Charles Daley - Corporate Communications David Wolfin - President and CEO

Heiko Ihle - H.C. Wainwright Christoph Bruening - Value Relations Chris Temple - The National Investor

Thank you for standing by. This is the conference operator. Welcome to the Avino Silver & Gold Mines Third Quarter 2014 Earnings Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. (Operator Instructions) At this time, I would like to turn the conference over to Charles Daley, Corporate Communications. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to Avino Silver & Gold Mines Limited third quarter 2014 financial results conference call. On the call today, we have the company’s President and CEO, Mr. David Wolfin; as well as our Chief Financial Officer, Mr. Malcolm Davidson; and one of our Directors, Mr. Jasman Yee. Before we get started, I’m required to remind you that certain statements on this call will include forward-looking information within the meaning of applicable securities laws. These may include statements regarding Avino’s anticipated performance in 2014 and future years, including revenue and cost forecast, silver and gold production, grades and recoveries, and the timing of expenditures required to develop new mines in mineralized zones. The company does not intend to, and does not assume any obligation to update such forward-looking statements or information other than as required by securities law. Thank you. With that, I’ll now turn the call over to Avino’s President and CEO, Mr. David Wolfin.

Thanks Charles and welcome everybody. I’d like to thank you all for joining us here today. During this call, I will cover the highlights of yesterday’s new release and our financial and operating performance in the third quarter of 2014 compared to the same quarter last year. I’ll then open up the call for Q&A session to address any questions you may have. I am pleased to report that Avino has delivered another solid quarter of financial results. Revenue for the third quarter was 4.7 million compared to 3.8 million last year. Mine operating income was 1.7 million compared to 2.3 million last year. The drop was due to higher cost of sales that rose to 3 million compared to 1.5 million last year. The increase of cost is due to higher prices paid for fuel and power and marginal increase in labor cost due to additions to our workforce, the accrual of 0.5% royalty and growth revenue as a result of the new Mexican tax legislation introduced earlier this year, and an increase in depletion expense. Our earnings for the quarter before taxes were 1.2 million compared to 1 million in the comparable quarter. Net income for the quarter after taxes were 788,000 compared to 939,000 in Q3 2013 resulting in earnings of $0.02 per share down from $0.03 last year. Current income tax expenses during the quarter totaled 374,000, compared to nil in the comparable quarter. The increase was a result of us using up all our available tax loss carry-forwards in Mexico and a result of Mexico’s new special mining duty. Our realized silver price decreased by 12% from $21.76 to $19.24 per ounce sold, and our realized gold decreased by 5% from $13.37 to $12.67 per ounce sold compared to last year. Our consolidated all-in sustaining cash costs were $13.01 compared to $11.35 last year for the reasons previously discussed. Consolidated cost in the future periods are expected to reflect the availability of cheaper grid power as well as the economies of scale created by the activation of the 1,000 ton per day mill Circuit number 3, which we expect will be online full time by the beginning of the year. Our cash and cash equivalents increased by 129% from December 31, 2013 to 8.8 million. This increase is primarily due to closing of two financings in the first quarter for $11 million. This amount also is a cash -- this amount also factors in cash spent on Avino expansion, a testament to the efficiency of our crew in Mexico as well as the recent acquisition of the Bralorne mine company. Now on to operations. I’m pleased to report that we delivered another solid quarter of production, thanks to our hardworking team in Mexico. Silver production increased by 21% to 217,000 ounces, gold production was up 27% to 1,105 ounces, silver equivalent was up 28% to 298,000 ounces. The increase was primarily due to improved grades and recoveries in both operations. Following the acquisition of the Bralorne mine project in October, we have been hard at work to implement the same principals and strategies that worked so well in Mexico to bring the Bralorne project forward as quickly as possible. We’ve retained engineers and are looking at ways to optimize and expand the operation, including examining new and more efficient mining methods. We are currently working on a phased expansion to improve and increase the production as well. Moving on to the outlook for 2014 and into 2015, management remains focused on the following key objectives; maintain profitable mining operations while managing operating costs and improving efficiencies, complete the mine expansion, bring mill Circuit number 3 online full time by the beginning of the year, integrate Bralorne Gold Mine's operation into Avino’s corporate structure, and implement strategies to make the operation more efficient and more profitable, and continue to explore regional targets on the Avino property followed by other properties in our portfolio. We would now like to open the call for questions-and-answers. Operator?

Thank you. We will now begin the question-and-answer session. (Operator Instructions) Our first question today comes from Heiko Ihle of H.C. Wainwright. Please go ahead. Heiko Ihle - H.C. Wainwright: So for year-to-date 2014 CapEx was 6.0 million, but obviously that included Circuit 3, just walk me sort of through what I should model out for Q4 because I don’t think trend lining is necessarily the best way to do it, and then also just what we should model out for 2015 for CapEx please.

Well, the CapEx for this year was 10 million, and I think we’re at 9.5 --

We're at 9.5 million, (inaudible) the expansion in the third circuit going. We've got few things left to do. With respect to 2015, we don’t have a lot of budget, we’ve got the power grid that we can complete and the tailings facility and then we'll start preparing the budget for sustaining CapEx for San Gonzalo. At the moment, we don’t report anything because we actually don’t have any or very minimal sustaining cost for capital. We’ve got all brand new equipments and we don’t have any plan to replace anything significant in the near future.

Also we've sent two independent geologists down to go meet with their team and go through the whole property and look at regional targets. So over the next month or six weeks, we’ll prepare a budget for next year's exploration program. Heiko Ihle - H.C. Wainwright: Okay, also can you walk me through sort of the impact of the grid tolerance at Circuit 3 which presumably operates at a lower cost and sort of the cash cost per ounce for 2015? I don’t know if you're willing to quantify that, but just if you are not just sort of guide me to why you should be looking for this?

Okay, definitely what we have found is, when we use diesel generated power, the power cost was roughly two times that of grid power, and if we take a look at the power component for Circuit number 3, I believe we have not done the actual breakdown on the different units on the operating cost of the power component. Until we have a better handle on that, I really don’t want to pull what kind of savings we can expect at this time. Heiko Ihle - H.C. Wainwright: Would it be fair to say that it's sort of in line with how other 1000 ton per day circuits are run?

I would think so. Heiko Ihle - H.C. Wainwright: Okay fair enough and I’ll get back in queue. Thanks you guys very much and once again well done.

Thank you and also I just wanted to mention about Circuit 2. You quoted the power cost or the cash cost per ounce in here, and so that’s going to come down because now it's on full grid power --.

Yes, that’s correct.

[Operator Instructions] The next question comes from Christoph Bruening of Value Relations. Please go ahead. Christoph Bruening - Value Relations: My question is -- actually it’s two of them; first of all, I remember you had that situation with Caterpillar. Do you still have their loan that they would provide you with equipment? And the second question is a little more general, do you have (inaudible) that Mexico is going to change its mind again and then increase taxes or other costs that were not expected for last year that came this year. So I would like to get your opinion on that.

Well the first question was Caterpillar-leased finance, we are using that. They are providing excellent support to our crew for servicing and training, and so we’ve requested that they can provide that service to the Bralorne operation as well, so that’s our plan. Number two.

Number two, with respect to any further changes to the Mexican tax legislation and how it will impact mining companies, I mean who knows, but --.

The opposition… Christoph Bruening - Value Relations: No my question is, is that agreement that is in place that has changed your costs for this year. Is that a long term agreement? Is this like something that was implemented for five years, for 10 years or indefinitely?

Indefinitely, however, that being said, I do sort of keep up to date on that wherever possible, and I do hear a lot of grumblings. I know that there has been a lot of push back in the mining companies that are operating in Mexico. I don't think that they’re going to increase the royalty or change the tax model. I do think that they may change it slightly, and I can’t say what that impact would be. But I think they are looking at ways to revise it to keep their investors happy.

Well both Silver standard and [indiscernible] are big projects [indiscernible] also. So the government is seeing that and they are not too thrilled about it, and the opposition party is calling for them to drop the new tax legislation and app, so we'll see what happens.

[Operator Instructions] The next question comes from Chris Temple of The National Investor. Please go ahead. Chris Temple - The National Investor: Hey guys, quick question David on Bralorne, do you have any preliminary budget set or can you put any meat on the more general statements you made as to what your near term plans are and what the company might be spending on that project up there in BC?

We’re working on that, we’re looking at a phased approach. First phase is to optimize the operation by bringing in new equipment and having less down time and then looking to increase the output. Do you want to comment on costs…?

At the moment, we’re trying to prepare a budget, but we’re working with consultants and we’ve had a number of ideas on the mine plan for 2015 and beyond. So we’re just working through the different scenarios at the moment and haven’t concluded on which one is going to be the most cost effective and efficient, so with respect to how much we’re going to spend, it’s hard to say what that will be in 2015.

We’re waiting for an analysis from an independent engineering firm; these are Australian guys that are well versed and narrow veined in underground systems. And we’re looking at possibly introducing a new type of mining method, long haul mining where applicable in the underground, and this would use more mechanized-type mining and lower operating costs is what our hope to achieve is. So they’re still working on the report. So we’ve got to wait for that one. Chris Temple - The National Investor: Okay. Are you talking specifically about like the [Alamac] method or just a long haul? I’m little familiar with [Alamac] which is fairly new.

I think for this particular instance, it’s really the long haul mining method. Chris Temple - The National Investor: Okay.

Yes, and we’re talking to Caterpillar and Sandvik about getting more equipment that can fit in the underground there. So this is our plan for next year to implement the new mining technique where possible.

[Operator Instructions] There are no further questions at this time. I’ll now hand the call back over to David Wolfin for concluding comments.

Well, thank you everybody. I’d just like to say we’re very excited. Jasman and I were out of the mine last week in Mexico and we’re just preparing to commission Circuit number 3, and the underground mining has been going very well. So, we should see a good fourth quarter and next year should be a real breakout year for the company. Thank you again very much.

Thank you.

This concludes today’s conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.