HispanicBusiness

Financial Results (see Consolidated Statement of Operations below)

Revenue

For the quarter ended March 31, 2013, the Company generated revenue totaling $69.9 million (2012 - $49.0 million). During the period, the Company sold 1,515,077 oz silver and 15,724 oz gold at realized prices of $29.38 and $1,613 per oz respectively as compared to sales of 1,100,000 oz silver and 7,496 oz gold at realized prices of $33.10 and $1,684 per oz respectively in 2012. After cost of sales of $51.0 million (2012 - $25.6 million), mine operating earnings amounted to $19.0 million (2012 - $23.4 million) from mining and milling operations in Mexico.

Cash Flow

Mine operating cash flow before taxes was $32.5 million (2012 - $32.0 million), excluding depreciation and depletion of $12.1 million (2012 - $8.5 million), stock-based compensation of $0.1 million (2012- $0.1 million), and a write-down of inventory of $1.5 million (2012- $nil). Operating earnings were $11.6 million (2012 - $18.9 million) and the Company incurred net earnings for the period ended March 31, 2013 of $14.4 million (2012-$19.8 million).

Earnings

Net earnings include a mark-to-market derivative liability gain related to share purchase warrants issued in 2009 denominated in Canadian dollars, while the Company's functional currency is the US dollar. Under IFRS, these warrants are classified and accounted for as financial liability at fair market value with adjustments recognized through net earnings. The appreciation of these warrants resulted in a derivative liability gain of $1.5 million (2012 - $0.1 million). Therefore, adjusted earnings were $12.9 million ($0.13 per share) compared to $19.6 million ($0.22 per share).

Cash Costs net of by-product credits

The cash cost of production, net of gold by-product credits, increased 60% to $10.04 per oz silver produced (2012 - $6.26), in line with the Company's guidance for 2013. The higher operating costs were largely due to the growing contribution of the El Cubo mine, which at the time of acquisition last year was a low-grade, high-cost mining operation, as well as the initiation of concentrate sales from Bolanitos, which generates more payable metal but at a higher operating cost, and lower grade ore at Guanacevi.

Operating Results (see Consolidated Table of Mine Operations below)

Guanacevi

Silver production at the Guanacevi mine during Q1, 2013 was 640,616 oz, a decrease of 12% compared to 726,697 oz and gold production was 942 oz, a decrease of 42% compared to 1,620 oz. Metal production was down due to lower grades and gold recoveries, partly offset by higher throughput. Plant throughput was 106,653 tonnes at average grades of 233 gpt silver and 0.34 gpt gold compared to 98,963 tonnes grading 292 gpt silver and 0.60 gptgold. The decreased silver and gold production is attributable to the drop in metal grades, slightly offset by increased throughput. Silver grades fell 20% and gold grades fell 43% as result of mining deeper ore from North Porvenir.

Bolanitos

Silver production at the Bolanitos mine was 578,654 ounces, an increase of 167% compared to 345,794 oz and gold production was 9,891 oz, an increase of 210% compared to 4,701 oz. Metal production was up due to higher throughput, recoveries and gold grades, partly offset by lower silver grades. Plant throughput was 167,500 tonnes at average grades of 135 gpt silver and 2.27 gpt gold compared to 94,796 tonnes grading 163 gpt silver and 2.10 gptgold. The increased silver and gold production is attributable to the 177% increase in throughput offset by lower ore grades. The Company completed a 60% plant expansion in Q4, 2012 which allowed the Company to significantly increase its throughput compared to the first three quarters 2012. During the quarter the Company executed contracts to sell Bolanitos concentrate rather than leaching the concentrates at the Company's leach facilities at Guanacevi and El Cubo improving the recovery of contained metal but at slightly higher processing cost.