HispanicBusiness

Fourth Quarter ended December 31, 2012

Net earnings were $13,616,028 ($0.14 per share basic) for the fourth quarter compared with $9,863,459 ($0.11 per share basic) in 2011. The increase in net earnings was mainly driven by a reduction in annual Mexican income tax estimate. The settlement of the Hedging Facility during the fourth quarter made the Company eligible for current income tax deduction.

Silver and gold revenues totalled $18,243,732 (2011 - $18,258,349) in the fourth quarter. Silver and gold revenues on a cash basis increased by 47% to $17,609,949 (2011 - $12,002,316), from record silver sales and more gold sales realized at market spot prices. Silver sales were a quarterly record of 171,714 ounces (2011 - 120,199), or 43% higher than during the same period in 2011. The average realized price received was consistent at $32 (2011 - $32) per ounce.

Gold sales were 8,444 ounces (2011 - 9,702) or 13% below 2011. The Company sold 6,755 gold ounces (2011 - 400) at market spot realized prices of $1,706 (2011 - $1,744) per ounce. There were no gold ounces (2011 - 7,362) delivered into the Hedging Facility at $926.50 per ounce as the Facility was settled in cash from a portion of the proceeds of the $34.5 million prospectus offering. The Company delivered 1,689 gold ounces (2011 - 1,940) to Sandstorm at $350 per ounce. Non-cash gold revenues attributed to deferred revenue totaled $633,783 (2011 - $728,209). The non-cash amount attributed to the Hedging Facility deliveries in the fourth quarter was $nil (2011 - $5,527,824). The non-cash amounts with respect to the Hedging Facility represented the difference between the market spot price at the date of delivery of gold (2011- average realized price of $1,676 per ounce) and the hedge price of $926.50 per ounce settled.

Cost of sales amounted to $5,156,489 (2011 - $3,764,200). Cash cost per silver equivalent ounce sold amounted to $8.05, Au:Ag 55.6:1 (2011 - $5.65, (Au:Ag 56.3:1), Corporate market guidance for 2012 was $8.20 per silver equivalent ounce, (Au:Ag 55:1)) (This is a NON-IFRS Performance Measure). The main drivers in the increase of cash cost per silver equivalent ounce sold from previous 2012 quarters were higher overall operating costs based on lower grade ore mined using a lower cutoff grade (0.2 gpt Au equivalent versus 0.38 used in 2011), and salary and other benefit increases, which corresponded to an increase in the average silver equivalent ounce value loaded on the leach pad and recorded in cost of sales. General and administrative expenses increased to $2,106,039 (2011 - $1,705,554) primarily due to an increase in remuneration, bonus payments and regulatory expenses for now being dual listed on the TSX-V and NYSE MKT.

In the fourth quarter, current income tax recovery (expense) amounted to $3,494,000 (2011 - ($985,000)), mainly from the eligible deduction for income tax purposes of the Hedging Facility cash settlement. Deferred tax expense amounted to $781,000 (2011 - $364,000), primarily from recognizing an income tax deduction on exploration drilling and related costs incurred during the quarter at Santa Elena and the Cruz de Mayo.

Year ended December 31, 2012

Net earnings were $30,475,744 ($0.33 per share basic) for 2012, compared with $9,456,419 ($0.12 per share basic) in 2011. The significant increase in net earnings is driven by continued improvements in operating performance since commercial production was declared during the second quarter of 2011.