | 1.95   |   |                    | $      | 1.33 |   |   | $ | 1.90 |   |   | $ | 1.37 |   |
|                  |   |                            |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |

| For the Quarter Ended |   | High   |   |   | Low    |   |   | High   |   |   | Low  |   |
|-----------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|------|--------|
| December 31, 2012     |   |   | 1.89   |   |   |   | 1.37   |   |   |   | 1.90 |   |   |   | 1.42 |   |
| September 30, 2012    |   |   | 1.80   |   |   |   | 1.12   |   |   |   | 1.74 |   |   |   | 1.07 |   |
| June 30, 2012         |   |   | 2.10   |   |   |   | 1.08   |   |   |   | 2.10 |   |   |   | 1.08 |   |
| March 31, 2012        |   |   | 2.52   |   |   |   | 1.51   |   |   |   | 2.54 |   |   |   | 1.46 |   |

| Last Five Fiscal Years |   | High   |   |   | Low    |   |   | High   |   |   | Low  |   |
|------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|------|--------|
| 2013                   |   |   | 1.90   |   |   |   | 0.75   |   |   |   | 1.95 |   |   |   | 0.71 |   |
| 2012                   |   |   | 2.52   |   |   |   | 1.08   |   |   |   | 2.54 |   |   |   | 1.07 |   |
| 2011                   |   |   | 3.47   |   |   |   | 1.42   |   |   |   | 2.94 | *      |   |   | 1.39 | * |
| 2010                   |   |   | 2.95   |   |   |   | 0.66   |   |   |   | 2.89 |   |   |   | 0.63 |   |
| 2009                   |   |   | 0.99   |   |   |   | 0.38   |   |   |   | 0.95 |   |   |   | 0.30 |   |

----

| B. | Plan of Distribution |
|----|----------------------|

| C. | Markets |
|----|---------|

| D. | Selling Shareholders |
|----|----------------------|

| E. | Dilution |
|----|----------|

| F. | Expenses of the Issue |
|----|-----------------------|

| A. | Share Capital |
|----|---------------|

| B. | Memorandum and Articles of Association |
|----|----------------------------------------|

----

|   | ● | the Rights will not be exercisable; |
|--------|---------|-------------------------------------|

|   | ● | the Rights will be evidenced by the certificates for common shares and not by separate rights certificates; and |
|--------|---------|-----------------------------------------------------------------------------------------------------------------|

|   | ● | the Rights will be transferable by, and only in connection with, the transfer of common shares. |
|--------|---------|-------------------------------------------------------------------------------------------------|

----

|   | ● | The day of a public announcement that a person has become an “Acquiring Person” by acquiring beneficial ownership of 20% or more of the outstanding voting shares then outstanding (or, in the case of a person that had beneficial ownership of 20% or more of the outstanding common shares on the date the Rights Plan was executed, by obtaining additional beneficial ownership of more than 1% of the voting shares outstanding at the Record Date) other than as a result of repurchases of common shares by us and certain other limited circumstances; and |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | The date of the commencement of or first public announcement of any person (other than us or our any subsidiary) to commence a tender or exchange offer if upon consummation thereof, such person would become an Acquiring Person, unless such bid is a Permitted Bid (as defined therein) or a Competing Permitted Bid (as defined therein). |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

| C. | Material Contracts |
|----|--------------------|

|   | 1. | Controlled Equity Offering Sales Agreement |
|--------|----|--------------------------------------------|

|   | 2. | Placement Agency Agreement |
|--------|----|----------------------------|

|   | 3. | Form of Subscription Agreement |
|--------|----|--------------------------------|

|   | 4. | Form of Warrant Agreement |
|--------|----|---------------------------|

| D. | Exchange Controls |
|----|-------------------|

----

| E. | Taxation |
|----|----------|

----

----

----

| F. | Dividends and Paying Agents |
|----|-----------------------------|

| G. | Statement by Experts |
|----|----------------------|

----

| H. | Documents on Display |
|----|----------------------|

| I. | Subsidiary Information |
|----|------------------------|

----

----

----

----

----

| Management’s Responsibility for Financial Reporting                                                         |   |   | 92     |   |
|-------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|
|                                                                                                              |   |   |   |   |
| Report of Independent Registered Public Accounting Firm                                                           |   |   | 93     |   |
|                                                                                                              |   |   |   |   |
| Consolidated Statements of Financial Position as at December 31, 2013 and December 31, 2012                       |   |   | 94     |   |
|                                                                                                              |   |   |   |   |
| Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2013, 2012 and 2011 |   |   | 95     |   |
|                                                                                                              |   |   |   |   |
| Consolidated Statements of Changes in Equity for the years ended December 31, 2013, 2012 and 2011                 |   |   | 96     |   |
|                                                                                                              |   |   |   |   |
| Consolidated Statements of Cash Flows for the years ended December 31, 2013, 2012 and 2011                        |   |   | 97     |   |
|                                                                                                              |   |   |   |   |
| Notes to the Consolidated Financial Statements                                                                    |   |   | 98     |   |

----

| Exhibit Number |   | Exhibit                                                                                                                                                                                                                                                   |
|----------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|           |   |                                                                                                                                                                                                                                                      |
| 1.1            |   | Memorandum of Avino Silver & Gold Mines Ltd.*                                                                                                                                                                                                         |
|           |   |                                                                                                                                                                                                                                                      |
| 1.2.           |   | Articles of Avino Silver & Gold Mines Ltd.*                                                                                                                                                                                                           |
|           |   |                                                                                                                                                                                                                                                      |
| 2.1            |   | Shareholders Rights Plan Agreement dated Apr. 22, 2013 (Incorporated by reference to Exhibit 2.1 to Form 20-F for the year ended December 31, 2012 filed with the SEC on May 14, 2013)                                                                    |
|           |   |                                                                                                                                                                                                                                                      |
| 4.2            |   | Intermark Capital Corporation Consulting Agreement dated Jan. 1, 2013(Incorporated by reference to Exhibit 4.2 to Form 20-F for the year ended December 31, 2012 filed with the SEC on May 14, 2013)                                                      |
|           |   |                                                                                                                                                                                                                                                      |
| 4.3            |   | Minerales de Avino SA de CV Agreement dated February 18, 2012 (Incorporated by reference to Exhibit 4.3 to Form 20-F for the year ended December 31, 2012 filed with the SEC on May 14, 2013)                                                             |
|           |   |                                                                                                                                                                                                                                                      |
| 4.4            |   | Stock Option Plan (Incorporated by reference to Exhibit 4.4 to Form 20-F for the year ended December 31, 2012 filed with the SEC on May 14, 2013)                                                                                                         |
|           |   |                                                                                                                                                                                                                                                      |
| 4.5            |   | $5 Million Master Credit Facility with Caterpillar Credito, S.A. de C.V. and Continuing Guarantee dated December 17, 2012 (Incorporated by reference to Exhibit 4.5 to Form 20-F for the year ended December 31, 2012 filed with the SEC on May 14, 2013) |
|           |   |                                                                                                                                                                                                                                                      |
| 4.6            |   | Avaron Mining Corp. Option Agreement dated January 3, 2012 (Incorporated by reference to Exhibit 4.6 to Form 20-F for the year ended December 31, 2012 filed with the SEC on May 14, 2013)                                                                |
|           |   |                                                                                                                                                                                                                                                      |
| 4.7            |   | Benz Capital Corp. Option Purchase and Assignment Agreement dated November 30, 2012 (Incorporated by reference to Exhibit 4.7 to Form 20-F for the year ended December 31, 2012 filed with the SEC on May 14, 2013)                                       |
|           |   |                                                                                                                                                                                                                                                      |
| 4.8            |   | Endeavour Silver Corp. Option to Joint Venture Agreement dated July 30, 2012 (Incorporated by reference to Exhibit 4.8 to Form 20-F for the year ended December 31, 2012 filed with the SEC on May 14, 2013)                                              |
|           |   |                                                                                                                                                                                                                                                      |
| 4.9            |   | Controlled Equity Offering Sales Agreement (Incorporated by reference to Exhibit 10.1 to Form 6-K filed with the SEC on December 31, 2013)                                                                                                                |
|           |   |                                                                                                                                                                                                                                                      |
| 4.10           |   | Placement Agency Agreement (Incorporated by reference to Exhibit 10.1 to Form 6-K filed with the SEC on February 21, 2014)                                                                                                                                |
|           |   |                                                                                                                                                                                                                                                      |
| 4.11           |   | Form of Subscription Agreement (Incorporated by reference to Exhibit 10.2 to Form 6-K filed with the SEC on February 21, 2014)                                                                                                                            |
|           |   |                                                                                                                                                                                                                                                      |
| 4.12           |   | Form of Warrant Agreement (Incorporated by reference to Exhibit 10.3 to Form 6-K filed with the SEC on February 21, 2014)                                                                                                                                 |
|           |   |                                                                                                                                                                                                                                                      |
| 8.1            |   | List of Subsidiaries                                                                                                                                                                                                                                      |
|           |   |                                                                                                                                                                                                                                                      |
| 11.1           |   | Code of Ethics (Incorporated by reference to Exhibit 11.1 to Form 20-F for the year ended December 31, 2012 filed with the SEC on May 14, 2013)                                                                                                           |
|           |   |                                                                                                                                                                                                                                                      |
| 11.2           |   | Audit Committee Charter (Incorporated by reference to Exhibit 11.2 to Form 20-F for the year ended December 31, 2012 filed with the SEC on May 14, 2013)                                                                                                  |
|           |   |                                                                                                                                                                                                                                                      |
| 11.3           |   | Governance & Nominating Committee Charter (Incorporated by reference to Exhibit 11.3 to Form 20-F for the year ended December 31, 2012 filed with the SEC on May 14, 2013)                                                                            |
|           |   |                                                                                                                                                                                                                                                      |
| 11.4           |   | Compensation Committee Charter (Incorporated by reference to Exhibit 11.2 to Form 20-F for the year ended December 31, 2012 filed with the SEC on May 14, 2013)                                                                                           |
|           |   |                                                                                                                                                                                                                                                      |
| 12.1           |   | Certification of the Principal Executive Officer                                                                                                                                                                                                          |
|           |   |                                                                                                                                                                                                                                                      |
| 12.2           |   | Certification of the Principal Financial Officer                                                                                                                                                                                                          |
|           |   |                                                                                                                                                                                                                                                      |
| 13.1           |   | Certificate under the Sarbanes-Oxley Act of the Principal Executive Officer                                                                                                                                                                               |
|           |   |                                                                                                                                                                                                                                                      |
| 13.2           |   | Certificate under the Sarbanes-Oxley Act of the Principal Financial Officer                                                                                                                                                                               |
|           |   |                                                                                                                                                                                                                                                      |
| 13.3           |   | Consent of Manning Elliott LLP                                                                                                                                                                                                                            |
|           |   |                                                                                                                                                                                                                                                      |
| 13.4           |   | Consent of Tetra Tech                                                                                                                                                                                                                                     |

----

----

| “David Wolfin” |   | “Malcolm Davidson” |
|----------------------------|--------|--------------------------------|
|                       |   |                           |
| David Wolfin               |   | Malcolm Davidson, CA           |
| President & CEO        |   | Chief Financial Officer        |
| April 17, 2014             |   | April 17, 2014                 |

----

----

----

----

|                                          |   | Note   |   |   | December 31,2013 |        |   | December 31, 2012 |   |
|-----------------------------------------------|--------|--------|--------|--------|------------------|-------------|--------|------------------------|--------|
|                                          |   |   |   |   |             |        |   |                   |   |
| ASSETS                                        |   |   |   |   |             |        |   |                   |   |
| Current assets                                |   |   |   |   |             |        |   |                   |   |
| Cash and cash equivalents                     |   |   |   |   | $                | 3,839,595   |   |                   | $      | 4,035,985 |   |
| Interest receivable                           |   |   |   |   |             | 6,040       |   |                   |   | 1,070 |   |
| Sales taxes recoverable                       |   | 5      |   |   |             | 307,101     |   |                   |   | 196,178 |   |
| Accounts receivable                           |   |   |   |   |             | 1,425,741   |   |                   |   | 254,695 |   |
| Prepaid expenses and other assets             |   |   |   |   |             | 713,967     |   |                   |   | 126,285 |   |
| Inventory                                     |   | 6      |   |   |             | 1,854,468   |   |                   |   | 2,225,840 |   |
|                                          |   |   |   |   |             | 8,146,912   |   |                   |   | 6,840,053 |   |
|                                          |   |   |   |   |             |        |   |                   |   |   |   |
| Exploration and Evaluation Assets             |   | 7      |   |   |             | 15,686,176  |   |                   |   | 12,828,202 |   |
| Plant, Equipment and Mining Properties        |   | 10     |   |   |             | 10,564,617  |   |                   |   | 6,308,480 |   |
| Investments in Related Companies              |   | 11     |   |   |             | 94,040      |   |                   |   | 194,373 |   |
| Investments in Other Companies                |   | 12     |   |   |             | 55,000      |   |                   |   | 15,000 |   |
| Reclamation Bonds                             |   |   |   |   |             | 5,500       |   |                   |   | 5,500 |   |
|                                          |   |   |   |   | $                | 34,552,245  |   |                   | $      | 26,191,608 |   |
|                                          |   |   |   |   |             |        |   |                   |   |   |   |
| LIABILITIES                                   |   |   |   |   |             |        |   |                   |   |   |   |
| Current liabilities                           |   |   |   |   |             |        |   |                   |   |   |   |
| Accounts payable and accrued liabilities      |   |   |   |   | $                | 1,410,947   |   |                   | $      | 1,145,747 |   |
| Amounts due to related parties                |   | 17     |   |   |             | 156,833     |   |                   |   | 174,714 |   |
| Current portion of finance lease obligations  |   | 18     |   |   |             | 585,845     |   |                   |   | 156,220 |   |
| Income taxes payable                          |   | 24     |   |   |             | 42,547      |   |                   |   | - |   |
|                                          |   |   |   |   |             | 2,196,172   |   |                   |   | 1,476,681 |   |
|                                          |   |   |   |   |             |        |   |                   |   |   |   |
| Finance Lease Obligations                     |   | 18     |   |   |             | 1,090,977   |   |                   |   | 78,732 |   |
| Reclamation Provision                         |   | 13     |   |   |             | 1,833,938   |   |                   |   | 323,140 |   |
| Deferred Tax Liabilities                      |   | 24     |   |   |             | 4,884,130   |   |                   |   | 2,365,677 |   |
| Total liabilities                             |   |   |   |   |             | 10,005,217  |   |                   |   | 4,244,230 |   |
|                                          |   |   |   |   |             |        |   |                   |   |   |   |
| EQUITY                                        |   |   |   |   |             |        |   |                   |   |   |   |
| Share Capital                                 |   | 14     |   |   |             | 42,784,832  |   |                   |   | 42,088,103 |   |
| Equity Reserves                               |   |   |   |   |             | 10,150,849  |   |                   |   | 9,749,674 |   |
| Treasury Shares (14,180 shares, at cost)      |   |   |   |   |             | (101,869    | )      |                   |   | (101,869 | ) |
| Accumulated Other Comprehensive Income (Loss) |   |   |   |   |             | 215,680     |   |                   |   | (330,211 | ) |
| Accumulated Deficit                           |   |   |   |   |             | (28,502,464 | )      |                   |   | (29,458,319 | ) |
| Total Equity                                  |   |   |   |   |             | 24,547,028  |   |                   |   | 21,947,378 |   |
|                                          |   |   |   |   | $                | 34,552,245  |   |                   | $      | 26,191,608 |   |

| Gary Robertson |  Director   | David Wolfin | Director |
|----------------|----------------------------|--------------|----------|

----

|                                                          |   | Note   |   |      | 2013   |       |   | 2012       |   |       | 2011   |       |
|---------------------------------------------------------------|--------|--------|--------|-----------|--------|------------|--------|------------|--------|------------|--------|------------|
|                                                          |   |   |   |      |   |       |   |       |   |       |   |       |   |   |   |
| Revenue                                                       |   | 16     |   |      | $      | 16,094,701 |   |       | $      | 2,255,376  |   |       | $ | - |   |
| Cost of Sales                                                 |   | 16     |   |      |   | 8,968,409  |   |       |   | 1,434,569  |   |       |   | - |   |
| Mine Operating Income                                         |   |   |   |      |   | 7,126,292  |   |       |   | 820,807    |   |       |   | - |   |
| General and Administrative Expenses                           |   |   |   |      |   |       |   |       |   |       |   |       |   |   |   |
| Depreciation                                                  |   |   |   |      |   | 687        |   |       |   | 6,193      |   |       |   | 803 |   |
| Directors’ fees                                         |   |   |   |      |   | 155,000    |   |       |   | 22,500     |   |       |   | 18,000 |   |
| Interest expense                                              |   |   |   |      |   | 52,753     |   |       |   | -          |   |       |   | - |   |
| Investor relations                                            |   |   |   |      |   | 194,955    |   |       |   | 247,044    |   |       |   | 294,882 |   |
| Management and consulting fees                                |   |   |   |      |   | 390,510    |   |       |   | 224,532    |   |       |   | 296,260 |   |
| Office and miscellaneous                                      |   |   |   |      |   | 722,816    |   |       |   | 434,011    |   |       |   | 181,721 |   |
| Professional fees                                             |   |   |   |      |   | 311,193    |   |       |   | 205,578    |   |       |   | 189,459 |   |
| Regulatory and compliance fees                                |   |   |   |      |   | 140,629    |   |       |   | 75,738     |   |       |   | 121,591 |   |
| Salaries and benefits                                         |   |   |   |      |   | 1,204,666  |   |       |   | 561,398    |   |       |   | 276,866 |   |
| Sales tax write-down (provision recovery)                     |   |   |   |      |   | -          |   |       |   | (47,409    | )      |       |   | - |   |
| Share-based payments                                          |   | 15     |   |      |   | 908,362    |   |       |   | 18,408     |   |       |   | 2,529,620 |   |
| Travel and promotion                                          |   |   |   |      |   | 165,860    |   |       |   | 181,753    |   |       |   | 133,445 |   |
|                                                          |   |   |   |      |   | 4,247,431  |   |       |   | 1,929,746  |   |       |   | 4,042,647 |   |
| Income (loss) before other items and income taxes             |   |   |   | 2,878,861 |   |       |   | (1,108,939 | )      |       |   | (4,042,647 | ) |
| Other Items                                                   |   |   |   |      |   |       |   |       |   |       |   |       |   |   |   |
| Foreign exchange gain                                         |   |   |   |      |   | 415,278    |   |       |   | 116,562    |   |       |   | 68,404 |   |
| Interest income                                               |   |   |   |      |   | 41,604     |   |       |   | 21,760     |   |       |   | 78,857 |   |
| Mineral property option income                                |   | 8      |   |      |   | 69,500     |   |       |   | 54,317     |   |       |   | - |   |
| Other income                                                  |   |   |   |      |   | 103,802    |   |       |   | 23,464     |   |       |   | 10,499 |   |
| Unrealized loss on investments                                |   |   |   |      |   | (99,833    | )      |       |   | (110,021   | )      |       |   | (212,966 | ) |
| Net income (loss) before income tax                           |   |   |   |      |   | 3,409,212  |   |       |   | (1,002,857 | )      |       |   | (4,097,853 | ) |
| Income taxes                                                  |   |   |   |      |   |       |   |       |   |       |   |       |   |   |   |
| Current income tax expense                                    |   | 24     |   |      |   | (42,547    | )      |       |   | -          |   |       |   | - |   |
| Deferred income tax expense                                   |   | 24     |   |      |   | (2,518,453 | )      |       |   | (260,321   | )      |       |   | (86,498 | ) |
|                                                          |   |   |   |      |   | (2,561,000 | )      |       |   | (260,321   | )      |       |   | (86,498 | ) |
| Net Income (Loss)                                             |   |   |   |      |   | 848,212    |   |       |   | (1,263,178 | )      |       |   | (4,184,351 | ) |
| Other Comprehensive Income (Loss) -                           |   |   |   |      |   |       |   |       |   |       |   |       |   |   |   |
| Items that may be reclassified subsequently to income or loss |   |   |   |      |   |       |   |       |   |       |   |       |   |
| Currency translation differences of foreign operations        |   |   |   | 545,891   |   |       |   | (67,811    | )      |       |   | 82,689     |   |
| Comprehensive Income (Loss)                                   |   |   |   |      | $      | 1,394,103  |   |       | $      | (1,330,989 | )      |       | $ | (4,101,662 | ) |
| Earnings (Loss) per Share                                     |   |   |   |      |   |       |   |       |   |       |   |       |   |   |   |
| Basic                                                         |   |   |   |      | $      | 0.03       |   |       | $      | (0.05      | )      |       | $ | (0.16 | ) |
| Diluted                                                       |   |   |   |      | $      | 0.03       |   |       | $      | (0.05      | )      |       | $ | (0.16 | ) |
| Weighted Average Number of Common Shares Outstanding          |   |   |   |      |   |       |   |       |   |
| Basic                                                         |   |   |   |      |   | 27,405,179 |   |       |   | 27,072,053 |   |       |   | 26,795,632 |   |
| Diluted                                                       |   |   |   |      |   | 27,701,403 |   |       |   | 27,072,053 |   |       |   | 26,795,632 |   |

----

|                                                   |   | Note     |   |   | Number of Common Shares |       |   | Share Capital Amount |   |       | Equity Reserves |   |   | Treasury Shares |   |   | Accumulated Other Comprehensive Income (Loss) |     |   | Accumulated Deficit |   |     | Total Equity |   |
|--------------------------------------------------------|--------|----------|--------|--------|-------------------------|------------|--------|----------------------|--------|------------|-----------------|--------|--------|-----------------|--------|--------|-----------------------------------------------|----------|--------|---------------------|--------|----------|--------------|--------|
| Balance, January 1, 2011                               |   |     |   |   |                    | 26,157,227 |   |                 | $      | 39,193,299 |            |   | $      | 9,508,838       |   |   | $                                             | (101,869 | )      |                | $      | (345,089 | )            |   | $ | (24,339,389 | ) |   | $ | 23,915,790 |   |
| Common shares issued for cash:                         |   |     |   |   |                    |       |   |                 |   |       |            |   |   |            |   |   |                                          |     |   |                |   |     |         |   |   |   |   |   |   |   |   |
| Share issuance costs                                   |   |     |   |   |                    | -          |   |                 |   | (1,539     | )               |   |   | -               |   |   |                                          | -        |   |                |   | -        |         |   |   | - |   |   |   | (1,539 | ) |
| Exercise of stock options                              |   |     |   |   |                    | 753,000    |   |                 |   | 592,050    |            |   |   | -               |   |   |                                          | -        |   |                |   | -        |         |   |   | - |   |   |   | 592,050 |   |
| Share-based payments                                   |   | 15       |   |   |                    | -          |   |                 |   | -          |            |   |   | 2,529,620       |   |   |                                          | -        |   |                |   | -        |         |   |   | - |   |   |   | 2,529,620 |   |
| Fair value of stock options exercised                  |   |     |   |   |                    | -          |   |                 |   | 1,936,273  |            |   |   | (1,936,273      | )      |   |                                          | -        |   |                |   | -        |         |   |   | - |   |   |   | - |   |
| Options and warrants cancelled or expired              |   |     |   |   |                    | -          |   |                 |   | -          |            |   |   | (203,999        | )      |   |                                          | -        |   |                |   | -        |         |   |   | 203,999 |   |   |   | - |   |
| Net loss for the year                                  |   |     |   |   |                    | -          |   |                 |   | -          |            |   |   | -               |   |   |                                          | -        |   |                |   | -        |         |   |   | (4,184,351 | ) |   |   | (4,184,351 | ) |
| Currency translation differences of foreign operations |   |     |   |   |                    | -          |   |                 |   | -          |            |   |   | -               |   |   |                                          | -        |   |                |   | 82,689   |         |   |   | - |   |   |   | 82,689 |   |
| Balance, December 31, 2011                             |   |     |   |   |                    | 26,910,227 |   |                 | $      | 41,720,083 |            |   | $      | 9,898,186       |   |   | $                                             | (101,869 | )      |                | $      | (262,400 | )            |   | $ | (28,319,741 | ) |   | $ | 22,934,259 |   |
| Common shares issued for cash:                         |   |     |   |   |                    |       |   |                 |   |       |            |   |   |            |   |   |                                          |     |   |                |   |     |         |   |   |   |   |   |   |   |   |
|  Exercise of stock options                        |   | 14       |   |   |                    | 82,000     |   |                 |   | 75,600     |            |   |   | -               |   |   |                                          | -        |   |                |   | -        |         |   |   | - |   |   |   | 75,600 |   |
| Shares issued for leased claim payment                 |   | 7(a)(iv) |   |   |                    | 135,189    |   |                 |   | 250,100    |            |   |   | -               |   |   |                                          | -        |   |                |   | -        |         |   |   | - |   |   |   | 250,100 |   |
| Fair value of stock options exercised                  |   |     |   |   |                    | -          |   |                 |   | 42,320     |            |   |   | (42,320         | )      |   |                                          | -        |   |                |   | -        |         |   |   | - |   |   |   | - |   |
| Share-based payments                                   |   | 15       |   |   |                    | -          |   |                 |   | -          |            |   |   | 18,408          |   |   |                                          | -        |   |                |   | -        |         |   |   | - |   |   |   | 18,408 |   |
| Options and warrants cancelled or expired              |   |     |   |   |                    | -          |   |                 |   | -          |            |   |   | (124,600        | )      |   |                                          | -        |   |                |   | -        |         |   |   | 124,600 |   |   |   | - |   |
| Net loss for the year                                  |   |     |   |   |                    | -          |   |                 |   | -          |            |   |   | -               |   |   |                                          | -        |   |                |   | -        |         |   |   | (1,263,178 | ) |   |   | (1,263,178 | ) |
| Currency translation differences of foreign operations |   |     |   |   |                    | -          |   |                 |   | -          |            |   |   | -               |   |   |                                          | -        |   |                |   | (67,811  | )            |   |   | - |   |   |   | (67,811 | ) |
| Balance, December 31, 2012                             |   |     |   |   |                    | 27,127,416 |   |                 | $      | 42,088,103 |            |   | $      | 9,749,674       |   |   | $                                             | (101,869 | )      |                | $      | (330,211 | )            |   | $ | (29,458,319 | ) |   | $ | 21,947,378 |   |
| Common shares issued for cash:                         |   |     |   |   |                    |       |   |                 |   |       |            |   |   |            |   |   |                                          |     |   |                |   |     |         |   |   |   |   |   |   |   |   |
| Exercise of stock options                              |   | 14       |   |   |                    | 361,418    |   |                 |   | 297,185    |            |   |   | -               |   |   |                                          | -        |   |                |   | -        |         |   |   | - |   |   |   | 297,185 |   |
| Fair value of stock options exercised                  |   |     |   |   |                    | -          |   |                 |   | 399,544    |            |   |   | (399,544        | )      |   |                                          | -        |   |                |   | -        |         |   |   | - |   |   |   | - |   |
| Share-based payments                                   |   | 15       |   |   |                    | -          |   |                 |   | -          |            |   |   | 908,362         |   |   |                                          | -        |   |                |   | -        |         |   |   | - |   |   |   | 908,362 |   |
| Options and warrants cancelled or expired              |   |     |   |   |                    | -          |   |                 |   | -          |            |   |   | (107,643        | )      |   |                                          | -        |   |                |   | -        |         |   |   | 107,643 |   |   |   | - |   |
| Net income for the year                                |   |     |   |   |                    | -          |   |                 |   | -          |            |   |   | -               |   |   |                                          | -        |   |                |   | -        |         |   |   | 848,212 |   |   |   | 848,212 |   |
| Currency translation differences of foreign operations |   |     |   |   |                    | -          |   |                 |   | -          |            |   |   | -               |   |   |                                          | -        |   |                |   | 545,891  |         |   |   | - |   |   |   | 545,891 |   |
| Balance, December 31, 2013                             |   |     |   |   |                    | 27,488,834 |   |                 | $      | 42,784,832 |            |   | $      | 10,150,849      |   |   | $                                             | (101,869 | )      |                | $      | 215,680  |         |   | $ | (28,502,464 | ) |   | $ | 24,547,028 |   |

----

|                                                         |   | Note   |   |   | 2013   |       |   | 2012   |   |       | 2011   |   |
|--------------------------------------------------------------|--------|--------|--------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
|                                                         |   |   |   |   |   |       |   |   |   |       |   |   |
| Cash Provided By (Used In):                                  |   |   |   |   |   |       |   |   |   |       |   |   |
|                                                         |   |   |   |   |   |       |   |   |   |       |   |   |
| Operating Activities                                         |   |   |   |   |   |       |   |   |   |       |   |   |
| Net income (loss)                                            |   |   |   |   | $      | 848,212    |   |   | $      | (1,263,178 | )      |   | $ | (4,184,351 | ) |
| Adjustments for non-cash items:                              |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |
| Depreciation, depletion, and accretion                       |   |   |   |   |   | 950,013    |   |   |   | 194,453    |   |   |   | 803 |   |
| Share-based payments                                         |   | 15     |   |   |   | 908,362    |   |   |   | 18,408     |   |   |   | 2,529,620 |   |
| Unrealized loss on investments                               |   |   |   |   |   | 99,833     |   |   |   | 110,021    |   |   |   | 212,966 |   |
| Sales tax write-down (provision recovery)                    |   |   |   |   |   | -          |   |   |   | (46,640    | )      |   |   | - |   |
| Mineral property option income                               |   | 8      |   |   |   | (39,500    | )      |   |   | (15,000    | )      |   |   | - |   |
| Other income                                                 |   |   |   |   |   | (88,637    | )      |   |   | -          |   |   |   | - |   |
|  Deferred income tax expense                            |   | 24     |   |   |   | 2,518,453  |   |   |   | 260,321    |   |   |   | 86,498 |   |
|                                                         |   |   |   |   |   | 5,196,736  |   |   |   | (741,615   | )      |   |   | (1,354,464 | ) |
| Net change in non-cash working capital                       |   | 19     |   |   |   | (1,213,384 | )      |   |   | (718,112   | )      |   |   | 60,463 |   |
|                                                         |   |   |   |   |   | 3,983,352  |   |   |   | (1,459,727 | )      |   |   | (1,294,001 | ) |
|                                                         |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |
| Financing Activities                                         |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |
| Shares issued for cash, net of issuance costs                |   |   |   |   |   | 297,185    |   |   |   | 75,600     |   |   |   | 590,511 |   |
| Finance lease payments                                       |   |   |   |   |   | (335,531   | )      |   |   | (42,969    | )      |   |   | - |   |
|                                                         |   |   |   |   |   | (38,346    | )      |   |   | 32,631     |   |   |   | 590,511 |   |
|                                                         |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |
| Investing Activities                                         |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |
| Proceeds from sale of equipment                              |   |   |   |   |   | 88,637     |   |   |   | -          |   |   |   | - |   |
| Recovery of exploration costs from concentrate proceeds      |   |   |   |   |   | -          |   |   |   | 3,490,581  |   |   |   | 3,114,552 |   |
| Exploration and evaluation expenditures                      |   |   |   |   |   | (901,912   | )      |   |   | (2,387,771 | )      |   |   | (4,590,331 | ) |
| Additions to plant, equipment and mining properties          |   |   |   |   |   | (3,315,192 | )      |   |   | (946,286   | )      |   |   | (1,483,453 | ) |
|                                                         |   |   |   |   |   | (4,128,467 | )      |   |   | 156,524    |   |   |   | (2,959,232 | ) |
|                                                         |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |
| Change in cash and cash equivalents                          |   |   |   |   |   | (183,461   | )      |   |   | (1,270,572 | )      |   |   | (3,662,722 | ) |
|                                                         |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |
| Effect of exchange rate changes on cash and cash equivalents |   |   |   |   |   | (12,929    | )      |   |   | 24,093     |   |   |   | (106,662 | ) |
|                                                         |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |
| Cash and Cash Equivalents, Beginning                         |   |   |   |   |   | 4,035,985  |   |   |   | 5,282,464  |   |   |   | 9,051,848 |   |
|                                                         |   |   |   |   |   |       |   |   |   |       |   |   |   |   |   |
| Cash and Cash Equivalents, Ending                            |   |   |   |   | $      | 3,839,595  |   |   | $      | 4,035,985  |   |   | $ | 5,282,464 |   |

----

----

| 1.  | NATURE OF OPERATIONS Avino Silver & Gold Mines Ltd. (the “Company” or “Avino”) was incorporated in 1968 under the laws of the Province of British Columbia, Canada. The Company is engaged in the production and sale of silver and gold, and the acquisition, exploration, and development of mineral properties. The Company’s head office and principal place of business is Suite 900, 570 Granville Street, Vancouver, BC, Canada. The Company is a reporting issuer in Canada and the United States and trades on the TSX-V, NYSE MKT and the Frankfurt and Berlin Stock Exchanges. The Company owns interests in mineral properties located in Durango, Mexico as well as in British Columbia and the Yukon, Canada. On October 1, 2012, the Company commenced production of silver and gold at levels intended by management at its San Gonzalo mine in the state of Durango, Mexico. |
|----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.  | BASIS OF PRESENTATION Statement of Compliance These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). Basis of Presentation These consolidated financial statements are expressed in Canadian dollars and have been prepared on a historical cost basis except for financial instruments that have been measured at fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting on a going concern basis. The accounting policies set out below have been applied consistently to all years presented in these consolidated financial statements as if the policies have always been in effect. Foreign Currency Translation |
|----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| a)   | Functional currencies The functional and presentation currency of the Company is the Canadian dollar. The functional currency of the Company’s subsidiaries is the U.S. dollar which is determined to be the currency of the primary economic environment in which the subsidiaries operate. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b)   | Foreign currency transactions Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on the dates of the transactions. At each financial position reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at the date of the statement of financial position. Non-monetary items that are measured in terms of historical cost in a foreign currency are not re-translated. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c)   | Foreign operations  Subsidiaries that have functional currencies other than the Canadian dollar translate their statement of operations items to Canadian dollars at the average rate during the year. Assets and liabilities are translated at exchange rates prevailing at the end of each reporting period. Exchange rate variations resulting from the retranslation at the closing rate of the net investment in these subsidiaries, together with differences between their statement of operations items translated at actual and average rates, are recognized in accumulated other comprehensive income (loss). |
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| 2. | BASIS OF PRESENTATION (continued) Significant Accounting Judgements and EstimatesThe preparation of these consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual outcomes could differ from these estimates under different assumptions and conditions.Critical judgements exercised by management in applying accounting policies that have the most significant effect on the amounts presented in these consolidated financial statements are as follows: |
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| a)   | Economic recoverability and probability of future economic benefits from exploration and evaluation costs Management has determined that exploratory drilling, exploration evaluation, and related costs incurred which were capitalized have future economic benefits and are economically recoverable. Management uses several criteria in its assessments of economic recoverability and probability of future economic benefits including geologic and metallurgic information, scoping studies, accessible facilities, existing permits and life of mine plans. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b)   | Commencement of production at levels intended by management Prior to reaching production levels intended by management, costs incurred are capitalized as part of the costs of related exploration and evaluation assets and proceeds from concentrate sales are offset against costs capitalized. Depletion of capitalized costs for mining properties and depreciation of plant and equipment begin when operating levels intended by management have been reached. Management considers several factors in determining when a mining property has reached the intended production levels, including production capacity, recoveries and number of uninterrupted production days. The results of operations of the Company during the periods presented in these consolidated financial statements have been impacted by management’s determination that the San Gonzalo Mine had achieved production levels intended by management as of October 1, 2012. Significant assumptions about the future and other sources of estimation uncertainty that management has made at the statement of financial position date that could result in a material adjustment to the carrying amounts of assets and liabilities in the event that actual results differ from assumptions made relate to, but are not limited to, the following: |
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| c)   | Stockpile and concentrate inventory valuations Concentrate and stockpile mineralized material are valued at the lower of average cost or net realizable value.The assumptions used in the valuation of mineralized material stockpile and concentrate include estimates of silver and gold contained in the stockpile and finished goods assumptions for the amount of silver and gold that is expected to be recovered from the concentrate. If these estimates or assumptions prove to be inaccurate, the Company could be required to write down the recorded value of its mineralized material stockpile and concentrate inventory, which would result in an increase in the Company’s expenses and a reduction in its working capital. |
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| d) | Estimated reclamation provisions The Company’s provision for reclamation represents management’s best estimate of the present value of the future cash outflows required to settle estimated reclamation and closure costs at the end of the life of the Avino and San Gonzalo mines. The provision reflects estimates of future costs, inflation, movements in foreign exchange rates and assumptions of risks associated with the future cash outflows, and the applicable risk free interest rates for discounting the future cash outflows. Changes in the above factors could result in a change to the provision recognized by the Company. |
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| 2. | BASIS OF PRESENTATION (continued) Significant Accounting Judgements and Estimates (continued) |
|----|----------------------------------------------------------------------------------------------------|

| d)   | Estimated reclamation provisions (continued) Changes to reclamation and closure cost obligations are recorded with a corresponding change to the carrying amounts of the related exploration and evaluation assets or mining properties. Adjustments to the carrying amounts of related mining properties result in a change to future depletion expense. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| e)   | Valuation of share-based payments The Company uses the Black-Scholes Option Pricing Model for valuation of share-based payments. Option pricing models require the input of subjective assumptions including expected price volatility, interest rate and forfeiture rate. Changes in the input assumptions can materially affect fair value estimates and the Company’s net income or net loss and its equity reserves. |
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| f)   | Impairment of plant and equipment, mining properties and exploration and evaluation assets Management considers both external and internal sources of information in assessing whether there areany indications that the Company’s plant and equipment, mining properties and exploration and evaluation assets are impaired. External sources of information management considers include changes in the market, economic and legal environments in which the Company operates that are not within its control and that affect the recoverable amount of its plant, equipment and mining properties. Internal sources of information that management considers include the manner in which mining properties and plant and equipment are being used or are expected to be used and indications of economic performance of the assets. In determining the recoverable amounts of the Company’s plant, equipment, and mining properties, management makes estimates of the undiscounted future pre-tax cash flows expected to be derived from the Company’s mining properties, and the appropriate discount rate. Reductions in metal price forecasts, increases in estimated future costs of production, increases in estimated future non expansionary capital expenditures, reductions in the amount of recoverable resources and exploration potential, and adverse current economic conditions are examples of factors that could result in a write down of the carrying amounts of the Company’s plant, equipment, mining properties, and exploration and evaluation assets. |
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| g)   | Depreciation rate for plant and equipment and depletion rate for mining properties Depreciation and depletion expenses are allocated based on estimates for useful lives of assets. Should the asset life, depletion rates, or depreciation rates differ from the initial estimate, the revised life or rate would be reflected prospectively through profit and loss. |
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| h)   | Recognition and measurement of deferred tax assets and liabilities Estimates of future taxable income are based on forecasted cash flows from operations and theapplication of existing tax laws in each jurisdiction. Forecasted cash flows from operations are based onlife of mine projections internally developed and reviewed by management. Weight is attached to tax planning opportunities that are within the Company’s control, and are feasible and implementable without significant obstacles. The likelihood that tax positions taken will be sustained upon examination by applicable tax authorities is assessed based on individual facts and circumstances of the relevant tax position evaluated in light of all available evidence. Where applicable tax laws and regulations are either unclear or subject to ongoing varying interpretations, it is reasonably possible that changes in these estimates can occur that could materially affect the amounts of deferred tax assets and liabilities. |
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| 2. | BASIS OF PRESENTATION (continued) Basis of ConsolidationThe consolidated financial statements include the accounts of the Company and its Mexican subsidiaries as follows: |
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| Subsidiary                                                                  | Ownership Interest                      | Jurisdiction | Nature of Operations                  |
|-----------------------------------------------------------------------------|-----------------------------------------|--------------|---------------------------------------|
| Oniva Silver and Gold Mines S.A., (“Oniva Silver”)              | 100%                                    | Mexico       | Mexican operations and administration |
| Promotora Avino, S.A. de C.V. (“Promotora”)                     | 79.09%                                  | Mexico       | Holding company                       |
| Compania Minera Mexicana de Avino, S.A. de C.V.(“Avino Mexico”) | 98.39% direct1.27% indirect (Promotora) | Mexico       | Mining and exploration                |
|                                                                        | 99.66% effective                        |         |                                  |

|   | Intercompany balances and transactions, including unrealized income and expenses arising from intercompany transactions, are eliminated in preparing the consolidated financial statements. On June 4, 2013, the Company converted existing loans advanced to Avino Mexico into new additional shares, resulting in an increase of the Company’s ownership by 0.38% to an effective 99.66%. The intercompany loans and investments are eliminated upon consolidation of the financial statements. The Company had a pre-existing effective ownership interest of 99.28% in Avino Mexico prior to the 0.38% increase. The issuance of shares to the Company by Avino Mexico on June 4, 2013 resulted in a reduction in the non-controlling interest from 0.72% to 0.34%. Financial InstrumentsAll financial assets are initially recorded at fair value and classified into one of four categories: held to maturity, available for sale, loans and receivables or fair value through profit or loss (“FVTPL”). All financial liabilities are initially recorded at fair value and classified as either FVTPL or other financial liabilities. Loans and receivables and other financial liabilities are subsequently measured at amortized cost. Financial instruments comprise cash and cash equivalents, interest receivable, sales taxes recoverable, accounts receivable, investments in related and other companies, reclamation bonds, accounts payable, amounts due to related parties, and finance lease obligations. At initial recognition management has classified financial assets and liabilities as follows:The Company has classified its cash and cash equivalents, interest receivable, and investments in related and other companies as FVTPL. Sales taxes recoverable, accounts receivable, and reclamation bonds are classified as loans and receivables. Accounts payable, amounts due to related parties, and finance lease obligations are classified as other financial liabilities.Cash and cash equivalentsCash and cash equivalents in the statement of financial position comprise cash at banks and on hand, and short-term deposits with an original maturity of three months or less which are readily convertible into a known amount of cash. |
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| 3.   | SIGNIFICANT ACCOUNTING POLICIES Exploration and evaluation assetsThe Company capitalizes all costs relating to the acquisition, exploration and evaluation of mineral claims and recognizes any proceeds received as a reduction of the cost of the related claims. The Company’s capitalized exploration and evaluation are classified as intangible assets. Such costs include, but are not exclusive to, geological, geophysical studies, exploratory drilling and sampling. Incidental revenues and operating costs are included in exploration and evaluation costs prior to intended production levels being achieved. When intended production levels are achieved, these costs are reclassified to mining properties and become subject to depletion. All capitalized exploration and evaluation expenditures are monitored for indications of impairment. Where a potential impairment is indicated, assessments are performed for each area of interest. To the extent that exploration expenditures are not expected to be recovered, the expenditures for the area of interest are written down and charged to operations. The aggregate costs related to abandoned mineral claims are charged to operations at the time of any abandonment. An impairment charge relating to a mineral claim may be subsequently reversed if new exploration results or actual or potential proceeds on sale or farm out of the property result in a revised estimate of the recoverable amount, but only to the extent that this does not exceed the original carrying value of the property that would have resulted if no impairment had been recognized. The recoverability of amounts shown for exploration and evaluation assets is dependent upon the discovery of economically recoverable reserves, the ability of the Company to obtain financing to complete development of the properties, and on future production or proceeds of disposition.Plant, equipment and mining propertiesOnce the work completed supports the achievement of management’s intended production levels, all expenditures incurred to that date for the mine are reclassified to mining properties. Expenditures capitalized to mining properties include all costs related to exploration, evaluation and development, direct overhead costs and the initial estimate of the reclamation provision. Prior to being reclassified to mining properties, exploration and development costs are assessed for impairment. Subsequent to the commencement of production at levels intended by management, further development expenditures incurred with respect to a mining property are capitalized, when it is probable that additional future economic benefits will flow to the Company. Otherwise, such expenditures are classified as a cost of production. Plant and equipment are recorded at historical cost less accumulated depreciation and any accumulated impairment losses. Historical costs include expenditures that are directly attributable to bringing the asset to a location and condition necessary to operate in a manner intended by management. Such costs are accumulated as construction in progress until the asset is available for use, at which point the asset is classified as plant, equipment and mining properties. After the date that management’s intended production levels have been achieved, mining properties are depleted using the straight-line method over the estimated remaining life of the mine. The Company estimates the remaining life of its producing mineral properties on an annual basis using a combination of quantitative and qualitative factors including historical results, mineral resource estimates, and management’s intent to operate the property. The Company does not have sufficient reserve information to form a basis for the application of the units-of-production method for depreciation and depletion. |
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| 3. | SIGNIFICANT ACCOUNTING POLICIES (continued) Plant, equipment and mining properties (continued)Accumulated mill, machinery, plant facilities, and certain equipment are depreciated using the straight-line method over their estimated useful lives, not to exceed the life of the mine for any assets that are inseparable from the mine. When parts of an item of plant and equipment have different useful lives, they are accounted for as separate items (or components) of plant and equipment.Plant and equipment are depreciated at the following annual rates: |
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| Office equipment, furniture and fixtures    | 20% declining balance  |
|---------------------------------------------|------------------------|
| Computer equipment                          | 30% declining balance  |
| Mine machinery and transportation equipment | 20% declining balance  |
| Mill machinery and processing equipment     | 20 years straight line |
| Buildings                                   | 20 years straight line |

|   | Impairment At each financial position reporting date, the carrying amounts of the Company’s assets are reviewed to determine whether there is any indication that those assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. Where the asset does not generate cash flows that are independent from other assets, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. An asset’s recoverable amount is the higher of fair value less costs to sell and value in use. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset or cash generating unit is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in profit or loss for the period.Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, provided the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss. Leases Leases in which the Company assumes substantially all risks and rewards of ownership are classified as finance leases. Assets held under finance leases are recognized at the lower of the fair value and present value of the minimum lease payments at inception of the lease, less accumulated depreciation and impairment losses. The corresponding liability is recognized as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation to achieve a constant rate of interest on the remaining liability. Finance charges are recorded as a finance expense within profit and loss, unless they are attributable to qualifying assets, in which case they are capitalized.Operating lease payments are recognized on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed, in which case that systematic basis is used. Operating lease payments are recorded within profit and loss unless they are attributable to qualifying assets, in which case they are capitalized. |
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| 3. | SIGNIFICANT ACCOUNTING POLICIES (continued) InventoryMaterial extracted from the Company's mine is classified as either process material or waste. Process material represents mineralized material that, at the time of extraction, the Company expects to process into a saleable form and sell at a profit, while waste is considered uneconomic to process and its extraction cost is included in direct mining costs. Raw materials are comprised of process material stockpiles. Process material is accumulated in stockpiles that are subsequently processed into bulk silver and gold concentrate in a saleable form. The Company has bulk silver and gold concentrate inventory in saleable form that has not yet been sold. Mine operating supplies represent commodity consumables and other raw materials used in the production process, as well as spare parts and other maintenance supplies that are not classified as capital items.Inventories are valued at the lower of cost and net realizable value. Cost is determined on a weighted average basis and includes all costs incurred, based on normal production capacity, in bringing each product to its present location and condition. Cost of inventories comprises direct labor, materials and contractor expenses, depletion and depreciation on mining properties, plant, and equipment, and an allocation of mine site overhead costs. As mineralized material is removed for processing, costs are removed based on the average cost per tonne in the stockpile. Stockpiled process material tonnages are verified by periodic surveys.Net realizable value (“NRV”) of mineralized material is determined with reference to relevant market prices less applicable variable selling expenses and costs to bring the inventory into its saleable form. NRV of materials and supplies is generally calculated by reference to salvage or scrap values when it is determined that the supplies are obsolete. NRV provisions are recorded within cost of sales in the consolidated statement of operations, and are reversed to reflect subsequent recoveries where the inventory is still on hand.Revenue recognitionRevenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received, excluding discounts, rebates and other sales tax or duty.Revenue from the sale of concentrate is recognized upon delivery when persuasive evidence of a sale agreement exists, the risks of ownership are transferred to the customer, collection is reasonably assured, and the price is readily determinable. Revenue is based on quoted market prices of the London Metal Exchange during the quotation period less treatment, refining and smelting charges, and penalties.Metals contained in bulk concentrate sold to third parties are provisionally invoiced and the price is not settled until a predetermined contractual future date, typically one to three months after delivery to the customer, based on the market price of metals at that time. The Company enters into contracts which provide a provisional payment on delivery based upon provisional assays and quoted metal prices at the time. Revenues are recorded when title passes from the Company to the buyer based on the spot price on date of delivery, and subsequently adjusted to market price based on the date of the final settlement.Prior to the date that management’s intended production levels have been achieved, concentrate sales incidental to the exploration of mineral properties are recorded net of production costs as a reduction of capitalized exploration and evaluation costs.Share capital |
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| a)   | Common shares Common shares are classified as equity. Transaction costs directly attributable to the issuance of common shares and share options are recognized as a deduction from equity, net of any tax effects. |
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| 3.   | SIGNIFICANT ACCOUNTING POLICIES (continued) Share capital (continued) |
|----------------|----------------------------------------------------------------------------|

| b)   | Repurchase of share capital (treasury shares) When share capital recognized as equity is repurchased, the amount of the consideration paid, which includes directly attributable costs, net of any tax effects, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares and are presented as a deduction from total equity. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is transferred to accumulated deficit. |
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|   | Share-based payment transactions The Company’s share option plan allows directors, officers, employees, and consultants to acquire common shares of the Company. All options granted are measured at fair value and are recognized in expenses as share-based payments with a corresponding increase in equity reserves. An individual is classified as an employee when the individual is an employee for legal or tax purposes (direct employee) or provides services similar to those performed by a direct employee. The fair value of employee options is measured at the grant date, and each tranche is recognized using the graded vesting method over the period during which the options vest. The fair value of the options granted is measured using the Black-Scholes option pricing model taking into account the terms and conditions upon which the options were granted. Share options granted to non-employees or consultants are measured at the fair value of services received. At each financial position reporting date, the amount recognized as an expense is adjusted to reflect the actual number of share options that are expected to vest.ProvisionsProvisions are recognized where a legal or constructive obligation has been incurred as a result of past events, it is probable that an outflow of resources embodying economic benefit will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made. If material, provisions are measured at the present value of the expenditures expected to be required to settle the obligation. The increase in any provision due to the passage of time is recognized as accretion expense.The Company records the present value of estimated costs of legal and constructive obligations required to restore mining properties in the period in which the obligation is incurred. The nature of these restoration activities includes dismantling and removing structures, rehabilitating mines and restoration, reclamation and re-vegetation of affected areas.Reclamation provisionThe fair value of the liability for a rehabilitation provision is recorded when it is incurred. When the liability is initially recognized, the present value of the estimated cost is capitalized by increasing the carrying amount of the related mineral property. Over time, the discounted liability is increased for the change in present value based on the discount rates that reflect current market assessments and the risks specific to the liability, which is accreted over time through periodic charges to income or loss. Additional disturbances, changes in costs, or changes in assumptions are recognized as adjustments to the corresponding assets and reclamation liabilities when they occur. |
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| 3. | SIGNIFICANT ACCOUNTING POLICIES(continued) Earnings (loss) per shareThe Company presents basic and diluted earnings (loss) per share data for its common shares, calculated by dividing the loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the year. Diluted earnings (loss) per share is determined by adjusting the earnings (loss) attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all potentially dilutive common shares.Income taxesIncome taxes in the years presented are comprised of current and deferred tax. Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized as equity.Deferred tax is recognized using the statement of financial position asset and liability method, which provides for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax recognized is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the statement of financial position date. A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. |
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| 4.  | RECENT ACCOUNTING PRONOUNCEMENTS The mandatory adoption of the following new and revised accounting standards and interpretations on January 1, 2013 had no significant impact on the Company’s consolidated financial statements for the years presented:IFRS 10 – Consolidated Financial StatementsIFRS 10 requires an entity to consolidate an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. IFRS 10 replaces SIC-12 Consolidation - Special Purpose Entities and parts of the previous IAS 27 Consolidated and Separate Financial Statements.IFRS 11 – Joint ArrangementsIFRS 11 requires a venturer to classify its interest in a joint arrangement as a joint venture or a joint operation. Joint ventures will be accounted for using the equity method of accounting whereas for a joint operation the venturer will recognize its share of the assets, liabilities, revenue and expenses of the joint operation. Under IFRS 11, proportionate consolidation is no longer permitted.IFRS 12 – Disclosure of Interests in Other EntitiesIFRS 12 establishes disclosure requirements for interests in other entities, such as joint arrangements, associates, special purpose vehicles and off balance sheet vehicles. The standard carries forward existing disclosures and also introduces significant additional disclosure requirements that address the nature of, and risks associated with, an entity’s interests in other entities.IFRS 13 – Fair Value MeasurementIFRS 13 is a comprehensive standard for fair value measurement and disclosure requirements for use across all IFRS standards. The new standard clarifies that fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It also establishes disclosures about fair value measurement. |
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| 4. | RECENT ACCOUNTING PRONOUNCEMENTS (continued) IAS 27 – Separate Financial StatementsAs a result of the issue of IFRS 10, IFRS 11 and IFRS 12, IAS 27 Separate Financial Statements has been reissued, as the consolidation guidance will now be included in IFRS 10. IAS 27 has been reissued to only prescribe the accounting and disclosure requirements for investments in subsidiaries, joint ventures and associates when an entity prepares separate financial statements.IAS 28 – Investments in Associates and Joint VenturesAs a consequence of the issuance of IFRS 10, IFRS 11 and IFRS 12, IAS 28 has been amended to provide accounting guidance for investments in associates and sets out the requirements for the application of the equity method when accounting for investments in associates and joint ventures. The amended IAS 28 is applied by all entities that are investors with joint control of, or significant influence over, an investee.IAS 1 – Presentation of Financial StatementsIn June 2011, the IASB issued an amendment to IAS 1, which requires entities to separately present items in other comprehensive income based on whether or not they may be reclassified to profit or loss in future periods.IFRIC 20 –Stripping Costs in the Production Phase of a Surface MineIn October 2011, the IASB issued IFRIC 20, which requires the capitalization and depreciation of stripping costs in the production phase if an entity can demonstrate (i) that it is probable future economic benefits will flow to the entity, (ii) the component of the ore body for which the access has been improved is identifiable, (iii) the costs related to the stripping activity associated with that component can be reliably measured.Future IFRS standards and interpretations - A number of new standards and amendments to standards and interpretations are not yet effective for the year ended December 31, 2013 and have not been applied in preparing these consolidated financial statements. The following standards will be adopted effective January 1, 2014:IAS 36 – Impairment of AssetsIn May 2013, the IASB issued an amendment to address the disclosure of information about the recoverable amount of impaired assets or a CGU for periods in which an impairment loss has been recognized or reversed. The amendments also address disclosure requirements applicable when and asset’s or a CGU’s recoverable amount is based on fair value less costs of disposal. Management is currently evaluating the impact the final interpretation is expected to have on the Company’s consolidated financial statements.IFRIC 21 – LeviesIn May 2013, the IASB issued IFRIC 21, Levies (“IFRIC 21”), an interpretation of IAS 37, Provisions, Contingent Liabilities and Contingent Assets (“IAS 37”), on the accounting for levies imposed by governments. IAS 37 sets out criteria for the recognition of a liability, one of which is the requirement for the entity to have a present obligation as a result of a past event (“obligating event”). IFRIC 21 clarifies that the obligating event that gives rise to a liability to pay a levy is the activity described in the relevant legislation that triggers the payment of the levy. Management is currently evaluating the impact the final interpretation is expected to have on the Company’s consolidated financial statements. |
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| 4. | RECENT ACCOUNTING PRONOUNCEMENTS (continued) The following standard will be adopted effective January 1, 2015:IFRS 9 – Financial Instruments: Classification and MeasurementAs issued, IFRS 9 reflects the first phase of the IASB’s work on the replacement of IAS 39, Financial Instruments: Recognition and Measurement ("IAS 39") and applies to classification and measurement of financial assets and financial liabilities as defined in IAS 39. The standard was initially effective for annual periods beginning on or after January 1, 2013. However, the IASB tentatively decided to require mandatory adoption of Amendments to IFRS 9: Mandatory Effective Date of IFRS 9 and Transition Disclosures, issued in December 2011, on or after January 1, 2015.In subsequent phases, the IASB will address hedge accounting and impairment of financial assets. Management will quantify the effect in conjunction with the other phases, when the final standard, including all phases, is issued. |
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| 5.  | SALES TAXES RECOVERABLE The Company’s sales taxes recoverable consist of the Mexican I.V.A. (“VAT”) and Canadian sales taxes (“GST/HST”) recoverable. |
|----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                    |   | 2013   |    |   | 2012   |   |
|-------------------------|--------|--------|---------|--------|--------|--------|
|                    |   |   |    |   |   |   |
| VAT recoverable         |   | $      | 292,242 |   |   | $      | 167,340 |   |
| GST/HST recoverable     |   |   | 14,859  |   |   |   | 28,838 |   |
|                    |   |   |    |   |   |   |   |   |
| Sales taxes recoverable |   | $      | 307,101 |   |   | $      | 196,178 |   |

| 6.  | INVENTORY |
|----------|-----------|

|                        |   | 2013   |      |   | 2012   |   |
|-----------------------------|--------|--------|-----------|--------|--------|--------|
|                        |   |   |      |   |   |   |
| Concentrate inventory       |   | $      | 448,019   |   |   | $      | 631,859 |   |
| Process material stockpiles |   |   | 1,041,994 |   |   |   | 1,384,973 |   |
| Materials and supplies      |   |   | 364,455   |   |   |   | 209,008 |   |
|                        |   |   |      |   |   |   |   |   |
|                        |   | $      | 1,854,468 |   |   | $      | 2,225,840 |   |

|   | The amount of inventory recognized as an expense for the year ended December 31, 2013 totalled $8,968,409 (2012 – $1,434,569), and includes production costs and depreciation and depletion directly attributable to the inventory production process. |
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| 7.  | EXPLORATION AND EVALUATION ASSETS The Company has accumulated the following acquisition, exploration and evaluation costs which are not subject to depletion: |
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|                                    |   | Durango, Mexico |       |   | British Columbia, Canada |   |   | Yukon, Canada |   |   | Total  |   |
|-----------------------------------------|--------|-----------------|------------|--------|--------------------------|--------|--------|---------------|--------|--------|--------|--------|
|                                    |   |            |       |   |                     |   |   |          |   |   |   |   |   |
| Balance, January 1, 2012                |   | $               | 16,269,207 |   |                     | $      | 3      |          |   | $      | 5,144  |   |   | $ | 16,274,354 |   |
|                                    |   |            |       |   |                     |   |   |          |   |   |   |   |   |   |   |   |
| Costs incurred during 2012:             |   |            |       |   |                     |   |   |          |   |   |   |   |   |   |   |   |
| Assays                                  |   |            | 49,685     |   |                     |   | -      |          |   |   | -      |   |   |   | 49,685 |   |
| Rights extension (Note 7(a)(iv))        |   |            | 250,100    |   |                     |   | -      |          |   |   | -      |   |   |   | 250,100 |   |
| Assessments and taxes                   |   |            | 86,870     |   |                     |   | -      |          |   |   | -      |   |   |   | 86,870 |   |
| Drilling and exploration                |   |            | 2,124,503  |   |                     |   | -      |          |   |   | -      |   |   |   | 2,124,503 |   |
| Geological and related services         |   |            | 131,856    |   |                     |   | -      |          |   |   | -      |   |   |   | 131,856 |   |
| Sales of concentrate                    |   |            | (3,490,581 | )      |                     |   | -      |          |   |   | -      |   |   |   | (3,490,581 | ) |
| Depreciation of plant and equipment     |   |            | 204,334    |   |                     |   | -      |          |   |   | -      |   |   |   | 204,334 |   |
| Effect of movements in exchange rates   |   |            | (136,511   | )      |                     |   | -      |          |   |   | -      |   |   |   | (136,511 | ) |
| Transfer to mining properties (Note 10) |   |            | (2,661,265 | )      |                     |   | -      |          |   |   | -      |   |   |   | (2,661,265 | ) |
| Property option proceeds (Note 8(b))    |   |            | -          |   |                     |   | -      |          |   |   | (5,143 | )      |   |   | (5,143 | ) |
| Balance, December 31, 2012              |   | $               | 12,828,198 |   |                     | $      | 3      |          |   | $      | 1      |   |   | $ | 12,828,202 |   |
|                                    |   |            |       |   |                     |   |   |          |   |   |   |   |   |   |   |   |
| Costs incurred during 2013:             |   |            |       |   |                     |   |   |          |   |   |   |   |   |   |   |   |
| Assessments and taxes                   |   |            | 181,048    |   |                     |   | -      |          |   |   | -      |   |   |   | 181,048 |   |
| Drilling and exploration                |   |            | 524,433    |   |                     |   | -      |          |   |   | -      |   |   |   | 524,433 |   |
| Reclamation provision                   |   |            | 1,500,000  |   |                     |   | -      |          |   |   | -      |   |   |   | 1,500,000 |   |
| Geological and related services         |   |            | 196,431    |   |                     |   | -      |          |   |   | -      |   |   |   | 196,431 |   |
| Depreciation of plant and equipment     |   |            | 240,021    |   |                     |   | -      |          |   |   | -      |   |   |   | 240,021 |   |
| Effect of movements in exchange rates   |   |            | 216,041    |   |                     |   | -      |          |   |   | -      |   |   |   | 216,041 |   |
|                                    |   |            |       |   |                     |   |   |          |   |   |   |   |   |   |   |   |
| Balance, December 31, 2013              |   | $               | 15,686,172 |   |                     | $      | 3      |          |   | $      | 1      |   |   | $ | 15,686,176 |   |

|   | Additional information on the Company’s exploration and evaluation properties by region is as follows: |
|--------|--------------------------------------------------------------------------------------------------------------|

| (a)   | Durango, Mexico The Company’s subsidiary Avino Mexico owns 42 mineral claims and leases 4 mineral claims under leased concessions in the state of Durango, Mexico. The Company’s mineral claims in Mexico are divided into the following four groups: (i) Avino mine area propertyThe Avino mine area property is situated around the towns of Panuco de Coronado and San Jose de Avino and surrounding the historic Avino mine site. There are four exploration concessions covering 154.4 hectares, 24 exploitation concessions covering 1,284.7 hectares and one leased exploitation concession covering 98.83 hectares. Within the Avino mine site area is the Company’s San Gonzalo mine which achieved production levels intended by management as of October 1, 2012 and on that date accumulated exploration and evaluation costs for the San Gonzalo mine were transferred to mining properties (see Note 10). |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| 7. | EXPLORATION AND EVALUATION ASSETS (continued) |
|----|-----------------------------------------------|

|   | (ii) Gomez Palacio property |
|--------|-----------------------------|

|   | The Gomez Palacio property is located near the town of Gomez Palacio, and consists of nine exploration concessions covering 2,549 hectares. (iii) Santiago Papasquiaro property The Santiago Papasquiaro property is located near the village of Papasquiaro, and consists of four exploration concessions covering 2,552.6 hectares and one exploitation concession covering 602.9 hectares. (iv) Unification Las Platosa propertiesThe Unification Las Platosa properties are situated within the Avino mine area property around the towns of Panuco de Coronado and San Jose de Avino and surrounding the formerly producing Avino mine.In February 2012, the Company’s wholly-owned Mexican subsidiary entered into a new agreement with Minerales de Avino, S.A. de C.V. (“Minerales”) whereby Minerales has indirectly granted to the Company the exclusive right to explore and mine the La Platosa property known as the “ET zone”.Under the agreement, the Company has obtained the exclusive right to explore and mine the property for an initial period of 15 years, with the option to extend the agreement for another 5 years. In consideration of the granting of these rights, the Company issued 135,189 common shares with a fair value of $250,100.The Company has agreed to pay to Minerales a royalty equal to 3.5% of net smelter returns (“NSR”) at the commencement of commercial production from the property. In addition, after the development period, if the minimum monthly processing rate of the mine facilities is less than 15,000 tonnes, then the Company must pay to Minerales a minimum royalty equal to the applicable NSR royalty based on processing at a monthly rate of 15,000 tonnes. Minerales has also granted to the Company the exclusive right to purchase a 100% interest in the property at any time during the term of the agreement (or any renewal thereof), upon payment of US$8 million within 15 days of the Company’s notice of election to acquire the property. The purchase would be subject to a separate purchase agreement for the legal transfer of the property. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | British Columbia, Canada The Company’s mineral claims in British Columbia encompass three properties: Aumax, Minto, and Olympic-Kelvin, each of which consist of 100% owned Crown-granted mineral claims located in the Lillooet Mining Division. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Yukon, Canada The Company has a 100% interest in 14 quartz leases located in the Mayo Mining Division of Yukon, Canada which collectively comprise the Eagle property. In January 2012, the Company entered into an option agreement on the Eagle property (refer to Note 8(b)). |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| 8.   | MINERAL PROPERTY OPTION AGREEMENTS The Company has two option agreements on certain mineral properties included in exploration and evaluation assets. During the year ended December 31, 2013, a total of $69,500 was recognized as mineral property option income in respect of payments received under these two option agreements (2012 - $54,317). |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a) | On July 30, 2012, the Company entered into an option and joint venture agreement with Endeavour Silver Corp. ("Endeavour"), whereby Endeavour was granted the option to acquire up to a 75% interest in the Laberinto property, consisting of approximately 91.7 hectares located in Durango State, Mexico. In order to exercise the option, Endeavour must pay a total of US$200,000 to the Company, and incur a total of US$3,000,000 in exploration work as follows: |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                               |   |   | Cash   |    |   |   | Exploration Expenditures |   |
|----------------------------------------------------|--------|--------|--------|---------|--------|--------|--------------------------|--------|
|                                               |   |   |   |    |   |   |                     |   |
| Upon signing July 30, 2012 (received)              | US$    |   |   | 20,000  |   | US$    |                     |   | – |   |
| On or before July 30, 2013 (received and incurred) |   |   |   | 30,000  |   |   |                     |   | 300,000 |   |
| On or before July 30, 2014                         |   |   |   | 40,000  |   |   |                     |   | 500,000 |   |
| On or before July 30, 2015                         |   |   |   | 50,000  |   |   |                     |   | 1,000,000 |   |
| On or before July 30, 2016                         |   |   |   | 60,000  |   |   |                     |   | 1,200,000 |   |
|                                               |   |   |   |    |   |   |                     |   |   |   |
|                                               | US$    |   |   | 200,000 |   | US$    |                     |   | 3,000,000 |   |

|   |   | Upon Endeavour acquiring its 75% interest, a joint venture will be formed, under which if any party does not contribute its proportionate share of costs, its participating interest will be diluted on a pro rata basis according to the contributions of all parties. If any party's participating interest is reduced to 10% or less, then its interest will be automatically converted into a 2.5% net smelter returns royalty. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | In January 2012, the Company entered into an option agreement with Avaron Mining Corp. (“Avaron”), a private Canadian company, whereby Avaron can earn the exclusive right and option to acquire a 100% title to and interest in the Company’s Eagle property located in the Yukon Territory. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | In April 2013, the option agreement was assigned to Benz Capital Corp (“Benz”), a Canadian public company, pursuant to the terms of an option purchase and assignment agreement dated November 30, 2012. Pursuant to the agreement, Benz acquired all of Avaron’s interest in the option agreement between Avaron and Avino. As consideration for Avino’s consent to the agreement, Benz and Avaron issued to Avino 50,000 common shares with a fair value of $14,500 (Note 12) and 250,000 common shares with a fair value of $25,000 respectively. The terms of the agreement allow Benz to earn a 75% interest by making total cash payments of $350,000, issuing 550,000 common shares, incurring exploration costs of $100,000, and drilling 35,000 meters (or incurring exploration costs of up to $7,100,000) as follows: |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                           |   | Cash   |    |   | Exploration Expenditures |   |      | Number of Shares |   |
|------------------------------------------------|--------|--------|---------|--------|--------------------------|--------|-----------|------------------|--------|
|                                           |   |   |    |   |                     |   |      |             |   |
| On approval of the agreement by TSX (received) |   | $      | – |   |                     | $      | –   |             |   |   | 50,000 |   |
| On or before January 31, 2014 (incurred)       |   |   | – |   |                     |   | 100,000   |             |   |   | – |   |
| On or before January 31, 2015                  |   |   | 100,000 |   |                     |   | 625,000   |             |   |   | – |   |
| On or before January 31, 2016                  |   |   | 100,000 |   |                     |   | 1,000,000 |             |   |   | 250,000 |   |
| On or before January 31, 2017                  |   |   | 50,000  |   |                     |   | 2,000,000 |             |   |   | 250,000 |   |
| On or before January 31, 2018                  |   |   | 100,000 |   |                     |   | 3,375,000 |             |   |   | – |   |
|                                           |   |   |    |   |                     |   |      |             |   |   |   |   |
|                                           |   | $      | 350,000 |   |                     | $      | 7,100,000 |             |   |   | 550,000 |   |

----

----

| 8.   | MINERAL PROPERTY OPTION AGREEMENTS (continued) After the initial 75% interest is earned, Benz may elect to either form a Joint Venture with the Company, or to earn the remaining 25% interest by paying a series of annual advance royalties and completing other activities as defined in the option agreement. Upon signing the original agreement with Avaron, the Company received a cash payment of $25,000 and 150,000 common shares of Avaron. Of the cash payment $5,143 was recorded as a reduction to the carrying value of the Eagle property, resulting in a carrying value of $1 for the Eagle property within exploration and evaluation assets. The remaining cash proceeds of $19,857 were recorded as option income along with the $15,000 fair value of the 150,000 common shares. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 9.   | NON-CONTROLLING INTEREST At December 31, 2013, the Company had an effective 99.66% (2012 - 99.28%) interest in its subsidiary Avino Mexico and the remaining 0.34% (2012 - 0.72%) interest represents a non-controlling interest. The accumulated deficit and current year income attributable to the non-controlling interest are insignificant and accordingly have not been recognized in the consolidated financial statements. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| 10.   | PLANT, EQUIPMENT AND MINING PROPERTIES |
|-----------------|----------------------------------------|

|                                   |   |  Miningproperties |      |   | Office equipment, furniture, and fixtures |   |   | Computer equipment |   |   | Mine machinery and transportation equipment |   |   | Mill machinery and processing equipment |      |   | Buildings |   |      | TOTAL  |   |
|----------------------------------------|--------|------------------------|-----------|--------|-------------------------------------------|--------|--------|--------------------|--------|--------|---------------------------------------------|--------|--------|-----------------------------------------|-----------|--------|-----------|--------|-----------|--------|--------|
|                                   |   | $                      |      |   | $                                         |   |   | $                  |   |   | $                                           |   |   | $                                       |      |   | $         |   |      | $      |   |
| COST                                   |   |                   |      |   |                                      |   |   |               |   |   |                                        |   |   |                                    |      |   |      |   |      |   |   |   |   |   |   |   |   |   |
| Balance at January 1, 2012             |   |                   | -         |   |                                      |   | 14,180 |               |   |   | 32,459                                      |   |   |                                    | 1,193,217 |   |      |   | 1,712,014 |   |   |   | 328,769 |   |   |   | 3,280,639 |   |
| Additions                              |   |                   | 2,661,265 |   |                                      |   | 7,125  |               |   |   | 57,576                                      |   |   |                                    | 547,663   |   |      |   | 368,755   |   |   |   | - |   |   |   | 3,642,384 |   |
| Effect of movements in exchange rates  |   |                   | 19,055    |   |                                      |   | 82     |               |   |   | 643                                         |   |   |                                    | 12,426    |   |      |   | 14,704    |   |   |   | 2,343 |   |   |   | 49,253 |   |
| Balance at December 31, 2012           |   |                   | 2,680,320 |   |                                      |   | 21,387 |               |   |   | 90,678                                      |   |   |                                    | 1,753,306 |   |      |   | 2,095,473 |   |   |   | 331,112 |   |   |   | 6,972,276 |   |
| Additions                              |   |                   | 607,068   |   |                                      |   | 23,592 |               |   |   | 21,852                                      |   |   |                                    | 2,894,154 |   |      |   | 1,292,746 |   |   |   | 173,676 |   |   |   | 5,013,088 |   |
| Effect of movements in exchange rates  |   |                   | 145,640   |   |                                      |   | 1,162  |               |   |   | 4,927                                       |   |   |                                    | 95,268    |   |      |   | 113,860   |   |   |   | 17,991 |   |   |   | 378,848 |   |
| Balance at December 31, 2013           |   |                   | 3,433,028 |   |                                      |   | 46,141 |               |   |   | 117,457                                     |   |   |                                    | 4,742,728 |   |      |   | 3,502,079 |   |   |   | 522,779 |   |   |   | 12,364,212 |   |
|                                   |   |                   |      |   |                                      |   |   |               |   |   |                                        |   |   |                                    |      |   |      |   |      |   |   |   |   |   |   |   |   |   |
| ACCUMULATED DEPLETION AND DEPRECIATION |   |                   |      |   |                                      |   |   |               |   |   |                                        |   |   |                                    |      |   |      |   |      |   |   |   |   |   |   |   |   |   |
| Balance at January 1, 2012             |   |                   | -         |   |                                      |   | 5,912  |               |   |   | 14,424                                      |   |   |                                    | 146,648   |   |      |   | 73,030    |   |   |   | 16,656 |   |   |   | 256,670 |   |
| Additions                              |   |                   | 93,518    |   |                                      |   | 2,149  |               |   |   | 9,042                                       |   |   |                                    | 235,149   |   |      |   | 42,529    |   |   |   | 20,093 |   |   |   | 402,480 |   |
| Effect of movements in exchange rates  |   |                   | 670       |   |                                      |   | 12     |               |   |   | 167                                         |   |   |                                    | 2,716     |   |      |   | 820       |   |   |   | 261 |   |   |   | 4,646 |   |
| Balance at December 31, 2012           |   |                   | 94,188    |   |                                      |   | 8,073  |               |   |   | 23,633                                      |   |   |                                    | 384,513   |   |      |   | 116,379   |   |   |   | 37,010 |   |   |   | 663,796 |   |
| Additions                              |   |                   | 122,474   |   |                                      |   | 5,097  |               |   |   | 11,264                                      |   |   |                                    | 510,939   |   |      |   | 98,682    |   |   |   | 351,275 |   |   |   | 1,099,731 |   |
| Effect of movements in exchange rates  |   |                   | 5,117     |   |                                      |   | 439    |               |   |   | 1,284                                       |   |   |                                    | 20,893    |   |      |   | 6,324     |   |   |   | 2,011 |   |   |   | 36,068 |   |
| Balance at December 31, 2013           |   |                   | 221,779   |   |                                      |   | 13,609 |               |   |   | 36,181                                      |   |   |                                    | 916,345   |   |      |   | 221,385   |   |   |   | 390,296 |   |   |   | 1,799,595 |   |
|                                   |   |                   |      |   |                                      |   |   |               |   |   |                                        |   |   |                                    |      |   |      |   |      |   |   |   |   |   |   |   |   |   |
| NET BOOK VALUE                         |   |                   |      |   |                                      |   |   |               |   |   |                                        |   |   |                                    |      |   |      |   |      |   |   |   |   |   |   |   |   |   |
| At December 31, 2013                   |   |                   | 3,211,249 |   |                                      |   | 32,532 |               |   |   | 81,276                                      |   |   |                                    | 3,826,383 |   |      |   | 3,280,694 |   |   |   | 132,483 |   |   |   | 10,564,617 |   |
| At December 31, 2012                   |   |                   | 2,586,132 |   |                                      |   | 13,314 |               |   |   | 67,045                                      |   |   |                                    | 1,368,793 |   |      |   | 1,979,094 |   |   |   | 294,102 |   |   |   | 6,308,480 |   |

----

----

| 10. | PLANT, EQUIPMENT AND MINING PROPERTIES (continued) The mining properties consist of the San Gonzalo mining concession which covers 12 hectares and is located approximately 2 km from the historic Avino mine site. The San Gonzalo mine achieved production levels intended by management as of October 1, 2012, and the Company began to record depletion at that time.Mine machinery and transportation equipment includes $456,414 in construction in progress as at December 31, 2013 (December 31, 2012 - $Nil), on which no depreciation was charged in the year ended December 31, 2013. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 11.  | INVESTMENTS IN RELATED COMPANIES Investments in related companies comprise the following: |
|-----------|------------------------------------------------------------------------------------------------|

|                                   |   |   |    |   | Accumulated Unrealized |   |     | Fair ValueDecember 31, |   |   | Fair ValueDecember 31, |   |
|----------------------------------------|--------|--------|---------|--------|------------------------|--------|----------|------------------------|--------|--------|------------------------|--------|
|                                   |   | Cost   |    |   | Gains (Losses)         |   |     | 2013                   |   |   | 2012                   |   |
|                                   |   |   |    |   |                   |   |     |                   |   |   |                   |   |
| (a) Bralorne Gold Mines Ltd.           |   | $      | 205,848 |   |                   | $      | (148,521 | )                      |   | $      | 57,327                 |   |   | $ | 134,362 |   |
| (b) Levon Resources Ltd.               |   |   | 4,236   |   |                   |   | 32,476   |                   |   |   | 36,712                 |   |   |   | 60,010 |   |
| (c) Oniva International Services Corp. |   |   | 1       |   |                   |   | -        |                   |   |   | 1                      |   |   |   | 1 |   |
|                                   |   |   |    |   |                   |   |     |                   |   |   |                   |   |   |   |   |   |
|                                   |   | $      | 210,085 |   |                   | $      | (116,045 | )                      |   | $      | 94,040                 |   |   | $ | 194,373 |   |

|   | During the year ended December 31, 2013, the Company recorded a $99,833 unrealized loss (2012 - $110,021 loss, 2011 - $212,966 loss) on investments in related companies, representing the change in fair value during the year. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a)  | Bralorne Gold Mines Ltd. (“Bralorne”)The Company’s investment in Bralorne consists of 179,149 common shares with a quoted market value of $57,327 as at December 31, 2013 (2012 - $134,362). Bralorne is a public company with common directors. |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)  | Levon Resources Ltd. (“Levon”) The Company’s investment in Levon consists of 141,200 common shares with a quoted market value of $36,712 as at December 31, 2013 (2012 - $60,010). Levon is a public company with common directors. |
|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)  | Oniva International Services Corp. (“Oniva”) The Company owns a 16.67% interest in Oniva, a private company with common management, which provides office and administration services to the Company. The remaining 83.33% is shared equally between five other companies that are related by some common directors and management. See Note 20 for disclosure of the Company’s commitments with Oniva. |
|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| 12. | INVESTMENTS IN OTHER COMPANIES The Company classifies its investments in other companies as a long-term investment designated at fair value through profit and loss, summarized as follows: |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                    |   |   |   |   | Accumulated Unrealized |   |   | Fair ValueDecember 31, |   |   | Fair ValueDecember 31, |   |
|-------------------------|--------|--------|--------|--------|------------------------|--------|--------|------------------------|--------|--------|------------------------|--------|
|                    |   | Cost   |   |   | Gains (Losses)         |   |   | 2013                   |   |   | 2012                   |   |
|                    |   |   |   |   |                   |   |   |                   |   |   |                   |   |
| (a) Avaron Mining Corp. |   | $      | 40,000 |   |                   | $      | -      |                   |   | $      | 40,000                 |   |   | $ | 15,000 |   |
| (b) Benz Capital Corp.  |   |   | 14,500 |   |                   |   | 500    |                   |   |   | 15,000                 |   |   |   | - |   |
|                    |   |   |   |   |                   |   |   |                   |   |   |                   |   |   |   |   |   |
|                    |   | $      | 54,500 |   |                   | $      | 500    |                   |   | $      | 55,000                 |   |   | $ | 15,000 |   |

| (a)   | Avaron Mining Corp. (“Avaron”) In January 2012, the Company acquired 150,000 common shares of Avaron at a cost of $15,000. In April 2013, Avino received an additional 250,000 common shares at a cost of $25,000 in accordance with the consent to assign the option agreement with Avaron described in Note 8(b). |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Benz Capital Corp. (“Benz”) In April 2013, the Company acquired 50,000 common shares of Benz Capital Corp. as part of the option agreement with Benz described in Note 8(b). The value assigned to the investment is based on the market price of Benz’s common shares on the date the agreement was entered into. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 13. | RECLAMATION PROVISION Management’s estimate of the reclamation provision at December 31, 2013 is a present value of $1,833,938 (December 31, 2012 - $323,140). The present value of the obligation was calculated using a risk-free interest rate of 7% (2012 – 7%) and an inflation rate of 4.25% (2012 – 4.0%). Reclamation activities are estimated to occur over a period of years beginning in 2019 to 2023. The undiscounted value of the obligation is $2,274,153 (2012 - $368,709). A reconciliation of the changes in the reclamation provision is summarized as follows: |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                            |   | December 31, 2013 |      |   | December 31, 2012 |   |
|-------------------------------------------------|--------|-------------------|-----------|--------|-------------------|--------|
|                                            |   |              |      |   |              |   |
| Balance at beginning of year                    |   | $                 | 323,140   |   |              | $      | 292,000 |   |
| Unwinding of discount                           |   |              | 21,596    |   |              |   | 31,140 |   |
| Change in estimates                             |   |              | (10,798   | )      |              |   | - |   |
| Initial recognition of provision for Avino Mine |   |              | 1,500,000 |   |              |   | - |   |
| Balance at end of year                          |   | $                 | 1,833,938 |   |              | $      | 323,140 |   |

----

----

| 14. | SHARE CAPITAL |
|-----|---------------|

| (a)   | Authorized: Unlimited common shares without par value |
|-----------------|-------------------------------------------------------|

| (b)   | Issued: |
|-----------------|---------|

| (i)   | During the year ended December 31, 2013, the Company issued 361,418 common shares upon exercise of stock options. |
|-----------------|-------------------------------------------------------------------------------------------------------------------|

| (ii)   | On February 22, 2012, the Company issued 135,189 common shares under a 20 year royalty agreement with Minerales de Avino S.A. de C.V. The market price of the common shares on February 22, 2012 was $1.85 per share. |
|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Warrants: During 2013 and 2012 there were no warrants issued or exercised. During the year ended December 31, 2013, 5,211,000 warrants expired unexercised. Details of share purchase warrants outstanding are as follows: |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                       |   | Underlying Shares |      |   | Weighted Average Exercise Price |   |
|----------------------------|--------|-------------------|-----------|--------|---------------------------------|--------|
| Balance, December 31, 2011 |   |              | 5,211,000 |   |                            | $      | 2.05 |   |
| Balance, December 31, 2012 |   |              | 5,211,000 |   |                            | $      | 2.05 |   |
| Balance, December 31, 2013 |   |              | -         |   |                            |   | - |   |

|              |   | Exercise Price |   |   | Warrants Outstanding and Exercisable |   |
|-------------------|--------|----------------|--------|--------|--------------------------------------|--------|
| Expiry Date       |   | perShare       |   |   | December 31,2013                     |   |   | December 31,2012 |   |
|              |   |           |   |   |                                 |   |   |   |   |
| November 10, 2013 |   | $              | 1.52   |   |                                 |   | - |   |   |   | 2,400,000 |   |
| December 22, 2013 |   | $              | 2.50   |   |                                 |   | - |   |   |   | 2,811,000 |   |

| (d)   | Stock options: The Company has a stock option plan to purchase the Company’s common shares under which it may grant stock options of up to 10% of the Company’s total number of shares issued and outstanding on a non-diluted basis. The stock option plan provides for the granting of stock options to directors, officers and employees (up to a limit of 5%) and to persons providing investor relations or consulting services (up to a limit of 2%), the limits being based on the Company’s total number of issued and outstanding shares per year. The stock options vest on the date of grant, except for those issued to persons providing investor relations or consulting services, which vest over a period of one year. The option price must be greater or equal to the discounted market price on the grant date and the option term cannot exceed five years from the grant date. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| 14. | SHARE CAPITAL (continued) |
|-----|---------------------------|

| (d)   | Stock options (continued) Continuity of stock options for the years ended December 31, 2013 and 2012 is as follows: |
|-----------------|--------------------------------------------------------------------------------------------------------------------------|

|                                                         |   | UnderlyingShares |      |   | Weighted Average Exercise Price |   |
|--------------------------------------------------------------|--------|------------------|-----------|--------|---------------------------------|--------|
|                                                         |   |             |      |   |                            |   |
| Stock options outstanding and exercisable, December 31, 2011 |   |             | 2,622,000 |   |                            | $      | 1.80 |   |
| Granted                                                      |   |             | 30,000    |   |                            | $      | 2.00 |   |
| Forfeited                                                    |   |             | (90,000   | )      |                            | $      | 2.17 |   |
| Expired                                                      |   |             | -         |   |                            |   | - |   |
| Exercised                                                    |   |             | (82,000   | )      |                            | $      | 0.92 |   |
|                                                         |   |             |      |   |                            |   |   |   |
| Stock options outstanding and exercisable, December 31, 2012 |   |             | 2,480,000 |   |                            | $      | 1.81 |   |
| Granted                                                      |   |             | 650,000   |   |                            | $      | 1.61 |   |
| Forfeited                                                    |   |             | (55,000   | )      |                            | $      | 1.71 |   |
| Expired                                                      |   |             | (70,625   | )      |                            | $      | 1.60 |   |
| Exercised                                                    |   |             | (361,418  | )      |                            | $      | 0.82 |   |
|                                                         |   |             |      |   |                            |   |   |   |
| Stock options outstanding and exercisable, December 31, 2013 |   |             | 2,642,957 |   |                            | $      | 1.16 |   |

|               |   |           |   |   | Stock Options Outstanding |   |
|--------------------|--------|----------------|--------|--------|---------------------------|--------|
| Expiry Date        |   | Exercise Price |   |   | 2013                      |   |   | 2012 |   |   | 2011 |   |
|               |   |           |   |   |                      |   |   |   |   |   |   |   |
| January 16, 2013   |   | $              | 2.00   |   |                      |   | - |   |   |   | 30,000 |   |   |   | - |   |
| February 27, 2013  |   | $              | 1.65   |   |                      |   | - |   |   |   | 10,000 |   |   |   | 10,000 |   |
| February 27, 2013  |   | $              | 0.75   |   |                      |   | - |   |   |   | 295,000 |   |   |   | 295,000 |   |
| December 9, 2013   |   | $              | 2.00   |   |                      |   | - |   |   |   | 20,000 |   |   |   | 20,000 |   |
| September 22, 2014 |   | $              | 0.75   |   |                      |   | - |   |   |   | 25,000 |   |   |   | 60,000 |   |
| January 14, 2015   |   | $              | 0.81   |   |                      |   | 60,000 |   |   |   | 60,000 |   |   |   | 60,000 |   |
| September 10, 2015 |   | $              | 1.05   |   |                      |   | 268,357 |   |   |   | 290,000 |   |   |   | 337,000 |   |
| January 18, 2016   |   | $              | 1.02   |   |                      |   | 924,600 |   |   |   | 960,000 |   |   |   | 1,010,000 |   |
| September 30, 2016 |   | $              | 1.02   |   |                      |   | 760,000 |   |   |   | 790,000  |   |   |   | 830,000 |   |
| February 18, 2018  |   | $              | 1.60   |   |                      |   | 230,000 |   |   |   |  - |   |   |   | - |   |
| Stember 9, 2018    |   | $              | 1.62   |   |                      |   |   400,000 |   |   |   |  - |   |   |   |  - |   |
|               |   |           |   |   |                      |   | 2,642,957 |   |   |   | 2,480,000 |   |   |   | 2,622,000 |   |

----

| 14. | SHARE CAPITAL (continued) |
|-----|---------------------------|

| (e)  | Earnings per share: The calculations for earnings per share and diluted earnings per share are as follows: |
|-----------|-----------------------------------------------------------------------------------------------------------------|

|                           |   | 2013 |    |   | 2012   |   |       | 2011 |   |
|--------------------------------|--------|------|---------|--------|--------|--------|------------|------|--------|
| Net income (loss) for the year |   | $    | 848,212 |   |   | $      | (1,263,178 | )    |   | $ | (4,184,351 | ) |

| Basic weighted average number of shares outstanding   |   |   | 27,405,179 |   |   |   | 27,072,053 |   |   |   | 26,795,632 |   |
|-------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|--------|------------|--------|
| Effect of dilutive share options                      |   |   | 296,224    |   |   |   | -          |   |   |   | -          |   |
| Diluted weighted average number of shares outstanding |   |   | 27,701,403 |   |   |   | 27,072,053 |   |   |   | 26,795,632 |   |

|    |   | 2013 |   |   | 2012   |   |   | 2011 |   |
|---------|--------|------|--------|--------|--------|--------|--------|------|--------|
| Basic   |   | $    | 0.03   |   |   | $      | (0.05  | )    |   | $ | (0.16 | ) |
| Diluted |   | $    | 0.03   |   |   | $      | (0.05  | )    |   | $ | (0.16 | ) |

| 15. | SHARE-BASED PAYMENTS During the year ended December 31, 2013, the Company granted stock options to directors, officers, employees, directors, and consultants of the Company to purchase up to a total of 650,000 common shares at a weighted average exercise price of $1.61 per share pursuant to the Company’s stock option plan. The options vest on dates ranging from the grant date to September 9, 2014. The options are exercisable on or before September 9, 2018. The Company recorded $647,762 as share-based compensation for the options vested during the period. During the year ended December 31, 2013, the Company re-priced 1,725,000 previously granted incentive stock options to directors, officers, employees, and consultants to a price of $1.02 per share. The incentive stock options had originally been granted at prices of $2.30 and $2.00 per share. The incremental fair value of the re-priced options of $260,600 was charged to share-based compensation. During the year ended December 31, 2012, the Company granted stock options to consultants to purchase up to a total of 30,000 common shares at a weighted average exercise price of $2.00 per share pursuant to the Company’s stock option plan. During the year ended December 31, 2011, the Company granted stock options to various directors, officers, employees, and consultants to purchase up to a total of 1,840,000 common shares at a weighted average exercise price of $2.16 per share pursuant to the Company’s stock option plan.During the year ended December 31, 2013, the Company recorded total amount of share-based payment expense in the amount of $908,362 (2012 - $18,408, 2011 - $2,529,620). |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| 15. | SHARE-BASED PAYMENTS (continued) Option pricing requires the use of highly subjective estimates and assumptions including the expected stock price volatility. The expected volatility used in valuing stock options is based on volatility observed in historical periods. Changes in the underlying assumptions can materially affect the fair value estimates. The fair value of the options re-priced and granted to directors, officers, employees, and consultants was calculated using the Black-Scholes model with the following weighted average assumptions and resulting grant date fair value: |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                      |   | 2013   |   |   | 2012   |   |   | 2011   |   |
|-------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Weighted average assumptions:             |   |   |   |   |   |   |   |   |   |
|  Risk-free interest rate             |   |   | 1.45   | %      |   |   | 1.06   | %      |   |   | 2.05 | % |
|  Expected dividend yield             |   |   | 0      | %      |   |   | 0      | %      |   |   | 0 | % |
|  Expected option life (years)        |   |   | 3.45   |   |   |   | 0.42   |   |   |   | 4.99 |   |
|  Expected stock price volatility     |   |   | 68.29  | %      |   |   | 50.89  | %      |   |   | 76.17 | % |
| Weighted average fair value at grant date |   | $      | 0.55   |   |   | $      | 0.13   |   |   | $ | 1.38 |   |

| 16.  | REVENUE AND COST OF SALES Revenue and the related cost of sales reflect the sale of silver and gold concentrate that was produced at the San Gonzalo and Avino mines during the year ended December 31, 2013. Cost of sales consists of changes in inventories, direct costs including personnel costs, general and administrative costs, energy costs (principally diesel fuel and electricity), maintenance and repair costs, operating supplies, external services, third party smelting, refining and transport fees, and depreciation related to sales and other expenses for the period. Cost of sales is based on the weighted average cost of contained or recoverable ounces sold for the period. Direct costs include the costs of extracting co-products. |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                   |   | 2013   |      |   | 2012   |   |      | 2011   |   |
|----------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
| Direct costs                           |   | $      | 8,019,083 |   |   | $      | 1,246,309 |   |   |   | - |   |
| Depreciation, depletion, and accretion |   |   | 949,326   |   |   |   | 188,260   |   |   |   | - |   |
|                                   |   | $      | 8,968,409 |   |   | $      | 1,434,569 |   |   |   | - |   |

| 17. | RELATED PARTY TRANSACTIONS AND BALANCES |
|-----|-----------------------------------------|

|   | All related party transactions are recorded at the exchange amount which is the amount agreed to by the Company and the related party. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------|

| (a)   | Management transactions |
|-----------------|-------------------------|

|                                    |   | 2013   |      |   | 2012   |   |    | 2011   |   |
|-----------------------------------------|--------|--------|-----------|--------|--------|--------|---------|--------|--------|
| Salaries, benefits, and consulting fees |   | $      | 779,571   |   |   | $      | 243,011 |   |   | $ | 362,173 |   |
| Share‐based payments              |   |   | 420,450   |   |   |   | -       |   |   |   | 2,009,400 |   |
|                                    |   | $      | 1,200,021 |   |   | $      | 243,011 |   |   | $ | 2,371,573 |   |

----

----

| 17. | RELATED PARTY TRANSACTIONS AND BALANCES (continued) |
|-----|-----------------------------------------------------|

| (b)   | Amounts due to related parties In the normal course of operations the Company transacts with companies related to Avino’s directors or officers. All amounts payable are non-interest bearing, unsecured and due on demand. As at December 31, 2013 and 2012 the following amounts were due to related parties: |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                               |   | December 31, 2013 |    |   | December 31, 2012 |   |
|------------------------------------|--------|-------------------|---------|--------|-------------------|--------|
| Directors’ fees              |   | $                 | 10,352  |   |              | $      | 24,469 |   |
| Oniva International Services Corp. |   |              | 135,458 |   |              |   | 147,845 |   |
| Sampson Engineering Inc.           |   |              | 1,840   |   |              |   | 2,400 |   |
| Andrew Kaplan                      |   |              | 1,518   |   |              |   | - |   |
| Jasman Yee & Associates, Inc.  |   |              | 5,040   |   |              |   | - |   |
| Wear Wolfin Design                 |   |              | 2,625   |   |              |   | - |   |
|                               |   | $                 | 156,833 |   |              | $      | 174,714 |   |

| (c)   | Other related party transactions The Company has a cost sharing agreement to reimburse Oniva International Services Corp. (“Oniva”) for its expenses and to pay Oniva a percentage fee as described in Note 20. The transactions with Oniva during the years are summarized below: |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                     |   | 2013   |    |   | 2012   |   |    | 2011   |   |
|--------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Salaries and benefits    |   | $      | 309,816 |   |   | $      | 179,555 |   |   | $ | 151,941 |   |
| Office and miscellaneous |   |   | 292,008 |   |   |   | 276,201 |   |   |   | 240,810 |   |
|                     |   |   |    |   |   |   |    |   |   |   |   |   |
|                     |   | $      | 601,824 |   |   | $      | 455,756 |   |   | $ | 392,751 |   |

| 18. | FINANCE LEASE OBLIGATIONS The Company has entered into mining equipment leases expiring between 2014 and 2018 with interest rates ranging from 1.75% to 4.95% per annum. The Company has the option to purchase the mining equipment at the end of the lease term for a nominal amount. The Company’s obligations under finance leases are secured by the lessor’s title to the leased assets. Plant and equipment includes a net carrying amount of $2,714,933 (2012 - $338,825) for this leased mining equipment. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                              |   | 2013   |      |   | 2012   |   |
|---------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Not later than one year                           |   | $      | 643,312   |   |   | $      | 156,478 |   |
| Later than one year and not later than five years |   |   | 1,146,189 |   |   |   | 78,863 |   |
| Less: Future finance charges                      |   |   | (112,679  | )      |   |   | (389 | ) |
| Present value of minimum lease payments           |   |   | 1,676,822 |   |   |   | 234,952 |   |
| Less: Current portion                             |   |   | (585,845  | )      |   |   | (156,220 | ) |
| Non-current portion                               |   | $      | 1,090,977 |   |   | $      | 78,732 |   |

----

----

| 18. | FINANCE LEASE OBLIGATIONS (continued) On December 20, 2012, the Company entered into a master credit facility of up to US$5 million with Caterpillar Finance in order to acquire equipment necessary for advancing operations at the San Gonzalo Mine and for continuing exploration activities at the Avino Mine. As of December 31, 2013, the Company had US$2,157,487 in available credit remaining under this facility. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 19. | SUPPLEMENTARY CASH FLOW INFORMATION |
|-----|-------------------------------------|

|                                          |   | 2013   |       |   | 2012   |   |       | 2011   |   |
|-----------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
| Net change in non-cash working capital items: |   |   |       |   |   |   |       |   |   |
| Interest receivable                           |   | $      | (4,970     | )      |   | $      | 52,573     |   |   | $ | (49,501 | ) |
| Sales taxes recoverable                       |   |   | (110,923   | )      |   |   | 79,282     |   |   |   | 4,868 |   |
| Accounts receivable                           |   |   | (1,171,047 | )      |   |   | 622,251    |   |   |   | - |   |
| Prepaid expenses                              |   |   | (587,682   | )      |   |   | (40,020    | )      |   |   | (55,775 | ) |
| Inventory                                     |   |   | 371,372    |   |   |   | (2,225,840 | )      |   |   | - |   |
| Accounts payable and accrued liabilities      |   |   | 265,200    |   |   |   | 822,691    |   |   |   | 126,373 |   |
| Income taxes payable                          |   |   | 42,547     |   |   |   | -          |   |   |   | - |   |
| Amounts due to related parties                |   |   | (17,881    | )      |   |   | (29,049    | )      |   |   | 34,498 |   |
|                                          |   | $      | (1,213,384 | )      |   | $      | (718,112   | )      |   | $ | 60,463 |   |

|          |   | 2013 |   |   | 2012   |   |   | 2011   |   |
|---------------|--------|------|--------|--------|--------|--------|--------|--------|--------|
| Interest paid |   | $    | 28,433 |   |   | $      | 1,471  |   |   | $ | - |   |
| Taxes paid    |   | $    | -      |   |   | $      | -      |   |   | $ | - |   |

| 20. | COMMITMENTS The Company has a cost sharing agreement to reimburse Oniva for a percentage of its overhead expenses, to reimburse 100% of its out-of-pocket expenses incurred on behalf of the Company, and to pay a percentage fee based on Oniva’s total overhead and corporate expenses. The agreement may be terminated with one-month notice by either party. Transactions and balances with Oniva are disclosed in Note 17. The Company and its subsidiaries have various operating lease agreements for their office premises, use of land, and equipment. The Company has commitments in respect of these lease agreements as follows: |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                              |   | December 31, 2013 |    |   | December 31, 2012 |   |
|---------------------------------------------------|--------|-------------------|---------|--------|-------------------|--------|
| Not later than one year                           |   | $                 | 254,017 |   |              | $      | 248,512 |   |
| Later than one year and not later than five years |   |              | 364,827 |   |              |   | 597,188 |   |
| Later than five years                             |   |              | 69,499  |   |              |   | 76,506 |   |
|                                              |   | $                 | 688,343 |   |              | $      | 922,206 |   |

----

----

| 21. | FINANCIAL INSTRUMENTS The fair values of the Company’s cash and cash equivalents, interest receivable, sales taxes recoverable, accounts receivable, amounts due to related party, accounts payable and income taxes payable approximate their carrying values because of the short-term nature of these instruments. The fair values of investments in related and other companies are based on quoted market prices. The Company’s financial instruments are exposed to certain financial risks, including credit risk, liquidity risk, and market risk. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a)   | Credit Risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Company has exposure to credit risk through its cash and cash equivalents, sales taxes recoverable, and accounts receivable. The Company manages credit risk, in respect of cash and cash equivalents, by maintaining the majority of cash at highly rated financial institutions. The Company is exposed to a significant concentration of credit risk with respect to its trade accounts receivable balance because all of its concentrate sales are with one counterparty and all of its stockpile sales are with one other counterparty. However, the Company has not recorded any allowance against its trade receivables because to-date all balances owed have been settled in full when due (typically within 60 days of submission) and because of the nature of the counterparties. The Company also has credit risk in respect of its sales taxes recoverable, which are due from the governments of Mexico and Canada. The balances are expected to be recoverable in full due to the Company’s previous collection history and the nature of the counterparties. The Company’s maximum exposure to credit risk at the end of any period is equal to the carrying amount of these financial assets as recorded in the consolidated statement of financial position. At December 31, 2013, no amounts were held as collateral. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Liquidity Risk Liquidity risk is the risk that the Company will encounter difficulty in satisfying financial obligations as they become due. The Company manages its liquidity risk by forecasting cash flows required by its operating, investing and financing activities. The Company had cash and cash equivalents at December 31, 2013 in the amount of $ 3,839,595 (2012 - $4,035,985) in order to meet short-term business requirements. At December 31, 2013, the Company had current liabilities of $2,196,172 (2012 - $1,476,681). Accounts payable have contractual maturities of approximately 30 to 90 days or are due on demand and are subject to normal trade terms. Current portion of finance lease obligations is due within 12 months of the consolidated statement of financial position date. Amounts due to related parties are without stated terms of interest or repayment. Income taxes are payable within 12 months. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Market Risk Market risk consists of interest rate risk, foreign currency risk and price risk. These are discussed further below. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------|

----

----

| 21. | FINANCIAL INSTRUMENTS (continued) |
|-----|-----------------------------------|

| (c)   | Market Risk (continued) Interest Rate Risk Interest rate risk consists of two components: |
|-----------------|-----------------------------------------------------------------------------------------------------|

|   | (i) | To the extent that payments made or received on the Company’s monetary assets and liabilities are affected by changes in the prevailing market interest rates, the Company is exposed to interest rate cash flow risk. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | To the extent that changes in prevailing market rates differ from the interest rates on the Company’s monetary assets and liabilities, the Company is exposed to interest rate price risk. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                     |   | December 31, 2013 |        |   | December 31, 2012 |   |
|------------------------------------------|--------|-------------------|-------------|--------|-------------------|--------|
|                                     |   | MXN               |        |   | USD               |   |   | MXN |   |   | USD |   |
| Cash and cash equivalents                |   | $                 | 6,166,837   |   |              | $      | 2,508,191 |   |   | $ | 3,586,471 |   |   | $ | 1,312,607 |   |
| Sales taxes recoverable                  |   |              | 3,599,484   |   |              |   | - |   |   |   | 2,180,706 |   |   |   | - |   |
| Amounts receivable                       |   |              | 1,897,963   |   |              |   | 1,197,766 |   |   |   | 3,096,083 |   |   |   | 210,076 |   |
| Accounts payable and accrued liabilities |   |              | (10,149,263 | )      |              |   | (408,427 | ) |   |   | (2,775,290 | ) |   |   | (408,437 | ) |
| Finance lease obligations                |   |              | -           |   |              |   | (1,579,402 | ) |   |   | - |   |   |   | (236,157 | ) |
| Net exposure                             |   |              | 1,515,021   |   |              |   | 1,718,128 |   |   |   | 6,087,970 |   |   |   | 878,089 |   |
| Canadian dollar equivalent               |   | $                 | 123,004     |   |              | $      | 1,827,401 |   |   | $ | 467,178 |   |   | $ | 873,611 |   |

----

----

| 21. | FINANCIAL INSTRUMENTS (continued) |
|-----|-----------------------------------|

| (c)   | Price Risk (continued) |
|-----------------|------------------------|

| (d)   | Classification of Financial instruments |
|-----------------|-----------------------------------------|

|                             |   | Level 1 |      |   | Level 2 |   |   | Level 3 |   |
|----------------------------------|--------|---------|-----------|--------|---------|--------|--------|---------|--------|
| Cash and cash equivalents        |   | $       | 3,839,595 |   |    |   | -      |    |   |   | - |   |
| Investments in related companies |   |    | 94,040    |   |    |   | -      |    |   |   | - |   |
| Investments in other companies   |   |    | 55,000    |   |    |   | -      |    |   |   | - |   |
|                             |   | $       | 3,988,635 |   |    |   | -      |    |   |   | - |   |

| 22. | CAPITAL MANAGEMENT The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue the exploration and development of its properties and to maintain a flexible capital structure for its projects for the benefit of its stakeholders. In the management of capital, the Company includes finance lease obligations and the components of shareholders’ equity. The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust its capital structure, the Company may attempt to incur new debt, issue new shares or adjust the amount of cash and cash equivalents. Management reviews the Company’s capital structure on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. The Company is not subject to any externally imposed capital requirements. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| 23.  | SEGMENTED INFORMATION The Company’s revenues of $16,094,701 (2012 - $2,255,376) are all attributable to Mexico where sales are recorded from shipments of concentrate produced by the San Gonzalo mine and the historic Avino stockpiles. For the year ended December 31, 2013, the Company had one customer that accounted for 88% of revenue and another customer that accounted for 12% of revenue. For the year ended December 31, 2012, the Company’s revenue was earned from one customer. Geographical information relating to the Company’s non-current assets (other than financial instruments) is as follows: |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                       |   | 2013   |       |   | 2012   |   |
|--------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                       |   |   |       |   |   |   |
| Exploration and evaluation assets - Mexico |   | $      | 15,686,172 |   |   | $      | 12,828,198 |   |
| Exploration and evaluation assets - Canada |   |   | 4          |   |   |   | 4 |   |
|                                       |   |   |       |   |   |   |   |   |
| Total exploration and evaluation assets    |   | $      | 15,686,176 |   |   | $      | 12,828,202 |   |

|                                             |   | 2013   |       |   | 2012   |   |
|--------------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                             |   |   |       |   |   |   |
| Plant, equipment, and mining properties - Mexico |   | $      | 10,561,869 |   |   | $      | 6,305,045 |   |
| Plant, equipment, and mining properties - Canada |   |   | 2,748      |   |   |   | 3,435 |   |
|                                             |   |   |       |   |   |   |   |   |
| Total plant, equipment, and mining properties    |   | $      | 10,564,617 |   |   | $      | 6,308,480 |   |

| 24.  | INCOME TAXES |
|-----------|--------------|

|                        |   | 2013   |      |   | 2012   |   |
|-----------------------------|--------|--------|-----------|--------|--------|--------|
|                        |   |   |      |   |   |   |
| Current income tax expense  |   | $      | 42,547    |   |   |   | - |   |
| Deferred income tax expense |   |   | 2,518,453 |   |   |   | 260,321 |   |
|                        |   |   |      |   |   |   |   |   |
| Total income tax expense    |   | $      | 2,561,000 |   |   | $      | 260,321 |   |

|                                                             |   | 2013   |      |   | 2012   |   |
|------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                                             |   |   |      |   |   |   |
| Net earnings (loss) before tax                                   |   | $      | 3,409,212 |   |   | $      | (1,002,857 | ) |
| Combined statutory tax rate                                      |   |   | 25.75     | %      |   |   | 25.00 | % |
|                                                             |   |   |      |   |   |   |   |   |
| Income tax expense (recovery) at the Canadian statutory rate     |   |   | 877,873   |   |   |   | (250,714 | ) |
|                                                             |   |   |      |   |   |   |   |   |
| Reconciling items:                                               |   |   |      |   |   |   |   |   |
| Effect of difference in Mexican tax rates                        |   |   | 176,081   |   |   |   | 12,523 |   |
| Non-tax deductible expenses                                      |   |   | 298,543   |   |   |   | 98,816 |   |
| Change in enacted rates                                          |   |   | 71,526    |   |   |   | 68,807 |   |
| Change in unrecognized benefit of tax losses                     |   |   | 183,052   |   |   |   | 282,604 |   |
| Special mining duties                                            |   |   | 1,163,717 |   |   |   | - |   |
| Benefit (liability) of tax attributes recognized and other items |   |   | (209,792  | )      |   |   | 48,285 |   |
|                                                             |   |   |      |   |   |   |   |   |
| Income tax expense recognized in the year                        |   | $      | 2,561,000 |   |   | $      | 260,321 |   |

----

----

| 24. | INCOME TAXES (continued) |
|-----|--------------------------|

|                            |   | 2013   |       |   | 2012   |   |
|---------------------------------|--------|--------|------------|--------|--------|--------|
|                            |   |   |       |   |   |   |
| Deferred income tax assets      |   | $      | 2,111,963  |   |   | $      | 2,269,260 |   |
| Deferred income tax liabilities |   |   | (6,996,093 | )      |   |   | (4,634,937 | ) |
|                            |   |   |       |   |   |   |   |   |
|                            |   | $      | (4,884,130 | )      |   | $      | (2,365,677 | ) |

|                                             |   | 2013   |       |   | 2012   |   |
|--------------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                             |   |   |       |   |   |   |
| Tax losses carried forward                       |   | $      | 767,448    |   |   | $      | 2,269,260 |   |
| Reclamation provision                            |   |   | 694,038    |   |   |   | - |   |
| Exploration and evaluation assets                |   |   | (3,804,986 | )      |   |   | (3,655,891 | ) |
| Plant, Equipment and Mining Properties           |   |   | (3,191,107 | )      |   |   | (394,475 | ) |
| Other deductible (taxable) temporary differences |   |   | 650,477    |   |   |   | (584,571 | ) |
|                                             |   |   |       |   |   |   |   |   |
| Net deferred income tax liabilities              |   | $      | (4,884,130 | )      |   | $      | (2,365,677 | ) |

|                                          |   | 2013   |       |   | 2012   |   |
|-----------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                          |   |   |       |   |   |   |
| Tax losses carried forward                    |   | $      | 7,795,353  |   |   | $      | 7,421,481 |   |
| Property, plant and equipment                 |   |   | 211,097    |   |   |   | 210,410 |   |
| Investments                                   |   |   | 348,047    |   |   |   | 247,712 |   |
| Resource pools                                |   |   | 1,799,659  |   |   |   | 1,871,812 |   |
| Other deductible temporary differences        |   |   | 1,523,271  |   |   |   | 1,574,332 |   |
|                                          |   |   |       |   |   |   |   |   |
| Unrecognized deductible temporary differences |   | $      | 11,677,427 |   |   | $      | 11,325,747 |   |

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| 24. | INCOME TAXES (continued) |
|-----|--------------------------|

| Year of Expiry |   | Canada |      |   | Mexico |   |
|----------------|--------|--------|-----------|--------|--------|--------|
|           |   |   |      |   |   |   |
| 2015           |   | $      | 568,450   |   |   | $      | – |   |
| 2020           |   |   | –   |   |   |   | 719,396 |   |
| 2021           |   |   | –   |   |   |   | 1,838,763 |   |
| 2025           |   |   | 799,044   |   |   |   | – |   |
| 2026           |   |   | 646,331   |   |   |   | – |   |
| 2027           |   |   | 643,498   |   |   |   | – |   |
| 2028           |   |   | 774,118   |   |   |   | – |   |
| 2029           |   |   | 727,183   |   |   |   | – |   |
| 2030           |   |   | 804,957   |   |   |   | – |   |
| 2031           |   |   | 1,268,691 |   |   |   | – |   |
| 2032           |   |   | 1,189,209 |   |   |   | – |   |
| 2033           |   |   | 373,872   |   |   |   | – |   |
|           |   |   |      |   |   |   |   |   |
|           |   | $      | 7,795,353 |   |   | $      | 2,558,159 |   |

| 25.  | SUBSEQUENT EVENTS |
|-----------|-------------------|

| a)   | In February 2014, the Company closed a brokered public offering through Noble International Investments, Inc. Total gross proceeds of US$5,000,000 were raised through the sale of 2,066,117 units at a price of US$2.42 per unit. Each unit consisted of one common share and one-half of a transferable share purchase warrant (the "Warrants"). Each whole Warrant is exercisable to acquire one additional common share at US$2.87 per share until February 25, 2017, provided that if the volume weighted average closing market price for the Company's common shares on the NYSE MKT is greater than US$6.85 per share for a period of twenty consecutive trading days, then the Company may deliver a notice (the "notice") to the warrant holder notifying such holder that the warrants must be exercised within thirty days from the date of delivery of such notice, otherwise the warrants will expire on the thirty-first day after the date of delivery of the notice. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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----

| 25. | SUBSEQUENT EVENTS (continued) |
|-----|-------------------------------|

| b)   | In February 2014, the Company closed an at-the-market (“ATM”) brokered public offering in the United States through Cantor Fitzgerald & Co. of New York. A total of US$5,741,668 in gross proceeds was raised through the sale of 2,540,709 common shares (the "shares"). |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c)   | Subsequent to December 31, 2013, 130,600 shares were issued pursuant to options exercised for gross proceeds of $136,762. |
|----------------|---------------------------------------------------------------------------------------------------------------------------|

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|                 | AVINO SILVER & GOLD MINES LTD. |                          |
|----------------------|------------------------------------|-------------------------------|
|                 |                               |                          |   |
| Date: April 17, 2014 | By:                                | /s/ David Wolfin              |   |
|                 |                               | David Wolfin                  |   |
|                 |                               | Chief Executive Officer       |   |
|                 |                               | (Principal Executive Officer) |   |

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