Document:

avino_ex101.htm

EXHIBIT 10.1
  
  	
	  
	 Report to:
  

	 Avino Gold & Silver Mines Ltd.
  
	  

	 Amended Mineral Resource Estimate Update for the
Avino Property, Durango, Mexico
  
  
  
	  

	 704-EG-VMIN03003-02
	
	  
  
 
	

   
  	 
	 
	 
 
	 

   
  		 Report to:
     
  
   
	
	 AVINO GOLD & SILVER MINES LTD.
 

	 AMENDED MINERAL RESOURCE ESTIMATE UPDATE
 FOR THE
 AVINO PROPERTY, DURANGO, MEXICO
  
   
  
   
  

	 EFFECTIVE DATE: FEBRUARY 21, 2018
 AMENDED DATE: DECEMBER 19, 2018
      
  
  

	 Prepared by: 
	 Hassan Ghaffari, P. Eng

		 Michael F. O’Brien, P.Geo., M.Sc., Pr.Sci,Nat., FAusIMM, FSAIMM

		 Mark Horan, P.Eng.

		 Jianhui (John) Huang, Ph.D., P.Eng.

	  
	  
	  

	  
	  
	  

	  
	  
	  

	 HG/vc
	  
	  

	  
	  
	  

	  
	  
	  

	 
	  

	  
	  

	 Suite 1000, 885 Dunsmiur Street, Vancouver, British Columbia V6C 1N5
 Phone: 604.408.3788 Fax: 604.684.6241

   
 	 
	 
	 
 
	 

  
  	 
	 

  
 REVISION HISTORY
  	  

   
 	 REV. 
 NO
	 ISSUE DATE
	 PREPARED BY 
 AND DATE
	 REVIEWED BY 
 AND DATE
	 APPROVED BY
  AND DATE
	 DESCRIPTION OF REVISION

	  
	 29 Mar 18
	 All QPs
	 All QPs
	 Hassan Ghaffari
	 Draft to Client

	  
	 03 Apr 18
	 All QPs
	 All QPs
	 Hassan Ghaffari
	 Draft to Client

	  
	 04 Apr 18
	 All QPs
	 All QPs
	 Hassan Ghaffari
	 Final Report

	  
	 06 Apr 18
	 All QPs
	 All QPs
	 Hassan Ghaffari
	 Final Report (Revised)

	  
	 18 Dec 18
	 All QPs
	 All QPs
	 Hassan Ghaffari
	 Ammended Report (Draft)

  
  
  	  
	 iii
	 704-EG-VMIN03003-02

  	 
	 
	 
 
	 

  
  	 
	 

  
TABLE OF CONTENTS  	  

   
  	 1.0
	 SUMMARY
	  
	 1-1
	  

	  
	 1.1
	 INTRODUCTION
	  
	 1-1
	  

	  
	 1.2
	 PROPERTY DESCRIPTION AND LOCATION
	  
	 1-1
	  

	  
	 1.3
	 GEOLOGY AND MINERALIZATION
	  
	 1-2
	  

	  
	  
	 1.3.1
	 THE AVINO VEIN
	  
	 1-4
	  

	  
	  
	 1.3.2
	 THE SAN GONZALO VEIN
	  
	 1-4
	  

	  
	  
	 1.3.3
	 THE OXIDE TAILINGS
	  
	 1-4
	  

	  
	 1.4
	 RESOURCE ESTIMATES
	  
	 1-5
	  

	  
	 1.5
	 MINERAL PROCESSING, METALLURGICAL TESTING AND RECOVERY METHODS
	  
	 1-7
	  

	  
	  
	 1.5.1
	 AVINO VEIN
	  
	 1-7
	  

	  
	  
	 1.5.2
	 SAN GONZALO VEIN
	  
	 1-8
	  

	  
	  
	 1.5.3
	 OXIDE TAILINGS
	  
	 1-8
	  

	  
	  
	 1.5.4
	 SULPHIDE TAILINGS
	  
	 1-8
	  

	  
	 1.6
	 MINING METHODS
	  
	 1-9
	  

	  
	  
	 1.6.1
	 AVINO VEIN
	  
	 1-9
	  

	  
	  
	 1.6.2
	 SAN GONZALO VEIN
	  
	 1-10
	  

	  
	  
	 1.6.3
	 OXIDE TAILINGS
	  
	 1-10
	  

	  
	 1.7
	 PROJECT INFRASTRUCTURE
	  
	 1-11
	  

	  
	 1.8
	 ENVIRONMENTAL
	  
	 1-11
	  

	  
	 1.9
	 CAPITAL AND OPERATING COSTS
	  
	 1-12
	  

	  
	  
	 1.9.1
	 CAPITAL COST ESTIMATES
	  
	 1-12
	  

	  
	  
	 1.9.2
	 OPERATING COST ESTIMATES
	  
	 1-13
	  

	  
	 1.10
	 ECONOMIC ANALYSIS
	  
	 1-15
	  

	  
	  
	 1.10.1
	 AVINO AND SAN GONZALO VEINS
	  
	 1-15
	  

	  
	  
	 1.10.2
	 TAILINGS RESOURCES
	  
	 1-15
	  

	  
	 1.11
	 RECOMMENDATIONS
	  
	 1-16
	  

	  
	  
	  
	  
	  
	  

	 2.0
	 INTRODUCTION
	  
	 2-1
	  

	  
	 2.1
	 EFFECTIVE DATES
	  
	 2-1
	  

	  
	 2.2
	 QUALIFIED PERSONS
	  
	 2-1
	  

	  
	 2.3
	 INFORMATION AND DATA SOURCES
	  
	 2-3
	  

	  
	 2.4
	 UNITS OF MEASUREMENT
	  
	 2-3
	  

	  
	  
	  
	  
	  
	  

	 3.0
	 RELIANCE ON OTHER EXPERTS
	  
	 3-1
	  

	  
	  
	  
	  
	  

	 4.0
	 PROPERTY DESCRIPTION AND LOCATION
	  
	 4-1
	  

	  
	 4.1
	 LOCATION
	  
	 4-1
	  

	  
	 4.2
	 PROPERTY OWNERSHIP
	  
	 4-2
	  

	  
	 4.3
	 MINERAL CONCESSIONS AND AGREEMENTS
	  
	 4-3
	  

  
  
  	  
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 	 5.0
	 ACCESSIBILITY, CLIMATE, INFRASTRUCTURE, LOCAL RESOURCES, AND PHYSIOGRAPHY
	  
	 5-1
	  

	  
	 5.1
	 TOPOGRAPHY, ELEVATION AND VEGETATION
	  
	 5-1
	  

	  
	 5.2
	 ACCESSIBILITY AND LOCAL RESOURCES
	  
	 5-1
	  

	  
	 5.3
	 CLIMATE AND LENGTH OF OPERATING SEASON
	  
	 5-1
	  

	  
	 5.4
	 INFRASTRUCTURE
	  
	 5-1
	  

	  
	  
	  
	  
	  
	  
	  

	 6.0
	 HISTORY
	  
	 6-1
	  

	  
	 6.1
	 AVINO MINE, 1555-1968
	  
	 6-1
	  

	  
	  
	 6.1.1
	 AVINO VEIN SYSTEM DEPOSIT
	  
	 6-1
	  

	  
	 6.2
	 SAN GONZALO VEIN DEPOSIT
	  
	 6-2
	  

	  
	 6.3
	 GUADALUPE VEIN DEPOSIT
	  
	 6-2
	  

	  
	 6.4
	 SAN JUVENTINO VEIN DEPOSIT
	  
	 6-2
	  

	  
	  
	  
	  
	  
	  
	  

	 7.0
	 GEOLOGICAL SETTING AND MINERALIZATION
	  
	 7-1
	  

	  
	 7.1
	 REGIONAL GEOLOGY
	  
	 7-1
	  

	  
	 7.2
	 PROPERTY GEOLOGY AND MINERALIZATION
	  
	 7-2
	  

	  
	  
	 7.2.1
	 AVINO VEIN
	  
	 7-3
	  

	  
	  
	 7.2.2
	 SAN GONZALO VEIN
	  
	 7-5
	  

	  
	  
	 7.2.3
	 OXIDE AND SULPHIDE TAILINGS
	  
	 7-5
	  

	  
	  
	  
	  
	  
	  
	  

	 8.0
	 DEPOSIT TYPES
	  
	 8-1
	  

	  
	  
	  
	  
	  
	  
	  

	 9.0
	 EXPLORATION
	  
	 9-1
	  

	  
	 9.1
	 EARLY EXPLORATION (PRIOR TO MINE CLOSURE), 1968 TO 2001
	  
	 9-1
	  

	  
	 9.2
	 RECENT EXPLORATION, 2001 TO PRESENT
	  
	 9-2
	  

	  
	  
	 9.2.1
	 TAILINGS INVESTIGATIONS (OXIDES), 2003 AND 2004
	  
	 9-2
	  

	  
	  
	 9.2.2
	 TAILINGS SAMPLING (SULPHIDES), 2005
	  
	 9-3
	  

	  
	  
	 9.2.3
	 BULK SAMPLE PROGRAM OF SAN GONZALO VEIN, 2011
	  
	 9-3
	  

	  
	  
	 9.2.4
	 UNDERGROUND CHANNEL SAMPLING OF SAN GONZALO AND AVINO VEINS, 2010 TO PRESENT
	  
	 9-3
	  

	  
	  
	 9.2.5
	 UNDERGROUND CHANNEL SAMPLING OF SAN GONZALO AND ANGELICA VEINS, 2010-PRESENT
	  
	 9-5
	  

	  
	  
	  
	  
	  
	  
	  

	 10.0
	 DRILLING
	  
	 10-1
	  

	  
	 10.1
	 EARLY DRILLING (PRIOR TO MINE CLOSURE), 1968 TO 2001
	  
	 10-1
	  

	  
	  
	 10.1.1
	 AVINO VEIN
	  
	 10-1
	  

	  
	  
	 10.1.2
	 OXIDE TAILINGS, 1990 TO 1991
	  
	 10-1
	  

	  
	 10.2
	 RECENT DRILLING (POST-MINE CLOSURE), 2001 TO PRESENT
	  
	 10-1
	  

	  
	  
	 10.2.1
	 AVINO VEIN
	  
	 10-2
	  

	  
	  
	 10.2.2
	 SAN GONZALO VEIN
	  
	 10-2
	  

	  
	  
	 10.2.3
	 SAN JUVENTINO AND GUADALUPE VEINS
	  
	 10-2
	  

	  
	  
	 10.2.4
	 OXIDE TAILINGS
	  
	 10-8
	  

	  
	  
	 10.2.5
	 SPECIFIC GRAVITY RESULTS
	  
	 10-12
	  

	  
	  
	  
	  
	  
	  
	  

	 11.0
	 SAMPLE PREPARATION, ANALYSIS AND SECURITY
	  
	 11-1
	  

	  
	 11.1
	 DRILLING AND TRENCHING OF OXIDE TAILINGS, 1990 TO 1991
	  
	 11-1
	  

   
  	  
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	 11.2
	 TAILINGS INVESTIGATIONS (TEST PITS IN OXIDE TAILINGS), 2004
	  
	 11-1
	  

	  
	 11.3
	 DRILLING PROGRAM, SAN GONZALO, 2007 TO PRESENT
	  
	 11-2
	  

	  
	 11.4
	 DRILLING PROGRAMS, ET ZONE OF THE AVINO VEIN, 2006 TO PRESENT
	  
	 11-3
	  

	  
	 11.5
	 UNDERGROUND CHANNEL SAMPLING OF SAN GONZALO VEIN, 2010 TO PRESENT
	  
	 11-3
	  

	  
	 11.6
	 AVINO LABORATORY
	  
	 11-4
	  

	  
	 11.7
	 SPECIFIC GRAVITY SAMPLES
	  
	 11-4
	  

	  
	  
	 11.7.1
	 CALIPER VOLUME CALCULATION METHOD
	  
	 11-4
	  

	  
	  
	 11.7.2
	 WATER DISPLACEMENT METHOD
	  
	 11-5
	  

	  
	 11.8
	 QP OPINION
	  
	 11-5
	  

	  
	  
	  
	  
	  
	  
	  

	 12.0
	 DATA VERIFICATION
	  
	 12-1
	  

	  
	 12.1
	 AVINO AND SAN GONZALO VEIN DRILLHOLE DATABASE VERIFICATION
	  
	 12-1
	  

	  
	  
	 12.1.1
	 COLLAR AND ASSAY DATA
	  
	 12-1
	  

	  
	  
	 12.1.2
	 DOWNHOLE SURVEY DATA
	  
	 12-3
	  

	  
	  
	 12.1.3
	 GEOLOGY DATA AND INTERPRETATION
	  
	 12-3
	  

	  
	  
	 12.1.4
	 REVIEW OF DRILLHOLE QUALITY ASSURANCE/QUALITY CONTROL SAMPLES
	  
	 12-3
	  

	  
	  
		  
	  
	  
	  

	  
	 12.2
	 BULK DENSITY
	  
	 12-16
	  

	  
	  
	 12.2.1
	 AVINO AND SAN GONZALO VEIN BULK DENSITY
	  
	 12-16
	  

	  
	 12.3
	 OXIDE TAILINGS DRILLHOLE DATABASE
	  
	 12-17
	  

	  
	  
	 12.3.1
	 ASSAY VERIFICATION OF 1990/1991 DRILLHOLES IN OXIDE TAILINGS
	  
	 12-17
	  

	  
	  
	 12.3.2
	 OXIDE TAILINGS VERIFICATION SAMPLES
	  
	 12-17
	  

	  
	 12.4
	 SITE VISIT
	  
	 12-18
	  

	  
	 12.5
	 ARANZ GEO CONCLUSIONS AND OPINION
	  
	 12-18
	  

	  
	  
	 12.5.1
	 AVINO AND SAN GONZALO VEINS
	  
	 12-18
	  

	  
	  
	 12.5.2
	 OXIDE TAILINGS
	  
	 12-19
	  

	  
	  
	 12.5.3
	 QP OPINION
	  
	 12-19
	  

	  
	  
	  
	  
	  
	  
	  

	 13.0
	 MINERAL PROCESSING AND METALLURGICAL TESTING
	  
	 13-1
	  

	  
	 13.1
	 AVINO VEIN
	  
	 13-1
	  

	  
	 13.2
	 SAN GONZALO VEIN
	  
	 13-2
	  

	  
	 13.3
	 OXIDE TAILINGS
	  
	 13-2
	  

	  
	 13.4
	 SULPHIDE TAILINGS
	  
	 13-21
	  

	  
	  
	  
	  
	  
	  
	  

	 14.0
	 MINERAL RESOURCE ESTIMATES
	  
	 14-1
	  

	  
	 14.1
	 RESOURCE SUMMARY
	  
	 14-1
	  

	  
	 14.2
	 DATA
	  
	 14-4
	  

	  
	 14.3
	 AVINO VEIN
	  
	 14-4
	  

	  
	  
	 14.3.1
	 GEOLOGICAL INTERPRETATION
	  
	 14-4
	  

	  
	  
	 14.3.2
	 WIREFRAMING
	  
	 14-4
	  

	  
	 14.4
	 SAN GONZALO VEIN
	  
	 14-7
	  

	  
	  
	 14.4.1
	 GEOLOGICAL INTERPRETATION
	  
	 14-7
	  

	  
	  
	 14.4.2
	 WIREFRAMING
	  
	 14-7
	  

	  
	 14.5
	 OXIDE TAILINGS
	  
	 14-9
	  

	  
	  
	 14.5.1
	 GEOLOGICAL INTERPRETATION
	  
	 14-9
	  

   
  	  
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	 14.5.2
	 WIREFRAMING
	  
	 14-10
	  

	  
	 14.6
	 EXPLORATORY DATA ANALYSIS
	  
	 14-11
	  

	  
	  
	 14.6.1
	 RAW DATA ASSAYS AND STATISTICS
	  
	 14-11
	  

	  
	  
	 14.6.2
	 OUTLIER MANAGEMENT AND CAPPING STRATEGY
	  
	 14-14
	  

	  
	  
	 14.6.3
	 DRILLHOLE COMPOSITING
	  
	 14-15
	  

	  
	 14.7
	 DENSITY
	  
	 14-15
	  

	  
	  
	 14.7.1
	 DENSITY DATA
	  
	 14-15
	  

	  
	 14.8
	 BISMUTH
	  
	 14-16
	  

	  
	 14.9
	 VARIOGRAPHY AND SPATIAL ANALYSIS
	  
	 14-17
	  

	  
	 14.10
	 INTERPOLATION PLAN AND KRIGING PARAMETERS
	  
	 14-24
	  

	  
	  
	 14.10.1
	 AVINO
	  
	 14-25
	  

	  
	  
	 14.10.2
	 SAN GONZALO
	  
	 14-25
	  

	  
	  
	 14.10.3
	 OXIDE TAILINGS
	  
	 14-25
	  

	  
	 14.11
	 RESOURCE BLOCK MODELS
	  
	 14-28
	  

	  
	  
	 14.11.1
	 BLOCK MODEL CONFIGURATIONS
	  
	 14-28
	  

	  
	  
	 14.11.2
	 INTERPOLATION
	  
	 14-29
	  

	  
	 14.12
	 MODEL VALIDATION
	  
	 14-29
	  

	  
	  
	 14.12.1
	 STATISTICS
	  
	 14-29
	  

	  
	  
	 14.12.2
	 SECTIONS
	  
	 14-32
	  

	  
	  
	 14.12.3
	 SWATH PLOTS
	  
	 14-38
	  

	  
	 14.13
	 MINERAL RESOURCE CLASSIFICATION
	  
	 14-55
	  

	  
	  
	 14.13.1
	 INTRODUCTION
	  
	 14-55
	  

	  
	 14.14
	 MINERAL RESOURCE TABULATION
	  
	 14-59
	  

	  
	  
	 14.14.1
	 CUT-OFFS AND SILVER EQUIVALENT CALCULATIONS
	  
	 14-59
	  

	  
	  
	 14.14.1
	 GRADE-TONNAGE TABLES
	  
	 14-62
	  

	  
	  
	 14.14.2
	 GRADE-TONNAGE GRAPHS
	  
	 14-64
	  

	  
	 14.15
	 SULPHIDE TAILINGS
	  
	 14-69
	  

	  
	  
	  
	  
	  
	  
	  

	 15.0
	 MINERAL RESERVE ESTIMATES
	  
	 15-1
	  

	  
	  
	  
	  
	  
	  
	  

	 16.0
	 MINING METHODS
	  
	 16-1
	  

	  
	 16.1
	 MINING AT THE AVINO PROPERTY
	  
	 16-1
	  

	  
	 16.2
	 AVINO VEIN
	  
	 16-1
	  

	  
	 16.3
	 SAN GONZALO VEIN
	  
	 16-2
	  

	  
	  
	 16.3.1
	 BULK SAMPLE PROGRAM
	  
	 16-3
	  

	  
	  
	 16.3.2
	 PRODUCTION
	  
	 16-4
	  

	  
	  
	 16.3.3
	 MINE DESIGN
	  
	 16-4
	  

	  
	 16.4
	 OXIDE TAILINGS
	  
	 16-5
	  

	  
	  
	 16.4.1
	 SCHEDULE
	  
	 16-5
	  

	  
	  
	 16.4.2
	 EQUIPMENT
	  
	 16-5
	  

	  
	  
	 16.4.3
	 MODIFYING SITE CONSIDERATIONS
	  
	 16-5
	  

	  
	 16.5
	 SULPHIDE TAILINGS
	  
	 16-5
	  

	  
	  
	  
	  
	  
	  
	  

	 17.0
	 RECOVERY METHODS
	  
	 17-1
	  

	  
	 17.1
	 AVINO VEIN
	  
	 17-1
	  

	  
	 17.2
	 SAN GONZALO VEIN
	  
	 17-4
	  

   
  	  
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	 17.3
	 TAILINGS MATERIAL
	  
	 17-4
	  

	  
	  
	 17.3.1
	 OXIDE TAILINGS
	  
	 17-5
	  

	  
	  
	 17.3.2
	 SULPHIDE TAILINGS
	  
	 17-10
	  

	  
	  
	  
	  
	  
	  
	  

	 18.0
	 PROJECT INFRASTRUCTURE
	  
	 18-1
	  

	  
	 18.1
	 INTRODUCTION
	  
	 18-1
	  

	  
	 18.2
	 ACCESSIBILITY
	  
	 18-3
	  

	  
	 18.3
	 POWER
	  
	 18-3
	  

	  
	 18.4
	 WATER SUPPLY
	  
	 18-3
	  

	  
	 18.5
	 WATER TREATMENT PLANT
	  
	 18-3
	  

	  
	  
	  
	  
	  
	  
	  

	 19.0
	 MARKET STUDIES AND CONTRACTS
	  
	 19-1
	  

	  
	 19.1
	 MINED MATERIAL HAULAGE FROM UNDERGROUND
	  
	 19-1
	  

	  
	 19.2
	 FLOTATION CONCENTRATES
	  
	 19-1
	  

	  
	 19.3
	 GOLD-SILVER DORÉ
	  
	 19-1
	  

	  
	  
	  
	  
	  
	  
	  

	 20.0
	 ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY IMPACT
	  
	 20-1
	  

	  
	 20.1
	 ENVIRONMENTAL STUDIES
	  
	 20-1
	  

	  
	  
	 20.1.1
	 ENVIRONMENTAL SETTING
	  
	 20-1
	  

	  
	 20.2
	 ENVIRONMENTAL PERMITTING
	  
	 20-3
	  

	  
	  
	 20.2.1
	 CURRENT PERMITS FOR THE OXIDE TAILINGS
	  
	 20-4
	  

	  
	  
	 20.2.2
	 CURRENT PERMITS FOR THE SAN GONZALO MINE (ADJACENT)
	  
	 20-4
	  

	  
	  
	 20.2.3
	 APPLICABLE LEGISLATION
	  
	 20-5
	  

	  
	 20.3
	 ENVIRONMENTAL MONITORING AND REPORTING
	  
	 20-7
	  

	  
	 20.4
	 ENVIRONMENTAL MANAGEMENT
	  
	 20-7
	  

	  
	 20.5
	 WATER MANAGEMENT
	  
	 20-7
	  

	  
	 20.6
	 SULPHIDE TAILINGS MANAGEMENT
	  
	 20-7
	  

	  
	 20.7
	 MINE CLOSURE AND RECLAMATION
	  
	 20-8
	  

	  
	 20.8
	 SOCIO-ECONOMIC AND COMMUNITY CONSIDERATIONS
	  
	 20-9
	  

	  
	  
	 20.8.1
	 PROJECT LOCATION
	  
	 20-9
	  

	  
	  
	 20.8.2
	 CONSULTATION WITH COMMUNITIES
	  
	 20-9
	  

	  
	  
	  
	  
	  
	  
	  

	 21.0
	 CAPITAL AND OPERATING COST ESTIMATES
	  
	 21-1
	  

	  
	 21.1
	 AVINO AND SAN GONZALO VEINS
	  
	 21-1
	  

	  
	  
	 21.1.1
	 CAPITAL COSTS
	  
	 21-1
	  

	  
	  
	 21.1.2
	 OPERATING COSTS
	  
	 21-2
	  

	  
	 21.2
	 TAILINGS RESOURCES
	  
	 21-3
	  

	  
	  
	 21.2.1
	 OXIDE TAILINGS
	  
	 21-3
	  

	  
	  
	 21.2.2
	 SULPHIDE TAILINGS
	  
	 21-3
	  

	  
	  
	  
	  
	  
	  
	  

	 22.0
	 ECONOMIC ANALYSIS
	  
	 22-1
	  

	  
	 22.1
	 AVINO AND SAN GONZALO VEINS
	  
	 22-1
	  

	  
	 22.2
	 TAILINGS RESOURCES
	  
	 22-1
	  

	  
	  
	 22.2.1
	 OXIDE TAILINGS
	  
	 22-1
	  

	  
	  
	 22.2.2
	 SULPHIDE TAILINGS
	  
	 22-3
	  

  
  
  	  
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 	 23.0
	 ADJACENT PROPERTIES
	  
	 23-1
	  

	  
	  
	  
	  
	  
	  
	  

	 24.0
	 OTHER RELEVANT DATA AND INFORMATION
	  
	 24-1
	  

	  
	  
	  
	  
	  
	  
	  

	 25.0
	 INTERPRETATIONS AND CONCLUSIONS
	  
	 25-1
	  

	  
	 25.1
	 GEOLOGY
	  
	 25-1
	  

	  
	 25.2
	 RESOURCE ESTIMATES
	  
	 25-1
	  

	  
	 25.3
	 MINERAL PROCESSING
	  
	 25-4
	  

	  
	 25.4
	 MINING
	  
	 25-4
	  

	  
	 25.5
	 CAPITAL AND OPERATING COSTS
	  
	 25-4
	  

	  
	  
	 25.5.1
	 AVINO VEIN AND SAN GONZALO VEIN
	  
	 25-4
	  

	  
	  
	 25.5.2
	 TAILINGS RESOURCES
	  
	 25-5
	  

	  
	 25.6
	 ECONOMIC ANALYSIS
	  
	 25-6
	  

	  
	  
	  
	  
	  
	  
	  

	 26.0
	 RECOMMENDATIONS
	  
	 26-1
	  

	  
	 26.1
	 GEOLOGY
	  
	 26-1
	  

	  
	  
	 26.1.1
	 DATABASE MANAGEMENT
	  
	 26-1
	  

	  
	  
	 26.1.2
	 UNDERGROUND SAMPLING
	  
	 26-1
	  

	  
	  
	 26.1.3
	 SPECIFIC GRAVITY SAMPLING AND ANALYSIS
	  
	 26-2
	  

	  
	  
	 26.1.4
	 QA/QC SAMPLING
	  
	 26-2
	  

	  
	  
	 26.1.5
	 SULPHIDE TAILINGS DRILLING
	  
	 26-2
	  

	  
	  
	 26.1.6
	 DENSITY MEASUREMENTS
	  
	 26-2
	  

	  
	  
	 26.1.7
	 BISMUTH
	  
	 26-3
	  

	  
	  
	 26.1.8
	 RESOURCE ESTIMATION
	  
	 26-3
	  

	  
	  
	 26.1.9
	 EXPLORATION FOR THE WESTERN EXTENSION OF THE AVINO VEIN
	  
	 26-3
	  

	  
	 26.2
	 MINING
	  
	 26-3
	  

	  
	  
	 26.2.1
	 LONG-TERM MINE PLANNING
	  
	 26-3
	  

	  
	  
	 26.2.2
	 SUBLEVEL MINING (WITH ROOM AND PILLAR ON SUBLEVELS)
	  
	 26-3
	  

	  
	 26.3
	 PROCESS
	  
	 26-4
	  

	  
	  
	 26.3.1
	 AVINO AND SAN GONZALO VEINS
	  
	 26-4
	  

	  
	  
	 26.3.2
	 OXIDE AND SULPHIDE TAILINGS
	  
	 26-4
	  

	  
	 26.4
	 ENVIRONMENTAL
	  
	 26-5
	  

	  
	 26.5
	 MINING OF OXIDE TAILINGS
	  
	 26-5
	  

	  
	 26.6
	 PROJECT DEVELOPMENT
	  
	 26-5
	  

	  
	  
	  
	  
	  
	  
	  

	 27.0
	 REFERENCES
	  
	 27-1
	  

  
 APPENDICES
  	  

  
  	 APPENDIX A
	 TITLE OPINION

  
  
  	  
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LIST OF TABLES  	  

  
  	 Table 1.1
	 Mineral Resources at the Avino Property
	  
	 1-6
	  

	 Table 1.2
	 Recent Production from the Avino Vein
	  
	 1-9
	  

	 Table 1.3
	 Recent Production from the San Gonzalo Vein
	  
	 1-10
	  

	 Table 1.4
	 Capital Costs for the Avino Vein (US$)
	  
	 1-12
	  

	 Table 1.5
	 Capital Costs for the San Gonzalo Vein (US$)
	  
	 1-13
	  

	 Table 1.6
	 Operating Costs for the Avino Vein (US$)
	  
	 1-14
	  

	 Table 1.7
	 Operating Costs for the San Gonzalo Vein (US$)
	  
	 1-14
	  

	 Table 2.1
	 Summary of QPs
	  
	 2-2
	  

	 Table 4.1
	 Summary of Property Ownership
	  
	 4-3
	  

	 Table 4.2
	 Mineral Concessions – Avino Property
	  
	 4-4
	  

	 Table 9.1
	 Summary Underground Channel Sampling by Level for the Avino (ET) Underground Mines
	  
	 9-4
	  

	 Table 9.2
	 Summary of Underground Channel Sampling by Level for the San Gonzalo Mine
	  
	 9-4
	  

	 Table 10.1
	 Drillholes Completed from 2007 to 2016 on the San Gonzalo Vein
	  
	 10-3
	  

	 Table 10.2
	 Drillholes Completed from 2001 to 2017 at ET Mine (includes San Luis, Avino vein and Chirumbo
	  
	 10-6
	  

	 Table 10.3
	 Drillholes Completed from 2017 to 2018 at Guadalupe and San Juventino
	  
	 10-8
	  

	 Table 10.4
	 Drillholes Drilled on Oxide Tailings 2003-2016
	  
	 10-9
	  

	 Table 10.5
	 Avino and San Gonzalo Density Data Summary
	  
	 10-12
	  

	 Table 12.1
	 Number of Records and Discrepancies for the Avino Drillhole Data
	  
	 12-2
	  

	 Table 12.2
	 Standards Specification and Performance
	  
	 12-4
	  

	 Table 14.1
	 Avino Mine – Mineral Resources
	  
	 14-2
	  

	 Table 14.2
	 Metal Grade Statistics for 2 m Composites for the Avino and San Gonzalo Vein Systems
	  
	 14-12
	  

	 Table 14.3
	 Oxide Tailings Samples by Sampling Campaign
	  
	 14-13
	  

	 Table 14.4
	 Oxide Tailings Assays by Unit
	  
	 14-14
	  

	 Table 14.5
	 Avino Vein System Density Data Summary
	  
	 14-15
	  

	 Table 14.6
	 San Gonzalo Vein System Density Data Summary
	  
	 14-15
	  

	 Table 14.7
	 Avino Vein System Variogram and Search Parameters
	  
	 14-26
	  

	 Table 14.8
	 San Gonzalo Vein System: Variogram and Search Parameters
	  
	 14-27
	  

	 Table 14.9
	 Oxide Tailings Deposit: Variogram and Search Parameters
	  
	 14-27
	  

	 Table 14.10
	 Estimation Block Model Specifications
	  
	 14-28
	  

	 Table 14.11
	 Explanation of Table 14-10
	  
	 14-28
	  

	 Table 14.12
	 Avino Vein: Block Estimates and Composite Sample Grades
	  
	 14-30
	  

	 Table 14.13
	 San Gonzalo Vein: Block Estimates and Composite Sample Grades
	  
	 14-31
	  

	 Table 14.14
	 Oxide Tailings: Block Estimates and Composite Sample Grades
	  
	 14-32
	  

	 Table 14.15
	 Criteria for Classification of Underground Mineral Resources
	  
	 14-58
	  

	 Table 14.16
	 Silver Equivalent Based Metal Prices and Operational Recovery Parameters
	  
	 14-59
	  

	 Table 14.17
	 Mineral Resource Statement for the Avino Property
	  
	 14-60
	  

	 Table 14.18
	 Avino Vein (ET and San Luis) – High Confidence/Measured
	  
	 14-62
	  

	 Table 14.19
	 Avino Vein (ET and San Luis) – Medium Confidence/Indicated
	  
	 14-62
	  

	 Table 14.20
	 Avino Vein (ET and San Luis) – Low Confidence/Inferred
	  
	 14-62
	  

	 Table 14.21
	 San Gonzalo Vein – High Confidence/Measured
	  
	 14-63
	  

	 Table 14.22
	 San Gonzalo – Medium Confidence/Indicated
	  
	 14-63
	  

	 Table 14.23
	 San Gonzalo – Low Confidence/Inferred
	  
	 14-63
	  

	 Table 14.24
	 Oxide Tailings – Medium Confidence/Indicated
	  
	 14-64
	  

  
  
  	  
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 	 Table 14.25
	 Oxide Tailings – Low Confidence/Inferred
	  
	 14-64
	  

	 Table 16.1
	 Recent Production from the Avino Vein
	  
	 16-2
	  

	 Table 16.2
	 Recent Production from the San Gonzalo Vein
	  
	 16-3
	  

	 Table 16.3
	 Mining Production Schedule
	  
	 16-5
	  

	 Table 17.1
	 Avino Vein Mill Production
	  
	 17-2
	  

	 Table 17.2
	 San Gonzalo Vein Mill Production
	  
	 17-4
	  

	 Table 20.1
	 Mammal Species Listed by NOM-059-SEMARNAT-2001 or in CITES within the San Gonzalo Mine
	  
	 20-2
	  

	 Table 20.2
	 Bird Species Listed by NOM-059-SEMARNAT-2001 or in CITES within the San Gonzalo Mine
	  
	 20-2
	  

	 Table 20.3
	 Reptile Species Listed by NOM-059-SEMARNAT-2001 or in CITES within the San Gonzalo Mine
	  
	 20-3
	  

	 Table 20.4
	 Amphibian Species Listed by NOM-059-SEMARNAT-2001 or in CITES within the San Gonzalo Mine
	  
	 20-3
	  

	 Table 21.1
	 Capital Costs for the Avino Vein (US$)
	  
	 21-1
	  

	 Table 21.2
	 Capital Costs for the San Gonzalo Vein (US$)
	  
	 21-2
	  

	 Table 21.3
	 Operating Costs for the Avino Vein (US$)
	  
	 21-2
	  

	 Table 21.4
	 Operating Costs for the San Gonzalo Vein (US$)
	  
	 21-2
	  

	 Table 25.1
	 Mineral Resources at the Avino Mine Property
	  
	 25-2
	  

  LIST OF FIGURES
  	  

  
  	 Figure 1.1
	 General Location of the Property
	  
	 1-2
	  

	 Figure 1.2
	 Perspective View of the Property Looking North and Showing the Three Deposits
	  
	 1-4
	  

	 Figure 4.1
	 General Location of the Property
	  
	 4-1
	  

	 Figure 4.2
	 Local Property Location
	  
	 4-2
	  

	 Figure 4.3
	 Map of Avino Property Concessions
	  
	 4-5
	  

	 Figure 6.1
	 Avino Mine: Vertical Section View Showing Development and Stoping
	  
	 6-2
	  

	 Figure 6.2
	 San Gonzalo Mine: Vertical Section View Showing Development and Stoping
	  
	 6-3
	  

	 Figure 7.1
	 General Map of Property Geology
	  
	 7-2
	  

	 Figure 7.2
	 Orthogonal View of the Oxide Tailings Deposit and Drillholes
	  
	 7-6
	  

	 Figure 9.1
	 Channel and Drillhole Samples, Colour Coded by Silver Grade, within the Avino System
	  
	 9-5
	  

	 Figure 9.2
	 Channel Samples, Colour Coded by Silver Grade, within the San Gonzalo Vein System
	  
	 9-5
	  

	 Figure 10.1
	 Drillholes Completed from 2016 to 2017 on the Avino-San Luis Infill and Chirumbo, Guadalupe and San Juventino Areas
	  
	 10-2
	  

	 Figure 10.2
	 Location of Drillholes Completed from 2016 to 2017 on Drillholes Completed from 2016 to 2017 on the Guadalupe and San Juventino Veins
	  
	 10-3
	  

	 Figure 10.3
	 Location of Drillholes Completed from 2015 to 2016 on the Oxide Tailings
	  
	 10-11
	  

	 Figure 12.1
	 Standard 1307_ME-1307 – Gold Performance
	  
	 12-5
	  

	 Figure 12.2
	 Standard CDN-ME-1307 – Silver Performance
	  
	 12-6
	  

	 Figure 12.3
	 Standard CDN-ME-1307 – Copper Performance
	  
	 12-6
	  

	 Figure 12.4
	 Standard CDN-ME-1414 – Gold Performance
	  
	 12-7
	  

  
  
  	  
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 	 Figure 12.5
	 Standard CDN-ME-1414 – Silver Performance
	  
	 12-8
	  

	 Figure 12.6
	 Standard CDN-ME-1414 – Copper Performance
	  
	 12-8
	  

	 Figure 12.7
	 Blank – Gold Performance
	  
	 12-9
	  

	 Figure 12.8
	 Blank – Silver Performance
	  
	 12-10
	  

	 Figure 12.9
	 Blank – Copper Performance
	  
	 12-10
	  

	 Figure 12.10
	 Gold – Duplicate Correlation
	  
	 12-11
	  

	 Figure 12.11
	 Gold – Half Absolute Relative Difference Chart
	  
	 12-12
	  

	 Figure 12.12
	 Silver – Duplicate Correlation
	  
	 12-13
	  

	 Figure 12.13
	 Silver – Half Absolute Relative Difference Chart
	  
	 12-14
	  

	 Figure 12.14
	 Copper – Duplicate Correlation
	  
	 12-15
	  

	 Figure 12.15
	 Copper – Half Absolute Relative Difference Chart
	  
	 12-16
	  

	 Figure 14.1
	 Oblique View, Looking North, of the Avino Vein System Model
	  
	 14-5
	  

	 Figure 14.2
	 Silver Grade Profiles Across the Avino Vein System Contacts
	  
	 14-6
	  

	 Figure 14.3
	 Copper Grade Profile Across the Avino Vein System Contacts
	  
	 14-7
	  

	 Figure 14.4
	 Oblique View, Looking North, of the San Gonzalo Vein System Model
	  
	 14-8
	  

	 Figure 14.5
	 Silver and Gold Grade Profiles Across the Main San Gonzalo Vein Contacts
	  
	 14-8
	  

	 Figure 14.6
	 Perspective View of Oxide Tailings Drilling and Silver Assays
	  
	 14-9
	  

	 Figure 14.7
	 Section View, Looking Northeast, Showing Silver Grades in Oxide Tailings Benches
	  
	 14-10
	  

	 Figure 14.8
	 Linear Regression Model Coefficients for Bismuth Estimation
	  
	 14-16
	  

	 Figure 14.9
	 Avino Vein: Main Zone Experimental and Modelled Silver Variograms
	  
	 14-18
	  

	 Figure 14.10
	 Avino Vein: Main Zone Experimental and Modelled Gold Variograms
	  
	 14-19
	  

	 Figure 14.11
	 Avino Vein: Main Zone Experimental and Modelled Copper Variograms
	  
	 14-20
	  

	 Figure 14.12
	 San Gonzalo Vein: SG1 Experimental and Modelled Silver Variograms
	  
	 14-21
	  

	 Figure 14.13
	 San Gonzalo Vein: SG1 Experimental and Modelled Gold Variograms
	  
	 14-22
	  

	 Figure 14.14
	 Oxide Tailings: Domain 10 Experimental Silver Variograms
	  
	 14-23
	  

	 Figure 14.15
	 Oxide Tailings: Domain 10 Experimental Silver Variograms
	  
	 14-24
	  

	 Figure 14.16
	 Avino Vein: Typical Transverse Section, Looking East through Drillhole ET07-10, Showing the Block Model Centroids Colour Coded by Silver Grade
	  
	 14-33
	  

	 Figure 14.17
	 Avino Vein: Longitudinal Section Showing the Block Model Centroids Colour Coded by Silver Grade
	  
	 14-34
	  

	 Figure 14.18
	 Avino Vein: Longitudinal Section Showing the Block Model Centroids Colour Coded by Gold Grade
	  
	 14-34
	  

	 Figure 14.19
	 Avino Vein: Longitudinal Section Showing the Block Model Centroids Colour Coded by Coper Grade
	  
	 14-35
	  

	 Figure 14.20
	 San Gonzalo Vein: Typical Transverse Section, Looking East Aligned Along Drillhole SG1115 Showing the Block Model Centroids Colour Coded by Silver Grade
	  
	 14-36
	  

	 Figure 14.21
	 San Gonzalo Vein: Longitudinal Section Showing the Block Model Centroids Colour Coded by Silver Grade
	  
	 14-37
	  

	 Figure 14.22
	 San Gonzalo Vein: Longitudinal Section Showing the Block Model Centroids Color Coded by Gold Grade
	  
	 14-37
	  

	 Figure 14.23
	 San Gonzalo Vein: Longitudinal Section Showing the Block Model Centroids Colour Coded by Silver Equivalent
	  
	 14-38
	  

	 Figure 14.24
	 Avino Vein, Swathplot for Silver, Eastings
	  
	 14-39
	  

	 Figure 14.25
	 Avino Vein, Swathplot for Gold Eastings
	  
	 14-40
	  

	 Figure 14.26
	 Avin Vein, Swathplot for Copper, Eastings
	  
	 14-41
	  

	 Figure 14.27
	 Avino Vein, Swathplot for Silver, Elevation
	  
	 14-42
	  

	 Figure 14.28
	 Avino Vein, Swathplot for Gold, Elevation
	  
	 14-43
	  

	 Figure 14.29
	 Avino Vein, Swathplot for Copper, Elevation
	  
	 14-44
	  

	 Figure 14.30
	 San Gonzalo Vein, Swathplot for Silver, Eastings
	  
	 14-45
	  

   
  	  
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 	 Figure 14.31
	 San Gonzalo Vein, Swathplot for Silver, Northings
	  
	 14-46
	  

	 Figure 14.32
	 San Gonzalo Vein, Swathplot for Silver, Elevation
	  
	 14-47
	  

	 Figure 14.33
	 San Gonzalo Vein, Swathplot for Gold, Eastings
	  
	 14-48
	  

	 Figure 14.34
	 San Gonzalo Vein, Swathplot for Gold, Northings
	  
	 14-49
	  

	 Figure 14.35
	 San Gonzalo Vein, Swathplot for Gold, Elevation
	  
	 14-50
	  

	 Figure 14.36
	 Oxide Tailings Deposit, Swathplot for Silver, Easting
	  
	 14-51
	  

	 Figure 14.37
	 Oxide Tailings Deposit, Swathplot for Gold, Easting
	  
	 14-52
	  

	 Figure 14.38
	 Oxide Tailings Deposit, Swathplot for Silver, Northing
	  
	 14-53
	  

	 Figure 14.39
	 Oxide Tailings Deposits, Swathplot for Gold, Northing
	  
	 14-53
	  

	 Figure 14.40
	 Oxide Tailings Deposit, Swathplot for Silver, Elevation
	  
	 14-54
	  

	 Figure 14.41
	 Oxide Tailings Deposit, Swathplot for Gold, Elevation
	  
	 14-54
	  

	 Figure 14.42
	 Grade Tonnage Graph of Avino Vein Material at Measured Confidence Level
	  
	 14-65
	  

	 Figure 14.43
	 Grade Tonnage Graph of Avino Vein Material at Indicated Confidence Level
	  
	 14-65
	  

	 Figure 14.44
	 Grade Tonnage Graph of Avino Vein Material at Inferred Confidence Level
	  
	 14-66
	  

	 Figure 14.45
	 Grade Tonnage Graph of San Gonzalo Vein Material at Measured Confidence Level
	  
	 14-66
	  

	 Figure 14.46
	 Grade Tonnage Graph of San Gonzalo Vein Material at Indicated Confidence Level
	  
	 14-67
	  

	 Figure 14.47
	 Grade Tonnage Graph of San Gonzalo Vein Material at Inferred Confidence Level
	  
	 14-67
	  

	 Figure 14.48
	 Grade Tonnage Graph of Oxide Tailings Material at Indicated Confidence Level
	  
	 14-68
	  

	 Figure 14.49
	 Grade Tonnage Graph of Oxide Tailings Material at Inferred Confidence Level
	  
	 14-68
	  

	 Figure 17.1
	 Simplified Flowsheet – Avino Vein
	  
	 17-3
	  

	 Figure 17.2
	 Proposed Process Flowsheet – Oxide Tailings
	  
	 17-5
	  

  GLOSSARY
  	  

  
UNITS OF MEASURE  
  	 above mean sea level
	  
	 amsl
	  

	 acre
	  
	 ac
	  

	 ampere
	  
	 A
	  

	 annum (year)
	  
	 a
	  

	 billion
	  
	 B
	  

	 billion tonnes
	  
	 Bt
	  

  
  
  	  
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 	 billion years ago
	  
	 Ga
	  

	 British thermal unit
	  
	 BTU
	  

	 centimetre
	  
	 cm
	  

	 cubic centimetre
	  
	 cm3
	  

	 cubic feet per minute
	  
	 cfm
	  

	 cubic feet per second
	  
	 ft3/s
	  

	 cubic foot
	  
	 ft3
	  

	 cubic inch
	  
	 in3
	  

	 cubic metre
	  
	 m3
	  

	 cubic yard
	  
	 yd3
	  

	 Coefficients of Variation
	  
	 CVs
	  

	 day
	  
	 d
	  

	 days per week
	  
	 d/wk
	  

	 days per year (annum)
	  
	 d/a
	  

	 dead weight tonnes
	  
	 DWT
	  

	 decibel adjusted
	  
	 dBa
	  

	 decibel
	  
	 dB
	  

	 degree
	  
	 °
	  

	 degrees Celsius
	  
	 °C
	  

	 diameter
	  
	 ø
	  

	 dollar (American)
	  
	 US$
	  

	 dollar (Canadian)
	  
	 Cdn$
	  

	 dry metric ton
	  
	 dmt
	  

	 foot
	  
	 ft
	  

	 gallon
	  
	 gal
	  

	 gallons per minute (US)
	  
	 gpm
	  

	 Gigajoule
	  
	 GJ
	  

	 gigapascal
	  
	 GPa
	  

	 gigawatt
	  
	 GW
	  

	 gram
	  
	 g
	  

	 grams per litre
	  
	 g/L
	  

	 grams per tonne
	  
	 g/t
	  

	 greater than
	  
	 > 
	  

	 hectare (10,000 m2)
	  
	 ha
	  

	 hertz
	  
	 Hz
	  

	 horsepower
	  
	 hp
	  

	 hour
	  
	 h
	  

	 hours per day
	  
	 h/d
	  

	 hours per week
	  
	 h/wk
	  

	 hours per year
	  
	 h/a
	  

	 inch
	  
	 in
	  

	 kilo (thousand)
	  
	 k
	  

	 kilogram
	  
	 kg
	  

	 kilograms per cubic metre
	  
	 kg/m3
	  

	 kilograms per hour
	  
	 kg/h
	  

   
  	  
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 	 kilograms per square metre
	  
	 kg/m2
	  

	 kilometre
	  
	 km
	  

	 kilometres per hour
	  
	 km/h
	  

	 kilopascal
	  
	 kPa
	  

	 kilotonne
	  
	 kt
	  

	 kilovolt
	  
	 kV
	  

	 kilovolt-ampere
	  
	 kVA
	  

	 kilovolts
	  
	 kV
	  

	 kilowatt
	  
	 kW
	  

	 kilowatt hour
	  
	 kWh
	  

	 kilowatt hours per tonne
	  
	 kWh/t
	  

	 kilowatt hours per year
	  
	 kWh/a
	  

	 less than
	  
	 < 
	  

	 litre
	  
	 L
	  

	 litres per minute
	  
	 L/m
	  

	 megabytes per second
	  
	 Mb/s
	  

	 megapascal
	  
	 MPa
	  

	 megavolt-ampere
	  
	 MVA
	  

	 megawatt
	  
	 MW
	  

	 metre
	  
	 m
	  

	 metres above sea level 
	  
	 masl
	  

	 metres Baltic sea level
	  
	 mbsl
	  

	 metres per minute
	  
	 m/min
	  

	 metres per second
	  
	 m/s
	  

	 microns
	  
	 μm
	  

	 milligram
	  
	 mg
	  

	 milligrams per litre
	  
	 mg/L
	  

	 millilitre
	  
	 mL
	  

	 millimetre
	  
	 mm
	  

	 million
	  
	 M
	  

	 million bank cubic metres
	  
	 Mbm3
	  

	 million bank cubic metres per annum
	  
	 Mbm3/a
	  

	 million tonnes
	  
	 Mt
	  

	 minute (plane angle)
	  
	 '
	  

	 minute (time)
	  
	 min
	  

	 month
	  
	 mo
	  

	 ounce
	  
	 oz
	  

	 pascal
	  
	 Pa
	  

	 centipoise
	  
	 mPa∙s
	  

	 parts per million
	  
	 ppm
	  

	 parts per billion
	  
	 ppb
	  

	 percent
	  
	 %
	  

	 pound(s)
	  
	 lb
	  

	 pounds per square inch
	  
	 psi
	  

	 pounds per square inch (gauge)
	  
	 psig
	  

   
  	  
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 	 revolutions per minute
	  
	 rpm
	  

	 second (plane angle)
	  
	 "
	  

	 second (time)
	  
	 s
	  

	 short ton (2,000 lb)
	  
	 st
	  

	 short tons per day
	  
	 st/d
	  

	 short tons per year
	  
	 st/y
	  

	 specific gravity
	  
	 SG
	  

	 square centimetre
	  
	 cm2
	  

	 square foot
	  
	 ft2
	  

	 square inch
	  
	 in2
	  

	 square kilometre
	  
	 km2
	  

	 square metre
	  
	 m2
	  

	 three-dimensional
	  
	 3D
	  

	 tonne (1,000 kg) (metric ton)
	  
	 t
	  

	 tonnes per day
	  
	 t/d
	  

	 tonnes per hour
	  
	 t/h
	  

	 tonnes per year
	  
	 t/a
	  

	 tonnes seconds per hour metre cubed
	  
	 ts/hm3
	  

	 volt
	  
	 V
	  

	 week
	  
	 wk
	  

	 weight/weight
	  
	 w/w
	  

	 wet metric ton
	  
	 wmt
	  

	 yard
	  
	 yd
	  

  ABBREVIATIONS AND ACRONYMS
  
  	 acid-base accounting
	  
	 ABA
	  

	 Aranz Geo Expert Services
	  
	 Aranz Geo
	  

	 atomic absorption
	  
	 AA
	  

	 Avino Silver & Gold Mines Ltd.
	  
	 Avino
	  

	 caliper volume
	  
	 CV
	  

	 Canadian Institute of Mining, Metalurgy, and Petroleum
	  
	 CIM
	  

	 Cannon-Hicks & Associates Ltd.
	  
	 Cannon-Hicks
	  

	 certified reference material
	  
	 CRM
	  

	 Compañía Minera Mexicana de Avino
	  
	 CMMA
	  

	 Compañía Minera Mexicana de Avino, S.A. de C.V.
	  
	 Avino Mexico
	  

	 Convention on International Trade in Endangered Species of Wild Fauna and Flora
	  
	 CITES
	  

	 copper sulphate
	  
	 CuS04
	  

	 copper
	  
	 Cu
	  

	 dissolved oxygen
	  
	 dO2
	  

	 east
	  
	 E
	  

	 Electrometals Electrowinning
	  
	 EMEW
	  

	 Elena Toloso Mine
	  
	 ET
	  

	 San Gonzalo Mine
	  
	 SG
	  

	 Environmental Impact Assessment Matter Regulation/
		  
	  

  
  
  	  
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 	 Reglamento en Materia de Evaluacion del Impacto Ambiental
	  
	 REIA
	  

	 Environmental Impact Assessment/Evaluación de Impacto Ambiental
	  
	 EIA
	  

	 Environmental Impact Statement/Manifestación de Impacto Ambiental
	  
	 EIS/MIA
	  

	 Environmental Quality Monitoring Program/
		  
	  

	 Programa de Seguimiento de la Calidad Ambiental
	  
	 EQMP
	  

	 Federal Attorney for Environmental Protection/
		  
	  

	 Procuraduría Federal de Proteccíon al Ambiente
	  
	 PROFEPA
	  

	 general and administrative
	  
	 G&A
	  

	 General Law for the Prevention and Comprehensive Management of Waste/
		  
	  

	 Ley General Para la Prevención y Gestión Integral de Residuos
	  
	 LGPyGIR
	  

	 General Law for the Prevention and Management of Waste/
		  
	  

	 Ley General Para la Prevención y Gestión Integral de los Residuos
	  
	 LGPGIR
	  

	 General Law of Ecological Equilibrium and Environmental Protection/
		  
	  

	 Ley General del Equilibrio Ecológico y la Protección al Ambiente
	  
	 LGEEPA
	  

	 global positioning system
	  
	 GPS
	  

	 gold equivalent
	  
	 AuEQ
	  

	 gold
	  
	 Au
	  

	 induced polarization
	  
	 IP
	  

	 inductively coupled plasma
	  
	 ICP
	  

	 inductively coupled plasma-method spectroscopy
	  
	 ICP-MS
	  

	 internal rate of return
	  
	 IRR
	  

	 International Organization for Standardization
	  
	 ISO
	  

	 inverse distance squared
	  
	 ID2
	  

	 kriging neighbourhood analysis
	  
	 KRN
	  

	 lead
	  
	 Pb
	  

	 life-of-mine
	  
	 LOM
	  

	 Minerales de Avino, Sociedad Anonima de Capital Variable
	  
	 Minerales
	  

	 MineStart Management Inc.
	  
	 MMI
	  

	 Ministry of Environment and Natural Resources/
		  
	  

	 Secretaría de Medio Ambiente y Recursos Naturales
	  
	 MENR/SEMARNAT
	  

	 National Instrument 43-101
	  
	 NI 43-101
	  

	 nearest neighbour
	  
	 NN
	  

	 net present value
	  
	 NPV
	  

	 net smelter return
	  
	 NSR
	  

	 north
	  
	 N
	  

	 ordinary kriging
	  
	 OK
	  

	 potassium amyl xanthate
	  
	 PAX
	  

	 preliminary economic assessment
	  
	 PEA
	  

	 PricewaterhouseCoopers
	  
	 PwC
	  

	 Process Research Associates Ltd.
	  
	 PRA
	  

	 Qualified Person
	  
	 QP
	  

	 quality assurance
	  
	 QA
	  

	 quality control
	  
	 QC
	  

	 silver equivalent
	  
	 Ag_Eq
	  

	 silver
	  
	 Ag
	  

  
  
  	  
	 xvii
	 704-EG-VMIN03003-02

  

  	 
	 
	 
 
	 

  
  	 
	 

  
 	 sodium carbonate
	  
	 Na2CO3
	  

	 sodium cyanide
	  
	 NaCN
	  

	 south
	  
	 S
	  

	 special mining duty
	  
	 SMD
	  

	 standard reference material
	  
	 SRM
	  

	 tailings storage facility
	  
	 TSF
	  

	 the Avino Mine
	  
	 the Property or
	  

		  
	 the Project
	  

	 Toronto Stock Exchange
	  
	 TSX
	  

	 Universal Transverse Mercator
	  
	 UTM
	  

	 water displacement
	  
	 WD
	  

	 west
	  
	 W
	  

	 zinc
	  
	 Zn
	  

  
  
  	  
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  	 1.0 SUMMARY

  
 1.1 INTRODUCTION
  
 Avino Silver & Gold Mines Ltd. (Avino) is a Canadian-based mining and exploration company listed on the Toronto Stock Exchange (TSX) and the NYSE-American with precious metal properties in Mexico and Canada.
  
 The Avino Mine (the Property or the Project), near Durango, Mexico, is Avino’s principal asset and is the subject of this Technical Report, which includes a current Mineral Resource estimate for the Avino Veins at the Elena Tolosa Mine (ET), San Gonzalo Veins at the San Gonzalo Mine (SG) and for the oxide tailings deposit. 
  
 Avino holds a 99.67% interest in the Property through its subsidiary companies called Compañía Minera Mexicana de Avino, S.A. de C.V. (CMMA) and Promotora Avino, S.A. de C.V. Avino commenced development, including drilling and bulk sampling, on the San Gonzalo Vein in 2010 and this work is ongoing. This marks the resumption of activity on the Property since 2001, when low metal prices and the closure of a key smelter caused the mine to close after having been in operation continuously for 27 years. Between 1976 and 2001, the mine produced approximately 497 t of silver, 3 t of gold, and 11,000 t of copper (Slim 2005a) as well as an apparently undocumented amount of lead.
  
 The majority of the information has been sourced from the data provided by Avino: Avino internal reports; Tetra Tech (2013); Tetra Tech (2017); Slim (2005d), and Gunning (2009). The majority of the information was provided in English, but some information was written in Spanish and subsequently translated into English.
  
 The purpose of this report is to support an updated Mineral Resource estimated as a result of modified current metal price parameters, new drilling information at the ET Mine (Avino and San Luis) and improved interpretation of the San Gonzalo mineralization trends. There has been no change to the oxide tailings estimate. 
  
 1.2 PROPERTY DESCRIPTION AND LOCATION
  
 The Property is located in Durango State in North Central Mexico, within the Sierra Madre Silver Belt, 82 km northeast of Durango City (Figure 1.1). The current Property is comprised of 23 mineral concessions, totalling 1,103.934 ha. Of these, 22 mineral concessions, totalling 1,005.104 ha, are held by CMMA (Avino’s Mexican subsidiary company), by Promotora Avino SA de CV, and by Susesion de la Sra. Elena del Hoyo Algara de Ysita.
  
  
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
Durango, Mexico		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 1.1 General Location of the Property
    
 
    
 Avino entered into an agreement (the Agreement) on February 18, 2012 through its subsidiary company, with Minerales de Avino, Sociedad Anonima de Capital Variable (Minerales), whereby Minerales has indirectly granted to Avino the exclusive mining and occupation rights to the La Platosa concession. The La Platosa concession covers 98.83 ha and hosts the Avino Vein and ET Zone (ET Zone).
  
 Pursuant to the Agreement, Avino has the exclusive right to explore and mine the concession for an initial period of 15 years, with the option to extend the agreement for another 5 years. In consideration of the grant of these rights, Avino has paid to Minerales the sum of US$250,000 by the issuance of 135,189 common shares of Avino. Avino has also agreed to pay to Minerales a royalty equal to 3.5% of net smelter returns (NSRs), at the commencement of commercial production from the concession.
  
 All concessions are current and up to date based on information received. Mineral concessions in Mexico do not include surface rights and Avino has entered into agreements with communal landowners (Ejidos) of San Jose de Avino, Panuco de Coronado and Zaragoza for the temporary occupation and surface rights of the concessions.
  
 1.3 GEOLOGY AND MINERALIZATION
  
 The Property is located within the Sierra de Gamon, on the east flank of the Sierra Madre Occidental. The area is a geological window into the Lower Volcanic series and consists of volcanic rocks of mainly Andesitic affiliation with other rock types occurring more sparsely to the north (Slim 2005d).
  
  
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 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 A large monzonitic intrusion is observed in the region in the form of dykes and small stocks, which may be related to the Avino Vein mineralization. Several younger thin mafic sills are also found in various parts of the region.
  
 The Avino concession is situated within a 12 km north-south by 8.5 km caldera, which hosts numerous low sulphidation epithermal veins, breccias, stockwork and silicified zones. These zones grade into a “near porphyry” environment in the general vicinity of the Avino property. The caldera has been uplifted by regional north trending block faulting (a graben structure), exposing a window of andesitic pyroclastic rocks of the lower volcanic sequence which is a favourable host rock. The upper volcanic sequence consists of rhyolite to trachytes with extensive ignimbrite and is intruded by monzonite bodies. The basal andesite-bearing conglomerate and underlying Paleozoic basement sedimentary rocks (consisting of shales, sandstones and conglomerates) have been identified on the Avino concession in the south-central portion of the caldera, covering the Guadalupe, Santiago, San Jorge, the San Gonzalo Trend, Malinche, Porterito and Yolanda areas.
  
 A northerly trending felsic dyke, probably a feeder to the upper volcanic sequence, transects the Property and many of the veins. The Aguila Mexicana low temperature vein system, with significant widths but overall low precious metal values, trends north-northwest, similar to the felsic dyke and with similar continuity across the Property. The two structures may occupy deep crustal faults that controlled volcanism and mineralization, with the felsic dyke structure controlling the emplacement of the Avino, Nuestra Senora and El Fuerte-Potosina volcanic centres and the Aguila Mexicana controlling the Cerro San Jose and El Fuerte-Potosina volcanic centres (Paulter 2006).
  
 Silver- and gold-bearing veins crosscut the various lithologies and are generally oriented north-northwest to south-southeast (the Avino Vein trend) and northwest to southeast the San Gonzalo trend). In Mexico, these vein deposits may have large lateral extents, but can be limited in the vertical continuity of grades due to the effects of pressure on boiling levels for mineralizing fluids. The rocks have been weathered and leached in the upper sections, as a result of contact with atmospheric waters. The oxide tailings material is derived primarily from these shallow zones, whereas the sulphide tailings are predominantly from material sourced at depth from the underground workings. 
  
 The valuable minerals found during the period of mining of the oxide zone are reported to be argentite, bromargyrite, chalcopyrite, chalcocite, galena, sphalerite, bornite, native silver and gold, and native copper.
  
 Three deposits, the Avino Vein, the San Gonzalo Vein and the oxide tailings deposit, are the subject of Mineral Resource estimates disclosed in this report. Recent exploration drilling reported at the Guadalupe and San Juventino veins is at an early stage and no Mineral Resources have been estimated for these two veins.
  
  
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	 1-3
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
Figure 1.2 Perspective View of the Property Looking North and Showing the Three Deposits 
1.3.1 THE AVINO VEIN  
 The Avino Vein (see Figure 1.2 for location) has been and continues to be the primary deposit mined on the Property since at least the 19th century. It is 1.6 km long and up to 60 m wide on the surface. The deepest level is at the 1,930 m amsl level (430 m below surface).
  
 1.3.2 THE SAN GONZALO VEIN
  
 The San Gonzalo Vein system (see Figure 1.2 for location), including the crosscutting Angelica vein, is located 2 km northeast of the Avino Vein. It constitutes a strongly developed vein system over 25 m across, trending 300 to 325°/80° northeast to 77° south. Banded textures and open-space filling are common and individual veins have an average width of less than 2 m. The vein was mined historically and underground workings extend approximately 1.1 km along strike and to the 1,970 m amsl (300 m below surface).
  
 1.3.3 THE OXIDE TAILINGS
  
 The oxide tailings deposit (see Figure 1.2 for location) comprises historic recovery plant residue material that was wasted from processing plants during the earlier period of open pit mining of the Avino Vein. The oxide tailings are partially covered by younger unconsolidated sulphide tailings on the northwest side. 
  
  
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

   
 1.4 RESOURCE ESTIMATES
  
 The Avino system, San Gonzalo system, and oxide tailings Mineral Resources were modelled and estimated using Leapfrog EDGETM software version 4.2.3. The reported Mineral Resource estimated by ARANZ Geo Expert Services (ARANZ Geo) was interpolated using ordinary kriging (OK) and capped grades and inverse distance squared (ID2) and nearest neighbour (NN) for model validation purposes. The Avino system was estimated for silver, gold, copper. The San Gonzalo Vein system and oxide tailings were estimated for silver and gold. Under current economic and technical conditions gold and silver and copper are recoverable from the Avino system and all three metals are included in the mineral resource and for the silver equivalent (AgEQ) calculation for the Avino system. Under current economic and technical conditions only gold and silver are recoverable from the San Gonzalo system and the oxide tailings and consequently only silver and gold are included in the Mineral Resource and for the silver equivalent calculation for the San Gonzalo system and oxide tailings. Cut-off reporting (to consider “eventual prospects for eventual economic extraction”) utilizes an AgEQ calculation where the total metal value is converted into an in situ silver resource. For reporting purposes, a base-case AgEQ cut-off of 60 g/t is used for the Avino system, an AgEQ cut-off of 130 g/t is used for the San Gonzalo system, and an AgEQ cut-off of 50 g/t is used for the oxide tailings based on current economic parameters. 
  
 Table 1.1 is the Mineral Resource statement. Other grade tonnage graphs and tables found in Section 14.0 are intended to show sensitivity of the mineralized material and must not be considered Mineral Resources.
  
 It must be noted that no Mineral Resource has been estimated for the sulphide tailings portion of the Property.
  
  
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	 Amended Mineral Resource Estimate Update for the 
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 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

   
 Table 1.1 Mineral Resources at the Avino Property
  
  	  
	  
	  
	  
		  
	  
		  
	  
	 Grade
	  
	  
	 Metal Contents 
	  

	  
 Resource Category
	  
	  
 Deposit
	  
	 Cut-off(AgEQ
 g/t)
	  
	  
	 Tonnes
 (t)
	  
	  
	 AgEQ
 (g/t)
	  
	  
	 Ag
 (g/t)
	  
	  
	 Au
 (g/t)
	  
	  
	 Cu
 (%)
	  
	  
	 AgEQ(million tr oz)*
	  
	  
	 Ag(million tr oz)
	  
	  
	 Au(thousand tr oz)
	  
	  
	 Cu
 (t) 
	  

	 Measured and Indicated Mineral Resources
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Measured
	  
	 Avino – ET
	  
	  
	60	  
	  
	  
	3,890,000	  
	  
	  
	141	  
	  
	  
	71	  
	  
	  
	0.54	  
	  
	  
	0.55	  
	  
	  
	17.6	  
	  
	  
	8.9	  
	  
	  
	67.4	  
	  
	  
	21,000	  

	 Measured
	  
	 Avino – San Luis
	  
	  
	60	  
	  
	  
	650,000	  
	  
	  
	142	  
	  
	  
	67	  
	  
	  
	0.70	  
	  
	  
	0.49	  
	  
	  
	3.0	  
	  
	  
	1.4	  
	  
	  
	14.6	  
	  
	  
	3,000	  

	 Measured
	  
	 San Gonzalo System
	  
	  
	130	  
	  
	  
	290,000	  
	  
	  
	397	  
	  
	  
	314	  
	  
	  
	1.65	  
	  
	  
	0.00	  
	  
	  
	3.7	  
	  
	  
	2.9	  
	  
	  
	15.4	  
	  
	  
	0	  

	 Total Measured
	  
	 All Deposits
	  
	  
	-	  
	  
	  
	4,830,000	  
	  
	  
	156	  
	  
	  
	85	  
	  
	  
	0.63	  
	  
	  
	0.51	  
	  
	  
	24.3	  
	  
	  
	13.2	  
	  
	  
	97.4	  
	  
	  
	24,000	  

	 Indicated
	  
	 Avino – ET
	  
	  
	60	  
	  
	  
	2,640,000	  
	  
	  
	105	  
	  
	  
	49	  
	  
	  
	0.56	  
	  
	  
	0.34	  
	  
	  
	8.9	  
	  
	  
	4.2	  
	  
	  
	47.6	  
	  
	  
	9,000	  

	 Indicated
	  
	 Avino – San Luis
	  
	  
	60	  
	  
	  
	1,620,000	  
	  
	  
	126	  
	  
	  
	54	  
	  
	  
	0.82	  
	  
	  
	0.36	  
	  
	  
	6.6	  
	  
	  
	2.8	  
	  
	  
	42.9	  
	  
	  
	6,000	  

	 Indicated
	  
	 San Gonzalo System
	  
	  
	130	  
	  
	  
	240,000	  
	  
	  
	319	  
	  
	  
	257	  
	  
	  
	1.25	  
	  
	  
	0.00	  
	  
	  
	2.5	  
	  
	  
	2.0	  
	  
	  
	9.6	  
	  
	  
	0	  

	 Indicated
	  
	 Oxide Tailings
	  
	  
	50	  
	  
	  
	1,330,000	  
	  
	  
	124	  
	  
	  
	98	  
	  
	  
	0.46	  
	  
	  
	0.00	  
	  
	  
	5.3	  
	  
	  
	4.2	  
	  
	  
	19.8	  
	  
	  
	0	  

	 Total Indicated
	  
	 All Deposits
	  
	  
	-	  
	  
	  
	5,830,000	  
	  
	  
	124	  
	  
	  
	70	  
	  
	  
	0.64	  
	  
	  
	0.25	  
	  
	  
	23.3	  
	  
	  
	13.1	  
	  
	  
	119.8	  
	  
	  
	15,000	  

	 Total Measured and Indicated
	  
	 All Deposits
	  
	  
	-	  
	  
	  
	10,660,000	  
	  
	  
	139	  
	  
	  
	77	  
	  
	  
	0.63	  
	  
	  
	0.37	  
	  
	  
	47.5	  
	  
	  
	26.3	  
	  
	  
	217.2	  
	  
	  
	39,000	  

	 Inferred Mineral Resources

	 Inferred
	  
	 Avino – ET
	  
	  
	60	  
	  
	  
	2,380,000	  
	  
	  
	111	  
	  
	  
	58	  
	  
	  
	0.51	  
	  
	  
	0.33	  
	  
	  
	8.5	  
	  
	  
	4,4	  
	  
	  
	39.1	  
	  
	  
	8,000	  

	 Inferred
	  
	 Avino – San Luis
	  
	  
	60	  
	  
	  
	1,780,000	  
	  
	  
	124	  
	  
	  
	57	  
	  
	  
	0.72	  
	  
	  
	0.38	  
	  
	  
	7.1	  
	  
	  
	3.2	  
	  
	  
	41.2	  
	  
	  
	7,000	  

	 Inferred
	  
	 San Gonzalo System
	  
	  
	130	  
	  
	  
	120,000	  
	  
	  
	262	  
	  
	  
	219	  
	  
	  
	0.86	  
	  
	  
	0.00	  
	  
	  
	1.0	  
	  
	  
	0.8	  
	  
	  
	3.3	  
	  
	  
	0	  

	 Inferred
	  
	 Oxide Tailings
	  
	  
	50	  
	  
	  
	1,810,000	  
	  
	  
	113	  
	  
	  
	88	  
	  
	  
	0.44	  
	  
	  
	0.00	  
	  
	  
	6.6	  
	  
	  
	5.1	  
	  
	  
	25.6	  
	  
	  
	0	  

	 Total Inferred
	  
	 All Deposits
	  
	  
	-	  
	  
	  
	6,090,000	  
	  
	  
	118	  
	  
	  
	70	  
	  
	  
	0.56	  
	  
	  
	0.24	  
	  
	  
	23.2	  
	  
	  
	13.6	  
	  
	  
	109.2	  
	  
	  
	15,000	  

  
  	 Notes:
	 Figures may not add to totals shown due to rounding.
 Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
 The Mineral Resource estimate is classified in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum’s (CIM) Definition Standards
 For Mineral Resources and Mineral Reserves incorporated by reference into National Instrument 43-101 (NI 43-101) Standards of Disclosure for Mineral Projects.
 Mineral Resources are reported at cut-off grades 60 g/t, 130 g/t, and 50 g/t AgEQ grade for ET, San Gonzalo, an oxide tailings, respectively.
 AgEQ or silver equivalent ounces are notational, based on the combined value of metals expressed as silver ounces
 Cut-off grades were calculated using the following assumptions:
 For Avino (ET and San Luis), San Gonzalo: gold price of US$1,300/oz, silver price of US$17.50/oz, and copper price of US$3.00/lb
 For Oxide Tailings: gold price of US$1,250/oz, silver price of US$19.50/oz
 A net smelter return (NSR) was calculated and the silver equivalent was back calculated using the following formulas:
 For ET: AgEQ = (24.06 x Au (g/t) + 0.347 x Ag (g/t) + 43.0 x Cu (%) – 151.8 x Bi (%)) / 0.347
 For San Gonzalo: AgEQ = (0.03 x Au (g/t) + 0.385 x Ag (g/t) – 4.03/0.385
 For Oxide Tailings: AqEQ = 69.37 x Au (g/t) + Ag (g/t)
 No Mineral Resource has been estimated for the sulphide tailings portion of the Property.
 Au – gold; Ag – silver; Cu – copper.

  
  
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 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

   
 1.5 MINERAL PROCESSING, METALLURGICAL TESTING AND RECOVERY METHODS
  
 There are three separate mineralization sources in the Property, including the Avino and San Gonzalo mines, which are currently in operation, and the potential tailings resource from previous milling operations. The San Gonzalo Mine entered commercial production in October 2012, followed by reopening the Avino Mine in January 2015. The two mines feed a conventional flotation mill that has three separate circuits and a capacity of 1,500 t/d. 
  
 From January 2017, Avino has been constructing a new separate processing line identified as Circuit #4. The addition of Circuit #4 will have an identical throughput capacity as Circuit #3 which currently used for processing the materials from the Avino mine. The mill expansion is expected to increase overall mill capacity to 2,500 t/d. 
  
 The existing crushing plant will be upgraded to accommodate the higher throughput with a new larger tertiary cone crusher. The equipment in grinding, flotation and dewatering circuits planned for the expansion are similar in size to the existing equipment used for Circuit #3. The initial mill feed to Circuit #4 will be from the existing surface stockpiles although the additional circuit will be mainly used for processing the materials from San Luis of the Avino mine. 
  
 Avino has not based its production decisions on a Feasibility Study or Mineral Reserves demonstrating economic and technical viability, and as a result there is increased uncertainty and multiple technical and economic risks of failure that are associated with these production decisions. These risks, among others, include areas that would be analyzed in more detail in a Feasibility Study, such as applying economic analysis to Mineral Resources and Mineral Reserves, more detailed metallurgy, and a number of specialized studies in areas such as mining and recovery methods, market analysis, and environmental and community impacts. Information in this section was provided by Avino.
  
 1.5.1 AVINO VEIN
  
 Avino is currently conducting mining activity on the Avino Vein and processing Avino Vein material at the mine plant. Historically, prior to the mine shutting down in 2001, Avino operated a 1,000 t/d processing plant, achieving up to 1,300 t/d, producing a copper concentrate that was sold to a smelter in San Luis Potosi for approximately 27 years. The mine and mill operations were then suspended. Following several years of redevelopment, Avino completed the Avino Mine and mill expansion in Q4 2014. On January 1, 2015, full scale operations commenced and commercial production was declared effective April 1, 2016 following a 19 month advancement and test period.
  
 The plant consists of a conventional three-stage crushing circuit with the tertiary crusher in closed circuit with a screen. The crushed material is fed to a ball mill and classified with a hydrocyclone at a grind size of approximately 65% passing 200 mesh. The fines from the hydrocyclone reports to the flotation circuit where typical flotation reagents for copper minerals are used. The concentrates from the rougher and scavenger circuits are upgraded in a cleaner circuit with the final concentrate reporting to a thickener and pressure filter. The moisture of the filter cake is approximately 8% and then shipped for sale overseas. Flotation tailing is pumped to the permitted tailings impoundment where decant water is reclaimed for process use.
  
  
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 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

   
 1.5.2 SAN GONZALO VEIN
  
 Avino is currently conducting mining activity on the San Gonzalo Vein, including processing of San Gonzalo Vein material at the mill plant at the Avino Mine site.
  
 The process plant consists of crushing and grinding circuits, followed by a gravity and flotation to recover and upgrade silver and gold from the feed material. Common reagents are used within the flotation circuit. The flotation concentrate is thickened, filtered to 9.9% moisture content, and sent to the concentrate stockpile for subsequent shipping to customers.
  
 The final flotation tailings is disposed of in the existing permitted tailings storage facility.
  
 1.5.3 OXIDE TAILINGS
  
 Currently there is no metal recovery operation on the stored tailings. As reported by MineStart Management Inc. (MMI) and Process Research Associates Ltd. (PRA), several metallurgical work programs were conducted to investigate silver and gold recovery from the tailings. 
  
 The test work investigated various treatment methods, including gravity separation, flotation, and cyanide leaching (tank leaching and heap leaching). The preliminary test results appear to show that the tailings materials responded reasonably well to the cyanide leaching treatment, including tank leaching and column leaching testing procedures. An updated preliminary economical assessment was conducted in 2017 to evaluate the recovery of silver and gold from the oxide tailings using heap leaching technology followed by the Merrill Crown treatment on the pregnant leach solution .
  
 The processing step will consist of tailings reclamation, agglomeration, and cyanide heap leaching followed by the Merrill-Crowe process to recover silver and gold from the pregnant solution. The process plant will operate at a throughput rate of 1,370 t/d on a 24 h/d, 365 d/a basis, with an overall utilization of 90%.
  
 1.5.4 SULPHIDE TAILINGS
  
 Avino is not currently conducting mining activity on the sulphide tailings. Because some of the oxide tailings and sulphide tailings were co-deposited, and the oxide tailings are partially covered by younger unconsolidated sulphide tailings on the northwest side of the tailings storage dam, the sulphide tailings materials will be reclaimed as required during the oxide tailings reclamation. The reclaimed sulphide tailings is planned to be stored in a separate sulphide tailings storage facility for further evaluation, while some of the sulphide tailings could be used for constructing the heap leach pad and facilities for the oxide tailings retreatment; however, no quantities have been estimated at this stage. In addition, no recovery methods are currently proposed for the sulphide tailings, which have been excluded from this estimate.
  
  
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	 1-8
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

   
 1.6 MINING METHODS
  
 1.6.1 AVINO VEIN
  
 Avino is currently conducting mining activity on the Avino Vein using sublevel stoping and room and pillar mining methods.
  
 Avino has not based its production decisions on a Feasibility Study or Mineral Reserves demonstrating economic and technical viability, and as a result there is increased uncertainty and multiple technical and economic risks of failure that are associated with these production decisions. These risks, among others, include areas that would be analyzed in more detail in a Feasibility Study, such as applying economic analysis to Mineral Resources and Mineral Reserves, more detailed metallurgy, and a number of specialized studies in areas such as mining and recovery methods, market analysis, and environmental and community impacts. Information in this section was provided by Avino.
  
 Production from the Avino Vein is summarized in Table 1.2.
  
 Table 1.2 Recent Production from the Avino Vein
  
 	 Production Description
	  
	 2015
	  
	  
	 2016
	  
	  
	 2017
	  

	 Mill Feed Tonnage
	  

	 Tonnes Milled (t)
	  
	  
	396,113	  
	  
	  
	429,289	  
	  
	  
	460,890	  

	 Feed Grade

	 Silver (g/t)
	  
	  
	65	  
	  
	  
	67	  
	  
	  
	64	  

	 Gold (g/t)
	  
	  
	0.29	  
	  
	  
	0.42	  
	  
	  
	0.52	  

	 Copper (%)
	  
	  
	0.62	  
	  
	  
	0.50	  
	  
	  
	0.48	  

	 Recovery

	 Silver (%)
	  
	  
	87	  
	  
	  
	85	  
	  
	  
	85	  

	 Gold (%)
	  
	  
	75	  
	  
	  
	64	  
	  
	  
	69	  

	 Copper (%)
	  
	  
	87	  
	  
	  
	90	  
	  
	  
	89	  

	 Total Metal Produced

	 Silver Produced (oz)
	  
	  
	717,901	  
	  
	  
	789,372	  
	  
	  
	803,438	  

	 Gold Produced (oz)
	  
	  
	2,757	  
	  
	  
	3,691	  
	  
	  
	5,259	  

	 Copper Produced (lb)
	  
	  
	4,743,691	  
	  
	  
	4,206,585	  
	  
	  
	4,373,166	  

	 AgEQ Produced (oz)
	  
	  
	1,801,997	  
	  
	  
	1,606,272	  
	  
	  
	1,911,428	  

  
 Source: Avino (2018c; 2017a; 2017b)
  
  
  	 Avino Silver & Gold Mines Ltd.
	 1-9
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

   
 1.6.2 SAN GONZALO VEIN
  
 Avino is currently conducting mining activity on the San Gonzalo Vein using cut-and-fill and shrinkage stoping mining methods.
  
 Avino has not based its production decisions on a Feasibility Study or Mineral Reserves demonstrating economic and technical viability, and as a result there is increased uncertainty and multiple technical and economic risks of failure that are associated with these production decisions. These risks, among others, include areas that would be analyzed in more detail in a Feasibility Study, such as applying economic analysis to Mineral Resources and Mineral Reserves, more detailed metallurgy, and a number of specialized studies in areas such as mining and recovery methods, market analysis, and environmental and community impacts. Information in this section was provided by Avino.
  
 Production from the San Gonzalo Vein is summarized in Table 1.3.
  
 Table 1.3 Recent Production from the San Gonzalo Vein
  
 	 Production Description
	  
	 2012
	  
	  
	 2013
	  
	  
	 2014
	  
	  
	 2015
	  
	  
	 2016 
	  
	  
	 2017
	  

	 Mill Feed Tonnage
	  

	 Total Mill Feed (t)
	  
	  
	19,539	  
	  
	  
	78,415	  
	  
	  
	79,729	  
	  
	  
	121,774	  
	  
	  
	115,047	  
	  
	  
	81,045	  

	 Feed Grade

	 Silver (g/t)
	  
	  
	259	  
	  
	  
	288	  
	  
	  
	337	  
	  
	  
	279	  
	  
	  
	267	  
	  
	  
	269	  

	 Gold (g/t)
	  
	  
	1.04	  
	  
	  
	1.34	  
	  
	  
	1.88	  
	  
	  
	1.48	  
	  
	  
	1.25	  
	  
	  
	1.32	  

	 Recovery

	 Silver (%)
	  
	  
	79	  
	  
	  
	83	  
	  
	  
	84	  
	  
	  
	83	  
	  
	  
	83	  
	  
	  
	84	  

	 Gold (%)
	  
	  
	70	  
	  
	  
	73	  
	  
	  
	78	  
	  
	  
	75	  
	  
	  
	74	  
	  
	  
	78	  

	 Total Produced

	 Silver (oz)
	  
	  
	128,607	  
	  
	  
	602,233	  
	  
	  
	724,931	  
	  
	  
	907,384	  
	  
	  
	822,689	  
	  
	  
	590,765	  

	 Gold (oz)
	  
	  
	455	  
	  
	  
	2,473	  
	  
	  
	3,740	  
	  
	  
	4,326	  
	  
	  
	3,427	  
	  
	  
	2,675	  

	 AgEQ Produced (oz)
	  
	  
	151,372	  
	  
	  
	751,462	  
	  
	  
	958,702	  
	  
	  
	1,218,351	  
	  
	  
	1,073,062	  
	  
	  
	789,157	  

  
 Source: Avino (2018c; 2017a; 2017b)
  
 1.6.3 OXIDE TAILINGS
  
 The oxide tailings Mineral Resource will be mined/moved using a conventional truck/loader surface mining method. The production cycle consists of loading and trucking. The production schedule has been developed for the oxide tailings based on a treatment rate of 500 kt/a, which would be equivalent to a throughput rate of 1,370 t/d. This will give an overall project duration of approximately eight years. This eight-year period includes a one-year pre-production period and excludes the time required for remediation of the heap after the leaching process has been completed. Only oxide tailings will be considered for treatment, while sulphide materials will be considered waste.
  
  
  	 Avino Silver & Gold Mines Ltd.
	 1-10
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

   
 1.7 PROJECT INFRASTRUCTURE
  
 The Property is easily accessible by road and is an important part of the local community from which skilled workers are available. The history of operations at the Avino Mine provides ample evidence of sufficient infrastructure and services in the area. The San Gonzalo Mine entered commercial production in October 2012, followed by reopening the Avino Mine in January 2015. The two mines feed a conventional flotation mill that has three separate circuits and a capacity of 1,500 t/d. From January 2017, Avino has been constructing a new separate processing line identified as Circuit #4. The addition of Circuit #4 will have an identical throughput capacity as Circuit #3 which currently used for processing the materials from the Avino mine. The existing crushing plant will be upgraded to accommodate the higher throughput with a new larger tertiary cone crusher. The mill expansion is expected to increase overall mill capacity to 2,500 t/d. 
  
 The existing tailings deposition facility has been upgraded and is fully permitted and operational for approximately another 500,000 t of tailings. The offices, miner’s quarters, secured explosives storage facilities, warehouse, laboratory and other associated facilities are all in place. The proposed tailings leach facilities are planned to be located southeast of the existing tailings storage pond.
  
 Before 2016, the mill was serviced with an existing power line providing only 1,000 kW of power with 500 kW servicing the mill, 400 kW for San Gonzalo and the balance for the well at Galeana, employee accommodation facility, and water reclaim from the tailings dam. The new power line from Guadelupe Victoria to the mine site was completed in June 2016. The power line was energized and tested on June 8th, 2016. The line was fully functional at the design capacity of 5 MW. Current power consumption at the mine is approximately 2 MW, leaving sufficient additional power for potential future expansion projects, including the planned Circuit #4 mill expansion, the proposed oxide tailings retreatment project using heap leach followed by gold and silver recovery by Merrill-Crowe precipitation and possible further expansion or upgrading of the processing plant. Additionally, the existing power line was left in place to service local communities and provide backup power for the mine. A C-27 CAT diesel power generator, which can produce 700 kW, is now used as backup.
  
 There is a water treatment plant for treating excess water from the Avino underground mine operation before discharging to El Caracol Dam. The effluent is being monitored on a daily basis when the treatment plant is operational. 
  
 1.8 ENVIRONMENTAL
  
 Environmental settings, permits and registrations, and environmental management strategies that may be required for the Project are summarized in Section 20.0. Permits and authorizations required for the operation of the Project may include an operating permit, an application for surface tenures, a waste water discharge registration, a hazardous waste generator’s registration, and an Environmental Impact Assessment (EIA) or Evaluación de Impacto Ambiental. Acid-base accounting (ABA) tests have indicated that mild acid generation may already have started on the tailings dam. A gap analysis and additional tests to further characterize current conditions of the tailings should be completed to properly design a tailings management plan.
  
  
  	 Avino Silver & Gold Mines Ltd.
	 1-11
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

   
 1.9 CAPITAL AND OPERATING COSTS
  
 1.9.1 CAPITAL COST ESTIMATES
  
 AVINO VEIN AND SAN GONZALO VEIN 
  
 Avino is currently conducting mining activity on the Avino and San Gonzalo veins. There is no cost estimate applicable and all costs are based on actual expenditure.
  
 Avino has not based its production decisions on a Feasibility Study or Mineral Reserves demonstrating economic and technical viability, and as a result there is increased uncertainty and multiple technical and economic risks of failure that are associated with these production decisions. These risks, among others, include areas that would be analyzed in more detail in a Feasibility Study, such as applying economic analysis to Mineral Resources and Mineral Reserves, more detailed metallurgy, and a number of specialized studies in areas such as mining and recovery methods, market analysis, and environmental and community impacts.
  
 The actual capital expenditures (in US dollars) to date on the Avino Vein and San Gonzalo Vein operations are summarized in Table 1.4 and Table 1.5, respectively. The capital expenditures have been broken down by year and area.
  
 Table 1.4 Capital Costs for the Avino Vein (US$)
  
 	 Description
	  
	 Q1-Q3 2017
	  
	  
	 2016
	  
	  
	 2015
	  
	  
	 2014
	  

	 Office Furniture
	  
	  
	19,035	  
	  
	  
	8,625	  
	  
	  
	7,093	  
	  
	  
	6,521	  

	 Computer Equipment
	  
	  
	5,023	  
	  
	  
	14,913	  
	  
	  
	17,233	  
	  
	  
	33,178	  

	 Mill Machinery and Processing Equipment
	  
	  
	703,475	  
	  
	  
	70,653	  
	  
	  
	525,067	  
	  
	  
	2,832,627	  

	 Mine Machinery and Transportation Equipment
	  
	  
	203,922	  
	  
	  
	1,985,446	  
	  
	  
	1,918,764	  
	  
	  
	2,125,229	  

	 Buildings and Construction
	  
	  
	1,985,450	  
	  
	  
	485,757	  
	  
	  
	590,639	  
	  
	  
	313,875	  

	 ET Mineral Property
	  
	  
	609,423	  
	  
	  
	4,330,125	  
	  
	  
	0	  
	  
	  
	0	  

	 Total Capital Costs
	  
	  
	3,526,327	  
	  
	  
	6,895,518	  
	  
	  
	3,058,796	  
	  
	  
	5,311,429	  

  
 Source: Avino
  
  
  	 Avino Silver & Gold Mines Ltd.
	 1-12
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

   
 Table 1.5 Capital Costs for the San Gonzalo Vein (US$)
  
 	 Description
	  
	 Q1-Q3 2017
	  
	  
	 2016
	  
	  
	 2015
	  
	  
	 2014
	  

	 Office Furniture
	  
	  
	16,119	  
	  
	  
	7,248	  
	  
	  
	3,725	  
	  
	  
	6,521	  

	 Computer Equipment
	  
	  
	4,973	  
	  
	  
	12,575	  
	  
	  
	17,233	  
	  
	  
	32,937	  

	 Mill Machinery and Processing Equipment
	  
	  
	951,881	  
	  
	  
	188,884	  
	  
	  
	100,537	  
	  
	  
	264,178	  

	 Mine Machinery and Transportation Equipment
	  
	  
	181,954	  
	  
	  
	40,294	  
	  
	  
	133,248	  
	  
	  
	646,981	  

	 Buildings and Construction
	  
	  
	76,773	  
	  
	  
	443,135	  
	  
	  
	55,819	  
	  
	  
	356,300	  

	 San Gonzalo Vein Mineral Property
	  
	  
	332,073	  
	  
	  
	1,080,889	  
	  
	  
	577,462	  
	  
	  
	697,107	  

	 ET Mineral Property
	  
	  
	0	  
	  
	  
	0	  
	  
	  
	0	  
	  
	  
	0	  

	 Total Capital Costs
	  
	  
	1,563,774	  
	  
	  
	1,773,024	  
	  
	  
	888,024	  
	  
	  
	2,004,023	  

  
 Source: Avino
  
 TAILINGS RESOURCES
  
 The capital costs for retreating the oxide tailings portion of the Property, including reclaiming the oxide tailings, constructing the heap leach pad and the treatment facilities, were estimated and reported in the technical report entitled “Technical Report on the Avino Property”, dated April 11, 2017. 
  
 The estimated capital cost was US$28.8 million (US$24.4 million of initial capital plus US$4.4 million sustaining capital).
  
 A PEA should not be considered to be a Prefeasibility or Feasibility study, as the economics and technical viability of the Project have not been demonstrated at this time. The PEA is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. Furthermore, there is no certainty that the conclusions or results reported in the PEA will be realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
  
 Avino is not currently conducting mining activity on the sulphide tailings portion of the Property. No capital costs have been estimated for any potential mining activity on the sulphide tailings portion of the Property.
  
 1.9.2 OPERATING COST ESTIMATES
  
 AVINO VEIN AND SAN GONZALO VEIN 
  
 Avino is currently conducting mining activity on the Avino and San Gonzalo veins. There is no cost estimate applicable and all costs are based on actual expenditures.
  
 Avino has not based its production decisions on a Feasibility Study or Mineral Reserves demonstrating economic and technical viability, and as a result there is increased uncertainty and multiple technical and economic risks of failure that are associated with these production decisions. These risks, among others, include areas that would be analyzed in more detail in a Feasibility Study, such as applying economic analysis to Mineral Resources and Mineral Reserves, more detailed metallurgy, and a number of specialized studies in areas such as mining and recovery methods, market analysis, and environmental and community impacts.
  
  
  	 Avino Silver & Gold Mines Ltd.
	 1-13
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

   
 The actual operating costs (in US dollars) for the Avino Vein and the San Gonzalo Vein in 2016 and 2017 are presented in Table 1.6 and Table 1.7.
  
 The mine and milling costs include operating and maintenance labour together with the operation associated consumable supplies. The cost for electrical power is included in the milling costs. The geological component is mostly related to technical labour.
  
 Table 1.6 Operating Costs for the Avino Vein (US$)
  
 	 Description
	  
	 Q1-Q3 2017
	  
	  
	 2016
	  

	 Mining Cost
	  
	  
	5,046,904	  
	  
	  
	5,306,208	  

	 Milling Cost
	  
	  
	3,214,053	  
	  
	  
	2,947,585	  

	 Geological and Other
	  
	  
	2,571,758	  
	  
	  
	2,300,243	  

	 Royalties
	  
	  
	544,571	  
	  
	  
	610,797	  

	 Depletion and Depreciation
	  
	  
	1,079,003	  
	  
	  
	919,756	  

	 Total Direct Costs
	  
	  
	12,456,289	  
	  
	  
	12,084,590	  

	 G&A
	  
	  
	3,295,481	  
	  
	  
	2,817,256	  

	 Total Operating Costs
	  
	  
	15,751,770	  
	  
	  
	14,901,845	  

  
 Source: Avino
  
 Table 1.7 Operating Costs for the San Gonzalo Vein (US$)
  
 	 Description
	  
	 Q1-Q3 2017
	  
	  
	 2016
	  

	 Mining Cost
	  
	  
	2,340,070	  
	  
	  
	1,798,503	  

	 Milling Cost
	  
	  
	495,546	  
	  
	  
	212,467	  

	 Geological and Other
	  
	  
	487,751	  
	  
	  
	318,843	  

	 Royalties
	  
	  
	0	  
	  
	  
	0	  

	 Depletion and Depreciation
	  
	  
	675,072	  
	  
	  
	485,732	  

	 Total Direct Costs
	  
	  
	3,998,439	  
	  
	  
	2,815,545	  

	 G&A
	  
	  
	1,063,226	  
	  
	  
	607,351	  

	 Total Operating Costs
	  
	  
	5,061,666	  
	  
	  
	3,422,897	  

  
 Source: Avino
  
 TAILINGS RESOURCES
  
 The operating costs for retreating the oxide tailings portion of the Property, including reclaiming the oxide tailings, were estimated to be US$15.06/t. The detailed estimates are reported in the technical report entitled “Technical Report on the Avino Property”, dated April 11, 2017.
  
 A PEA should not be considered to be a Prefeasibility or Feasibility study, as the economics and technical viability of the Project have not been demonstrated at this time. The PEA is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. Furthermore, there is no certainty that the conclusions or results reported in the PEA will be realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
  
  
  	 Avino Silver & Gold Mines Ltd.
	 1-14
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

   
 Avino is not currently conducting mining activity on the sulphide tailings portion of the Property. No operating costs have been estimated for any potential mining activity on the sulphide tailings portion of the Property.
  
 1.10 ECONOMIC ANALYSIS
  
 1.10.1 AVINO AND SAN GONZALO VEINS
  
 Avino is currently conducting mining activity, including mineral processing, on the Avino and San Gonzalo Veins. There is no economic analysis performed on both the Veins.
  
 Avino has not based its production decisions on a Feasibility study or Mineral Reserves demonstrating economic and technical viability, and as a result there is increased uncertainty and multiple technical and economic risks of failure, which are associated with these production decisions. These risks, among others, include areas that would be analyzed in more detail in a Feasibility study, such as applying economic analysis to Mineral Resources and Mineral Reserves, more detailed metallurgy, and a number of specialized studies in areas such as mining and recovery methods, market analysis, and environmental and community impacts.
  
 1.10.2 TAILINGS RESOURCES
  
 In 2017, Tetra Tech prepared a preliminary economic assessment (PEA) technical report for the silver and gold recoveries from the oxide tailings, entitled “Technical Report on the Avino Property”, dated April 11, 2017.
  
 A PEA should not be considered to be a Prefeasibility or Feasibility study, as the economics and technical viability of the Project have not been demonstrated at this time. The PEA is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. Furthermore, there is no certainty that the conclusions or results reported in the PEA will be realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
  
  
  	 Avino Silver & Gold Mines Ltd.
	 1-15
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

   
 The report includes a preliminary economic evaluation for the oxide tailings retreatment based on a pre-tax financial model. Metal prices used in the base case for the preliminary economic evaluation were:
  
 	  
	·	gold – US$1,250/oz
	  
	  
	  

	  
	·	silver – US$18.50/oz.

  
 The pre-tax financial results were:
  
 	  
	·	48.4% internal rate of return (IRR)
	  
	  
	  

	  
	·	2.0-year payback period
	  
	  
	  

	  
	·	US$40.5 million net present value (NPV) at an 8% discount rate.

  
 Avino commissioned PricewaterhouseCoopers (PwC) in Vancouver to prepare the tax component of the model for the post-tax economic evaluation for this updated PEA with the inclusion of applicable income and mining taxes.
  
 The following post-tax financial results were calculated:
  
 	  
	·	32% IRR
	  
	  
	  

	  
	·	2.6-year payback period
	  
	  
	  

	  
	·	US$22.2 million NPV at an 8% discount rate.

   Avino is not currently conducting mining activity on the sulphide tailings portion of the Property. No economical assessments have been conducted for any potential mining activity on the sulphide tailings portion of the Property.
  
 1.11 RECOMMENDATIONS
  
 The recommendations for the further Mineral Resource estimates are presented in Section 26.0.
  
  
  	 Avino Silver & Gold Mines Ltd.
	 1-16
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

 
 	  
	  

   
  	 2.0 INTRODUCTION

  
 Avino is a Canadian-based mining and exploration company listed on the TSX and the NYSE-American trading under the symbol ASM. Avino has precious metal properties in Mexico and Canada and has a head office located at 900-570 Granville Street, Vancouver, British Columbia, Canada, V6C 3P1.
  
 Avino retained Tetra Tech, in conjuction with ARANZ Geo, to prepare an update of resource estimate on the Avino Property in Durango, Mexico. The purpose of this report is to disclose three updated mineral resource estimates for the Avino Vein, the San Gonzalo Vein and Oxide Tailings portions of the Property. The report also includes a summary of the information previously disclosed in Tetra Tech report filed in 2017, comprising preliminary economic assessment on the oxide tailings portion of the Property. This report has been prepared in accordance with National Instrument 43-101 (NI 43-101) and Form 43-101F.
  
 2.1 EFFECTIVE DATES
  
 The effective date of this report is February 21, 2018 and the amended date is December 19th, 2018. The effective date of the Mineral Resource estimate is January 31, 2018.
  
 2.2 QUALIFIED PERSONS
  
 A summary of the Qualified Persons (QPs) responsible for this report is provided in Table 2.1. The following QPs conducted site visits of the Property:
  
 	  
	·	Hassan Ghaffari, P.Eng. M.A.Sc., visited the site March 30, 2011 and December 12, 2017 for two days.
	  
	  
	  

	  
	·	Mark Horan, P.Eng. M.Sc., visited the site December12, 2017 for one day.
	  
	  
	  

	  
	·	Michael F. O’Brien, P.Geo., M.Sc., Pr.Scit.Nat., FAusIMM, FSAIMM visited the site June 12 to 15, 2017, inclusive.

  
  
  	 Avino Silver & Gold Mines Ltd.
	 2-1
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

    
 Table 2.1 Summary of QPs
  
 	 Report Section
	  
	 Company
	  
	 QP

	 1.0 Summary
	  
	 All
	  
	 Sign-off by Section

	 2.0 Introduction
	  
	 Tetra Tech
	  
	 Hassan Ghaffari, P.Eng.

	 3.0 Reliance on Other Experts
	  
	 ARANZ Geo Tetra Tech
	  
	Michael F. O’Brien, P.Geo., M.Sc., Pr.Sci.Nat., FAusIMM, FSAIMM Mark Horan., P.Eng.
 Jianhui (John) Huang, Ph.D., P.Eng.
 Hassan Ghaffari, P.Eng.

	 4.0 Property Description and Location
	  
	 ARANZ Geo
	  
	 Michael F. O’Brien, P.Geo., M.Sc., Pr.Sci.Nat., FAusIMM, FSAIMM

	 5.0 Accessibility, Climate, Local Resources, Infrastructure and Physiography
	  
	 ARANZ Geo
	  
	 Michael F. O’Brien, P.Geo., M.Sc., Pr.Sci.Nat., FAusIMM, FSAIMM

	 6.0 History
	  
	 ARANZ Geo
	  
	 Michael F. O’Brien, P.Geo., M.Sc., Pr.Sci.Nat., FAusIMM, FSAIMM

	 7.0 Geological Setting and Mineralisation
	  
	 ARANZ Geo
	  
	 Michael F. O’Brien, P.Geo., M.Sc., Pr.Sci.Nat., FAusIMM, FSAIMM

	 8.0 Deposit Types
	  
	 ARANZ Geo
	  
	 Michael F. O’Brien, P.Geo., M.Sc., Pr.Sci.Nat., FAusIMM, FSAIMM

	 9.0 Exploration
	  
	 ARANZ Geo
	  
	 Michael F. O’Brien, P.Geo., M.Sc., Pr.Sci.Nat., FAusIMM, FSAIMM

	 10.0 Drilling
	  
	 ARANZ Geo
	  
	 Michael F. O’Brien, P.Geo., M.Sc., Pr.Sci.Nat., FAusIMM, FSAIMM

	 11.0 Sample Preparation, Analyses and Security
	  
	 ARANZ Geo
	  
	 Michael F. O’Brien, P.Geo., M.Sc., Pr.Sci.Nat., FAusIMM, FSAIMM

	 12.0 Data Verification
	  
	 ARANZ Geo
	  
	 Michael F. O’Brien, P.Geo., M.Sc., Pr.Sci.Nat., FAusIMM, FSAIMM

	 13.0 Mineral Processing and Metallurgical Testing
	  
	 Tetra Tech
	  
	 Jianhui (John) Huang, Ph.D., P.Eng.

	 14.0 Mineral Resource Estimates
	  
	 ARANZ Geo
	  
	 Michael F. O’Brien, P.Geo., M.Sc., Pr.Sci.Nat., FAusIMM, FSAIMM

	 15.0 Mineral Reserve Estimates
	  
	 Tetra Tech
	  
	 Mark Horan, P.Eng.

	 16.0 Mining Methods
	  
	 Tetra Tech
	  
	 Mark Horan, P.Eng.

	 17.0 Recovery Methods
	  
	 Tetra Tech
	  
	 Jianhui (John) Huang, Ph.D., P.Eng.

	 18.0 Infrastructure
	  
	 Tetra Tech
	  
	 Hassan Ghaffari, P.Eng.

	 19.0 Market Studies and Contracts
	  
	 Tetra Tech
	  
	 Hassan Ghaffari, P.Eng.

	 20.0 Environmental Studies, Permitting and Social or Community Impact
	  
	 Tetra Tech
	  
	 Hassan Ghaffari, P.Eng.

	 21.0 Capital and Operating Costs
	  
	 Tetra Tech
	  
	 Hassan Ghaffari, P.Eng..

	 22.0 Economic Analysis
	  
	 Tetra Tech
	  
	 Hassan Ghaffari, P.Eng.

	 23.0 Adjacent Properties
	  
	 ARANZ Geo
	  
	 Michael F. O’Brien, P.Geo., M.Sc., Pr.Sci.Nat., FAusIMM, FSAIMM

	 24.0 Other Relevant Data and Information
	  
	 Tetra Tech
	  
	 Hassan Ghaffari, P.Eng.

	 25.0 Interpretation and Conclusions
	  
	 All
	  
	 Sign-off by Section

	 26.0 Recommendations
	  
	 All
	  
	 Sign-off by Section

	 27.0 References
	  
	 All
	  
	 Sign-off by Section

	 28.0 Certificates of Qualified Person
	  
	 All
	  
	 Sign-off by Section

  
  
  	 Avino Silver & Gold Mines Ltd.
	 2-2
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

   
 2.3 INFORMATION AND DATA SOURCES
  
 In preparation of this report, various historical engineering, geological and management reports compiled about the Project or site were reviewed and supplemented by direct site examinations and investigations. All the data files reviewed for this study were provided by Avino in the form of hard copy documents, electronic .pdf reports, .xls files, email correspondence, and personal communication with management and personnel from Avino. Work completed by Avino includes several decades of open pit and underground mining, drilling and sampling, trenching, metallurgical testing, and geophysical surveying.
  
 The main sources of information in preparing this report are:
  
 	  
	·	Gunning, D. (2009). Resource Estimate on the San Gonzalo Vein – A Part of the Avino Mine, Durango, Mexico, for Avino Silver and Gold Mines Ltd. Prepared by Orequest. August 31, 2009.
	  
	  
	  

	  
	·	Slim, B. (2005d). A Tailings Resource. Prepared for Avino Silver & Gold Mines Ltd. Report prepared by Bryan Slim, MineStart Management Inc. October 25, 2005.
	  
	  
	  

	  
	·	Tetra Tech and QG Australia (Pty) Ltd. (2016). Amended Resource Estimate Update for the Avino Property, Durango, Mexico. Prepared for Avino Silver & Gold Mined Ltd. October 27, 2016.
	  
	  
	  

	  
	·	Tetra Tech (2017). Technical Report on the Avino Property, Durango, Mexico. Prepared for Avino Silver & Gold Mined Ltd. April 11, 2017.

  
 A complete list of references is provided in Section 27.0.
  
 2.4 UNITS OF MEASUREMENT
  
 All units of measurement used in this technical report and resource estimate are in metric, and currency is expressed in US dollars, unless otherwise stated.
  
  
  	 Avino Silver & Gold Mines Ltd.
	 2-3
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	 
	  
	 

  
  	 3.0 RELIANCE ON OTHER EXPERTS

  
 This Technical Report Update has been prepared by Michael O’Brien, P.Geo, of ARANZ Geo, and Hassan Ghaffari, P.Eng, Jianhui Huang, Ph.D. P.Eng. and Mark Horan, P.Eng, all of Tetra Tech. All authors are independent QPs as defined within the requirements of NI 43-101.
  
 The information, conclusions, opinions, and estimates contained herein are based on:
  
 	  
	·	information available to the authors at the time the report was prepared
	  
	  
	  

	  
	·	assumptions, conditions, and qualifications as outlined in this report
	  
	  
	  

	  
	·	production and expenditure data, reports, and other information supplied by Avino and other third-party sources.

  
 Avino reported to the authors that, to the best of its knowledge, there is no known litigation that could potentially affect the Project.
  
 Note: The authors of this report are not qualified to provide extensive commentary on legal or political issues associated with the Property, which are considered to be outside the scope of this report. For the portions of this report (Sections 1.2, 4.2 and 4.3) that deal with the types and numbers of mineral tenures and licenses; the nature and extent of title and interest in the Property and the terms of any royalties, back-in rights, payments or other agreements and encumbrances to which the Property is subject, we have relied upon the title opinion dated February 1, 2018 by Juan Manuel Gonzalez Olguin of the Mexican law firm Bufete Gonazalez Olguin, S.C., (a copy of which is appended to this report, see Appendix A). 
  
 	  

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	 3-1
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	 
	  
	 

  
  	4.0 PROPERTY DESCRIPTION AND LOCATION

  
 4.1 LOCATION
  
 The Property is in Durango State in North Central Mexico, within the Sierra Madre Silver Belt on the eastern edge of the Sierra Madre Occidental mountain range. The nearest major centre is the city of Durango, 82 km to the southwest of the Property. The Property is within the municipality of Pánuco de Coronado between the towns of Pánuco de Coronado and San José de Avino. The Property is located at latitude N 24° 53’, longitude W 104° 31’, 14 km northwest of Highway 40D.
  
 The Property location is situated as illustrated in Figure 4.1 and Figure 4.2.
  
 Figure 4.1 General Location of the Property
 
  	  

	 Avino Silver & Gold Mines Ltd.
	 4-1
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	 
	  
	 

  
 Figure 4.2 Local Property Location
   
  
  
 4.2 PROPERTY OWNERSHIP
  
 The current Property comprises 23 mineral concessions, totalling 1,103.934 ha.
  
 In 1968, Avino Mines and Resources Ltd. acquired a 49% interest in the company CMMA and Minera San José de Avino SA, which together held mineral claims totalling 2,626 ha (6,488 ac). Avino Mines and Resources Ltd. retained Vancouver based Cannon-Hicks & Associates Ltd. (Cannon-Hicks), a mining consulting firm, to conduct the exploration and development of the Property. Cannon-Hicks’s exploration activities included surface and underground sampling and diamond drilling (VSE 1979).
  
 On July 17, 2006, the Company completed the acquisition of Compañía Minera Mexicana de Avino, S.A. de C.V. (Avino Mexico), a Mexican corporation, through the acquisition of an additional 39.25% interest in Avino Mexico which combined with the Company’s pre-existing 49% share of Avino Mexico, brought the Company’s ownership interest in Avino Mexico to 88.25%. The additional 39.25% interest in Avino Mexico was obtained through the acquisition of 79.09% of the common shares of Promotora Avino S.A. de C.V., referred to as “Promotora”, which in turn owns 49.75% of Avino Mexico’s common shares, and the direct acquisition of 1% of the common shares of Avino Mexico.  
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 4-2
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	 
	  
	 

  
 The July 17, 2006 acquisition was accomplished by a share exchange by which the Company issued 3,164,702 shares as consideration, which we refer to as the “Payment Shares”, for the purchase of the additional 39.25% interest in Avino Mexico. The Payment Shares were valued based on the July 17, 2006 closing market price of the Company’s shares on the TSX.
  
 The Company acquired a further 1.1% interest in Avino Mexico through the acquisition from an estate subject to approval and transfer of the shares to the Company by the trustee for the estate. On December 21, 2007 approval was received and the Company obtained the 1.1% interest from the estate for no additional consideration. 
  
 On February 16, 2009, the Company converted existing loans advanced to Avino Mexico into new additional shares of Avino Mexico. As a result, the Company’s ownership interest in Avino Mexico increased to 99.28%. 
  
 On June 4, 2013, the Company converted existing loans advanced to Avino Mexico into new additional shares of Avino Mexico, resulting in the Company’s ownership increasing by 0.38% to an effective 99.67%. The issuance of shares to the Company by Avino Mexico on June 4, 2013 resulted in a reduction in the non-controlling interest from 0.72% to 0.34%. 
  
 On August 26, 2015, the Company converted existing loans advanced to Avino Mexico into new additional shares, resulting in an increase of the Company’s ownership by 0.01% to an effective 99.67%. The intercompany loans and investments are eliminated upon consolidation of the financial statements. The Company had a pre-existing effective ownership interest of 99.66% in Avino Mexico prior to the 0.01% increase. The issuance of shares to the Company by Avino Mexico on August 26, 2015, resulted in a reduction in the non-controlling interest from 0.34% to 0.33%. 
  
 4.3 MINERAL CONCESSIONS AND AGREEMENTS
  
 The current Property comprises 23 mineral concessions, totalling 1,103.934 ha (Figure 4.3). Of these, 22 mineral concessions totalling 1,005.104 ha, are held by CMMA (Avino’s Mexican subsidiary company), Promotora Avino SA de CV, and Susesion de la Sra. Elena del Hoyo Algara de Ysita. Ownership proportions and mineral concessions are summarized in Table 4.1 and Table 4.2, respectively.
  
 Table 4.1 Summary of Property Ownership
  
  	 Company
	  
	 Relationship to Avino
 Silver and Gold
Mines Ltd.	  
	  
	 Effective
 Ownership
of Avino Mine Property (%)	  

	 CMMA
	  
	 Subsidiary
	  
	  
	  
	98.45	  

	 Promotora Avino, S.A. de C.V. 
	  
	 Subsidiary
	  
	  
	  
	1.22	  

	 Total Effective Ownership of Avino Mine Property 
	  
	 -
	  
	  
	  
	99.67	  

	 Estate of Ysita 
	  
	 Non-controlling interest
	  
	  
	  
	0.33	  

	 Total
	  
	 -
	  
	  
	  
	100.00	  

  
  
  
  
  
  
  
  
  
  
  
   
   
  	  

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	 4-3
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	 
	  
	 

   
 Table 4.2 Mineral Concessions – Avino Property
  
 	 Concession Name
	  
	 Concession No.
	  
	  
	 Location
	  
	  
	 Hectares
(ha)	  
	  
	 Date
Acquired	  
	  
	 Expiration
Date	  
	  
	 Cost
(US$/ha)	  
	  
	 Payment
(US$)	  

	 Agrupamiento San Jose (Purisma Chica)
	  
	  
	155597	  
	  
	 Pánuco
	  
	  
	  
	136.708	  
	  
	 30/09/1971
	  
	  
	 29/09/2021
	  
	  
	  
	124.74	  
	  
	  
	17,052.91	  

	 Agrupamiento (San Jose)
	  
	  
	164985	  
	  
	 Pánuco
	  
	  
	  
	8.000	  
	  
	 13/08/1979
	  
	  
	 12/8/2029
	  
	  
	  
	124.74	  
	  
	  
	997.92	  

	 Agrupamiento San Jose (El Trompo)
	  
	  
	184397	  
	  
	 Pánuco
	  
	  
	  
	81.547	  
	  
	 13/10/1989
	  
	  
	 12/10/2039
	  
	  
	  
	124.74	  
	  
	  
	10,172.12	  

	 Agrupamiento San Jose (Gran Lucero)
	  
	  
	189477	  
	  
	 Pánuco
	  
	  
	  
	161.468	  
	  
	 5/12/1990
	  
	  
	 4/12/2040
	  
	  
	  
	124.74	  
	  
	  
	20,141.57	  

	 Agrupamiento San Jose (San Carlos)
	  
	  
	117411	  
	  
	 Pánuco
	  
	  
	  
	4.451	  
	  
	 5/2/1961
	  
	  
	 16/12/2061
	  
	  
	  
	124.74	  
	  
	  
	555.16	  

	 Agrupamiento San Jose (San Pedro Y San Pablo)
	  
	  
	139615	  
	  
	 Pánuco
	  
	  
	  
	12.000	  
	  
	 22/06/1959
	  
	  
	 21/06/2061
	  
	  
	  
	124.74	  
	  
	  
	1,496.88	  

	 Aguila Mexicana
	  
	  
	215733	  
	  
	 Pánuco
	  
	  
	  
	36.768	  
	  
	 12/3/2004
	  
	  
	 29/06/2044
	  
	  
	  
	70.88	  
	  
	  
	2,606.12	  

	 Ampliacion La Malinche
	  
	  
	204177	  
	  
	 Pánuco
	  
	  
	  
	6.010	  
	  
	 18/12/1996
	  
	  
	 17/12/2046
	  
	  
	  
	124.74	  
	  
	  
	749.72	  

	 Ampliacion San Gonzalo
	  
	  
	191837	  
	  
	 Pánuco
	  
	  
	  
	5.850	  
	  
	 19/12/1991
	  
	  
	 18/12/2041
	  
	  
	  
	124.74	  
	  
	  
	729.67	  

	 Avino Grande Ix
	  
	  
	216005	  
	  
	 Pánuco
	  
	  
	  
	19.558	  
	  
	 2/4/2002
	  
	  
	 1/4/2052
	  
	  
	  
	70.88	  
	  
	  
	1,386.24	  

	 Avino Grande Viii
	  
	  
	215224	  
	  
	 Pánuco
	  
	  
	  
	22.882	  
	  
	 14/02/2002
	  
	  
	 13/02/2052
	  
	  
	  
	70.88	  
	  
	  
	1,621.85	  

	 El Caracol
	  
	  
	215732	  
	  
	 Pánuco
	  
	  
	  
	102.382	  
	  
	 12/3/2002
	  
	  
	 28/04/2044
	  
	  
	  
	70.88	  
	  
	  
	7,256.84	  

	 El Potrerito
	  
	  
	185328	  
	  
	 Pánuco
	  
	  
	  
	9.000	  
	  
	 14/12/1989
	  
	  
	 13/12/2039
	  
	  
	  
	124.74	  
	  
	  
	1,122.66	  

	 Fernando
	  
	  
	205401	  
	  
	 Pánuco
	  
	  
	  
	72.129	  
	  
	 29/08/1997
	  
	  
	 28/08/2047
	  
	  
	  
	124.74	  
	  
	  
	8,997.33	  

	 La Estela
	  
	  
	179658	  
	  
	 Pánuco
	  
	  
	  
	14.000	  
	  
	 11/12/1986
	  
	  
	 12/12/2036
	  
	  
	  
	124.74	  
	  
	  
	1,746.36	  

	 La Malinche
	  
	  
	203256	  
	  
	 Pánuco
	  
	  
	  
	9.000	  
	  
	 28/06/1996
	  
	  
	 27/06/2046
	  
	  
	  
	124.74	  
	  
	  
	1,122.66	  

	 Los Angeles
	  
	  
	154410	  
	  
	 Pánuco
	  
	  
	  
	23.713	  
	  
	 25/03/1971
	  
	  
	 24/03/2021
	  
	  
	  
	124.74	  
	  
	  
	2,957.96	  

	 Negro Jose
	  
	  
	218252	  
	  
	 Pánuco
	  
	  
	  
	58.000	  
	  
	 17/10/2002
	  
	  
	 16/10/2052
	  
	  
	  
	70.88	  
	  
	  
	4,111.04	  

	 San Gonzalo
	  
	  
	190748	  
	  
	 Pánuco
	  
	  
	  
	12.000	  
	  
	 29/04/1991
	  
	  
	 28/04/2041
	  
	  
	  
	124.74	  
	  
	  
	1,496.88	  

	 San Martin De Porres
	  
	  
	222909	  
	  
	 Pánuco
	  
	  
	  
	30.000	  
	  
	 15/09/2004
	  
	  
	 14/09/2054
	  
	  
	  
	70.88	  
	  
	  
	2,126.40	  

	 Santa Ana
	  
	  
	195678	  
	  
	 Pánuco
	  
	  
	  
	136.182	  
	  
	 14/09/1992
	  
	  
	 13/09/2042
	  
	  
	  
	124.74	  
	  
	  
	16,987.38	  

	 Yolanda
	  
	  
	191083	  
	  
	 Pánuco
	  
	  
	  
	43.458	  
	  
	 29/04/1991
	  
	  
	 28/04/2041
	  
	  
	  
	124.74	  
	  
	  
	5,420.91	  

	 Total
	  
	  
	-	  
	  
	  
	-	  
	  
	  
	1005.106	  
	  
	  
	-	  
	  
	  
	-	  
	  
	  
	110.29	  
	  
	  
	110,856.58	  

  
  	  

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	 4-4
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	 
	  
	 

  
Figure 4.3 Map of Avino Property Concessions 
 Source: after Tetra Tech (2013)
  
 In May 1970, Avino Mines and Resources Ltd. signed a formal agreement with Selco Mining and Development (Selco), a division of Selection Trust Company. Due to other commitments, Selco abandoned its interest in the Project in 1973 (VSE 1979). On February 18, 2012, through its subsidiary company CMMA, Avino re-entered into an agreement (the Agreement) with Minerales, whereby Minerales has indirectly granted to Avino the exclusive mining and occupation rights to the La Platosa concession. The La Platosa concession covers 98.83 ha and hosts the Avino Vein and ET Zone.
  
 Pursuant to the Agreement, Avino has the exclusive right to explore and mine the concession for an initial period of 15 years, with the option to extend the agreement for another 5 years. In consideration of the grant of these rights, Avino has paid to Minerales the sum of US$250,000, by the issuance of 135,189 common shares of Avino. Avino will have a period of 24 months for the development of mining facilities. 
  
  	  

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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

   
  	 
	  
	 

  
 Avino has agreed to pay to Minerales a royalty equal to 3.5% of NSRs, at the commencement of commercial production from the concession. In addition, after the development period, if the minimum monthly processing rate of the mine facilities is less than 15,000 t, then Avino must pay to Minerales in any event a minimum royalty equal to the applicable NSR royalty based on processing at a minimum monthly rate of 15,000 t. In the event of a force majeure, Avino shall pay the minimum royalty as follows:
  
  	  
	·	first quarter: payment of 100% of the minimum royalty
	  
	  
	  

	  
	·	second quarter: payment of 75% of the minimum royalty
	  
	  
	  

	  
	·	third quarter: payment of 50% of the minimum royalty
	  
	  
	  

	  
	·	fourth quarter: payment of 25% of the minimum royalty
	  
	  
	  

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

  
 Minerales has also granted to Avino the exclusive right to purchase a 100% interest in the concession at any time during the term of the Agreement (or any renewal thereof), upon payment of US$8 million within 15 days of Avino’s notice of election to acquire the Property. The purchase would be completed under a separate purchase agreement for the legal transfer of the concession. This agreement replaces all other previous agreements.
  
 During the month of May of each year, Avino must file assessment work made on each concession for the immediately preceding calendar year. During the months of January and July of each year, Avino must pay in advance the mining taxes which are based on the surface of the concession and the number of years that have elapsed since it was issued.
  
 Consistent with the mining regulations of Mexico, cadastral surveys have been carried out for all the listed mineral concessions as part of the field staking prior to recording (Slim 2005d). It is believed that all concessions are current and up to date. Mineral concessions in Mexico do not include surface rights. Avino has entered into agreements with communal land owners (Ejidos) of San José de Avino, for the temporary occupation and surface rights of the concessions.
  
 A current title opinion dated February 1, 2018, has been prepared by Juan Manuel González Olguin of the Mexican law firm Bufete González Olguin S.C. (a copy of which is appended to this report [Appendix A]). 
  
  	  

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	 4-6
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
  	5.0 ACCESSIBILITY, CLIMATE, INFRASTRUCTURE, LOCAL RESOURCES, AND PHYSIOGRAPHY

  
  	5.1 TOPOGRAPHY, ELEVATION AND VEGETATION

  
 The average elevation of the Property is approximately 2,200 masl. Local relief is estimated to be roughly 100 m ranging from the bottom bench of the tailings to the top of the open pit.
  
 Vegetation is sparse and consists of shrubs and grasses typical of the high desert.
  
  	5.2 ACCESSIBILITY AND LOCAL RESOURCES

  
 The Property is easily accessible by road and the mine is an important employer of the local community from which skilled workers are available. Access is provided by Highway 40, a four-lane highway leading from Durango, past the airport and on to the city of Torreon in Coahuila. Successive turn-offs for the Property are at Francisco I Madero, Ignacio Zaragoza, and San José de Avino (Slim 2005d). The Avino mineral concessions are covered by a network of dirt roads, which provide easy transport access between all areas of interest on the Property and the mill at the main Avino Mine (Gunning 2009).
  
 The nearest major city is Durango, with a population of approximately 465,000. Durango is a major mining centre in Mexico where experienced labour and services can be obtained. The two towns nearest the mine are Pánuco de Coronado and San José de Avino, where the majority of the employees lived while working at the mine when it was in operation. Pánuco de Coronado has a population of approximately 12,000, and San José de Avino is a small centre with a population of less than 1,000.
  
  	5.3 CLIMATE AND LENGTH OF OPERATING SEASON

  
 The climate is temperate and semi-arid. In the region, the mean annual rainfall is 580.6 mm and the average annual temperature is 16.9°C. July and January average temperatures are 21.8°C and 11.3°C, respectively (www.worldclimate.com – Durango). The majority of the rainfall occurs between June and September. In the winter months, the temperature can drop below freezing and frost and even light snowfall can occur.
  
 Exploration, development, and mining activities may take place throughout the year without any significant seasonal impact.
  
  	5.4 INFRASTRUCTURE

  
 Infrastructure is disclosed in Section 18.0.
  
  
  	 Avino Silver & Gold Mines Ltd.
	 5-1
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	
	
	 

	

  
  	  
	  

  
  	6.0 HISTORY

  
  	6.1 AVINO MINE, 1555-1968

  
 The Avino deposit was originally discovered around 1555 by the Spanish conquistador, Don Francisco de Ibarra. In 1562, Francisco de Ibarra, was appointed governor of the newly formed province of Nueva Vizcaya, in the Viceroyalty of Nueva España (New Spain) and, in 1563, founded the town of Durango. Francisco de Ibarra led several expeditions in search of silver deposits in the region and is recognized as having established Minas de Avino, present day Avino Mine; San Martín, Durango; and Pánuco, Sinaloa. Mining operations at the Avino Mine are said to have commenced in 1562-1563 and have been in production until the early 1900s. Operations at the Avino Mine continued up to the onset of the War of Independence (1810) when operations were interrupted but then restarted and continued through to the early 1900s.
  
 In 1880, the mines were taken over by Avino Mines Ltd., a company controlled by American and British interests. The introduction of more modern industrial technology helped the Avino Mine develop into a significant mining operation at the beginning of the 20th century. By 1908, the Avino Mine was considered one of the largest open pit mines in the world and equipped with one of the largest lixification smelters (Gallegos 1960; VSE 1979; Slim 2005d).
  
 During the early phases of the Mexican Revolution in 1910, proceeds from the mine supplied funds to the revolutionary forces. Since much of the fighting occurred in and around Durango and the risk posed by brigands hiding in the mountains was high, the mine was abandoned in 1912.
  
 Between 1912 and 1968, the mine was worked intermittently on a small scale (Avino Annual Report 1980). There is no documentary record of production from the Avino Mine during this period.
  
 The Property was acquired under current ownership in 1968.
  
  	6.1.1 AVINO VEIN SYSTEM DEPOSIT

  
 The Avino Vein System was the mainstay of historic exploitation and is situated adjacent to the mine offices and processing plant. The upper portion of the deposit was extensively mined in an open pit and the lower portion is currently accessible via a ramp and has been extensively developed and mined from more than 6 km of horizontal drifts, with vertical spacings between 15 and 25 m. The Avino (ET Mine) workings extend to a maximum depth of 360 m vertically below the portal of the Avino ramp. An old vertical shaft, no longer used for hoisting, is used for ventilation and to supply water and power for development and mining. A vertical section of Avino Mine is shown in Figure 6.1 . The western historically mined portion of the Avino Vein system is referred to as the San Luis. In 2016-2017, the focus of exploration drilling was on the region between the ET Mine and San Luis. The eastern extension of the Avino Vein system is known as Chirumbo.
  
  
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	 6-1
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 6.1 Avino Mine: Vertical Section View Showing Development and Stoping
 
  
  	6.2 SAN GONZALO VEIN DEPOSIT

  
 Shallow workings from an old mine are present in the San Gonzalo Vein, and consist of small underground workings which were originally accessed by a five-level vertical shaft.
  
 Current access to the San Gonzalo Deposit is via a ramp that is being actively developed. All old working levels have been dewatered. The deposit has been explored and exploited by more than 4 km of horizontal drifts with upper levels at 40 m vertical spacing and lower levels at 25 m vertical spacing. A vertical section of the San Gonzalo Mine is shown in Figure 6.2 .
  
  	6.3 GUADALUPE VEIN DEPOSIT

  
 The Guadalupe Vein (see Figure 7.1) extends between the Avino Vein and the San Gonzalo Vein and is a current exploration target.
  
  	6.4 SAN JUVENTINO VEIN DEPOSIT

  
 The San Juventino Vein (see Figure 7.1) is adjacent to the eastern end of the Avino Vein and is a current exploration target.
  
  
  	 Avino Silver & Gold Mines Ltd.
	 6-2
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
  
 Figure 6.2 San Gonzalo Mine: Vertical Section View Showing Development and Stoping
 
  
  
  
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	 6-3
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 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
  	 7.0 GEOLOGICAL SETTING AND MINERALIZATION

  7.1 REGIONAL GEOLOGY
  
 The Property is located within the Sierra de Gamon, on the east flank of the Sierra Madre Occidental. The area is a geological window into the Lower Volcanic series and consists mainly of volcanic flows, sills, and tuffaceous layers of andesite, rhyolite, and trachyte. Individual rock units typically vary from 300 to 800 m in thickness. Andesitic rocks outcrop over most of the region with other rock types occurring more sparsely to the north (Slim 2005d).
  
 A large monzonitic intrusion is observed in the region in the form of dykes and small stocks, which appear to be linked to the onset of the Avino Vein mineralization. Other post-mineralization dykes of intermediate to felsic composition crop out in various areas and appear to cause minor structural displacements. Occurrences of thin mafic sills are also found in various parts of the region and are believed to be related to recent volcanism.
  
 Higher areas of the Sierra Madre Occidental surrounding the mine are composed of rhyolites and ignimbrites of the Upper Volcanic Series, with thicknesses approaching 1,500 m.
  
 The Laramide orogenic event is believed to have affected the Avino district. Later extrusive and intrusive igneous events appear to have caused the formation of various systems of pre-mineralization faulting. These fault systems usually produced normal displacement of the pre-existing rocks, and generally strike northwest-southeast (subparallel to the Avino Vein System). Additional normal fault systems are also observed in the region, striking northeast-southwest and dipping towards the south (subparallel to the San Gonzalo Vein System).
  
 The rugged topography is a result of erosion of the post-mineralization faulted blocks. One of the most significant regional features of the district is the Avino Fault which strikes northwest 20° southeast, dips southeast and which appears to terminate the Avino Vein mineralization, juxtaposing the Upper and Lower Volcanic series (Figure 7.1).
  
  
  	 Avino Silver & Gold Mines Ltd.
	 7-1
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 7.1 General Map of Property Geology
 
 7.2 PROPERTY GEOLOGY AND MINERALIZATION
  
 The Avino concession is located within a 12 km (north-south) by 8.5 km (east-west) caldera. The Property contains numerous low-sulphidation epithermal veins, breccias, stockwork, and silicified zones that grade into a “near porphyry” environment, particularly in the Avino Mine area. The caldera has been uplifted by regional north-trending block faulting (a graben structure), exposing a window of andesitic pyroclastic rocks of the lower volcanic sequence within the caldera. The Lower Volcanic Sequence is overlain by the Upper Volcanic Sequence, consisting of rhyolite to trachyte flows and extensive ignimbrites and intruded by monzonite bodies.
  
 The basal andesite-bearing conglomerate and underlying Paleozoic basement sedimentary rocks (consisting of shales, sandstones and conglomerates) have been identified on the Avino concession in the south-central portion of the caldera, covering the Guadalupe, Santiago, San Jorge, the San Gonzalo Trend, Malinche, Porterito and Yolanda areas. A northerly trending felsic dyke, possibly a feeder to the upper volcanic sequence, transects the Property and many of the veins. The Aguila Mexicana low temperature vein system, trends north-northwest at a similar orientation to the felsic dyke and with similar continuity across the Property. The two structures have been interpreted to occur along deep crustal faults that controlled volcanism and mineralization, with the felsic dyke structure controlling the emplacement of the Avino, Nuestra Senora and El Fuerte-Potosina volcanic centres and the Aguila Mexicana structure controlling the Cerro San Jose and El Fuerte-Potosina volcanic centres (Paulter 2006).
  
  
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 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

   
 Silver- and gold-bearing veins cross-cut the various lithologies and are generally oriented north northwest-south southeast and northwest-southeast (Figure 7.1). The rocks have been weathered and leached in the upper sections, as a result of contact with atmospheric waters; the oxide tailings material (Section 7.2.3) is primarily from this source, whereas the sulphide tailings are predominantly from material sourced at depth, below the leached zone. In Mexico, these types of deposits can have large lateral extents, but can be limited in the vertical continuity of grades.
  
 In the oxide zone, mineralization is primarily hosted by the minerals argentite, bromargyrite, chalcopyrite, chalcocite, galena, sphalerite, bornite, native silver, gold, and native copper. Other minerals present in mineralized areas, but not hosting the metals of interest, include hematite, chlorite, quartz, barite, pyrite, arsenopyrite and pyrrhotite. Malachite, anglesite and limonite are common in the quartz zones of the weathered parts of the oxide material.
  
 7.2.1 AVINO VEIN
  
 Geology and mineralization of the Avino Vein are summarized from Slim (2005d).
  
 The Avino Vein is 1.6 km long and 60 m wide on the surface. The Avino Vein is the most striking and important example of the epithermal mineralization of the district whose structures are normally weathered and leached in their upper section as a result of contact with atmospheric waters producing a band of oxide minerals and zones of supergene enrichment to a depth of about 70 m.
  
 In the oxide portion of the Avino Vein, the common minerals encountered include hematite, limonite, anglesite and copper carbonate in white or green, somewhat chloritized, quartz zones. The common primary and secondary minerals encountered are argentite, bromargyrite, chalcopyrite, chalcocite, galena sphalerite, bornite, native silver, free gold, and native copper. Other minerals present in mineralized areas include quartz, pyrite, chlorite, barite, arsenopyrite, pyrrhotite and specularite.
  
 Higher silver values are reported to decrease overall with depth, except at vein intersections and vein inflections, where higher values persist to depth. The same can be said for gold, although the higher values start just below the onset of silver mineralization, at or near the surface. In contrast, higher copper values coincide with vein intersections and may increase with depth. Sporadic, localized copper enrichment occurs toward the footwall contact and may represent a different phase of fluid emplacement. Despite the overall decrease in precious metal grade with depth, local increases in metal grades are apparent in the mine sampling and exploration drilling, possible reflecting changes in boiling level with pressure variations in the epithermal system.
  
 The Avino Vein has been followed longitudinally for more than 1,300 m and vertically for more than 600 m. It strikes north 66° east with an east-west splay, and dips to the south and southeast at 60° to 70°. Steeply dipping, high grade zones within the vein and stock-work zones are frequently found in the upper part of the vein, as well as at its intersections with a number of lateral veins. An example of a higher-grade area of mineralization encountered with major lateral vein intersecting the Avino was the El Hundido, which exceeded 40 m in thickness. In the lower areas of the vein and mine, mineralized cross-veins, branch-veins, and stockwork zones have been found in the footwall at San Luis and at El Hundido, and are assumed to persist with depth.
  
  
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 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

   
 The hanging wall of the Avino Vein is andesite, while the footwall is a monzonite intrusive with andesite sections. A post-mineralization fault parallel with the vein occurs in the hanging wall at a distance of several metres in the area of San Luis, while in the central part of El Hundido, this fault is located at the contact with the vein over a distance of about 300 m, up to the area of Santa Elena and San Antonio. From that point, and proceeding toward the El Chirumbo Mine, this fault cuts the vein between the face at San Carlos and the exposure at the underground ramp. The fault then enters the footwall where it remains until a point about 30 m east of the west face of the Chirumbo area, producing a downward displacement of the vein of between 50 to 100 m.
  
 At Chirumbo, the fault largely replaces the vein due to strong leaching by post-mineralization circulating of water in the gouge. On the east face at Chirumbo, the fault again enters the hanging wall; in this zone the vein is composed of branches and stockwork and to the east of this point the fault crosses the vein numerous times.
  
 The deposit is epithermal and made up of veins and dependent stockwork structures, mainly in the hanging wall and often associated with vein intersections. Four vein systems have been described which, in decreasing order of importance, are:
  
 	  
	·	system striking east-west, dipping south at 60° to 70°, including the Avino Vein and its possible extension in the Cerro de San Jose
	  
	  
	  

	  
	·	system striking north 60° to 70° west, dipping 60° to 80° southwest, comprising the following important veins: El Trompo, San Juventino, San Jorge, Platosa, Los Reyes, Potosina, El Fuerte, and Conejo
	  
	  
	  

	  
	·	system striking north 20° to 30° west, dipping between 60° to 80° to either the southwest or northeast, comprising the following significant veins: San Gonzalo, Aguila Mexicana, and La Calcita, as well as the Stockwork La Potosina, and the Stockwork El Fuerte
	  
	  
	  

	  
	·	systems striking north 60° to 80° east, dipping 60° to 80° southeast, comprising the following veins: Santiago, Retana, Nuestra Senora, and San Pedro and San Pablo.

  
 Alteration has been reported in three main types:
  
 	  
	·	Propylitic alteration is most common in andesite, giving the andesite a greenish tint.
	  
	  
	  

	  
	·	Argillaceous alteration appears mainly in the upper parts of the veins and manifests itself as a whitening of the country rock due to alunite and montmorillonite clays.
	  
	  
	  

	  
	·	Silicification, chloritization, and pyritization alteration is observed in the hanging wall and footwall, and is more prominent closer to the vein.

  
  
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

     
 7.2.2 SAN GONZALO VEIN
  
 The San Gonzalo Vein is located approximately 1.4 km northeast of the eastern modelled extent of the Avino Vein. The San Gonzalo Vein system constitutes a strongly developed vein system over 25 m wide, trending 300° to 325°/80° northeast to 77° south. It is characterized by banded textures and open-space filling. The main vein has an average width of 2 m, but the silica-pyrite or iron oxide-sericite alteration with additional stock working extends across 300 m, south of the main San Gonzalo Vein to the Los Angeles Vein. 
  
 The San Gonzalo is a typical narrow vein precious metal deposit with some erratic values and extends approximately 2 km to the northwest to the Santa Ana-Malinche area (Gunning 2009).
  
 The Cerro San Jose-La Estella-San Gonzalo Cerro San Jose represents a distinct hydrothermal centre with similar characteristics to the Avino system which include the following (Paulter 2006):
  
 	  
	·	occur on a topographic high
	  
	  
	  

	  
	·	strong to intense silicification and brecciation
	  
	  
	  

	  
	·	easterly trending stockwork system similar to the trend of the Avino Vein
	  
	  
	  

	  
	·	similar temperatures of formation to Avino
	  
	  
	  

	  
	·	presence of an intersecting northwesterly trending vein system (la Estella at San Jose and San Juventino at Avino)
	  
	  
	  

	  
	·	emplacement along a northerly trending, deep crustal fault zone (defined by the Aguila Mexicana Vein at Cerro San Jose and the felsic dyke at Avino).

  
 7.2.3 OXIDE AND SULPHIDE TAILINGS
  
 The Avino tailings dam is located approximately 500 m west-southwest of the main shaft to the old underground workings and 2.5 km southwest of the San Gonzalo Vein. An orthogonal view of the oxide tailings deposit, looking northwards and with the drillholes indicated, is shown in Figure 7.2.
  
  
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

    
 Figure 7.2 Orthogonal View of the Oxide Tailings Deposit and Drillholes
 
 Within the tailings dam, there are three distinct benches:
  
 	  
	·	lower oxide bench
	  
	  
	  

	  
	·	middle oxide bench
	  
	  
	  

	  
	·	upper bench or sulphide bench.

  
 Due to the historical processing sequence, the oxide tailings are primarily derived from weathered and oxidized rocks close to the surface on the Property, whereas the sulphide tailings are predominantly derived from material sourced at depth from the underground workings, below the weathered/leached zone.
  
 The oxide tailings (both the middle and lower benches) have been analyzed in greater details than the sulphide tailings, and are included in the current mineral resource for the oxide tailings. The sulphide tailings, in the absence of any definitive sampling data penetrating the depth of the pile, are an exploration target (Section 14.15).
  
  
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

    
  	 8.0 DEPOSIT TYPES

  
 Regionally, the Property is situated within a 12 km by 8.5 km caldera that hosts numerous low- to intermediate-sulphidation silver-gold epithermal veins, breccias, stockwork and silicified zones, grading into a “near porphyry” environment in the Avino Mine area.
  
 The historic mining on the Property was on the Avino Vein, a silver-gold-copper rich epithermal vein. The San Gonzalo Vein, however, has a much lower copper content than the Avino Vein and is more equivalent to other silver-lead-zinc deposits of the Sierra Madres.
  
 Low-sulphidation vein systems are commonly characterized by low concentrations of sulphide minerals, alteration mineralogy dominated by quartz-adularia-sericite, and a lack of extensive wall-rock alteration. Conversely, high-sulphidation vein systems are commonly characterized by sulphur saturation leading to the presence of native sulphur and sulphide minerals, quartz-alunite alteration, and extensive wall-rock alteration. The Mexican silver deposits are usually within the intermediate sulphidation range, rather than either of the end member classifications.
  
 In Mexico, and particularly within the Mexican Silver Belt, these types of deposits can have large lateral extents, but may be limited vertically. There are many silver-gold mines in Mexico, some of which form large mining districts, and others that exploit multiple veins over limited vertical horizons that are sometimes only 100 m in depth (Gunning 2009).
  
 On the Property, the oxide tailings have been predominantly sourced from earlier open pit operations and the sulphide tailings have been predominantly sourced from later underground workings. Exposure to surface weathering and historic process activities has homogenised the oxide tailings material to produce a deposit with little or no sulphides.
  
  
  	 Avino Silver & Gold Mines Ltd.
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
  	9.0 EXPLORATION

  
 9.1 EARLY EXPLORATION (PRIOR TO MINE CLOSURE), 1968 TO 2001
  
 Exploration on the Property has been ongoing since before production commenced, and the majority of the recorded work has been focused on the main Avino Vein and surrounding area. The following is a summary of significant exploration work conducted either by Avino, or on behalf of Avino, until the mine closed in 2001.
  
 Pre-production exploration was carried out by CMMA and others, and covered 2,500 m of drifting and cross-cuts, as well as 8,000 m of surface and underground diamond drilling. Extensive rehabilitation was completed involving Selco, including connecting three of the old—possibly pre-1900—underground mine workings.
  
 In 1970, a contract was signed with Selco, who spent more than US$1 million in exploration and feasibility studies before returning the Property back to CMMA in 1972, reportedly because of low metal prices. The majority of the documentation examined covered feasibility work and was related to investigations of old underground workings that were likely developed in the late 1800s. A contract was signed in October 1973 with S.G.L. Ltd. and Sheridan Geophysics Ltd., under which a new 500 t/d plant was completed in May 1974.
  
 Since 1992 exploration in/for the mine has been limited to traditional underground mine development with associated sampling and planning for production feed. In the late 1990s it appears that development was not kept up as company monthly reports showed decreasing historical reserve allocations for production and mill feed.
   
 The only recorded property exploration, apart from limited prospecting, is documented in the 1993 report by Servicios Administratos Luismin, SA de CV, the engineering branch of Cía Minera de San Luis Exploration. The study reported on detailed analysis and sampling of the then known showings on the Property with the emphasis on the Avino Vein and Potosina/El Fuerte area. The extensive underground sampling program carried out by Luismin provided later direction for underground mining. The report made recommendations for follow-up for drilling and underground development for the main Avino Vein, as well as trenching and drilling recommendations for the Potosina/El Fuerte area. It is believed that these recommendations were never implemented for the prospective areas. Additionally, the report included a property-scale geological mapping and lithogeochemical sampling program which was contoured and coloured for gold, silver, copper, lead, zinc, arsenic, antimony and mercury.
  
  
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

 
 	  
	  

  
 Other notable observations from the study include the following:
  
 	  
	·	All mineralization, except for Nuestra Senora and Potosina/El Fuerte radiate outwards in a west to north-west direction from the Cerro San Jose. The Cerro San Jose is a silicified and partly hornfelsed body of volcanic rock probably overlying an intrusive stock, which could have been the source of most mineralization on the Property.
	  
	  
	  

	  
	·	Mineralization in all radiating structures is described as being strongest 2 to 3 km from Cerro San Jose. This resembles many of the gold deposits in Nevada where the source of mineralization is a near surface acid-intrusive but with mineralized bodies lying 1 to 5 km away along high angle faults.
	  
	  
	  

	  
	·	The two strongest and widest structures appear to be the Avino and Aguila Mexicana veins.
	  
	  
	  

	  
	·	The Avino Vein has three main mineralized zones—San Luis, ET (La Gloria/Hundido) and Chirumbo areas—which rake to the west and are open at depth.
	  
	  
	  

	  
	·	The existence of other mineralization cutting the Cerro San Jose mineralization in the Nuestra Senora and Potosina/El Fuerta areas could offer the potential for bulk mineable stockwork zones.

  
 Assay values from outcrop sampling of surface-mapped veins towards the San Jose hill ranged from lows of 2 g/t silver and trace gold over true thicknesses from 0.1 to 2.3 m up to a high of 755 g/t silver with a corresponding 1.5 g/t gold over a thickness of 0.45 m.
  
 No systematic sampling, trenching or drilling of either the outcrops or the veins is known to have occurred during the program undertaken in 1993.
  
 9.2 RECENT EXPLORATION, 2001 TO PRESENT
  
 Since mine closure in 2001, Avino has intermittently conducted exploration work on the Property, with the intention of expanding and better defining known areas of mineralization. Historic near-to-surface mining activities are being relied upon for guidance, and modern techniques are being employed to integrate, manage and interpret results. Included in the list of exploration activities is an induced polarization (IP) geophysical survey, 1,500 soil samples, satellite imagery, mapping, trenching, tailings investigations, bulk sampling, and underground channel sampling.
  
 9.2.1 TAILINGS INVESTIGATIONS (OXIDES), 2003 AND 2004
  
 Two specific mineralogical assessments were conducted in 2003 and 2004 on samples from the tailings on the Property. The purpose of the program was to provide data for independent investigation of the 1990 drilling results on the oxide tailings (discussed in Section 10.0) in terms of verifying assay grades and volumes, as well to examine the metallurgical characteristics of the material. The results and implications of these findings are discussed further in Section 13.0.
  
  
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	 9-2
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

 
 	  
	  

  
 The following information regarding the 2004 sampling is summarized from Slim (2005d).
  
 The 2004 tailings field-work was under the direction of MineStart and excavation of the sample pits was under contract to Desarrollos Rod Construcciones of Durango. Given the hydraulic deposition of the tailings, four important factors required examination: anomaly characteristics of the samples and total population, assay comparison by fence, examination of downstream decrease in assays and factors arising from the downstream construction.
  
 Comparison of the 2004 assays with those from 1990 show consistency in assay values and provide confidence in the 1990 sampling and assaying program.
  
 The preliminary investigations in 2003 showed the need for a sampling of the oxide tailings to validate the assay results of the 1990 drilling and to carry out metallurgical characterization, the latter requiring large samples.
  
 The sampling exercise carried out in 2004, using shallow (4 m deep) backhoe trenches and hand-dug pits, represented a local corroboration of the previous sampling but could not be considered to constitute a representative random sampling of the oxide tailings.
  
 The trench sampling material (Z-series) from the 1993 campaign was also considered to be non-representative.
  
 9.2.2 TAILINGS SAMPLING (SULPHIDES), 2005
  
 Some sampling was carried out in 2005 by means of hand-dug pits on the “upper bench” of sulphide tailings. The silver and gold values generally ranged from 40.0 to 100.0 g/t and 0.3 to 0.6 g/t, respectively. While these values give a general idea of the potential grade of the sulphide tailings, they have not been verified to be representative of the sulphide tailings, even at a local scale.
  
 9.2.3 BULK SAMPLE PROGRAM OF SAN GONZALO VEIN, 2011
  
 Avino completed a 10,000 t bulk sample program at the San Gonzalo deposit following a comprehensive review of the data and discussions with Tetra Tech. The bulk sample feed grade was 261 g/t silver and 0.9 g/t gold. Silver and gold recoveries were stated to be 76% and 59%, respectively, and 232 dry tonnes of flotation concentrate were produced.
  
 9.2.4 UNDERGROUND CHANNEL SAMPLING OF SAN GONZALO AND AVINO VEINS, 2010 TO PRESENT
  
 Underground channel sampling began in 2010 and has continued to the present at ET Mine (Avino Vein System) and San Gonzalo Mine. Channel sampling generated since 2010 data are summarized in 
  
  
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	 9-3
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico

  	 
	 
	 
 
	 

  
  	  
	  

  
 Table 9.1 Summary Underground Channel Sampling by Level for the Avino (ET) Underground Mines
 	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Level
	  
	 Elevation
 (m)
	  
	 Number of
 Channels
	  
	 Total
 Sampled
 (m)
	  
	 Average
 Channel
 Length
 (m)
	  
	 Ag
 (g/t)
	  
	 Au
 (g/t)
	  
	 Cu
 (%)
	  

	 6.5
	  
	 2,271.0
	  
	 97
	  
	 373.6
	  
	 3.9
	  
	 113.01
	  
	 0.98
	  
	 0.51
	  

	 7
	  
	 2,241.8
	  
	 195
	  
	 1,197.6
	  
	 6.1
	  
	 72.50
	  
	 0.42
	  
	 0.44
	  

	 7.5
	  
	 2,212.8
	  
	 33
	  
	 230.5
	  
	 7.0
	  
	 66.15
	  
	 0.49
	  
	 0.50
	  

	 8
	  
	 2,199.1
	  
	 79
	  
	 486.3
	  
	 6.2
	  
	 141.32
	  
	 1.14
	  
	 0.22
	  

	 8.5
	  
	 2,171.9
	  
	 87
	  
	 576.9
	  
	 6.6
	  
	 123.19
	  
	 1.37
	  
	 0.48
	  

	 9
	  
	 2,147.1
	  
	 178
	  
	 1,343.8
	  
	 7.5
	  
	 121.65
	  
	 1.52
	  
	 0.57
	  

	 9.5
	  
	 2,128.0
	  
	 84
	  
	 768.2
	  
	 9.1
	  
	 122.42
	  
	 2.26
	  
	 0.76
	  

	 10
	  
	 2,115.0
	  
	 399
	  
	 2,905.9
	  
	 7.3
	  
	 72.12
	  
	 0.60
	  
	 0.49
	  

	 10.5
	  
	 2,101.0
	  
	 207
	  
	 1,468.0
	  
	 7.1
	  
	 106.90
	  
	 0.77
	  
	 0.65
	  

	 11
	  
	 2,083.0
	  
	 127
	  
	 1,214.7
	  
	 9.6
	  
	 87.57
	  
	 0.48
	  
	 0.73
	  

	 11.5
	  
	 2,067.2
	  
	 171
	  
	 1,289.9
	  
	 7.5
	  
	 89.65
	  
	 0.44
	  
	 0.63
	  

	 12
	  
	 2,051.0
	  
	 133
	  
	 1,092.0
	  
	 8.2
	  
	 94.87
	  
	 0.41
	  
	 0.76
	  

	 12.5
	  
	 2,034.3
	  
	 173
	  
	 1,356.5
	  
	 7.8
	  
	 84.94
	  
	 0.51
	  
	 0.69
	  

	 13
	  
	 2,016.1
	  
	 106
	  
	 645.8
	  
	 6.1
	  
	 61.64
	  
	 0.24
	  
	 0.63
	  

	 13.5
	  
	 1,995.5
	  
	 75
	  
	 386.3
	  
	 5.2
	  
	 57.01
	  
	 0.24
	  
	 0.51
	  

	 14
	  
	 1,975.0
	  
	 107
	  
	 578.0
	  
	 5.4
	  
	 54.56
	  
	 0.13
	  
	 0.52
	  

	 14.5
	  
	 1,954.3
	  
	 419
	  
	 2,622.4
	  
	 6.3
	  
	 54.18
	  
	 0.38
	  
	 0.56
	  

	 15
	  
	 1,932.5
	  
	 390
	  
	 2,341.1
	  
	 6.0
	  
	 63.98
	  
	 0.48
	  
	 0.58
	  

	 15.5
	  
	 1,910.0
	  
	 379
	  
	 2,182.4
	  
	 5.8
	  
	 59.15
	  
	 0.41
	  
	 0.57
	  

	 16
	  
	 1,886.5
	  
	 63
	  
	 433.6
	  
	 6.9
	  
	 49.69
	  
	 0.28
	  
	 0.51
	  

  
 Table 9.2 Summary of Underground Channel Sampling by Level for the San Gonzalo Mine
 	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Level
	  
	 Elevation
 (m)
	  
	 Number of
 Channels
	  
	 Total
 Sampled
 (m)
	  
	 Average
 Channel
 Length
 (m)
	  
	 Ag
 (g/t)
	  
	 Au
 (g/t)
	  
	 Cu
 (%)
	  

	 1
	  
	 2,311.9
	  
	 114
	  
	 272.8
	  
	 2.4
	  
	 157.65
	  
	 0.43
	  
	 -
	  

	 2
	  
	 2,265.3
	  
	 314
	  
	 840.6
	  
	 2.7
	  
	 115.75
	  
	 0.40
	  
	 -
	  

	 3
	  
	 2,218.3
	  
	 378
	  
	 1,046.1
	  
	 2.8
	  
	 119.92
	  
	 0.41
	  
	 -
	  

	 4
	  
	 2,180.0
	  
	 685
	  
	 1,814.2
	  
	 2.6
	  
	 241.59
	  
	 1.15
	  
	 -
	  

	 5
	  
	 2,138.5
	  
	 740
	  
	 2,031.9
	  
	 2.7
	  
	 285.70
	  
	 1.57
	  
	 -
	  

	 6
	  
	 2,091.8
	  
	 603
	  
	 1,667.8
	  
	 2.8
	  
	 186.70
	  
	 1.14
	  
	 -
	  

	 6.5
	  
	 2,064.4
	  
	 243
	  
	 682.4
	  
	 2.8
	  
	 177.17
	  
	 0.86
	  
	 -
	  

	 7
	  
	 2,046.9
	  
	 190
	  
	 517.4
	  
	 2.7
	  
	 111.50
	  
	 0.71
	  
	 -
	  

	 7.5
	  
	 2,020.0
	  
	 114
	  
	 295.6
	  
	 2.6
	  
	 179.90
	  
	 1.01
	  
	 -
	  

  
  
  	 Avino Silver & Gold Mines Ltd.
	 9-4
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico

  	 
	 
	 
 
	 

 
 	  
	  

  
 9.2.5 UNDERGROUND CHANNEL SAMPLING OF SAN GONZALO AND ANGELICA VEINS, 2010-PRESENT
  
 Underground channel sampling began in 2010 and has continued to the present. Channel sampling between 2010 and 2012 was summarized in Tetra Tech (2013). Results of underground sampling since 2013 are summarized in Table 9.2.
  
 Figure 9.1 and Figure 9.2 show the location of all channels, colour coded by grade, included in the current resource estimate (Section 14.2), within and adjacent to the Avino and San Gonzalo Vein systems respectively. Drillholes are also shown for orientation.
  
 Figure 9.1 Channel and Drillhole Samples, Colour Coded by Silver Grade, within the Avino System
  
  
 
  
  
 Figure 9.2 Channel Samples, Colour Coded by Silver Grade, within the San Gonzalo Vein System
  
  
 
  
  
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico

  	 
	 
	 
 
	 

  
  	  
	  

  
  	 10.0 DRILLING

  
 Drilling activities performed by Avino since acquisition of the Property are summarized in the following sections. Drillhole assay results have been previously reported (except ET-12-07 to ET-12-09; Appendix A) by Gunning (2009), Tetra Tech (2012) and Tetra tech (2013) and are not disclosed here.
  
 10.1 EARLY DRILLING (PRIOR TO MINE CLOSURE), 1968 TO 2001
  
 10.1.1 AVINO VEIN
  
 Between 1968 and 2001, at least 25 diamond drillholes, ranging in length from 132.20 to 575.20 m, are reported to have been drilled from surface into the Avino Vein. Included in this total are 10 holes that were drilled by Selco in 1970 when they were re-habilitating some of the old underground workings to provide access for sampling (Slim 2005d). No further information on these drillholes was available to ARANZ Geo and they are not included in the resource estimate for the Avino Vein.
  
 10.1.2 OXIDE TAILINGS, 1990 TO 1991
  
 Between November 10 and December 5, 1990 and March 8 and May 30, 1991, Avino completed six trenches and 28 vertical drillholes in the tailings (Table 10.1) along 7 fences at a spacing of roughly 50 m by50 m (Figure 10.1) (Benitez Sanchez 1991). Drilling was completed transversely to the drainage pattern of the tailings. Cut at 1 m vertical increments, 461 samples were assayed for silver and gold at the mine assay lab and occasional moisture contents were reported. Assay results from these drillholes have been previously reported (Tetra Tech 2012). Although the Z-series trenches are included in Table 10.1 and Figure 10.1, they are not included in the oxide tailings resource estimate (Section 14.3) as they are not considered representative of the tailings at a local scale (see Section 9.2.1). During 2015 and 2016 further drilling was carried out on the oxide tailings.
  
 10.2 RECENT DRILLING (POST-MINE CLOSURE), 2001 TO PRESENT
  
 A total of 37 drillholes have been completed on the Avino Vein system and 101 holes 21,253 m San Gonzalo Vein system, totalling almost 34,100 m. Additional exploration holes have been drilled elsewhere on the Property, but those drilling results are not considered material. Most holes were surveyed downhole using a Tropari single-shot magnetic instrument.
  
  
  	 Avino Silver & Gold Mines Ltd.
	 10-1
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 10.2.1 AVINO VEIN
  
 Since 2016, 5,510 m (34 holes see Figure 10.1) were drilled in an infill program in the San Luis/Avino Vein system. In 2017, 1,478 m (7 holes, see Figure 10.1) were drilled in the Chirumbo section (eastern extension) of the Avino Vein. A total of 20,967 m (85 holes, see Table 10.1) of documented drilling has been used for Mineral Resource estimation on the Avino Vein system.
  
 10.2.2 SAN GONZALO VEIN
  
 A total of 22, 617 m (110 holes, see Table 10.4 of documented drilling has been used for Mineral Resource estimation on the San Gonzalo vein system.
  
 Figure 10.1 Drillholes Completed from 2016 to 2017 on the Avino-San Luis Infill and Chirumbo, Guadalupe and San Juventino Areas
 
10.2.3 SAN JUVENTINO AND GUADALUPE VEINS  
 During 2016 and 2017, exploration drilling was carried out on the San Juventino and Guadalupe veins (see Figure 10.2 and Table 10.5). These veins are strategically positioned next close to and between the ET and San Gonzalo mining operations. A total of 936 m (6 holes) of documented drilling has been drilled on the Guadalupe Vein. A total of 846 m (5 holes) of documented drilling has been drilled on the San Juventino Vein.
  
  
  	 Avino Silver & Gold Mines Ltd.
	 10-2
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 10.2 Location of Drillholes Completed from 2016 to 2017 on Drillholes Completed from 2016 to 2017 on the Guadalupe and San Juventino Veins
  
 Table 10.1 Drillholes Completed from 2007 to 2016 on the San Gonzalo Vein
  
  	 Hole ID
	 Azimuth
 (°)
	 Dip
 (°)
	 Easting
 (m)
	 Northing
 (m)
	 Elevation
 (m)
	 Depth
 (m)

	 SG-07-01
	 43
	 60
	 571713
	 2713982
	 2,297
	 386.8

	 SG-07-02
	 38
	 48
	 571714
	 2713983
	 2,297
	 323.7

	 SG-07-03
	 74
	 43
	 571714
	 2713981
	 2,297
	 315.0

	 SG-07-04
	 53
	 49
	 571651
	 2714059
	 2,276
	 312.7

	 SG-07-05
	 59
	 69
	 571650
	 2714058
	 2,276
	 137.0

	 SG-07-06
	 55
	 58
	 571650
	 2714058
	 2,276
	 387.2

	 SG-07-07
	 44
	 44
	 571578
	 2714117
	 2,281
	 281.6

	 SG-07-08
	 43
	 55
	 571578
	 2714116
	 2,281
	 383.7

	 SG-07-09
	 38
	 45
	 571677
	 2714137
	 2,277
	 106.6

	 SG-07-10
	 53
	 58
	 571677
	 2714136
	 2,277
	 162.9

	 SG-07-11
	 15
	 49
	 571676
	 2714135
	 2,277
	 158.6

	 SG-07-12
	 89
	 53
	 571678
	 2714133
	 2,277
	 175.5

	 SG-07-13
	 55
	 49
	 571770
	 2713993
	 2,315
	 160.6

	 SG-07-14
	 54
	 53
	 571716
	 2713972
	 2,297
	 295.2

	 SG-07-15
	 218
	 49
	 571689
	 2714268
	 2,296
	 96.2

	 SG-07-16
	 219
	 54
	 571552
	 2714354
	 2,285
	 99.9

	 SG-07-17
	 252
	 55
	 571428
	 2714421
	 2,268
	 69.8

	 SG-07-18
	 218
	 65
	 571765
	 2714318
	 2,293
	 238.1

	 table continues...

  
  
  	 Avino Silver & Gold Mines Ltd.
	 10-3
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

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

  	 SG-07-19
	 257
	 66
	 571763
	 2714320
	 2,293
	 344.9

	 SG-07-20
	 215
	 67
	 571650
	 2714345
	 2,281
	 247.4

	 SG-07-21
	 38
	 53
	 571713
	 2713979
	 2,297
	 295.0

	 SG-07-22
	 218
	 54
	 572007
	 2714128
	 2,343
	 232.5

	 SG-07-23
	 216
	 70
	 572007
	 2714128
	 2,343
	 303.5

	 SG-07-24
	 217
	 53
	 571969
	 2714077
	 2,351
	 124.4

	 SG-07-25
	 216
	 65
	 571969
	 2714078
	 2,351
	 190.5

	 SG-07-26
	 216
	 69
	 572033
	 2714172
	 2,337
	 395.4

	 SG-07-27
	 218
	 55
	 572078
	 2714077
	 2,345
	 237.8

	 SG-07-28
	 218
	 74
	 572078
	 2714078
	 2,345
	 319.5

	 SG-07-29
	 221
	 43
	 572033
	 2714010
	 2,356
	 103.6

	 SG-07-30
	 221
	 64
	 572034
	 2714010
	 2,356
	 158.4

	 SG-07-31
	 218
	 43
	 571954
	 2714056
	 2,352
	 104.8

	 SG-07-32
	 223
	 70
	 572122
	 2714135
	 2,330
	 408.0

	 SG-07-33
	 211
	 43
	 572069
	 2714009
	 2,353
	 130.6

	 SG-07-34
	 210
	 58
	 572069
	 2714010
	 2,353
	 183.1

	 SG-07-35
	 211
	 68
	 572069
	 2714010
	 2,353
	 272.2

	 SG-07-36
	 215
	 41
	 572050
	 2713959
	 2,358
	 102.2

	 SG-07-37
	 219
	 53
	 572115
	 2713975
	 2,351
	 154.4

	 SG-07-38
	 221
	 67
	 572115
	 2713975
	 2,351
	 214.2

	 SG-07-39
	 220
	 73
	 572120
	 2713898
	 2,353
	 128.1

	 SG-07-40
	 220
	 74
	 571899
	 2714211
	 2,321
	 516.1

	 SG-08-01
	 35
	 51
	 571776
	 2713974
	 2,314
	 210.1

	 SG-08-02
	 215
	 57
	 571964
	 2714167
	 2,335
	 269.1

	 SG-08-03
	 215
	 70
	 571964
	 2714168
	 2,335
	 332.0

	 SG-08-04
	 215
	 63
	 572029
	 2714121
	 2,343
	 270.0

	 SG-08-05
	 35
	 55
	 571701
	 2713893
	 2,285
	 475.3

	 SG-08-06
	 48
	 64
	 571679
	 2714137
	 2,277
	 226.4

	 SG-11-01
	 215
	 59
	 571981
	 2714009
	 2,357
	 101.0

	 SG-11-02
	 215
	 63
	 571995
	 2714030
	 2,355
	 141.2

	 SG-11-03
	 215
	 44
	 572020
	 2713994
	 2,357
	 98.5

	 SG-11-04
	 212
	 54
	 571969
	 2714079
	 2,351
	 176.5

	 SG-11-05
	 40
	 43
	 571892
	 2713832
	 2,317
	 151.4

	 SG-11-06
	 189
	 44
	 571732
	 2714379
	 2,274
	 122.3

	 SG-11-07
	 30
	 68
	 572030
	 2713946
	 2,358
	 74.0

	 SG-11-08
	 37
	 67
	 572043
	 2713888
	 2,360
	 125.4

	 SG-11-09
	 181
	 48
	 571585
	 2714366
	 2,278
	 71.1

	 SG-11-10
	 201
	 61
	 571240
	 2714538
	 2,235
	 78.4

	 SG-11-11
	 201
	 61
	 571329
	 2714397
	 2,274
	 92.0

	 SG-11-12
	 218
	 71
	 571811
	 2714288
	 2,305
	 312.2

	 SG-11-13
	 218
	 71
	 571847
	 2714258
	 2,310
	 345.4

	 SG-11-14
	 209
	 61
	 571939
	 2714214
	 2,326
	 330.5

	 table continues...

  
  
  	 Avino Silver & Gold Mines Ltd.
	 10-4
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

 	 
	 
	 
 
	 

  
  	  
	  

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

  	 SG-11-15
	 211
	 68
	 572030
	 2714172
	 2,337
	 363.5

	 SG-11-16
	 209
	 62
	 572092
	 2714173
	 2,331
	 334.3

	 SG-11-17
	 210
	 70
	 571836
	 2714336
	 2,306
	 383.1

	 SG-11-18
	 218
	 71
	 571765
	 2714321
	 2,293
	 318.2

	 SG-14-01
	 287
	 54
	 571858
	 2714156
	 2,086
	 156.6

	 SG-14-02
	 258
	 60
	 571858
	 2714155
	 2,086
	 120.1

	 SG-14-03
	 160
	 71
	 571861
	 2714153
	 2,086
	 173.0

	 SG-14-04
	 199
	 70
	 571688
	 2714270
	 2,296
	 120.0

	 SG-14-05
	 219
	 70
	 572157
	 2714044
	 2,330
	 346.8

	 SG-14-06
	 207
	 79
	 572158
	 2714044
	 2,331
	 411.0

	 SG-14-07
	 210
	 27
	 572284
	 2714059
	 2,297
	 248.3

	 SG-14-08
	 209
	 58
	 572285
	 2714061
	 2,298
	 336.0

	 SG-14-09
	 208
	 68
	 572285
	 2714061
	 2,297
	 401.8

	 SG-14-10
	 213
	 50
	 572293
	 2713911
	 2,300
	 235.3

	 SG-14-11
	 37
	 -2
	 571865
	 2714159
	 2,087
	 224.2

	 SG-14-12
	 286
	 52
	 571896
	 2714157
	 2,044
	 185.0

	 SG-14-13
	 209
	 62
	 571898
	 2714156
	 2,043
	 213.4

	 SG-14-14
	 208
	 33
	 572294
	 2713912
	 2,300
	 192.2

	 SG-14-15
	 210
	 72
	 572294
	 2713912
	 2,300
	 257.4

	 SG-15-01
	 237
	 40
	 571874
	 2714128
	 2,043
	 75.2

	 SG-15-02
	 187
	 42
	 571875
	 2714128
	 2,043
	 81.7

	 SG-15-03
	 148
	 30
	 571878
	 2714126
	 2,043
	 75.8

	 SG-15-04
	 280
	 43
	 571873
	 2714130
	 2,043
	 98.8

	 SG-15-05
	 163
	 52
	 571878
	 2714127
	 2,043
	 58.0

	 SG-15-06
	 242
	 73
	 571876
	 2714129
	 2,043
	 106.4

	 SG-15-07
	 258
	 0
	 572234
	 2713841
	 2,139
	 44.0

	 SG-15-08
	 13
	 0
	 572255
	 2713906
	 2,138
	 16.2

	 SG-15-09
	 215
	 36
	 572255
	 2713894
	 2,138
	 99.6

	 SG-15-10
	 260
	 32
	 572252
	 2713896
	 2,137
	 90.5

	 SG-15-11
	 204
	 71
	 571672
	 2714298
	 2,292
	 150.0

	 SG-15-12
	 192
	 83
	 571672
	 2714298
	 2,291
	 200.8

	 SG-15-13
	 240
	 0
	 572288
	 2713887
	 2,138
	 74.5

	 SG-15-14
	 216
	 58
	 571652
	 2714345
	 2,280
	 145.8

	 SG-15-15
	 216
	 76
	 571652
	 2714346
	 2,280
	 195.7

	 SG-15-16
	 90
	 0
	 572288
	 2713888
	 2,138
	 100.8

	 SG-15-17
	 226
	 68
	 571593
	 2714352
	 2,282
	 145.3

	 SG-15-18
	 215
	 30
	 572479
	 2713867
	 2,284
	 209.8

	 SG-15-19
	 214
	 52
	 572480
	 2713868
	 2,283
	 290.9

	 SG-15-20
	 210
	 52
	 572586
	 2713740
	 2,309
	 218.8

	 SG-15-21
	 212
	 20
	 572584
	 2713739
	 2,309
	 145.6

	 SG-15-22
	 218
	 71
	 572570
	 2713772
	 2,303
	 350.0

	 SG-15-23
	 213
	 59
	 572702
	 2713747
	 2,284
	 251.8

	 table continues...

  
  
  	 Avino Silver & Gold Mines Ltd.
	 10-5
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

 	 
	 
	 
 
	 

  
  	  
	  

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

  	 SG-15-24
	 215
	 28
	 572700
	 2713745
	 2,284
	 187.7

	 SG-16-01
	 250
	 68
	 571428
	 2714421
	 2,268
	 147.7

	 SG-16-02
	 250
	 77
	 571428
	 2714421
	 2,268
	 167.8

	 SG-16-03
	 208
	 51
	 571339
	 2714462
	 2,256
	 74.8

	 SG-16-04
	 193
	 79
	 571340
	 2714463
	 2,256
	 111.0

	 SG-16-05
	 190
	 75
	 571347
	 2714495
	 2,248
	 159.6

	 SG-16-06
	 215
	 69
	 571300
	 2714500
	 2,245
	 171.7

	 SG-16-07
	 215
	 54
	 571299
	 2714499
	 2,245
	 89.5

  
 Note: Datum NAD27 Mexico
  
 Table 10.2 Drillholes Completed from 2001 to 2017 at ET Mine (includes San Luis, Avino vein and Chirumbo
  
  	 Hole ID
	 Azimuth
 (°)
	 Dip
 (°)
	 Easting
 (m)
	 Northing
 (m)
	 Elevation
 (m)
	 Depth
 (m)

	 BDD-5-1
	 329
	 0
	 570712
	 2712933
	 2,242
	 53.3

	 BDVD1
	 38
	 55
	 570374
	 2712575
	 2,248
	 100.1

	 CH-06-03
	 331
	 51
	 571013
	 2712796
	 2,208
	 454.3

	 DDH-1-1950
	 340
	 45
	 570481
	 2712348
	 2,193
	 433.1

	 DDH-1-2200
	 359
	 45
	 570025
	 2712487
	 2,232
	 151.1

	 DDH-2-2075
	 340
	 45
	 570296
	 2712488
	 2,221
	 287.1

	 DDH-2-2200
	 0
	 50
	 570155
	 2712550
	 2,252
	 178.8

	 DDH-3-2200
	 0
	 50
	 570286
	 2712594
	 2,258
	 175.1

	 DDH-4-1950
	 340
	 70
	 570302
	 2712480
	 2,220
	 331.7

	 DDH-8-2200
	 0
	 45
	 569961
	 2712489
	 2,232
	 162.0

	 ET-06-01
	 337
	 55
	 570271
	 2712262
	 2,187
	 431.2

	 ET-06-02
	 340
	 50
	 570337
	 2712309
	 2,190
	 416.7

	 ET-06-03
	 339
	 48
	 570457
	 2712361
	 2,194
	 421.2

	 ET-06-04
	 340
	 50
	 570501
	 2712468
	 2,215
	 444.1

	 ET-07-01
	 1
	 70
	 570176
	 2712453
	 2,222
	 298.6

	 ET-07-02
	 358
	 75
	 570206
	 2712467
	 2,224
	 311.9

	 ET-07-03
	 336
	 71
	 570344
	 2712498
	 2,226
	 349.5

	 ET-07-04
	 331
	 56
	 570440
	 2712511
	 2,226
	 318.7

	 ET-07-05
	 333
	 66
	 570440
	 2712510
	 2,226
	 351.5

	 ET-07-06
	 336
	 55
	 570520
	 2712524
	 2,225
	 320.1

	 ET-07-07
	 330
	 57
	 570585
	 2712569
	 2,230
	 304.9

	 ET-07-08
	 346
	 69
	 570584
	 2712569
	 2,231
	 399.7

	 ET-07-09
	 336
	 62
	 570629
	 2712604
	 2,235
	 328.6

	 ET-07-10
	 338
	 62
	 570645
	 2712650
	 2,245
	 308.7

	 ET-07-11
	 337
	 69
	 570682
	 2712654
	 2,241
	 329.8

	 ET-07-12
	 337
	 48
	 570735
	 2712654
	 2,234
	 284.7

	 ET-08-01
	 329
	 45
	 570807
	 2712712
	 2,236
	 221.5

	 ET-08-02
	 330
	 55
	 570341
	 2712549
	 2,244
	 234.5

	 table continues...

  
  
  	 Avino Silver & Gold Mines Ltd.
	 10-6
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

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

  	 ET-08-03
	 330
	 65
	 570341
	 2712549
	 2,244
	 265.1

	 ET-08-04
	 336
	 65
	 570588
	 2712568
	 2,231
	 358.7

	 ET-08-05
	 336
	 67
	 570658
	 2712629
	 2,245
	 371.1

	 ET-08-06
	 336
	 60
	 570676
	 2712654
	 2,243
	 292.5

	 ET-08-07
	 336
	 60
	 570747
	 2712656
	 2,234
	 160.4

	 ET-08-08
	 336
	 45
	 570906
	 2712766
	 2,227
	 269.1

	 ET-12-01
	 336
	 63
	 570354
	 2712501
	 2,226
	 288.2

	 ET-12-02
	 337
	 53
	 570507
	 2712472
	 2,214
	 360.9

	 ET-12-03
	 336
	 59
	 570507
	 2712471
	 2,214
	 367.8

	 ET-12-04
	 339
	 64
	 570544
	 2712497
	 2,216
	 373.6

	 ET-12-05
	 336
	 62
	 570566
	 2712508
	 2,218
	 369.2

	 ET-12-06
	 334
	 70
	 570589
	 2712523
	 2,219
	 396.1

	 ET-12-07
	 334
	 63
	 570678
	 2712594
	 2,227
	 327.6

	 ET-12-08
	 333
	 71
	 570678
	 2712594
	 2,227
	 384.4

	 ET-12-09
	 329
	 72
	 570646
	 2712555
	 2,222
	 395.4

	 ET-16-01
	 338
	 21
	 570395
	 2712660
	 2,278
	 151.3

	 ET-16-02
	 336
	 44
	 570396
	 2712658
	 2,277
	 152.4

	 ET-16-03
	 338
	 47
	 570325
	 2712641
	 2,273
	 161.8

	 ET-16-04
	 340
	 45
	 570275
	 2712634
	 2,270
	 126.6

	 ET-16-05
	 339
	 42
	 570295
	 2712566
	 2,251
	 196.0

	 ET-16-06
	 6
	 74
	 570221
	 2712667
	 2,291
	 118.0

	 ET-16-07
	 320
	 73
	 570183
	 2712656
	 2,287
	 89.5

	 ET-16-08
	 337
	 47
	 570399
	 2712606
	 2,261
	 194.3

	 ET-16-09
	 337
	 49
	 570411
	 2712570
	 2,247
	 237.5

	 ET-16-10
	 9
	 21
	 570195
	 2712466
	 2,224
	 254.2

	 ET-16-11
	 2
	 44
	 570179
	 2712458
	 2,224
	 265.1

	 ET-16-12
	 359
	 63
	 570148
	 2712465
	 2,226
	 266.6

	 ET-17-01
	 360
	 62
	 569935
	 2712576
	 2,263
	 103.8

	 ET-17-02
	 358
	 55
	 569881
	 2712568
	 2,243
	 100.8

	 ET-17-03
	 360
	 34
	 569861
	 2712588
	 2,244
	 85.9

	 ET-17-04
	 251
	 90
	 569861
	 2712585
	 2,244
	 182.7

	 ET-17-05
	 321
	 89
	 569830
	 2712600
	 2,244
	 91.5

	 ET-17-06
	 338
	 48
	 570301
	 2712635
	 2,271
	 144.5

	 ET-17-07
	 337
	 29
	 570301
	 2712635
	 2,271
	 121.5

	 ET-17-08
	 336
	 54
	 570264
	 2712631
	 2,269
	 119.3

	 ET-17-09
	 337
	 31
	 570263
	 2712632
	 2,269
	 101.5

	 ET-17-10
	 339
	 23
	 570349
	 2712649
	 2,274
	 129.3

	 ET-17-11
	 336
	 24
	 570436
	 2712672
	 2,280
	 143.4

	 ET-17-12
	 348
	 60
	 570200
	 2712661
	 2,288
	 80.7

	 ET-17-13
	 349
	 29
	 570200
	 2712663
	 2,288
	 62.2

	 ET-17-14
	 339
	 31
	 570375
	 2712735
	 2,311
	 61.0

	 ET-17-15
	 341
	 19
	 570304
	 2712697
	 2,302
	 80.3

	 table continues...

  
  
  	 Avino Silver & Gold Mines Ltd.
	 10-7
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

 	 
	 
	 
 
	 

  
  	  
	  

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

  	 ET-17-16
	 1
	 21
	 570197
	 2712460
	 2,223
	 247.6

	 ET-17-17
	 358
	 53
	 570197
	 2712460
	 2,223
	 261.6

	 ET-17-18
	 355
	 38
	 570236
	 2712452
	 2,219
	 249.5

	 ET-17-19
	 356
	 52
	 570155
	 2712467
	 2,226
	 225.7

	 ET-17-20
	 336
	 51
	 570369
	 2712554
	 2,243
	 220.3

	 ET-17-21
	 336
	 59
	 570357
	 2712552
	 2,243
	 248.4

	 ET-17-22
	 357
	 9
	 570236
	 2712454
	 2,220
	 234.9

	 ET-17-23
	 345
	 50
	 570999
	 2712915
	 2,225
	 190.6

	 ET-17-24
	 337
	 45
	 570964
	 2712882
	 2,230
	 208.2

	 ET-17-25
	 339
	 38
	 570965
	 2712962
	 2,232
	 140.8

	 ET-17-26
	 338
	 38
	 570888
	 2712934
	 2,268
	 160.0

	 ET-17-27
	 341
	 46
	 570926
	 2712854
	 2,229
	 223.3

	 SELCO-2-1800
	 342
	 68
	 570435
	 2712337
	 2,194
	 575.2

	 SELCO-3
	 339
	 53
	 570357
	 2712451
	 2,217
	 325.7

	 SELCO-4A
	 350
	 60
	 570070
	 2712396
	 2,214
	 251.0

  
 Note: Datum NAD27 Mexico
  
 Table 10.3 Drillholes Completed from 2017 to 2018 at Guadalupe and San Juventino
  
 	 Hole ID
	 Azimuth
 (°)
	 Dip
 (°)
	 Easting
 (m)
	 Northing
 (m)
	 Elevation
 (m)
	 Depth
 (m)

	 GPE-17-01
	 208
	 51
	 571382
	 2713655
	 2,298
	 179.7

	 GPE-17-02
	 208.1
	 39
	 571489
	 2713624
	 2,291
	 179.7

	 GPE-17-03
	 208
	 44
	 571290
	 2713657
	 2,298
	 92.5

	 GPE-17-04
	 199
	 32
	 571554
	 2713639
	 2,292
	 193.2

	 GPE-17-05
	 181.5
	 56
	 571554
	 2713522
	 2,326
	 110.4

	 GPE-17-06
	 180
	 48
	 571708
	 2713531
	 2,341
	 180.8

	 SJV-17-01
	 19
	 41
	 571077
	 2713002
	 2,243
	 180.9

	 SJV-17-02
	 348
	 35
	 571038
	 2713020
	 2,251
	 140.9

	 SJV-17-03
	 19
	 35
	 571037
	 2713025
	 2,251
	 222

	 SJV-17-04
	 16
	 48
	 571091
	 2712908
	 2,221
	 190.2

	 SJV-17-05
	 337
	 35
	 571007
	 2712994
	 2,237
	 112.1

  
 Note: Datum NAD27 Mexico
  
 10.2.4 OXIDE TAILINGS
  
 During 2015 and 2016, Avino drilled 57 new holes on the oxide tailings deposit. Collar coordinates are provided in Table 10.4. Drillholes completed before 2015 on the oxide tailings have been previously reported (Tetra Tech 2013). A location map of oxide tailings drillholes is provided in Figure 10.3. The 2015/16 holes are indicated in red.
  
  
  	 Avino Silver & Gold Mines Ltd.
	 10-8
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Table 10.4 Drillholes Drilled on Oxide Tailings 2003-2016
  
  	 Hole ID
	 Azimuth
 (°)
	 Dip
 (°)
	 Easting
 (m)
	 Northing
 (m)
	 Elevation
 (m)
	 Depth
 (m)

	 A1
	 0
	 90
	 570205
	 2712340
	 2,203.8
	 5.2

	 A2
	 0
	 90
	 570184
	 2712306
	 2,203.5
	 7.2

	 A3
	 0
	 90
	 570192
	 2712267
	 2,203.1
	 8.2

	 A4
	 0
	 90
	 570167
	 2712236
	 2,203.0
	 9.2

	 A5
	 0
	 90
	 570175
	 2712197
	 2,202.9
	 15.2

	 A6
	 0
	 90
	 570152
	 2712167
	 2,202.0
	 18.2

	 A7
	 0
	 90
	 570159
	 2712128
	 2,201.0
	 16.2

	 A8
	 0
	 90
	 570150
	 2712094
	 2,200.4
	 8.2

	 B1
	 0
	 90
	 570132
	 2712365
	 2,217.1
	 10.2

	 B2
	 0
	 90
	 570114
	 2712318
	 2,216.7
	 19.2

	 B3
	 0
	 90
	 570101
	 2712268
	 2,216.4
	 26.6

	 B4
	 0
	 90
	 570079
	 2712207
	 2,216.1
	 23.7

	 B5
	 0
	 90
	 570082
	 2712140
	 2,214.3
	 18.2

	 C1
	 0
	 90
	 570085
	 2712383
	 2,217.6
	 8.7

	 C2
	 0
	 90
	 570077
	 2712354
	 2,217.1
	 15.2

	 C4
	 0
	 90
	 570049
	 2712250
	 2,216.1
	 24.2

	 C5
	 0
	 90
	 570028
	 2712164
	 2,216.0
	 14.2

	 C6
	 0
	 90
	 570017
	 2712117
	 2,216.4
	 10.2

	 D1
	 0
	 90
	 570029
	 2712373
	 2,217.6
	 13.2

	 D2
	 0
	 90
	 570018
	 2712329
	 2,216.7
	 19.2

	 D3
	 0
	 90
	 570003
	 2712273
	 2,217.6
	 19.7

	 D4
	 0
	 90
	 569962
	 2712167
	 2,215.9
	 6.2

	 E1
	 0
	 90
	 569977
	 2712369
	 2,216.5
	 13.2

	 E2
	 0
	 90
	 569960
	 2712311
	 2,216.1
	 18.7

	 E3
	 0
	 90
	 569952
	 2712267
	 2,215.8
	 12.2

	 F1
	 0
	 90
	 569936
	 2712401
	 2,216.4
	 18.7

	 F2
	 0
	 90
	 569926
	 2712364
	 2,216.1
	 16.2

	 F3
	 0
	 90
	 569915
	 2712324
	 2,215.8
	 15.2

	 PJ-15-01
	 0
	 90
	 570191
	 2712415
	 2,219.5
	 6.5

	 PJ-15-02
	 0
	 90
	 570183
	 2712386
	 2,219.2
	 12.4

	 PJ-15-03
	 0
	 90
	 570173
	 2712357
	 2,218.6
	 13.4

	 PJ-15-04
	 0
	 90
	 570168
	 2712327
	 2,217.7
	 18.9

	 PJ-15-05
	 0
	 90
	 570160
	 2712298
	 2,216.8
	 21.8

	 PJ-15-06
	 0
	 90
	 570153
	 2712269
	 2,216.4
	 8.3

	 PJ-15-06A
	 0
	 90
	 570155
	 2712277
	 2,216.5
	 26.8

	 PJ-15-07
	 0
	 90
	 570143
	 2712241
	 2,215.7
	 28.5

	 PJ-15-08
	 0
	 90
	 570128
	 2712212
	 2,219.5
	 28.0

	 PJ-15-09
	 0
	 90
	 570093
	 2712157
	 2,214.9
	 21.2

	 PJ-15-10
	 0
	 90
	 570101
	 2712184
	 2,215.2
	 27.0

	 PJ-15-11
	 0
	 90
	 570109
	 2712215
	 2,216.8
	 28.5

	 PJ-16-01
	 0
	 90
	 570116
	 2712245
	 2,216.7
	 27.9

	 table continues...

  
  
  	 Avino Silver & Gold Mines Ltd.
	 10-9
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

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

  	 PJ-16-02
	 0
	 90
	 570124
	 2712274
	 2,217.2
	 26.4

	 PJ-16-03
	 0
	 90
	 570132
	 2712305
	 2,217.4
	 23.0

	 PJ-16-04
	 0
	 90
	 570139
	 2712335
	 2,218.0
	 18.0

	 PJ-16-05
	 0
	 90
	 570135
	 2712371
	 2,218.5
	 12.0

	 PJ-16-06
	 0
	 90
	 570154
	 2712393
	 2,219.2
	 8.0

	 PJ-16-07
	 0
	 90
	 570156
	 2712422
	 2,220.3
	 3.9

	 PJ-16-08
	 0
	 90
	 570111
	 2712340
	 2,218.8
	 18.0

	 PJ-16-09
	 0
	 90
	 570099
	 2712313
	 2,217.8
	 22.9

	 PJ-16-10
	 0
	 90
	 570091
	 2712284
	 2,216.9
	 27.5

	 PJ-16-11
	 0
	 90
	 570083
	 2712255
	 2,216.6
	 23.0

	 PJ-16-12
	 0
	 90
	 570078
	 2712223
	 2,216.0
	 24.1

	 PJ-16-13
	 0
	 90
	 570066
	 2712197
	 2,216.0
	 24.0

	 PJ-16-14
	 0
	 90
	 570057
	 2712168
	 2,215.9
	 20.0

	 PJ-16-15
	 0
	 90
	 570057
	 2712138
	 2,215.1
	 14.5

	 PJ-16-16
	 0
	 90
	 570020
	 2712120
	 2,215.8
	 9.5

	 PJ-16-17
	 0
	 90
	 570028
	 2712145
	 2,216.0
	 14.0

	 PJ-16-18
	 0
	 90
	 570035
	 2712177
	 2,215.9
	 13.1

	 PJ-16-19
	 0
	 90
	 570042
	 2712206
	 2,216.0
	 21.0

	 PJ-16-20
	 0
	 90
	 570050
	 2712234
	 2,217.1
	 26.0

	 PJ-16-21
	 0
	 90
	 570056
	 2712261
	 2,217.5
	 24.5

	 PJ-16-22
	 0
	 90
	 570029
	 2712232
	 2,218.2
	 21.5

	 PJ-16-23
	 0
	 90
	 570014
	 2712210
	 2,217.7
	 20.0

	 PJ-16-24
	 ,0
	 90
	 569999
	 2712152
	 2,215.8
	 8.9

	 PJ-16-25
	 0
	 90
	 570004
	 2712125
	 2,216.2
	 8.4

	 PJ-16-26
	 0
	 90
	 570227
	 2712405
	 2,207.6
	 0.6

	 PJ-16-27
	 0
	 90
	 570219
	 2712377
	 2,206.3
	 0.5

	 PJ-16-27A
	 0
	 90
	 570218
	 2712373
	 2,206.0
	 0.7

	 PJ-16-28
	 0
	 90
	 570211
	 2712349
	 2,205.0
	 0.6

	 PJ-16-29
	 0
	 90
	 570188
	 2712322
	 2,205.5
	 7.9

	 PJ-16-30
	 0
	 90
	 570179
	 2712289
	 2,205.3
	 13.5

	 PJ-16-31
	 0
	 90
	 570173
	 2712261
	 2,205.8
	 16.0

	 PJ-16-32
	 0
	 90
	 570166
	 2712232
	 2,204.9
	 19.6

	 PJ-16-33
	 0
	 90
	 570159
	 2712206
	 2,204.5
	 17.0

	 PJ-16-34
	 0
	 90
	 570152
	 2712176
	 2,203.8
	 20.5

	 PJ-16-35
	 0
	 90
	 570141
	 2712147
	 2,202.9
	 13.7

	 PJ-16-36
	 0
	 90
	 570138
	 2712120
	 2,201.3
	 8.1

	 PJ-16-37
	 0
	 90
	 570130
	 2712090
	 2,200.6
	 4.3

	 PJ-16-38
	 0
	 90
	 570109
	 2712094
	 2,200.9
	 2.0

	 PJ-16-39
	 0
	 90
	 570116
	 2712122
	 2,201.7
	 6.0

	 PJ-16-40
	 0
	 90
	 570144
	 2712093
	 2,200.6
	 0.6

	 PJ-16-41
	 0
	 90
	 570049
	 2712386
	 2,245.9
	 28.5

	 PJ-16-42
	 0
	 90
	 570019
	 2712393
	 2,245.4
	 21.0

	 table continues...

  
  
  	 Avino Silver & Gold Mines Ltd.
	 10-10
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

 	 
	 
	 
 
	 

  
  	  
	  

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

  	 PJ-16-43
	 0
	 90
	 570061
	 2712412
	 2,245.5
	 20.0

	 PJ-16-44
	 0
	 90
	 570052
	 2712443
	 2,245.5
	 5.0

	 Z1
	 100
	 30
	 570206
	 2712408
	 2,203.7
	 9.0

	 Z2
	 100
	 30
	 570189
	 2712363
	 2,203.7
	 16.0

	 Z3
	 100
	 30
	 570185
	 2712313
	 2,203.7
	 13.0

	 Z4
	 100
	 30
	 570174
	 2712266
	 2,203.7
	 13.0

	 Z5
	 100
	 30
	 570162
	 2712219
	 2,203.7
	 13.0

	 Z6
	 100
	 30
	 570150
	 2712173
	 2,203.7
	 14.0

  
 Note: Datum NAD27 Mexico
  
 Figure 10.3 Location of Drillholes Completed from 2015 to 2016 on the Oxide Tailings
 
  
  	 Avino Silver & Gold Mines Ltd.
	 10-11
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 10.2.5 SPECIFIC GRAVITY RESULTS
  
 Bulk density samples were analyzed from all 2006-2012 drilling programs on both the Avino and San Gonzalo Veins. Analytical procedures are discussed in Section 11.7. Table 10.5 summarizes the results of these specific gravity measurements.
  
 Table 10.5 Avino and San Gonzalo Density Data Summary
  
 	 Domain
	 Number
	 Minimum
	 Maximum
	 Mean
	 Variance
	 Coefficient of 
 Variation

	 Avino Vein System

	 10 (Main)
	 40
	 2.53
	 3.00
	 2.71
	 0.02
	 0.05

	 20
	 42
	 2.43
	 2.90
	 2.68
	 0.01
	 0.03

	 wall rock
	 93
	 2.29
	 3.00
	 2.65
	 0.04
	 0.07

	 Combined
	 175
	 2.29
	 3.00
	 2.67
	 0.03
	 0.06

	 San Gonzalo Vein System

	 10
	 50
	 2.40
	 3.00
	 2.64
	 0.03
	 0.07

	 20
	 2
	 2.73
	 2.78
	 2.76
	 0.00
	 0.01

	 Wall Rock
	 41
	 2.40
	 3.00
	 2.69
	 0.02
	 0.05

	 Combined
	 93
	 2.40
	 3.00
	 2.67
	 0.03
	 0.06

   
  
  	 Avino Silver & Gold Mines Ltd.
	 10-12
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  
	  

  
  	11.0 SAMPLE PREPARATION, ANALYSIS AND SECURITY

  
 11.1 DRILLING AND TRENCHING OF OXIDE TAILINGS, 1990 TO 1991
  
 The oxide tailings were sampled prior to institution of NI 43-101 and associated quality assurance (QA)/quality control (QC) requirements, and as such no QA/QC measures were utilized during the 1990-1991 program. As a result, the resource estimate for the oxide tailings in Section 14.3 is all classified as Inferred. Twenty-eight holes were drilled and six trenches completed, from which a total of 461 samples were collecting for assaying. The analyses were completed in the on-site laboratory, which is described in Section 11.7 and was visited during the site visit, as summarized in Section 12.4.
  
 Avino’s current on-site, non-certified, laboratory facility consists of sample preparation, crushing and pulverizing, a fire assay and an atomic absorption (AA) section. However, the procedures and facilities used in 1990 to 1991 may be different from the current sample analysis procedures. Because of the uncertainty associated with these analyses, two separate verification exercises have been completed. Slim (2005d) collected several samples from the oxide tailings, and the results of this verification are discussed in Section 11.2. In 2012, Mr. M.F. O’Brien, QP, collected numerous verification samples from the oxide tailings, and these results are discussed in Section 12.3.2.
  
 11.2 TAILINGS INVESTIGATIONS (TEST PITS IN OXIDE TAILINGS), 2004
  
 The sampling method and approach adopted by Slim (2005d) on the test pits in the oxide tailings incorporated the following steps:
  
  	  
	1.	A backhoe was used to excavate sample pits to a depth of 4 m. Hand samples were taken at 1 m vertical increments from the sidewalls of each pit.
	  
	  
	  

	  
	2.	The sample mass collected from each sampling point generally amounted to between 2 and 5 kg.
	  
	  
	  

	  
	3.	The sampling program was ostensibly based on the 1990 CMMA sampling program. Fourteen sample pits were excavated to a depth of 4 m and generated 86 samples.

  
 The samples were air-freighted to PRA labs in Vancouver, British Columbia, from Durango, Mexico. The samples had been initially bagged and sealed with identification tags attached. The samples were allotted new identification numbers, and were subsequently un-bagged and dried. The dry samples were individually mixed and blended, and then split into four one-quarter fractions as directed by Slim (2005d). One fraction was used to determine the head grade assay, while another quarter was used to create composite samples used for the subsequent metallurgical test work program. Instructions were followed with the compositing of the samples, and the test work program. 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 11-1
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Excess sample was archived for future test work or analyses. For analytical techniques employed during the test work program, the standard fire assay (with AA spectrophotometric finish) was initially used for the silver analyses.
  
 However, this method is not very accurate for silver values of less than 100 g/t. Subsequently, the inductively coupled plasma spectroscopy method (ICP-MS), which uses multi-acid digestion, was used for silver. This method also resulted in analyses being obtained for other elements of interest (e.g. copper, zinc, lead, etc.). The standard fire assay method was used for gold analyses. Cyanide and lime concentrations were measured using standard titrimetric methods. Total sulphur was measured using a standard Leco furnace, and sulphide sulphur assays were measured using the standard wet chemical gravimetric analysis (Slim 2005d).
  
 The PRA labs (part of Inspectorate labs) in Nevada and British Columbia are International Organization for Standardization (ISO) 9001:2008 certified, full service laboratories that are independent of Avino. ARANZ Geo did not independently verify nor compare the results of the sampling program.
  
 11.3 DRILLING PROGRAM, SAN GONZALO, 2007 TO PRESENT
  
 For the drilling programs at San Gonzalo, core is sawed at Avino's core storage facility at the secure mine site. Samples of vein material, usually from a few centimeters to 1.5 m, are placed and sealed in plastic bags, which are collected by personnel from Inspectorate Labs in Durango at the mine site facilities. Samples are prepared in Durango, and pulps are sent to the Inspectorate facility in Sparks, Nevada for analysis. Since 2016, all drill core samples have been sent to SGS Durango for sample preparation and assaying. Switch was made for faster turnaround times.
  
 Sample preparation in Durango involves the initial drying of the entire sample. Two-stage crushing is used to create a product which is at least 80% minus 10 mesh. A Jones riffle splitter is then used to separate a nominal 300 g portion of the sample. This 300 g sub-sample is then pulverized to more than 90% passing a 150-mesh screen. Inspectorate Labs states that they use sterile sand to clean the pulverizer between samples (Gunning 2009).
  
 Gold analyses are by 30 g fire assay with an AA finish. silver, zinc, and lead are analyzed as part of a multi-element inductively coupled argon plasma package using a four-acid digestion with over-limit results for silver being reanalyzed with assay procedures using fire assay and gravimetric. Avino employs a rigorous quality control program that includes standardized material, blanks, and core duplicates. However, for the 2007 program, Avino did not perform any independent QA/QC and relied on the internal QA/QC procedures completed by the labs (Gunning 2009). 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 11-2
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Inspectorate Labs in Nevada and British Columbia are ISO 9001:2008 certified, full service laboratories that are independent of Avino.
  
 Avino used a series of standard reference materials (SRMs), blank reference materials (blanks) and duplicates as part of their QA/QC program during analysis of assays from San Gonzalo Vein drillholes. ARANZ Geo compiled and reviewed these results in Section 12.1.4.
  
 11.4 DRILLING PROGRAMS, ET ZONE OF THE AVINO VEIN, 2006 TO PRESENT
  
 Sample lengths of NQ drill core were diamond sawed into halves by mine staff and shipped to Inspectorate Labs in Durango for preparation into pulps and rejects. Pulps were analyzed at Inspectorate Labs in Sparks, Nevada. Gold and silver were analyzed by fire assay using aqua regia leach and AA finish. Other elements are reported from a 29-element ICP-MS package. Inspectorate Labs in Nevada and British Columbia are ISO 9001:2008 certified, full service laboratories that are independent of Avino. Sample preparation and analysis and QA/QC procedures are as described in Section 11.3.
  
 Avino used a series of certified reference materials (CRMs), blank reference materials (blanks) and duplicates as part of their QA/QC program during analysis of assays from Avino Vein drillholes. ARANZ Geo compiled and reviewed these results in Section 12.1.4.
  
 11.5 UNDERGROUND CHANNEL SAMPLING OF SAN GONZALO VEIN, 2010 TO PRESENT
  
 Samples from channels cut across the San Gonzalo Vein were assayed by Inspectorate Labs. Samples were crushed and ground in Durango with pulps assayed in Richmond, British Columbia using fire assay and AA finish for gold, four acid digestion and AA for most silver with fire assay and gravimetric finish for very high silver. Base metals were analyzed via aqua regia digestion and ICP-MS. Inspectorate Labs in Durango and British Columbia are ISO 9001:2008 certified, full service laboratories that are independent of Avino. Sample preparation and analysis and QA/QC procedures are as described in Section 11.3.
  
 For the 2011 bulk sampling program of San Gonzalo, samples were obtained from channels cut across the vein, and were assayed by Inspectorate Labs. Samples were crushed and ground in Durango with pulps assayed in Richmond, British Columbia using fire assay and AA finish for gold, four acid digestion and AA for most silver with fire assay and gravimetric finish for very high silver. Base metals were analyzed via aqua regia digestion and ICP-MS for base metals. Inspectorate Labs in Nevada and British Columbia are ISO 9001:2008 certified, full service laboratories that are independent of Avino.
  
 Samples from 2012 and 2013 underground channel sampling of the San Gonzalo Vein are shipped to Inspectorate Labs for analysis for gold, silver, arsenic, bismuth, copper, molybdenum, lead, antimony, zinc, and mercury. Samples are crushed and ground in Durango with pulps assayed in Reno, Nevada using fire assay and AA finish for gold, four acid digestion and AA for most silver with fire assay and gravimetric finish for very high silver, and aqua regia digestion and ICP-MS for base metals. Inspectorate Labs in Nevada and British Columbia are ISO 9001:2008 certified, full service laboratories that are independent of Avino. Sample QA/QC procedures are as described in Section 11.3. 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 11-3
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

   
 11.6 AVINO LABORATORY
  
 The Avino laboratory has fire assay, AA and sieving analysis equipment and has been recently upgraded with new AA equipment. A high standard of neatness and cleanliness is being maintained to reduce the risk of contamination. The laboratory was reviewed by Mr. O’Brien during site visits in 2012 and 2016.
  
 11.7 SPECIFIC GRAVITY SAMPLES
  
 Avino completed specific gravity measurements on drillcore from both the Avino and San Gonzalo Veins. All measurements were completed by Avino staff on the mine site. Two different methods were employed to obtain these specific gravity values: caliper volume calculation (CV) and water displacement (WD). The procedures followed for each method are summarized in the following sections.
  
 A total of 262 samples were measured for bulk density, 110 from the Avino Vein and 152 from the San Gonzalo Vein. ARANZ Geo provides recommendations regarding specific gravity sampling procedures in Section 26.1.4 and a QP opinion in Section 12.5.1.
  
 11.7.1 CALIPER VOLUME CALCULATION METHOD
  
 The CV method of determining the specific gravity of drillcore samples involved the following procedures, based on the methodology outlined by Lipton (2001):
  
 	  
	·	Each measurement involves pieces of whole core with the ends neatly cut perpendicular to the core axis.
	  
	  
	  

	  
	·	The core diameter is determined using a pair of vernier calipers, and the diameter should be measured at several points along the length of core and averaged.
	  
	  
	  

	  
	·	The core length is measured using a tape measure.
	  
	  
	  

	  
	·	The mass is determined by weighing the core; weighing should be completed once the core is dried.
	  
	  
	  

	  
	·	The dry bulk density is calculated by: density = mass/volume where volume = Pi x (average core diameter/2)2 x core length.

   	  

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	 11-4
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 11.7.2 WATER DISPLACEMENT METHOD
  
 The WD method of determining the specific gravity of drill core samples involved the following procedures, based on Archimedes’ Principle:
  
 	  
	·	The mass is determined by weighing the core; weighing should be completed once the core is dried.
	  
	  
	  

	  
	·	A graduated cylinder, of an appropriate size to completely submerse the core, is used to determine the volume. The volume of water in the graduated cylinder is measured prior to submersing the core.
	  
	  
	  

	  
	·	The core is then submersed in water in the graduated cylinder and the total volume is measured.
	  
	  
	  

	  
	·	The difference in the volume of water before and after sample submersion is the volume of the sample.
	  
	  
	  

	  
	·	The dry bulk density = mass/volume.

  
 11.8 QP OPINION
  
 ARANZ Geo is not aware of any drilling, sampling or recovery factors affecting the reliability of the samples. It is ARANZ Geo’s opinion that the sample preparation, security and analytical procedures followed by Avino are fit for the purpose of this Technical Report. 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 11-5
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
  	12.0 DATA VERIFICATION

  
 12.1 AVINO AND SAN GONZALO VEIN DRILLHOLE DATABASE VERIFICATION
  
 ARANZ Geo compiled the drillhole data provided by Avino on a hole-by-hole basis, including drillhole collar, survey, lithology, and assay data.
  
 During the site visit in June 2016, ARANZ Geo selected the following drillholes for verification in the core shack: ET-06-02, ET-07-01, ET-07-03, SG-15-03 and SG-14-02. Logging and cores showed good correspondence with no significant differences.
  
 Collars for exploration drillholes are marked by concrete monuments and the collars have been surveyed. Subsequent collars have been similarly marked and were observed during a site visit in June 2016.
  
 A check of the coordinates with a handheld global positioning system (GPS) during a site visit in 2016 revealed a possible 4 m constant error, which may indicate the existence of a small surveying error on the Property.
  
 The QP opinion of the reliability of the Avino drillhole data is discussed in Section 12.5.1 and detailed recommendations are provided in Section 26.1.
  
 12.1.1 COLLAR AND ASSAY DATA
  
 Table 12.1 summarizes the database validation results. The Avino Vein lithology data for the older drillholes and upper portion of the mine, is very sparse owing to the age of the records. The upper part of the deposit model has consequently been modelled using assay data and development mapping information. As the deficient lithology information pertains mainly to parts of the deposit that have been mined out, ARANZ Geo does not consider it to be a material deficiency. 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 12-1
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	 Amended Mineral Resource Estimate Update for the 
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 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Table 12.1 Number of Records and Discrepancies for the Avino Drillhole Data 
  	   
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Avino Vein
	  
	 Number of
Records	  
	  
	 Discrepancies
	  
	  
	 Discrepancy Rate
(%)	  

	 Avino Vein
	  

	 Survey Data
	  
	  
	3,330	  
	  
	  
	-	  
	  
	  
	2.2	  

	 No Surveys for Collar
	  
	  
	  
	  
	  
	  
	2	  
	  
	  
	  
	  

	 Duplicate Collar and Surveys
	  
	  
	  
	  
	  
	  
	3	  
	  
	  
	  
	  

	 Duplicate Survey Depths
	  
	  
	  
	  
	  
	  
	67	  
	  
	  
	  
	  

	 Assays
	  
	  
	16,906	  
	  
	  
	  
	  
	  
	  
	0.3	  

	 No Sample for Collars
	  
	  
	  
	  
	  
	  
	24	  
	  
	  
	  
	  

	 Overlapping Segments
	  
	  
	  
	  
	  
	  
	8	  
	  
	  
	  
	  

	 Collar Max Depth Exceeded
	  
	  
	  
	  
	  
	  
	15	  
	  
	  
	  
	  

	 Lithology
	  
	  
	4,059	  
	  
	  
	  
	  
	  
	  
	54.2	  

	 From to Depth Overelap
	  
	  
	  
	  
	  
	  
	280	  
	  
	  
	  
	  

	 No Samples for Collar
	  
	  
	  
	  
	  
	  
	1,916	  
	  
	  
	  
	  

	 Collar Max Depth Exceeded
	  
	  
	  
	  
	  
	  
	2	  
	  
	  
	  
	  

	 San Gonzalo Vein

	 Survey Data
	  
	  
	3,506	  
	  
	  
	  
	  
	  
	  
	0.1	  

	 No Survey for Collar
	  
	  
	  
	  
	  
	  
	1	  
	  
	  
	  
	  

	 Duplicate Collar and Surveys
	  
	  
	  
	  
	  
	  
	0	  
	  
	  
	  
	  

	 Duplicate Survey Depths
	  
	  
	  
	  
	  
	  
	0	  
	  
	  
	  
	  

	 Incomplete Survey Data
	  
	  
	  
	  
	  
	  
	2	  
	  
	  
	  
	  

	 Assays
	  
	  
	16,077	  
	  
	  
	  
	  
	  
	  
	0.2	  

	 No Samples for Collars
	  
	  
	  
	  
	  
	  
	23	  
	  
	  
	  
	  

	 Overlapping Segments
	  
	  
	  
	  
	  
	  
	8	  
	  
	  
	  
	  

	 Collar Max Depth Exceeded
	  
	  
	  
	  
	  
	  
	6	  
	  
	  
	  
	  

	 Lithology
	  
	  
	15,043	  
	  
	  
	  
	  
	  
	  
	0.3	  

	 From to Depth Overlap
	  
	  
	  
	  
	  
	  
	0	  
	  
	  
	  
	  

	 No Samples for Collar
	  
	  
	  
	  
	  
	  
	52	  
	  
	  
	  
	  

	 Collar Max Depth Exceeded
	  
	  
	  
	  
	  
	  
	0	  
	  
	  
	  
	  

  
 A previous validation exercise was completed for assay results from post-2009 drilling by Tetra Tech (2012). Original assay certificates were compared against the data as reported by Avino. Assay results from drillholes SG-11-13 to SG-11-17, and ET-12-01 to ET-12-09 were verified. For all metals in the database (gold, silver, copper, lead, zinc, and bismuth), the error incidence was less than 1%. 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 12-2
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 12.1.2 DOWNHOLE SURVEY DATA
  
 Downhole survey data exists for 87 of the 98 drillholes completed in the Avino and San Gonzalo Veins. Most drillholes have three or fewer downhole survey points, which is less frequent than typical industry practice. Many of these holes contain a survey data point at the collar and near the end of hole, and sometimes part-way down the hole. However, 26 of the 87 holes for which downhole survey data exists were not surveyed to within 10 m of the end of the hole. All measurements were completed by a magnetic survey method, which is not recommended in general, and particularly not in locations with extensive underground infrastructure such as those present on the Property. Given the abundance of historical infrastructure on the Property and the potential for any drillholes to intersect active workings, downhole survey measurements should be collected at a frequency of at least every 10 m and all drillholes should be cemented following completion.
  
 Downhole survey data for hole SG-07-06 was disregarded below 50 m depth due to an unrealistic kink in the drillhole orientation below this depth, which could be due to an instrument malfunction or to magnetic interference.
  
 12.1.3 GEOLOGY DATA AND INTERPRETATION
  
 ARANZ Geo has the following observations on the Avino geology database and interpretation:
  
 To ARANZ Geo knowledge, routine photography of drillcore and underground drifts is being completed. A digital photographic record is kept of all drillcore and underground drifts for future reference, and to facilitate consistent core logging and geology interpretation.
  
 12.1.4 REVIEW OF DRILLHOLE QUALITY ASSURANCE/QUALITY CONTROL SAMPLES
  
 QA/QC samples were submitted in the sample stream during all 2006 to 2012 drilling programs on both the Avino and San Gonzalo veins, although not in a consistent manner. These results were reviewed in detail by Tetra Tech and were discussed in Tetra Tech’s 2013 report. Avino used a number of SRMs, blank reference materials (blanks) and duplicates as part of their 2015/2016 QA/QC program.
  
 STANDARDS FOR OXIDE TAILINGS CAMPAIGN 2015-2016
  
 Three standards were analyzed during 2015-2016 oxide tailings drilling campaign. Three laboratory-certified standards (see Table 12-2) were used and the silver and gold results are discussed below.
  
 The standards were submitted at a rate of 10% (total of 561 samples) which is higher than the industry norm of 5%. They were submitted to both Inspectorate and SGS Laboratories. 
  
 The three standards appear to have been determined within the limits in most of cases, but standard CDN-ME-1305 showed some anomalies for silver, notably one high grade return above the upper limit and a run of four over the upper limit returns for the Inspectorate results. This is a high-grade silver sample, so it may be that the standard was not well mixed and is showing some nugget behaviour.  
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 12-3
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Standards for Exploration Drilling 2016-2017
  
 During the period March 2016 to February 2018, 5,912 samples were submitted for assay, 5,462 to SGS Durango and 450 to Inspectorate America Corporation. Totals of 628 standard samples, 181 blanks and 138 duplicates were submitted. Thus, a relative submission rate of 10.6% standard reference materials, 3.1% blanks and 2.3% duplicate samples was maintained during the period. This is within industry norms.
  
 Nine different reference standards, bracketing the expected ranges of grades for gold, silver and copper, were analyzed during the 2016-2017 period drilling campaigns for Avino-ET, San Gonzalo, Guadalupe and San Juventino. The silver, gold and copper results are discussed below.
  
 Table 12.2 Standards Specification and Performance
   
 
  
  	  

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	 Amended Mineral Resource Estimate Update for the 
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 The standards performances are colour-coded in the two right hand columns of Table 12.1. Shades of red indicate relatively high percentage of assay returns recorded outside the two and three standard deviation confidence limits, while shades of green reflect low percentage of assays falling outside the limits. The pattern of performance for all three metals is similar for each of the standards. CDN-ME-1307 is the worst performer for gold, silver and copper. 
  
 Performance graphs showing the results for CDN-ME-1307 are shown as an example of a poorly performing standard in Figure 12.1 through Figure 12.3 for gold, silver and copper respectively. In the following graphs, good performance is indicated by consistent appearance of the assays within the red lines (representing three standard deviations from the mean of the material) and the brown lines (representing two standard deviations from the mean of the material). Poor performance is indicated by assays falling outside the confidence limits.
  
 Figure 12.1 Standard 1307_ME-1307 – Gold Performance
  
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
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	 Amended Mineral Resource Estimate Update for the 
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 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 12.2 Standard CDN-ME-1307 – Silver Performance
  
 
  
 Figure 12.3 Standard CDN-ME-1307 – Copper Performance
  
 
  
  	  

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	 Amended Mineral Resource Estimate Update for the 
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 Standard CDN-ME-1307 has produced quite erratic results for all three metals. This standard was not employed for a period of six months, between May and November, 2016. Standard materials can become less homogenous and thus less amenable to act as a standard material, if they allowed to remain in place for a long period of time, particularly if they are subjected to low frequency consistent vibration. This may occur on a mine site with heavy equipment or a laboratory crushing equipment in frequent prolonged use. This is one possibility for the pattern of assay results. It is best to keep consistently using a standard material unit lit is used up as it may deteriorate, through physical segregation of light and heavy particles and also possibly undergo chemical changes that can affect assay performance. 
  
 Performance graphs showing the results for CDN-ME-1414 are shown as an example of a well performing standard in Figure 12.4 through Figure 12.6 for gold, silver and copper respectively. 
  
 Figure 12.4 Standard CDN-ME-1414 – Gold Performance
  
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 12-7
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	 Amended Mineral Resource Estimate Update for the 
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 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 12.5 Standard CDN-ME-1414 – Silver Performance
  
 
  
 Figure 12.6 Standard CDN-ME-1414 – Copper Performance
  
 
  
 CDN-ME-1414 displays consistent results and was frequently used during the period July 2017 to March 2018.
  
  	  

	 Avino Silver & Gold Mines Ltd.
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 BLANKS
  
 Blank performance is shown in Figure 12.7, Figure 12.8 and Figure 12.9, for gold, silver and copper, respectively. All three graphs cover the period May 2016 to March 2018. Clusters of anomalous grades are present for all three metals, from November 2016 to March 2017 and may represent laboratory contamination that could be due to:
  
  	  
	·	consignments of high volumes of samples or
	  
	  
	  

	  
	·	high grade material from another operation or
	  
	  
	  

	  
	·	end of year staff turnover.

 
 In any case, these sporadic incidents of blank failure are relatively few and contamination does not appear to be significant. Nevertheless, Avino should continue to monitor blanks and inform external laboratories if failures occur in clusters.
  
 Figure 12.7 Blank – Gold Performance
  
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 12-9
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 12.8 Blank – Silver Performance
 
 
  
 Figure 12.9 Blank – Copper Performance
 
 
  
 DUPLICATE ASSAYS
  
 Duplicate results for gold silver and copper are summarized in Figure 12.10 to Figure 12.15. Scatterplots (Figure 12.10, Figure 12.12, and Figure 12.14) show good correspondence across the spectrum of assay values. Power fit curves have been generated to show the relationships telescoped across the logarithmic axes.
  
 Half Absolute Relative Difference (HARD) Charts are useful for assessing the precision of a set of duplicates and are shown in Figure 12.11, Figure 12.13, and Figure 12.15, for gold, silver and copper, respectively. In all three cases the plots do not pass through the nominal target of 90th percentile passing 20% half absolute relative difference for pulp duplicates.  
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 12-10
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 This could be due to:
  
 	  
	·	retaining low-grade data close to detection limit level data (high variability)
	  
	  
	  

	  
	·	too small as sample, or
	  
	  
	  

	  
	·	insufficient crushing before splitting, or
	  
	  
	  

	  
	·	insufficient pulverising before splitting

  
 ARANZ Geo recommends that some experiments be carried out to improve assay precision.
  
 Figure 12.10 Gold – Duplicate Correlation
  
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 12-11
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 12.11 Gold – Half Absolute Relative Difference Chart
  
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 12-12
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 12.12 Silver – Duplicate Correlation
  
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 12-13
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 12.13 Silver – Half Absolute Relative Difference Chart
  
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 12-14
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 12.14 Copper – Duplicate Correlation
  
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 12-15
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 12.15 Copper – Half Absolute Relative Difference Chart
 
 
  
 The correlation graphs for the three metals (Figure 12.10, Figure 12.12, and Figure 12.14) show no significant bias between originals and repeats. 
  
 12.2 BULK DENSITY
  
 12.2.1 AVINO AND SAN GONZALO VEIN BULK DENSITY
  
 A limited number of specific gravity measurements were originally collected by Avino from drillholes in the Avino and San Gonzalo Veins. These measurements were not representative of the veins spatially or by drilling program, and Tetra Tech (2012) requested additional specific gravity measurements be completed on drillcore from both veins. These additional measurements were completed by Avino in 2013. Review of these measurements (see Section 14.6) suggests that they are a limited basis for spatial estimation. Consequently, the long-term historic production average value of 2.63 has been assigned as a density factor to the Avino and San Gonzalo Mineral Resources disclosed in Section 14.0.
  
 A QP opinion of the reliability of the Avino specific gravity data is discussed in Section 12.5.1. 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 12-16
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 12.3 OXIDE TAILINGS DRILLHOLE DATABASE
  
 Tetra Tech (2012) compiled the assay data used in the oxide tailings resource estimate by referring to original mine sections and verification of this data is described below. The 1:1,000 scale plans drafted for this exercise were scanned and used to verify the positions of the old drillholes. One transposition error on a collar elevation in mine coordinates was observed and subsequently corrected (drillhole E3 was incorrectly recorded at an elevation of 2,275 m, and was corrected to 2,257 m).
  
 Avino provided the following formulae to convert the collar coordinate data from local mine grid coordinates to Universal Transverse Mercator (UTM) coordinates:
  
 	  
	·	local mine grid X + 560421.245 = X UTM
	  
	  
	  

	  
	·	local mine grid Y + 2707618.312 = Y UTM
	  
	  
	  

	  
	·	local elevation - 41.306 = elevation amsl.

  
 Since the trenches (named with Z-series) from the 1990 to 1991 program represent incomplete surface sampling of an unrepresentative part of the pile (at the wall where the outlets for the hydraulic emplacement of the material were sited), these data were not used in the oxide tailings resource estimate.
  
 12.3.1 ASSAY VERIFICATION OF 1990/1991 DRILLHOLES IN OXIDE TAILINGS
  
 Tetra Tech (2013) verified 54% of drillholes in this database (15 of 28 drillholes) and 58% of both silver and gold assays (444 of 766 values) used for this estimation. QG Consulting verified the oxide tailings data in 2016 and ARANZ Geo reviewed the work again in 2017 and is not aware of any significant errors.
  
 The QP opinion of the reliability of the 1990 to 1991 oxide tailings assays is discussed in Section 12.5.2.
  
 12.3.2 OXIDE TAILINGS VERIFICATION SAMPLES
  
 As was reported by Tetra Tech (2013), during a previous site visit conducted on June 7 and 8, 2012, Michael F. O’Brien visited the tailings heaps and supervised the collection of eight samples from the oxide tailings (3 to 4 kg each). The samples were collected from gulleys that had eroded into the tailings pile and provided a vertical section through the tailings. It is believed that while such samples cannot provide a statistically representative reflection of overall grade, they do provide some insight into the grade of the tailings near surface. The eight samples were each split into three separate sub-samples, which were submitted in turn to the Avino Mine laboratory together with SGS laboratories in Durango and Vancouver.
  
 Statistical analysis of the three sets of results demonstrated that there is good correlation between the three laboratories and this conclusion remains valid.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 12-17
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 The sampling exercise in 2012 provided the opportunity to review the artificial sedimentary deposit that comprises the Avino oxide tailings and supported the previous assumptions of the tailings, such as regarding the oxide tailings as two superimposed units with slightly different chemical and particle size characteristics and pronounced horizontal continuity. The source data and plans prepared more than 20 years ago after the initial drilling campaign, were examined at the mine and found to be of professional standard and provide support for their use in the estimation of the oxide tailings. The overall homogeneity of the material, horizontal continuity and relatively high confidence in the volume and tonnage, mitigate any uncertainty in the historical data set. The pattern of sample grades (see Figure 14.6) from the 2015/2016 drill campaigns the earlier drilling form a coherent pattern with no obvious discontinuity between campaigns.
  
 12.4 SITE VISIT
  
 Michael F. O’Brien conducted site visits on June 7 and 8, 2012, June 6 and 7, 2016, and June 12 to 15, 2017. During the latest visit, Mr. O’Brien visited Avino and San Gonzalo underground mines to review the Avino and San Gonzalo Vein systems. The surface drill sites and exposure to the Guadalupe Vein were examined.
  
 12.5 ARANZ GEO CONCLUSIONS AND OPINION
  
 The drill dataset has been produced over a long period of time within a brownfield property. All data used for this study is obtained from work carried out by staff of the current issuer, which has owned the Property continuously since the start of this work.
  
 12.5.1 AVINO AND SAN GONZALO VEINS
  
 DRILLHOLE DATABASE
  
 A single, compiled database containing all relevant drilling information does not exist for the Property. A variety of partially-compiled data sources were provided to ARANZ Geo.
  
 DOWNHOLE SURVEY DATA
  
 Downhole survey data and the location of the Avino and San Gonzalo Vein intersections observed in drillholes has been verified by both surface and underground mapping, providing confidence in the location, orientation, and true width of both veins.
  
 GEOLOGY DATA AND INTERPRETATION
  
 The legacy data from the Avino Vein is understandably deficient in recorded lithology data. Modelling of the Avino Vein and San Gonzalo Vein Systems made use of grade as well as lithology data. Consequently, ARANZ Geo regards the lithology database adequate and fit for purposes of resource estimation. The recent mining history provides comfort that the potentially economic units persistently demonstrate continuity as new exposures become available.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 12-18
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 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 SPECIFIC GRAVITY SAMPLES
  
 Based on a review of specific gravity data from drillholes in the Avino and San Gonzalo veins, ARANZ Geo concludes that future bulk density measurements should be completed using a water displacement method. A comparison of the two measurement techniques used for these specific gravity samples indicates that the results are acceptable for this study. However, ARANZ Geo considers that the current level of data is inadequate for meaningful spatial estimation and recommends that the frequency at which specific gravity measurements are collected should be increased. To supplement the specific gravity data generated from drillhole samples, ARANZ Geo recommends that large grab samples be obtained from the underground development at approximately 30 m intervals and subjected to the water displacement method of specific gravity determination.
  
 QA/QC SAMPLES
  
 The rate of QA/QC standard reference materials, blanks and duplicates insertions meets recommended industry standards. HARD charts indicate less assay precision than would be expected for pulp duplicates. 
  
 ARANZ Geo has found no evidence of systematic laboratory bias, indicating that the assay results are reliable but ARANZ Geo recommends that some experiments be carried out to improve assay precision.
  
 12.5.2 OXIDE TAILINGS
  
 The identified grade pattern is similar in character to other tailings deposits, such as overall homogeneity and a pronounced horizontal continuity.
  
 Verification samples taken by Mr. O’Brien have confirmed the presence of gold and silver mineralization at grades similar to those obtained in the original tailings drilling campaign, with a low silver bias consistent with the superficial position of the samples in the zone most likely to have suffered surface leaching. The verification samples also confirm that the mine lab assays are not materially different from those of external labs.
  
 12.5.3 QP OPINION
  
 There were no limitations on or failure to conduct data verification.
  
 In ARANZ Geo’s opinion the assay, sample location, vein lithology, and specific gravity data from the Avino and San Gonzalo Veins are reliable to support the purpose of this Technical Report and a current mineral resource on both veins and the oxide tailings.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 12-19
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
  	13.0 MINERAL PROCESSING AND METALLURGICAL TESTING

  
 There are three separate mineralization sources in the Avino property, including the Avino and San Gonzalo Mines, which are currently in operation, and the potential tailings resource from previous milling operations. The San Gonzalo Mine entered commercial production in October 2012, followed by reopening of the Avino Mine in January 2015. The two mines feed a conventional flotation mill that has three separate circuits and a capacity of 1,500 t/d.
  
 13.1 AVINO VEIN
  
 The Avino vein material is currently been processed at the Avino mill using froth flotation to produce a marketable copper concentrate with silver and gold credits. The material has been successfully processed in the past. Bismuth was identified as a deleterious material in the concentrate and there are plans for test work to reduce the bismuth content in the concentrate to improve on the smelter return. No mineral processing or metallurgical test work has been performed in the preparation of this report. 
  
 The Avino Vein was mined during the 27 years of open pit and underground production prior to 2001. From 1997 to 2001, the mine and mill production averaged 1,000 t/d and achieved up to 1,300 t/d. The mine and mill operations were then suspended. Following several years of redevelopment, in Q4 2014 Avino completed its Avino Mine and mill expansion. On January 1, 2015, full-scale operations commenced and commercial production was declared effective April 1, 2016 following a 19-month advancement and test period.
  
 The mill feed from the Avino Mine has been processed using froth flotation to produce a copper concentrate with silver and gold credits. In 2017 operation, the average copper, silver and gold recoveries reporting to a copper concentrate of 20.3% copper, 2,560 g/t silver and 16.7 g/t gold were 89%, 85%, and 69% respectively. The total material processed was 460,890 t. 
  
 The Company has not based its production decisions on a feasibility study or mineral reserves demonstrating economic and technical viability, and as a result there is increased uncertainty and there are multiple technical and economic risks of failure, which are associated with these production decisions. These risks, among others, include areas that would be analyzed in more detail in a feasibility study, such as applying economic analysis to resources and reserves, more detailed metallurgy, and a number of specialized studies in areas such as mining and recovery methods, market analysis, and environmental and community impacts.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 13-1
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 13.2 SAN GONZALO VEIN
  
 The San Gonzalo treatment scheme was based on the bulk sample test carried out in 2012. The feed grade of the bulk sample tested was 261 g/t silver and 0.9 g/t gold. Silver and gold recoveries were 76% and 59% respectively and 232 dry tonnes of flotation concentrate were produced from 10,000 t of feed. Conventional froth flotation was used to produce the flotation concentrate with the silver and gold values. Since then, a gravity circuit had been installed to improve the silver and gold recoveries. In 2017, a total of 81,045 t of mill feed with average grades of 269 g/t silver and 1.32 g/t gold has been processed. The silver and gold recoveries to the silver and gold concentrate were 84% and 78%, respectively.
  
 The Company has not based its production decisions on a feasibility study or mineral reserves demonstrating economic and technical viability, and as a result there is increased uncertainty and there are multiple technical and economic risks of failure, which are associated with these production decisions. These risks, among others, include areas that would be analyzed in more detail in a feasibility study, such as applying economic analysis to resources and reserves, more detailed metallurgy, and a number of specialized studies in areas such as mining and recovery methods, market analysis, and environmental and community impacts.
  
 13.3 OXIDE TAILINGS
  
 This study assesses the potential for processing the oxide tailings resource from previous milling operations. The subsections summarize the metallurgical characterization obtained from previous test work and the study conducted by MMI in 2005 (Slim 2005c). MMI’s report used the metallurgical results obtained and conclusions drawn by PRA (Huang 2003; Huang and Tan 2005). The revised and final report by MMI was dated October 2005 (Slim 2005d).
  
 The following sections are reproduced from the 2013 PEA (Tetra Tech 2013), with some minor modifications to summarize the findings of the metallurgical test programs conducted so far.
  
 HISTORICAL METALLURGICAL TEST RESULTS
  
 A number of metallurgical evaluations have been completed on various samples from the oxide tailings dam, according to the MMI report produced in 2003 (Slim 2003). Apparently, the first cyanidation tests were conducted in 1982, followed by further tests performed over the years. The summarized cyanidation test results are shown in Table 13.1 taken from the 2003 MMI report (Slim 2003), while the reported flotation test results are given in Table 13.2. The results obtained from the test work program initiated by MMI in 2003 and 2004 were reported in the MMI 2005 technical report (Slim 2005d) and are included in Table 13.1 for purposes of comparison. The results will be discussed in greater detail later in this section.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 13-2
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Table 13.1 Cyanidation Test Results
  
  	  
	 Date of
	 Extraction (%)
	 Leaching 
	 Particle 

	 Author
	 Test
	 Ag
	 Au
	 Time (h)
	 Size (μm)

	 Denver Equipment
	 1982
	 69.3
	 66.7
	 24
	 66.6% <149

	 Penoles
	 1987
	 78.3
	 88.9
	 24
	 87% <74

	 Maja
	 1990
	 85.9
	 80.9
	 24
	 100% <105

	 Chryssoulis
	 1990
	 85.9
	 80.9
	 24
	 no data

	 Rosales
	 1996
	 83.9
	 76.9
	 23
	 75% <74

	 MMI
	 2003
	 77.1
	 71.4
	 24
	 86% <74

	 MMI
	 2003
	 88.8
	 88.4
	 48
	 86% <74

  
 Source: Slim (2003)
  
 Table 13.2 Flotation Test Results
  
 	  
	 Date of
	 Recovery (%)
	 Particle

	 Author
	 Test
	 Ag
	 Au
	 Size (μm)

	 Penoles
	 1987
	 60.2
	 47.1
	 87% <74

	 Rosales
	 1996
	 69.4
	 66.9
	 75% <74

  For the tests outlined in Table 13.1 and Table 13.2, no details have been provided regarding:
  
  	  
	·	the location or the manner in which the samples were taken
	  
	  
	  

	  
	·	why these particular samples were taken
	  
	  
	  

	  
	·	the test parameters employed
	  
	  
	  

	  
	·	the assay techniques used, etc.

  
 The first set of results for tests conducted on MMI samples from the 2003 sampling campaign indicate a silver extraction of 77.1% and gold extraction 71.4%. However, these results cannot be verified since the origin of this set of numbers as quoted in the MMI technical report (Slim 2005d) is not known. The second set of results was reported in the 2003 PRA report (Huang 2003). Considered in general terms, it would appear as if the cyanidation test results are reasonably consistent over the indicated period of time. However, no specific conclusions should be drawn since nothing is known about the head grades of the samples, the samples used, or the test and assay procedures used at the time that these tests were conducted.
  
 The flotation results vary widely for similar particle sizes with recoveries ranging from 60% to 69% for silver and 47% to 67% for gold. However, the test details of these reported cyanidation and flotation tests are unknown.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 13-3
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 THE MMI TECHNICAL REPORT
  
 Avino commissioned MMI to produce a document that was NI 43-101 compliant with respect to detailing the indicated oxide tailings resource (subsequently referred to as an Inferred Resource) and to define the metallurgical characterization and assay results for this material. The proposed economic processing of this tailings material could then be used to form the financial basis for restarting the mine.
  
 The first report prepared by MMI was titled "Tailings Valuation" and was dated November 2003 (Slim 2003). Two further reports by MMI titled "Preliminary Feasibility" (Slim 2005a) and "Tailings Valuation" (Slim 2005b) were produced in May 2005. The “Tailings Valuation” report (Slim 2005b) was subsequently revised and re-titled "A Tailings Resource" in July 2005 (Slim 2005c). This July 2005 MMI report (Slim 2005c) was reviewed by the Canadian Securities Administrators and returned to MMI for revision. The revised MMI report was re-issued as "A Tailings Resource" and dated October 2005 (Slim 2005d) and was resubmitted to the CSRA for review. The October 2005 report (Slim 2005d) was produced for Avino Mines, Cia Minera Mexicana, Durango, Mexico, by Bryan Slim, of MMI, North Vancouver, British Columbia, Canada. The document was submitted as a Technical Report to the CSRA.
  
 Two sets of test programs were conducted by PRA under direction of MMI. One was conducted during 2003, for which no sample origin can be determined (Huang 2003), and the other, more detailed test program, was conducted during 2004 (Huang and Tan 2005). The 2004 test work and assaying program was designed and supervised by MMI. It was conducted on samples collected from the tailings dam by MMI during 2004, while also using the results from the preliminary metallurgical scoping tests completed during 2003 as a guide. PRA staff, at their facilities in Vancouver, British Columbia, conducted all the test work from both MMI test programs.
  
 INTRODUCTION TO THE MMI 2003 METALLURGICAL TEST PROGRAM
  
 The 2003 test program consisted of the following tests as summarized in Table 13.3. The cyanidation extraction results obtained were used in a preliminary report by MMI (Slim 2003). MMI considered using a 2,000 t/d vat leaching process to recover the silver and gold from the oxide tailings; however, this treatment process option was revised when the results of the 2004 test program became available.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 13-4
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Table 13.3 Test Procedures MMI 2003 Test Program
   
  	 Process/Procedure
	 Details of Test
	 Sample Identify

	 Sample Preparation
	 No details documented
	 Sample L and Sample U

	 Head Assays
	 Fire assays, AA, and ICP multi-acid
	 Composite of L and U

	 Specific Gravity
	 Standard pycnometer test
	 Composite of L and U

	 Cyanidation Leach
	 P80 = 68 μm; 40% solids; pH 10.5; 1.0 g/L NaCN;
 48 h; dO2 > 7.9 mg/L 0.4 kg sample
	 Composite of L and U

	 Flotation
	 Rougher and 2 scavenger stages; P80 = 85 μm;
 35% solids; pH 5.5; PAX & A208 with MIBC; 1 kg sample
	 Composite of L and U

	 Mineralogical
	 Examination of flotation tailings
	 Composite of L and U

  
 Note: dO2 – dissolved oxygen; PAX – potassium amyl xanthate; NaCN – sodium cyanide
 Source: Slim (2003)
  
 The exact origin of Sample L and Sample U is not known and does not appear to have been documented. The manner in which each of the samples was collected by MMI has apparently also not been documented. The size of both samples, namely 0.8 kg for Sample L and 0.9 kg for Sample U, is small and its representation is questioned. Also, there appears to be no documentation relating to the arrival and receipt of these samples at PRA. There is no receiving log in the PRA Report No. 0302303 (Huang 2003). Also, no assay certificates have been recovered to date. Even though these tests were considered to be scoping tests only, the results cannot be validated. When considering all the above factors, it is apparent that these results cannot be used with any degree of validity in the review of process options for the recovery of silver and gold.
  
 INTRODUCTION TO THE MMI 2004 METALLURGICAL TEST PROGRAM
  
 The 2004 test program was a better structured program, which included the pre- concentration processes such as gravity concentration and flotation, both with and without regrinding, in an attempt to upgrade the material into a smaller mass for the subsequent treatment for the recovery of silver and gold. Also, cyanidation leach tests were conducted on as-received samples, as well as samples that were reground in order to attempt to improve the liberation of silver and gold from the associated minerals. A single column leach test was also performed.
  
 Additional work completed included establishing the specific gravity and bulk density of the material, determining the Bond Mill Work Index on an oxide sample from the open pit, settling and filtration tests following cyanidation tests, and electrowinning tests using Electrometals Electrowinning (EMEW) technology. All the different test procedures are summarized in Table 13.4.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 13-5
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Table 13.4 Test Procedures – MMI 2004 Test Program
  
  	 Process/Procedure
	 Details of Test
	 Sample Identify

	 Sample Preparation
	 Individually numbered; dried; weighed;
 subsequently composited
	 Composites A, B and C

	 Head Assays
	 Fire assays, AA and ICP multi-acid
	 Individual samples, and
 Composites A, B and C

	 Specific Gravity
	 Standard pycnometer test
	 Composites A, B and C

	 Bulk Density
	 Standard volume displacement test
	 Composites A, B and C

	 Mineralogical Examination
	 Examination of as-received samples
	 Selected Samples

	 Test Product Assays
	 Fire assays, AA and ICP multi-acid
	 All test products

	 Bond Mill Work Index
	 Six cycles; closing screen size 150 μm
	 Oxide sample

	 Size-assay Distribution
	 Screened and assayed the size fractions
	 Selected samples

	 Gravity Concentration
	 Various test conditions
	 Composites A, B and C

	 Cyanidation Leach
	 Various test conditions
	 Composites A, B and C

	 Flotation
	 Various test conditions
	 Composites A, B and C

	 Column Leach Test
	 Agglomerated feed; 81 d duration; 0.5 to
 1.0 g/L NaCN; pH 10.5; 0.05 mL/s
	 Composite of A and B

	 EMEW
	 Various test conditions
	 PLS from leach test

	 ABA
	 Acid generation tests
	 Composites A, B and C

  
 The results obtained from this test program led MMI to include the heap leach process as the recommended treatment option in their report dated May 2005 (Slim 2005a).
  
 EVALUATION AND REVIEW OF METALLURGICAL TESTS
  
 Tetra Tech reviewed the metallurgical tests conducted during the MMI 2004 test program. The most promising process option will be selected as the recommended process treatment route based on the evaluation of the results obtained from the test program. This process option will then be evaluated with respect to capital and operating cost estimates. The process implications of the procedures and processes investigated, and the results obtained, are discussed in this section.
  
 Sample Preparation and Characteristics
  
 Bagged samples carrying the MMI identification tags were prepared at Avino Mine under the direct supervision of MMI personnel. These samples were then transported from the mine site to Durango, Mexico, and shipped via airfreight to Vancouver, British Columbia. The samples were delivered to the PRA facility, and unpacked in the presence of MMI personnel to ensure that no tampering had occurred to the samples en route. The samples were subsequently renumbered by MMI prior to PRA staff un-bagging and drying the samples. These details are shown on the PRA sample receiving log (Huang and Tan 2005). The individual samples were initially air-dried, followed by a low-temperature of less than 50°C, of oven drying.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 13-6
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 The individual samples were subsequently homogenized and riffled and split into four one-quarter fractions. One of these fractions was used for head assay determinations. A second fraction was used for compositing selected individual samples to create the sample Composite A, representing the oxide material of the lower bench of the tailings dam. Similarly, Composite B, representing the oxide material of the middle bench of the tailings dam, was prepared by compositing selected individual samples, as was Composite C, representing the sulphide tailings of the upper bench.
  
 Although the samples had arrived at PRA from Avino Mine without any indication of tampering, it is the sampling regime itself, which is considered to be deficient. First, the sampling of the oxide section of the tailings dam was incomplete. The sampling did not replicate the 1990 CMMA program, and certain parts of the tailings dam were not sampled. Second, the samples that were taken by MMI only represented the first 4 m of depth of the tailings dam. Indications are, however, that the overall depth of the oxide section of the tailings dam varies between 7 and 27 m. These two major deficiencies were also recognized by the Canadian Securities Administrators as deficiencies during their review. Both these items were addressed in the final MMI report dated October 2005 (Slim 2005d). The October 2005 report recommended a more detailed program of sampling of the whole tailings dam up to bedrock or ground soil level, as well as conducting metallurgical characterization tests using representative material from this more detailed sampling process whenever this is to be performed. However, since the MMI Technical Report (as reviewed by the Canadian Securities Administrators subsequently referred to the oxide tailings as an Inferred Resource (Slim 2005d), this and other sampling discrepancies noted in the MMI test program, will not be discussed any further.
  
 Moisture Content
  
 The moisture contents of the samples as received from the Avino Mine tailings dam were found to vary widely, namely from a low value of 5.12% to a high value of 28.25% moisture. A frequency distribution for moisture content of all the oxide tailings samples as received by PRA is given in Table 13.5. The bi-nodal distribution is apparent.
  
 Table 13.5 Moisture Content of Samples
  
  	 Frequency Distribution

	 Moisture Content
 Range
 (%)
	 Number

	 5.00-7.50
	 9

	 7.51-10.00
	 14

	 10.01-12.50
	 19

	 12.51-15.00
	 16

	 15.01-17.50
	 5

	 17.51-20.00
	 5

	 20.01-22.50
	 12

	 22.51-25.00
	 5

	 25.01-27.50
	 0

	 27.51 -30.00
	 1

  
  	  

	 Avino Silver & Gold Mines Ltd.
	 13-7
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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 The particular presence of these high moisture content values in the tailings dam apparently confirms the high moisture content values found during the 1990 sampling program conducted by CMMA. Although the precise sampling procedure and drying conditions are unrecorded, a data sheet provided by Avino Mines as ostensibly related to this sampling program, provides assay values and moisture contents obtained during the program. The moisture values obtained varied from a low moisture value of 13.89% to a high value of 29.4%, and a calculated average of 22.87% moisture.
  
 A possible reason for the high moisture content of the tailings material is that the mine was operational during this period when the sampling program was undertaken, i.e. 1990, and that routine tailings deposition was still in progress.
  
 The specific reason for the relatively high moisture contents found during the 2004 MMI sampling program, is not apparent. The MMI Technical Report (Slim 2005d) has referred to the possibility of the original manner of deposition of the tailings which has resulted in the localized areas of high moisture content. Also, the presence of artesian springs under the tailings dam has also been mentioned as a possible reason. It was also observed that any rain water run-off from the higher levels above the tailings dam would collect at the head of the tailings dam and subsequently seep through the dam exiting at the foot of the dam. Whatever the reason(s) may be, areas of high moisture content do exist and will influence the method of recovery of the tailings and the subsequent agglomeration process.
  
 Head Assays and Test Products Assays
  
 Gold assaying was completed using the standard fire assay procedure. Initially the silver was also analyzed by the fire assay procedure followed by an AA spectrophotometric finish. However, this fire assay-based method for silver is not very accurate in the low concentration range of less than 100 g/t for silver. Assaying for silver was then done using ICP-MS preceded by the total digestion of the sample in a suite of mineral acids. A further method was also investigated, namely that of total acid digestion followed by an AA finish. The results obtained with this acid digestion and AA method were similar to the ICP-MS. The assay method selected for all the silver assays was therefore the ICP-MS method preceded by the total digestion of the sample in a suite of mineral acids (ICP- MS). All the other analyses for the various products arising from the metallurgical tests were done by the standard and universal methods using titration, ICP-MS or AA methods.
  
 All the various head sample analyses conducted during the test program are listed in Table 13.6. The reference to the test number relates to the stage of the test work that the sample was submitted for analysis. The average values for the four different composite samples tested, namely Composite A, Composite B, Composite C, and the Composite A + B blended sample, have all been calculated and are given in the table together with the respective standard deviation values. The standard deviation of the head samples representing Composite A and Composite B are shown to be within 10% of the deviation from the average value. This is considered to be reasonable.
  
 However, the average silver value of all the head assay analyses assayed as head samples representing both Composite A and Composite B together is only 86.8 g/t silver.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 13-8
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 This average silver grade is less than the 95.5 g/t silver as given in the MMI Technical Report as being the overall silver grade of the material of the whole oxide tailings dam (Slim 2005d). Similarly, the average gold value of all the head assay analyses assayed as head samples representing both Composite A and Composite B (i.e. representing the oxide tailings dam) taken during the test work program, is 0.44 g/t gold which also is less than the 0.53 g/t gold, as quoted in the MMI Technical Report (Slim 2005d). For silver, this amounts to a difference of about 9% based on the MMI quoted head grade of 95.5 g/t silver, while for gold the difference is larger at 17% based on the MMI quoted gold value of 0.53 g/t gold. It is of interest that the average head assay for the Composite A + B sample is closer to the calculated average for Composite A and for Composite B, namely 89.6 g/t compared with 86.8 g/t for silver, and 0.41 g/t compared with 0.44 g/t for gold. The above discussion assumes that the tonnages of the tailings dam labelled Composite A (lower bench) will be mixed in equal proportion to the area of the tailings dam designated as Composite B (middle bench). In the absence of specific tailings dam volumes, or tonnages, this assumption may be an oversimplification and may therefore not be entirely valid. However, the assay values for the Composite B is lower than the overall average head grade of the tailings samples collected.
  
 Table 13.6 Head Assays
  
  		 Assays
 (g/t)
	  
		 Assays
 (g/t)

	 Test No.
	 Ag
	 Au
	  
	 Test No.
	 Ag
	 Au

	 Composite A
	  
	 Composite B

	 SA9
	 99.8
	 0.37
	  
	 SA10
	 88.3
	 00.55

	 Ave. 1
	 103.4
	 0.34
	  
	 Ave. 1
	 82.6
	 0.68

	 Ave. 2
	 105.3
	 0.36
	  
	 Ave. 2
	 88.4
	 0.51

	 C1
	 95.2
	 0.35
	  
	 C4
	 76.3
	 0.52

	 C2
	 94.3
	 0.35
	  
	 C5
	 70.6
	 0.49

	 C3
	 94.1
	 0.36
	  
	 C6
	 71.4
	 0.50

	 C7
	 88.7
	 0.36
	  
	 C9
	 70.3
	 0.52

	 C8
	 88.7
	 0.36
	  
	 C10
	 70.3
	 0.52

	 C13
	 95.9
	 0.28
	  
	 C15
	 77.2
	 0.49

	 C14
	 98.9
	 0.37
	  
	 C16
	 78.3
	 0.52

	 C17
	 95.2
	 0.35
	  
	 C18
	 77.2
	 0.49

	 Average Value
	 96.32
	 0.350
	  
	 Average Value
	 77.35
	 0.526

	 Standard Deviation
	 5.27
	 0.025
	  
	 Standard Deviation
	 6.72
	 0.054

	 Composite C
	  
	 Column Composite A+B

	 C11
	 39.8
	 0.34
	  
	 C4
	 87.4
	 0.42

	 C12
	 39.8
	 0.34
	  
	 C5
	 90.1
	 0.40

	 Ave. 1
	 31.7
	 0.29
	  
	 C6
	 91.4
	 0.42

	 Ave. 2
	 39.8
	 0.39
	  
	 C9
	 -
	 -

	 Average Value
	 37.78
	 0.340
	  
	 Average Value
	 89.63
	 0.413

	 Standard Deviation
	 4.05
	 0.041
	  
	 Standard Deviation
	 2.04
	 0.012

  
  	  

	 Avino Silver & Gold Mines Ltd.
	 13-9
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 A further comment regarding the assay results above relates to the methods employed for the assaying techniques for silver from these samples. The MMI Technical Report (Slim 2005d) states that for the CMMA 1990 tailings drilling program, the silver assaying was completed using the mine standard practice of fire assay followed by acid digestion and AA finish. The PRA metallurgical test work program used multi-acid digestion followed by ICP assay method for silver analyses. It is anticipated that there will not be a significant difference between the silver assays as reported in 1990 and those from the MMI test program as conducted by PRA, but the extent of this difference cannot be quantified in this review. Similarly, no comment can be given as to the accuracy of the assays conducted by CMMA since the standards of precision of sampling, sample preparation and detailed methodology of the assaying methods are unknown. However, a summary sheet containing assay values has been provided by Avino as being the silver and gold grades obtained from the 1990 CMMA sampling program. No calculations have been performed using these assay values and it is only included in this report since it is part of the CMMA sampling program. The MMI report (Slim 2005d) provides a grid map identifying the various sample holes.
  
 Mineralogical Evaluation
  
 At the start of the 2004 metallurgical test program, MMI requested that a sample from some of the individual samples be submitted for mineralogical analysis. The mineralogical findings have not been reported in the PRA Report No. 0406407 (Huang and Tan 2005), and also were not alluded to in the MMI Technical Report (Slim 2005d), nor in any of the preceding reports. The reason(s) why these results have apparently not been communicated to Avino or to the investigators of the test program at PRA, is not known.
  
 Bond Ball Mill Work Index
  
 Although this information was not required for the treatment of the oxide tailings dam material, a Bond Ball Mill Work Index determination test was done on an oxide material sample. The work index was determined to be 12.3 kWh/t using a closing screen size of 74 μm (200 mesh) with convergence of the specific energy input (grams of product per revolution) found after five cycles of testing. This makes the sample tested a moderately hard rock type. The details regarding the origin of this sample have not been documented and its relevance as data is therefore questioned.
  
 Bulk Density and Specific Gravity
  
 Bulk density and specific gravity determinations were conducted on samples specifically identified by MMI. The specific gravity measurements were done using the standard pycnometric method, while the bulk density values were obtained by measuring the volume of dry solids in a measuring cylinder. The values obtained are reproduced in Table 13.7.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 13-10
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Table 13.7 Bulk Density and Specific Gravity
  
  	 Location/ 
 Bench
	 Sample
 Identify
	 P80 Size
 (μm)
	 Bulk Density
 (g/cm3)
	 Specific
 Gravity

	 Upper Bench
	 S2
	 226
	 1.66
	 2.74

	 Lower Bench
	 S10
	 326
	 1.73
	 2.62

	 Lower Bench
	 S22
	 367
	 1.73
	 2.76

	 Middle Bench
	 S45
	 254
	 1.60
	 2.76

	 Middle Bench
	 S50
	 201
	 1.63
	 2.74

	 Upper Bench
	 S74
	 301
	 1.57
	 2.72

	 Average
	 -
	 -
	 1.653
	 2.723

  
 The bulk density values determined for the oxide tailings material were found to vary between 1.57 and 1.73 g/cm3 with an average of 1.653 g/cm3. This average value is in reasonable accord with the bulk density of 1.605 g/cm3 as quoted in the MMI Technical Report. The specific values obtained were generally consistent with an average value of 2.723.
  
 Particle Size – Assay Analysis
  
 A particle size–fraction analysis was done on the same samples as were used for the bulk density and specific gravity determinations. These tests were conducted to determine whether the silver and gold were predominantly occurring in a particular particle size range. The size-assay analyses indicated that the metal distributions were varied according to the location, but that all displayed the bi-nodal distribution for silver, gold and mass to varying degrees.
  
 Sample S10 from Composite A from the Lower Bench of the tailings dam indicated one maximum metal distribution occurring in the size range 149 to 210 μm, and another in the minus 37 μm size range. The maximum mass distributions are generally similar although it occurs over a wider size range in the coarse size, namely 105 to 210 μm. The second sample from this bench, Sample S22, was similar but with a shifted maximum metal and mass distribution in the 210 to 297 μm size range, and a secondary maximum metal and mass distribution in the minus 37 μm size range.
  
 Sample S45 from the Middle Bench of the tailings dam, and part of Composite B, indicated maximum metal distribution in the 149 to 210 μm size range with maximum mass distribution in the 105 to 149 μm size range. The secondary maximum metal and mass distribution was found in the minus 37 μm size range. The second sample from the Middle Bench, namely Sample S50, had the maximum metal and mass distributions in the 105 to 149 μm size range as well as the minus 37 μm size range.
  
 The two samples from the Upper Bench of the tailings dam of Composite C displayed totally different particle size distributions. Sample S2 was bi-nodal with one maximum for metal and mass distribution in the size range 105 to 149 μm and the second maximum occurring for the size range of minus 37 μm. Sample S74 displayed only one maximum metal and mass distribution over the relatively wide coarse particle size range of 105 to 297 μm. This sample was almost entirely devoid of slimes, or minus 37 μm material.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 13-11
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 These samples reflect the operating discharge conditions and history at the time of plant operations and tailings deposition. The results typify the use of a tailings cyclone situated on the tailings dam wall discharging the coarse undersize material onto the wall area with the finer cyclone overflow material flowing downstream and settling within the tailings dam. Changes in the size distribution would be anticipated with downstream distance from the point of discharge by the cyclones at the tailings dam wall. This is typified by the size distribution of Sample S74 which purports to be a cyclone underflow sample taken at the point of discharge and which was found to be almost totally devoid of fines, or minus 37 μm material.
  
 Gravity Concentration Tests
  
 Pre-concentration tests using the centrifugal gravity concentration method were conducted to evaluate the potential upgrading of silver and gold. The laboratory size concentrator used was the Falcon Model SB40 centrifugal concentrator. The tests were conducted on samples from Composites A, B and C. MMI dictated the test parameters used for these tests, including a set of tests where the samples were reground prior to conducting the gravity concentration test. The results from the gravity concentration tests are summarized in Table 13.8.
  
 Table 13.8 Summary of Results of Gravity Concentration Tests
  
  	  
	 Head Grade
	 Concentrate
 Grade
	 Recovery
 (%)
	  
		 Remarks

	 Sample
 Identify
	 Ag
 (g/t)
	 Au
 (g/t)
	 Ag
 (g/t)
	 Au
 (g/t)
	 Mass
	 Ag
	 Au
	 P80
 (μm)
	  
	 (Note: All tests
 are 3-pass tests)

	 Composite A
	 93.8
	 0.35
	 124.7
	 0.52
	 24.1
	 32.1
	 36.5
	 269
	  
	 Pressure 1.5 psig; no regrind

	 Composite B
	 70.3
	 0.50
	 96.9
	 0.71
	 23.6
	 32.5
	 33.3
	 180
	  
	 -

	 Composite C
	 39.7
	 0.33
	 58.0
	 0.65
	 24.1
	 35.2
	 47.0
	 254
	  
	 -

	 Composite A
	 92.1
	 0.33
	 126.1
	 0.71
	 19.7
	 27.2
	 42.1
	 76
	  
	 Pressure 1.0 psig; reground

	 Composite B
	 70.5
	 0.56
	 96.5
	 1.29
	 22.4
	 30.7
	 51.5
	 77
	  
	 -

	 Composite C
	 40.7
	 0.38
	 65.5
	 0.98
	 24.8
	 39.9
	 64.3
	 79
	  
	 -

  
 Note: psig = pounds per square inch (gauge)
  
 The mass recoveries varied between 20 and 25% indicating that the tests were performed in a uniform and consistent manner. The highest silver recovery obtained was 40% (after regrind) for Composite C and decreasing to 31% for Composite B (after regrind) and about 27% for Composite A, also after regrind. The gold recoveries were higher than the equivalent silver recoveries, particularly after regrind, indicating that the liberation of the precious metals could be incomplete.
  
 However, the upgrading factor for both silver and gold is very low, namely about 1.4 for silver and up to 2.3 for gold. No further upgrading or silver and gold recovery tests were conducted on the gravity concentrates produced possibly as a result of the relatively low grades and recoveries obtained. Also of interest is the fact that no historical test work was documented by MMI where gravity concentration was used to produce a saleable high-grade concentrate.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 13-12
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Flotation
  
 Different scoping flotation tests were conducted on samples from Composite A and Composite B using various reagent schemes and conditions as dictated by MMI. The results of the flotation tests are summarized in Table 13.9. The test results reported led to the following conclusions.
  
 For Composite A, a regrind from a P80 size of 238 μm (as received particle size) to a P80 of 72 μm, improved the flotation recovery of silver from 18 to 23%, and that of gold from 18 to 39%. The standard suite of reagents was used for these tests (Tests F1, F3 and F4). For Composite B, a regrind from a P80 size of 173 μm (as received particle size) to a P80 of 74 μm, improved the flotation recovery of silver from 22 to 33%, and that of gold from 12 to 32% (Tests F2, F5 and F6). A particle size fraction analysis distribution conducted on the tailings of Test F4 (Composite A) indicated that the major proportion of the mass and the silver and gold is present in the slimes, or minus 37 μm size fraction. However, significant losses of silver, and particularly gold, occurred in the coarser sizes, namely the size range 53 to 105 μm. This indicates that the degree of liberation could be improved and that some metal appears to be occluded in the coarser particle sizes. Some silver may also occur within secondary oxide minerals and be unrecoverable by flotation. A similar mass and metal distribution was obtained in the case of Test F9 (also Composite A) which was a flotation test performed using a sulphidization reagent.
  
 In testing the various flotation reagent suites, variable mass and metal recoveries and concentrate grades were obtained. However, the maximum silver grade obtained for a rougher concentrate was 909 g/t silver, while the overall recoveries for silver could not be improved beyond approximately 40%. This indicated that mineral surface alteration or oxidation, or occlusion of precious metals in gangue, was inhibiting the concentration by the flotation process. Since the silver recoveries obtained were deemed low and unsatisfactory, no further flotation tests were conducted and no extraction tests were performed on flotation concentrates.
  
 The head assays obtained during the flotation testing stage gave inconsistent results. Table 13.9 shows the actual head assays obtained for each flotation test compared with the head assay obtained for silver for the composite samples. For Composite A, the individual silver head values for each flotation test conducted are all higher than the assay for the composite sample, except in the case of Test F11. The gold (and silver) values obtained for Tests F7, F8 and F9, are known to have been the result of poor sampling technique adopted for these three tests. The composite head assay gold value of 0.36 g/t gold is probably a reasonably representative assay value for Composite A. For Composite B, the silver head value for the composite sample is slightly lower than the assays for the individual flotation tests. For gold, the composite sample value is higher at 0.52 g/t gold than the assays for the individual tests.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 13-13
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 The historical results of the flotation tests reported in Table 13.2 are significantly higher at 60 to 69% recovery for silver and 47 to 67% for gold. However, in the absence of information regarding the origins of these samples, the lack of head grade data and the absence of sampling and flotation procedures involved, these results will not be taken into consideration in selecting of the processing options for the oxide tailings dam material.
  
 Table 13.9 Summary of Results of Flotation Tests
  
  		 Head
 Grade
	 Concentrate
 Grade
	 Recovery
 (%)
	  
	  
	  

	 Sample Identify & 
 Test No.
	 Ag
 (g/t)
	 Au
 (g/t)
	 Ag
 (g/t)
	 Au
 (g/t)
	 Mass
	 Ag
	 Au
	 P80
 (μm)
	  
	 Remarks

	 Composite A/F1
	 112.2
	 0.35
	 908.7
	 3.17
	 2.1
	 17.8
	 18.4
	 238
	  
	 3-stage ro., pH 8;

	 Composite A/F3
	 119.2
	 0.39
	 734.6
	 3.88
	 2.6
	 21.0
	 30.4
	 103
	  
	 Conditioning NaCN +

	 Composite A/F4
	 104.6
	 0.40
	 630.9
	 3.36
	 3.8
	 22.6
	 38.6
	 72
	  
	 Na2CO3; A404, PAX

	 Composite A/F7
	 111.9
	 1.39
	 654.6
	 5.56
	 2.3
	 16.3
	 34.9
	 ~75
	  
	 2-stage ro., nil NaCN

	 Composite A/F8
	 108.5
	 2.38
	 887.2
	 11.91
	 0.9
	 7.8
	 30.7
	 ~75
	  
	 2-stage ro., nil NaCN

	 Composite A/F9
	 114.5
	 1.67
	 723.9
	 5.86
	 2.7
	 20.8
	 45
	 ~75
	  
	 2-stage ro., NaS2, PAX

	 Composite A/F10
	 103.5
	 0.58
	 401.3
	 1.62
	 8.9
	 34.6
	 39.8
	 ~75
	  
	 with NaCO3, CuSO4

	 Composite A/F11
	 99.6
	 0.34
	 484.8
	 1.83
	 8.8
	 42.2
	 48.3
	 ~75
	  
	 with CuSO4, A208

	 Composite B/F2
	 88.4
	 0.42
	 695.4
	 2.65
	 2.6
	 22.0
	 12.2
	 173
	  
	 3-stage ro., pH 8

	 Composite B/F5
	 89.7
	 0.47
	 806.1
	 4.18
	 2.9
	 27.0
	 24.6
	 92
	  
	 conditioning NaCN +

	 Composite B/F6
	 89.9
	 0.51
	 867.1
	 5.45
	 2.9
	 32.5
	 32.1
	 74
	  
	 Na2CO3; A404, PAX

	 Composite A: Head
	 99.8
	 0.36
	 -
	 -
	 -
	 -
	 -
	 -
	  
	 -

	 Composite B: Head
	 88.3
	 0.52
	 -
	 -
	 -
	 -
	 -
	 -
	  
	 -

  
 Note: CuSO4 = copper sulphate; NaCO3 = sodium carbonate
  
 Cyanidation Tests
  
 Cyanide leaching tests were conducted on samples from Composite A, Composite B and Composite C using different leaching conditions. The first set of tests were to determine the effect of regrinding the tailings samples prior to leaching while subsequent tests determined the effect of cyanide concentration in the leach solution.
  
 For Composite A, the silver extractions varied from 66% for the un-milled (as received) sample to 80% for the samples that were reground, while the gold extractions varied from 82 to 89% respectively. For Composite B, the silver extractions ranged between 69% for as-received material, to 77% for samples that were reground. The corresponding gold extractions varied between 82 and 87%. Although the cyanide consumption increased with the regrinding of samples tested for both Composite A and Composite B, the increase in extraction may compensate for the additional cost of cyanide reagent and regrinding provided that the filtration characteristics are not detrimentally affected. Higher cyanide concentrations in the leach solution tended to improve the extractions of silver and gold but increased the cyanide consumption significantly as well.
  
 The results from the sulphide tailings, namely Composite C, indicate that between 73 and 87% of the silver can be extracted, with between 77 and 85% of the gold. However, the cyanide consumption values were higher than the results from the oxide tailings. Only two leach tests were conducted on reground samples from Composite C, each having a P80 of about 69 μm. A summary of the cyanide leach test results is given in Table 13.10.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 13-14
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Table 13.10 Summary of Results of PRA Cyanidation Tests
  
  	 Sample Identify & 
	 Extraction
 (%)
	 Reagent Usage
 (kg/t)
	 NaCN 
 Concentration 
	 P80

	 Test No.
	 Ag
	 Au
	 NaCN
	 Lime
	 (g/L)
	 (μm)

	 Composite A+/C1
	 66.4
	 81.5
	 1.8
	 1.4
	 1.0
	 269

	 Composite A+/C2
	 79.3
	 85.7
	 1.6
	 1.8
	 1.0
	 103

	 Composite A+/C3
	 80.4
	 89.1
	 2.6
	 1.6
	 1.0
	 78

	 Composite A+/C7
	 78.6
	 82.7
	 2.2
	 1.8
	 0.5
	 74

	 Composite A+/C8
	 89.7
	 85.5
	 5.1
	 0.8
	 2.0
	 74

	 Composite A*/C13
	 79.7
	 86.8
	 1.5
	 1.3
	 0.5
	 74

	 Composite A*/C14
	 83.1
	 82.1
	 3.7
	 0.8
	 2.0
	 74

	 Composite A*/C17
	 79.4
	 90.9
	 1.0
	 1.2
	 1.0
	 74

	 Composite B+/C4
	 69.1
	 82.0
	 2.6
	 1.8
	 1.0
	 180

	 Composite B+/C5
	 77.1
	 88.3
	 1.7
	 1.8
	 1.0
	 100

	 Composite B+/C6
	 77.3
	 86.9
	 1.7
	 1.9
	 1.0
	 84

	 Composite B+/C9
	 73.2
	 86.0
	 2.6
	 1.2
	 0.5
	 84

	 Composite B+/C10
	 79.5
	 86.4
	 4.5
	 1.0
	 2.0
	 84

	 Composite B*/C15
	 72.9
	 82.6
	 1.6
	 2.0
	 0.5
	 84

	 Composite B*/C16
	 75.4
	 83.4
	 3.8
	 1.0
	 2.0
	 84

	 Composite B*/C18
	 67.7
	 78.6
	 0.9
	 1.3
	 1.0
	 84

	 Composite C+/C11
	 73.8
	 77.3
	 4.0
	 2.8
	 1.0
	 69

	 Composite C+/C12
	 86.6
	 85.0
	 7.3
	 2.6
	 2.0
	 67

  
  	 Notes:
	 “+” indicates Original Composite Sample.
 “*” indicates New Composite Sample.
 Tests C17 & C18 = 24 h leach duration; other tests + 72 h leach duration.

  
 During the cyanide leach test program, a new Composite A and Composite B sample had to be prepared since the original composite samples had been exhausted. Comparison of results from the two composite samples indicated similar behaviour patterns, although there are some noticeable differences in the extractions. Also, the cyanide and lime consumption values as recorded are inconsistent. This indicates that absolute numbers cannot be assigned to a single test although any observed trends would be valid. The averages of similar tests would more likely predict the overall responses more accurately. It is also apparent that non-systematic variations in the assay results could have arisen from subtle variations in mineralogy, sample preparation, the sample regrinding process and possibly daily variations in temperature.
  
 The cyanide leach extraction results quoted by MMI in Table 13.1, and the averaged results from the present test program, are summarized below in Table 13.11, and will be discussed in the following section.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 13-15
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Table 13.11 Summary of Cyanidation Test Results Used by the MMI Reports
  
  	 Sample Identify & 
	 Extraction
 (%)
	  

	 Test No.
	 Ag
	 Au
	 Remarks

	 Composite A/C1
	 66
	 82
	 As-received; 1.0 g/L NaCN

	 Composite A/C7 & C13
	 80
	 85
	 Average; reground; 0.5 g/L NaCN

	 Composite B/C4
	 69
	 82
	 As-received; 1.0 g/L NaCN

	 Composite B/C9 & C15
	 73
	 84
	 Average; reground; 0.5 g/L NaCN

	 MMI 2003
	 77
	 71
	 Results from 2003 test program

	 MMI 2003
	 88
	 88
	 Origin of results unrecorded

	 MMI 2004/C8 & C10
	 85
	 86
	 Average; reground; 2.0 g/L NaCN

  
 The average extraction results obtained from samples from Composite A and Composite B in the present study are generally lower than the results from the historical test work as detailed in Table 13.11. However, in the absence of details, these historical results cannot be used in the overall evaluation of this process. The MMI claim of a 77% silver extraction, based on the MMI (2003) test program, cannot be considered an acceptable result since only one test was done. The sample origin is purported to be four holes dug at approximately 25 m intervals with samples scraped into a bag, one for the lower bench and one for the upper bench of the oxide tailings dam. Clearly, a sample collected in this manner cannot be considered to be representative. Also, the other MMI (2003) claim for an extraction result of 89% silver and 88% gold cannot be validated. All these test results can therefore not be considered as valid and will not be used in any further discussions or evaluations.
  
 The MMI (2004) results, as claimed in the Technical Report and listed in Table 13.11 above, are also considered unusable. The reasons for this statement are that these results were obtained with a reground sample and leached at a high cyanide concentration of 2.0 g/L sodium cyanide, whereas the other tests were done using 1.0 g/L sodium cyanide. Both these conditions, that is, the regrinding of the tailings material and a high cyanide concentration leach condition, will not be implemented in a recovery process and these results are considered to be unrealistic.
  
 The extraction results from the cyanidation tests obtained using as-received samples from Composite A and Composite B, namely 66 to 69% for silver and 82% for gold, were encouraging.
  
 Column Leach Test
  
 One column leach test was conducted on a 30.9 kg sample being an equal mix of material from Composite A and Composite B. The sample was mixed with water, Portland Cement and lime and then agglomerated to a P80 size of 2,614 μm. After curing, the sample was put into a column with a diameter of 102 mm and a height of 3 m. The column test was run for a total of 81 days after the solution flowrate and pH had been stabilized. The silver extraction obtained was 73.0% while the gold extraction was 78.9%.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 13-16
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 These results compare very well to the average extraction values calculated from the cyanidation tests of the individual composite samples leached in the as-received condition, namely 67.8% for silver and 81.8% for gold. The cyanide consumption values are also comparable. The results obtained from the column test, as well as the calculated average extraction values obtained from the tests conducted on the as-received samples of Composite A and Composite B, have been summarized in Table 13.12.
  
 Table 13.12 Summary of Results of Column Leach Tests
  
  	 Sample & 
	 Extraction
 (%)
	 Reagent Consumption
 (kg/t)
	 NaCN 
 Concentration 
	 P80
	
	 Test No.
	 Ag
	 Au
	 NaCN
	 Lime
	 Cement
	 (g/L)
	 (μm)
	 Remarks

	 Column Test, Composites A and B
	 73.0
	 78.9
	 2.32
	 13.73
	 21.8
	 0.5 & 2.0
	 2,614
	 pH 11;
 flowrate
 0.05 mL/s

	 Composites A and B Average,
 Tests C1&C4
	 67.8
	 81.8
	 2.18
	 1.59
	 -
	 1.0
	 225
	 pH
 10.5/11;
 bottle roll

  
 The kinetics of leaching had slowed down significantly by Day 81 when the test was terminated, although there was evidence that some leaching was still in progress.
  
 A particle size assay analysis of the leach residue of the column test found that the highest unleached (undissolved) silver grade was in the coarsest size range of plus 210 μm, while the highest gold value was found in the minus 37 μm size range. This suggests both inadequate liberation of the silver grains and/or minerals, and occlusion of gold possibly by clay minerals, or the presence of tarnished/coated mineral surfaces, or the presence of refractory minerals. The subsequent leaching of de-agglomerated column leach test residue resulted in a negligible extraction of silver and gold. This indicates that the column leach test had virtually reached its maximum potential extraction, which confirms the observation that the leaching rate had slowed down.
  
 Only one column leach test was conducted. Also, the material tested was a mixture of samples from Composite A and Composite B, that is, a mixture of material from the lower and the middle benches of the oxide tailings dam. During the test, flow problems were encountered which resulted in the column having to be unloaded and the material having to be re-agglomerated with the test subsequently re-started after filling the column. In general terms, the results from one test only cannot be regarded as representative of the whole oxide tailings dam. However, despite these limitations and problems encountered, the encouraging results obtained and the close comparison with the bottle-roll tests, implies that the results are relatively reliable. The extraction values obtained from the column test, namely 73.0% for silver and 78.9% for gold, will therefore be used in the evaluation of this treatment process. The reagent consumption values also appear to be very high, namely 13.73 kg/t for lime, 21.8 kg/t for cement and 2.32 kg/t for cyanide. However, lime and cement consumption values obtained in laboratory tests generally approximate commercial operations although, in this case, they seem to be unrealistically high. The cyanide consumption of a commercial operation would typically only be 30 to 50% of that measured in a laboratory test.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 13-17
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Acid-base Accounting
  
 The ABA results predict the overall acid generating potential of selected samples. A net acid general potential was found for the sulphide tailings but not the oxide tailings. The processing of the sulphide tailings for silver and gold recovery could modify the ABA and increase the stability of the ultimate residues. Alternatively, the sulphide tailings would require the addition of lime during the process of relocating this material. This would ensure that the sulphide tailings would not cause acid-generating environmental problems.
  
 Electrowinning
  
 Electrowinning metal recovery tests were conducted using EMEW technology (from the Electrometals Electrowinning company), specifically designed for the electrodeposition of metals from dilute solution tenors. The tests were carried out using filtered cyanide leach pregnant solutions. Although the test results were favourable, it appears unlikely at this stage that this technology could be applied in this situation given the high solution volumes generated and the very low silver concentrations anticipated in the pregnant solution from the heap. However, further test work using the EMEW metal recovery system should be undertaken if the Project advances to the Feasibility Study level because the potential for savings in capital cost and operating cost needs to be investigated.
  
 TEST RESULT REVIEW
  
 Gravity Concentration
  
 Review of Results
  
 As indicated in Table 13.8, the upgrading for silver from the as-received oxide tailings was poor with a maximum concentrate grade of 125 g/t silver at a mass recovery of 20%. The upgrading of gold is similarly poor. The re-grinding of the samples prior to gravity concentration leads to an almost negligible improvement in the upgrading of silver to 126 g/t silver, while for gold a maximum concentrate grade of 1.29 g/t gold was obtained. The sulphide tailings response to gravity concentration is equally poor with even lower grade gravity concentrates being obtained despite slightly improved recoveries being observed for both silver and gold.
  
 Conclusion
  
 The poor results obtained in that no high-grade metal concentrate could be produced, coupled with the fact that no extraction tests for silver and gold were conducted on the gravity concentrates produced, has resulted in the gravity concentration treatment option not being selected for further consideration.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 13-18
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Flotation
  
 Review of Results
  
 The flotation results have been summarized in Table 13.9. The results indicate that the overall recoveries for both silver and gold are low, namely between 8 and 42% for silver and 12 to 48% for gold. The re-grinding of both the tailings samples (Composite A and Composite B) are seen to improve the recoveries, while the testing of various reagent regimes also resulted in improvements to the overall recoveries of both silver and gold in some cases. However, the overall recoveries are generally considered to be low at less than 40% for silver and less than 48% for gold, and this is coupled with a very low-grade concentrate being produced. This poor flotation response is probably the result of surface alterations and/or inadequate liberation of the silver and gold bearing minerals. No extraction tests were conducted on any of the flotation concentrates produced and so the total extent of extraction is not known. No tests were conducted on the sulphide tailings material (Composite C) and its response to flotation as a pre-concentration process is therefore not known.
  
 Conclusion
  
 Flotation will not be considered as a treatment option for the recovery of silver and gold from the oxide tailings dam material. For the reasons specified above, namely a generally low recovery of silver and gold, the option of using flotation to recover silver and gold will not be considered as a processing method in the treatment of the oxide tailings dam material.
  
 Cyanide Leaching
  
 Review of Results
  
 Cyanidation leach tests were done on samples from Composite A and Composite B under different conditions of particle size and solution cyanide concentration. The results have been summarized in Table 13.10. The results generally indicated that cyanidation was still occurring after 72 h of the leaching time used for the laboratory tests, but at a much reduced rate. The base metals copper and zinc also dissolved during the cyanide leach and will contribute to the overall consumption of cyanide. Increasing the cyanide concentration in the leach solution generally improved the extraction of silver and gold, but also increased the overall cyanide consumption. The extraction of silver and gold from Composite A increased with fineness of grind, while Composite B did not improve the extraction for finer grinds than P80 of 100 μm. The cyanide consumption figures are inconsistent in some cases although trends are apparent. Although limited test work was done on material from Composite C, namely the sulphide tailings, a set of results have been included in Table 13.13 below for purposes of comparison.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 13-19
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Table 13.13 Cyanide Leaching Parameters
  
  	  
	 Head Grade
	 Extraction
 (%)
	 Reagent 
 Consumption 
 (kg/t)
	 NaCN 
		  

	 Sample
 Identify
	 Ag
 (g/t)
	 Au
 (g/t)
	 Ag
 (g/t)
	 Au
 (g/t)
	 NaCN
	 Lime
	 Concentration
 (g/l)
	 P80
 (μm)
	 Remarks

	 Composite A
	 94.7
	 0.35
	 66.4
	 81.5
	 1.8
	 1.4
	 1.0
	 269
	 As-received sample

	 Composite B
	 95.9
	 0.28
	 69.1
	 82.0
	 2.6
	 1.8
	 1.0
	 180

	 Average of A
 & B
	 95.3
	 0.32
	 67.8
	 81.8
	 2.2
	 1.6
	 1.0
	 225

	 Composite A
	 94.7
	 0.35
	 79.3
	 85.7
	 1.6
	 1.8
	 1.0
	 103
	 Reground sample

	 Composite B
	 70.3
	 0.52
	 77.1
	 88.3
	 1.7
	 1.8
	 1.0
	 100

	 Average of A
 & B
	 82.5
	 0.44
	 78.2
	 87.0
	 1.7
	 1.8
	 1.0
	 102

	 Composite C
	 39.8
	 0.34
	 73.8
	 77.3
	 4.0
	 2.8
	 1.0
	 69

  
 Conclusions
  
 As-received (unmilled) and reground tailings dam material will be expected to show the following extraction results under normal leaching conditions of approximately 68% for silver and 82% for gold. The reground material will give higher extractions at approximately 78% for silver and 87% for gold (see results in Table 13.12). Although the regrinding of tailings material is considered to be an expensive treatment method, cyanidation with and without regrinding as a treatment option will be reviewed and discussed in Sections 17.1.
  
 Column Leach Test
  
 Review of Results
  
 One column leach test was conducted using a blend of equal proportions of as-received (unmilled) Composite A and Composite B oxide tailings material. Despite interruptions in the leaching cycle as a result of the de-agglomeration of material in the column and the resultant percolation of fines, the overall extraction of silver was 73% and 79% for gold (see Table 13.12 for the results). Although the test was terminated after a total leaching time of 81 d, indications were that the leaching process was nearing completion but had not finalized at that stage. The above extraction results compare very well with the average extraction results obtained from the bottle roll leach tests, namely 68% extraction for silver and 82% for gold. The cyanide consumption of 2.3 kg/t for the column test was also comparable with that obtained for the bottle roll leach tests, namely 2.2 kg/t. The lime consumption for the column test was significantly higher probably as a result of the two repeated agglomeration exercises.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 13-20
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Conclusions
  Although only one column leach test was performed, the extraction results are in keeping with those obtained from the bottle roll tests. The results as given in Table 13.12 will be used for developing the process design criteria.
  
 Precious Metal Recovery
  
 Review of Results
  
 Only one technology was tested for recovering precious metals from cyanide leach solutions. The pregnant solution arising from leach tests performed on oxide tailings material was used to conduct electrowinning tests. Three tests were conducted using the EMEW technology. These tests indicated that silver could be electrowon from solutions with a starting concentration of about 58 mg/L silver to a depleted electrolyte with about 3 mg/L silver. The deposition was also shown to be very selective with respect to the co-deposition of base metals. However, the pregnant solution from a leaching heap is expected to be significantly less than 58 mg/l silver, possibly as low as 16 mg/L silver. It is unclear whether the EMEW technology could operate efficiently under such low silver tenors.
  
 The alternative process options for the recovery of precious metals would likely be either activated carbon, or the zinc precipitation method. No tests were conducted on these two process options. The use of an activated carbon circuit to recover silver is not recommended because of the added operational complexity. Also, the relatively high- grade of the silver in solution will result in the treating of relatively large amounts of carbon, which will add to the cost of the Project.
  
 Conclusions
  
 No other historical test work results were reported by MMI, nor are any alternative technology results known to have taken place, which tested the recovery of silver from the Avino Mine tailings material. The Merrill-Crowe process will therefore be the preferred technology to recover the silver and gold from pregnant leach solution.
  
 13.4 SULPHIDE TAILINGS
  
 Limited test work has been completed on material from the sulphide tailings before 2012. The two sets of the results on the reground sulphide samples indicate that 73% and 87% of the silver and 77% and 85% of the gold can be extracted using 1 and 2 g/L cyanide solutions, respectively. However, the cyanide consumptions were higher than the results from the oxide tailings. No further testing has been conducted on the sulphide tailings samples after 2012.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 13-21
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
  	14.0 MINERAL RESOURCE ESTIMATES

  
 14.1 RESOURCE SUMMARY
  
 The following tables provide a synopsis of the reported Mineral Resources reported in this section. Table 14.1 summarizes the base case values for all current Mineral Resources on the Property.
  
 The reporting cut-off for the Avino Vein is 60 g/t AgEQ and the cut-off for the San Gonzalo Vein is 130 g/t AgEQ. These cut-offs were determined by Avino based on actual mining scenarios and a silver price of $18.50/oz. 
  
 The reporting cut-off for the oxide tailings is 50 g/t AgEQ.
  
 No Mineral Resource for the sulphide tailings is disclosed in this Technical Report.
  
 Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-1
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Table 14.1 Avino Mine – Mineral Resources 
  
  	 Resource Category
	  
	 Deposit
	  
	 Cut-off AgEQ
 (g/t)
	  
	 Tonnes
 (t)
	 Grade
	  
	 Metal Contents

	  
	  
	  
	  
	 AgEQ
 (g/t)
	  
	 Ag
 (g/t)
	  
	 Au
 (g/t)
	  
	 Cu
 (%)
	  
	 AgEQ(million tr oz)*
	  
	 Ag (million
 tr oz)
	  
	 Au (thousand
 tr oz)
	  
	 Cu
 (t)
	  

	 Measured and Indicated Mineral Resources
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Measured
	  
	 Avino – ET
	  
	 60
	  
	 3,890,000
	  
	 141
	  
	 71
	  
	 0.54
	  
	 0.55
	  
	 17.6
	  
	 8.9
	  
	 67.4
	  
	 21,000
	 
	 Measured
	  
	 Avino – San Luis
	  
	 60
	  
	 650,000
	  
	 142
	  
	 67
	  
	 0.70
	  
	 0.49
	  
	 3.0
	  
	 1.4
	  
	 14.6
	  
	 3,000
	 
	 Measured
	  
	 San Gonzalo System
	  
	 130
	  
	 290,000
	  
	 397
	  
	 314
	  
	 1.65
	  
	 0.00
	  
	 3.7
	  
	 2.9
	  
	 15.4
	  
	 0
	 
	 Total Measured
	  
	 All Deposits
	  
	 -
	  
	 4,830,000
	  
	 156
	  
	 85
	  
	 0.63
	  
	 0.51
	  
	 24.3
	  
	 13.2
	  
	 97.4
	  
	 24,000
	 
	 Indicated
	  
	 Avino – ET
	  
	 60
	  
	 2,640,000
	  
	 105
	  
	 49
	  
	 0.56
	  
	 0.34
	  
	 8.9
	  
	 4.2
	  
	 47.6
	  
	 9,000
	 
	 Indicated
	  
	 Avino – San Luis
	  
	 60
	  
	 1,620,000
	  
	 126
	  
	 54
	  
	 0.82
	  
	 0.36
	  
	 6.6
	  
	 2.8
	  
	 42.9
	  
	 6,000
	 
	 Indicated
	  
	 San Gonzalo System
	  
	 130
	  
	 240,000
	  
	 319
	  
	 257
	  
	 1.25
	  
	 0.00
	  
	 2.5
	  
	 2.0
	  
	 9.6
	  
	 0
	 
	 Indicated
	  
	 Oxide Tailings
	  
	 50
	  
	 1,330,000
	  
	 124
	  
	 98
	  
	 0.46
	  
	 0.00
	  
	 5.3
	  
	 4.2
	  
	 19.8
	  
	 0
	 
	 Total Indicated
	  
	 All Deposits
	  
	 -
	  
	 5,830,000
	  
	 124
	  
	 70
	  
	 0.64
	  
	 0.25
	  
	 23.3
	  
	 13.1
	  
	 119.8
	  
	 15,000
	 
	 Total Measured and Indicated
	  
	 All Deposits
	  
	 -
	  
	 10,660,000
	  
	 139
	  
	 77
	  
	 0.63
	  
	 0.37
	  
	 47.5
	  
	 26.3
	  
	 217.2
	  
	 39,000
	 
	 Inferred Mineral Resources
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Inferred
	  
	 Avino – ET
	  
	 60
	  
	 2,380,000
	  
	 111
	  
	 58
	  
	 0.51
	  
	 0.33
	  
	 8.5
	  
	 4,4
	  
	 39.1
	  
	 8,000
	 
	 Inferred
	  
	 Avino – San Luis
	  
	 60
	  
	 1,780,000
	  
	 124
	  
	 57
	  
	 0.72
	  
	 0.38
	  
	 7.1
	  
	 3.2
	  
	 41.2
	  
	 7,000
	 
	 Inferred
	  
	 San Gonzalo System
	  
	 130
	  
	 120,000
	  
	 262
	  
	 219
	  
	 0.86
	  
	 0.00
	  
	 1.0
	  
	 0.8
	  
	 3.3
	  
	 0
	 
	 Inferred
	  
	 Oxide Tailings
	  
	 50
	  
	 1,810,000
	  
	 113
	  
	 88
	  
	 0.44
	  
	 0.00
	  
	 6.6
	  
	 5.1
	  
	 25.6
	  
	 0
	 
	 Total Inferred
	  
	 All Deposits
	  
	 -
	  
	 6,090,000
	  
	 118
	  
	 70
	  
	 0.56
	  
	 0.24
	  
	 23.2
	  
	 13.6
	  
	 109.2
	  
	 15,000
	 

  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-2
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

   	  
	  

  
  	 Notes:
	 Figures may not add to totals shown due to rounding. 
 Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
 The Mineral Resource estimate is classified in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum’s (CIM) Definition Standards
 For Mineral Resources and Mineral Reserves incorporated by reference into National Instrument 43-101 (NI 43-101) Standards of Disclosure for Mineral Projects.
 Mineral Resources are reported at cut-off grades 60 g/t, 130 g/t, and 50 g/t AgEQ grade for ET, San Gonzalo, an oxide tailings, respectively.
 AgEQ or silver equivalent ounces are notational, based on the combined value of metals expressed as silver ounces
 Cut-off grades were calculated using the following assumptions:
 For Avino (ET and San Luis), San Gonzalo: gold price of US$1,300/oz, silver price of US$17.50/oz, and copper price of US$3.00/lb
 For Oxide Tailings: gold price of US$1,250/oz, silver price of US$19.50/oz
 A net smelter return (NSR) was calculated and the silver equivalent was back calculated using the following formulas:
 For ET: AgEQ = (24.06 x Au (g/t) + 0.347 x Ag (g/t) + 43.0 x Cu (%) – 151.8 x Bi (%)) / 0.347
 For San Gonzalo: AgEQ = (0.03 x Au (g/t) + 0.385 x Ag (g/t) – 4.03/0.385
 For Oxide Tailings: AqEQ = 69.37 x Au (g/t) + Ag (g/t)
 No Mineral Resource has been estimated for the sulphide tailings portion of the Propert

  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-3
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 14.2 DATA
  
 Drillhole data for the Avino and San Gonzalo resource estimates was supplied by Avino to ARANZ Geo in the form of several Microsoft® Excel spreadsheet and Microsoft® Access files, and this data was verified and compiled into .csv files (see Section 12.1). 
  
 Wireframe meshes (.dxf files) of the topography, underground development, previous 3D models of the San Gonzalo and Avino Veins and cross-section and plan view images were supplied by Avino. Drillhole data was imported into Leapfrog GeoTM software (version 4.2.3).
  
 Data includes underground channel sampling and diamond drill data.
  
 14.3 AVINO VEIN
  
 14.3.1 GEOLOGICAL INTERPRETATION
  
 The Avino Vein and the surrounding system are interpreted as part of a low- to intermediate-sulphidation system of silver-gold epithermal veins, breccias, stockworks, and silicified zones. The Avino system is relatively thick (up to 40 m thick in places) and exhibits lower silver but higher copper grades than the San Gonzalo Vein system.
  
 Historically, exposure and sampling of the deposit in underground development has been understandably biased towards the higher end of the silver grade spectrum. This presents problems when making decisions on what should be considered to be mineralized vein material, as the position of the mineralization to barren interface was either not exposed or recorded in the development data. In many cases the edge of the mineralized zones was approximated by the end of sampling, the edge of the development or a 40 g/t silver grade.
  
 14.3.2 WIREFRAMING
  
 Mineralized zones were independently modeled by ARANZ Geo in Leapfrog GeoTM software, utilizing the drillhole data, topography and the underground development information. Wireframes and scans of cross-sectional interpretations and underground mappings supplied by Avino assisted in modelling the deposit.
  
 The modelling was carried out independently by ARANZ Geo using Leapfrog GeoTM software applying an implicit “vein system”-style of modelling workflow to produce a series of seamless 3D units.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-4
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 The Avino mineralized vein system was modelled as four subparallel but cross-cutting veins including the main most persistent body consisting of vein material sandwiched between two prominent and siliceous breccias and three subsidiary units (NW1, NW2, NE1). Lithology information and grade information were both used to interpret the extents of the veins and to flag sampled and logged intervals as country rock or as one of the units of interest. Lithology information is often not available for the mined-out areas and grade interpretations had to be used. Material outside the veins and most likely of low grade has usually not been recorded in the legacy data for obvious reasons. Where there is absence of recorded intersections of the vein margins, ARANZ Geo has erred on the side of caution by interpreting the edges of the vein to the last samplings with appreciable grades.
  
 Figure 14.1 Oblique View, Looking North, of the Avino Vein System Model
 
  
 To test the robustness of the model, grade contact profiles were generated.
  
 Grade contact profiles demonstrate how well the wireframe meshes segregate the metal, based on the assayed samples. These contact profiles were generated by determining the average grades for sampled metals within successive 5 m wide slices inside and outside the Avino Vein System models for a range of distances from -10 m (inside the system) to +50 m (outside) from the contact.
  
 The profiles are shown in graphs in Figure 14.2 and the number of samples per 5 m slice is shown in Figure 14.3. There is a moderately rapid decrease with increasing distance from the vein contacts in silver, gold, zinc and copper profiles (as shown in Figure 14.2). To better display the profiles on a single graph, silver has been re-scaled to fit and copper and zinc are in percentage units. For example, the silver grade is generally in excess of 80 g/t within the vein but decreases to an average of less than 30 g/t at a distance of 30 m from the vein contact. Zinc appears to be a good indicator element for the mineralized system and rapidly decreases in abundance within 5 m of the contact. This may be used to advantage in future modelling of the system.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-5
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 As can be seen (Figure 14.3), there is a rapid decrease of information at ranges greater than 20 m from the contact (contact is represented by “0” on the horizontal axis). This is to be expected as the information has been generated in underground workings that have been designed to preferentially expose and sample material that is better mineralized in the vein system. Information is biased towards the underground excavations and the understandable historic tendency to only sample material at any distances away from the known veins that display good mineralization characteristics. However, the profiles do provide an indication that the Avino Vein System has a gradational or soft boundary tendency from an estimation point of view. Silver, gold and copper show the gradational profile, while zinc has relatively sharp profile. This should be followed up to develop future estimation strategies. 
  
 Figure 14.2 Silver Grade Profiles Across the Avino Vein System Contacts
  
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-6
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

   
  	  
	  

  
 Figure 14.3 Copper Grade Profile Across the Avino Vein System Contacts
 
  
 14.4 SAN GONZALO VEIN
  
 14.4.1 GEOLOGICAL INTERPRETATION
  
 The San Gonzalo Vein is interpreted as part of a low- to intermediate-sulphidation system of silver-gold epithermal veins and silicified zones. The individual veins in the San Gonzalo system are relatively narrow (mostly less than 3 m thick in places) and exhibit higher silver but lower copper grades than the Avino Vein system.
  
 14.4.2 WIREFRAMING
  
 The system was modelled using Leapfrog GeoTM software as six sub parallel but cross-cutting veins consisting of a main vein (SG1) and five subsidiary units (SG2 through SG6). Lithology information and grade information were both used to interpret the extents of the veins and to flag sampled and logged intervals as country rock or as one of the units of interest. Figure 14.4 displays the modeling results graphically.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-7
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.4 Oblique View, Looking North, of the San Gonzalo Vein System Model
  
 
  
 To assess the level to which the interpreted San Gonzalo Veins have honoured the selection, contact profiles were generated to examine how well the wireframe meshes segregate the metal, based on the assayed samples. The San Gonzalo Veins are more compact than the Avino Veins and the metal grades at San Gonzalo are confined to the vein material. The contact profiles were generated by determining the average grades for several metals within successive 5 m wide slices inside and outside the San Gonzalo Vein System models for a range of distances from -1.5 m (inside the system) to +1.7 m (outside) from the contact. The profiles are shown in Figure 14.5. There is a rapid decrease with increasing distance from the vein contacts in silver, gold and copper profiles.
  
 Figure 14.5 Silver and Gold Grade Profiles Across the Main San Gonzalo Vein Contacts
  
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-8
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 For example, the silver grade is generally in excess of 200 g/t within the vein but decreases to an average of less than 50 g/t at a distance of 1 m from the vein contact. 
  
 For gold the contacts were less conspicuous, but average grade data still showed that the populations were statistically distinct. All contacts between mineralized and wall rock populations were treated as hard boundaries in estimation.
  
 The San Gonzalo Vein System model is more robust when compared to the data and displays more abrupt metal profiles than the equivalent for the Avino Vein. This may reflect real differences in the mineralization styles (thickness and metal grade differences also support a different process) but may also to some degree be a result of the sparse legacy lithology data in the upper part of the Avino Mine.
  
 14.5 OXIDE TAILINGS
  
 14.5.1 GEOLOGICAL INTERPRETATION
  
 In the Avino oxide tailings, a prominent bench separates the lower portion of the deposit (referred to as the “oxide lower bench” in various documents) from the upper portion of the oxide tailings (the “middle bench”). Overlying the oxide tailings is a volume of sulphide tailings material (the “upper bench” or “sulphide tailings”). The sulphide tailings material lacks representative sampling data.
  
 Figure 14.6 is a perspective view looking north, showing the oxide lower bench, oxide lower bench and sulphide tailings and the positions of drillholes and silver assays.
  
 Figure 14.6 Perspective View of Oxide Tailings Drilling and Silver Assays
  
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-9
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

   
 14.5.2 WIREFRAMING
  
 The tailings deposit was modelled using topography information supplied by Avino and bedrock contact information from the drilling data. 
  
 Figure 14.7 Section View, Looking Northeast, Showing Silver Grades in Oxide Tailings Benches
 
   
 The grade pattern of the upper and lower and middle benches has been better defined by the addition of the recent drilling information (more than doubling the amount of assays, see Table 14.2). Previously, the middle and lower oxide benches were considered separately from an estimation perspective based on the colour difference, the middle bench appearing to be more reddish than the lower material. This may reflect a change in iron content but not necessarily the gold or silver grades. The sampling data (see Figure 14.7) shows a pattern of silver depletion at the top of the middle bench with enrichment immediately below.
  
 The spatial pattern indicates gradational changes between the middle and lower oxide benches, except for silver which appears to have been leached downwards from the top of the middle bench. While the colour difference between the two units may be significant for iron-bearing species, there is not a great statistical difference between the silver and gold grades in the middle and lower benches, and the leaching effect (see Figure 14.6) appears to affect the upper portion of the middle bench. Consequently, it was decided to estimate the middle and lower bench as a single domain. The use of a variogram and search ellipse, flattened in the horizontal direction also reduces the risk of smearing grade vertically. In future it may be preferable to evaluate the leached cap of the tailings separately from the remainder. The risk of not doing so at this time, is ameliorated by the horizontal variogram continuity which reduces the risk of mixing.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-10
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 14.6 EXPLORATORY DATA ANALYSIS
  
 14.6.1 RAW DATA ASSAYS AND STATISTICS
  
 AVINO AND SAN GONZALO
  
 Table 14.2 shows the length-weighted metal statistics for the sample data for the Avino and San Gonzalo mineralization. Assayed metals include silver, gold, and copper. Metals considered in the Avino ET resource estimate include silver, gold, and copper. Metals considered in the San Gonzalo Vein resource estimate include silver and gold.
  
 Oxide Tailings
  
 The drillhole dataset included 91 drillholes with a total metreage of 1,396 m that was completed in the tailings from 1990 to 2016. Only the gold and silver are considered to be of economic interest in the oxide tailings deposit.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-11
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

   
 Table 14.2 Metal Grade Statistics for 2 m Composites for the Avino and San Gonzalo Vein Systems 
  	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Metal
	  
	 Domain
	  
	 Number of
Composites	  
	  
	 Minimum
	  
	  
	 Maximum
	  
	  
	 Mean
	  
	  
	 Variance
	  
	  
	 CV
	  
	  
	 Capping
Value	  
	  
	 Number
Capped	  

	 Avino Vein

	 Ag
	  
	 Main
	  
	  
	6,508	  
	  
	  
	0.01	  
	  
	  
	1,289.96	  
	  
	  
	96.60	  
	  
	  
	7151.54	  
	  
	  
	0.88	  
	  
	  
	1000	  
	  
	  
	2	  

	 Ag
	  
	 NE1
	  
	  
	191	  
	  
	  
	0.01	  
	  
	  
	233.32	  
	  
	  
	47.70	  
	  
	  
	1795.62	  
	  
	  
	0.89	  
	  
	  
	-	  
	  
	  
	0	  

	 Ag
	  
	 NW1
	  
	  
	99	  
	  
	  
	0.01	  
	  
	  
	421.00	  
	  
	  
	100.74	  
	  
	  
	7468.03	  
	  
	  
	0.86	  
	  
	  
	-	  
	  
	  
	0	  

	 Ag
	  
	 NW2
	  
	  
	50	  
	  
	  
	0.01	  
	  
	  
	514.49	  
	  
	  
	104.15	  
	  
	  
	13902.29	  
	  
	  
	1.13	  
	  
	  
	-	  
	  
	  
	0	  

	 Ag
	  
	 HW01
	  
	  
	121	  
	  
	  
	0.01	  
	  
	  
	366.67	  
	  
	  
	49.25	  
	  
	  
	4621.60	  
	  
	  
	1.38	  
	  
	  
	-	  
	  
	  
	0	  

	 Ag
	  
	 HW02
	  
	  
	168	  
	  
	  
	1.58	  
	  
	  
	310.52	  
	  
	  
	42.55	  
	  
	  
	1969.53	  
	  
	  
	1.04	  
	  
	  
	-	  
	  
	  
	0	  

	 Au
	  
	 Main
	  
	  
	6,508	  
	  
	  
	0.00	  
	  
	  
	127.29	  
	  
	  
	0.71	  
	  
	  
	7.55	  
	  
	  
	3.85	  
	  
	  
	50	  
	  
	  
	6	  

	 Au
	  
	 NE1
	  
	  
	191	  
	  
	  
	0.00	  
	  
	  
	2.25	  
	  
	  
	0.24	  
	  
	  
	0.08	  
	  
	  
	1.16	  
	  
	  
	-	  
	  
	  
	0	  

	 Au
	  
	 NW1
	  
	  
	99	  
	  
	  
	0.01	  
	  
	  
	5.60	  
	  
	  
	0.89	  
	  
	  
	0.62	  
	  
	  
	0.89	  
	  
	  
	-	  
	  
	  
	0	  

	 Au
	  
	 NW2
	  
	  
	50	  
	  
	  
	0.01	  
	  
	  
	4.00	  
	  
	  
	0.93	  
	  
	  
	0.50	  
	  
	  
	0.76	  
	  
	  
	-	  
	  
	  
	0	  

	 Au
	  
	 HW01
	  
	  
	121	  
	  
	  
	0.01	  
	  
	  
	8.96	  
	  
	  
	0.73	  
	  
	  
	1.16	  
	  
	  
	1.48	  
	  
	  
	-	  
	  
	  
	0	  

	 Au
	  
	 HW02
	  
	  
	168	  
	  
	  
	0.01	  
	  
	  
	7.65	  
	  
	  
	0.99	  
	  
	  
	1.32	  
	  
	  
	1.16	  
	  
	  
	-	  
	  
	  
	0	  

	 Bi
	  
	 Main
	  
	  
	259	  
	  
	  
	0.00	  
	  
	  
	0.47	  
	  
	  
	0.05	  
	  
	  
	0.00	  
	  
	  
	1.26	  
	  
	  
	-	  
	  
	  
	0	  

	 Bi_2
	  
	 Main
	  
	  
	6,465	  
	  
	  
	0.00	  
	  
	  
	0.81	  
	  
	  
	0.05	  
	  
	  
	0.00	  
	  
	  
	1.14	  
	  
	  
	-	  
	  
	  
	0	  

	 Bi_2
	  
	 NE1
	  
	  
	183	  
	  
	  
	0.00	  
	  
	  
	0.14	  
	  
	  
	0.03	  
	  
	  
	0.00	  
	  
	  
	0.80	  
	  
	  
	-	  
	  
	  
	0	  

	 Bi_2
	  
	 NW1
	  
	  
	96	  
	  
	  
	0.00	  
	  
	  
	0.23	  
	  
	  
	0.04	  
	  
	  
	0.00	  
	  
	  
	1.22	  
	  
	  
	-	  
	  
	  
	0	  

	 Bi_2
	  
	 NW2
	  
	  
	47	  
	  
	  
	0.00	  
	  
	  
	0.30	  
	  
	  
	0.05	  
	  
	  
	0.00	  
	  
	  
	1.35	  
	  
	  
	-	  
	  
	  
	0	  

	 Bi_2
	  
	 HW01
	  
	  
	113	  
	  
	  
	0.00	  
	  
	  
	0.18	  
	  
	  
	0.01	  
	  
	  
	0.00	  
	  
	  
	2.49	  
	  
	  
	-	  
	  
	  
	0	  

	 Bi_2
	  
	 HW02
	  
	  
	168	  
	  
	  
	0.00	  
	  
	  
	0.15	  
	  
	  
	0.01	  
	  
	  
	0.00	  
	  
	  
	2.05	  
	  
	  
	-	  
	  
	  
	0	  

	 Cu
	  
	 Main
	  
	  
	6,508	  
	  
	  
	0.00	  
	  
	  
	7.07	  
	  
	  
	0.65	  
	  
	  
	0.28	  
	  
	  
	0.82	  
	  
	  
	-	  
	  
	  
	0	  

	 Cu
	  
	 NE1
	  
	  
	191	  
	  
	  
	0.01	  
	  
	  
	3.07	  
	  
	  
	0.57	  
	  
	  
	0.24	  
	  
	  
	0.86	  
	  
	  
	-	  
	  
	  
	0	  

	 Cu
	  
	 NW1
	  
	  
	99	  
	  
	  
	0.01	  
	  
	  
	2.04	  
	  
	  
	0.55	  
	  
	  
	0.20	  
	  
	  
	0.81	  
	  
	  
	-	  
	  
	  
	0	  

	 Cu
	  
	 NW2
	  
	  
	50	  
	  
	  
	0.01	  
	  
	  
	2.15	  
	  
	  
	0.41	  
	  
	  
	0.19	  
	  
	  
	1.07	  
	  
	  
	-	  
	  
	  
	0	  

	 Cu
	  
	 HW01
	  
	  
	121	  
	  
	  
	0.01	  
	  
	  
	8.96	  
	  
	  
	0.73	  
	  
	  
	1.16	  
	  
	  
	1.48	  
	  
	  
	-	  
	  
	  
	0	  

	 Cu
	  
	 HW02
	  
	  
	168	  
	  
	  
	0.01	  
	  
	  
	7.65	  
	  
	  
	0.99	  
	  
	  
	1.32	  
	  
	  
	1.16	  
	  
	  
	-	  
	  
	  
	0	  

	 San Gonzalo Vein

	 Ag
	  
	 SG1
	  
	  
	6,669	  
	  
	  
	0.00	  
	  
	  
	14,768.40	  
	  
	  
	283.66	  
	  
	  
	349,328.43	  
	  
	  
	2.08	  
	  
	  
	25	  
	  
	  
	5000	  

	 Ag
	  
	 SG2
	  
	  
	117	  
	  
	  
	0.90	  
	  
	  
	890.24	  
	  
	  
	72.32	  
	  
	  
	6,500.57	  
	  
	  
	1.11	  
	  
	  
	-	  
	  
	  
	0	  

	 Ag
	  
	 SG3
	  
	  
	38	  
	  
	  
	1.69	  
	  
	  
	604.45	  
	  
	  
	95.94	  
	  
	  
	17,852.42	  
	  
	  
	1.39	  
	  
	  
	-	  
	  
	  
	0	  

	 Ag
	  
	 SG4
	  
	  
	168	  
	  
	  
	3.72	  
	  
	  
	5,265.20	  
	  
	  
	200.05	  
	  
	  
	315,058.50	  
	  
	  
	2.81	  
	  
	  
	2	  
	  
	  
	3000	  

	 Ag
	  
	 SG5
	  
	  
	40	  
	  
	  
	1.50	  
	  
	  
	708.10	  
	  
	  
	111.98	  
	  
	  
	36,807.33	  
	  
	  
	1.71	  
	  
	  
	2	  
	  
	  
	600	  

	 Ag
	  
	 SG6
	  
	  
	54	  
	  
	  
	0.70	  
	  
	  
	331.20	  
	  
	  
	40.25	  
	  
	  
	6,418.32	  
	  
	  
	1.99	  
	  
	  
	-	  
	  
	  
	0	  

	 Au
	  
	 SG1
	  
	  
	6,669	  
	  
	  
	0.00	  
	  
	  
	204.17	  
	  
	  
	1.48	  
	  
	  
	17.22	  
	  
	  
	2.80	  
	  
	  
	-	  
	  
	  
	0	  

	 Au
	  
	 SG2
	  
	  
	117	  
	  
	  
	0.01	  
	  
	  
	3.79	  
	  
	  
	0.56	  
	  
	  
	0.35	  
	  
	  
	1.04	  
	  
	  
	-	  
	  
	  
	0	  

	 Au
	  
	 SG3
	  
	  
	38	  
	  
	  
	0.02	  
	  
	  
	3.05	  
	  
	  
	0.58	  
	  
	  
	0.38	  
	  
	  
	1.07	  
	  
	  
	-	  
	  
	  
	0	  

	 Au
	  
	 SG4
	  
	  
	168	  
	  
	  
	0.01	  
	  
	  
	13.96	  
	  
	  
	0.69	  
	  
	  
	2.41	  
	  
	  
	2.24	  
	  
	  
	2	  
	  
	  
	10	  

	 Au
	  
	 SG5
	  
	  
	40	  
	  
	  
	0.01	  
	  
	  
	9.84	  
	  
	  
	0.74	  
	  
	  
	2.78	  
	  
	  
	2.26	  
	  
	  
	2	  
	  
	  
	4	  

	 Au
	  
	 SG6
	  
	  
	54	  
	  
	  
	0.00	  
	  
	  
	2.77	  
	  
	  
	0.30	  
	  
	  
	0.39	  
	  
	  
	2.08	  
	  
	  
	-	  
	  
	  
	0	  

   
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-12
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Table 14.3 Oxide Tailings Samples by Sampling Campaign 
  	  
	  
	  
	  
	  
	  
	  

	 By campaign
	  
	 Pre-2012
	  
	  
	 2015-16
	  

	 Campaign
	  
	  
	0	  
	  
	  
	1	  

	 Number (Ag)
	  
	  
	448	  
	  
	  
	561	  

	 Number (Au)
	  
	  
	448	  
	  
	  
	556	  

	 Number (Cu)
	  
	  
	0	  
	  
	  
	566	  

	 Number (Pb)
	  
	  
	0	  
	  
	  
	563	  

	 Number (Zn)
	  
	  
	0	  
	  
	  
	566	  

	 Mean Ag (g/t)
	  
	  
	95.39	  
	  
	  
	97.81	  

	 Mean Au (g/t)
	  
	  
	0.53	  
	  
	  
	0.47	  

	 Mean Cu (%)
	  
	  
	-	  
	  
	  
	0.14	  

	 Mean Pb (%)
	  
	  
	-	  
	  
	  
	0.99	  

	 Mean Zn (%)
	  
	  
	-	  
	  
	  
	0.19	  

	 Variance Ag
	  
	  
	814.94	  
	  
	  
	1073.20	  

	 Variance Au
	  
	  
	0.03	  
	  
	  
	0.06	  

	 Variance Cu
	  
	  
	-	  
	  
	  
	0.01	  

	 Variance Pb
	  
	  
	-	  
	  
	  
	0.18	  

	 Variance Zn
	  
	  
	-	  
	  
	  
	0.04	  

	 Minimum Ag
	  
	  
	11.00	  
	  
	  
	4.00	  

	 Minimum Au
	  
	  
	0.10	  
	  
	  
	0.01	  

	 Minimum Cu
	  
	  
	-	  
	  
	  
	0.00	  

	 Minimum Pb
	  
	  
	-	  
	  
	  
	0.00	  

	 Minimum Zn
	  
	  
	-	  
	  
	  
	0.00	  

	 Maximum Ag
	  
	  
	222.00	  
	  
	  
	309.00	  

	 Maximum Au
	  
	  
	1.28	  
	  
	  
	2.02	  

	 Maximum Cu
	  
	  
	-	  
	  
	  
	0.66	  

	 Maximum Pb
	  
	  
	-	  
	  
	  
	3.26	  

	 Maximum Zn
	  
	  
	-	  
	  
	  
	1.65	  

	 CV Ag
	  
	  
	0.09	  
	  
	  
	0.11	  

	 CV Au
	  
	  
	0.10	  
	  
	  
	0.26	  

	 CV Cu
	  
	  
	-	  
	  
	  
	0.53	  

	 CV Pb
	  
	  
	-	  
	  
	  
	0.18	  

	 CV Zn
	  
	  
	-	  
	  
	  
	1.19	  

  
 The oxide tailings data have been subdivided by unit and the metal assay statistics are summarized in Table 14.4.
   
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-13
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Table 14.4 Oxide Tailings Assays by Unit 
  	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Unit
	  
	 Unknown
	  
	  
	 Lower
	  
	  
	 Middle
	  
	  
	 Bedrock
	  

	 Length (m)
	  
	  
	139.7	  
	  
	  
	608.9	  
	  
	  
	619.2	  
	  
	  
	28.2	  

	 Number (Ag)
	  
	  
	50	  
	  
	  
	497	  
	  
	  
	482	  
	  
	  
	11	  

	 Number (Au)
	  
	  
	50	  
	  
	  
	497	  
	  
	  
	482	  
	  
	  
	11	  

	 Number (Cu)
	  
	  
	41	  
	  
	  
	186	  
	  
	  
	207	  
	  
	  
	3	  

	 Number (Pb)
	  
	  
	41	  
	  
	  
	186	  
	  
	  
	207	  
	  
	  
	3	  

	 Number (Zn)
	  
	  
	41	  
	  
	  
	186	  
	  
	  
	207	  
	  
	  
	3	  

	 Mean Ag (g/t)
	  
	  
	97.72	  
	  
	  
	103.85	  
	  
	  
	89.27	  
	  
	  
	77.55	  

	 Mean Au (g/t)
	  
	  
	0.39	  
	  
	  
	0.47	  
	  
	  
	0.51	  
	  
	  
	0.29	  

	 Mean Cu (%)
	  
	  
	0.15	  
	  
	  
	0.13	  
	  
	  
	0.12	  
	  
	  
	0.14	  

	 Mean Pb (%)
	  
	  
	1.24	  
	  
	  
	1.12	  
	  
	  
	0.85	  
	  
	  
	1.28	  

	 Mean Zn (%)
	  
	  
	0.18	  
	  
	  
	0.18	  
	  
	  
	0.12	  
	  
	  
	0.20	  

	 Variance Ag
	  
	  
	20.60	  
	  
	  
	20.60	  
	  
	  
	52.00	  
	  
	  
	20.60	  

	 Variance Au
	  
	  
	0.20	  
	  
	  
	0.11	  
	  
	  
	0.13	  
	  
	  
	0.11	  

	 Variance Cu
	  
	  
	0.00	  
	  
	  
	0.00	  
	  
	  
	0.00	  
	  
	  
	0.00	  

	 Variance Pb
	  
	  
	0.00	  
	  
	  
	0.00	  
	  
	  
	0.00	  
	  
	  
	0.00	  

	 Variance Zn
	  
	  
	0.00	  
	  
	  
	0.00	  
	  
	  
	0.00	  
	  
	  
	0.00	  

	 Minimum Ag
	  
	  
	148.13	  
	  
	  
	182.01	  
	  
	  
	193.13	  
	  
	  
	115.00	  

	 Minimum Au
	  
	  
	0.74	  
	  
	  
	1.08	  
	  
	  
	1.21	  
	  
	  
	0.44	  

	 Minimum Cu
	  
	  
	0.27	  
	  
	  
	0.27	  
	  
	  
	0.26	  
	  
	  
	0.15	  

	 Minimum Pb
	  
	  
	1.75	  
	  
	  
	1.83	  
	  
	  
	2.02	  
	  
	  
	1.50	  

	 Minimum Zn
	  
	  
	0.34	  
	  
	  
	0.38	  
	  
	  
	0.26	  
	  
	  
	0.22	  

	 Maximum Ag
	  
	  
	542.01	  
	  
	  
	428.63	  
	  
	  
	525.92	  
	  
	  
	1257.48	  

	 Maximum Au
	  
	  
	0.01	  
	  
	  
	0.02	  
	  
	  
	0.01	  
	  
	  
	0.01	  

	 Maximum Cu
	  
	  
	24.41	  
	  
	  
	22.01	  
	  
	  
	9.75	  
	  
	  
	3.51	  

	 Maximum Pb
	  
	  
	479.10	  
	  
	  
	531.34	  
	  
	  
	528.62	  
	  
	  
	453.94	  

	 Maximum Zn
	  
	  
	18.67	  
	  
	  
	25.97	  
	  
	  
	12.96	  
	  
	  
	6.20	  

	 CV Ag
	  
	  
	0.00	  
	  
	  
	0.00	  
	  
	  
	0.01	  
	  
	  
	0.00	  

	 CV Au
	  
	  
	1.30	  
	  
	  
	0.52	  
	  
	  
	0.48	  
	  
	  
	1.34	  

	 CV Cu
	  
	  
	0.00	  
	  
	  
	0.00	  
	  
	  
	0.00	  
	  
	  
	0.00	  

	 CV Pb
	  
	  
	0.00	  
	  
	  
	0.00	  
	  
	  
	0.00	  
	  
	  
	0.00	  

	 CV Zn
	  
	  
	0.00	  
	  
	  
	0.00	  
	  
	  
	0.00	  
	  
	  
	0.00	  

  
 14.6.2 OUTLIER MANAGEMENT AND CAPPING STRATEGY
  
 It is common practice in the mineral industry to restrict the influence of high assays through “top-cutting” or “capping”. Capping was implemented for each element and for each domain, after to sample length compositing. Capping limits were chosen based on a review of sampling histograms using Snowden SupervisorTM software and examination of coefficient of variation statistic for each domain. The coefficient of variation, also known as relative standard deviation (RSD), is a standardized measure of dispersion of a probability distribution and provides an indication of the presence of significant outliers. Coefficient of variation statistics greater than two and the visual detection of irregular behaviour in the upper portion of log histogram of the data were used as an indicator that capping should be applied.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-14
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 14.6.3 DRILLHOLE COMPOSITING
  
 Compositing is carried out to ensure a common ‘change of support’ length. If samples are not composited, small length samples with a high grade (and the converse) might bias the estimation process.
  
 Inspection of the raw data from the Avino and San Gonzalo systems, indicated that a common composite length of 2 m would accommodate most sample lengths as the majority of sample lengths were less than 2 m and 2 m was used as the standard composite length for the deposit.
  
 Compositing in LeapfrogTM included all samples in the composites with a minimum width of 1.0 m within the mineralized zones. New composites were thus created each time the domain changed.
  
 14.7 DENSITY
  
 14.7.1 DENSITY DATA
  
 Density data was supplied by Avino in the form of a set of measurements made at site. Summary statistics for these measurements are provided in Table 14.5 and Table 14.6.
  
 Table 14.5 Avino Vein System Density Data Summary 
  	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Domain
	  
	 Number
	  
	  
	 Minimum
	  
	  
	 Maximum
	  
	  
	 Mean
	  
	  
	 Variance
	  
	  
	 Coefficient of
Variation	  

	10 (Main)	  
	  
	40	  
	  
	  
	2.53	  
	  
	  
	3.00	  
	  
	  
	2.71	  
	  
	  
	0.02	  
	  
	  
	0.05	  

	 HW01
	  
	  
	42	  
	  
	  
	2.43	  
	  
	  
	2.90	  
	  
	  
	2.68	  
	  
	  
	0.01	  
	  
	  
	0.03	  

	 Wall Rock
	  
	  
	93	  
	  
	  
	2.29	  
	  
	  
	3.00	  
	  
	  
	2.65	  
	  
	  
	0.04	  
	  
	  
	0.07	  

	 Combined
	  
	  
	175	  
	  
	  
	2.29	  
	  
	  
	3.00	  
	  
	  
	2.67	  
	  
	  
	0.03	  
	  
	  
	0.06	  

  
 Table 14.6 San Gonzalo Vein System Density Data Summary 
  	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Domain
	  
	 Number
	  
	  
	 Minimum
	  
	  
	 Maximum
	  
	  
	 Mean
	  
	  
	 Variance
	  
	  
	 Coefficient of
Variation	  

	 SG1
	  
	  
	50	  
	  
	  
	2.40	  
	  
	  
	3.00	  
	  
	  
	2.64	  
	  
	  
	0.03	  
	  
	  
	0.07	  

	 SG2
	  
	  
	2	  
	  
	  
	2.73	  
	  
	  
	2.78	  
	  
	  
	2.76	  
	  
	  
	0.00	  
	  
	  
	0.01	  

	 Wall Rock
	  
	  
	41	  
	  
	  
	2.40	  
	  
	  
	3.00	  
	  
	  
	2.69	  
	  
	  
	0.02	  
	  
	  
	0.05	  

	 Combined
	  
	  
	93	  
	  
	  
	2.40	  
	  
	  
	3.00	  
	  
	  
	2.67	  
	  
	  
	0.03	  
	  
	  
	0.06	  

  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-15
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 The Avino Vein System density data is widely spaced in drillholes across the lower portion of the mine and more than half of the measurements are not in the vein material. The San Gonzalo Vein System density data is more comprehensive but more than 40% of the measurements are not in the vein material.
  
 A global average of 2.63 t/m3 was used for the resource tonnage estimation as it reflects the historic average used at the mine for both the Avino and the San Gonzalo Vein Systems.
  
 Avino conducted bulk density measurements on 432 samples from 20 drillholes in the oxide tailings. Based on these data, Slim (2005d) determined a global average specific gravity value of 1.605 for the oxide tailings. No new specific gravity data that can be considered representative of the tailings pile has been collected, so ARANZ Geo used the specific gravity value of 1.605 for the current oxide tailings estimate.
  
 14.8 BISMUTH
  
 Bismuth is relevant as a penalty element in the Avino Vein material at ET Mine and San Luis. The spatial distribution of the bismuth grade is important for any future planning for possible selective mining or blending. However, there are only 2,462 bismuth assays, compared with 25,074 silver assays. Statistical analysis of the coordinated assay data shows that bismuth is correlated with silver and copper. A linear model was developed using open source R statistical software (R Project 2013) to predict bismuth for samples that have been analysed for silver and copper. The model is summarized in Figure 14.8.
  
 Figure 14.8 Linear Regression Model Coefficients for Bismuth Estimation 
  
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-16
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 The model was verified against the real bismuth grade assays and the model fit was statistically significant. The linear model was used to estimate bismuth into the block model for the Avino Vein System using the linear relationship Bi = 0.0003574 * [Ag] + 0.0230816 * [Cu] + 0.001615. 
  
 In ARANZ Geo’s opinion, this method of estimating bismuth as a penalty element is useful to estimate in situ bismuth. In the future bismuth should be assayed at the same rate as copper to provide more detailed information for mine planning.
  
 14.9 VARIOGRAPHY AND SPATIAL ANALYSIS
  
 Variography was conducted utilizing Snowden SupervisorTM software. The experimental variograms were modelled parallel to the orientations of the veins in the case of the Avino and San Gonzalo Veins and horizontal for the oxide tailings.
  
 Experimental variograms were modelled for the Avino Vein system and the oxide tailings, for all domains and for the relevant potentially useful metals, silver, gold and copper. Experimental variograms were modelled for the San Gonzalo Vein system for all domains and for the relevant potentially useful metals, silver and gold. The variogram models for San Gonzalo have been revised since 2016 to incorporate the observed sub-horizontal trends in grade that appear to reflect telescoping of the mineralization into a vertical window some two to three hundred metres in vertical extent. 
  
 Figure 14.9 through to Figure 14.15 show representative variograms. Variograms were modelled in a normal scores transform, using Snowden SupervisorTM and then back-transformed and used for estimation on the untransformed grade data in Leapfrog EdgeTM. Nearest neighbour (NN) and inverse distance (ID) estimates used the same search ellipses applied for the corresponding ordinary kriged (OK) estimators.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-17
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.9 Avino Vein: Main Zone Experimental and Modelled Silver Variograms
 
  
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-18
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.10 Avino Vein: Main Zone Experimental and Modelled Gold Variograms
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-19
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  
  	 
	 
	 
 
	 

  	  
	  

  
 Figure 14.11 Avino Vein: Main Zone Experimental and Modelled Copper Variograms
  
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-20
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.12 San Gonzalo Vein: SG1 Experimental and Modelled Silver Variograms
 
  
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-21
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.13 San Gonzalo Vein: SG1 Experimental and Modelled Gold Variograms
 
  
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-22
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.14 Oxide Tailings: Domain 10 Experimental Silver Variograms
 
  
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-23
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.15 Oxide Tailings: Domain 10 Experimental Silver Variograms
  
  
 14.10 INTERPOLATION PLAN AND KRIGING PARAMETERS
  
 Estimation for the Avino and San Gonzalo Vein systems was carried out using Leapfrog EdgeTM software and parameters optimized by kriging neighbourhood analysis (KNA) carried out using SupervisorTM software. Optimization was achieved by minimising the number of negative kriging weights and maximising the theoretical slope of regression of the estimates.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-24
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

   
 14.10.1 AVINO
  
 A sub-blocked block model was created to cover the Avino system. The parent block size of 20 m by 10 m by 10 m was used for block model and resource estimate. Sub-blocks of 5 m by 1 m by 2 m were used to better fill the vein system model shapes. Sub-blocks were populated with grades corresponding to those estimated in the parent blocks. The interpolation method used for populating the block model was OK following a kriging neighbourhood specification tested in Snowden SupervisorTM software. A minimum of 8 and maximum of 32 composites were used per block with a maximum of 5 samples per drillhole.
  
 Estimation parameters for the Avino Vein System are summarised in Table 14.7.
  
 14.10.2 SAN GONZALO
  
 A single block model was created to cover the San Gonzalo system. A block size of 10 m by 10 m by 10 m was used for block model and resource estimate. The interpolation method used for populating the block model was OK following a kriging neighbourhood specification tested in Snowden SupervisorTM software. A minimum of 16 and maximum of 48 composites were used per block with a maximum of 40 samples per drillhole.
  
 Estimation parameters used for the San Gonzalo System are summarised in Table 14.8.
  
 14.10.3 OXIDE TAILINGS
  
 A single block model was created to cover the Avino oxide tailings deposit. A block size of 20 m by 20 m by 2 m was used for block model and resource estimate, as the average distance between sample drillholes approximates 30 m and the composite length is 2 m. The interpolation method used for populating the block model was OK following a kriging neighbourhood specification tested in Snowden SupervisorTM software. A minimum of 8 and maximum of 32 composites were used per block with a maximum of 40 samples per drillhole.
  
 Estimation parameters used for the oxide tailings deposit are summarised in Table 14.9.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-25
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Table 14.7 Avino Vein System Variogram and Search Parameters 
  	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	 Ellipsoid
 Rotation
	  
	  
	  
	Min	  
	Max	  

	 Metal
	  
	 Domain
	  
	 Nugget C0
	  
	 C1
	  
	 C2
	  
	 R11
	  
	 R12
	  
	 R13
	  
	 R21
	  
	 R22
	  
	 R23
	  
	 Dip 
	  
	 Azimuth
	  
	 Pitch
	  
	 Comps
	  
	 Comps
	  

	 Ag
	  
	 Main
	  
	 2390
	  
	 2940
	  
	 1740
	  
	 8
	  
	 8
	  
	 8
	  
	 61
	  
	 38
	  
	 18
	  
	 66
	  
	 161
	  
	 157
	  
	 8
	  
	 32
	  

	 Ag
	  
	 NE1
	  
	 724
	  
	 704
	  
	 380
	  
	 8
	  
	 8
	  
	 8
	  
	 61
	  
	 38
	  
	 18
	  
	 73
	  
	 147
	  
	 80
	  
	 8
	  
	 32
	  

	 Ag
	  
	 NW1
	  
	 2390
	  
	 3473
	  
	 3030
	  
	 9
	  
	 8
	  
	 8
	  
	 61
	  
	 38
	  
	 18
	  
	 48
	  
	 177
	  
	 76
	  
	 8
	  
	 32
	  

	 Ag
	  
	 NW2
	  
	 5240
	  
	 4860
	  
	 5500
	  
	 8
	  
	 8
	  
	 8
	  
	 60
	  
	 38
	  
	 18
	  
	 41
	  
	 180
	  
	 110
	  
	 8
	  
	 32
	  

	 Ag
	  
	 HW01
	  
	 530
	  
	 1200
	  
	 880
	  
	 8
	  
	 8
	  
	 8
	  
	 61
	  
	 38
	  
	 18
	  
	 59
	  
	 183
	  
	 76
	  
	 8
	  
	 32
	  

	 Ag
	  
	 HW02
	  
	 980
	  
	 302
	  
	 800
	  
	 9
	  
	 8
	  
	 8
	  
	 62
	  
	 38
	  
	 18
	  
	 63
	  
	 162
	  
	 82
	  
	 8
	  
	 32
	  

	 Au
	  
	 Main
	  
	 1.35
	  
	 1.9
	  
	 4.28
	  
	 8
	  
	 8
	  
	 6
	  
	 35
	  
	 25
	  
	 10
	  
	 66
	  
	 161
	  
	 157
	  
	 8
	  
	 32
	  

	 Au
	  
	 NE1
	  
	 0.036
	  
	 0.036
	  
	 0.029
	  
	 7.8
	  
	 8
	  
	 6
	  
	 35
	  
	 25
	  
	 10
	  
	 73
	  
	 147
	  
	 80
	  
	 8
	  
	 32
	  

	 Au
	  
	 NW1
	  
	 0.28
	  
	 0.26
	  
	 0.3
	  
	 8
	  
	 8
	  
	 8
	  
	 37
	  
	 25
	  
	 10
	  
	 48
	  
	 177
	  
	 76
	  
	 8
	  
	 32
	  

	 Au
	  
	 NW2
	  
	 0.28
	  
	 0.26
	  
	 0.3
	  
	 8
	  
	 8
	  
	 8
	  
	 35
	  
	 25
	  
	 10
	  
	 41
	  
	 180
	  
	 110
	  
	 8
	  
	 32
	  

	 Au
	  
	 HW01
	  
	 1.35
	  
	 1.9
	  
	 4.28
	  
	 8
	  
	 8
	  
	 6
	  
	 35
	  
	 25
	  
	 10
	  
	 59
	  
	 183
	  
	 76
	  
	 8
	  
	 32
	  

	 Au
	  
	 HW02
	  
	 0.5
	  
	 0.5
	  
	 0.3
	  
	 8
	  
	 8
	  
	 6
	  
	 35
	  
	 25
	  
	 10
	  
	 63
	  
	 162
	  
	 82
	  
	 8
	  
	 32
	  

	 Bi
	  
	 Main
	  
	 0.0012
	  
	 0.00067
	  
	 0.0009
	  
	 8
	  
	 7
	  
	 6
	  
	 83
	  
	 46
	  
	 18
	  
	 57
	  
	 158
	  
	 128
	  
	 8
	  
	 32
	  

	 Bi
	  
	 NE1
	  
	 0.00017
	  
	 0.00039
	  
	 0.00014
	  
	 6
	  
	 8
	  
	 9
	  
	 63
	  
	 38
	  
	 26
	  
	 73
	  
	 147
	  
	 78
	  
	 8
	  
	 32
	  

	 Bi
	  
	 NW1
	  
	 0.00015
	  
	 0.00015
	  
	 0.00038
	  
	 10
	  
	 8
	  
	 8
	  
	 62
	  
	 25
	  
	 12
	  
	 48
	  
	 177
	  
	 76
	  
	 8
	  
	 32
	  

	 Bi
	  
	 NW2
	  
	 0.0000048
	  
	 0.00017
	  
	 0.00025
	  
	 11
	  
	 11
	  
	 10
	  
	 63
	  
	 41
	  
	 19
	  
	 41
	  
	 180
	  
	 110
	  
	 8
	  
	 32
	  

	 Bi
	  
	 HW01
	  
	 0.00011
	  
	 0.0002
	  
	 0.00023
	  
	 11
	  
	 8
	  
	 4
	  
	 59
	  
	 25
	  
	 10
	  
	 59
	  
	 183
	  
	 76
	  
	 8
	  
	 32
	  

	 Bi
	  
	 HW02
	  
	 0.00026
	  
	 0.0001
	  
	 0.000036
	  
	 13
	  
	 9
	  
	 6
	  
	 45
	  
	 23
	  
	 9
	  
	 63
	  
	 162
	  
	 82
	  
	 8
	  
	 32
	  

	 Cu
	  
	 Main
	  
	 0.075
	  
	 0.095
	  
	 0.07
	  
	 7
	  
	 5
	  
	 5
	  
	 50
	  
	 40
	  
	 20
	  
	 66
	  
	 161
	  
	 157
	  
	 8
	  
	 32
	  

	 Cu
	  
	 NE1
	  
	 0.075
	  
	 0.095
	  
	 0.07
	  
	 7
	  
	 5
	  
	 5
	  
	 50
	  
	 40
	  
	 20
	  
	 73
	  
	 147
	  
	 78
	  
	 8
	  
	 32
	  

	 Cu
	  
	 NW1
	  
	 0.1
	  
	 0.07
	  
	 0.06
	  
	 7
	  
	 5
	  
	 5
	  
	 50
	  
	 40
	  
	 20
	  
	 48
	  
	 177
	  
	 76
	  
	 8
	  
	 32
	  

	 Cu
	  
	 NW2
	  
	 0.1
	  
	 0.07
	  
	 0.06
	  
	 7
	  
	 5
	  
	 5
	  
	 50
	  
	 40
	  
	 20
	  
	 41
	  
	 180
	  
	 110
	  
	 8
	  
	 32
	  

	 Cu
	  
	 HW01
	  
	 1.35
	  
	 1.9
	  
	 4.28
	  
	 8
	  
	 8
	  
	 6
	  
	 35
	  
	 25
	  
	 10
	  
	 59
	  
	 183
	  
	 76
	  
	 8
	  
	 32
	  

	 Cu
	  
	 HW02
	  
	 0.5
	  
	 0.5
	  
	 0.3
	  
	 8
	  
	 8
	  
	 6
	  
	 35
	  
	 25
	  
	 10
	  
	 63
	  
	 162
	  
	 82
	  
	 8
	  
	 32
	  

  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-26
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Table 14.8 San Gonzalo Vein System: Variogram and Search Parameters
  	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	 Ellipsoid
 Rotation
	  
	  
	  
	  
	  
	  
	  

	 Metal
	  
	 Domain
	  
	 Nugget C0
	  
	 C1
	  
	 C2
	  
	 R11
	  
	 R12
	  
	 R13
	  
	 R21
	  
	 R22
	  
	 R23
	  
	 Dip 
	  
	 Azimuth
	  
	 Pitch
	  
	 Min
 Comps
	  
	 Max
 Comps
	  

	 Ag
	  
	 SG1
	  
	 165000
	  
	 200000
	  
	 109160
	  
	 16
	  
	 16
	  
	 6
	  
	 92
	  
	 84
	  
	 13
	  
	 76
	  
	 32
	  
	 170
	  
	 8
	  
	 32
	  

	 Ag
	  
	 SG2
	  
	 4060
	  
	 6156
	  
	 900
	  
	 16
	  
	 16
	  
	 6
	  
	 92
	  
	 84
	  
	 16
	  
	 84
	  
	 358
	  
	 168
	  
	 8
	  
	 32
	  

	 Ag
	  
	 SG3
	  
	 5000
	  
	 9000
	  
	 4013
	  
	 16
	  
	 16
	  
	 6
	  
	 92
	  
	 84
	  
	 16
	  
	 73
	  
	 42
	  
	 166
	  
	 8
	  
	 32
	  

	 Ag
	  
	 SG4
	  
	 160000
	  
	 180000
	  
	 72635
	  
	 16
	  
	 16
	  
	 6
	  
	 92
	  
	 84
	  
	 16
	  
	 86
	  
	 9
	  
	 117
	  
	 8
	  
	 32
	  

	 Ag
	  
	 SG5
	  
	 10000
	  
	 15000
	  
	 6487
	  
	 16
	  
	 16
	  
	 6
	  
	 92
	  
	 84
	  
	 16
	  
	 76
	  
	 198
	  
	 14
	  
	 8
	  
	 32
	  

	 Ag
	  
	 SG6
	  
	 2000
	  
	 2000
	  
	 1400
	  
	 16
	  
	 16
	  
	 6
	  
	 92
	  
	 84
	  
	 16
	  
	 87
	  
	 34
	  
	 168
	  
	 8
	  
	 32
	  

	 Au
	  
	 SG1
	  
	 11
	  
	 7.5
	  
	 3.94
	  
	 13
	  
	 10
	  
	 3
	  
	 71
	  
	 51
	  
	 10
	  
	 76
	  
	 32
	  
	 170
	  
	 8
	  
	 32
	  

	 Au
	  
	 SG2
	  
	 0.17
	  
	 0.1
	  
	 0.071
	  
	 13
	  
	 10
	  
	 3
	  
	 71
	  
	 51
	  
	 10
	  
	 82
	  
	 358
	  
	 12
	  
	 8
	  
	 32
	  

	 Au
	  
	 SG3
	  
	 0.27
	  
	 0.2
	  
	 0.069
	  
	 13
	  
	 10
	  
	 3
	  
	 71
	  
	 51
	  
	 10
	  
	 73
	  
	 42
	  
	 166
	  
	 8
	  
	 32
	  

	 Au
	  
	 SG4
	  
	 2.03
	  
	 0.7
	  
	 0.33
	  
	 13
	  
	 10
	  
	 3
	  
	 71
	  
	 51
	  
	 10
	  
	 86
	  
	 9
	  
	 168
	  
	 8
	  
	 32
	  

	 Au
	  
	 SG5
	  
	 1.6
	  
	 0.9
	  
	 0.66
	  
	 13
	  
	 10
	  
	 3
	  
	 71
	  
	 51
	  
	 10
	  
	 76
	  
	 198
	  
	 14
	  
	 8
	  
	 32
	  

	 Au
	  
	 SG6
	  
	 0.16
	  
	 0.1
	  
	 0.06
	  
	 13
	  
	 10
	  
	 3
	  
	 71
	  
	 51
	  
	 10
	  
	 87
	  
	 34
	  
	 89
	  
	 8
	  
	 32
	  

  
 Table 14.9 Oxide Tailings Deposit: Variogram and Search Parameters 
 	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Domain 10
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Metal
	  
	 Nugget
	  
	 C1
	  
	 R11
	  
	 R12
	  
	 R13
	  
	 C2
	  
	 R21
	  
	 R22
	  
	 R23
	  
	 Angle1
	  
	 Angle2
	  
	 Angle3
	  
	 mincomps
	  
	 maxcomps
	  

	 Ag
	  
	 0.37
	  
	 0.49
	  
	 30
	  
	 7
	  
	 68
	  
	 0.14
	  
	 130
	  
	 20
	  
	 170
	  
	 0
	  
	 -90
	  
	 135
	  
	 8
	  
	 32
	  

	 Au
	  
	 0.39
	  
	 0.51
	  
	 55
	  
	 8
	  
	 16
	  
	 0.1
	  
	 100
	  
	 20
	  
	 92
	  
	 0
	  
	 -90
	  
	 135
	  
	 8
	  
	 32
	  

	 Cu
	  
	 0.2
	  
	 0.59
	  
	 68
	  
	 8
	  
	 24
	  
	 0.21
	  
	 195
	  
	 19
	  
	 112
	  
	 0
	  
	 -90
	  
	 135
	  
	 8
	  
	 32
	  

	 Pb
	  
	 0.45
	  
	 0.35
	  
	 63
	  
	 13
	  
	 70
	  
	 0.2
	  
	 269
	  
	 14
	  
	 170
	  
	 0
	  
	 -90
	  
	 135
	  
	 8
	  
	 32
	  

	 Zn
	  
	 0.23
	  
	 0.42
	  
	 190
	  
	 11
	  
	 51
	  
	 0.35
	  
	 191
	  
	 12
	  
	 165
	  
	 0
	  
	 -90
	  
	 135
	  
	 8
	  
	 32
	  

   	  

	 Avino Silver & Gold Mines Ltd.
	 14-27
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

   
 14.11 RESOURCE BLOCK MODELS
  
 14.11.1 BLOCK MODEL CONFIGURATIONS
  
 The specifications for the estimation block models for the Avino Vein System and the San Gonzalo Vein System (built using Leapfrog EdgeTM) and the oxide tailings (built using Datamine StudioTM)are summarized in Table 14.10. Both the hard rock vein deposit models for the Avino and San Gonzalo systems are rotated about a vertical axis passing through the bottom left hand corner to better conform to the strike of the veins. Sub-blocking was used to optimize volume filling of the vein models by preferentially minimizing block dimension in the Y-dimension for the vein models while the sub-blocking used for the oxide tailings block model minimized the block dimension in the vertical direction. The block models were not inclined, to avoid potential geometric confusion when the models are used for planning and reconciliation.
  
 Table 14.10 Estimation Block Model Specifications 
  	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Model
	  
	 X0
	  
	 Y0
	  
	 Z0
	  
	 NX
	  
	 NY
	  
	 NZ
	  
	 DX
	  
	 DY
	  
	 DZ
	  
	 MinDX
	  
	 MinDY
	  
	 MinDZ
	  
	 RotV
	  

	 Avino Vein (Leapfrog)
	  
	 569840
	  
	 2712270
	  
	 1800
	  
	 137
	  
	 44
	  
	 65
	  
	 20
	  
	 10
	  
	 10
	  
	 5
	  
	 1
	  
	 2
	  
	 335
	  

	 San Gonzalo Vein (Leapfrog)
	  
	 571065
	  
	 2714432.5
	  
	 2355
	  
	 163
	  
	 72
	  
	 56
	  
	 10
	  
	 5
	  
	 10
	  
	 2.5
	  
	 0.25
	  
	 2.5
	  
	 35
	  

	 Oxide Tailings (Datamine)
	  
	 569680
	  
	 2712020
	  
	 2170
	  
	 16
	  
	 15
	  
	 37
	  
	 40
	  
	 40
	  
	 2
	  
	 4
	  
	 4
	  
	 0.2
	  
	 0
	  

  
 Table 14.11 Explanation of Table 14-10 
  	  
	  
	  

	 Variable
	  
	 Meaning

	 X0
	  
	 minimum easting

	 Y0
	  
	 minimum northing

	 Z0
	  
	 minimum elevation

	 NX
	  
	 number of primary blocks in easting direction

	 NY
	  
	 number of primary blocks in northing direction

	 NZ
	  
	 number of primary blocks in elevation direction

	 DX
	  
	 primary easting block dimension

	 DY
	  
	 primary northing block dimension

	 DZ
	  
	 primary vertical block dimension

	 MinDX
	  
	 minimum sub-block easting dimension

	 MinDY
	  
	 minimum sub-block northing dimension

	 MinDZ
	  
	 minimum sub-block vertical dimension

	 RotV
	  
	 Rotation angle of model about a vertical axis

  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-28
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 14.11.2 INTERPOLATION
  
 The reported resource relies on OK as the best unbiased linear estimator of grade. Other methods of interpolation, including ID2 and NN were employed for model validation purposes and are retained in the block models.
  
 14.12 MODEL VALIDATION
  
 14.12.1 STATISTICS
  
 Mean metal grade values (silver, gold, and copper) for estimated blocks using OK and ID2 for the Avino Vein System domains are shown in Table 14.12. The two types of estimates are comparable particularly in the Main Zone, which is the largest domain.
  
 Mean metal grade values (Ag and Au) for estimated blocks ordinary kriged (OK) and inverse distance to the second power (ID) for the Avino Vein system domains are shown in Table 14.13. The two types of estimates are comparable particularly in the Main Zone, which is the largest domain. 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-29
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Table 14.12 Avino Vein: Block Estimates and Composite Sample Grades
  	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Name
	  
		  
	 Block Count
	  
	 Volume
	  
	 Mean
	  
	 Std. Dev.
	  
	 CV
	  
	 Variance
	  
	 Minimum
	  
	 L. Quartile
	  
	 Median
	  
	 U. Quartile
	  
	 Maximum
	  

	 HW01
	  
		  
	 72,150
	  
	 721,500
	  
		  
		  
		  
		  
		  
		  
		  
		  
		  

		  
	 Ag_ID_all
	  
	 60,031
	  
	 600,310
	  
	 46.55
	  
	 28.80
	  
	 0.62
	  
	 829.67
	  
	 5.50
	  
	 22.79
	  
	 39.04
	  
	 66.40
	  
	 157.22
	  

		  
	 AgOK_all
	  
	 60,031
	  
	 600,310
	  
	 40.89
	  
	 19.34
	  
	 0.47
	  
	 373.86
	  
	 7.65
	  
	 24.31
	  
	 37.85
	  
	 54.52
	  
	 112.68
	  

		  
	 Au_ID_all
	  
	 54,142
	  
	 541,420
	  
	 0.77
	  
	 0.34
	  
	 0.44
	  
	 0.11
	  
	 0.04
	  
	 0.52
	  
	 0.72
	  
	 0.98
	  
	 3.08
	  

		  
	 AuOK_all
	  
	 54,142
	  
	 541,420
	  
	 0.73
	  
	 0.23
	  
	 0.31
	  
	 0.05
	  
	 0.24
	  
	 0.57
	  
	 0.72
	  
	 0.86
	  
	 2.23
	  

		  
	 Cu_ID_all
	  
	 54,142
	  
	 541,420
	  
	 0.15
	  
	 0.09
	  
	 0.62
	  
	 0.01
	  
	 0.03
	  
	 0.09
	  
	 0.12
	  
	 0.19
	  
	 0.82
	  

		  
	 CuOK_all
	  
	 54,142
	  
	 541,420
	  
	 0.16
	  
	 0.07
	  
	 0.45
	  
	 0.01
	  
	 0.05
	  
	 0.10
	  
	 0.13
	  
	 0.21
	  
	 0.40
	  

	 HW02
	  
		  
	 79,666
	  
	 856,360
	  
		  
		  
		  
		  
		  
		  
		  
		  
		  

		  
	 Ag_ID_all
	  
	 73,252
	  
	 792,220
	  
	 39.54
	  
	 14.24
	  
	 0.36
	  
	 202.78
	  
	 9.11
	  
	 30.22
	  
	 38.01
	  
	 47.55
	  
	 94.83
	  

		  
	 AgOK_all
	  
	 73,252
	  
	 792,220
	  
	 38.63
	  
	 10.01
	  
	 0.26
	  
	 100.22
	  
	 10.34
	  
	 32.28
	  
	 38.33
	  
	 45.44
	  
	 74.15
	  

		  
	 Au_ID_all
	  
	 71,897
	  
	 778,670
	  
	 0.84
	  
	 0.61
	  
	 0.72
	  
	 0.37
	  
	 0.10
	  
	 0.39
	  
	 0.66
	  
	 1.18
	  
	 3.64
	  

		  
	 AuOK_all
	  
	 71,897
	  
	 778,670
	  
	 0.87
	  
	 0.51
	  
	 0.58
	  
	 0.26
	  
	 0.12
	  
	 0.47
	  
	 0.77
	  
	 1.22
	  
	 2.51
	  

		  
	 Cu_ID_all
	  
	 71,897
	  
	 778,670
	  
	 0.13
	  
	 0.12
	  
	 0.94
	  
	 0.02
	  
	 0.03
	  
	 0.06
	  
	 0.11
	  
	 0.17
	  
	 2.21
	  

		  
	 CuOK_all
	  
	 71,897
	  
	 778,670
	  
	 0.13
	  
	 0.07
	  
	 0.56
	  
	 0.01
	  
	 0.04
	  
	 0.07
	  
	 0.12
	  
	 0.16
	  
	 0.59
	  

	 Main
	  
		  
	 526,988
	  
	 5,598,230
	  
		  
		  
		  
		  
		  
		  
		  
		  
		  

		  
	 Ag_ID_all
	  
	 453,966
	  
	 4,860,050
	  
	 78.90
	  
	 41.73
	  
	 0.53
	  
	 1741.18
	  
	 0.14
	  
	 50.99
	  
	 70.94
	  
	 98.90
	  
	 518.61
	  

		  
	 AgOK_all
	  
	 453,966
	  
	 4,860,050
	  
	 77.40
	  
	 37.54
	  
	 0.49
	  
	 1409.54
	  
	 0.50
	  
	 50.87
	  
	 70.70
	  
	 97.49
	  
	 326.15
	  

		  
	 Au_ID_all
	  
	 453,966
	  
	 4,860,050
	  
	 0.63
	  
	 0.57
	  
	 0.90
	  
	 0.32
	  
	 0.01
	  
	 0.26
	  
	 0.49
	  
	 0.83
	  
	 9.20
	  

		  
	 AuOK_all
	  
	 453,966
	  
	 4,860,050
	  
	 0.61
	  
	 0.51
	  
	 0.83
	  
	 0.26
	  
	 0.01
	  
	 0.26
	  
	 0.51
	  
	 0.83
	  
	 6.23
	  

		  
	 Cu_ID_all
	  
	 453,966
	  
	 4,860,050
	  
	 0.55
	  
	 0.31
	  
	 0.55
	  
	 0.09
	  
	 0.01
	  
	 0.34
	  
	 0.52
	  
	 0.72
	  
	 2.99
	  

		  
	 CuOK_all
	  
	 453,966
	  
	 4,860,050
	  
	 0.55
	  
	 0.29
	  
	 0.52
	  
	 0.08
	  
	 0.02
	  
	 0.35
	  
	 0.51
	  
	 0.71
	  
	 2.23
	  

	 NE1
	  
		  
	 64,820
	  
	 648,200
	  
		  
		  
		  
		  
		  
		  
		  
		  
		  

		  
	 Ag_ID_all
	  
	 33,557
	  
	 335,570
	  
	 40.81
	  
	 21.03
	  
	 0.52
	  
	 442.38
	  
	 1.64
	  
	 27.69
	  
	 37.69
	  
	 50.05
	  
	 156.58
	  

		  
	 AgOK_all
	  
	 33,557
	  
	 335,570
	  
	 43.02
	  
	 17.40
	  
	 0.40
	  
	 302.59
	  
	 13.15
	  
	 29.28
	  
	 39.00
	  
	 56.42
	  
	 94.32
	  

		  
	 Au_ID_all
	  
	 33,557
	  
	 335,570
	  
	 0.24
	  
	 0.18
	  
	 0.76
	  
	 0.03
	  
	 0.01
	  
	 0.08
	  
	 0.22
	  
	 0.38
	  
	 1.80
	  

		  
	 AuOK_all
	  
	 33,557
	  
	 335,570
	  
	 0.24
	  
	 0.18
	  
	 0.73
	  
	 0.03
	  
	 0.01
	  
	 0.07
	  
	 0.22
	  
	 0.39
	  
	 0.88
	  

		  
	 Cu_ID_all
	  
	 33,557
	  
	 335,570
	  
	 0.45
	  
	 0.21
	  
	 0.47
	  
	 0.05
	  
	 0.02
	  
	 0.29
	  
	 0.45
	  
	 0.58
	  
	 1.40
	  

		  
	 CuOK_all
	  
	 33,557
	  
	 335,570
	  
	 0.45
	  
	 0.16
	  
	 0.36
	  
	 0.03
	  
	 0.11
	  
	 0.35
	  
	 0.45
	  
	 0.55
	  
	 1.04
	  

	 NW1
	  
		  
	 13,119
	  
	 131,190
	  
		  
		  
		  
		  
		  
		  
		  
		  
		  

		  
	 Ag_ID_all
	  
	 12,438
	  
	 124,380
	  
	 72.01
	  
	 48.30
	  
	 0.67
	  
	 2333.35
	  
	 6.18
	  
	 36.95
	  
	 56.73
	  
	 93.36
	  
	 250.23
	  

		  
	 AgOK_all
	  
	 12,438
	  
	 124,380
	  
	 73.33
	  
	 46.15
	  
	 0.63
	  
	 2129.74
	  
	 11.81
	  
	 40.83
	  
	 60.19
	  
	 92.86
	  
	 235.98
	  

		  
	 Au_ID_all
	  
	 12,653
	  
	 126,530
	  
	 0.74
	  
	 0.41
	  
	 0.56
	  
	 0.17
	  
	 0.20
	  
	 0.45
	  
	 0.60
	  
	 0.87
	  
	 2.49
	  

		  
	 AuOK_all
	  
	 12,653
	  
	 126,530
	  
	 0.75
	  
	 0.34
	  
	 0.46
	  
	 0.12
	  
	 0.31
	  
	 0.55
	  
	 0.62
	  
	 0.78
	  
	 2.11
	  

		  
	 Cu_ID_all
	  
	 12,438
	  
	 124,380
	  
	 0.46
	  
	 0.20
	  
	 0.43
	  
	 0.04
	  
	 0.10
	  
	 0.30
	  
	 0.44
	  
	 0.59
	  
	 1.24
	  

		  
	 CuOK_all
	  
	 12,438
	  
	 124,380
	  
	 0.47
	  
	 0.17
	  
	 0.37
	  
	 0.03
	  
	 0.16
	  
	 0.35
	  
	 0.45
	  
	 0.59
	  
	 0.98
	  

	 NW2
	  
		  
	 11,546
	  
	 115,460
	  
		  
		  
		  
		  
		  
		  
		  
		  
		  

		  
	 Ag_ID_all
	  
	 10,756
	  
	 107,560
	  
	 71.55
	  
	 64.14
	  
	 0.90
	  
	 4114.02
	  
	 4.98
	  
	 15.82
	  
	 43.15
	  
	 122.52
	  
	 276.46
	  

		  
	 AgOK_all
	  
	 10,756
	  
	 107,560
	  
	 68.15
	  
	 49.78
	  
	 0.73
	  
	 2478.49
	  
	 12.90
	  
	 20.04
	  
	 51.94
	  
	 109.94
	  
	 204.36
	  

		  
	 Au_ID_all
	  
	 10,756
	  
	 107,560
	  
	 0.91
	  
	 0.27
	  
	 0.30
	  
	 0.07
	  
	 0.18
	  
	 0.72
	  
	 0.92
	  
	 1.16
	  
	 1.51
	  

		  
	 AuOK_all
	  
	 10,756
	  
	 107,560
	  
	 0.85
	  
	 0.14
	  
	 0.16
	  
	 0.02
	  
	 0.39
	  
	 0.76
	  
	 0.84
	  
	 0.91
	  
	 1.31
	  

		  
	 Cu_ID_all
	  
	 10,756
	  
	 107,560
	  
	 0.33
	  
	 0.22
	  
	 0.65
	  
	 0.05
	  
	 0.04
	  
	 0.13
	  
	 0.24
	  
	 0.52
	  
	 1.20
	  

		  
	 CuOK_all
	  
	 10,756
	  
	 107,560
	  
	 0.36
	  
	 0.18
	  
	 0.51
	  
	 0.03
	  
	 0.10
	  
	 0.13
	  
	 0.36
	  
	 0.52
	  
	 0.87
	  

  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-30
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Table 14.13 San Gonzalo Vein: Block Estimates and Composite Sample Grades 
  	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Name
	  
		  
	 Block Count
	  
	 Volume
	  
	 Mean
	  
	 Std. Dev.
	  
	 CV
	  
	 Variance
	  
	 Minimum
	  
	 L. Quartile
	  
	 Median
	  
	 U. Quartile
	  
	 Maximum
	  

	 SG1
	  
		  
	 356842
	  
	 568531.25
	  
		  
		  
		  
		  
		  
		  
		  
		  
		  

		  
	 Ag_ID
	  
	 318859
	  
	 509182.81
	  
	 159.86
	  
	 195.31
	  
	 1.22
	  
	 38144.29
	  
	 2.30
	  
	 37.33
	  
	 94.93
	  
	 211.95
	  
	 3946.41
	  

		  
	 Ag_OK
	  
	 318859
	  
	 509182.81
	  
	 156.18
	  
	 181.65
	  
	 1.16
	  
	 32995.31
	  
	 3.04
	  
	 42.33
	  
	 100.38
	  
	 203.94
	  
	 2301.70
	  

		  
	 Au_ID
	  
	 271130
	  
	 434606.25
	  
	 0.81
	  
	 1.19
	  
	 1.47
	  
	 1.41
	  
	 0.01
	  
	 0.19
	  
	 0.41
	  
	 0.99
	  
	 28.14
	  

		  
	 Au_OK
	  
	 271130
	  
	 434606.25
	  
	 0.81
	  
	 1.23
	  
	 1.51
	  
	 1.50
	  
	 0.02
	  
	 0.19
	  
	 0.41
	  
	 1.01
	  
	 23.15
	  

	 SG2
	  
		  
	 47936
	  
	 74900.00
	  
		  
		  
		  
		  
		  
		  
		  
		  
		  

		  
	 Ag_ID
	  
	 36088
	  
	 56387.50
	  
	 38.81
	  
	 30.67
	  
	 0.79
	  
	 940.36
	  
	 5.98
	  
	 21.94
	  
	 31.47
	  
	 44.11
	  
	 624.41
	  

		  
	 Ag_OK
	  
	 36088
	  
	 56387.50
	  
	 47.95
	  
	 33.71
	  
	 0.70
	  
	 1136.40
	  
	 10.92
	  
	 20.70
	  
	 37.65
	  
	 69.21
	  
	 257.38
	  

		  
	 Au_ID
	  
	 24189
	  
	 37795.31
	  
	 0.31
	  
	 0.27
	  
	 0.85
	  
	 0.07
	  
	 0.05
	  
	 0.09
	  
	 0.16
	  
	 0.50
	  
	 1.16
	  

		  
	 Au_OK
	  
	 24189
	  
	 37795.31
	  
	 0.33
	  
	 0.24
	  
	 0.73
	  
	 0.06
	  
	 0.05
	  
	 0.11
	  
	 0.24
	  
	 0.50
	  
	 1.06
	  

	 SG3
	  
		  
	 10025
	  
	 15664.06
	  
		  
		  
		  
		  
		  
		  
		  
		  
		  

		  
	 Ag_ID
	  
	 5840
	  
	 9125.00
	  
	 78.37
	  
	 23.01
	  
	 0.29
	  
	 529.47
	  
	 22.23
	  
	 65.38
	  
	 79.68
	  
	 92.21
	  
	 200.60
	  

		  
	 Ag_OK
	  
	 9693
	  
	 15145.31
	  
	 80.66
	  
	 24.89
	  
	 0.31
	  
	 619.35
	  
	 29.95
	  
	 70.31
	  
	 75.23
	  
	 82.29
	  
	 249.26
	  

		  
	 Au_ID
	  
	 4535
	  
	 7085.94
	  
	 0.40
	  
	 0.18
	  
	 0.44
	  
	 0.03
	  
	 0.18
	  
	 0.35
	  
	 0.37
	  
	 0.39
	  
	 1.67
	  

		  
	 Au_OK
	  
	 4535
	  
	 7085.94
	  
	 0.40
	  
	 0.17
	  
	 0.43
	  
	 0.03
	  
	 0.22
	  
	 0.32
	  
	 0.34
	  
	 0.38
	  
	 1.24
	  

	 SG4
	  
		  
	 122062
	  
	 190721.88
	  
		  
		  
		  
		  
		  
		  
		  
		  
		  

		  
	 Ag_ID
	  
	 27942
	  
	 43659.38
	  
	 255.74
	  
	 179.66
	  
	 0.70
	  
	 32277.38
	  
	 27.03
	  
	 105.08
	  
	 179.65
	  
	 416.42
	  
	 1466.25
	  

		  
	 Ag_OK
	  
	 27942
	  
	 43659.38
	  
	 263.03
	  
	 174.03
	  
	 0.66
	  
	 30285.34
	  
	 33.52
	  
	 100.17
	  
	 239.88
	  
	 402.12
	  
	 821.71
	  

		  
	 Au_ID
	  
	 13551
	  
	 21173.44
	  
	 0.84
	  
	 0.56
	  
	 0.67
	  
	 0.32
	  
	 0.12
	  
	 0.46
	  
	 0.68
	  
	 1.06
	  
	 5.07
	  

		  
	 Au_OK
	  
	 13551
	  
	 21173.44
	  
	 0.91
	  
	 0.61
	  
	 0.67
	  
	 0.37
	  
	 0.21
	  
	 0.47
	  
	 0.64
	  
	 1.49
	  
	 2.75
	  

	 SG5
	  
		  
	 47581
	  
	 74345.31
	  
		  
		  
		  
		  
		  
		  
		  
		  
		  

		  
	 Ag_ID
	  
	 24108
	  
	 37668.75
	  
	 98.25
	  
	 80.16
	  
	 0.82
	  
	 6426.00
	  
	 14.83
	  
	 19.64
	  
	 80.86
	  
	 170.84
	  
	 326.19
	  

		  
	 Ag_OK
	  
	 24108
	  
	 37668.75
	  
	 94.40
	  
	 64.34
	  
	 0.68
	  
	 4139.40
	  
	 13.57
	  
	 22.95
	  
	 93.00
	  
	 156.26
	  
	 259.26
	  

		  
	 Au_ID
	  
	 14339
	  
	 22404.69
	  
	 0.68
	  
	 0.63
	  
	 0.93
	  
	 0.40
	  
	 0.06
	  
	 0.12
	  
	 0.43
	  
	 1.23
	  
	 2.42
	  

		  
	 Au_OK
	  
	 14339
	  
	 22404.69
	  
	 0.67
	  
	 0.57
	  
	 0.85
	  
	 0.33
	  
	 0.09
	  
	 0.14
	  
	 0.48
	  
	 1.29
	  
	 2.02
	  

	 SG6
	  
		  
	 100563
	  
	 157129.69
	  
		  
		  
		  
		  
		  
		  
		  
		  
		  

		  
	 Ag_ID
	  
	 45332
	  
	 70831.25
	  
	 47.82
	  
	 44.86
	  
	 0.94
	  
	 2012.74
	  
	 4.21
	  
	 10.78
	  
	 29.16
	  
	 77.66
	  
	 197.34
	  

		  
	 Ag_OK
	  
	 45332
	  
	 70831.25
	  
	 48.69
	  
	 28.05
	  
	 0.58
	  
	 786.74
	  
	 3.76
	  
	 22.14
	  
	 48.89
	  
	 68.46
	  
	 123.33
	  

		  
	 Au_ID
	  
	 26683
	  
	 41692.19
	  
	 0.30
	  
	 0.31
	  
	 1.04
	  
	 0.10
	  
	 0.01
	  
	 0.05
	  
	 0.16
	  
	 0.49
	  
	 1.57
	  

		  
	 Au_OK
	  
	 26683
	  
	 41692.19
	  
	 0.39
	  
	 0.28
	  
	 0.73
	  
	 0.08
	  
	 0.01
	  
	 0.11
	  
	 0.37
	  
	 0.66
	  
	 0.94
	  

  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-31
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Mean values for estimated blocks and composites used for the estimation in the oxide tailings model are shown in Table 14.14. The block estimates show lower silver grades than the composites due to the declustering effect of kriging and the large numbers of relatively high-grade composites in the development sampling.
  
 Table 14.14 Oxide Tailings: Block Estimates and Composite Sample Grades
  	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Estimator
	  
	Ag (g/t)
	  
	  
	Au (g/t)
	  
	  
	Cu (%)
	  
	  
	Pb (%)
	  
	  
	Zn (%)
	  

	 Ordinary Kriging
	  
	  
	93.24	  
	  
	  
	0.48	  
	  
	  
	0.130	  
	  
	  
	0.950	  
	  
	  
	0.150	  

	 Nearest Neighbour
	  
	  
	92.56	  
	  
	  
	0.48	  
	  
	  
	0.129	  
	  
	  
	0.930	  
	  
	  
	0.150	  

	 Inverse Distance
	  
	  
	93.94	  
	  
	  
	0.48	  
	  
	  
	0.128	  
	  
	  
	0.949	  
	  
	  
	0.151	  

	 Composites
	  
	  
	96.48	  
	  
	  
	0.46	  
	  
	  
	0.125	  
	  
	  
	0.958	  
	  
	  
	0.153	  

	 Number of Blocks
	  
	  
	45,607	  
	  
	  
	-	  
	  
	  
	-	  
	  
	  
	-	  
	  
	  
	-	  

  
 14.12.2 SECTIONS
  
 The spatial pattern of metal grade distributions for the Avino Vein is shown in Figure 14.16 to Figure 14.19, inclusive. Figure 14.16 shows a typical transverse section illustrating the interaction between the secondary (NE1) zone developed on the footwall side of the main the Avino Vein system. Figure 14.17 to Figure 14.19 are longitudinal sections viewed from the south showing silver, gold and copper grades with high-grade zones tending to plunge at about 40° to the west (Horner 2017).
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-32
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.16 Avino Vein: Typical Transverse Section, Looking East through Drillhole ET07-10,
 Showing the Block Model Centroids Colour Coded by Silver Grade
  
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-33
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.17 Avino Vein: Longitudinal Section Showing the Block Model Centroids Colour
 Coded by Silver Grade
  
 
  
 Figure 14.18 Avino Vein: Longitudinal Section Showing the Block Model Centroids Colour
 Coded by Gold Grade
  
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-34
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.19 Avino Vein: Longitudinal Section Showing the Block Model Centroids Colour
 Coded by Coper Grade
  
  
  
 The spatial pattern of metal grade distributions for the San Gonzalo Vein is shown in Figure 14.20 to Figure 14.23, inclusive. Figure 14.20 shows a typical transverse section illustrating the relatively narrow San Gonzalo Vein and the Anjelica vein (SG4). Figure 14.21 to Figure 14.23 are longitudinal sections viewed from the south showing silver, gold and copper grades with high-grade zones with a subhorizontal tendency despite some local steepening. It has become clear by continued underground mapping and sampling that the San Gonzalo mineralization is depth-constrained within a 250 m interval, probably due to pressure constraining boiling levels during the residence time of the mineralizaing fluids.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-35
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.20 San Gonzalo Vein: Typical Transverse Section, Looking East Aligned Along Drillhole
 SG1115 Showing the Block Model Centroids Colour Coded by Silver Grade
  
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-36
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.21 San Gonzalo Vein: Longitudinal Section Showing the Block Model Centroids
 Colour Coded by Silver Grade
  
  
  
 Figure 14.22 San Gonzalo Vein: Longitudinal Section Showing the Block Model Centroids
 Color Coded by Gold Grade
  
  
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-37
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.23 San Gonzalo Vein: Longitudinal Section Showing the Block Model Centroids
 Colour Coded by Silver Equivalent
  
 
 14.12.3 SWATH PLOTS
  
 Swath plots were generated for the underground vein deposits to compare trends in the estimated grades for the three estimation methods (ordinary kriging, inverse distance and nearest neighbour) in the block models to the source sampling data. The estimation methods for comparison are ordinary kriging (OK, green), nearest neighbour (NN, red) and inverse distance squared (ID2, blue) block estimates for the silver, gold, and copper) and averages were generated for slices oriented parallel to the eastings, northings and elevations. The widths of the swaths (or slices) are 20 m for eastings and 10 m for elevations and the number of blocks is also plotted as histograms to show the number of blocks. The average of assay composites is shown as a black line.
  
 Figure 14.24 through Figure 14.29 displays the swath plots for the Avino deposit, comparing block model estimates and sample grades.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-38
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.24 Avino Vein, Swathplot for Silver, Eastings
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-39
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.25 Avino Vein, Swathplot for Gold Eastings
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-40
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.26 Avin Vein, Swathplot for Copper, Eastings
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-41
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.27 Avino Vein, Swathplot for Silver, Elevation
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-42
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.28 Avino Vein, Swathplot for Gold, Elevation
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-43
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.29 Avino Vein, Swathplot for Copper, Elevation
 
  
 Figure 14.30 through Figure 14.35 displays the swath plots for San Gonzalo Deposit, comparing block model estimates and sample grades.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-44
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.30 San Gonzalo Vein, Swathplot for Silver, Eastings
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-45
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.31 San Gonzalo Vein, Swathplot for Silver, Northings
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-46
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.32 San Gonzalo Vein, Swathplot for Silver, Elevation
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-47
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

   
 Figure 14.33 San Gonzalo Vein, Swathplot for Gold, Eastings
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-48
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.34 San Gonzalo Vein, Swathplot for Gold, Northings
 
   
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-49
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.35 San Gonzalo Vein, Swathplot for Gold, Elevation
 
  
 Figures 14-31 and 14-34 illustrate the restricted vertical interval within which the pressure conditions for silver and gold grade mineralization were operative in the San Gonzalo mineralization event. Figure 14-27 shows a similar pattern for gold in the Avino Vein. However, Figures 14-26 and 14-28 indicate that the silver and copper mineralization window for the Avino Vein system is more persistent with depth.
  
 Figure 14.36 through Figure 14.41 displays the swath plots for the oxide tailings deposit, comparing block model estimates and sample grades.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-50
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.36 Oxide Tailings Deposit, Swathplot for Silver, Easting
  
 
   
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-51
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.37 Oxide Tailings Deposit, Swathplot for Gold, Easting
  
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-52
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.38 Oxide Tailings Deposit, Swathplot for Silver, Northing
  
 
  
 Figure 14.39 Oxide Tailings Deposits, Swathplot for Gold, Northing
  
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-53
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.40 Oxide Tailings Deposit, Swathplot for Silver, Elevation
  
  
  
 Figure 14.41 Oxide Tailings Deposit, Swathplot for Gold, Elevation
  
  
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-54
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 The swath plot comparisons show reasonable correspondence between block estimates and sampling data. As expected, the OK and ID estimates show less extreme values than the NN estimates particularly near the edges of the models. 
  
 14.13 MINERAL RESOURCE CLASSIFICATION
  
 14.13.1 INTRODUCTION
  
 CIM Definition Standards (adopted by the CIM Council on May 10, 2014) for reporting on mineral resources are stated below:
  
 Mineral Resource
  
 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 solid material of economic interest in or on the Earth’s crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction. 
  
 The location, quantity, grade or quality, continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling. 
  
 Material of economic interest refers to diamonds, natural solid inorganic material, or natural solid fossilized organic material including base and precious metals, coal, and industrial minerals. 
  
 The term Mineral Resource covers mineralization and natural material of intrinsic economic interest which has been identified and estimated through exploration and sampling and within which Mineral Reserves may subsequently be defined by the consideration and application of Modifying Factors. The phrase ‘reasonable prospects for eventual economic extraction’ implies a judgment by the Qualified Person in respect of the technical and economic factors likely to influence the prospect of economic extraction. The Qualified Person should consider and clearly state the basis for determining that the material has reasonable prospects for eventual economic extraction. Assumptions should include estimates of cutoff grade and geological continuity at the selected cut-off, metallurgical recovery, smelter payments, commodity price or product value, mining and processing method and mining, processing and general and administrative costs. The Qualified Person should state if the assessment is based on any direct evidence and testing. 
   
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-55
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Interpretation of the word ‘eventual’ in this context may vary depending on the commodity or mineral involved. For example, for some coal, iron, potash deposits and other bulk minerals or commodities, it may be reasonable to envisage ‘eventual economic extraction’ as covering time periods in excess of 50 years. However, for many gold deposits, application of the concept would normally be restricted to perhaps 10 to 15 years, and frequently to much shorter periods of time.
  
 Inferred Mineral Resource 
  
 An Inferred Mineral Resource is that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. 
  
 An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration. 
  
 An Inferred Mineral Resource is based on limited information and sampling gathered through appropriate sampling techniques from locations such as outcrops, trenches, pits, workings and drill holes. Inferred Mineral Resources must not be included in the economic analysis, production schedules, or estimated mine life in publicly disclosed Pre-Feasibility or Feasibility Studies, or in the Life of Mine plans and cash flow models of developed mines. Inferred Mineral Resources can only be used in economic studies as provided under NI 43-101. 
  
 There may be circumstances, where appropriate sampling, testing, and other measurements are sufficient to demonstrate data integrity, geological and grade/quality continuity of a Measured or Indicated Mineral Resource, however, quality assurance and quality control, or other information may not meet all industry norms for the disclosure of an Indicated or Measured Mineral Resource. Under these circumstances, it may be reasonable for the Qualified Person to report an Inferred Mineral Resource if the Qualified Person has taken steps to verify the information meets the requirements of an Inferred Mineral Resource. 
  
 Indicated Mineral Resource 
  
 An Indicated Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. 
  
 Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing and is sufficient to assume geological and grade or quality continuity between points of observation. 
  
 An Indicated Mineral Resource has a lower level of confidence than that applying to a Measured Mineral Resource and may only be converted to a Probable Mineral Reserve. 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-56
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Mineralization may be classified as an Indicated Mineral Resource by the Qualified Person when the nature, quality, quantity and distribution of data are such as to allow confident interpretation of the geological framework and to reasonably assume the continuity of mineralization. The Qualified Person must recognize the importance of the Indicated Mineral Resource category to the advancement of the feasibility of the project. An Indicated Mineral Resource estimate is of sufficient quality to support a Pre-Feasibility Study which can serve as the basis for major development decisions. 
  
 Measured Mineral Resource 
  
 A Measured Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine planning and final evaluation of the economic viability of the deposit. 
  
 Geological evidence is derived from detailed and reliable exploration, sampling and testing and is sufficient to confirm geological and grade or quality continuity between points of observation. 
  
 A Measured Mineral Resource has a higher level of confidence than that applying to either an Indicated Mineral Resource or an Inferred Mineral Resource. It may be converted to a Proven Mineral Reserve or to a Probable Mineral Reserve. 
  
 Mineralization or other natural material of economic interest may be classified as a Measured Mineral Resource by the Qualified Person when the nature, quality, quantity and distribution of data are such that the tonnage and grade or quality of the mineralization can be estimated to within close limits and that variation from the estimate would not significantly affect potential economic viability of the deposit. This category requires a high level of confidence in, and understanding of, the geology and controls of the mineral deposit. 
  
 The Avino resource has estimates for silver, gold, copper, zinc, and lead but reports silver, gold and copper. Silver, gold and copper are recovered from the Avino material and gold and copper are included in the silver equivalent calculation. 
  
 The San Gonzalo resource estimates silver, gold, copper, zinc, and lead but reports only silver and gold. This is because copper, lead and zinc are not current payable metals at San Gonzalo and only gold is additional in the silver equivalent estimate.
  
 Resource classification for both Avino and San Gonzalo is in part based on kriging variance, geological consideration and the practical geometry of distance from data. 
  
 The 2014 CIM Definition Standards of indicated Mineral Resources includes the phrase that “quantity, grade or quality, densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit”. 
   
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-57
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 ARANZ Geo has noted that, in our opinion, the current information available for estimating in situ density is insufficient to support localized (block) estimates to the same level of detail as the metal grades. However, the current data shows that the wall-rock and vein material of the Avino and San Gonzalo deposits have small differences (density difference of vein to wall-rock less than 2%) and very low variability within the veins as measured by the coefficient of variation (less than 0.08, see Table 14.5). The variability of the metal grades shows levels of variability orders of magnitude higher as measured by the coefficient of variation (between 0.4 and 4.4, see Table 14.2). It would be ideal to have density measurements sufficient for local block estimation. However, potential error resulting from the use of a global density mean is likely to be less than 2%. No significant density anomalies have been reported during the current phase of production at the Avino property. Based on the data from the Avino and San Gonzalo veins, grade is a much more material risk factor than the density information. ARANZ Geo considers the restricted amount of density information to be less material and significant than the metal grade variability. ARANZ Geo used the kriging variance of the silver grade estimates as the main factor for resource classification. 
  
 ARANZ Geo has also noted that, despite the lack of metallurgical bulk sampling, there have been several years of metal production from ore of all operating levels on the Avino and San Gonzalo Veins using current processing facilities and that there has been no report of unforeseen metallurgical recovery issues. ARANZ Geo considers that this production history mitigates the lack of a formal bulk sampling program or density data and has allowed mineral resources to be defined with sufficient confidence to support detailed mine planning and evaluation of the economic viability of the deposit. 
  
 Table 14.15 Criteria for Classification of Underground Mineral Resources 
  	  

	 Avino

	 Measured:
	  
	 Ag_kvar <=0.75 (up to 20 m from sampled development)

	 Indicated:
	  
	 Ag_kvar <=0.50 (35 m from sampling, contiguous with development and measured)

	 Inferred:
	  
	 Up to 200 m from sampling data (with demonstrated vein continuity)

	 San Gonzalo

	 Measured:
	  
	 Ag_kvar <=0.18 (up to 15 m from sampled development)

	 Indicated:
	  
	 Ag_kvar <=0.24 (up to 30 m from sampling, contiguous with development and measured)

	 Inferred:
	  
	 Up to 200 m from at least 3 holes data (with demonstrated vein continuity)

  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-58
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 14.14 MINERAL RESOURCE TABULATION
  
 14.14.1 CUT-OFFS AND SILVER EQUIVALENT CALCULATIONS
  
 The San Gonzalo and Avino reported Mineral Resources are tabulated on the basis of AgEQ cut-offs (Table 14.16).
  
 Table 14.16 Silver Equivalent Based Metal Prices and Operational Recovery Parameters 
  	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Metal
	  
	 Price
	  
	  
	 Unit
	  
	  
	 Recovery
(%)	  
	  
	 Rev.
($/t)	  
	  
	 AgEQ
 per Grade
Unit	  

	 San Gonzalo Vein System
	  

	 Ag
	  
	  
	17.50	  
	  
	 $/oz
	  
	  
	  
	83	  
	  
	  
	0.52	  
	  
	  
	1.00	  

	 Au
	  
	  
	1,300.00	  
	  
	 $/oz
	  
	  
	  
	73	  
	  
	  
	29.34	  
	  
	  
	56.38	  

	 Avino Vein System

	 Ag
	  
	  
	17.50	  
	  
	 $/oz
	  
	  
	  
	86	  
	  
	  
	0.54	  
	  
	  
	1.00	  

	 Au
	  
	  
	1,300.00	  
	  
	 $/oz
	  
	  
	  
	75	  
	  
	  
	30.14	  
	  
	  
	55.90	  

	 Cu
	  
	  
	3.00	  
	  
	 $/lb
	  
	  
	  
	85	  
	  
	  
	39.35	  
	  
	  
	72.99	  

	 Bi
	  
	 Penalty 
 Variable
	  
	  
	  
	 -
	  
	  
	  
	70	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Avino Oxide Tailings

	 Ag
	  
	  
	19.50	  
	  
	 $/oz
	  
	  
	  
	73	  
	  
	  
	0.46	  
	  
	  
	1.00	  

	 Au
	  
	  
	1,250.00	  
	  
	 $/oz
	  
	  
	  
	79	  
	  
	  
	31.75	  
	  
	  
	69.37	  

  
 Silver equivalent was calculated from metal grade estimates using operational recovery parameters and the metal prices based on price trends over the last three years. The gold price used is $1,300/oz for the Avino and San Gonzalo Veins and $1,300/oz for the oxide tailings. The silver price used is $17.50/oz for the Avino and San Gonzalo Veins and $19.50/oz for the oxide tailings. The copper price used is $3.00/lb. Copper was only used in the equivalent calculation for the Avino System, the only mineralization where the copper grade justifies extraction.
  
 Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-59
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

   	  
	  

  
 Table 14.17 Mineral Resource Statement for the Avino Property 
  	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	  
	  
	  
	  
	  
	  
	  
	  
	 Grade
	  
	 Metal Contents
	  

	 Resource Category
	  
	 Deposit
	  
	 Cut-off(AgEQ
 g/t) 
	  
	 Tonnes 
 (t)
	  
	 AgEQ (g/t)
	  
	 Ag (g/t)
	  
	 Au (g/t)
	  
	 Cu (%)
	  
	 AgEQ
 (million
 tr oz)* 
	  
	 Ag 
 (million
 tr oz) 
	  
	 Au (thousand
 tr oz) 
	  
	 Cu (t)
	  

	 Measured and Indicated Mineral Resources

	 Measured
	  
	 Avino – ET
	  
	 60
	  
	 3,890,000
	  
	 141
	  
	 71
	  
	 0.54
	  
	 0.55
	  
	 17.6
	  
	 8.9
	  
	 67.4
	  
	 21,000
	 
	 Measured
	  
	 Avino – San Luis
	  
	 60
	  
	 650,000
	  
	 142
	  
	 67
	  
	 0.70
	  
	 0.49
	  
	 3.0
	  
	 1.4
	  
	 14.6
	  
	 3,000
	 
	 Measured
	  
	 San Gonzalo System
	  
	 130
	  
	 290,000
	  
	 397
	  
	 314
	  
	 1.65
	  
	 0.00
	  
	 3.7
	  
	 2.9
	  
	 15.4
	  
	 0
	 
	 Total Measured
	  
	 All Deposits
	  
	 -
	  
	 4,830,000
	  
	 156
	  
	 85
	  
	 0.63
	  
	 0.51
	  
	 24.3
	  
	 13.2
	  
	 97.4
	  
	 24,000
	 
	 Indicated
	  
	 Avino – ET
	  
	 60
	  
	 2,640,000
	  
	 105
	  
	 49
	  
	 0.56
	  
	 0.34
	  
	 8.9
	  
	 4.2
	  
	 47.6
	  
	 9,000
	 
	 Indicated
	  
	 Avino – San Luis
	  
	 60
	  
	 1,620,000
	  
	 126
	  
	 54
	  
	 0.82
	  
	 0.36
	  
	 6.6
	  
	 2.8
	  
	 42.9
	  
	 6,000
	 
	 Indicated
	  
	 San Gonzalo System
	  
	 130
	  
	 240,000
	  
	 319
	  
	 257
	  
	 1.25
	  
	 0.00
	  
	 2.5
	  
	 2.0
	  
	 9.6
	  
	 0
	 
	 Indicated
	  
	 Oxide Tailings
	  
	 50
	  
	 1,330,000
	  
	 124
	  
	 98
	  
	 0.46
	  
	 0.00
	  
	 5.3
	  
	 4.2
	  
	 19.8
	  
	 0
	 
	 Total Indicated
	  
	 All Deposits
	  
	 -
	  
	 5,830,000
	  
	 124
	  
	 70
	  
	 0.64
	  
	 0.25
	  
	 23.3
	  
	 13.1
	  
	 119.8
	  
	 15,000
	 
	 Total Measured and Indicated
	  
	 All Deposits
	  
	 -
	  
	 10,660,000
	  
	 139
	  
	 77
	  
	 0.63
	  
	 0.37
	  
	 47.5
	  
	 26.3
	  
	 217.2
	  
	 39,000
	 
	 Inferred Mineral Resources

	 Inferred
	  
	 Avino – ET
	  
	 60
	  
	 2,380,000
	  
	 111
	  
	 58
	  
	 0.51
	  
	 0.33
	  
	 8.5
	  
	 4,4
	  
	 39.1
	  
	 8,000
	 
	 Inferred
	  
	 Avino – San Luis
	  
	 60
	  
	 1,780,000
	  
	 124
	  
	 57
	  
	 0.72
	  
	 0.38
	  
	 7.1
	  
	 3.2
	  
	 41.2
	  
	 7,000
	 
	 Inferred
	  
	 San Gonzalo System
	  
	 130
	  
	 120,000
	  
	 262
	  
	 219
	  
	 0.86
	  
	 0.00
	  
	 1.0
	  
	 0.8
	  
	 3.3
	  
	 0
	 
	 Inferred
	  
	 Oxide Tailings
	  
	 50
	  
	 1,810,000
	  
	 113
	  
	 88
	  
	 0.44
	  
	 0.00
	  
	 6.6
	  
	 5.1
	  
	 25.6
	  
	 0
	 
	 Total Inferred
	  
	 All Deposits
	  
	 -
	  
	 6,090,000
	  
	 118
	  
	 70
	  
	 0.56
	  
	 0.24
	  
	 23.2
	  
	 13.6
	  
	 109.2
	  
	 15,000
	 

  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-60
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
  	 Notes: 
	 Figures may not add to totals shown due to rounding. 
 Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
 The Mineral Resource estimate is classified in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum’s (CIM) Definition Standards
 For Mineral Resources and Mineral Reserves incorporated by reference into National Instrument 43-101 (NI 43-101) Standards of Disclosure for Mineral Projects.
 Mineral Resources are reported at cut-off grades 60 g/t, 130 g/t, and 50 g/t AgEQ grade for ET, San Gonzalo, an oxide tailings, respectively.
 AgEQ or silver equivalent ounces are notational, based on the combined value of metals expressed as silver ounces
 Cut-off grades were calculated using the following assumptions:
 For Avino (ET and San Luis), San Gonzalo: gold price of US$1,300/oz, silver price of US$17.50/oz, and copper price of US$3.00/lb
 For Oxide Tailings: gold price of US$1,250/oz, silver price of US$19.50/oz
 A net smelter return (NSR) was calculated and the silver equivalent was back calculated using the following formulas:
 For ET: AgEQ = (24.06 x Au (g/t) + 0.347 x Ag (g/t) + 43.0 x Cu (%) – 151.8 x Bi (%)) / 0.347
 For San Gonzalo: AgEQ = (0.03 x Au (g/t) + 0.385 x Ag (g/t) – 4.03/0.385
 For Oxide Tailings: AqEQ = 69.37 x Au (g/t) + Ag (g/t)
 No Mineral Resource has been estimated for the sulphide tailings portion of the Property.

  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-61
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

   
 14.14.1 GRADE-TONNAGE TABLES
  
 Table 14.18 to Table 14.25 inclusive, provide a summary of the grade and tonnage for the Avino, San Gonzalo and Tailings models at a series of cutoffs. These tables show the grade and tonnages for mineralized material at confidence levels of confidence (see Table 14.14) equivalent to measured, indicated and inferred for the three deposits. Each table contains a grey-highlighted line that represents the selection used for the Mineral Resource summarized in Table 14.17.
  
 Table 14.18 Avino Vein (ET and San Luis) – High Confidence/Measured 
  	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Cut-off
 AuEQ
(g/t)	  
	  
	 Tonnes
(t)	  
	  
	 AgEQ
(g/t)	  
	  
	 Ag
(g/t)	  
	  
	 Au
(g/t)	  
	  
	 Cu
(%)	  

	20	  
	  
	  
	4,720,000	  
	  
	  
	137.5	  
	  
	  
	68.0	  
	  
	  
	0.5	  
	  
	  
	0.5	  

	40	  
	  
	  
	4,650,000	  
	  
	  
	139.0	  
	  
	  
	69.0	  
	  
	  
	0.6	  
	  
	  
	0.5	  

	60	  
	  
	  
	4,540,000	  
	  
	  
	141.0	  
	  
	  
	70.4	  
	  
	  
	0.6	  
	  
	  
	0.5	  

	80	  
	  
	  
	3,960,000	  
	  
	  
	152.3	  
	  
	  
	77.6	  
	  
	  
	0.6	  
	  
	  
	0.6	  

	100	  
	  
	  
	3,450,000	  
	  
	  
	161.4	  
	  
	  
	82.5	  
	  
	  
	0.6	  
	  
	  
	0.6	  

  
 Table 14.19 Avino Vein (ET and San Luis) – Medium Confidence/Indicated 
  	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Cut-off
 AuEQ
(g/t)	  
	  
	 Tonnes
(t)	  
	  
	 AgEQ
(g/t)	  
	  
	 Ag
(g/t)	  
	  
	 Au
(g/t)	  
	  
	 Cu
(%)	  

	20	  
	  
	  
	4,430,000	  
	  
	  
	110.6	  
	  
	  
	49.4	  
	  
	  
	0.65	  
	  
	  
	0.34	  

	40	  
	  
	  
	4,390,000	  
	  
	  
	111.4	  
	  
	  
	49.9	  
	  
	  
	0.65	  
	  
	  
	0.34	  

	60	  
	  
	  
	4,260,000	  
	  
	  
	113.1	  
	  
	  
	50.9	  
	  
	  
	0.66	  
	  
	  
	0.35	  

	80	  
	  
	  
	3,030,000	  
	  
	  
	131.8	  
	  
	  
	61.2	  
	  
	  
	0.74	  
	  
	  
	0.40	  

	100	  
	  
	  
	2,300,000	  
	  
	  
	145.3	  
	  
	  
	68.2	  
	  
	  
	0.78	  
	  
	  
	0.46	  

  
 Table 14.20 Avino Vein (ET and San Luis) – Low Confidence/Inferred 
  	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Cut-off
 AuEQ
(g/t)	  
	  
	 Tonnes
(t)	  
	  
	 AgEQ
(g/t)	  
	  
	 Ag
(g/t)	  
	  
	 Au
(g/t)	  
	  
	 Cu
(%)	  

	20	  
	  
	  
	4,870,000	  
	  
	  
	113.5	  
	  
	  
	55.0	  
	  
	  
	0.58	  
	  
	  
	0.36	  

	40	  
	  
	  
	4,770,000	  
	  
	  
	115.2	  
	  
	  
	56.0	  
	  
	  
	0.59	  
	  
	  
	0.36	  

	60	  
	  
	  
	4,160,000	  
	  
	  
	116.5	  
	  
	  
	57.4	  
	  
	  
	0.60	  
	  
	  
	0.35	  

	80	  
	  
	  
	3,620,000	  
	  
	  
	130.8	  
	  
	  
	64.4	  
	  
	  
	0.67	  
	  
	  
	0.40	  

	100	  
	  
	  
	2,840,000	  
	  
	  
	142.1	  
	  
	  
	70.0	  
	  
	  
	0.71	  
	  
	  
	0.44	  

  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-62
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Table 14.21 San Gonzalo Vein – High Confidence/Measured 
  	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Cut-off
 AuEQ
(g/t)	  
	  
	 Tonnes
(t)	  
	  
	 AgEQ
(g/t)	  
	  
	 Ag
(g/t)	  
	  
	 Au
(g/t)	  

	90	  
	  
	  
	360,000	  
	  
	  
	338.8	  
	  
	  
	267.5	  
	  
	  
	1.43	  

	110	  
	  
	  
	320,000	  
	  
	  
	366.6	  
	  
	  
	290.1	  
	  
	  
	1.53	  

	130	  
	  
	  
	290,000	  
	  
	  
	396.8	  
	  
	  
	314.4	  
	  
	  
	1.65	  

	150	  
	  
	  
	260,000	  
	  
	  
	425.4	  
	  
	  
	336.8	  
	  
	  
	1.77	  

	170	  
	  
	  
	230,000	  
	  
	  
	456.1	  
	  
	  
	361.3	  
	  
	  
	1.90	  

  
 Table 14.22 San Gonzalo – Medium Confidence/Indicated 
  	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Cut-off
 AuEQ
(g/t)	  
	  
	 Tonnes
(t)	  
	  
	 AgEQ
(g/t)	  
	  
	 Ag
(g/t)	  
	  
	 Au
(g/t)	  

	90	  
	  
	  
	330,000	  
	  
	  
	265.4	  
	  
	  
	213.5	  
	  
	  
	1.04	  

	110	  
	  
	  
	280,000	  
	  
	  
	293.9	  
	  
	  
	236.4	  
	  
	  
	1.15	  

	130	  
	  
	  
	240,000	  
	  
	  
	319.1	  
	  
	  
	256.8	  
	  
	  
	1.25	  

	150	  
	  
	  
	220,000	  
	  
	  
	336.6	  
	  
	  
	270.9	  
	  
	  
	1.31	  

	170	  
	  
	  
	190,000	  
	  
	  
	360.2	  
	  
	  
	290.2	  
	  
	  
	1.40	  

  
 Table 14.23 San Gonzalo – Low Confidence/Inferred 
  	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Cut-off
 AuEQ
(g/t)	  
	  
	 Metric
(t)	  
	  
	 AgEQ
(g/t)	  
	  
	 Ag
(g/t)	  
	  
	 Au
(g/t)	  

	90	  
	  
	  
	160,000	  
	  
	  
	220.7	  
	  
	  
	184.6	  
	  
	  
	0.72	  

	110	  
	  
	  
	140,000	  
	  
	  
	245.3	  
	  
	  
	204.9	  
	  
	  
	0.81	  

	130	  
	  
	  
	120,000	  
	  
	  
	262.3	  
	  
	  
	219.2	  
	  
	  
	0.86	  

	150	  
	  
	  
	110,000	  
	  
	  
	276.9	  
	  
	  
	231.1	  
	  
	  
	0.92	  

	170	  
	  
	  
	90,000	  
	  
	  
	293.0	  
	  
	  
	244.7	  
	  
	  
	0.96	  

  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-63
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Table 14.24 Oxide Tailings – Medium Confidence/Indicated 
  	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Cut-off
 AgEQ
(g/t)	  
	  
	 Tonnes
(t)	  
	  
	 AgEQ
(g/t)	  
	  
	 Ag
(g/t)	  
	  
	 Au
(g/t)	  

	50	  
	  
	  
	1,329,680	  
	  
	  
	123.69	  
	  
	  
	97.85	  
	  
	  
	0.46	  

	90	  
	  
	  
	1,329,680	  
	  
	  
	123.69	  
	  
	  
	97.85	  
	  
	  
	0.46	  

	100	  
	  
	  
	1,246,533	  
	  
	  
	125.43	  
	  
	  
	99.52	  
	  
	  
	0.46	  

	110	  
	  
	  
	1,113,074	  
	  
	  
	127.88	  
	  
	  
	101.94	  
	  
	  
	0.46	  

	120	  
	  
	  
	817,672	  
	  
	  
	132.45	  
	  
	  
	105.81	  
	  
	  
	0.48	  

	130	  
	  
	  
	412,200	  
	  
	  
	140.02	  
	  
	  
	111.51	  
	  
	  
	0.51	  

	140	  
	  
	  
	165,903	  
	  
	  
	148.05	  
	  
	  
	117.76	  
	  
	  
	0.54	  

	150	  
	  
	  
	49,547	  
	  
	  
	156.67	  
	  
	  
	126.68	  
	  
	  
	0.54	  

  
 Table 14.25 Oxide Tailings – Low Confidence/Inferred 
  	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Cut-off
 AgEQ
(g/t)	  
	  
	 Tonnes
(t)	  
	  
	 AgEQ
(g/t)	  
	  
	 Ag
(g/t)	  
	  
	 Au
(g/t)	  

	50	  
	  
	  
	1,810,640	  
	  
	  
	112.51	  
	  
	  
	87.91	  
	  
	  
	0.44	  

	70	  
	  
	  
	1,810,640	  
	  
	  
	112.51	  
	  
	  
	87.91	  
	  
	  
	0.44	  

	80	  
	  
	  
	1,672,985	  
	  
	  
	115.39	  
	  
	  
	88.76	  
	  
	  
	0.48	  

	90	  
	  
	  
	1,630,901	  
	  
	  
	116.14	  
	  
	  
	88.82	  
	  
	  
	0.49	  

	100	  
	  
	  
	1,580,804	  
	  
	  
	116.71	  
	  
	  
	89.23	  
	  
	  
	0.49	  

	110	  
	  
	  
	994,997	  
	  
	  
	123.72	  
	  
	  
	95.01	  
	  
	  
	0.51	  

	120	  
	  
	  
	541,494	  
	  
	  
	131.80	  
	  
	  
	102.11	  
	  
	  
	0.53	  

	130	  
	  
	  
	290,153	  
	  
	  
	137.97	  
	  
	  
	107.37	  
	  
	  
	0.55	  

	140	  
	  
	  
	112,432	  
	  
	  
	143.11	  
	  
	  
	111.60	  
	  
	  
	0.56	  

	150	  
	  
	  
	3,657	  
	  
	  
	154.09	  
	  
	  
	122.29	  
	  
	  
	0.57	  

  
 14.14.2 GRADE-TONNAGE GRAPHS
  
 Figure 14.42 to Figure 14.49 show the grade-tonnage curves for the mineralized material in the Avino and San Gonzalo Vein systems and the oxide tailings. The graphs correspond to the information shown in Table 14.18 to Table 14.25 inclusive, provide a summary of the grade and tonnage for the Avino, San Gonzalo and Tailings models at a series of cut-offs. These tables show the grade and tonnages for mineralized material at confidence levels of confidence (see Table 14.14Table 14.14) equivalent to measured, indicated and inferred for the three deposits. Each table contains a grey-highlighted line that represents the selection used for the Mineral Resource summarized in Table 14.17.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-64
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.42 Grade Tonnage Graph of Avino Vein Material at Measured Confidence Level
 
  
 Figure 14.43 Grade Tonnage Graph of Avino Vein Material at Indicated Confidence Level
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-65
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.44 Grade Tonnage Graph of Avino Vein Material at Inferred Confidence Level
 
 Figure 14.45 Grade Tonnage Graph of San Gonzalo Vein Material at Measured Confidence Level
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-66
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.46 Grade Tonnage Graph of San Gonzalo Vein Material at Indicated Confidence Level
 
  
 Figure 14.47 Grade Tonnage Graph of San Gonzalo Vein Material at Inferred Confidence Level
 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-67
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Figure 14.48 Grade Tonnage Graph of Oxide Tailings Material at Indicated Confidence Level
  
 
  
  
 Figure 14.49 Grade Tonnage Graph of Oxide Tailings Material at Inferred Confidence Level
  
  
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-68
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 14.15 SULPHIDE TAILINGS
  
 There is no current resource estimate for the sulphide tailings (The upper bench of the tailings heap shown in Figure 14.6).
  
 Some sampling was carried out in 2005 by means of hand-dug pits on the “upper bench” of sulphide tailings but this information does not provide an unbiased sample, being restricted to the top surface of the deposit and consequently no estimation can be carried out with any confidence on the sulphide tailings. 
  
 The volume of the deposit can be estimated, but the tonnage and recoverable metal are not quantifiable. At best, the sulphide tailings are considered a target for further exploration.
  
 No Mineral Resource for the sulphide tailings is disclosed in this Technical Report.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 14-69
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

   	 15.0 MINERAL RESERVE ESTIMATES

  There are currently no Mineral Reserves on the Property.
  
  
 	 Avino Silver & Gold Mines Ltd.
	 15-1
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
 	  
	  

  
 	 16.0 MINING METHODS

  
 A PEA should not be considered to be a Prefeasibility or Feasibility study, as the economics and technical viability of the Project have not been demonstrated at this time. The PEA is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. Furthermore, there is no certainty that the conclusions or results reported in the PEA will be realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
  
 16.1 MINING AT THE AVINO PROPERTY
  
 Tetra Tech mining engineer, Mr. M. Horan, conducted a site visit to the Avino mine, Durango, Mexico on the 19th of December 2017. An underground visit was conducted to mining operations on both the Avino vein and the San Gonzalo veins. 
  
 The site visit included review of mining methods and reviewing short term mining plans. 
  
 16.2 AVINO VEIN
  
 Avino has not based its production decisions on a Feasibility study or Mineral Reserves demonstrating economic and technical viability, and as a result there is increased uncertainty and multiple technical and economic risks of failure, which are associated with these production decisions. These risks, among others, include areas that would be analyzed in more detail in a Feasibility study, such as applying economic analysis to Mineral Resources and Mineral Reserves, more detailed metallurgy, and a number of specialized studies in areas such as mining and recovery methods, market analysis, and environmental and community impacts. Information in this section was provided by Avino.
  
 Avino is currently mining on the Avino Vein using sublevel stoping and room and pillar mining methods. Levels are spaced 20 m apart and accessed via crosscuts from the main ramp. 
  
 The room and pillar methods is used on each sublevel to mine out each level to the extents of the mineralisation. Longholes are then drilled between the sublevels to facilitate blasting of the mineralisation between the sublevels. 
  
 Avino has not yet developed a LOM plan for the Mineral Resources in the Avino Vein; however, mine development and production have been scheduled on a monthly basis for 2018 to 2022. 
  
  
  	 Avino Silver & Gold Mines Ltd.
	 16-1
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
 	  
	  

  
 From 1997 to 2001, mining in the Avino Vein consistently yielded 1,000 t/d of mill feed. During that period, mine production was comprised of ore development mining (drift and slash) and longhole stoping. In contrast, Avino’s strategy for 2015 and 2016 was to produce 1,000 t/d of mill feed by ore development mining until reaching Level 17. The longhole stoping and sublevel caving will then be employed to extract the mineralized material between Levels 9.5, when mining ceased in 2001, to Level 17. In Q4 2014, approximately 35,000 t of mill feed was stockpiled near the mine portal as operations started ramping up. The average mining rate during the first 12 days of January 2015 was 700 t/d and a steady state mining rate of 1,100 t/d has been achieved since then.
  
 Production from the Avino Vein is summarized in Table 16.1.
  
 Table 16.1 Recent Production from the Avino Vein
 	  
	  
	  
	  

	 Production Description
	 2015
	 2016
	 2017

	 Mill Feed Tonnage

	 Tonnes Milled (t)
	 396,113
	 429,289
	 460,890

	 Feed Grade

	 Silver (g/t)
	 65
	 67
	 64

	 Gold (g/t)
	 0.29
	 0.42
	 0.52

	 Copper (%)
	 0.62
	 0.50
	 0.48

	 Recovery

	 Silver (%)
	 87
	 85
	 85

	 Gold (%)
	 75
	 64
	 69

	 Copper (%)
	 87
	 90
	 89

	 Total Metal Produced

	 Silver Produced (oz)
	 717,901
	 789,372
	 803,438

	 Gold Produced (oz)
	 2,757
	 3,691
	 5,259

	 Copper Produced (lb)
	 4,743,691
	 4,206,585
	 4,373,166

	 Ag_Eq Produced (oz)
	 1,801,997
	 1,606,272
	 1,911,428

  
 Source: Avino (2018c; 2017a; 2017b)
  
 16.3 SAN GONZALO VEIN
  
 Avino has not based its production decisions on a Feasibility study or Mineral Reserves demonstrating economic and technical viability, and as a result there is increased uncertainty and multiple technical and economic risks of failure, which are associated with these production decisions. These risks, among others, include areas that would be analyzed in more detail in a Feasibility study, such as applying economic analysis to Mineral Resources and Mineral Reserves, more detailed metallurgy, and a number of specialized studies in areas such as mining and recovery methods, market analysis, and environmental and community impacts. Information in this section was provided by Avino.
  
 Avino is currently mining on the San Gonzalo Vein using cut-and-fill and shrinkage stoping methods.
  
  
  	 Avino Silver & Gold Mines Ltd.
	 16-2
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
 	  
	  

  
 Production from the San Gonzalo Vein is summarized in Table 16.2.
  
 Table 16.2 Recent Production from the San Gonzalo Vein
 	  
	  
	  
	  
	  
	  
	  

	 Production Description
	 2012
	 2013
	 2014
	 2015
	 2016 
	 2017

	 Mill Feed Tonnage

	 Total Mill Feed (t)
	 19,539
	 78,415
	 79,729
	 121,774
	 115,047
	 81,045

	 Feed Grade

	 Silver (g/t)
	 259
	 288
	 337
	 279
	 267
	 269

	 Gold (g/t)
	 1.04
	 1.34
	 1.88
	 1.48
	 1.25
	 1.32

	 Recovery

	 Silver (%)
	 79
	 83
	 84
	 83
	 83
	 84

	 Gold (%)
	 70
	 73
	 78
	 75
	 74
	 78

	 Total Produced

	 Silver (oz)
	 128,607
	 602,233
	 724,931
	 907,384
	 822,689
	 590,765

	 Gold (oz)
	 455
	 2,473
	 3,740
	 4,326
	 3,427
	 2,675

	 Ag_Eq Produced (oz)
	 151,372
	 751,462
	 958,702
	 1,218,351
	 1,073,062
	 789,157

  
 Source: Avino (2018c; 2017a; 2017b)
  
 16.3.1 BULK SAMPLE PROGRAM
  
 Note that information in this section was provided by Avino.
  
 No formal Prefeasibility study has been commissioned, but a 10,000 t bulk sample program was carried out in 2011, and in July 2011 the results were announced. The bulk sample was intended to allow Avino to assess the economics of the zone by confirming mineral grades obtained through earlier diamond drilling. The bulk sample program was completed during Q1 2011.
  
 The overall bulk sample feed grade was 261 g/t silver and 0.9 g/t gold. Silver and gold recoveries were 76% and 59%, respectively, and 232 dry tonnes of flotation concentrate were produced, of which 188 t were sold for net proceeds of US$1.83 million. If the entire production were sold under the same contract terms, the net proceeds would have been US$2.26 million.
  
 Evaluation costs relating to mining, milling, and overhead for the bulk sample program were US$567,045 or US$7.62/oz Ag_Eq, including the costs for the raises and stopes. The cost per tonne produced was US$53.91 and proceeds on 188 t of concentrate sold at US$1.83 million. (The contract prices per ounce of silver and gold were US$36.75 and US$1,511.31, respectively.)
  
 On the basis of internal modelling of the bulk sampling program, Avino proceeded with their mine plan to develop the third, fourth, and fifth levels and to provide mill feed at the rate of 250 t/d on a sustained basis.
  
 It should be noted this production decision is being made without Mineral Reserves or any studies of economic viability that have been prepared in accordance with NI 43-101.
  
  
  	 Avino Silver & Gold Mines Ltd.
	 16-3
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
 	  
	  

  
 16.3.2 PRODUCTION
  
 Note that information in this section was provided by Avino.
  
 Recent production for the Avino Vein and San Gonzalo Vein are summarized in Table 16.1 and Table 16.2, respectively.
  
 Concentrate has been sold on a regular basis to a concentrate-trading firm, with shipments taking place monthly. The Q3 2017 financial results indicated that the cost as cash per ounce silver for the San Gonzalo and Avino Veins was US$9.74. Mining and milling operations continue, even though there has been no Prefeasibility or Feasibility study commissioned after the bulk sample program.
  
 16.3.3 MINE DESIGN
  
 Note that information in this section was provided by Avino.
  
 Access to the underground mining on the San Gonzalo Vein is via a 4 m by 4 m decline developed at -12%. Ground conditions are good. Ground support is mainly bolting, as required.
  
 San Gonzalo uses shrinkage mining for the narrower material, approximately 1.4 m in width, and cut-and-fill mining for mineralized material wider than 2 m.
  
 During shrinkage mining, miners use hand-held jacklegs and stopers to drill and blast in stopes. Material is drilled and blasted using jacklegs to breast horizontally, with two miners from two ends of the stope, with several breasts worked on at once. After each blast, the swell (approximately 40% of the broken material) is mucked from the extraction drift below to allow room for the miners to drill the next lift. Materials and supplies are carried into the stopes by hand down a small raise equipped with steel ladders and a rope. Only 40% of the material is extracted during mining, with the remainder extracted after all mining has been completed; meaning more stopes are required in the development stage at one time to sustain production targets. Scoops are used to muck from the extraction drift below and the material is trammed to a mineralized material pass.
  
 Cut-and-fill mining is more mechanized, as access for scoops is maintained in the stopes from the main ramp by a smaller access attack decline/incline ramp. This access means less manhandling of materials and provides material on a steady basis from each lift while mining takes place. This method requires that waste fill be placed after each lift of material has been mined prior to mining the next lift. Stopers are used to drill vertical holes, with half the stope being blasted at once. A two-yard scoop is used in the stope to place waste and muck material. It is 1.2 m wide and requires 2.0 m wide to operate. No mill discharge is used for backfilling.
  
 The mine is able to achieve a production rate of 230 t/d, with three shrinkage stopes and one cut-and-fill stope developed/mined at once, plus two headings in mineralized material or the shrinkage undercut. The mine works 6 d/wk, or 26 d/mo. A mining contractor has been hired for material haulage.
  
  
  	 Avino Silver & Gold Mines Ltd.
	 16-4
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
 	  
	  

  
 16.4 OXIDE TAILINGS
  
 The oxide tailings Mineral Resource will be mined/moved using a conventional truck/loader surface mining method. The production cycle consists of loading and trucking.
  
 16.4.1 SCHEDULE
  
 The production schedule has been developed for the oxide tailings based on a treatment rate of 500 kt/a. This would be equivalent to a throughput rate of 1,370 t/d. This will give an overall Project duration of approximately eight years. This eight-year period includes one year of pre-production and excludes the time required for remediation of the heap after the leaching process has been completed. Only oxide tailings will be considered for treatment, while sulphide materials will be considered waste. The production schedule is shown in Table 16.3.
  
 Table 16.3 Mining Production Schedule
 	  
	  
	  
	  
	  

	 Year
	 Mineralized
 Material
 (t)
	 Head Grade
	 Waste
 (t)
	 Total Material
 Moved
 (t)

	 Ag (g/t)
	 Au (g/t)

	 -1
	 -
	 -
	 -
	 500,000
	 500,000

	 1
	 350,000
	 88.83
	 0.51
	 558,906
	 908,906

	 2
	 500,000
	 100.11
	 0.48
	 497,101
	 997,101

	 3
	 500,000
	 94.95
	 0.44
	 498,995
	 998,995

	 4
	 500,000
	 78.28
	 0.45
	 75,148
	 575,148

	 5
	 499,673
	 82.99
	 0.44
	 500,327
	 1,000,000

	 6
	 500,000
	 87.95
	 0.36
	 295,829
	 795,829

	 7
	 272,641
	 76.27
	 0.28
	 12,405
	 285,046

	 LOM
	 3,122,314
	 87.75
	 0.43
	 2,938,711
	 6,061,025

  
 16.4.2 EQUIPMENT
  
 The mining operations include loading and trucking. Loading/trucking operations will be conducted in two, 12 h shifts per day. A 3.85 m3 rated (5.0 yd3) front-end loader will be used to load 3, 24 t articulated truck that will either deliver the sulphide tailings to the sulphide waste stockpile or the oxide tailings to the oxide tailings hopper.
  
 16.4.3 MODIFYING SITE CONSIDERATIONS
  
 Certain areas of the tailings might contain high amounts of moisture that can lead to equipment getting stuck. To mitigate this challenge, wider, oversized tires with chains will be installed on the front-end loader. Also, the front-end loader bucket will be downsized to 3.06 m3 (4.0 yd3). This will lighten the load on the front tires preventing them from sinking into saturated material. The trucks will not enter the soft zones so there will be no modifications to the trucks.
  
 16.5 SULPHIDE TAILINGS
  
 Avino is not currently conducting treatment activity on the sulphide tailings. In this study, sulphide tailings are considered as waste.
  
  
  	 Avino Silver & Gold Mines Ltd.
	 16-5
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

   
  	 17.0 RECOVERY METHODS

  
 As mentioned in Section 13.0, there are three separate mineralization sources in the Property, including the Avino and San Gonzalo mines, which are currently in operation, and the potential tailings resource from previous milling operations. The San Gonzalo Mine entered commercial production in October 2012, followed by reopening the Avino Mine in January 2015. The two mines feed a conventional flotation mill that has three separate circuits and a capacity of 1,500 t/d. 
  
 From January 2017, Avino has been constructing a new separate processing line identified as Circuit #4. The addition of Circuit #4 will have an identical throughput capacity as Circuit #3 which currently used for processing the materials from the Avino mine. The mill expansion is expected to increase overall mill capacity to 2,500 t/d.
  
 The existing crushing plant will be upgraded to accommodate the higher throughput with a new larger tertiary cone crusher. The equipment in grinding, flotation and dewatering circuits planned for the expansion are similar in size to the existing equipment used for Circuit #3. The initial mill feed to Circuit #4 will be from the existing surface stockpiles although the additional circuit will be mainly used for processing the materials from San Luis of the Avino vein system. 
  
 Currently, there is no operation for the tailings resource. The PEA study conducted in 2017 proposed heap leaching treatment for the silver and gold recovery from the oxide tailings portion of the Property. The proposed treatment was discussed in details in the technical report entitled “Technical Report on the Avino Property”, dated April 11, 2017. 
  
 Avino is not currently conducting mining activity on the sulphide tailings. No recovery methods are currently proposed for the sulphide tailings. 
  
 17.1 AVINO VEIN
  
 Avino is currently conducting mining activity on the Avino Vein and processing Avino Vein material at the mine plant.
  
 Historically, prior to the mine shutting down in 2001, Avino operated a 1,000 t/d processing plant, producing a copper concentrate that was sold to a smelter in San Luis Potosi for approximately 27 years. From 1997 to 2001, the mill process rate averaged 1,000 t/d and achieved up to 1,300 t/d. The mine and mill operations were then suspended. Following several years of redevelopment, Avino completed the Avino Mine and mill expansion in Q4 2014. On January 1, 2015, full scale operations commenced and commercial production was declared effective April 1, 2016 following a 19 month advancement and test period.
  
  
  	 Avino Silver & Gold Mines Ltd.
	 17-1
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

 
 	  
	  

   
 The plant consists of a conventional three-stage crushing circuit with the tertiary crusher in closed circuit with a screen. The crushed material is fed to a ball mill and the ball discharge is classified with a hydrocyclone at a grind size of approximately 65% passing 200 mesh. Lime is added in the ball mill to raise the flotation pH to about 10.5 to depress pyrite. Flotation reagents used include Aeroflot 208, 404 and Aerophine 3418, together with a glycol frother. The concentrates from the rougher and scavenger circuits are upgraded in a cleaner circuit with the final concentrate reporting to a dewatering circuit. The final concentrate is dewatered to approximately 8% moisture and then shipped to the smelter. Flotation tailings is pumped to the permitted tailings impoundment where decant water is reclaimed for process use.
  
 A single stage of cleaning is used for the rougher and scavenger concentrates to produce a final copper concentrate grading 20 to 25% copper. Typical copper recoveries range from 85 to 90%, silver in the mid 80’s, and gold between 60 and 70% depending on the source of the material. Process optimization should focus on reducing the bismuth content in the concentrate and on improving gold recovery.
  
 A summary of the mill production and balance for 2015, 2016, and 2017 is provided in Table 17.1.
  
 Table 17.1 Avino Vein Mill Production
 	  
	  
	  
	  

	 Production Description
	 2015
	 2016
	 2017

	 Mill Feed Tonnage

	 Tonnes Milled (t)
	 396,113
	 429,289
	 460,890

	 Feed Grade

	 Silver (g/t)
	 65
	 67
	 64

	 Gold (g/t)
	 0.29
	 0.42
	 0.52

	 Copper (%)
	 0.62
	 0.50
	 0.48

	 Recovery

	 Silver (%)
	 87
	 85
	 85

	 Gold (%)
	 75
	 64
	 69

	 Copper (%)
	 87
	 90
	 89

	 Total Metal Produced

	 Silver Produced (oz)
	 717,901
	 789,372
	 803,438

	 Gold Produced (oz)
	 2,757
	 3,691
	 5,259

	 Copper Produced (lb)
	 4,743,691
	 4,206,585
	 4,373,166

	 AgEQ Produced (oz)
	 1,801,997
	 1,606,272
	 1,911,428

  
 Source: Avino (2018; 2017a,)
  
  
  	 Avino Silver & Gold Mines Ltd.
	 17-2
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

   
 The simplified flowsheet, including grinding and flotation circuits, is shown in Figure 17.1.
  
 Figure 17.1 Simplified Flowsheet – Avino Vein
  
 
  
  
  	 Avino Silver & Gold Mines Ltd.
	 17-3
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

   
 17.2 SAN GONZALO VEIN
  
 The San Gonzalo Mine entered commercial production in October 2012. The current process plant consists of crushing and grinding facilities, followed by a gravity and flotation process circuit to recover and upgrade silver and gold from the feed material. Aeroflot 208 and Aerophine 3418, together with a glycol frother, are used within the flotation circuit. The flotation concentrate is thickened, filtered to approximately 8% moisture content, and sent to the concentrate stockpile for subsequent shipping to customers. A gravity concentrator has been incorporated into the grinding circuit to recover electrum and to improve the overall silver and gold recoveries.
  
 The final flotation tailings is disposed of in the existing permitted tailings storage facility. A summary of the material and metallurgical balances from April 2013 is outlined in Table 17.2. The process flowsheet is similar to the one used for the Avino vein as shown in Figure 17.1.
  
 Table 17.2 San Gonzalo Vein Mill Production
 	  
	  
	  
	  
	  
	  
	  

	 Production Description
	 2012
	 2013
	 2014
	 2015
	 2016 
	 2017

	 Mill Feed Tonnage

	 Total Mill Feed (t)
	 19,539
	 78,415
	 79,729
	 121,774
	 115,047
	 81,045

	 Feed Grade

	 Silver (g/t)
	 259
	 288
	 337
	 279
	 267
	 269

	 Gold (g/t)
	 1.04
	 1.34
	 1.88
	 1.48
	 1.25
	 1.32

	 Recovery

	 Silver (%)
	 79
	 83
	 84
	 83
	 83
	 84

	 Gold (%)
	 70
	 73
	 78
	 75
	 74
	 78

	 Total Produced

	 Silver (oz)
	 128,607
	 602,233
	 724,931
	 907,384
	 822,689
	 590,765

	 Gold (oz)
	 455
	 2,473
	 3,740
	 4,326
	 3,427
	 2,675

	 AgEQ Produced (oz)
	 151,372
	 751,462
	 958,702
	 1,218,351
	 1,073,062
	 789,157

  
 Source: Avino (2018; 2017a)
  
 17.3 TAILINGS RESOURCES
  
 There are two types of the tailings produced from the previous mining operations: oxide tailings and sulphide tailings. Currently there is no operation to recover metals from both the tailings resources.
  
 A PEA Update study was conducted in 2017, focusing on the oxide tailings treatment for the recovery of silver and gold from the tailings dam.
  
  
  	 Avino Silver & Gold Mines Ltd.
	 17-4
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
17.3.1 OXIDE TAILINGS   
 TREATMENT SELECTION
  
 An earlier PEA was conducted in 2012 (Tetra Tech 2013) to compare three potential processing treatment routines for the oxide tailings retreatment project, including:
  
  	  
	·	cyanidation (tank leaching) of the oxide tailings without regrinding
	  
	  
	  

	  
	·	cyanidation (tank leaching) of the oxide tailings with regrinding
	  
	  
	  

	  
	·	heap leaching of the oxide tailings without regrinding.

  
 A preliminary economical evaluation, at a mill feed rate of 1,370 t/d, shows that heap leaching treatment is more favourable than the other two treatment options, in terms of initial capital cost and operating cost. The 2017 PEA Update was based on the heap leaching treatment technology that was used for the previous PEA (Tetra Tech 2013).
  
 PROCESS FLOWSHEET
  
 The proposed treatment plant will consist of agglomeration and cyanide heap leaching, followed by a Merrill-Crowe process to recover silver and gold from pregnant solution. The process plant will operate on a 24 h/d, 365 d/a basis, with an overall utilization of 90%.
  
 The simplified flowsheet is shown in Figure 17.2.
  
  
  	 Avino Silver & Gold Mines Ltd.
	 17-5
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

   
 Figure 17.2 Simplified Process Flowsheet
  
 
  
  
  	 Avino Silver & Gold Mines Ltd.
	 17-6
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 MAJOR DESIGN CRITERIA
  
 The heap leach was designed to process 0.5 Mt/a of oxide tailings. This would be equivalent to a throughput rate of 1,370 t/d and equivalent to 63.4 t/h at a 90% running time.
  
 The major criteria used in the design are outlined in Table 17.3
  
 Table 17.3 Major Design Criteria
  	  
	  
	  

	 Criteria
	 Unit
	 Number

	 Operating Year
	 d
	 365

	 Overall Plant Availability
	 %
	 90

	 Annual Processing Rate
	 t
	 500,000

	 Daily Processing Rate
	 t/d
	 1,370

	 Tailing Bulk Density
	 t/m3
	 1.605

	 Agglomerated Tailing Bulk Density
	 t/m3
	 1.24

	 Agglomerated Feed Size, P80 Passing
	 μm
	 225

	 Agglomerated Product Size, P80 Passing
	 mm
	 6 to 15

	 Moisture Content of Agglomerated Feed
	 %
	 12.5

	 Total Loading/Curing/Leaching/Rinsing Cycle
	 d
	 142

	 Cyanide Solution Strength
	 g/L
	 0.5

  
 The design parameters were based on test work results obtained by PRA but directed by MMI, using the results from Huang (2005) and Slim (2005d).
  
 PROCESS PLANT DESCRIPTION
  
 For an oxide tailings treatment rate of 0.5 Mt/a, an equivalent throughput rate of 1,370 t/d or 63.4 t/h is required. This will give an overall Project duration of approximately seven years. This seven-year period will exclude the time required for site establishment and remediation of the heap after the leaching process has been completed.
  
 The mining equipment will operate on a different schedule than the process plant. Loading operations will be conducted during one 8 h shift per day, 365 d/a. A 3.85 m3 rated (5.0 yd3) front-end loader will be used to load a 24 t articulated truck that will either deliver the sulphide tailings to the sulphide stockpile or the oxide tailings to the 160 t oxide tailings hopper. Once the hopper is filled, excess tailings will be stockpiled around the hopper to be loaded by the process plant group.
  
 Certain areas of the tailings might contain high amounts of moisture that can lead to equipment getting stuck. To mitigate this challenge, wider, oversized tires with chains will be installed on the front-end loader. Also, the front-end loader bucket will be downsized to 3.06 m3 (4.0 yd3). This will lighten the load on the front tires preventing them from sinking into saturated material. The trucks will not enter the soft zones so there will be no modifications to the trucks.
  
  
  	 Avino Silver & Gold Mines Ltd.
	 17-7
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

   
 A dribble chute will feed the tailings from the hopper onto a conveyor belt. Cement and lime will be added to the tailings at controlled addition rates. Although some operations add solid dry, flake cyanide to the agglomerator feed material, this option will not be exercised in this case. The cement and lime will be added from their respective bulk storage silos. A 50 t capacity cement storage silo equipped with a dust collection filter and a cement blower will be required, as well as a 30 t capacity lime storage silo similarly equipped with a dust collection filter and a lime blower. Each reagent delivery system will be controlled by a weightometer prior to feeding the reagents to the tailings material conveyor belt feeding the agglomerator drum. The design treatment rate will be 63.4 t/h of tailings material with an average moisture content of 10%. Water, or barren solution, will be added to the agglomerator to provide for an overall moisture content of approximately 12.5 to 15% to the leach pad feed material. Two, 1 t capacity cyanide mixing and storage tanks will be positioned at the Merrill-Crowe facility. Cyanide preparation system will produce a cyanide solution with a strength of 20% sodium cyanide. The cyanide solution will then be injected into the solution distribution system going to the heap pad and precipitation filter press.
  
 The agglomerator will be a drum type unit with a diameter of 1.8 m and a length of 6.7 m rotating at 10.5 rpm and with a variable angle of 2.5, 5.0 or 7.5°. Agglomerated material will be discharged onto a conveyor belt, then on to a series of jump conveyors, and then deposited on the heap leach pad by a radial telestacker. A curing time of 5 d will be allowed before spraying of the agglomerates with cyanide-bearing leach solution commences.
  
 There will be only one leach pad. The leach heap pad dimensions are estimated to be 288 m wide and 428 m long and includes a surrounding berm of 6.5 m in width. There will be four lifts over the seven-year treatment period. Each lift will be 6.5 m high giving the heap an overall height of 26 m.
  
 The heap leach process will operate with three solution ponds:
  
  	  
	·	a barren solution pond
	  
	  
	  

	  
	·	a pregnant solution pond
	  
	  
	  

	  
	·	an event or overflow pond.

  
 Solution from the barren solution pond will be pumped to the leach heap. Concentrated cyanide solution will be added to the barren solution pond where it will be mixed to give a controlled cyanide concentration of approximately 0.5 g/L sodium cyanide strength. The pH will be maintained at 10.5. This solution will be distributed over the leach pad using irrigation pipes and drips for an overall solution feeding rate of approximately 7.3 L/h/m2 (0.002 L/s/m2). A total leaching duration of 130 d will be allowed, followed by a wash/rinse cycle of seven days resulting in a total loading, leaching and rinsing cycle of 142 d.
  
 The total calculated amount of area of pad under irrigation per day will be approximately 22,000 m2, with 1,210 m2 being rinsed every day. The calculated volume of solution pumped to the heap will be 173 m3/h of which a nominal 9 m3/h will be rinse solution. A total solution evaporation loss of 10% is assumed.
  
  
  	 Avino Silver & Gold Mines Ltd.
	 17-8
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

   
  	  
	  

   
 The 173 m3/h pregnant solution collected from the leach pad will be directed to the pregnant solution pond. The solution from the pregnant solution pond will be pumped to the Merrill-Crowe plant for silver and gold recovery by precipitation with zinc dust and filtration of the precipitate. The barren solution will then be returned to the barren solution pond. Solution from the pregnant solution pond can overflow into the barren solution pond should this be required. Solution from the barren solution pond can also overflow into the overflow solution pond. This overflow solution pond will also collect excess water and drainage solution from the heaps and the plant environs. The overflow solution pond will also supply make-up water to the process by pumping the water back to the barren solution pond. Alternatively, excess solution from this pond will be treated with calcium hypochlorite in an agitated treatment tank to reduce the cyanide levels to acceptable limits prior to discharging this water to the environment or re-using this water as process water.
  
 The Merrill-Crowe section will receive the pregnant solution, which will be pumped to the clarifier filter together with filter aid pre-coat and body feed. The slurry from the backwash cycles will be pumped to an inactive part of leach heap. The clarified solution will be pumped to the de-aeration tower where the solution will be de-oxygenated and a slurry of zinc dust, lead nitrate, cyanide and filter aid will be pumped into the de-aerated solution after the tower but ahead of the precipitate filters. The zinc dust, lead nitrate and filter aid will be made up into a slurry at the required dosage rate in the precipitate mixing tank and cyanide will be added as needed. The cementation reaction occurs at the point of introduction of the slurry to the de-aerated solution. This reaction normally requires approximately 2 to 5 minutes for completion. The reaction should be complete by the time the new-barren solution exits the precipitate filter to barren solution tank and from there it will flow into the barren solution pond where the pH will be adjusted to 10.5 with lime if necessary and then be pumped back to the heap pad for leaching after cyanide concentration is adjusted to approximately 0.5 g/L sodium cyanide.
  
 The addition of zinc dust has been calculated on the basis of 10 g of zinc dust per 1 g of silver plus gold in order to ensure that the cementation reaction will be driven to completion. Although precipitation efficiencies are normally considered to be higher than 99.5%, in this case 96% has been selected since no test work has been conducted on the pregnant solution from this material. The cyanide concentration of the pregnant solution should be a minimum of about 100 mg/L as free cyanide and will be monitored on a regular basis. The lead nitrate addition will be added to improve the precipitation efficiency and its dosage is based on approximately 2 mg lead nitrate per litre of solution. Approximately 50% of the total required amount of the lead nitrate will be added to the pregnant solution prior to the clarifier filter where impurities present in the solution will be removed by the clarifier filter. Although no anti-scalant reagents have been included in the study, any reagents of this nature should be tested to determine its effect on the precipitation efficiency.
  
  
  	 Avino Silver & Gold Mines Ltd.
	 17-9
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

   
 The silver-rich precipitate which contains the gold and excess zinc will flow to the acid vat tank where the excess zinc can be dissolved by mixing with adequate amount of sulphuric acid and from there it will be pumped to the digest precipitate filter press. This precipitate from the filter press will be dried in an oven prior to being melted in a smelting furnace for doré production. It is anticipated that the total metal precipitate production per day will be approximately 420 kg (dry basis) with approximately 20% of silver and gold, or approximately 85 kg of silver and gold.
  
 HEAP LEACH LAYOUT
  
 The maximum height has been restricted to 26 m as a result of the proximity of the proposed heap leach facility to the community of San Jose de Avino and possibly weak compressive strength of the agglomerates. This proposed height for the heap would require geotechnical verification. The relatively low heap pad height proposed has resulted in a relatively large surface area being required for the leach pad. The site layout and available space, site drainage, and pad size have been designed according to the area topography and the best available information. However, the close proximity of the proposed heap leach facility to the community of San Jose de Avino, and its agricultural workings, may yet result in site and/or layout revisions.
  
 17.3.2 SULPHIDE TAILINGS
  
 Avino is not currently conducting mining activity on the sulphide tailings. No recovery methods are currently proposed for the sulphide tailings.
  
 Because some of the oxide tailings and sulphide tailings were co-deposited, and the oxide tailings are partially covered by younger unconsolidated sulphide tailings on the northwest side of the tailings storage dam, the sulphide tailings materials will be reclaimed as required during the oxide tailings reclamation. As the 2017 PEA, the reclaimed sulphide tailings was planned to store in a separate sulphide tailings storage facility for further exploration. While some of the sulphide tailings could be used for constructing the proposed heap leach pad and facilities for the oxide tailings retreatment, no quantities were estimated for the PEA.
  
   	 Avino Silver & Gold Mines Ltd.
	 17-10
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	
	
	 

	

  
  	  
	  

  
  	 18.0 PROJECT INFRASTRUCTURE

  
 18.1 INTRODUCTION
  
 The history of operations at the Avino Mine provides ample evidence of sufficient infrastructure and services in the area. The San Gonzalo Mine entered commercial production in October 2012, followed by reopening the Avino Mine in January 2015. The two mines feed a conventional flotation mill that has three separate circuits and a capacity of 1,500 t/d. 
  
 From January 2017, Avino has been constructing a new separate processing line identified as Circuit #4. The addition of Circuit #4 will have an identical throughput capacity as Circuit #3 which currently used for processing the materials from the Avino mine. The mill expansion is expected to increase overall mill capacity to 2,500 t/d.
  
 The existing crushing plant will be upgraded to accommodate the higher throughput with a new larger tertiary cone crusher. The equipment in grinding, flotation and dewatering circuits planned for the expansion are similar in size to the existing equipment used for Circuit #3. The initial mill feed to Circuit #4 will be from the existing surface stockpiles although the additional circuit will be mainly used for processing the materials from the Avino mine. 
  
 The existing tailings deposition facility has been upgraded and is fully permitted and operational for approximately another 500,000 t of tailings. The offices, miner’s quarters, secured explosives storage facilities, warehouse, laboratory and other associated facilities are all in place.
  
 The proposed tailings leach facilities are planned to be located southeast of the existing tailings storage pond. The preliminary arrangement for these facilities is shown in Figure 18.1 and has been detailed in the technical report entitled “Technical Report on the Avino Property”, dated April 11, 2017.
  
  
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Figure 18.1 Overall Tailings Heap Leach Facility Layout  
 
  
  
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 18.2 ACCESSIBILITY
  
 The Property is easily accessible by road and is an important part of the local community from which skilled workers are available. Access is provided by Highway 40, a four-lane highway leading from Durango, past the airport and on to the city of Torreon in Coahuila. Successive turn-offs for the Property are at Francisco I Madero, Ignacio Zaragoza, and San Jose de Avino (Slim 2005d). The Avino mineral concessions are covered by a network of dirt roads which provide easy transport access between the San Gonzalo deposit and the mill at the main Avino Mine (Gunning 2009). In 2008, a 1.7 km road accessing to the San Gonzalo deposit was widened and upgraded so it would be suitable for use by the mineralized material haul trucks and heavy equipment. 
   
 18.3 POWER
  
 The Avino Mine was connected to the local power grid with a line capacity quoted at 4 MW when the mine last operated in 2001. With the shutdown, much of this excess power was diverted to the surrounding towns in the district. Before 2016, the existing power line provides only 1,000 kW of power with 500 kW servicing the mill, 400 kW for San Gonzalo and the balance for the well at Galeana, employee accommodation facility, and water reclaim from the tailings dam. The San Gonzalo power line was built in 2009 to replace the contractor’s diesel generator used during mine development.
  
 The new power line from Guadelupe Victoria to the mine site was completed in June 2016. The power line was energized and tested on June 8th, 2016. The test was successful and the line was then fully functional at the design capacity of 5 MW. Current power consumption at the mine is approximately 2 MW, leaving sufficient additional power for potential future expansion projects, including the planned Circuit #4 mill expansion, the proposed oxide tailings retreatment project using heap leach followed by gold and silver recovery by Merrill-Crowe precipitation and possible further expansion or upgrading of the processing plant. Additionally, the existing power line was left in place to service local communities and provide backup power for the mine.
  
 A C-27 CAT diesel power generator, which can produce 700 kW, is now used as backup.
  
 18.4 WATER SUPPLY
  
 While water supply was found to be limiting in the past, Avino has taken the necessary steps to secure adequate supply. To supplement the 1 Mm3 dam built by Avino in 1989, a well (Galeana) was drilled to the west of the mine site in 1996 to a depth of 400 m and is reported to have a water level at 40 m below the collar. From this, a pipeline connection has been installed to the mine. Additionally, CMMA, in cooperation with the government, has repaired a government dam (El Caracol) and raised the dam wall by 6 m. A pipeline to the mine has also been installed. This dam is shared with the population of Pánuco de Coronado for their irrigation needs, as 60% for the mine and 40% for the town, with government setting the annual total take to which percent sharing applies. Mine site water use is from a combination of tailings water reclaim, El Caracol, and Galeana with preference given to mine site sources for which no water conservation charge was applicable (Slim 2005). The dewatered water from San Gonzalo and Avino underground mines are used as mill processing and agricultural irrigation.
  
 18.5 WATER TREATMENT PLANT
  
 Underground mine water at the Avino Mine is acidic. Since October 2012, dewatering of the Avino Mine began and a water treatment plant using lime to raise the pH and to precipitate the heavy metals was constructed and built. The water treatment facility is a typical Mexican design and the effluent water quality had to meet the agricultural standards for discharge. Test results to date show the results do meet the required agricultural standards and being discharged to the El Caracol Dam via gravity. Treatment of the Avino underground water had been completed with the commencement of production in 2015. The water treatment plant is in place for treating excess water before discharging to El Caracol Dam. The effluent is being monitored on a daily basis when the treatment plant is operational. Sludge, which is considered low density, is sent to the tailings dam.
  
  
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  	 19.0 MARKET STUDIES AND CONTRACTS

  
 19.1 MINED MATERIAL HAULAGE FROM UNDERGROUND
  
 Haulage of the materials from the San Gonzalo and Avino mines is contracted out and the contract terms are within industry norms.
  
 19.2 FLOTATION CONCENTRATES
  
 There is a ready market for both the San Gonzalo silver/gold flotation concentrate and the Avino copper, silver, and gold flotation concentrate. These concentrates are currently being sold under contract to Samsung C&T UK Ltd. The terms and conditions of these contracts are based on industry norms and the terms have been used to establish the revenues from both mining operations.
  
 Under the terms of the agreement, the concentrates are delivered by truck to the Port of Manzanillo, located on the Pacific coast of Mexico, loaded into containers and shipped to smelters located overseas.
  
 The metal prices used for the payable metals namely copper, silver and gold are based on the average market prices of the first month after the month of delivery to the loading port.
  
 In 2016, Avino announced that the concentrate prepayment agreement with Samsung C&T UK Ltd. had been extended from July 2017 to July 2021.
  
 19.3 GOLD-SILVER DORÉ
  
 For the doré produced from the proposed oxide tailings retreatment project, currently there are no letters of interest or letters of intent from potential smelters or buyers of gold and silver doré
  
  
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  	 20.0 ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY IMPACT

  
 20.1 ENVIRONMENTAL STUDIES
  
 Construction of the new tailings storage facility was halted pending a review of tailing for use as underground backfill and for storage in the open pit. This study is ongoing and decisions will be made once the path forward on ground stability underground has been determined.
  
 The assessment work currently underway is part of the recommendations contained in the 2013 PEA (Tetra Tech 2013), intended to advance the tailings resource towards a production decision for a Merrill-Crowe precipitation heap leach operation.
  
 In November 2015, in order to get a head start on the assessment work, Avino began a program of sampling the lower oxide bench in areas not in use. The program consisted of using a hydraulic drill with a 2 m split spoon auger to drill vertical holes to a depth of 20 to 30 m; 12 holes were drilled by the end of 2015 totalling 227 m. By the end of February 2016, a further 40 holes had been drilled, totalling over 650 m; assays have been received and are currently being compiled.
  
 Once the plan for the tailings storage is made, whether used in the underground as backfill or storage in the open pit, Avino will decommission the current tailings storage facility and begin installing wells that will be used to pump out the retained water in the dam. This will speed up the sonic drilling program planned for the upper benches, provide samples for the metallurgical program, and increase confidence in the oxide resource located below the sulphide tailings.
  
 20.1.1 ENVIRONMENTAL SETTING
  
 Flora and fauna of the surrounding San Gonzalo Property is anticipated to be similar to what may be found in the area of oxide tailings, although presence of these species has not been confirmed at the oxide tailings site. Vegetation observed on the San Gonzalo Property at the time of permitting includes catclaw mimosa; cactus species, such as paddle cactus and desert christmas cactus; needle bush, gobernadora; and persimmon trees.
  
 Within the adjacent San Gonzalo Mine Project area, there were 15 species of major mammals, 51 species of birds, 10 species of reptiles, and 3 species of amphibious reported at the time of permitting. Of these species, four mammal species, 14 species of birds, 9 reptiles, and 3 amphibians species are listed by Official Mexican Standard NOM-059-SEMARNAT-2001 or in the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) (Ministry of Environment and Natural Resources [MENR 2008a) (Table 20.1 to Table 20.4). 
  
  
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 Table 20.1 Mammal Species Listed by NOM-059-SEMARNAT-2001 or in CITES within the San Gonzalo Mine
 	  
	  
	  

	 Common Name
	 Gender and Species
	 Status under NOM-059-SEMARNAT-2001
 or CITES

	 Squirrel*
	 Sciurus aberti
	 Resident. Endemic. Special Protection

	 Mouse
	 Neotoma albigula
	 Resident. Endemic. Threatened.

	 Desert Fox
	 Vulpex velox
	 Resident. Endemic. Threatened.

	 Badger
	 Taxidea Taxus
	 Resident. Threatened.

  
 Notes: *No English Common Name translation
 Source: MENR (2008a)
  
 Table 20.2 Bird Species Listed by NOM-059-SEMARNAT-2001 or in CITES within the San Gonzalo Mine
 	  
	  
	  

	 Common Name
	 Gender and Species
	 Status under NOM-059-SEMARNAT-200
 or CITES

	 Heron
	 Ardea herodias
	 Migratory. Special protection.

	 Cerceta aliazul
	 Anas discors
	 Migratory. Special protection. Hunting.

	 Black eagle
	 Buteogallus anthracinus
	 Resident. Special Protection. Indicator.

	 Red tailed eagle
	 Buteo jamaicensis
	 Resident. Indicator.

	 Owl with horns
	 Bubo virginianus
	 Resident. Threatened.

	 Cernicalo
	 Falco sparverius
	 Resident. Indicator.

	 Quail with flakes
	 Callipepla squamata
	 Resident. Endemic. Self-consume.

	 Blue mulato
	 Melanotis caerulescens
	 Resident. Endemic. Threatened. Esthetic.

	 Northern cenzontle
	 Mimus polyglotos
	 Resident. Esthetic.

	 Cuitlacoche with curved beak
	 Toxostoma curvirostre
	 Resident. Esthetic.

	 Gray capulinero
	 Ptilogonys cinereus
	 Resident. Endemic.

	 Golden vireo
	 Vireo hypochryseus
	 Resident. Endemic.

	 Desert cardinal
	 Cardinalis sinuatus
	 Resident. Esthetic.

	 Colorin seven colours
	 Passerina ciris
	 Migratory. Esthetic.

  
 Source: MENR (2008a)
  
  
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 Table 20.3 Reptile Species Listed by NOM-059-SEMARNAT-2001 or in CITES within the San Gonzalo Mine
 	  
	  
	  

	 Common Name
	 Gender and Species
	 Status under NOM-059-SEMARNAT-2001
 or CITES

	 Black iguana
	 Ctenosaura pectinata
	 Resident. Endemic. Threatened.

	 Chivilla *
	 Xantusia bolsonae
	 Resident. Endemic. Threatened.

	 Lizard *
	 Sceloporus horridus
	 Resident. Endemic.

	 Water snake
	 Nerodia melanogaster
	 Resident. Endemic. Threatened.

	 Chirrionera snake
	 Pituophis deppei
	 Resident. Endemic. Threatened.

	 Water snake
	 Thamnophis eques
	 Resident. Threatened.

	 Rattle snake
	 Crotalus atrox
	 Resident. Special protection.

	 Rattle snake
	 Crotalus molossus
	 Resident. Special protection.

	 Water turtle
	 Chrysemys scripta
	 Resident. Special protection.

  
 Notes: *No English common name translation
 Source: MENR (2008a)
  
 Table 20.4 Amphibian Species Listed by NOM-059-SEMARNAT-2001 or in CITES within the San Gonzalo Mine
 	  
	  
	  

	 Common Name
	 Gender and Species
	 Status under NOM-059-SEMARNAT-2001
 or CITES

	 Ajolote (Mexican mole lizard)
	 Ambystoma rosaceum
	 Resident. Endemic. Special protection.

	 Toad *
	 Bufo mazatlensis
	 Resident. Endemic.

	 Frog *
	 Rana pustulosa
	 Resident. Endemic. Special protection.

  
 Notes: *No English common name translation
 Source: MENR (2008a)
  
 20.2 ENVIRONMENTAL PERMITTING
  
 Permits and authorizations required for the Project operation include:
  
 	  
	·	an operating permit
	  
	  
	  

	  
	·	an application for surface tenures
	  
	  
	  

	  
	·	a waste water discharge registration
	  
	  
	  

	  
	·	a hazardous waste generator's registration.

  
 An environmental impact assessment (EIA) or Evaluación de Impacto Ambiental under the Ley General del Equilibrio Ecológico y la Protección al Ambiente (LGEEPA), article 28 (General Law of Ecological Equilibrium and Environmental Protection), is required by the Ministry of Environment and Natural Resources (Secretaría de Medio Ambiente y Recursos Naturales (SEMARNAT)). Prior to this EIA, an authorization regarding environmental impact matters is required by the SEMARNAT.
  
 Additional surface tenures will likely be required for the re-location of any tailings to areas outside of the current surface tenure rights.
  
  
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 20.2.1 CURRENT PERMITS FOR THE OXIDE TAILINGS
  
 There are no current operating permits for the mining and exploitation of the oxide tailings. However, a conditionally approved Environmental Impact Statement (EIS) (Manifestación de Impacto Ambiental (MIA)) for the exploitation and associated transmission line is in place for the Avino Mine where the tailings are located. Changes to the operating methods may be required if mining of the tailings was not included in the original mining plan. Based on this information, revisions to the permits will be required. If new operating permits are required, an EIA and EIS (MIA) will be mandatory.
  
 20.2.2 CURRENT PERMITS FOR THE SAN GONZALO MINE (ADJACENT)
  
 In order to obtain an authorization regarding environmental impact matters, Avino must prepare an EIS or MIA. Avino prepared an EIS, known as “Manifestación de Impacto Ambiental, modalidad Particular” (MIA-P) for the San Gonzalo Mine and submitted it to the MENR in August of 2008. The applicable regulations fall under Federal jurisdiction, Article 28, sections II, III and VII of the LGEEPA and the Reglamento en Materia de Evaluacion del Impacto Ambiental (REIA), sections K, L and O (Environmental Impact Assessment Matter Regulation).
  
 Given the planned activities for the site, the Ministry also required an assessment in “Environmental Impact Matter for Change of Land Use” (Materia de Impacto Ambiental para el Cambio de Uso de Suelo) for forested areas and mining infrastructure and electrification, for a surface area of 9.08 ha.
  
 The authorization from the Ministry also requires the mine to present mitigation measures for all potential environmental impacts, as per Article 30, LGEEPA and Article 44, REIA, which Avino detailed in its EIS to the authorities.
  
 Based on the information provided by Avino to the Mexican authorities, a conditional authorization was granted, subject to additional prevention and mitigation measures in order to avoid, minimize, or compensate for any environmental impacts during the different stages of the adjacent San Gonzalo Mine (Article 35, section II, LGEEPA), which include an assessment of the “Environmental Impact Matter for Change of Land Use” described above. This permit is valid for 11 years from the date it was issued, to perform various activities on-site. Any modification to the Project must be sent to the MENR in writing before commencing changes.
  
 Aside from complying with all prevention, protection, control and mitigation measures laid out in the proposed MIA-P, Avino must develop an Environmental Quality Monitoring Program (EQMP) or ‘Programa de Seguimiento de la Calidad Ambiental’. The proposed EQMP must be presented to the MENR within six months of receiving the conditional authorization. Once the MENR has assessed the monitoring program, Avino needs to deliver progress reports semi-annually for a period of at least five years. Lastly, Avino must obtain proper authorization from the MENR for “Change of Land Use” as well as the corresponding “Change of Use for Forested Ground to Mining Infrastructure”.
  
  
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 It is important to note that the current conditional authorization can be cancelled for many reasons, one of them includes improper disposal of liquid/solid waste (hazardous or non-hazardous).
  
 A second permit for “Change of Forest Land Use to Mining Infrastructure” (Cambio de Utilización de Terreno Forestal a Infraestructura Minera) was requested to the SEMARNAT and granted in September of 2008 for the adjacent San Gonzalo Mine. The corresponding legislation is Article 62, section IX of the “Ley General de Desarrollo Forestal Sustentable” (General Law for Sustainable Forest Development) and Article 27 of the Regulation. . In addition, the Official Mexican Standard NOM-060-SEMARNAT-1994 and NOM-061-SEMARNAT-1994 must be adhered to. As per the authorization, Avino must complete its change in land use within 18 months of the date of the permit.
  
 20.2.3 APPLICABLE LEGISLATION
  
 In order to remain in compliance with current permits for the San Gonzalo Mine, the following eight applicable Official Mexican Standards for the Project must be complied with:
  
  	  
	·	Official Mexican Standards NOM-001-SEMARNAT-1996, which establishes the maximum limits allowed for contaminants in waste water discharges in national waters and goods
	  
	  
	  

	  
	·	Official Mexican Standard NOM-041-SEMARNAT-1999; which establishes the maximum limits allowed for the emission of polluted gas generated from the exhaust pipe of automotive vehicles circulating, which utilize gas as fuel
	  
	  
	  

	  
	·	Official Mexican Standard NOM-043-SEMARNAT-1993, which establishes the maximum levels allowed for emissions from fixed sources of solid particles to the atmosphere
	  
	  
	  

	  
	·	Official Mexican Standard NOM-045-SEMARNAT-1996, which establishes the maximum levels of emission (smokes opacity) generated from of automotive vehicles circulating, which utilize diesel or mixtures that include diesel as fuel
	  
	  
	  

	  
	·	Official Mexican Standard NOM-052-SEMARNAT-2005, which establishes the characteristics, the process of identification, classification and listing of hazardous waste
	  
	  
	  

	  
	·	Official Mexican Standard NOM-054-SEMARNAT-1993, which establishes the procedure to determine the incompatibility between two or more types of residues considered as harmful by NOM-052-SEMARNAT-2005
	  
	  
	  

	  
	·	Official Mexican Standard NOM-059-SEMARNAT-2001, which regulates the environmental protection-Mexico’s native species of wild flora and fauna and specifications for their inclusion, exclusion or change-list of species in risk
	  
	  
	  

	  
	·	Official Mexican Standard NOM-060-SEMARNAT-1994, which establishes protection measures for forestry grounds.

   
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 In addition, other Official Mexican Standards regarding change in land use and mining must be followed and may include:
  
  	  
	·	Official Mexican Standard NOM-061-SEMARNAT-1994, which refers to the specifications to mitigate the adverse effects caused to the Wild Animals and Uncultivated Vegetation as a result of the forestry utilization, and which nomenclature was modified
	  
	  
	  

	  
	·	Official Mexican Standard NOM-062-SEMARNAT-1994 establishes specifications to mitigate adverse effects on biodiversity that are caused by change of land use in forested areas
	  
	  
	  

	  
	·	Official Mexican Standard NOM-120-SEMARNAT-1997 establishes environmental protection specifications for mining exploration activities in dry and temperate climate regions
	  
	  
	  

	  
	·	Official Mexican Standard NOM-141-SEMARNAT-2003 establishes requirements for tailings characterization, and specifications and criteria for site preparation, design, construction, operation and post-operation of tailings dams.

 
 Dependent on the mining plan, additional Official Mexican Standards for mining operations will also be required for the Project:
  
 	  
	·	Official Mexican Standard NOM-147-SEMARNAT/SSA1-2004, which establishes criteria for determining the concentrations of remediation of soils contaminated with arsenic, barium, beryllium, cadmium, hexavalent chromium, mercury, nickel, silver, lead, selenium, thallium and/or vanadium; published in the Official Gazette on March 2, 2007
	  
	  
	  

	  
	·	Draft Official Mexican standard, PROY-NOM-XXX-SEMARNAT-2009, which establishes the elements and procedures to implement management plans for mining waste
	  
	  
	  

	  
	·	Draft Official Mexican Standard NOM-155-SEMARNAT-2007, which establishes environmental protection requirements for systems leaching gold and silver ores
	  
	  
	  

	  
	·	General Law for the Prevention and Management of Waste (Ley General para la Prevención y Gestión Integral de los Residuos (LGPGIR)) and applicable regulations, which regulated the following registrations and authorizations:
	  
	  
	  

	  
	·	Hazardous Waste Generator's Registration and other compliance documents; such as Manifest, Monthly Log of Hazardous Waste Generation; Ecological Waybills for the Importation and/or Exportation of hazardous Materials and Wastes; Semi-annual Report on Hazardous Wastes Sent to Recycling, Treatment or Final Disposition; and Accidental Hazardous Waste Spill Manifest
	  
	  
	  

	  
	·	LGEEPA
	  
	  
	  

	  
	·	Official Mexican Standard NOM-023-STPS-2003, which establishes standards for work in mines and health and safety conditions at these sites
	  
	  
	  

	  
	·	Official Mexican Standard NOM-055-SEMARNAT-2003, which establishes the requirements to be met by sites that will use a hazardous waste landfill
	  
	  
	  

	  
	·	Official Mexican Standard NOM-147-SEMARNAT/SSA1-2004, which establishes criteria for determining the concentrations of remediation of soils contaminated by arsenic, barium, beryllium, cadmium, chromium.

  
  
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 20.3 ENVIRONMENTAL MONITORING AND REPORTING
  
 The conditional authorization sets out the requirements for environmental monitoring and reporting, on a semi-annual basis, for a minimum of five years. Details are provided in Section 20.2.
  
 20.4 ENVIRONMENTAL MANAGEMENT
  
 Brownfields, or site recycling as it is called within the Mexican environmental legislation, looks at the environmental liabilities (pasivos ambientales) as per Articles 68, 69 and 70 of the Ley General Para la Prevención y Gestión Integral de Residuos (LGPyGIR) or General Law for the Prevention and Comprehensive Management of Waste. It is based on the “polluter pay” principle, according to the LGEEPA, and the LGPyGIR. The federal government coordinates with both provincial and municipal authorities to manage the environmental liabilities, whether the sites are orphaned or not. The LGPyGIR requires complete clean-up of contaminated sites.
  
 20.5 WATER MANAGEMENT
  
 Fresh water for the Project is available from a well drilled in 1996, west of the mine site and surface water from a dam which is divided 60%/40% with the town of Panuco de Coronado. The Project has previously been charged annually for water use. Piping infrastructure from these water sources is still in place.
  
 Additional water was also obtained from underground workings, and re-circulation from the tailings. There is potential for the water from the underground workings to be acid producing (Slim 2005d). Treatment of water from the underground workings may be required prior to use depending on the water quality.
  
 20.6 SULPHIDE TAILINGS MANAGEMENT
  
 ABA tests have indicated that mild acid generation may already have started on the tailings dam. A gap analysis and additional tests to further characterize current conditions of the tailings should be completed to properly design a tailings management plan.
  
  
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 Three preliminary options have been identified for the management of the sulphide tailings:
  
 	  
	·	reprocessing the tailings
	  
	  
	  

	  
	·	retreating of the tailings on the heap
	  
	  
	  

	  
	·	re-location and treatment for remediation.

  
 The feasibility of these options are not known at this stage.
  
 The absence of complete sulphide tailings metallurgical information makes identification of feasibility of the options difficult. A detailed trade-off study should be undertaken to characterize current conditions of the tailings and to determine whether the retreatment of this material would contribute to the profitability of the Project. However, at this stage only limited metallurgical test data is available since no detailed metallurgical test work was undertaken on this material during the MMI 2004 test program.
  
 Alternatively, the treatment of the sulphide tailings for gold recovery will afford an opportunity to recover silver and gold from the material as well as treating this material with the lime to ensure that this material will not be a net acid producer. Indications are that the sulphide tailings will also require treatment for environmental remediation purposes in the future. These costs could be partially or completely be off-set by treating this material separately or together with the oxide material by the heap leach process.
  
 Re-locating the sulphide tailings may afford a more expedient option to address this potential environmental problem. For the purposes of this preliminary economic assessment, it will be assumed that the sulphide tailings will be moved to another location north-east of the proposed site for the leach pad.
  
 20.7 MINE CLOSURE AND RECLAMATION
  
 An updated mine closure plan and reclamation will be required for the Project. The mine closure plan should include information; such as:
  
 	  
	·	justification for the closure plan considering technical, environmental and legal aspects
	  
	  
	  

	  
	·	objectives and how they will be met
	  
	  
	  

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

	  
	·	schedule of activities
	  
	  
	  

	  
	·	the progressive reclamation of the site during the life of the operation
	  
	  
	  

	  
	·	the design of tailings disposal areas
	  
	  
	  

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

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

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

  
  
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 No cost estimates have been generated at this time to ensure the Project meets the environmental requirements once the processing of the heap material has been terminated.
  
 As per federal regulations, under LGEEPA, both the SEMARNAT and Procuraduría Federal de Proteccíon al Ambiente (PROFEPA) (Federal Attorney for Environmental Protection) ministries require Avino to present in its first semi-annual report for a General Plan to Remediate the Site dates, activities, techniques, costs that will guarantee restoration of affected areas, considering complete reforestation of impacted sites, removal of foundations and infrastructure that is no longer useful, roads that no longer have any use, remove all rubbish and properly dispose of, closing off adits that are no longer needed and restoration of the tailings facility when its operational life is finished. Avino will also need to present a reforestation program for the entire surface area affected during mining operations. This program will include caveats to safeguard flora and fauna.
  
 20.8 SOCIO-ECONOMIC AND COMMUNITY CONSIDERATIONS
  
 This socio-economic section of the Technical Report:
  
 	  
	·	identifies communities that may potentially be affected by the development of the Project
	  
	  
	  

	  
	·	identifies potential positive and adverse effects of the Project on local communities
	  
	  
	  

	  
	·	advises on further study requirements.

  
 20.8.1 PROJECT LOCATION
  
 The Project is located approximately 82 km northeast of the City of Durango, in the state of Durango. The Property lies between the communities of Panuco de Coronado and San Jose de Avino.
  
 20.8.2 CONSULTATION WITH COMMUNITIES
  
 The implementation of an effective community engagement program is fundamental to the successful environmental permitting of mining projects. As part of a comprehensive community engagement program, should be initiated as soon as possible. Consultation will include addressing concerns of the leap-leach pile that may be present within or adjacent to the Property.
  
  
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 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Consultation and the development of a working relationship with local communities typically involves the development of a series of agreements that lay the groundwork for conversations. These include:
  
 	  
	·	memorandums of understanding
	  
	  
	  

	  
	·	protocol agreements
	  
	  
	  

	  
	·	community consultation/participation agreements.

  
 As project exploration and development proceeds, other agreements will become necessary, including:
  
 	  
	·	socio-economic/community economic benefits agreements
	  
	  
	  

	  
	·	environmental monitoring agreements
	  
	  
	  

	  
	·	training agreements
	  
	  
	  

	  
	·	accommodation/impact benefit agreements.

  
 POTENTIAL POSITIVE EFFECTS ON LOCAL COMMUNITIES
  
 Potential positive effects of the proposed project development include:
  
 	  
	·	long-term, meaningful employment in mining operations and related positions (e.g., environmental monitors, service industry sector)
	  
	  
	  

	  
	·	economic development and contract opportunities for local communities (existing and new businesses), and community infrastructure improvements.

  
 POTENTIAL ADVERSE EFFECTS ON LOCAL COMMUNITIES
  
 For potential adverse effects of the proposed project development, it will be assumed that the sulphide tailings will be moved to another location northeast of the proposed site for the leach pad. Again, it should also be mentioned that this proposed site is very close to the town of San Jose de Avino and this may result in objections from the local community.
  
  
  	 Avino Silver & Gold Mines Ltd.
	 20-10
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	 
	 

  
  	 21.0 CAPITAL AND OPERATING COST ESTIMATES 

  
 21.1 AVINO AND SAN GONZALO VEINS 
  
 Avino is currently conducting mining activity, including mineral processing, on the Avino and San Gonzalo Veins. There is no cost estimate applicable and all costs below are based on actual expenditure.
  
 Avino has not based its production decisions on a Feasibility study or Mineral Reserves demonstrating economic and technical viability, and as a result there is increased uncertainty and multiple technical and economic risks of failure, which are associated with these production decisions. These risks, among others, include areas that would be analyzed in more detail in a Feasibility study, such as applying economic analysis to Mineral Resources and Mineral Reserves, more detailed metallurgy, and a number of specialized studies in areas such as mining and recovery methods, market analysis, and environmental and community impacts.
  
 21.1.1 CAPITAL COSTS
  
 The actual capital expenditures to date on the Avino and San Gonzalo Veins are summarized in Table 21.1 and Table 21.2, respectively.
  
 Mine and mill capital costs were attributed to equipment purchases.
  
 Table 21.1 Capital Costs for the Avino Vein (US$)
  													
	 Description
		 Q1-Q3 2017
			 2016
			 2015
			 2014
	
	 Office Furniture
			19,035				8,625				7,093				6,521	
	 Computer Equipment
			5,023				14,913				17,233				33,178	
	 Mill Machinery and Processing Equipment
			703,475				70,653				525,067				2,832,627	
	 Mine Machinery and Transportation Equipment
			203,922				1,985,446				1,918,764				2,125,229	
	 Buildings and Construction
			1,985,450				485,757				590,639				313,875	
	 Elena Toloso Mineral Property - Avino
			609,423				4,330,125				0				0	
	 Total Capital Costs
			3,526,327				6,895,518				3,058,796				5,311,429	

  
 Source: Avino
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 21-1
	 704-ENG-VMIN03003-01

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	
	
	 

	

  
  	 
	 

  
 Table 21.2 Capital Costs for the San Gonzalo Vein (US$)
 	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Description
	  
	 Q1-Q3 2017
	  
	  
	 2016
	  
	  
	 2015
	  
	  
	 2014
	  

	 Office Furniture
	  
	  
	16,119	  
	  
	  
	7,248	  
	  
	  
	3,725	  
	  
	  
	6,521	  

	 Computer Equipment
	  
	  
	4,973	  
	  
	  
	12,575	  
	  
	  
	17,233	  
	  
	  
	32,937	  

	 Mill Machinery and Processing Equipment
	  
	  
	951,881	  
	  
	  
	188,884	  
	  
	  
	100,537	  
	  
	  
	264,178	  

	 Mine Machinery and Transportation Equipment
	  
	  
	181,954	  
	  
	  
	40,294	  
	  
	  
	133,248	  
	  
	  
	646,981	  

	 Buildings and Construction
	  
	  
	76,773	  
	  
	  
	443,135	  
	  
	  
	55,819	  
	  
	  
	356,300	  

	 San Gonzalo Vein Mineral Property
	  
	  
	332,073	  
	  
	  
	1,080,889	  
	  
	  
	577,462	  
	  
	  
	697,107	  

	 Total Capital Costs
	  
	  
	1,563,774	  
	  
	  
	1,773,024	  
	  
	  
	888,024	  
	  
	  
	2,004,023	  

  
 Source: Avino
  
 21.1.2 OPERATING COSTS
  
 The mine and milling costs included operating and maintenance labour together with the operation associated consumable supplies. The cost for electrical power was included in the milling costs. The geological component was mostly related to technical labour.
  
 Table 21.3 Operating Costs for the Avino Vein (US$) 
 	  
	  
	  
	  
	  
	  
	  

	 Description
	  
	 Q1-Q3 2017
	  
	  
	 2016
	  

	 Mining Cost
	  
	  
	5,046,904	  
	  
	  
	5,306,208	  

	 Milling Cost
	  
	  
	3,214,053	  
	  
	  
	2,947,585	  

	 Geological and Other
	  
	  
	2,571,758	  
	  
	  
	2,300,243	  

	 Royalties
	  
	  
	544,571	  
	  
	  
	610,797	  

	 Depletion and Depreciation
	  
	  
	1,079,003	  
	  
	  
	919,756	  

	 Total Direct Costs
	  
	  
	12,456,289	  
	  
	  
	12,084,590	  

	 G&A
	  
	  
	3,295,481	  
	  
	  
	2,817,256	  

	 Total Operating Costs
	  
	  
	15,751,770	  
	  
	  
	14,901,845	  

  
 Source: Avino
  
 Table 21.4 Operating Costs for the San Gonzalo Vein (US$) 
 	  
	  
	  
	  
	  
	  
	  

	 Description
	  
	 Q1-Q3 2017
	  
	  
	 2016
	  

	 Mining Cost
	  
	  
	2,340,070	  
	  
	  
	1,798,503	  

	 Milling Cost
	  
	  
	495,546	  
	  
	  
	212,467	  

	 Geological and Other
	  
	  
	487,751	  
	  
	  
	318,843	  

	 Royalties
	  
	  
	0	  
	  
	  
	0	  

	 Depletion and Depreciation
	  
	  
	675,072	  
	  
	  
	485,732	  

	 Total Direct Costs
	  
	  
	3,998,439	  
	  
	  
	2,815,545	  

	 G&A
	  
	  
	1,063,226	  
	  
	  
	607,351	  

	 Total Operating Costs
	  
	  
	5,061,666	  
	  
	  
	3,422,897	  

  
 Source: Avino
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 21-2
	 704-ENG-VMIN03003-01

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	
	
	 

	

  
  	 
	 

  
21.2 TAILINGS RESOURCES   
 21.2.1 OXIDE TAILINGS
  
 The capital costs and operating costs for retreating the oxide tailings portion of the Property, including reclaiming the oxide tailings, constructing the heap leach pad and the treatment facilities, were estimated and reported in the technical report entitled “Technical Report on the Avino Property”, dated April 11, 2017. 
  
 The estimated capital cost was US$28.8 million (US$24.4 million of initial capital plus US$4.4 million sustaining capital) and the estimated operating cost was US$15.06/t.
  
 A PEA should not be considered to be a Prefeasibility or Feasibility study, as the economics and technical viability of the Project have not been demonstrated at this time. The PEA is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. Furthermore, there is no certainty that the conclusions or results reported in the PEA will be realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
  
 The updated capital costs for the Project were developed based on 1,370 t/d or 500,000 t/a treatment of oxide tailings and construction of the heap leach pad in two phases.
  
 The updated capital cost estimate includes the following items:
  
  	  
	·	An updated equipment list was generated with process engineering and new quotations for major equipment were obtained and replace the previous costs.
	  
	  
	  

	  
	·	Other items in the previous estimate in 2012 were escalated to reflect the 2016 Q4 costs.

  
 21.2.2 BASIS OF ESTIMATE
  
 The estimate was a PEA, Class IV estimate prepared in accordance with industry standard. The accuracy of the estimate is -25%/+40%.
  
 PRICING AND CURRENCY
  
 This PEA estimate was prepared with a base date of Q4 2016 and had not included any escalation beyond this date.
  
 For major equipment, costing was based on budgetary quotations from vendors. Other mechanical equipment costs were based on in-house data.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 21-3
	 704-ENG-VMIN03003-01

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	 
	 

   
 All capital costs are expressed in US dollars. No provision was made for fluctuations in the currency exchange rates.
  
 The currency exchange rates used in the estimate are shown in Table 21.5.
  
 Table 21.5 Currency Exchange Rate
  	  
	  

	 Currency
	 Exchange

	 CDN$1.00
	 US$0.7454

	 MXN$19.23
	 US$1.0000

  
 CONSTRUCTION LABOUR RATES
  
 A blended labour rate of US$13.50/h had been used and calculated based on the assessment of current labour conditions as compared to the labour rate of US$12.68 in the previous estimate from 2012.
  
 INFLATION RATE
  
 An inflation rate had been applied to reflect the PEA’s cost of the Project (Table 21.6). The escalation was based on inflation rate (consumer prices) in Mexico (Trading Economics 2016 www.tradingeconomics.com).
  
 Table 21.6 Inflation Rates in Mexico
  	  
	  

	 Year
	 Rate
 (%)

	 2013
	 4.4

	 2014
	 5.6

	 2015
	 2.7

	 2016
	 3.5

  
 An average rate of inflation from 2012 to 2016 is 17%. Due to a combination of factors such as inflation, supply/demand, and other effects such as environmental, technological, and political changes, an escalation of 2% per year was applied in the updated capital cost estimate.
  
 DIRECT COSTS
  
 The equipment list had been updated based on the process flow diagram document. The cost of equipment was estimated based on changes to the process flow diagram.
  
 Disciplines other than mechanical equipment used costs from the previous cost estimate, with escalation applied only.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 21-4
	 704-ENG-VMIN03003-01

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	
	
	 

	

  
  	 
	 

   
 INDIRECT COSTS
  
 All indirect costs were estimated based on a percentage of direct costs.
  
 CONTINGENCY AND RISK
  
 A contingency assessment was completed and applied to various areas of the direct and indirect costs to meet anticipated, foreseen, but incompletely defined costs to satisfy the approved scope.
  
 Table 21.7 Contingency by Area
  	  

	 Contingency (%) by Area

	 12.0% of Mining, Agglomeration & Pad Loading

	 20.0% of Process Facilities

	 15.0% of Reagents / Auxiliary Services

	 15.0% of Buildings

	 30.0% of Leach Pad & Infrastructure

	 20.0% of Power Supply and Distribution

	 15.0% of EPCM & Vendor Representatives

	 15.0% of Freight & Construction Indirects

	 10.0% of Owners Costs

  
 21.2.3 CAPITAL COST SUMMARY
  
 The capital cost for the Project had been assessed at US$28.8 million (including initial capital of US$24.4 million) and is summarized in Table 21.8.
  
 Table 21.8 Capital Cost Summary
  	  

	 Item/Description
	  
	 Total Initial Capital Cost (US$000)
	  
	  
	 Total Sustaining Capital Cost (US$000)
	  

	 Direct Costs

	 Mining, Agglomeration, and Pad Loading
	  
	  
	2,899	  
	  
	  
	818	  

	 Process Facilities
	  
	  
	3,979	  
	  
	  
	  
	  

	 Reagents/Auxiliary Services
	  
	  
	526	  
	  
	  
	  
	  

	 Buildings
	  
	  
	1,003	  
	  
	  
	  
	  

	 Leach Pad and Infrastructure
	  
	  
	4,522	  
	  
	  
	1,819	  

	 Power Supply and Distribution
	  
	  
	1,571	  
	  
	  
	  
	  

	 Total Direct Costs
	  
	  
	14,500	  
	  
	  
	2,637	  

	 Indirect Costs

	 Engineering, Procurement, Construction Management, Quality Assurance and Vendor Representatives
	  
	  
	2,338	  
	  
	  
	386	  

	 Freight and Construction Indirects
	  
	  
	2,898	  
	  
	  
	430	  

	 Owner’s Costs 
	  
	  
	725	  
	  
	  
	132	  

	 Contingency
	  
	  
	3,902	  
	  
	  
	767	  

	 Total Indirect Costs
	  
	  
	9,863	  
	  
	  
	1,715	  

	 Total Capital Costs
	  
	  
	24,363	  
	  
	  
	4,352	  

  
  	  

	 Avino Silver & Gold Mines Ltd.
	 21-5
	 704-ENG-VMIN03003-01

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	 
	 

   
 MINING, AGGLOMERATION AND PAD LOADING
  
 These costs included the facilities required for transferring the tailings from the existing tailing dam to the dump bin for oxide tailings and to the sulphide stockpile for the sulphide tailings, using the front-end loader and trucks. It also included the facilities required for the loading of the tailings into a bin to feed the conveyor to the agglomerator and included the agglomerator and its structural supports as well as the ancillary equipment. These costs also included the lime and cement silos.
  
 PROCESS FACILITIES
  
 The costs in this section included the various items of equipment, the tanks and their attendant pumps and agitators (if equipped), the Merrill-Crowe circuit (supplied as a modular package unit) and other miscellaneous process-related equipment. The process equipment was estimated as new-cost items.
  
 REAGENTS AND AUXILIARY SERVICES
  
 The costs derived for this section included reagent preparation and holding tanks and related equipment as well as civil construction costs. Water was assumed to be supplied from the existing sources, namely from the dams and/or the wells. The costs shown for the fresh water supply included the refurbishing of the equipment and pumps. Safety items related to reagent handling had also been included.
  
 BUILDINGS
  
 The existing buildings and offices of the Avino Mine will be utilized for the Project. An allowance had been included for the refurbishment of these facilities. No costs had been allocated for the truck shop since it was intended to have a transport contractor to provide all the transportation needs for the Project. An allowance had been included for the procurement/refurbishing of laboratory equipment. The costs for constructing building to house the Merrill-Crowe circuit and reagent preparation related equipment had been included in the cost estimates.
  
 LEACH PAD AND INFRASTRUCTURE
  
 The leach pad with liners and a leak detection system will be constructed in two phases. The barren, pregnant and event solution ponds will all be lined. Also included is the cost of fencing off the plant area, the telephone system, sewage disposal, water supply and treatment, and fuel storage facilities. The existing fuel storage facilities will be used but this will require refurbishing and this cost had been provided in the cost estimate.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 21-6
	 704-ENG-VMIN03003-01

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	
	
	 

	

  
  	 
	 

   
 POWER SUPPLY AND DISTRIBUTION
  
 The refurbishing and expanding of the existing electrical power supply system, along with lighting, had been included in this section. It also included power to the agglomerated area and the Merrill-Crowe area.
  
 INDIRECT COSTS
  
 Indirect costs had been included as costs associated with construction services, consulting services, spare parts, and freight. Contingency had been included in the indirect costs.
  
 No sunk costs or taxes had been added to the capital cost estimate.
  
 21.2.4 OPERATING COSTS SUMMARY
  
 The LOM overall operating costs for the Project, including the costs for mining, process and G&A, had been estimated to be approximately $15.06/t milled. Table 21.9 gives the LOM overall unit operating cost summary, based on a nominal processing rate of 1,370 t/d. The operating cost estimate was reported in US dollar with an exchange rate of Mexican Peso to US Dollar at 19.23.
  
 Table 21.9 LOM Unit Operating Cost Estimate Summary
  	  

	 Description
	  
	 Personnel
	  
	  
	 Unit Cost
 (US$/t treated)
	  

	 Mining
	  
	  
	15	*	  
	  
	1.13	  

	 Process
	  
	  
	39	  
	  
	  
	12.53	  

	 G&A
	  
	  
	11	  
	  
	  
	1.41	  

	 Total Operating Cost
	  
	  
	65	  
	  
	  
	15.06	  

  
 Note: *labour requirement for trucking of the tailings and waste is excluded as it will be by a contractor.
  
 MINING OPERATING COSTS
  
 Mining production cycle consists of loading, hauling and unloading, no drilling or blasting is required. Oxide tailing materials will be loaded using a 3.8 m3 wheel loader and hauled to the leach pad using a 24 t articulated truck. Sulphide tailing materials are treated as waste and will be hauled to the waste dump. Trucking of oxide and sulphide materials will be performed by a contractor. Table 21.10 summarizes the mining operating costs.
  
 Table 21.10 Mining Cost Summary
  	  

	 Mining Cost Item
	  
	 LOM Cost*
 (US$ 000)
	  
	  
	 Unit Cost
 (US$/t mined)
	  

	 Loading
	  
	  
	226	  
	  
	  
	0.037	  

	 Hauling
	  
	  
	969	  
	  
	  
	0.160	  

	 Support Equipment
	  
	  
	649	  
	  
	  
	0.107	  

	 Ancillary Equipment
	  
	  
	274	  
	  
	  
	0.045	  

	 Dewatering
	  
	  
	252	  
	  
	  
	0.042	  

	 Labour
	  
	  
	1,153	  
	  
	  
	0.190	  

	 Total Costs
	  
	  
	3,523	  
	  
	  
	0.581	  

  
 Note: *excludes pre-production costs
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 21-7
	 704-ENG-VMIN03003-01

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	 
	 

  
 PROCESS OPERATING COST ESTIMATE
  
 The process operating cost for the Project included the costs for agglomeration, heap leaching, solution handling and Merrill-Crowe refinery plant to produce a silver/gold doré.
  
 Table 21.11 gives the overall LOM process operating cost summary based on a nominal processing rate of 1,370 t/d with an availability of 90% and 365 operating days per year.
  
 The LOM annual average operating cost for the process facilities was estimated to be US$6.0 million per year or US$12.53/t of tailings treated.
  
 Table 21.11 LOM Process Operating Cost
  	  

	 Description
	  
	 Personnel
	  
	  
	 Annual Cost
 (US$)
	  
	  
	 Unit Cost
 (US$/t treated)
	  

	 Process Manpower
	  

	 Maintenance Labour
	  
	  
	7	  
	  
	  
	105,200	  
	  
	  
	0.221	  

	 Operations Labour
	  
	  
	25	  
	  
	  
	318,100	  
	  
	  
	0.667	  

	 Laboratory
	  
	  
	7	  
	  
	  
	89,600	  
	  
	  
	0.188	  

	 Subtotal
	  
	  
	39	  
	  
	  
	512,900	  
	  
	  
	1.076	  

	 Process Supplies

	 Operating Supplies
	  
	  
	-	  
	  
	  
	4,617,600	  
	  
	  
	9.679	  

	 Maintenance Supplies
	  
	  
	-	  
	  
	  
	569,000	  
	  
	  
	1.193	  

	 Power Supply
	  
	  
	-	  
	  
	  
	276,900	  
	  
	  
	0.581	  

	 Subtotal
	  
	  
	 -
	  
	  
	  
	5,463,500	  
	  
	  
	11.453	  

	 Total Process Operating Costs
	  
	  
	39	  
	  
	  
	5,976,400	  
	  
	  
	12.529	  

  
 The annual operating cost included the following:
  
  	  
	·	staffing and maintenance manpower complements, and base salaries including an average burden of 60% (salary information is based on staffing complements, similar project salary costs as supplied by Avino, and Tetra Tech in-house data)
	  
	  
	  

	  
	·	power consumption based on the estimated power drawn by the equipment
	  
	  
	  

	  
	·	reagent consumption rates and associated costs based on test work results and recent prices received from reagent suppliers
	  
	  
	  

	  
	·	estimated maintenance costs based on approximately 10% of equipment costs.

  
  	  

	 Avino Silver & Gold Mines Ltd.
	 21-8
	 704-ENG-VMIN03003-01

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	
	
	 

	

  
  	 
	 

  
 G&A COST ESTIMATE
  
 Average LOM G&A operating cost was estimated to be US$672,000 per year, or US$1.41/t of tailings treated. Table 21.12 and Table 21.13 detail the manpower requirement estimates, annual G&A expenses and LOM unit G&A expenses operating cost. 
  
 Table 21.12 G&A Manpower Requirements
  	  

	 Description
	  
	 Manpower
	  
	  
	 Annual Cost/ Employee (US$)
	  
	  
	 Total Annual Cost Payroll (US$)
	  
	  
	 Unit Cost (US$/t milled)
	  

	 General Manager
	  
	  
	1	  
	  
	  
	64,514	  
	  
	  
	64,515	  
	  
	  
	0.135	  

	 Administration Manager
	  
	  
	1	  
	  
	  
	35,574	  
	  
	  
	35,574	  
	  
	  
	0.075	  

	 First Aid Attendant
	  
	  
	1	  
	  
	  
	10,821	  
	  
	  
	10,821	  
	  
	  
	0.023	  

	 Purchasing Agent
	  
	  
	1	  
	  
	  
	17,380	  
	  
	  
	17,380	  
	  
	  
	0.036	  

	 Office Clerk
	  
	  
	1	  
	  
	  
	9,623	  
	  
	  
	9,623	  
	  
	  
	0.020	  

	 Computer Technician
	  
	  
	1	  
	  
	  
	9,623	  
	  
	  
	9,623	  
	  
	  
	0.020	  

	 Safety and Security
	  
	  
	2	  
	  
	  
	22,650	  
	  
	  
	45,300	  
	  
	  
	0.095	  

	 Warehouse Staff
	  
	  
	2	  
	  
	  
	10,663	  
	  
	  
	21,325	  
	  
	  
	0.045	  

	 Environmental Supervisor
	  
	  
	1	  
	  
	  
	22,650	  
	  
	  
	22,650	  
	  
	  
	0.047	  

	 Total G&A Manpower
	  
	  
	11	  
	  
	  
	-	  
	  
	  
	236,811	  
	  
	  
	0.496	  

  
 Table 21.13 G&A Expenses
  	  

	 Description
	  
	 Total Cost
 (US$/a)
	  
	  
	 Unit Cost
 (US$/t milled)
	  

	 Communications
	  
	  
	36,000	  
	  
	  
	0.076	  

	 Consulting
	  
	  
	30,000	  
	  
	  
	0.063	  

	 Human Resources and Employee Costs
	  
	  
	10,000	  
	  
	  
	0.021	  

	 Vehicle Costs
	  
	  
	15,000	  
	  
	  
	0.032	  

	 Site Costs
	  
	  
	24,000	  
	  
	  
	0.050	  

	 Office Costs
	  
	  
	24,000	  
	  
	  
	0.050	  

	 Safety and Security
	  
	  
	24,000	  
	  
	  
	0.050	  

	 Travel
	  
	  
	36,000	  
	  
	  
	0.076	  

	 Water Costs
	  
	  
	24,000	  
	  
	  
	0.050	  

	 Housing Costs
	  
	  
	30,000	  
	  
	  
	0.063	  

	 Insurance
	  
	  
	60,000	  
	  
	  
	0.126	  

	 General & Others
	  
	  
	50,000	  
	  
	  
	0.105	  

	 Environmental

	 Consumables and Supplies
	  
	  
	24,000	  
	  
	  
	0.050	  

	 Permitting
	  
	  
	24,000	  
	  
	  
	0.050	  

	 Water Analysis
	  
	  
	24,000	  
	  
	  
	0.050	  

	 Total G&A Expenses
	  
	  
	435,000	  
	  
	  
	0.912	  

  
 21.2.5 SULPHIDE TAILINGS
  
 Avino is not currently conducting mining activity on the sulphide tailings portion of the Property. No capital or operating costs have been estimated for any potential mining activity on the sulphide tailings portion of the Property.
  
  	
	 Avino Silver & Gold Mines Ltd.
	 21-9
	 704-ENG-VMIN03003-01

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  	  
	  

  
  	 22.0 ECONOMIC ANALYSIS

  
 22.1 AVINO AND SAN GONZALO VEINS
  
 Avino is currently conducting mining activity, including mineral processing, on the Avino and San Gonzalo Veins. There is no economic analysis performed on both the Veins.
  
 Avino has not based its production decisions on a Feasibility study or Mineral Reserves demonstrating economic and technical viability, and as a result there is increased uncertainty and multiple technical and economic risks of failure, which are associated with these production decisions. These risks, among others, include areas that would be analyzed in more detail in a Feasibility study, such as applying economic analysis to Mineral Resources and Mineral Reserves, more detailed metallurgy, and a number of specialized studies in areas such as mining and recovery methods, market analysis, and environmental and community impacts.
  
 22.2 TAILINGS RESOURCES
  
 22.2.1 OXIDE TAILINGS
  
 In 2017, Tetra Tech prepared a PEA technical report for the silver and gold recoveries from the oxide tailings, entitled “Technical Report on the Avino Property”, dated April 11, 2017. 
  
 A PEA should not be considered to be a Prefeasibility or Feasibility study, as the economics and technical viability of the Project have not been demonstrated at this time. The PEA is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. Furthermore, there is no certainty that the conclusions or results reported in the PEA will be realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
  
 The report includes a preliminary economic evaluation for the oxide tailings retreatment based on a pre-tax financial model. Metal prices used in the base case for the preliminary economic evaluation were:
  
 	  
	 ·
	gold – US$1,250/oz
	  
	  
	  

	  
	 ·
	silver – US$18.50/oz.

  
  	  

	 Avino Silver & Gold Mines Ltd.
	 22-1
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 The pre-tax financial results were:
  
  	  
	 ·
	48.4% IRR
	  
	  
	  

	  
	 ·
	2.0-year payback period
	  
	  
	  

	  
	 ·
	US$40.5 million NPV at an 8% discount rate.

 
 Avino commissioned PwC in Vancouver to prepare the tax component of the model for the post-tax economic evaluation for this updated PEA with the inclusion of applicable income and mining taxes.
  
 The following post-tax financial results were calculated:
  
 	  
	 ·
	32% IRR
	  
	  
	  

	  
	 ·
	2.6-year payback period
	  
	  
	  

	  
	 ·
	US$22.2 million NPV at an 8% discount rate.

  
 The assessments are no longer current. 
  
 The pre-tax financial model was established on a 100% equity basis, excluding debt financing, and loan interest charges. The financial results for the base case are presented in Table 22.1.
  
 Table 22.1 Summary of Pre-tax Financial Results
  	  

	 Description
	 Base
 Case

	 Gold Price (US$/oz)
	 1,250

	 Silver Price (US$/oz)
	 18.5

	 Total Payable Metal Value (US$000)
	 148,892

	 Refining (US$000)
	 6,123

	 Transportation, Insurance (US$000)
	 214

	 At-mine Revenue (US$000)
	 142,555

	 Operating Costs (US$000)
	 47,034

	 Operating Cash Flow (US$000)
	 95,521

	 Initial Capital (US$000)
	 24,363

	 Sustaining Capital (US$000)
	 4,352

	 Salvage Value (US$000)
	 -861

	 Reclamation Cost (US$000)
	 606

	 Total Capital Expenditure, Including Reclamation and Salvage (US$000)
	 28,460

	 Net Cash Flow (US$000)
	 67,061

	 Discounted Cash Flow NPV (US$000) at 5.00%
	 48,922

	 Discounted Cash Flow NPV (US$000) at 8.00%
	 40,554

	 Discounted Cash Flow NPV (US$000) at 10.00%
	 35,786

	 Payback (years)
	 2.0

	 IRR (%)
	 48.4

  
  	  

	 Avino Silver & Gold Mines Ltd.
	 22-2
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  	  
	  

  
 The post-tax financial results estimated by the 2017 PEA Update are summarized in Table 22.2.
  
 Table 22.2 Summary of Post-tax Financial Results
  	  

		 Unit
	 Base Case

	 Gold
	 US$/oz
	 1250.00

	 Silver
	 US$/oz
	 18.50

	 Undiscounted NCF
	 US$ million
	 40.743

	 NPV (at 5%)
	 US$ million
	 28.006

	 NPV (at 8%)
	 US$ million
	 22.187

	 NPV (at 10%)
	 US$ million
	 18.892

	 IRR
	 %
	 32.0

	 Payback
	 years
	 2.6

  
 22.2.2 SULPHIDE TAILINGS
  
 Avino is not currently conducting mining activity on the sulphide tailings portion of the Property. No economical assessments have been conducted for any potential mining activity on the sulphide tailings portion of the Property.
  
 	  

	 Avino Silver & Gold Mines Ltd.
	 22-3
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  	  
	  

  
  	 23.0 ADJACENT PROPERTIES

  
 There are no material properties adjacent to the Property.
   
 	  

	 Avino Silver & Gold Mines Ltd.
	 23-1
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  	  
	  

  
  	 24.0 OTHER RELEVANT DATA AND INFORMATION

  
 There is no additional information or explanation necessary to make the technical report understandable and not misleading. 
   
 	  

	 Avino Silver & Gold Mines Ltd.
	 24-1
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
  	 25.0 INTERPRETATIONS AND CONCLUSIONS

  
 25.1 GEOLOGY
  
 The Property is located in Durango State in North Central Mexico, within the Sierra Madre Silver Belt, and 82 km northeast of Durango City. The current Property is comprised of 23 mineral concessions, totalling 1,103.934 ha.
  
 The Property is located within a large caldera which hosts numerous epithermal veins and breccias, grading into a “near porphyry” environment. The dominant rock types in the region of the Avino Mine include andesitic, rhyolitic and trachytic pyroclastic rocks. The area was intruded by monzonite dykes and stocks, which appear to be related to mineralization. Silver- and gold-bearing veins crosscut the various lithologies and are generally oriented north-northwest to south-southeast and northwest to southeast. The rocks have been weathered and leached in the upper sections from contact with atmospheric waters, resulting in an oxidized and a reduced, or sulphide, portion of the mine.
  
 Four deposits are present on the Property: the Avino Vein, the San Gonzalo Vein, and the tailings dam (which includes an oxide and a sulphide portion). Current Mineral Resource estimates are reported in this study for the Avino and San Gonzalo veins, as well as the oxide tailings.
  
 25.2 RESOURCE ESTIMATES
  
 The Mineral Resources of the Property are summarized in Table 25.1.
  
 It must be noted that no Mineral Resource has been estimated for the sulphide tailings portion of the Property.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 25-1
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
Table 25.1 Mineral Resources at the Avino Mine Property  	  
	  
	  
	  
	  
	  
	  

	 Resource Category
	 Deposit
	 Cut-off (AgEQ 
 g/t)
	 Tonnes 
 (t)
	 Grade
	 Metal Contents
	  

	 AgEQ 
 (g/t)
	 Ag 
 (g/t)
	 Au 
 (g/t)
	 Cu 
 (%)
	 AgEQ 
 (million tr oz)*
	 Ag 
 (million 
 tr oz)
	 Au (thousand 
 tr oz)
	 Cu 
 (t)
	 
	 Measured and Indicated Mineral Resources

	 Measured
	 Avino – ET
	 60
	 3,890,000
	 141
	 71
	 0.54
	 0.55
	 17.6
	 8.9
	 67.4
	 21,000
	 
	 Measured
	 Avino – San Luis
	 60
	 650,000
	 142
	 67
	 0.70
	 0.49
	 3.0
	 1.4
	 14.6
	 3,000
	 
	 Measured
	 San Gonzalo System
	 130
	 290,000
	 397
	 314
	 1.65
	 0.00
	 3.7
	 2.9
	 15.4
	 0
	 
	 Total Measured
	 All Deposits
	 -
	 4,830,000
	 156
	 85
	 0.63
	 0.51
	 24.3
	 13.2
	 97.4
	 24,000
	 
	 Indicated
	 Avino – ET
	 60
	 2,640,000
	 105
	 49
	 0.56
	 0.34
	 8.9
	 4.2
	 47.6
	 9,000
	 
	 Indicated
	 Avino – San Luis
	 60
	 1,620,000
	 126
	 54
	 0.82
	 0.36
	 6.6
	 2.8
	 42.9
	 6,000
	 
	 Indicated
	 San Gonzalo System
	 130
	 240,000
	 319
	 257
	 1.25
	 0.00
	 2.5
	 2.0
	 9.6
	 0
	 
	 Indicated
	 Oxide Tailings
	 50
	 1,330,000
	 124
	 98
	 0.46
	 0.00
	 5.3
	 4.2
	 19.8
	 0
	 
	 Total Indicated
	 All Deposits
	 -
	 5,830,000
	 124
	 70
	 0.64
	 0.25
	 23.3
	 13.1
	 119.8
	 15,000
	 
	 Total Measured and Indicated
	 All Deposits
	 -
	 10,660,000
	 139
	 77
	 0.63
	 0.37
	 47.5
	 26.3
	 217.2
	 39,000
	 
	 Inferred Mineral Resources

	 Inferred
	 Avino – ET
	 60
	 2,380,000
	 111
	 58
	 0.51
	 0.33
	 8.5
	 4,4
	 39.1
	 8,000
	 
	 Inferred
	 Avino – San Luis
	 60
	 1,780,000
	 124
	 57
	 0.72
	 0.38
	 7.1
	 3.2
	 41.2
	 7,000
	 
	 Inferred
	 San Gonzalo System
	 130
	 120,000
	 262
	 219
	 0.86
	 0.00
	 1.0
	 0.8
	 3.3
	 0
	 
	 Inferred
	 Oxide Tailings
	 50
	 1,810,000
	 113
	 88
	 0.44
	 0.00
	 6.6
	 5.1
	 25.6
	 0
	 
	 Total Inferred
	 All Deposits
	 -
	 6,090,000
	 118
	 70
	 0.56
	 0.24
	 23.2
	 13.6
	 109.2
	 15,000
	 

  
  	  

	 Avino Silver & Gold Mines Ltd.
	 25-2
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

 	 
	 
	 
 
	 

  
  	  
	  

  
  	 Notes:
	 Figures may not add to totals shown due to rounding. 
 Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
 The Mineral Resource estimate is classified in accordance with the CIM Definition Standards
 For Mineral Resources and Mineral Reserves incorporated by reference into NI 43-101 Standards of Disclosure for Mineral Projects.
 Mineral Resources are reported at cut-off grades 60 g/t, 130 g/t, and 50 g/t AgEQ grade for ET, San Gonzalo, an oxide tailings, respectively..
 AgEQ or silver equivalent ounces are notational, based on the combined value of metals expressed as silver ounces
 Cut-off grades were calculated using the following assumptions:
 For Avino (ET and San Luis), San Gonzalo: gold price of US$1,300/oz, silver price of US$17.50/oz, and copper price of US$3.00/lb
 For Oxide Tailings: gold price of US$1,250/oz, silver price of US$19.50/oz
 A net smelter return (NSR) was calculated and the silver equivalent was back calculated using the following formulas:
 For ET: AgEQ = (24.06 x Au (g/t) + 0.347 x Ag (g/t) + 43.0 x Cu (%) – 151.8 x Bi (%)) / 0.347
 For San Gonzalo: AgEQ = (0.03 x Au (g/t) + 0.385 x Ag (g/t) – 4.03/0.385
 For Oxide Tailings: AqEQ = 69.37 x Au (g/t) + Ag (g/t)
 No Mineral Resource has been estimated for the sulphide tailings portion of the Property.

  
  	  

	 Avino Silver & Gold Mines Ltd.
	 25-3
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

 	 
	 
	 
 
	 

  
  	  
	  

  
25.3 MINERAL PROCESSING   
 Avino is currently conducting mining activities on the Avino Vein and the San Gonzalo Vein, including processing of the materials from both the properties at the flotation processing plant at the Avino Vein site. Production decisions for both the existing operations were being made without Mineral Reserves or any studies of economic viability that have been prepared in accordance with NI 43-101. As a result there is increased uncertainty and multiple technical and economic risks of failure, which are associated with these production decisions. These risks, among others, include areas that would be analyzed in more detail in a Feasibility study, such as applying economic analysis to Mineral Resources and Mineral Reserves, more detailed metallurgy, and a number of specialized studies in areas such as mining and recovery methods, market analysis, and environmental and community impacts.
  
 For the oxide tailings, the preliminary test results indicate that the tailings samples responded well to cyanide leaching, including column leaching treatment. The proposed gold and silver extraction was by heap leaching. Further evaluations are required to better understanding the metallurgical performance of the oxide tailings and the economics of reprocessing the tailings. 
  
 For the sulphide tailings, Avino is not currently conducting mining activity on the tailings. No recovery methods are currently proposed for the sulphide tailings. The gold and silver recovery from the sulphide tailings has been excluded from this study. 
  
 25.4 MINING
  
 Avino is currently conducting mining activity on the San Gonzalo and the Avino Veins. Cut and fill method, sublevel stoping and shrinkage stoping methods are used to feed the mill (more information can be found in Section 16.0).
  
 The oxide tailings Mineral Resource is proposed to be mined/moved using a conventional truck/loader surface mining method. The production cycle will consist of loading and trucking. The production schedule has been developed for the oxide tailings based on a treatment rate of 500 kt/a; this would be equivalent to a throughput rate of 1,370 t/d.
  
 25.5 CAPITAL AND OPERATING COSTS
  
 25.5.1 AVINO VEIN AND SAN GONZALO VEIN
  
 Avino is currently conducting mining activity on the Avino and San Gonzalo veins. There is no cost estimate applicable and all costs are based on actual expenditures. The capital and operating costs are detailed in Section 21.0.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 25-4
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

 	 
	 
	 
 
	 

  
  	  
	  

  
25.5.2 TAILINGS RESOURCES   
 The capital costs and operating costs for retreating the oxide tailings portion of the Property, including reclaiming the oxide tailings, constructing the heap leach pad and the treatment facilities, were detailed in Section 21.0 and reported in the technical report entitled “Technical Report on the Avino Property”, dated April 11, 2017. The 2017 PEA Update results are summarized in the following subsections.
  
 CAPITAL COSTS
  
 The capital cost for the oxide tailing tailings part of the Property had been developed based on the treatment of 1,370 t/d, or 500,000 t/a of oxide tailings. A total initial capital cost of US$24.4 million, including contingency, was estimated for the oxide tailings retreatment by the proposed heap leaching processing. The breakdown of the estimate is shown in Table 25.2. The exchange rate used for the cost estimates was Mexican Peso to US Dollar at 19.23.
  
 Table 25.2 Capital Cost Summary
 	  

	 Item/Description
	  
	 Total Initial
 Capital Cost
 (US$ 000)
	  
	  
	 Total Sustaining Capital Cost
 (US$ 000)
	  

	 Direct Costs
	  

	 Mining, Agglomeration, and Pad Loading
	  
	  
	2,899	  
	  
	  
	818	  

	 Process Facilities
	  
	  
	3,979	  
	  
	  
	  
	  

	 Reagents/Auxiliary Services
	  
	  
	526	  
	  
	  
	  
	  

	 Buildings
	  
	  
	1,003	  
	  
	  
	  
	  

	 Leach Pad and Infrastructure
	  
	  
	4,522	  
	  
	  
	1,819	  

	 Power Supply and Distribution
	  
	  
	1,571	  
	  
	  
	  
	  

	 Total Direct Costs
	  
	  
	14,500	  
	  
	  
	2,637	  

	 Indirect Costs

	 Engineering, Procurement, Construction Management, Quality Assurance and Vendor Representatives
	  
	  
	2,338	  
	  
	  
	386	  

	 Freight and Construction Indirects
	  
	  
	2,898	  
	  
	  
	430	  

	 Owner’s Costs
	  
	  
	725	  
	  
	  
	132	  

	 Contingency
	  
	  
	3,902	  
	  
	  
	767	  

	 Total Indirect Costs
	  
	  
	9,863	  
	  
	  
	1,715	  

	 Total Capital Costs
	  
	  
	24,363	  
	  
	  
	4,352	  

  
 OPERATING COSTS
  
 The LOM overall operating cost for the oxide tailings retreatment, including costs for mining, process and G&A, had been estimated to be approximately US$15.06/t milled and is detailed in Table 25.3. The LOM overall unit operating cost estimate was based on a nominal processing rate of 1,370 t/d.
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 25-5
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

   
  	  
	  

  
 Table 25.3 LOM Unit Operating Cost Estimate Summary
  	  

	 Description
	 Personnel
	 Unit Cost
 (US$/t treated)

	 Mining
	 15*
	 1.13

	 Process
	 39
	 12.53

	 G&A
	 11
	 1.41

	 Total Operating Cost
	 65
	 15.06

  
 Note: *labour requirement for trucking of the tailings and waste was excluded as it will be by a contractor.
  
 Avino is not currently conducting mining activity on the sulphide tailings portion of the Property. No capital or operating costs have been estimated for any potential mining activity on the sulphide tailings portion of the Property.
  
 25.6 ECONOMIC ANALYSIS
  
 Avino is currently conducting mining activity, including mineral processing, on the Avino and San Gonzalo Veins. There is no economic analysis performed on both the Veins.
  
 Avino has not based its production decisions on a Feasibility study or Mineral Reserves demonstrating economic and technical viability, and as a result there is increased uncertainty and multiple technical and economic risks of failure, which are associated with these production decisions. These risks, among others, include areas that would be analyzed in more detail in a Feasibility study, such as applying economic analysis to Mineral Resources and Mineral Reserves, more detailed metallurgy, and a number of specialized studies in areas such as mining and recovery methods, market analysis, and environmental and community impacts.
  
 In 2017, Tetra Tech prepared an economic evaluation (“Technical Report on the Avino Property”, dated April 11, 2017) for the oxide tailings retreatment based on a pre-tax financial model. The assessment results are detailed in Section 22.0 and the Technical Report dated on April 11, 2017.
  
 The economic evaluation for the oxide tailings retreatment was based on a pre-tax financial model. Metal prices used in the base case were:
  
  	  
	·	gold – US$1,250/oz
	  
	  
	  

	  
	·	silver – US$18.50/oz.

  
 The pre-tax financial results were:
  
  	  
	·	48.4% IRR
	  
	  
	  

	  
	·	2.0-year payback period
	  
	  
	  

	  
	·	US$40.5 million NPV at an 8% discount rate.

  
  	  

	 Avino Silver & Gold Mines Ltd.
	 25-6
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

 	 
	 
	 
 
	 

   	  
	  

  
 Avino commissioned PwC in Mexico to prepare the tax component of the model for the post-tax economic evaluation for the updated PEA with the inclusion of applicable income and mining taxes.
  
 The following post-tax financial results were calculated:
  
  	  
	·	32.0% IRR
	  
	  
	  

	  
	·	2.6-year payback period
	  
	  
	  

	  
	·	US$22.2 million NPV at an 8% discount rate.

  
  	  

	 Avino Silver & Gold Mines Ltd.
	 25-7
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

    	  
	  

  
  	 26.0 RECOMMENDATIONS

  
 26.1 GEOLOGY
  
 ARANZ Geo’s recommendations are itemized in the following subsections. These recommendations are not required for continued mine development on the Property, and therefore a cost estimate for this work is not provided.
  
 26.1.1 DATABASE MANAGEMENT
  
 Tetra Tech has the following recommendations regarding Avino database management:
  
 Tetra Tech (2013) previously recommended that all drillhole data (including collar, survey, assay, geology, and specific gravity data) should be maintained in a single, compiled database for both the Avino and San Gonzalo Veins. The data has been not consolidated to date. ARANZ Geo reiterates this recommendation but goes further to recommend that tailings sampling data also be included.
  
 ARANZ Geo recommends that underground channel sampling and QA/QC data be incorporated into the same unified system together with the exploration drilling data to form a single repository or “version of the truth”.
  
 Avino currently possess SurpacTM software that should be adequate to manage a more centralized database. The ability to select data by type and location for assaying and logging should be managed through the judicious use of codes to allow selective extraction and summarization as and when required.
  
 26.1.2 UNDERGROUND SAMPLING
  
 ARANZ Geo has the following recommendations regarding Avino geology data and interpretation:
  
 ARANZ Geo recommends that level sampling strategy at the Avino Vein be improved. Currently the development drifts bracketing the individual bodies are manually sampled across the width of the tunnels. 
  
 The Avino Vein is very wide (in excess of 30 m in places) and subsequent sampling across the full width of the orebodies, creates a potential for bias in the frequency of sampling in the orebody between the drifts is lower. ARANZ Geo recommends that the drift on the footwall side be driven in advance of the hanging wall drift. 
  
  	  

	 Avino Silver & Gold Mines Ltd.
	 26-1
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
 Advantages are: 
  
  	  
	·	allow fans of short holes to be drilled at intervals (estimated 15 to 25 m)
	  
	  
	  

	  
	·	to provide advanced and balanced sample coverage
	  
	  
	  

	  
	·	optimal positioning of hanging wall drift to preserve the geotechnical integrity of the hanging wall of the orebody and
	  
	  
	  

	  
	·	allow the possibility of stoping on retreat (with improved safety and planning flexibility).

 
 26.1.3 SPECIFIC GRAVITY SAMPLING AND ANALYSIS
  
 ARANZ Geo recommends that Avino continues to develop the database for specific gravity data using drill cores. ARANZ Geo also recommends that grab samples from controlled underground exposures (location, and lithology description) be used to supplement the data. ARANZ Geo further recommends that some large samples be cut from the faces of the oxide tailings deposit weighed and measured to determine specific gravity for the deposit. 
  
 26.1.4 QA/QC SAMPLING
  
 ARANZ Geo recommends that standards and blank submissions be included in the master database for the Property to avoid the difficulty of locating such data when it is resides in separate spreadsheet reports.
  
 ARANZ Geo recommends that QA/QC performance graphs be updated on a monthly basis to allow questionable sample batches to be repeated timeously.
  
 26.1.5 SULPHIDE TAILINGS DRILLING
  
 Drill the sulphide tailings when it has been dewatered. A hole spacing of 80 to 100 m (based on experience with the oxide tailings) should be sufficient to allow an Inferred Mineral Resource to be declared, provided sufficient mineralization is present.
  
 26.1.6 DENSITY MEASUREMENTS
  
 ARANZ GEo recommends that further density measurements be generated. Access to most of the levels in the Avino Mine and San Gonzalo Mine provides the opportunity to rapidly supplement density measurements from underground exposures in the form of grab samples from known positions for the major vein units. Density measurements from the accessible oxide tailings heap can be obtained by carefully removing and measuring volumes of material and drying and weighing the material. ARANZ Geo suggests representative volumes of 0.3 m x 0.3 m x 0.3 m adjacent to the collars of every second drill hole should be captured.
   
  	  

	 Avino Silver & Gold Mines Ltd.
	 26-2
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  
26.1.7 BISMUTH   
 Bismuth is a significant deleterious penalty element and should be assayed at the same rate as copper to provide detailed information for the mine planning at ET/San Luis.
  
 26.1.8 RESOURCE ESTIMATION
  
 An internal capacity to perform mineral resource estimation, using geostatistical methods should be developed. The SurpacTM software should provide the tools to be able to do this in the long term.
  
 26.1.9 EXPLORATION FOR THE WESTERN EXTENSION OF THE AVINO VEIN
  
 Horner (2017), in his recent structural geology report, concludes that the known portion of the Avino Vein system west of San Luis terminates on a post mineralization fault and recommends that the extension to the system be investigated. ARANZ Geo supports this investigation.
  
 26.2 MINING
  
 26.2.1 LONG-TERM MINE PLANNING
  
 Tetra Tech recommends that Avino prepare a long-term mine plan based on the resource estimate, to enable Avino to declare mineral reserves and ensure that the mineral resources disclosed can be included in a long-term mine plan. 
  
 26.2.2 SUBLEVEL MINING (WITH ROOM AND PILLAR ON SUBLEVELS)
  
 A key feature of the mining method used at Avino is to mine out the sublevels from hangingwall to footwall, leaving pillars, as a means of limiting unsupported spans. In addition, much of the current production is from conducting room and pillar on the sublevels as opposed to long hole blasting between sublevels. 
  
 Furthermore, Tetra Tech has noted that Avino plans to leave pillars behind and potentially to backfill the mined-out stopes. 
  
 A number of potential problems may arise with the current mining practice:
  
 	  
	·	The stability of the spans created by slashing out from hangingwall to footwall is not well understood and the large unsupported spans on the sublevels may not remain stable once long hole stoping becomes a greater portion of the mining activity
	  
	  
	  

	  
	·	Instability on one of the sublevels could compromise ventilation and escape way access as well as the ability to mine between sublevels
	  
	  
	  

	  
	·	Rib pillars (dip pillars) may have larger heights (distance from hanging wall to footwall) that the planned widths (20 to 25 m), which will affect pillar stability
	  
	  
	  

	  
	 ·
	 The use of backfilling in the stope is challenged by the potential need to barricade the slashed-out widths and heights of the sublevels

  
  	  

	 Avino Silver & Gold Mines Ltd.
	 26-3
	 704-ENG-VMIN03003-02

	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, Mexico
		

  	 
	 
	 
 
	 

  
  	  
	  

  As such Tetra Tech recommends the following:
  
  	  
	·	The current method be subjected to a detailed geotechnical review, including a review of pillar stability for mining of the current sublevels using long hole stoping
	  
	  
	  

	  
	·	Avino alter the mining method from slashing out of sublevels as they are advanced, to one where the slashing out of sublevels is delayed to immediately prior to long hole blasting between sublevels. This will reduce the time that the large spans are needed and will ensure that mining personnel will work in smaller span ore drifts, which can have support installed as needed as may occur due to increased induced horizontal stress during bulk mining. Smaller drifts will also make backfilling easier.
	  
	  
	  

	  
	·	As with Point 2 above, this could be done in conjunction with uphole blastholes, with mining done on retreat towards the crosscut. This could avoid the need to have personnel and equipment enter large unsupported excavations underground.
	  
	  
	  

	  
	·	Avino investigate the use of backfill for continued mining of the Avino vein
	  
	  
	  

	  
	·	Ventilation airways and escapeways are developed in waste away from stopes

 
 26.3 PROCESS
  
 26.3.1 AVINO AND SAN GONZALO VEINS
  
 Avino is currently conducting mining activities on the Avino and San Gonzalo veins, including metal recovery using flotation processes. Tetra Tech recommends that Avino further optimize the processing conditions, including metallurgical tests, to improve metallurgical performances for both the Avino and San Gonzalo vein mill feeds.
  
 26.3.2 OXIDE AND SULPHIDE TAILINGS
  
 Further tests are recommended to evaluate the metallurgical performances of the tailings samples, including the sulphide tailings samples. The test work should be conducted on samples that better represent the tailings Mineral Resources. The test work should include:
  
 	  
	·	head characterization and mineralogical determination
	  
	  
	  

	  
	·	leaching condition optimization, including cyanide concentration, leaching retention time, agglomeration binding material types and dosages
	  
	  
	  

	  
	·	determination of the effect of the particle size distribution on metal extraction and agglomeration

  
  	  

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	·	further confirmation of the effect of flotation pre-concentration on improving overall metal recovery
	  
	  
	  

	  
	·	residual cyanide management tests, including residual cyanide management and valuable metal recoveries from the barren solution
	  
	  
	  

	  
	·	further evaluations to compare heap leach vs tank leach should be investigated.

  For the sulphide tailings, systematic test work should be conducted to effectively recover silver and gold values from the tailings, including co-processing of the sulfide tailings with the oxide tailings.
  
 The estimated costs for the test work, excluding sampling, is approximately Cdn$150,000.
  
 26.4 ENVIRONMENTAL
  
 The cost of permitting has not been considered at this stage of the Project. Government agencies should be consulted prior to the permitting process to determine if current permits for the San Gonzalo Mine can been revised. The cost of expropriating agricultural land for the leach pad, and the cost of water which would have to be redirected to the heap leach project but which is currently used for agricultural purposes have also not been assessed. Once the mine plan, site layout and tailings management plan are further along and have definitive locations, the cost of these factors should be addressed. The cost for monitoring environmental effects post mine closure needs to be estimated.
  
 A detailed trade-off study should be undertaken to characterize current conditions of the sulphide tailings and to determine whether the re-treatment of this material would contribute to the profitability of the Project.
  
 26.5 MINING OF OXIDE TAILINGS
  
 Potential for handling sulphide tailings as a mineralized material, rather than waste material, should be investigated based on appropriate metallurgical tests. Further optimization of the mine plan for the oxide tailings should be conducted.
  
 26.6 PROJECT DEVELOPMENT
  
 Tetra Tech recommends that a preliminary economic assessment be completed for the entire Property, including the Avino Vein, the San Gonzalo Vein, the oxide tailings, and the sulphide tailings. 
  
  	  

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  	 27.0 REFERENCES

  
 Audited Annual Financial Report & MD&A for the year ended December 31, 2015.
  
 Audited Annual Financial Report & MD&A for the year ended December 31, 2016.
  
 Avino Annual Reports www.avino.com.
  
 Avino Silver & Gold Mines Ltd., 2001. Internal Report – Avino Operating Records, October 2001.
  
 Avino Silver & Gold Mines Ltd., 2011a. News Release: Avino Reports Results of San Gonzalo Bulk Sample July 11, 2011. 
  
 Avino Silver & Gold Mines Ltd., 2011b. Consolidated Financial Statements for the years ended December 31, 2011 and 2010. Retrieved July 17, 2013 from www.avino.com. 
  
 Avino Silver & Gold Mines Ltd., 2012. Consolidated Financial Statements for the years ended December 31, 2012, 2011, and 2010. Retrieved July 17, 2013 from www.avino.com.
  
 Avino Silver & Gold Mines Ltd., 2013a. Avino May Production Report June 06, 2013. Retrieved July 17, 2013 from www.avino.com.
  
 Avino Silver & Gold Mines Ltd., 2013b. Condensed Consolidated Interim Financial Statements for the Three Months Ended March 31, 2013 and 2012. Retrieved July 17, 2013 from www.avino.com.
  
 Avino Silver & Gold Mines Ltd. 2016a. News Release: Avino Reports New Power Line Energized and Final Permits Received for New Tailings Storage Facility. June 13, 2016.
  
 Avino Silver & Gold Mines Ltd. 2016b. News Release: Avino Announces Extension of Concentrates Prepayment Agreement with Samsung C&T. June 29, 2016.
  
 Avino Silver & Gold Mines Ltd. 2017a. News Release: Avino Announces Fourth Quarter and Full Year 2016 Production Results from its Avino Property. January 17, 2017.
  
 Avino Silver & Gold Mines Ltd. 2017b. News Release: Avino Announces Q1 2017 Production Results. April 13, 2017.
  
 Avino Silver & Gold Mines Ltd., 2017c. News Release: Avino Silver and Gold Mines Provides Update on its Avino Property, May 08, 2017
  
  	  

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 Avino Silver & Gold Mines Ltd., 2018a. News Release: Avino Announces Results from its Current Exploration Drill Programs on the Chirumbo, Guadelupe and San Juventino Areas of the Avino Mine Property February 6, 2018
  
 Avino Silver & Gold Mines Ltd., 2018b. News Release: Avino Announces an Updated Mineral Resource Estimate at the Avino Property February 21, 2018
  
 Avino Silver & Gold Mines Ltd., 2018c. Avino Announces Fourth Quarter and Full Year 2017 Production Results from its Avino Property, January 16, 2018
  
 Avino Silver & Gold Mines Ltd., 2018d. News Release: Avino Provides 2017 Year End Summary and Outlook for 2018, February 13, 2018
  
 Benitez, Sanchez, 1991. Memorandum: Informe Final de la Cubicacion de Presa de Jales. Prepared for Ing. Rene Cuellar Torres, Cia Minera Mexicana de Avino, S.A. de C.v. June 6, 1991, 5 pages.
  
 Bermúdez Fernández, Jesús, 2012. Legal agreement between Minerales de Avino, Sociedad Anónima de Capital Variable and Compañía Minera Mexicana de Avino, Sociedad Anónima de Capital Variable on the La Platosa Concession. Volume seven hundred and twenty-six/mbq* number fifteen thousand one hundred and ninety-seven. February 18, 2012, 14 pages.
  
 Emsley, J., 2003. Nature’s Building Blocks: an A-Z Guide to the Elements. Oxford University Press, 538 pages.
  
 Gallegos, J.I., 1960. Durango Colonial, 1563–1821, Mexico City: Editorial Jus, p. 78.
  
 González Olguin, Juan Manuel, 2017. Current title opinion prepared by Bufete González Olguin S.C. Law Firm for Avino Silver and Gold Mines, Ltd. February 3, 2017, 9 pages.
  
 Gunning, D., 2009. Resource Estimate on the San Gonzalo Vein – A Part of the Avino Mine, Durango, Mexico, for Avino Silver and Gold Mines Ltd. Prepared by Orequest. Effective date August 31, 2009.
  
 Hall, R., 2006. Technical Report: Tailings Retreatment – Process Option. Prepared by Ron Hall, Wardrop Engineering Inc. for Avino Silver & Gold Mines Ltd. March 31, 2006
  
 Horner, J., 2017. Structural Study Avino Mine, Durango, Mexico – Intersection Avino-San Juventino. IC Consulenten Ziviltechniker GesmbH, Niederlassung Salzburg.
  
 Huang, J. and Tan, G., 2005. Metallurgical Test Work on Avino Tailings, Durango, Mexico. Project No, 0406407. Report prepared by John Huang and Gie Tan, Process Research Associates Ltd. for Bryan Slim, MineStart Management Inc. March 28, 2005.
  
 Huang, J., 2003. Flotation and Cyanidation Scoping Tests and Specific Gravity. Project No. 0302303. Report prepared by John Huang, Process Research Associates Ltd. for Bryan Slim, MineStart Management Inc. March 28, 2003.
  
  	  

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 Index Mundi 2011 http://www.indexmundi.com/
  
 Paulter, J., 2006. Regional Exploration Evaluation and Recommendations. Unpublished internal report for Avino.
  
 Paulter, J., 2006. Regional Exploration Evaluation and Recommendations. Unpublished internal report for Avino.
  
 QG Australia (Pty) Ltd. (2016). Amended Resource Estimte Update for the Avino Property Durango, Mexio. Prepared for Avino Silver & Gold Mines Ltd. October 27, 2016.
  
 R Core Team (2013). R: A language and environment for statistical computing. R Foundation for Statistical Computing, Vienna, Austria. URL http://www.R-project.org/.
  
 Servicios Administratos Luismin, 1993. Unpublished Report on the Potential of the Avino Property. SA de CV, the engineering branch of Cía Minera de San Luis Exploration
  
 Slim, B., 2003. Tailings Valuation. Prepared for Avino Silver & Gold Mines Ltd. Report prepared by Bryan Slim, MineStart Management Inc. November 2003.
  
 Slim, B., 2005a. Preliminary Feasibility. Prepared for Avino Silver & Gold Mines Ltd. Report prepared by Bryan Slim, MineStart Management Inc. May 2005.
  
 Slim, B., 2005b. Tailings Valuation. Prepared for Avino Silver & Gold Mines Ltd. Report prepared by Bryan Slim, MineStart Management Inc. May 2005.
  
 Slim, B., 2005c. A Tailings Resource. Prepared for Avino Silver & Gold Mines Ltd. Report prepared by Bryan Slim, MineStart Management Inc. July 21, 2005.
  
 Slim, B., 2005d. A Tailings Resource. Prepared for Avino Silver & Gold Mines Ltd. Report prepared by Bryan Slim, MineStart Management Inc. October 25, 2005.
  
 Tetra Tech, 2012. Technical Report on the Avino Property. Prepared for Avino Silver & Gold Mines Ltd. Effective Date: July 24, 2012. www.sedar.com
  
 Tetra Tech, 2013. Technical Report on the Avino Property. Prepared for Avino Silver & Gold Mines Ltd. Effective Date: July 19, 2013. www.sedar.com Document No. 1251920100-REP-R0001-02.1
  
 Tetra Tech and QG Australia (Pty) Ltd, 2016. Amended Resource Estimate Update for the Avino Property. Prepared for Avino Silver & Gold Mines Ltd. Effective Date: October 27, 2016. www.sedar.com Document No. 1251920100-REP-R0001-02.1
  
 Tetra Tech 2017. Technical Report on the Avino Property, Durango, Mexico. Prepared for Avino Silver & Gold Mines Ltd. Effective Date: April 11, 2017. www.sedar.com Document No. 735-1651920100-REP-R0001-03.
  
 VSE, 1977. Vancouver Stock Exchange Review. September 1979.
  
 VSE, 1977. Vancouver Stock Exchange Review. September 1979.
  
 Wikipedia Durango entry: http://en.wikipedia.org/wiki/Durango
     
 	  

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	 Amended Mineral Resource Estimate Update for the 
 Avino Property, 
 Durango, MexicoExhibit 10.1

 

LOAN
AGREEMENT

 

Access
Capital, Inc. (“Access Capital”) and the undersigned companies named below, and set forth on Exhibit A, jointly and
severally (each a “Company” and collectively the “Companies”) hereby mutually agree to the creation of
a funding relationship between the parties, on the terms and conditions contained within this Loan Agreement (the “Loan
Agreement”) and in accordance with the Standard Terms and Conditions of Loan Agreement attached hereto as Exhibit A
and made a part hereof (the “Standard Terms”; the Loan Agreement and the Standard Terms are collectively referred
to as the “Agreement”; all defined terms used herein and not expressly defined herein shall have the meaning given
to such terms in the Standard Terms):

 

1.       Invoice
Delivery; Advances If requested by Access Capital, each Company will deliver copies of all of its customer invoices (each,
an “Account Receivable” and collectively, the “Accounts Receivable”) to Access Capital for verification
and processing promptly after their creation. Each Company will forward each invoice to the respective customer of such Company
(individually an “Account Debtor” and collectively, “Account Debtors”). Access Capital may in its sole
discretion make revolving credit advances (the “Advances”) to each Company from time to time during the term of this
Agreement which in the aggregate at any time outstanding, will not exceed (without the consent of Access Capital) the lesser of
(i) $2,500,000 (the “Capital Availability Amount”) minus such reserves as Access Capital may reasonably deem proper
and necessary from time to time based on, for example, unpaid taxes, judgments, liens against the Collateral which have not been
subordinated in favor of Access Capital, amounts deemed necessary by Access Capital to preserve or protect the Collateral, or
any deterioration in the Collateral (the “Reserves”) or (ii) the sum of (1) up to 85% of the net face amount of those
Accounts Receivable (as hereinafter defined) of each Company which Access Capital deems to be eligible for borrowing purposes
(as determined by Access Capital in the exercise of its commercially reasonable discretion) minus Reserves plus (2) the lesser
of (a) the Inventory Sublimit Amount (as hereafter defined) or (b) up to 50% of the value (calculated at the lower of cost or
market value) of that inventory of each Company which Access Capital deems eligible for borrowing purposes (the “Eligible
Inventory”) minus Reserves. For purposes hereof, the term “Inventory Sublimit Amount” means $1,150,000, provided
that immediately after giving effect to the Mortgage Refinance (as defined in Section 3(b) of the Standard Terms) the Inventory
Sublimit Amount shall be reduced to $500,000 (such reduction, the “Inventory Sublimit Reduction”).

 

2.       Interest
and Fees. The Companies shall jointly and severally pay Access Capital interest and fees as follows, each of which shall
constitute an Obligation:

 

(a)       Interest
on the unpaid principal balance of each Advance until such time as such Advance is collected in full in good funds in dollars
of the United States of America at a per annum rate equal to 1.50% over Prime (the “Contract Rate”). “Prime”
shall mean the prime or “Base Rate” of Citibank, N.A. from time to time. Interest and fees shall be computed on the
basis of actual days elapsed in a year of 360 days.

 

(b)       An
annual fee (the “Annual Fee”) equal to 1% of the Capital Availability Amount on the Closing Date (as hereafter defined)
and on each anniversary of the Closing Date. The Annual Fee shall be deemed earned in full as of the Closing Date and shall not
be subject to rebate or proration for any reason.

 

3.       Term.
This Loan Agreement shall be in effect for an initial term beginning on the date hereof (the “Closing Date”) and continuing
until three years from the date on which any Company shall have first received the proceeds of the initial Advances from Access
Capital (the “Initial Term”).

 

4.       Conditions
Precedent. Unless otherwise consented to by Access Capital, Access Capital shall not be obligated to make any Advances
until the conditions precedent set forth on Exhibit B attached hereto shall have been satisfied (this Agreement, the documents
listed on Exhibit B and any and all other documents, instruments and agreements from time to time entered into by the Companies
and/or any Responsible Party (as hereafter defined) in favor of Access Capital are collectively referred to as the “Transaction
Documents”).

 

     

     

    

  

5.       The
Companies’ Representations, Warranties and Covenants. Each Company represents, warrants and covenants to Access
Capital as follows:

 

(a)       The
Company in whose name the invoice has been billed is the sole owner of the Collateral free and clear of all liens and encumbrances;
such Company has the full power and authority to grant Access Capital a security interest in the Collateral and such security
interest grant has been duly authorized by all necessary company action;

 

(b)       The
goods or services listed or referred to in the invoices related to each Account Receivable have been shipped or rendered to the
Account Debtor, and the prices and terms of shipment set forth therein conform in all material respects to the terms of any related
purchase order or agreement with the Account Debtor;

 

(c)       The
invoices representing each Account Receivable correctly set forth the full purchase price of the goods or services covered thereby,
and such amount is due and owing from the Account Debtor, subject to no set-offs, deductions, disputes, contingencies or counterclaims
against such Company or the invoice, and payment thereof is not contingent upon fulfillment of any obligation;

 

(d)       Such
Company will perform all steps from time to time as requested by Access Capital to create and maintain in Access Capital’s
favor a valid perfected first priority security interest in the Collateral; and

 

(e)       All
inventory manufactured by each Company in the United States of America shall be produced in accordance with the requirements of
the Federal Fair Labor Standards Act of 1938, as amended and all rules, regulations and orders related thereto or promulgated
thereunder.

 

6.       Servicing
Agent. For the purpose of administrative convenience in the servicing of this Agreement, Sterling Seal & Supply Company,
Inc., a New Jersey corporation (the “Servicing Agent”), is hereby appointed by the other Companies as the servicing
agent for the Companies and the Companies hereby instruct Access Capital to make all payments due to any Company, directly to
the Servicing Agent.

 

7.       Governing
Law. This Agreement has been made in, and shall be governed by the laws of, the State of New York, without giving effect
to conflicts of laws rules.

 

8.       Complete
Agreement. This Agreement and the other Transaction Documents set forth the complete and entire understanding among the
Companies, each Responsible Party and Access Capital and may only be modified by a written instrument signed by the party to be
bound thereby.

 

[Remainder
of this page intentionally left blank; signatures follow]

 

     

     

    

 

 

     

     

    

 

 

 

 

     

     

    

  

 

 

     

     

    

 

 

 

     

     

    

 

 

 

     

     

    

 

 

 

     

     

    

 

 

 

     

     

    

EXHIBIT
A

 

STANDARD
TERMS AND CONDITIONS OF LOAN AGREEMENT

 

The
following Standard Terms and Conditions are attached to, and hereby incorporated by reference in, the Loan Agreement. All defined
terms used herein and not expressly defined herein shall have the meaning given to such terms in the Loan Agreement.

 

1.       Verification,
Credit and Availability. Access Capital will conduct such examination and verification of the Companies’ Accounts
Receivable, and such credit investigation of the Account Debtors, as it considers necessary or desirable. Access Capital shall
have the absolute right, in the exercise of its commercially reasonable discretion, to deem any or all Accounts Receivable of
any Company ineligible for borrowing purposes Access Capital shall have no obligation to deem any Account Receivable from a specific
Account Debtor to be an Eligible Receivable if: (i) the Account Receivable exceeds the Eligibility Period (as such term is defined
in paragraph 3 herein), (ii) 25% or more of the Accounts Receivable from the applicable Account Debtor exceeds the Eligibility
Period, (iii) the Account Receivable due from any affiliate of any of the Companies, (iv) the Account Receivable is due from an
Account Debtor to which any of the Companies is also a debtor or (v) the total unpaid Accounts Receivable from the applicable
Account Debtor exceeds 25% of all Eligible Accounts Receivable. In determining Account Debtor eligibility, Access Capital shall
act in a commercially reasonable manner and its credit department will follow its standard operating procedures in making credit
decisions consistent with its regular practices. Access Capital shall have the absolute right, in the exercise of its commercially
reasonable discretion, to deem any or all inventory of any Company as ineligible for borrowing purposes, including without limitation,
if such inventory (i) is not subject to Access Capital’s first priority security interest, (ii) is located on premises with
respect to which Access Capital has not received a landlord waiver or bailee letter acceptable in form and substance to Access
Capital, (iii) is in transit, (iv) is not in good condition, (v) fails to meet all standards imposed by any governmental agency,
department or division, (vi) is not currently either usable or salable in the normal course of such Company’s business,
(vii) such inventory is work in process, (viii) such inventory is slow moving or aged beyond twelve-months or (ix) such inventory
is anything other than finished goods.

 

2.       Procedure
for Advances; Collection of Collateral. Any Company may by written notice to Access Capital request a borrowing of Advances
prior to 12:00 noon (New York time) on the business day of its request to incur, on that day, an Advance. Together with each request
for an Advance (or at such other intervals as Access Capital may request), such Company shall deliver to Access Capital a Borrowing
Base Certificate in the form of Exhibit C, which shall be certified as true and correct by the President or Chief Financial Officer
of each Company together with all supporting documentation relating thereto (each, a “Borrowing Base Certificate”).
All Advances shall be charged to the Companies’ account on Access Capital’s books. The proceeds of each Advance made
by Access Capital shall be made available to the Companies on the business day following the business day so requested in accordance
with the terms of this Section 2 by way of credit to the Companies’ operating account maintained with such bank as the Servicing
Agent designates to Access Capital. Any and all Obligations due and owing under this Agreement and the other Transaction Documents
may be charged to the Companies’ account and shall constitute Advances. The Companies shall be required to (a) make a mandatory
prepayment hereunder at any time that the aggregate outstanding principal balance of the Advances is in excess of the maximum
amount of Advances permitted under this Agreement, in an amount equal to such excess; and (b) repay on the expiration of the term
of this Agreement (i) the then aggregate outstanding principal balance of the Advances together with accrued and unpaid interest,
fees and charges and (ii) all other amounts owed Access Capital under this Agreement and the other Transaction Documents. Any
payments of principal, interest, fees or any other amounts payable under this Agreement or under any other Transaction Documents
shall be made prior to 12:00 noon (New York time) on the due date thereof in immediately available funds. Access Capital will
credit (conditional upon final collection) all proceeds of Accounts Receivable to the Companies’ account one (1) business
day after receipt by Access Capital of good funds in dollars of the United States of America in Access Capital’s account;
provided, however, for purposes of computing interest and fees hereunder, Access Capital will credit (conditioned upon final collection)
all such payments to the Companies’ account three business days after receipt by Access Capital of good funds in dollars
of the United States of America in Access Capital’s account. Any amount received by Access Capital after 12:00 noon (New
York time) on any business day shall be deemed received on the next business day.

 

     

     

    

  

3.       Nonconforming
Receivables; Shortfall.

 

(a)       If
any Eligible Receivable is not paid by the Account Debtor within 90 days after the date that such Eligible Receivable was invoiced
(the “Eligibility Period”), or if any Account Debtor asserts at any time a deduction, dispute, contingency, set-off
or counterclaim with respect to any Eligible Receivable, the Companies shall reimburse Access Capital on demand for the amount
of the Advance made with respect to such Eligible Receivable. The Companies shall be jointly and severally obligated to pay (and
Access Capital shall have the right to retain) all applicable interest and fees due with respect to such Eligible Receivable even
if the Companies are required to reimburse Access Capital for such Eligible Receivable.

 

(b)       In
the event that the average outstanding Advances during any month (the “Actual Amount”) is less than the Minimum Average
Monthly Borrowing Amount (as hereafter defined), then the Companies shall jointly and severally pay to Access Capital at the end
of each such month an amount equal to the interest payments (the “Monthly Fees”) Access Capital would have been paid
on the amount by which the Minimum Average Monthly Borrowing Amount exceeds the Actual Amount for such month (herein called the
“Shortfall”). For purposes of calculating the Monthly Fees hereunder for any month, the Shortfall shall be deemed
to have been outstanding from the first to the last day of such month. For purposes hereof, (1) the term “Minimum Average
Monthly Borrowing Amount” means $750,000, provided that in the event Access Capital shall (i) have received cash proceeds
in an amount of not less than the Required Repayment Amount (as hereafter defined) from the refinancing of Access Capital’s
first mortgage lien (the “Mortgage Refinance”) on the real property located at 1105 Green Grove Road, Neptune, New
Jersey (the “Real Property”), which such proceeds shall be applied to reduce the then outstanding Obligations and
(ii) retain a second mortgage lien on the Real Property (the occurrence of (i) and (ii), the “Trigger Event”), then
upon the occurrence of the Trigger Event the Minimum Average Monthly Borrowing Amount shall be reduced to $500,000; and (2) the
term “Required Repayment Amount” means the amount, if any, which would be necessary to eliminate any overadvance in
existence immediately after giving effect to the Inventory Sublimit Reduction (as defined in Section 1(a) of the Loan Agreement).

 

4.       Collection
of Accounts Receivable.

 

(a)       Each
Company will irrevocably instruct all present and future Account Debtors and all other persons and entities obligated to make
payments constituting Collateral to mail or deliver such payments: (i) directly to such Company which such payments such Company
will, within one (1) business day of receipt, deposit into a deposit account maintained by such Company with Customers Bank or
such other financial institution accepted by Access Capital in writing (the “Blocked Account Bank”) pursuant to the
terms of a Control Agreement (as hereafter defined) or (ii) if such payments are made by wire transfer, to a deposit account of
such Companies covered by a Control Agreement. Such instructions shall not be rescinded or modified without Access Capital's prior
written consent. All such payments received by any Company shall be so received in trust for the benefit of Access Capital until
so deposited in a deposit account subject to a Control Agreement. For purposes hereof, the term “Control Agreement”
means a deposit account control agreement in form and substance reasonably acceptable to Access Capital entered into among the
applicable Companies, Access Capital and the Blocked Account Bank covering the Companies’ blocked account(s) maintained
with such Blocked Account Bank, as such agreement may be amended, restated or otherwise modified from time to time.

 

(b)       Following
the occurrence of an Event of Default (as such term is hereafter defined), Access Capital (i) may notify the Companies’
Account Debtors of Access Capital’s security interest in the Accounts Receivable, collect them directly and charge the collection
costs and expenses thereof to the Companies’ account and (ii) shall have the full power and authority to collect each Account
Receivable, through legal action or otherwise, and may, in its sole discretion, settle, compromise, or assign (in whole or in
part) the claim for any of the Accounts Receivable, or otherwise exercise any other right now existing or hereafter arising with
respect to any of the Accounts Receivable, if such action will facilitate collection, the costs with respect to which shall be
charged, in each case, by Access Capital to the Companies’ loan account. If Access Capital is required to enforce its rights
hereunder or under any other Transaction Document against one or more of the Account Debtors, any Company and/or any Responsible
Party, then in any such event the Companies shall be jointly and severally liable to Access Capital for its reasonable attorneys’
fees incurred in connection therewith together with interest thereon from the date of the occurrence of the Event of Default upon
which such enforcement is based to the date of satisfaction at the maximum rate permitted by law. All reimbursable expenses described
in the Standard Terms shall be charged by Access Capital to the Companies’ loan account. The Companies acknowledge and agree
that, following the occurrence and during the continuance of an Event of Default, Access Capital shall have the sole and exclusive
right to commence legal action to collect any Account Receivable

 

     

     

    

  

(c)       Access
Capital shall have no liability to any Company for any mistake in the application of any payment received by it with respect to
any Account Receivable, so long as Access Capital acts in good faith and without gross negligence.

 

5.       Payment
of Expenses and Taxes; Indemnification.

 

(a)       The
Companies will jointly and severally pay or reimburse Access Capital for all of Access Capital’s reasonable out of pocket
costs and expenses incurred in connection with the preparation and execution of, and any amendment, supplement or modification
to this Agreement and any of the other Transaction Documents and the consummation of the transactions contemplated hereby and
thereby, including, without limitation, the reasonable fees and disbursements of counsel to Access Capital (whether or not such
counsel is affiliated with Access Capital). The Companies shall jointly and severally pay or reimburse Access Capital for all
reasonable costs and expenses incurred for such additional services as may be required hereunder, in each case in accordance with
the regular practices of Access Capital and in accordance with Access Capital’s regular service charge rate schedule.

 

(b)       The
Companies will jointly and severally pay or reimburse Access Capital for all its reasonable costs and expenses incurred in connection
with the enforcement and preservation of any and all rights under this Agreement and the other Transaction Documents, including,
without limitation, fees and disbursements of counsel to Access Capital (whether or not such counsel is affiliated with Access
Capital) and any collateral evaluation (e.g. field examinations, collateral analysis or other business analysis) performed by
Access Capital or for its benefit as Access Capital deems necessary, as well as for the costs at Access Capital’s regularly
posted rates, for overnight mail delivery, UCC, tax lien and judgment searches (and all updates with respect thereto) and bank
wire transfer fees, as outlined in Exhibit D. Access Capital shall have the right to visit any Company at any time to review and
photocopy the books and records of such Company, or portions thereof, as Access Capital shall determine to facilitate its work
hereunder.

 

(c)       The
Companies will jointly and severally pay, indemnify, and hold Access Capital harmless from, any and all recording and filing fees
and any and all liabilities with respect to, or resulting from, any delay in paying stamp, excise and other taxes, if any, which
may be payable or determined to be payable in connection with the execution and delivery of, or consummation of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement
and the other Transaction Documents.

 

(d)       The
Companies will jointly and severally pay, indemnify, and hold Access Capital harmless from and against any and all claims, liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and disbursements of any kind or nature whatsoever,
whether threatened, pending or determined (including attorneys’ fees and court costs now or hereafter arising from the enforcement
of this clause), (1) with respect to the execution, delivery, enforcement and performance of this Agreement and the other Transaction
Documents, including, without limitation, the custody, preservation, use or operation of, or the sale of, collection from, or
other realization upon, any collateral securing Obligations, (2) arising directly or indirectly from the activities of any Company
or any subsidiary, its predecessors in interest, or third parties with whom it has a contractual relationship, or arising directly
or indirectly from the violation of any environmental protection, health, or safety law, whether such claims are asserted by any
governmental agency or any other person or entity, and/or (3) arising by virtue of or in connection with any representation or
warranty by any Company or any Responsible Party being untrue or misleading or any agreement or covenant by any Company or any
Responsible Party not being performed as and when required hereunder or under any other Transaction Document (all of the foregoing,
collectively, the “indemnified liabilities”); provided, that no Company shall have any obligation hereunder to Access
Capital with respect to indemnified liabilities arising from (i) the gross negligence or willful misconduct of Access Capital,
(ii) salaries and other amounts payable by Access Capital to its employees in the ordinary course of business (other than for
legal fees specifically billed with respect to a particular matter to which the foregoing relates) or (iii) expenses incurred
by Access Capital (other than those specifically enumerated above) in the ordinary course of business in connection with the performance
of its obligations hereunder. To the extent that Access Capital shall provide amounts to any Company in excess of amounts permitted
by Section 1 of the Loan Agreement, all such amounts shall bear interest at a per annum rate equal to the Prime Rate plus 10%
of the amounts so provided. The obligations in this Section shall survive the termination of this Agreement and the other Transaction
Documents.

 

     

     

    

  

6.       Termination.
This Agreement shall be deemed to be automatically renewed for an additional term of three years at the expiration of the Initial
Term, and thereafter to be automatically renewed for succeeding three year terms at the end of the first and each succeeding renewal
term, unless (a) the Companies shall (1) deliver written notice of cancellation to Access Capital not earlier than 90 days and
not later than 60 days prior to the expiration date of the Initial Term or any succeeding renewal term and (2) have paid in full
all Obligations (as defined below) on or prior to the expiration date of the Initial Term or any renewal term, as applicable;
or (b) Access Capital shall deliver written notice of cancellation to the Servicing Agent not earlier than 90 days and not later
than 60 days prior to the expiration date of the Initial Term or any renewal term, as applicable. At Access Capital’s election
following the occurrence of an Event of Default, Access Capital may terminate this Agreement. The termination of this Agreement
shall not affect any of Access Capital’s rights hereunder or under any other Transaction Document and the provisions hereof
and thereof shall continue to be fully operative until all transactions entered into, rights or interests created and the Obligations
have been disposed of, concluded or liquidated in a manner acceptable to Access Capital. If for any reason this Agreement is terminated
prior to the end of the Initial Term or any renewal term, as applicable, or the Obligations are repaid prior to the end of the
Initial Term or any renewal term, as applicable, the Companies shall jointly and severally pay to Access Capital, upon the effective
date of such termination or repayment, an early termination fee equal to the Required Minimum Amount (as hereinafter defined)
Access Capital would have been paid through the remainder of the term calculated in accordance with the provisions of this Agreement
and the other Transaction Documents. For purposes hereof, the term “Required Minimum Amount” means both during and
following the expiration of the Initial Term, (a) the aggregate interest payments which would have been payable to Access Capital
for each month (or portion thereof) remaining during the Initial Term or any renewal term, as applicable, based upon the Minimum
Average Monthly Borrowing Amount for each such remaining month (or portion thereof) and (b) the Annual Fees payable to Access
Capital for the Initial Term or any renewal term, as applicable, all of which payments and fees shall be deemed fully earned on
the Closing Date; such amount being intended to compensate Access Capital for its costs and expenses incurred in initially approving
this Agreement or extending same. Such early termination fee shall also be due and payable by the Companies to Access Capital
upon termination of this Agreement by Access Capital after the occurrence of an Event of Default.

 

The
representations, warranties and covenants of the Companies and the remedies of Access Capital for a breach of such representations,
warranties and/or covenants, shall survive the termination of this Agreement, and such termination shall not affect the rights
of Access Capital to enforce its remedies under this Agreement and the other Transaction Documents against any Company, each Responsible
Party any Collateral and/or other assets pledged by any Responsible Party to Access Capital following the occurrence of an Event
of Default.

 

7.       Security
Interest.

 

(a)       Each
Company hereby grants Access Capital a security interest (the “Security Interest”) in all of the following property
now owned or at any time hereafter acquired by such Company, or in which such Company now has or at any time in the future may
acquire any right, title or interest (the “Collateral”): all accounts and all other personal property and fixtures
of each Company, including, without limitation, inventory, equipment, goods, documents, instruments (including, without limitation,
promissory notes), contract rights, general intangibles (including without limitation, payment intangibles), chattel paper (whether
tangible or electronic), supporting obligations, investment property, cash, deposit accounts, letter-of-credit rights, books and
records, trademarks, tradestyles, patents and copyrights in which such Company now has or hereafter may acquire any right, title
or interest and the proceeds and products thereof (including without limitation, proceeds of insurance) and all additions, accessions
and substitutions thereto or therefor, all rights of such Company pursuant to this Agreement and the other Transaction Documents,
and all contract rights and other general intangibles related to the Accounts Receivable and associated therewith and the proceeds
and products thereof (including without limitation proceeds of insurance) and all additions, accessions and substitutions thereto
or therefor. Terms used in this Section which are defined in the Uniform Commercial Code as enacted and in effect from time to
time in the State of New York (the “Code”) are used as so defined in the Code.

 

     

     

    

 

(b)       This
Security Interest shall secure any and all obligations and liabilities of each Company and each other party to any Transaction
Document to Access Capital, whether such liabilities and obligations be direct or indirect, absolute or contingent, secured or
unsecured, now existing or hereafter arising or acquired, due or to become due (the “Obligations”).

 

(c)       Each
Company will do all lawful acts which Access Capital deems necessary or desirable to protect the Security Interest or otherwise
to carry out the provisions of this Agreement and the other Transaction Documents, including, but not limited to, the execution,
if required, of Uniform Commercial Code financing, continuation, amendment and termination statements and similar instruments
in form satisfactory to Access Capital and will promptly pay on demand any filing fees or other costs in connection with the filing
or recordation of such statements and instruments. Each Company irrevocably appoints Access Capital as its attorney-in-fact during
the term of this Agreement, to do all acts which it may be required to do in connection with the creation and perfection of its
security interest under this Agreement and the other Transaction Documents, such appointment being deemed to be a power coupled
with an interest, including, without limitation, the filing of UCC-1 Financing Statements (or such other filings required under
applicable law) in the name of such Company to reflect the security interest created hereby and/or thereby.

 

(d)       Each
Company warrants that (i) its principal place of business, chief executive office and the place where the records concerning its
accounts and contract rights are located are at the address(es) set forth herein and (ii) it is duly organized in the state named
below its signature on the signature page of the Loan Agreement (the “Signature Page”) with the Organizational ID
# stated on the Signature Page. None of the Companies’ Accounts Receivable is evidenced by a promissory note or other instrument.
Each Company shall keep its principal place of business and chief executive office and the office where it keeps its records concerning
its accounts and contract rights at the location therefor specified in the first sentence of this clause or, upon 30 days’
prior written notice to Access Capital, at any other locations in the continental United States so long as such Company shall
have taken all action required by Access Capital to preserve and maintain Access Capital’s first priority perfected security
interest in and its rights with respect to the Collateral, including delivery of landlord agreements, mortgagee agreements and
warehouse agreements, each in form and substance satisfactory to Access Capital. Each Company shall hold and preserve its records
concerning its accounts and contract rights and shall permit representatives of Access Capital at any time during normal business
hours upon advance notice to inspect and make abstracts from such records. Notwithstanding the above, in the event that an Event
of Default has occurred and is continuing or Access Capital believes, in the exercise of its commercially reasonable discretion
that such access is necessary to preserve or protect the Collateral, each Company shall permit representatives of Access Capital
at any time, without prior notice, during normal business hours to inspect and make abstracts from such records.

 

(e)       Each
Company warrants that it has title to the Collateral purportedly owned by it and that there are no sums owed or claims, liens,
security interests or other encumbrances (collectively, “Liens”) against the Collateral other than in favor of Access
Capital. Each Company will notify Access Capital of any Liens against the Collateral, will defend the Collateral against any Liens
adverse to Access Capital, and will not create, incur, assume, or suffer to exist now or at any time throughout the duration of
the term of this Agreement, any Liens against the Collateral, whether now owned or hereafter acquired, except liens in favor of
Access Capital.

 

(f)       Each
Company authorizes Access Capital to file, without the signature of such Company, where permitted by law, one or more financing
or continuation statements, and amendments thereto, relating to the Collateral. Access Capital may file a photographic or other
reproduction of this Agreement in lieu of a financing or continuation statement in any filing office where it is permissible to
do so.

 

(g)       Each
Company irrevocably appoints Access Capital as its attorney-in-fact (which power of attorney is coupled with an interest) and
proxy, with full authority in the place and stead of such Company and in its name or otherwise, from time to time in Access Capital’s
discretion, to take any action or execute any instrument which Access Capital may deem necessary or advisable to accomplish the
purposes of this Agreement and the other Transaction Documents, including, without limitation: (i) the right of endorsement on
all payments received in connection with each Account Receivable; (ii) to obtain and adjust insurance required to be paid to Access
Capital pursuant to this Agreement and the other Transaction Documents; (iii) to ask, demand, collect, sue for, recover, compound,
receive, and give acquittance and receipts for moneys due and to become due under or in respect of any of the Collateral; (iv)
to receive, endorse, and collect any checks, drafts or other instruments, documents, and chattel paper of such Company; (v) to
sign such Company’s name on any invoice or bill of lading relating to any account, on drafts against customers, on schedules
and assignments of accounts, on notices of assignment, financing statements and other public records, on verification of accounts
and on notices to customers (including notices directing customers to make payment directly to Access Capital); (vi) if an Event
of Default has occurred and is continuing, to notify the postal authorities to change the address for delivery of its mail to
an address designated by Access Capital, to receive, open and process all mail addressed to any Company, to send requests for
verification of accounts to customers; and (vii) to file any claims or take any action or institute any proceedings which Access
Capital may deem necessary or desirable for the collection of any of the Collateral or otherwise to enforce the rights of Access
Capital with respect to any of the Collateral. Each Company ratifies and approves all acts of said attorney; and so long as the
attorney acts in good faith and without gross negligence it shall have no liability to any Company for any act or omission or
for any error of judgment or mistake of fact or law as such attorney.

 

     

     

    

  

(h)       If
any Company fails to perform any agreement contained in this Agreement or any other Transaction Document, Access Capital may itself
perform, or cause performance of, such agreement or obligation, and the costs and expenses of Access Capital incurred in connection
therewith shall be jointly and severally payable by the Companies and shall be fully secured hereby.

 

(i)       The
powers conferred on Access Capital hereunder are solely to protect its interest in the Collateral and shall not impose any duty
upon Access Capital to exercise any such powers. Except for the safe custody of any Collateral in its possession and the accounting
for moneys actually received by it hereunder, Access Capital shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral.

 

(j)       Anything
herein to the contrary notwithstanding, (i) each Company shall remain liable under any and all contracts and agreements relating
to the Collateral, to the extent set forth therein, to perform all of its obligations thereunder, to the same extent as if this
Agreement had not been executed; (ii) the exercise by Access Capital of any of its rights hereunder shall not release any Company
from any of its obligations under the contracts and agreements relating to the Collateral; and (iii) Access Capital shall not
have any obligation or liability by reason of this Agreement under any contracts and agreements relating to the Collateral, nor
shall Access Capital be obligated to perform any of the obligations or duties of any Company thereunder or to take any action
to collect or enforce any claim for payment assigned hereunder.

 

(k)       Notwithstanding
payment in full of all Obligations to Access Capital under the Transaction Documents, Access Capital shall not be required to
record any terminations or satisfactions of Liens on the Collateral unless and until each Company and each Responsible Party have
executed and delivered to Access Capital a general release in a form reasonably satisfactory to Access Capital.

 

8.       Events
of Default; Remedies. If any of the following events (each herein referred to as an “Event of Default”) shall
occur:

 

(a)       Any
representation, warranty or statement made by any Company and/or any Responsible Party, as applicable, in any of the Transaction
Documents, any certificate, statement or document delivered pursuant to the terms hereof, in connection with the transactions
contemplated by the Transaction Documents should at any time be false, incomplete or misleading; or

 

(b)       Any
Company and/or any other person or entity shall fail to perform under and/or shall commit a breach of any term or provision of
this Agreement or any other Transaction Document or any other agreement between any Company and/or any Responsible Party and Access
Capital; or

 

(c)       Any
Company shall fail to pay any amount owing to Access Capital under this Agreement or any other Transaction Document when due;
or

 

(d)       Any
Company shall fail to provide to Access Capital (i) all such information from time to time requested by Access Capital with respect
to such Company’s Accounts Receivable and/or inventory and (ii) Borrowing Base Certificates, in each case as and when requested
by Access Capital; or

 

     

     

    

  

(e)       Any
Company shall (i) instruct any Account Debtor to mail or deliver payment on Accounts Receivable to a person, entity and/or place
other than as expressly provided for in this Agreement; or (ii) deposit any Account Debtor payments and fail to deliver the proceeds
thereof to Access Capital in accordance with the terms of this Agreement; or

 

(f)       There
shall be any change in the controlling ownership or senior management of any Company; or

 

(g)       Any
Company, any Responsible Party, any affiliate of any Company, subsidiary of any Company, affiliate of any Responsible Party or
subsidiary of any Responsible Party (i) shall generally not pay, or shall be unable to pay, or shall admit in writing its/his/her
inability to pay its/his/her debts as such debts become due; or (ii) shall make an assignment for the benefit of creditors, or
petition or apply to any tribunal for the appointment of a custodian, receiver, trustee or liquidator for it/him/her or a substantial
part of its/his/her assets; or (iii) shall commence any proceeding under any bankruptcy, reorganization, arrangement, readjustment
of debt, dissolution, or liquidation law or statute of any jurisdiction, whether now or hereafter in effect; or (iv) shall have
had any such petition or application filed or any such proceeding commenced against it/him/her in which an order for relief is
entered or an adjudication or appointment is made, or (v) shall take any action indicating its/his/her consent to, approval of,
or acquiescence in any such petition, application, proceeding, or order for relief or the appointment of a custodian, receiver,
trustee or liquidator for all or any substantial part of its/his/her properties; or (vi) shall suffer any such custodianship,
receivership, or trusteeship to continue undischarged; or (vii) shall take any action for the purpose of effecting any of the
foregoing; or

 

(h)       The
Companies shall fail to maintain, at of the end of each quarter (calculated on a rolling four (4) quarter basis), positive Cash
Flow. “Cash Flow” shall mean, for any period, the net income (as defined by Generally Accepted Accounting Principles
(“GAAP”) of the Companies, plus any non-cash charges less (i) any withdrawals by, loan advances to or repayments to
the officers or owners of the Companies or any other cash payments paid or scheduled to be repaid to any other party,  (ii)
principal repayments and any indebtedness by the Company paid or scheduled to be paid during such period, (iii) payments under
capital leases paid or scheduled to be paid during said period, (iv) capital expenditures paid or scheduled to be paid during
said period and (v) any non-cash extraordinary gains.

 

For
purposes of this Agreement, a breach of any financial covenant set forth herein shall be deemed to have occurred as of any date
of determination by Access Capital or as of the last day of any specified measurement period, regardless of when the financial
statements reflecting such breach are delivered to Access Capital; or

 

(i)       Any
Company shall fail to provide Access Capital with any one or more of the following: (i) within one hundred and twenty (120) days
after the end of each of such Company’s fiscal years, each of such Company’s audited balance sheet as at the end of
such fiscal year and the related statements of income, retained earnings and changes in cash flow for such fiscal year with a
report of independent certified public accountants of recognized standing selected by the Companies and acceptable to Access Capital,
setting forth in comparative form the figures as at the end of and for the previous fiscal year; (ii) within thirty (30) days
after the end of each month, Sterling Seal & Supply, Inc.’s internal balance sheet and statement of income, retained
earnings and cash flow as at the end of and for such month, and for the year to date period then ended, in reasonable detail and
stating in comparative form the figures for the corresponding date and periods in the previous year; (iii) within forty-five (45)
days after the end of each fiscal quarter of the Companies, the Companies’ consolidated internal balance sheet and statement
of income, retained earnings and cash flow as at the end of and for such fiscal quarter, and for the year to date period then
ended, in reasonable detail and stating in comparative form the figures for the corresponding date and periods in the previous
year; (iv) no later than thirty (30) days prior to the end of a fiscal year-end period, a complete set of projections, (which
shall be prepared on a monthly basis and include balance sheets, income statements, and schedules of cash flows) for the forthcoming
fiscal period; (iv) no later than 10 days after the end of each monthly period, an accounts receivable and accounts payable detailed
aging for said month; (v) within thirty (30) days after the filing thereof in accordance with applicable law (including any applicable
filing extensions granted to each Company, notice of any such filing extensions to be promptly provided to Access Capital), copies
of each Company’s federal income tax returns and any amendments thereto and promptly upon request from Access Capital, satisfactory
evidence of each Company’s payment of all withholding and other taxes required to be paid by such Company; (vi) within ninety
(90) days after the end of each fiscal year, each Responsible Party’s annual financial statement; (vii) within thirty (30)
days after filing thereof is in accordance with applicable law (including any applicable filing extensions granted to each Responsible
Party, notice of any such filing extensions to be promptly provided to Access Capital) copies of all federal and state income
tax returns of each Responsible Party; and (viii) promptly after each fiscal quarter, a copy of each Company’s’ 941
payroll tax filing along with proof of payment of the applicable required tax payment. At the times the financial statements are
furnished pursuant to (i) and (ii) above, a certificate of each Company’s President or Chief Financial Officer shall be
delivered to Access Capital stating that, based on an examination sufficient to enable him or her to make an informed statement,
no Event of Default exists, or, if such is not the case, specifying such Event of Default and its nature, when it occurred, whether
it is continuing and the steps being taken by such Company with respect to such event. All financial statements required to be
delivered hereunder shall be prepared in accordance with generally accepted accounting principles, subject to normal year-end
adjustments in the case of any monthly statement.; or

 

     

     

    

  

(j)       Any
Company’s trade accounts payable shall be more than sixty (60) days past due unless such trade accounts payable are subject
to bona fide disputes and adequate reserves have been provided on the applicable Company’s books with respect thereto; or

 

(k)       Any
Company shall fail to pay its taxes (payroll, sales and/or other) when due unless such Company shall have delivered to Access
Capital a valid written extension (acceptable to Access Capital) from the applicable taxing authority for such taxes and the applicable
taxing authority agrees to subordinate its lien, if any, in all assets of such Company in favor of Access Capital; or

 

(l)       An
attachment or levy is made upon any Company’s and/or any Responsible Party’s assets having an aggregate value in excess
of $25,000 or a judgment is rendered against any Company and/or any Responsible Party or any Company’s or any Responsible
Party’s property involving a liability of more than $25,000 which shall not have been vacated, discharged, stayed or bonded
pending appeal within thirty (30) days from the entry thereof; or

 

(m)       Any
change in any Company’s condition or affairs (financial or otherwise) which in Access Capital’s reasonable opinion
impairs the Collateral or the ability of such Company to perform its Obligations; or

 

(n)       Any
lien created hereunder or under any other Transaction Document for any reason ceases to be or is not a valid and perfected lien
having a first priority interest other than as a result of any action or inaction by Access Capital; or

 

(o)       Any
Company directly or indirectly sells, assigns, transfers, conveys, or suffers or permits to occur any sale, assignment, transfer
or conveyance of any assets of such Company or any interest therein, except as permitted in this Agreement and the other Transaction
Documents; or

 

(p)       If
any Responsible Party attempts to terminate, challenges the validity of, or challenges his/her liability under this Agreement
or any other Transaction Document or if any individual Responsible Party shall die and the Companies shall fail to provide Access
Capital with a replacement Responsible Party acceptable to Access Capital within thirty (30) days of such occurrence or if any
other Responsible Party shall cease to exist; or

 

(q)       Any
of the Companies fail to operate in the ordinary course of business; or

 

(r)       The
indictment or threatened indictment of any of the Companies, or any officer of any of the Companies or any Responsible Party under
any criminal statute, or the commencement or threatened commencement of criminal or civil proceedings against any of the Companies,
any officer of any of the Companies or any Responsible Party pursuant to which statute or proceeding penalties or remedies sought
or available include forfeiture or any of the property of any of the Companies or any Responsible Party; or

 

(s)       A
default by any of the Companies in the payment, when due, of any principal of or interest on any indebtedness for borrowed money
other than indebtedness to Access Capital; or

 

     

     

    

 

(t)       Access
Capital shall in good faith deem itself insecure or shall fear diminution in value, removal or waste of the Collateral; or

 

(u)       Any
of the Companies shall take or participate in any action which would be prohibited under the provisions of any subordination agreement
or intercreditor agreement (collectively, a “Subordination Agreement”) made by any subordinated creditor in favor
of Access Capital or make any payment on any indebtedness subordinated under any Subordination Agreement that any person or entity
was not entitled to receive under the provisions of the Subordination Agreement;

 

then,
and in any of the foregoing such events,

 

(1)       Access
Capital may exercise in respect of the Collateral, in addition to other rights and remedies provided for herein, in the Transaction
Documents and/or otherwise available to it, all the rights and remedies of a secured party on default under the Code (whether
or not the Code applies to the affected Collateral), and also may (x) require each Company to, and each Company hereby agrees
that it will at its expense and upon request of Access Capital forthwith, assemble all or part of the Collateral as directed by
Access Capital and make it available to Access Capital at a place to be designated by Access Capital which is reasonably convenient
to both parties and (y) without notice except as specified below, sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any of Access Capital’s offices or elsewhere for cash, on credit or for future delivery, and
upon such other terms as Access Capital may deem commercially reasonable. Each Company agrees that, to the extent notice of sale
shall be required by law, at least ten days’ notice to such Company of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable notification. Access Capital shall not be obligated to
make any sale of Collateral regardless of notice of sale having been given. Access Capital may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and any such sale may, without further notice, be made
at the time and place to which it was so adjourned.

 

(2)       Any
cash held by Access Capital as Collateral and all cash proceeds received by Access Capital in respect of any sale of, collection
from, or other realization upon all or any part of the Collateral may, in the discretion of Access Capital, be held by Access
Capital as Collateral for, and/or then or any time thereafter be applied in whole or in part by Access Capital against, all or
any part of the Obligations in such order as Access Capital shall elect. Any surplus of such cash or cash proceeds held by Access
Capital and remaining after payment in full of all the Obligations shall be paid over to the Companies or to whomsoever may be
lawfully entitled to receive such surplus.

 

(3)       Access
Capital may exercise any and all rights and remedies of each Company under or in connection with the Collateral, including, without
limitation, any and all rights of each Company to demand or otherwise require payment of any amount under, or performances of
any provision of, any account, contract or agreement.

 

(4)       The
Contract Rate shall be increased by an additional 5% per annum (the “Default Rate”) until the Event of Default has
been cured.

 

(5)       Access
Capital shall have the right, which may be exercised in its sole and absolute discretion at any time and from time to time during
the continuance of such Event of Default, to apply all amounts collected with respect to Accounts Receivable as follows, before
any payment from such collections shall be made to any Company: (i) against the unreimbursed balance of the Advances made by Access
Capital to any Company; (ii) to the payment of all interest and fees accrued with respect to the Advances and the Accounts Receivables,
whether or not such fees have become due and payable pursuant to the terms of this Agreement; and (iii) to the payment of any
and all other liabilities and Obligations of any Company to Access Capital pursuant to this Agreement and the other Transaction
Documents and any other agreement entered into between Access Capital and the Companies. For purposes of this Section, “Company”
and “Companies” means and includes each person named as a Company in the preamble to this Agreement and any parent,
subsidiary, controlling person or other affiliate thereof.

 

     

     

    

 

An
Event of Default hereunder shall be a default under each of the Transaction Documents and Access Capital, without notice to any
Company, may exercise all of the rights provided in this Agreement and the other Transaction Documents and, by notice to any Company,
may: (i) declare all Required Minimum Amounts and Annual Fees Access Capital would have been paid through the remainder of the
Initial Term or any renewal term, as applicable, all of which payments and fees shall be deemed fully earned on the Closing Date,
and all other Obligations payable under the Transaction Documents to be forthwith due and payable, whereupon such amounts shall
become and be forthwith due and payable, without demand, protest, or further notice of any kind, all of which are hereby expressly
waived by the Companies; or (ii) elect to cease making Advances pursuant to this Agreement; or (iii) both.

 

9.       Responsible
Party Obligations.

 

(a)       Each
Responsible Party shall be jointly and severally liable for the prompt and complete payment and performance of all Obligations
that shall become due or owing to Access Capital by any Company under this Agreement and each other Transaction Document and the
payment of any and all costs and expenses incurred by Access Capital in enforcing the same (the “Responsible Party Obligations”)
and this liability shall continue until all Obligations have been paid in full in cash and this Agreement and the other Transaction
Documents have been irrevocably terminated and payments may be required by Access Capital on demand for satisfaction at its offices
on any number of occasions.

 

(b)       Notwithstanding
any payment or payments made by a Responsible Party hereunder, the Responsible Party will not exercise any rights of Access Capital
against any Company by way of subrogation, reimbursement or indemnity, and shall have no right of recourse to any assets or property
of any Company held for the payment and performance of its Responsible Party Obligations, whether or not the Responsible Party
Obligations shall be satisfied. Each Responsible Party agrees not to seek contribution from any other Responsible Party until
all the Responsible Party Obligations shall have been paid in full. If any amount shall nevertheless be paid to the Responsible
Party, such amount shall be held in trust for the benefit of Access Capital and shall forthwith be paid to Access Capital to be
credited and applied to the Responsible Party Obligations, whether matured or not matured. The provisions of this sub section
shall survive termination of this Agreement.

 

(c)       Each
Responsible Party hereby assents, to the extent permitted by law, to all the terms and conditions of the Responsible Party Obligations
and waives: (i) notice of acceptance hereof and all notice of the creation, extension or accrual of any Responsible Party Obligations;
(ii) presentment, demand for payment, notice of dishonor and protest; (iii) notice of any other nature whatsoever; (iv) any requirement
of diligence or promptness on the part of Access Capital in the enforcement of any of its rights under the provisions of this
Agreement or any other Transaction Document; (v) any requirement that Access Capital take any action whatsoever against the Companies
or any other party or file any claim in the event of the bankruptcy of any Company; or (vi) failure of Access Capital to protect,
preserve or resort to any collateral unless through the gross negligence or willful misconduct of Access Capital or (vii) any
other circumstance which might otherwise constitute a defense available to, or a discharge of, such Responsible Party. Each Responsible
Party waives any and all defenses and discharges available to surety, guarantor or accommodation co-obligor. The waivers set forth
in this section shall be effective notwithstanding the fact that any Company ceases to exist by reason of its liquidation, merger,
consolidation or otherwise.

 

(d)       Each
Responsible Party hereby consents that from time to time, and without further notice to or consent of any Responsible Party, Access
Capital may take any or all of the following actions without affecting the liability of a Responsible Party: (i) extend, renew,
modify, compromise, settle or release the Responsible Party Obligations; (ii) modify and/or amend any terms or provisions of this
Agreement or any other Transaction Document; (iii) release or compromise any liability of any party or parties with respect to
the Responsible Party Obligations; (iv) release its security interest in the Collateral or any other assets of any Responsible
Party pledged to Access Capital or exchange, surrender or otherwise deal with the Collateral or any other assets of any Responsible
Party pledged to Access Capital as Access Capital may determine; or (v) exercise or refrain from exercising any right or remedy
of Access Capital.

 

10.       Notices.
All notices and other communications hereunder and under this Agreement and each other Transaction Document (unless otherwise
specified in such Transaction Document) shall be deemed given by registered or certified mail, return receipt requested, hand
delivery, overnight mail or telecopy (confirmed by mail) if to a party hereto at the address for such party on the signature page
set forth herein unless a party shall give notice in writing of a different address or facsimile number in the manner provided
herein. Notices and other communications shall be (i) in the case of those by hand delivery, deemed to have been given when delivered
to any officer of the party to whom it is addressed, (ii) in the case of those by mail or overnight mail, deemed to have been
given when deposited in the mail or with the overnight mail carrier and (iii) in the case of a telecopy, deemed given when dispatched.

 

     

     

    

  

11.       Amendments;
Etc. No amendment, modification, termination, or waiver of any provision of this Agreement or any other Transaction Document
to which any Company or any Responsible Party is a party, nor consent to any departure by any Company or any Responsible Party
from any Transaction Document to which it/he/she is a party, shall in any event be effective unless the same shall be in writing
and signed by Access Capital, and then such waiver or consent shall be effective only in the specific instance and for the specific
purpose for which given.

 

12.       No
Waiver. No course of dealing between Access Capital and any Company, nor any failure or delay on the part of Access Capital
in exercising any right, power, or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise
of any such right, power, or remedy preclude any other or further exercise thereof or the exercise of any other right, power,
or remedy hereunder. The rights and remedies provided in this Agreement and the other Transaction Documents are cumulative, and
are not exclusive of any other rights, powers, privileges, or remedies, now or hereafter existing, at law or in equity or otherwise.

 

13.       Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of each Company, each Responsible Party party
hereto, Access Capital and their respective heirs successors and assigns, except that no Company nor any Responsible Party may
assign or transfer any of its/his/her/ rights under this Agreement or any other Transaction Document to which it/he/she is a party
without the prior written consent of Access Capital.

 

14.       Integration.
This Agreement and the other Transaction Documents contain the entire agreement between the parties relating to the subject matter
hereof and supersede all oral statements and prior writings with respect thereto.

 

15.       Severability
of Provisions. Any provision of this Agreement or any other Transaction Document which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement or such Transaction Document or affecting the validity or enforceability
of such provision in any other jurisdiction.

 

16.       Additional
Reports. In the event that at any time after the expiration of the term of this Agreement (as the same may be extended
or modified, or terminated following the occurrence of an Event of Default), any Company or any successor or assignee of such
Company, shall request additional information from Access Capital including, without limitation, account reports, collections
advice for previously concluded transactions or information for such Company’s accounting records, such information shall
be supplied by Access Capital to such Company if available, and the Companies shall jointly and severally pay Access Capital based
on the time spent by Access Capital personnel in the preparation of such information for such Company, and for the disbursements
incurred by Access Capital in connection therewith, at the hourly rates established by Access Capital for the consulting services
of its personnel.

 

17.       Headings.
Section headings in this Agreement and the other Transaction Documents are included herein and in such Transaction Documents for
the convenience of reference only and shall not constitute a part hereof or of the applicable Transaction Documents for any other
purpose.

 

18.       Counterparts.
This Agreement may be executed in any number of counterparts, all of which shall constitute one and the same agreement, and any
party hereto may execute this Agreement by signing one or more counterparts.

 

19.       Relief
from Automatic Stay in Bankruptcy Case. If any voluntary or involuntary petition is filed under any section of the United
States Bankruptcy Code by or against any Company, each Company represents, warrants and agrees that to the fullest extent permitted
by applicable law: (a) Access Capital shall be entitled to immediate relief from the automatic stay to permit enforcement of Access
Capital’s rights and remedies pursuant to this Agreement, the other Transaction Documents and applicable law; (b) consent
is hereby unconditionally given to the immediate termination of the automatic stay and no contest or objection will be made to
any motion, application or petition filed by Access Capital for such determination of lifting of the automatic stay; (c) the exclusive
period for such Company or the debtor in any such bankruptcy proceeding to file a plan in bankruptcy, reorganization, arrangement,
wage earner’s plan or otherwise and to seek acceptances of any such plan, will terminate on the earlier of the one hundred
twentieth (120th) day following the filing of any such voluntary petition or, on the one hundred twentieth (120th) day following
the initial order for relief, without extension of any kind; (d) to the best knowledge and belief of each Company, the property
as to which Access Capital is given or granted a security interest pursuant to the terms of this Agreement would not be necessary
to any plan of reorganization or liquidation; (e) the filing of any petition in bankruptcy will constitute bad faith on the part
of any Company if the primary purpose of same is to delay any pending foreclosure or enforcement of any lien or security interest
held by Access Capital; (f) absent such foreclosure of enforcement of the lien or security interest of Access Capital, Access
Capital has no adequate protection; and (g) each Company will do all things and assign and deliver all documents, papers and instruments
requested by Access Capital to facilitate the obtaining by Access Capital of a release from any automatic stay or order or in
obtaining any order to dismiss such bankruptcy case.

 

     

     

    

  

20.       Invalid
Provisions. Nothing contained in this Agreement or any other Transaction Document shall be construed so as to require
the commission of any act contrary to law and wherever there is any conflict between any provision(s) of this Agreement or any
other Transaction Document and any material statute, law or ordinance, contrary to which the parties have no legal right to contract,
the latter shall prevail; but in such event, the provision(s) of this Agreement and the other Transaction Documents affected shall
be curtailed and limited only to the scope and extent necessary to bring it within the legal requirements.

 

If
any provision(s) of this Agreement or any other Transaction Document is held by a court of competent jurisdiction to be illegal,
invalid or unenforceable, such provision(s) shall be fully severable and this Agreement and the other Transaction Documents shall
be then construed and enforced as if such illegal, invalid or unenforceable provision(s) was never part of this Agreement or any
other Transaction Document in the first instance and the remaining provision(s) shall continue in full force and effect without
being affected by any such illegal, invalid or unenforceable provision(s) or by its severance from this Agreement or any other
Transaction Document. In addition, upon the finding of any such illegal, invalid or unenforceable provision(s), the parties agree
that to the extent legally possible so that the same may be valid and enforceable, a provision shall be added to this Agreement
and the other Transaction Documents as similar in its terms to the illegal, invalid or unenforceable provision as may be so within
the confines of legality, validity and enforceability. In all events, if this entire Agreement or the entire agreement of any
other Transaction Document or such material parts thereof are held illegal, invalid or unenforceable so that it cannot effectively
continue so that its intents and purposes are carried out, or, if this Agreement or any Transaction Document is terminated as
a result of any default on the part of any Company or any Responsible Party, then, in any such event, notwithstanding anything
to the contrary contained in this Agreement or otherwise, Access Capital shall, nevertheless, be entitled to immediate joint and
several payment by and from the Companies of all Obligations then outstanding.

 

21.       Limitation
of Liability. Access Capital shall have no liability whatsoever pursuant to this Agreement or any other Transaction Document
(i) for any loss or damages (including, without limitation, indirect, special or consequential damages) resulting from the refusal
of Access Capital, in the exercise of it commercially reasonable discretion, to make Advances against any Accounts Receivable
or with respect to any malfunction, failure or interruption of computer, communication facilities, labor difficulties or Acts
of God or other causes beyond its control; or (ii) for indirect, special or consequential damages arising from accounting or ministerial
errors with respect to the account of any Company with Access Capital. The liability of Access Capital for any default on its
part pursuant to, or tort arising out of, this Agreement or any other Transaction Document shall be limited to a refund to the
Companies of any fees paid by it during the period starting on the occurrence of the default or tort and ending when it is cured
or waived, or when this Agreement is terminated, whichever is earlier except to the extent such liability is determined to result
from the willful misconduct or gross negligence of Access Capital.

 

22.       JURISDICTION;
JURY TRIAL WAIVER. EACH PARTY HERETO IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE
BOROUGH OF MANHATTAN, THE CITY OF NEW YORK OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
ANY OTHER TRANSACTION DOCUMENT. EACH PARTY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT/HE
/SHE MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT ACTION OR PROCEEDING BROUGHT IN SUCH A COURT AND ANY
CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY AGREES
THAT A FINAL JUDGMENT IN ANY SUCH SUIT ACTION OR PROCEEDING BROUGHT IN SUCH A COURT, AFTER ALL APPROPRIATE APPEALS, SHALL BE CONCLUSIVE
AND BINDING UPON IT/HIM/HER. THE PARTIES HERETO DO HEREBY WAIVE ANY AND ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING
ARISING OUT OF THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT. NOTHING CONTAINED HEREIN SHALL LIMIT IN ANY MANNER WHATSOEVER
ACCESS CAPITAL’S RIGHT TO LITIGATE ANY AND ALL ACTIONS AND PROCEEDINGS RELATING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT
OR ANY OTHER TRANSACTION DOCUMENT IN ANY OTHER COURTS AS ACCESS CAPITAL MAY SELECT, WHICH SUCH COURTS ARE CONVENIENT FORUMS
AND THE COMPANIES AND EACH RESPONSIBLE PARTY SUBMIT TO THE PERSONAL JURISDICTION OF SUCH COURTS.

 

     

     

    

EXHIBIT
B

 

TRANSACTION
DOCUMENTS

 

Access
Capital shall have received the following documents, all of which shall be in form and substance satisfactory to Access Capital,
in such number of counterparts as Access Capital may require and, in the case of instruments or agreements, shall have been executed
by all the parties thereto:

 

		1.	This
                                         Agreement;

 

		2.	Uniform
                                         Commercial Code initial financing statements and such other security interest perfection
                                         documentation as shall be required under the applicable law for filing in such jurisdictions
                                         as Access Capital shall determine against each Company;

 

		3.	The
                                         results of lien searches against the Companies showing no liens or judgments of record;

 

		4.	The
                                         following documents, in form and substance satisfactory to Access Capital, duly executed
                                         by Customers Bank (the “Bank”):

 

		a.	Payoff
                                         letter from the Bank with respect to all amounts owing to the Bank (the “Bank Loan”);

 

		b.	Release
                                         of all liens in connection with the Bank Loan and authorization to file Uniform Commercial
                                         Code termination statements in respect thereof; and

 

		c.	Uniform
                                         Commercial Code termination statements;

 

		5.	Account
                                         Debtor Notification Letters;

 

		6.	Account
                                         Verification Letter;

 

		7.	Letters
                                         of Instruction;

 

		8.	Corporate
                                         Certificates;

 

		9.	IRS
                                         Form 8821 for each Company and each Responsible Party and Tax Information Authorization
                                         Form for the state of New Jersey for each Company;

 

		10.	Certificates
                                         of Insurance and Evidence of Property Insurance covering each Company under which Access
                                         Capital is named as a Lender Loss Payee and Additional Insured;

 

		11.	Copy
                                         of state issued driver’s license of all signatories and Responsible Parties to
                                         the Agreement;

 

		12.	Fully
                                         executed Deposit Account Control Agreement between Access Capital, Inc. and Customers
                                         Bank;

 

		13.	Mortgage,
                                         Assignment of Leases and Rents, Fixture Filing and Security Agreement with respect to
                                         the real property located at 1105 Green Grove Road, Neptune, New Jersey 07753 and all
                                         other agreements required by Access Capital in connection therewith;

 

		14.	Landlord
                                         Waiver with respect to each location leased by a Company;

 

		15.	Subordination
                                         Agreement between Angelo DeRosa and Access Capital, Inc.;

 

		16.	Collateral
                                         Assignment of Rights Under Asset Purchase Agreement; and

 

		17.	Other
                                         documents as deemed necessary by Access Capital as determined during due diligence.

 

     

     

    

 

EXHIBIT
D

 

REIMBURSABLE
EXPENSES

 

	Wire
    Transfer Fee/ Domestic	$50.00
    each
	Wire
    Transfer Fee/ Foreign	$60.00
    each
	Third
    Party Credit Reports	$100.00
    each
	UCC
    Filings/Searches	Client
    Specific
	Returned
    Checks- Insufficient Funds/Stop Payment	$40.00
    each
	Online
    Reporting Access	$75.00
    per month
	8821
    Monitoring Fee	$21.00
    per month

 

 

     

     

    

 

EXHIBIT
C

 

BORROWING
BASE CERTIFICATE

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