(1) Mill production represents metal contained in concentrates produced at the mill, which is before payable metal deductions are levied by the buyer of our concentrates. In addition, mill production quantities for the year ended December 31, 2012 do not reflect any deduction for 583 gold ounces, respectively, and 45,432 silver ounces, respectively, (approximately 1,400 gold equivalent ounces) resulting from the settlement agreement with the buyer of our concentrates as discussed on page 30 under "Settlement with Concentrate Buyer". Gold equivalent ounces sold for the year ended December 31, 2012 have been reduced by approximately 1,400 gold equivalent ounces as a result of the settlement.
(2) A reconciliation of this non-GAAP measure to mine cost of sales, the most comparable GAAP measure, can be found in Non-GAAP Measures in the Form 10-K for the period ended December 31, 2012. Total cash cost per gold equivalent ounce sold for the combined La Arista underground mine and the El Aguila open pit mine for the for the year ended December 31, 2011, can be found in the Form 10-K for the period ended December 31, 2012.
(3) Gold equivalent mill production for 2012 of 90,432 ounces differs from gold equivalent ounces sold for 2012 of 72,399 due principally to buyer (smelter) concentrate processing deductions of approximately 9,078 gold equivalent ounces, a settlement agreement with the buyer of the Company's concentrates of approximately 1,400 gold equivalent ounces and an increase in gold equivalent ounces contained in ending inventory of approximately 7,555 ounces
Overview of Q4 2012 Results from El Aguila Project
Fourth quarter production from the El Aguila Project totaled 23,782 ounces AuEq at a cash cost of $551 per ounce AuEq and realized average sales prices of $1,691 per ounce gold and $36 per ounce silver. The mine generated gross profit of $17.2 million. The Company paid $9.5 million to shareholders in dividends, and repurchased 149,407 shares at an average share price of $16.30.
2013 Production Outlook
The Company's 2013 production target is between 80,000 to 100,000 ounces AuEq. The target range was estimated based on the Company's 2013 mine plan, the area of the deposit scheduled to be mined during the upcoming year and the planned mill expansion goals with associated down time for construction. The Company is targeting to be in the lowest quartile of total cash cost per ounce ranging from $300 to $500 per ounce AuEq in 2013. Cost cutting measures and production increases are being targeted to lower costs. (Total cash cost per ounce is a Non-GAAP Financial Measure. Please see additional information in Management's Discussion and Analysis and Results of Operation in the Company's annual report on Form 10-K for the period ended December 31, 2012).
The Company views 2013 as an important year of improvements both at the mine and in the mill. The plan is to position the Project to nominally produce 1,500 tonnes/day by the end of the year. Expected mine development of the Arista deposit is to the south and southeast and this area is anticipated to provide the ore for production in 2013. The Company is targeting higher grade ore shoots located further southeast in the deposit in the 2014 production year. Currently the decline ramp is down to level 15 and stopes are being developed from level 10 down to level 13.
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