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Resources

The following is a summary of current resources at the San Gonzalo and Avino Mines, as well as the updated oxide tailings resource, grouped into the measured, indicated and inferred categories. The effective date of the resource estimates is August 31, 2016.

The resource estimates were prepared by Michael O'Brien P.Geo., Pr.Sci.Nat., who is a "Qualified Person" within the meaning of National Instrument 43-101 and who is an employee of QG Australia Pty Ltd (an ARANZ Geo Company) and independent of Avino, as defined by Section 1.5 of NI 43-101.



Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues. The quantity and grade of reported Inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred resources as an Indicated or Measured mineral resource and it is uncertain if further exploration will result in upgrading them to the Indicated or Measured mineral resource category.

Figures in the table may not add to the totals shown due to rounding.

The mineral resource estimate is classified in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum's "CIM Definition Standards - For Mineral Resources and Mineral Reserves" incorporated by reference into National Instrument 43-101 "Standards of Disclosure for Mineral Projects".

Mineral Resources are reported at cut-off grades 55, 125 and 50 g/t silver equivalent grade for the Avino, San Gonzalo and oxide tailings respectively as indicated in the table.


San Gonzalo Mine

A measured and indicated resource of 490,000 tonnes at an average grade of 250 g/t silver and 1.37 g/t gold totaling 5.1 million troy ounces of silver and 21.6 thousand troy ounces of gold using a cut-off grade of 125 g/t silver equivalent.

An inferred resource of 540,000 tonnes at an average grade of 314 g/t silver and 1.58 g/t gold totaling 5.4 million troy ounces of silver and 27.3 thousand troy ounces of gold using a cut-off grade of 125 g/t for silver equivalent.

Measured and indicated tonnage at San Gonzalo has increased by about 67%, while the inferred tonnage has decreased by 50% from the previous estimate. The lower inferred figure takes into account resource depletion from the mine's operations since 2012.

The San Gonzalo Vein System is comparatively high-grade and provides flexibility during times of uncertain metal prices.

The Avino Mine

A measured and indicated resource of 1,450,000 tonnes at an average grade of 72 g/t silver, 0.34 g/t gold and 0.64% copper totaling 3.4 million troy ounces of silver, 18,551 troy ounces of gold and 9,350 tonnes copper using a cut-off grade of 55 g/t silver equivalent.

An inferred resource of 5,790,000 tonnes at an average grade of 81 g/t silver, 0.57 g/t gold and 0.58% copper totaling 15.1 million troy ounces of silver, 106 thousand troy ounces of gold and 33,600 tonnes of copper using a cut-off grade of 55 g/t silver equivalent

The Avino Vein System contains the most tonnage on the Avino property and includes significant copper grades. Development drifting on the Avino Mine totalled 2855 metres in 2015 and 1108 metres in the first half of 2016.

Mr. Wolfin noted that the previous resource estimate included no measured resources, with the estimate prepared using mainly drill hole information providing indicated and inferred categories only. "With the additional underground sampling and more up-to-date geological information, we've been able to better refine the categories to include the measured category," said Mr. Wolfin.

Oxide Tailings

An indicated silver resource of 1,330,000 tonnes at an average grade of 98 g/t silver and 0.46 g/t gold totaling 4.2 million troy ounces of silver and 19.8 thousand troy ounces of gold using a cut-off grade of 50 g/t silver equivalent.

An inferred resource of 1,810,000 tonnes at an average grade of 88 g/t silver and 0.44 g/t gold totaling 5.1 million troy ounces of silver and 25.6 thousand troy ounces of gold using a cut-off grade of 50 g/t for silver equivalent.

Method of Calculation

The estimation methods used were substantially the same for all three deposits, providing a consistent baseline for strategic planning.

Mineral resources were estimated by ordinary kriging, optimized using kriging neighborhood analysis and verification by means of nearest neighbor and inverse distance methods, swathplot comparisons of estimates and visual inspections. Block models were created for the San Gonzalo and Avino Vein Systems and the oxide Tailings deposit and estimates were made into blocks of sizes 10m easting x 5m northing x10m elevation (San Gonzalo and Avino) and 40m easting x 40m northing x 2m elevation (oxide Tailings).

Classification of the mineral resource was based on kriging variance as a measure of uncertainty with adjustment to practical geometries using geological knowledge of the deposit.

Silver equivalent cut-off grades were applied to satisfy the condition of reasonable prospects for eventual economic extraction and were calculated using conversion formulas AgEQ = Ag + 55.9 * Au + 72.99 * Cu for Avino Vein, AgEQ = Ag + 69.37 * Au for oxide tailings and AgEQ = Ag + 56.38 * Au for San Gonzalo vein System.

Cut-off grades were calculated using current costs, silver price of US$19.50/oz, gold price of US$1,250/oz and copper price of US$2.10/lb.

Since 2013, Avino has drilled 57 new holes on the oxide tailings deposit, nearly three thousand channel samples representing 14,470 metres of vein material have been obtained on the Avino and San Gonzalo Veins, and 46 surface drill holes, (totaling 7,960 m) have been drilled on the San Gonzalo and Avino vein systems. This investment has significantly increased the amount of information available for resource estimation.

Fundamental changes since the previous mineral resource estimates are (1) depletion due to mining (over 1 million tonnes milled since the beginning of 2013), significant new sampling information (almost double in the case of the Oxide Tailings) (3) changes to silver equivalent calculation and cut-offs and (4) reclassification of mineral resources in the light of improved understanding of confidence in the deposits at distances from the underground channel samples and drill hole samples. More sampling information does not always lead to direct increases in resource tonnages and metal. In some cases, the new information provides improved understanding (developed by variogram modelling and kriging neighborhood analysis) that may demote some portions of mineral resource from high confidence categories such as measured and indicated to a lower confidence category such as inferred. Currently, for the San Gonzalo and Avino Vein Systems, estimated blocks more than thirty metres from sampling are not considered to be of sufficient confidence to be indicated category resources and have been classified as inferred resources. Consequently, the total indicated resources for the Avino Property are significantly less than those were reported previously. For the Oxide Tailings, estimated blocks more than fifty metres from sampling are not considered to be of sufficient confidence to be indicated category resources.

Qualified Person(s)

Avino's projects are under the supervision of Chris Sampson, P.Eng, BSc, Avino Consultant and Mr. Jasman Yee P.Eng, Avino director, who are both qualified persons within the context of National Instrument 43-101. Both have reviewed and approved the technical data in this news release except for the quotes.