Avino Acquires Neighboring LA Preciosa Project; Adds Significant Production Potential to Growth Profile, and Substantially Enhances Its Mineral Resources
October 27, 2021
AVINO ACQUIRES NEIGHBORING LA PRECIOSA PROJECT;
ADDS SIGNIFICANT PRODUCTION POTENTIAL TO GROWTH PROFILE,
AND SUBSTANTIALLY ENHANCES ITS MINERAL RESOURCES
Avino Silver & Gold Mines Ltd. (ASM: TSX/NYSE American, GV6: FSE, “Avino” or “the Company”) is pleased to
announce that it has entered into a share purchase agreement (the “Transaction”) to indirectly acquire through
the purchase of the shares of certain h olding companies, the La Preciosa Property (“La Preciosa”) from Coeur
Mining, Inc. (NYSE: CDE) (“Coeur”). La Preciosa is a development stage mineral property, 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.
Strategic Rationale for the Transaction
Key strategic, financial, and operational advantages of the Transaction include:
• Presents Unique Operational Synergies due to La Preciosa’s Strategic Location – Avino’s and La Preciosa’s
property boundaries are within 2 km of each other. The existing infrastructure and permitting , as well as
excess milling capacity , at the Avino Property offer the potential to significantly reduce t he required
development capital costs at La Preciosa under Avino’s ownership. For example, Avino has a 20km dedicated
5MW power line and only utilizes 2.5 -3.0MW. La Preciosa can potentially further benefit from Avino’s
flexible mill circuit, which is capab le of processing at any level up to 2,500 tonnes per day with further
expandable production capacity.
• Positive Results from Initial Metallurgical Testwork – Current metallurgical testwork performed by Avino
during the due diligence process achieved 80% sil ver recovery and 60% gold recovery using flotation
methods currently used at Avino’s mill facility, further enhancing operational synergies.
• Reduces Development Timeline and Risk – Utilizing Avino’s existing mill and infrastructure in connection
with a rapid future potential development of La Preciosa’s Gloria and Abundancia veins is expected to result
in a shorter development timeline and reduce the overall development risk of La Preciosa.
• Reduces Environmental Footprint – Leveraging Avino’s existing infrastructure, which includes a tailings
storage facility and fresh water well, will reduce the environmental footprint associated with the future
development of La Preciosa.
• Increases Avino’s Silver Resource Base – The addition of La Preciosa’s mineral resource inventory
substantially augments Avino’s consolidated NI 43 -101 mineral resources to over 235 million silver
equivalent ounces (“AgEq”). A Technical Report for the updated NI 43-101 mineral resource estimate on La
Preciosa is expected to be filed within 45 days of this news release.
• Elevates Avino’s Potential as a Silver Producer and Developer –The Transaction’s impact on Avino’s
production capabilities and its increase in Avi no’s combined mineral resources, raises Avino’s potential as
an intermediate silver producing company.
• Enhances Avino’s Land Position in Durango – The acquisition of La Preciosa strengthens Avino’s position in
Durango, Mexico, by increasing its mineral property ownership interests by over 600% to 7,746 hectares. La
Preciosa’s land package is adjacent to Avino’s and allows Avino to employ its local expertise in mine
development and operations.
N E W S R E L E A S E
ASM: TSX/NYSE American
Avino Silver & Gold Mines Ltd. T (604) 682 3701
Suite 900-570 Granville Street F (604) 682 3600
Vancouver, BC V6C 3P1 www.avino.com
October 27, 2021 – Avino Silver & Gold Mines Ltd. – News Release
Avino Acquires Neighboring La Preciosa Project; Adds Significant Production Potential to Growth Profile, and
Substantially Enhances its Mineral Resources
Page 2
• Presents Exploration Upside Potential at La Preciosa – Over 90% of historic drilling has been within the
current mineral resource footprint, which represents only 10% of the total land package. Areas outside the
current mineral resource footprint remain open for exploration, including to the east of the Mar tha vein
and other underexplored targets to the south or west of the current mineral resource.
David Wolfin, President & CEO, stated: “We believe this is a transformational Transaction for Avino shareholders.
I have always believed that Avino and La Preciosa belong under common ownership given the clear synergies and
common infrastructure, and I’m delighted that Coeur shares this vision. La Preciosa is an excellent strategic fit
within Avino’s existing operations and further strengthens our presence in Durango by adding not only a large,
high-quality silver development project with near-term production potential to our portfolio, but also increasing
our mineral exploration concessions by more than 7 -fold to over 7,000 hectares. We are also very please d to
welcome an experienced miner in Coeur as a strategic Avino equity holder. Work is already underway to
determine how to best integrate La Preciosa into Avino’s production operations, given the proximity to the current
processing facilities and infrastr ucture. We expect a large portion of the existing La Preciosa resource could be
mined via an underground operation to potentially improve Avino’s production and organic growth profile.”
Table 1. La Preciosa Mineral Resource Estimate
Table 2. Avino Mine Mineral Resource Estimate
Table 3. Avino Silver & Gold Mines Ltd. - Mineral Resources
1. The stated mineral resources comply with the disclosure requirements of NI 43 -101 and are classified in accordance with the
Canadian Institute of Mining, Metallur gy and Petroleum's " CIM Definition Standards – For Mineral Resources and Mineral
Reserves".
2. Mineral resources for La Preciosa are estimated at a cut-off grade of 120 g/t AgEq.
3. Mineral resources for La Preciosa are estimated using a long -term silver price of US$19.00/oz and a long -term gold price of
US$1,750/oz.
4. Mineral resources are not mineral reserves and do not have demonstrated economic viability.
5. Tonnage and metal content figures are expressed in thousands and may not add up due to rounding.
6. Further details on the Avino Mine mineral resource estimate, effective October 31, 2020, are available on our website at
https://www.avino.com/operations/resources/ and on our SEDAR and Edgar profile.
7. A Technical Report for the updated NI 43-101 mineral resource estimate on La Preciosa is expected to be filed by Avino within 45
days of this news release.
October 27, 2021 – Avino Silver & Gold Mines Ltd. – News Release
Avino Acquires Neighboring La Preciosa Project; Adds Significant Production Potential to Growth Profile, and
Substantially Enhances its Mineral Resources
Page 3
Terms of the Transaction
Avino has agreed to pay cash considerati on of US$20 million of which US$15 million is payable at the closing of
the Transaction from Avino’s cash on hand. The remaining US$5 million is payable before the first anniversary of
the closing date. Avino will execute a note payable in favor of Coeur w ith respect to the remaining cash
consideration on customary termsi. Additionally, Avino will issue 14.0 million units (the “Units”), each comprising
one (1) common share and one-half (1/2) of a common share purchase warrant (each full warrant, a “Warrant”).
On closing, Coeur will own ~12% of Avino’s issued and outstandin g common shares. The Warrants will have an
exercise price of $1.09, representing a 25% premium to Avino’s 20-day VWAP as of October 26, 2021, and will
have a term of 18 months from the closing date of the Transaction. The Units will be issued on a private placement
basis and will be subject to a statutory 4-month and a day hold period in Canada and entitled to registration rights
in favor of Coeur. Additionally, contingent cash consideration of US$8.75 million will be payable by Avino to Coeur
within 12 mo nths of initial production at La Preciosa. Avino may elect to pay up to half of the contingent cash
consideration in Avino sharesii. Coeur will retain ownership of a 1.25% net smelter return royalty on the Gloria
and Abundancia areas of La Preciosa, and a 2.00% gross value royalty on all areas of La Preciosa other than the
Gloria and Abundancia areas. So long as Coeur holds 10% or more of the outstanding shares of Avino, Coeur has
the option to nominate one director for election to the Avino board or designate a board observer . At closing,
Coeur has also been granted pre-emptive rights to maintain its equity ownership position in Avino and has entered
into a voting agreement with Avino.
Other contingent consideration payable by Avino to Coeur includes an additional payment of US$0.25 per silver
equivalent ounce 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 US$50 million in total payments to Coeur. Any payments
made under the new mineral reserve amount shall be credited against pre-existing and/or future payments owing
on the gross value royalty. Avino has also agreed to incur a minimum of US$2 million, in aggregate, in exploration
expenditures on La Preciosa beyond the existing mineral resource area over the next five years.
I In the event any portion of the US$5 million remains outstanding on the 1-year anniversary of the closing, the total amount of remaining
cash consideration will increase to US$6 million and begin accruing interest.
ii Payment in shares will be subject to Coeur not owning more than 19.9% of Avino’s issued and outstanding shares. The value of the shares
will be calculated based on the twenty (20) day VWAP for the period ending two (2) trading days before the date of issuance of the shares.
Significant Conditions to Closing
The completion of the proposed Transaction is subject to a number of customary conditions precedent, as well
as, the authorization of the Mexican Federal Economic Competition Commission, approval of the issuance of the
Unit consideration and contingent payment amount by the NYSE American, the Toronto Stock Exchange, and any
other necessary third party approvals. The Closing of the Transaction is expected to occur during Q1 2022. There
can be no assurance that the proposed Transaction will be completed as proposed or at all.
Advisors and Counsel
Cantor Fitzgerald Canada Corporation acted as Avino’s financial advisor , and Harper Grey LLP and Lewis Brisbois
Bisgaard & Smith LLP acted as legal counsels to Avino in connection with the Transaction.
October 27, 2021 – Avino Silver & Gold Mines Ltd. – News Release
Avino Acquires Neighboring La Preciosa Project; Adds Significant Production Potential to Growth Profile, and
Substantially Enhances its Mineral Resources
Page 4
Qualified Person(s)
Avino's projects in Durango, Mexico are under the independent geoscientific oversight of Michael O’Brien, P.Geo.,
Senior Principal Consultant, Red Pennant Communications, and under the supervision of Peter Latta, P.Eng,
Avino’s VP, Technical Services, and non-independent, who are both qualified persons within the context of NI 43-
101. Both have reviewed and approved the technical data in this news release.
About Avino
Avino is primarily a silver producer from its wholly owned Avino Mine near Durango, Mexico. The Company’s silver
and gold production remains unhedged. The Company’s mission and strategy is to create shareholder value
through organic growth at the historic Avino Property and the strategic acquisition of mineral exploration and
mining properties. We are committed to managing all business activities in a s afe, environmentally responsible,
and cost-effective manner, while contributing to the well -being of the communities in which we operate. We
encourage you to connect with us on Twitter at @Avino_ASM and on LinkedIn at Avino Silver & Gold Mines.
ON BEHALF OF THE BOARD
“David Wolfin”
David Wolfin
President & Chief Executive Officer
This news release contains “forward-looking information” and “forward-looking statements” (together, the “forward looking statements”)
within the meaning of applicable securities laws and the United States Private Securities Litigation Reform Act of 1995, including the
updated mineral resource estimate for the Company’s Avino Property located near Durango in west -central Mexico (the “Property”) with
an effective date of October 31, 2020, prepared for the Company, and La Preciosa’s updated October 27, 2021 r esource estimate and
references to Measured, Indicated, Inferred Resources referred to in this press release. These forward-looking statements are made as of
the date of this news release and the dates of technical reports, as applicable. Readers are caut ioned not to place undue reliance on
forward-looking statements, as there can be no assurance that the future circumstances, outcomes or results anticipated in or implied by
such forward-looking statements will occur or that plans, intentions or expectations upon which the forward-looking statements are based
will occur. While we have based these forward -looking statements on our expectations about future events as at the date that such
statements were prepared, the statements are not a guarantee that such future events will occur and are subject to risks, uncertainties,
assumptions and other factors which could cause events or outcomes to differ materially from those expressed or implied by such forward-
looking statements. No assurance can be given that the Company’s Property nor the La Preciosa Property have the amount of the mineral
resources indicated in their reports or that such mineral resources may be economically extracted.
Such factors and assumptions include, among others, the effects of general economic conditions, the price of gold, silver and copper,
changing foreign exchange rates and actions by government authorities, uncertainties associated with legal proceedings and negotiations
and misjudgments in the course of preparing forward -looking information. In addition, there are known and unknown risk factors which
could cause our actual results, performance or achievements to differ materially from any future results, per formance or achievements
expressed or implied by the forward-looking statements. Other risk factors include risks associated with project development; the need for
additional financing; operational risks associated with mining and mineral processing; fluct uations in metal prices; title matters;
uncertainties and risks related to carrying on business in foreign countries; environmental liability claims and insurance; r eliance on key
personnel; the potential for conflicts of interest among certain of our offi cers, directors or promoters with certain other projects; the
absence of dividends; currency fluctuations; competition; dilution; the volatility of the our common share price and volume; tax
consequences to U.S. investors; and other risks and uncertainties Included in filings made from time to time with the U.S. Securities and
Exchange Commission, and the Canadian securities regulators, including, without limitation, our most recent reports on Form 2 0-F and
Form 6-K. Although we have attempted to identify i mportant factors that could cause actual actions, events or results to differ materially
from those described in forward -looking statements, there may be other factors that cause actions, events or results not to be as
anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results
and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place un due reliance
on forward-looking statements. We are under no obligation to update or alter any forward -looking statements except as required under
applicable securities laws.
Neither the TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy
or accuracy of this release.