Avino announces updated positive Preliminary Economic Assessment for the 'Oxide Tailings': base case pre-tax NPV (8%) of US$40.5 million and a 48.4% IRR

The base case PEA provides a solid foundation for focused growth and demonstrates the value of the existing infrastructure, and outlines a low capital cost option with attractive returns.

The PEA focuses on the Oxide Tailings Retreatment of the Avino mine as a stand alone project with an initial 7 year life of mine plan ("LOMP").  The Sulphides will be considered during the pre-feasibility study stage, and evaluated as to their own economic viability.  This approach provides attractive economic returns using lower initial capital costs.

The Financial results for the base case are presented in the table below:

The life of project average material tonnages, grades and metal production are shown below:

PEA Study Parameters and basis of Financial Evaluations

The production schedule was incorporated into the 100% equity pre-tax financial model to develop annual recovered metal production from the relationships of tonnage processed, head grades, and recoveries.

Gold and silver payable values were calculated utilizing base case metal prices.  Net invoice value was calculated each year by subtracting the applicable refining charges from the payable metal value.  At-mine revenues are then estimated by subtracting transportation and insurance costs.  Operating costs for mining, processing, and G&A were deducted from the at-mine revenues to derive annual operating cash flow.

Initial and sustaining capital costs as well as working capital have been incorporated on a year-by-year basis over the mine life.  Salvage value and mine reclamation costs are applied to the capital expenditure in the last production year.  Capital expenditures are then deducted from the operating cash flow to determine the net cash flow before taxes.

Initial capital expenditures include costs accumulated prior to first production of dore.  Sustaining capital includes any capital expenditures required during the production period.  Initial and sustaining capital costs applied in the economic analysis are US$24.36 million and US$4.35 million, respectively.

The Company cautions that the PEA is preliminary in nature in that it is based on Inferred Mineral Resources which are considered too speculative geologically to have the economic considerations applied to them that would enable them to be characterized as mineral reserves, and there is no certainty that the PEA will be realized.  Mineral resources that are not mineral reserves do not have demonstrated economic viability.

Sensitivity Analysis

Sensitivities of the project's NPV, IRR and payback period to the Project key variables were investigated.  Using the base case as reference, all of the key variables were changed between -30%/+30% at a 10% interval while holding the other variables constant. The project NPV is most sensitive to the silver price, and in descending order gold price, operating costs; and capitals costs.  The project IRR is most sensitive to the capital costs and the silver price, followed by the gold price and operating costs and the gold price. The payback period is also most sensitive to the silver price, followed by capital costs, operating costs and the gold price.

Post-Tax Economic Analysis

Avino commissioned PricewaterhouseCoopers 'PwC' in Mexico to prepare the tax component for the post-tax economic evaluation for this updated PEA with the inclusion of applicable income and mining taxes, and the results are as follows:

• Federal income taxes in Mexico are calculated using the currently enacted corporate rate of 30%
• A special mining duty (SMD) of 7.5% is applied to net profits and is paid annually and is deductible for tax purposes, resulting in an effective tax rate of 5.25%
• At the base-case gold and silver prices, the total estimated taxes payable are $26.32 million over the 7 year LOM, as shown below:

	Unit	Base Case
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