Depreciation was higher this year than last mainly because of higher copper sales volumes at Las Cruces and Cayeli.
2013 outlook for depreciation
We expect depreciation to be higher in 2013 because of higher sales volumes at Las Cruces.
Corporate costs
Corporate costs include corporate development and exploration, general and administration costs, taxes, interest and other income.
Spending on corporate development and exploration
Corporate development and exploration costs were approximately $8 million higher than 2011, which mainly reflects our higher budget for 2012 to explore for world class deposits.
2013 outlook for corporate development and exploration
We expect spending on exploration in 2013 to be slightly higher than 2012, focusing on Mexico, Chile and Peru, where we have established field offices, the United States and on Cobre Panama to drill more exploration targets on the concession there. We will also continue exploring in areas around our existing operations.
General and administration
General and administration costs are largely for management remuneration, governance and strategy. Costs in 2012 were $19 million higher than 2011 mainly because stock-based compensation expense was $10 million higher. As a result of the decision to proceed with full construction of Cobre Panama, we recognized a non-cash stock-based compensation expense of $8 million this year on Long-Term Incentive Plan (LTIP) units issued in previous years that relate to the project. This expense represents the cumulative impact from the units' grant dates to December 31, 2012, on a 100 percent award basis, as no value was attributed to these units prior to a positive construction decision for Cobre Panama. See note 22c to our 2011 annual financial statements for more details on these units. The increase in general and administration expense also reflects increased human resources and other costs supporting the growth of the business and construction activities for Cobre Panama.
2013 outlook for general and administration
We expect general and administration costs in 2013 to be similar to those in 2012.
Investment and other income
---------------------------------------------------------------------------- three months ended year ended December 31 December 31(thousands) 2012 2011 2012 2011----------------------------------------------------------------------------Interest income $3,818 $4,668 $15,144 $16,099Foreign exchange gain (loss) (19,608) (8,327) 6,270 10,446Dividend and royalty income 759 1,460 2,988 2,944Other (1,248) (1,684) (196) 259---------------------------------------------------------------------------- ($16,279) ($3,883) $24,206 $29,748----------------------------------------------------------------------------
Foreign exchange gains and losses
We have foreign exchange gains or losses when we revalue certain foreign denominated assets and liabilities.
Our foreign exchange gains and losses were from:
---------------------------------------------------------------------------- three months ended year ended December 31 December 31(thousands) 2012 2011 2012 2011----------------------------------------------------------------------------Translation of US dollar cash held by Corporate prior to June 2012 inclusive of proceeds of notes offering - 5 27,338 (8,001)Translation of US dollar senior unsecured notes prior to June 2012 - - (16,884) -Translation of US dollar bonds and other securities prior to June 2012 - (8,321) 4,330 11,232Translation of US dollar cash held in euro-based entities (14,771) - (15,998) -Translation of Cdn dollar cash held by Corporate subsequent to May 2012 (357) - 2,231 -Translation of Cdn dollar bonds and other securities subsequent to May 2012 (2,067) - 7,912 -Translation of other monetary assets and liabilities (2,413) (11) (2,659) 7,215---------------------------------------------------------------------------- ($19,608) ($8,327) $6,270 $10,446----------------------------------------------------------------------------
