Fiscal Year 2012 Financial and Operational Highlights (Compared to Fiscal Year 2011)
-- Revenues totalled $61.1 million for the year ended December 31, 2012, an increase of 6%;-- Net income was $5.5 million for 2012, a decrease of 52%;-- Cash-flow from operating activities was $13.1 million for 2012, compared to $19.1 million;-- Cash position at year end was $25.9 million, inclusive of short term investments, compared to $39.5 million;-- Net working capital at year end was $44.5 million, compared to $53.8 million;-- Processed ore for 2012 totaled 230,120 tonnes, a 6% increase;-- Record metal production was achieved for 2012 of 2,378,603 silver equivalent ounces ("Ag eq oz"), an 8% increase;-- Silver production for 2012 increased 4% to 1,560,040 ounces;-- Gold production for 2012 increased 36% to a record of 10,924 ounces;-- Cash cost per silver ounce for 2012 increased 13% to US$12.24;-- Average silver grades at Guanajuato for 2012 were unchanged at 199g/t, while average gold grades increased to 2.02g/t from 1.52g/t;-- Topia average silver grades for 2012 decreased to 345g/t from 400g/t, and-- Guanajuato maintained strong metallurgical recoveries 2012 of 90.2% and 91.5% for silver and gold respectively.
Fourth Quarter 2012 Financial and Operational Highlights (Compared to Fourth Quarter 2011)
-- Revenues totalled $17.8 million for the three months ended December 31, 2012 ("Q4 2012") compared to $17.5 million for the three months ended December 31, 2011 ("Q4 2011"), an increase of 2%;-- Net loss for Q4 2012 was $1.3 million, compared to a net loss of $1.4 million in Q4 2011;-- Cash-flow from operating activities was $4.5 million for Q4 2012, compared to $9.9 million for Q4 2011;-- Processed ore for Q4 was 67,659 tonnes, representing an increase of 30%;-- Metal production for Q4 2012 was 672,690 Ag eq oz, a quarterly record and an increase of 23% over Q4 2011;-- Silver production for Q4 was 453,934 ounces, an increase of 28%; and-- Gold production for Q4 was 2,826 ounces, an increase of 24%.
FISCAL YEAR 2012 FINANCIAL DISCUSSION
-- Revenues for the year ended December 31, 2012 totalled $61.1 million, an increase of 6% over 2011 as a result of an increase in silver equivalent ounces sold, which offset an 11% decrease in the average realized silver price;-- Gross profit for the year ended December 31, 2012 was $19.2 million compared to $26.9 million for the year ended December 31, 2011. The decrease is due to higher site costs at both mines and lower ore grades at Topia. In addition, higher amortization and depletion charges were realized in cost of sales as a result of increased investments in mine development, exploration of operating mines, and plant and equipment over the past year;-- Gross profit percentage for the year ended December 31, 2012 was 31% compared to 47% for the year ended December 31, 2011. The decrease is attributed to a lower average realized silver price, higher unit cost of sales, and higher amortization and depletion charges;-- Consolidated cash cost per silver ounce for the year ended December 31, 2012 was US$12.24, a 13% increase from US$10.84 in 2011. The increase was primarily due to higher site costs at both mines and lower grades at Topia which resulted in higher unit production costs. In addition, the Company saw an increase in overall smelting and refining charges as a result of higher contractual charges for Topia concentrates. The higher unit production costs and smelting and refining charges were offset somewhat by higher by-product credits from an increase in gold production at Guanajuato;-- General and administrative expenses for the year ended December 31, 2012 totalled $10.1 million as compared to $8.6 million for the year ended December 31, 2011. The increase due primarily to a one-time payment of $0.7 million in connection with the retirement of an executive director, a $0.3 million increase in occupancy costs reflecting a new office lease and the remaining payments on the lease for the former premises;-- Exploration and evaluation expenses for the year ended December 31, 2012 were $2.4 million compared to $0.9 million for the year ended December 31, 2011. The increase is attributable to an increase in exploration and business development activities outside of the Company's operating mines. These include exploration activities at Santa Rosa and the El Horcon Project and increased evaluation activities in connection with prospective acquisitions;-- Net income for the year ended December 31, 2012 totalled $5.5 million, compared to $11.5 million for the year ended December 31, 2011. The decrease is attributable to a $7.7 million decrease in gross profit, a $1.5 million increase in general and administrative expenses, a $1.5 million increase in exploration and evaluation expenses, and an increase in tax expense of $2.2 million. These were offset by a foreign exchange gain of $2.8 million in 2012 in finance and other income compared to a foreign exchange loss of $4.6 million in 2011;-- Foreign exchange gains and losses arise from the translation of foreign denominated transactions and balances relative to the functional currency of the Company's subsidiaries and the Company's reporting currency. The Company has significant Canadian and US dollar loans receivable from one of its Mexican subsidiaries and fluctuations in the Mexican peso create significant unrealized foreign exchange gains and losses on the loans owing to the Canadian parent. These unrealized gains and losses are recognized in the consolidated net income of the Company;-- Adjusted EBITDA(1) was $16.9 million for the year ended December 31, 2012, compared to $24.7 million for the year ended December 31, 2011. The decrease is primarily due to a decrease in gross profit but also an increase in general and administrative expenses before amortization and share-based payment expenses, and increased exploration and evaluation expenses;-- At December 31, 2012, the Company had cash and cash equivalents of $25.9 million, inclusive of short term investments, which constituted a decrease of $13.6 million from the balance at December 31, 2011. During the year, the Company generated net cash flows from operating activities of $13.1 million. Net cash outflows from investment activities were $27.5 million for the year, primarily related to the development and exploration of the Company's operating mines, the purchase of plant and mine equipment, and the acquisition of the El Horcon Project for $1.6 million; and-- At December 31, 2012, the Company's net working capital position remained strong at $44.5 million, although it represented a decrease from $53.8 million at December 31, 2011.