Avino Silver & Gold Mines Ltd 6-K, filed Mar 17, 2022

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

March, 2022

Commission File Number: 001-35254

AVINO SILVER & GOLD MINES LTD.

Suite 900, 570 Granville Street, Vancouver, BC V6C 3P1

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. ☒ Form 20-F ☐  Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes ☐   No ☒

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

Explanatory Note

Avino Silver & Gold Mines Ltd. (the “Company”) is furnishing this Form 6-K to provide its consolidated financial statements  for the years ended December 31, 2021, 2020 and 2019 and Management Discussion and Analysis related thereto as filed in the SEDAR filing system on March 16, 2022.

Exhibits:

99.1	Consolidated Financial Statements For the Years Ended December 31, 2021, 2020 and 2019
99.2	Management Discussion and Analysis
99.3	CEO Certification
99.4	CFO Certification

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	AVINO SILVER & GOLD MINES LTD.

| | (Registrant) | | | Date: March 16, 2022 | By: | /s/ Jennifer Trevitt |

| | | Jennifer Trevitt |

| | | Corporate Secretary |

3

avino_ex991.htm EXHIBIT 99.1

AVINO SILVER & GOLD MINES LTD.

Consolidated Financial Statements

For the years ended December 31, 2021, 2020 and 2019

---

MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING

The consolidated financial statements of Avino Silver & Gold Mines Ltd. (the “Company”) are the responsibility of the Company’s management. The consolidated financial statements are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and reflect management’s best estimates and judgments based on information currently available.

Management has developed and is maintaining a system of internal controls to ensure that the Company’s assets are safeguarded, transactions are authorized and properly recorded, and financial information is reliable.

The Board of Directors is responsible for ensuring that management fulfills its responsibilities. The Audit Committee reviews the results of the annual audit and reviews the consolidated financial statements prior to their submission to the Board of Directors for approval.

The consolidated financial statements as at December 31, 2021 and 2020, and for the years ended December 31, 2021, 2020 and 2019, have been audited by Manning Elliott LLP, an independent registered public accounting firm, and their report outlines the scope of their examination, and gives their opinion on the consolidated financial statements.

“David Wolfin”	“Nathan Harte”
David Wolfin	Nathan Harte, CPA

| President & CEO | Chief Financial Officer |

| March 16, 2022 | March 16, 2022 |

-2-

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of

Avino Silver & Gold Mines Ltd.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated financial statements of Avino Silver & Gold Mines Ltd. and its subsidiaries (together, the “Company”), which comprise the consolidated statements of financial position as at December 31, 2021 and 2020, and the consolidated statements of operations and comprehensive income (loss), consolidated statements of changes in equity and consolidated statements of cash flows for the years ended December 31, 2021, 2020 and 2019, and the related notes, including a summary of significant accounting policies and other explanatory information (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2021 and 2020, and its financial performance and its cash flows for the years ended December 31, 2021, 2020 and 2019 in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 16, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.

---

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement, whether due to fraud or error. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and performing procedures that respond to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a reasonable basis for our audit opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

-3-

Assessment of the Existence of Impairment Indicators for the Avino Mine

As described in Note 11 to the consolidated financial statements the carrying amount of the plant, equipment and Avino mining properties is $35,675,000 as at December 31, 2021.  Management applies significant judgement to assess plant, equipment and Avino mining properties (collectively the “Avino Mine”) for the existence of impairment indicators that could give rise to the requirement to conduct a formal impairment test. Management considers both external and internal sources of information in assessing whether there are any indictors of impairment as disclosed in Note 2 (iv).  External sources of information considered by management include changes in the market, economic and legal environments, in which the Company operates, that are not within its control and that affect the recoverable amount of the Avino Mine. Internal sources of information that management considers include the manner in which the Avino Mine is being used, or is expected to be used, and indications of economic performance of the assets.

We have determined that performing procedures relating to the assessment of the existence of impairment indicators for the Avino Mine is a critical audit matter primarily due to the application of judgment by management in assessing specific factors such as (a) significant adverse changes in the economic or legal environment of operations, (b) significant changes with an adverse effect on the use of the asset, (c) current period cash flow or operating losses, combined with a history of losses or a forecast of continuing losses associated with the use of the assets.  This in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures to evaluate audit evidence relating to the judgements made by management in their assessment of indicators of impairment that could give rise to the requirement to conduct a formal impairment test.

Addressing the critical audit matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. Our audit procedures included amongst others, (a) a review of management’s assessment of the existence of impairment indicators of the Avino Mine (b) completion of our own assessment of impairment indicators in accordance with IAS 36 Impairment of Assets, (c) a review of matters that impact the Company’s ability to continue mining operations, (d) evaluated whether there were adverse economic changes in metal prices by considering external observable market prices, (e) compared the current performance to the Company’s historical mining results associated with the assets, (f) compared management’s mine plans to data in the Company’s resource estimate which was prepared by a specialist.

/s/ Manning Elliott LLP

CHARTERED PROFESSIONAL ACCOUNTANTS

Vancouver, British Columbia, Canada

March 16, 2022

We have served as the Company’s auditor since 2007.

-4-

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of

Avino Silver & Gold Mines Ltd.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Avino Silver & Gold Mines Ltd. and subsidiaries (the “Company") as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as at and for the year ended December 31, 2021, of the Company and our report dated March 16, 2022, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Manning Elliott LLP

CHARTERED PROFESSIONAL ACCOUNTANTS

Vancouver, British Columbia, Canada

March 16, 2022

-5-

AVINO SILVER & GOLD MINES LTD.<br> <br>Consolidated Statements of Financial Position<br> <br>(Expressed in thousands of US dollars)

	Note	December 31,<br> <br>2021			December 31,<br> <br>2020

| ASSETS | | | | | | | |

| Current assets | | | | | | | |

| Cash | | $ | 24,765 | | $ | 11,713 | |

| Amounts receivable | | | 1,208 | | | 529 | |

| Taxes recoverable | 6 | | 3,364 | | | 5,044 | |

| Prepaid expenses and other assets | | | 962 | | | 757 | |

| Inventory | 7 | | 5,179 | | | 1,659 | |

| Total current assets | | | 35,478 | | | 19,702 | |

| Exploration and evaluation assets | 9 | | 11,053 | | | 10,052 | |

| Plant, equipment and mining properties | 11 | | 35,675 | | | 34,846 | |

| Long-term investments | 8 | | 3,939 | | | 4,176 | |

| Other assets | | | 133 | | | 4 | |

| Total assets | | $ | 86,278 | | $ | 68,780 | |

| LIABILITIES | | | | | | | |

| Current liabilities | | | | | | | |

| Accounts payable and accrued liabilities | | $ | 3,260 | | $ | 2,068 | |

| Amounts due to related parties | 12(b) | | 163 | | | 154 | |

| Taxes payable | | | 31 | | | 7 | |

| Current portion of term facility | 13 | | - | | | 2,513 | |

| Current portion of equipment loans | | | - | | | 72 | |

| Current portion of finance lease obligations | | | 389 | | | 208 | |

| Total current liabilities | | | 3,843 | | | 5,022 | |

| Finance lease obligations | | | 680 | | | 278 | |

| Warrant liability | 14 | | 741 | | | 2,295 | |

| Reclamation provision | 15 | | 726 | | | 808 | |

| Deferred income tax liabilities | | | 1,781 | | | 1,369 | |

| Total liabilities | | | 7,771 | | | 9,772 | |

| EQUITY | | | | | | | |

| Share capital | 16 | | 129,953 | | | 108,303 | |

| Equity reserves | | | 9,573 | | | 9,951 | |

| Treasury shares (14,180 shares, at cost) | | | (97 | ) | | (97 | ) |

| Accumulated other comprehensive loss | | | (4,969 | ) | | (4,810 | ) |

| Accumulated deficit | | | (55,953 | ) | | (54,339 | ) |

| Total equity | | | 78,507 | | | 59,008 | |

| Total liabilities and equity | | $ | 86,278 | | $ | 68,780 | |

Commitments – Note 19

Approved by the Board of Directors on March 16, 2022:

Gary Robertson	Director	David Wolfin	Director

The accompanying notes are an integral part of the consolidated financial statements

-6-

AVINO SILVER & GOLD MINES LTD.<br> <br>Consolidated Statements of Operations and Comprehensive Income (Loss)<br> <br>(Expressed in thousands of US dollars)

	Note	2021			2020			2019

| Revenue from mining operations | 17 | $ | 11,228 | | $ | 16,022 | | $ | 31,746 | |

| Cost of sales | 17 | | 7,681 | | | 15,832 | | | 32,016 | |

| Mine operating income (loss) | | | 3,547 | | | 190 | | | (270 | ) | | Operating expenses | | | | | | | | | | |

| General and administrative expenses | 19 | | 3,566 | | | 2,902 | | | 3,193 | |

| Share-based payments | 16 | | 1,469 | | | 1,857 | | | 937 | |

| Loss before other items | | | (1,488 | ) | | (4,569 | ) | | (4,400 | ) | | Other items | | | | | | | | | | |

| Interest and other income | | | 178 | | | 332 | | | 545 | |

| Unrealized gain (loss) on long-term investments | | | (423 | ) | | (124 | ) | | 1,282 | |

| Fair value adjustment on warrant liability | 14 | | 1,581 | | | (650 | ) | | 520 | |

| Realized loss on warrants exercised | | | (1,106 | ) | | (2,733 | ) | | - | |

| Foreign exchange loss | | | (61 | ) | | (811 | ) | | (663 | ) |

| Project evaluation expenses | | | (176 | ) | | - | | | - | |

| Finance cost | | | (52 | ) | | (211 | ) | | (84 | ) |

| Accretion of reclamation provision | 15 | | (47 | ) | | (99 | ) | | (104 | ) |

| Interest expense | | | 24 | ) | | (25 | ) | | (64 | ) |

| Loss from continuing operations before income taxes | | | (1,618 | ) | | (8,890 | ) | | (2,968 | ) |

| Income taxes: | | | | | | | | | | |

| Current income tax expense | | | (27 | ) | | (161 | ) | | (327 | ) |

| Deferred income tax (expense) recovery | | | (412 | ) | | 1,569 | | | 960 | |

| Income tax (expense) recovery | | | (439 | ) | | 1,408 | | | 633 | |

| Net loss from continuing operations | | | (2,057 | ) | | (7,482 | ) | | (2,335 | ) |

| Loss from discontinued operations and on disposal **** | 5 | | - | | | (169 | ) | | (29,126 | ) |

| Net loss | | | (2,057 | ) | | (7,651 | ) | | (31,461 | ) | | Other comprehensive income (loss) | | | | | | | | | | |

| Currency translation differences | | | (159 | ) | | (247 | ) | | 1,603 | |

| Reclassification of foreign exchange on translation into net loss on sale of discontinued operations | | | - | | | - | | | (42 | ) |

| Total comprehensive loss | | $ | (2,216 | ) | $ | (7,898 | ) | $ | (29,900 | ) |

| Loss per share from continuing operations | 16 (e) | | | | | | | | | |

| Basic | | $ | (0.02 | ) | $ | (0.09 | ) | $ | (0.03 | ) |

| Diluted | | $ | (0.02 | ) | $ | (0.09 | ) | $ | (0.03 | ) |

| Loss per share | 16 (e) | | | | | | | | | |

| Basic | | $ | (0.02 | ) | $ | (0.09 | ) | $ | (0.45 | ) |

| Diluted | | $ | (0.02 | ) | $ | (0.09 | ) | $ | (0.45 | ) |

| Weighted average number of common shares outstanding | 16 (e) | | | | | | | | | |

| Basic | | | 100,161,357 | | | 83,180,069 | | | 69,980,178 | |

| Diluted | | | 100,161,357 | | | 83,180,069 | | | 69,980,178 | |

The accompanying notes are an integral part of the consolidated financial statements

-7-

AVINO SILVER & GOLD MINES LTD.<br> <br>Consolidated Statements of Changes in Equity<br> <br>(Expressed in thousands of US dollars)

	Note	Number of Common Shares		Stock Capital Amount			Equity Reserves			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Equity

| Balance, January 1, 2019 | | | 63,337,769 | $ | 88,045 | | $ | 9,849 | | $ | (97 | ) | $ | (6,124 | ) | $ | (16,505 | ) | $ | 75,168 | |

| Common shares issued for cash: | | | | | | | | | | | | | | | | | | | | | |

| Brokered public offerings | | | 7,735,360 | | 4,877 | | | - | | | - | | | - | | | - | | | 4,877 | |

| Less: Issuance costs | | | - | | (472 | ) | | - | | | - | | | - | | | - | | | (472 | ) |

| At the market issuances | | | 4,954,000 | | 2,924 | | | - | | | - | | | - | | | - | | | 2,924 | |

| Less: Issuance costs | | | - | | (162 | ) | | - | | | - | | | - | | | - | | | (162 | ) |

| Options cancelled or expired | | | - | | - | | | (762 | ) | | - | | | - | | | 762 | | | - | |

| Carrying value of RSUs exercised | | | 565,259 | | 835 | | | (835 | ) | | - | | | - | | | - | | | - | |

| Fair value of warrants issued | | | - | | - | | | 116 | | | - | | | - | | | - | | | 116 | |

| Shares to be issued | | | - | | 349 | | | - | | | - | | | - | | | - | | | 349 | |

| Share-based payments | | | - | | - | | | 1,023 | | | - | | | - | | | - | | | 1,023 | |

| Net loss for the year | | | - | | - | | | - | | | - | | | - | | | (31,461 | ) | | (31,461 | ) |

| Currency translation differences | | | - | | - | | | - | | | - | | | 1,561 | | | - | | | 1,561 | |

| Balance, January 31, 2019 | | | 76,592,388 | $ | 96,396 | | $ | 9,391 | | $ | (97 | ) | $ | (4,563 | ) | $ | (47,204 | ) | $ | 53,923 | |

| Common shares issued for cash: | | | | | | | | | | | | | | | | | | | | | |

| At the market issuances | | | 6,730,054 | | 4,940 | | | - | | | - | | | - | | | - | | | 4,940 | |

| Exercise of warrants | | | 4,659,194 | | 6,528 | | | (116 | ) | | - | | | - | | | - | | | 6,412 | |

| Exercise of options | | | 48,000 | | 43 | | | (15 | ) | | - | | | - | | | - | | | 28 | |

| Common shares issued for services | | | 675,145 | | - | | | - | | | - | | | - | | | - | | | - | |

| Issuance costs | | | - | | (254 | ) | | - | | | - | | | - | | | - | | | (254 | ) |

| Options cancelled or expired | | | - | | - | | | (516 | ) | | - | | | - | | | 516 | | | - | |

| Carrying value of RSUs exercised | | | 863,901 | | 650 | | | (650 | ) | | - | | | - | | | - | | | - | |

| Share-based payments | | | - | | - | | | 1,857 | | | - | | | - | | | - | | | 1,857 | |

| Net loss for the year | | | - | | - | | | - | | | - | | | - | | | (7,651 | ) | | (7,651 | ) |

| Currency translation differences | | | - | | - | | | - | | | - | | | (247 | ) | | - | | | (247 | ) |

| Balance, December 31, 2020 | | | 89,568,682 | $ | 108,303 | | $ | 9,951 | | $ | (97 | ) | $ | (4,810 | ) | $ | (54,339 | ) | $ | 59,008 | |

| Common shares issued for cash: | | | | | | | | | | | | | | | | | | | | | |

| At the market issuances | 16 | | 10,050,000 | | 18,497 | | | - | | | - | | | - | | | - | | | 18,497 | |

| Exercise of warrants | 16 | | 1,030,362 | | 1,911 | | | - | | | - | | | - | | | - | | | 1,911 | |

| Exercise of options | 16 | | 264,000 | | 364 | | | (126 | ) | | - | | | - | | | - | | | 238 | |

| Issuance costs | 16 | | - | | (400 | ) | | - | | | - | | | - | | | - | | | (400 | ) |

| Options cancelled or expired | 16 | | - | | - | | | (443 | ) | | - | | | - | | | 443 | | | - | |

| Carrying value of RSUs exercised | | | 1,330,167 | | 1,278 | | | (1,278 | ) | | - | | | - | | | - | | | - | |

| Share-based payments | 16 | | - | | - | | | 1,469 | | | - | | | - | | | - | | | 1,469 | |

| Net loss for the year | 16 | | - | | - | | | - | | | - | | | - | | | (2,057 | ) | | (2,057 | ) |

| Currency translation differences | | | - | | - | | | - | | | - | | | (159 | ) | | - | | | (159 | ) |

| Balance, December 31, 2021 | | | 102,243,211 | $ | 129,953 | | $ | 9,573 | | $ | (97 | ) | $ | (4,969 | ) | $ | (55,953 | ) | $ | 78,507 | |

The accompanying notes are an integral part of the consolidated financial statements

-8-

AVINO SILVER & GOLD MINES LTD.<br> <br>Consolidated Statements of Cash Flows<br> <br>(Expressed in thousands of US dollars)

	Note	2021			2020			2019
Cash generated by (used in):
Operating Activities

| Net loss | | $ | (2,057 | ) | $ | (7,651 | ) | $ | (31,461 | ) |

| Adjustments for non-cash items: | | | | | | | | | | |

| Deferred income tax expense (recovery) | | | 412 | | | (1,569 | ) | | (960 | ) |

| Depreciation and depletion | | | 2,116 | | | 1,917 | | | 3,723 | |

| Inventory net realizable value adjustment | | | - | | | - | | | 387 | |

| Accretion of reclamation provision | | | 47 | | | 99 | | | 104 | |

| Unrealized loss (gain) on investments | | | 423 | | | 124 | | | (1,282 | ) |

| Unrealized foreign exchange loss (gain) | | | (265 | ) | | (588 | ) | | 1,461 | |

| Unwinding of fair value adjustment on term facility | | | (13 | ) | | (51 | ) | | (170 | ) |

| Fair value adjustment on warrant liability | | | (1,581 | ) | | 650 | | | (520 | ) |

| Realized loss on warrants exercised | | | 1,106 | | | 2,733 | | | 2,708 | |

| Loss from discontinued operations and on disposal | | | - | | | - | | | 29,126 | |

| Share-based payments | | | 1,469 | | | 1,857 | | | 937 | | | | | | 1,657 | | | (2,479 | ) | | 1,345 | | | Net change in non-cash working capital items | 20 | | (1,548 | ) | | 2,551 | | | 4,162 | | | | | | 109 | | | 72 | | | 5,507 | | | Financing Activities | | | | | | | | | | |

| Shares and units issued for cash, net of issuance costs | | | 18,098 | | | 4,685 | | | 7,283 | |

| Proceeds from option exercise | | | 238 | | | 29 | | | - | |

| Proceeds from warrant exercise | | | 805 | | | 3,679 | | | - | |

| Term facility payments | | | (2,500 | ) | | (3,333 | ) | | (833 | ) |

| Finance lease payments | | | (477 | ) | | (640 | ) | | (956 | ) |

| Equipment loan payments | | | (72 | ) | | (217 | ) | | (524 | ) | | | | | 16,092 | | | 4,203 | | | 4,970 | | | Investing Activities | | | | | | | | | | |

| Exploration and evaluation expenditures | | | (1,294 | ) | | (231 | ) | | (5,273 | ) |

| Additions to plant, equipment and mining properties | | | (1,913 | ) | | (2,014 | ) | | (3,276 | ) |

| Proceeds from sale of long-term investments | | | - | | | 78 | | | 23 | |

| Cash proceeds from sale of discontinued operations | | | - | | | - | | | 6,599 | |

| Cash disposed of in discontinued operations | | | - | | | - | | | (1,459 | ) |

| Redemption of reclamation bonds | | | - | | | - | | | 102 | | | | | | (3,207 | ) | | (2,167 | ) | | (3,734 | ) | | Change in cash | | | 12,994 | | | 2,108 | | | 6,743 | | | Effect of exchange rate changes on cash | | | 58 | | | (20 | ) | | (370 | ) | | Cash, Beginning | | | 11,713 | | | 9,625 | | | 3,252 | | | Cash, E nding | | $ | 24,765 | | $ | 11,713 | | $ | 9,625 | |

Supplementary Cash Flow Information (Note 20)

The accompanying notes are an integral part of the consolidated financial statements

-9-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

1.

NATURE OF OPERATIONS

Avino Silver & Gold Mines Ltd. (the “Company” or “Avino”) was incorporated in 1968 under the laws of the Province of British Columbia, Canada. The Company is engaged in the production and sale of silver, gold, and copper and the acquisition, exploration, and advancement of mineral properties.<br> <br><br> <br>The Company’s head office and principal place of business is Suite 900, 570 Granville Street, Vancouver, BC, Canada. The Company is a reporting issuer in Canada and the United States, and trades on the Toronto Stock Exchange (“TSX”), the NYSE American, and the Frankfurt and Berlin Stock Exchanges.<br> <br><br> <br>The Company operates the Avino Mine which produces copper, silver and gold at the historic Avino property in the state of Durango, Mexico. The Company also owns interests in mineral properties located in British Columbia and Yukon, Canada.<br> <br><br> <br>Risks associated with Public Health Crises, including COVID-19<br> <br><br> <br>The Company's business, operations and financial condition could be materially adversely affected by the outbreak of epidemics, pandemics or other health crises, such as the outbreak of COVID-19 that was designated as a pandemic by the World Health Organization on March 11, 2020. The international response to the spread of COVID-19 has led to significant restrictions on travel, temporary business closures, quarantines, global stock market volatility and a general reduction in consumer activity. Such public health crises can result in operating, supply chain and project development delays and disruptions, global stock market and financial market volatility, declining trade and market sentiment, reduced movement of people and labour shortages, and travel and shipping disruption and shutdowns, including as a result of government regulation and prevention measures, or a fear of any of the foregoing, all of which could affect commodity prices, interest rates, credit risk and inflation. In addition, the current COVID-19 pandemic, and any future emergence and spread of similar pathogens could have an adverse impact on global economic conditions which may adversely impact the Company's operations, and the operations of suppliers, contractors and service providers, including smelter and refining service providers, and the demand for the Company's production.<br> <br><br> <br>The Company may experience business interruptions, including suspended (whether government mandated or otherwise) or reduced operations relating to COVID-19 and other such events outside of the Company's control, which could have a material adverse impact on its business, operations and operating results, financial condition and liquidity.<br> <br><br> <br>As at the date of the consolidated financial statements, the duration of the business disruptions internationally and related financial impact of COVID-19 cannot be reasonably estimated. It is unknown whether and how the Company may be affected if the pandemic persists for an extended period of time. In particular, the region in which we operate may not have sufficient public infrastructure to adequately respond or efficiently and quickly recover from such event, which could have a materially adverse effect on the Company's operations. The Company's exposure to such public health crises also includes risks to employee health and safety. Should an employee, contractor, community member or visitor become infected with a serious illness that has the potential to spread rapidly, this could place the Company's workforce at risk.

-10-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

2.

BASIS OF PRESENTATION

Statement of Compliance<br> <br><br> <br>These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).<br> <br><br> <br>Basis of Presentation<br> <br><br> <br>These consolidated financial statements are expressed in US dollars and have been prepared on a historical cost basis except for financial instruments that have been measured at fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting on a going concern basis. The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements as if the policies have always been in effect.<br> <br><br> <br>Foreign Currency Translation<br> <br><br> <br>Functional & presentation currencies<br> <br><br> <br>The functional currency of the Company is the Canadian dollar. The functional currency of the Company’s Mexican subsidiaries is the US dollar, which is determined to be the currency of the primary economic environment in which the subsidiaries operate.<br> <br><br> <br>Foreign currency transactions<br> <br><br> <br>Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on the dates of the transactions. At each financial position reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at the date of the statement of financial position. Non-monetary items that are measured in terms of historical cost in a foreign currency are not re-translated.<br> <br><br> <br>Foreign operations<br> <br><br> <br>Subsidiaries that have functional currencies other than the US dollar translate their statement of operations items at the average rate during the year. Assets and liabilities are translated at exchange rates prevailing at the end of each reporting period. Exchange rate variations resulting from the retranslation at the closing rate of the net investment in these subsidiaries, together with differences between their statement of operations items translated at actual and average rates, are recognized in accumulated other comprehensive income (loss). On disposition or partial disposition of a foreign operation, the cumulative amount of related exchange difference is recognized in the statement of operations.<br> <br><br> <br>Significant Accounting Judgments and Estimates<br> <br><br> <br>The Company’s management makes judgments in its process of applying the Company’s accounting policies to the preparation of its consolidated financial statements. In addition, the preparation of financial data requires that the Company’s management make assumptions and estimates of the impacts on the carrying amounts of the Company’s assets and liabilities at the end of the reporting period from uncertain future events and on the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates as the estimation process is inherently uncertain. Estimates are reviewed on an ongoing basis based on historical experience and other factors that are considered to be relevant under the circumstances. Revisions to estimates and the resulting impacts on the carrying amounts of the Company’s assets and liabilities are accounted for prospectively.

-11-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

a)	Critical judgments exercised by management in applying accounting policies that have the most significant effect on the amounts presented in these consolidated financial statements are as follows:

i.

Economic recoverability and probability of future economic benefits from exploration and evaluation costs

Management has determined that mine and camp, exploratory drilling, and other exploration and evaluation-related costs that were capitalized have future economic benefits and are economically recoverable. Management uses several criteria in its assessments of economic recoverability and probability of future economic benefits including geologic and metallurgic information, scoping studies, accessible facilities, existing permits, and mine plans.

ii.

Commencement of production at levels intended by management

Prior to reaching production levels intended by management, costs incurred are capitalized as part of the costs of related exploration and evaluation assets, and proceeds from concentrate sales are offset against costs capitalized. Depletion of capitalized costs for mining properties and depreciation of plant and equipment begin when operating levels intended by management have been reached. Management considers several factors in determining when a mining property has reached the intended production levels, including production capacity, recoveries, and number of uninterrupted production days.<br> <br><br> <br>The basis for achievement of production levels intended by management as indicated by technical feasibility and commercial viability is generally established with proven reserves based on a NI 43-101-compliant technical report or a comparable resource statement and feasibility study, combined with pre-production operating statistics and other factors. In cases where the Company does not have a 43-101-compliant reserve report, on which to base a production decision, the technical feasibility and commercial viability of extracting a mineral resource are considered in light of additional factors including but not limited to:

·	Acquisition and installation of all critical capital components to achieve desired mining and processing results has been completed. Capital components have been acquired directly and are also available on an as-needed basis from the underground mining contractor;

| · | The necessary labour force, including mining contractors, has been secured to mine and process at planned levels of output; |

| · | The mill has consistently processed at levels above design capacity and budgeted production levels with consistent recoveries and grades; and, |

| · | Establishing sales agreements with respect to the sale of concentrates. |

	When technical feasibility and commercial viability are considered demonstrable according to the above criteria and other factors, the Company performs an impairment assessment and records an impairment loss, if  any, before reclassifying exploration and evaluation costs to plant, equipment, and mining properties.
iii.	Functional currency
	The functional currency for the Company and its subsidiaries is the currency of the primary economic environment, in which the entity operates. The Company has determined the functional currency of the Company to be the Canadian dollar. The Company has determined the functional currency of its Mexican subsidiaries to be the US dollar. Determination of functional currency may involve certain judgments to determine the primary economic environment. The Company reconsiders the functional currency of its entities, if there is a change in events and conditions, which determine the primary economic environment.

-12-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

b)	Significant assumptions about the future and other sources of estimation uncertainty that management has made at the consolidated statement of financial position date that could result in a material adjustment to the carrying amounts of assets and liabilities in the event that actual results differ from assumptions made relate to, but are not limited to, the following:

i.

Stockpile and concentrate inventory valuations

Concentrate and stockpile mineralized material are valued at the lower of average cost or net realizable value. The assumptions used in the valuation of concentrate and stockpile mineralized material include estimates of copper, silver, and gold contained in the stockpiles and finished goods assumptions for the amount of copper, silver, and gold that is expected to be recovered from the concentrate. If these estimates or assumptions prove to be inaccurate, the Company could be required to write down the recorded value of its concentrate and stockpile mineralized material inventory, which would result in an increase in the Company’s expenses and a reduction in its working capital.

ii.

Estimated reclamation provisions

The Company’s provision for reclamation represents management’s best estimate of the present value of the future cash outflows required to settle estimated reclamation and closure costs at the Avino and San Gonzalo properties. The provision reflects estimates of future costs, inflation, foreign exchange rates and assumptions of risks associated with the future cash outflows, and the applicable risk-free interest rates for discounting the future cash outflows. Changes in the above factors could result in a change to the provision recognized by the Company.<br> <br><br> <br>Changes to reclamation and closure cost obligations are recorded with a corresponding change to the carrying amounts of the related exploration and evaluation assets or mining properties. Adjustments to the carrying amounts of related mining properties result in a change to future depletion expense.

iii.

Valuation of share-based payments and warrants

The Company uses the Black-Scholes Option Pricing Model for valuation of share-based payments and warrants. Option pricing models require the input of subjective assumptions including expected price volatility, interest rate, and forfeiture rate. Changes in the input assumptions can materially affect fair value estimates and the Company’s net income or loss and its equity reserves. Warrant liabilities are accounting for as derivate liabilities (see Note 16).

iv.

Impairment of plant, equipment and mining properties, and exploration and evaluation assets

Management considers both external and internal sources of information in assessing whether there are any indications that the Company’s plant, equipment, and mining properties, and exploration and evaluation assets are impaired. External sources of information management considers include changes in the market, economic and legal environments, in which the Company operates, that are not within its control and that affect the recoverable amount of its plant, equipment, and mining properties. Internal sources of information that management considers include the manner in which mining properties and plant and equipment are being used, or are expected to be used, and indications of economic performance of the assets.<br> <br><br> <br>In determining the recoverable amounts of the Company’s plant, equipment and mining properties, management makes estimates of the undiscounted future pre-tax cash flows expected to be derived from the Company’s mining properties, and the appropriate discount rate. Reductions in metal price forecasts, increases in estimated future costs of production, increases in estimated future non expansionary capital expenditures, reductions in the amount of recoverable resources and exploration potential, and adverse current economic conditions are examples of factors that could result in a write down of the carrying amounts of the Company’s plant, equipment and mining properties, and exploration and evaluation assets.

-13-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

	Impairment<br> <br><br> <br>Based on the Company’s assessment with respect to possible indicators of impairment of its mineral properties, including the impact of COVID-19 on our operations and the prevailing market metals prices, the Company concluded that as of December 31, 2021, no impairment indicators were identified.
v.	Depreciation rate for plant and equipment and depletion rate for mining properties
	Depreciation and depletion expenses are allocated based on estimates for useful lives of assets. Should the asset life, depletion rates, or depreciation rates differ from the initial estimate, the revised life or rate would be reflected prospectively through income or loss. A change in the mineral resource estimate may impact depletion expense on a prospective basis.

vi.

Recognition and measurement of deferred tax assets and liabilities

Actual amounts of income tax expense are not final until tax returns are filed and accepted by the relevant authorities. This occurs subsequent to the issuance of the consolidated financial statements and the final determination of actual amounts may not be completed for a number of years. Therefore, tax assets and liabilities and net income in subsequent periods will be affected by the amount that estimates differ from the final tax return. Estimates of future taxable income are based on forecasted cash flows from operations and the application of existing tax laws in each jurisdiction. Forecasted cash flows from operations are based on projections internally developed and reviewed by management. Weight is attached to tax planning opportunities that are within the Company’s control, and are feasible and implementable without significant obstacles. The likelihood that tax positions taken will be sustained upon examination by applicable tax authorities is assessed based on individual facts and circumstances of the relevant tax position evaluated in light of all available evidence. Where applicable tax laws and regulations are either unclear or subject to ongoing varying interpretations, it is reasonably possible that changes in these estimates can occur that could materially affect the amounts of deferred tax assets and liabilities.

Basis of Consolidation
The audited consolidated financial statements include the accounts of the Company and its Mexican subsidiaries as follows:

Subsidiary	Ownership Interest	Jurisdiction	Nature of Operations

| Oniva Silver and Gold Mines S.A. de C.V. | 100% | Mexico | Mexican administration |

| Nueva Vizcaya Mining, S.A. de C.V. | 100% | Mexico | Mexican administration |

| Promotora Avino, S.A. de C.V. (“Promotora”) | 79.09% | Mexico | Holding company |

| Compañía Minera Mexicana de Avino, S.A. de C.V. (“Avino Mexico”) | 98.45% direct<br> <br>1.22% indirect (Promotora)<br> <br>99.67% effective | Mexico | Mining and exploration |

| La Luna Silver & Gold Mines Ltd. | 100% | Canada | Holding company |

| La Preciosa Silver & Gold Mines Ltd. | 100% | Canada | Holding company |

-14-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

Intercompany balances and transactions, including unrealized income and expenses arising from intercompany transactions, are eliminated in preparing the audited consolidated financial statements.

3.	SIGNIFICANT ACCOUNTING POLICIES
	Exploration and evaluation assets and development costs
	(i) Exploration and evaluation expenditures<br> <br><br> <br>The Company capitalizes all costs relating to the acquisition, exploration and evaluation of mineral claims. Expenditures incurred before the Company has obtained the legal rights to explore a specific area are expensed. The Company’s capitalized exploration and evaluation costs are classified as intangible assets. Such costs include, but are not limited to, certain camp costs, geophysical studies, exploratory drilling, geological and sampling expenditures, and depreciation of plant and equipment during the exploration stage. Costs not directly attributable to exploration and evaluation activities, including general administrative overhead costs, are expensed in the period in which they occur. Proceeds from the sale of mineral products or farm outs during the exploration and evaluation stage are deducted from the related capitalized costs.<br> <br><br> <br>The carrying values of capitalized amounts are reviewed annually, or when indicators of impairment are present. In the case of undeveloped properties, there may be only inferred resources to allow management to form a basis for the impairment review. The review is based on the Company’s intentions for the development of such properties. If a mineral property does not prove to be viable, all unrecoverable costs associated with the property are charged to the consolidated statement of comprehensive income (loss) at the time the determination is made.<br> <br><br> <br>When the technical feasibility and commercial viability of extracting mineral resources have been demonstrated, exploration and evaluation costs are assessed for impairment, reclassified to mining properties and become subject to depletion. Management considers the technical feasibility and commercial viability of extracting a mineral resource to be demonstrable upon the completion of a positive feasibility study and the establishment of mineral reserves. For certain mineral projects, management may determine the completion of a feasibility study to be cost prohibitive, unnecessary or to present undue risk to the structural integrity of the ore body. Under such circumstances, management considers technical feasibility to be demonstrable when the Company has obtained the necessary environmental and mining permits, land surface and mineral access rights, and the mineral project can be physically constructed and operated in a technically sound manner to produce a saleable mineral product. In assessing whether commercial viability is demonstrable, management considers if its internal economic assessment indicates that the mineral project can be mined to generate a reasonable return on investment for the risk undertaken, and markets or long-term contracts for the product exist.<br> <br><br> <br>(ii) Development expenditures<br> <br><br> <br>Mine development costs are capitalized until the mineral property is capable of operating in the manner intended by management. The Company evaluates the following factors in determining whether a mining property is capable of operating in the manner intended by management:

·	The completion and assessment of a reasonable commissioning period of the mill and mining facilities;

| · | Consistent operating results are achieved during the test period; |

| · | Existence of clear indicators that operating levels intended by management will be sustainable for the foreseeable future; |

| · | Plant / mill has reached a pre-determined percentage of design capacity; |

| · | Adequate funding is available and can be allocated to the operating activities; and, |

| · | Long term sales arrangements have been secured. | | The carrying values of capitalized development costs are reviewed annually, or when indicators are present, for impairment. | |

-15-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

Plant, equipment and mining properties

Upon demonstrating the technical feasibility and commercial viability of extracting mineral resources, all expenditures incurred to that date for the mine are reclassified to mining properties. Expenditures capitalized to mining properties include all costs related to obtaining or expanding access to resources including extensions of the haulage ramp and installation of underground infrastructure, and the estimated reclamation provision. Expenditures incurred with respect to a mining property are capitalized when it is probable that additional future economic benefits will flow to the Company. Otherwise, such expenditures are classified as a cost of sales.
Plant and equipment are recorded at historical cost less accumulated depreciation and any accumulated impairment losses. Historical costs include expenditures that are directly attributable to bringing the asset to a location and condition necessary to operate in a manner intended by management. Such costs are accumulated as construction in progress until the asset is available for use, at which point the asset is classified as plant, equipment and mining properties and depreciation commences.
After the date that management’s intended production levels have been achieved, mining properties are depleted using the straight-line method over the estimated remaining life of the mine. The Company estimates the remaining life of its producing mineral properties on an annual basis using a combination of quantitative and qualitative factors including historical results, mineral resource estimates, and management’s intent to operate the property.
The Company does not have sufficient reserve information to form a basis for the application of the units-of-production method for depreciation and depletion.
As at December 31, 2021 and 2020, the Company estimated a remaining mine life for the Avino Mine of 20 and 20.4 years, respectively.
Accumulated mill, machinery, plant facilities, and certain equipment are depreciated using the straight-line method over their estimated useful lives, not to exceed the life of the mine for any assets that are inseparable from the mine. When parts of an item of plant and equipment have different useful lives, they are accounted for as separate items (or components) of plant and equipment.

-16-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

Plant and equipment are depreciated using the following annual rates and methods:

Office equipment, furniture, and fixtures	3 years straight line balance

| Computer equipment | 5 years straight line balance |

| Mine machinery and transportation equipment | 5 years straight line balance |

| Mill machinery and processing equipment | 5 - 20 years straight line |

| Buildings | 5 - 20 years straight line |

Impairment<br> <br><br> <br>At each financial position reporting date, the carrying amounts of the Company’s assets are reviewed to determine whether there is any indication that those assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any.  Where the asset does not generate cash flows that are independent from other assets, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.<br> <br><br> <br>An asset’s recoverable amount is the higher of fair value less costs to sell and value in use. Fair value is determined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset or cash generating unit is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in profit or loss for the period.<br> <br><br> <br>Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, provided the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.<br> <br><br> <br>Leases<br> <br><br> <br>Leases in which the Company assumes substantially all risks and rewards of ownership are classified as finance leases. Assets held under finance leases are recognized at the lower of the fair value and present value of the minimum lease payments at inception of the lease, less accumulated depreciation and impairment losses. The corresponding liability is recognized as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation to achieve a constant rate of interest on the remaining liability. Finance charges are recorded as a finance expense within profit and loss, unless they are attributable to qualifying assets, in which case they are capitalized.<br> <br><br> <br>Operating lease payments are recognized on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed, in which case that systematic basis is used. Operating lease payments are recorded within profit and loss unless they are attributable to qualifying assets, in which case they are capitalized.<br> <br><br> <br>Inventory<br> <br><br> <br>Material extracted from the Company's mine is classified as either process material or waste. Process material represents mineralized material that, at the time of extraction, the Company expects to process into a saleable form and sell at a profit, while waste is considered uneconomic to process and its extraction cost is included in direct mining costs. Raw materials are comprised of process material stockpiles. Process material is accumulated in stockpiles that are subsequently processed into bulk copper, silver, and gold concentrate in a saleable form. The Company has bulk copper, silver, and gold concentrate inventory in saleable form that has not yet been sold. Mine operating supplies represent commodity consumables and other raw materials used in the production process, as well as spare parts and other maintenance supplies that are not classified as capital items.

-17-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

Inventories are valued at the lower of cost and net realizable value (“NRV”). Cost is determined on a weighted average basis and includes all costs incurred, based on normal production capacity, in bringing each product to its present location and condition. Cost of inventories comprises direct labor, materials and contractor expenses, depletion and depreciation on mining properties, plant and equipment, and an allocation of mine site costs. As mineralized material is removed for processing, costs are removed based on the average cost per tonne in the stockpile. Stockpiled process material tonnages are verified by periodic surveys.<br> <br><br> <br>NRV of mineralized material is determined with reference to relevant market prices less applicable variable selling expenses and costs to bring the inventory into its saleable form. NRV of materials and supplies is generally calculated by reference to salvage or scrap values when it is determined that the supplies are obsolete. NRV provisions are recorded within cost of sales in the consolidated statement of operations, and are reversed to reflect subsequent recoveries where the inventory is still on hand.<br> <br><br> <br>Revenue from Contracts with Customers<br> <br><br> <br>Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue and costs to sell can be reliably measured. Revenue is measured at the fair value of the consideration received, excluding discounts, rebates, and other sales tax or duty.<br> <br><br> <br>Performance Obligations<br> <br><br> <br>Based on the criteria outlined in IFRS 15, the Company applied significant judgment in determining that the primary performance obligation relating to its sales contracts is the delivery of concentrates. Shipping and insurance services arranged by the Company for concentrate sales that occur after the transfer of control are also considered performance obligations.<br> <br><br> <br>Transfer of Control<br> <br><br> <br>Based on the criteria outlined in IFRS 15, the Company applied significant judgment in determining when the transfer of control occurs. Management based its assessment on a number of indicators of control, which include but are not limited to, whether the Company has the present right of payment and whether the physical possession of the goods, significant risks and rewards, and legal title have been transferred to the customer.<br> <br><br> <br>Provisional Pricing<br> <br><br> <br>Based on the criteria outlined in IFRS 15, the Company applied significant judgment in determining variable consideration. The Company identified two provisional pricing components in concentrate sales, represents variable consideration in the form of a) adjustments between original and final assay results relating to the quantity and quality of concentrate shipments, as well as b) pricing adjustments between provisional and final invoicing based on market prices for base and precious metals.<br> <br><br> <br>Based on the Company’s historical accuracy in the assay process, as evidenced by the negligible historical adjustments relating to assay differences, the Company concluded the variability in consideration caused by the assaying results is negligible. The Company does not expect a significant amount of reversal related to assaying differences. The Company records revenues based on provisional invoices based on quoted market prices of the London Bullion Market Association and the London Metal Exchange during the quotation period outlined in the concentrate sales agreement. The Company applied judgment to determine the amount of variable consideration to be recognized during the period for which the likelihood of significant reversal is low.

-18-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

Financial Instruments<br> <br><br>Measurement – initial recognition <br><br> <br>All financial assets and financial liabilities are initially recorded on the Company’s consolidated statement of financial position when the Company becomes a party to the contractual provisions of the instrument. All financial asset and liabilities are initially recorded at fair value, net of attributable transaction costs, except for those classified as fair value through profit or loss (“FVTPL”). Subsequent measurement of financial assets and financial liabilities depends on the classifications of such assets and liabilities.<br> <br><br> <br>Classification – financial assets<br> <br><br> <br>Amortized cost:<br> <br><br> <br>Financial assets that are held within a business model whose objective is to hold financial assets in order to collect contractual cash flows, and that the contractual terms of the financial assets give rise on specified date to cash flows that are solely payments of principal and interest on the principal amount outstanding, are measured subsequent to initial recognition at amortized cost.<br> <br><br> <br>The amortized cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortization using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. Interest income is recognized using the effect interest method, and is recognized in Interest and other income, on the consolidated statements of operations and comprehensive income (loss)<br> <br><br> <br>The Company financial assets at amortized costs include its cash, amounts receivable not related to sales of concentrate, investments (short-term), and reclamation bonds.<br> <br><br> <br>Fair value through other comprehensive income (“FVTOCI”)<br> <br><br> <br>Financial assets that are held within a business model whose objective is to hold financial assets in order to both collect contractual cash flows and selling financial assets, and that the contractual terms of the financial assets give rise on specified date to cash flows that are solely payments of principal and interest on the principal amount outstanding.<br> <br><br> <br>Upon initial recognition of equity securities, the Company may make an irrevocable election (on an instrument-by-instrument basis) to designate its equity securities that would otherwise be measured at FVTPL to present subsequent changes in fair value in other comprehensive income. Designation at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination. Investments in equity instruments at FVTOCI are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognized in other OCI. The cumulative gain or loss is not reclassified to profit or loss on disposal of the instrument; instead, it is transferred to retained earnings.<br> <br><br> <br>The Company currently has no financial assets designated as FVTOCI.<br> <br><br> <br>Fair value through profit or loss (“FVTPL”)<br> <br><br> <br>By default, all other financial assets are measured subsequently at FVTPL, which includes amounts receivable from concentrate sales.

-19-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

Classification – financial liabilities <br><br> <br>Financial liabilities that are not contingent consideration of an acquirer in a business combination, held for trading or designated as at FVTPL, are measured at amortized cost using the effective interest method.<br> <br><br> <br>Financial liabilities at amortized cost include accounts payable, amounts due to related parties, term facility, equipment loans, and finance lease obligations.<br> <br><br> <br>Financial liabilities classified FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as FVTPL. Fair value changes on financial liabilities classified as FVTPL are recognized in the consolidated statements of operations. The Company has classified share purchase warrants with an exercise price in US dollars (see Note 16) as financial liabilities at FVTPL. As these warrants are exercised, the fair value of the recorded warrant liability on date of exercise is included in share capital along with the proceeds from the exercise. If these warrants expire, the related decrease in warrant liability is recognized in the consolidated statements of operations and comprehensive income (loss).<br> <br><br> <br>The Company has no hedging arrangements and does not apply hedge accounting.<br> <br><br> <br>Impairment<br> <br><br> <br>The Company recognizes a loss allowance for expected credit losses on its financial assets when necessary. The amount of expected credit losses is updated at each reporting period to reflect changes in credit risk since initial recognition of the respective financial instruments.<br> <br><br> <br>Share capital

a)	Common shares
	Common shares are classified as equity. Transaction costs directly attributable to the issuance of common shares and equity warrants are recognized as a deduction from equity, net of any tax effects. Transaction costs directly attributable to derivative warrants are charged to operations as a finance cost.

b)

Repurchase of share capital (treasury shares)

When share capital recognized as equity is repurchased, the amount of the consideration paid, which includes directly attributable costs, net of any tax effects, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares and are presented as a deduction from total equity. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is transferred to accumulated deficit.

Share-based payment transactions<br> <br><br> <br>The Company’s share option plan and restricted share unit (“RSU”) plan allows directors, officers, employees, and consultants to acquire common shares of the Company.<br> <br><br> <br><br> <br>The fair value of options granted is measured at fair value at the grant date based on the market value of the Company’s common shares on that date.<br> <br><br> <br>The fair value of equity-settled RSUs is measured at the grant date based on the market value of the Company’s common shares on that date, and each tranche is recognized using the graded vesting method over the period during which the RSUs vest. At each financial position reporting date, the amount recognized as an expense is adjusted to reflect the actual number of RSUs that are expected to vest.<br> <br><br> <br>All options and RSUs are recognized in the consolidated statements of operations and comprehensive income (loss) as an expense or in the consolidated statements of financial position as exploration and evaluation assets over the vesting period with a corresponding increase in equity reserves in the consolidated statements of financial position.

-20-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

Reclamation and other provisions<br> <br><br> <br>Provisions are recognized where a legal or constructive obligation has been incurred as a result of past events, it is probable that an outflow of resources embodying economic benefit will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made. If material, provisions are measured at the present value of the expenditures expected to be required to settle the obligation. The increase in any provision due to the passage of time is recognized as accretion expense.<br> <br><br> <br>The Company records the present value of estimated costs of legal and constructive obligations required to restore properties in the period in which the obligation is incurred. The nature of these restoration activities includes dismantling and removing structures, rehabilitating mines and restoration, reclamation, and re-vegetation of affected areas.<br> <br><br> <br>The fair value of the liability for a rehabilitation provision is recorded when it is incurred. When the liability is initially recognized, the present value of the estimated cost is capitalized by increasing the carrying amount of the related mining property or exploration and evaluation asset. Over time, the discounted liability is increased for the change in present value based on the discount rates that reflect current market assessments and the risks specific to the liability, which is accreted over time through periodic charges to income or loss. A revision in estimates or new disturbance will result in an adjustment to the provision with an offsetting adjustment to the mineral property or the exploration and evaluation asset. Additional disturbances, changes in costs, or changes in assumptions are recognized as adjustments to the corresponding assets and reclamation liabilities when they occur.<br> <br><br> <br>Earnings per share<br> <br><br> <br>The Company presents basic and diluted earnings per share data for its common shares, calculated by dividing the earnings attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the year. Diluted earnings per share is determined by adjusting the earnings attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all potentially dilutive common shares.<br> <br><br> <br>Income taxes<br> <br><br> <br>Income taxes in the years presented are comprised of current and deferred tax. Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized as equity.<br> <br><br> <br>Deferred tax is recognized using the statement of financial position asset and liability method, which provides for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax recognized is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the consolidated statement of financial position date. A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized.<br> <br><br> <br>Deferred tax assets and liabilities are not recognized if the temporary differences arise from the initial recognition of goodwill or an asset or liability in a transaction other than a business combination that affects neither accounting profit nor taxable profit.

-21-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

4.

RECENT ACCOUNTING PRONOUNCEMENTS

Application of new and revised accounting standards:<br> <br><br> <br>Interest Rate Benchmark Reform – Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)<br> <br><br> <br>The amendments in Interest Rate Benchmark Reform – Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) introduce a practical expedient for modifications required by the reform, clarify that hedge accounting is not discontinued solely because of the IBOR reform, and introduce disclosures that allow users to understand the nature and extent of risks arising from the IBOR reform to which the entity is exposed to and how the entity manages those risks as well as the entity’s progress in transitioning from IBORs to alternative benchmark rates, and how the entity is managing this transition.<br> <br><br> <br>The amendments were applied effective January 1, 2021, and did not have a material impact on the Company’s financial statements.<br> <br><br> <br>Future Changes in Accounting Policies Not Yet Effective as at December 31, 2021:<br> <br><br> <br>Property, Plant and Equipment — Proceeds before Intended Use (Amendments to IAS 16)<br> <br><br> <br>The amendments prohibit deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognizes the proceeds from selling such items, and the cost of producing those items, in profit or loss. The amendments are applied on or after the first annual reporting period beginning on or after January 1, 2022, with early application permitted. The amendments are applied retrospectively, but only to items of property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after the beginning of the earliest period presented in the financial statements in which the Company first applies the amendments. The Company will recognize the cumulative effect of initially applying the amendments as an adjustment to the opening balance of retained earnings at the beginning of that earliest period presented. This amendment will impact the Company’s future accounting for proceeds from mineral sales prior to reaching commercial production at levels intended by management, however there is no impact upon adoption on January 1, 2022.<br> <br><br> <br>Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)<br> <br><br> <br>The amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current. The amendments are applied on or after the first annual reporting period beginning on or after January 1, 2023, with early adoption permitted. This amendment is not expected to have a material impact on the Company’s financial statements.

-22-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

5.	DISPOSITION OF DISCONTINUED OPERATIONS – BRALORNE GOLD MINES LTD.
	On December 13, 2019, the Company completed the sale of its 100% wholly-owned subsidiary Bralorne Gold Mines Ltd. (“Bralorne”) to Talisker Resources Ltd. (“Talisker”). The sale was record in the fourth quarter of fiscal 2019 and includes the Bralorne Gold Mine and is part of the Company’s plan to focus on its core mining operations in Mexico.<br> <br><br> <br>The consideration included:

·	C$8.7 million (translated to $6,599) in cash

| · | The issuance of 12,580,000 common shares of Talisker, representing 9.9% on a pro-forma basis following the close of the transaction and subsequent financing by Talisker; |

| · | The issuance of 6,290,000 share purchase warrants exercisable at C$0.25 per share for a period of three years after the closing, subject to acceleration in the event the closing price of Talisker’s common shares is great than C$0.35 per share for 20 or more consecutive trading days at any time following April 14, 2020; |

The sale includes the Bralorne claims, as well as nine mineral claims covering approximately 2,114 hectares in the Lillooet Mining Division of British Columbia, known as the BRX Property.<br> <br><br> <br>The Company also received future consideration of a $2.5 million cash payment, contingent upon the commencement of commercial production at the Bralorne Mine, for which a fair value has been determined to be Nil at this time.<br> <br><br> <br>The Company recognized a loss on disposition, net of tax, calculated as follows:

Cash proceeds	$	6,599

| Talisker shares | | 2,243 | |

| Talisker warrants | | 716 | |

| Total proceeds | $ | 9,558 | |

| Net assets sold and derecognized: | | | |

| Cash | | 1,495 | |

| Other current assets | | 242 | |

| Exploration and evaluation assets | | 45,613 | |

| Plant and equipment | | 1,745 | |

| Other long-term assets | | 19 | |

| Current portion of finance lease obligations and equipment loans | | (175 | ) |

| Non-current portion of finance lease obligations and equipment loans | | (111 | ) |

| Site restoration obligation | | (10,828 | ) |

| Foreign currency translation adjustments | | (42 | ) |

| | | 37,958 | |

| Loss on disposition before selling costs | | (28,400 | ) |

| Selling costs | | (490 | ) |

| Loss on disposition, net | | (28,890 | ) |

-23-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

As a result of the sale, the comparative net income (loss) for the current period, as well as previous two years, have been reclassified from continuing operations to discontinued operations:

	2021		2020			2019

| Revenue from mining operations | $ | - | $ | - | | $ | - | |

| Cost of sales | | - | | - | | | - | |

| Mine operating income (loss) | | - | | - | | | - | | | Operating expenses (income) | | - | | - | | | 16 | |

| Accretion of reclamation provision | | - | | - | | | 217 | |

| Gain on sale of assets | | - | | - | | | 2 | |

| Other items | | - | | - | | | 1 | |

| Loss on disposition | | - | | 169 | | | 28,890 | |

| Net loss before income taxes | | - | | (169 | ) | | (29,126 | ) |

| Income taxes | | - | | - | | | - | |

| Net loss from discontinued operations and on disposal | $ | - | $ | (169 | ) | $ | (29,126 | ) |

The results of discontinued operations included in the consolidated statements of cash flows for the years ended December 31, 2020, 2019 and 2018, are as follows:

Cash generated by (used in):	2021		2020		2019
Cash flow used in operating activities	$	-	$	-	$	(19	)

| Cash flow used in financing activities | | - | | - | | (258 | ) |

| Cash flow used in investing activities | | - | | - | | (5,583 | ) |

| Net cash decrease from discontinued operations | $ | - | $ | - | $ | (5,860 | ) |

6.	TAXES RECOVERABLE
	The Company’s taxes recoverable consist of the Mexican I.V.A. (“VAT”) and income taxes recoverable and Canadian sales taxes (“GST/HST”) recoverable.

	December 31,<br> <br>2021		December 31,<br> <br>2020

| VAT recoverable | $ | 790 | $ | 2,328 |

| GST recoverable | | 26 | | 16 |

| Income taxes recoverable | | 2,548 | | 2,700 |

| | $ | 3,364 | $ | 5,044 |

-24-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

7.	INVENTORY

	December 31,<br> <br>2021		December 31,<br> <br>2020

| Process material stockpiles | $ | 1,083 | $ | 373 |

| Concentrate inventory | | 2,467 | | 64 |

| Materials and supplies | | 1,629 | | 1,222 |

| | $ | 5,179 | $ | 1,659 |

The amount of inventory recognized as an expense for the year ended December 31, 2021 totalled $7,282 (2020 – $15,832, 2019 – $32,016). See Note 17 for further details.

8.	LONG-TERM INVESTMENTS
	The Company classifies its long-term investments as designated at fair value through profit and loss under IFRS 9. Long-term investments are summarized as follows:

	Fair Value<br> <br>December 31,		Net Additions		Movements in foreign		Fair value adjustments			Fair Value<br> <br>December 31,

| | 2020 | | | | Exchange | | for the period | | | 2021 | |

| Talisker Resources Common Shares | $ | 4,176 | $ | - | $ | 21 | $ | (317 | ) | $ | 3,880 |

| Silver Wolf Exploration Ltd. Common Shares | | - | | 109 | | 2 | | (52 | ) | | 59 |

| | $ | 4,176 | $ | 109 | $ | 23 | $ | (369 | ) | $ | 3,939 |

On March 26, 2021, the Company received 131,718 common shares as part of the terms in the Option Agreement with Silver Wolf Exploration Ltd., as well as 300,000 share purchase warrants at an exercise price of C$0.20. On October 21, 2021 the company exercised the 300,000 share purchase warrants. Upon acquisition, the fair value of these common shares and share purchase warrants were recorded as “Option Income” as a credit to exploration and evaluation assets (see Note 9). Any subsequent revaluation under IFRS 9 at fair value through profit and loss will be recorded as a gain or loss on long-term investments.<br> <br><br> <br>See Note 9 for full details of the Option Agreement, and Note 21(d) for valuation methodology for the share purchase warrants.

-25-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

9.	EXPLORATION AND EVALUATION ASSETS
	The Company has accumulated the following acquisition, exploration and evaluation costs which are not subject to depletion:

	Durango,<br> <br>Mexico			British Columbia & Yukon, anada		Total
Balance, January 1, 2020	$	9,826		$	1	$	9,827
Costs incurred during 2020:

| Drilling and exploration | | 146 | | | - | | 146 | |

| Assessments and taxes | | 83 | | | - | | 83 | |

| Effect of movements in exchange rates | | (4 | ) | | - | | (4 | ) | | Balance, December 31, 2020 | $ | 10,051 | | $ | 1 | $ | 10,052 | |

| Costs incurred during 2021: | | | | | | | | |

| Drilling and exploration | | 1,047 | | | - | | 1,047 | |

| Assessments and taxes | | 68 | | | - | | 698 | |

| Effect of movements in exchange rates | | 3 | | | - | | 3 | |

| Option income | | (117 | ) | | - | | (117 | ) | | Balance, December 31, 2021 | $ | 11,052 | | $ | 1 | $ | 11,053 | |

Additional information on the Company’s exploration and evaluation properties by region is as follows:
(a)	Durango, Mexico
	The Company’s subsidiary Avino Mexico owns 42 mineral claims and leases four mineral claims in the state of Durango, Mexico. The Company’s mineral claims in Mexico are divided into the following four groups:

(I)

Avino Mine area property

The Avino Mine area property is situated around the towns of Panuco de Coronado and San Jose de Avino and surrounding the historic Avino mine site. There are four exploration concessions covering 154.4 hectares, 24 exploitation concessions covering 1,284.7 hectares, and one leased exploitation concession covering 98.83 hectares. Within the Avino Mine site area is the Company’s San Gonzalo Mine, which achieved production at levels intended by management as of October 1, 2012, and on this date accumulated exploration and evaluation costs were transferred to mining properties.

-26-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

(ii)

Gomez Palacio/Ana Maria property

The Ana Maria property is located near the town of Gomez Palacio, and consists of nine exploration concessions covering 2,549 hectares, and is also known as the Ana Maria property.<br> <br><br> <br>Option Agreement – Silver Wolf Exploration Ltd. (formerly Gray Rock Resources Ltd.) (“Silver Wolf”)<br> <br><br> <br>On March 11, 2021, the Company was informed that Silver Wolf received TSX Venture Exchange approval on the previously-announced entrance into an option agreement to grant Silver Wolf the exclusive right to acquire a 100% interest in the Ana Maria and El Laberinto properties in Mexico (the “Option Agreement”). In exchange, Avino received Silver Wolf share purchase warrants to acquire 300,000 common shares of Silver Wolf at an exercise price of C$0.20 per share for a period of 36 months from the date of the TSX Venture Exchange’s final acceptance of the Option Agreement  (the “Approval Date”).  In order to exercise the option, Silver Wolf will:

1.	Issue to Avino a total of C$600 in cash or common shares of Silver Wolf as follows:

a.	C$50 in common shares of Silver Wolf within 30 days of the Approval Date (received on March 26, 2021 – see Note 6 for details);

| b. | A further C$50 in cash or shares of Silver Wolf at Avino’s discretion on or before the first anniversary of the Approval Date; |

| c. | A further C$100 in cash or shares of Silver Wolf at Avino’s discretion on or before the second anniversary of the Approval Date; |

| d. | A further C$200 in cash or shares of Silver Wolf at Avino’s discretion on or before the third anniversary of the Approval Date; and |

| e. | A further C$200 in cash or shares of Silver Wolf at Avino’s discretion on or before the fourth anniversary of the Approval Date; and |

2.	Incur a total of C$750 in exploration expenditures on the properties, as follows:

a.	C$50 on or before the first anniversary of the Approval Date;

| b. | A further C$100 on or before the second anniversary of the Approval Date; and |

| c. | A further C$600 on or before the fourth anniversary of the Approval Date. |

	Under the Option Agreement, the parties intend that the first two year’s payments (C$200 in cash or shares), and first C$150 in exploration work will be firm commitments by Silver Wolf. All share issuances will be based on the average volume weighted trading price of Silver Wolf’s shares on the TSX Venture Exchange for the ten (10) trading days immediately preceding the date of issuance of the shares, and the shares will be subject to resale restrictions under applicable securities legislation for 4 months and a day from their date of issue.<br> <br><br> <br>The Option Agreement between the Company and Silver Wolf is considered a related party transaction as the two companies have directors in common.
(iii)	Santiago Papasquiaro property
	The Santiago Papasquiaro property is located near the village of Santiago Papasquiaro, and consists of four exploration concessions covering 2,552.6 hectares and one exploitation concession covering 602.9 hectares.

-27-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

(iv)

Unification La Platosa properties

The Unification La Platosa properties, consisting of three leased concessions in addition to the leased concession described in note (i) above, are situated within the Avino Mine area property near the towns of Panuco de Coronado and San Jose de Avino and surrounding the Avino Mine.<br> <br><br> <br>In February 2012, the Company’s wholly-owned Mexican subsidiary entered into a new agreement with Minerales de Avino, S.A. de C.V. (“Minerales”) whereby Minerales has indirectly granted to the Company the exclusive right to explore and mine the La Platosa property known as the “ET zone”. The ET zone includes the Avino Mine, where production at levels intended by management was achieved on July 1, 2015.<br> <br><br> <br>Under the agreement, the Company has obtained the exclusive right to explore and mine the property for an initial period of 15 years, with the option to extend the agreement for another 5 years. In consideration of the granting of these rights, the Company issued 135,189 common shares with a fair value of C$250 during the year ended December 31, 2012.<br> <br><br> <br>The Company has agreed to pay to Minerales a royalty equal to 3.5% of net smelter returns (“NSR”). In addition, after the start of production, if the minimum monthly processing rate of the mine facilities is less than 15,000 tonnes, then the Company must pay to Minerales a minimum royalty equal to the applicable NSR royalty based on the processing at a monthly rate of 15,000 tonnes.<br> <br><br> <br>Minerales has also granted to the Company the exclusive right to purchase a 100% interest in the property at any time during the term of the agreement (or any renewal thereof), upon payment of $8 million within 15 days of the Company’s notice of election to acquire the property. The purchase would be subject to a separate purchase agreement for the legal transfer of the property.

(b)	British Columbia, Canada

(i)	Minto and Olympic-Kelvin properties
	The Company’s mineral claims in British Columbia encompass two additional properties, Minto and Olympic-Kelvin, each of which consists of 100% owned Crown-granted mineral claims located in the Lillooet Mining Division.

(c)	Yukon, Canada
	The Company has a 100% interest in 14 quartz leases located in the Mayo Mining Division of Yukon, Canada, which collectively comprise the Eagle property.

10.

NON-CONTROLLING INTEREST

At December 31, 2021, the Company had an effective 99.67% (December 31, 2020 - 99.67%) interest in its subsidiary Avino Mexico and the remaining 0.33% (December 31, 2020 - 0.33%) interest represents a non-controlling interest. The accumulated deficit and current period income attributable to the non-controlling interest are insignificant and accordingly have not been recognized in the consolidated financial statements.

-28-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

11.	PLANT, EQUIPMENT AND MINING PROPERTIES

	Mining properties		Office equipment, furniture, and fixtures	Computer equipment		Mine machinery and transportation equipment	Mill machinery and processing equipment		Buildings and construction in process	Total

| | | | | | | | | | | |

| COST | | | | | | | | | | |

| Balance at January 1, 2020 | | | | | | | | | | |

| Additions / Transfers | | ) | | | | | | ) | | |

| Effect of movements in exchange rates | | | | | | | | | | |

| Balance at December 31, 2020 | | | | | | | | | | |

| Additions / Transfers | | ) | | | ) | | | | | |

| Effect of movements in exchange rates | | | | | | | | | | |

| Balance at December 31, 2021 | | | | | | | | | | | | ACCUMULATED DEPLETION AND DEPRECIATION | | | | | | | | | | |

| Balance at January 1, 2020 | | | | | | | | | | |

| Additions / Transfers | | | | | | | | | | |

| Effect of movements in exchange rates | | | | | | | | | | |

| Balance at December 31, 2020 | | | | | | | | | | |

| Additions / Transfers | | | | | | | | | | |

| Effect of movements in exchange rates | | | | | | | | | | |

| Balance at December 31, 2021 | | | | | | | | | | | | NET BOOK VALUE | | | | | | | | | | |

| At December 31, 2021 | | | | | | | | | | |

| At December 31, 2020 | | | | | | | | | | |

| At January 1, 2020 | | | | | | | | | | |

All values are in US Dollars.

-29-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

Included in Buildings above are assets under construction of $6,348 as at December 31, 2021 (2020 - $5,327) on which no depreciation was charged in the periods then ended. Once the assets are put into service, they will be transferred to the appropriate class of plant, equipment and mining properties.<br> <br><br> <br>As at December 31, 2021, plant, equipment and mining properties included a net carrying amount of $Nil (2020 - $442) for mining equipment under equipment loan, and $1,306 (2020 - $1,087) for mining equipment and right of use assets under finance lease.

12.	RELATED PARTY TRANSACTIONS AND BALANCES
	All related party transactions are recorded at the exchange amount which is the amount agreed to by the Company and the related party.

(a)	Key management personnel
	The Company has identified its directors and certain senior officers as its key management personnel. The compensation costs for key management personnel for the years ended December 31, 2021, 2020 and 2019 is as follows:

	2021		2020		2019

| Salaries, benefits, and consulting fees | $ | 1,021 | $ | 757 | $ | 723 |

| Share-based payments | | 1,188 | | 1,468 | | 659 |

| | $ | 2,209 | $ | 2,225 | $ | 1,382 |

(b)	Amounts due to/from related parties
	In the normal course of operations the Company transacts with companies related to Avino’s directors or officers. All amounts payable and receivable are non-interest bearing, unsecured and due on demand. The following table summarizes the amounts due to / (from) related parties:

	December 31,<br> <br>2021		December 31,<br> <br>2020

| Oniva International Services Corp. | $ | 107 | $ | 106 |

| Directors | | 56 | | 48 |

| | $ | 163 | $ | 154 |

	For services provided to the Company as President and Chief Executive Officer, the Company pays Intermark Capital Corporation (“ICC”), a company controlled by David Wolfin, the Company’s president and CEO and also a director, for consulting services. For the year ended December 31, 2021, 2020 and 2019, the Company paid $239, $224 and $226, respectively, to ICC.
(c)	Other related party transactions
	The Company has a cost sharing agreement with Oniva International Services Corp. (“Oniva”) for office and administration services. Pursuant to the cost sharing agreement, the Company will reimburse Oniva for the Company’s percentage of overhead and corporate expenses and for out-of-pocket expenses incurred on behalf of the Company. David Wolfin, President & CEO, and a director of the Company, is the sole owner of Oniva. The cost sharing agreement may be terminated with one-month notice by either party without penalty.

-30-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

The transactions with Oniva during the year ended December 31, 2021, 2020 and 2019 are summarized below:

	2021		2020		2019

| Salaries and benefits | $ | 766 | $ | 636 | $ | 665 |

| Office and miscellaneous | | 403 | | 290 | | 322 |

| Exploration and evaluation assets | | - | | - | | 206 |

| | $ | 1,169 | $ | 926 | $ | 1,193 |

13.

TERM FACILITY

In July 2015, the Company entered into a ten million dollar term facility with Samsung C&T U.K. Limited (“Samsung”). Interest is charged on the facility at a rate of US dollar LIBOR (3 month) plus 4.75%. The agreement was later amended in 2018 to extend the repayment period and modify the monthly payments. Other material terms of the facility remained unchanged. The Company paid the remaining balance in monthly instalments of $278 ending September 2021. The Company is committed to selling Avino Mine concentrate on an exclusive basis to Samsung until December 31, 2024.<br> <br><br> <br>The facility is secured by the concentrates produced under the agreement and by 33% of the common shares of the Company’s wholly-owned subsidiary Compañía Minera Mexicana de Avino, S.A. de C.V.. The facility with Samsung relates to the sale of concentrates produced from the Avino Mine only.<br> <br><br> <br>The continuity of the term facility with Samsung for the year ended December 31, 2021, and the year ended December 31, 2020, is as follows:

	December 31,			December 31,

| | 2021 | | | 2020 | | |

| Balance at beginning of the period | $ | 2,513 | | $ | 5,897 | |

| Repayments | | (2,500 | ) | | (3,333 | ) |

| Unwinding of fair value adjustment | | (13 | ) | | (51 | ) |

| Balance at end of the period | | - | | | 2,513 | |

| Less: Current portion | | - | | | (2,513 | ) |

| Non-current portion | $ | - | | $ | - | |

-31-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

14.

WARRANT LIABILITY

The Company’s warrant liability arises as a result of the issuance of warrants exercisable in US dollars. As the denomination is different from the Canadian dollar functional currency of the entity issuing the underlying shares, the Company recognizes a derivative liability for these warrants and re-measures the liability at the end of each reporting period using the Black-Scholes model. Changes in respect of the Company’s warrant liability are as follows:

	December 31,<br> <br>2021			December 31,<br> <br>2020

| Balance at beginning of the period | $ | 2,295 | | $ | 1,579 |

| Fair value adjustment | | (1,581 | ) | | 650 |

| Effect of movement in exchange rates | | 27 | | | 66 |

| Balance at end of the period | $ | 741 | | $ | 2,295 |

Continuity of warrants during the periods is as follows:

	Underlying<br> <br>Shares			Weighted Average Exercise Price

| Warrants outstanding and exercisable, January 1, 2020 | | 7,639,968 | | |

| Exercised | | (4,195,072 | ) | |

| Exercised | | (464,122 | ) | C0.85 |

| Warrants outstanding and exercisable, December 31, 2020 | | 2,980,774 | | |

| Exercised | | (1,030,362 | ) | |

| Warrants outstanding and exercisable, December 31, 2021 | | 1,950,412 | | |

All values are in US Dollars.

	All Warrants<br> <br>Outstanding and Exercisable

| Expiry Date | Exercise Price<br> <br>per Share | | December 31,<br> <br>2021 | | December 31,<br> <br>2020 | |

| September 25, 2023 | $ | 0.80 | | 1,950,412 | | 2,980,774 |

| | | | | 1,950,412 | | 2,980,774 |

As at December 31, 2021, the weighted average remaining contractual life of warrants outstanding was 1.73 years (December 31, 2020 – 2.73 years).<br> <br><br> <br>Valuation of the warrant liability requires the use of highly subjective estimates and assumptions including the expected stock price volatility. The expected volatility used in valuing warrants is based on volatility observed in historical periods. Changes in the underlying assumptions can materially affect the fair value estimates. The fair value of the warrant liability was calculated using the Black-Scholes model with the following weighted average assumptions and resulting fair values:

	December 31,<br> <br>2021			December 31,<br> <br>2020

| Weighted average assumptions: | | | | | | |

| Risk-free interest rate | | 0.91 | % | | 0.20 | % |

| Expected dividend yield | | 0 | % | | 0 | % |

| Expected warrant life (years) | | 1.73 | | | 2.73 | |

| Expected stock price volatility | | 83.13 | % | | 73.93 | % |

| Weighted average fair value | $ | 0.38 | | $ | 0.77 | |

During the year ended December 31, 2021, the Company recorded a realized loss on the exercise of warrants of $1,106 as result of the exercise of 1,030,362 warrants for the issuance of 1,030,362 common shares.

---

-32-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

15.

RECLAMATION PROVISION

Management’s estimate of the reclamation provision at December 31, 2021, is $726 (December 31, 2020 – $808), and the undiscounted value of the obligation is $1,252 (December 31, 2020 – $1,275).<br> <br><br> <br>The present value of the obligation was calculated using a risk-free interest rate of 7.78% (December 31, 2020 – 5.96%) and an inflation rate of 7.36% (December 31, 2020 – 3.15%). Reclamation activities are estimated to begin in 2023 for the San Gonzalo Mine and in 2041 for the Avino Mine.<br> <br><br> <br>A reconciliation of the changes in the Company’s reclamation provision for the year ended December 31, 2021, and the year ended December 31, 2020, is as follows:

	December 31,<br> <br>2021			December 31,<br> <br>2020
Balance at beginning of the period	$	808		$	1,524

| Changes in estimates | | (105 | ) | | (737 | ) |

| Unwinding of discount related to continuing operations | | 47 | | | 99 | |

| Effect of movements in exchange rates | | (24 | ) | | (78 | ) |

| Balance at end of the period | $ | 726 | | $ | 808 | |

16.	SHARE CAPITAL AND SHARE-BASED PAYMENTS

(a)	Authorized: Unlimited common shares without par value.
(b)	Issued:

(i)

During the year ended December 31, 2021, the Company issued 10,050,000 common shares in an at-the-market offering under prospectus supplement for gross proceeds of $19,020. The Company paid a 2.75% cash commission of $523 on gross proceeds, for net proceeds of $18,497, and incurred additional $400 in issuance costs during the period.<br> <br><br> <br>During the year ended December 31, 2021, the Company issued 1,030,362 common shares following the exercise of 1,030,362 warrants. As a result, $1,911 was recorded to share capital, representing cash proceeds of $824, fair value of the warrants on the date of exercise (see Note 14 for valuation methodology of $US denominated warrants) of $1,106, and movements in foreign exchange of $(19).<br> <br><br> <br>During the year ended December 31, 2021, the Company issued 264,000 common shares following the exercise of 264,000 options. As a result, $364 was recorded to share capital, representing cash proceeds of $237 and the fair value upon issuance of $127.<br> <br><br> <br>During the year ended December 31, 2021, the Company issued 1,330,167 common shares upon exercise of RSUs. As a result, $1,278 was recorded to share capital.

(ii)

During the year ended December 31, 2020, the Company issued 6,730,054 common shares in an at-the-market offering under prospectus supplement for gross proceeds of $4,940. The Company paid a 3% cash commission of $148 on gross proceeds, for net proceeds of $4,792, and incurred an additional $106 in issuance costs during the period.<br> <br><br> <br>During the year ended December 31, 2020, the Company issued 4,195,072 common shares following the exercise of 4,195,072 warrants. As a result, $6,112 was recorded to share capital, representing cash proceeds of $3,356, fair value of the warrants on the date of exercise (see Note 14 for valuation methodology for $US denominated warrants) of $2,733, and movements in foreign exchange of $69.

-33-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

During the year ended December 31, 2020, the Company also issued 464,122 common shares following the exercise of 464,122 broker warrants. As a result, $416 was recorded to share capital, representing cash proceeds of $300 and the amount attributed to the warrants upon issuance in 2019, representing $116.<br> <br><br> <br>During the year ended December 31, 2020, the Company issued 675,145 common shares as settlement of accrued advisory services provided by Cantor Fitzgerald Canada Corporate (“Cantor”) for the completion of the sale of Bralorne. The value of these shares was accrued at December 31, 2019; however, the shares were not issued until January 2020.<br> <br><br> <br>During the year ended December 31, 2020, the Company issued 48,000 common shares following the exercise of 48,000 options. As a result, $43 was recorded to share capital, representing cash proceeds of $28 and the fair value upon issuance of $15.<br> <br><br> <br>During the year ended December 31, 2020, the Company issued 863,901 common shares upon exercise of RSUs. As a result, $650 was recorded to share capital.

(c)

Stock options:

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

	Underlying<br> <br>Shares			Weighted Average Exercise Price (C)
Stock options outstanding, January 1, 2020		2,638,500

| Granted | | 1,700,000 | | |

| Exercised | | (48,000 | ) | |

| Cancelled / Forfeited | | (807,500 | ) | |

| Stock options outstanding, December 31, 2020 | | 3,483,000 | | |

| Exercised | | (264,000 | ) | |

| Expired | | (360,000 | ) | |

| Cancelled / Forfeited | | (20,000 | ) | |

| Stock options outstanding, December 31, 2021 | | 2,839,000 | | |

| Stock options exercisable, December 31, 2021 | | 2,839,000 | | |

All values are in US Dollars.

-34-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

The following table summarizes information about the stock options outstanding and exercisable at December 31, 2021:

		Outstanding				Exercisable

| Expiry Date | Price (C) | Number of Options | | Weighted Average Remaining Contractual Life (Years) | | Number of Options | | Weighted Average Remaining Contractual Life (Years) | |

| September 20, 2022 | | | 880,000 | | 0.72 | | 880,000 | | 0.72 |

| August 28, 2023 | | | 105,000 | | 1.66 | | 105,000 | | 1.66 |

| August 21, 2024 | | | 174,000 | | 2.64 | | 174,000 | | 2.64 |

| August 4, 2025 | | | 1,680,000 | | 3.59 | | 1,680,000 | | 3.59 |

| | | | 2,839,000 | | 2.57 | | 2,839,000 | | 2.57 |

All values are in US Dollars.

	During the year ended December 31, 2021, the Company charged $362 (year ended December 31, 2020 - $777) to operations as share-based payments for the fair value of stock options granted.
(d)	Restricted Share Units:
	On April 19, 2018, the Company’s Restricted Share Unit (“RSU”) Plan was approved by its shareholders. The RSU Plan is administered by the Compensation Committee under the supervision of the Board of Directors as compensation to officers, directors, consultants, and employees. The Compensation Committee determines the terms and conditions upon which a grant is made, including any performance criteria or vesting period.<br> <br><br> <br>Upon vesting, each RSU entitles the participant to receive one common share, provided that the participant is continuously employed with or providing services to the Company. RSUs track the value of the underlying common shares, but do not entitle the recipient to the underlying common shares until such RSUs vest, nor do they entitle a holder to exercise voting rights or any other rights attached to ownership or control of the common shares, until the RSU vests and the RSU participant receives common shares.<br> <br><br> <br>Continuity of RSUs is as follows:

	Underlying<br> <br>Shares			Weighted Average Price (C)
RSUs outstanding, January 1, 2020		2,372,875

| Granted | | 1,481,000 | | |

| Exercised | | (863,901 | ) | |

| Cancelled / Forfeited | | (115,974 | ) | |

| RSUs outstanding, December 31, 2020 | | 2,874,000 | | |

| Exercised | | (1,330,167 | ) | |

| Cancelled / Forfeited | | (104,356 | ) | |

| RSUs outstanding, December 31, 2021 | | 1,439,477 | | |

All values are in US Dollars.

The following table summarizes information about the RSUs outstanding at December 31, 2021:

Issuance Date	Price (C)	Number of RSUs Outstanding

| August 21, 2019 | | | 539,733 |

| August 4, 2020 | | | 899,744 |

| | | | 1,439,477 |

All values are in US Dollars.

-35-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

	During the year ended December 31, 2021, no RSUs (year ended December 31, 2020 – 1,481,000) were granted. For the RSUs issued in the year ended December 31, 2020, the weighted average fair value at the measurement date was C$1.64, based on the TSX market price of the Company’s shares on the date the RSUs were granted.<br> <br><br> <br>During the year ended December 31, 2021, the Company charged $1,107 (December 31, 2020 - $1,080) to operations as share-based payments for the fair value of the RSUs vested. The fair value of the RSUs is recognized over the vesting period with reference to vesting conditions and the estimated RSUs expected to vest.
(e)	Earnings (loss) per share:
	The calculations for basic earnings (loss) per share and diluted earnings (loss) per share are as follows:

	2021			2020			2019

| Net loss from continuing operations for the period | $ | (2,057 | ) | $ | (7,482 | ) | $ | (2,335 | ) |

| Net loss for the period | $ | (2,057 | ) | $ | (7,651 | ) | $ | (31,461 | ) |

| Basic weighted average number of shares outstanding | | 100,161,357 | | | 83,180,069 | | | 69,980,178 | |

| Effect of dilutive share options, warrants, and RSUs (‘000) | | - | | | - | | | - | |

| Diluted weighted average number of shares outstanding | | 100,161,357 | | | 83,180,069 | | | 69,980,178 | |

| Basic loss from continuing operations per share | $ | (0.02 | ) | $ | (0.09 | ) | $ | (0.03 | ) |

| Diluted loss from continuing operations per share | $ | (0.02 | ) | $ | (0.09 | ) | $ | (0.03 | ) |

| Basic loss per share | $ | (0.02 | ) | $ | (0.09 | ) | $ | (0.45 | ) |

| Diluted loss per share | $ | (0.02 | ) | $ | (0.09 | ) | $ | (0.45 | ) |

17.	REVENUE AND COST OF SALES
	The Company’s revenues for the year ended December 31, 2021, 2020 and 2019 are all attributable to Mexico, from shipments of concentrate from the Avino Mine, and processing of Historical Above Ground Stockpiles.

	2021		2020		2019

| Concentrate sales | $ | 11,208 | $ | 15,304 | $ | 31,417 |

| Provisional pricing adjustments | | 20 | | 718 | | 329 |

| | $ | 11,228 | $ | 16,022 | $ | 31,746 |

Cost of sales consists of changes in inventories, direct costs including personnel costs, mine site costs, energy costs (principally diesel fuel and electricity), maintenance and repair costs, operating supplies, external services, third party transport fees, depreciation and depletion, and other expenses for the periods. Direct costs include the costs of extracting co-products. Stand-by costs consist of care and maintenance costs incurred during the work stoppages at the Avino Mine during the year ended December 31, 2021 and 2020.

-36-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

Cost of sales is based on the weighted average cost of inventory sold for the periods and consists of the following:

	2021		2020		2019

| Production costs | $ | 4,905 | $ | 11,443 | $ | 27,949 |

| Stand-by costs | | 800 | | 2,394 | | - |

| Inventory net realizable adjustment | | - | | - | | 387 |

| Depreciation and depletion | | 1,976 | | 1,995 | | 3,680 |

| | $ | 7,681 | $ | 15,832 | $ | 32,016 |

18.	GENERAL AND ADMINISTRATIVE EXPENSES
	General and administrative expenses on the consolidated statements of operations consist of the following:

	2021		2020		2019

| Salaries and benefits | $ | 1,277 | $ | 1,361 | $ | 1,347 |

| Office and miscellaneous | | 647 | | 117 | | 286 |

| Management and consulting fees | | 451 | | 406 | | 461 |

| Professional fees | | 402 | | 380 | | 470 |

| Investor relations | | 227 | | 166 | | 171 |

| Directors fees | | 182 | | 171 | | 162 |

| Regulatory and compliance fees | | 170 | | 139 | | 143 |

| Depreciation | | 140 | | 116 | | 43 |

| Travel and promotion | | 70 | | 46 | | 110 |

| | $ | 3,566 | $ | 2,902 | $ | 3,193 |

19.

COMMITMENTS

The Company has a cost sharing agreement to reimburse Oniva for a percentage of its overhead expenses, to reimburse 100% of its out-of-pocket expenses incurred on behalf of the Company, and to pay a percentage fee based on Oniva’s total overhead and corporate expenses. The agreement may be terminated with one-month notice by either party. Transactions and balances with Oniva are disclosed in Note 12.<br> <br><br> <br>The Company and its subsidiaries have various operating lease agreements for their office premises, use of land, and equipment. Commitments in respect of these lease agreements are as follows:

	December 31,<br> <br>2021		December 31,<br> <br>2020

| Not later than one year | $ | 96 | $ | 20 |

| Later than one year and not later than five years | | 330 | | 14 |

| Later than five years | | 462 | | 3 |

| | $ | 888 | $ | 37 |

Office lease payments recognized as an expense during the year ended December 31, 2021, totalled $16 (December 31, 2020 - $40).

-37-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

20.	SUPPLEMENTARY CASH FLOW INFORMATION

	2021			2020			2019

| Net change in non-cash working capital items: | | | | | | | | | |

| Deferred revenues | $ | - | | $ | - | | $ | (573 | ) |

| Accounts payable and accrued liabilities | | 1,240 | | | (2,877 | ) | | (941 | ) |

| Prepaid expenses and other assets | | (203 | ) | | (157 | ) | | 287 | |

| Amounts receivable | | (680 | ) | | 1,211 | | | 2,615 | |

| Taxes payable | | 25 | | | (39 | ) | | (121 | ) |

| Amounts due to related parties | | 8 | | | 1 | | | 6 | |

| Taxes recoverable | | 1,727 | | | 440 | | | (193 | ) |

| Other liabilities | | - | | | (178 | ) | | (100 | ) |

| Inventory | | (3,664 | ) | | 4,150 | | | 3,182 | |

| | $ | (1,547 | ) | $ | 2,551 | | $ | 4,162 | |

---

	2020		2019		2018

| Interest paid | $ | 92 | $ | 264 | $ | 618 |

| Taxes paid | $ | 589 | $ | 279 | $ | 2,373 |

| Equipment acquired under finance leases and equipment loans | $ | 1,058 | $ | - | $ | 122 |

21.

FINANCIAL INSTRUMENTS

The fair values of the Company’s amounts due to related parties and accounts payable approximate their carrying values because of the short-term nature of these instruments. Cash, amounts receivable, long-term investments, and warrant liability are recorded at fair value. The carrying amounts of the Company’s term facility, equipment loans, and finance lease obligations are a reasonable approximation of their fair values based on current market rates for similar financial instruments.<br> <br><br> <br>The Company’s financial instruments are exposed to certain financial risks, including credit risk, liquidity risk, and market risk.

(a)

Credit Risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Company has exposure to credit risk through its cash, long-term investments and amounts receivable. The Company manages credit risk, in respect of cash and short-term investments, by maintaining the majority of cash and short-term investments at highly rated financial institutions.<br> <br><br> <br>The Company is exposed to a significant concentration of credit risk with respect to its trade accounts receivable balance because all of its concentrate sales are with two (December 31, 2020 – three) counterparty (see Note 23). However, the Company has not recorded any allowance against its trade receivables because to-date all balances owed have been settled in full when due (typically within 60 days of submission) and because of the highly-rated nature of the counterparties.<br> <br><br> <br>The Company’s maximum exposure to credit risk at the end of any period is equal to the carrying amount of these financial assets as recorded in the audited consolidated statement of financial position. At December 31, 2021, no amounts were held as collateral.

-38-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

(b)

Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in satisfying financial obligations as they become due. The Company manages its liquidity risk by forecasting cash flows required by its operating, investing and financing activities. The Company had cash at December 31, 2021, in the amount of $24,765 and working capital of $31,635 in order to meet short-term business requirements. Accounts payable have contractual maturities of approximately 30 to 90 days, or are due on demand and are subject to normal trade terms. The current portions of term facility, equipment loans, and finance lease obligations are due within 12 months of the consolidated statement of financial position date. Amounts due to related parties are without stated terms of interest or repayment.<br> <br><br> <br>The maturity profiles of the Company’s contractual obligations and commitments as at December 31, 2021, are summarized as follows:

	Total		Less Than<br> <br>1 Year		1-5 years		More Than 5 Years

| Accounts payable and accrued liabilities | $ | 3,260 | $ | 3,260 | $ | - | $ | - |

| Amounts due to related parties | | 163 | | 163 | | - | | - |

| Minimum rental and lease payments | | 889 | | 96 | | 331 | | 462 |

| Finance lease obligations | | 1,152 | | 438 | | 714 | | - |

| Total | $ | 5,464 | $ | 3,957 | $ | 1,045 | $ | 462 |

---

(c)	Market Risk
	Market risk consists of interest rate risk, foreign currency risk and price risk. These are discussed further below.<br> <br><br> <br>Interest Rate Risk<br> <br><br> <br>Interest rate risk consists of two components:

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

-39-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

In management’s opinion, the Company is exposed to interest rate risk primarily on its outstanding term facility, as the interest rate is subject to floating rates of interest. A 10% change in the interest rate would not result in a material impact on the Company’s operations.<br> <br><br> <br>Foreign Currency Risk<br> <br><br> <br>Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The Company is exposed to foreign currency risk to the extent that the following monetary assets and liabilities are denominated in Mexican pesos and Canadian dollars:

	December 31, 2021						December 31, 2020

| | MXN | | | CDN | | | MXN | | | CDN | | |

| Cash | $ | 3,576 | | $ | 1,450 | | $ | 36,896 | | $ | 2,831 | |

| Long-term investments | | - | | | 4,976 | | | - | | | 5,317 | |

| Reclamation bonds | | - | | | 6 | | | - | | | 6 | |

| Amounts receivable | | - | | | 33 | | | - | | | 20 | |

| Accounts payable and accrued liabilities | | (57,604 | ) | | (211 | ) | | (22,972 | ) | | (157 | ) |

| Due to related parties | | - | | | (206 | ) | | - | | | (196 | ) |

| Finance lease obligations | | (1 | ) | | (394 | ) | | (1,543 | ) | | (448 | ) |

| Net exposure | | (54,029 | ) | | 5,654 | | | 12,381 | | | 7,373 | |

| US dollar equivalent | $ | (2,363 | ) | $ | (4,054 | ) | $ | 620 | | $ | 5,791 | |

Based on the net US dollar denominated asset and liability exposures as at December 31, 2021, a 10% fluctuation in the US/Mexican and Canadian/US exchange rates would impact the Company’s earnings for the year ended December 31, 2021, by approximately $143 (year ended December 31, 2020 - $589). The Company has not entered into any foreign currency contracts to mitigate this risk.<br> <br><br> <br>Price Risk<br> <br><br> <br>Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices, other than those arising from interest rate risk or foreign currency risk.<br> <br><br> <br>The Company is exposed to price risk with respect to its amounts receivable, as certain trade accounts receivable are recorded based on provisional terms that are subsequently adjusted according to quoted metal prices at the date of final settlement. Quoted metal prices are affected by numerous factors beyond the Company’s control and are subject to volatility, and the Company does not employ hedging strategies to limit its exposure to price risk. At December 31, 2021, based on outstanding accounts receivable that were subject to pricing adjustments, a 10% change in metals prices would have an impact on net earnings (loss) of $26 (December 31, 2020 - $2).<br> <br>The Company is exposed to price risk with respect to its long-term investments, as these investments are carried at fair value based on quoted market prices. Changes in market prices result in gains or losses being recognized in net income (loss). At December 31, 2021, a 10% change in market prices would have an impact on net earnings (loss) of approximately $330 (December 31, 2020 - $418).<br> <br>The Company’s profitability and ability to raise capital to fund exploration, evaluation and production activities is subject to risks associated with fluctuations in mineral prices. Management closely monitors commodity prices, individual equity movements, and the stock market to determine the appropriate course of action to be taken by the Company.

-40-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

(d)

Classification of Financial Instruments

IFRS 7 Financial Instruments: Disclosures establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value as follows:<br> <br><br> <br>Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;<br> <br>Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and<br> <br>Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs).<br> <br><br> <br>The following table sets forth the Company’s financial assets and financial liabilities measured at fair value on a recurring basis by level within the fair value hierarchy as at December 31, 2021:

	Level 1		Level 2		Level 3

| Financial assets | | | | | | | |

| Cash | $ | 24,765 | $ | - | $ | - | |

| Amounts receivable | | - | | 1,208 | | - | |

| Long-term investments | | 3,939 | | - | | - | |

| Total financial assets | $ | 28,704 | $ | 1,208 | $ | - | |

| Financial liabilities | | | | | | | |

| Warrant liability | | - | | - | | (741 | ) |

| Total financial liabilities | $ | - | $ | - | $ | (741 | ) |

The Company uses Black-Scholes model to measure its Level 3 financial instruments. As at December 31, 2021, the Company’s Level 3 financial instruments consisted of the warrant liability.<br> <br><br> <br>For the Company’s warrant liability valuation and fair value adjustments during the years ended December 31, 2021 and 2020, see Note 14 of the consolidated financial statements.

-41-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

22.

CAPITAL MANAGEMENT

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue the exploration and expansion of its properties and to maintain a flexible capital structure for its projects for the benefit of its stakeholders. In the management of capital, the Company includes equity (comprising of all issued share capital, equity reserves, retained earnings or accumulated deficit, and other comprehensive income (loss)), the term facility, equipment loan obligations, and finance lease, are listed as follows:

	December 31,		December 31,

| | 2021 | | 2020 | |

| Equity | $ | 78,507 | $ | 59,008 |

| Term Facility | | - | | 2,513 |

| Finance Lease Obligations | | 1,069 | | 486 |

| Equipment Loans | | - | | 72 |

| | $ | 79,576 | $ | 62,079 |

The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust its capital structure, the Company may attempt to incur new debt or issue new shares. Management reviews the Company’s capital structure on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. At December 31, 2021, the Company expects its capital resources and projected future cash flows from operations to support its normal operating requirements on an ongoing basis, and planned development and exploration of its mineral properties and other expansionary plans. At December 31, 2021, there was no externally imposed capital requirement to which the Company was subject and with which the Company did not comply.

23.	SEGMENTED INFORMATION
	The Company’s revenues for the year ended December 31, 2021, of $11,228 (2020 - $16,022, 2019 - $3,746) are all attributable to Mexico, from shipments of concentrate produced by the Avino Mine and processed material from the Avino Historic Above Ground stockpiles.<br> <br><br> <br>On the consolidated statements of operations, the Company had revenue from the following product mixes:

	2021			2020			2019

| Silver | $ | 3,421 | | $ | 6,318 | | $ | 14,030 | |

| Copper | | 5,566 | | | 4,662 | | | 13,953 | |

| Gold | | 4,344 | | | 8,517 | | | 10,326 | |

| Penalties, treatment costs and refining charges | | (2,103 | ) | | (3,475 | ) | | (6,563 | ) |

| Total revenue from mining operations | $ | 11,228 | | $ | 16,022 | | $ | 31,746 | |

-42-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

For the year ended December 31, 2021, the Company had three customers (2020 – three customers, 2019 – six customers) that accounted for total revenues as follows:

	2021		2020			2019

| Customer #1 | $ | 5,521 | $ | - | | $ | - |

| Customer #2 | | 3,045 | | 12,573 | | | 21,810 |

| Customer #3 | | 2,662 | | 3,206 | | | 4,861 |

| Customer #4 | | - | | (19 | ) | | 3,350 |

| Customer #5 | | - | | 262 | | | 1,246 |

| Customer #6 | | - | | - | | | 469 |

| Customer #7 | | - | | - | | | 10 |

| Customer #8 | | - | | - | | | - |

| Total revenue from mining operations | $ | 11,228 | $ | 16,022 | | $ | 31,746 |

Geographical information relating to the Company’s non-current assets (other than financial instruments) is as follows:

	December 31,<br> <br>2021		December 31,<br> <br>2020

| Exploration and evaluation assets - Mexico | $ | 11,052 | $ | 10,051 |

| Exploration and evaluation assets - Canada | | 1 | | 1 |

| Total exploration and evaluation assets | $ | 11,053 | $ | 10,052 |

	December 31,<br> <br>2021		December 31,<br> <br>2020

| Plant, equipment, and mining properties - Mexico | $ | 35,390 | $ | 34,475 |

| Plant, equipment, and mining properties - Canada | | 285 | | 371 |

| Total plant, equipment, and mining properties | $ | 35,675 | $ | 34,846 |

-43-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

24.	INCOME TAXES

(a)	Income tax expense
	Income tax expense included in the consolidated statements of operations and comprehensive income (loss) is as follows:

	2021		2020			2019
Current income tax expense	$	27	$	161		$	327

| Deferred income tax expense (recovery) | | 412 | | (1,569 | ) | | (960 | ) |

| Total income tax expense (recovery) | $ | 439 | $ | (1,408 | ) | $ | (633 | ) |

The reconciliation of income taxes calculated at the Canadian statutory tax rate to the income tax expense recognized in the year is as follows:

	2021			2020			2019
Net income (loss) before income taxes	$	(1,618	)	$	(8,890	)	$	(2,968	)

| Net loss from discontinued operations before income taxes | | - | | | (169 | ) | | (29,126 | ) |

| Net income (loss) before income taxes | $ | (1,618 | ) | $ | (9,059 | ) | $ | (32,094 | ) |

| Combined statutory tax rate | | 27.00 | % | | 27.00 | % | | 27.00 | % | | Income tax expense (recovery) at the Canadian statutory rate | | (437 | ) | | (2,446 | ) | | (8,665 | ) | | Reconciling items: | | | | | | | | | |

| Effect of difference in foreign tax rates | | 11 | | | (86 | ) | | (120 | ) |

| Non-deductible/non-taxable items | | 675 | | | 1,467 | | | 6,449 | |

| Change in unrecognized deductible temporary differences | | 122 | | | 332 | | | 1,263 | |

| Impact of foreign exchange | | 75 | | | (112 | ) | | 222 | |

| Special mining duties | | 17 | | | (185 | ) | | 231 | |

| Revisions to estimates | | 313 | | | (297 | ) | | 58 | |

| Share issue costs | | (249 | ) | | (73 | ) | | (174 | ) |

| Other items | | (88 | ) | | (8 | ) | | 103 | | | Income tax expense (recovery) recognized in the year | $ | 439 | | $ | (1,408 | ) | $ | (633 | ) |

The Company recognized a non-cash recovery of $Nil for the year ended December 31, 2021 (2020 – expense of $164; 2019 – expense of $235) related to the deferred tax impact of the special mining duty. The Canadian income tax rate increased from 26% to 27% effective January 1, 2018, with a statutory impact prior to year-end. The impact of this change has been reflected in the consolidated financial statements.

	December 31,			December 31,

| | 2021 | | | 2020 | | | | Deferred income tax assets | $ | 4,341 | | $ | 4,249 | |

| Deferred income tax liabilities | | (6,122 | ) | | (5,618 | ) | | | $ | (1,781 | ) | $ | (1,369 | ) |

-44-

AVINO SILVER & GOLD MINES LTD.<br> <br>Notes to the consolidated financial statements<br> <br>For the years ended December 31, 2021, 2020 and 2019<br> <br>(Expressed in thousands of US dollars, except where otherwise noted)

The approximate tax effects of each type of temporary difference that gives rise to potential deferred income tax assets and liabilities are as follows:

	December 31, 2021			December 31, 2020
Reclamation provision	$	272		$	304

| Non-capital losses | | 3,525 | | | 3,383 | |

| Other deductible temporary differences | | 543 | | | 562 | |

| Inventory | | - | | | (2 | ) |

| Exploration and evaluation assets | | (3,326 | ) | | (3,349 | ) |

| Plant, equipment and mining properties | | (2,795 | ) | | (2,267 | ) | | Net deferred income tax liabilities | $ | (1,781 | ) | $ | (1,369 | ) |

	The net deferred tax liability presented in these consolidated financial statements is due to the difference in the carrying amounts and tax bases of the Mexican plant, equipment and mining properties which were acquired in the purchase of Avino Mexico. The carrying values of the Mexican plant, equipment and mining properties includes an estimated fair value adjustment recorded upon the July 17, 2006, acquisition of control of Avino Mexico that was based on a share exchange, while the tax bases of these assets are historical undeducted tax amounts that were nil on acquisition. The deferred tax liability is attributable to assets in the tax jurisdiction of Mexico.
(b)	Unrecognized deductible temporary differences:
	Temporary differences and tax losses arising in Canada have not been recognized as deferred income tax assets due to the fact that management has determined it is not probable that sufficient future taxable profits will be earned in Canada to recover such assets.  Unrecognized deductible temporary differences are summarized as follows:

	December 31,<br> <br>2021			December 31,<br> <br>2020
Tax losses carried forward	$	17,968		$	18,974

| Share issue costs | | 1,478 | | | 1,144 | |

| Plant, equipment and mining properties | | 341 | | | 263 | |

| Exploration and evaluation assets | | 1,244 | | | 1,248 | |

| Investments | | (15 | ) | | (400 | ) |

| Reclamation provision and other | | - | | | - | | | Unrecognized deductible temporary differences | $ | 21,016 | | $ | 21,229 | |

The Company has capital losses of $10,361 carried forward and $7,607 in non-capital tax losses carried forward available to reduce future Canadian taxable income. The capital losses can be carried forward indefinitely until used. The non-capital losses have an expiry date range of 2027 to 2041.

25.	PENDING TRANSACTION

Pending acquisition of La Preciosa – On October 27, 2021, the Company announced it has entered into a share purchase agreement (the “Transaction”) to indirectly acquire through the purchase of the shares of certain holding companies, the La Preciosa Property (“La Preciosa”) from Coeur Mining, Inc. (“Coeur”).<br> <br><br> <br>Consideration of $20 million, of which $15 million is payable at the closing of the Transaction from Avino’s cash on hand and the remaining $5 million is payable before the first anniversary of the closing date.<br> <br><br> <br>Additionally, Avino will issue 14.0 million units (the “Units”), each comprising one common share and one-half of a common share purchase warrant (each full warrant, a “Warrant”).<br> <br><br> <br>Contingent cash consideration of US$8.75 million will be payable by Avino to Coeur within 12 months of initial production at La Preciosa. Avino may elect to pay up to half of the contingent cash consideration in Avino shares. Coeur will retain ownership of a 1.25% net smelter return royalty on the Gloria and Abundancia areas of La Preciosa, and a 2.00% gross value royalty on all areas of La Preciosa other than the Gloria and Abundancia areas.<br> <br><br> <br>So long as Coeur holds 10% or more of the outstanding shares of Avino, Coeur has the option to nominate one director for election to the Avino board or designate a board observer. At closing, Coeur has also been granted pre-emptive rights to maintain its equity ownership position in Avino and has entered into a voting agreement with Avino.<br> <br><br> <br>The completion of the proposed Transaction is subject to a number of customary conditions precedent, as well as, the authorization of the Mexican Federal Economic Competition Commission, approval of the issuance of the Unit consideration and contingent payment amount by the NYSE American, the Toronto Stock Exchange, and any other necessary third party approvals. The Closing of the Transaction is expected to occur during Q1 2022.

-45-

avino_ex992.htm EXHIBIT 99.2

---

MANAGEMENT’S DISCUSSION AND ANALYSIS<br> <br>FOR THE YEAR ENDED DECEMBER 31, 2021

The following discussion and analysis of the operations, results, and financial position of Avino Silver & Gold Mines Ltd. (the “Company” or “Avino”) should be read in conjunction with the Company’s audited consolidated financial statements as at and for the year ended December 31, 2021, and the notes thereto.

This Management’s Discussion and Analysis (“MD&A”) is dated March 16, 2022, and discloses specified information up to that date. The consolidated financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). Unless otherwise cited, references to dollar amounts are in US dollars. This MD&A contains “forward-looking statements” that are subject to risk factors including those set out in the “Cautionary Statement” at the end of this MD&A. All information contained in this MD&A is current and has been approved by the Company’s Board of Directors as of March 16, 2022, unless otherwise indicated. Throughout this report we refer to “Avino”, the “Company”, “we”, “us”, “our”, or “its”. All these terms are used in respect of Avino Silver & Gold Mines Ltd. We recommend that readers consult the “Cautionary Statement” on the last page of this report. Additional information relating to the Company is available on the Company’s website at www.avino.com and on SEDAR at www.sedar.com.

Business Description

Founded in 1968, the Company is engaged in the production and sale of silver, gold, and copper bulk concentrate, and the acquisition, exploration, and evaluation of mineral properties. The Company holds mineral claims and leases in Durango, Mexico, and in British Columbia and Yukon, Canada. Avino is a reporting issuer in all of the provinces of Canada, except for Quebec, and a foreign private issuer with the Securities and Exchange Commission in the United States. The Company’s shares trade on the Toronto Stock Exchange (“TSX”) and the NYSE American under the symbol “ASM”, and on the Berlin and Frankfurt Stock Exchanges under the symbol “GV6”.

Discussion of Operations

The Company’s production, exploration, and evaluation activities during the year ended December 31, 2021, have been conducted on its Avino Property.

The Company holds a 99.67% effective interest in Compañía Minera Mexicana de Avino, S.A. de C.V. (“Avino Mexico”), a Mexican corporation which owns the Avino Property. The Avino Property covers approximately 1,104 contiguous hectares, and is located approximately 80 km north-east of the city of Durango. The Avino Property is equipped with milling and processing facilities that presently process all output from the Avino Mine located on the property.

MANAGEMENT’S DISCUSSION AND ANALYSIS<br> <br>FOR THE YEAR ENDED DECEMBER 31, 2021

Operational Highlights

HIGHLIGHTS<br> <br>(Expressed in US$)	Fourth<br> <br>Quarter 2021		Fourth<br> <br>Quarter 2020		Change			Year<br> <br>2021		Year<br> <br>2020		Change

| Operating | | | | | | | | | | | | | | |

| Tonnes Milled | | 103,513 | | - | | 100 | % | | 165,304 | | 204,286 | | -19 | % |

| Silver Ounces Produced | | 163,933 | | - | | 100 | % | | 245,372 | | 317,299 | | -23 | % |

| Gold Ounces Produced | | 2,158 | | - | | 100 | % | | 3,386 | | 1,935 | | 75 | % |

| Copper Pounds Produced | | 1,128,728 | | - | | 100 | % | | 1,869,306 | | 2,267,939 | | -18 | % |

| Silver Equivalent Ounces^1^ Produced | | 541,432 | | - | | 100 | % | | 842,373 | | 842,230 | | 0 | % |

| Concentrate Sales and Cash Costs | | | | | | | | | | | | | | |

| Silver Equivalent Payable Ounces Sold^2^ | | 417,881 | | 59,710 | | 600 | % | | 524,993 | | 1,071,367 | | -51 | % |

| Cash Cost per Silver Equivalent Payable Ounce^1,2,3^ | $ | 9.57 | $ | 14.01 | | -32 | % | $ | 9.09 | $ | 10.68 | | -15 | % |

| All-in Sustaining Cash Cost per Silver Equivalent Payable Ounce^1,2,3^ | $ | 17.24 | $ | 73.08 | | -76 | % | $ | 24.51 | $ | 20.35 | | 20 | % |

1 . In Q4 2021, AgEq was calculated using metal prices of $23.33 oz Ag, $1,795 oz Au, and $4.40 lb Cu. In Q4 2020, AgEq was calculated using metals prices of $24.39 oz Ag, $1,867 oz Au and $2.67 lb Cu.

2. “Silver equivalent payable ounces sold” for the purposes of cash costs and all-in sustaining costs consists of the sum of payable silver ounces, gold ounces and copper tonnes sold, before penalties, treatment charges, and refining charges, multiplied by the ratio of the average spot gold and copper prices to the average spot silver price for the corresponding period.

3. The Company reports non-IFRS measures which include cash cost per silver equivalent payable ounce, all-in sustaining cash cost per payable ounce, EBITDA, adjusted EBITDA, and cash flow per share. These measures are widely used in the mining industry as a benchmark for performance, but do not have a standardized meaning and the calculation methods may differ from methods used by other companies with similar reported measures. See Non-IFRS Measures section for further information and detailed reconciliations.

Financial Highlights

HIGHLIGHTS<br> <br>(Expressed in 000’s of US$)	Fourth<br> <br>Quarter 2021		Fourth<br> <br>Quarter 2020			Change			Year<br> <br>2021			Year<br> <br>2020			Change

| Financial Operating Performance | | | | | | | | | | | | | | | | | |

| Revenues | $ | 9,318 | $ | 1,407 | | | 562 | % | $ | 11,228 | | $ | 16,022 | | | -30 | % |

| Mine operating income (loss) | $ | 4,406 | $ | (1,251 | ) | | 452 | % | $ | 3,547 | | $ | 190 | | | 1767 | % |

| Net income (loss) from continuing operations | $ | 2,629 | $ | (1,553 | ) | | 269 | % | $ | (2,057 | ) | $ | (7,482 | ) | | 73 | % |

| Net income (loss) | $ | 2,629 | $ | (1,555 | ) | | 269 | % | $ | (2,057 | ) | $ | (7,651 | ) | | 73 | % |

| Earnings (losses) before interest, taxes and amortization (“EBITDA”)^1^ | $ | 4,821 | $ | (2,269 | ) | | 312 | % | $ | 443 | | $ | (6,945 | ) | | 106 | % |

| Adjusted earnings (losses)^1^ | $ | 4,746 | $ | (182 | ) | | 2708 | % | $ | 2,298 | | $ | 1,500 | | | 53 | % |

| Per Share Amounts | | | | | | | | | | | | | | | | | |

| Earnings (loss)  per share – basic & diluted | $ | 0.03 | $ | (0.02 | ) | | 250 | % | $ | (0.02 | ) | $ | (0.09 | ) | | 78 | % |

| Cash Flow per share^1^– basic | $ | 0.04 | $ | (0.03 | ) | | 233 | % | $ | 0.02 | | $ | (0.03 | ) | | 167 | % |

| HIGHLIGHTS<br> <br>(Expressed in 000’s of US$) | December 31, 2021 | | December 31,<br> <br>2020 | | | Change | | | December 31,<br> <br>2021 | | | December 31, 2020 | | | Change | | |

| Liquidity & Working Capital | | | | | | | | | | | | | | | | | |

| Cash | $ | 24,765 | $ | 11,713 | | | 111 | % | $ | 24,765 | | $ | 11,713 | | | 111 | % |

| Working capital | $ | 31,635 | $ | 14,680 | | | 115 | % | $ | 31,635 | | $ | 14,680 | | | 115 | % |

1. The Company reports non-IFRS measures which include cash cost per silver equivalent payable ounce, all-in sustaining cash cost per payable ounce, EBITDA, adjusted earnings, and cash flow per share. These measures are widely used in the mining industry as a benchmark for performance, but do not have a standardized meaning and the calculation methods may differ from methods used by other companies with similar reported measures. See Non-IFRS Measures section for further information and detailed reconciliations.

2	Page

MANAGEMENT’S DISCUSSION AND ANALYSIS<br> <br>FOR THE YEAR ENDED DECEMBER 31, 2021

4^th^ Quarter and FY 2021 Highlights

Strategic Acquisition of La Preciosa Silver Project from Coeur Mining Inc. (“Coeur”)

•

On October 27, 2021, the Company announced that it has entered into a definitive agreement (the “Agreement”) with Coeur to acquire the La Preciosa silver project, which is located adjacent to the Avino Mine in the state of Durango, Mexico, for upfront consideration of $29.7 million on closing and $5 million due within 12 months of closing. Further contingent consideration including cash, royalties and a mineral reserve discovery payment. The transaction is expected to close during Q1 2022

Mining Operations Resumed at Avino Mine

•	On August 3, 2021, the Company announced that mining operations have officially restarted at the Avino Mine. During H2 2021, mining activities continued to ramp up and the Company is confident that ramp up activities will continue throughout 2022.

Term Facility Repaid on Schedule

•	During 2021, the Company has fully repaid its $10 million term facility with Samsung C&T U.K. Limited (“Samsung”). The Company remains committed to selling Avino Mine concentrate to Samsung until December 31, 2024.

Exploration Continues

·

Over 15,000 metres were drilled during the year. Areas drilled include the existing Oxide Tailings Resource, which is contained within the tailings storage facility (“TSF #1). 124 holes have been drilled on this program, with 110 having reported assays and currently under review by our technical team. Additional areas for exploration include the main Avino vein below current mining activities and at the La Potosina vein. Turnaround times for assay results have been slow and results will continue to be released throughout 2022.

Working Capital & Liquidity at December 31, 2021

·	The Company’s cash balance at December 31, 2021, totaled $24.8 million compared to $22.3 million at September 30, 2021 and $11.7 million at December 31, 2020. Working capital totaled $31.6 million at December 31, 2020, compared to $28.9 million at September 30, 2021 and $14.7 million at December 31, 2020.

3	Page

MANAGEMENT’S DISCUSSION AND ANALYSIS<br> <br>FOR THE YEAR ENDED DECEMBER 31, 2021

Financial Results – Three months ended December 31, 2021, compared to three months ended December 31, 2020

Revenues

The Company recognized revenues net of penalties, treatment costs and refining charges, of $9.3 million on the sale of Avino Mine bulk copper/silver/gold concentrate, compared to revenues of $1.4 million for Q4 2020, an increase of $7.9 million.

The increase in revenues is a direct result of the shutdown of mining operations until August 2021, as well as additional COVID-19 protocols, with the only revenues in the Q4 2020 period being from sales of stockpiled inventory, and sales from the finalization of provisionally priced invoices issued during Q2 and Q3 2020.

Metal prices for revenues recognized during the period were $22.83 per ounce of silver, $1,802 per ounce of gold, and $9,548 per tonne of copper, compared to averages of $24.48 per ounce of silver, $1,853 per ounce of gold, and $7,765 per tonne of copper, for Q4 2020.

Cost of Sales & Mine Operating Income

Cost of sales was $4.9 million, compared to $2.8 million in Q4 2020, an increase of $2.1 million. The increase in cost of sales is attributable to mining operations being active in Q4 2021, with no tonnage being mined and milled during Q4 2020. Any cost of sales in Q4 2020 related to sales of concentrate inventory, as well as $0.9 million in stand-by costs while the mining operations were shutdown.

Mine operating income, after depreciation and depletion, was $4.4 million, compared to a loss of $1.4 million in Q4 2020. The increase in mine operating income is a direct result of the Company being in production for Q4 2021, alongside higher feed grades for the current period, compared to the inventory processed and sold during Q4 2020.

The higher grades also resulted in lower per unit costs for mining and processing activities.

General and Administrative Expenses & Share-Based Payments

General and administrative expenses was $0.8 million, compared to $0.8 million in Q4 2020, with no significant changes, even with the increased corporate activity surrounding ramp up procedures.

Share-based payments was $0.1 million, compared to $0.8 million in Q4 2020, a decrease of $0.7 million. The decrease is a direct result of no option or RSU grants occurring during 2021, whereas there were grants for both in 2020. Any share-based payment expense in Q4 2021 related to the three-year vesting period for RSUs issued in previous years.

Other Items

Other items totaled $0.6 million in income for the period, an increase of $0.3 million compared to income of $0.3 million related to other items in Q4 2020.

Unrealized gain on long-term investment was $0.6 million, an increase of $0.5 million compared to $0.1 million in Q4 2020. This is a direct result of fluctuations in the Company’s investment in shares of Talisker Resources from period to period, as well as the Company’s investment in shares of Silver Wolf Exploration.

Fair value adjustment on warrant liability was a gain of $Nil million, an increase to income of $0.6 million compared to a loss of $0.6 million in Q4 2020. The fair value adjustment on the Company’s warrant liability relates to the issuance of US dollar-denominated warrants, which are re-valued each reporting period, and the value fluctuates with changes in the US-Canadian dollar exchange rate, and in the variables used in the valuation model, such as the Company’s US share price, and expected share price volatility.

4	Page

MANAGEMENT’S DISCUSSION AND ANALYSIS<br> <br>FOR THE YEAR ENDED DECEMBER 31, 2021

Foreign exchange gain for the period was $0.1 million, a change of $0.8 million compared to a gain of $0.9 million in Q4 2020. Foreign exchange gains or losses result from transactions in currencies other than the Canadian dollar functional currency. During the three months ended December 31, 2021, the Canadian dollar and the US dollar depreciated slightly in relation to the Mexican peso, resulting in a foreign exchange loss.

The remaining Other Items resulted in income of $0.2 million, a change of $0.3 compared to a loss of $0.1 million for Q4 2020.

Current and Deferred Income Taxes

Current income tax expense remained fairly unchanged at $Nil for Q4 2021, compared to $0.1 million in income tax expense for Q4 2020. Given the return to profitable mining operations, the lower amount of current income tax expenses in Q4 2021 is a result of the current period application of income tax losses built up during 2020 and 2021.

Deferred income tax expense was $0.4 million, a change of $1.4 million compared to a recovery of $1.1 million in Q4 2020. Deferred income tax fluctuates due to movements in taxable and deductible temporary differences related to the special mining duty in Mexico and to changes in inventory, plant, equipment and mining properties, and exploration and evaluation assets, amongst other factors. The changes in current income taxes and deferred income taxes during the current and comparable periods primarily relate to movements in the tax bases and mining profits and/or losses in Mexico.

Net Income/Loss

Net income from all operations was $2.6 million for the period, or $0.03 per share, compared to a loss of $1.6 million, or $0.02 per share during Q4 2020. The changes are a result of the items noted above, which are primarily increases in revenues and mine operating income, decreases in share-based payments, an increased unrealized gain on investments between the two comparable quarters. The positive movement in income/loss was partially offset by movements in unrealized foreign exchange, as noted above.

EBITDA & Adjusted Income/Loss (see “Non-IFRS Measures”)

EBITDA was $4.8 million, a positive increase of $7.1 million when compared to losses of $2.3 million for Q4 2020. The changes in EBITDA are primarily a factor of the items above, excluding any changes in depreciation and depletion, and any changes in income taxes. See Non-IFRS Measures for a reconciliation for EBITDA.

Adjusted earnings for the period was $4.7 million, a positive increase of $4.9 when compared to adjusted losses of $0.2 million in the corresponding quarter in 2020. Changes to adjusted losses are a result of the items noted above in EBITDA, further excluding share-based payments, gains and losses related to warrants,  and movements in unrealized foreign exchange. See Non-IFRS Measures for a reconciliation for adjusted losses.

Cash Costs & All-in Sustaining Cash Costs (see “Non-IFRS Measures”)

Cash costs per silver equivalent payable ounce, excluding stand-by costs, was $9.71, compared to $14.01 for Q4 2020. The decrease in cash costs is a result of higher grades mined during the current period, which resulted in lower unit costs on a per ounce sold basis.

All-in sustaining cash costs per silver equivalent payable ounce was $17.55, compared to $73.08 for Q4 2020. The decrease in all-in sustaining cash costs during the current period is attributable to the items mentioned above, as well as the stand-by costs incurred during Q4 2020, of $0.9 million, with no comparable costs being incurred during the current period. Throughout Q4 2020, no production mining activities took place.

See Non-IFRS Measures for a reconciliation for cash costs and all-in sustaining cash costs.

5	Page

MANAGEMENT’S DISCUSSION AND ANALYSIS<br> <br>FOR THE YEAR ENDED DECEMBER 31, 2021

Financial Results – Year ended December 31, 2021, compared to year ended December 31, 2020

Revenues

The Company recognized revenues net of penalties, treatment costs and refining charges, of $11.2 million on the sale of Avino Mine bulk copper/silver/gold concentrate, compared to revenues of $16.0 million for year ended December 31, 2020, a decrease of $4.8 million. The decrease in revenues is a direct result of the shutdown of mining operations until August 2021, as well as additional COVID-19 protocols, with the only revenues in the current period being from sales that occurred in the second half of 2021 and from the finalization of provisionally priced invoices.

Metal prices for revenues recognized during the period were $23.18 per ounce of silver, $1,802 per ounce of gold, and $9,524 per tonne of copper, in the prior year quarter, compared to $23.73, $1,885, and $6,610, respectively, for the same period in 2020.

Cost of Sales & Mine Operating Income

Cost of sales was $7.7 million, compared to $15.8 million in 2020, a decrease of $8.1 million. The decrease in cost of sales is attributable to lower production costs by $6.5 million as a result of lower tonnages mined and milled. Further, the Company incurred $0.8 million in stand-by costs, compared to $2.4 million in the comparable period for 2020, a decrease of $1.6 million. Depreciation and depletion remained consistent with 2020 at $2.0 million for the period.

Mine operating income was $3.5 million, compared to mine operating income of $0.2 million, an increase of $3.3 million. This was a direct result of higher feed grade for silver, gold, and copper, and increased metal prices for copper when compared to 2020,as well as the factors noted above.

General and Administrative Expenses & Share-Based Payments

General and administrative expenses was $3.6 million, compared to $2.9 million in 2020, an increase of $0.7 million The increase is attributable to increased administrative and support activity following the restart of mining operations in Q3 2021, as well as the cost reduction measures put into place following the government mandated COVID-19 shutdown in Q2 2020.

Share-based payments was $1.5 million, compared to $1.9 million in 2020, a decrease of $0.4 million. The decrease is a direct result of no option or RSU grants occurring during 2021, whereas there were grants for both in 2020. Any share-based payment expense in 2021 related to options vesting in Q1-Q3 2021, as well as the three-year vesting period for RSUs issued in previous years.

Other Items

Other items totaled $0.1 million in losses for the period, a favourable change of $4.2 million compared to a loss of $4.3 million related to other items in the comparable period in 2020.

Unrealized loss on long-term investment was $0.4 million, a decrease of $0.3 million compared to a loss of $0.1 million in 2020. This is a direct result of fluctuations in the Company’s investment in shares of Talisker Resources from period to period, as well as the Company’s investment in shares of Silver Wolf Exploration.

Fair value adjustment on warrant liability was a gain of $1.6 million, a favourable change of $2.3 million compared to a loss of $0.7 million in 2020. The fair value adjustment on the Company’s warrant liability relates to the issuance of US dollar-denominated warrants, which are re-valued each reporting period, and the value fluctuates with changes in the US-Canadian dollar exchange rate, and in the variables used in the valuation model, such as the Company’s US share price, and expected share price volatility.

Realized loss on warrants exercised was $1.1 million, a decrease of $1.6 million compared to $2.7 million in 2020. During the current period, 1.0 million warrants were exercised, compared to 4.2 million warrants in the comparable period in 2020. These exercises generated all of the non-cash losses noted above.

6	Page

MANAGEMENT’S DISCUSSION AND ANALYSIS<br> <br>FOR THE YEAR ENDED DECEMBER 31, 2021

Foreign exchange loss for the period was $0.1 million, a decrease of $0.7 million compared to a loss of $0.8 million in the comparable period in 2020. Foreign exchange gains or losses result from transactions in currencies other than the Canadian dollar functional currency. Overall, during the year ended December 31, 2021, the Canadian dollar remained fairly constant in relation to the US dollar and Mexican peso, resulting in minimal foreign exchange loss. During the comparable period in 2020, the Canadian dollar depreciated in relation to the US dollar and Mexican peso, resulting in higher foreign exchange loss.

The remaining Other Items resulted in a loss of $0.1 million, a change of $0.1 million compared to a loss of $Nil million for the same remaining Other items in 2020.

Current and Deferred Income Taxes

Current income tax expense remained fairly unchanged when compared to 2020, with under $0.1 million in income tax expense for the current period and $0.2 million for the comparable period in 2020. Given the return to profitable mining operations, the lower amount of current income tax expenses in 2021 is a result of the current period application of income tax losses built up during 2020 and the first half of 2021.

Deferred income tax expense was $0.4 million, a change of $2.0 million compared to a recovery of $1.6 million for the comparable period in 2020. Deferred income tax fluctuates due to movements in taxable and deductible temporary differences related to the special mining duty in Mexico and to changes in inventory, plant, equipment and mining properties, and exploration and evaluation assets, amongst other factors. The changes in current income taxes and deferred income taxes during the current and comparable periods primarily relate to movements in the tax bases and mining profits and/or losses in Mexico.

Net Income/Loss

Net loss from all operations was $2.1 million for the period, or $0.02 per share, compared to a loss of $7.7 million, or $0.09 per share during the comparable period in 2020. The changes are a result of the items noted above, primarily increases to mine operating income, the decreased losses relating to warrants exercised, the favourable change in the fair value adjustment on warrant liability, and movements in unrealized foreign exchange between the two comparable periods.

EBITDA & Adjusted Income/Loss (see “Non-IFRS Measures”)

EBITDA was $0.4 million, compared to losses of $6.9 million for 2020. The changes in EBITDA are primarily a factor of the items above, excluding any changes in depreciation and depletion, and any changes in income taxes. See Non-IFRS Measures for a reconciliation for EBITDA.

Adjusted earnings for the period was $2.3 million, an increase of $0.8 million when compared to $1.5 million in 2020. Changes to adjusted losses are a result of the items noted above in EBITDA, further excluding share-based payments, gains and losses related to warrants, and movements in unrealized foreign exchange. See Non-IFRS Measures for a reconciliation for adjusted losses.

Cash Costs & All-in Sustaining Cash Costs (see “Non-IFRS Measures”)

Cash costs per silver equivalent payable ounce, excluding stand-by costs was $9.09, compared to $10.68 for the comparable period in 2020. The decrease in cash costs is a result of higher grades mined during the current period, which resulted in lower unit costs on a per ounce sold basis.

7	Page

MANAGEMENT’S DISCUSSION AND ANALYSIS<br> <br>FOR THE YEAR ENDED DECEMBER 31, 2021

All-in sustaining cash costs per silver equivalent payable ounce, including stand-by costs, was $24.51, compared to $20.35 in 2020. The increase is due to the fact that during the majority of 2021, and up until Q3, no mining activities and sales took place due to the work stoppage. As such, ounces sold was significantly lower at 0.5 million silver equivalent ounces compared to 1.1 million during 2020. This contributed to the increase in all-in sustaining cash costs during the current period, as all administrative and sustaining costs were higher on a per ounce basis.

See Non-IFRS Measures for a reconciliation for cash costs and all-in sustaining cash costs.

Three months ended December 31, 2021, compared to the three months ended December 31, 2020:

(000’s)	2021			2020

| Revenue from mining operations | $ | 9,318 | | $ | 1,407 | |

| Cost of sales | | 4,912 | | | 2,658 | |

| Mine operating income (loss) | | 4,406 | | | (1,251 | ) |

| Operating expenses | | | | | | |

| General and administrative expenses | | 840 | | | 838 | |

| Share-based payments | | 79 | | | 795 | |

| Income (loss) before other items | | 3,487 | | | (2,884 | ) |

| Other items | | | | | | |

| Interest and other income | | 35 | | | 101 | |

| Gain on long-term investments | | 579 | | | 57 | |

| Fair value adjustment on warrant liability | | 21 | | | (637 | ) |

| Realized loss on exercise of warrants | | - | | | (25 | ) |

| Unrealized foreign exchange gain | | 132 | | | 890 | |

| Project evaluation expenses | | (176 | ) | | - | |

| Finance costs | | (6 | ) | | (36 | ) |

| Accretion of reclamation provision | | (11 | ) | | (25 | ) |

| Interest expense | | (9 | ) | | (3 | ) |

| Net income (loss) from continuing operations before income taxes | | 4,052 | | | (2,562 | ) |

| Income taxes | | | | | | |

| Current income tax expense | | (2 | ) | | (73 | ) |

| Deferred income tax (expense) recovery | | (1,421 | ) | | 1,082 | |

| Income tax (expense) recovery | | (1,423 | ) | | 1,009 | | | Net income (loss) from continuing operations | $ | 2,629 | | $ | (1,553 | ) |

| Loss from discontinued operations and on disposal | | - | | | (2 | ) |

| Net income (loss) | $ | 2,629 | | $ | (1,555 | ) | | Earnings (loss) per share from continuing operations | | | | | | |

| Basic & Diluted | $ | 0.03 | | $ | (0.02 | ) |

| Earnings (loss)  per share | | | | | | |

| Basic & Diluted | $ | 0.03 | | $ | (0.02 | ) |

8	Page

MANAGEMENT’S DISCUSSION AND ANALYSIS<br> <br>FOR THE YEAR ENDED DECEMBER 31, 2021

Year ended December 31, 2021, compared to the year ended December 31, 2020:

(000’s)	2021		****	2020

| Revenue from mining operations | $ | 11,228 | | $ | 16,022 | |

| Cost of sales | | 7,681 | | | 15,832 | |

| Mine operating income | | 3,547 | | | 190 | |

| Operating expenses | | | | | | |

| General and administrative expenses | | 3,566 | | | 2,902 | |

| Share-based payments | | 1,469 | | | 1,857 | |

| Loss before other items | | (1,488 | ) | | (4,569 | ) |

| Other items | | | | | | |

| Interest and other income | | 178 | | | 332 | |

| Gain on long-term investments | | (423 | ) | | (124 | ) |

| Fair value adjustment on warrant liability | | 1,581 | | | (650 | ) |

| Realized loss on exercise of warrants | | (1,106 | ) | | (2,733 | ) |

| Unrealized foreign exchange loss | | (61 | ) | | (811 | ) |

| Project evaluation expenses | | (176 | ) | | - | |

| Finance costs | | (52 | ) | | (211 | ) |

| Accretion of reclamation provision | | (47 | ) | | (99 | ) |

| Interest expense | | (24 | ) | | (25 | ) |

| Net loss from continuing operations before income taxes | | (1,618 | ) | | (8,890 | ) | | Income taxes | | | | | | |

| Current income tax expense | | (25 | ) | | (161 | ) |

| Deferred income tax (expense) recovery | | (412 | ) | | 1,569 | |

| Income tax (expense) recovery | | (439 | ) | | 1,408 | | | Net loss from continuing operations | $ | (2,057 | ) | $ | (7,482 | ) |

| Loss from discontinued operations and on disposal | | - | | | (169 | ) |

| Net loss | $ | (2,057 | ) | $ | (7,651 | ) | | Loss per share from continuing operations | | | | | | |

| Basic & Diluted | $ | (0.02 | ) | $ | (0.09 | ) |

| Loss per share | | | | | | |

| Basic & Diluted | $ | (0.02 | ) | $ | (0.09 | ) |

9	Page

MANAGEMENT’S DISCUSSION AND ANALYSIS<br> <br>FOR THE YEAR ENDED DECEMBER 31, 2021

Consolidated Production Highlights

Q4 2021

| Production by Mine | Tonnes<br> <br>Processed | | Silver<br> <br>oz | | Gold<br> <br>oz | | Copper<br> <br>lbs | | AgEq<br> <br>oz | |

| Avino | | 103,513 | | 163,933 | | 2,158 | | 1,128,728 | | 541,432 |

| Historic Above Ground Stockpiles | | - | | - | | - | | - | | - |

| Consolidated | | 103,513 | | 163,933 | | 2,158 | | 1,128,728 | | 541,432 |

| YTD 2021 | | | | | | | | | | |

| Production by Mine | Tonnes<br> <br>Processed | | Silver<br> <br>oz | | Gold<br> <br>oz | | Copper<br> <br>lbs | | AgEq<br> <br>oz | |

| Avino | | 154,498 | | 236,035 | | 3,328 | | 1,856,722 | | 826,589 |

| Historic Above Ground Stockpiles | | 10,806 | | 9,336 | | 58 | | 12,584 | | 15,784 |

| Consolidated | | 165,304 | | 245,372 | | 3,386 | | 1,869,306 | | 842,373 |

Q4 2021

| Grade & Recovery by Mine | Grade<br> <br>Ag g/t | | Grade<br> <br>Au g/t | | Grade<br> <br>Cu % | | Recovery<br> <br>Ag % | | Recovery<br> <br>Au % | | Recovery<br> <br>Cu % | |

| Avino | | 56 | | 0.86 | | 0.55 | | 89% | | 75% | | 90% |

| Historic Above Ground Stockpiles | | - | | 0.00 | | 0.00 | | 0% | | 0% | | 0% |

| Consolidated | | 56 | | 0.86 | | 0.55 | | 89% | | 75% | | 90% |

| YTD 2021 | | | | | | | | | | | | |

| Grade & Recovery by Mine | Grade<br> <br>Ag g/t | | Grade<br> <br>Au g/t | | Grade<br> <br>Cu % | | Recovery<br> <br>Ag % | | Recovery<br> <br>Au % | | Recovery<br> <br>Cu % | |

| Avino | | 53 | | 0.88 | | 0.60 | | 89% | | 75% | | 91% |

| Historic Above Ground Stockpiles | | 41 | | 0.26 | | 0.12 | | 65% | | 63% | | 45% |

| Consolidated | | 53 | | 0.84 | | 0.57 | | 87% | | 75% | | 88% |

10	Page

MANAGEMENT’S DISCUSSION AND ANALYSIS<br> <br>FOR THE YEAR ENDED DECEMBER 31, 2021

Avino Mine Production Highlights

	Q4<br> <br>2021		Q4<br> <br>2020		Change<br> <br>%		YTD<br> <br>2021		YTD<br> <br>2020		Change %

| Total Mill Feed (dry tonnes) | | 103,513 | | - | | 100% | | 154,498 | | 199,575 | | -23% |

| Feed Grade Silver (g/t) | | 56 | | - | | 100% | | 53 | | 54 | | -2% |

| Feed Grade Gold (g/t) | | 0.86 | | - | | 100% | | 0.88 | | 0.40 | | 121% |

| Feed Grade Copper (%) | | 0.55 | | - | | 100% | | 0.60 | | 0.58 | | 3% |

| Recovery Silver (%) | | 89% | | - | | 100% | | 89% | | 90% | | -1% |

| Recovery Gold (%) | | 75% | | - | | 100% | | 76% | | 75% | | 1% |

| Recovery Copper (%) | | 90% | | - | | 100% | | 91% | | 88% | | 3% |

| Total Silver Produced (oz) | | 163,933 | | - | | 100% | | 236,035 | | 312,819 | | -25% |

| Total Gold Produced (oz) | | 2,158 | | - | | 100% | | 3,328 | | 1,916 | | 74% |

| Total Copper Produced (lbs) | | 1,128,728 | | - | | 100% | | 1,856,722 | | 2,263,082 | | -18% |

| Total Silver Equivalent Produced (oz)* | | 541,432 | | - | | 100% | | 826,589 | | 835,370 | | -1% |

* In Q4 2021, AgEq was calculated using metal prices of $23.33 oz Ag, $1,795 oz Au, and $4.40 lb Cu. In Q4 2020, AgEq was calculated using metals prices of $24.39 oz Ag, $1,867 oz Au and $2.67 lb Cu.

Under National Instrument 43-101, the Company is required to disclose that it has not based its production decisions on NI 43-101-compliant reserve estimates, preliminary economic assessments, or feasibility studies, and historically projects without such reports have increased uncertainty and risk of economic viability. The Company's decision to place a mine into operation at levels intended by management, expand a mine, make other production-related decisions, or otherwise carry out mining and processing operations is largely based on internal non-public Company data, and on reports based on exploration and mining work by the Company and by geologists and engineers engaged by the Company. The results of this work are evident in the Company's discovery of the San Gonzalo and Avino Mine resources, and in the Company's record of mineral production and financial returns since operations at levels intended by management commenced at the San Gonzalo Mine in 2012.

Avino Mine Exploration

Plans continued for the Company’s 30,000 metre exploration program and the Company is looking at all options to increase overall head grade and expand resources.

On January 10, 2022, the Company released drill results from Phase 2 of the drill campaign. In 2021, the Company drilled over 15,500 metres and was one of the Company’s main focuses for the year.

The reported results below are from the El Trompo Vein, the Santiago Vein and the La Malinche Vein and additional areas including the Nuestra Señora and the area below Level 17 at the current ET mine. The tables below include previous results achieved in 2021 and the latest new holes. In addition, we have completed drilling on the oxide tailings resource but are waiting for assays on a number of outstanding holes.

Brecha de Bajo Veins:

This vein is located Northeast of the Avino Vein at the eastern end. This vein is within 20m of the current mine working into the footwall and shows some potentially large, strongly mineralized widths with a 15.4m and 32.2m intersections. In addition to a showing of gold and silver grades, there is massive specularite (iron ore) mineralization. More work is planned in this area.

11	Page

MANAGEMENT’S DISCUSSION AND ANALYSIS<br> <br>FOR THE YEAR ENDED DECEMBER 31, 2021

Table 1: The Brecha de Bajo and Bart Vein – Summary of Drilling – 3 holes and 843 metres

Hole Number	From<br> <br>(m)	To<br> <br>(m)	Length^1^ (m)	Au<br> <br>(g/t)	Ag<br> <br>(g/t)	Cu<br> <br>(ppm)	PB<br> <br>(ppm)	Zn<br> <br>(ppm)	AgEq^2^ (g/t)

| NBX-21-02 | 259.10 | 260.30 | 1.20 | 0.06 | 151 | 3,743 | 614 | 1,807 | 211 |

| And | 276.60 | 284.40 | 7.80 | 0.08 | 21 | 5,550 | 66 | 1,611 | 103 |

| And | 300.40 | 301.05 | 0.65 | 0.06 | 48 | 7,565 | 128 | 3,063 | 159 |

| NBX-21-03 | 184.05 | 185.55 | 1.50 | 0.14 | 84 | 3,236 | 762 | 2,491 | 147 |

| And | 186.90 | 202.30 | 15.40 | 0.27 | 72 | 2,569 | 2,808 | 1,326 | 141 |

| Including | 189.60 | 190.65 | 1.05 | 0.30 | 380 | 11,980 | 4,230 | 1,838 | 573 |

| And | 222.60 | 254.80 | 32.20 | 0.84 | 44 | 2,173 | 1,906 | 1,698 | 151 |

| Including | 247.85 | 249.80 | 1.95 | 1.58 | 120 | 1,187 | 1,355 | 453 | 267 |

1. True Widths cannot be determined with the available information

2. AgEq in drill results above assumes $1,750 Au and $22.00 Ag per ounce, and $4.30 Cu, $1.25 Pb, and $1.50 Zn per pound, and 100% metallurgical recovery

Below Level 17 and West of the Current ET Mine Workings:

Eight holes were drilled to identify the continuity of the ET vein to the west and below the current mine workings on Level 17, and five assays have been received. ET-21-01 to 04 correspond to the area west of the current workings and it appears that the vein narrows significantly; however, more work is needed to understand the extent of the ET mineralization. ET-21-05 corresponds to the area below the current workings. It was redrilled (ET-21-05B) due to the original hole trending off target. The number of intersections correspond to offshoot vein and veinlets that make up the stockwork system of the Avino vein. The remaining outstanding assays are for holes below the current mining works.

Table 2: Below and Beside the ET Vein – Summary of Drilling – 8 holes and 3,170 metres

Hole Number	From<br> <br>(m)	To<br> <br>(m)	Length^1^ (m)	Au<br> <br>(g/t)	Ag<br> <br>(g/t)	Cu<br> <br>(ppm)	PB<br> <br>(ppm)	Zn<br> <br>(ppm)	AgEq^2^ (g/t)

| ET-21-01 | 309.80 | 320.60 | 10.80 | 0.11 | 7 | 537 | 50 | 154 | 23 |

| ET-21-02 | 364.65 | 365.85 | 1.20 | 0.03 | 9 | 84 | 165 | 302 | 14 |

| ET-21-03 | 288.40 | 288.95 | 0.55 | 0.15 | 58 | 459 | 469 | 283 | 79 |

| ET-21-04 | 303.00 | 310.50 | 7.50 | 0.85 | 8 | 210 | 46 | 116 | 79 |

| including | 309.30 | 310.20 | 0.90 | 2.59 | 15 | 513 | 44 | 115 | 228 |

| ET-21-05 | 182.15 | 183.15 | 1.00 | 0.57 | 62 | 17,514 | 71 | 71 | 322 |

| ET-21-05B | 180.75 | 181.90 | 1.15 | 0.20 | 16 | 4,785 | 65 | 127 | 90 |

| And | 459.15 | 466.20 | 7.05 | 0.03 | 10 | 3,513 | 37 | 363 | 57 |

| And | 489.25 | 489.85 | 0.60 | 0.04 | 17 | 15,150 | 19 | 83 | 205 |

| And | 494.50 | 508.20 | 13.70 | 0.07 | 14 | 5,222 | 185 | 292 | 85 |

| including | 494.50 | 494.80 | 0.30 | 0.07 | 54 | 49,200 | 121 | 246 | 662 |

1. True Widths cannot be determined with the available information

2. AgEq in drill results above assumes $1,750 Au and $22.00 Ag per ounce, and $4.30 Cu, $1.25 Pb, and $1.50 Zn per pound, and 100% metallurgical recovery

12	Page

MANAGEMENT’S DISCUSSION AND ANALYSIS<br> <br>FOR THE YEAR ENDED DECEMBER 31, 2021

La Malinche Vein:

The La Malinche vein has been tested by six holes and the assays are shown in Table 3. The style of mineralization intersected resembles the low-sulphidation epithermal San Gonzalo vein, which was the main source of the Company’s production from 2012 to its closure in 2019. This vein may represent a northwestern fault-dislocated extension of the San Gonzalo vein.

More exploration work will be conducted to confirm this concept and broaden the understanding of the system.

Table 3: La Malinche – Summary of Drilling – 8 holes and 820 metres

Hole Number	From<br> <br>(m)	To<br> <br>(m)	Length^1^ (m)	Au<br> <br>(g/t)	Ag<br> <br>(g/t)	Cu<br> <br>(ppm)	PB<br> <br>(ppm)	Zn<br> <br>(ppm)	AgEq^2^ (g/t)

| LM-21-07 | 29.90 | 30.10 | 0.20 | 7.87 | 100 | 2,710 | 27,700 | 2,880 | 870 |

| LM-21-08 | 5.75 | 6.40 | 0.65 | 6.04 | 173 | 697 | 6,100 | 1,350 | 689 |

| And | 13.75 | 14.90 | 1.15 | 0.41 | 29 | 470 | 3,190 | 1,292 | 85 |

| including | 14.60 | 14.90 | 0.30 | 1.44 | 50 | 1,270 | 2,020 | 1,240 | 193 |

| LM-21-08 | 16.60 | 16.65 | 0.05 | 1.49 | 320 | 2,650 | 75,400 | 1,800 | 746 |

| And | 86.98 | 87.03 | 0.05 | 0.42 | 61 | 2,890 | 99,600 | 17,300 | 557 |

1. True Widths cannot be determined with the available information

2. AgEq in drill results above assumes $1,750 Au and $22.00 Ag per ounce, and $4.30 Cu, $1.25 Pb, and $1.50 Zn per pound, and 100% metallurgical recovery

These drill results are encouraging as the presence of mineralized material in the La Malinche Vein has been shown to extend along a strike distance of 250 metres and to a depth of 75 metres from surface. The 650 metre gap between the La Malinche vein and the northwest termination of the San Gonzalo vein remains prospective.

Nuestra Señora Vein

The Nuestra Señora structure is another example of an epithermal, low sulfidation vein. This structure ranges from 0.10 to 0.90 m wide, composed of white, gray, and banded quartz, abundant galena, sphalerite, and moderate argentite. Disseminated pyrite is also observed, as well as scarce chalcopyrite in some areas.

Table 4: Nuestra Señora – Summary of Drilling – 2 Holes at 340 metres

Hole Number	From<br> <br>(m)	To<br> <br>(m)	Length^1^ (m)	Au<br> <br>(g/t)	Ag<br> <br>(g/t)	Cu<br> <br>(ppm)	PB<br> <br>(ppm)	Zn<br> <br>(ppm)	AgEq^2^ (g/t)

| NS-21-01 | 145.80 | 146.10 | 0.30 | 0.03 | 71 | 2,480 | 26,300 | 29,700 | 324 |

| And | 148.20 | 149.20 | 1.00 | 0.99 | 82 | 604 | 38,292 | 12,986 | 360 |

| including | 148.20 | 148.50 | 0.30 | 2.99 | 135 | 880 | 56,300 | 21,800 | 676 |

| including | 149.00 | 149.20 | 0.20 | 0.16 | 184 | 712 | 104,000 | 26,500 | 688 |

| And | 149.55 | 149.70 | 0.15 | 0.31 | 143 | 426 | 90,600 | 111,000 | 968 |

| NS-21-02 | 154.30 | 154.55 | 0.25 | 0.10 | 206 | 73,400 | 521 | 930 | 1,116 |

| And | 157.65 | 157.75 | 0.10 | 0.08 | 174 | 63,200 | 643 | 702 | 958 |

| And | 157.90 | 158.20 | 0.30 | 0.04 | 100 | 41,200 | 333 | 456 | 609 |

| And | 159.25 | 159.75 | 0.50 | 0.06 | 106 | 14,200 | 436 | 701 | 289 |

| And | 160.25 | 161.15 | 0.90 | 0.17 | 268 | 20,928 | 6,288 | 10,121 | 603 |

| including | 160.25 | 160.50 | 0.25 | 0.06 | 192 | 24,200 | 1,300 | 2,440 | 508 |

| including | 160.50 | 160.70 | 0.20 | 0.12 | 323 | 22,300 | 1,470 | 1,770 | 618 |

| including | 160.70 | 161.15 | 0.45 | 0.26 | 285 | 18,500 | 11,200 | 18,100 | 649 |

1. True Widths cannot be determined with the available information

2. AgEq in drill results above assumes $1,750 Au and $22.00 Ag per ounce, and $4.30 Cu, $1.25 Pb, and $1.50 Zn per pound, and 100% metallurgical recovery

13	Page

MANAGEMENT’S DISCUSSION AND ANALYSIS<br> <br>FOR THE YEAR ENDED DECEMBER 31, 2021

Santiago Vein:

The Santiago vein lies north of the ET Mine in an area of narrow veins that average 1 to 2 metres in width, and it intersects the San Gonzalo vein with similar style of mineralization to the historically exploited at San Gonzalo Mine. The San Gonzalo Mine previously produced 6 million ounces of silver equivalent until it closed in 2019. The continuity of the mineralization of the Santiago vein is being tested as well as a possible offset displacement by the San Gonzalo fault. This target was drilled from surface. Because of the proximity to San Gonzalo underground infrastructure, mining access would be relatively easy, if significant mineralization is found.

Table 5: Santiago Vein – Summary of Drilling – 7 holes and 1,717 metres

Hole Number	From<br> <br>(m)	To<br> <br>(m)	Length^1^ (m)	Au<br> <br>(g/t)	Ag<br> <br>(g/t)	Cu<br> <br>(ppm)	PB<br> <br>(ppm)	Zn<br> <br>(ppm)	AgEq^2^ (g/t)

| ST-21-04 | 202.60 | 203.40 | 0.80 | 2.62 | 643 | 2,500 | 2,605 | 2,918 | 904 |

| including | 202.90 | 203.20 | 0.30 | 6.24 | 1,000 | 1,010 | 3,710 | 6,080 | 1,548 |

| ST-21-07 | 211.2 | 211.4 | 0.2 | 0.16 | 46 | 2740 | 3480 | 262 | 106 |

1. True Widths cannot be determined with the available information

2. AgEq in drill results above assumes $1,750 Au and $22.00 Ag per ounce, and $4.30 Cu, $1.25 Pb, and $1.50 Zn per pound, and 100% metallurgical recovery

El Trompo Vein:

The El Trompo Vein is an offshoot of the Avino Vein. Historical data suggests that there are narrower high-grade areas within the broader vein volume.  Also, existing underground infrastructure adjacent to the El Trompo vein, potentially provides rapid and easy access for mining. The structure has already been exposed and developed on the upper levels in the ET Area of the Avino Vein. Drilling on this vein has been from surface to confirm the continuity of the mineralization at depth.

Table 6: El Trompo Vein – Summary of Drilling – 9 hole and 1,569 metres

Hole Number	From<br> <br>(m)	To<br> <br>(m)	Length^1^ (m)	Au<br> <br>(g/t)	Ag<br> <br>(g/t)	Cu<br> <br>(ppm)	PB<br> <br>(ppm)	Zn<br> <br>(ppm)	AgEq^2^ (g/t)

| TR-21-09 | 178.50 | 180.00 | 1.50 | 0.01 | 6 | 416 | 42 | 3,187 | 26 |

1. True Widths cannot be determined with the available information

2. AgEq in drill results above assumes $1,750 Au and $22.00 Ag per ounce, and $4.30 Cu, $1.25 Pb, and $1.50 Zn per pound, and 100% metallurgical recovery

The recent El Trompo drilling has demonstrated continuity along 250 m of strike at a depth of 120 m below surface.

San Jorge Vein:

The San Jorge vein appears to be an extension of the Santiago vein across a known fault. Only one exploratory hole has been drilled to date.

Table 7: San Jorge Vein – Summary of Drilling - 1 hole and 133 metres

Hole Number	From<br> <br>(m)	To<br> <br>(m)	Length^1^ (m)	Au<br> <br>(g/t)	Ag<br> <br>(g/t)	Cu<br> <br>(ppm)	PB<br> <br>(ppm)	Zn<br> <br>(ppm)	AgEq^2^ (g/t)

| SJG-21-01 | 83.30 | 85.50 | 2.20 | 0.02 | 10 | 100 | 55 | 433 | 15 |

1. True Widths cannot be determined with the available information

2. AgEq in drill results above assumes $1,750 Au and $22.00 Ag per ounce, and $4.30 Cu, $1.25 Pb, and $1.50 Zn per pound, and 100% metallurgical recovery

14	Page

MANAGEMENT’S DISCUSSION AND ANALYSIS<br> <br>FOR THE YEAR ENDED DECEMBER 31, 2021

Current Drilling Highlights

As of Dec 31, 2021, the total meterage drilled was 15,583 and is as follows:

·	El Trompo Vein – 1,569 metres

| · | Santiago Vein – 1,717 metres |

| · | La Malinche – 820 metres |

| · | Nuestra Senora – 340 metres |

| · | San Jorge – 133 metres |

| · | Below and Beside ET – 4,082 metres |

| · | Brecha de bajo and Bart Veins – 895 metres |

| · | La Potosina – 2,382 metres |

| · | Oxide Tailings – 3,645 metres |

Assays are pending due to long turnaround times at the laboratories for some of the Oxide Tailings drilling as well as the holes at La Potosina, Brecha de Bajo and 3 holes below ET.

Avino Historic Above Ground Stockpile Production Highlights

	Q4<br> <br>2021	Q4<br> <br>2020	Change %	YTD 2021	YTD 2020	Change %

| Total Mill Feed (dry tonnes) | - | - | 0% | 10,806 | 4,711 | 129% |

| Feed Grade Silver (g/t) | - | - | 0% | 41 | 59 | -30% |

| Feed Grade Gold (g/t) | - | - | 0% | 0.26 | 0.31 | -14% |

| Feed Grade Copper (%) | - | - | 0% | 0.12 | 0.15 | -22% |

| Recovery Silver (%) | - | - | 0% | 65% | 50% | 30% |

| Recovery Gold (%) | - | - | 0% | 63% | 41% | 54% |

| Recovery Copper (%) | - | - | 0% | 45% | 31% | 45% |

| Total Silver Produced (oz) | - | - | 0% | 9,336 | 4,481 | 108% |

| Total Gold Produced (oz) | - | - | 0% | 58 | 19 | 205% |

| Total Copper Produced (lbs) | - | - | 0% | 12,584 | 4,857 | 159% |

| Total Silver Equivalent Produced (oz) calculated* | - | - | 0% | 15,784 | 6,860 | 130% |

* In Q4 2021, AgEq was calculated using metal prices of $23.33 oz Ag, $1,795 oz Au, and $4.40 lb Cu. In Q4 2020, AgEq was calculated using metals prices of $24.39 oz Ag, $1,867 oz Au and $2.67 lb Cu.

Moving forward, no production is expected from the Historic Stockpiles, and any production during 2021 was a result of ramp-up procedures.

Qualified Person(s)

Peter Latta, P.Eng, MBA, VP Technical Services, Avino, is a qualified person within the context of National Instrument 43-101, and has reviewed and approved the technical data in this document.

15	Page

MANAGEMENT’S DISCUSSION AND ANALYSIS<br> <br>FOR THE YEAR ENDED DECEMBER 31, 2021

Non – IFRS Measures

EBITDA and Adjusted earnings

Earnings, or loss, before interest, taxes and amortization (“EBITDA”) is a non IFRS financial measure which excludes the following items from net earnings:

·	Income tax expense

| · | Finance cost |

| · | Amortization and depletion |

Adjusted earnings excludes the following additional items from EBITDA

·	Share based compensation;

| · | Non-operational items including foreign exchange movements, fair value adjustments on outstanding warrants and other non-recurring items |

Management believes EBITDA and adjusted earnings provides an indication of continuing capacity to generate operating cash flow to fund capital needs, service debt obligations and fund capital expenditures. These measures are intended to provide additional information to investors and analysts. There are not standardized definitions under IFRS and should not be considered in isolation or as a substitute for measures of operating performance prepared in accordance with IFRS.

Adjusted earnings excludes share-based payments, and non-operating or recurring items such as foreign exchange gains and losses and fair value adjustments on outstanding warrants. Under IFRS, entities must reflect within compensation expense the cost of share-based payments. In the Company’s circumstances, share-based compensation can involve significant amounts that will not be settled in cash but are settled by issuance of shares in exchange. The Company discloses adjusted earnings to aid in understanding the results of the company.

The following table provides a reconciliation of net earnings in the financial statements to EBITDA and adjusted earnings, and includes the Company’s discontinued operations (see Note 5 of the consolidated audited financial statements):

Expressed in 000’s of US$, unless otherwise noted	Q4 2021		Q4 2020		YTD 2021		YTD 2020

| Net income (loss) for the period | $ | 2,629 | $ | (1,555) | $ | (2,057) | $ | (7,651) |

| Depreciation and depletion | | 778 | | 332 | | 2,116 | | 2,111 |

| Interest income and other | | (35) | | (101) | | (178) | | (332) |

| Interest expense | | 9 | | 3 | | 24 | | 25 |

| Finance cost | | 6 | | 36 | | 52 | | 211 |

| Accretion of reclamation provision | | 11 | | 25 | | 47 | | 99 |

| Current income tax expense | | 2 | | 73 | | 27 | | 161 |

| Deferred income tax expense (recovery) | | 1,421 | | (1,082) | | 412 | | (1,569) |

| EBITDA | $ | 4,821 | $ | (2,269) | $ | 443 | $ | (6,945) |

| Fair value adjustment on warrant liability | | (21) | | 637 | | (1,581) | | 650 |

| Realized loss on warrants exercised | | - | | 26 | | 1,106 | | 2,733 |

| Share-based payments | | 78 | | 795 | | 1,469 | | 1,857 |

| Stand-by costs during strike action | | - | | 1,519 | | 800 | | 2,394 |

| Foreign exchange loss (gain) | | (132) | | (890) | | 61 | | 811 |

| Adjusted earnings (loss) | $ | 4,746 | $ | (182) | $ | 2,298 | $ | 1,500 |

16	Page

MANAGEMENT’S DISCUSSION AND ANALYSIS<br> <br>FOR THE YEAR ENDED DECEMBER 31, 2021

Cash cost per payable ounce, all-in sustaining cash cost per payable ounce, and cash flow per share

Cash cost per payable ounce, all-in sustaining cash cost per payable ounce, and cash flow per share are measures developed by mining companies in an effort to provide a comparable standard. However, there can be no assurance that our reporting of these non-IFRS measures is similar to that reported by other mining companies. Total cash cost per payable ounce, all-in sustaining cash cost per payable ounce, and cash flow per share are measures used by the Company to manage and evaluate operating performance of the Company’s mining operations, and are widely reported in the silver and gold mining industry as benchmarks for performance, but do not have standardized meanings prescribed by IFRS, and are disclosed in addition to IFRS measures.

Management believes that the Company’s ability to control the cash cost per payable silver equivalent ounce is one of its key performance drivers impacting both the Company’s financial condition and results of operations. Achieving a low silver equivalent production cost base allows the Company to remain profitable from mining operations even during times of low commodity prices, and provides more flexibility in responding to changing market conditions. In addition, a profitable operation results in the generation of positive cash flows, which then improve the Company’s financial condition.

The Company has adopted the reporting of “all-in sustaining cash cost per silver equivalent payable ounce”. This measure has no standardized meaning throughout the industry. However, it is intended to provide additional information. Avino presents all-in sustaining cash cost, because it believes that it more fully defines the total current cost associated with producing a silver equivalent payable ounce. Further, the Company believes that this measure allows investors of the Company to better understand its cost of producing silver equivalent payable ounces, and better assess the Company’s ability to generate cash flow from operations. Although the measure seeks to reflect the full cost per silver equivalent ounce of production from current operations, it does not include capital expenditures attributable to mine expansions, exploration, and evaluation costs attributable to growth projects, income tax payments, and financing costs. In addition, the calculation of all-in sustaining cash costs does not include depreciation and depletion expense as it does not reflect the impact of expenditures incurred in prior periods.

The Company’s calculation of all-in sustaining cash costs includes sustaining capital expenditures of $1,780 for the year ended December 31, 2021 (December 31, 2020 - $1,699) all of which is attributable to the Avino Mine

The Company also presents cash flow per share, as it believes it assists investors and other stakeholders in evaluating the Company's overall performance and its ability to generate cash flow from current operations. To facilitate a better understanding of these measures as calculated by the Company, detailed reconciliations between the non-IFRS measures and the Company’s consolidated financial statements are provided below. The measures presented are intended to provide additional information, and should not be considered in isolation nor should they be considered substitutes for IFRS measures. Calculated figures may not add up accurately due to rounding.

Cash Cost and All-in Sustaining Cash Cost per Silver Equivalent Payable Ounce

The following table provide a reconciliation of cost of sales from the consolidated financial statements to cash cost and all-in sustaining cash cost per silver equivalent payable ounce sold. In each table, “silver equivalent payable ounces sold” consists of the sum of payable silver ounces, gold ounces and copper tonnes sold, before penalties, treatment charges, and refining charges, multiplied by the ratio of the average spot gold and copper prices for the corresponding period.

17	Page

MANAGEMENT’S DISCUSSION AND ANALYSIS<br> <br>FOR THE YEAR ENDED DECEMBER 31, 2021

The following table reconcile cost of sales to cash cost per payable AgEq oz and all-in sustaining cash cost per payable AgEq oz for the three months ended December 31, 2021, and 2020:

Expressed in 000’s of US$, unless otherwise noted	Avino						AHAG Stockpiles					Consolidated

| | Q4 2021 | | | Q4 2020 | | | Q4 2021 | | | Q4 2020 | | Q4 2021 | | | Q4 2020 | | |

| Cost of sales | $ | 4,766 | | $ | 2,658 | | $ | 146 | | $ | - | $ | 4,912 | | $ | 2,658 | |

| Stand-by costs during strike action | | - | | | (1,519 | ) | | - | | | - | | - | | | (1,519 | ) |

| Depletion and depreciation | | (728 | ) | | (303 | ) | | (13 | ) | | - | | (741 | ) | | (303 | ) |

| Cash production cost | | 4,038 | | | 836 | | | 133 | | | - | | 4,171 | | | 836 | |

| Payable silver equivalent ounces sold | | 417,881 | | | 59,710 | | | 18,004 | | | - | | 435,885 | | | 59,710 | |

| Cash cost per silver equivalent ounce | $ | 9.67 | | $ | 14.01 | | $ | 7.37 | | $ | - | $ | 9.57 | | $ | 14.01 | |

| General and administrative expenses | | 928 | | | 1,633 | | | 39 | | | - | | 967 | | | 1,633 | |

| Treatment & refining charges | | 510 | | | 47 | | | 19 | | | | | 529 | | | 47 | |

| Penalties | | 1,181 | | | 45 | | | 19 | | | | | 1,200 | | | 45 | |

| Sustaining capital expenditures | | 774 | | | 1,106 | | | - | | | - | | 774 | | | 1,106 | |

| Stand-by costs during stoppages | | - | | | 1,519 | | | - | | | - | | - | | | 1,519 | |

| Share-based payments and G&A depreciation | | (120 | ) | | (824 | ) | | (5 | ) | | - | | (125 | ) | | (824 | ) |

| Cash operating cost | $ | 7,311 | | $ | 4,362 | | $ | 205 | | $ | - | $ | 7,516 | | | 4,362 | |

| AISC per silver equivalent ounce | $ | 17.50 | | $ | 73.08 | | $ | 11.37 | | $ | - | $ | 17.24 | | $ | 73.08 | |

The following table reconciles cash cost per AgEq oz production cost to all-in sustaining cash cost per AgEq oz for the year ended December 31, 2021, and 2020:

Expressed in 000’s of US$, unless otherwise noted	Avino						AHAG Stockpiles						Consolidated

| | 2021 | | | 2020 | | | 2021 | | | 2020 | | | 2021 | | | 2020 | | |

| Cost of sales | $ | 7,535 | | $ | 15,222 | | $ | 146 | | $ | 610 | | $ | 7,681 | | $ | 15,832 | |

| Stand-by costs during strike action | | (800 | ) | | (2,394 | ) | | - | | | - | | | (800 | ) | | (2,394 | ) |

| Depletion and depreciation | | (1,963 | ) | | (1,981 | ) | | (13 | ) | | (14 | ) | | (1,976 | ) | | (1,995 | ) |

| Cash production cost | | 4,772 | | | 10,847 | | | 133 | | | 596 | | | 4,905 | | | 11,443 | |

| Payable silver equivalent ounces sold | | 524,993 | | | 1,011,665 | | | 18,004 | | | 59,702 | | | 542,997 | | | 1,071,367 | |

| Cash cost per silver equivalent ounce | $ | 9.09 | | $ | 10.72 | | $ | 7.37 | | $ | 9.98 | | $ | 9.03 | | $ | 10.68 | |

| General and administrative expenses | | 5,045 | | | 4,622 | | | 39 | | | 137 | | | 5,084 | | | 4,759 | |

| Treatment & refining charges | | 637 | | | 1,274 | | | 19 | | | 67 | | | 656 | | | 1,341 | |

| Penalties | | 1,436 | | | 2,020 | | | 19 | | | 121 | | | 1,455 | | | 2,141 | |

| Sustaining capital expenditures | | 1,781 | | | 1,699 | | | - | | | - | | | 1,781 | | | 1,699 | |

| Stand-by costs during stoppages | | 800 | | | 2,394 | | | - | | | - | | | 800 | | | 2,394 | |

| Share-based payments and G&A depreciation | | (1,604 | ) | | (1,945 | ) | | (5 | ) | | (28 | ) | | (1,609 | ) | | (1,973 | ) |

| Cash operating cost | $ | 12,867 | | $ | 20,911 | | $ | 205 | | | 893 | | $ | 13,072 | | $ | 21,804 | |

| AISC per silver equivalent ounce | $ | 24.51 | | $ | 20.67 | | $ | 11.37 | | $ | 14.95 | | $ | 24.07 | | $ | 20.35 | |

18	Page

MANAGEMENT’S DISCUSSION AND ANALYSIS<br> <br>FOR THE YEAR ENDED DECEMBER 31, 2021

Cash Flow per Share

Cash flow per share is determined based on operating cash flows before movements in working capital, as illustrated in the consolidated statements of cash flows, divided by the basic and diluted weighted average shares outstanding during the three months and year ended December 31, 2021, and 2020.

	Q4 2021		Q4 2020		****	2021		2020

| Operating cash flows before movements in working capital | $ | 4,020 | $ | (2,199 | ) | $ | 1,657 | $ | (2,479 | ) | | Weighted average number of shares outstanding | | | | | | | | | | |

| Basic | | 102,243,211 | | 89,568,682 | | | 100,161,357 | | 83,180,069 | |

| Diluted | | 103,938,699 | | 89,568,682 | | | 100,161,357 | | 83,180,069 | |

| Cash Flow per Share – basic & diluted | $ | 0.04 | $ | (0.02 | ) | $ | 0.02 | $ | (0.03 | ) |

Working Capital

	December 31,<br> <br>2021		****	December 31,<br> <br>2020

| Current assets | $ | 35,478 | | $ | 19,702 | |

| Current liabilities | | (3,843 | ) | | (5,022 | ) |

| Working capital | $ | 31,635 | | $ | 14,680 | |

Results of Operations

Summary of Quarterly Results

(000’s)	2021		2021			2021			2021			2020			2020			2020			2020

| Quarter ended | Dec 31<br> <br>Q4 | | Sep 30<br> <br>Q3 | | **** | Jun 30<br> <br>Q2 | | **** | Mar 31<br> <br>Q1 | | **** | Dec 31<br> <br>Q4 | | **** | Sep 30<br> <br>Q3 | | **** | Jun 30<br> <br>Q2 | | **** | Mar 31<br> <br>Q1 | | |

| Revenue | $ | 9,318 | $ | 1,881 | | $ | - | | $ | 29 | | $ | 1,407 | | $ | 2,659 | | $ | 4,840 | | $ | 7,116 | |

| Net income (loss) from all operations  for the quarter | | 2,629 | | (214 | ) | | (2,654 | ) | | (1,818 | ) | | (1,555 | ) | | (4,589 | ) | | (1,276 | ) | | (232 | ) |

| Earnings (loss) per share from all operations - basic | $ | 0.03 | $ | (0.00 | ) | $ | (0.03 | ) | $ | (0.02 | ) | $ | (0.02 | ) | $ | (0.05 | ) | $ | (0.02 | ) | $ | (0.00 | ) |

| Earnings (loss) per share from all operations - diluted | $ | 0.04 | $ | (0.00 | ) | $ | (0.03 | ) | $ | (0.02 | ) | $ | (0.02 | ) | $ | (0.05 | ) | $ | (0.02 | ) | $ | (0.00 | ) |

| Total<br> <br>Assets | $ | 86,264 | $ | 82,109 | | $ | 83,024 | | $ | 84,550 | | $ | 68,780 | | $ | 71,638 | | $ | 70,970 | | $ | 67,420 | |

·	Revenue increased in Q4 2021 compared to previous quarters after Q4 2020, due to the restart of operations and the commencement of sales.
·	Net income in Q4 2021 increased primarily due to higher mine operating income of $5.6 million compared with prior quarter, partially offset by higher current and deferred income tax of $1.4 million.
·	Total assets increased at December 31, 2021 compared to previous quarters in 2021, as result of increased operating cash flow generation. Total assets had increased compared to 2020 due to the receipt of net proceeds from financing activities of $19.2 million in connection with a brokered at-the-market offering issued under prospectus supplements, warrants and stock options exercised, most of which came in during Q1 2021.

19	Page

MANAGEMENT’S DISCUSSION AND ANALYSIS<br> <br>FOR THE YEAR ENDED DECEMBER 31, 2021

Quarterly results will fluctuate with changes in revenues, cost of sales, general and administrative expenses, including non-cash items such as share-based payments, and other items including foreign exchange and deferred income taxes.

Liquidity and Capital Resources

The Company’s ability to generate sufficient amounts of cash, in both the short term and the long term, to maintain existing capacity and to fund ongoing exploration, is dependent upon the discovery of economically recoverable reserves or resources and the ability of the Company to obtain the financing necessary to generate and sustain profitable operations.

Management expects that the Company’s ongoing liquidity requirements will be funded from cash generated from current operations and from further financing, as required, in order to fund ongoing exploration activities, and meet its objectives, including ongoing advancement at the Avino Mine. The Company continues to evaluate financing opportunities to advance its projects. The Company’s ability to secure adequate financing is, in part, dependent on overall market conditions, the prices of silver, gold, and copper, and other factors outside the Company’s control. There is no guarantee the Company will be able to secure any or all necessary financing in the future. The Company’s recent financing activities are summarized in the table below.

Intended Use of Proceeds	Actual Use of Proceeds

| During 2021, the Company received net proceeds of $18.1 million in connection with a brokered at-the-market offering issued under prospectus supplements, $0.8 million in connection with warrants exercised and $0.2 million in connection with stock options exercised. | As of the date of this MD&A, the Company is using the funds as intended. During 2021, the Company announced an increase to its exploration from 12,000 to 30,600 metres of exploration and resource drilling. As of the date of this MD&A, over 15,500 metres of the program had been completed.<br> <br><br> <br>The Company will use the gross proceeds raised from the at-the-market offering, as well as warrants and options exercised, for advancing the development of other areas of the Avino Mine, and its operations and production, and to a lesser extent, for general working capital.<br> <br><br> <br>In supporting mining operations in Mexico, the Company incurred expenditures of $1.1 million for exploration and evaluation activities, acquired property and equipment of $2.8 million, and made lease and loan repayments of $0.5 million during the year ended December 31, 2021. |

20	Page

MANAGEMENT’S DISCUSSION AND ANALYSIS<br> <br>FOR THE YEAR ENDED DECEMBER 31, 2021

Intended Use of Proceeds	Actual Use of Proceeds

| During 2020, the Company received net proceeds of $4.7 million in connection with a brokered at-the-market offering issued under prospectus supplements and $3.7 million in connection with warrants exercised. | As of the date of this MD&A, the Company had used, and was continuing to use, the funds as intended. There has been no impact on the ability of the Company to achieve its business objectives and milestones.<br> <br><br> <br>The Company intends to continue to explore its properties, as described above, subject to market conditions and the ability to continue to obtain suitable financing. |

| In May 2015, the Company entered into a master credit facility with Sandvik Customer Finance LLC for $5.0 million. The facility is being used to acquire equipment necessary for continuing exploration activities at the Avino and Bralorne Mines. | As of the date of this MD&A, the Company had used, and was continuing to use, the facility as intended, and there was $5.0 million in available credit remaining under the facility. There has been no impact on the ability of the Company to achieve its business objectives and milestones. |

Discussion and analysis relating to the Company’s liquidity as at December 31, 2021 and December 31, 2020, as well as movements in cash flow during the year ended December 31, 2021 and 2020, is as follows:

Statement of Financial Position

(000’s)	December 31,<br> <br>2021		****	December 31,<br> <br>2020

| Cash | $ | 24,765 | | $ | 11,713 | |

| Working capital | | 31,635 | | | 14,680 | |

| Accumulated Deficit | | (55,953 | ) | | (54,339 | ) |

Cash Flow

(000’s)	December 31,<br> <br>2021		****	December 31,<br> <br>2020

| Cash generated by operating activities | $ | 109 | | $ | 72 | |

| Cash generated by financing activities | | 16,092 | | | 4,203 | |

| Cash used in investing activities | | (3,207 | ) | | (2,167 | ) |

| Change in cash | | 12,994 | | | 2,108 | |

| Effect of exchange rate changes on cash | | 58 | | | (20 | ) |

| Cash, beginning of period | | 11,713 | | | 9,625 | |

| Cash, end of period | $ | 24,765 | | $ | 11,713 | |

Operating Activities

Cash generated by operating activities for the year ended December 31, 2021, was $0.1 million compared to $0.1 million used for the year ended December 31, 2020. Cash movements from operating activities can fluctuate with changes in net income, non-cash items, such as foreign exchange and deferred income tax expenses, and working capital.

21	Page

MANAGEMENT’S DISCUSSION AND ANALYSIS<br> <br>FOR THE YEAR ENDED DECEMBER 31, 2021

Financing Activities

Cash generated by financing activities was $16.1 million for the year ended December 31, 2021, compared to $4.2 million for the year ended December 31, 2020. Cash generated by financing activities for the year ended December 31, 2021, relates to the issuance of shares for cash, by way of at-the-market sales and the exercise of warrants and stock options. Cash used in financing activities relates to the repayment of the term facility, as well as on its existing equipment loans and finance leases for mining equipment.

During the year ended December 31, 2021, the Company received net proceeds from issuance of shares for cash of $18.1 million (December 31, 2020 - $4.7 million), received proceeds from warrants exercise by $0.8 million (December 31, 2020 - $3.7 million) and received proceeds from stock options exercised by $0.2 million (December 31, 2020 - $0.03 million). The Company also made term facility repayments of $2.5 million (December 31, 2020 - $3.3 million) and made finance lease and equipment loan payments totalling $0.5 million (December 31, 2020 - $0.9 million).

Investing Activities

Cash used in investing activities for the year ended December 31, 2021, was $3.2 million compared to $2.2 million for year ended December 31, 2020. Cash generated from the proceeds of sale of common shares in Talisker totalled $Nil (December 31, 2020 - $1.3 million). Proceeds were re-invested through the exercise of share purchase warrants in Talisker, totalling $Nil (December 31, 2020 - $1.2 million).

Other financing activities the year ended December 31, 2021, includes cash capital expenditures and exploration and evaluation expenditures of $3.2 million (December 31, 2020 - $2.2 million) on the acquisition of property and equipment and exploration expenditures.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements.

Transactions with Related Parties

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

(a)	Key management personnel
	The Company has identified its directors and certain senior officers as its key management personnel. The compensation costs for key management personnel for the years ended December 31, 2021, 2020 and 2019 is as follows:

	2021		2020		2019

| Salaries, benefits, and consulting fees | $ | 1,021 | $ | 757 | $ | 723 |

| Share-based payments | | 1,188 | | 1,468 | | 659 |

| | $ | 2,209 | $ | 2,225 | $ | 1,382 |

22	Page

MANAGEMENT’S DISCUSSION AND ANALYSIS<br> <br>FOR THE YEAR ENDED DECEMBER 31, 2021

(b)	Amounts due to/from related parties
	In the normal course of operations the Company transacts with companies related to Avino’s directors or officers. All amounts payable and receivable are non-interest bearing, unsecured and due on demand. The following table summarizes the amounts due to / (from) related parties:

	December 31,<br> <br>2021		December 31,<br> <br>2020

| Oniva International Services Corp. | $ | 107 | $ | 106 |

| Directors | | 56 | | 48 |

| | $ | 163 | $ | 154 |

	For services provided to the Company as President and Chief Executive Officer, the Company pays Intermark Capital Corporation (“ICC”), a company controlled by David Wolfin, the Company’s president and CEO and also a director, for consulting services. For the year ended December 31, 2021, 2020 and 2019 the Company paid $239, $224 and $226, respectively to ICC.
(c)	Other related party transactions
	The Company has a cost sharing agreement with Oniva International Services Corp. (“Oniva”) for office and administration services. Pursuant to the cost sharing agreement, the Company will reimburse Oniva for the Company’s percentage of overhead and corporate expenses and for out-of-pocket expenses incurred on behalf of the Company. David Wolfin, President & CEO, and a director of the Company, is the sole owner of Oniva. The cost sharing agreement may be terminated with one-month notice by either party without penalty.
	The transactions with Oniva during the year ended December 31, 2021, 2020 and 2019 are summarized below:

	2021		2020		2019

| Salaries and benefits | $ | 766 | $ | 636 | $ | 665 |

| Office and miscellaneous | | 403 | | 290 | | 322 |

| Exploration and evaluation assets | | - | | - | | 206 |

| | $ | 1,169 | $ | 926 | $ | 1,193 |

Financial Instruments and Risks

The fair values of the Company’s amounts due to related parties and accounts payable approximate their carrying values because of the short-term nature of these instruments. Cash, amounts receivable, long-term investments, and warrant liability are recorded at fair value. The carrying amounts of the Company’s term facility, equipment loans, and finance lease obligations are a reasonable approximation of their fair values based on current market rates for similar financial instruments.<br> <br><br> <br>The Company’s financial instruments are exposed to certain financial risks, including credit risk, liquidity risk, and market risk.
(a)	Credit Risk
	Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Company has exposure to credit risk through its cash, long-term investments and amounts receivable. The Company manages credit risk, in respect of cash and short-term investments, by maintaining the majority of cash and short-term investments at highly rated financial institutions.

23	Page

MANAGEMENT’S DISCUSSION AND ANALYSIS<br> <br>FOR THE YEAR ENDED DECEMBER 31, 2021

	The Company is exposed to a significant concentration of credit risk with respect to its trade accounts receivable balance because all of its concentrate sales are with two (December 31, 2020 – three) counterparty (see Note 23. However, the Company has not recorded any allowance against its trade receivables because to-date all balances owed have been settled in full when due (typically within 60 days of submission) and because of the highly-rated nature of the counterparties.
	The Company’s maximum exposure to credit risk at the end of any period is equal to the carrying amount of these financial assets as recorded in the unaudited consolidated statement of financial position. At December 31, 2021, no amounts were held as collateral.
(b)	Liquidity Risk
	Liquidity risk is the risk that the Company will encounter difficulty in satisfying financial obligations as they become due. The Company manages its liquidity risk by forecasting cash flows required by its operating, investing and financing activities. The Company had cash at December 31, 2021, in the amount of $24,765 and working capital of $31,635 in order to meet short-term business requirements. Accounts payable have contractual maturities of approximately 30 to 90 days, or are due on demand and are subject to normal trade terms. The current portions of term facility, equipment loans, and finance lease obligations are due within 12 months of the consolidated statement of financial position date. Amounts due to related parties are without stated terms of interest or repayment.
	The maturity profiles of the Company’s contractual obligations and commitments as at December 31, 2021, are summarized as follows:

	Total		Less Than<br> <br>1 Year		1-5 years		More Than 5 Years

| Accounts payable and accrued liabilities | $ | 3,260 | $ | 3,260 | $ | - | $ | - |

| Amounts due to related parties | | 163 | | 163 | | - | | - |

| Minimum rental and lease payments | | 889 | | 96 | | 331 | | 462 |

| Finance lease obligations | | 1,152 | | 438 | | 714 | | - |

| Total | $ | 5,464 | $ | 3,957 | $ | 1,045 | $ | 462 |

24	Page

MANAGEMENT’S DISCUSSION AND ANALYSIS<br> <br>FOR THE YEAR ENDED DECEMBER 31, 2021

(c)	Market Risk
	Market risk consists of interest rate risk, foreign currency risk and price risk. These are discussed further below.
	Interest Rate Risk
	Interest rate risk consists of two components:

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

In management’s opinion, the Company is exposed to interest rate risk primarily on its outstanding term facility, as the interest rate is subject to floating rates of interest. A 10% change in the interest rate would not result in a material impact on the Company’s operations.
Foreign Currency Risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The Company is exposed to foreign currency risk to the extent that the following monetary assets and liabilities are denominated in Mexican pesos and Canadian dollars:

	December 31, 2021						December 31, 2020

| | MXN | | | CDN | | | MXN | | | CDN | | |

| Cash | $ | 3,576 | | $ | 1,450 | | $ | 36,896 | | $ | 2,831 | |

| Long-term investments | | - | | | 4,976 | | | - | | | 5,317 | |

| Reclamation bonds | | - | | | 6 | | | - | | | 6 | |

| Amounts receivable | | - | | | 33 | | | - | | | 20 | |

| Accounts payable and accrued liabilities | | (57,604 | ) | | (211 | ) | | (22,972 | ) | | (157 | ) |

| Due to related parties | | - | | | (206 | ) | | - | | | (196 | ) |

| Finance lease obligations | | (1 | ) | | (394 | ) | | (1,543 | ) | | (448 | ) |

| Net exposure | | (54,029 | ) | | 5,654 | | | 12,381 | | | 7,373 | |

| US dollar equivalent | $ | (2,363 | ) | $ | (4,054 | ) | $ | 620 | | $ | 5,791 | |

Based on the net US dollar denominated asset and liability exposures as at December 31, 2021, a 10% fluctuation in the US/Mexican and Canadian/US exchange rates would impact the Company’s earnings for the year ended December 31, 2021, by approximately $143 (year ended December 31, 2020 - $589). The Company has not entered into any foreign currency contracts to mitigate this risk.
Price Risk
Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices, other than those arising from interest rate risk or foreign currency risk.

25	Page

MANAGEMENT’S DISCUSSION AND ANALYSIS<br> <br>FOR THE YEAR ENDED DECEMBER 31, 2021

The Company is exposed to price risk with respect to its amounts receivable, as certain trade accounts receivable are recorded based on provisional terms that are subsequently adjusted according to quoted metal prices at the date of final settlement. Quoted metal prices are affected by numerous factors beyond the Company’s control and are subject to volatility, and the Company does not employ hedging strategies to limit its exposure to price risk. At December 31, 2021, based on outstanding accounts receivable that were subject to pricing adjustments, a 10% change in metals prices would have an impact on net earnings (loss) of $26 (December 31, 2020 - $2).
The Company is exposed to price risk with respect to its long-term investments, as these investments are carried at fair value based on quoted market prices. Changes in market prices result in gains or losses being recognized in net income (loss). At December 31, 2021, a 10% change in market prices would have an impact on net earnings (loss) of approximately $330 (December 31, 2020 - $418).
The Company’s profitability and ability to raise capital to fund exploration, evaluation and production activities is subject to risks associated with fluctuations in mineral prices. Management closely monitors commodity prices, individual equity movements, and the stock market to determine the appropriate course of action to be taken by the Company.

(d)	Classification of Financial Instruments

IFRS 7 Financial Instruments: Disclosures establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value as follows:
Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;

| Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and |

| Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs). | | The following table sets forth the Company’s financial assets and financial liabilities measured at fair value on a recurring basis by level within the fair value hierarchy as at December 31, 2021: |

	Level 1		Level 2		Level 3

| Financial assets | | | | | | | |

| Cash | $ | 24,765 | $ | - | $ | - | |

| Amounts receivable | | - | | 1,208 | | - | |

| Long-term investments | | 3,939 | | - | | - | |

| Total financial assets | $ | 28,704 | $ | 1,208 | $ | - | |

| Financial liabilities | | | | | | | |

| Warrant liability | | - | | - | | (741 | ) |

| Total financial liabilities | $ | - | $ | - | $ | (741 | ) |

The Company uses Black-Scholes model to measure its Level 3 financial instruments. As at December 31, 2021, the Company’s Level 3 financial instruments consisted of the Silver Wolf warrants and the warrant liability.
For the Company’s warrant liability valuation and fair value adjustments during the years ended December 31, 2021 and 2020, see Note 14 of the consolidated financial statements.

26	Page

MANAGEMENT’S DISCUSSION AND ANALYSIS<br> <br>FOR THE YEAR ENDED DECEMBER 31, 2021

The Company’s Level 3 financial assets, which consists of warrants of Silver Wolf that were acquired during the year ended December 31, 2021 (see Note 8 for long-term investments details and Note 9 for details of the acquisition). The warrants are measured on acquisition and at December 31, 2021, using the following assumptions:

	December 31,<br> <br>2021		****	March 1,<br> <br>2021

| Weighted average assumptions: | | | | | | |

| Risk-free interest rate | | 0.91 | % | | 0.26 | % |

| Expected dividend yield | | 0 | % | | 0 | % |

| Expected life (years) | | 2.19 | | | 3.00 | |

| Expected stock price volatility | | 128.24 | % | | 129.51 | % |

| Weighted average fair value at grant date | C$ | 0.11 | | C$ | 0.32 | |

Risks associated with Public Health Crises, including COVID-19

The Company's business, operations and financial condition could be materially adversely affected by the outbreak of epidemics, pandemics or other health crises, such as the outbreak of COVID-19 that was designated as a pandemic by the World Health Organization on March 11, 2020. The international response to the spread of COVID-19 has led to significant restrictions on travel, temporary business closures, quarantines, global stock market volatility and a general reduction in consumer activity. Such public health crises can result in operating, supply chain and project development delays and disruptions, global stock market and financial market volatility, declining trade and market sentiment, reduced movement of people and labour shortages, and travel and shipping disruption and shutdowns, including as a result of government regulation and prevention measures, or a fear of any of the foregoing, all of which could affect commodity prices, interest rates, credit risk and inflation. In addition, the current COVID-19 pandemic, and any future emergence and spread of similar pathogens could have an adverse impact on global economic conditions which may adversely impact the Company's operations, and the operations of suppliers, contractors and service providers, including smelter and refining service providers, and the demand for the Company's production.

The Company may experience business interruptions, including suspended (whether government mandated or otherwise) or reduced operations relating to COVID-19 and other such events outside of the Company's control, which could have a material adverse impact on its business, operations and operating results, financial condition and liquidity.

As at the date of this MD&A, the duration of the business disruptions internationally and related financial impact of COVID-19 cannot be reasonably estimated. It is unknown whether and how the Company may be affected if the pandemic persists for an extended period of time. In particular, the region in which we operate may not have sufficient public infrastructure to adequately respond or efficiently and quickly recover from such event, which could have a materially adverse effect on the Company's operations. The Company's exposure to such public health crises also includes risks to employee health and safety. Should an employee, contractor, community member or visitor become infected with a serious illness that has the potential to spread rapidly, this could place the Company's workforce at risk.

Mexico has been particularly impacted by the COVID-19 pandemic. The Company’s mining operations have been temporarily shut-down since April 2020, first as a result of governmental COVID-19 quarantine and containment measures, and later in July 2020 due to a labour strike, which was resolved in October 2020. The labour settlement agreement must be approved by the Mexican governmental labour authority. On August 3, 2021, the Company announced that mining operations had resumed. Although the Company takes appropriate measures and safeguards to protect its staff from infection, these events can result in volatility and disruption to supply chains, operations, transportation, and mobility of people, which are beyond the control of the Company, and which have had and could continue to adversely affect the availability of components, supplies and materials, labour, interest rates, credit ratings, credit risk, inflation, business operations, financial markets, exchange rates, and other factors material to the Company, including in particular, the Company’s revenues and concentrate delivery schedule.

27	Page

MANAGEMENT’S DISCUSSION AND ANALYSIS<br> <br>FOR THE YEAR ENDED DECEMBER 31, 2021

Commitments

The Company has a cost sharing agreement to reimburse Oniva for a percentage of its overhead expenses, to reimburse 100% of its out-of-pocket expenses incurred on behalf of the Company, and to pay a percentage fee based on Oniva’s total overhead and corporate expenses. The agreement may be terminated with one-month notice by either party. Transactions and balances with Oniva are disclosed in Note 10.

The Company and its subsidiaries have various operating lease agreements for their office premises, use of land, and equipment. Commitments in respect of these lease agreements are as follows:

	December 31,<br> <br>2021		December 31,<br> <br>2020

| Not later than one year | $ | 96 | $ | 20 |

| Later than one year and not later than five years | | 330 | | 14 |

| Later than five years | | 462 | | 3 |

| | $ | 889 | $ | 37 |

Office lease payments recognized as an expense during the year ended December 31, 2021, totalled $16 (December 31, 2020 - $40).

Outstanding Share Data

The Company’s authorized share capital consists of an unlimited number of common shares without par value.

As at March 16, 2022 the following common shares, warrants, and stock options were outstanding:

		Exercise price

| Share capital | 102,243,211 | | - | - |

| Warrants (US) | 1,950,412 | $ | 0.80 | 1.53 |

| Restricted Share Units (“RSUs”) | 1,439,477 | | - | 0.43 – 1.39 |

| Stock options | 2,839,000 | C$ | 0.79 - C1.98 | 0.52 – 3.39 |

| Fully diluted | 108,472,100 | | | |

All values are in US Dollars.

The following are details of outstanding stock options as at December 31, 2021 and March 16, 2022:

Expiry Date	Exercise Price Per Share		Number of Shares Remaining Subject to Options<br> <br>(December 31, 2021)		Number of Shares Remaining Subject to Options<br> <br>(March 16, 2022)

| September 20, 2022 | C$ | 1.98 | | 880,000 | | 880,000 |

| August 28, 2023 | C$ | 1.30 | | 105,000 | | 105,000 |

| August 21, 2024 | C$ | 0.79 | | 174,000 | | 174,000 |

| August 4, 2025 | C$ | 1.64 | | 1,680,000 | | 1,680,000 |

| Total: | | | | 2,839,000 | | 2,839,000 |

28	Page

MANAGEMENT’S DISCUSSION AND ANALYSIS<br> <br>FOR THE YEAR ENDED DECEMBER 31, 2021

The following are details of outstanding warrants as at December 31, 2021 and March 16, 2022:

Expiry Date	Exercise Price Per Share		Number of Underlying Shares<br> <br>(December 31, 2021)		Number of Underlying Shares<br> <br>(March 16, 2022)

| September 25, 2023 | $ | 0.80 | | 1,950,412 | | 1,950,412 |

| Total: | | | | 1,950,412 | | 1,950,412 |

The following are details of outstanding RSUs as at December 31, 2021 and March 16, 2022:

Expiry Date	Number of Shares Remaining Subject to RSUs<br> <br>(December 31, 2021)		Number of Shares Remaining Subject to RSUs<br> <br>(March 16, 2022)

| August 21, 2022 | | 539,733 | | 539,733 |

| August 4, 2023 | | 899,744 | | 899,744 |

| Total: | | 1,439,477 | | 1,439,477 |

Proposed Transactions

Acquisition of La Preciosa – On October 27, 2021, the Company announced it has entered into a share purchase agreement (the “Transaction”) to indirectly acquire through the purchase of the shares of certain holding companies, the La Preciosa Property (“La Preciosa”) from Coeur Mining, Inc. (“Coeur”).

Consideration of $20 million, of which $15 million is payable at the closing of the Transaction from Avino’s cash on hand and the remaining $5 million is payable before the first anniversary of the closing date.

Additionally, Avino will issue 14.0 million units (the “Units”), each comprising one common share and one-half of a common share purchase warrant (each full warrant, a “Warrant”).

Contingent cash consideration of US$8.75 million will be payable by Avino to Coeur within 12 months of initial production at La Preciosa. Avino may elect to pay up to half of the contingent cash consideration in Avino shares. Coeur will retain ownership of a 1.25% net smelter return royalty on the Gloria and Abundancia areas of La Preciosa, and a 2.00% gross value royalty on all areas of La Preciosa other than the Gloria and Abundancia areas.

So long as Coeur holds 10% or more of the outstanding shares of Avino, Coeur has the option to nominate one director for election to the Avino board or designate a board observer. At closing, Coeur has also been granted pre-emptive rights to maintain its equity ownership position in Avino and has entered into a voting agreement with Avino.

The completion of the proposed Transaction is subject to a number of customary conditions precedent, as well as, the authorization of the Mexican Federal Economic Competition Commission, approval of the issuance of the Unit consideration and contingent payment amount by the NYSE American, the Toronto Stock Exchange, and any other necessary third party approvals. The Closing of the Transaction is expected to occur during Q1 2022.

29	Page

Recent Accounting Pronouncements

Application of new and revised accounting standards:

Interest Rate Benchmark Reform – Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)

The amendments in Interest Rate Benchmark Reform – Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) introduce a practical expedient for modifications required by the reform, clarify that hedge accounting is not discontinued solely because of the IBOR reform, and introduce disclosures that allow users to understand the nature and extent of risks arising from the IBOR reform to which the entity is exposed to and how the entity manages those risks as well as the entity’s progress in transitioning from IBORs to alternative benchmark rates, and how the entity is managing this transition.

The amendments were applied effective January 1, 2021, and did not have a material impact on the Company’s financial statements.

Future Changes in Accounting Policies Not Yet Effective as at December 31, 2021:

Property, Plant and Equipment — Proceeds before Intended Use (Amendments to IAS 16)

The amendments prohibit deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognizes the proceeds from selling such items, and the cost of producing those items, in profit or loss. The amendments are applied on or after the first annual reporting period beginning on or after January 1, 2022, with early application permitted. The amendments are applied retrospectively, but only to items of property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after the beginning of the earliest period presented in the financial statements in which the Company first applies the amendments. The Company will recognize the cumulative effect of initially applying the amendments as an adjustment to the opening balance of retained earnings at the beginning of that earliest period presented. This amendment will impact the Company’s accounting for proceeds from mineral sales prior to reaching commercial production at levels intended by management.

Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)

The amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current. The amendments are applied on or after the first annual reporting period beginning on or after January 1, 2023, with early adoption permitted. This amendment is not expected to have a material impact on the Company’s financial statements.

Disclosure Controls and Procedures

Management has designed and evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures on financial reporting (as defined in NI 52-109 - Certification of Disclosure in Issuers’ Annual and Interim Filings) and has concluded that, based on its evaluation, they are effective as of December 31, 2021, to provide reasonable assurance that material information relating to the Company and its consolidated subsidiaries is made known to management and disclosed in accordance with applicable securities regulations.

30	Page

Internal Controls over Financial Reporting (“ICFR”)

The management of the Company is responsible for establishing and maintaining adequate internal controls over financial reporting. Internal controls over financial reporting is a process to provide reasonable assurance regarding the reliability of the Company’s financial reporting for external purposes in accordance with IFRS. Internal controls over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect the Company’s transactions and dispositions of the assets of the Company; providing reasonable assurance that transactions are recorded as necessary for preparation of the Company’s consolidated financial statements in accordance with IFRS; providing reasonable assurance that receipts and expenditures are made in accordance with authorizations of management and the directors of the Company; and providing reasonable assurance that unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the Company’s consolidated financial statements would be prevented or detected on a timely basis.  Our management and the Board of Directors do not expect that our disclosure controls and procedures or internal controls over financial reporting will prevent all errors or all instances of fraud. A control system, no matter how well designed and operated, can provide only reasonable (not absolute) assurance that the control system’s objectives will be met. Further, the design, maintenance and testing of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control gaps and instances of fraud have been detected. These inherent limitations include the reality that judgment in decision-making can be faulty, and that breakdowns can occur because of simple errors or mistakes. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design, maintenance and testing of any system of controls is based in part upon certain assumptions about the likelihood of future events, and any control system may not succeed in achieving its stated goals under all potential future conditions.

Management conducted an evaluation of the effectiveness of the Company’s internal controls over financial reporting based on the framework and criteria established in Internal Control – Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013) (‘COSO’). This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation.

Based on this evaluation, management concluded that as of December 31, 2021, the Company’s internal controls over financial reporting, as defined in NI 52-109 - Certification of Disclosure in Issuer’s Annual and Interim Filings, are effective to achieve the purpose for which they have been designed.

31	Page

Cautionary Statement

This MD&A is based on a review of the Company’s operations, financial position and plans for the future based on facts and circumstances as of March 16, 2022. Except for historical information or statements of fact relating to the Company, this document contains “forward-looking statements” within the meaning of applicable Canadian securities regulations. Forward-looking statements in this document include, but are not limited to, those regarding the economic outlook for the mining industry, expectations regarding metals prices, expectations regarding production output, production costs, cash costs and other operating results, expectations regarding growth prospects and the outlook for the Company’s operations, and statements regarding the Company’s liquidity, capital resources, and capital expenditures. There can be no assurance that such statements will prove to be accurate, and future events and actual results could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from our expectations are disclosed in the Company’s documents filed from time to time via SEDAR with the Canadian regulatory agencies to whose policies we are bound. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made, and we do not undertake any obligation to update forward-looking statements should conditions or our estimates or opinions change, except as required by applicable securities regulations. These statements involve known and unknown risks, uncertainties, and other factors that may cause the Company’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

32	Page

avino_ex993.htm EXHIBIT 99.3

---

Form 52-109F1

Certification of Annual Filings

Full Certificate

I, David Wolfin, Chief Executive Officer, of Avino Silver & Gold Mines Ltd.,** certify the following:

1.	Review: **** I have reviewed the AIF, if any, annual financial statements and annual MD&A, including, for greater certainty, all documents and information that are incorporated by reference in the AIF (together, the “annual filings”) of Avino Silver & Gold Mines Ltd. (the “issuer”) for the financial year ended December 31, 2021.
2.	No misrepresentations: **** Based on my knowledge, having exercised reasonable diligence, the annual filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, for the period covered by the annual filings.

| 3. | Fair presentation: **** Based on my knowledge, having exercised reasonable diligence, the annual financial statements together with the other financial information included in the annual filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the annual filings. |

| 4. | Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer. | | 5. | Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the financial year end |

(a)	designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
	(i)	material information relating to the issuer is made known to us by others, particularly during the period in which the annual filings are being prepared; and
	(ii)	information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
(b)	designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

5.1	Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
5.2	ICFR – material weakness relating to design – N/A
5.3	Limitation on scope of design *- ***** N/A
6.	Evaluation: The issuer’s other certifying officer(s) and I have

(a)	evaluated, or caused to be evaluated under our supervision, the effectiveness of the issuer’s DC&P at the financial year end and the issuer has disclosed in its annual MD&A our conclusions about the effectiveness of DC&P at the financial year end based on that evaluation; and
(b)	evaluated, or caused to be evaluated under our supervision, the effectiveness of the issuer’s ICFR at the financial year end and the issuer has disclosed in its annual MD&A

(i)	our conclusions about the effectiveness of ICFR at the financial year end based on that evaluation; and
(ii)	N/A

7.	Reporting changes in ICFR: **** The issuer has disclosed in its annual MD&A any change in the issuer’s ICFR that occurred during the period beginning on October 1, 2021 and ended on December 31, 2021 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
8.	Reporting to the issuer’s auditors and board of directors or audit committee: The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of ICFR, to the issuer’s auditors, and the board of directors or the audit committee of the board of directors any fraud that involves management or other employees who have a significant role in the issuer’s ICFR.

Date: March 16, 2022

“David Wolfin”

| David Wolfin<br> <br>Chief Executive Officer |

avino_ex994.htm EXHIBIT 99.4

---

Form 52-109F1

Certification of Annual Filings

Full Certificate

I, Nathan Harte, Chief Financial Officer, of Avino Silver & Gold Mines Ltd.,** certify the following:

1.	Review: **** I have reviewed the AIF, if any, annual financial statements and annual MD&A, including, for greater certainty, all documents and information that are incorporated by reference in the AIF (together, the “annual filings”) of Avino Silver & Gold Mines Ltd. (the “issuer”) for the financial year ended December 31, 2021.
2.	No misrepresentations: **** Based on my knowledge, having exercised reasonable diligence, the annual filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, for the period covered by the annual filings.

| 3. | Fair presentation: **** Based on my knowledge, having exercised reasonable diligence, the annual financial statements together with the other financial information included in the annual filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the annual filings. |

| 4. | Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer. | | 5. | Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the financial year end |

(a)	designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
	(i)	material information relating to the issuer is made known to us by others, particularly during the period in which the annual filings are being prepared; and
	(ii)	information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
(b)	designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

5.1	Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
5.2	ICFR – material weakness relating to design – N/A
5.3	Limitation on scope of design *- ***** N/A
6.	Evaluation: The issuer’s other certifying officer(s) and I have

(a)	evaluated, or caused to be evaluated under our supervision, the effectiveness of the issuer’s DC&P at the financial year end and the issuer has disclosed in its annual MD&A our conclusions about the effectiveness of DC&P at the financial year end based on that evaluation; and
(b)	evaluated, or caused to be evaluated under our supervision, the effectiveness of the issuer’s ICFR at the financial year end and the issuer has disclosed in its annual MD&A

(i)	our conclusions about the effectiveness of ICFR at the financial year end based on that evaluation; and
(ii)	N/A

7.	Reporting changes in ICFR: **** The issuer has disclosed in its annual MD&A any change in the issuer’s ICFR that occurred during the period beginning on October 1, 2021 and ended on December 31, 2021 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
8.	Reporting to the issuer’s auditors and board of directors or audit committee: The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of ICFR, to the issuer’s auditors, and the board of directors or the audit committee of the board of directors any fraud that involves management or other employees who have a significant role in the issuer’s ICFR.

Date: March 16, 2022

“Nathan Harte”

| Nathan Harte<br> <br>Chief Financial Officer |