Avino Silver & Gold Mines Ltd 6-K, filed Mar 10, 2026
Avino Silver & Gold Mines Ltd (ASM)
About this 6-K
Avino Silver & Gold Mines Ltd filed this 6-K on March 10, 2026.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the Month of March, 2026
Commission File Number:
(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
Explanatory Note
Avino Silver & Gold Mines Ltd. (the “Company”) is filing this Form 6-K to provide its financial information for the years ended December 31, 2025 and 2024, as filed on Sedar+ on March 10, 2026, and to incorporate such financial information into the Company’s registration statements referenced below.
Exhibits 99.1 and 99.2 attached hereto is hereby incorporated by reference to the Company’s Registration Statements on Form F-10 (Registration Statement File Numbers 333-287246 and 333-293435) to be a part thereof from the date on which this report is submitted, to the extent not superseded by documents or reports subsequently filed.
Exhibits:
The following exhibits are filed as part of this Form 6-K.
Exhibit No. |
| Document |
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| Consolidated Audited Financial Statements For the years ended December 31, 2025 and 2024 | |
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101.INS |
| Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). |
101.SCH |
| Inline XBRL Taxonomy Extension Schema Document |
101.CAL |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF |
| Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB |
| Inline XBRL Taxonomy Extension Label Linkbase Document |
101.PRE |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104 |
| Cover Page Interactive Data File (formatted as inline XBRL). |
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 hereunto duly authorized.
AVINO SILVER & GOLD MINES LTD. | |||
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Date: March 10, 2026 | By: | /s/ Jennifer Trevitt | |
Jennifer Trevitt | |||
Corporate Secretary | |||
3 |
EXHIBIT 99.1
AVINO SILVER & GOLD MINES LTD.
Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
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 IFRS Accounting Standards Board as issued by the International Financial Reporting Standards Board (“IFRS Accounting Standards”), 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.
“David Wolfin” | “Nathan Harte” |
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David Wolfin | Nathan Harte, CPA |
President & CEO | Chief Financial Officer |
March 10, 2026 | March 10, 2026 |
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of
Avino Silver & Gold Mines Ltd.
Opinion on the Financial Statements
We have audited the accompanying consolidated statements of financial position of Avino Silver & Gold Mines Ltd. and subsidiaries (the “Company”) as at December 31, 2025 and December 31, 2024, the related consolidated statements of operations and comprehensive income, shareholders' equity, and cash flows, for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2025 and December 31, 2024, and its financial performance and its cash flows for each of the two years in the period ended December 31, 2025, in accordance with IFRS Accounting 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, 2025, 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 10, 2026, expressed an unqualified opinion on the Company 's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. 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 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 financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the 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 financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the 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 financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the 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.
| 2 |
Plant, Equipment and Mining Properties - Assessment of Whether Indicators of Impairment Exist Refer to Notes 2 and 3 to the financial statements
Critical Audit Matter Description
The Company’s determination of whether or not an indicator of impairment exists at the cash generating unit (“CGU”) level requires significant management judgment. Changes in metal price forecasts or discount rates, 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 can result in a write-down of the carrying amounts of the Company’s plant, equipment and mining properties.
While several factors are assessed to determine whether or not an indicator of impairment exists, the judgments with the highest degree of subjectivity are changes in metal price forecasts (for silver, gold, and copper). Auditing these estimates and factors required a high degree of subjectivity in applying audit procedures and in evaluating the results of those procedures. This resulted in an increased extent of audit effort, including the involvement of fair value specialists.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the changes in metal price forecasts (for silver, gold, and copper) considered in the assessment of indicators of impairment included the following, among others:
| · | Evaluated the effectiveness of the Company’s controls over management’s assessment of indicators of impairment, and |
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| · | With the assistance of fair value specialists, evaluated future metal prices (for silver, gold, and copper) by comparing management forecasts to third party forecasts. |
/s/ Deloitte LLP
Chartered Professional Accountants
Vancouver, Canada
March 10, 2026
We have served as the Company's auditor since 2022.
| 3 |
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, 2025, 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, 2025, 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, 2025, of the Company and our report dated March 10, 2026, 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.
| 4 |
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/ Deloitte LLP
Chartered Professional Accountants
Vancouver, Canada
March 10, 2026
| 5 |
AVINO SILVER & GOLD MINES LTD. Consolidated Statements of Financial Position (Expressed in Thousands of US Dollars) |
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| Note |
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| December 31, 2025 |
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| December 31, 2024 |
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ASSETS |
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Current assets |
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Cash |
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Amounts receivable |
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Amounts due from related parties |
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| 11(b) |
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Taxes recoverable |
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| 5 |
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Derivative asset |
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Prepaid expenses and other assets |
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Inventory |
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| 6 |
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Total current assets |
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Exploration and evaluation assets |
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| 8 |
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Plant, equipment and mining properties |
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| 10 |
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Long-term investments |
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| 7 |
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Other assets |
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Total assets |
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| $ |
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LIABILITIES |
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Current liabilities |
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Accounts payable and accrued liabilities |
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Taxes payable |
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Deferred consideration payable |
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| 10 |
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Derivative liability |
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Current portion of finance lease obligations |
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Current portion of equipment loans |
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Total current liabilities |
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Finance lease obligations |
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Equipment loans |
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Reclamation provision |
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| 12 |
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Deferred income tax liabilities |
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| 21 |
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Total liabilities |
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EQUITY |
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Share capital |
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| 13 |
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Equity reserves |
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Treasury shares |
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Accumulated other comprehensive loss |
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Accumulated deficit |
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Total equity |
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Total liabilities and equity |
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| $ |
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Commitments & Contingencies – Note 16
Subsequent Events – Note 22
Approved by the Board of Directors on March 10, 2026.
| Michael Clark |
| Director | David Wolfin |
| Director |
The accompanying notes are an integral part of the consolidated financial statements
| 6 |
AVINO SILVER & GOLD MINES LTD. Consolidated Statements of Operations and Comprehensive Income(Expressed in Thousands of US Dollars) |
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| Note |
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| 2025 |
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| 2024 |
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Revenue from mining operations |
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| 14 |
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Cost of sales |
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| 14 |
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Mine operating income |
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Operating expenses |
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General and administrative expenses |
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| 15 |
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Share-based payments |
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| 13(c)(d) |
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Other items |
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Interest and other income |
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Gain (loss) on long-term investments |
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| 7 |
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Unrealized gain (loss) on derivatives |
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| 18(c) |
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Foreign exchange gain (loss) |
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Finance cost |
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| ( | ) |
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Accretion of reclamation provision |
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| 12 |
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Interest expense |
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| ( | ) |
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Other expenses |
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Loss on sale of mineral properties |
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Write-down of uncollectible account |
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Income before income taxes |
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Income taxes: |
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Current income tax expense |
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| 21 |
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| ( | ) |
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Deferred income tax expense |
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| 21 |
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| ( | ) |
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Income tax expense |
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Net income |
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Other comprehensive income (loss) |
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Items that may be reclassified subsequently to profit or loss: |
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Currency translation differences |
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| ( | ) | |
Total comprehensive income |
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Earnings per share |
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| 13(e) |
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Basic |
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Diluted |
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| $ |
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Weighted average number of common shares outstanding |
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| 13(e) |
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Basic |
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Diluted |
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The accompanying notes are an integral part of the consolidated financial statements
| 7 |
AVINO SILVER & GOLD MINES LTD. Consolidated Statements of Changes in Equity(Expressed in Thousands of US Dollars,) |
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| Note |
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| Number of Common Shares |
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| Share Capital Amount |
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| Equity Reserves |
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| Treasury Shares |
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| Accumulated Other Comprehensive Income (Loss) |
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| Accumulated Deficit |
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| Total Equity |
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Balance, January 1, 2024 |
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Common shares issued: |
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At the market issuances |
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| 13 |
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| - |
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Exercise of options |
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Vesting of RSUs |
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| 13 |
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| - |
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Issuance costs |
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| 13 |
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| - |
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| - |
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Share-based payments |
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| 13 |
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| - |
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| - |
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Net income for the period |
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| - |
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| - |
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Currency translation differences |
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| - |
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| - |
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| ( | ) |
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Balance, December 31, 2024 |
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| $ |
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| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ |
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Balance, January 1, 2025 |
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Common shares issued: |
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At the market issuances |
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| 13 |
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| - |
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Exercise of options |
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| 13 |
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| ( | ) |
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| - |
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Vesting of RSUs |
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| 13 |
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| ( | ) |
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| - |
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Carrying value of RSUs forfeited for withholding taxes |
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| 13 |
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| - |
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| ( | ) |
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| - |
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Issuance costs |
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| 13 |
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| - |
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| ( | ) |
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| - |
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Share-based payments |
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| 13 |
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| - |
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| - |
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Expiration of options |
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| 13 |
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| - |
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| - |
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Net income for the period |
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| 13 |
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| - |
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| - |
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Currency translation differences |
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| - |
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| - |
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Balance, December 31, 2025 |
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| $ |
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| $ |
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| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ |
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The accompanying notes are an integral part of the consolidated financial statements
| 8 |
AVINO SILVER & GOLD MINES LTD. Consolidated Statements of Cash Flows(Expressed in Thousands of US Dollars) |
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Operating Activities |
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Net income |
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Adjustments for non-cash items: |
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Deferred income tax expense |
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Depreciation and depletion |
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Accretion of reclamation provision |
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| 12 |
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Loss (gain) on investments |
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Unrealized loss (gain) on derivatives |
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| 18 |
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Unrealized loss (gain) on foreign exchange |
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Write down of uncollectible account |
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Write down of equipment and materials and supplies inventory |
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Loss on sale of mineral properties |
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Finance costs on deferred consideration payable |
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Other expenses |
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Share-based payments |
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Net change in non-cash working capital items |
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| 17 |
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Cash provided by operating activities |
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Financing Activities |
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Shares issued for cash, net of issuance costs |
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Proceeds from option exercises and RSU vesting, net |
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Lease liability payments |
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Equipment loan payments |
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Cash provided by financing activities |
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Investing Activities |
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Exploration and evaluation expenditures |
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Additions to plant, equipment and mining properties |
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Cash used in investing activities |
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Change in cash |
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Effect of exchange rate changes on cash |
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Cash, ending |
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Supplementary Cash Flow Information (Note 17)
The accompanying notes are an integral part of the consolidated financial statements
| 9 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
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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.
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 (except for the province of Quebec) and the United States, and trades on the Toronto Stock Exchange (“TSX”) under the ticker ASM:TSX, the NYSE American under the ticker ASM:NYSE-A, and the Frankfurt and Berlin Stock Exchanges under the ticker GV6.
The Company operates the Elena Tolosa Mine (“ET Mine” or “Avino Mine”) which produces copper, silver and gold at the historic Avino property in the state of Durango, Mexico. The Avino property also hosts the San Gonzalo Mine, which is currently on care and maintenance. The Company also holds 100% interest in Proyectos Mineros La Preciosa S.A. de C.V. (“La Preciosa”), a Mexican corporation which owns the La Preciosa Property.
2) BASIS OF PRESENTATION
Statement of Compliance
These consolidated financial statements have been prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (“IFRS Accounting Standards”).
Basis of Presentation
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.
Foreign Currency Translation
Foreign currency transactions
Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on the dates of the transactions. At each financial position reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at the date of the statement of financial position. Non-monetary items that are measured in terms of historical cost in a foreign currency are not re-translated.
Foreign operations
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.
| 10 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
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Significant Accounting Judgments and Estimates
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.
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, or as part of the related mine or mill. Depletion of capitalized costs for mining properties and depreciation of plant and equipment begin when operating levels intended by management have been reached. Management considers several factors in determining when a mining property has reached the intended production levels, including production capacity, recoveries, and number of uninterrupted production days.
The 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 at or 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.
| 11 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
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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.
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.
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.
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.
| 12 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
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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.
Impairment
There is significant judgment involved in assessing whether any indications of impairment exist for plant, equipment and mineral properties, with consideration given to both external and internal sources of information.
Information the Company considers include changes in the technological market, economic and legal environment in which the Company operates that are not within its control that affect the recoverable amount of mineral properties. Internal sources of information include the manner in which mineral property, plant and equipment are being used or are expected to be used and indications of the economic performance of the assets.
Changes in metal price forecasts, changes in discount rates, increases or decreases in estimated future costs of production, increases or decreases in estimated future capital costs, reductions or increases in the amount of recoverable mineral resources and/or adverse or favorable current economics can result in a write-down or write-up of the carrying amounts of the Company’s mining interests.
Based on the Company’s assessment with respect to possible indicators of impairment of its mineral properties, including the prevailing market metals prices and existence of a market capitalization deficiency, the Company concluded that as of December 31, 2025, no impairment indicator was identified.
There were no indicators of impairment identified as of December 31, 2025, on any of the Company’s CGUs.
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. 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.
| 13 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
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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. | ||||
Nueva Vizcaya Mining, S.A. de C.V. |
| |||
Promotora Avino, S.A. de C.V. (“Promotora”) | ||||
Compañía Minera Mexicana de Avino, S.A. de C.V. (“Avino Mexico”) | ||||
La Luna Silver & Gold Mines Ltd. | ||||
La Preciosa Silver & Gold Mines Ltd. | ||||
Proyectos Mineros La Preciosa S.A. de C.V. | ||||
Cervantes LLP |
Intercompany balances and transactions, including unrealized income and expenses arising from intercompany transactions, are eliminated in preparing the consolidated financial statements.
3) MATERIAL ACCOUNTING POLICIES
Exploration and evaluation assets and development costs
Exploration and evaluation expenditures
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. The proceeds from the sales of such assets are recognized as revenue.
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 at the time the determination is made.
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.
| 14 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
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Development expenditures
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.
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. Such estimation is a subjective process and the accuracy of any mineral resource estimate is a function of the quantity and quality of available data and of the assumptions made and judgments used in engineering and geological interpretation. Differences between management’s assumptions including economic assumptions such as metal prices, discount rate and market conditions could have a material effect in the future on the Company’s financial position, results of operation and cash flows.
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.
| 15 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
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As at December 31, 2025 and 2024, the Company estimated a remaining mine life for the Avino Mine of
Upon the acquisition of an asset or a group of assets and liabilities that does not constitute a business, the Company identifies and recognizes the individual identifiable assets acquired and liabilities assumed. The cost of the group is allocated to the individual identifiable assets and liabilities on the basis of their relative fair values at the date of purchase. Such a transaction or event does not give rise to goodwill. Transaction costs related to the acquisition is capitalized as part of cost of assets acquired.
Accumulated mill, machinery, plant facilities, and certain equipment are depreciated using the straight-line method over their estimated useful lives, not to exceed the life of the mine for any assets that are inseparable from the mine. When parts of an item of plant and equipment have different useful lives, they are accounted for as separate items (or components) of plant and equipment.
Plant and equipment are depreciated using the following annual rates and methods:
Office equipment, furniture, and fixtures | |
Computer equipment | |
Mine machinery and transportation equipment | |
Mill machinery and processing equipment | |
Buildings |
Impairment
At each financial position reporting date, the carrying amounts of the Company’s non-financial or long-lived assets are reviewed to determine whether there is any indication that those assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. Where the asset does not generate cash flows that are independent from other assets, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
An asset’s recoverable amount is the higher of fair value less costs to sell and value in use. Fair value is determined as the 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.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, provided the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.
Leases
The Company assesses whether a contract is, or contains, a lease, at inception of the contract. The Company recognizes a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets (such as tablets and personal computers, small items of office furniture and telephones). For these leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.
| 16 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
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The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate.
The incremental borrowing rate depends on the term, currency and start date of the lease and is determined based on a series of inputs including: the risk-free rate based on government bond rates; a country-specific risk adjustment; a credit risk adjustment based on bond yields; and an entity-specific adjustment when the risk profile of the entity that enters into the lease is different to that of the Company and the lease does not benefit from a guarantee from the Company.
Lease payments included in the measurement of the lease liability comprise:
| · | Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable |
| · | Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date |
| · | The amount expected to be payable by the lessee under residual value guarantees |
| · | The exercise price of purchase options, if the lessee is reasonably certain to exercise the options |
| · | Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease |
The lease liability is presented as a separate line in the consolidated statement of financial position. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
| · | The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate |
| · | The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used) |
| · | A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification |
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses. Right-of-use assets are depreciated over the shorter period of lease term and useful life of the right-of-use asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Company expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.
The Company applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in the ‘Plant, Equipment and Mining Properties’ policy.
| 17 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
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Inventory
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.
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.
NRV of mineralized material is determined with reference to relevant market prices less the estimated costs of completion and the estimated costs necessary to make the sale. NRV of materials and supplies is generally calculated by reference to salvage or scrap values when it is determined that the supplies are obsolete. NRV provisions are recorded within cost of sales in the consolidated statement of operations, and are reversed to reflect subsequent recoveries where the inventory is still on hand.
Revenue from Contracts with Customers
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.
Performance Obligations
Based on the criteria outlined in IFRS 15, the Company applied 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.
Transfer of Control
Based on the criteria outlined in IFRS 15, the Company applied 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.
Provisional Pricing
Based on the criteria outlined in IFRS 15, the Company applied significant judgment in determining variable consideration. The Company identified a provisional pricing component in concentrate sales, representing variable consideration in the form of adjustments between original and final assay results relating to the quantity and quality of concentrate shipments. Pricing adjustments between provisional and final invoicing based on market prices for base and precious metals are included in revenues until final settlement.
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. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
|
Financial Instruments
Measurement – initial recognition
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.
Classification – financial assets
Amortized cost:
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.
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.
The Company financial assets at amortized costs include amounts receivable not related to sales of concentrate (including due from related parties) and reclamation bonds.
Fair value through other comprehensive income (“FVTOCI”)
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.
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.
The Company currently has no financial assets designated as FVTOCI.
Fair value through profit or loss (“FVTPL”)
By default, all other financial assets are measured subsequently at FVTPL, which includes cash, long-term investments, and amounts receivable from concentrate sales.
| 19 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
|
Classification – financial liabilities
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.
Financial liabilities at amortized cost include accounts payable and amounts due to related parties.
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 hedging arrangements. Financial liabilities related to hedging arrangements are classified FVTPL upon initial recognition. Fair value changes on financial liabilities classified as FVTPL are recognized in the consolidated statements of operations. As these arrangements mature, the fair value of the recorded derivative liability on the date of maturity is included in the consolidated statement of operations, along with the related decrease or increase to the derivative liability.
Impairment
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.
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
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.
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.
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.
All options and RSUs are recognized in the consolidated statements of operations and comprehensive income as an expense over the vesting period with a corresponding increase in equity reserves in the consolidated statements of financial position.
| 20 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
|
Reclamation and other provisions
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.
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.
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.
Earnings per share
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.
Income taxes
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.
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.
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.
4) RECENT ACCOUNTING PRONOUNCEMENTS
New and amended IFRS Accounting Standards that are effective for the current year:
Certain new accounting standards and interpretations have been published that are either applicable in the current year, or are not mandatory for the current period and have not been early adopted. We have assessed these standards, and they are not expected to have a material impact on the Company in the current or future reporting periods.
| 21 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
|
Amendments to IAS 21 – Lack of Exchangeability
The amendments clarify how an entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate when exchangeability is lacking. In addition, the amendments require the disclosure of information that enables users of financial statements to understand the impact of currency not being exchangeable. There was no material impact on the Company’s consolidated financial statements from the adoption of these amendments.
Future Changes in Accounting Policies Not Yet Effective as at December 31, 2025:
Amendments to IFRS 9 and IFRS 7 – Classification and Measurement of Financial instruments
The amendments provide guidance on the derecognition of a financial liability settled through electronic transfer, as well as the classification of financial assets for: contractual terms consistent with a basic lending arrangement; assets with non-recourse features and contractually linked instruments.
Additionally, the amendments introduce new disclosure requirements related to investments in equity instruments designated at fair value through other comprehensive income (“FVOCI”), and additional disclosures for financial instruments with contingent features.
The amendments to IFRS 9 and IFRS 7 regarding the Classification and Measurement of Financial Instruments with a mandatory application of the standard on annual reporting periods beginning on or after January 1, 2026. We are currently assessing these standards, and their potential impact on the Company in the current or future reporting periods.
Amendments to IFRS 18 – Presentation and Disclosure in Financial Statements
In April 2024, the IASB released IFRS 18. IFRS 18 replaces IAS 1 while carrying forward many of the requirements in IAS 1. IFRS 18 introduces new requirements: i) present specified categories and defined subtotals in the statement of earnings, ii) provide disclosures on management defined performance measures (MPMs) in the notes to the financial statements, iii) improve aggregation and disaggregation. IFRS 18 requires retrospective application with specific transition provisions.
IFRS 18 regarding the Presentation and Disclosure of Financial Statements with a mandatory application of the standard on annual reporting periods beginning on or after January 1, 2027. We are currently assessing these standards, and their potential impact on the Company in future reporting periods.
5) 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, 2025 |
|
| December 31, 2024 |
| ||
VAT recoverable |
| $ |
|
| $ |
| ||
GST recoverable |
|
|
|
|
|
| ||
Income taxes recoverable |
|
|
|
|
|
| ||
|
| $ |
|
| $ |
| ||
| 22 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
|
6) INVENTORY
|
| December 31, 2025 |
|
| December 31, 2024 |
| ||
Process material stockpiles |
| $ |
|
| $ |
| ||
Concentrate inventory |
|
|
|
|
|
| ||
Materials and supplies |
|
|
|
|
|
| ||
|
| $ |
|
| $ |
| ||
The amount of inventory recognized as an expense for the year ended December 31, 2025 totaled $
7) 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 December 31, |
|
| Net Additions / |
|
| Movements in foreign |
|
| Fair value adjustments |
|
| Fair Value December 31, |
| |||||
|
| 2024 |
|
| (Disposals) |
|
| exchange |
|
| for the period |
|
| 2025 |
| |||||
Talisker Resources Common Shares |
| $ |
|
| $ | ( | ) |
| $ |
|
| $ |
|
| $ |
| ||||
Silver Wolf Exploration Ltd. Common Shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Silver Wolf Exploration Ltd. Warrants |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Endurance Gold Corp. Common Shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Endurance Gold Corp. Warrants |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| |||||
Silver Wolf
During the year ended December 31, 2025, the Company received
| 23 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
|
8) EXPLORATION AND EVALUATION ASSETS
The Company has accumulated the following acquisition, exploration and evaluation costs which are not subject to depletion:
|
| Avino, Mexico |
|
| La Preciosa, Mexico |
|
| Canada |
|
| Total |
| ||||
Balance, December 31, 2023 |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Drilling and exploration |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Assessments and taxes |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Disposition of Olympic claims |
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||
Effect of movements in exchange rates |
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) | ||
Balance, December 31, 2024 |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Drilling and exploration |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Assessments and taxes |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Transfer to other assets |
|
|
|
|
| ( | ) |
|
|
|
|
|
| ( | ) | |
Transfer to mining properties (Note 10) |
|
|
|
|
| ( | ) |
|
|
|
|
|
| ( | ) | |
Disposition of Ana Maria and El Laberinto claims |
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) | ||
Effect of movements in exchange rates |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Balance, December 31, 2025 |
| $ |
|
| $ |
|
| $ | - |
|
| $ |
| |||
a) Avino, 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 two 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
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
| 24 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
|
Option Agreement – Silver Wolf Exploration Ltd. (“Silver Wolf”)
On March 11, 2021, the Company entered into an option agreement to grant Silver Wolf the exclusive right to acquire a
The Option Agreement between the Company and Silver Wolf is considered a related party transaction as the two companies have directors in common.
Unification La Platosa properties
The Unification La Platosa properties, consist of three leased concessions in addition to the leased concessions situated within the Avino mine area property near the towns of Panuco de Coronado and San Jose de Avino and surrounding the Avino Mine.
In February 2012, the Company’s wholly-owned Mexican subsidiary entered into a new agreement with Minerales de Avino, S.A. de C.V. (“Minerales”) whereby Minerales has indirectly granted to the Company the exclusive right to explore and mine the La Platosa property known as the “ET zone”. The ET zone includes the Avino Mine, where production at levels intended by management was achieved on July 1, 2015.
Under the agreement,
b) La Preciosa, Mexico
La Preciosa is a development stage mineral property located in the state of Durango, Mexico, within the municipalities of Pánuco de Coronado and Canatlán. The Project is hosting one of the largest undeveloped primary silver resources in Mexico, and is located adjacent to Avino’s existing operations at the Avino Property in Durango, Mexico. The property covers an area of approximately 1,134 hectares and is located on the eastern flank of the Sierra Madre Occidental mountain range.
On April 1, 2025, the Company determined that La Preciosa had demonstrated technical feasibility and commercial viability to support the reclassification from the exploration and evaluation asset stage to the development stage and mining properties with plant, equipment and mining properties.
As such, the Company performed an assessment for impairment under IFRS 6 prior to reclassification. Management assessed whether or not the assets were impaired using a quantitative assessment of the recoverable value.
Based on these factors, all of the criteria required by IAS 36.10 have been met, and the Company determined that the recoverable amount exceeds the carrying value, and no impairment was recorded.
| 25 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
|
9) NON-CONTROLLING INTEREST
At December 31, 2025, the Company had an effective
| 26 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
|
10) 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, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Additions / Transfers |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Writedowns |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) | |
Effect of movements in exchange rates |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) | |
Balance at December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Additions / Transfers |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Transfer from exploration and evaluation assets (Note 8) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Royalty buyback |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Writedowns |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
| ( | ) | ||
Effect of movements in exchange rates |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Balance at December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 15,851 |
|
|
|
| ||||||
ACCUMULATED DEPLETION AND DEPRECIATION / IMPAIRMENT | ||||||||||||||||||||||||||||
Balance at January 1, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Additions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Writedowns |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) | |
Balance at December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Additions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Writedowns |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
| ( | ) | ||
Balance at December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
NET BOOK VALUE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
At December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
| 27 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
|
Included in Buildings and construction in process above are assets under construction of $
As of December 31, 2025, the Company recorded a write-down of $
As at December 31, 2025, plant, equipment and mining properties included a net carrying amount of $
On August 25, 2025, the Company acquired all outstanding royalties and obligations held by Deterra Royalties Inc., on the La Preciosa property. Consideration for the transaction was $13.25 million upfront payment, followed by an $8.75 million payment deferred for one year. The consideration has been measured at fair value as of the transaction date and recorded as an addition to mineral properties. The present value of the deferred obligation payment was calculated using a discount interest rate of 7.47%.
11) 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 is as follows:
|
| 2025 |
|
| 2024 |
| ||
Salaries, benefits, and consulting fees |
| $ |
|
| $ |
| ||
Share-based payments |
|
|
|
|
|
| ||
|
| $ |
|
| $ |
| ||
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 were due to/(from) related parties:
|
| December 31, 2025 |
|
| December 31, 2024 |
| ||
Oniva International Services Corp. |
| $ |
|
| $ |
| ||
Silver Wolf Exploration Ltd. |
|
| ( | ) |
|
| ( | ) |
|
| $ | ( | ) |
| $ | ( | ) |
For consulting services provided to the Company by the President and Chief Executive Officer, the Company pays Intermark Capital Corporation (“ICC”), a company controlled by the Company’s President and CEO and director. For the year ended December 31, 2025, the Company paid $
| 28 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
|
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, with a 2.5% markup. The President & CEO, and 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 are summarized below:
|
| 2025 |
|
| 2024 |
| ||
Salaries and benefits |
| $ |
|
| $ |
| ||
Office and miscellaneous |
|
|
|
|
|
| ||
|
| $ |
|
| $ |
| ||
12) RECLAMATION PROVISION
Management’s estimate of the reclamation provision at December 31, 2025, is $
The present value of the obligation was calculated using a risk-free interest rate of
A reconciliation of the changes in the Company’s reclamation provision is as follows:
|
| December 31, 2025 |
|
| December 31, 2024 |
| ||
Balance at beginning of the period |
| $ |
|
| $ |
| ||
Changes in estimates |
|
|
|
|
|
| ||
Unwinding of discount |
|
|
|
|
|
| ||
Effect of movements in exchange rates |
|
|
|
|
| ( | ) | |
Balance at end of the period |
| $ |
|
| $ |
| ||
| 29 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
|
13) SHARE CAPITAL AND SHARE-BASED PAYMENTS
a) Authorized: Unlimited common shares without par value
b) Issued:
During the year ended December 31, 2025, the Company issued
During the year ended December 31, 2025, the Company issued
During the year ended December 31, 2025, the Company issued
During the year ended December 31, 2024, the Company issued
During the year ended December 31, 2024, the Company issued
During the year ended December 31, 2024, the Company issued
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.
| 30 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
|
Continuity of stock options is as follows:
|
| Underlying Shares |
|
| Weighted Average Exercise Price (C$) |
| ||
Stock options outstanding, January 1, 2024 |
|
|
|
| $ |
| ||
Granted |
|
|
|
| $ |
| ||
Exercised |
|
| ( | ) |
| $ |
| |
Cancelled / Forfeited |
|
| ( | ) |
| $ |
| |
Stock options outstanding, December 31, 2024 |
|
|
|
| $ |
| ||
Granted |
|
|
|
| $ |
| ||
Exercised |
|
| ( | ) |
| $ |
| |
Expired |
|
| ( | ) |
| $ |
| |
Stock options outstanding, December 31, 2025 |
|
|
|
| $ |
| ||
Stock options exercisable, December 31, 2025 |
|
|
|
| $ |
| ||
The following table summarizes information about the stock options outstanding and exercisable at December 31, 2025:
|
|
|
| Outstanding |
|
| Exercisable |
| ||||||||||||
Expiry Date |
| Price (C$) |
|
| Number of Options |
|
| Weighted Average Remaining Contractual Life (Years) |
|
| Number of Options |
|
| Weighted Average Remaining Contractual Life (Years) |
| |||||
| $ |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| $ |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| $ |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| $ |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
| $ |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Valuation of stock options requires the use of estimates and assumptions including the expected stock price volatility. The expected volatility used in valuing stock options is based on volatility observed in historical periods. Changes in the underlying assumptions can materially affect the fair value estimates. The fair value of the stock options was calculated using the Black-Scholes model with the following weighted average assumptions and resulting fair values:
|
| December 31, 2025 |
|
| December 31, 2024 |
| ||
Weighted average assumptions: |
|
|
|
|
|
| ||
Risk-free interest rate |
|
| % |
|
| % | ||
Expected dividend yield |
|
| % |
|
| % | ||
Expected life (years) |
|
|
|
|
|
| ||
Expected stock price volatility |
|
| % |
|
| % | ||
Expected forfeiture rate |
|
| % |
|
| % | ||
Weighted average fair value |
| C$ |
|
| C$ |
| ||
During the year ended December 31, 2025, the Company charged $
| 31 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
|
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.
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.
Continuity of RSUs is as follows:
|
| Underlying Shares |
|
| Weighted Average Price (C$) |
| ||
RSUs outstanding, January 1, 2024 |
|
|
|
| $ |
| ||
Granted |
|
|
|
| $ |
| ||
Exercised |
|
| ( | ) |
| $ |
| |
Cancelled / Forfeited |
|
| ( | ) |
| $ |
| |
RSUs outstanding, December 31, 2024 |
|
|
|
| $ |
| ||
Granted |
|
|
|
| $ |
| ||
Exercised |
|
| ( | ) |
| $ |
| |
Cancelled / Forfeited |
|
| ( | ) |
| $ |
| |
RSUs outstanding, December 31, 2025 |
|
|
|
| $ |
| ||
The following table summarizes information about the RSUs outstanding at December 31, 2025:
Issuance Date |
| Price (C$) |
|
| Number of RSUs Outstanding |
| ||
March 29, 2023 |
| $ |
|
|
|
| ||
July 10, 2023 |
| $ |
|
|
|
| ||
April 1, 2024 |
| $ |
|
|
|
| ||
April 9, 2025 |
| $ |
|
|
|
| ||
May 27, 2025 |
| $ |
|
|
|
| ||
|
|
|
|
|
|
|
| |
During the year ended December 31, 2025,
During the year ended December 31, 2025, the Company charged $
| 32 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
|
e) Earnings per share:
The calculations for basic earnings per share and diluted earnings per share are as follows:
|
| 2025 |
|
| 2024 |
| ||
Net income for the period |
| $ |
|
| $ |
| ||
Basic weighted average number of shares outstanding |
|
|
|
|
|
| ||
Effect of dilutive share options, warrants, and RSUs (‘000) |
|
|
|
|
|
| ||
Diluted weighted average number of shares outstanding |
|
|
|
|
|
| ||
Basic income per share |
| $ |
|
| $ |
| ||
Diluted income per share |
| $ |
|
| $ |
| ||
14) REVENUE AND COST OF SALES
The Company’s revenues for the year ended December 31, 2025 and 2024, are all attributable to Mexico, from shipments of concentrate from the Avino Mine and processing of development material from the La Preciosa Mine.
|
| 2025 |
|
| 2024 |
| ||
Concentrate sales |
| $ |
|
| $ |
| ||
Provisional pricing adjustments |
|
|
|
|
| ( | ) | |
|
| $ |
|
| $ |
| ||
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.
| 33 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (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 for the year ended December 31, 2025 and 2024:
|
| 2025 |
|
| 2024 |
| ||
Production costs |
| $ |
|
| $ |
| ||
Write down of equipment and materials and supplies inventory |
|
|
|
|
|
| ||
Depreciation and depletion |
|
|
|
|
|
| ||
|
| $ |
|
| $ |
| ||
15) GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses consist of the following:
|
| 2025 |
|
| 2024 |
| ||
Salaries and benefits |
| $ |
|
| $ |
| ||
Office and miscellaneous |
|
|
|
|
|
| ||
Professional fees |
|
|
|
|
|
| ||
Management and consulting fees |
|
|
|
|
|
| ||
Investor relations |
|
|
|
|
|
| ||
Regulatory and compliance fees |
|
|
|
|
|
| ||
Directors’ fees |
|
|
|
|
|
| ||
Travel and promotion |
|
|
|
|
|
| ||
Depreciation |
|
|
|
|
|
| ||
|
| $ |
|
| $ |
| ||
16) COMMITMENTS & CONTINGENCIES
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 11.
| 34 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
|
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, 2025 |
|
| December 31, 2024 |
| ||
Not later than one year |
| $ |
|
| $ |
| ||
Later than one year and not later than five years |
|
|
|
|
|
| ||
Later than five years |
|
|
|
|
|
| ||
|
| $ |
|
| $ |
| ||
Office lease payments recognized as an expense during the year ended December 31, 2025, totaled $
Due to the nature of the Company’s activities, the Company is from time to time involved in various claims and legal proceedings arising in the conduct of its business. At the reporting date, none of such claims and legal proceedings are considered probable of resulting in a material loss or judgment against the Company.
17) SUPPLEMENTARY CASH FLOW INFORMATION
|
| 2025 |
|
| 2024 |
| ||
Net change in non-cash working capital items: |
|
|
|
|
|
| ||
Inventory |
| $ | ( | ) |
| $ |
| |
Prepaid expenses and other assets |
|
|
|
|
| ( | ) | |
Taxes recoverable |
|
| ( | ) |
|
|
| |
Taxes payable |
|
|
|
|
|
| ||
Accounts payable and accrued liabilities |
|
|
|
|
| ( | ) | |
Amounts receivable |
|
| ( | ) |
|
| ( | ) |
Amounts due to related parties |
|
| ( | ) |
|
| ( | ) |
|
| $ | ( | ) |
| $ |
| |
|
| 2025 |
|
| 2024 |
| ||
Other supplementary information: |
|
|
|
|
|
| ||
Interest paid |
| $ |
|
| $ |
| ||
Taxes paid |
|
|
|
|
|
| ||
|
| $ |
|
| $ |
| ||
|
|
|
|
|
|
| ||
|
| 2025 |
|
| 2024 |
| ||
Non-cash investing and financing activities: |
|
|
|
|
|
|
|
|
Shares acquired under terms of option agreements |
| $ |
|
| $ |
| ||
Transfer of share-based payments reserve upon vesting of RSUs |
|
|
|
|
|
| ||
Transfer of share-based payments reserve upon exercise of stock options |
|
|
|
|
|
| ||
Equipment acquired under finance leases and equipment loans |
|
|
|
|
|
| ||
Transfer of SBC reserves upon cancellation of options |
|
|
|
|
|
| ||
|
| $ |
|
| $ |
| ||
| 35 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
|
18) FINANCIAL INSTRUMENTS
The fair values of the Company’s amounts receivable not subject to provisional pricing, due to/from related parties and accounts payable approximate their carrying values because of the short-term nature of these instruments. Cash, amounts receivable subject to provisional pricing, long-term investments are recorded at fair value. The carrying amounts of the Company’s deferred consideration payable, equipment loans, and finance lease obligations are a reasonable approximation of their fair values based on current market rates for similar financial instruments.
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.
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 three (December 31, 2024 – two) counterparties (see Note 20). However, the Company has not recorded any allowance against its trade receivables because to-date all balances owed have been settled in full when due (typically within 60 days of submission) and because of the nature of the counterparties.
The Company’s maximum exposure to credit risk at the end of any period is equal to the carrying amount of these financial assets as recorded in the consolidated statement of financial position. At December 31, 2025, 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, 2025, in the amount of $
The maturity profiles of the Company’s contractual obligations and commitments as at December 31, 2025, are summarized as follows:
|
| Total |
|
| Less Than 1 Year |
|
| 1-5 years |
|
| More Than 5 Years |
| ||||
Accounts payable and accrued liabilities |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Deferred consideration payable |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Equipment loans |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Finance lease obligations |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
| 36 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
|
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 not materially exposed to interest rate risk, as any material debt obligations that bear interest are fixed and not subject to floating interest rates.
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, 2025 |
|
| December 31, 2024 |
| ||||||||||
|
| MXN |
|
| CDN |
|
| MXN |
|
| CDN |
| ||||
Cash |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Due from related parties |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Long-term investments |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Reclamation bonds |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Amounts receivable |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Accounts payable and accrued liabilities |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Due to related parties |
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | ||
Finance lease obligations |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Net exposure |
|
| ( | ) |
|
|
|
|
| ( | ) |
|
|
| ||
US dollar equivalent |
| $ | ( | ) |
| $ |
|
| $ | ( | ) |
| $ |
| ||
Based on the net US dollar denominated asset and liability exposures as at December 31, 2025, a 10% fluctuation in the US/Mexican and Canadian/US exchange rates would impact the Company’s earnings for the year ended December 31, 2025, by approximately $
| 37 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
|
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.
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, 2025, 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 approximately $
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, 2025, a 10% change in market prices would have an impact on net earnings (loss) of approximately $
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 13 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 measured at fair value on a recurring basis by level within the fair value hierarchy as at December 31, 2025:
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
| |||
Financial assets |
|
|
|
|
|
|
|
|
| |||
Cash |
| $ |
|
| $ |
|
| $ |
| |||
Amounts receivable |
|
|
|
|
|
|
|
|
| |||
Derivative asset |
|
|
|
|
|
|
|
|
| |||
Long-term investments |
|
|
|
|
|
|
|
|
| |||
Total financial assets |
| $ |
|
| $ |
|
| $ |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Derivative liability |
|
|
|
|
|
|
|
|
| |||
Total financial liabilities |
| $ |
|
| $ |
|
| $ |
| |||
| 38 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
|
The following table sets forth the Company’s financial assets measured at fair value on a recurring basis by level within the fair value hierarchy as at December 31, 2024:
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
| |||
Financial assets |
|
|
|
|
|
|
|
|
| |||
Cash |
| $ |
|
| $ |
|
| $ |
| |||
Amounts receivable |
|
|
|
|
|
|
|
|
| |||
Derivative asset |
|
|
|
|
|
|
|
|
| |||
Long-term investments |
|
|
|
|
|
|
|
|
| |||
Total financial assets |
| $ |
|
| $ |
|
| $ |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Derivative liability |
|
|
|
|
| ( | ) |
|
|
| ||
Total financial liabilities |
| $ |
|
| $ | ( | ) |
| $ |
| ||
19) 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), equipment loan obligations, and finance lease obligations, are listed as follows:
|
| 2025 |
|
| 2024 |
| ||
Equity |
| $ |
|
| $ |
| ||
Deferred consideration payable |
|
|
|
|
|
| ||
Equipment loan obligations |
|
|
|
|
|
| ||
Finance lease obligations |
|
|
|
|
|
| ||
|
| $ |
|
| $ |
| ||
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, 2025, 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, 2025, there was no externally imposed capital requirement to which the Company was subject and with which the Company did not comply.
20) SEGMENTED INFORMATION
The Company reviews its segment reporting to ensure it reflects the operational structure of the Company and enables the Company's Chief Operating Decision Maker (the Company’s CEO) to review operating segment performance at the mine operating income or loss level, as well as on the basis of total comprehensive income. Effective December 31, 2025, it was determined that the Company has two reportable operating segments, located in Mexico (Avino and La Preciosa). The Company also has a Corporate segment located in Canada. Revenues, cost of sales, operating expenses, other items and income taxes are attributed to the operation in which they arise. Segment results are presented net of intersegment transactions where services are performed on behalf of other segments within the Company. There are no amounts unallocated to reportable segments. In 2024, the Company only had one reportable segment. Following this change in the composition of reportable segments, the Company has restated the corresponding segment information as at and for the year ended December 31, 2024, and the information as at December 31, 2024.
| 39 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
|
The following table represents the statement of operations and other comprehensive income by segment:
For the year ended December 31 |
|
|
| Revenue |
|
| Cost of sales - production costs |
|
| Cost of sales - depreciation |
|
| Cost of sales - other |
|
| Mine operating income |
|
| Total comprehensive income |
| ||||||
Mexico |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Avino |
| 2025 |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||||
|
| 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
La Preciosa |
| 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
| 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Canada |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate |
| 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) | |||||
|
| 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) | |||||
Consolidated |
| 2025 |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||||
|
| 2024 |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||||
The following table represents information from the consolidated statement of financial position by segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
As at December 31 |
|
|
| PP&E assets (including mineral properties |
|
| E&E assets |
|
| Total mining assets |
|
| Total assets |
|
| Total liabilities |
| |||||
Mexico |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Avino |
| 2025 |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| |||||
|
| 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
La Preciosa |
| 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
| 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Canada |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate |
| 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
| 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Consolidated |
| 2025 |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| |||||
|
| 2024 |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| |||||
On the consolidated statements of operations and other comprehensive income, the Company had revenue from the following product mixes, all deriving from its Mexico operations:
|
| 2025 |
|
| 2024 |
| ||
Silver |
| $ |
|
| $ |
| ||
Copper |
|
|
|
|
|
| ||
Gold |
|
|
|
|
|
| ||
Penalties, treatment costs and refining charges |
|
| ( | ) |
|
| ( | ) |
Total revenue from mining operations |
| $ |
|
| $ |
| ||
| 40 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
|
For the years ended December 31, 2025 and 2024, the Company had the following customers that accounted for total revenues as follows:
|
| 2025 |
|
| 2024 |
| ||
Customer #1 |
| $ |
|
| $ |
| ||
Customer #2 |
|
|
|
|
|
| ||
Other customers |
|
|
|
|
|
| ||
Total revenue from mining operations |
| $ |
|
| $ |
| ||
21) INCOME TAXES
a) Income tax expense
Income tax expense included in the consolidated statements of operations and comprehensive income is as follows:
|
| 2025 |
|
| 2024 |
| ||
|
|
|
|
|
|
| ||
Current income tax expense |
| $ |
|
| $ |
| ||
Deferred income tax expense |
|
|
|
|
|
| ||
Total income tax expense |
| $ |
|
| $ |
| ||
The reconciliation of income taxes calculated at the Canadian statutory tax rate to the income tax expense recognized in the year is as follows:
|
| 2025 |
|
| 2024 |
| ||
|
|
|
|
|
|
| ||
Net income before income taxes |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Combined statutory tax rate |
|
| % |
|
| % | ||
|
|
|
|
|
|
|
|
|
Income tax expense at the Canadian statutory rate |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Reconciling items: |
|
|
|
|
|
|
|
|
Effect of difference in foreign tax rates |
|
|
|
|
|
| ||
Non-deductible/non-taxable items |
|
|
|
|
|
| ||
Change in unrecognized deductible temporary differences |
|
| ( | ) |
|
| ( | ) |
Impact of foreign exchange |
|
| ( | ) |
|
|
| |
Special mining duties |
|
|
|
|
|
| ||
Revisions to estimates |
|
|
|
|
|
| ||
Impact of change of tax rates |
|
|
|
|
|
| ||
Share issue costs |
|
| ( | ) |
|
| ( | ) |
Other items |
|
| ( | ) |
|
|
| |
|
|
|
|
|
|
|
|
|
Income tax expense recognized in the year |
| $ |
|
| $ |
| ||
| 41 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
|
The Company recognized a non-cash recovery of $
|
| December 31, |
|
| December 31, |
| ||
|
| 2025 |
|
| 2024 |
| ||
|
|
|
|
|
|
| ||
Deferred income tax assets |
| $ |
|
| $ |
| ||
Deferred income tax liabilities |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
| $ | ( | ) |
| $ | ( | ) |
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, 2025 |
|
| December 31, 2024 |
| ||
|
|
|
|
|
|
| ||
Reclamation provision |
| $ |
|
| $ |
| ||
Non-capital losses |
|
|
|
|
|
| ||
Other deductible temporary differences |
|
|
|
|
|
| ||
Exploration and evaluation assets |
|
|
|
|
| ( | ) | |
Plant, equipment and mining properties |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
Net deferred income tax liabilities |
| $ | ( | ) |
| $ | ( | ) |
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.
The Company has non-capital tax losses of $
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, 2025 |
|
| December 31, 2024 |
| ||
|
|
|
|
|
|
| ||
Tax losses carried forward - Canada |
| $ |
|
| $ |
| ||
Tax losses carried forward - Mexico |
|
|
|
|
|
| ||
Share issue costs |
|
|
|
|
|
| ||
Plant, equipment and mining properties |
|
|
|
|
|
| ||
Exploration and evaluation assets |
|
| ( | ) |
|
|
| |
Investments |
|
| ( | ) |
|
|
| |
|
|
|
|
|
|
|
|
|
Unrecognized deductible temporary differences |
| $ |
|
| $ |
| ||
| 42 |
AVINO SILVER & GOLD MINES LTD. Notes to the Consolidated Financial Statements For the years Ended December 31, 2025, and 2024 (Expressed in Thousands of US Dollars – except where otherwise noted) |
|
The Company has capital losses of $
22) SUBSEQUENT EVENTS
At-The-Market Sales –Subsequent to December 31, 2025, the Company issued
Stock Options Exercises –Subsequent to December 31, 2025, the Company issued
| 43 |
EXHIBIT 99.2
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
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, 2025, and the notes thereto.
This Management’s Discussion and Analysis (“MD&A”) is dated March 10, 2026, and discloses specified information up to that date. The consolidated financial statements are prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (“IFRS Accounting Standards”). 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 10, 2026, 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.sedarplus.ca.
Business Description
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.
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 (except for the province of Quebec) and the United States, and its common shares are listed on the Toronto Stock Exchange (“TSX”) under the ticker ASM:TSX, the NYSE American under the ticker ASM:NYSE-A, and the Frankfurt and Berlin Stock Exchanges under the ticker GV6.
Discussion of Operations
The Company’s production, exploration, and evaluation activities during the year ended December 31, 2025, have been conducted on the Avino Property and the La Preciosa 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. The Avino Property also hosts the San Gonzalo Mine, which is currently on care and maintenance. The Company also holds 100% interest in Proyectos Mineros La Preciosa S.A. de C.V. (“La Preciosa”), a Mexican corporation which owns the La Preciosa Property.
On April 1, 2025, the Company determined that La Preciosa had demonstrated technical feasibility and commercial viability to support the reclassification from the exploration and evaluation asset stage to the development stage and mining properties with plant, equipment and mining properties.
| Page 1 |
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
Operational and Financial Highlights
| HIGHLIGHTS (In US$, unless otherwise noted) |
| Fourth Quarter 2025 |
|
| Fourth Quarter 2024 |
|
| Change |
|
| Year 2025 |
|
| Year 2024 |
|
| Change |
| ||||||
| Operating |
| |||||||||||||||||||||||
| Tonnes Milled |
|
| 189,338 |
|
|
| 181,733 |
|
|
| 4 | % |
|
| 736,935 |
|
|
| 648,774 |
|
|
| 14 | % |
| Silver Ounces Produced |
|
| 345,298 |
|
|
| 283,794 |
|
|
| 22 | % |
|
| 1,157,828 |
|
|
| 1,109,214 |
|
|
| 4 | % |
| Gold Ounces Produced |
|
| 1,687 |
|
|
| 2,560 |
|
|
| -34 | % |
|
| 7,621 |
|
|
| 7,477 |
|
|
| 2 | % |
| Copper Pounds Produced |
|
| 1,295,244 |
|
|
| 1,773,694 |
|
|
| -27 | % |
|
| 5,667,996 |
|
|
| 6,197,603 |
|
|
| -9 | % |
| Silver Equivalent Ounces1 Produced |
|
| 671,583 |
|
|
| 735,557 |
|
|
| -9 | % |
|
| 2,606,155 |
|
|
| 2,652,498 |
|
|
| -2 | % |
| Concentrate Sales and Costs | ||||||||||||||||||||||||
| Silver Equivalent Payable Ounces Sold2 |
|
| 555,567 |
|
|
| 889,294 |
|
|
| -38 | % |
|
| 2,362,505 |
|
|
| 2,562,211 |
|
|
| -8 | % |
| Cash Cost per Silver Equivalent Payable Ounce1,2,3 |
| $ | 21.10 |
|
| $ | 13.88 |
|
|
| 52 | % |
| $ | 16.13 |
|
| $ | 14.84 |
|
|
| 9 | % |
| All-in Sustaining Cost per Silver Equivalent Payable Ounce1,2,3 |
| $ | 31.59 |
|
| $ | 18.62 |
|
|
| 70 | % |
| $ | 23.75 |
|
| $ | 20.57 |
|
|
| 15 | % |
| Financial Operating Performance (in 000’s) |
| |||||||||||||||||||||||
| Revenues |
| $ | 30,544 |
|
| $ | 24,382 |
|
|
| 25 | % |
| $ | 92,227 |
|
| $ | 66,178 |
|
|
| 39 | % |
| Mine operating income |
| $ | 17,844 |
|
| $ | 10,456 |
|
|
| 71 | % |
| $ | 48,535 |
|
| $ | 23,201 |
|
|
| 109 | % |
| Net income |
| $ | 10,460 |
|
| $ | 5,092 |
|
|
| 105 | % |
| $ | 26,643 |
|
| $ | 8,100 |
|
|
| 229 | % |
| Earnings before interest, taxes and amortization (“EBITDA”)3 |
| $ | 14,409 |
|
| $ | 9,099 |
|
|
| 58 | % |
| $ | 42,996 |
|
| $ | 18,037 |
|
|
| 138 | % |
| Adjusted earnings3 |
| $ | 16,297 |
|
| $ | 9,950 |
|
|
| 64 | % |
| $ | 46,535 |
|
| $ | 21,333 |
|
|
| 118 | % |
| Cash provided by operating activities |
| $ | 9,986 |
|
| $ | 15,551 |
|
|
| -36 | % |
| $ | 27,423 |
|
| $ | 23,124 |
|
|
| 19 | % |
| Operating cash flow before working capital adjustments3 |
| $ | 18,953 |
|
|
| 5,947 |
|
|
| 219 | % |
|
| 35,343 |
|
|
| 15,089 |
|
|
| 134 | % |
| Mine operating cash flow before taxes3 |
| $ | 18,989 |
|
| $ | 11,878 |
|
|
| 60 | % |
| $ | 52,709 |
|
| $ | 27,578 |
|
|
| 91 | % |
| Per Share Amounts | ||||||||||||||||||||||||
| Earnings per share - diluted |
| $ | 0.06 |
|
| $ | 0.03 |
|
|
| 100 | % |
| $ | 0.17 |
|
| $ | 0.06 |
|
|
| 183 | % |
| Adjusted earnings per share3 |
| $ | 0.10 |
|
| $ | 0.07 |
|
|
| 43 | % |
| $ | 0.29 |
|
| $ | 0.15 |
|
|
| 93 | % |
| Liquidity & Working Capital (in 000’s) | ||||||||||||||||||||||||
|
|
| December 31, 2025 |
|
| December 31, 2024 |
|
| Change |
|
| December 31, 2025 |
|
| December 31, 2024 |
|
| Change |
| ||||||
| Cash |
| $ | 101,724 |
|
| $ | 27,317 |
|
|
| 272 | % |
| $ | 101,724 |
|
| $ | 27,317 |
|
|
| 272 | % |
| Working capital3 |
| $ | 99,562 |
|
| $ | 25,235 |
|
|
| 295 | % |
| $ | 99,562 |
|
| $ | 25,235 |
|
|
| 295 | % |
| 1. | In Q4 2025, AgEq was calculated using metal prices of $54.83 per oz Ag, $4,146 per oz Au and $5.04 per lb Cu. In Q4 2024, AgEq was calculated using metals prices of $31.34 oz Ag, $2,662 oz Au and $4.17 lb Cu. For YTD 2025, AgEq was calculated using metal prices of $39.94 per oz Ag, $3,436 per oz Au and $4.51 per lb Cu. For YTD 2024, AgEq was calculated using metal prices of $28.24 oz Ag, $2,387 oz Au and $4.15 lb Cu. Calculated figures may not add up due to rounding. |
|
|
|
| 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. | Non-IFRS Accounting Standard measure. These measures are widely used in the mining industry as a benchmark for performance, but do not have a standardized meaning under IFRS Accounting Standards and the calculation methods may differ from methods used by other companies with similar reported measures. See Non-IFRS Accounting Standards Measures section for further information and detailed reconciliations. |
| Page 2 |
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
Record Cash and Working Capital Position
|
| · | Avino had $101.7 million in cash at December 31, 2025, and remains debt-free, excluding operating equipment leases and the deferred royalty repurchase payment. Our working capital position of $99.6 million and strong balance sheet will provide the foundation to support our transformational growth plan to become a Mexico-focused mid-tier primary silver producer. |
TSX Recognition and Index Inclusion
|
| · | On September 9, 2025, Avino announced its inclusion in the Toronto Stock Exchange’s TSX30TM. Avino has distinguished itself by reaching the 5th position on the TSX30 2025 ranking, which is a flagship program recognizing the 30 top-performing TSX stocks on a dividend-adjusted share price appreciation over a three-year period. |
|
|
|
|
|
| · | On September 16, 2025, Avino announced that it has been added to the Market Vectors Junior Gold Miners Index (“MVGDXJTR”) and the VanEck Junior Gold Miners ETF ("GDXJ"), effective at market close on September 19, 2025, pursuant to the GDXJ's semi-annual review and quarterly rebalance. |
4th Quarter 2025 Financial Highlights
|
| · | Record revenues of $30.5 million, an increase of 25% from Q4 2024, our previous quarterly record. |
|
|
|
|
|
| · | Mine operating income of $17.8 million, an increase of 71% from Q4 2024. |
|
|
|
|
|
| · | Net income of $10.5 million, or $0.06 per share. |
|
|
|
|
|
| · | Adjusted earnings of $16.3 million, or $0.10 per diluted share, an increase of 62% and 43%, respectively, from Q4 2024. |
|
|
|
|
|
| · | Cash flow provided by operating activities of $10 million, a decrease of 36% compared to Q4 2024. Prior to working capital adjustments, cash flow provided from operating activities was $18.9 million, an increase of 219% compared to Q4 2024. |
|
|
|
|
|
| · | Mine operating cash flow before taxes of $19.0 million, an increase of 60% from Q4 2024. |
|
|
|
|
|
| · | Earnings before interest, taxes, depreciation and amortization (“EBITDA”) of $14.4 million, an increase of 58% from Q4 2024. |
|
|
|
|
|
| · | Cash costs per silver equivalent payable ounce sold of $21.10, an increase of 52% from Q4 2024. |
|
|
|
|
|
| · | All in sustaining costs per silver equivalent payable ounce sold of $31.59, an increase of 70% from Q4 2024. |
FY 2025 Highlights
|
| · | La Preciosa Royalty Repurchase: During the 3rd quarter, Avino acquired all outstanding royalties and obligations held by Deterra Royalties Inc. “Deterra”, for consideration of $13.25 million upfront payment followed by an $8.75 million deferred payment, achieving 100% interest on the La Preciosa property. The deferred payment to Deterra is due in Q3 2026. |
|
|
|
|
|
| · | Silver Equivalent Production Decreased 2%: Avino produced 2,606,155 silver equivalent ounces in 2025, representing a 2% decrease from 2024. The decrease was driven by lower feed grades in all three metals (silver, gold and copper), as we moved through a lower grade section of the mine plan and was partially offset by improved mill availability of 14%. |
|
|
|
|
|
| · | Continued Elevated Mill Throughput: In 2025, Avino achieved 14% higher mill throughput versus 2024, totalling 736,935 tonnes of material. These throughput levels built off last quarter’s record and were a result of previous upgrades and automation enhancements made by our operations team, demonstrating significant improvements in mill availability. |
|
|
|
|
|
| · | Gold and Silver Production Increased 2% and 4%: Avino produced 1,157,828 silver ounces and 7,621 gold ounces in 2025, an increase in both metals from 2024. Improved production resulted from the increased tonnes processed. |
|
|
|
|
|
| · | Copper Production Decreased 9%: Avino produced 5.7 million pounds of copper in 2025, a decrease of 9% from 2024. This decrease was result of lower feed grade from certain areas in our planned mine sequencing, which did have an impact on recoveries as well. This was partially offset by significantly improved mill availability of 14%. |
| Page 3 |
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
La Preciosa Updates
Royalty & Obligations Repurchase
On August 25, 2025, Avino announced the acquisition of 100% interest of La Preciosa by purchasing and extinguishing all of the outstanding royalties and contingent payment obligations (the “La Preciosa Obligations”) currently held by Deterra Royalties Limited (“Deterra”). The consideration for the La Preciosa Obligations was a $13.25 million upfront payment upon closing, followed by an $8.75 million payment deferred for one year after closing. The deferred payment was already accounted for in the existing royalty agreement with Deterra.
The La Preciosa Obligations were comprised of:
|
| · | a cash payment of US$8.75 million, to be paid no later than 12 months after initial production at La Preciosa (the “Contingent Production Payment”); |
|
| · | a 1.25% net smelter returns royalty on the Gloria and Abundancia areas of La Preciosa, and a 2.00% gross value returns royalty on all other areas of La Preciosa; and |
|
| · | a payment of $0.25 per silver equivalent ounce (subject to inflationary adjustment) of new mineral reserves (as defined by NI 43-101) discovered and declared outside of the current mineral resource area at La Preciosa, subject to a cap of $50 million, with any such payments to be credited against any existing or future payments owing on the gross value returns royalty. |
The La Preciosa Obligations were initially issued to Coeur Mining, Inc. (“Coeur”) in connection with the acquisition of La Preciosa by Avino in March 2022. Details of the Company’s acquisition of La Preciosa are available on the Company’s website here. Following the acquisition, Coeur sold the La Preciosa Obligations to Trident Royalties Plc (“Trident”) in May 2023, with Deterra subsequently acquiring the La Preciosa Obligations by way of its acquisition of Trident in September 2024.
Following the transaction, the deferred payment of $8.75 million remains the sole material obligation related to La Preciosa, with all other obligations having been extinguished.
Exploration & Confirmatory Drilling
Throughout 2025 and in January 2026, Avino announced the results of fourteen drill holes from La Preciosa which were drilled to twin previous drilling. Assay results for the intercepts of the La Gloria and Abundancia veins were very positive and are shown in Table 1 through 3 below.
Selected Intercept Highlights:
|
| · | Hole PMLP 25-03: 1,638 g/t Ag and 1.92 g/t Au over 7.90 metres true width | |
|
|
| o | including 15,352 g/t Ag and 1.55 g/t Au over 0.37 metres true width |
|
|
|
|
|
|
| · | Hole PMLP 25-04: 544 g/t Ag and 0.46 g/t Au over 6.42 metres true width | |
|
|
| o | including 1,739 g/t Ag and 0.74 g/t Au over 0.66 metres true width |
|
|
|
|
|
|
| · | Hole PMLP 25-06: 787 g/t Ag and 0.51 g/t Au over 5.22 metres true width | |
|
|
| o | including 3,206 g/t Ag and 1.02 g/t Au over 0.77 metres true width |
|
|
|
|
|
|
| · | Hole PMLP 25-08 at La Gloria: 306 g/t Ag and 1.15 g/t Au over 3.98 metres true width | |
|
|
| o | including 699 g/t Ag and 5.80 g/t Au over 0.63 metres true width |
|
|
|
|
|
|
| · | Hole PMLP 25-08 at Abundancia: 463 g/t Ag and 0.61 g/t Au over 4.00 metres true width | |
|
|
| o | including 642 g/t Ag and 0.60 g/t Au over 0.95 metres true width |
|
|
|
|
|
|
| · | Hole PMLP 25-12: 585 g/t Ag and 0.65 g/t Au over 4.90 metres true width | |
|
|
| o | including 2,218 g/t Ag and 1.92 g/t Au over 0.51 metres true width |
|
|
|
|
|
|
| · | Hole PMLP 25-14 at La Gloria: 694 g/t Ag and 0.63 g/t Au over 4.52 metres true width | |
|
|
| o | including 2,275 g/t Ag and 1.28 g/t Au over 0.61 metres true width |
| Page 4 |
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
The variation of grades and thicknesses within relatively short distances (under 10 metres) compared with previously drilled intercepts were expected due to the “pinch and swell” geometry of the La Preciosa veins and the high nugget effects. The drill results exceeded grade expectations and verified the geometry of the current vein-based resource model. Higher grades intersected in the northern portion of the La Gloria Vein are expected to continue further to the North and warrant additional step-out drilling to potentially expand the mineral resource defined on the shallow La Gloria Vein.
Assays were received on fourteen (14) holes totalling approximately 3,500 metres drilled at La Preciosa, intersecting the La Gloria vein in all 14 holes, the Abundancia vein in 13 holes, and additional unnamed and splay veins in multiple holes. Assays were processed under Avino’s standard QA/QC program, with no indications of bias or contamination detected. Unlike the Avino Mine, the La Preciosa deposit contains no notable copper mineralization, so no copper values are reported.
Sampling and Assay Methods
Following detailed geological and geotechnical logging, selected drill core areas were cut in half. One half of the core was submitted to the SGS Laboratory facility in Durango, Mexico, and the other half was retained on-site for verification and reference. Gold is assayed by fire assay with an AA finish. Any samples exceeding 3.0 gold g/t are re-assayed and followed by a gravimetric finish. Multi-element analyses are also completed for each sample by SGS ICP14B methods. Silver is fire assayed with a gravimetric finish for samples assaying over 100 g/t. Avino uses a series of standard reference materials, blank reference materials, and duplicates as part of their QA/QC program during assaying.
Table 1 – Summary Drill Results – August 18, 2025 News Release
| Structure | Hole Number | From (m) | To (m) | Intercept Length (m) | True width (m) | Ag (g/t) | Au (g/t) | AgEq¹ (g/t) |
| La Gloria | PMLP-25-01 | 84.35 | 88.5 | 4.15 | 3.41 | 398 | 0.36 | 431 |
|
| Including | 85.05 | 86.8 | 1.75 | 1.44 | 601 | 0.36 | 634 |
| Abundancia | PMLP-25-01 | 166.35 | 182.6 | 16.25 | 14.80 | 257 | 0.38 | 292 |
|
| Including | 166.35 | 171.85 | 5.5 | 5.04 | 594 | 0.72 | 660 |
|
| Including | 169 | 170 | 1 | 0.92 | 1173 | 1.00 | 1,264 |
| Unnamed_1 | PMLP-25-02 | 72.6 | 75.82 | 3.22 | 2.92 | 282 | 0.19 | 299 |
|
| Including | 73.34 | 75.1 | 1.76 | 1.6 | 422 | 0.20 | 440 |
| La Gloria | PMLP-25-02 | 99.1 | 103.3 | 4.2 | 3.45 | 970 | 0.44 | 1,010 |
|
| Including | 99.72 | 102.65 | 2.93 | 2.41 | 1260 | 0.52 | 1,307 |
|
| Including | 100.3 | 101.73 | 1.43 | 1.17 | 1936 | 0.64 | 1,994 |
| Abundancia | PMLP-25-02 | 281.6 | 287 | 5.4 | 5.27 | 112 | 0.19 | 129 |
| La Gloria | PMLP-25-03 | 106.4 | 116.05 | 9.65 | 7.90 | 1638 | 1.92 | 1,812 |
|
| Including | 113.8 | 116.05 | 2.25 | 1.84 | 5006 | 0.61 | 5,061 |
|
| Including | 113.8 | 114.25 | 0.45 | 0.37 | 15352 | 1.55 | 15,493 |
| Unnamed_2 | PMLP-25-03 | 134.9 | 136.8 | 1.9 | 1.30 | 525 | 1.20 | 635 |
| Abundancia | PMLP-25-03 | 288.8 | 290.05 | 1.25 | 1.22 | 45 | 0.18 | 61 |
| La Gloria | PMLP-25-04 | 183.83 | 192.5 | 8.67 | 6.42 | 544 | 0.46 | 585 |
|
| including | 190.96 | 191.85 | 0.89 | 0.66 | 1739 | 0.74 | 1,807 |
| Abundanica Splay 1 | PMLP-25-04 | 214.14 | 214.98 | 0.84 | 0.83 | 125 | 0.28 | 150 |
| Unnamed_3 | PMLP-25-04 | 271.84 | 272.4 | 0.56 | 0.51 | 174 | 0.33 | 204 |
| Unnamed_4 | PMLP-25-04 | 274.5 | 275.2 | 0.7 | 0.66 | 369 | 0.82 | 444 |
|
| 1. | AgEq in drill results above assumes $3,000/oz Au and $33.00/oz Ag, and 100% metallurgical recovery |
| Page 5 |
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
Table 2 – Summary Drill Results – October 27, 2025 News Release
| Structure | Hole Number | From (m) | To (m) | Intercept Length (m) | True width (m) | Au (g/t) | Ag (g/t) | AgEq¹ (g/t) |
| La Gloria | PMLP-25-05 | 223.25 | 226.45 | 3.2 | 2.48 | 0.66 | 425 | 484 |
|
| Including | 225.7 | 226.45 | 0.75 | 0.58 | 1.60 | 1299 | 1441 |
| Abun Splay 1 | PMLP-25-05 | 234.5 | 237.6 | 3.1 | 3.07 | 0.16 | 34 | 48 |
| Abundancia | PMLP-25-05 | 303.75 | 304.55 | 0.8 | 0.78 | 1.21 | 513 | 621 |
| Unnamed_5 | PMLP-25-05 | 221.3 | 221.8 | 0.5 | 0.40 | 1.02 | 455 | 546 |
| Unnamed_6 | PMLP-25-05 | 261.71 | 263.06 | 1.35 | 0.90 | 0.29 | 74 | 100 |
| La Gloria | PMLP-25-06 | 169.8 | 176.6 | 6.8 | 5.22 | 0.51 | 787 | 832 |
|
| Including | 174.45 | 175.45 | 1 | 0.77 | 1.02 | 3206 | 3297 |
| Abundancia | PMLP-25-06 | 219.4 | 220.9 | 1.5 | 1.47 | 0.86 | 635 | 711 |
| La Gloria | PMLP-25-07 | 175.9 | 181.7 | 5.8 | 2.84 | 0.39 | 216 | 251 |
|
| Including | 176.93 | 178 | 1.07 | 0.52 | 0.35 | 490 | 521 |
| Abundancia | PMLP-25-07 | 227.2 | 227.75 | 0.55 | 0.52 | 0.24 | 93 | 114 |
| La Gloria | PMLP-25-08 | 53.15 | 58.5 | 5.35 | 3.98 | 1.15 | 306 | 408 |
|
| Including | 53.15 | 54.00 | 0.85 | 0.63 | 5.80 | 699 | 1215 |
| Abundancia | PMLP-25-08 | 135.60 | 139.80 | 4.20 | 4.00 | 0.61 | 463 | 517 |
|
| Including | 136.6 | 137.6 | 1 | 0.95 | 0.60 | 642 | 696 |
|
| 1. | AgEq in drill results above assumes $4,000/oz Au and $45.00/oz Ag, and 100% metallurgical recovery. |
| Page 6 |
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
Table 3 – Summary Drill Results – January 26, 2026 News Release
| Structure | Hole Number | From (m) | To (m) | Intercept Length (m) | True width (m) | Au (g/t) | Ag (g/t) | AgEq¹ (g/t) |
| La Gloria | PMLP-25-09 | 130.96 | 136.40 | 5.44 | 4.30 | 0.37 | 489 | 519 |
|
| Including | 133.96 | 135.18 | 1.22 | 0.96 | 0.48 | 799 | 837 |
| Abundancia | PMLP-25-09 | 242.90 | 246.95 | 4.05 | 3.94 | 0.18 | 106 | 120 |
|
| Including | 244.95 | 246.05 | 1.10 | 0.87 | 0.17 | 169 | 182 |
| La Gloria | PMLP-25-10 | 122.60 | 126.35 | 3.75 | 2.41 | 0.60 | 563 | 611 |
|
| Including | 125.65 | 126.35 | 0.70 | 0.45 | 0.93 | 778 | 853 |
| Abundancia Splay 1 | PMLP-25-10 | 181.05 | 181.60 | 0.55 | 0.54 | 0.05 | 7 | 11 |
| Abundancia | PMLP-25-10 | 208.65 | 211.15 | 2.50 | 2.47 | 0.40 | 68 | 100 |
| La Gloria | PMLP-25-11 | 149.30 | 152.25 | 2.95 | 1.88 | 0.65 | 442 | 494 |
|
| Including | 151.30 | 152.25 | 0.95 | 0.61 | 0.96 | 590 | 666 |
| Abundancia Splay 1 | PMLP-25-11 | 189.10 | 189.50 | 0.40 | 0.39 | 0.07 | 6 | 12 |
| Abundancia | PMLP-25-11 | 225.40 | 226.60 | 1.20 | 1.19 | 0.60 | 233 | 281 |
| La Gloria | PMLP-25-12 | 139.25 | 148.40 | 9.15 | 4.90 | 0.65 | 585 | 637 |
|
| Including | 144.00 | 144.95 | 0.95 | 0.51 | 1.92 | 2218 | 2372 |
|
| Including | 146.83 | 147.60 | 0.77 | 0.41 | 1.91 | 1107 | 1260 |
| Abundancia | PMLP-25-12 | 206.70 | 208.30 | 1.60 | 1.58 | 0.74 | 260 | 320 |
| La Gloria | PMLP-25-13 | 153.60 | 157.70 | 4.10 | 2.91 | 0.49 | 406 | 444 |
|
| Including | 156.60 | 157.70 | 1.10 | 0.78 | 0.54 | 598 | 642 |
| Abundancia Splay 1 | PMLP-25-13 | 194.80 | 195.45 | 0.65 | 0.64 | 0.39 | 34 | 65 |
| Unnamed | PMLP-25-13 | 241.50 | 242.00 | 0.50 | 0.50 | 0.07 | 54 | 59 |
| La Gloria | PMLP-25-14 | 134.40 | 141.05 | 6.65 | 4.52 | 0.63 | 694 | 745 |
|
| Including | 138.20 | 139.10 | 0.90 | 0.61 | 1.28 | 2275 | 2377 |
| Abundancia Splay 1 | PMLP-25-14 | 182.85 | 183.75 | 0.90 | 0.89 | 0.13 | 72 | 83 |
| Abundancia | PMLP-25-14 | 200.85 | 201.45 | 0.60 | 0.58 | 0.62 | 340 | 390 |
|
| 1. | AgEq in drill results above assumes $4,000/oz Au and $50.00/oz Ag, and 100% metallurgical recovery. |
| Page 7 |
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
Financial Results – Three months ended December 31, 2025, compared to three months ended December 31, 2024
| In 000’s |
|
|
|
|
| |||
|
|
| 2025 |
|
| 2024 |
| ||
| Revenue from mining operations |
| $ | 30,544 |
|
| $ | 24,382 |
|
| Cost of sales |
|
| 12,700 |
|
|
| 13,926 |
|
| Mine operating income |
|
| 17,844 |
|
|
| 10,456 |
|
|
|
|
|
|
|
|
|
|
|
| Operating expenses: |
|
|
|
|
|
|
|
|
| General and administrative expenses |
|
| 2,762 |
|
|
| 1,708 |
|
| Share-based payments |
|
| 879 |
|
|
| 434 |
|
| Income before other items |
|
| 14,203 |
|
|
| 8,314 |
|
| Other items: |
|
|
|
|
|
|
|
|
| Interest and other income |
|
| 739 |
|
|
| 287 |
|
| Gain (loss) on long-term investments |
|
| 22 |
|
|
| (259 | ) |
| Other expenses |
|
| 3 |
|
|
| - |
|
| Unrealized loss on derivative |
|
| (211 | ) |
|
| (475 | ) |
| Foreign exchange gain (loss) |
|
| (313 | ) |
|
| 637 |
|
| Finance cost |
|
| (168 | ) |
|
| - |
|
| Accretion of reclamation provision |
|
| (48 | ) |
|
| (46 | ) |
| Impairment of PPE and other assets |
|
| (304 | ) |
|
| - |
|
| Interest expense |
|
| (98 | ) |
|
| (139 | ) |
| Income before income taxes |
|
| 13,825 |
|
|
| 8,319 |
|
| Income taxes: |
|
|
|
|
|
|
|
|
| Current income tax expense |
|
| (3,164 | ) |
|
| (4,255 | ) |
| Deferred income tax recovery (expense) |
|
| (201 | ) |
|
| 1,028 |
|
| Income tax expense |
|
| (3,365 | ) |
|
| (3,227 | ) |
| Net income |
| $ | 10,460 |
|
| $ | 5,092 |
|
| Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
| Currency translation differences |
|
| 1,333 |
|
|
| (704 | ) |
| Total comprehensive income |
| $ | 11,793 |
|
| $ | 4,388 |
|
| Income per share |
|
|
|
|
|
|
|
|
| Basic |
| $ | 0.07 |
|
| $ | 0.04 |
|
| Diluted |
| $ | 0.06 |
|
| $ | 0.03 |
|
| Weighted average number of common shares outstanding |
|
|
|
|
|
|
|
|
| Basic |
|
| 155,208,645 |
|
|
| 139,726,509 |
|
| Diluted |
|
| 164,389,466 |
|
|
| 146,635,008 |
|
| Page 8 |
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
Revenues
During the three months ended December 31, 2025, the Company recognized revenues of $30.5 million on the sale of Avino Mine bulk copper/silver/gold concentrate and La Preciosa silver/gold concentrate, compared to $24.4 million revenues for 2024, an increase of $6.1 million. The increase is a result of higher average realized metal prices for silver, gold and copper for the period.
Metal prices for revenues recognized during the period were $59.52 per ounce of silver, $4,174 per ounce of gold, and $10,194 per tons of copper, with comparable prices for Q4 2024 were $30.21 per ounce of silver, $2,564 per ounce of gold, and $9,300 per tonne of copper.
Payable silver equivalent ounces sold in the current period were 555,567 ounces, compared to 889,294 ounces in Q4 2024. Payable silver equivalent ounces sold were lower in the current period than previous periods as a result of higher silver prices impacting the silver:gold and silver:copper ratios used to calculate silver equivalent ounces, as well as lower volumes sold of silver, gold and copper.
Cost of Sales & Mine Operating Income
During the three months ended December 31, 2025, cost of sales was $12.7 million, compared to $13.9 million in Q4 2024, an increase of $1.2 million. The increase is mainly attributable to less volume sold, as well as a stronger average Mexican Peso compared to the US Dollar during the current quarter, with an average of $18.31 Mexican Pesos to 1 US Dollar in Q4 2025 compared to an average of $18.90 Mexican Pesos to 1 US Dollar in Q4 2024.
Mine operating income, after depreciation and depletion, was $17.8 million, compared to $10.5 million in Q4 2024. The increase in mine operating income is a result of the items noted above as well as mark to market movements resulting from higher metal prices and higher metal contents that had a positive impact of $4.4 million in Q4 2025 compared to a negative impact of $1.6 million in Q4 2024.
General and Administrative Expenses & Share-Based Payments
General and administrative expenses were $2.8 million, compared to $1.7 million in Q4 2024. The increase is a result of higher salaries and benefits primarily as a result of increase in operations and increased employee benefits and profit-sharing accruals from improved financial performance.
Share-based payments were $0.9 million, compared to $0.4 million in Q4 2024, an increase of $0.5 million. The increase is a direct result of the timing of option and RSU grants, and fluctuations in share price at the time of the grants.
Other Items
Gain on long-term investments was $0.1 million compared to a loss of $0.3 million in Q4 2024. This is a direct result of fluctuations in the Company’s investment in shares of Talisker Resources, as well as minor movements in the Company’s investment in shares of Silver Wolf Exploration and Endurance Gold.
Unrealized gain on derivative liability was $0.2 million compared to 0.4 million in Q4 2024. This is a direct result of US Dollar/Mexican Peso foreign exchange forward contracts entered into during the year to mitigate risks surrounding the Company of material foreign exchange movements that could cause the Company to incur material losses.
Foreign exchange loss for the period was $0.3 million, a negative movement of $0.9 million compared to a gain of $0.6 million in Q4 2024. Foreign exchange gains or losses result from transactions in currencies other than the Canadian dollar functional currency. During the quarter ended December 31, 2025, the US dollar depreciated in relation to the Mexican Peso and strengthened against the Canadian dollar, resulting in foreign exchange gains overall.
| Page 9 |
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
Current and Deferred Income Taxes
Current income tax expense was $3.2 million in Q4 2025, a change of $1.1 million compared to an income tax expense of $4.3 million for Q4 2024. The movement relates primarily to tax losses used to offset income from La Preciosa generated in Q4 2025, which resulted in decreased income tax expense.
Deferred income tax expense was $0.2 million, a change of $1.2 million compared to an expense of $1.0 million in Q4 2024. Deferred income taxes fluctuate due to movements in taxable and deductible temporary differences related 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
Net income was $10.5 million for the period, or $0.07 per basic and $0.06 diluted share, compared to net income of $5.1 million, or $0.04 per basic and diluted share for Q4 2024. The increase is a result of the items noted above, including increases in revenues, mine operating income, gain on long-term investments, gain on foreign exchange and interest income. The positive movements were partially offset by increases to current income tax expense.
EBITDA & Adjusted Income/Loss (see “Non-IFRS Accounting Standards Measures”)
EBITDA was $14.4 million for the period, an increase of $5.3 million when compared to $9.1 million for Q4 2024. The changes in EBITDA are primarily a factor of the items above, excluding any changes in depreciation and depletion, changes in interest expense and income, as well as any changes in income taxes. See Non-IFRS Accounting Standards Measures for a reconciliation for EBITDA.
Adjusted earnings for the period was $16.3 million, an increase of $6.3 million when compared to adjusted earnings of $10.0 million in the corresponding quarter in 2024. Changes to adjusted earnings are a result of the items noted above in EBITDA, further excluding share-based payments, unrealized gains and losses related to derivative liabilities, write-downs of equipment and movements in foreign exchange. See Non-IFRS Accounting Standards Measures for a reconciliation for adjusted earnings.
Cash Costs & All-in Sustaining Costs (see “Non-IFRS Accounting Standard Measures”)
Cash costs per silver equivalent payable ounce sold was $21.10, compared to $13.88 for Q4 2024. The increase is attributable to lower payable silver equivalent ounces sold in the current period than previous periods as a result of higher silver prices impacting the silver:gold and silver:copper ratios used to calculate silver equivalent ounces, as well as lower volumes sold of silver, gold and copper.
All-in sustaining costs per silver equivalent payable ounce sold was $31.59, compared to $18.62 for Q4 2024. As noted above, the increase is primarily due to lower payable silver equivalent ounces sold in the current period than previous periods as a result of higher silver prices impacting the silver:gold and silver:copper ratios used to calculate silver equivalent ounces, as well as lower volumes sold of silver, gold and copper. This was further impacted by increased sustaining capital expenditures and increased general & administrative expenses in the current period compared to Q4 2024.
See Non-IFRS Accounting Standard Measures for a reconciliation for cash costs and all-in sustaining costs
| Page 10 |
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
Selected Annual Information - Year ended December 31, 2025, compared to year ended December 31, 2024:
| In 000’s |
|
|
| |||||
|
|
| 2025 |
|
| 2024 |
| ||
| Revenue from mining operations |
| $ | 92,227 |
|
| $ | 66,178 |
|
| Cost of sales |
|
| 43,692 |
|
|
| 42,977 |
|
| Mine operating income |
|
| 48,535 |
|
|
| 23,201 |
|
|
|
|
|
|
|
|
|
|
|
| Operating expenses: |
|
|
|
|
|
|
|
|
| General and administrative expenses |
|
| 8,690 |
|
|
| 6,226 |
|
| Share-based payments |
|
| 3,726 |
|
|
| 2,035 |
|
| Income before other items |
|
| 36,119 |
|
|
| 14,940 |
|
|
|
|
|
|
|
|
|
|
|
| Other items: |
|
|
|
|
|
|
|
|
| Interest and other income |
|
| 1,414 |
|
|
| 364 |
|
| Gain (loss) on long-term investments |
|
| 2,769 |
|
|
| (172 | ) |
| Unrealized gain (loss) on derivative |
|
| 1,789 |
|
|
| (475 | ) |
| Foreign exchange (loss) gain |
|
| (705 | ) |
|
| 979 |
|
| Finance cost |
|
| (247 | ) |
|
| (10 | ) |
| Accretion of reclamation provision |
|
| (204 | ) |
|
| (197 | ) |
| Interest expense |
|
| (316 | ) |
|
| (387 | ) |
| Other expenses |
|
| (417 | ) |
|
| - |
|
| Loss on sale of mineral properties |
|
| (304 | ) |
|
| - |
|
| Write-down of uncollectible account |
|
| - |
|
|
| (621 | ) |
| Income before income taxes |
|
| 39,898 |
|
|
| 14,421 |
|
|
|
|
|
|
|
|
|
|
|
| Income taxes: |
|
|
|
|
|
|
|
|
| Current income tax expense |
|
| (11,590 | ) |
|
| (6,288 | ) |
| Deferred income tax expense |
|
| (1,665 | ) |
|
| (33 | ) |
| Income tax expense |
|
| (13,255 | ) |
|
| (6,321 | ) |
| Net income |
|
| 26,643 |
|
|
| 8,100 |
|
|
|
|
|
|
|
|
|
|
|
| Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
| Currency translation differences |
|
| 1,771 |
|
|
| (827 | ) |
| Total comprehensive income |
| $ | 28,414 |
|
| $ | 7,273 |
|
| Income per share |
|
|
|
|
|
|
|
|
| Basic |
| $ | 0.18 |
|
| $ | 0.06 |
|
| Diluted |
| $ | 0.17 |
|
| $ | 0.06 |
|
| Weighted average number of common shares outstanding |
|
|
|
|
|
|
|
|
| Basic |
|
| 147,721,818 |
|
|
| 134,599,532 |
|
| Diluted |
|
| 157,811,276 |
|
|
| 141,331,864 |
|
| Page 11 |
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
Revenues
The Company recognized revenues net of penalties, treatment costs and refining charges, of $92.2 million on the sale of Avino Mine bulk copper/silver/gold concentrate, compared to revenues of $66.2 million for 2024, an increase of $26.0 million.
The increase in revenues is a result of higher average realized metal prices for silver, gold and copper for the period.
Metal prices for revenues recognized during the year were $44.70 per ounce of silver, $3,563 per ounce of gold, and $10,137 per tonne of copper, with comparable prices for the year ended December 31, 2024, of $29.21 per ounce of silver, $2,487 per ounce of gold, and $9,251 per tonne of copper.
Payable silver equivalent ounces sold in the current period were 2,362,505 ounces, compared to 2,562,211 ounces in 2024. Payable silver equivalent ounces sold were lower in the current period than previous periods as a result of higher silver prices impacting the silver:gold and silver:copper ratios used to calculate silver equivalent ounces, as well as lower volumes sold of silver, gold and copper.
Cost of Sales & Mine Operating Income
Cost of sales for the year were $43.7 million, compared to $43.0 million in the 2024 period, an increase of $0.7 million. The increase in cost of sales is attributable to higher tonnes milled and higher ounces sold as mentioned above, which resulted in higher overall costs despite minimally improved cost per ounce metrics.
Mine operating income for the year was $48.5 million, compared to $23.2 million in 2024. The increase in mine operating income is a result of higher revenues, with cost of sales being similar to the comparative period, as noted above.
General and Administrative Expenses & Share-Based Payments
General and administrative expenses were $8.7 million, compared to $6.2 million in the comparable year, with any increases coming from additional salaries and benefits and office expenses in the period, as result of increased operations in Mexico.
Share-based payments were $3.7 million, compared to $2.0 million in the comparable year, an increase of $1.7 million. The increase is a direct result of the timing of stock option and RSU grants, and fluctuations in share price on the grant dates.
Other Items
Unrealized gain on derivative liability was $1.8 million compared to $0.5 million loss in Q4 2024. This is a direct result of US dollar/Mexican Peso foreign exchange forward contracts entered into mitigate risks surrounding the Company of material foreign exchange movements that could cause the Company to incur material losses.
Unrealized foreign exchange loss for the year was $0.7 million, a negative movement of $1.7 million compared to a gain of $1.0 million in the comparable period in 2024. Foreign exchange gains or losses result from transactions in currencies other than the Canadian dollar functional currency. During the period, the Mexican Peso appreciated against the US dollar, with the Canadian dollar remaining constant, resulting in an overall foreign exchange loss for the period. During the year ended December 31, 2024, the US dollar remained constant in relation to the Canadian dollar but depreciated compared to the Mexican peso by the end of first half of the year, resulting in a foreign exchange gain.
Current and Deferred Income Taxes
Current income tax expense for the period was $11.6 million, compared to a current income tax expense of $6.3 million in the comparable period. The movements are a result of higher profits generated in 2025, resulting in increased income tax expense, whereas in 2024, the Company had losses available to partially offset taxable income in Mexico.
| Page 12 |
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
Deferred income tax expense was $1.7 million, a change of $1.6 million compared to an expense of $0.1 million in 2024. 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
Net income was $26.6 million for the period, or $0.18 per basic share and $0.17 per diluted share, compared to net income of $8.1 million, or $0.06 per share during the comparable period in 2024. The changes are a result of the items noted above, which are primarily increases in revenues, mine operating income and gains on long-term investments between the two comparable periods. The increase was partially offset by increases in general and administrative expenses, share-based payments, and foreign exchange loss. Net income was further impacted by movements in the unrealized derivative liability / asset and other expenses.
EBITDA & Adjusted Income/Loss (see “Non-IFRS Accounting Standards Measures”)
EBITDA for the year was $43.0 million, an increase of $25.0 million when compared to $18.0 million for the comparable year. 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 Accounting Standards Measures for a reconciliation for EBITDA.
Adjusted earnings for the year was $46.5 million, an increase of $25.2 million when compared to adjusted earnings of $21.3 million in the corresponding period in 2024. Changes to adjusted earnings are a result of the items noted above in EBITDA, further excluding share-based payments, unrealized gains and losses related to derivative liabilities, write-downs of equipment and movements in foreign exchange. See Non-IFRS Accounting Standards Measures for a reconciliation for adjusted earnings.
Cash Costs & All-in Sustaining Costs (see “Non-IFRS Accounting Standards Measures”)
Cash costs per silver equivalent payable ounce sold was $16.13, compared to $14.84 for the comparable period in 2024. The increase is attributable to lower payable silver equivalent ounces sold in the current period than previous periods as a result of higher silver prices impacting the silver:gold and silver:copper ratios used to calculate silver equivalent ounces, as well as lower volumes sold of silver, gold and copper.
All-in sustaining costs per silver equivalent payable ounce sold was $23.75, compared to $20.57 in 2024. As noted above, the increase is primarily due to lower payable silver equivalent ounces sold in the current period than previous periods as a result of higher silver prices impacting the silver:gold and silver:copper ratios used to calculate silver equivalent ounces, as well as lower volumes sold of silver, gold and copper. This was further impacted by increased sustaining capital expenditures and increased general & administrative expenses in the current period compared to 2024.
See Non-IFRS Accounting Standards Measures for a reconciliation for cash costs and all-in sustaining costs
| Page 13 |
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
Production Highlights
| Q4 2025 | Q4 2024 | Change% |
| YTD 2025 | YTD 2024 | Change % |
| 189,338 | 181,733 | 4% | Total Mill Feed (dry tonnes) | 736,935 | 648,774 | 14% |
| 70 | 56 | 26% | Feed Grade Silver (g/t) | 59 | 61 | -4% |
| 0.40 | 0.59 | -33% | Feed Grade Gold (g/t) | 0.44 | 0.51 | -14% |
| 0.40 | 0.52 | -24% | Feed Grade Copper (%) | 0.42 | 0.51 | -17% |
| 82% | 87% | -5% | Recovery Silver (%) | 84% | 88% | -4% |
| 70% | 74% | -5% | Recovery Gold (%) | 73% | 71% | 3% |
| 83% | 86% | -3% | Recovery Copper (%) | 84% | 87% | -4% |
| 345,298 | 283,794 | 22% | Total Silver Produced (oz) | 1,157,828 | 1,109,214 | 4% |
| 1,687 | 2,560 | -34% | Total Gold Produced (oz) | 7,621 | 7,477 | 2% |
| 1,295,244 | 1,773,694 | -27% | Total Copper Produced (lbs) | 5,667,996 | 6,197,603 | -9% |
| 671,583 | 735,557 | -9% | Total Silver Equivalent Produced (oz)1 | 2,606,155 | 2,652,498 | -2% |
| Production Results by Operation – Q4 2025 | Avino | La Preciosa | Total |
| Total Mill Feed (dry tonnes) | 177,343 | 11,995 | 189,338 |
| Feed Grade Silver (g/t) | 62 | 191 | 70 |
| Feed Grade Gold (g/t) | 0.40 | 0.32 | 0.40 |
| Feed Grade Copper (%) | 0.40 | - | 0.40 |
| Recovery Silver (%) | 84% | 66% | 82% |
| Recovery Gold (%) | 71% | 62% | 70% |
| Recovery Copper (%) | 83% | -% | 83% |
| Total Silver Produced (oz) | 297,054 | 48,244 | 345,298 |
| Total Gold Produced (oz) | 1,610 | 77 | 1,687 |
| Total Copper Produced (lbs) | 1,295,244 | - | 1,295,244 |
| Total Silver Equivalent1 Produced (oz) | 616,635 | 54,949 | 671,583 |
| Production Results by Operation – FY 2025 | Avino | La Preciosa | Total |
| Total Mill Feed (dry tonnes) | 724,940 | 11,995 | 736,935 |
| Feed Grade Silver (g/t) | 56 | 191 | 59 |
| Feed Grade Gold (g/t) | 0.44 | 0.32 | 0.44 |
| Feed Grade Copper (%) | 0.42 | - | 0.42 |
| Recovery Silver (%) | 84% | 66% | 84% |
| Recovery Gold (%) | 73% | 62% | 73% |
| Recovery Copper (%) | 84% | -% | 84% |
| Total Silver Produced (oz) | 1,109,584 | 48,244 | 1,157,828 |
| Total Gold Produced (oz) | 7,544 | 77 | 7,621 |
| Total Copper Produced (lbs) | 5,667,996 | - | 5,667,996 |
| Total Silver Equivalent1 Produced (oz) | 2,551,207 | 54,949 | 2,606,155 |
| 1. | In Q4 and FY 2025, AgEq was calculated using metal prices of $30.00 per oz Ag, $2,600 per oz Au and $4.17 per lb Cu. In Q4 2024, AgEq was calculated using metals prices of $31.34 oz Ag, $2,662 oz Au and $4.17 lb Cu. For FY 2024, AgEq was calculated using metal prices of $28.24 oz Ag, $2,387 oz Au and $4.15 lb Cu. Calculated figures may not add up due to rounding. |
| Page 14 |
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
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.
Qualified Person(s)
Peter Latta, P.Eng, MBA, Vice President, Technical Services, is a qualified person within the context of National Instrument 43-101, and has reviewed and approved the technical data in this document.
Non – IFRS Accounting Standards 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 costs |
|
| · | 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 derivative liability movements 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 and are indicative of the Company’s financial performance. There are not standardized definitions under IFRS Accounting Standards and should not be considered in isolation or as a substitute for measures of operating performance prepared in accordance with IFRS Accounting Standards.
Adjusted earnings excludes share-based payments, and non-operating or recurring items such as foreign exchange gains and losses, writedown of equipment or supplies and materials inventory, fair value adjustments on outstanding warrants and fair value adjustments on derivative liabilities. Under IFRS Accounting Standards, 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.
Adjusted earnings per share is calculated taking adjusted earnings divided by the weighted average number of diluted common shares per the financial statements.
| Page 15 |
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
The following table provides a reconciliation of net earnings in the financial statements to EBITDA, adjusted earnings and adjusted earnings per share:
| Expressed in 000’s of US$, unless otherwise noted |
| Q4 2025 |
|
| Q4 2024 |
|
| FY 2025 |
|
| FY 2024 |
| ||||
| Net income for the period |
| $ | 10,460 |
|
| $ | 5,092 |
|
| $ | 26,643 |
|
| $ | 8,100 |
|
| Depreciation and depletion |
|
| 1,009 |
|
|
| 882 |
|
|
| 3,745 |
|
|
| 3,386 |
|
| Interest income and other |
|
| (739 | ) |
|
| (287 | ) |
|
| (1,414 | ) |
|
| (364 | ) |
| Interest expense |
|
| 98 |
|
|
| 139 |
|
|
| 316 |
|
|
| 387 |
|
| Finance cost |
|
| 168 |
|
|
| - |
|
|
| 247 |
|
|
| 10 |
|
| Accretion of reclamation provision |
|
| 48 |
|
|
| 46 |
|
|
| 204 |
|
|
| 197 |
|
| Current income tax expense |
|
| 3,164 |
|
|
| 4,255 |
|
|
| 11,590 |
|
|
| 6,288 |
|
| Deferred income tax expense |
|
| 201 |
|
|
| (1,028 | ) |
|
| 1,665 |
|
|
| 33 |
|
| EBITDA |
| $ | 14,409 |
|
| $ | 9,099 |
|
| $ | 42,996 |
|
| $ | 18,037 |
|
| Unrealized (gain) loss on derivatives |
|
| 211 |
|
|
| 475 |
|
|
| (1,789 | ) |
|
| 475 |
|
| Share-based payments |
|
| 879 |
|
|
| 434 |
|
|
| 3,726 |
|
|
| 2,035 |
|
| Write down of equipment and supplies and materials inventory |
|
| 180 |
|
|
| 578 |
|
|
| 593 |
|
|
| 1,144 |
|
| Write-down of uncollectible asset |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 621 |
|
| Loss on sale of mineral properties |
|
| 304 |
|
|
| - |
|
|
| 304 |
|
|
| - |
|
| Foreign exchange (gain) loss |
|
| 314 |
|
|
| (636 | ) |
|
| 705 |
|
|
| (979 | ) |
| Adjusted earnings |
| $ | 16,297 |
|
| $ | 9,950 |
|
| $ | 46,535 |
|
| $ | 21,333 |
|
| Shares outstanding (diluted) |
|
| 164,389,466 |
|
|
| 146,635,008 |
|
|
| 157,811,276 |
|
|
| 141,331,864 |
|
| Adjusted earnings per share |
| $ | 0.10 |
|
| $ | 0.07 |
|
| $ | 0.29 |
|
| $ | 0.15 |
|
Cash Cost and All-in Sustaining Cost per Silver Equivalent Payable Ounce Sold
The following tables provide a reconciliation of cost of sales from the consolidated financial statements to cash cost and all-in sustaining 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 silver, gold and copper prices for the corresponding period.
Cash cost per payable ounce and all-in sustaining cost per payable ounce 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 Accounting Standard measures is similar to that reported by other mining companies. Total cash cost per payable ounce and all-in sustaining cost per payable ounce 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 Accounting Standards, and are disclosed in addition to IFRS Accounting Standards measures.
| Page 16 |
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
Cash cost per silver equivalent payable ounce
Management believes that the Company’s ability to control the cash cost per silver equivalent payable 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’s calculation of all-in sustaining costs includes sustaining capital expenditures of $3,219 for the year ended December 31, 2025 and all of which is attributable to the Avino Mine.
To facilitate a better understanding of these measures as calculated by the Company, detailed reconciliations between the non-IFRS Accounting Standard measures and the Company’s consolidated financial statements are provided below. The non-IFRS Accounting Standard measures presented are intended to provide additional information, and should not be considered in isolation nor should they be considered substitutes for IFRS Accounting Standards measures. Calculated figures may not add up accurately due to rounding.
The following table reconciles cost of sales to cash cost per payable AgEq oz and all-in sustaining cost per payable AgEq oz for the three months ended December 31, 2025 and 2024:
| Expressed in 000’s of US$, unless otherwise noted |
| Q4 2025 |
|
| Q4 2024 |
| ||||||||||||||||||
|
| Avino |
|
| La Preciosa |
|
| Total |
|
| Avino |
|
| La Preciosa |
| Total | |||||||||
| Cost of sales |
| $ | 12,365 |
|
| $ | 963 |
|
| $ | 13,328 |
|
| $ | 13,926 |
|
| $ | - |
|
| $ | 13,926 |
|
| Exploration expenses |
|
| (458 | ) |
|
| - |
|
|
| (458 | ) |
|
| (158 | ) |
|
| - |
|
|
| (158 | ) |
| Write down of equipment and supplies and materials inventory |
|
| (180 | ) |
|
| - |
|
|
| (180 | ) |
|
| (578 | ) |
|
| - |
|
|
| (578 | ) |
| Depletion and depreciation |
|
| (933 | ) |
|
| (33 | ) |
|
| (966 | ) |
|
| (843 | ) |
|
| - |
|
|
| (843 | ) |
| Cash production cost |
|
| 10,794 |
|
|
| 930 |
|
|
| 11,724 |
|
|
| 12,347 |
|
|
| - |
|
|
| 12,347 |
|
| Silver equivalent payable ounces sold |
|
| 529,913 |
|
|
| 25,654 |
|
|
| 555,567 |
|
|
| 889,294 |
|
|
| - |
|
|
| 889,294 |
|
| Cash cost per silver equivalent payable ounce sold |
| $ | 20.37 |
|
| $ | 36.27 |
|
| $ | 21.10 |
|
| $ | 13.88 |
|
| $ | - |
|
| $ | 13.88 |
|
| General and administrative expenses |
|
| 3,450 |
|
|
| 261 |
|
|
| 3,711 |
|
|
| 2,141 |
|
|
| - |
|
|
| 2,141 |
|
| Treatment & refining charges |
|
| 543 |
|
|
| 25 |
|
|
| 568 |
|
|
| 1,087 |
|
|
| - |
|
|
| 1,087 |
|
| Penalties |
|
| 547 |
|
|
| - |
|
|
| 547 |
|
|
| 745 |
|
|
| - |
|
|
| 745 |
|
| Sustaining capital expenditures |
|
| 1,467 |
|
|
| - |
|
|
| 1,467 |
|
|
| 555 |
|
|
| - |
|
|
| 555 |
|
| Exploration expenses |
|
| 458 |
|
|
| - |
|
|
| 458 |
|
|
| 158 |
|
|
| - |
|
|
| 158 |
|
| Share-based payments and G&A depreciation |
|
| (866 | ) |
|
| (56 | ) |
|
| (922 | ) |
|
| (473 | ) |
|
| - |
|
|
| (473 | ) |
| Cash operating cost |
| $ | 16,393 |
|
| $ | 1,160 |
|
| $ | 17,553 |
|
| $ | 16,560 |
|
| $ | - |
|
| $ | 16,560 |
|
| AISC per silver equivalent payable ounce sold |
| $ | 30.94 |
|
| $ | 45.20 |
|
| $ | 31.59 |
|
| $ | 18.62 |
|
| $ | - |
|
| $ | 18.62 |
|
*Certain amounts shown may not add exactly to the total due to rounding differences
| Page 17 |
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
The following table reconciles cash cost per AgEq oz production cost to all-in sustaining cost per AgEq oz for the year ended December 31, 2025, and 2024:
| Expressed in 000’s of US$, unless otherwise noted |
| FY 2025 |
|
| FY 2024 |
| ||||||||||||||||||
|
|
| Avino |
|
| La Preciosa |
|
| Total |
|
| Avino |
|
| La Preciosa |
|
| Total |
| ||||||
| Cost of sales |
| $ | 42,729 |
|
| $ | 963 |
|
| $ | 43,692 |
|
| $ | 42,977 |
|
| $ | - |
|
| $ | 42,977 |
|
| Exploration expenses |
|
| (1,417 | ) |
|
| - |
|
|
| (1,417 | ) |
|
| (567 | ) |
|
| - |
|
|
| (567 | ) |
| Write down of equipment and supplies and materials inventory |
|
| (593 | ) |
|
| - |
|
|
| (593 | ) |
|
| (1,144 | ) |
|
| - |
|
|
| (1,144 | ) |
| Depletion and depreciation |
|
| (3,548 | ) |
|
| (33 | ) |
|
| (3,581 | ) |
|
| (3,233 | ) |
|
| - |
|
|
| (3,233 | ) |
| Cash production cost |
|
| 37,171 |
|
|
| 930 |
|
|
| 38,101 |
|
|
| 38,033 |
|
|
| - |
|
|
| 38,033 |
|
| Silver equivalent payable ounces sold |
|
| 2,336,851 |
|
|
| 25,654 |
|
|
| 2,362,505 |
|
|
| 2,562,211 |
|
|
| - |
|
|
| 2,562,211 |
|
| Cash cost per silver equivalent payable ounce sold |
| $ | 15.91 |
|
| $ | 36.27 |
|
| $ | 16.13 |
|
| $ | 14.84 |
|
| $ | - |
|
| $ | 14.84 |
|
| General and administrative expenses |
|
| 12,155 |
|
|
| 261 |
|
|
| 12,416 |
|
|
| 8,261 |
|
|
| - |
|
|
| 8,261 |
|
| Treatment & refining charges |
|
| 2,402 |
|
|
| 25 |
|
|
| 2,427 |
|
|
| 3,527 |
|
|
| - |
|
|
| 3,527 |
|
| Penalties |
|
| 2,428 |
|
|
| - |
|
|
| 2,428 |
|
|
| 2,978 |
|
|
| - |
|
|
| 2,978 |
|
| Sustaining capital expenditures |
|
| 3,219 |
|
|
| - |
|
|
| 3,219 |
|
|
| 1,533 |
|
|
| - |
|
|
| 1,533 |
|
| Exploration expenses |
|
| 1,417 |
|
|
| - |
|
|
| 1,417 |
|
|
| 567 |
|
|
| - |
|
|
| 567 |
|
| Share-based payments and G&A depreciation |
|
| (3,834 | ) |
|
| (56 | ) |
|
| (3,890 | ) |
|
| (2,188 | ) |
|
| - |
|
|
| (2,188 | ) |
| Cash operating cost |
| $ | 54,958 |
|
| $ | 1,160 |
|
| $ | 56,118 |
|
| $ | 52,711 |
|
| $ | - |
|
| $ | 52,711 |
|
| AISC per silver equivalent payable ounce sold |
| $ | 23.52 |
|
| $ | 45.20 |
|
| $ | 23.75 |
|
| $ | 20.57 |
|
| $ | - |
|
| $ | 20.57 |
|
*Certain amounts shown may not add exactly to the total due to rounding differences
*General and administrative expenses in 2025 excludes $165 in expenses attributable to La Preciosa
Mine Operating Cash Flow Before Taxes
Mine operating cash flow before taxes is a non-IFRS Accounting Standard measure that does not have a standardized meaning prescribed by IFRS Accounting Standards and therefore may not be comparable to similar measures presented by other issuers. Mine operating cash flow before taxes is calculated as mine operating income less depreciation and depletion in cost of sales and write down or reversals of equipment and supplies and materials inventory. Mine operating cash flow before taxes is used by management to assess the performance of the mine operations, excluding corporate activities and is provided to investors as a measure of the Company’s operating performance.
| In 000’s |
| Q4 2025 |
|
| Q4 2024 |
|
| FY 2025 |
|
| FY 2024 |
| ||||
| Mine operating income – per financial statements |
| $ | 17,844 |
|
| $ | 10,456 |
|
| $ | 48,535 |
|
| $ | 23,201 |
|
| Depreciation and depletion included in cost of sales |
|
| 965 |
|
|
| 843 |
|
|
| 3,581 |
|
|
| 3,233 |
|
| Write down of equipment and supplies and materials inventory |
|
| 180 |
|
|
| 579 |
|
|
| 593 |
|
|
| 1,144 |
|
| Mine operating cash flow before taxes |
| $ | 18,989 |
|
| $ | 11,878 |
|
| $ | 52,709 |
|
| $ | 27,578 |
|
| Page 18 |
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
Operating Cash Flow Before Working Capital Adjustments
Operating cash flow before working capital adjustments a non-IFRS Accounting Standard measure that does not have a standardized meaning prescribed by IFRS Accounting Standards and therefore may not be comparable to similar measures presented by other issuers. Operating cash flow before working capital adjustments is calculated as cash provided by operating activities on the consolidated statement of cash flows, less net changes in non-cash working capital items per the consolidated statement of cash flows. This measure is used by management to assess the performance of the mine operations and is provided to investors as a measure of the Company’s operating performance.
| In 000’s |
| Q4 2025 |
|
| Q4 2024 |
|
| FY 2025 |
|
| FY 2024 |
| ||||
| Cash provided by operating activities |
| $ | 9,986 |
|
| $ | 15,551 |
|
| $ | 27,423 |
|
| $ | 23,124 |
|
| Net change in non-cash working capital items |
|
| 8,967 |
|
|
| (9,604 | ) |
|
| 7,919 |
|
|
| (8,035 | ) |
| Operating cash flow before working capital adjustments |
| $ | 18,953 |
|
| $ | 5,947 |
|
| $ | 35,342 |
|
| $ | 15,089 |
|
Working Capital
Management uses working capital to assess the Company’s ongoing liquidity position and future requirements, and believe it provides useful information to an investor. The Company’s working capital position is as follows:
| In 000’s |
| December 31, 2025 |
|
| December 31, 2024 |
| ||
| Current assets |
| $ | 132,068 |
|
| $ | 40,769 |
|
| Current liabilities |
|
| (32,506 | ) |
|
| (15,534 | ) |
| Working capital |
| $ | 99,562 |
|
| $ | 25,235 |
|
Results of Operations - Summary of Quarterly Results
| In 000’s |
| 2025 |
|
| 2025 |
|
| 2025 |
|
| 2025 |
|
| 2024 |
|
| 2024 |
|
| 2024 |
|
| 2024 |
| ||||||||
| Quarter ended |
| Dec 31 Q4 |
|
| Sep 30 Q3 |
|
| Jun 30 Q2 |
|
| Mar 31 Q1 |
|
| Dec 31 Q4 |
|
| Sep 30 Q3 |
|
| Jun 30 Q2 |
|
| Mar 31 Q1 |
| ||||||||
| Revenue |
| $ | 30,544 |
|
| $ | 21,042 |
|
| $ | 21,805 |
|
| $ | 18,836 |
|
| $ | 24,382 |
|
| $ | 14,616 |
|
| $ | 14,787 |
|
| $ | 12,393 |
|
| Net income (loss) |
| $ | 10,460 |
|
| $ | 7,702 |
|
| $ | 2,864 |
|
| $ | 5,617 |
|
| $ | 5,092 |
|
| $ | 1,169 |
|
| $ | 1,240 |
|
| $ | 599 |
|
| Earnings(loss)pershare - basic |
| $ | 0.07 |
|
| $ | 0.05 |
|
| $ | 0.02 |
|
| $ | 0.04 |
|
| $ | 0.04 |
|
| $ | 0.01 |
|
| $ | 0.01 |
|
| $ | 0.00 |
|
| Earnings(loss)pershare - diluted |
| $ | 0.06 |
|
| $ | 0.05 |
|
| $ | 0.02 |
|
| $ | 0.04 |
|
| $ | 0.03 |
|
| $ | 0.01 |
|
| $ | 0.01 |
|
| $ | 0.00 |
|
| Total Assets |
| $ | 279,032 |
|
| $ | 221,858 |
|
| $ | 174,680 |
|
| $ | 157,693 |
|
| $ | 148,711 |
|
| $ | 135,366 |
|
| $ | 133,702 |
|
| $ | 128,644 |
|
During Q4 2025, revenue increased significantly compared to previous quarters, mainly due to elevated silver prices even with lower silver equivalent ounces sold in the current quarter.
Net income and earnings per share in Q4 2025 were the highest in the Company’s history. Earnings overall have increased quarter over quarter, other than Q2 2025, mainly due to better metal realized prices, volume sold and lower costs due to cost management as well as positive movements between the USD and Mexican Peso exchange rates. For further details see “Financial Results” section.
Total assets continue to increase overall when compared to previous quarters, as result of operating and financing cash flow generation, and capital investment in the operation.
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. These fluctuations are mainly caused by market conditions such as fluctuations in metal prices, currency fluctuations as well as variations in mineralization of the zones mined.
| Page 19 |
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
Discussion and analysis relating to the Company’s financial position, as well as movements in cash flow, is as follows:
Selected Annual Information - Statement of Financial Position
| (000’s) |
| December 31, 2025 |
|
| December 31, 2024 |
|
| December 31, 2023 |
| |||
| Cash |
| $ | 101,724 |
|
| $ | 27,317 |
|
| $ | 2,688 |
|
| Total current assets |
|
| 132,068 |
|
|
| 40,769 |
|
|
| 23,535 |
|
| Total assets |
|
| 279,032 |
|
|
| 148,711 |
|
|
| 128,340 |
|
| Total current liabilities |
|
| 32,506 |
|
|
| 15,534 |
|
|
| 13,808 |
|
| Total liabilities |
|
| 45,002 |
|
|
| 23,312 |
|
|
| 22,339 |
|
| Share capital |
|
| 243,317 |
|
|
| 163,325 |
|
|
| 151,688 |
|
| Accumulated deficit |
|
| (16,615 | ) |
|
| (43,323 | ) |
|
| (51,423 | ) |
| Total equity |
|
| 234,030 |
|
|
| 125,399 |
|
|
| 106,001 |
|
Cash and current assets have increased in the current year, as a result of higher metal prices and good cost management, as well as proceeds from the at-the-market (“ATM”) offering. These increases were partly offset by capital re-investment into mining operations at Avino and development and exploration expenditures at La Preciosa. As a result of capital acquisitions, total assets have increased year over year.
Total and current liabilities in 2025 compared to prior years increased, with increases mainly due to higher taxes payable from higher operational profits as well as the deferred consideration payable that resulted from the repurchase of the royalty obligations on La Preciosa. The decrease in 2024 is a result of the repayment of the $5 million note payable arising from the La Preciosa acquisition that closed during 2022, as well as reductions in taxes payable and the expiration of the warrants associated with the warrant liability.
Share capital and total equity increased year over year as a result of shares issued through the Company’s ATM program, as well as exercises of stock options, with proceeds being used for capital expansion purposes and retirement of existing obligations.
Accumulated deficit has decreased year over year as a result of profitable operations. Further details are available on operations in the “Financial Results” sections.
Cash Flow
|
|
| December 31, 2025 |
|
| December 31, 2024 |
| ||
| Cash generated by operating activities |
| $ | 27,423 |
|
| $ | 23,124 |
|
| Cash generated by financing activities |
|
| 73,859 |
|
|
| 8,015 |
|
| Cash used in investing activities |
|
| (26,875 | ) |
|
| (6,560 | ) |
| Change in cash |
|
| 74,407 |
|
|
| 24,579 |
|
| Effect of exchange rate changes on cash |
|
| - |
|
|
| 50 |
|
| Cash, beginning of period |
|
| 27,317 |
|
|
| 2,688 |
|
| Cash, end of period |
| $ | 101,724 |
|
| $ | 27,317 |
|
Operating Activities
Cash generated by operating activities for the year ended December 31, 2025, was $27.4 million, an increase of $4.3 million compared to $23.1 million generated for the year ended December 31, 2024. Cash movements from operating activities can fluctuate with changes in net income and working capital movements. In the year ended December 31, 2025, cash generated from operating activities increased primarily as a result of increases to net income by $18.5 million, offset primarily by non-cash adjustments for gains on long-term investments and derivatives totalling $4.6 million, as well as smaller movements in other non-cash items.
| Page 20 |
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
Financing Activities
Cash generated by financing activities was $73.9 million for the year ended December 31, 2025, compared to $8.0 million generated for the year ended December 31, 2024. The movement is a result of proceeds from shares issued on the ATM and option exercises, partially offset by higher payments of lease and equipment loan. During the year ended December 31, 2025, the Company received net proceeds from issuance of shares for cash and from options exercise of $76.5 million (December 31, 2024 – $10.1 million). The Company also made lease and equipment loan payments totaling $2.6 million (December 31, 2024 - $2.1 million).
Investing Activities
Cash used in investing activities for the year ended December 31, 2025, was $26.9 million compared to $6.6 million for the year ended December 31, 2024. Cash used in investing activities included $26.3 million (December 31, 2024 - $6.6 million) spent on additions to plant, equipment and mining properties and $0.6 million on exploration expenditures (December 31, 2024 - $5.0 million). Additions to plant, equipment and mining properties included $13.25 million spent on the repurchase of royalty obligations on La Preciosa in the current period.
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 continue with sustainable and profitable mining operations.
Management expects that the Company’s ongoing liquidity requirements will be funded from cash generated from current operations. If required to fund ongoing exploration activities, and meet its objectives, including ongoing advancement at the Avino Mine further financing may be required. 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.
The Company’s recent financing activities are summarized in the table below.
| Intended Use of Proceeds |
| Actual Use of Proceeds |
| In June 2025, the Company announced the renewal of the at-the-market (the “2025 ATM”) sales agreement for gross proceeds of up to $40 million. At December 31, 2025, the Company had received gross proceeds of $40 million in connection with the 2025 ATM, completing the program. Proceeds from the 2025 ATM are intended for development activities focused at La Preciosa, sustaining capital and development activities at the Avino Mine, including equipment lease and loan payments, and general working capital purposes.
In November 2025, the Company announced a new at-the-market (the “2025 ATM #2”) sales agreement for gross proceeds of up to $60 million. At December 31, 2025, the Company had received gross proceeds of $33 million in connection with the 2025 ATM #2. The proceeds from the 2025 ATM #2 are intended for development activities focused at La Preciosa, sustaining capital and development activities at the Avino Mine, including equipment lease and loan payments, and general working capital purposes.
|
| As of the date of this MD&A, the Company is using the funds as intended.
During this period, funds have been used for exploration and evaluation activities, the acquisition of mining equipment and development activities at La Preciosa, the acquisition of sustaining capital equipment and development of the Avino Mine and the repayments of capital equipment acquired under lease and loan. Further, funds were used for the repurchase of existing royalty and production obligations at La Preciosa. Remaining funds have remained in treasury for further acquisitions or investments into the existing operations |
| Since the at-the-market (“2023 ATM”) sales agreement was initiated in Q2 2023 which expired on May 2025, the Company received net proceeds of $20.6 million in connection the 2023 ATM. Proceeds from the 2023 ATM were intended for exploration and evaluation activities focused at La Preciosa, sustaining capital and development activities at the Avino Mine, including equipment lease and loan payments, and general working capital purposes. |
| As of the date of this MD&A, the Company has used the funds as intended.
During the period between May 2023 and June 2025, all funds were used for exploration and evaluation activities, the acquisition of sustaining capital equipment and development of the Avino Mine and the repayments of capital equipment acquired under lease and loan. Remaining funds have remained in treasury for further acquisitions or investments into the existing operations. |
| Page 21 |
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
Off-Balance Sheet Arrangements
The Company has no off-balance sheet arrangements other than those disclosed in the Commitments section of this MD&A.
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 is as follows:
|
|
| 2025 |
|
| 2024 |
| ||
| Salaries, benefits, and consulting fees |
| $ | 2,558 |
|
| $ | 1,203 |
|
| Share-based payments |
|
| 3,003 |
|
|
| 1,666 |
|
|
|
| $ | 5,561 |
|
| $ | 2,869 |
|
(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 were due to/(from) related parties:
|
|
| December 31, 2025 |
|
| December 31, 2024 |
| ||
| Oniva International Services Corp. |
| $ | 98 |
|
| $ | 95 |
|
| Silver Wolf Exploration Ltd. |
|
| (239 | ) |
|
| (113 | ) |
|
|
| $ | (141 | ) |
| $ | (18 | ) |
For services provided to the Company by the President and Chief Executive Officer, the Company pays Intermark Capital Corporation (“ICC”), a company controlled by the Company’s President and CEO and director, for consulting services. For the year ended December 31, 2025, the Company paid $788 (December 31, 2024 - $281) to ICC.
| Page 22 |
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
(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, with a 2.5% markup. The President & CEO, and 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 are summarized below:
|
|
| 2025 |
|
| 2024 |
| ||
| Salaries and benefits |
| $ | 1,116 |
|
| $ | 974 |
|
| Office and miscellaneous |
|
| 573 |
|
|
| 480 |
|
|
|
| $ | 1,689 |
|
| $ | 1,454 |
|
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 equipment loans, and finance lease obligations are a reasonable approximation of their fair values based on current market rates for similar financial instruments.
The Company’s financial instruments are exposed to certain financial risks, including credit risk, liquidity risk, and market risk.
(a) CreditRisk
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.
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 three (December 31, 2024 – two) counterparties. However, the Company has not recorded any allowance against its trade receivables because to-date all balances owed have been settled in full when due (typically within 60 days of submission) and because of the nature of the counterparties.
The Company’s maximum exposure to credit risk at the end of any period is equal to the carrying amount of these financial assets as recorded in the consolidated statement of financial position. At December 31, 2025, no amounts were held as collateral.
(b)LiquidityRisk
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, 2025, in the amount of $101,724 and current assets exceeded current liabilities by $99,562 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 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.
| Page 23 |
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
The maturity profiles of the Company’s contractual obligations and commitments as at December 31, 2025, are summarized as follows:
|
|
| Total |
|
| Less Than 1 Year |
|
| 1-5 years |
|
| More Than 5 Years |
| ||||
| Accounts payable and accrued liabilities |
| $ | 14,204 |
|
| $ | 14,204 |
|
| $ | - |
|
| $ | - |
|
| Deferred consideration payable |
|
| 8,750 |
|
|
| 8,750 |
|
|
| - |
|
|
| - |
|
| Equipment loans |
|
| 422 |
|
|
| 225 |
|
|
| 197 |
|
|
| - |
|
| Finance lease obligations |
|
| 5,946 |
|
|
| 2,907 |
|
|
| 3,039 |
|
|
| - |
|
| Total |
| $ | 29,322 |
|
| $ | 26,086 |
|
| $ | 3,236 |
|
| $ | - |
|
(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 not materially exposed to interest rate risk, as any material debt obligations that bear interest are fixed and not subject to floating interest rates. A 10% change in the interest rate would not a 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, 2025 |
|
| December 31, 2024 |
| ||||||||||
|
|
| MXN |
|
| CDN |
|
| MXN |
|
| CDN |
| ||||
| Cash |
| $ | 29,172 |
|
| $ | 1,710 |
|
| $ | 13,989 |
|
| $ | 396 |
|
| Due from related parties |
|
| 4,026 |
|
|
| - |
|
|
| 2,287 |
|
|
| - |
|
| Long-term investments |
|
| - |
|
|
| 5,690 |
|
|
| - |
|
|
| 1,742 |
|
| Reclamation bonds |
|
| - |
|
|
| 6 |
|
|
| - |
|
|
| 6 |
|
| Amounts receivable |
|
| 11,461 |
|
|
| 30 |
|
|
| 3,599 |
|
|
| 24 |
|
| Accounts payable and accrued liabilities |
|
| (73,792 | ) |
|
| (311 | ) |
|
| (65,989 | ) |
|
| (46 | ) |
| Due to related parties |
|
| - |
|
|
| (135 | ) |
|
| - |
|
|
| (136 | ) |
| Finance lease obligations |
|
| (4,320 | ) |
|
| (430 | ) |
|
| (2,031 | ) |
|
| (549 | ) |
| Net exposure |
|
| (33,453 | ) |
|
| 6,560 |
|
|
| (48,145 | ) |
|
| 1,437 |
|
| US dollar equivalent |
| $ | (1,863 | ) |
| $ | 4,785 |
|
| $ | (2,349 | ) |
| $ | 998 |
|
Based on the net US dollar denominated asset and liability exposures as at December 31, 2025, a 10% fluctuation in the US/Mexican and Canadian/US exchange rates would impact the Company’s earnings for the year ended December 31, 2025, by approximately $248 (December 31, 2024 - $144). The Company has entered into certain foreign currency contracts to mitigate this risk and during the year ended December 31, 2025, recorded a derivative asset of $1,314 (December 31, 2024 – derivative liability of $475).
| Page 24 |
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
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.
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, 2025, 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 approximately $743 (December 31, 2024 - $36).
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, 2025, a 10% change in market prices would have an impact on net earnings (loss) of approximately $384 (December 31, 2024 - $119).
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 13 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 measured at fair value on a recurring basis by level within the fair value hierarchy as at December 31, 2025:
|
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
| |||
| Financial assets |
|
|
|
|
|
|
|
|
| |||
| Cash |
| $ | 101,724 |
|
| $ | - |
|
| $ | - |
|
| Amounts receivable |
|
| - |
|
|
| 7,430 |
|
|
| - |
|
| Derivative asset |
|
| - |
|
|
| 1,314 |
|
|
| - |
|
| Long-term investments |
|
| 3,843 |
|
|
| - |
|
|
| 308 |
|
| Total financial assets |
| $ | 105,567 |
|
| $ | 8,744 |
|
| $ | 308 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
| Derivative liability |
|
| - |
|
|
| - |
|
|
| - |
|
| Total financial liabilities |
| $ | - |
|
| $ | - |
|
| $ | - |
|
| Page 25 |
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
The following table sets forth the Company’s financial assets measured at fair value on a recurring basis by level within the fair value hierarchy as at December 31, 2024:
|
|
| Level 1 |
|
| Level 2 |
|
| Level 3 |
| |||
| Financial assets |
|
|
|
|
|
|
|
|
| |||
| Cash |
| $ | 27,317 |
|
| $ | - |
|
| $ | - |
|
| Amounts receivable |
|
| - |
|
|
| 369 |
|
|
| - |
|
| Derivative asset |
|
| - |
|
|
| - |
|
|
| - |
|
| Long-term investments |
|
| 1,190 |
|
|
| - |
|
|
| 57 |
|
| Total financial assets |
| $ | 28,507 |
|
| $ | 369 |
|
| $ | 57 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
| Derivative liability |
|
| - |
|
|
| (475 | ) |
|
| - |
|
| Total financial liabilities |
| $ | - |
|
| $ | (475 | ) |
| $ | - |
|
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 of the consolidated financial statements.
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, 2025 |
|
| December 31, 2024 |
| ||
| Not later than one year |
| $ | 459 |
|
| $ | 180 |
|
| Later than one year and not later than five years |
|
| 1,677 |
|
|
| 1,052 |
|
| Later than five years |
|
| 3,210 |
|
|
| 3,312 |
|
|
|
| $ | 5,346 |
|
| $ | 4,544 |
|
Office lease payments recognized as an expense during the year ended December 31, 2025, totaled $39 (December 31, 2024 - $39).
Due to the nature of the Company’s activities, the Company is from time to time involved in various claims and legal proceedings arising in the conduct of its business. At the reporting date, none of such claims and legal proceedings are considered probable of resulting in a material loss or judgment against the Company.
Subsequent Events
At-The-Market Sales – Subsequent to December 31, 2025, the Company issued 3,099,435 common shares in at- the-market offerings under prospectus supplement for gross proceeds of $24,950.
Stock Options Exercises – Subsequent to December 31, 2025, the Company issued 2,535,226 common shares through the exercise of 2,549,322 stock options at an average exercise price of C$1.17 for proceeds of C$2,960.
| Page 26 |
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
Outstanding Share Data
The Company’s authorized share capital consists of an unlimited number of common shares without par value.
As at March 10, 2026 the following common shares, warrants, and stock options were outstanding:
|
|
| Number of shares |
|
| Exercise price |
|
| Remaining life (years) |
| |||
| Share capital |
|
| 167,943,649 |
|
|
| - |
|
|
| - |
|
| Restricted Share Units (“RSUs”) |
|
| 3,336,715 |
|
|
| - |
|
| 0.05 – 2.22 |
| |
| Stock options |
|
| 3,322,750 |
|
| C$1.12 - C$4.38 |
|
| 1.04 – 4.22 |
| ||
| Fully diluted |
|
| 174,603,114 |
|
|
|
|
|
|
|
|
|
The following are details of outstanding stock options as at December 31, 2025 and March 10, 2026:
| Expiry Date |
| Exercise Price Per Share |
| Number of Shares Remaining Subject to Options (December 31, 2025) |
|
| Number of Shares Remaining Subject to Options (March 10, 2026) |
| ||
| March 25, 2027 |
| C$1.20 |
|
| 262,500 |
|
|
| 262,500 |
|
| March 29, 2028 |
| C$1.12 |
|
| 1,560,000 |
|
|
| 450,000 |
|
| March 25, 2029 |
| C$0.78 |
|
| 1,624,000 |
|
|
| 610,000 |
|
| April 9, 2030 |
| C$2.11 |
|
| 2,274,500 |
|
|
| 1,925,250 |
|
| May 27, 2030 |
| C$4.38 |
|
| 150,000 |
|
|
| 75,000 |
|
| Total: |
|
|
|
| 5,871,250 |
|
|
| 3,322,750 |
|
The following are details of outstanding RSUs as at December 31, 2025 and March 10, 2026:
| Expiry Date |
| Number of Shares Remaining Subject to RSUs (December 31, 2025) |
|
| Number of Shares Remaining Subject to RSUs (March 10, 2026) |
| ||
| March 29, 2026 |
|
| 585,000 |
|
|
| 585,000 |
|
| April 1, 2027 |
|
| 1,204,000 |
|
|
| 1,204,000 |
|
| April 9, 2028 |
|
| 1,476,000 |
|
|
| 1,476,000 |
|
| April 9, 2028 |
|
| 71,715 |
|
|
| 71,715 |
|
| Total: |
|
| 3,336,715 |
|
|
| 3,336,715 |
|
Recent Accounting Pronouncements
New and amended IFRS that are effective for the current year:
Certain new accounting standards and interpretations have been published that are either applicable in the current year, or are not mandatory for the current period and have not been early adopted.
Amendments to IAS 21 – Lack of Exchangeability
The amendments clarify how an entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate when exchangeability is lacking. In addition, the amendments require the disclosure of information that enables users of financial statements to understand the impact of currency not being exchangeable. There was no material impact on the Company’s consolidated financial statements from the adoption of these amendments.
| Page 27 |
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
Amendments to IFRS 9 and IFRS 7 – Classification and Measurement of Financial instruments
The amendments provide guidance on the derecognition of a financial liability settled through electronic transfer, as well as the classification of financial assets for: contractual terms consistent with a basic lending arrangement; assets with non-recourse features and contractually linked instruments.
Additionally, the amendments introduce new disclosure requirements related to investments in equity instruments designated at fair value through other comprehensive income (“FVOCI”), and additional disclosures for financial instruments with contingent features.
The amendments to IFRS 9 and IFRS 7 regarding the Classification and Measurement of Financial Instruments with a mandatory application of the standard on annual reporting periods beginning on or after January 1, 2026. We are currently assessing these standards, and their potential impact on the Company in the current or future reporting periods.
Amendments to IFRS 18 – Presentation and Disclosure in Financial Statements
In April 2024, the IASB released IFRS 18. IFRS 18 replaces IAS 1 while carrying forward many of the requirements in IAS 1. IFRS 18 introduces new requirements: i) present specified categories and defined subtotals in the statement of earnings, ii) provide disclosures on management defined performance measures (MPMs) in the notes to the financial statements, iii) improve aggregation and disaggregation. IFRS 18 requires retrospective application with specific transition provisions.
IFRS 18 regarding the Presentation and Disclosure of Financial Statements with a mandatory application of the standard on annual reporting periods beginning on or after January 1, 2027. We are currently assessing these standards, and their potential impact on the Company in future reporting periods.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d- 15(f) of the Exchange Act, and by the Canadian Securities Administrators) that occurred during the nine months ended September 30, 2025, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Cautionary Note regarding Reserves and Resources
National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”), issued by the Canadian Securities Administrators, lays out the standards of disclosure for mineral projects. This includes a requirement that a certified Qualified Person (“QP”) (as defined under the NI 43-101) supervises the preparation of the mineral reserves and mineral resources. Peter Latta, Vice President, Technical Services is a certified QP for the Company and has reviewed this MD&A for QP technical disclosures. All NI 43-101 technical reports can be found on the Company’s website at www.avino.com or under the Company’s profile on SEDAR+ at www.sedarplus.ca.
| Page 28 |
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
Disclosure Controls and Procedures
Management, including our principal executive officer and principal financial officer, has 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 as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) and has concluded that, based on its evaluation, that the Company’s disclosure controls and procedures were effective as of December 31, 2025.
Management’s Report on Internal Control 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 as issued by the IASB. 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 as issued by the IASB; 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.
Management, including our principal executive officer and principal financial officer, 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, 2025, the Company’s internal controls over financial reporting, as defined in NI 52-109 - Certification of Disclosure in Issuer’s Annual and Interim Filings and as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) were effective as of December 31, 2025.
The consolidated financial statements for the years ended December 31, 2025 and 2024, have been audited by Deloitte LLP, an independent registered public accounting firm, and its attestation report on management's assessment of the Company’s internal control over financial reporting as of December 31, 2025 appearing immediately preceding the Company’s audited consolidated financial statements.
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.
| Page 29 |
|
| MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2025 |
Cautionary Note to United States Investors Concerning Estimates of Mineral Reserves and Resources
This MD&A has been prepared in accordance with the requirements of the securities laws in effect in Canada, which differ from the requirements of United States securities laws applicable to U.S. companies. Information concerning our mineral properties has been prepared in accordance with the requirements of Canadian securities laws, which differ in respects from the requirements of the United States Securities and Exchange Commission (the “SEC”) applicable to domestic United States issuers. Accordingly, the disclosure in this MD&A regarding our mineral properties may not be comparable to the disclosure of United States issuers subject to the SEC’s mining disclosure requirements.
Additional Information
Additional information on the Company, including the Company’s consolidated audited financial statements for the year ended December 31, 2025, is available under the Company’s profile on SEDAR+ at www.sedarplus.ca and on the Company’s website at www.avino.com.
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 10, 2026. 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. Material linked to the Company’s website within this MD&A is not deemed to be incorporated by reference nor form a part of this MD&A. |
| Page 30 |