This is the conference operator. Welcome to the Avino Silver & Gold Mines’ First Quarter 2016 Earnings Call, taking place on May 17, 2016 at 8 AM Pacific Time. 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 the Avino Silver & Gold Mines' first quarter 2016 financial results conference call. On the call today, we have the company’s President and CEO, David Wolfin; as well as our Chief Financial Officer, 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 2016 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 applicable 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 this morning news release and financial and operating performance during the first quarter of 2016 compared to 2015. I'll then open up the call for Q&A to address any questions you may have. Before we get into financial results I want to preface the discussion by letting you know that the details relate only to the sale of San Gonzalo mine concentrate, as we have not yet declared commercial production at the Avino mine. Additionally, all of the financial figures are based on production from January and February only. We signed a new agreement for the sale of San Gonzalo mine concentrate in March. The new agreement has a slightly different shipping schedule, meaning that March concentrate was not shipped by the end of the quarter and will be accounted for in our Q2, 2016 financials instead along with the proceeds from April and May. Despite this we were still profitable. Revenue from mine operating for the quarter was $2.8 million compared to $4.3 million during the comparative quarter last year. As I mentioned this was only for the sale of San Gonzalo concentrate during January and February. Proceeds from the sale of Avino concentrate totaled $5.6 million, but was recorded as a recovery of exploration and evaluation expenses rather than revenue this quarter. Proceeds from the sale of Avino concentrate will be reported as revenue when management has made a production decision. The mine plan calls for 20 to 24 month of development which began in Q4 of 2014. So we are getting close. Additionally, we announced in our April 11 news release that underground mining commenced on April 1 on the upper level…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] The first question is from Bhakti Pavani of Euro Pacific Capital. Please go ahead.

Good morning guys. Just curious…

Good morning, Bhakti.

Just curious how big of a shipment was delayed into Q2?

It was the month of March production which was Jasman…

Typically it’ll be around about 200 tonnes, 200 metric tonnes grading above 7,500 kilograms silver and around about 25 to 30 grams per tonne gold.

Okay, also with regarding to the CapEx spend how should we look for the expenditure over the remaining of 2016?

Well, we've acquired most of the equipment we need for both operations. We have our new tailings facility that we’ll be looking at later in 2016 and 2017. We’re still working on the CapEx, but we anticipate it to be between $2 million and maybe $3.5 million perhaps less. We have a new production jumbo [ph] on the way to Mexico, which is about a $1 million. But as far as the Avino operation is concerned we’re not expecting to make too many more capital purchases. On the Bralorne side we’re still evaluating mine plans and that will indicate what type of [indiscernible] test long hole program. And we’ve already acquired the necessary equipment for Bralorne, that was two scoops and a loader in 2015. But till the operation is up and running we’ll be very - keeping the capital expenditures to a minimum.

Fair enough. Given the uptick in commodity prices have you guys thought up any budget for the exploration for San Gonzalo? If at all.

We’re drilling right now.

Absolutely we’re drilling on it right now.

So should we be expecting an updated resource estimate anytime soon?

Yeah and we’re also - we’ve commenced doing new resource estimate which will come out this summer sometime.

Okay perfect. But regarding to the new sales agreement is that the sales agreement related to Samsung or is it some other client?

It is with Samsung. Normally we don’t make disclosures about who we sell our product to. We did with the Avino Mine because it was a term facility associated with it. But we have - it’s a much shorter term but yeah, we will be selling San Gonzalo product to Samsung for a few months.

Okay and also with regards to shipment is it exclusively the San Gonzalo concentrate or it does include the stockpiles?

Do you mean the historic stockpiles?

Yes.

Well at the moment we’re not doing anything with the historic stockpile. So it's just San Gonzalo and the Avino concentrate.

The Avino Mine is feeding Circuit 2 and 3 right now. So roughly 1,200 tonnes per day is processing Avino material and Circuit 1 is doing San Gonzalo.

Also I know you guys have a new contractor that started work on April 1. Would you provide some more color on how things are shaping up and should we be expecting a production decision soon?

I think so, to answer your question we have new mining contracted that started in early April for a production mining which is - let me generally check the reason why we brought in the contractors we’re waiting for a new production jumbo which was being delayed from Sweden. So we’ve decided to speed up the process and we brought in a contractor for track drills [ph].

So that mining has been going on for four to six weeks and we’re currently in the process of analyzing the economics to see how that blends into our decision for the production decision.

Any kind of timeline that you have in for us?

I'd like to say it's going to be in Q2. But we need to review the results and make sure they are consistent with what our expectations are for the ET mine. We are very optimistic, but we need to complete our evaluation first.

Okay. That's it from my side. Thank you very much guys.

Thanks Bhakti.

Thanks Bhakti.

The next question is from Michael Wichterle of Cantor Fitzgerald. Please go ahead.

Hi guys. Congrats on the results. I'll keep it short. Just two quick questions. Is there anything in terms of guidance you can provide just for the year either in terms of production or in revenue? And secondly I may have missed this but would have any sort of time on in terms of the declaration of commercial production at Avino? Thanks very much.

The production is consistent with last year. So we are hoping to duplicate about 3 million ounces of silver equivalent.

On the production decision as I just mentioned with Bhakti we're reviewing some of the economics from the new mining contractor that's sort of working with us in April. That will be significant piece to evaluate in making the production decision which we expect in the coming months.

Very good. Thanks very much.

Thank you.

The next question is from Michael Hebner of IFS Securities. Please go ahead.

Yes, the Samsung contract, I was in and out of the conference call, do you have more color on the total dollar amount and the time frame of this and it's for all your production from both mines?

That's correct. The two agreements, the sales agreements are very different. The agreement we did with Samsung for the sales of ET concentrate had a term facility associated with it. There isn't anything like that with San Gonzalo sales. It's just a straight sales agreement with preferable terms for one year.

What was the dollar amount we received for that or what's the - what are we getting in?

There is no additional term facility or financing associated with the sale agreement for the San Gonzalo material and nothing at this time this changed with the existing term.

Yeah, we get paid every month at whatever the price of metals are.

Yeah, it's very similar to the way we've sales in the past. The only thing that was different this quarter was the shipping terms. So they just one time one month deferral and that's the only difference.

So we didn't ship because of some shipping change and that's where it messed up the quarter?

Yeah, basically it's just the shipping term. So it's a one-time event. So going forward each quarter will have...

We had basically an auction. So we have to review all the different participants and it took a little longer to review to pick the best one. And Samsung beat everybody.

Yeah. It's essentially to get preferable sales terms we had to make a compromise and delay a shipment for basically just over quarter end.

So would that mean we have like four months in this next quarter or no?

No.

No.

No, basically next quarter you'll see production from March, April and May and then Q3 it will be May, June, July and so on. But it will always be three months.

Okay.

But on the bright side by having this deferral of one month we are getting more favorable pricing. So that's good.

Thank you.

Thanks for the question.

[Operator Instructions] The next question is from Jake Sekelsky of Rodman & Renshaw. Go ahead please.

Hey guys, thanks for taking my question.

Hey, Jake.

Hi, Jake.

Just quickly on Bralorne, do you guys have any sort of time frame for receiving the permits as far as restarting activities up there?

That's too hard to predict. But we feel it will be this year sometime. We are going back and forth with the different industries and so we are working on it. It's pretty difficult to predict.

We've been putting every effort forward to provide the government what they need to make a decision. But they just move very, very slowly here.

Yeah. Since the [indiscernible] disaster they have really slowed down this process. But we were able to expedite it in the way by working with the First Nation as part of the process. So the Deputy Minister of Mines was commending us for doing that. So we're pretty happy about that. And during the year we've submitted a new mine closure plans or we're in the second round of questions and answers. I don't expect it will go too many more rounds. So they should be satisfied and we should get the permit.

So it's fair to say that we probably should get some greater visibility towards the second half of this year then?

Yes.

Okay, awesome. Thank you guys.

And come take a trip up there.

Will do. Thanks a lot guys.

Okay, thanks a lot Jake.

There are no more questions at this time. I will now hand the call back over to David Wolfin for closing remarks.

Just want to thank everybody for taking the time to call here today and we wish you all well and we're really thrilled about the future potential and keep an eye on us. We've got the commercial production decision coming and a new resource estimate which should give us proven and probable reserves. So there is lots of good news coming and thank you again.

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