After multiple years of outstanding performance, Cerro San Pedro faced a temporary production setback in 2013. A pit wall movement in August led to a change in the mine plan, the mining of lower-grade ore, less ore tonnes placed on the leach pad and lower recoveries. The area impacted by the pit wall movement is now slated to be mined through the fourth quarter of 2014 and into 2015. With the benefit of leach solution adjustments, recoveries steadily increased in the fourth quarter of 2013. For the year, Cerro San Pedro exceeded its revised production guidance, with production of 102,795 ounces of gold and 1.3 million ounces of silver.

Cerro San Pedro’s 2013 total cash costs remained below the industry average; however, they were impacted by a combination of the lower gold production base as well as lower silver by-product revenue.

In 2014, Cerro San Pedro will continue through the top section of its final pit phase which requires increased waste stripping activity in the first half of the year to get to the balance of the ore body. Those ounces are expected to be placed on the leach pad in the latter part of 2014 and also in 2015, leading to an expected production increase in 2015.

Cerro San Pedro’s 2014 targeted gold production is expected to be impacted by a combination of the mining and processing of lower-grade ore from the upper levels of the ore body as well as the continued effect of the residual leaching of lower recovery ore placed on the pad in 2013. Silver production in 2014 is anticipated to remain similar to 2013.

For 2014, total cash costs are expected to rise, driven by lower production of gold as well as increased volumes of processing reagents, increased waste stripping costs and a lower silver by-product price assumption.

Sustaining capital costs are estimated to be $8 million in 2014 and relate to the final leach pad expansion at Cerro San Pedro to allow for the effective processing of ore from the final mining phase. An additional $20 million of waste stripping costs are classified as non-sustaining capital, as the final phase currently being mined was not included in Cerro San Pedro's original mine plan and thus has extended the mine's life. The significant 2014 waste stripping campaign positions Cerro San Pedro to benefit from reduced stripping requirements in 2015.

A key driver of Cerro San Pedro’s success will continue to be its unwavering commitment to operating in a socially responsible and sustainable manner. Notably, for the fourth consecutive year, the mine was recognized as a socially responsible company in 2013 by the Mexican Center for Philanthropy. As well, Cerro San Pedro achieved substantial compliance with the International Cyanide Management Code.