A Clear Path to Transformational Growth Q4 AND FULL YEAR 2023 FINANCIAL RESULTS CONFERENCE CALL & WEBCAST MARCH 21, 2024 A CLEAR PATH TO TRANSFORMATIONAL GROWTH ...

Core Insights - Avino Silver & Gold Mines Ltd. reported a decline in earnings per share for Q4 2023, with a 33% drop to 2 cents compared to 3 cents in Q4 2022, while revenues decreased by 14.5% year over year to $12.5 million, surpassing the Zacks Consensus Estimate of $9.5 million [1][2] Operational Update - Cash costs per silver equivalent payable ounce decreased by 28% to $15.04, while all-in sustaining costs rose by 16% to $21.67 per silver equivalent ounce [2] - Mine-operating profit fell by 41% to $2.56 million, and EBITDA dropped by 65% to $1.1 million compared to the previous year [2] Financial Position - The company ended 2023 with $2.7 million in cash, down from $11.2 million at the end of 2022, with cash provided by operating activities at $1.5 million compared to $11.8 million in 2022 [3] Production Update - Consolidated production for Q4 2023 was 558,460 silver equivalent ounces, a 27% decrease year over year, with silver production down 27%, gold down 40%, and copper down 14% [4] - For the full year 2023, consolidated production was approximately 2.42 million silver equivalent ounces, a 9% decline, while gold production increased by 27% to 7,335 ounces [4] 2023 Results - For 2023, earnings per share were 4 cents, beating the Zacks Consensus Estimate of 1 cent, but down 50% from 8 cents in 2022; revenues dipped 1% year over year to $44 million, exceeding the Zacks Consensus Estimate of $43 million [5] Update on La Preciosa - The company is prepared to start operations at La Preciosa, having applied for an environmental permit, with capital expenditures for 2024 estimated between $3 million and $4 million for initial development [6][7] Guidance for 2024 - Expected output for 2024 from both the Avino Mine and La Preciosa stockpiles is projected to be between 700,000 and 750,000 tons for mill processing, with production anticipated between 2.5 million and 2.8 million silver equivalent ounces [8] Price Performance - Avino Silver's shares have declined by 24.8% over the past year, compared to a 10% decline in the industry [9]

[Management's Responsibility for Financial Reporting](index=1&type=section&id=Management's%20Responsibility%20for%20Financial%20Reporting) Company management is responsible for preparing consolidated financial statements in accordance with IFRS and maintaining internal controls to ensure asset safeguarding, transaction authorization, and reliable financial information [Overview of Management's Responsibility for Financial Reporting](index=1&type=section&id=Management's%20Responsibility%20for%20Financial%20Reporting_Summary) Management is responsible for preparing IFRS-compliant consolidated financial statements and maintaining internal controls, with oversight from the Board and Audit Committee - Company management is responsible for preparing consolidated financial statements in accordance with International Financial Reporting Standards (IFRS), making best estimates and judgments based on available information[2](index=2&type=chunk) - Management has established and maintained internal control systems to safeguard company assets, authorize and record transactions, and ensure reliable financial information[2](index=2&type=chunk) - The Board of Directors is responsible for ensuring management fulfills its responsibilities, with the Audit Committee reviewing annual audit results and consolidated financial statements before Board approval[3](index=3&type=chunk) [Report of Independent Registered Public Accounting Firm](index=1&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Deloitte LLP issued an unqualified opinion on the company's consolidated financial statements and internal control over financial reporting, while highlighting the determination of the ET mine CGU's recoverable amount as a critical audit matter [Opinion on the Financial Statements](index=1&type=section&id=Opinion%20on%20the%20Financial%20Statements) Deloitte LLP issued an unqualified opinion on the company's consolidated financial statements for 2022 and 2023, affirming fair presentation in accordance with IFRS - Deloitte LLP issued an unqualified opinion on the company's consolidated financial statements for the two years ended December 31, 2023, and December 31, 2022[3](index=3&type=chunk) - The financial statements fairly present, in all material respects, the financial position, financial performance, and cash flows of the company in accordance with International Financial Reporting Standards[3](index=3&type=chunk) [Opinion on Internal Control over Financial Reporting](index=3&type=section&id=Opinion%20on%20Internal%20Control%20over%20Financial%20Reporting) Deloitte LLP issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of December 31, 2023, based on the COSO framework - Deloitte LLP issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of December 31, 2023[11](index=11&type=chunk) - The company maintained effective internal control over financial reporting in all material respects, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)[11](index=11&type=chunk) [Critical Audit Matter](index=2&type=section&id=Critical%20Audit%20Matter) A critical audit matter involved determining the recoverable amount of the ET mine CGU, requiring significant management estimates for future metal prices and discount rates due to net assets exceeding market capitalization - The company identified an indicator of impairment as of December 31, 2023, because its net assets exceeded its market capitalization[9](index=9&type=chunk) - The recoverable amount of the ET mine Cash Generating Unit (CGU) was determined using a discounted cash flow model based on the higher of fair value less costs to dispose and value in use[9](index=9&type=chunk) - Management made significant estimates and assumptions regarding future silver, gold, and copper prices and discount rates when determining the recoverable amount, which involve a high degree of subjectivity and judgment uncertainty[9](index=9&type=chunk)[10](index=10&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements present the company's financial position, operational performance, equity changes, and cash flows for the reporting periods, reflecting key shifts in assets, liabilities, and profitability [Consolidated Statements of Financial Position](index=4&type=section&id=Consolidated%20Statements%20of%20Financial%20Position) As of December 31, 2023, total assets increased to **USD 128,340 thousand**, total liabilities slightly decreased to **USD 22,339 thousand**, and total equity rose to **USD 106,001 thousand** Consolidated Statements of Financial Position Key Data (USD thousands) | Indicator | December 31, 2023 | December 31, 2022 | | :-------------------------------------- | :------------- | :------------- | | **Assets** | | | | Cash | 2,688 | 11,245 | | Accounts receivable | 3,303 | 2,672 | | Inventory | 8,826 | 6,260 | | Total current assets | 23,535 | 25,585 | | Exploration and evaluation assets | 50,111 | 49,804 | | Plant, equipment and mining properties | 53,069 | 44,056 | | Total assets | 128,340 | 121,196 | | **Liabilities** | | | | Accounts payable and accrued liabilities | 11,867 | 9,469 | | Total current liabilities | 13,808 | 16,764 | | Total liabilities | 22,339 | 23,175 | | **Equity** | | | | Share capital | 151,688 | 145,515 | | Accumulated deficit | (51,423) | (52,026) | | Total equity | 106,001 | 98,021 | - As of December 31, 2023, cash balance significantly decreased to **USD 2,688 thousand** from **USD 11,245 thousand** in 2022[17](index=17&type=chunk) - As of December 31, 2023, the net value of plant, equipment, and mining properties increased to **USD 53,069 thousand**, compared to **USD 44,056 thousand** in 2022[17](index=17&type=chunk) [Consolidated Statements of Operations and Comprehensive Income (Loss)](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) In 2023, net income significantly decreased to **USD 542 thousand** from **USD 3,096 thousand** in 2022, primarily due to increased cost of sales, resulting in **USD 0.00** basic and diluted earnings per share Consolidated Statements of Operations and Comprehensive Income (Loss) Key Data (USD thousands) | Indicator | 2023 | 2022 | | :--------------------------------- | :----- | :----- | | Mining operations revenue | 43,889 | 44,187 | | Cost of sales | 36,070 | 29,125 | | Mining operations income | 7,819 | 15,062 | | Net income | 542 | 3,096 | | Total comprehensive income | 557 | 2,842 | | Basic earnings per share | 0.00 | 0.03 | | Diluted earnings per share | 0.00 | 0.03 | - Net income for 2023 was **USD 542 thousand**, a significant decrease from **USD 3,096 thousand** in 2022[20](index=20&type=chunk) - Mining operations income decreased from **USD 15,062 thousand** in 2022 to **USD 7,819 thousand** in 2023, primarily due to increased cost of sales[20](index=20&type=chunk) [Consolidated Statements of Changes in Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) Total equity increased to **USD 106,001 thousand** as of December 31, 2023, driven by an increase in share capital from market offerings and RSU exercises, despite lower net income Consolidated Statements of Changes in Equity Key Data (USD thousands) | Indicator | December 31, 2023 | December 31, 2022 | | :--------------------- | :------------- | :------------- | | Share capital | 151,688 | 145,515 | | Equity reserves | 11,041 | 9,852 | | Accumulated deficit | (51,423) | (52,026) | | Total equity | 106,001 | 98,021 | - Share capital increased by **USD 6,173 thousand** in 2023, primarily from market offerings (**USD 5,648 thousand**) and RSU exercises (**USD 1,019 thousand**)[24](index=24&type=chunk)[179](index=179&type=chunk) - Equity reserves increased by **USD 1,189 thousand** in 2023, mainly from share-based payments[24](index=24&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The company's cash balance significantly decreased in 2023 due to a substantial drop in cash flow from operating activities and continued outflows from investing activities Consolidated Statements of Cash Flows Key Data (USD thousands) | Indicator | 2023 | 2022 | | :----------------------- | :----- | :----- | | Cash flow from operating activities | 1,488 | 11,831 | | Cash flow from financing activities | 3,488 | (1,149) | | Cash flow from investing activities | (13,531) | (24,101) | | Change in cash | (8,555) | (13,419) | | Cash, end of period | 2,688 | 11,245 | - Cash flow from operating activities significantly decreased from **USD 11,831 thousand** in 2022 to **USD 1,488 thousand** in 2023[28](index=28&type=chunk) - Investing activities continued to result in outflows, totaling **USD 13,531 thousand** in 2023, primarily for additions to plant, equipment, and mining properties, and exploration and evaluation expenditures[28](index=28&type=chunk) - Financing activities provided **USD 3,488 thousand** in cash in 2023, mainly from share issuances, compared to a cash outflow in 2022[28](index=28&type=chunk) [Notes to the Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20consolidated%20financial%20statements) These notes provide detailed explanations of the company's business operations, accounting policies, significant judgments, and financial instrument risks, offering crucial context for the consolidated financial statements [1. Nature of Operations](index=7&type=section&id=1.%20NATURE%20OF%20OPERATIONS) Avino Silver & Gold Mines Ltd., established in 1968, primarily engages in silver, gold, and copper production and sales, alongside mineral acquisition, exploration, and development in Mexico and Canada - The company is primarily engaged in the production and sale of silver, gold, and copper, as well as the acquisition, exploration, and development of mineral properties[30](index=30&type=chunk) - The company operates the Elena Tolosa (ET) mine in Durango, Mexico, which produces copper, silver, and gold[31](index=31&type=chunk) - The company holds a **100%** interest in the La Preciosa property in Mexico and mineral interests in British Columbia and Yukon, Canada[31](index=31&type=chunk) [2. Basis of Presentation](index=8&type=section&id=2.%20BASIS%20OF%20PRESENTATION) Consolidated financial statements are prepared in USD under IFRS, using historical cost and a going concern basis, involving significant management judgments and estimates across various accounting policies - Consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board[32](index=32&type=chunk) - Management made significant judgments and estimates regarding the economic recoverability of exploration and evaluation costs, determination of the commencement of production, functional currency, inventory valuation, reclamation provision, share-based payments and warrants valuation, asset impairment, and the recognition and measurement of depreciation/amortization rates and deferred taxes[37](index=37&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk)[44](index=44&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk) [Statement of Compliance](index=8&type=section&id=Statement%20of%20Compliance) The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board - Consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board[32](index=32&type=chunk) [Basis of Presentation_Sub](index=8&type=section&id=Basis%20of%20Presentation_Sub) Consolidated financial statements are presented in USD, prepared on a historical cost basis, with financial instruments measured at fair value, and utilize the accrual basis and going concern assumption - Consolidated financial statements are presented in US dollars and prepared on a historical cost basis, except for financial instruments measured at fair value[33](index=33&type=chunk) - The statements are prepared on an accrual basis and a going concern basis[33](index=33&type=chunk) [Foreign Currency Translation](index=8&type=section&id=Foreign%20Currency%20Translation) Transactions in non-functional currencies are recorded at the exchange rate on the transaction date, while monetary assets and liabilities are translated at the period-end exchange rate - Transactions denominated in non-functional currencies are recorded at the exchange rate on the date of the transaction; monetary assets and liabilities are translated at the exchange rate at the end of the reporting period[34](index=34&type=chunk) - For subsidiaries whose functional currency is not the US dollar, operating statement items are translated at the average annual exchange rate, and assets and liabilities are translated at the exchange rate at the end of the reporting period[35](index=35&type=chunk) [Significant Accounting Judgments and Estimates](index=8&type=section&id=Significant%20Accounting%20Judgments%20and%20Estimates) Management made significant judgments and estimates regarding the economic recoverability of exploration costs, production commencement, functional currency, inventory valuation, reclamation provisions, share-based payments, asset impairment, and deferred taxes - Management made significant judgments and estimates in assessing the economic recoverability of exploration and evaluation costs, determining the commencement of production, functional currency, inventory valuation, reclamation provision, share-based payments and warrants valuation, asset impairment, and the recognition and measurement of depreciation/amortization rates and deferred taxes[37](index=37&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk)[44](index=44&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk) - As of December 31, 2023, an impairment indicator was identified because the company's net assets exceeded its market capitalization, but no impairment was recognized as the fair value less costs to dispose of the ET mine CGU was assessed to be higher than its carrying value[53](index=53&type=chunk)[54](index=54&type=chunk) [Basis of Consolidation](index=12&type=section&id=Basis%20of%20Consolidation) The consolidated financial statements include the accounts of the company and its Mexican subsidiaries, with intercompany balances and transactions eliminated - The consolidated financial statements include the accounts of the company and its Mexican subsidiaries, with intercompany balances and transactions eliminated[59](index=59&type=chunk)[60](index=60&type=chunk) [3. Material Accounting Policies](index=12&type=section&id=3.%20MATERIAL%20ACCOUNTING%20POLICIES) This section details the company's material accounting policies for exploration assets, property, plant, and equipment, leases, inventory, revenue, financial instruments, equity, share-based payments, reclamation, EPS, and income taxes - The company capitalizes mineral property acquisition, exploration, and evaluation related costs as intangible assets, reclassifying them to mining properties and commencing amortization upon establishing technical and commercial feasibility[61](index=61&type=chunk)[63](index=63&type=chunk) - Inventory is measured at the lower of cost and net realizable value, with cost determined using the weighted-average method and including direct labor, materials, contractor fees, allocated mining property amortization and depreciation, and mine site costs[83](index=83&type=chunk) - Revenue is recognized when economic benefits are probable and the amount can be reliably measured, primarily from concentrate sales, and considers provisional pricing adjustments[85](index=85&type=chunk)[88](index=88&type=chunk) [Exploration and evaluation assets and development costs](index=12&type=section&id=Exploration%20and%20evaluation%20assets%20and%20development%20costs) The company capitalizes mineral property acquisition, exploration, and evaluation costs as intangible assets, reclassifying them to mining properties and commencing amortization upon establishing technical and commercial feasibility - The company capitalizes mineral property acquisition, exploration, and evaluation related costs as intangible assets, and upon establishing technical feasibility and commercial viability, these costs are reclassified to mining properties and amortization commences[61](index=61&type=chunk)[63](index=63&type=chunk) - Mine development costs are capitalized until the mineral property is capable of operating in the manner intended by management[64](index=64&type=chunk) [Plant, equipment and mining properties](index=13&type=section&id=Plant,%20equipment%20and%20mining%20properties) Once technical and commercial feasibility of mineral extraction is proven, all related expenditures are reclassified to mining properties and amortized over their estimated remaining life - Once the technical feasibility and commercial viability of extracting mineral resources are demonstrated, all related expenditures are reclassified to mining properties and amortization commences[66](index=66&type=chunk) - Mining properties are amortized on a straight-line basis over their estimated remaining life, which for the Avino mine is estimated at **19 years** as of December 31, 2023[69](index=69&type=chunk)[70](index=70&type=chunk) - Plant and equipment are depreciated on a straight-line basis over their estimated useful lives, ranging from **3 to 20 years**[71](index=71&type=chunk)[73](index=73&type=chunk) [Impairment](index=14&type=section&id=Impairment) The company reviews the carrying values of non-financial or long-term assets at each reporting date to identify impairment indicators, with recoverable amounts determined as the higher of fair value less costs to dispose or value in use - The company reviews the carrying values of non-financial or long-term assets at each reporting date to determine if there is any indication of impairment[74](index=74&type=chunk) - The recoverable amount of an asset is the higher of its fair value less costs to dispose and its value in use[75](index=75&type=chunk) [Leases](index=15&type=section&id=Leases) The company recognizes right-of-use assets and corresponding lease liabilities for all lease arrangements, excluding short-term and low-value asset leases - The company recognizes right-of-use assets and corresponding lease liabilities for all lease arrangements, except for short-term leases and leases of low-value assets[78](index=78&type=chunk) - Lease liabilities are initially measured at the present value of unpaid lease payments, and right-of-use assets are measured at cost less accumulated depreciation and impairment losses[79](index=79&type=chunk)[81](index=81&type=chunk) [Inventory](index=16&type=section&id=Inventory) Inventory is measured at the lower of cost and net realizable value, with cost determined using the weighted-average method and including direct labor, materials, contractor fees, and allocated mining property amortization and depreciation - Inventory is measured at the lower of cost and net realizable value, with cost determined using the weighted-average method and including direct labor, materials, contractor fees, allocated mining property amortization and depreciation, and mine site costs[83](index=83&type=chunk) - Net realizable value (NRV) is determined based on relevant market prices less estimated costs to complete and costs to sell[84](index=84&type=chunk) [Revenue from Contracts with Customers](index=16&type=section&id=Revenue%20from%20Contracts%20with%20Customers) Revenue is recognized when economic benefits are probable, and the amount can be reliably measured, primarily from concentrate sales, including adjustments for provisional pricing components - Revenue is recognized when it is probable that economic benefits will flow to the company and the revenue and costs of sales can be reliably measured, and is measured at the fair value of the consideration received[85](index=85&type=chunk) - The primary performance obligation is the delivery of concentrate, which includes transportation and insurance services arranged by the company[86](index=86&type=chunk) - Concentrate sales include a provisional pricing component, representing adjustments between initial and final assay results, with the company recording revenue based on London Bullion Market Association and London Metal Exchange quotes[88](index=88&type=chunk)[89](index=89&type=chunk) [Financial Instruments](index=17&type=section&id=Financial%20Instruments) All financial assets and liabilities are initially recorded at fair value, with subsequent classification into amortized cost, fair value through other comprehensive income (FVTOCI), or fair value through profit or loss (FVTPL) - All financial assets and liabilities are initially recorded at fair value, less transaction costs attributable to the acquisition (except for FVTPL)[91](index=91&type=chunk) - Financial assets are classified as amortized cost, fair value through other comprehensive income (FVTOCI), or fair value through profit or loss (FVTPL); cash, long-term investments, and accounts receivable from concentrate sales are classified as FVTPL[91](index=91&type=chunk)[92](index=92&type=chunk)[94](index=94&type=chunk) - Financial liabilities are classified as amortized cost (e.g., accounts payable) and FVTPL (e.g., US dollar-denominated warrant liability)[96](index=96&type=chunk)[97](index=97&type=chunk) [Share capital](index=18&type=section&id=Share%20capital) Common shares are classified as equity, with issuance costs directly deducted from equity, and repurchased shares (treasury stock) treated as a reduction of equity - Common shares are classified as equity, and costs directly attributable to the issuance of equity instruments are deducted from equity[99](index=99&type=chunk) - Repurchased share capital (treasury stock) is recognized as a deduction from equity, and upon resale or reissuance, the amount received is recognized as an increase in equity[100](index=100&type=chunk)[101](index=101&type=chunk) [Share-based payment transactions](index=19&type=section&id=Share-based%20payment%20transactions) The company grants common shares to directors, executives, employees, and consultants through stock option and restricted share unit (RSU) plans, with fair value measured at grant date and expensed over the vesting period - The company grants common shares to directors, officers, employees, and consultants through its stock option plan and restricted share unit (RSU) plan[102](index=102&type=chunk) - The fair value of options and RSUs is measured at the grant date based on the market value of the company's common shares and recognized as an expense over the vesting period[102](index=102&type=chunk)[103](index=103&type=chunk) [Reclamation and other provisions](index=19&type=section&id=Reclamation%20and%20other%20provisions) Provisions are recognized when a legal or constructive obligation arises from past events, an outflow of economic benefits is probable, and the amount can be reliably estimated, such as for reclamation - Provisions are recognized when a legal or constructive obligation arises from past events, an outflow of economic benefits is probable, and the amount can be reliably estimated[105](index=105&type=chunk) - The fair value of reclamation provisions is recorded when incurred and capitalized to the carrying amount of the related mining property or exploration and evaluation assets[106](index=106&type=chunk) [Earnings per share](index=19&type=section&id=Earnings%20per%20share) The company presents basic and diluted earnings per share, calculated by dividing earnings attributable to common shareholders by the weighted-average number of common shares outstanding - The company presents basic and diluted earnings per share data, calculated by dividing the earnings attributable to common shareholders by the weighted-average number of common shares outstanding[107](index=107&type=chunk) [Income taxes](index=19&type=section&id=Income%20taxes) Income taxes comprise current and deferred taxes, with deferred taxes recognized using the balance sheet liability method based on temporary differences between asset and liability carrying amounts and their tax bases - Income taxes comprise current and deferred taxes, with deferred taxes recognized using the balance sheet liability method based on temporary differences between the carrying amounts of assets and liabilities and their tax bases[108](index=108&type=chunk)[109](index=109&type=chunk) - Deferred tax assets are recognized only to the extent that it is probable that sufficient taxable profits will be available in the future to offset the asset[109](index=109&type=chunk) [4. Recent Accounting Pronouncements](index=20&type=section&id=4.%20RECENT%20ACCOUNTING%20PRONOUNCEMENTS) Recent IFRS amendments effective in 2023 (IAS 1, IAS 8, IAS 12) and future amendments for 2024 (IAS 1, IFRS 16) are not expected to have a material impact on the company's financial statements - Amendments to IAS 1 (Disclosure of Accounting Policies), IAS 8 (Definition of Accounting Estimates), and IAS 12 (Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction) effective in 2023 had no material impact on the company's financial statements[111](index=111&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk) - Future amendments to IAS 1 (Classification of Liabilities) and IFRS 16 (Lease Liability in a Sale and Leaseback) effective in 2024 are not expected to have a material impact on the company's financial statements[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) [5. Acquisition of La Preciosa](index=21&type=section&id=5.%20ACQUISITION%20OF%20LA%20PRECIOSA) The acquisition of La Preciosa property on March 21, 2022, involved **USD 36,190 thousand** in cash, notes, shares, and warrants, and was accounted for as an asset acquisition due to its exploration stage - The company completed the acquisition of the La Preciosa property on March 21, 2022[119](index=119&type=chunk) La Preciosa Acquisition Consideration (USD thousands) | Consideration Type | Amount | | :------------------- | :--- | | Cash consideration | 15,300 | | USD 5 million note payable | 5,000 | | 14,000,000 common shares | 13,650 | | 7,000,000 warrants | 2,240 | | **Total Consideration** | **36,190** | - The transaction was accounted for as an asset acquisition because La Preciosa was in the exploration and evaluation stage, without demonstrated technical feasibility, commercial viability, or ability to generate economic benefits[122](index=122&type=chunk) [6. Taxes Recoverable](index=22&type=section&id=6.%20TAXES%20RECOVERABLE) Recoverable taxes significantly increased to **USD 6,580 thousand** as of December 31, 2023, primarily driven by higher recoverable VAT and income taxes in Mexico Taxes Recoverable (USD thousands) | Tax Type | December 31, 2023 | December 31, 2022 | | :------------------- | :------------- | :------------- | | VAT recoverable | 3,231 | 1,385 | | GST recoverable | 20 | 25 | | Income tax recoverable | 3,329 | 2,327 | | **Total** | **6,580** | **3,737** | - Total recoverable taxes for 2023 were **USD 6,580 thousand**, representing a **76%** increase from 2022[125](index=125&type=chunk) [7. Inventory](index=23&type=section&id=7.%20INVENTORY) Total inventory increased to **USD 8,826 thousand** as of December 31, 2023, mainly due to higher stockpiled materials and concentrate inventory, with **USD 270 thousand** impairment for obsolete materials Inventory Composition (USD thousands) | Inventory Category | December 31, 2023 | December 31, 2022 | | :------------------- | :------------- | :------------- | | Stockpiled materials | 4,050 | 2,788 | | Concentrate inventory | 2,448 | 1,617 | | Materials and supplies | 2,328 | 1,855 | | **Total** | **8,826** | **6,260** | - Total inventory for 2023 was **USD 8,826 thousand**, a **41%** increase from 2022[127](index=127&type=chunk) - An inventory impairment of **USD 270 thousand** was recognized in 2023 due to obsolete materials and supplies[127](index=127&type=chunk) [8. Long-Term Investments](index=23&type=section&id=8.%20LONG-TERM%20INVESTMENTS) Long-term investments decreased to **USD 934 thousand** as of December 31, 2023, primarily due to a **USD 931 thousand** loss from fair value adjustments of Talisker Resources common shares Long-Term Investments Composition (USD thousands) | Investment Item | Fair Value December 31, 2023 | Fair Value December 31, 2022 | | :--------------------------------- | :--------------------- | :--------------------- | | Talisker Resources common shares | 782 | 1,640 | | Silver Wolf Exploration Ltd. common shares | 71 | 51 | | Endurance Gold Corp. common shares | 81 | 55 | | **Total** | **934** | **1,746** | - Total long-term investments for 2023 were **USD 934 thousand**, a **46.5%** decrease from 2022[129](index=129&type=chunk) - A loss of **USD 931 thousand** was incurred in 2023 due to fair value adjustments of long-term investments[129](index=129&type=chunk) [9. Exploration and Evaluation Assets](index=24&type=section&id=9.%20EXPLORATION%20AND%20EVALUATION%20ASSETS) Exploration and evaluation assets totaled **USD 50,111 thousand** as of December 31, 2023, with increased costs for Avino Mexico properties partially offset by reduced assessments for La Preciosa Exploration and Evaluation Assets Composition (USD thousands) | Region | December 31, 2023 | December 31, 2022 | | :------------------- | :------------- | :------------- | | Avino, Mexico | 15,698 | 11,828 | | La Preciosa, Mexico | 34,412 | 37,975 | | British Columbia and Yukon, Canada | 1 | 1 | | **Total** | **50,111** | **49,804** | - Exploration and evaluation costs for Avino Mexico properties increased by **USD 3,870 thousand** in 2023, while assessments and taxes for La Preciosa properties decreased by **USD 930 thousand**[134](index=134&type=chunk) - The company has option agreements with Silver Wolf Exploration Ltd. and Endurance Gold Corporation for the Ana Maria and El Laberinto properties in Mexico and the Olympic Claims in British Columbia, Canada[138](index=138&type=chunk)[145](index=145&type=chunk) [10. Non-Controlling Interest](index=26&type=section&id=10.%20NON-CONTROLLING%20INTEREST) As of December 31, 2023, the company held a **99.67%** effective interest in Avino Mexico, with the **0.33%** non-controlling interest not separately presented due to immaterial accumulated deficit and current earnings - As of December 31, 2023, the company held a **99.67%** effective interest in its subsidiary, Avino Mexico[148](index=148&type=chunk) - The accumulated deficit and current earnings attributable to the non-controlling interest are not material and are therefore not separately presented in the consolidated financial statements[148](index=148&type=chunk) [11. Plant, Equipment and Mining Properties](index=27&type=section&id=11.%20PLANT,%20EQUIPMENT%20AND%20MINING%20PROPERTIES) The net book value of property, plant, and mining properties increased to **USD 53,069 thousand** as of December 31, 2023, reflecting **USD 12,020 thousand** in new investments and **USD 798 thousand** in impairment Plant, Equipment and Mining Properties Net Book Value (USD thousands) | Category | December 31, 2023 | December 31, 2022 | | :----------------------- | :------------- | :------------- | | Office equipment, furniture and fixtures | 8,902 | 5,581 | | Computer equipment | 296 | 322 | | Mine machinery and transport equipment | 1,148 | 176 | | Mill machinery and processing equipment | 12,338 | 9,752 | | Buildings and construction in progress | 18,338 | 16,561 | | Mining properties | 12,047 | 11,664 | | **Total** | **53,069** | **44,056** | - New investments of **USD 12,020 thousand** were made in 2023, primarily for plant, equipment, and mining properties[152](index=152&type=chunk) - An impairment of **USD 144 thousand** was recognized in 2023 for mine and mill machinery and transport equipment due to damage and obsolescence[157](index=157&type=chunk) [12. Related Party Transactions and Balances](index=28&type=section&id=12.%20RELATED%20PARTY%20TRANSACTIONS%20AND%20BALANCES) All related party transactions are recorded at exchange amounts, with key management personnel compensation totaling **USD 2,966 thousand** in 2023, and a net **USD 167 thousand** receivable from related parties - All related party transactions are recorded at the exchange amount, are non-interest bearing, unsecured, and due on demand[159](index=159&type=chunk)[161](index=161&type=chunk) Key Management Personnel Compensation (USD thousands) | Compensation Category | 2023 | 2022 | | :------------------- | :----- | :----- | | Salaries, benefits and consulting fees | 1,184 | 1,228 | | Share-based payments | 1,782 | 1,566 | | **Total** | **2,966** | **2,794** | Amounts Due From/To Related Parties (USD thousands) | Related Party | December 31, 2023 | December 31, 2022 | | :----------------------- | :------------- | :------------- | | Oniva International Services Corp. | 102 | 100 | | Silver Wolf Exploration Ltd. | (269) | (72) | | **Total** | **(167)** | **28** | [13. Note Payable](index=29&type=section&id=13.%20NOTE%20PAYABLE) The **USD 5 million** note payable for the La Preciosa acquisition was fully repaid before March 21, 2023, resulting in a zero balance as of December 31, 2023 - The **USD 5 million** note payable, incurred for the acquisition of the La Preciosa property, was fully repaid before March 21, 2023[168](index=168&type=chunk) Note Payable Movement (USD thousands) | Movement Item | December 31, 2023 | December 31, 2022 | | :------------------- | :------------- | :------------- | | Beginning balance | 4,926 | - | | Additions | - | 4,665 | | Repayments | (5,000) | - | | Amortization of fair value adjustment | 74 | 261 | | **Ending Balance** | **-** | **4,926** | [14. Warrant Liability](index=29&type=section&id=14.%20WARRANT%20LIABILITY) As of December 31, 2023, all warrant liabilities matured, resulting in a zero balance, with a **USD 478 thousand** gain from fair value adjustments in 2023 - As of December 31, 2023, all warrants had expired, and the company no longer had any warrant liability[173](index=173&type=chunk) Warrant Liability Movement (USD thousands) | Movement Item | December 31, 2023 | December 31, 2022 | | :------------------- | :------------- | :------------- | | Beginning balance | 475 | 741 | | Warrants issued | - | 2,240 | | Fair value adjustment | (478) | (2,395) | | Effect of exchange rate changes | 3 | (111) | | **Ending Balance** | **-** | **475** | - Warrant liability was valued using the Black-Scholes model, with weighted average assumptions in 2022 including a **4.07%** risk-free interest rate and **56.80%** expected share price volatility[174](index=174&type=chunk)[175](index=175&type=chunk) [15. Reclamation Provision](index=30&type=section&id=15.%20RECLAMATION%20PROVISION) The reclamation provision increased significantly to an estimated **USD 2,195 thousand** as of December 31, 2023, primarily due to changes in estimates and exchange rate fluctuations - As of December 31, 2023, the reclamation provision was estimated at **USD 2,195 thousand**, with an undiscounted obligation value of **USD 5,491 thousand**[176](index=176&type=chunk) Reclamation Provision Movement (USD thousands) | Movement Item | December 31, 2023 | December 31, 2022 | | :------------------- | :------------- | :------------- | | Beginning balance | 445 | 726 | | Change in estimate | 1,615 | (364) | | Accretion of discount on continuing operations | 49 | 44 | | Effect of exchange rate changes | 86 | 39 | | **Ending Balance** | **2,195** | **445** | - Reclamation activities are expected to commence in **2025** for the San Gonzalo mine and **2042** for the Avino mine[176](index=176&type=chunk) [16. Share Capital and Share-Based Payments](index=31&type=section&id=16.%20SHARE%20CAPITAL%20AND%20SHARE-BASED%20PAYMENTS) In 2023, the company issued **10,379,158** common shares through market offerings and RSU exercises, increasing share capital, with total share-based payment expense of **USD 2,269 thousand** - In 2023, the company issued **9,373,825** common shares through market offerings, generating net proceeds of **USD 5,493 thousand**[179](index=179&type=chunk) - In 2023, **1,005,333** common shares were issued due to Restricted Share Unit (RSU) exercises, increasing share capital by **USD 1,019 thousand**[179](index=179&type=chunk) Stock Options and RSUs Overview (as of December 31, 2023) | Category | Number | Weighted Average Exercise Price (CAD) | | :------------------- | :--------- | :-------------------- | | Stock options outstanding | 6,666,000 | 1.27 | | Stock options exercisable | 5,959,750 | 1.29 | | RSUs outstanding | 2,994,709 | 1.03 | - In 2023, the company recognized **USD 924 thousand** in share-based payment expense for stock options and **USD 1,345 thousand** for RSUs, totaling **USD 2,269 thousand**[188](index=188&type=chunk)[193](index=193&type=chunk) - Basic and diluted earnings per share for 2023 were both **USD 0.00**[195](index=195&type=chunk) [17. Revenue and Cost of Sales](index=34&type=section&id=17.%20REVENUE%20AND%20COST%20OF%20SALES) Mining operations revenue in 2023 was **USD 43,889 thousand**, slightly below 2022, while cost of sales significantly increased to **USD 36,070 thousand**, leading to a decline in mining operating income Mining Operations Revenue (USD thousands) | Revenue Category | 2023 | 2022 | | :------------------- | :----- | :----- | | Concentrate sales | 43,199 | 43,648 | | Provisional pricing adjustments | 690 | 539 | | **Total** | **43,889** | **44,187** | Cost of Sales Composition (USD thousands) | Cost Category | 2023 | 2022 | | :------------------- | :----- | :----- | | Production costs | 32,872 | 26,749 | | Equipment impairment | 414 | 330 | | Depreciation and amortization | 2,784 | 2,046 | | **Total** | **36,070** | **29,125** | - Cost of sales for 2023 was **USD 36,070 thousand**, representing a **23.8%** increase from 2022[199](index=199&type=chunk) [18. General and Administrative Expenses](index=34&type=section&id=18.%20GENERAL%20AND%20ADMINISTRATIVE%20EXPENSES) General and administrative expenses increased to **USD 5,620 thousand** in 2023, driven by significant rises in office and miscellaneous expenses and professional service fees, despite a decrease in salaries and benefits General and Administrative Expenses Composition (USD thousands) | Expense Category | 2023 | 2022 | | :------------------- | :----- | :----- | | Salaries and benefits | 1,506 | 1,892 | | Office and miscellaneous | 1,399 | 647 | | Professional services | 1,378 | 402 | | Management and consulting fees | 436 | 451 | | Investor relations | 245 | 227 | | Directors' fees | 187 | 182 | | Regulatory and compliance fees | 164 | 170 | | Depreciation | 135 | 140 | | Travel and promotion | 170 | 70 | | **Total** | **5,620** | **5,156** | - Office and miscellaneous expenses increased by **116%** in 2023, and professional service fees increased by **243%**[202](index=202&type=chunk) [19. Commitments](index=34&type=section&id=19.%20COMMITMENTS) Total lease commitments increased substantially to **USD 5,920 thousand** as of December 31, 2023, with **USD 3,965 thousand** committed for periods beyond five years - The company has a cost-sharing agreement with Oniva International Services Corp., terminable with one month's notice[203](index=203&type=chunk) Lease Commitments (USD thousands) | Term | December 31, 2023 | December 31, 2022 | | :------------------- | :------------- | :------------- | | Within one year | 714 | 105 | | One to five years | 1,241 | 347 | | More than five years | 3,965 | 398 | | **Total** | **5,920** | **850** | - Total lease commitments for 2023 were **USD 5,920 thousand**, representing a **596%** increase from 2022[205](index=205&type=chunk) [20. Supplementary Cash Flow Information](index=35&type=section&id=20.%20SUPPLEMENTARY%20CASH%20FLOW%20INFORMATION) Net changes in non-cash working capital items resulted in a **negative USD 4,761 thousand** in 2023, primarily due to increases in taxes recoverable and inventory Net Change in Non-Cash Working Capital Items (USD thousands) | Item | 2023 | | :----------------------- | :----- | | Accounts payable and accrued liabilities | 2,832 | | Prepaid expenses and other assets | (225) | | Accounts receivable | (631) | | Taxes payable | (768) | | Amounts due to related parties | (196) | | Taxes recoverable | (2,842) | | Inventory | (2,931) | | **Net Change** | **(4,761)** | Other Non-Cash Supplementary Information (USD thousands) | Item | 2023 | | :----------------------- | :----- | | Interest paid | 227 | | Income taxes paid | 37 | - Equipment totaling **USD 3,193 thousand** was acquired through finance leases and equipment loans in 2023[207](index=207&type=chunk) [21. Financial Instruments](index=35&type=section&id=21.%20FINANCIAL%20INSTRUMENTS) The company's financial instruments are exposed to credit, liquidity, and market risks, which are managed through diversification, accounts receivable monitoring, and commodity price oversight - The company's financial instruments are exposed to credit risk, liquidity risk, and market risk (interest rate risk, foreign currency risk, and price risk)[209](index=209&type=chunk)[216](index=216&type=chunk) - The company manages credit risk by holding most cash and short-term investments with highly-rated financial institutions and has not recorded an allowance for trade receivables as all amounts have been settled in full to date[211](index=211&type=chunk) - As of December 31, 2023, the company had a net negative exposure of **USD 60,251 thousand** to the Mexican Peso and a net positive exposure of **USD 836 thousand** to the Canadian Dollar[221](index=221&type=chunk) - A **10%** fluctuation in commodity prices would impact 2023 net income (loss) by approximately **USD 134 thousand**[222](index=222&type=chunk) [Credit Risk](index=36&type=section&id=Credit%20Risk) The company manages credit risk by depositing most cash and short-term investments with highly-rated financial institutions and has not recorded an allowance for trade receivables due to full settlement to date - The company manages credit risk by holding most of its cash and short-term investments with highly-rated financial institutions[211](index=211&type=chunk) - The company has a significant concentration of credit risk with respect to trade accounts receivable, but all amounts have been settled in full to date, so no allowance has been recorded[211](index=211&type=chunk) [Liquidity Risk](index=36&type=section&id=Liquidity%20Risk) Liquidity risk is managed by forecasting cash flows required for operating, investing, and financing activities, with **USD 2,688 thousand** in cash and **USD 9,727 thousand** in excess current assets over current liabilities as of December 31, 2023 - The company manages liquidity risk by forecasting cash flows required for operating, investing, and financing activities[213](index=213&type=chunk) - As of December 31, 2023, the company had **USD 2,688 thousand** in cash and current assets exceeded current liabilities by **USD 9,727 thousand**[213](index=213&type=chunk) Contractual Obligations and Commitments Maturity (USD thousands) | Obligation Category | Total | Within 1 Year | 1-5 Years | More than 5 Years | | :----------------------- | :----- | :----- | :---- | :------ | | Accounts payable and accrued liabilities | 11,867 | 11,867 | - | - | | Minimum lease payments | 5,920 | 714 | 1,241 | 3,965 | | Equipment loans | 405 | 188 | 217 | - | | Finance lease obligations | 3,361 | 1,830 | 1,531 | - | | **Total** | **21,553** | **14,599** | **2,989** | **3,965** | [Market Risk](index=36&type=section&id=Market%20Risk) Market risk encompasses interest rate, foreign currency, and price risks, with the company not significantly exposed to interest rate risk due to fixed-rate debt, but sensitive to foreign currency and commodity price fluctuations - Market risk includes interest rate risk, foreign currency risk, and price risk[216](index=216&type=chunk) - The company does not believe it is subject to significant interest rate risk as any significant debt obligations are at fixed rates[219](index=219&type=chunk) - A **10%** fluctuation in Mexican/US dollar and Canadian/US dollar exchange rates as of December 31, 2023, would impact the company's earnings by approximately **USD 304 thousand**[221](index=221&type=chunk) - A **10%** fluctuation in commodity prices would impact 2023 net income (loss) by approximately **USD 134 thousand**[222](index=222&type=chunk) [Classification of Financial Instruments](index=38&type=section&id=Classification%20of%20Financial%20Instruments) The company's financial assets and liabilities are classified into fair value hierarchy levels (Level 1, Level 2, Level 3), with no Level 3 financial instruments as of December 31, 2023 - The company's financial assets and liabilities are classified into fair value hierarchy levels (Level 1, Level 2, Level 3)[225](index=225&type=chunk) Financial Assets Fair Value Hierarchy (USD thousands) | Financial Asset | Level 1 | Level 2 | Level 3 | | :------------------- | :------ | :------ | :------ | | Cash | 2,688 | - | - | | Accounts receivable | - | 3,303 | - | | Long-term investments | 934 | - | - | | **Total** | **3,622** | **3,303** | **-** | - As of December 31, 2023, the company had no Level 3 financial instruments (compared to warrant liability in 2022)[227](index=227&type=chunk) [22. Capital Management](index=38&type=section&id=22.%20CAPITAL%20MANAGEMENT) Capital management aims to ensure going concern, pursue property exploration and expansion, and maintain a flexible capital structure, with **USD 109,455 thousand** in total capital as of December 31, 2023 - The company's capital management objectives are to safeguard its ability to continue as a going concern, pursue property exploration and expansion, and maintain a flexible capital structure for its projects[230](index=230&type=chunk) Capital Composition (USD thousands) | Item | December 31, 2023 | December 31, 2022 | | :------------------- | :------------- | :------------- | | Equity | 106,001 | 98,021 | | Note payable | - | 4,926 | | Equipment loan obligations | 359 | - | | Finance lease obligations | 3,095 | 1,716 | | **Total** | **109,455** | **104,663** | - As of December 31, 2023, the company expects its capital resources and future operating cash flows to be sufficient to support normal operations and expansion plans, and it is not subject to externally imposed capital requirements[231](index=231&type=chunk) [23. Segmented Information](index=39&type=section&id=23.%20SEGMENTED%20INFORMATION) All company revenue is derived from concentrate sales from the Avino mine in Mexico, treated as a single reportable operating segment, with significant revenue concentration from a major customer - All of the company's revenue is derived from concentrate sales from the Avino mine in Mexico, which is considered a single reportable operating segment[232](index=232&type=chunk) Product Mix Revenue (USD thousands) | Product | 2023 | 2022 | | :------------------- | :----- | :----- | | Silver | 16,642 | 16,570 | | Copper | 13,137 | 10,258 | | Gold | 20,361 | 25,875 | | Penalties, treatment costs and refining charges | (6,251) | (8,516) | | **Total** | **43,889** | **44,187** | - In 2023, Customer 1 contributed **USD 35,053 thousand** in revenue, accounting for **80%** of total revenue[235](index=235&type=chunk) Non-Current Assets Geographical Information (USD thousands) | Region | December 31, 2023 | December 31, 2022 | | :------------------- | :------------- | :------------- | | Exploration and evaluation assets - Mexico | 50,110 | 49,803 | | Plant, equipment and mining properties - Mexico | 52,891 | 43,812 | [24. Income Taxes](index=40&type=section&id=24.%20INCOME%20TAXES) Income tax expense (recovery) for 2023 was a **negative USD 1,052 thousand**, primarily due to current and deferred tax recoveries, with substantial unrecognized deductible temporary differences and tax loss carryforwards Income Tax Expense (Recovery) (USD thousands) | Item | 2023 | 2022 | | :------------------- | :----- | :----- | | Current income tax expense (recovery) | (527) | (1,144) | | Deferred income tax expense (recovery) | (525) | (3,440) | | **Total** | **(1,052)** | **(4,584)** | - Income tax expense (recovery) for 2023 was a **negative USD 1,052 thousand**, compared to a **negative USD 4,584 thousand** in 2022[239](index=239&type=chunk) Unrecognized Deductible Temporary Differences (USD thousands) | Item | December 31, 2023 | December 31, 2022 | | :------------------- | :------------- | :------------- | | Tax loss carryforwards - Canada | 20,468 | 20,370 | | Tax loss carryforwards - Mexico | 50,889 | 42,575 | | **Total** | **76,124** | **66,642** | - The company has **USD 7,919 thousand** in capital losses and **USD 12,549 thousand** in non-capital tax loss carryforwards in Canada, and **USD 50,889 thousand** in non-capital tax loss carryforwards in Mexico[245](index=245&type=chunk)[246](index=246&type=chunk) [25. Subsequent Events](index=42&type=section&id=25.%20SUBSEQUENT%20EVENTS) Subsequent to December 31, 2023, the company issued **1,886,248** common shares through a market offering, generating **USD 900 thousand** in gross proceeds - Subsequent to December 31, 2023, the company issued **1,886,248** common shares through a market offering, generating gross proceeds of **USD 900 thousand**[247](index=247&type=chunk)

Avino Silver & Gold Mines Ltd. (ASM) provided an update on the recently completed and ongoing work at La Preciosa.La Preciosa is a development stage mineral property in Durango, Mexico, next to Avino Silver's existing operations. It hosts one of Mexico's largest undeveloped primary silver resources. The addition of La Preciosa's mineral resource inventory significantly enhanced ASM's consolidated NI 43-101 mineral resources, which currently comprise 371 million silver equivalent ounces.In the first half of ...

In 2023, silver prices witnessed a 1% decline amid rising interest rates, a stronger dollar and diminished industrial demand. This, in turn, impacted the Zacks Mining - Silver industry’s performance. The combination of positive U.S. economic data, reduced expectations of immediate monetary easing by the Federal Reserve and apprehensions about China's economic condition further contributed to the downward pressure on silver prices this year.Amid this scenario, we suggest companies like Pan American Silver (P ...

Financial Data and Key Metrics Changes - Q3 2023 revenues reached $12.3 million, an increase of over $3 million from the previous quarter and the same quarter in 2022 [15][16] - Mine operating income for Q3 was $2.4 million, with a year-to-date total of $5.3 million [15] - Adjusted earnings for Q3 were $1.6 million or $0.01 per share, with a year-to-date total of $2.6 million or $0.02 per share [16][17] - Working capital increased by $2.8 million or 62%, totaling $7.4 million at the end of Q3 [16] Business Line Data and Key Metrics Changes - Q3 production results included 591,000 silver equivalent ounces, with silver production at 237,000 ounces and gold production increasing by 73% to just under 2,100 ounces [9][15] - Mill throughput was just under 155,000 tons, with an adjusted full-year production estimate of 2.4 million to 2.7 million ounces of silver equivalent [9][10] Market Data and Key Metrics Changes - The Mexican peso appreciated over 15% in Q3 compared to the 2022 average, impacting costs as most expenditures are incurred in pesos [19][42] - Cash costs for silver equivalent payable ounces were $16.90, with all-in sustaining cash costs at $22.69 [18][19] Company Strategy and Development Direction - The company aims to scale production from 2.4 million to 2.7 million ounces of silver equivalent to between 8 million and 10 million ounces by 2028 [9][28] - The prefeasibility study on the oxide tailings project is underway, expected to be completed in Q1 2024 [8][27] - Community engagement is ongoing for the La Preciosa project, with plans for development contingent on obtaining necessary approvals [27][28] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the higher grades expected from La Preciosa, with an anticipated agreement with the Tahito group imminent [34][35] - The company is focused on cash flow generation from the Avino mine to support future developments [28][35] Other Important Information - The company has completed its planned drilling program for the year, totaling 7,545 meters in 13 holes [8][10] - ESG initiatives included community summer courses for children and first aid training for employees, reflecting the company's commitment to social responsibility [21][22][24] Q&A Session Summary Question: Update on La Preciosa asset and cash flow for 2024 - Management confirmed that the timeline for La Preciosa remains on track, with higher grades expected and cash flow anticipated from both La Preciosa and Avino [34][35] Question: Impact of peso strength on costs and hedging plans - Management acknowledged the peso's impact on costs and indicated that they are monitoring foreign exchange rates and considering hedging options for the next year [42][43] Question: Nature of the 207,000 tons hauled to surface - The company clarified that the material is primarily high-grade stockpiles, with improvements in ramp conditions allowing for increased hauling efficiency [49][50] Question: Recovery rates for silver and copper - Management indicated that recovery rates are expected to improve due to the arrival of a rock breaker, which will help process larger boulders and enhance overall recovery [51][52]

Financial Data and Key Metrics Changes - Avino achieved production results of just over 587,000 silver equivalent ounces, a slight decrease of 10% compared to Q2 2022 [6][8] - Net revenues for Q2 were $9.2 million, a slight decrease from $9.3 million in the previous year [15] - Cash flow generated from operations before working capital adjustments was $1 million for Q2, bringing the total for 2023 to $2.2 million [14][16] - Net income after taxes was $1.1 million or $0.01 per share for Q2 [16] Business Line Data and Key Metrics Changes - Silver production increased by 3% to 232,000 ounces, while copper production decreased by 12% to 1.45 million pounds [8] - Gold production increased by 13% to 1,520 ounces [8] - Mill throughput increased by 33% to just over 157,000 tonnes [8] Market Data and Key Metrics Changes - The silver price ranged from a low of $22.34 to a high of $26.02 per ounce during Q2 [23] - The London fixed price for gold ranged from $1,899 to $2,048 per ounce in Q2 [23] Company Strategy and Development Direction - The company aims to increase production from 2.8 million to 3 million ounces of silver equivalent to between 8 million and 10 million ounces by 2028 [8] - The prefeasibility study on the Oxide Tailings Project is underway, with results expected in Q4 2023 [24] - The company is focused on community engagement and environmental permit applications for the La Preciosa project [24][37] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for increased financial performance in the second half of the year despite operational challenges in Q2 [14] - The company is confident in decreasing costs per ounce in the second half of the year [17] - Management noted that the demand for silver and other precious metals is expected to increase due to global net-zero policies [24] Other Important Information - The dry stack tailings facility is completed and operational, with the conveyor system transporting dry tailings to the Avino open pit area [7] - The company has 438 direct jobs, which translates to three times the number of indirect jobs in surrounding communities [21] Q&A Session Summary Question: Impact of haulage ramp improvements - The improvements have significantly shifted the bottleneck from being mine-limited to mill-limited, enhancing throughput [30] Question: Foreign exchange impact on operating costs - The Mexican peso appreciated over 15% in Q2, impacting costs, but the company is working with vendors and evaluating hedging options to mitigate risks [32][34] Question: Community engagement feedback for La Preciosa - The community is generally pro-mining, and the company is negotiating with the last Tahito group for permitting [37] Question: Timeline for the prefeasibility study - The prefeasibility study is expected to be released in early December, with potential for slight delays [40] Question: Current mill and haulage capacity - The current mill capacity is just over 2,500 tonnes per day, and haulage capacity is above this figure [43] Question: Capital expenditure outlook - The company expects lower capital expenditures in the second half of the year compared to the first half [50] Question: Cash position and capital access - The company renewed its ATM in June and has options to tap into additional capital if needed [52]

Financial Performance - Revenues decreased by 2% from $9.3 million in Q2 2022 to $9.2 million in Q2 2023[24] and decreased by 7% from $20.4 million in YTD 2022 to $19.0 million in YTD 2023[24] - Mine operating income decreased by 73% from $3.9 million in Q2 2022 to $1.0 million in Q2 2023[24] and decreased by 67% from $8.6 million in YTD 2022 to $2.9 million in YTD 2023[24] - Net income decreased by 50% from $2.3 million in Q2 2022 to $1.1 million in Q2 2023[24] and decreased by 73% from $2.9 million in YTD 2022 to $0.8 million in YTD 2023[24] - Cash provided by operating activities decreased by 86% from $3.7 million in Q2 2022 to $0.5 million in Q2 2023[24] and decreased by 87% from $7.1 million in YTD 2022 to $1.0 million in YTD 2023[24] - Free cash flow decreased by 202% from $1.2 million in Q2 2022 to $(1.2) million in Q2 2023[24] and decreased by 224% from $3.7 million in YTD 2022 to $(4.6) million in YTD 2023[24] Production and Exploration - Silver equivalent production reached 587 thousand ounces in Q2 2023[10] - Hole ET-23-09 shows 296 AgEq g/t over 57 metres true width, including 407 AgEq g/t over 37 metres true width and 2,866 AgEq g/t over 3.43 metres true width[17] - Measured Resources for Oxide Tailings Project is 3,809,000 Mt, with 63 g/t of Ag, 0.48 g/t of Au, and 102 g/t of AgEq[20] - Indicated Resources for Oxide Tailings Project increased by 68% from 1,120,000 Mt in 2021 to 1,877,000 Mt in 2023[20]

Financial Data and Key Metrics Changes - Silver equivalent production increased by 48% to 678,000 ounces compared to Q1 2022 [7][11] - Net revenues decreased to $9.8 million from $11.1 million in Q1 2022, partly due to provisional pricing adjustments [21][22] - Mine operating income was $1.9 million, down from $4.7 million in Q1 2022, attributed to higher overhead costs [22] - The company reported a net loss after taxes of $400,000 or $0.00 per share for Q1 [23] Business Line Data and Key Metrics Changes - Silver production increased by 43% to 234,000 ounces [11] - Copper production increased by 15% to 1.4 million pounds [11] - Gold production surged by 185% to 2,286 ounces [11] - Mill throughput increased by 44% to just under 160,000 tonnes [11] Market Data and Key Metrics Changes - Silver prices ranged from $20.09 to $24.43 in Q1 2023, while gold prices ranged from $18.10 to $19.93 [19][20] - Gold hit $20.45 an ounce on May 4, continuing to hold above the $2000 level, indicating a strong outlook for precious metals [20] Company Strategy and Development Direction - The company aims to increase production from 2.8 million to 3 million ounces of silver equivalent to between 8 million and 10 million ounces by 2028 [9] - The five-year growth plan includes development and optimization of La Preciosa and the Oxide Tailings Project [8][9] - The company is focused on community engagement and sustainable practices as part of its growth strategy [15][16] Management's Comments on Operating Environment and Future Outlook - Management expects little short-term economic impact from recent Mexican mining law changes, with long-term concessions remaining secure [8] - The outlook for silver demand is strong, driven by industrial fabrication and green technology [20] - The company remains focused on cost management and generating strong results in Q2 [21] Other Important Information - The updated mineral resource estimate increased consolidated resources to 368 million silver equivalent ounces [13][14] - The company has completed metallurgical testing on the Oxide Tailings Project, which will inform a pre-feasibility study [12][26] Q&A Session Summary Question: Impact of strengthening peso on costs - Management is monitoring the situation closely and has implemented policies to mitigate impacts, as many costs are still in US dollars [30] Question: Capital expenditure plans for the year - The budget for capital expenditures is between $9 million to $12 million, with spending expected to decrease in the coming quarters [31][32] Question: Community support budget and comparison to previous years - Direct spending on community support has grown substantially compared to five years ago, though quantifying it is challenging [34] Question: Drilling results and costs - Ten outstanding holes are ready to release results, encompassing over 3,100 meters of drilling [36] Question: Plans for La Preciosa - The company plans to start development this year, with fresh ore expected to come in early 2024 [39][40]

[Summary](index=21&type=section&id=1.0%20SUMMARY) [Introduction](index=21&type=section&id=1.1%20Introduction) This report updates the Mineral Resource estimate for Avino's Durango, Mexico property, consolidating Avino and La Preciosa data - The report updates the Mineral Resource estimate for the Avino Property, including Avino Veins, San Gonzalo Veins, oxide tailings, La Potosina, Guadalupe veins, and the consolidated La Preciosa area[29](index=29&type=chunk) - Avino holds a **99.67% interest** in the property, with mining operations resuming in **2010** after a **2001** closure due to low metal prices[30](index=30&type=chunk) - In **2022**, the mine produced approximately **28 tonnes of silver**, **0.16 tonnes of gold**, and **2,950 tonnes of copper**[30](index=30&type=chunk) [Property Description and Location](index=21&type=section&id=1.2%20Property%20Description%20and%20Location) The Avino Property, 85 km northeast of Durango, Mexico, consists of 41 mineral concessions totaling 7,943 hectares with secured surface rights - The property is located in Durango, Mexico, approximately **85 km northeast** of the city of Victoria de Durango[34](index=34&type=chunk) - Avino holds a total of **41 mineral concessions** covering **7,943.01 hectares**, split between the Avino and La Preciosa areas[37](index=37&type=chunk)[41](index=41&type=chunk)[43](index=43&type=chunk) - Surface rights are not included with mineral concessions in Mexico; Avino has entered into temporary occupation agreements with local communal landowners (Ejidos)[43](index=43&type=chunk) [Geology and Mineralization](index=24&type=section&id=1.3%20Geology%20and%20Mineralization) The property hosts low-sulphidation epithermal veins within a caldera, with distinct silver-gold mineralization styles in the Avino and La Preciosa areas [Avino Area](index=24&type=section&id=1.3.1%20Avino%20Area) The Avino concession is within a caldera hosting low-sulphidation epithermal veins in andesitic rocks, with key deposits including the Avino and San Gonzalo Veins - The Avino concession is situated within a **12 km by 8.5 km caldera** hosting numerous low-sulphidation epithermal veins, breccias, and stockwork in a window of andesitic pyroclastic rocks[46](index=46&type=chunk) - Key deposits include the Avino Vein (**1.6 km long**, up to **60 m wide**), the San Gonzalo Vein system (over **25 m across**), the Guadalupe Vein, the La Potosina Veins, and historical oxide and sulphide tailings deposits[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) - Valuable minerals identified include argentite, chalcopyrite, galena, sphalerite, native silver, and gold[49](index=49&type=chunk) [La Preciosa Area](index=26&type=section&id=1.3.2%20La%20Preciosa%20Area) La Preciosa mineralization occurs in poly-phase quartz veins typical of intermediate-sulphidation epithermal deposits, with acanthite as the principal silver-bearing mineral - Mineralization is hosted in multiple discrete poly-phase quartz veins with textures typical of intermediate-sulphidation epithermal deposits[60](index=60&type=chunk)[63](index=63&type=chunk) - The principal silver-bearing mineral is acanthite; other minerals include sphalerite, galena, pyrite, chalcopyrite, and free gold[60](index=60&type=chunk) - The main vein systems are the Abundancia ridge system (traced for over **1.5 km**) and the Martha vein system (traced for over **2.5 km**), with the Martha vein being the largest[61](index=61&type=chunk)[65](index=65&type=chunk) [Resource Estimates](index=27&type=section&id=1.4%20Resource%20Estimates) The Avino Property holds 52.1 Mt M&I resources at 164 g/t AgEQ and 23.7 Mt Inferred resources at 123 g/t AgEQ, based on specified metal prices Avino Property Mineral Resources (Effective Date: Nov 30, 2022) | Category | Mass (Mt) | AgEQ (g/t) | Ag (g/t) | Au (g/t) | Cu (%) | AgEQ (M tr oz) | Ag (M tr oz) | Au (k tr oz) | Cu (M lb) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **M&I** | 52.103 | 164 | 101 | 0.47 | 0.26 | 273.90 | 168.55 | 785.84 | 301.40 | | **INF** | 23.710 | 123 | 65 | 0.33 | 0.30 | 93.71 | 49.75 | 248.12 | 158.49 | Metal Price and Recovery Assumptions | Area | Metal | Price (USD) | Unit | Recovery (%) | | :--- | :--- | :--- | :--- | :--- | | **Avino Mine Area** | Ag | 21.00 | $/oz | 82-90 | | | Au | 1,800.00 | $/oz | 73-78 | | | Cu | 3.50 | $/lb | 89 | | **La Preciosa** | Ag | 19.00 | $/oz | 90 | | | Au | 1,750.00 | $/oz | 75 | - Cut-off grades are based on silver equivalent (AgEQ) values: **60 g/t** for the Avino system, **120 g/t** for San Gonzalo, and **50 g/t** for oxide tailings[68](index=68&type=chunk) [Mineral Processing, Metallurgical Testing and Recovery Methods](index=29&type=section&id=1.5%20Mineral%20Processing%2C%20Metallurgical%20Testing%20and%20Recovery%20Methods) The Avino Area operates a 2,500 t/d flotation plant with high recoveries, while La Preciosa shows promising flotation results from recent tests [Avino Area](index=29&type=section&id=1.5.1%20Avino%20Area) The Avino processing plant has a 2,500 t/d capacity, achieving high recoveries in 2022, with recent tests showing improved extraction from oxide tailings via regrinding - The processing plant has a total capacity of **2,500 t/d** across four circuits, utilizing conventional crushing, grinding, and flotation[79](index=79&type=chunk)[83](index=83&type=chunk) 2022 Production Data | Description | 2022 Value | | :--- | :--- | | Tonnes Milled | 541,823 t | | Silver Recovery | 92% | | Gold Recovery | 78% | | Copper Recovery | 89% | | Silver Produced | 985,195 oz | | Gold Produced | 5,778 oz | | Copper Produced | 6,504,177 lbs | - Recent tests on oxide tailings show that regrinding can improve silver extraction to **~89%** and gold to **~88%**[88](index=88&type=chunk) [La Preciosa Area](index=31&type=section&id=1.5.2%20La%20Preciosa%20Area) Recent flotation tests on La Preciosa composites yielded promising silver recoveries, with Martha achieving 81.4% and Abundancia-Gloria 76.9% - **2021** flotation locked cycle tests on the Martha composite yielded a concentrate of **7.36 g/t Au** and **6,455 g/t Ag**, with **54.2% gold** and **81.4% silver recovery**[95](index=95&type=chunk)[101](index=101&type=chunk) - Tests on the Abundancia-Gloria composite yielded a concentrate of **9.1 g/t Au** and **10,650 g/t Ag**, with **53.3% gold** and **76.9% silver recovery**[95](index=95&type=chunk)[101](index=101&type=chunk) [Mining Methods](index=32&type=section&id=1.6%20Mining%20Methods) The Avino Vein is actively mined using sublevel long hole stoping and room and pillar methods, while San Gonzalo operations ceased in Q4 2019, and La Preciosa has no commercial operations [Avino Area](index=32&type=section&id=1.6.1%20Avino%20Area) The Avino Vein is mined using sublevel long hole stoping and room and pillar methods, while San Gonzalo mining ceased in Q4 2019 - The Avino Vein is mined using sublevel long hole stoping and room and pillar methods[97](index=97&type=chunk) - Mining at the San Gonzalo Vein stopped in **Q4 2019** as it reached the end of its current resources, though the mine remains open for exploration[98](index=98&type=chunk) [La Preciosa Area](index=32&type=section&id=1.6.2%20La%20Preciosa%20Area) There are currently no commercial mining operations in the La Preciosa area - There are currently no commercial mining operations in the La Preciosa area[100](index=100&type=chunk) [Project Infrastructure](index=33&type=section&id=1.7%20Project%20Infrastructure) The property features established infrastructure, including a 2,500 t/d processing plant, offices, and a 5.0 MW power line, with water supplied from local sources and managed through treatment and recycling systems - The site is fully equipped with a **2,500 t/d** processing plant, offices, and other necessary facilities[102](index=102&type=chunk) - A power line with a design capacity of **5.0 MW** was completed in **2016**, with current consumption at approximately **3.5 MW**, providing sufficient power for potential future expansions[104](index=104&type=chunk) - A water treatment plant (WTP) treats excess water from underground operations before discharge[105](index=105&type=chunk) [Environmental](index=33&type=section&id=1.8%20Environmental) The project requires various environmental permits, including an Environmental Impact Assessment, with acid-base accounting tests indicating potential for mild acid generation from the tailings dam - Required permits include an operating permit, wastewater discharge registration, and an Environmental Impact Assessment (EIA)[106](index=106&type=chunk) - Acid-base accounting (ABA) tests suggest that mild acid generation may have started on the tailings dam, requiring environmental management[106](index=106&type=chunk) [Capital and Operating Costs](index=33&type=section&id=1.9%20Capital%20and%20Operating%20Costs) Capital and operating costs for the Avino Vein are based on actual expenditures, totaling $7.1 million and $23.9 million respectively for Q1-Q3 2022, while the 2017 PEA for tailings is outdated and no cost estimates exist for La Preciosa [Capital Cost Estimates](index=33&type=section&id=1.9.1%20Capital%20Cost%20Estimates) Capital costs for the Avino Mine totaled $7.1 million for Q1-Q3 2022, primarily for process plant and mine machinery Capital Costs for the Avino Mine (US$ thousands) | Description | Q1 - Q3 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Process Plant Machinery and Equipment | 3,728 | 1,130 | 30 | | Mine Machinery and Transportation Equipment | 1,815 | 1,337 | 36 | | Buildings and Construction | 327 | 445 | 1,875 | | **Total Capital Costs** | **7,105** | **2,843** | **1,488** | [Operating Cost Estimates](index=34&type=section&id=1.9.2%20Operating%20Cost%20Estimates) Operating costs for the Avino Mine totaled $23.9 million for Q1-Q3 2022, with mining being the largest component Operating Costs for the Avino Mine (US$ thousands) | Description | Q1 - Q3 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Mining Cost | 8,859 | 2,683 | 5,700 | | Processing Cost | 4,762 | 1,467 | 3,739 | | G&A | 5,086 | 5,084 | 4,760 | | **Total Operating Costs** | **23,917** | **12,765** | **20,592** | [Economic Analysis](index=35&type=section&id=1.10%20Economic%20Analysis) No current economic analysis has been performed for the ongoing Avino Vein operations or the La Preciosa resources, and the 2017 PEA for oxide tailings is outdated - There is no current economic analysis for the active Avino Vein operations[118](index=118&type=chunk) - The **2017 PEA** technical report for the oxide tailings is not current[119](index=119&type=chunk) - No economic analysis or cost estimates have been conducted by Avino for the La Preciosa area[120](index=120&type=chunk) [Recommendations](index=35&type=section&id=1.11%20Recommendations) The report concludes with recommendations for further work, which are detailed in Section 26.0 of the full report - Recommendations for further work on Mineral Resource estimates are presented in Section **26.0**[121](index=121&type=chunk) [Introduction](index=36&type=section&id=2.0%20INTRODUCTION) [Effective Dates](index=36&type=section&id=2.1%20Effective%20Dates) The Technical Report's effective date is February 16, 2023, with the Mineral Resource estimate effective November 30, 2022 - The effective date of the Technical Report is **February 16, 2023**[125](index=125&type=chunk) - The effective date for the Mineral Resource estimate is **November 30, 2022**[125](index=125&type=chunk) [Personal Inspections and Qualified Persons](index=36&type=section&id=2.2%20Personal%20Inspections%20and%20Qualified%20Persons) Qualified Persons Hassan Ghaffari, P.Eng., and Michael F. O'Brien, P.Geo., conducted multiple site inspections, most recently in July 2021 - Qualified Persons Hassan Ghaffari, P.Eng., and Michael F. O'Brien, P.Geo., conducted multiple personal inspections of the site, most recently on **July 20, 2021**[126](index=126&type=chunk) [Information and Data Sources](index=38&type=section&id=2.3%20Information%20and%20Data%20Sources) The technical report was compiled using historical engineering and geological reports, supplemented by direct site examinations and data provided by Avino [Units of Measurement](index=38&type=section&id=2.4%20Units%20of%20Measurement) All units of measurement used in this report are metric, and currency is expressed in US dollars unless otherwise specified [Reliance on Other Experts](index=39&type=section&id=3.0%20RELIANCE%20ON%20OTHER%20EXPERTS) The independent Qualified Persons relied on Avino's information regarding legal matters such as mineral claims, ownership, and royalties for property descriptions in Section 4.0, as they are not qualified to provide legal or political commentary - The Qualified Persons relied on information provided by Avino concerning claims, ownership, and status of the Avino Property as detailed in Section **4.0**[133](index=133&type=chunk) - The authors are not qualified to provide extensive commentary on legal or political issues, and for details on mineral tenures, title, and royalties, they have relied upon the title opinion provided by Avino[135](index=135&type=chunk) [Property Description and Location](index=40&type=section&id=4.0%20PROPERTY%20DESCRIPTION%20AND%20LOCATION) [Avino Area](index=41&type=section&id=4.1%20Avino%20Area) The Avino area consists of 26 mineral concessions totaling 1,301.4 hectares, with Avino holding a 99.67% effective ownership and a 15-year exclusive mining right on the La Platosa concession, subject to a 3.5% NSR royalty [Property Ownership](index=41&type=section&id=4.1.1%20Property%20Ownership) Avino's effective ownership in its Mexican subsidiary, Avino Mexico (CMMA), has increased to 99.67% through acquisitions and loan conversions - Avino's ownership in its Mexican subsidiary, Avino Mexico (CMMA), has increased over time through acquisitions and loan conversions, reaching an effective ownership of **99.67%**[144](index=144&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk) [Mineral Concessions and Agreements](index=42&type=section&id=4.1.2%20Mineral%20Concessions%20and%20Agreements) The Avino area comprises 26 mineral concessions totaling 1,301.4314 hectares, including a 15-year exclusive mining right for the La Platosa concession with a 3.5% NSR royalty - The Avino area comprises **26 mineral concessions** totaling **1,301.4314 hectares**[152](index=152&type=chunk) - Avino holds an exclusive **15-year mining right** (with a 5-year extension option) for the La Platosa concession, which hosts the Avino Vein and ET Zone; this agreement includes a **3.5% Net Smelter Return (NSR) royalty** payable to Minerales de Avino upon commencement of commercial production[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk) [La Preciosa Area](index=45&type=section&id=4.2%20La%20Preciosa%20Area) The La Preciosa area, acquired indirectly from Coeur Mining, Inc. in 2022, consists of 15 mining concessions covering 6,641.6 hectares, with previously existing 3% NSR royalties repurchased by Coeur in 2014, and numerous temporary occupancy agreements in place for surface rights [Mineral Tenure](index=45&type=section&id=4.2.1%20Mineral%20Tenure) The La Preciosa property consists of 15 Mining Concessions totaling 6,641.5809 hectares, acquired indirectly by Avino from Coeur Mining, Inc. in 2021 - The La Preciosa part of the property consists of **15 Mining Concessions** totaling **6,641.5809 hectares**[165](index=165&type=chunk) - Avino acquired the La Preciosa property indirectly through a share purchase agreement with Coeur Mining, Inc. dated **October 27, 2021**[166](index=166&type=chunk) [Royalties, Back-in Rights, Payments, Agreements, and Encumbrances](index=48&type=section&id=4.2.3%20Royalties%2C%20Back-in%20Rights%2C%20Payments%2C%20Agreements%2C%20and%20Encumbrances) Coeur repurchased two 3% NSR royalties on key La Preciosa concessions for $12 million in 2014, and multiple long-term Temporary Occupancy Agreements secure surface rights with local landowners - On **July 2, 2014**, Coeur repurchased two separate **3% NSR royalties** (Sanluis Royalty 1 and 2) encumbering six key Mining Concessions in the La Preciosa area for a total of **USD$12,000,000**[186](index=186&type=chunk) - Multiple long-term Temporary Occupancy Agreements are in place with local private landowners and ejidos to secure surface rights for exploration, exploitation, and beneficiation activities, with annual or lump-sum payments[186](index=186&type=chunk)[188](index=188&type=chunk)[189](index=189&type=chunk) [Accessibility, Climate, Local Resources, Infrastructure, and Physiography](index=52&type=section&id=5.0%20ACCESSIBILITY%2C%20CLIMATE%2C%20LOCAL%20RESOURCES%2C%20INFRASTRUCTURE%2C%20AND%20PHYSIOGRAPHY) [Avino Property](index=52&type=section&id=5.1%20Avino%20Property) The Avino Property, located on Mexico's high plains, is easily accessible by highway from Durango, offering skilled labor and services, with a temperate, semi-arid climate allowing year-round operations - The property is easily accessible via Highway **40** from Durango, a major mining center with available skilled labor[196](index=196&type=chunk)[197](index=197&type=chunk) - The climate is temperate and semi-arid, allowing for year-round operations without significant seasonal impact[198](index=198&type=chunk)[199](index=199&type=chunk) [La Preciosa Area](index=53&type=section&id=5.2%20La%20Preciosa%20Area) The La Preciosa area supports year-round mining activities, with surface rights secured through agreements with private landowners and communal land groups (ejidos) - Mining activities can take place year-round[203](index=203&type=chunk) - Surface rights are held by a mix of private landowners and ejidos (communal land groups)[204](index=204&type=chunk) [History](index=54&type=section&id=6.0%20HISTORY) [Avino Mine Area](index=54&type=section&id=6.1%20Avino%20Mine%20Area) The Avino deposit, discovered around 1555, has a long history of intermittent mining, becoming one of the world's largest open-pit mines by 1908, and was acquired by the current ownership in 1968, with the Avino Vein system remaining the primary focus - The Avino deposit was discovered around **1555** and has been mined intermittently for centuries, with significant operations in the early **20th century**[208](index=208&type=chunk)[209](index=209&type=chunk) - The property was acquired under its current ownership in **1968**[211](index=211&type=chunk) - The Avino Vein system has been the mainstay of historical exploitation and is currently accessed via a ramp with workings extending to a depth of **360 m**[212](index=212&type=chunk) [La Preciosa Area](index=56&type=section&id=6.2%20La%20Preciosa%20Area) La Preciosa saw early mining in the late 19th century, followed by modern exploration and extensive drilling by various operators, leading to a historical resource estimate before Avino's acquisition in 2021 - Early mining focused on the Gloria and Abundancia veins in the late **19th century**; modern exploration and drilling were conducted by Luismin, Orko, Pan-American Silver (PAS), and Coeur[220](index=220&type=chunk)[222](index=222&type=chunk)[223](index=223&type=chunk) La Preciosa Historical MRE (Effective Date: Oct 25, 2012) - NOT CURRENT | Mining Method | Classification | Mass (Mt) | Ag (g/t) | Au (g/t) | Ag Equivalent (g/t) | | :--- | :--- | :--- | :--- | :--- | :--- | | Open Pit | Indicated | 29.6 | 104 | 0.20 | 115 | | Open Pit | Inferred | 47.7 | 86 | 0.16 | 96 | | Underground | Inferred | 1.9 | 124 | 0.21 | 136 | - Avino agreed to acquire the La Preciosa property from Coeur via a share purchase agreement dated **October 27, 2021**[228](index=228&type=chunk) [Geological Setting and Mineralization](index=58&type=section&id=7.0%20GEOLOGICAL%20SETTING%20AND%20MINERALIZATION) [Avino Mine Area](index=58&type=section&id=7.1%20Avino%20Mine%20Area) The Avino Mine is located within a caldera on the Sierra Madre Occidental's eastern flank, hosting low-sulphidation epithermal veins in andesitic rocks, with the Avino Vein being a significant silver, gold, and copper-bearing structure [Avino Mine Concessions Geology and Mineralization](index=60&type=section&id=7.1.2%20Avino%20Mine%20Concessions%20Geology%20and%20Mineralization) The Avino concession is within a caldera exposing andesitic pyroclastic rocks, hosting numerous low-sulphidation epithermal veins, including the significant Avino Vein and the San Gonzalo Vein system - The Avino concession is located within a **12 km by 8.5 km caldera**, exposing andesitic pyroclastic rocks of the lower volcanic sequence, which host numerous low-sulphidation epithermal veins[247](index=247&type=chunk) - The Avino Vein is the most significant structure, extending **1.6 km long** and **60 m wide** on the surface, with mineralization traced vertically for over **600 m**[252](index=252&type=chunk)[255](index=255&type=chunk) - The San Gonzalo Vein system is a strongly developed, **25m wide** structure characterized by banded textures and open-space filling[259](index=259&type=chunk) - The oxide tailings are derived from weathered near-surface rock, while sulphide tailings come from deeper underground workings[269](index=269&type=chunk) [La Preciosa Area](index=64&type=section&id=7.2%20La%20Preciosa%20Area) The La Preciosa area, on the Sierra Madre Occidental's eastern flank, features Tertiary-age silver-bearing epithermal quartz veins with intermediate-sulphidation characteristics, including the Abundancia Ridge and Martha vein systems [La Preciosa Local Geology and Mineral Deposits](index=67&type=section&id=7.2.2%20La%20Preciosa%20Local%20Geology%20and%20Mineral%20Deposits) The La Preciosa area contains Tertiary-age silver-bearing epithermal quartz veins hosted mainly in conglomerate and Tertiary Lower Volcanic andesitic rocks, with main vein systems on Abundancia Ridge and the Martha vein system - The area contains Tertiary-age silver-bearing (±gold) epithermal quartz veins hosted mainly in conglomerate and Tertiary Lower Volcanic andesitic rocks[284](index=284&type=chunk) - The main vein system on Abundancia Ridge consists of south-striking, west-dipping veins traced for over **1.5 km**[287](index=287&type=chunk) - The Martha vein system is a north- to northwest-striking, shallow west-dipping system traced by drilling for over **2.5 km** along strike[287](index=287&type=chunk) [Mineralization](index=73&type=section&id=7.2.3%20Mineralization) La Preciosa mineralization displays characteristics typical of intermediate-sulphidation epithermal deposits, rich in silver, with the Martha vein being the largest deposit - The mineralization displays characteristics typical of intermediate-sulphidation epithermal deposits in Mexico, rich in silver[322](index=322&type=chunk) - Veins consist of multiple stages of banded crustiform quartz, adularia, barite, and carbonates, with variable amounts of pyrite, sphalerite, galena, argentite, and Ag sulfosalts[321](index=321&type=chunk) - The Martha vein is the largest in the deposit, with at least **three times the volume** of the next largest, La Abundancia[326](index=326&type=chunk) [Deposit Types](index=76&type=section&id=8.0%20DEPOSIT%20TYPES) The Avino Property hosts low- to intermediate-sulphidation silver-gold epithermal veins, breccias, and stockwork zones within a caldera, grading into a "near porphyry" environment, with distinct characteristics for the Avino, San Gonzalo, and La Preciosa veins - The property hosts low- to intermediate-sulphidation silver-gold epithermal veins, breccias, and stockwork zones within a **12 km by 8.5 km caldera**[333](index=333&type=chunk) - The Avino Vein is a steep-dipping, silver-gold-copper-rich epithermal vein, whereas the San Gonzalo Vein has lower copper content, similar to other silver-lead-zinc deposits in the Sierra Madres[334](index=334&type=chunk) - The La Preciosa veins are generally narrower and have flatter dips (**15 to 40 degrees**)[335](index=335&type=chunk) [Exploration](index=79&type=section&id=9.0%20EXPLORATION) [Avino Mine Area](index=79&type=section&id=9.1%20Avino%20Mine%20Area) Exploration at the Avino Mine area, ongoing since before 1968, has focused on the main Avino Vein, with post-2001 activities including geophysical surveys, soil sampling, mapping, and extensive underground channel sampling to define mineralization - Post-2001 exploration has included induced polarization surveys, **1,500 soil samples**, mapping, trenching, tailings investigations, and extensive drilling and channel sampling[356](index=356&type=chunk) - A **10,000-tonne** bulk sample program at the San Gonzalo deposit in **2011** had a feed grade of **261 g/t silver** and **0.9 g/t gold**[363](index=363&type=chunk) - Continuous underground channel sampling has been conducted from **2010** to the present at both the ET Mine (Avino Vein) and San Gonzalo Mine to support resource estimation[364](index=364&type=chunk) [La Preciosa Area](index=83&type=section&id=9.2%20La%20Preciosa%20Area) Exploration at La Preciosa, dating back to the late 1800s, primarily relies on modern drilling by Luismin, Orko, and Pan American Silver, with Coeur's 2013-2014 program adding significant infill, condemnation, and geotechnical drilling - Most material exploration data comes from drilling campaigns by Luismin, Orko, and Pan American Silver (PAS)[372](index=372&type=chunk) Coeur 2013-2014 Exploration and Development Summary | Data Type | Quantity | Target | | :--- | :--- | :--- | | Core Holes (Infill) | 75 holes (11,437 m) | Resource conversion | | RC Holes (Condemnation) | 21 holes (8,543 m) | Waste dumps and tailings sites | | Core Holes (Geotechnical) | 7 holes (2,244 m) | Geotechnical information | [Drilling](index=86&type=section&id=10.0%20DRILLING) [Avino Mine Area](index=86&type=section&id=10.1%20Avino%20Mine%20Area) Since 2001, 355 drill holes totaling 78,414 meters have been completed across the Avino Mine area, with recent 2021-2022 drilling focusing on the Avino Vein, Guadalupe veins, and a 127-hole sonic drilling program on oxide tailings to improve resource definition - Post-2001, a total of **355 core drill holes** (**78,414 m**) have been completed across the Avino Vein, San Gonzalo, Guadalupe, and La Potosina systems[389](index=389&type=chunk) - Recent exploration drilling in **2021-2022** targeted the Avino Vein system, Guadalupe veins, and La Potosina veins[383](index=383&type=chunk)[394](index=394&type=chunk)[395](index=395&type=chunk) - In **2021-2022**, Avino drilled **127 new vertical holes** using the sonic drilling method on the oxide tailings deposit to improve resource confidence[399](index=399&type=chunk) [La Preciosa Area](index=94&type=section&id=10.2%20La%20Preciosa%20Area) A total of 867 diamond drill holes, amounting to 267,916 meters, have been completed at La Preciosa by previous operators, with Coeur's 2014 program adding 75 HQ core holes for infill drilling, and the historical data is considered sufficient for the Mineral Resource Estimate Historical Drilling Summary at La Preciosa | Company | Years | Number of Drillholes | Meters of Drilling | | :--- | :--- | :--- | :--- | | Luismin | 1981-1994 | 8 | 1,630 | | Orko | 2005-2012 | 387 | 152,367 | | PAS | 2009-2010 | 363 | 91,095 | | Coeur | 2013-2014 | 103 | 22,324 | | **Totals** | | **861** | **267,416** | - In **2017**, Coeur conducted underground channel sampling on the Abundancia and Gloria Veins, which showed statistical similarity to nearby drill hole samples, allowing both data types to be used in resource estimation[418](index=418&type=chunk) - The Qualified Person is satisfied that the amount and quality of historical drilling are sufficient to support the current Mineral Resource Estimate[434](index=434&type=chunk) [Sample Preparation, Analyses, and Security](index=98&type=section&id=11.0%20SAMPLE%20PREPARATION%2C%20ANALYSES%2C%20AND%20SECURITY) [Avino Mine](index=98&type=section&id=11.1%20Avino%20Mine) Current drill core samples from the Avino Mine are processed at SGS Laboratory in Durango, with 2021-2022 QA/QC programs showing no significant bias, and the QP considers the procedures adequate for the technical report - Current drill core samples are processed at the SGS Laboratory in Durango[442](index=442&type=chunk) - The **2021-2022** drilling programs had a QA/QC submission rate of **9.28%**, including standards, duplicates, and blanks[443](index=443&type=chunk) - Analysis of QA/QC samples, including standards, duplicates, and blanks, showed no significant bias or contamination issues[445](index=445&type=chunk)[477](index=477&type=chunk)[486](index=486&type=chunk) - The QP's opinion is that the sample preparation, security, and analytical procedures are adequate for this Technical Report[494](index=494&type=chunk) [La Preciosa Area](index=112&type=section&id=11.2%20La%20Preciosa%20Area) Sample preparation and analysis for La Preciosa were conducted by various operators using certified labs, with Coeur's 2013-2014 program employing a robust QA/QC program that, despite minor issues, was deemed acceptable by the QP to support an MRE - Samples from various drilling campaigns were prepared and analyzed by certified laboratories including Inspectorate, SGS, and ALS[503](index=503&type=chunk)[509](index=509&type=chunk)[512](index=512&type=chunk) - Coeur's **2013-2014** QA/QC program had a standard insertion rate of **6.23%** and a blank insertion rate of **4.63%**, exceeding the company's **10%** combined target[559](index=559&type=chunk) - After excluding a problematic historical standard (Orko-10), the Round 1 QA/QC failure rate for Coeur's campaign was low at **1.78%**[562](index=562&type=chunk)[563](index=563&type=chunk) - The QP is satisfied that the QA/QC, check samples, and check assays are adequate and within industry-accepted norms to support a Mineral Resource Estimate[585](index=585&type=chunk) [Data Verification](index=131&type=section&id=12.0%20DATA%20VERIFICATION) [Avino Mine Area](index=132&type=section&id=12.1%20Data%20Verification) The Qualified Person verified the Avino Mine drillhole database, finding minimal discrepancies, and confirmed mineralization grades in oxide tailings, concluding that the data is adequate for resource estimation - The QP reviewed and validated the drillhole database, finding no material discrepancies in collar positions, downhole surveys, or grade data[588](index=588&type=chunk)[590](index=590&type=chunk) - The drillhole database was consolidated into a Microsoft Access database, which improved consistency and security; discrepancy rates were low (e.g., **0.6%** for lithology overlaps in the Avino Vein)[593](index=593&type=chunk)[594](index=594&type=chunk)[597](index=597&type=chunk) - Verification samples collected by the QP from the oxide tailings confirmed the presence of gold and silver mineralization at grades similar to the original drilling campaign[614](index=614&type=chunk) [La Preciosa Area](index=136&type=section&id=12.2%20Data%20Verification) The QP's site visit and review confirmed the integrity of La Preciosa's historical drillhole database, which has been extensively validated by previous operators and consultants, with Coeur's 2013-2014 re-assay campaign further enhancing data quality for mineral resource estimation - The QP's site visit in **July 2021** confirmed drill collar locations, reviewed core logging facilities, and inspected vein outcrops, finding no material discrepancies[616](index=616&type=chunk)[620](index=620&type=chunk)[621](index=621&type=chunk) - The historical drillhole database has been repeatedly verified by previous operators and independent consultants, including MDA, Snowden, and IMC[628](index=628&type=chunk) - In **2014**, Coeur initiated a comprehensive review of all historical geologic logs and re-assayed **6,884 pulp samples** from the Orko era, which showed an average increase in Ag grade of up to **11%** due to improved digestion methods, enhancing the database quality[648](index=648&type=chunk)[659](index=659&type=chunk) [Mineral Processing and Metallurgical Testing](index=148&type=section&id=13.0%20MINERAL%20PROCESSING%20AND%20METALLURGICAL%20TESTING) [Avino Mine Area](index=148&type=section&id=13.1%20Mineral%20Processing%20and%20Metallurgical%20Testing) The Avino processing plant achieves high recoveries for silver, gold, and copper from the Avino Vein, and metallurgical tests on oxide tailings indicate that regrinding significantly improves silver and gold extraction via cyanide leaching - In **2022**, the Avino Vein flotation circuit achieved average recoveries of **92% for silver**, **78% for gold**, and **89% for copper**[670](index=670&type=chunk) - **2022-2023** tests on early-stage oxide tailings showed that regrinding to **80% passing 75 µm** improved silver extraction to **~89%** (from **82.7%**) and gold extraction to **~88%** (from **78.7%**)[695](index=695&type=chunk) - A column leach test on oxide tailings yielded **73.0% silver** and **78.9% gold extraction**, comparable to bottle-roll tests on as-received material[751](index=751&type=chunk) [La Preciosa Area](index=166&type=section&id=13.2%20Mineral%20Processing%20and%20Metallurgical%20Testing) Extensive metallurgical work for La Preciosa, including a 2014 Feasibility Study, focused on cyanidation, while 2021 flotation tests showed promising silver recoveries for Martha (81.4%) and Abundancia-Gloria (76.9%) composites - A **2014 Feasibility Study** determined weighted average life-of-mine recoveries via cyanidation to be **84% for silver** and **61% for gold**[784](index=784&type=chunk) - **2021** flotation locked cycle tests on the Martha composite achieved **81.4% silver recovery**, producing a concentrate grading **6,455 g/t Ag**[799](index=799&type=chunk) - **2021** flotation locked cycle tests on the Abundancia-Gloria composite achieved **76.9% silver recovery**, producing a concentrate grading **10,650 g/t Ag**[810](index=810&type=chunk)[814](index=814&type=chunk) [Mineral Resource Estimates](index=176&type=section&id=14.0%20MINERAL%20RESOURCE%20ESTIMATES) [Avino Property](index=177&type=section&id=14.1%20Avino%20Property) The Avino Mine Area's Mineral Resources include 34.7 Mt M&I at 144 g/t AgEQ and 19.3 Mt Inferred at 112 g/t AgEQ, estimated using Ordinary Kriging within geological constraints and cut-off grades based on operational costs and metal prices [Resource Summary](index=177&type=section&id=14.1.1%20Resource%20Summary) The Avino Mine Area's Mineral Resources, effective November 30, 2022, include 34.7 Mt Measured & Indicated and 19.3 Mt Inferred resources Avino Mine Area Mineral Resources (Effective Date: Nov 30, 2022) | Category | Mass (Mt) | AgEQ (g/t) | Ag (g/t) | Au (g/t) | Cu (%) | AgEQ (M tr oz) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **M&I** | 34.662 | 144 | 63 | 0.54 | 0.39 | 160.76 | | **INF** | 19.313 | 112 | 46 | 0.34 | 0.37 | 69.61 | [La Preciosa Area](index=247&type=section&id=14.2%20La%20Preciosa%20Area) The La Preciosa Mineral Resource, estimated using a two-dimensional approach for narrow veins, includes 17.4 Mt Indicated at 202 g/t AgEQ and 4.4 Mt Inferred at 170 g/t AgEQ, reported at a 120 g/t AgEQ cut-off and constrained to underground mining areas [Mineral Resource Statement](index=288&type=section&id=14.2.16%20Mineral%20Resource%20Statement) The La Preciosa Mineral Resource Summary, effective October 2021, includes 17.4 Mt Indicated and 4.4 Mt Inferred resources La Preciosa Mineral Resource Summary (Effective Date: Oct 2021) | Category | Mass (kt) | AgEQ (g/t) | Ag (g/t) | Au (g/t) | AgEQ (k tr oz) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Indicated** | 17,440.6 | 202 | 176 | 0.34 | 113,137.7 | | **Inferred** | 4,396.2 | 170 | 151 | 0.25 | 24,095.2 | - The resource is reported at a cut-off grade of **120 g/t AgEQ**, based on conceptual underground mining costs[1247](index=1247&type=chunk)[1255](index=1255&type=chunk) [Mineral Reserve Estimates](index=291&type=section&id=15.0%20MINERAL%20RESERVE%20ESTIMATES) There are currently no Mineral Reserves reported for the Avino Property - There are currently no Mineral Reserves reported on the Property and Project[1261](index=1261&type=chunk) [Mining Methods](index=292&type=section&id=16.0%20MINING%20METHODS) Avino actively mines the Avino Vein using sublevel stoping and room and pillar methods, while San Gonzalo operations ceased in Q4 2019, and there are no current commercial operations at La Preciosa or active mining of oxide tailings - The Avino Vein is currently mined using sublevel stoping and room and pillar methods[1266](index=1266&type=chunk) - Underground mining activities at the San Gonzalo Vein were stopped in **Q4 2019** after reaching the end of its current resources[1277](index=1277&type=chunk) - A conventional truck and loader surface mining method is planned for the oxide tailings, but there is no current plan to mine this resource[1282](index=1282&type=chunk) Total Production (2020-2022) | Description | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Tonnes Milled (t) | 541,823 | 165,304 | 204,286 | [Recovery Methods](index=297&type=section&id=17.0%20RECOVERY%20METHODS) The Avino processing plant, with a 2,500 t/d capacity, uses conventional flotation to produce a copper concentrate with silver and gold credits, achieving high recoveries in 2022, and commissioned a new dry-stack tailings facility in Q3 2022 for improved water conservation and stability - The plant has a total capacity of **2,500 t/d** across four separate flotation circuits[1295](index=1295&type=chunk) - The process involves three-stage crushing, grinding to **65-75% passing 200 mesh**, gravity concentration to recover coarse precious metals, and flotation to produce a copper concentrate[1299](index=1299&type=chunk)[1301](index=1301&type=chunk)[1302](index=1302&type=chunk) - A dry-stack tailings facility was commissioned in **Q3 2022** to improve water management and tailings safety[1297](index=1297&type=chunk)[1310](index=1310&type=chunk) [Project Infrastructure](index=302&type=section&id=18.0%20PROJECT%20INFRASTRUCTURE) The Avino Property has significant existing infrastructure, including a 2,500 t/d processing plant, offices, and a 5.0 MW power line with ample capacity, and water management is enhanced by recycling systems and a water treatment plant - The property is easily accessible by road and has a fully operational **2,500 t/d** processing plant and associated facilities[1316](index=1316&type=chunk)[1324](index=1324&type=chunk) - A **5.0 MW** power line was completed in **June 2016**, providing ample power for current operations (approx. **3.5 MW**) and future projects[1326](index=1326&type=chunk) - Water supply is secured from a well and a shared dam, with significant water recycling from the tailings thickener and a new dry-stack tailings facility commissioned in **Q3 2022**[1319](index=1319&type=chunk)[1328](index=1328&type=chunk) [Market Studies and Contracts](index=306&type=section&id=19.0%20MARKET%20STUDIES%20AND%20CONTRACTS) Avino has a ready market for its copper, silver, and gold flotation concentrates, sold exclusively to Samsung C&T UK Ltd. under an agreement extending until December 2024, with concentrates shipped overseas from the Port of Manzanillo - Avino has an exclusive sales agreement for its flotation concentrates with Samsung C&T UK Ltd. until **December 2024**[1334](index=1334&type=chunk) - Concentrates are trucked to the Port of Manzanillo for shipment to overseas smelters[1335](index=1335&type=chunk) [Environmental Studies, Permitting and Social Community Impact](index=307&type=section&id=20.0%20ENVIRONMENTAL%20STUDIES%2C%20PERMITTING%20AND%20SOCIAL%20COMMUNITY%20IMPACT) [Avino Mine Area](index=307&type=section&id=20.1%20Environmental%20Studies%2C%20Permitting%20and%20Social%20Community%20Impact) The Avino Mine Area requires various environmental permits, including an EIA, and must manage potential acid generation from tailings, while Avino actively engages with local communities through support programs - The project requires an Environmental Impact Assessment (EIA) and adherence to numerous Official Mexican Standards (NOMs) for environmental protection[1350](index=1350&type=chunk)[1361](index=1361&type=chunk) - ABA tests have indicated potential for mild acid generation from the tailings dam, which requires a management plan[1367](index=1367&type=chunk) - Avino maintains an active community engagement program, providing financial and material support to the local communities of Zaragoza, Avino, and Panuco[1377](index=1377&type=chunk) [La Preciosa Area](index=319&type=section&id=20.2%20Environmental%20Studies%2C%20Permitting%20and%20Social%20Community%20Impact) Comprehensive environmental studies for the La Preciosa area have been completed, covering baseline data, waste characterization, and the development of monitoring, management, and mine closure plans - Extensive environmental studies have been completed for the La Preciosa area, including baseline data collection for water and waste characterization[1396](index=1396&type=chunk) - Monitoring, management, and a mine closure and reclamation plan with cost estimates have been prepared for the area[1396](index=1396&type=chunk) [Capital and Operating Costs](index=320&type=section&id=21.0%20CAPITAL%20AND%20OPERATING%20COSTS) [Avino Veins](index=320&type=section&id=21.1%20Capital%20and%20Operating%20Costs) Costs for the Avino Veins are based on actual expenditures from ongoing operations, with total capital costs of $7.1 million and total operating costs of $23.9 million for Q1-Q3 2022 Capital Costs (US$ thousands) | Description | Q1 - Q3 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | **Total Capital Costs** | **7,105** | **2,843** | **1,488** | Operating Costs (US$ thousands) | Description | Q1 - Q3 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | **Total Operating Costs** | **23,917** | **12,765** | **20,592** | [Tailings Resources](index=321&type=section&id=21.2%20Capital%20and%20Operating%20Costs) A Preliminary Economic Assessment (PEA) for the recovery of silver and gold from the oxide tailings was prepared in 2017, but it is no longer considered current - The **2017 PEA** technical report for the oxide tailings is not current[1406](index=1406&type=chunk) [La Preciosa Area](index=321&type=section&id=21.3%20Capital%20and%20Operating%20Costs) There are currently no commercial operations at the La Preciosa property, and Avino has not conducted any capital or operating cost estimates for this area - Avino has not conducted capital and operating cost estimates for the La Preciosa property[1407](index=1407&type=chunk) [Economic Analysis](index=322&type=section&id=22.0%20ECONOMIC%20ANALYSIS) No current economic analysis has been performed for any part of the Avino Property, including ongoing Avino Vein operations, the outdated 2017 PEA for tailings, or the La Preciosa area - There is no economic analysis for the current mining operations at the Avino Vein[1410](index=1410&type=chunk) - The **2017 PEA** for the oxide tailings is not current[1411](index=1411&type=chunk) - Avino has not conducted a project economic analysis on the La Preciosa property[1412](index=1412&type=chunk) [Adjacent Properties](index=323&type=section&id=23.0%20ADJACENT%20PROPERTIES) The La Preciosa property is adjacent to mining concessions owned by Arcelia Gold Corp. and Canasil Resources, Inc. [Other Relevant Data and Information](index=324&type=section&id=24.0%20OTHER%20RELEVANT%20DATA%20AND%20INFORMATION) There is no additional information necessary to make this technical report understandable and not misleading [Interpretation and Conclusions](index=325&type=section&id=25.0%20INTERPRETATION%20AND%20CONCLUSIONS) [Geology](index=325&type=section&id=25.1%20Geology) The Avino Property, located in the Sierra Madre Silver Belt, hosts numerous epithermal veins and breccias within a large caldera, encompassing five main deposits in the historic Avino Mine area and significant flat-lying, narrow silver and gold-bearing veins in the recently acquired La Preciosa concessions [Resource Estimates](index=325&type=section&id=25.2%20Resource%20Estimates) The Mineral Resources for the entire property are summarized in Table 14.1, detailing the combined resources from both the Avino Mine and La Preciosa areas [Mineral Processing](index=325&type=section&id=25.3%20Mineral%20Processing) Avino actively processes ore from the Avino Vein, with tests showing regrinding significantly improves silver and gold extractions from oxide tailings, and recent flotation tests on La Preciosa material demonstrate good silver recovery - Recent tests on oxide tailings show regrinding to **75 µm** improves Ag extraction to **~89%** and Au to **~88%**[1425](index=1425&type=chunk) - **2021** flotation tests on La Preciosa material showed good response, with silver recovery of **79.1%** for the Abundancia-Gloria composite after regrinding[1427](index=1427&type=chunk)[1428](index=1428&type=chunk) [Mining](index=326&type=section&id=25.4%20Mining) The Avino Vein is being mined using sublevel stoping, while mining at San Gonzalo ceased in 2019 but the mine remains open for exploration, and a conventional surface mining method is proposed for the oxide tailings but is not currently active [Capital and Operating Costs](index=326&type=section&id=25.5%20Capital%20and%20Operating%20Costs) Costs for the Avino Vein are based on actual expenditures from current operations, while the 2017 PEA for the tailings is not current, and no cost estimates have been conducted for the La Preciosa property [Economic Analysis](index=326&type=section&id=25.6%20Economic%20Analysis) There is no current economic analysis for the active mining operations at the Avino Vein, the 2017 PEA for the oxide tailings is outdated, and no economic analysis has been conducted for the La Preciosa property [Recommendations](index=328&type=section&id=26.0%20RECOMMENDATIONS) The report recommends a budget of approximately C$2 million for further work, including deep drilling at the Avino Vein, developing a long-term mine plan, conducting additional metallurgical test work, and utilizing remote sensing for exploration optimization - The total estimated cost for recommended future work is approximately **CAD$2,000,000**[1438](index=1438&type=chunk) - Geology: Recommended **8,000 m** of deep drilling to explore the extension of the Avino breccias (est. cost **CAD$1,950,000**) and use of hyperspectral techniques for exploration optimization (est. cost **CAD$50,000**)[1441](index=1441&type=chunk)[1443](index=1443&type=chunk)[1449](index=1449&type=chunk) - Mining: Prepare a long-term mine plan for the Avino area resources and develop mining methods for the tailings and La Preciosa (est. cost **CAD$300,000**)[1444](index=1444&type=chunk) - Metallurgy: Conduct further optimization tests for the Avino Vein (bismuth separation), oxide/sulphide tailings (regrinding), and La Preciosa (est. total cost **CAD$230,000**)[1445](index=1445&type=chunk)[1447](index=1447&type=chunk)[1448](index=1448&type=chunk) [References](index=331&type=section&id=27.0%20REFERENCES) [Certificates of Qualified Persons](index=339&type=section&id=28.0%20CERTIFICATES%20OF%20QUALIFIED%20PERSONS)