Resource World Magazine

o c t o b e r / n o v e m b e r 2 0 1 4 www.resourceworld.com 35 Avino Silver & Gold Mines ramping up production by Ellsworth Dickson Avino Silver & Gold Mines Ltd. [ASM-TSXV, NYSE MKT; GV6-FSE] has announced the re-opening of the Avino Mine and the re-starting of mining operations. The company's Avino Mine and its nearby San Gonzalo Mine are located approximately 80 km northeast of Durango, Mexico. Although Avino Silver & Gold acquired the property in 1968, the Avino Mine was founded in 1558 and was one of the first Spanish mines in Mexico and, by the end of the 18th century, was the largest open pit mine in the world. Avino Silver & Gold was in production for 27 years until 2001 when production ceased due to low metal prices. During that time, 16 million oz of silver were produced as well as 96,000 oz gold and 24 million lbs copper. Due to higher metal prices, the San Gonzalo Mine has been in production, and the Avino Mine, two km southeast, resumed production in late August. Both mines are underground operations targeting high- grade vein systems. Measured and indicated resources at San Gonzalo were based on sur- face diamond drilling of 64 holes totaling 14,624 metres and stand at 293,822 tonnes grading 389.3 g/t silver equivalent (Eq) oz, or 3,677,861 silver Eq oz. (silver + gold) using a 150 gram/tonne cut-off. Inferred resources are 1,085,276 tonnes of 300.8 sil- ver Eq oz/ton, or 10,494,843 silver Eq oz with the same cut-off. At the Avino Mine, indicated resources are pegged at 4,253,968 tonnes grading 174.3 silver Eq oz/ton (silver+gold+copper), or 23,838,629 silver Eq oz, based on a 100 g/t silver Eq. Inferred resources are 3,220,896 tonnes of 157.0 g/t silver Eq, or 16,262,944 oz silver Eq at the same cut-off. The Avino resource figures were based on data derived from 34 drill holes totaling 11,523 metres. All the above figures assume a silver price of US $20/oz. These resource figures do not repre- sent the total extent of silver-gold-copper mineralization on the property and the company has ongoing drilling programs to delineate further metal resources. Rehabilitation programs have been under way at the Avino Mine in prepara- tion for the resumption of production, including the completion of a dewatering program that began in November 2012. Since dewatering the mine, Avino has hauled 5,850 tonnes of material from underground. The dewatering program was part of the Avino Mine expansion pro- gram. This initial tonnage was blasted mill feed material left underground prior to the mine shutting down 13 years ago. Samples of this material have been assayed and indicate they are of a higher grade than the historic stockpile material currently being processed in circuit No. 2. Currently, circuits 1 and 2 at the Avino mill process 500 tonnes per day. When Circuit 3 comes on line later this year, the mill will be processing 1,500 tonnes per day. Presently, in addition to the San Gonzalo Mine ore, the mill is also process- ing stockpiled ore from the Avino Mine, left over from the 2001 closure. "The reopening of underground min- ing operations represents a major milestone achieved as we deliver on our promise of growth. The local communities' support has been tremendous as they are thrilled we are creating new jobs for the region. We con- tinue to work towards completing our goal of increasing mill capacity from 500 tpd to 1,500 tpd in the fourth quarter of 2014," said David Wolfin, President and CEO. Avino management has also been looking into reprocessing oxide tailings derived from the Avino property. With modern milling and heap leach technol- ogy, metal recoveries from processing old tailings appear to be economically robust. Inferred tailings resources are estimated to be 6.6 million oz silver and 39,530 oz gold. Pre-tax IRR works out to be 54% with an NPV of $38.6 million. While Q2 2014 financial results are not yet available, Q1 2014 revenue was $5.77 million compared to $3.49 million for Q1 2013 for an EPS of $0.05. Consolidated cash cost per silver equivalent ounce dur- ing Q1 2014 totaled $8.62. Avino reported a silver equivalent production increase of 32% for Q2 2014 – 295,531 oz as compared to 224,291 oz in Q2 2013. Silver production for Q2 2014 increased 27% to 223,183 oz while gold production increased 47% to 1,157 oz. Avino is in the process of acquiring all the shares of related company Bralorne Gold Mines Ltd. [BPM-TSXV; BPMSF- OTCQX] which has a 100% interest in the producing Bralorne Gold Mine, located near Gold Bridge 241 km northeast of Vancouver, British Columbia. n MINING The Avino property mining operation northeast of Durango, Mexico. Photo courtesy Avino Silver & Gold Mines Ltd.

• Cover