----

----

| 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, 2010 |
|--------|---------------------------------------------|

| 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______________ |
|--------|-----------------------------------------------------------------|

| Not Applicable      |   | Not Applicable                            |
|---------------------|--------|-------------------------------------------|
| Title of Each Class |   | Name of Each Exchange on Which Registered |

----

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

----

----

----

|                                                                                                       |                                                                         |   | Page   |   |
|------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------|--------|--------|--------|
| Introduction                                                                                               |                                                                         |   | 2      |   |
| Currency                                                                                                   |                                                                         |   | 2      |   |
| Forward-looking Statements                                                                                 |                                                                         |   | 2      |   |
| Cautionary Note to United States Investors Concerning Estimate of Measured and Indicated Mineral Resources |                                                                         |   | 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                                                   |   |   | 14     |   |
|  Item 5.                                                                                         | Operating and Financial Review and Prospects                                 |   |   | 45     |   |
|  Item 6.                                                                                    | Directors, Senior Management and Employees                                   |   |   | 50     |   |
|  Item 7.                                                                                         | Major Shareholders and Related Party Transactions                            |   |   | 60     |   |
|  Item 8.                                                                          | Financial Information                                                        |   |   | 61     |   |
|  Item 9.                                                                                    | The Offer and Listing                                                        |   |   | 62     |   |
|  Item 10.                                                                                        | Additional Information                                                       |   |   | 64     |   |
|  Item 11.                                                                                   | Quantitative and Qualitative Disclosures About Market Risk                   |   |   | 70     |   |
|  Item 12.                                                                                        | Description of Securities Other than Equity Securities                       |   |   | 70     |   |
|                                                                                                       |                                                                         |   |   |   |   |
| Part II                                                                                                    |                                                                         |   |   | 71     |   |
|                                                                                                       |                                                                         |   |   |   |   |
|  Item 13.                                                                                        | Defaults, Dividend Arrearages and Delinquencies                              |   |   | 71     |   |
|  Item 14.                                                                                        | Material Modifications to the Rights of Security Holders and Use of Proceeds |   |   | 71     |   |
|  Item 15T.                                                                                            | Controls and Procedures                                                      |   |   | 71     |   |
|  Item 16A.                                                                                       | Audit Committee Financial Expert                                             |   |   | 72     |   |
|  Item 16B.                                                                                  | Code of Ethics                                                               |   |   | 72     |   |
|  Item 16C.                                                                                       | Principal Accountant Fees and Services                                       |   |   | 73     |   |
|  Item 16D.                                                                             | Exemptions from the Listing Standards for Audit Committees                   |   |   | 73     |   |
|  Item 16E.                                                                                       | Purchases of Equity Securities by the Issuer and Affiliated Purchasers       |   |   | 73     |   |
|  Item 16F.                                                                                  | Changes in Registrants Certifying Accountant                                 |   |   | 73     |   |
|  Item 16G.                                                                                  | Corporate Governanace                                                        |   |   | 73     |   |
|                                                                                                       |                                                                         |   |   |   |   |
| Part III                                                                                                   |                                                                         |   |   | 74     |   |
|                                                                                                       |                                                                         |   |   |   |   |
|  Item 17.                                                                                        | Financial Statements                                                         |   |   | 74     |   |
|  Item 18.                                                                                        | Financial Statements                                                         |   |   | 74     |   |
|  Item 19.                                                                         | Exhibits                                                                     |   |   | 74     |   |

----

----

----

| 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 gold or silver 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| heap leaching           | A process whereby valuable metals, usually gold and silver, are leached from a heap, or pad, of crushed ore by leaching solutions percolating down through the heap and collected from a sloping, impermeable liner below the pad.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| lp induced polarization | A method of ground geophysics surveying employing an electrical current to determine indications of mineralization, also referred to as “IP”.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| laterite                | A residual product of rock decay that is red in colour and has a high content in the oxides of iron and hydroxide of aluminum.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 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 or 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 or NSR Royalty                            | Payment of a percentage of net mining profits after deducting applicable smelter charges.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| NQ                                                    | Denotes a definition of drill size of approximately 2-1/2 inches.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| outcrop                                               | An exposure of rock at the earth’s surface.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| possible or inferred ore                              | Term used to describe ore where the mineralization is believed to exist on the basis of some geological information, but the size, shape, grade, and tonnage are a matter of speculation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 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 gold and silver 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

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1

  

----

| Canadian GAAP                                               |   |                     |       |   |         |   |       |        |   |   | Eleven Months Ended |   |   | Year Ended |       |
|-------------------------------------------------------------|--------|--------------------------|------------|--------|--------------|--------|------------|-------------|--------|--------|---------------------|--------|--------|------------|------------|
|                                                        |   | Years Ended December 31, |       |   | December 31, |   |       | January 31, |   |
|                                                        |   | 2010                     |       |   | 2009         |   |       | 2008        |   |   | 2007                |   |   | 2007       |       |
| Summary of Operations:                                      |   |                     |       |   |         |   |       |        |   |   |                |   |   |       |       |
| Revenue                                                     |   | $                        | -          |   |         | $      | -          |        |   | $      | -                   |   |   | $          | -          |   |   | $ | - |   |
| Interest Income                                             |   |                     | 14,206     |   |         |   | 68,224     |        |   |   | 146,386             |   |   |       | 359,339    |   |   |   | 430,231 |   |
| Expenses                                                    |   |                     |       |   |         |   |       |        |   |   |                |   |   |       |       |   |   |   |   |   |
| Operating and administrative                                |   |                     | 1,130,679  |   |         |   | 669,178    |        |   |   | 1,575,913           |   |   |       | 868,527    |   |   |   | 4,014,734 |   |
| Write-down of mineral properties                            |   |                     | -          |   |         |   | 608,118    |        |   |   | -                   |   |   |       | -          |   |   |   | - |   |
| Equity losses in Cia Minera Mexicana de Avino, S.A. de C.V. |   |                     | -          |   |         |   | -          |        |   |   | -                   |   |   |       | -          |   |   |   | 33,581 |   |
| Litigation settlement                                       |   |                     | -          |   |         |   | -          |        |   |   | -                   |   |   |       | (759,302   | ) |   |   | - |   |
| Misappropriation loss                                       |   |                     | -          |   |         |   | -          |        |   |   | -                   |   |   |       | (86,155    | ) |   |   | - |   |
| Mineral property option revenue                             |   |                     | -          |   |         |   | -          |        |   |   | 25,000              |   |   |       | -          |   |   |   | - |   |
| Future income tax benefit (expense)                         |   |                     | (332,141   | )      |         |   | 239,562    |        |   |   | (98,653             | )      |   |       | 501,083    |   |   |   | - |   |
| Net loss                                                    |   |                     | (1,490,194 | )      |         |   | (987,759   | )           |   |   | (1,538,876          | )      |   |       | (885,863   | ) |   |   | (3,648,539 | ) |
| Loss per share                                              |   |                     | (0.07      | )      |         |   | (0.05      | )           |   |   | (0.07               | )      |   |       | (0.04      | ) |   |   | (0.20 | ) |
|                                                        |   |                     |       |   |         |   |       |        |   |   |                |   |   |       |       |   |   |   |   |   |
| Weighted average number of shares outstanding               |   |                     | 21,059,008 |   |         |   | 20,584,727 |        |   |   | 20,584,727          |   |   |       | 20,584,727 |   |   |   | 18,385,007 |   |
|                                                        |   |                     |       |   |         |   |       |        |   |   |                |   |   |       |       |   |   |   |   |   |
|                                                        |   |                     |       |   |         |   |       |        |   |   |                |   |   |       |       |   |   |   |   |   |

|                       |   | As at December 31, |       |   | As at January 31, |   |
|----------------------------|--------|--------------------|------------|--------|-------------------|--------|
|                       |   | 2010               |       |   | 2009              |   |   | 2008 |   |   | 2007 |   |   | 2007 |   |
| Balance Sheet Data:        |   |               |       |   |              |   |   |   |   |   |   |   |   |   |   |
| Total assets               |   | $                  | 27,048,567 |   |              | $      | 19,206,278 |   |   | $ | 20,126,230 |   |   | $ | 21,190,940 |   |   | $ | 23,295,039 |   |
| Cash and cash equivalents  |   |               | 9,051,456  |   |              |   | 2,829,605 |   |   |   | 3,575,241 |   |   |   | 6,342,481 |   |   |   | 11,045,106 |   |
| Total liabilities          |   |               | 2,669,485  |   |              |   | 2,241,179 |   |   |   | 2,508,776 |   |   |   | 2,532,414 |   |   |   | 3,789,083 |   |
| Shareholders’ equity |   |               | 24,379,082 |   |              |   | 16,965,099 |   |   |   | 17,617,454 |   |   |   | 18,658,526 |   |   |   | 19,505,956 |   |

----

|   United States GAAP             |   |                     |       |   |         |   |       |        |   |   | Eleven Months Ended |   |   | Year Ended |       |
|---------------------------------------|--------|--------------------------|------------|--------|--------------|--------|------------|-------------|--------|--------|---------------------|--------|--------|------------|------------|
|                                  |   | Years Ended December 31, |       |   | December 31, |   |       | January 31, |   |
|                                  |   | 2010                     |       |   | 2009         |   |       | 2008        |   |   | 2007                |   |   | 2007       |       |
| Summary of Operations:                |   |                     |       |   |         |   |       |        |   |   |                |   |   |       |       |
| Net loss per Canadian GAAP            |   | $                        | (1,490,194 | )      |         | $      | (987,759   | )           |   | $      | (1,538,876          | )      |   | $          | (885,863   | ) |   | $ | (3,648,539 | ) |
| Adjustments                           |   |                     | (396,664   | )      |         |   | (95,108    | )           |   |   | (1,851,231          | )      |   |       | (2,833,433 | ) |   |   | (10,277,556 | ) |
| Net loss per US GAAP                  |   |                     | (1,886,858 | )      |         |   | (1,082,867 | )           |   |   | (3,390,107          | )      |   |       | (3,719,296 | ) |   |   | (13,926,095 | ) |
| Loss  per share per US GAAP |   |                     | (0.09      | )      |         |   | (0.05      | )           |   |   | (0.17               | )      |   |       | (0.18      | ) |   |   | (0.76 | ) |

|                             |   | As at December 31, |        |   | As at January 31, |   |
|----------------------------------|--------|--------------------|-------------|--------|-------------------|--------|
|                             |   | 2010               |        |   | 2009              |   |   | 2008 |   |   | 2007 |   |   | 2007 |   |
| Balance Sheet Data:              |   |               |        |   |              |   |   |   |   |   |   |   |   |   |   |
| Total assets under Canadian GAAP |   | $                  | 27,048,567  |   |              | $      | 19,206,278 |   |   | $ | 20,126,230 |   |   | $ | 21,190,940 |   |   | $ | 23,295,039 |   |
| Adjustments                      |   |               | (15,302,311 | )      |              |   | (14,573,506 | ) |   |   | (14,861,524 | ) |   |   | (13,096,805 | ) |   |   | (10,747,339 | ) |
| Total assets under US GAAP       |   |               | 11,746,256  |   |              |   | 4,632,772 |   |   |   | 5,264,706 |   |   |   | 8,094,135 |   |   |   | 12,547,700 |   |
|                             |   |               |        |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total equity under Canadian GAAP |   |               | 24,379,082  |   |              |   | 16,965,099 |   |   |   | 17,617,454 |   |   |   | 18,658,526 |   |   |   | 19,505,956 |   |
| Adjustments                      |   |               | (13,276,163 | )      |              |   | (12,879,499 | ) |   |   | (12,927,955 | ) |   |   | (11,261,889 | ) |   |   | (10,747,339 | ) |
| Total equity under US GAAP       |   |               | 11,102,919  |   |              |   | 4,085,600 |   |   |   | 4,689,499 |   |   |   | 7,396,637 |   |   |   | 8,758,617 |   |

| Fiscal Year Ended |   | Average |   |   | Period End |   |   | High   |   |   | Low    |   |
|-------------------|--------|---------|--------|--------|------------|--------|--------|--------|--------|--------|--------|--------|
|              |   |    |   |   |       |   |   |   |   |   |   |   |
| 2007              |   |    | 1.1357 |   |       |   | 1.1792 |   |   |   | 1.1824 |   |   |   | 1.0989 |   |
| 2007 II           |   |    | 1.0651 |   |       |   | 0.9913 |   |   |   | 1.1853 |   |   |   | 0.9170 |   |
| 2008              |   |    | 1.0660 |   |       |   | 1.2246 |   |   |   | 1.2969 |   |   |   | 0.9719 |   |
| 2009              |   |    | 1.1420 |   |       |   | 1.0466 |   |   |   | 1.3000 |   |   |   | 1.0292 |   |
| 2010              |   |    | 1.0299 |   |       |   | 0.9946 |   |   |   | 1.0778 |   |   |   | 0.9946 |   |

----

| Month         |   | High   |   |   | Low    |   |
|---------------|--------|--------|--------|--------|--------|--------|
| January 2011  |   |   | 1.0022 |   |   |   | 0.9862 |   |
| February 2011 |   |   | 0.9955 |   |   |   | 0.9739 |   |
| March 2011    |   |   | 0.9918 |   |   |   | 0.9686 |   |
| April 2011    |   |   | 0.9691 |   |   |   | 0.9486 |   |
| May 2011      |   |   | 0.9809 |   |   |   | 0.9486 |   |
| June 2011     |   |   | 0.9861 |   |   |   | 0.9643 |   |

----

| ·       | 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 mineral properties; and |
|--------------------------------------------|-------------------------------------------------------------------------|

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

----

----

----

----

----

----

----

----

| From(m) | To(m)  | Length(m) | Au(g/t) | Ag(g/t) | Cu(ppm) | Pb(ppm) | Zn(ppm) |
|---------|--------|-----------|---------|---------|---------|---------|---------|
| 195.05  | 195.90 | .85       | .221    | 189.4   | 155     | 238     | 438     |
| 195.90  | 196.80 | .90       | .100    | 19.1    | 139     | 155     | 384     |
| 196.80  | 197.90 | 1.10      | .245    | 82,6    | 738     | 14400   | 34000   |
| 197.90  | 199.10 | 1.20      | .905    | 42.1    | 467     | 13800   | 46500   |
| 199.10  | 200.10 | 1.00      | 1.046   | 77.1    | 1552    | 3977    |    |

----

| From(m) | To(m)  | Length(m) | Au(g/t) | Ag(g/t) | Cu(ppm) | Pb(ppm) | Zn(ppm) |
|---------|--------|-----------|---------|---------|---------|---------|---------|
| 205.10  | 206.15 | 1.05      | 0.309   | 85.4    | 1092    | 4672    | 4835    |
| 206.15  | 207.15 | 1.00      | 0.259   | 132.7   | 3278    | 6780    | 1116    |
| 207.15  | 207.80 | .65       | 0.600   | 277.4   | 1017    | 1979    | 1020    |
| 207.80  | 208.40 | .60       | 0.243   | 159.4   | 693     | 786     | 693     |

----

| From(m) | To(m)  | Length(m) | Description                                                | Au(g/t) | Ag (g/t) | Cu (ppm) |
|---------|--------|-----------|------------------------------------------------------------|---------|---------------|---------------|
| 284.90  | 285.85 | 0.95      | Avino vein. Silicified quartz with diss-cpy-py-specularite | 0.068   | 201.7         | 3149          |
| 285.85  | 286.80 | 0.95      | 0.025                                                      | 35.4    | 969           |
| 286.80  | 287.00 | 0.20      | 0.226                                                      | 808.8   | 100200        |
| 287.00  | 288.50 | 1.50      | 0.045                                                      | 27.3    | 2540          |
| 288.50  | 290.00 | 1.50      | 0.052                                                      | 101.6   | 10000         |

| From(m) | To(m)  | Length(m) | Description                   | Au(g/t) | Ag (g/t) | Cu (ppm) |
|---------|--------|-----------|-------------------------------|---------|---------------|---------------|
| 280.75  | 282.25 | 1.50      | Avino vein. Oxidized material | 7.680   | 121.9         | 6048          |
| 282.25  | 283.75 | 1.50      | 6.034                         | 196.3   | 5034          |
| 283.75  | 285.25 | 1.50      | 1.692                         | 69.9    | 10400         |
| 285.25  | 286.75 | 1.50      | 13.988                        | 295.3   | 19600         |
| 286.75  | 288.25 | 1.50      | 4.731                         | 104.7   | 16100         |
| 288.25  | 289.75 | 1.50      | 2.158                         | 103.7   | 3948          |
| 289.75  | 291.25 | 1.50      | 0.158                         | 31.5    | 3789          |
| 291.25  | 292.75 | 1.50      | 2.411                         | 60.0    | 2683          |
| 292.75  | 294.25 | 1.50      | 2.733                         | 27.5    | 2793          |
| 294.25  | 295.75 | 1.50      | 0.548                         | 89.6    | 7268          |
| 295.75  | 297.25 | 1.50      | 3.086                         | 161.8   | 5934          |
| 297.25  | 298.75 | 1.50      | 7.954                         | 75.7    | 1476          |
| 298.75  | 300.25 | 1.50      | 2.265                         | 97.0    | 10500         |
| 300.25  | 301.75 | 1.50      | 1.057                         | 60.4    | 1486          |
| 301.75  | 303.25 | 1.50      | 1.911                         | 42.0    | 3258          |

----

| From  (m) |  To (m) | Length  (m) | Description                                          | Au(g/t) | Ag (g/t) | Cu (ppm) |
|---------------------|-------------------|-----------------------|------------------------------------------------------|---------|---------------|---------------|
| 271.45              | 272.95            | 1.50                  | Avino vein. Wh qtz veining w/ fine grain diss cpy-py | 0.155   | 44.1          | 3618          |
| 272.95              | 274.45            | 1.50                  | 0.397                                                | 106.1   | 2842          |
| 274.45              | 275.95            | 1.50                  | 1.080                                                | 76.1    | 3862          |
| 275.95              | 277.45            | 1.50                  | 1.314                                                | 126.9   | 4010          |
| 277.45              | 278.95            | 1.50                  | 0.874                                                | 53.0    | 381           |
| 278.95              | 280.45            | 1.50                  | 0.534                                                | 61.4    | 675           |
| 280.45              | 281.95            | 1.50                  | 0.436                                                | 97.3    | 2649          |
| 287.95              | 289.45            | 1.50                  | 0.250                                                | 63.5    | 7555          |
| 289.45              | 290.95            | 1.50                  | 0.101                                                | 31.4    | 5156          |
| 290.95              | 292.45            | 1.50                  | 1.115                                                | 138.6   | 3558          |
| 292.45              | 293.95            | 1.50                  | 0.151                                                | 86.3    | 4162          |
| 293.95              | 295.45            | 1.50                  | 0.161                                                | 34.9    | 3521          |
| 295.45              | 296.95            | 1.50                  | 0.568                                                | 41.6    | 5047          |
| 296.95              | 298.45            | 1.50                  | 0.115                                                | 29.1    | 10000         |
| 298.45              | 300.10            | 1.65                  | 0.080                                                | 29.8    | 8408          |

----

| From  (m) | To  (m) | Length  (m) | Description                                              | Au(g/t) | Ag (g/t) | Cu (ppm) |
|---------------------|-------------------|-----------------------|----------------------------------------------------------|---------|---------------|---------------|
| 301.95              | 303.45            | 1.50                  | Avino vein. Wh qtz stkwk-veining w/diss f.g. cpy+py+spec | 1.152   | 83.0          | 1971          |
| 303.45              | 304.95            | 1.50                  | 1.483                                                    | 26.7    | 683           |
| 304.95              | 306.45            | 1.50                  | 2.119                                                    | 36.9    | 2030          |
| 312.45              | 312.95            | 0.50                  | 1.752                                                    | 10.7    | 533           |
| 312.95              | 315.45            | 2.50                  | 1.015                                                    | 119.7   | 1268          |
| 315.45              | 316.95            | 1.50                  | 0.195                                                    | 204.2   | 8565          |
| 316.95              | 318.45            | 1.50                  | 0.075                                                    | 123.6   | 2212          |
| 319.95              | 321.45            | 1.50                  | 0.155                                                    | 86.2    | 20300         |
| 321.45              | 322.95            | 1.50                  | 0.120                                                    | 30.4    | 13000         |
| 322.95              | 324.45            | 1.50                  | 0.115                                                    | 45.2    | 15400         |
| 324.45              | 325.95            | 1.50                  | 0.075                                                    | 40.2    | 18400         |
| 325.95              | 327.45            | 1.50                  | 0.070                                                    | 27.5    | 10200         |
| 327.45              | 328.95            | 1.50                  | 0.050                                                    | 48.1    | 17500         |
| 328.95              | 330.45            | 1.50                  | 0.053                                                    | 38.2    | 16700         |
| 330.45              | 331.95            | 1.50                  | 0.095                                                    | 61.9    | 20200         |
| 331.95              | 333.45            | 1.50                  | 0.144                                                    | 75.2    | 18900         |
| 333.45              | 334.95            | 1.50                  | 0.130                                                    | 45.7    | 15800         |
| 337.95              | 339.45            | 1.50                  | 0.328                                                    | 69.0    | 12200         |
| 339.45              | 340.95            | 1.50                  | 0.236                                                    | 41.0    | 12200         |

| From  (m) |  To (m) | Length  (m) | Description                                                       | Au (g/t) | Ag (g/t) | Cu (ppm) |
|---------------------|-------------------|-----------------------|-------------------------------------------------------------------|---------------|---------------|---------------|
| 289.00              | 290.50            | 1.50                  | Avino vein. Wh qtz stockwork veining textures w’diss py-cpy | 0.950         | 228.9         | 23200         |
| 298.00              | 299.50            | 1.50                  | 0.165                                                             | 72.3          | 14800         |
| 299.50              | 301.00            | 1.50                  | 0.485                                                             | 54.6          | 8401          |
| 301.00              | 302.50            | 1.50                  | 0.090                                                             | 40.8          | 11500         |
| 302.50              | 304.00            | 1.50                  | 0.147                                                             | 55.6          | 14400         |
| 304.00              | 305.50            | 1.50                  | 0.093                                                             | 55.8          | 8321          |
| 305.50              | 307.00            | 1.50                  | 1.590                                                             | 90.4          | 15100         |
| 307.00              | 308.60            | 1.60                  | 0.150                                                             | 73.8          | 8729          |
| 308.60              | 310.10            | 1.50                  | 0.040                                                             | 54.6          | 5962          |
| 310.10              | 311.60            | 1.50                  | 0.075                                                             | 98.0          | 6217          |
| 311.60              | 313.10            | 1.50                  | 0.075                                                             | 81.9          | 10800         |
| 313.10              | 314.60            | 1.50                  | 0.040                                                             | 97.9          | 7765          |

----

| From(m) | To  (m) | Length  (m) | Description                                                   | Au (g/t) | Ag (g/t) | Cu (ppm) |
|---------|-------------------|-----------------------|---------------------------------------------------------------|---------------|---------------|---------------|
| 272.30  | 273.80            | 1.50                  | Avino vein. Wh qtz veining w/moderate diss cpy and strong py. | 0.615         | 80.6          | 2199          |
| 273.80  | 275.30            | 1.50                  | 0.148                                                         | 160.9         | 20500         |
| 275.30  | 276.80            | 1.50                  | 0.118                                                         | 203.5         | 19700         |
| 276.80  | 278.30            | 1.50                  | 0.280                                                         | 172.8         | 17800         |
| 278.30  | 279.80            | 1.50                  | 0.368                                                         | 441.4         | 24600         |
| 279.80  | 281.30            | 1.50                  | 0.220                                                         | 327.0         | 12600         |
| 281.30  | 282.80            | 1.50                  | 0.081                                                         | 110.8         | 3002          |
| 282.80  | 284.30            | 1.50                  | 0.065                                                         | 184.6         | 3317          |
| 284.30  | 285.80            | 1.50                  | 0.070                                                         | 89.2          | 8786          |
| 285.80  | 287.30            | 1.50                  | 0.070                                                         | 209.3         | 54400         |
| 287.30  | 288.80            | 1.50                  | 0.035                                                         | 32.8          | 13200         |
| 288.80  | 290.30            | 1.50                  | 0.047                                                         | 76.1          | 29300         |
| 290.30  | 291.80            | 1.50                  | 0.126                                                         | 339.7         | 44300         |
| 291.80  | 293.30            | 1.50                  | 0.060                                                         | 20.8          | 6361          |
| 293.30  | 295.15            | 1.85                  | 0.202                                                         | 166.9         | 55500         |

| From (m) | To  (m) | Length (m) | Description                      | Au (g/t) | Ag (g/t) | Cu (ppm) |
|---------------|-------------------|-----------------|----------------------------------|---------------|---------------|---------------|
| 355.85        | 357.35            | 1.50            | Avino vein. Moderate diss cpy-py | 0.111         | 257.5         | 6959          |
| 357.35        | 359.15            | 1.80            | 0.125                            | 170.0         | 9341          |

----

| From  (m) | To  (m) | Length  (m) | Description                          | Au (g/t) | Ag (g/t) | Cu (ppm) |
|---------------------|-------------------|-----------------------|--------------------------------------|---------------|---------------|---------------|
| 290.80              | 292.30            | 1.50                  | Avino vein with massive chalcopyrite | 0.040         | 101.9         | 12100         |
| 292.30              | 293.80            | 1.50                  | 0.160                                | 23.7          | 11500         |
| 295.30              | 296.80            | 1.50                  | 0.146                                | 32.3          | 11200         |
| 299.80              | 301.30            | 1.50                  | 0.070                                | 51.2          | 6327          |
| 301.30              | 302.80            | 1.50                  | 0.360                                | 40.4          | 14600         |
| 302.80              | 304.30            | 1.50                  | 0.015                                | 18.1          | 8029          |
| 304.30              | 305.80            | 1.50                  | 0.020                                | 28.2          | 8475          |

| From  (m) | To  (m) | Length  (m) | Description                      | Au (g/t) | Ag  (g/t) | Cu (ppm) |
|---------------------|-------------------|-----------------------|----------------------------------|---------------|---------------------|---------------|
| 257.30              | 258.80            | 1.50                  | Avino quartz vein with sulphides | 0.160         | 85.3                | 15700         |
| 258.80              | 260.30            | 1.50                  | 0.080                            | 86.6          | 23400               |
| 260.30              | 261.80            | 1.50                  | 0.125                            | 27.7          | 14100               |
| 261.80              | 263.30            | 1.50                  | 0.101                            | 21.8          | 15400               |
| 263.30              | 264.80            | 1.50                  | 0.098                            | 20.3          | 13500               |
| 266.30              | 267.80            | 1.50                  | 0.574                            | 43.4          | 6613                |
| 267.80              | 269.30            | 1.50                  | 0.457                            | 39.8          | 4211                |
| 269.30              | 270.80            | 1.50                  | 0.089                            | 19.3          | 15200               |
| 282.80              | 284.30            | 1.50                  | 0.020                            | 9.3           | 16000               |
| 284.30              | 285.80            | 1.50                  | 0.010                            | 10.2          | 19300               |
| 285.80              | 287.30            | 1.50                  | 0.035                            | 27.0          | 31600               |
| 287.30              | 288.80            | 1.50                  | 0.070                            | 37.4          | 21500               |
| 288.80              | 290.30            | 1.50                  | 0.049                            | 27.1          | 34200               |
| 290.30              | 291.80            | 1.50                  | 0.065                            | 51.3          | 72600               |
| 291.80              | 293.30            | 1.50                  | 0.020                            | 14.8          | 33300               |
| 293.30              | 294.80            | 1.50                  | 0.335                            | 28.8          | 15000               |
| 294.80              | 295.80            | 1.00                  | 0.035                            | 23.2          | 17200               |
| 295.80              | 297.30            | 1.50                  | 1.310                            | 37.9          | 16100               |
| 297.30              | 299.10            | 1.80                  | 0.510                            | 51.5          | 7570                |

----

| From(m) | To(m)  | Length(m) | Description                        | g/t   | Ppm |
|---------|--------|-----------|------------------------------------|-------|-----|
| Au      | Ag     | Cu        | Pb                                 | Zn    |
| 196.90  | 198.40 | 1.50      |     Avino Vein | 0.322 | 3.6 | 259 | 149 | 719 |
| 198.40  | 199.90 | 1.50      | 0.020                              | 7.8   | 97  | 68 | 554 |
| 199.90  | 201.40 | 1.50      | 0.054                              | 5.2   | 331 | 180 | 665 |
| 201.40  | 202.90 | 1.50      | <0.005                          | 2.4   | 306 | 45 | 2079 |
| 202.90  | 204.40 | 1.50      | 0.090                              | 1.6   | 271 | 54 | 5950 |
| 204.40  | 205.90 | 1.50      | 0.005                              | 0.6   | 456 | 25 | 2784 |
| 205.90  | 207.40 | 1.50      | <0.005                          | 0.8   | 168 | 16 | 4381 |
| 207.40  | 208.90 | 1.50      | <0.005                          | 0.8   | 229 | 18 | 2361 |
| 208.90  | 210.40 | 1.50      | 0.040                              | 1.3   | 178 | 34 | 3494 |
| 210.40  | 211.90 | 1.50      | 0.015                              | 0.3   | 320 | 23 | 2502 |
| 211.90  | 213.40 | 1.50      | 0.005                              | 3.0   | 621 | 29 | 3957 |

| From(m) | To(m)  | Length(m) | Description                        | g/t   | Ppm  |
|---------|--------|-----------|------------------------------------|-------|------|
| Au      | Ag     | Cu        | Pb                                 | Zn    |
| 189.75  | 191.25 | 1.50      |     Avino Vein | 2.635 | 19.4 | 692 | 724 | 817 |
| 191.25  | 192.75 | 1.50      | 3.225                              | 12.0  | 113  | 95 | 612 |
| 192.75  | 194.25 | 1.50      | 2.080                              | 27.7  | 224  | 125 | 595 |
| 194.25  | 195.75 | 1.50      | <0.005                          | 40.5  | 1734 | 454 | 847 |
| 195.75  | 197.25 | 1.50      | <0.005                          | 3.4   | 28   | 184 | 1074 |
| 197.25  | 198.75 | 1.50      | <0.005                          | 4.0   | 42   | 168 | 690 |
| 198.75  | 200.25 | 1.50      | <0.005                          | 4.9   | 201  | 352 | 1042 |
| 200.25  | 201.75 | 1.50      | <0.005                          | 10.6  | 276  | 162 | 670 |
| 201.75  | 203.25 | 1.50      | 0.035                              | 20.3  | 68   | 320 | 1091 |
| 203.25  | 204.75 | 1.50      | <0.005                          | 12.7  | 228  | 413 | 871 |
| 204.75  | 206.25 | 1.50      | <0.005                          | 32.2  | 751  | 317 | 530 |
| 206.25  | 207.75 | 1.50      | <0.005                          | 8.5   | 1200 | 83 | 410 |
| 207.75  | 209.25 | 1.50      | <0.005                          | 10.3  | 957  | 134 | 660 |
| 209.25  | 210.75 | 1.50      | <0.005                          | 25.5  | 1180 | 185 | 522 |
| 210.75  | 212.25 | 1.50      | <0.005                          | 22.9  | 2220 | 423 | 3806 |
| 212.25  | 213.50 | 1.25      | <0.005                          | 36.9  | 400  | 473 | 2021 |

----

| From(m) | To(m)  | Length(m) | Description     | g/t   | Ppm  |
|---------|--------|-----------|-----------------|-------|------|
| Au      | Ag     | Cu        | Pb              | Zn    |
| 79.75   | 80.40  | 0.65      | Breccia Zone    | 0.020 | 14.7 | 409 | 40 | 2080 |
| 80.40   | 81.90  | 1.50      | 1.396           | 48.0  | 2641 | 148 | 435 |
| 81.90   | 83.20  | 1.30      | 6.720           | 174.4 | 2456 | 327 | 21 |
| 83.20   | 84.50  | 1.30      | 3.703           | 96.4  | 1815 | 818 | 94 |
| 214.55  | 216.05 | 1.50      | Main Avino Vein | 0.135 | 21.2 | 315 | 241 | 217 |
| 216.05  | 217.55 | 1.50      | 0.109           | 40.6  | 257  | 618 | 318 |
| 217.55  | 219.05 | 1.50      | 3.017           | 113.2 | 5264 | 177 | 123 |
| 219.05  | 220.55 | 1.50      | 0.096           | 7.9   | 1528 | 298 | 330 |
| 220.55  | 222.05 | 1.50      | 0.025           | 8.8   | 405  | 253 | 275 |
| 222.05  | 223.66 | 1.50      | 0.128           | 11.9  | 520  | 687 | 391 |
| 223.56  | 225.05 | 1.50      | 0.049           | 9.6   | 1592 | 5318 | 570 |
| 225.05  | 226.55 | 1.50      | 0.105           | 8.4   | 631  | 331 | 750 |
| 226.55  | 228.05 | 1.50      | 0.084           | 21.1  | 432  | 167 | 487 |
| 226.05  | 229.55 | 1.50      | 0.100           | 21.7  | 517  | 1910 | 584 |
| 229.55  | 231.05 | 1.50      | 0.723           | 82.3  | 484  | 4282 | 3006 |
| 231.05  | 232.55 | 1.50      | 1.310           | 94.9  | 3753 | 565 | 674 |

| From(m) | To(m)  | Length(m) | Description     | g/t   | Ppm  |
|---------|--------|-----------|-----------------|-------|------|
| Au      | Ag     | Cu        | Pb              | Zn    |
| 232.55  | 234.05 | 1.50      | Main Avino Vein | 1.890 | 58.4 | 574 | 474 | 619 |
| 234.05  | 235.55 | 1.50      | 1.658           | 69.1  | 1117 | 412 | 687 |
| 235.55  | 237.05 | 1.50      | 2.756           | 53.0  | 2590 | 396 | 711 |
| 237.05  | 238.55 | 1.50      | 1.065           | 28.7  | 1816 | 280 | 410 |
| 238.55  | 240.05 | 1.50      | 0.219           | 66.5  | 1263 | 916 | 416 |
| 240.05  | 241.55 | 1.50      | 0.185           | 45.3  | 369  | 191 | 424 |
| 241.55  | 243.05 | 1.50      | 0.167           | 42.0  | 1220 | 482 | 438 |
| 243.05  | 244.55 | 1.50      | 0.382           | 48.1  | 8097 | 525 | 2111 |
| 244.55  | 246.05 | 1.50      | 0.648           | 60.7  | 1638 | 766 | 716 |
| 246.05  | 247.55 | 1.50      | 0.506           | 49.7  | 1311 | 549 | 415 |
| 247.55  | 249.05 | 1.50      | 0.125           | 39.7  | 1343 | 911 | 475 |
| 249.05  | 250.55 | 1.50      | 0.160           | 78.1  | 3430 | 790 | 737 |
| 250.55  | 252.05 | 1.50      | 0.135           | 92.9  | 3617 | 551 | 506 |
| 252.05  | 253.55 | 1.50      | 0.130           | 44.4  | 5739 | 351 | 603 |
| 253.55  | 255.05 | 1.50      | 0.070           | 42.6  | 3395 | 796 | 357 |
| 255.05  | 256.55 | 1.50      | 0.045           | 30.0  | 2971 | 365 | 374 |
| 256.55  | 257.85 | 1.30      | 0.025           | 31.4  | 5772 | 1510 | 686 |

----

| From(m) | To(m)  | Length(m) | Description     | g/t   | Ppm   |
|---------|--------|-----------|-----------------|-------|-------|
| Au      | Ag     | Cu        | Pb              | Zn    |
| 321.00  | 322.50 | 1.50      | Main Avino Vein | 0.501 | 34.2  | 2378 | 264 | 426 |
| 322.50  | 324.00 | 1.50      | 1.146           | 71.0  | 3147  | 421 | 496 |
| 324.00  | 325.50 | 1.50      | 0.904           | 55.2  | 4652  | 230 | 288 |
| 325.50  | 327.00 | 1.50      | 0.262           | 54.9  | 1395  | 230 | 236 |
| 327.00  | 328.50 | 1.50      | 2.174           | 165.0 | 8408  | 509 | 286 |
| 328.50  | 330.00 | 1.50      | 0.173           | 101.9 | 7194  | 8582 | 3727 |
| 330.00  | 331.50 | 1.50      | 0.053           | 56.0  | 4926  | 5923 | 18300 |
| 331.50  | 333.00 | 1.50      | 0.095           | 54.9  | 4081  | 2559 | 561 |
| 333.00  | 334.50 | 1.50      | 0.080           | 23.1  | 1089  | 1199 | 301 |
| 334.50  | 336.00 | 1.50      | 0.052           | 56.6  | 11000 | 536 | 597 |
| 336.00  | 337.50 | 1.50      | 0.030           | 49.7  | 10900 | 170 | 618 |
| 337.50  | 339.00 | 1.50      | 0.032           | 156.6 | 14700 | 395 | 853 |
| 339.00  | 340.00 | 1.00      | 0.025           | 48.4  | 6149  | 174 | 595 |
| 340.00  | 341.10 | 1.10      | 0.064           | 161.8 | 8252  | 2170 | 1765 |

| From(m) | To(m)  | Length(m) | Description     | g/t   | Ppm   |
|---------|--------|-----------|-----------------|-------|-------|
| Au      | Ag     | Cu        | Pb              | Zn    |
| 290.95  | 292.30 | 1.35      | Main Avino Vein | 0.172 | 16.7  | 533 | 3964 | 643 |
| 292.30  | 293.35 | 1.05      | 0.096           | 0.5   | 581   | 5078 | 2842 |
| 293.35  | 294.85 | 1.50      | 0.379           | 30.8  | 2116  | 8000 | 559 |
| 294.85  | 296.35 | 1.50      | 0.050           | 12.3  | 2654  | 7063 | 582 |
| 296.35  | 297.60 | 1.25      | 0.568           | 67.3  | 3564  | 3688 | 164 |
| 297.60  | 299.10 | 1.50      | 0.062           | 42.4  | 5360  | 1771 | 688 |
| 299.10  | 300.60 | 1.50      | 0.020           | 31.8  | 14900 | 896 | 3473 |
| 300.60  | 301.70 | 1.10      | 0.060           | 34.4  | 11300 | 282 | 1743 |
| 301.70  | 302.70 | 1.00      | 0.130           | 44.2  | 10000 | 469 | 1265 |

----

| From(m) | To(m)  | Length(m) | Description     | g/t       | Ppm   |
|---------|--------|-----------|-----------------|-----------|-------|
| Au      | Ag     | Cu        | Pb              | Zn        |
| 237.60  | 238.25 | 0.65      | Main Avino Vein | 0.140     | 74.2  | 3526 | 7260 | 909 |
| 238.25  | 239.75 | 1.50      | 0.065           | 22.4      | 2260  | 344 | 383 |
| 239.75  | 241.25 | 1.50      | 0.020           | 8.7       | 883   | 43 | 528 |
| 241.25  | 242.75 | 1.50      | 0.115           | 10.1      | 2249  | 374 | 1981 |
| 242.75  | 244.25 | 1.50      | 0.045           | 8.7       | 2641  | 40 | 631 |
| 244.25  | 245.75 | 1.50      | 0.105           | 14.4      | 3472  | 87 | 651 |
| 245.75  | 247.25 | 1.50      | 0.072           | 17.1      | 4780  | 41 | 876 |
| 247.25  | 248.75 | 1.50      | 0.053           | 20.5      | 6107  | 100 | 950 |
| 248.75  | 250.25 | 1.50      | 0.100           | 11.0      | 4619  | 191 | 1044 |
| 250.25  | 251.75 | 1.50      | 0.120           | 10.4      | 4869  | 282 | 784 |
| 251.75  | 253.25 | 1.50      | 0.035           | 4.0       | 1261  | 45 | 662 |
| 253.25  | 254.75 | 1.50      | 0.163           | 14.9      | 2553  | 78 | 835 |
| 254.75  | 256.25 | 1.50      | 0.045           | 25.4      | 6483  | 95 | 734 |
| 256.25  | 257.75 | 1.50      | 0.015           | 12.0      | 5544  | 40 | 871 |
| 257.75  | 259.25 | 1.50      | 0.025           | 39.8      | 5758  | 217 | 521 |
| 259.25  | 260.75 | 1.50      | 0.025           | 20.6      | 6136  | 89 | 465 |
| 260.75  | 262.25 | 1.50      | 0.015           | 10.5      | 3202  | 74 | 327 |
| 262.25  | 263.75 | 1.50      | 0.059           | 24.0      | 3670  | 105 | 533 |
| 263.75  | 265.25 | 1.50      | 0.049           | 28.7      | 3252  | 183 | 718 |
| 265.25  | 266.75 | 1.50      | 0.053           | 14.2      | 6129  | 112 | 584 |
| 266.75  | 268.25 | 1.50      | 0.156           | 47.3      | 7192  | 217 | 399 |
| 268.25  | 269.75 | 1.50      | 0.102           | 19.8      | 3342  | 125 | 326 |
| 269.75  | 271.25 | 1.50      | 0.030           | 9.1       | 4101  | 38 | 414 |
| 271.25  | 272.75 | 1.50      | 0.010           | 9.3       | 2611  | 94 | 455 |
| 272.75  | 274.25 | 1.50      | 0.020           | 7.9       | 3355  | 41 | 391 |
| 274.25  | 275.75 | 1.50      | 0.020           | 16.5      | 4405  | 58 | 496 |
| 275.75  | 277.25 | 1.50      | 0.076           | 82.7      | 4570  | 422 | 979 |
| 277.25  | 278.75 | 1.50      | 0.084           | 58.4      | 5545  | 956 | 593 |
| 278.75  | 280.25 | 1.50      | 0.010           | 16.6      | 5749  | 74 | 659 |
| 280.25  | 281.75 | 1.50      | 0.020           | 18.7      | 4592  | 68 | 575 |
| 281.75  | 283.25 | 1.50      | 0.015           | 16.1      | 4219  | 74 | 651 |
| 283.25  | 284.75 | 1.50      | 0.038           | 23.6      | 3526  | 7260 | 909 |
| 284.75  | 286.25 | 1.50      | Main Avino Vein | <0.005 | 6.7   | 2841 | 22 | 1225 |
| 286.25  | 287.75 | 1.50      | 0.092           | 49.4      | 25700 | 44 | 2712 |
| 287.75  | 288.70 | 0.95      | 0.105           | 62.5      | 27200 | 57 | 2669 |

----

| From(m) | To(m)  | Length(m) | Description     | g/t   | Ppm  |
|---------|--------|-----------|-----------------|-------|------|
| Au      | Ag     | Cu        | Pb              | Zn    |
| 192.95  | 194.45 | 1.50      | Main Avino Vein | 1.456 | 4.6  | 318 | 57 | 508 |
| 194.45  | 195.95 | 1.50      | 0.431           | 4.4   | 329  | 256 | 502 |
| 195.95  | 197.10 | 1.15      | 0.325           | 13.5  | 1523 | 2446 | 3813 |
| 197.10  | 198.60 | 1.50      | 0.100           | 2.5   | 133  | 355 | 1688 |
| 198.60  | 199.70 | 1.10      | 0.048           | 4.4   | 101  | 36 | 1206 |
| 199.70  | 200.80 | 1.10      | 0.046           | 5.7   | 69   | 72 | 896 |
| 200.80  | 201.75 | 0.95      | 0.203           | 27.2  | 120  | 301 | 627 |
| 201.75  | 203.25 | 1.50      | 0.030           | 6.5   | 431  | 43 | 1048 |

----

| From(m) | To(m)  | Length(m) | Au(g/t) | Ag(g/t) | Cu(ppm) | Pb(ppm) | Zn(ppm) |
|---------|--------|-----------|---------|---------|---------|---------|---------|
| 143.05  | 144.40 | 1.35      | 1.330   | 168.6   | 309     | 530     | 3598    |
| 144.40  | 145.80 | 1.40      | 0.930   | 142.1   | 131     | 560     | 1540    |

| From(m) | To(m)  | Length(m) | Au(g/t) | Ag(g/t) | Cu(ppm) | Pb(ppm) | Zn(ppm) |
|---------|--------|-----------|---------|---------|---------|---------|---------|
| 257.50  | 258.05 | .55       | .420    | 150.2   | 318     | 2832    | 5393    |
| 258.05  | 258.70 | .65       | 3.840   | 1564.4  | 264     | 13100   | 13900   |
| 258.70  | 259.10 | .40       | 0.075   | 68.1    | 79      | 266     | 502     |
|    |   |      |    |    |    |    |    |
| 263.05  | 263.75 | .70       | 10.765  | 1275.6  | 7394    | 106000  | 146000  |
| 263.75  | 263.95 | .20       | 0.115   | 62.3    | 364     | 4916    | 31000   |
| 263.95  | 264.70 | .75       | 2.606   | 587.4   | 4327    | 76200   | 200000  |
| 264.70  | 265.30 | .60       | 7.337   | 224.1   | 2363    | 146000  | 355000  |
| 264.30  | 266.05 | .75       | 22.560  | 204.2   | 917     | 80000   | 126000  |

----

| From(m) | To(m)  | Length(m) | Description                                | g/t   | ppm  |
|---------|--------|-----------|--------------------------------------------|-------|------|
| Au      | Ag     | Cu        | Pb                                         | Zn    |
| 321.40  | 322.00 | 0.60      |  Andesite volcanic with quartz veins  | 0.016 | 1.6  | 33 | 126 | 423 |
| 322.00  | 322.85 | 0.65      | 0.215                                      | 74.1  | 409  | 11500 | 2725 |
| 322.85  | 323.70 | 0.85      | 0.195                                      | 75.2  | 389  | 2665 | 3405 |
| 323.70  | 324.10 | 0.40      | 0.109                                      | 221.0 | 3668 | 65000 | 3569 |
| 324.10  | 324.90 | 0.80      |  San Gonzalo vein with quartz breccia | 0.925 | 55.0 | 264 | 6449 | 3610 |
| 324.90  | 325.70 | 0.80      | 0.457                                      | 223.5 | 729  | 15500 | 4012 |
| 325.70  | 327.00 | 1.30      | 0.288                                      | 31.8  | 483  | 2241 | 2408 |

| From(m) | To(m)  | Length(m) | Description                  | g/t   | ppm  |
|---------|--------|-----------|------------------------------|-------|------|
| Au      | Ag     | Cu        | Pb                           | Zn    |
| 261.25  | 261.75 | 0.50      |   San Gonzalo Vein | 0.802 | 81.0 | 145 | 754 | 1251 |
| 261.75  | 262.75 | 1.00      | 0.331                        | 61.4  | 234  | 1014 | 2002 |
| 262.75  | 263.15 | 0.40      | 0.040                        | 11.2  | 39   | 109 | 353 |
| 263.15  | 263.70 | 0.55      | 0.990                        | 85.0  | 119  | 396 | 794 |
| 263.70  | 264.60 | 0.90      | 0.424                        | 49.7  | 208  | 440 | 702 |

----

| From(m) | To(m)  | Length(m) | Description        | g/t     | ppm |
|---------|--------|-----------|--------------------|---------|-----|
| Au      | Ag     | Cu        | Pb                 | Zn      |
| 437.75  | 438.50 | 0.75      |  Breccia Zone | 0.030   | 0.1 | 5 | 33 | 32 |
| 438.50  | 438.90 | 0.40      | <0.005          | <0.1 | 6   | 22 | 76 |
| 438.90  | 439.55 | 0.65      | 0.015              | <0.1 | 7   | 18 | 65 |
| 439.55  | 440.35 | 0.80      | 0.010              | <0.1 | 8   | 14 | 30 |

| From(m) | To(m)  | Length(m) | Description                                   | g/t   | ppm   |
|---------|--------|-----------|-----------------------------------------------|-------|-------|
| Au      | Ag     | Cu        | Pb                                            | Zn    |
| 214.05  | 214.85 | 0.80      |  San Gonzalo vein with Sulphide Minerals | 0.729 | 204.0 | 2944 | 21400 | 17600 |
| 214.85  | 215.95 | 1.10      | 0.523                                         | 95.0  | 1189  | 5264 | 6417 |
| 215.95  | 216.80 | 0.65      | 0.335                                         | 47.5  | 398   | 1486 | 2918 |
| 216.80  | 218.00 | 1.20      | 0.360                                         | 87.3  | 1960  | 5342 | 7772 |
| 218.00  | 218.85 | 0.85      | 3.228                                         | 758.9 | 3731  | 18500 | 19000 |
| 218.85  | 219.70 | 0.85      | 0.402                                         | 316.1 | 7094  | 17500 | 14800 |

----

| Length along vein (metres) | Width(metres) | Gold(g/t) | Silver(g/t) | Lead (ppm) | Zinc(ppm) | Copper (ppm) |
|----------------------------|---------------|-----------|-------------|------------|-----------|--------------|
| 21.04                      | 2.83          | 1.146     | 394         | 3580       | 3112      | 502          |
| 27.24                      | 2.41          | 1.231     | 342         | 4999       | 2202      | 442          |
| 11.37                      | 1.61          | 1.752     | 532         | 9651       | 11438     | 1605         |

----

| Line          |  Width (m) | Gold g/t | Silver g/t | Lead g/t | Zinc g/t | Copper g/t |
|---------------|-----------------|----------|------------|----------|----------|------------|
|   1 | 0.75            | 1.112    | 227        | 4012     | 1772     | 930        |
|   2 | 1.10            | 3.621    | 508        | 7007     | 4295     | 657        |
|   3 | 1.05            | 2.243    | 384        | 4817     | 718      | 1263       |
|   4 | 1.25            | 6.120    | 216        | 2563     | 1206     | 2398       |
|   5 | 1.15            | 2.221    | 380        | 5712     | 1330     | 1689       |
|   6 | 1.25            | 1.436    | 260        | 3921     | 1925     | 852        |
|   7 | 1.30            | 1.391    | 727        | 5667     | 1305     | 448        |
|   8 | 1.15            | 0.670    | 313        | 1656     | 1339     | 667        |
| 9             | 1.10            | 1.413    | 344        | 4322     | 904      | 1394       |
| 10            | 1.25            | 2.078    | 276        | 12255    | 1762     | 891        |
| 11            | 1.60            | 1.077    | 315        | 2339     | 482      | 815        |
| 12            | 1.30            | 3.642    | 514        | 5893     | 698      | 745        |
| 13            | 1.35            | 1.698    | 707        | 3323     | 610      | 372        |
| 14            | 1.65            | 1.493    | 422        | 4202     | 896      | 258        |
| 15            | 1.10            | 1.518    | 588        | 2304     | 610      | 173        |
| 16            | 1.60            | 1.122    | 366        | 3234     | 824      | 334        |
|  17      | 1.30            | 4.030    | 171        | 10609    | 633      | 509        |
| 18            | 1.25            | 1.769    | 224        | 12334    | 1161     | 1091       |
| Average:      | 1.25            | 2.135    | 389        | 5313     | 1197     | 831        |

----

| Assay Values (ppm)     |
|------------------------|
|                   |   | Width | Gold | Silver | Lead | Zinc | Copper |
| Line 2                 |   | 1.15 | 0.977 | 423 | 1137 | 3928 | 509 |
| Line 3                 |   | 1.50 | 0.513 | 333 | 1471 | 4066 | 767 |
| Line 4                 |   | 1.40 | 0.828 | 402 | 1340 | 1931 | 522 |
|                   | Average | 1.35 | 0.754 | 383 | 1331 | 3289 | 609 |
|                   |   |   |   |   |   |   |   |
| Line 5                 |   | 1.50 | 0.459 | 176 | 2612 | 2889 | 392 |
| Line 6                 |   | 1.00 | 0.219 | 91 | 3786 | 4630 | 513 |
| Line 7                 |   | 1.25 | 0.679 | 223 | 737 | 1341 | 131 |
| Line 8                 |   | 1.85 | 1.301 | 178 | 1188 | 1316 | 240 |
| Line 9                 |   | 1.80 | 0.904 | 274 | 2204 | 774 | 230 |
| Line 10                |   | 2.35 | 1.551 | 392 | 2819 | 1238 | 397 |
|                   | Average | 1.63 | 0.968 | 244 | 2197 | 1782 | 313 |
|                   |   |   |   |   |   |   |   |
| II Line 1              |   | 2.60 | 0.778 | 165 | 1261 | 1483 | 135 |
| II Line 2              |   | 2.00 | 0.518 | 238 | 1635 | 1830 | 222 |
|                   |   |   |   |   |   |   |   |
| II Line 3              |   | 2.10 | 1.692 | 536 | 2566 | 2875 | 276 |
| Includes Sample 158328 | 0.5 | 3.156 | 1151.6 | 3914 | 6096 | 540 |
|                   |   |   |   |   |   |   |   |
| II Line 4              |   | 1.80 | 1.841 | 397 | 1051 | 601 | 374 |
| Includes Sample 158332 | 0.6 | 3.384 | 761.2 | 2310 | 886 | 725 |
|                   |   |   |   |   |   |   |   |
| II Line 5              |   | 2.50 | 0.546 | 191 | 692 | 1981 | 356 |
|                   | Average | 2.20 | 1.026 | 293 | 1415 | 1780 | 267 |

----

----

| EAGLE VEIN – HISTORIC REPORTED DRILLING (YTG MinFile 105M 021)  |
|----------------------------------------------------------------------------|
| Year                                                                       | Operator | Reported Structure | Reported Intercept(m) | Silver g/t | Lead % | Zinc % |
| 1964                                                                       | Jersey Yukon Mines Ltd. | Branch Vein | 2.1 | 1,885.7 | 12.8 | 4.2 |
|                                                                       |   | Main Vein (parallel intercepts) | 0.15 | 7,624.9 | 1.2 |   |
|                                                                       |   |   | 0.4 | 682.3 | 11.6 |   |
| 1978/79                                                                    | Teck Corporation | Main Vein (DDH JB3) | 1.5 | 366.6 | 5.4 | 6.8 |

----

| EAGLE PROPERTY - DIAMOND DRILL RESULTS SUMMARY  |
|------------------------------------------------------|
| Hole Number                                          | Intercept | Analytical Results* |
| Target                                               | Drill Section | From(m) | To(m) | Width (m) | Au(ppb) | Ag(g/t) | Pb(ppm) | Zn(ppm) | In(g/t) |
| D09EE-01                                             | Eagle Vein | L40+00E |   | 328.6 | 332.7 | 4.1 | 16 | 15.1 | 554 | 1.16% | 11.3 |
|                                                 | 346.3 | 352.5 | 6.2 | 425 | 12.2 | 489 | 1.86% | 22.9 |
| Incl.                                                | 351.0 | 352.5 | 1.5 | 1263 | 15.7 | 138 | 797 | 0.1 |
| D09EE-02                                             | Eagle Vein | L40+00E |   | 272.9 | 296.6 | 23.7 | 60 | 47.1 | 3750 | 3.85% | 37.1 |
| Incl.                                                | 272.9 | 274.2 | 1.3 | 312 | 284.3 | 3.16% | 7.11% | 57.9 |
| Incl.                                                | 283.7 | 284.8 | 1.1 | 222 | 110.8 | 1.90% | 12.01% | 89.4 |
| Incl.                                                | 288.3 | 296.0 | 7.7 | 46 | 20.9 | 1008 | 4.89% | 65.8 |
| D09EE-03                                             | Eagle / McLeod | L33+50E |   | 267.7 | 268.4 | 0.7 | 8 | 29.4 | 3120 | 5262 | n/a |
| D09EE-04                                             | McLeod Fault | n/a |   | - | - | - | No significant results. |
| D09EE-10                                             | Eagle Vein | L39+00E |   | 305.1 | 305.9 | 0.8 | 160 | 28.1 | 0.35% | 3.23% | n/a |
| D09EE-11                                             | Eagle Vein | L42+00E |   | 232.7 | 241.1 | 8.4 | 181 | 10.3 | 668 | 1.09% | n/a |
| Incl.                                                | 232.7 | 234.1 | 1.4 | 934 | 18.6 | 482 | 2.53% | n/a |
|                                                 | 244.5 | 265.5 | 19.0 | 58 | 29.1 | 2805 | 2.79% | n/a |
| Incl.                                                | 252.5 | 254.5 | 2.0 | 112 | 145.0 | 1.03% | 3.17% | 20.3 |
| And                                                  | 262.8 | 264.6 | 1.8 | 230 | 31.9 | 626 | 18.52% | 285.4 |

----

----

----

----

----

----

----

----

----

|                          |   | Payment due by period |      |
|-------------------------------|--------|-----------------------|-----------|
|                          |   | Total                 |      |   | <1 year |   |   | 1-3 Years |   |   | 3-5 Years |   |   | More than 5 years |   |
| Drilling Contract             |   | $                     | 302,358   |   |   | $ | 302,358 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Future Income Tax Liabilities |   |                  | 2,026,148 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,026,148 |   |
| Total                         |   | $                     | 2,328,506 |   |   | $ | 302,358 |   |   |   | - |   |   |   | - |   |   | $ | 2,026,148 |   |

----

| Name and Present Position with the Company | Principal Occupation                                                                                                                                                                                                                                                             | Director/Officer Since |
|--------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------|
| Michael Baybak                             | A business consultant.                                                                                                                                                                                                                                                           | June 1990              |
| Director                                   |                                                                                                                                                                                                                                                                             |                   |
| Gary Robertson                             | Certified Financial Planner, Director of Bralorne Gold Mines Ltd., Coral Gold Resources Ltd., Levon Resources Ltd., Mill Bay Ventures Inc. and Sage Gold Inc.                                                                                                                    | August 2005            |
| Director                                   |                                                                                                                                                                                                                                                                             |                   |
| David Wolfin(1)                            | Director and VP Finance of Berkley Resources Inc., Director and VP Finance, of Levon Resources Ltd., President and Director of Coral Gold Resources Ltd. and Gray Rock Resources Ltd. and Director of Bralorne Gold Mines Ltd., Mill Bay Ventures Ltd. and Cresval Capital Corp. | October 1995           |
| Director/President/CEO                     |                                                                                                                                                                                                                                                                             |                   |
| Jasman Yee                                 | Metallurgical Engineer                                                                                                                                                                                                                                                           | January 2011           |
| Director                                   |                                                                                                                                                                                                                                                                             |                   |
| Dorothy Chin                               | Corporate Secretary of Bralorne Gold Mines Ltd., Coral Gold Resources Ltd., Gray Rock Resources Ltd., and Levon Resources Ltd.                                                                                                                                                   | September 2008         |
| Corporate Secretary                        |                                                                                                                                                                                                                                                                             |                   |
| Lisa Sharp                                 | Chief Financial Officer of Bralorne Gold Mines Ltd., Coral Gold Resources Ltd., Gray Rock Resources Ltd., Levon Resources Ltd., Mill Bay Ventures Inc. and Venerable Ventures Ltd.                                                                                               | June 2008              |
| Chief Financial Officer                    |                                                                                                                                                                                                                                                                             |                   |

----

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

| 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      | Cash payment to add variable component to compensation                                                                                         | Based on corporate and individual performances of key personnel. |
| 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. | Retain qualified leaders, motivate strong business performance.  |

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

| Name and principal position                                         | Year                      | Salary($) | Share-based awards($)1 | Option-based awards($)2 | Non-equity incentive plan compensation($)3 | Pension value($)3 | All other compensation($) | Total compensation($) |
|---------------------------------------------------------------------|---------------------------|-----------|------------------------|-------------------------|--------------------------------------------|-------------------|---------------------------|-----------------------|
| Annual incentive plans                                              | Long-term incentive plans |
| DAVID Wolfin(4)President , CEO  &  Director | 2010                      | $96,000   | NIL                    | $65,300                 | NIL                                        | NIL               | NIL                       | NIL                   | $161,300 |
| 2009                                                                | $96,000                   | NIL       | NIL                    | NIL                     | NIL                                        | NIL               | NIL                       | $96,000               |
| 2008                                                                | $96,000                   | NIL       | $72,150                | NIL                     | NIL                                        | NIL               | NIL                       | $168,150              |
| LOUIS Wolfin(4)Former CEO  &  Director      | 2010                      | NIL       | NIL                    | $31,750                 | NIL                                        | NIL               | NIL                       | NIL                   | $31,750 |
| 2009                                                                | NIL                       | NIL       | NIL                    | NIL                     | NIL                                        | NIL               | NIL                       | NIL                   |
| 2008                                                                | NIL                       | NIL       | $72,150                | NIL                     | NIL                                        | NIL               | NIL                       | $72,150               |
| Lisa SharpCFO                                                       | 2010                      | $20,992   | NIL                    | $18,300                 | NIL                                        | NIL               | NIL                       | NIL                   | $39,292 |
| 2009                                                                | $19,800                   | NIL       | $19,500                | NIL                     | NIL                                        | NIL               | NIL                       | $39,300               |
| 2008                                                                | $11,106                   | NIL       | NIL                    | NIL                     | NIL                                        | NIL               | NIL                       | $11,106               |

----

| 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.  The Company used the following weighted average assumptions in the model to determine the award recorded above: Dividend Yield – Nil; Expected Life – 5 years; Volatility – 77.47%; Risk Free Interest Rate – 2.19%. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 | The Company does not have any non-equity incentive plans or any pension plans |
|---|-------------------------------------------------------------------------------|

| 4 | On June 24, 2010, Mr. Louis Wolfin resigned as CEO and director and 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 shares or units of shares that have not vested(#) | Market or payout value of share-based awards that have not vested($)1 |
| David WolfinPresident, CEO & Director | 65,000                                                 | $0.75                    | Feb. 27, 2013          | $131,300                                      | Nil                                                         | Nil                                                                   |
| 15,000                                    | $0.81                                                  | Jan 14, 2015             | $29,400                | Nil                                           | Nil                                                         |
| 95,000                                    | $1.05                                                  | Sept 15, 2015            | $163,400               | Nil                                           | Nil                                                         |
| Louis Wolfin, Former CEO & Director   | 65,000                                                 | $0.75                    | Feb. 27, 2013          | $131,300                                      | Nil                                                         | Nil                                                                   |
| 15,000                                    | $0.81                                                  | Jan 14, 2015             | $29,400                | Nil                                           | Nil                                                         |
| 40,000                                    | $1.05                                                  | Sept 15, 2015            | $68,800                | Nil                                           | Nil                                                         |
| Lisa SharpCFO                             | 40,000                                                 | $0.75                    | Sept. 22, 2014         | $80,800                                       | Nil                                                         | Nil                                                                   |
| 30,000                                    | $1.05                                                  | Sep 10, 2015             | $51,600                | Nil                                           | Nil                                                         |

----

| Name                                       | Option-based awards – Value vested during the year($) (1) | Share-based awards – Value vested during the year($) | Non-equity incentive plan compensation – Value earned during the year ($) |
|--------------------------------------------|-----------------------------------------------------------------|------------------------------------------------------------|---------------------------------------------------------------------------------|
| David Wolfin(2)President, CEO and Director | Nil                                                             | Nil                                                        | Nil                                                                             |
| Louis Wolfin(2)Former CEO and Director     | Nil                                                             | Nil                                                        | Nil                                                                             |
| Lisa SharpCFO                              | Nil                                                             | Nil                                                        | Nil                                                                             |

| (1)   | The options have no value since the exercise price was higher than the market price at the grant date. |
|-----------------|--------------------------------------------------------------------------------------------------------|

| (2)   | On June 24, 2010 Louis Wolfin resigned as CEO and director, and David Wolfin was appointed President and CEO. |
|-----------------|---------------------------------------------------------------------------------------------------------------|

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

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

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

|    Name |  Fees earned($) | Share-based awards($) | Option-based awards($)(1) | Non-equity incentive plan compensation($) |  Pension value($) |  All other compensation($) |   Total($) |
|------------------------|----------------------|-----------------------|---------------------------|-------------------------------------------|------------------------|---------------------------------|----------------------|
| Michael Baybak*        | $3,000               | NIL                   | $19,550                   | NIL                                       | NIL                    | NIL                             | $22,550              |
| Gary Robertson*        | $6,000               | NIL                   | $25,650                   | NIL                                       | NIL                    | NIL                             | $31,650              |
| David Wolfin           | NIL                  | NIL                   | NIL                       | NIL                                       | NIL                    | NIL                             | NIL                  |
| Louis Wolfin           | NIL                  | NIL                   | NIL                       | NIL                                       | NIL                    | NIL                             | NIL                  |

----

| Name           | Number of options | Option exercise price ($) | Option expiration date | Option Exercised | Balance of OptionUn-Exercised |
|----------------|-------------------|---------------------------|------------------------|------------------|-------------------------------|
| Michael Baybak | 25,000            | $0.75                     | Feb 27, 2013           | Nil              | 25,000                        |
| 15,000         | $0.81             | Jan 14, 2015              | Nil                    | 15,000           |
| 20,000         | $1.05             | Sep 10, 2015              | Nil                    | 20,000           |
| Gary Robertson | 25,000            | $0.75                     | Feb 27, 2013           | Nil              | 25,000                        |
| 15,000         | $0.81             | Jan 14, 2015              | Nil                    | 15,000           |
| 30,000         | $1.05             | Sep 10, 2015              | Nil                    | 30,000           |
| TOTAL:         | 130,000           |                      |                   | -                | 130,000                       |

----

----

| ·       | 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. |
|--------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------|

----

| Name of Beneficial Owner |   | Number of Shares |    |   | Percent |   |
|--------------------------|--------|------------------|---------|--------|---------|--------|
|                     |   |             |    |   |    |   |
| Michael Baybak           |   |             | 102,400 |   |    |   | * |   |
| Gary Robertson           |   |             | 75,000  |   |    |   | * |   |
| David Wolfin             |   |             | 303,084 |   |    |   | * |   |
| Louis Wolfin(1)          |   |             | 4,345   |   |    |   | * |   |
| Jasman Yee               |   |             | 22,500  |   |    |   | * |   |
| Lisa Sharp               |   | Nil              |    |   |    | N/A    |   |
|                     |   |             |    |   |    |   |   |   |

----

|                        | No. of Shares | Date of Grant    | Exercise Price | Expiration Date  |
|-----------------------------|---------------|------------------|----------------|------------------|
|                        |          |             |           |             |
| David Wolfin                | 65,000        | Feb. 27, 2008    | $0.75          | Feb. 27, 2013    |
| President, CEO and Director | 15,000        | January 14, 2010 | $0.81          | January 14, 2015 |
|                        | 95,000        | Sept 10, 2010    | $1.05          | Sept 10, 2015    |
|                        | 410,000       | Jan 18, 2011     | $2.30          | Jan 18, 2016     |
|                        |          |             |           |             |
| Louis Wolfin                | 65,000        | Feb. 27, 2008    | $0.75          | Feb. 27, 2013    |
| Former CEO & Director   | 15,000        | January 14, 2010 | $0.81          | January 14, 2015 |
|                        | 40,000        | Sept 10, 2010    | $1.05          | Sept 10, 2015    |
|                        |          |             |           |             |
| Lisa Sharp                  | 40,000        | Sept. 22, 2009   | $0.75          | Sept. 22, 2014   |
| CFO                         | 30,000        | Sept 10, 2010    | $1.05          | Sept 10, 2015    |
|                        | 50,000        | Jan 18, 2011     | $2.30          | Jan 18, 2016     |
|                        |          |             |           |             |
| Michael Baybak              | 25,000        | Feb. 27, 2008    | $0.75          | Feb. 27, 2013    |
| Director                    | 15,000        | January 14, 2010 | $0.81          | January 14, 2015 |
|                        | 20,000        | Sept 10, 2010    | $1.05          | Sept 10, 2015    |
|                        | 100,000       | Jan 18, 2011     | $2.30          | Jan 18, 2016     |
|                        |          |             |           |             |
| Gary Robertson              | 25,000        | Feb. 27, 2008    | $0.75          | Feb. 27, 2013    |
| Director                    | 15,000        | January 14, 2010 | $0.81          | January 14, 2015 |
|                        | 30,000        | Sept 10, 2010    | $1.05          | Sept 10, 2015    |
|                        | 100,000       | Jan 18, 2011     | $2.30          | Jan 18, 2016     |
|                        |          |             |           |             |
| Jasman Yee                  | 15,000        | Sept. 22, 2009   | $0.75          | Feb. 27, 2013    |
| Director                    | 30,000        | Sept 10, 2010    | $1.05          | Sept 10, 2015    |
|                        | 100,000       | Jan 18, 2011     | $2.30          | Jan 18, 2016     |

----

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

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

| i) | $168,527 (2009 - $148,754; 2008 - $188,158) for administrative expenses (rent, salaries, office supplies and other miscellaneous disbursements) to Oniva International Services Corp (“Oniva”), a private company beneficially owned by the Company and a number of other public companies related through common directors; |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ii) | $96,000 (2009 - $96,000; 2008 - $96,000) to a private company controlled by a Director for management fees; |
|-----|-------------------------------------------------------------------------------------------------------------|

| iii)   | $30,000 (2009 - $30,000; 2008 - $30,000) to a private company controlled by a director of a related company for consulting fees; |
|------------------|----------------------------------------------------------------------------------------------------------------------------------|

| iv)   | $24,954 (2009 - $10,344; 2008 - $34,698) to a private company controlled by a director of a related company for geological consulting services; |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

| v)   | $13,500 (2009 - $15,000; 2008 - $15,000) to Directors for Directors fees. |
|----------------|---------------------------------------------------------------------------|

----

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

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

| ·   | Audit Report of Independent Registered Public Accounting Firm; |
|--------------------|----------------------------------------------------------------|

| ·   | Consolidated Balance Sheets as at December 31, 2010 and December 31, 2009; |
|--------------------|----------------------------------------------------------------------------|

| ·   | Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2010, December 31, 2009 and  2008; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2010, 2009 and 2008; |
|--------------------|-------------------------------------------------------------------------------------------------------------|

| ·   | Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008; and |
|--------------------|-------------------------------------------------------------------------------------------------|

| ·   | Notes to the Consolidated Financial Statements for the years ended December 31, 2010, 2009 and 2008. |
|--------------------|------------------------------------------------------------------------------------------------------|

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

----

| Item 9. | The Offer and Listing |
|---------|-----------------------|

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

|                                   |   | TSX-V(Canadian Dollars) |         |   | OTCBB(United States Dollars) |   |
|----------------------------------------|--------|-------------------------|--------------|--------|------------------------------|--------|
| Last Six Months                        |   | High                    |         |   | Low                          |   |   | High |   |   | Low |   |
| June 2011                              |   |                    | 2.57         |   |                         |   | 1.93 |   |   |   | 2.63 |   |   |   | 1.99 |   |
| May 2011                               |   |                    | 2.82         |   |                         |   | 2.20 |   |   |   | 2.95 |   |   |   | 2.27 |   |
| April 2011                             |   |                    | 3.46         |   |                         |   | 2.30 |   |   |   | 3.60 |   |   |   | 2.48 |   |
| March 2011                             |   |                    | 3.47         |   |                         |   | 2.27 |   |   |   | 3.55 |   |   |   | 2.27 |   |
| February 2011                          |   |                    | 3.31         |   |                         |   | 2.51 |   |   |   | 3.38 |   |   |   | 2.57 |   |
| January 2011                           |   |                    | 2.95         |   |                         |   | 2.00 |   |   |   | 2.95 |   |   |   | 2.20 |   |
| 2010                                   |   | High                    |         |   | Low                          |   |   | High |   |   | Low |   |
| Fourth Quarter ended December 31, 2010 |   |                    | 2.95         |   |                         |   | 1.10 |   |   |   | 2.89 |   |   |   | 1.10 |   |
| Third Quarter ended September 30, 2010 |   |                    | 1.30         |   |                         |   | 0.71 |   |   |   | 1.27 |   |   |   | 0.68 |   |
| Second Quarter ended June 30, 2010     |   |                    | 0.86         |   |                         |   | 0.66 |   |   |   | 0.878 |   |   |   | 0.63 |   |
| First Quarter ended March 31, 2010     |   |                    | 0.88         |   |                         |   | 0.67 |   |   |   | 0.84 |   |   |   | 0.64 |   |
|                                   |   |                    |         |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| 2009                                   |   | High                    |         |   | Low                          |   |   | High |   |   | Low |   |
| Fourth Quarter ended December 31, 2009 |   |                    | 0.99         |   |                         |   | 0.57 |   |   |   | 0.95 |   |   |   | 0.52 |   |
| Third Quarter ended September 30, 2009 |   |                    | 0.71         |   |                         |   | 0.49 |   |   |   | 0.69 |   |   |   | 0.44 |   |
| Second Quarter ended June 30, 2009     |   |                    | 0.82         |   |                         |   | 0.38 |   |   |   | 0.75 |   |   |   | 0.30 |   |
| First Quarter ended March 31, 2009     |   |                    | 0.83         |   |                         |   | 0.50 |   |   |   | 0.70 |   |   |   | 0.50 |   |
|                                   |   |                    |         |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Last Five Fiscal Years                 |   | High                    |         |   | Low                          |   |   | High |   |   | Low |   |
|                                   |   |                    |         |   |                         |   |   |   |   |   |   |   |
| 2010                                   |   |                    | 2.95         |   |                         |   | 0.66 |   |   |   | 2.89 |   |   |   | 0.63 |   |
| 200920082007 II                        |   |                    | 0.991.782.75 |   |                         |   | 0.380.181.46 |   |   |   | 0.951.792.42 |   |   |   | 0..300.201.44 |   |
| 2007                                   |   |                    | 4.48         |   |                         |   | 1.50 |   |   |   | 4.00 |   |   |   | 1.32 |   |

----

| 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 |
|----------|----------------------------------------|

----

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

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

----

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

----

|   | 1. | Distributions made by the Company during a taxable year to a United States Investor who owns shares in the Company that are an “excess distribution” (defined generally as the excess of the amount received with respect to the shares in any taxable year over 125% of the average received in the shorter of either the three previous years or such United States Investor’s holding period before the taxable year) must be allocated ratably to each day of such shareholder’s holding period.  The amount allocated to the current taxable year and to years when the corporation was not a PFIC must be included as ordinary income in the shareholder’s gross income for the year of distribution.  The remainder is not included in gross income but the shareholder must pay a deferred tax on that portion.  The deferred tax amount, in general, is the amount of tax that would have been owed if the allocated amount had been included in income in the earlier year, plus interest.  The interest charge is at the rate applicable to deficiencies in income taxes. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2. | The entire amount of any gain realized upon the sale or other disposition of the shares will be treated as an excess distribution made in the year of sale or other disposition and as a consequence will be treated as ordinary income and, to the extent allocated to years prior to the year of sale or disposition, will be subject to the interest charge described above. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

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

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

----

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

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

----

----

----

----

| The following financial statements pertaining to the Company are filed as part of this Annual Report:             |  75 |
|-------------------------------------------------------------------------------------------------------------------|----------|
|                                                                                                              |     |
| Audit Report of Independent Registered Public Accounting Firm                                                     |  76 |
|                                                                                                              |     |
| Consolidated Balance Sheets as at December 31, 2010 and December 31, 2009                                         |  77 |
|                                                                                                              |     |
| Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2010, 2009 and 2008 |  78 |
|                                                                                                              |     |
| Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2010, 2009 and 2008        |  79 |
|                                                                                                              |     |
| Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008                        |  80 |
|                                                                                                              |     |
| Notes to the Consolidated Financial Statements for the years ended December 31, 2010, 2009 and 2008 70 thru  |  81 |

| Item 19. | Exhibits |
|----------|----------|

| Exhibit Number |   | Name                                                                        |
|----------------|--------|-----------------------------------------------------------------------------|
|           |   |                                                                        |
| 1.1       |   | Memorandum of Avino Silver & Gold Mines Ltd.*                           |
| 1.2       |   | Articles of Avino Silver & Gold Mines Ltd.*                             |
| 4.1            |   | Share Purchase Agreement dated March 22, 2004*                              |
| 8.1            |   | List of Subsidiaries                                                        |
| 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 |

----

----

| REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
|---------------------------------------------------------|

----

|                                        |   | 2010   |        |   | 2009   |   |
|---------------------------------------------|--------|--------|-------------|--------|--------|--------|
|                                        |   |   |        |   |   |   |
| ASSETS                                      |   |   |        |   |   |   |
| Current                                     |   |   |        |   |   |   |
| Cash and cash equivalents                   |   | $      | 9,051,456   |   |   | $      | 2,829,605 |   |
| Interest receivable                         |   |   | 4,142       |   |   |   | 146 |   |
| Sales taxes recoverable (Note 8)            |   |   | 233,378     |   |   |   | 88,725 |   |
| Amounts receivable (Note 6)                 |   |   | 117,940     |   |   |   | - |   |
| Prepaid expenses and other assets           |   |   | 30,463      |   |   |   | 49,614 |   |
|                                        |   |   | 9,437,379   |   |   |   | 2,968,090 |   |
|                                        |   |   |        |   |   |   |   |   |
| Property, Plant & Equipment (Note 5)    |   |   | 1,786,017   |   |   |   | 1,455,146 |   |
| Reclamation Bonds                           |   |   | 5,500       |   |   |   | 5,500 |   |
| Mineral Properties (Note 6)                 |   |   | 15,302,311  |   |   |   | 14,573,506 |   |
| Investments in Related Companies (Note 7)   |   |   | 517,360     |   |   |   | 204,036 |   |
|                                        |   | $      | 27,048,567  |   |   | $      | 19,206,278 |   |
|                                        |   |   |        |   |   |   |   |   |
| LIABILITIES                                 |   |   |        |   |   |   |   |   |
| Current                                     |   |   |        |   |   |   |   |   |
| Accounts payable and accrued liabilities    |   | $      | 474,072     |   |   | $      | 382,482 |   |
| Amounts due to related parties (Note 11(a)) |   |   | 169,265     |   |   |   | 164,690 |   |
|                                        |   |   | 643,337     |   |   |   | 547,172 |   |
|                                        |   |   |        |   |   |   |   |   |
| Future Income Tax Liability (Note 16)       |   |   | 2,026,148   |   |   |   | 1,694,007 |   |
|                                        |   |   | 2,669,485   |   |   |   | 2,241,179 |   |
| SHAREHOLDERS' EQUITY                        |   |   |        |   |   |   |   |   |
| Share Capital (Note 9)                      |   |   | 39,132,349  |   |   |   | 33,112,072 |   |
| Contributed Surplus                         |   |   | 10,702,206  |   |   |   | 8,131,629 |   |
| Treasury Shares (14,180 Shares, at cost)    |   |   | (101,869    | )      |   |   | (101,869 | ) |
|                                        |   |   | 49,732,686  |   |   |   | 41,141,832 |   |
|                                        |   |   |        |   |   |   |   |   |
| Accumulated Other Comprehensive Loss        |   |   | 307,274     |   |   |   | (6,049 | ) |
| Deficit                                     |   |   | (25,660,878 | )      |   |   | (24,170,684 | ) |
|                                        |   |   | (25,353,604 | )      |   |   | (24,176,733 | ) |
|                                        |   |   | 24,379,082  |   |   |   | 16,965,099 |   |
|                                        |   | $      | 27,048,567  |   |   | $      | 19,206,278 |   |

|               |     |   |             |     |
|--------------------|----------|--------|------------------|----------|
| /s/ Gary Robertson | Director |   | /s/ David Wolfin | Director |
|               |     |   |             |     |

----

|                                                                |   | 2010   |       |   | 2009   |   |       | 2008   |   |
|---------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
|                                                                |   |   |       |   |   |   |       |   |   |
| Operating and Administrative Expenses                               |   |   |       |   |   |   |       |   |   |
| Amortization                                                        |   | $      | 3,834      |   |   | $      | 2,328      |   |   | $ | 2,869 |   |
| General exploration                                                 |   |   | -          |   |   |   | 294        |   |   |   | 8,823 |   |
| Investor relations                                                  |   |   | 99,450     |   |   |   | 90,031     |   |   |   | 172,992 |   |
| Management fees                                                     |   |   | 96,000     |   |   |   | 96,000     |   |   |   | 96,000 |   |
| Office and miscellaneous                                            |   |   | 218,489    |   |   |   | 104,548    |   |   |   | 121,353 |   |
| Professional fees                                                   |   |   | 127,711    |   |   |   | 183,911    |   |   |   | 179,299 |   |
| Regulatory and compliance fees                                      |   |   | 26,028     |   |   |   | 24,540     |   |   |   | 25,821 |   |
| Salaries and benefits                                               |   |   | 109,873    |   |   |   | 82,160     |   |   |   | 109,354 |   |
| Sales tax write-down (recovery) (Note 8)                            |   |   | 42,478     |   |   |   | (181,456   | )      |   |   | 213,652 |   |
| Stock-based compensation (Note 10)                                  |   |   | 361,784    |   |   |   | 237,887    |   |   |   | 606,000 |   |
| Travel and promotion                                                |   |   | 45,032     |   |   |   | 28,935     |   |   |   | 39,750 |   |
|                                                                |   |   | 1,130,679  |   |   |   | 669,178    |   |   |   | 1,575,913 |   |
|                                                                |   |   |       |   |   |   |       |   |   |   |   |   |
| Loss before other items and income tax                              |   |   | (1,130,679 | )      |   |   | (669,178   | )      |   |   | (1,575,913 | ) |
|                                                                |   |   |       |   |   |   |       |   |   |   |   |   |
| Other Income (Expenses)                                             |   |   |       |   |   |   |       |   |   |   |   |   |
| Interest income                                                     |   |   | 14,206     |   |   |   | 68,224     |   |   |   | 146,386 |   |
| Foreign exchange loss                                               |   |   | (41,580    | )      |   |   | (18,249    | )      |   |   | (35,696 | ) |
| Impairment of mineral properties (Note 6)                           |   |   | -          |   |   |   | (608,118   | )      |   |   | - |   |
| Mineral property option revenue (Note 6)                            |   |   | -          |   |   |   | -          |   |   |   | 25,000 |   |
|                                                                |   |   |       |   |   |   |       |   |   |   |   |   |
| LOSS BEFORE INCOME TAX                                              |   |   | (1,158,053 | )      |   |   | (1,227,321 | )      |   |   | (1,440,223 | ) |
| Future income tax (expense) recovery (Note 16)                      |   |   | (332,141   | )      |   |   | 239,562    |   |   |   | (98,653 | ) |
| NET LOSS                                                            |   |   | (1,490,194 | )      |   |   | (987,759   | )      |   |   | (1,538,876 | ) |
|                                                                |   |   |       |   |   |   |       |   |   |   |   |   |
| Other Comprehensive Income (Loss)                                   |   |   |       |   |   |   |       |   |   |   |   |   |
| Unrealized gain (loss) on investments in related companies (Note 7) |   |   | 313,323    |   |   |   | 97,517     |   |   |   | (108,196 | ) |
|                                                                |   |   |       |   |   |   |       |   |   |   |   |   |
| COMPREHENSIVE LOSS                                                  |   | $      | (1,176,871 | )      |   | $      | (890,242   | )      |   | $ | (1,647,072 | ) |
|                                                                |   |   |       |   |   |   |       |   |   |   |   |   |
| Loss per Share - Basic and Diluted                                  |   | $      | (0.07      | )      |   | $      | (0.05      | )      |   | $ | (0.07 | ) |
|                                                                |   |   |       |   |   |   |       |   |   |   |   |   |
| Weighted Average Number of Shares Outstanding                       |   |   | 21,059,008 |   |   |   | 20,584,727 |   |   |   | 20,584,727 |   |

----

|                                               |   | Number of Common Shares |       |   | Share Capital |   |       | Treasury Shares |   |   | Contributed Surplus |   |   | Deficit |       |   | Accumulated Other Comprehensive Income (Loss) |   |        | Total Shareholders’ Equity |   |
|----------------------------------------------------|--------|-------------------------|------------|--------|---------------|--------|------------|-----------------|--------|--------|---------------------|--------|--------|---------|------------|--------|-----------------------------------------------|--------|-------------|----------------------------------|--------|
|                                               |   |                    |       |   |          |   |       |            |   |   |                |   |   |    |       |   |                                          |   |        |                             |   |
| Balance, December 31, 2007                         |   |                    | 20,584,727 |   |          | $      | 33,112,072 |            |   | $      | (101,869            | )      |   | $       | 7,287,742  |   |                                          | $      | (21,644,049 | )                                |   | $ | 4,630 |   |   | $ | 18,658,526 |   |
|                                               |   |                    |       |   |          |   |       |            |   |   |                |   |   |    |       |   |                                          |   |        |                             |   |   |   |   |   |   |   |   |
| Stock based compensation (Note 10)                 |   |                    | -          |   |          |   | -          |            |   |   | -                   |   |   |    | 606,000    |   |                                          |   | -           |                             |   |   | - |   |   |   | 606,000 |   |
| Net loss for year                                  |   |                    | -          |   |          |   | -          |            |   |   | -                   |   |   |    | -          |   |                                          |   | (1,538,876  | )                                |   |   | - |   |   |   | (1,538,876 | ) |
| Unrealized loss on investments                     |   |                    | -          |   |          |   | -          |            |   |   | -                   |   |   |    | -          |   |                                          |   | -           |                             |   |   | (108,196 | ) |   |   | (108,196 | ) |
|                                               |   |                    |       |   |          |   |       |            |   |   |                |   |   |    |       |   |                                          |   |        |                             |   |   |   |   |   |   |   |   |
| Balance, December 31, 2008                         |   |                    | 20,584,727 |   |          |   | 33,112,072 |            |   |   | (101,869            | )      |   |    | 7,893,742  |   |                                          |   | (23,182,925 | )                                |   |   | (103,566 | ) |   |   | 17,617,454 |   |
|                                               |   |                    |       |   |          |   |       |            |   |   |                |   |   |    |       |   |                                          |   |        |                             |   |   |   |   |   |   |   |   |
| Stock based compensation (Note 10)                 |   |                    | -          |   |          |   | -          |            |   |   | -                   |   |   |    | 237,887    |   |                                          |   | -           |                             |   |   | - |   |   |   | 237,887 |   |
| Net loss for year                                  |   |                    | -          |   |          |   | -          |            |   |   | -                   |   |   |    | -          |   |                                          |   | (987,759    | )                                |   |   | - |   |   |   | (987,759 | ) |
| Unrealized gain on investments                     |   |                    | -          |   |          |   | -          |            |   |   | -                   |   |   |    | -          |   |                                          |   | -           |                             |   |   | 97,517 |   |   |   | 97,517 |   |
|                                               |   |                    |       |   |          |   |       |            |   |   |                |   |   |    |       |   |                                          |   |        |                             |   |   |   |   |   |   |   |   |
| Balance, December 31, 2009                         |   |                    | 20,584,727 |   |          |   | 33,112,072 |            |   |   | (101,869            | )      |   |    | 8,131,629  |   |                                          |   | (24,170,684 | )                                |   |   | (6,049 | ) |   |   | 16,965,099 |   |
|                                               |   |                    |       |   |          |   |       |            |   |   |                |   |   |    |       |   |                                          |   |        |                             |   |   |   |   |   |   |   |   |
| Common shares issued for cash:                     |   |                    |       |   |          |   |       |            |   |   |                |   |   |    |       |   |                                          |   |        |                             |   |   |   |   |   |   |   |   |
|     Private placement (Note 9) |   |                    | 5,100,000  |   |          |   | 5,107,614  |            |   |   | -                   |   |   |    | 3,202,468  |   |                                          |   | -           |                             |   |   | - |   |   |   | 8,310,082 |   |
|     Share issuance costs       |   |                    | -          |   |          |   | (435,387   | )               |   |   | -                   |   |   |    | -          |   |                                          |   | -           |                             |   |   | - |   |   |   | (435,387 | ) |
|     Exercise of stock options  |   |                    | 472,500    |   |          |   | 354,375    |            |   |   | -                   |   |   |    | -          |   |                                          |   | -           |                             |   |   | - |   |   |   | 354,375 |   |
| Fair value of stock options exercised              |   |                    | -          |   |          |   | 993,675    |            |   |   | -                   |   |   |    | (993,675   | )      |                                          |   | -           |                             |   |   | - |   |   |   | - |   |
| Stock-based compensation (Note 10)                 |   |                    | -          |   |          |   | -          |            |   |   | -                   |   |   |    | 361,784    |   |                                          |   | -           |                             |   |   | - |   |   |   | 361,784 |   |
| Net loss for the year                              |   |                    | -          |   |          |   | -          |            |   |   | -                   |   |   |    | -          |   |                                          |   | (1,490,194  | )                                |   |   | - |   |   |   | (1,490,194 | ) |
| Unrealized gain on investments                     |   |                    | -          |   |          |   | -          |            |   |   | -                   |   |   |    | -          |   |                                          |   | -           |                             |   |   | 313,323 |   |   |   | 313,323 |   |
|                                               |   |                    |       |   |          |   |       |            |   |   |                |   |   |    |       |   |                                          |   |        |                             |   |   |   |   |   |   |   |   |
| Balance, December 31, 2010                         |   |                    | 26,157,227 |   |          | $      | 39,132,349 |            |   | $      | (101,869            | )      |   | $       | 10,702,206 |   |                                          | $      | (25,660,878 | )                                |   | $ | 307,274 |   |   | $ | 24,379,082 |   |

----

|                                             |   | 2010   |       |   | 2009   |   |      | 2008   |   |
|--------------------------------------------------|--------|--------|------------|--------|--------|--------|-----------|--------|--------|
|                                             |   |   |       |   |   |   |      |   |   |
| CASH PROVIDED BY (USED IN):                      |   |   |       |   |   |   |      |   |   |
|                                             |   |   |       |   |   |   |      |   |   |
| OPERATING ACTIVITIES                             |   |   |       |   |   |   |      |   |   |
| Net loss                                         |   | $      | (1,490,194 | )      |   | $      | (987,759  | )      |   | $ | (1,538,876 | ) |
| Adjustments for non-cash items:                  |   |   |       |   |   |   |      |   |   |   |   |   |
| Amortization                                     |   |   | 3,834      |   |   |   | 2,328     |   |   |   | 2,869 |   |
| Sales tax write-down provision                   |   |   | 42,478     |   |   |   | 8,873     |   |   |   | 213,652 |   |
| Stock-based compensation                         |   |   | 361,784    |   |   |   | 237,887   |   |   |   | 606,000 |   |
| Impairment of mineral properties                 |   |   | -          |   |   |   | 608,118   |   |   |   | - |   |
| Future income tax expense (recovery)             |   |   | 332,141    |   |   |   | (239,562  | )      |   |   | 98,653 |   |
|                                             |   |   |       |   |   |   |      |   |   |   |   |   |
|                                             |   |   | (749,957   | )      |   |   | (370,115  | )      |   |   | (617,702 | ) |
|                                             |   |   |       |   |   |   |      |   |   |   |   |   |
| Net change in non-cash working capital (Note 12) |   |   | (75,811    | )      |   |   | 226,040   |   |   |   | (291,327 | ) |
|                                             |   |   |       |   |   |   |      |   |   |   |   |   |
|                                             |   |   | (825,768   | )      |   |   | (144,075  | )      |   |   | (909,029 | ) |
|                                             |   |   |       |   |   |   |      |   |   |   |   |   |
|                                             |   |   |       |   |   |   |      |   |   |   |   |   |
| FINANCING ACTIVITIES                             |   |   |       |   |   |   |      |   |   |   |   |   |
| Shares issued for cash, net of issuance costs    |   |   | 8,229,069  |   |   |   | -         |   |   |   | - |   |
|                                             |   |   |       |   |   |   |      |   |   |   |   |   |
| INVESTING ACTIVITIES                             |   |   |       |   |   |   |      |   |   |   |   |   |
| Mineral property exploration expenditures        |   |   | (846,745   | )      |   |   | (320,100  | )      |   |   | (1,764,719 | ) |
| Property, plant and equipment purchases          |   |   | (334,705   | )      |   |   | (281,461  | )      |   |   | (93,492 | ) |
|                                             |   |   |       |   |   |   |      |   |   |   |   |   |
|                                             |   |   | (1,181,450 | )      |   |   | (601,561  | )      |   |   | (1,858,211 | ) |
|                                             |   |   |       |   |   |   |      |   |   |   |   |   |
| Increase (decrease) in cash and cash equivalents |   |   | 6,221,851  |   |   |   | (745,636  | )      |   |   | (2,767,240 | ) |
|                                             |   |   |       |   |   |   |      |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, Beginning             |   |   | 2,829,605  |   |   |   | 3,575,241 |   |   |   | 6,342,481 |   |
|                                             |   |   |       |   |   |   |      |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, Ending                |   | $      | 9,051,456  |   |   | $      | 2,829,605 |   |   | $ | 3,575,241 |   |
|                                             |   |   |       |   |   |   |      |   |   |   |   |   |
|                                             |   |   |       |   |   |   |      |   |   |   |   |   |
| SUPPLEMENTARY CASH FLOW DISCLOSURES              |   |   |       |   |   |   |      |   |   |   |   |   |
| Cash paid for:                                   |   |   |       |   |   |   |      |   |   |   |   |   |
| Interest expense                                 |   | $      | -          |   |   | $      | -         |   |   | $ | - |   |
| Income taxes                                     |   |   | -          |   |   |   | -         |   |   |   | - |   |

----

----

| i)   | Basis of presentation  These consolidated financial statements are expressed in Canadian dollars and prepared in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”) and include the accounts of the Company and its Mexican subsidiaries. A summary of the differences between accounting principles generally accepted in Canada and those generally accepted in the United States are contained in Note 20. All significant inter-company balances and transactions have been eliminated on consolidation. The Company’s Mexican subsidiaries are Oniva Silver and Gold Mines S.A., (“Oniva Silver”) which is wholly-owned, Promotora Avino, S.A. De C.V. (“Promotora”) in which the Company has a direct 79.09% ownership, and Compania Minera Mexicana de Avino, S.A. de C.V. (“Cia Minera”) in which the Company has a 96.60% direct ownership and an additional 2.68% indirect effective ownership held through Promotora. The ownership interests in Cia Minera combine for an effective 99.28% held by the Company as at December 31, 2010 and 2009 (see Note 3). |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ii)   | Cash and cash equivalents The Company considers all highly liquid instruments with original maturities of three months or less on the date of purchase to be cash equivalents. Cash equivalents are carried at cost, plus accrued interest, which approximates fair value. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| iii)   | Property, plant and equipment  Property, plant and equipment is stated at cost less accumulated amortization. Amortization is recorded over the estimated useful lives of the assets on the declining balance basis at the following annual rates: |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Office equipment, furniture and fixtures | 20% |
|------------------------------------------|-----|
| Computer equipment                       | 30% |
| Mine facilities and equipment            | 20% |

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----

| iv) | Mineral properties, deferred exploration and development expenditures  The Company follows CICA Accounting Guideline 11, Enterprises in the Development Stage. Mineral property acquisition, exploration and development costs are deferred until the property to which they relate is placed into production, sold, allowed to lapse or abandoned. Mineral property acquisition costs include the cash consideration and the fair value of common shares issued for mineral property interests based on the observed trading price of the shares. Mineral exploration costs such as field labour and consultants, geology and assaying, and mining claims are capitalized and carried at cost until the properties to which they relate are placed into production, sold or management determines a permanent impairment in value. Development costs incurred to access ore bodies identified in the current mining plan will be expensed as incurred after production has commenced. Development costs necessary to extend a mine beyond those areas identified in the current mining plan and which are incurred to access additional reserves are deferred until the incremental reserves are mined. Mineral properties and development costs, including the mineral acquisition and direct mineral exploration costs relating to the current mining plan, will be depleted and amortized using the units-of-production method over the estimated life of the ore body based on proven and probable reserves once commercial production commences. Incidental revenues and operating costs are included in mineral properties and development costs prior to commercial production. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| v)   | Investments  Investments in shares of public companies traded on an active market over which Avino does not have control or exercises significant influence are classified as available-for-sale and accounted for at fair market value, based upon quoted market share prices at the consolidated balance sheet date. Unrealized gains or losses on these investments are recorded as other comprehensive income or loss, unless a decline in value is considered to be other than temporary. Purchases and sales of investments are measured on a settlement date basis. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| vi)   | Translation of foreign currencies and foreign subsidiaries  The Company’s integrated Mexican foreign subsidiaries are financially and operationally dependent on the Company. The Company uses the temporal method to translate the accounts of its integrated foreign operations into Canadian dollars. Monetary assets and liabilities are translated at the exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are translated at historical rates. Revenues and expenses are translated at rates in effect during the period, except for amortization, which is translated on the same basis as the related assets. The resulting exchange gains or losses are recognized in income. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| vii)   | Comprehensive loss  Comprehensive loss is comprised of the sum of the net loss and other comprehensive income or loss which includes unrealized gains or losses from changes in the fair market value of available-for-sale investments, changes in the fair market value of derivative instruments designated as cash flow hedges and currency translation adjustments on self-sustaining foreign operations. The Company does not have any derivative instruments or self-sustaining foreign operations and currently the Company’s other comprehensive income (loss) is comprised only of changes in the fair value of the Company’s available-for-sale investments. |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| viii)  | Financial instruments |
|-------------|-----------------------|

| (a)   | Classification Financial instruments are classified into one of five categories: held-for-trading, held-to-maturity investments, loans and receivables, available-for-sale financial assets or other financial liabilities. All financial instruments are measured at fair value except for loans and receivables, held-to-maturity investments and other financial liabilities which are measured at amortized cost. Subsequent measurement and accounting for changes in the value of these investments will depend on their initial classification as follows: held-for-trading financials assets are measured at fair value with changes in fair value recognized in operations. Available-for-sale financial instruments are measured at fair value with changes in fair value recorded in other comprehensive income until the change in value is realized or the instrument is derecognized or permanently impaired. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Transaction costs  Transaction costs attributable to the acquisition or issue of financial assets or financial liabilities, other than those classified as held-for-trading, are added to the initial fair value amount to match the costs with the related transactions. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ix) | Use of estimates The preparation of financial statements in accordance with Canadian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported periods. Significant areas requiring the use of estimates relate to the recoverability or valuation of sales taxes recoverable, property, plant, equipment, and mineral properties, the valuation of asset retirement obligations, useful lives for amortization, recognition and disclosure of future income tax assets and liabilities, and stock-based compensation. Actual results could differ from those estimates. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| x)  | Income taxes  The Company follows the asset and liability method of accounting for income taxes. Future income tax assets and liabilities are determined based on temporary differences between the accounting and taxes bases for existing assets and liabilities, and are measured using the tax rates expected to apply when these differences reverse. A valuation allowance is recorded against any future income tax asset if it is more likely than not that the asset will not be realized. The Company follows CICA Emerging Issues Committee Abstract 146 Flow-Through Shares. Canadian tax legislation permits a company to issue securities referred to as flow-through shares whereby the Company assigns the tax deductions arising from the related resource expenditures, to the shareholders. When resource expenditures are renounced to the investors and the Company has reasonable assurance that the expenditures will be completed, a future income tax liability is recognized for the net tax effect of the deductions renounced, and share capital is reduced. If the Company has sufficient unrecognized tax losses carried forward or other unrecognized future income tax assets to offset all or part of this future income tax liability, a portion of such unrecognized future income tax assets is recorded as a future income tax recovery up to the amount of the future income tax liability that would otherwise be recognized. |
|----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

| (a)   | the Company's work program on a property has significantly changed, so that previously identified resource targets or work programs are no longer being pursued; |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | exploration results are not promising and no more work is being planned in the foreseeable future on the property; or |
|-----------------|-----------------------------------------------------------------------------------------------------------------------|

| (c)   | the remaining lease terms for the property are insufficient to conduct necessary studies, exploration work, or mineral extraction. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------|

| (a)   | In February 2008, the CICA announced that Canadian GAAP for publicly accountable enterprises will be replaced by International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”) for interim and annual financial statements for fiscal years beginning on or after January 1, 2011. The pronouncement also requires that comparative figures for 2010 be based on IFRS. The Company has completed the planning and diagnostic stages to identify the impact of adopting IFRS and will continue to invest in training and necessary resources to complete the conversion. The Company continues to monitor and assess the impact of convergence of Canadian GAAP and IFRS. The Company will adopt IFRS commencing with the first quarter of fiscal 2011. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| (b)   | CICA Section 1582 Business Combinations, which replaces Section 1581, Business Combinations; CICA Section 1601 Consolidated Financial Statement and Section 1602 Non-Controlling Interests, which replace Section 1600, Consolidated Financial Statements. These new standards are based on the International Financial Reporting Standard 3, Business Combinations. These new standards replace the existing guidance on business combination and consolidated financial statements. These new standards require that most assets acquired and liabilities assumed, including contingent liabilities, to be measured at fair value and all acquisition costs to be expensed. These new standards also require non-controlling interests to be recognized as a separate component of equity and net earnings to be calculated without a deduction for non-controlling interests. The objective of these new standards is to harmonize Canadian accounting for business combinations with the International and United States accounting standards. The new standards are to be applied prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2011, with earlier application permitted. This standard is effective for the Company for interim and annual financial statements beginning on January 1, 2011. The Company does not expect a significant impact on the adoption of this standard on its consolidated financial statements. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                      |   | Cost   |      |   | Accumulated Amortization |   |   | 2010Net Book Value |   |   | 2009Net Book Value |   |
|-------------------------------------------|--------|--------|-----------|--------|--------------------------|--------|--------|--------------------|--------|--------|--------------------|--------|
| Office equipment, furniture and fixtures  |   | $      | 6,482     |   |                     | $      | 4,796  |               |   | $      | 1,686              |   |   | $ | 955 |   |
| Computer equipment                        |   |   | 27,642    |   |                     |   | 7,853  |               |   |   | 19,789             |   |   |   | 21,055 |   |
| Mine mill, machinery and processing plant |   |   | 1,706,542 |   |                     |   | -      |               |   |   | 1,706,542          |   |   |   | 1,387,082 |   |
| Mine facilities and equipment             |   |   | 62,691    |   |                     |   | 4,691  |               |   |   | 58,000             |   |   |   | 46,054 |   |
|                                      |   | $      | 1,803,357 |   |                     | $      | 17,340 |               |   | $      | 1,786,017          |   |   | $ | 1,455,146 |   |

|                                    |   |    |       |   | British  |   |     |   |   |   |   |   |
|-----------------------------------------|--------|---------|------------|--------|----------|--------|----------|--------|--------|--------|--------|--------|
|                                    |   | Durango |       |   | Columbia |   |     | Yukon  |   |   |   |   |
|                                    |   | Mexico  |       |   | Canada   |   |     | Canada |   |   | Total  |   |
|                                    |   |    |       |   |     |   |     |   |   |   |   |   |
| Balance, December 31, 2008              |   | $       | 14,251,649 |   |     | $      | 608,121  |   |   | $      | 1,754  |   |   | $ | 14,861,524 |   |
|                                    |   |    |       |   |     |   |     |   |   |   |   |   |   |   |   |   |
| Exploration costs incurred during year: |   |    |       |   |     |   |     |   |   |   |   |   |   |   |   |   |
| Assays                                  |   |    | 9,480      |   |     |   | -        |   |   |   | -      |   |   |   | 9,480 |   |
| Assessment and taxes                    |   |    | 40,948     |   |     |   | -        |   |   |   | -      |   |   |   | 40,948 |   |
| Drilling                                |   |    | 156,612    |   |     |   | -        |   |   |   | -      |   |   |   | 156,612 |   |
| Geological                              |   |    | 143,149    |   |     |   | -        |   |   |   | -      |   |   |   | 143,149 |   |
| Sale of concentrate                     |   |    | (30,089    | )      |     |   | -        |   |   |   | -      |   |   |   | (30,089 | ) |
| Less write down on properties           |   |    | -          |   |     |   | (608,118 | )      |   |   | -      |   |   |   | (608,118 | ) |
| Balance, December 31, 2009              |   | $       | 14,571,749 |   |     | $      | 3        |   |   | $      | 1,754  |   |   | $ | 14,573,506 |   |
|                                    |   |    |       |   |     |   |     |   |   |   |   |   |   |   |   |   |
| Exploration costs incurred during year: |   |    |       |   |     |   |     |   |   |   |   |   |   |   |   |   |
| Assays                                  |   |    | 56,032     |   |     |   | -        |   |   |   | -      |   |   |   | 56,032 |   |
| Assessment and taxes                    |   |    | 45,893     |   |     |   | -        |   |   |   | -      |   |   |   | 45,893 |   |
| Drilling and exploration                |   |    | 1,470,996  |   |     |   | -        |   |   |   | -      |   |   |   | 1,470,996 |   |
| Geological                              |   |    | 201,139    |   |     |   | -        |   |   |   | 750    |   |   |   | 201,889 |   |
| Sale of concentrate                     |   |    | (1,046,005 | )      |     |   | -        |   |   |   | -      |   |   |   | (1,046,005 | ) |
|                                    |   |    |       |   |     |   |     |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2010              |   | $       | 15,299,804 |   |     | $      | 3        |   |   | $      | 2,504  |   |   | $ | 15,302,311 |   |

----

----

| (i)   | Avino mine area property  The Avino mine property is situated around the towns of Panuco de Coronado and San Jose de Avino and surrounding the formerly producing Avino mine. 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. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii)   | Gomez Palacio property  The Gomez Palacio property is located near the town of Gomez Palacio, Durango, Mexico. There are nine exploration concessions covering 2,549 hectares. |
|------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii)    | Papas Quiero property The Papas Quiero property is located near the village of Papas Quiero, Durango, Mexico. There are four exploration concessions covering 2,552.6 hectares and one exploitation concession covering 602.9 hectares. |
|-------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ix)  | Stackpole area property  The Stackpole area property is situated with the Avino mine property around the towns of Panuco de Coronado and San Jose de Avino and surrounding the formerly producing Avino mine. Under a royalty agreement covering three mineral concessions, Cia Minera shall pay to Minerales de Avino royalties of 3.5% on mineral extracted, processed and sold from the Unification La Platosa, San Carlos and San Jose concessions. The royalties are to be calculated on a base of net sales (net smelter payment less the cost of sales) less other commercialization and transportation costs. The lease agreement expired on October 31, 2010 and is currently under renegotiation. |
|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| (i)   | Aumax property The Company owns a 100% interest in a Crown granted mineral claim, located in the Lillooet Mining Division of British Columbia, Canada that was acquired in 2003 by issuing 200,000 common shares at a price of $0.50 per share and paying $4,000 in cash for total consideration of $104,000. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii)   | Minto property The Company has a 100% interest in a Crown granted mineral claim situated in the Lillooet Mining Division of British Columbia. |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii)   | Olympic-Kelvin property The Company has a 100% interest in six Crown granted mineral claims located in the Lillooet Mining Division of British Columbia. |
|-------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                  |   |   |    |   | Accumulated |   |    | Fair   |   |   | Fair    |   |
|---------------------------------------|--------|--------|---------|--------|-------------|--------|---------|--------|--------|--------|---------|--------|
|                                  |   |   |    |   | Unrealized  |   |    | Value  |   |   | Value   |   |
|                                  |   | Cost   |    |   | Gains       |   |    | 2010   |   |   | 2009    |   |
|                                  |   |   |    |   |        |   |    |   |   |   |    |   |
| (a) Bralorne Gold Mines Ltd.          |   | $      | 205,848 |   |        | $      | 23,463  |   |   | $      | 229,311 |   |   | $ | 143,319 |   |
| (b) Levon Resources Ltd.              |   |   | 4,236   |   |        |   | 283,812 |   |   |   | 288,048 |   |   |   | 60,716 |   |
| (c) Oniva InternationalServices Corp. |   |   | 1       |   |        |   | -       |   |   |   | 1       |   |   |   | 1 |   |
|                                  |   |   |    |   |        |   |    |   |   |   |    |   |   |   |   |   |
|                                  |   | $      | 210,085 |   |        | $      | 307,275 |   |   | $      | 517,360 |   |   | $ | 204,036 |   |

|                    |   |   |    |   |   |   |
|-------------------------|--------|--------|---------|--------|--------|--------|
|                    |   | 2010   |    |   | 2009   |   |
|                    |   |   |    |   |   |   |
| VAT recoverable         |   | $      | 267,084 |   |   | $      | 92,706 |   |
| Write-down provision    |   |   | (50,887 | )      |   |   | (8,873 | ) |
|                    |   |   |    |   |   |   |   |   |
| VAT net carrying amount |   |   | 216,197 |   |   |   | 83,833 |   |
| HST recoverable         |   |   | 17,181  |   |   |   | 4,892 |   |
|                    |   |   |    |   |   |   |   |   |
| Sales tax recoverable   |   | $      | 233,378 |   |   | $      | 88,725 |   |

----

----

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

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

| (i)   | On December 20, 2010, the Company closed a non-brokered private placement issuing 2,700,000 units at a price of $1.90 per unit for gross proceeds of $5,130,000. Each unit is comprised of one common share and one non-transferrable share purchase warrant. Each share purchase warrant is exercisable for a term for a term of three years into one common share at a price of $2.50 per share until December 22, 2013. The Company paid a cash commission equal to 5% of the applicable gross proceeds from units sold to such investors ($210,900) and compensation warrants to purchase common shares of the Company equal to 5% of the units sold under the offering (111,000 units).The fair value of the warrants and compensation warrants have been estimated using the Black-Scholes option pricing model using the following assumptions: risk-free interest rate of 1.90%, dividend yield of nil, volatility of 84.87%, and an expected life of three years. Of the $5,130,000 total aggregate proceeds raised $3,252,285 was attributed to common shares and the residual amount of $1,877,715 was attributed to the common share purchase warrants, which has been recorded in contributed surplus. The fair value of the compensation warrants were valued at $180,082. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii)   | On November 10, 2010, the Company closed a non-brokered private placement issuing 2,400,000 units at a price of $1.25 per unit for gross proceeds of $3,000,000. Each unit is comprised of one common share and one non-transferrable share purchase warrant. Each share purchase warrant is exercisable for a term for a term of three years into one common share at a price of $1.52 per share until November 10, 2013. The fair value of the warrants has been estimated using the Black-Scholes option pricing model using the following assumptions: risk-free interest rate of 1.94%, dividend yield of nil, volatility of 83.86%, and an expected life of three years. Of the $3,000,000 total aggregate proceeds raised $1,855,329 was attributed to common shares and the residual amount of $1,144,671 was attributed to common share purchase warrants, which has been recorded in contributed surplus. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Warrants |
|-----------------|----------|

|                                |   | Underlying Shares |       |   | Weighted Average Exercise Price |   |
|-------------------------------------|--------|-------------------|------------|--------|---------------------------------|--------|
| Balance, December 31, 2009 and 2008 |   |              | 2,498,750  |   |                            | $      | 2.50 |   |
|                                |   |              |       |   |                            |   |   |   |
| Issued                              |   |              | 5,211,000  |   |                            | $      | 2.05 |   |
| Expired                             |   |              | (2,498,750 | )      |                            | $      | 2.50 |   |
|                                |   |              |       |   |                            |   |   |   |
| Balance, December 31, 2010          |   |              | 5,211,000  |   |                            | $      | 2.05 |   |

----

----

| Number of Warrants Outstanding and Exercisable |      |   |   |   |                     |
|------------------------------------------------|-----------|--------|--------|--------|--------------------------|
| 2010                                           |      | 2009   |   |   | Exercise Price per Share |   |      Expiry Date |
|                                           |      |   |   |   |                     |   |   |
|                                           | 2,400,000 |   |   |   | -                        |   |   | $ | 1.52 |   | November 10, 2013 |
|                                           | 2,811,000 |   |   |   | -                        |   |   | $ | 2.50 |   | December 22, 2013 |
|                                           | -         |   |   |   | 2,498,750                |   |   | $ | 2.50 |   | March 10, 2010 |
|                                           |      |   |   |   |                     |   |   |   |   |   |   |
|                                           | 5,211,000 |   |   |   | 2,498,750                |   |   |   |   |   |   |

| (d)   | Stock options  The Company has a stock option plan under which it may grant stock options 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 regular employees and persons providing investor-relation or consulting services up to a limit of 5% and 2% respectively of 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-relation 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. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                         |   | Underlying Shares |      |   | Weighted Average Exercised Price |   |
|----------------------------------------------|--------|-------------------|-----------|--------|----------------------------------|--------|
|                                         |   |              |      |   |                             |   |
| Stock options outstanding, December 31, 2008 |   |              | 1,854,500 |   |                             | $      | 2.85 |   |
|    Granted                    |   |              | 160,000   |   |                             | $      | 0.75 |   |
|    Expired or cancelled       |   |              | (195,000  | )      |                             | $      | 2.49 |   |
|                                         |   |              |      |   |                             |   |   |   |
| Stock options outstanding, December 31, 2009 |   |              | 1,819,500 |   |                             | $      | 0.88 | * |
|    Granted                    |   |              | 520,000   |   |                             | $      | 1.05 |   |
|    Expired or cancelled       |   |              | (262,000  | )      |                             | $      | 0.85 |   |
|    Exercised                  |   |              | (472,500  | )      |                             | $      | 0.75 |   |
|                                         |   |              |      |   |                             |   |   |   |
| Stock options outstanding, December 31, 2010 |   |              | 1,605,000 |   |                             | $      | 0.97 | * |

----

----

| (e)   | Stock options |
|-----------------|---------------|

| Expiry Date        |   | Exercise Price |   |   | 2010Stock Options Outstanding |   |      | 2009Stock Options Outstanding |   |
|--------------------|--------|----------------|--------|--------|-------------------------------|--------|-----------|-------------------------------|--------|
|               |   |           |   |   |                          |   |      |                          |   |
| April 5, 2010      |   | $              | 1.35   |   |                          |   | -         |                          |   |   | 42,500 |   |
| April 5, 2010      |   | $              | 0.75   | *      |                          |   | -         |                          |   |   | 219,500 |   |
| September 26, 2010 |   | $              | 0.75   | *      |                          |   | -         |                          |   |   | 52,500 |   |
| April 26, 2011     |   | $              | 3.99   |   |                          |   | 60,000    |                          |   |   | 60,000 |   |
| April 26, 2011     |   | $              | 0.75   | *      |                          |   | 600,000   |                          |   |   | 865,000 |   |
| February 26, 2013  |   | $              | 1.65   |   |                          |   | 10,000    |                          |   |   | 10,000 |   |
| February 26, 2013  |   | $              | 0.75   | *      |                          |   | 340,000   |                          |   |   | 410,000 |   |
| December 9, 2013   |   | $              | 2.00   |   |                          |   | 20,000    |                          |   |   | - |   |
| September 22, 2014 |   | $              | 0.75   |   |                          |   | 75,000    |                          |   |   | 160,000 |   |
| January 14, 2015   |   | $              | 0.81   |   |                          |   | 75,000    |                          |   |   | - |   |
| September 10, 2015 |   | $              | 1.05   |   |                          |   | 425,000   |                          |   |   | - |   |
|               |   |           |   |   |                          |   |      |                          |   |   |   |   |
|               |   |           |   |   |                          |   | 1,605,000 |                          |   |   | 1,819,500 |   |

|   | *  Repriced during the year ended December 31, 2009, the Company’s shareholders and the TSX Venture Exchange approved a re-pricing of options for directors and employees. See Note 10. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                      |   | 2010   |    |   | 2009   |   |    | 2008   |   |
|-------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Weighted average assumptions:             |   |   |    |   |   |   |    |   |   |
|  Risk-free interest rate             |   |   | 2.08    | %      |   |   | 1.38    | %      |   |   | 3.32 | % |
|  Expected dividend yield             |   |   | – |   |   |   | – |   |   |   | - |   |
|  Expected option life (years)        |   |   | 4.83    |   |   |   | 2.27    |   |   |   | 5 |   |
|  Expected stock price volatility     |   |   | 74.95   | %      |   |   | 94.84   | %      |   |   | 78.23 | % |
| Weighted average fair value at grant date |   | $      | 0.67    |   |   | $      | 0.16    |   |   | $ | 1.01 |   |

| (a)   | Amounts due to related parties: |
|-----------------|---------------------------------|

|                               |   | 2010   |    |   | 2009   |   |
|------------------------------------|--------|--------|---------|--------|--------|--------|
| Directors                          |   | $      | 10,500  |   |   | $      | 18,000 |   |
| Frobisher Securities Ltd.          |   |   | 4,687   |   |   |   | 516 |   |
| Oniva International Services Corp. |   |   | 153,289 |   |   |   | 145,120 |   |
| Sampson Engineering Inc.           |   |   | 789     |   |   |   | 1,054 |   |
|                               |   | $      | 169,265 |   |   | $      | 164,690 |   |

| (b) | The Company recorded the following amounts for management and consulting services provided by the following companies: |
|-----|------------------------------------------------------------------------------------------------------------------------|

|                    |   | 2010   |    |   | 2009   |   |    | 2008   |   |
|-------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
|                    |   |   |    |   |   |   |    |   |   |
| Intermark Capital Corp  |   | $      | 96,000  |   |   | $      | 96,000  |   |   | $ | 96,000 |   |
| Wear Wolfin Design Ltd. |   |   | 30,000  |   |   |   | 30,000  |   |   |   | 30,000 |   |
|                    |   | $      | 126,000 |   |   | $      | 126,000 |   |   | $ | 126,000 |   |

----

----

| (c) | The Company recorded the following amounts for other services provided by the following companies: |
|-----|----------------------------------------------------------------------------------------------------|

|                             |   | 2010   |   |   | 2009   |   |   | 2008   |   |
|----------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                             |   |   |   |   |   |   |   |   |   |
| Chevillon Exploration Consulting |   | $      | -      |   |   | $      | 4,331  |   |   | $ | 16,789 |   |
| Sampson Engineering Inc.         |   |   | 24,954 |   |   |   | 10,344 |   |   |   | 34,698 |   |
|                             |   | $      | 24,954 |   |   | $      | 14,675 |   |   | $ | 51,487 |   |

| (d) | The Company recorded the following amounts for administrative services and expenses provided by Oniva International Services Corp.: |
|-----|-------------------------------------------------------------------------------------------------------------------------------------|

|                     |   | 2010   |    |   | 2009   |   |    | 2008   |   |
|--------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
|                     |   |   |    |   |   |   |    |   |   |
| Salaries and benefits    |   | $      | 108,086 |   |   | $      | 81,841  |   |   | $ | 109,354 |   |
| Office and miscellaneous |   |   | 60,441  |   |   |   | 66,913  |   |   |   | 78,804 |   |
|                     |   |   |    |   |   |   |    |   |   |   |   |   |
|                     |   | $      | 168,527 |   |   | $      | 148,754 |   |   | $ | 188,158 |   |

|                                          |   | 2010   |     |   | 2009   |   |    | 2008   |   |
|-----------------------------------------------|--------|--------|----------|--------|--------|--------|---------|--------|--------|
| Net change in non-cash working capital items: |   |   |     |   |   |   |    |   |   |
| Interest receivable                           |   | $      | (3,995   | )      |   | $      | 2,793   |   |   | $ | 16,244 |   |
| Sales taxes recoverable                       |   |   | (187,131 | )      |   |   | 289,409 |   |   |   | (206,110 | ) |
| Prepaid expenses                              |   |   | 19,151   |   |   |   | (38,127 | )      |   |   | 20,830 |   |
| Accounts payable and accrued liabilities      |   |   | 91,589   |   |   |   | (21,925 | )      |   |   | (116,303 | ) |
| Due to related parties                        |   |   | 4,575    |   |   |   | (6,110  | )      |   |   | (5,988 | ) |
|                                          |   | $      | (75,811  | )      |   | $      | 226,040 |   |   | $ | 291,327 |   |

----

----

|   |   | Amount |      |
|--------|--------|--------|-----------|
|   |   |   |      |
| 2011   |   | $      | 750,793   |   |
| 2012   |   |   | 238,046   |   |
| 2013   |   |   | 242,040   |   |
| 2014   |   |   | 246,234   |   |
| 2015   |   |   | 250,638   |   |
|   |   | $      | 1,727,751 |   |

----

----

|                                                                                                            |   | 2010   |     |   | 2009   |   |     | 2008   |   |
|-----------------------------------------------------------------------------------------------------------------|--------|--------|----------|--------|--------|--------|----------|--------|--------|
|                                                                                                            |   |   |     |   |   |   |     |   |   |
| Statutory rate                                                                                                  |   |   | 28.5     | %      |   |   | 30.00    | %      |   |   | 31.00 | % |
|                                                                                                            |   |   |     |   |   |   |     |   |   |   |   |   |
| Income taxes recovered at the Canadian statutory rate                                                           |   | $      | 330,045  |   |   | $      | 368,196  |   |   | $ | 446,469 |   |
|                                                                                                            |   |   |     |   |   |   |     |   |   |   |   |   |
| Less permanent differences:                                                                                     |   |   |     |   |   |   |     |   |   |   |   |   |
|      Stock-based compensation                                                          |   |   | (103,108 | )      |   |   | (71,366  | )      |   |   | (181,598 | ) |
|      Investor relations expense for stock options     granted |   |   | -        |   |   |   | -        |   |   |   | (6,262 | ) |
|      Reduction for effect of lower Mexican tax rates                                   |   |   | 3,736    |   |   |   | 1,394    |   |   |   | (7,160 | ) |
|      Other non-tax deductible expenses                                                 |   |   | (758     | )      |   |   | (363     | )      |   |   | (762 | ) |
|                                                                                                            |   |   |     |   |   |   |     |   |   |   |   |   |
| Non-capital losses expired                                                                                      |   |   | (489,600 | )      |   |   | (271,284 | )      |   |   | - |   |
| Change in enacted rates                                                                                         |   |   | (102,398 | )      |   |   | (206,652 | )      |   |   | - |   |
|                                                                                                            |   |   |     |   |   |   |     |   |   |   |   |   |
| Valuation allowance on benefit of tax loss                                                                      |   |   | (62,595  | )      |   |   | 180,075  |   |   |   | (301,758 | ) |
|                                                                                                            |   |   |     |   |   |   |     |   |   |   |   |   |
| Benefit of tax attributes not recognized (recognized) and other items                                           |   |   | 92,537   |   |   |   | 239,694  |   |   |   | (47,582 | ) |
|                                                                                                            |   |   |     |   |   |   |     |   |   |   |   |   |
| Income tax (expense) recovery recognized in the year                                                            |   | $      | (332,141 | )      |   | $      | 239,694  |   |   | $ | (98,653 | ) |

----

----

|                                                                                                                                                                  |   | 2010   |       |   | 2009   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                                                                                                                                                  |   |   |       |   |   |   |
| Expected tax recovery rate                                                                                                                                            |   |   | 25         | %      |   |   | 26 | % |
|                                                                                                                                                                  |   |   |       |   |   |   |   |   |
| Non-capital tax losses carried forward                                                                                                                                |   | $      | 1,239,395  |   |   | $      | 1,141,325 |   |
|                                                                                                                                                                  |   |   |       |   |   |   |   |   |
| Capital losses carried forward                                                                                                                                        |   |   | 184,026    |   |   |   | 191,387 |   |
|                                                                                                                                                                  |   |   |       |   |   |   |   |   |
| Canadian exploration expenses, Canadian development expenses and foreign exploration, and development expenses in excess of book value of Canadian mineral properties |   |   | 507,015    |   |   |   | 540,234 |   |
|                                                                                                                                                                  |   |   |       |   |   |   |   |   |
| Share issuance costs                                                                                                                                                  |   |   | 51,061     |   |   |   | 42,833 |   |
|                                                                                                                                                                  |   |   |       |   |   |   |   |   |
| Tax basis of investments in related companies in excess of book value                                                                                                 |   |   | 27,125     |   |   |   | 28,210 |   |
|                                                                                                                                                                  |   |   |       |   |   |   |   |   |
| Undeducted capital cost allowance in excess of book value of Canadian equipment                                                                                       |   |   | 52,187     |   |   |   | 54,225 |   |
|                                                                                                                                                                  |   |   |       |   |   |   |   |   |
| Future income tax assets                                                                                                                                              |   |   | 2,060,809  |   |   |   | 1,998,214 |   |
|                                                                                                                                                                  |   |   |       |   |   |   |   |   |
| Less: valuation allowance                                                                                                                                             |   |   | (2,060,809 | )      |   |   | (1,998,214 | ) |
|                                                                                                                                                                  |   |   |       |   |   |   |   |   |
| Net tax assets                                                                                                                                                        |   | $      | –    |   |   | $      | – |   |

|                                                     |   | 2010   |       |   | 2009   |   |
|----------------------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                                     |   |   |       |   |   |   |
| Mexican statutory rate                                   |   |   | 28         | %      |   |   | 28 | % |
|                                                     |   |   |       |   |   |   |   |   |
| Book value of mineral properties in excess of tax bases  |   | $      | 3,676,031  |   |   | $      | 3,472,175 |   |
| Book value of plant and equipment in excess of tax bases |   |   | 366,045    |   |   |   | 333,676 |   |
| Less: Mexican tax losses carried forward                 |   |   | (2,015,928 | )      |   |   | (2,111,844 | ) |
|                                                     |   |   |       |   |   |   |   |   |
| Future income tax liability                              |   | $      | 2,026,148  |   |   | $      | 1,694,007 |   |
|                                                     |   |   |       |   |   |   |   |   |

----

----

| Year of Expiry |   | Canada |      |   | Mexico |   |
|----------------|--------|--------|-----------|--------|--------|--------|
|           |   |   |      |   |   |   |
| 2014           |   | $      | 568,450   |   |   | $      | – |   |
| 2018           |   |   | –   |   |   |   | 5,220,380 |   |
| 2019           |   |   | –   |   |   |   | 1,078,275 |   |
| 2020           |   |   | –   |   |   |   | 901,089 |   |
| 2025           |   |   | 799,044   |   |   |   | – |   |
| 2026           |   |   | 646,331   |   |   |   | – |   |
| 2027           |   |   | 643,498   |   |   |   | – |   |
| 2028           |   |   | 774,118   |   |   |   | – |   |
| 2029           |   |   | 727,183   |   |   |   | – |   |
| 2030           |   |   | 798,957   |   |   |   | – |   |
|           |   |   |      |   |   |   |   |   |
|           |   | $      | 4,957,581 |   |   | $      | 7,199,744 |   |

|                             |   | 2010   |      |   | 2009   |   |
|----------------------------------|--------|--------|-----------|--------|--------|--------|
|                             |   |   |      |   |   |   |
| Held for trading (i)             |   | $      | 9,055,598 |   |   | $      | 2,829,751 |   |
| Loan and receivables (ii)        |   |   | 117,940   |   |   |   | - |   |
| Available for sale (iii)         |   |   | 517,360   |   |   |   | 204,036 |   |
| Other financial liabilities (iv) |   |   | 566,337   |   |   |   | 465,172 |   |

| (i)   | Cash and cash equivalents and interest receivable |
|-----------------|---------------------------------------------------|

| (ii)   | Amounts receivable |
|------------------|--------------------|

| (iii)   | Investments in related companies |
|-------------------|----------------------------------|

| (iv)   | Accounts payable and amounts due to related parties |
|------------------|-----------------------------------------------------|

| (b)   | Fair values |
|-----------------|-------------|

----

----

| (b) | Fair values (continued) |
|-----|-------------------------|

|                             |   |    |      |   |    |   |   |    |   |   | Total  |   |
|----------------------------------|--------|---------|-----------|--------|---------|--------|--------|---------|--------|--------|--------|--------|
|                             |   | Level 1 |      |   | Level 2 |   |   | Level 3 |   |   | 2010   |   |
|                             |   |    |      |   |    |   |   |    |   |   |   |   |
| Cash and cash equivalents        |   | $       | 9,051,456 |   |    | $      | -      |    |   | $      | -      |   |   | $ | 9,051,456 |   |
| Investments in related companies |   |    | 517,360   |   |    |   | -      |    |   |   | -      |   |   |   | 517,360 |   |
|                             |   | $       | 9,568,816 |   |    | $      | -      |    |   | $      | -      |   |   | $ | 9,568,816 |   |

| (c)   | Interest rate risk In management’s opinion, the Company is not exposed to significant interest rate risk as the Company has no interest bearing debt. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | Foreign exchange rate risk The operations and financial instruments of the Company’s subsidiaries are denominated in Mexican pesos (“MXN”) and are converted into Canadian dollars as the reporting currency in these financial statements. Fluctuations in the exchange rates between the Mexican peso and the Canadian dollar could have a material effect on the Company’s business and on the reported amounts of the Company’s financial instruments. The Company is exposed to foreign exchange rate risk relating to cash denominated in Mexican pesos totalling $273,867 (MXN$3,398,701), and accounts payable denominated in pesos totalling $374,067 (MXN$4,642,180). The Company does not utilize any financial instruments or cash management policies to mitigate the risks arising from changes in foreign currency rates. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e)   | Credit risk The Company's cash and equivalents are primarily held in bank accounts with Canadian financial institutions, and as at December 31, 2010 cash and cash equivalents substantially exceed the amounts covered under federal deposit insurance. To minimize the credit risk on cash and cash equivalents the Company uses high quality financial institutions. As at December 31, 2010 the Company has no financial assets that are past due or impaired due to credit risk defaults. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (f)   | Liquidity risk The Company ensures its holding of cash and cash equivalents is sufficient to meet its operational requirements. The Company handles its liquidity risk through the management of its capital structure. All of the Company’s financial liabilities have contractual maturities of approximately 30 days or are due on demand and are subject to normal trade terms. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| (g)   | Market risk  Market risk is the risk that the fair value of, or future cash flows from, the Company’s financial instruments will significantly fluctuate due to changes in market prices. The sale of the financial instruments can be affected by changes in interest rates, foreign exchange rates, and equity prices. The Company is exposed to market risk in trading its investments, and unfavourable market conditions could result in dispositions of investments at less than favourable prices. The Company’s investments are accounted for at estimated fair values and are sensitive to changes in market prices, such that changes in market prices result in a proportionate change in the carrying value of the Company’s investments. The Company’s ability to raise capital to fund mineral resource exploration is subject to risks associated with fluctuations in mineral resource prices. Management closely monitors commodity prices, individual equity movements, and the stock market to determine the appropriate course of action to be taken by the Company. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (h)   | Sensitivity analysis The Company has completed a sensitivity analysis to estimate the impact on net loss for the year which a change in foreign exchange rates would have had.  A change of +/- 10% in MXN$ foreign exchange rate would have an impact of approximately +/- $25,000 on the Company’s net loss.  This impact results from the Company’s MXN$ based balances of monetary assets and liabilities. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                                                          |   | 2010   |        |   | 2009   |   |
|-------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
| Balance sheets                                                                |   |   |        |   |   |   |
| Total assets under Canadian GAAP                                              |   | $      | 27,048,567  |   |   | $      | 19,206,278 |   |
| Deferred exploration expenditures and mineral property acquisition costs (ii) |   |   | (15,302,311 | )      |   |   | (14,573,506 | ) |
| Total assets under US GAAP                                                    |   | $      | 11,746,256  |   |   | $      | 4,632,772 |   |
|                                                                          |   |   |        |   |   |   |   |   |
| Total liabilities under Canadian GAAP                                         |   | $      | 2,669,485   |   |   | $      | 2,241,179 |   |
| Future income taxes related to mineral properties (ii)                        |   |   | (2,026,148  | )      |   |   | (1,694,007 | ) |
| Total liabilities under US GAAP                                               |   | $      | 643,337     |   |   | $      | 547,172 |   |
|                                                                          |   |   |        |   |   |   |   |   |
| Total shareholders’ equity under Canadian GAAP                          |   | $      | 24,379,082  |   |   | $      | 16,965,099 |   |
| Future income taxes related to mineral properties (ii)                        |   |   | 2,026,148   |   |   |   | 1,694,007 |   |
| Deferred exploration expenditures (ii)                                        |   |   | (15,302,311 | )      |   |   | (14,573,506 | ) |
| Total shareholders’ equity under US GAAP                                |   | $      | 11,102,919  |   |   | $      | 4,085,600 |   |

----

----

|                                                  |   | 2010   |       |   | 2009   |   |       | 2008   |   |
|-------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
| Consolidated statements of operations                 |   |   |       |   |   |   |       |   |   |
| Loss for year under Canadian GAAP                     |   | $      | (1,490,194 | )      |   | $      | (987,759   | )      |   | $ | (1,538,876 | ) |
| Future income taxes related to mineral properties (i) |   |   | 332,141    |   |   |   | (239,562   | )      |   |   | 98,653 |   |
| Current period exploration costs (i)                  |   |   | (728,805   | )      |   |   | (320,100   | )      |   |   | (1,764,719 | ) |
| Addback of impairment in mineral properties           |   |   | -          |   |   |   | 608,118    |   |   |   | - |   |
| Stock based compensation expense (ii)                 |   |   | -          |   |   |   | (143,564   | )      |   |   | (185,165 | ) |
| Net loss for the year under US GAAP (ii)              |   | $      | (1,886,858 | )      |   | $      | (1,082,867 | )      |   | $ | (3,390,107 | ) |
| Loss per share under US GAAP - basic and diluted      |   | $      | (0.09      | )      |   | $      | (0.05      | )      |   | $ | (0.17 | ) |

|                                                        |   | 2010   |       |   | 2009   |   |     | 2008   |   |
|-------------------------------------------------------------|--------|--------|------------|--------|--------|--------|----------|--------|--------|
| Statements of cash flows                                    |   |   |       |   |   |   |     |   |   |
| Cash flows used in operating activities under Canadian GAAP |   | $      | (825,768   | )      |   | $      | (144,075 | )      |   | $ | (909,029 | ) |
| Mineral properties expenditures (i)                         |   |   | (846,745   | )      |   |   | (320,100 | )      |   |   | (1,764,719 | ) |
| Cash flows used in operating activities under US GAAP       |   | $      | (1,672,513 | )      |   | $      | (464,175 | )      |   | $ | (2,673,748 | ) |
|                                                        |   |   |       |   |   |   |     |   |   |   |   |   |
| Cash flows used in investing activities under Canadian GAAP |   | $      | (1,181,450 | )      |   | $      | (601,561 | )      |   | $ | (1,858,211 | ) |
| Mineral properties expenditures (ii)                        |   |   | 846,745    |   |   |   | 320,100  |   |   |   | 1,764,719 |   |
| Cash flows used in investing activities under US GAAP       |   | $      | (334,705   | )      |   | $      | (281,461 | )      |   | $ | (93,492 | ) |

| i) | Mineral properties and deferred exploration expenditures |
|----|----------------------------------------------------------|

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| 20. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (Continued) |
|-----|-----------------------------------------------------------------------------------------------------|

| ii) | Stock-based compensation |
|-----|--------------------------|

| iii) | Recently adopted accounting standards |
|------|---------------------------------------|

| a)   | Accounting for Transfer of Financial Assets  In December 2009, the FASB issued ASU 2009-16, “Transfers and Servicing (Topic 860), and Amendment of the Accounting Transfers of Financial Assets” (formerly SFAS 166, Accounting for Transfers of Financial Assets”). This ASU significantly changes how companies account for transfers of financial assets. The ASU provides revised guidance in a number of areas including the elimination of the qualifying special purpose entity concept, the introduction of a new “participating interest” definition that must be met for transfers of portions of financial assets to be eligible for sale accounting, clarification and amendments to the derecognition criteria for a transfer accounted for as a sale when beneficial interests are received by the transferor, and extensive new disclosures. The provisions of this ASU are to be applied to transfers of financial assets occurring in years beginning after November 15, 2009. The adoption of this ASU did not impact our financial results or disclosures as at December 31, 2010 |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b)   | Consolidation of Variable Interest Entities  In December 2009, the FASB issued ASU 2009-17, “Consolidations (Topic 810), Improvements to Financial Reporting Enterprises Involved with Variable Interest Entities” (formerly SFAS 167, “Amendments to FASB Interpretation No 46 (R)”) which amends the consolidation guidance for variable interest entities. (“VIE”) The changes include the elimination of the exemption for qualifying special purpose entities and a new approach for determining who should consolidate a VIE. In addition, the changes to when it is necessary to reassess who should consolidate a VIE have also been made. In determining the primary beneficiary, or entity required to consolidate a VIE, quantitative analysis of who absorbs the majority of the expected losses or receives a majority of the expected residual returns or both of the VIE is no longer required. Under ASU 2009-17, an entity is required to assess whether its variable interest or interests in an entity give it a controlling financial interest in the VIE, which involves more qualitative analysis. Additional disclosures will be required under this ASU to provide more transparent information regarding an entity’s involvement with a VIE. The provisions of this ASU are to be applied for years beginning after November 15, 2009, for interim periods within those years, and for interim annual reporting periods thereafter. The adoption of this ASU did not impact our financial results or disclosures as at December 31, 2010. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 20. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (Continued) |
|-----|-----------------------------------------------------------------------------------------------------|

| c)   | Fair Value Measurement and Disclosures  In January 2010, the FASB issued ASU 2010-16, “Fair Value Measurements and Disclosures (Topic 810) “Improving Disclosures About Fair Value Measurements.” This ASU provides further disclosure requirements for recurring and non-recurring fair value measurements. These disclosure requirements include transfers in and out of Level 1 and 2 and additional information relating to activity in Level 3 fair value measurements. The ASU also provides clarification on the level of disaggregation for disclosure of fair value measurement. The new disclosure and clarifications are effective for interim and annual periods beginning after December 31, 2009, except for disclosures about activity in Level 3 fair value measurements, which are effective for fiscal years beginning after December 15, 2010 and for interim periods within those fiscal years. The adoption of this ASU did not impact our financial results or disclosures as at December 31, 2010. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                 |  AVINO SILVER & GOLD MINES LTD. |                                                               |
|--------------------------------------|------------------------------------------|--------------------------------------------------------------------|
|                                 |                                     |                                                               |   |
| Date: July 7, 2011    | By:                                      | /s/ David Wolfin           |   |
|                                 |                                     | David Wolfin, Chief Executive Officer(Principal Executive Officer) |   |

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| Exhibit Number |   | Name                                                                        |
|----------------|--------|-----------------------------------------------------------------------------|
|           |   |                                                                        |
| 1.1       |   | Memorandum of Avino Silver & Gold Mines Ltd.*                           |
| 1.2       |   | Articles of Avino Silver & Gold Mines Ltd.*                             |
| 4.1            |   | Share Purchase Agreement dated March 22, 2004*                              |
| 8.1            |   | List of Subsidiaries                                                        |
| 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 |

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