**Exhibit 99.1**

 

**Report of Independent Auditors**

 

To the Board of Directors of Minera Santa Cruz S.A.:

 

We have audited the accompanying financial statements of Minera Santa Cruz S.A. which comprise the balance sheet as of December 31, 2012, and the related statements of income, changes in stockholders’ equity and cash flows for the year then ended, and the related notes to the financial statements, which, as described in Note 2 to the financial statements, have been prepared on the basis of accounting principles generally accepted in Argentina.

 

**Management’s Responsibility for the Financial Statements**

 

Management is responsible for the preparation and fair presentation of these financial statements in conformity with generally accepted accounting principles in Argentina; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error.

 

**Auditor’s Responsibility**

 

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

 

**Opinion**

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Minera Santa Cruz S.A. as of December 31, 2012, and the results of its operations and its cash flows for the year then ended, in accordance with accounting principles generally accepted in Argentina.

 

**Emphasis of Matter**

 

As discussed in Note 2 to the financial statements, the Company prepares its financial statements in accordance with accounting principles generally accepted in Argentina, which differ from accounting principles generally accepted in the United States of America (see note 9 to the financial statements). Our opinion is not modified with respect to this matter.

 

City of Buenos Aires, Argentina

April 25, 2014

 
|   | PISTRELLI, HENRY MARTIN Y ASOCIADOS S.R.L. |   |
|--------|--------------------------------------------|--------|
|   | Member of Ernst & Young   Global  |   |
|   | */S/ ENRIQUE GROTZ*                        |   |

 

1

----

 

**MINERA SANTA CRUZ SA**

**BALANCE SHEETS**

**AT DECEMBER 31, 2012 AND 2011**

**(Stated in Argentine pesos — see Note 2.II)**

 
| ** **                                                     | ** ** | **2012**      | ** ** | **2011**        | ** ** |
|----------------------------------------------------------------|------------|---------------|------------|-----------------|------------|
| ** **                                                     | ** ** | ** **    | ** ** | **(Unaudited)** | ** ** |
| **ASSETS**                                                     |       |          |       |            |       |
| **CURRENT ASSETS**                                             |       |          |       |            |       |
|                                                           |       |          |       |            |       |
| Cash on hand and in bank (Note 3.a)                            |       | 85,294,273    |       | 84,772,691      |       |
| Investments (Note 3.b)                                         |       | 30,403,665    |       | 138,052,356     |       |
| Trade receivables (Exhibit IV)                            |       | 188,669,951   |       | 120,756,570     |       |
| Other receivables (Note 3.c)                                   |       | 146,180,585   |       | 91,402,513      |       |
| Inventories (Note 3.d)                                         |       | 65,275,344    |       | 22,256,663      |       |
| Materials                                                      |       | 69,861,398    |       | 85,463,912      |       |
| **Total current assets**                                       |       | 585,685,216   |       | 542,704,705     |       |
|                                                           |       |          |       |            |       |
| **NON-CURRENT ASSETS**                                         |       |          |       |            |       |
|                                                           |       |          |       |            |       |
| Other receivables (Note 3.c)                                   |       | 31,601,527    |       | 28,862,347      |       |
| Property, plant and equipment (Exhibit I)                 |       | 756,648,911   |       | 622,133,343     |       |
| Intangible assets (Exhibit II)                            |       | 174,008,400   |       | 182,076,437     |       |
| **Total non-current assets**                                   |       | 962,258,838   |       | 833,072,127     |       |
| **Total assets**                                               |       | 1,547,944,054 |       | 1,375,776,832   |       |
|                                                           |       |          |       |            |       |
| **LIABILITIES**                                                |       |          |       |            |       |
| **CURRENT LIABILITIES**                                        |       |          |       |            |       |
|                                                           |       |          |       |            |       |
| Accounts payable (Note 3.e)                                    |       | 85,193,523    |       | 99,489,730      |       |
| Payroll and social security taxes (Note 3.f)                   |       | 65,595,660    |       | 49,582,849      |       |
| Taxes payable (Note 3.g)                                       |       | 133,904,517   |       | 28,966,116      |       |
| Other liabilities (Note 3.h)                                   |       | —        |       | 3,796,790       |       |
| Loans (Exhibit IV)                                        |       | —        |       | 166,528,894     |       |
| Dividends payable (Note 4)                                     |       | 21,863,941    |       | 83,199,256      |       |
| **Total current liabilities**                                  |       | 306,557,641   |       | 431,563,635     |       |
|                                                           |       |          |       |            |       |
| **NON-CURRENT LIABILITIES**                                    |       |          |       |            |       |
|                                                           |       |          |       |            |       |
| Payroll and social security taxes (Note 3.f)                   |       | 4,057,999     |       | 2,954,416       |       |
| Other liabilities (Note 3.h)                                   |       | 244,900,771   |       | 194,800,040     |       |
| Reserves (Exhibit III)                                    |       | 7,991,305     |       | 4,052,153       |       |
| **Total non-current liabilties**                               |       | 256,950,075   |       | 201,806,609     |       |
| **Total liabilities**                                          |       | 563,507,716   |       | 633,370,244     |       |
|                                                           |       |          |       |            |       |
| **SHAREHOLDERS’ EQUITY (Per   corresponding statements)** |       | 984,436,338   |       | 742,406,588     |       |
| **Total liabilities and   shareholders’ equity**          |       | 1,547,944,054 |       | 1,375,776,832   |       |

 

The accompanying Notes 1 to 10 and Exhibits I to VII are an integral part of these financial statements.

 

2

----

 

**MINERA SANTA CRUZ SA**

**STATEMENTS OF INCOME**

**FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010**

**(Stated in Argentine pesos — see Note 2.II)**

 
| ** **                                              | ** ** | **2012**      | ** ** | **2011**        | ** ** | **2010**        | ** ** |
|---------------------------------------------------------|------------|---------------|------------|-----------------|------------|-----------------|------------|
| ** **                                              | ** ** | ** **    | ** ** | **(Unaudited)** | ** ** | **(Unaudited)** | ** ** |
| Sales (Note 3.i)                                        |       | 1,441,039,291 |       | 1,351,998,246   |       | 870,216,939     |       |
| Costs of sales (Exhibit VII)                       |       | (655,685,510  | )          | (517,193,173    | )          | (410,180,181    | )          |
| **Gross profit**                                        |       | 785,353,781   |       | 834,805,073     |       | 460,036,758     |       |
| Exploration expenses (Exhibit VI)                  |       | (29,878,857   | )          | (7,931,335      | )          | (9,216,801      | )          |
| Administrative expenses (Exhibit VI)               |       | (50,039,359   | )          | (46,202,785     | )          | (36,884,881     | )          |
| Selling expenses (Exhibit VI)                      |       | (152,915,637  | )          | (131,204,650    | )          | (81,474,786     | )          |
| Financial expenses and holding losses, net (Note   3.j) |       | (24,462,601   | )          | (58,471,211     | )          | (106,858,783    | )          |
| Other income (expenses), Net (Note 3.k)                 |       | 6,552,983     |       | (6,991,217      | )          | (3,264,450      | )          |
| **Income before income tax**                            |       | 534,610,310   |       | 584,003,875     |       | 222,337,057     |       |
| Income tax (Note 2.III.i)                               |       | (175,716,617  | )          | (194,457,399    | )          | (60,856,088     | )          |
| **Net income**                                          |       | 358,893,693   |       | 389,546,476     |       | 161,480,969     |       |

 

The accompanying Notes 1 to 10 and Exhibits I to VII are an integral part of these financial statements.

 

3

----

 

**MINERA SANTA CRUZ SA**

**STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY**

**FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011**

**(Stated in Argentine pesos — see Note 2 II)**

 
| ** **                                                                              | ** ** | **2012**                                  | ** ** | ** **          | ** ** |
|-----------------------------------------------------------------------------------------|------------|-------------------------------------------|------------|---------------------|------------|
| ** **                                                                              | ** ** | **Shareholders’ contributions** | ** ** | ** **          | ** ** | ** ** | ** ** |
| ** **                                                                              | ** ** | **Capital**                               | ** ** | **Adjustment**      | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                                                              | ** ** | **stock**                                 | ** ** | **to capital** | ** ** | **Irrevocable** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                                                              | ** ** | **(Note 5)**                         | ** ** | **stock**           | ** ** | **contributions** | ** ** | **Total** | ** ** | ** ** | ** ** |
|                                                                                    |       |                                      |       |                |       |   |   |   |   |   |   |
| Balances at beginning of the year                                                       |       | 344,756,530                               |       | 14,367              |       | 15,167 |   | 344,786,064 |   |   |   |
|                                                                                    |       |                                      |       |                |       |   |   |   |   |   |   |
| As decided by the Extraordinary Shareholders’   Meeting of December 19, 2011: |       |                                      |       |                |       |   |   |   |   |   |   |
| - Dividend distribution                                                                 |       | —                                    |       | —              |       | — |   | — |   |   |   |
|                                                                                    |       |                                      |       |                |       |   |   |   |   |   |   |
| As decided by the Ordinary Shareholders’ Meeting   of May 17, 2012:           |       |                                      |       |                |       |   |   |   |   |   |   |
| - Appropriation to Legal reserve                                                        |       | —                                    |       | —              |       | — |   | — |   |   |   |
| - Appropriation to Facultative reserve                                                  |       | —                                    |       | —              |       | — |   | — |   |   |   |
| - Dividend distribution                                                                 |       | —                                    |       | —              |       | — |   | — |   |   |   |
|                                                                                    |       |                                      |       |                |       |   |   |   |   |   |   |
| Net income                                                                              |       | —                                    |       | —              |       | — |   | — |   |   |   |
| Balances at the end of the year                                                         |       | 344,756,530                               |       | 14,367              |       | 15,167 |   | 344,786,064 |   |   |   |

 
| ** **                                                                              | ** ** | **2012**                   | ** ** | **2011**        | ** ** |
|-----------------------------------------------------------------------------------------|------------|----------------------------|------------|-----------------|------------|
| ** **                                                                              | ** ** | **Retained earnings** | ** ** | ** **      | ** ** | ** ** | ** ** |
| ** **                                                                              | ** ** | ** **                 | ** ** | ** **      | ** ** | **Unappropriated** | ** ** | ** ** | ** ** | **(Unaudited)** | ** ** |
| ** **                                                                              | ** ** | **Legal**                  | ** ** | **Facultative** | ** ** | **retained** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                                                              | ** ** | **reserve**                | ** ** | **reseve**      | ** ** | **earnings** | ** ** | **Total** | ** ** | **Total** | ** ** |
| Balances at beginning of the year                                                       |       | 8,074,048                  |       | —          |       | 389,546,476 |   | 742,406,588 |   | 436,059,368 |   |
|                                                                                    |       |                       |       |            |       |   |   |   |   |   |   |
| As decided by the Extraordinary Shareholders’   Meeting of December 19, 2011: |       |                       |       |            |       |   |   |   |   |   |   |
| - Dividend distribution                                                                 |       | —                     |       | —          |       | — |   | — |   | (83,199,256 | ) |
|                                                                                    |       |                       |       |            |       |   |   |   |   |   |   |
| As decided by the Ordinary Shareholders’ Meeting   of May 17, 2012:           |       |                       |       |            |       |   |   |   |   |   |   |
| - Appropriation to Legal reserve                                                        |       | 19,477,324                 |       | —          |       | (19,477,324 | ) | — |   | — |   |
| - Appropriation to Facultative reserve                                                  |       | —                     |       | 253,205,209     |       | (253,205,209 | ) | — |   | — |   |
| - Dividend distribution                                                                 |       | —                     |       | —          |       | (116,863,943 | ) | (116,863,943 | ) | — |   |
|                                                                                    |       |                       |       |            |       |   |   |   |   |   |   |
| Net income                                                                              |       | —                     |       | —          |       | 358,893,693 |   | 358,893,693 |   | 389,546,476 |   |
| Balances at the end of the year                                                         |       | 27,551,372                 |       | 253,205,209     |       | 358,893,693 |   | 984,436,338 |   | 742,406,588 |   |

 

The accompanying Notes 1 to 10 and Exhibits I to VII are an integral part of these financial statements.

 

4

----

 

**MINERA SANTA CRUZ SA**

**STATEMENTS OF CASH FLOWS (1)**

**FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010**

**(Stated in Argentine pesos — see Note 2 II)**

 
| ** **                                                                                   | ** ** | **2012**     | ** ** | **2011**        | ** ** | **2010**        | ** ** |
|----------------------------------------------------------------------------------------------|------------|--------------|------------|-----------------|------------|-----------------|------------|
| ** **                                                                                   | ** ** | ** **   | ** ** | **(Unaudited)** | ** ** | **(Unaudited)** | ** ** |
| **(DECREASE) INCREASE IN CASH AND   CASH EQUIVALENTS**                                       |       |         |       |            |       |            |       |
| Cash and Cash Equivalents at the beginning of the   year                                     |       | 222,825,047  |       | 209,088,730     |       | 92,086,435      |       |
| Cash and Cash Equivalents at the end of the year                                             |       | 115,697,938  |       | 222,825,047     |       | 209,088,730     |       |
| (Decrease) increase in Cash and Cash Equivalents                                             |       | (107,127,109 | )          | 13,736,317      |       | 117,002,295     |       |
|                                                                                         |       |         |       |            |       |            |       |
| **(DECREASE) INCREASE IN CASH AND   CASH EQUIVALENTS**                                       |       |         |       |            |       |            |       |
| **Cash Flows from Operating   Activities:**                                                  |       |         |       |            |       |            |       |
| Net income                                                                                   |       | 358,893,693  |       | 389,546,476     |       | 161,480,969     |       |
|                                                                                         |       |         |       |            |       |            |       |
| Income tax                                                                                   |       | 175,716,617  |       | 194,457,399     |       | 60,856,088      |       |
| Accrued interest payable                                                                     |       | —       |       | 824,894         |       | 29,877,095      |       |
| Unrealized foreign exchange differences                                                      |       | —       |       | 3,860,500       |       | 29,513,127      |       |
|                                                                                         |       |         |       |            |       |            |       |
| Adjustments to reconcile net income to net cash   flows provided by operating activities:    |       |         |       |            |       |            |       |
| Depreciation of fixed assets                                                                 |       | 213,705,022  |       | 152,858,685     |       | 127,360,716     |       |
| Amortization of intangible assets                                                            |       | 11,082,835   |       | 11,362,449      |       | 16,338,960      |       |
| Provision for commitments and contingencies                                                  |       | 3,942,213    |       | (3,762,929      | )          | 22,205,048      |       |
| Net book value decrease of property, plant and   equipment                                   |       | 1,808,505    |       | 3,002,657       |       | 368,690         |       |
| (Decrease) / increase in provision for impairment   of construction-in-progress assets       |       | (847,425     | )          | 1,139,822       |       | 5,326,830       |       |
| Impairment of materials                                                                      |       | 11,768,346   |       | 3,258,422       |       | —          |       |
| Customs benefits                                                                             |       | (10,416,635  | )          | (13,556,193     | )          | (7,359,198      | )          |
| Allowance for doubtful tax receivables                                                       |       | —       |       | 35,293          |       | 3,804,482       |       |
| (Decrease) / increase in fair value of assets and   liabilities due to change in discounting |       | (1,635,809   | )          | 3,510,967       |       | 2,152,762       |       |
|                                                                                         |       | 764,017,362  |       | 746,538,442     |       | 451,925,569     |       |
|                                                                                         |       |         |       |            |       |            |       |
| Change in operating assets and liabilities:                                                  |       |         |       |            |       |            |       |
| – Increase in trade receivables                                                         |       | (67,913,381  | )          | (25,432,666     | )          | (30,597,932     | )          |
| – Increase in other receivables                                                         |       | (45,464,808  | )          | (7,455,898      | )          | 3,730,069       |       |
| – (Increase) / Decrease in inventories                                                  |       | (43,018,681  | )          | 145,676         |       | (7,724,412      | )          |
| – Decrease / (Increase) in materiales                                                   |       | 3,834,168    |       | (26,584,782     | )          | (19,425,145     | )          |
| – (Decrease) / Increase in accounts payable                                             |       | (14,296,207  | )          | 34,027,444      |       | 23,077,671      |       |
| – Increase in payroll and social security taxes                                         |       | 17,116,394   |       | 21,771,232      |       | 16,503,310      |       |
| – (Decrease) / Increase in taxes payable                                                |       | (35,600,159  | )          | 13,347,152      |       | 11,761,023      |       |
| – Payments of lawsuits and other contingencies                                          |       | (3,061       | )          | (19,423,634     | )          | (2,379,466      | )          |
| – Increase / (Decrease) in other liabilities                                            |       | 25,387,824   |       | (1,192,256      | )          | (8,646          | )          |
| Payment of income taxes                                                                      |       | (14,261,940  | )          | —          |       | —          |       |
| **Net cash flows provided by   operating activities**                                        |       | 589,797,511  |       | 735,740,710     |       | 446,862,041     |       |
|                                                                                         |       |         |       |            |       |            |       |
| **Cash Flows Used in Investing   Activities:**                                               |       |         |       |            |       |            |       |
| Acquisitions of fixed assets and intangible assets                                           |       | (352,196,468 | )          | (273,555,021    | )          | (216,871,852    | )          |
| **Net cash flows used in investing   activities**                                            |       | (352,196,468 | )          | (273,555,021    | )          | (216,871,852    | )          |
|                                                                                         |       |         |       |            |       |            |       |
| **Cash Flows Used in Financing   Activities:**                                               |       |         |       |            |       |            |       |
| Payment of loans                                                                             |       | —       |       | (530,424,995    | )          | (116,513,372    | )          |
| (Decrease) / Increase in financing loans                                                     |       | (166,528,894 | )          | 81,975,623      |       | 3,525,478       |       |
| Payment of dividends                                                                         |       | (178,199,258 | )          | —          |       | —          |       |
| **Net cash flows used in financing   activities**                                            |       | (344,728,152 | )          | (448,449,372    | )          | (112,987,894    | )          |
| **Net decrease/increase in Cash and   Cash Equivalents**                                     |       | (107,127,109 | )          | 13,736,317      |       | 117,002,295     |       |

 

----

(1) Cash and Cash Equivalents includes cash in bank and investments with original maturities of less than three months

 

The accompanying Notes 1 to 10 and Exhibits I to VII are an integral part of these financial statements.

 

5

----

 

**MINERA SANTA CRUZ S.A.**

**NOTES TO THE FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010**

(Amounts stated in Argentine pesos - except where expressly indicated)

 

**1.****                  ****PURPOSE AND BUSINESS OF THE COMPANY**

 

Minera Santa Cruz S.A. (the “Company”) was incorporated in 2001 in order to, on its own, by means of third parties or in association with third parties, engage in the exploration, mining, extraction and processing of minerals and the marketing of the derived products and byproducts.

 

The Company owns 18 *Minas*(approved mining claims) and 32 *Manifestaciones de Descubrimiento*(claims that are in the application process for mining claim status)*,* all of which are located in the Province of Santa Cruz. There are several mineralized structures on these properties, identified through geophysical surveys and diamond drilling.

 

In order to maintain its current right to mining concessions, the Company is required to pay a semi-annual mining royalty to the Province of Santa Cruz.

 

The Company’s activities are focused on the exploration and exploitation of the “San José” project.The commissioning of the processing plant took place in September 2007.

 

Until October 2008, the processing plant had a production capacity of 750 tonnes per day. Subsequent to this, the production capacity was increased to 1,500 tonnes per day.

 

Moreover, the feasibility study was presented in November 2005 at the Ministry of Mining. Additionally, the environmental impact study submitted to the Provincial Mining of Santa Cruz in November 2005, was approved in March 2006 by the authorities. Its biannual update was submitted, the first one in 2008, the second one, in 2010 and the third one in 2012.

 

The project has shown sufficient potential to continue operation in the areas of interest with a remaining mine life of approximately 12 years. According to the studies performed, the operation is economically viable and the carrying value of the Company’s assets does not exceed their recoverable value.

 

**2.****                  ****SIGNIFICANT ACCOUNTING POLICIES**

 

**I.****              ****Generally accepted accounting principles**

 

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in effect in Argentina (“Argentine GAAP”).

 

**I.a)****    ****Judgments, estimates and significant accounting assumptions**

 

The preparation of financial statements in accordance with Argentine GAAP requires the development and consideration by management of judgments, estimates and significant accounting assumptions that affect the reported balances of assets and liabilities, income and expenses, as well as the determination and disclosure of contingent assets and liabilities at the date of such statements. In this sense, the uncertainty associated with the estimates and 

 

6

----

 

**MINERA SANTA CRUZ S.A.**

**NOTES TO THE FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010**

(Amounts stated in Argentine pesos - except where expressly indicated)

 

assumptions used could result in future final results which could differ from those estimates and require significant adjustments to the reported balances of assets and liabilities affected.

 

**I.b)****    ****Measurement issues not covered by Argentine GAAP: Application of supplementary regulatory sources**

 

Measurement issues not covered by Argentine GAAP can be resolved by (i) the use of specific accounting standards dealing with similar and related issues (unless such standard prohibits its application in the particular case being considered, or it has been indicated that the accounting treatment it establishes should not be applied by analogy to other cases), (ii) the application of accounting measurement standards in general, and (iii) the application of concepts included in the Conceptual Framework of Argentine GAAP, in the order of priority as indicated above.

 

When the resolution of the issue is not evident based on the above-mentioned sources, the following may be considered, in descending order of priority, on a supplementary basis for the management to make a judgment and develop appropriate accounting policies: (i) International Financial Reporting Standards (IFRS) and interpretations that have been approved and issued by the International Accounting Standards Board (IASB); and (ii) in no particular order, the most recent pronouncements of other issuers that use a similar conceptual framework to issue accounting standards, accepted industry practices and accounting doctrine, provided that the extra sources used do not conflict with the regulatory sources listed in the previous paragraph, and until the Argentine Federation of Professional Councils in Economic Sciences (“FACPCE”) issues a standard covering the measurement issue in question.

 

**II.****         ****Restatement in constant currency**

 

The Company’s financial statements recognize the variations in the currency purchasing power until February 28, 2003, having discontinued the incorporation of adjustments to reflect such variations as of that date, in accordance with the provisions set forth in Argentine GAAP and as required by Presidential Decree No. 664/2003.

 

However, as observed in recent years, there continues to exist significant fluctuations in the price of the relevant economic variables affecting the Company’s business, such as wage costs, prices of key raw materials and foreign exchange rates, even though such fluctuations have not reached levels leading professional and regulatory bodies to reinstate an obligation to apply the adjustments mentioned above. However, these fluctuations still affect the financial position and results of the Company and, therefore, the information provided in these financial statements. As such, these fluctuations should be taken into account in the interpretation of the financial position and results of operations presented by the Company in these financial statements.

 

7

----

 

**MINERA SANTA CRUZ S.A.**

**NOTES TO THE FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010**

(Amounts stated in Argentine pesos - except where expressly indicated)

 

**III.****    ****Valuation Criteria**

 

The main valuation criteria used by the Company are as follows:

 

a)             Cash and cash equivalents, and balances with companies in accordance with Article 33, Law No. 19,550 and related parties.

 

·                  In local currency: at nominal value.

 

·                  In foreign currency: at nominal value, converted at the prevailing exchange rates using the year-end date as settlement date.

 

Receivables from and payables to Companies in accordance with Article 33 of Law 19,550 and related parties have been valued in accordance with conditions agreed upon for each transaction and include, if applicable, the accrued amount up to the end of each financial year presented in these financial statements.

 

b)             Investments

 

·                  In local currency: corresponds to government securities valued at market value less estimated selling costs.

 

·                  In foreign currency: corresponds to deposits valued at nominal value plus financial income accrued at the end of each year, converted at the prevailing exchange rate using the year-end date as settlement date.

 

c)              Receivables from customers and other receivables, trade payables, payroll and social security taxes payable, loans, taxes payables and other liabilities.

 

·                  In local currency: valued, as appropriate, at their cash value or based on discounted cash flows, in accordance with the guidelines set forth in applicable Argentine GAAP accounting standards.

 

·                  In foreign currency: valued as mentioned above, converted at the prevailing exchange rates using the year-end date as settlement date.

 

·                  They include, if applicable, accrued financial income at the end of each year.

 

d)             Inventories: they include, as appropriate, stockpiles, concentrates and doré, which are valued at production costs by applying absorption costing, which is the best estimate of their reproduction value at the end of each year.

 

e)              Materials: includes materials, parts and supplies, which are valued at their replacement costs at end of each year.

 

8

----

 

**MINERA SANTA CRUZ S.A.**

**NOTES TO THE FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010**

(Amounts stated in Argentine pesos - except where expressly indicated)

 

f)               Property, plant and equipment: valued at cost of acquisition or construction as restated in accordance with Note 2.II above, less related accumulated depreciation at the end of each year.

 

The Company capitalizes estimated discounted future mine abandonment and closure costs. These assets are included in property, plant and equipment. Additionally, a liability for these costs is recognized as a counterpart to these assets.

 

Property, plant and equipment are presented net of impairments.

 

The value of property, plant and equipment, net of impairments referred to in the preceding paragraph, does not exceed their recoverable value at the end of each financial year.

 

g)              Intangible assets

 

Intangible assets primarily include rights for the use of electrical transmission lines, in addition to capitalized pre-operating and exploration costs incurred by the Company. These are valued at original cost less accumulated amortization at the end of each year.

 

Intangible assets do not exceed their recoverable value at the end of each year.

 

h)             Provisions

 

·                  For lawsuits, claims and contingencies: provisions for lawsuits, claims and contingencies are constituted to cover contingencies in which there is a high likelihood that the Company will have to use economic resources to settle a present obligation arising in past events and whose existence depends on one or more future events that may occur or fail to occur. The evaluation and estimate of the amounts for contingent liabilities is made by the Company’s management based on available evidence and considering the opinion of its legal counsel, if applicable. In the opinion of Company’s management, the provision made at the end of each year is sufficient to meet the situations to which the Company is exposed. When the probability that a loss will materialize is not high, but is not remote either, or if the probability is high but the amount of the loss cannot be reasonably estimated, a liability is not recorded. In these cases, Argentine GAAP are followed in order to define the measurement requirements and, in the opinion of the Company, the Company’s position should prevail against such contingencies. The contingencies assessed as remote are not accounted for or disclosed in the notes to the financial statements.

 

·                  For impairments of construction-in-progress assets: provisions for impairments of construction-in-progress assets are established when their carrying value exceeds their recoverable value.

 

·                  For doubtful tax credits: provisions for tax credits are established when their carrying value exceeds their recoverable value.

 

·                  For obsolescence of materials: provisions for obsolescence of materials are established when their carrying value exceeds their recoverable value.

 

9

----

 

**MINERA SANTA CRUZ S.A.**

**NOTES TO THE FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010**

(Amounts stated in Argentine pesos - except where expressly indicated)

 

i)                 Income tax and minimum presumed income tax

 

Law No. 25,063, published in the Official Gazette on December 30, 1998, establishes amongst other things, the tax on minimum presumed income, expressly excludes from its scope companies included in the provisions of Law No. 24,196, known as the Investment Regime for Mining Activity. As the Company was incorporated in accordance with this regime, as described in Note 7, it is therefore not within the scope of this tax.

 

Argentine GAAP require the recognition of income taxes under the deferred tax method, which establishes the determination of deferred income assets or liabilities based on temporary differences between the accounting measurement of assets and liabilities and their respective tax values. Temporary differences result in deferred tax assets or liabilities when future reversals decrease or increase income taxes, respectively. Also, a deferred tax asset is recognized when there are unused tax losses which may be offset against future taxable income, but only to the extent that the future use of those losses is probable.

 

A breakdown of the net deferred tax liability as at December 31, 2012, 2011 and 2010 is as follows:

 
| ** **                                             | ** ** | **2012**     | ** ** | **2011**        | ** ** |
|--------------------------------------------------------|------------|--------------|------------|-----------------|------------|
|                                                   |       |         |       | **(Unaudited)** |       |
| Property, plant and equipment, and intangible   assets |       | (202,272,137 | )          | (169,339,285    | )          |
| Other receivables                                      |       | 4,689,030    |       | 3,962,671       |       |
| Inventories                                            |       | 1,059,501    |       | (1,396,318      | )          |
| Provision for lawsuits, claims and contingencies       |       | 2,796,957    |       | 1,418,253       |       |
| Provision for mine abandonment and closure             |       | 21,482,282   |       | 12,526,573      |       |
| Other liabilities                                      |       | 3,228,988    |       | 4,728,844       |       |
| **Net   deferred tax liability**                       |       | (169,015,379 | )          | (148,099,262    | )          |

 

At December 31, 2012 and 2011, the reconciliation between the income tax expense charged to the statement of income, and the result of applying the rate of 35% set by tax regulations to accounting profits before income tax of each exercise is as follows:

 
| ** **                                              | ** ** | **Profits/(Losses)** | ** ** |
|---------------------------------------------------------|------------|----------------------|------------|
| ** **                                              | ** ** | **2012**             | ** ** | **2011** | ** ** | **2010** | ** ** |
|                                                    |       |                 |       | **(Unaudited)** |   | **(Unaudited)** |   |
| Income before income tax                                |       | 534,610,310          |       | 584,003,875 |   | 222,337,057 |   |
| Current tax rate                                        |       | 35                   | %          | 35 | % | 35 | % |
| **Income tax on accounting income**                     |       | (187,113,609         | )          | (204,401,356 | ) | (77,817,970 | ) |
|                                                    |       |                 |       |   |   |   |   |
| **Permanent   differences**                             |       |                 |       |   |   |   |   |
|                                                    |       |                 |       |   |   |   |   |
| Double deduction (Law No. 24,196 and   amendments) |       | 11,295,576           |       | 8,641,664 |   | 3,980,239 |   |
| Effect on property, plant and equipment                 |       | —               |       | 3,442,001 |   | (3,256,288 | ) |
| Non-recoverable value added tax credits                 |       | —               |       | (8,166 | ) | (1,302,169 | ) |
| Non-deductible   expenses                               |       | (122,582             | )          | (2,047,144 | ) | (662,085 | ) |
| Other, net                                              |       | 223,998              |       | (84,398 | ) | (67,490 | ) |
| **Subtotal**                                            |       | (175,716,617         | )          | (194,457,399 | ) | (1,307,793 | ) |
| Provision for   impairment (Exhibit III)           |       | —               |       | — |   | 18,269,675 |   |
| **Income tax expense**                                  |       | (175,716,617         | )          | (194,457,399 | ) | (60,856,088 | ) |

 

10

----

 

**MINERA SANTA CRUZ S.A.**

**NOTES TO THE FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010**

(Amounts stated in Argentine pesos - except where expressly indicated)

 

Income tax expense is composed of the following:

 
| ** **                        | ** ** | **2012**     | ** ** | **2011**        | ** ** | **2010**        | ** ** |
|-----------------------------------|------------|--------------|------------|-----------------|------------|-----------------|------------|
|                              |       |         |       | **(Unaudited)** |       | **(Unaudited)** |       |
| Current tax                       |       | (154,800,500 | )          | (41,750,161     | )          | —          |       |
| Change in temporary   differences |       | (20,916,117  | )          | (152,707,238    | )          | (60,856,088     | )          |
|                              |       | (175,716,617 | )          | (194,457,399    | )          | (60,856,088     | )          |

 

j)                Shareholders’ equity

 

Restated, as described in Section II of this note, except the “Capital Stock” account, which is stated at nominal value. The adjustment resulting from the restatement in constant currency is included in the “Adjustment to capital stock” account.

 

k)             Statement of income accounts

 

·                  Accounts which relate to monetary transactions are valued at their nominal value.

 

·                  Expenses relating to the consumption of non-monetary assets were valued at their restated cost, in accordance with the provisions described in Note 2.II.

 

·                  Financial income (expense) and holding gains (losses), net, include accrued interest and foreign exchange differences generated by assets and liabilities, among other items.

 

**3.****                  ****COMPOSITION OF MAIN ACCOUNTS**

 
| ** **                                                                                                      | ** ** | **2012**   | ** ** | **2011**        | ** ** |
|-----------------------------------------------------------------------------------------------------------------|------------|------------|------------|-----------------|------------|
| ** **                                                                                                      | ** ** | ** ** | ** ** | **(Unaudited)** | ** ** |
| **a)****            ****Cash on hand and in bank:** |       |       |       |            |       |
| ** **                                                                                                      |       |       |       |            |       |
| Cash on hand - in local currency                                                                                |       | 278,232    |       | 164,194         |       |
| Cash on hand - in foreign currency   (Exhibit IV)                                                          |       | 5,886      |       | —          |       |
| Cash in bank - in local currency                                                                                |       | 48,777,455 |       | 31,908,346      |       |
| Cash in bank - in foreign currency   (Exhibit IV)                                                          |       | 36,232,700 |       | 52,700,151      |       |
|                                                                                                            |       | 85,294,273 |       | 84,772,691      |       |
| **b)****            ****Investments:**              |       |       |       |            |       |
| ** **                                                                                                      |       |       |       |            |       |
| Argentine bonds                                                                                                 |       | 1,000,155  |       | —          |       |
| Mutual funds (Exhibit IV)                                                                                  |       | 29,403,510 |       | 138,052,356     |       |
|                                                                                                            |       | 30,403,665 |       | 138,052,356     |       |

 

11

----

 

**MINERA SANTA CRUZ S.A.**

**NOTES TO THE FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010**

(Amounts stated in Argentine pesos - except where expressly indicated)

 
| ** **                                                                                                     | ** ** | **2012**    | ** ** | **2011**        | ** ** |
|----------------------------------------------------------------------------------------------------------------|------------|-------------|------------|-----------------|------------|
| ** **                                                                                                     | ** ** | ** **  | ** ** | **(Unaudited)** | ** ** |
| **c)****             ****Other receivables:** |       |        |       |            |       |
| ** **                                                                                                     |       |        |       |            |       |
| **Current:**                                                                                                   |       |        |       |            |       |
|                                                                                                           |       |        |       |            |       |
| Value added tax credit                                                                                         |       | 91,394,823  |       | 66,461,903      |       |
| Advances to suppliers                                                                                          |       |        |       |            |       |
| In local currency                                                                                              |       | 19,418,558  |       | 4,498,129       |       |
| In foreign currency (Exhibit IV)                                                                          |       | 145,647     |       | 2,169,373       |       |
| Security deposits                                                                                              |       |        |       |            |       |
| In local currency                                                                                              |       | 71,503      |       | 24,233          |       |
| In foreign currency (Exhibit IV)                                                                          |       | 51,599      |       | 148,948         |       |
| Prepaid insurance                                                                                              |       |        |       |            |       |
| In local currency                                                                                              |       | 846,159     |       | 826,954         |       |
| In foreign currency (Exhibit IV)                                                                          |       | —      |       | 6,167,145       |       |
| Companies of Article 33 Law 19,550 and   related parties (Note 4)                                         |       |        |       |            |       |
| In local currency                                                                                              |       | 100,290     |       | 85,620          |       |
| In foreign currency (Exhibit IV)                                                                          |       | 1,123       |       | 83,770          |       |
| Customs benefits (Exhibit IV)                                                                             |       | 12,577,281  |       | 5,095,540       |       |
| Advance on royalties (Exhibit IV)                                                                         |       | 15,035,382  |       | —          |       |
| Other                                                                                                          |       |        |       |            |       |
| In local currency                                                                                              |       | 6,538,220   |       | 5,083,171       |       |
| In foreign currency (Exhibit IV)                                                                          |       | —      |       | 757,727         |       |
|                                                                                                           |       | 146,180,585 |       | 91,402,513      |       |
| **Non-current:**                                                                                               |       |        |       |            |       |
|                                                                                                           |       |        |       |            |       |
| Value added tax credit                                                                                         |       | 3,755,777   |       | 6,858,912       |       |
| Provision for doubtful tax receivables   (Exhibit III)                                                    |       | (3,755,777  | )          | (3,755,777      | )          |
| Turn-over tax                                                                                                  |       | 1,629,322   |       | 1,241,382       |       |
| Security deposits                                                                                              |       |        |       |            |       |
| In local currency                                                                                              |       | 96,147      |       | 96,147          |       |
| Customs benefits (Exhibit IV)                                                                             |       | 28,783,832  |       | 24,017,786      |       |
| Other                                                                                                          |       | 1,092,226   |       | 403,897         |       |
|                                                                                                           |       | 31,601,527  |       | 28,862,347      |       |
| **d)****            ****Inventories:**             |       |        |       |            |       |
| ** **                                                                                                     |       |        |       |            |       |
| Ore in stockpiles                                                                                              |       | 51,697,660  |       | 18,883,860      |       |
| Concentrate                                                                                                    |       | 279,142     |       | —          |       |
| Doré                                                                                                      |       | 13,298,542  |       | 3,372,803       |       |
|                                                                                                           |       | 65,275,344  |       | 22,256,663      |       |

 

12

----

 

**MINERA SANTA CRUZ S.A.**

**NOTES TO THE FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010**

(Amounts stated in Argentine pesos - except where expressly indicated)

 
| ** **                                                                                                                             | ** ** | **2012**    | ** ** | **2011**        | ** ** |
|----------------------------------------------------------------------------------------------------------------------------------------|------------|-------------|------------|-----------------|------------|
| ** **                                                                                                                             | ** ** | ** **  | ** ** | **(Unaudited)** | ** ** |
| **e)****             ****Accounts payable:**                          |       |        |       |            |       |
| ** **                                                                                                                             |       |        |       |            |       |
| **Current:**                                                                                                                           |       |        |       |            |       |
|                                                                                                                                   |       |        |       |            |       |
| Trades payable                                                                                                                         |       |        |       |            |       |
| In local currency                                                                                                                      |       | 16,077,486  |       | 14,877,250      |       |
| In foreign currency (Exhibit IV)                                                                                                  |       | 17,093,731  |       | 13,976,812      |       |
| Accrued expenses                                                                                                                       |       |        |       |            |       |
| In local currency                                                                                                                      |       | 26,417,200  |       | 30,538,964      |       |
| In foreign currency (Exhibit IV)                                                                                                  |       | 19,350,310  |       | 33,914,433      |       |
| Companies of Article 33 Law 19,550 and   related parties (Note 4)                                                                 |       |        |       |            |       |
| In foreign currency (Exhibit IV)                                                                                                  |       | 6,254,796   |       | 6,182,271       |       |
|                                                                                                                                   |       | 85,193,523  |       | 99,489,730      |       |
| **f)****              ****Payroll and social security   taxes:** |       |        |       |            |       |
|                                                                                                                                   |       |        |       |            |       |
| **Current:**                                                                                                                           |       |        |       |            |       |
|                                                                                                                                   |       |        |       |            |       |
| Salaries and social contributions payable                                                                                              |       | 23,403,446  |       | 19,372,279      |       |
| Bonuses payable                                                                                                                        |       | 29,788,691  |       | 21,179,085      |       |
| Accrued vacation payable                                                                                                               |       | 12,403,523  |       | 9,031,485       |       |
|                                                                                                                                   |       | 65,595,660  |       | 49,582,849      |       |
| **Non-current:**                                                                                                                       |       |        |       |            |       |
|                                                                                                                                   |       |        |       |            |       |
| Bonuses payable                                                                                                                        |       | 4,057,999   |       | 2,954,416       |       |
|                                                                                                                                   |       | 4,057,999   |       | 2,954,416       |       |
| **g)****            ****Taxes payable:**                                   |       |        |       |            |       |
|                                                                                                                                   |       |        |       |            |       |
| Income tax payable                                                                                                                     |       | 133,007,286 |       | 26,833,170      |       |
| Royalties payable                                                                                                                      |       | 897,231     |       | 2,132,946       |       |
|                                                                                                                                   |       | 133,904,517 |       | 28,966,116      |       |
| **h)****            ****Other liabilities:**                               |       |        |       |            |       |
| ** **                                                                                                                             |       |        |       |            |       |
| **Current:**                                                                                                                           |       |        |       |            |       |
|                                                                                                                                   |       |        |       |            |       |
| Provision for community relation expenses                                                                                              |       | —      |       | 3,796,790       |       |
|                                                                                                                                   |       | —      |       | 3,796,790       |       |
| **Non-current:**                                                                                                                       |       |        |       |            |       |
|                                                                                                                                   |       |        |       |            |       |
| Deferred tax liability (Note 2.III.i)                                                                                                  |       | 169,015,379 |       | 148,099,262     |       |
| Provision for mine abandonment and closure   (Exhibit IV)                                                                         |       | 75,885,392  |       | 46,700,778      |       |
|                                                                                                                                   |       | 244,900,771 |       | 194,800,040     |       |

 

13

----

 

**MINERA SANTA CRUZ S.A.**

**NOTES TO THE FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010**

(Amounts stated in Argentine pesos - except where expressly indicated)

 
| ** **                                                                                                                                                        | ** ** | **Profits/(Losses)** | ** ** |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|----------------------|------------|
| ** **                                                                                                                                                        | ** ** | **2012**             | ** ** | **2011** | ** ** | **2010** | ** ** |
| ** **                                                                                                                                                        | ** ** | ** **           | ** ** | **(Unaudited)** | ** ** | **(Unaudited)** | ** ** |
| **i)****               ****Sales:**                                                    |       |                 |       |   |   |   |   |
|                                                                                                                                                              |       |                 |       |   |   |   |   |
| Concentrate                                                                                                                                                       |       | 869,547,462          |       | 666,159,640 |   | 454,723,539 |   |
| Doré                                                                                                                                                         |       | 571,491,829          |       | 685,838,606 |   | 415,493,400 |   |
|                                                                                                                                                              |       | 1,441,039,291        |       | 1,351,998,246 |   | 870,216,939 |   |
| **j)****               ****Financial   income (expenses) and holding gains (losses):** |       |                 |       |   |   |   |   |
| ** **                                                                                                                                                        |       |                 |       |   |   |   |   |
| Discounting of taxes receivable                                                                                                                                   |       | (3,586,792           | )          | (6,709,650 | ) | (3,804,482 | ) |
| Change in provision for obsolescence of materials   (Exhibit III)                                                                                            |       | (11,768,346          | )          | (3,258,422 | ) | (22,205,048 | ) |
| Change in provision for impairment of   works-in-progress assets (Exhibit III)                                                                               |       | 847,425              |       | 3,762,929 |   | — |   |
| Foreign currency exchange differences                                                                                                                             |       | (518,833             | )          | (14,330,608 | ) | (26,225,158 | ) |
| Interest and other income                                                                                                                                         |       | (9,436,055           | )          | (37,935,460 | ) | (54,624,095 | ) |
|                                                                                                                                                              |       | (24,462,601          | )          | (58,471,211 | ) | (106,858,783 | ) |
| **k)****            ****Other   income (expenses), net:**                                             |       |                 |       |   |   |   |   |
| ** **                                                                                                                                                        |       |                 |       |   |   |   |   |
| Customs benefits                                                                                                                                                  |       | 10,416,635           |       | 13,556,193 |   | 7,359,198 |   |
| Idle capacity                                                                                                                                                     |       | —               |       | (14,887,235 | ) | (8,797,800 | ) |
| Other                                                                                                                                                             |       | (3,863,652           | )          | (5,660,175 | ) | (1,825,848 | ) |
|                                                                                                                                                              |       | 6,552,983            |       | (6,991,217 | ) | (3,264,450 | ) |

 

**4.****                  ****BALANCES AND OPERATIONS WITH COMPANIES ART. 33 LAW No. 19,550 AND RELATED PARTIES**

 
| ** **                                     | ** ** | ** **    | ** ** | **2012**   | ** ** | **2011**        | ** ** |
|------------------------------------------------|------------|---------------|------------|------------|------------|-----------------|------------|
| ** **                                     | ** ** | ** **    | ** ** | ** ** | ** ** | **(Unaudited)** | ** ** |
| **Other receivables:**                         |       |          |       |       |       |            |       |
|                                           |       |          |       |       |       |            |       |
| Hochschild Mining plc                          |       | Related party |       | —     |       | 89,027          |       |
| Compañía Minera Ares   S.A.C.        |       | Related party |       | 101,413    |       | 80,363          |       |
|                                           |       |          |       | 101,413    |       | 169,390         |       |
| **Accounts payable:**                          |       |          |       |       |       |            |       |
|                                           |       |          |       |       |       |            |       |
| Compañía Minera Ares   S.A.C.        |       | Related party |       | 5,719,309  |       | 5,742,617       |       |
| MH Argentina S.A.                              |       | Related party |       | 535,487    |       | 423,514         |       |
| Minera Andes S.A.                              |       | Shareholder   |       | —     |       | 10,093          |       |
| Minera Andes S.A.                              |       | Related party |       | —     |       | 6,047           |       |
|                                           |       |          |       | 6,254,796  |       | 6,182,271       |       |
| **Dividends:**                                 |       |          |       |       |       |            |       |
|                                           |       |          |       |       |       |            |       |
| Hochschild Mining (Argentina) Corporation S.A. |       | Shareholder   |       | 11,150,610 |       | 42,431,621      |       |
| Minera Andes S.A.                              |       | Shareholder   |       | 10,713,331 |       | 40,767,635      |       |
|                                           |       |          |       | 21,863,941 |       | 83,199,256      |       |

 

14

----

 

**MINERA SANTA CRUZ S.A.**

**NOTES TO THE FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010**

(Amounts stated in Argentine pesos - except where expressly indicated)

 

Transactions with Companies according to Art. 33 of Law 19,550 and related companies during the financial years ending on December 31, 2012 and 2011 were the following:

 
| ** **                                                          | ** ** | ** **    | ** ** | **2012**    | ** ** | **2011**        | ** ** |
|---------------------------------------------------------------------|------------|---------------|------------|-------------|------------|-----------------|------------|
| ** **                                                          | ** ** | ** **    | ** ** | ** **  | ** ** | **(Unaudited)** | ** ** |
| **Intangible assets**                                               |       |          |       |        |       |            |       |
|                                                                |       |          |       |        |       |            |       |
| –   Compañía Minera Ares S.A.C.            |       | Related party |       | 257,075     |       | (404,486        | )          |
| –   MH Argentina   S.A.                              |       | Related party |       | 554,266     |       | 1,156,585       |       |
|                                                                |       |          |       | 811,341     |       | 752,099         |       |
| **Interests on loans:**                                             |       |          |       |        |       |            |       |
|                                                                |       |          |       |        |       |            |       |
| –   Hochschild   Mining (Argentina) Corporation S.A. |       | Shareholder   |       | —      |       | 726,757         |       |
| –   Minera   Andes S.A.                              |       | Shareholder   |       | —      |       | 970,210         |       |
| –   Minera   Andes Inc.                              |       | Related party |       | —      |       | 11,225,032      |       |
| –   Hochschild   Mining Holdings Limited             |       | Related party |       | —      |       | 11,902,973      |       |
|                                                                |       |          |       | —      |       | 24,824,972      |       |
| **Fees for services:**                                              |       |          |       |        |       |            |       |
|                                                                |       |          |       |        |       |            |       |
| –   Compañía Minera Ares S.A.C.            |       | Related party |       | 4,208,283   |       | 5,484,257       |       |
|                                                                |       |          |       | 4,208,283   |       | 5,484,257       |       |
| **Production costs:**                                               |       |          |       |        |       |            |       |
|                                                                |       |          |       |        |       |            |       |
| –   Compañía Minera Ares S.A.C.            |       | Related party |       | 925,101     |       | 514,605         |       |
|                                                                |       |          |       | 925,101     |       | 514,605         |       |
| **Payment of dividends**                                            |       |          |       |        |       |            |       |
|                                                                |       |          |       |        |       |            |       |
| –   Hochschild   Mining (Argentina) Corporation S.A. |       | Shareholder   |       | 90,881,622  |       | —          |       |
| –   Minera   Andes S.A.                              |       | Shareholder   |       | 87,317,636  |       | —          |       |
|                                                                |       |          |       | 178,199,258 |       | —          |       |

 

**5.****                  ****CAPITAL STOCK AND SHAREHOLDERS’ RESOLUTIONS**

 

In 2008, the Assembly of Shareholders of the Company decided to carry out a capital increase by means of new contributions in cash in the amount of 77,418,000. This increase led to an amendment of the Bylaws, which is pending registration. In December 2008, the shareholder Hochschild Mining (Argentina) Corporation S.A. signed and integrated all of the shares for class B. Moreover, in February 2009, Minera Andes S.A. integrated the total amount of Class A shares in the amount of 37,934,820. At the date of issuance of these financial statements, capital stock amounted to 344,756,530.

 

15

----

** **

**MINERA SANTA CRUZ S.A.**

**NOTES TO THE FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010**

(Amounts stated in Argentine pesos - except where expressly indicated)

 

The composition by shareholder of the capital stock of the Company at December 31, 2012 is as follows:

 
| ** **                                     | ** ** | **Number of   subscribed   shares** | ** ** | **Participation   percentage** | ** ** |
|------------------------------------------------|------------|------------------------------------------|------------|--------------------------------|------------|
|                                           |       |                                     |       |                           |       |
| Hochschild Mining (Argentina) Corporation S.A. |       | 175,825,830                              |       | 51                             | %          |
| Minera Andes S.A.                              |       | 168,930,700                              |       | 49                             | %          |
|                                           |       | 344,756,530                              |       | 100                            | %          |

 

On May 17, 2012 the Ordinary General Assembly of Shareholders ratified the allocation of retained earnings to constitute a legal reserve in the amount of 19,477,324, the formation of a Facultative Reserve in the amount of 253,205,209 and the declaration of dividends with the balance of 116,863,943. The payment of such dividends declared was made during the course of 2012, with the exception of the sum of 21,863,941 the payment of which was extended until the first half of 2013.

 

**6.****                  ****FINANCING OF ACTIVITIES**

 

During 2012, the Company financed its activities with funds generated by its business and also obtained short-term loans in U.S. dollars from local financial institutions, which accrued nominal annual interest rates ranging from 3.5% to 6.6%. At December 31, 2012 the Company settled the total amount for loans taken during the year.

 

During 2011, the Company prepaid its financial debts with companies under Article 33 Law 19,550 and related parties.

 

**7.****                  ****INVESTMENT REGIME FOR MINING ACTIVITY**

 

Law No. 24,196, as amended by Law No. 25,429 establishes a regime for mining investments applicable in all provinces. In this regard, on October 21, 1993, the Province of Santa Cruz emulated this mining investment regime through Provincial Law No. 2,332. Those interested in benefitting from this regime must register with the National Mining Secretary.

 

The main benefits for the mining companies that carry out activities within the framework of this regime are detailed below:

 

·                  Fiscal stability for a period of thirty years from the date of submission of the Feasibility Study. Fiscal stability for all taxes, to be understood as such all direct taxes and tax contributions that have as taxpayers the companies registered in the register mentioned previously, as well as rights, duties or other import or export charges.

 

Fiscal stability shall also apply to foreign exchange regimes (see Note 8) and tariffs, excluding exchange rate and repayments, refunds and/or repayment of charges in connection with exports.

 

16

----

 

**MINERA SANTA CRUZ S.A.**

**NOTES TO THE FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010**

(Amounts stated in Argentine pesos - except where expressly indicated)

 

·                  Tax deduction from income tax balance, from the time of submission of the application for registration authorized by Law No. 24,196, one hundred percent of the amounts invested in exploration expenditures, mineralogical and metallurgical testing, pilot plant and other work to determine the technical and economic feasibility of the projects, subject to treatment as expenses or amortizable investment, appropriate to these in accordance with income tax law.

 

·                  Optional accelerated depreciation regime for income tax on capital investments made towards the execution of new mining projects and expansion of existing ones.

 

In this regard, annual tax depreciation shall not exceed, in each fiscal year, the amount of taxable income generated by mining activities, prior to the transfer of the relevant amortization and, if applicable, once tax losses from prior years are computed. The non-computable surplus in a given fiscal year can be attributed to the following years, considering for each the maximum limit mentioned above. The period during which tax depreciation of assets is computed may not exceed the term of their respective useful lives. The existing residual value at the end of the year in which the expiration of the useful life of assets occurs, may be attributed entirely to the tax balance of that fiscal year, and the above limitation is not applicable in these cases.

 

·                  Exemption from payment of import duties and any other duty, correlative levy or statistics duty, except other remuneration duties on services, corresponding to the introduction of capital goods, special equipment or component parts of such property and inputs determined by the enforcement authority that are necessary for the execution of the activities covered by this scheme.

 

·                  Recovery of tax credits arising from acquisitions and imports of goods and services for the purposes of carrying out mining activities such as prospection, exploration, mineralogical studies and applied research that after twelve (12) fiscal years counted from the year in which they were computed, make up the balance of the value added tax.

 

·                  Deduction of the provision for mine closure and abandonment in the determination of income tax, up to an amount equal to five percent of the operating costs of extraction and processing.

 

Companies registered in the regime will not see an increase in their total tax burden, considered separately in each relevant jurisdiction upon the filing of said Feasibility Study at the national, provincial and municipal levels, which adhere to Law 24,196.

 

Due to increases in the total tax burden, the following actions, among others, are mentioned in Law No. 25,429: the creation of new taxes, an increase in the rates, fees or amounts of existing taxes, the modification of the mechanisms or procedures determining the fiscal base for taxes, the repeal of exemptions granted and the elimination of deductions allowed.

 

17

----

 

**MINERA SANTA CRUZ S.A.**

**NOTES TO THE FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010**

(Amounts stated in Argentine pesos - except where expressly indicated)

 

Additionally, with regards to interest payments to foreign financial institutions and entities, included in Title V of the Income Tax Law, fiscal stability also applies to the increase in the rates, fees or amounts in effect on the date of the Feasibility Study to the alteration of rates or mechanisms for determining the estimated net gain of Argentine origin, when companies operating under the regime have agreed by contract to take charge of the respective tax.

 

Fiscal stability does not include: changes in the value of property, when such valuation is the basis for the determination of a tax, the extension of the validity of rules passed for a certain time, which are in effect at the time fiscal stability is obtained; expiration of exemptions, exceptions or other measures adopted for a certain time, and due to the expiry of that period; contributions towards the Single Social Security System and indirect taxes, including Value Added Tax.

 

These benefits (except fiscal stability), apply to mining projects of the Company as from April 18, 2002, the date on which the Secretariat of Energy and Mining of the Nation, decided to register the Company in the Register of Mining Investments (Law No. 24,196). Said registration was requested by the Company in October 2001.

 

On November 21, 2005 the Company submitted the Feasibility Study to the Mining Ministry, from which date it is enjoying the benefits of fiscal stability.

 

**8.****                  ****ENFORCEMENT OF CURRENCY EXCHANGE REGULATIONS**

 

On June 2005, the National Executive issued Decree No. 616/05 (“Decree 616”), which imposed modifications to the foreign currency exchange rate regime in Argentina in relation to foreign exchange inflows and outflows, among which, is a provision for the establishment of a nominative deposit in U.S. dollars, non-transferable and unpaid in an amount equal to 30% of the amount involved in the foreign exchange operation, which must be kept for 365 days in a local financial institution (“Deposit”). It is important to highlight that the deposit cannot be used as security or collateral for credit operations of any kind.

 

Although Decree 616 established exceptions to the constitution of the deposit, having delegated in the Central Bank of Argentina (the “Central Bank”) the regulation of the decree, the Central Bank established some additional exceptions to the constitution of the deposit and regulated requirements to be met for specific exceptions to the constitution of the deposit regulated in Decree 616.

 

Without prejudice to the fact that the principles set out in Decree 616 are a clear restriction on the free availability of foreign exchange, precisely with the exception of companies that enjoy fiscal stability and exchange rate stability in accordance with the provisions of Decree No. 753/2004, as in the case of Minera Santa Cruz S.A., it has been informed by the financial institution involved in foreign currency settlements that it must constitute said deposit. Additionally, on December 17, 2007, Minera Santa Cruz S.A. received a registered letter from the Central Bank, notifying them that within 5 working days they must constitute said deposit, according to information provided by the Standard Bank S.A. due to the non-submission of appropriate certificates according to current regulations in force, since it considered that certain inflows of funds were not specifically included in the items included in the exceptions.

 

The Company responded that said deposit was not legally applicable to the Company.

 

18

----

 

**MINERA SANTA CRUZ S.A.**

**NOTES TO THE FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010**

(Amounts stated in Argentine pesos - except where expressly indicated)

 

Based on the foregoing, the Company believes that it is complying with current foreign exchange regulations in force in Argentina.

 

Moreover, on October 26, 2011, Decree 1722/2011 issued by the National Executive was published, under which the Company (amongst other mining companies) was within the scope of the obligation to settle in Argentina its total foreign exchange earnings from export operations. Since the issuance of said decree the Company began to comply with the foreign exchange settlement regime with regards to its export sales, the aforesaid does not imply the Company abandons the possibility of challenging Decree 1722/2011 in the future.

 

**9.****                  ****SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN ACCOUNTING PRINCIPLES FOLLOWED BY THE COMPANY AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES**

 

The financial statements have been prepared in accordance with Argentine GAAP, which differs in certain respects from generally accepted accounting principles in the United States of America (“U.S. GAAP”).

 

The main differences between Argentine GAAP and U.S. GAAP for measurement purposes principally relate to the items discussed in the following paragraphs:

 

**a)****      ****Functional and reporting currency**

 

Under Argentine GAAP, financial statements are presented in constant Argentine pesos (“reporting currency”), as mentioned in Note 2. Foreign currency transactions are recorded in Argentine pesos by applying the foreign currency exchange rate at the date of the transaction to the foreign currency amount. Exchange rate differences arising on monetary items in foreign currency are recognized in the income statement of each year. Monetary assets and liabilities in a foreign currency are remeasured at the balance sheet date, using the closing exchange rate. Foreign currency revenue and expenses are remeasured using the exchange rate on the date of the transaction, except for the consumption of nonmonetary assets, which are remeasured using the exchange rates in effect when the respective asset was acquired.

 

Under U.S. GAAP, a definition of the functional currency is required, which may differ from the reporting currency. Management has determined the U.S. dollar as its functional currency. Therefore, under U.S. GAAP, the Company would remeasure its financial statements into U.S. dollars. The objective of the remeasurement process would be to produce the same results that would have been reported if the accounting records had been kept in the functional currency. Accordingly, monetary assets and liabilities would be remeasured at the balance sheet date (current) exchange rate. Amounts carried at prices in past transactions would be remeasured at the exchange rates in effect when the transactions occurred. Revenues and expenses would be remeasured at the exchange rate in effect on the date of the transaction, except for consumption of nonmonetary assets, which would be remeasured at the rates of exchange in effect when the respective assets were acquired. Translation gains and losses on monetary assets and liabilities arising from the remeasurement would be included in the determination of net income (loss) in the period such gains and losses arise.

 

19

----

 

**MINERA SANTA CRUZ S.A.**

**NOTES TO THE FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010**

(Amounts stated in Argentine pesos - except where expressly indicated)

 

**b)****      ****Proven and probable reserves**

 

Under US GAAP, the definition of proven and probable reserves is set forth in the U.S. Securities and Exchange Commission (“SEC”) Industry Guide 7. Proven reserves are reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes, grade and/or quality are computed from the results of detailed sampling and (b) the sites for inspection, sampling and measurement are spaced so closely and the geological character is so well defined that size, shape, depth and mineral content of the reserves are well established. Probable reserves are reserves for which quantity and grade and/or quality are computed from information similar to that used for proven (measured) reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven (measured) reserves, is high enough to assume continuity between points of observations.

 

**c)****       ****Valuation of inventories**

 

Under Argentine GAAP, inventories, which include stockpiles, concentrates and doré, should be accounted for at reproduction cost, which is the price the Company would pay at any given time to reproduce such inventory.

 

Under US GAAP, inventories are stated at the lower of cost or market, with cost being determined using the weighted average cost method. However, this difference in accounting policy does not give rise to material differences for the Company, as the Company considers the best estimate of reproduction costs to be production costs as determined by applying the absorption costing method.

 

For this purpose, costs of production include:

 

·                  costs, materials and contractor expenses which are directly attributable to the extraction and processing of ore;

·                  depreciation of property, plant and equipment used in the extraction and processing of ore; and

·                  related production overheads (based on normal operating capacity).

 

Further, as discussed in Note 9. g), since the basis for depreciation and amortization differs under Argentine GAAP compared to U.S. GAAP, the amount included in the inventory also differs. As a result, the carrying value of inventories under Argentine GAAP differs from the value of inventories under U.S. GAAP.

 

Under Argentine GAAP, materials, which include material, parts and supplies, are accounted for at their replacement costs.

 

Under U.S. GAAP, materials are valued at the lower of average cost or net realizable value.

 

**d)****      ****Mine development costs**

 

Under Argentine GAAP, costs associated with developments of mining properties are capitalized and presented in the property, plant and equipment line on the balance sheet.

 

Under U.S. GAAP, capitalization of mine development costs begins once all operating permits have been secured, mineralization is classified as proven and probable reserves and a final feasibility study has been completed. Costs incurred before mineralization is classified as proven and probable reserves are expensed.

 

20

----

 

**MINERA SANTA CRUZ S.A.**

**NOTES TO THE FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010**

(Amounts stated in Argentine pesos - except where expressly indicated)

 

**e)****       ****Evaluation and exploration costs**

 

Under Argentine GAAP, evaluation and exploration expenses are capitalized when the future economic benefit of the project can be reasonably assured. Evaluation and exploration costs are reclassified to property, plant, and equipment when mining from the respective area commences.

 

Under U.S. GAAP, all evaluation and exploration costs are expensed as incurred.

 

**f)****        ****Pre-operating costs**

 

Under Argentine GAAP, pre-operating costs can be capitalized subject to recoverability through future revenues.

 

Under U.S. GAAP, start-up costs are expensed as incurred.

 

**g)****      ****Depreciation and amortization**

 

Under both Argentine and U.S. GAAP, depreciation and amortization is charged to production costs on a units-of-production (“UOP”) basis for capitalized mine development costs, mine buildings, installations and property, plant and equipment used in the mining production process, unless the straight-line depreciation method is considered more appropriate based on the type of asset being depreciated.

 

Under Argentine GAAP, there is no specific guidance on the reserves, or reserves and resources, measurement to be used in the calculation of UOP depreciation, or on how the assumptions within the reserve estimates should be calculated or approximated. Consequently, practice varies as to how reserves are incorporated into the calculation of depreciation. MSC’s accounting policy is to include in its UOP calculation an estimate of future development costs that will be necessary to extract all of the reserve and resource base from the mine. Further, for purposes of the UOP calculation, reserves and resources include both proven and probable reserves, as well as measured and indicated resources expected to the be converted into reserves.

 

Under U.S. GAAP, the basis of the UOP calculation includes only proven and probable reserves, as defined in the SEC Industry Guide 7.

 

**h)****      ****Impairment of long-lived assets**

 

Argentine GAAP requires that an impairment loss calculation be performed if impairment indicators exist. The impairment loss is the amount by which the carrying amount exceeds its recoverable amount, where recoverable amount is the higher of (1) fair value less costs to sell, and (2) value in use.

 

Under U.S. GAAP, the two-step approach requires that a recoverability test be performed first, whereby the carrying amount of the asset is compared to the sum of future undiscounted cash flows generated through use and eventual disposition. If it is determined that the asset is not recoverable, an impairment loss calculation is required. The impairment loss is the amount by which the carrying amount of the asset exceeds its fair value.

 

Further, under Argentina GAAP, long-lived assets must be reviewed at the end of each reporting 

 

21

----

 

**MINERA SANTA CRUZ S.A.**

**NOTES TO THE FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010**

(Amounts stated in Argentine pesos - except where expressly indicated)

 

period for reversal indicators. If appropriate, impairment loss should be reversed up to the new estimated recoverable amount, not to exceed the initial carrying amount adjusted for depreciation. Under U.S. GAAP, reversal of impairment losses are prohibited.

 

**i)****         ****Accounting for asset retirement obligations**

 

U.S. GAAP requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred, if a reasonable estimate of fair value can be made. The asset retirement obligations liability is built up in cash flow layers, with each layer being discounted using the credit-adjusted, risk-free rate as of the date that the layer was created. Measurement of the entire obligation using current discount rates is not permitted. Each cash flow layer is added to the carrying amount of the associated asset. This additional carrying amount is then depreciated over the life of the asset. The liability is increased due to the passage of time based on the time value of money (“accretion expense”) until the obligation is settled.

 

Argentine GAAP is similar to U.S. GAAP with respect to asset retirement obligations, except for a change in the discount rate which is treated as a change in estimates, so the entire liability must be recalculated using the current discount rate that reflects current market assessments of the time value of money and the risks specific to the liability, with the change added or reduced from the related asset.

 

**j)****         ****Income taxes**

 

Argentine GAAP and U.S. GAAP both require the liability method to be used in accounting for deferred income taxes. Under this method, deferred income tax assets or liabilities are recorded for temporary differences that arise between the financial and tax bases of assets and liabilities at each reporting date. The benefits of tax loss carry-forwards are recognized as deferred income tax assets. A valuation allowance is provided when it is more likely than not (under US GAAP) or probable (under Argentine GAAP) that a portion or all of the deferred tax assets will not be realized.

 

**k)****      ****Restatement in constant currency**

 

The Company’s financial statements recognize the variations in the currency purchasing power until February 28, 2003, having discontinued the incorporation of adjustments to reflect such variations as of that date, in accordance with the provisions set forth in Argentine GAAP and as required by Presidential Decree No. 664/2003.

 

Under U.S. GAAP, general price level adjusted financial statements are not required. However, SEC rules do not require removing effects of inflation for foreign companies operating in inflationary environments when determining U.S. GAAP amounts.

 

**10.****           ****SUBSEQUENT EVENT**

 

The Company evaluated subsequent events through the date the financial statements were issued, which was April 25, 2014. There were no other subsequent events that required recognition or additional disclosures.

 

22

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**Exhibit I**

 

**MINERA SANTA CRUZ SA**

**CHANGES IN PROPERTY, PLANT AND EQUIPMENT**

**FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011**

(Stated in Argentine pesos — Note 2II)

 
| ** **                                                       | ** ** | **2012**                  | ** ** | ** **    | ** ** | ** **    | ** ** |
|------------------------------------------------------------------|------------|---------------------------|------------|---------------|------------|---------------|------------|
| ** **                                                       | ** ** | **Original cost**    | ** ** | ** **    | ** ** | ** **    | ** ** |
| ** **                                                       | ** ** | **At beginning**     | ** ** | ** **    | ** ** | ** **    | ** ** | ** ** | ** ** | **At end** | ** ** | ** ** | ** ** | ** ** | ** ** |
| **Main account**                                            | ** ** | **of the year** | ** ** | **Additions** | ** ** | **Transfers** | ** ** | **Decreases** | ** ** | **of the year** | ** ** | ** ** | ** ** | ** ** | ** ** |
|                                                             |       |                      |       |          |       |          |       |   |   |   |   |   |   |   |   |
| Furniture,   fixtures and office equipment                       |       | 5,883,077                 |       | 199,364       |       | 1,022,355     |       | (334,851 | ) | 6,769,945 |   |   |   |   |   |
| Facilities                                                       |       | 116,871,836               |       | —        |       | 11,191,367    |       | (143,276 | ) | 127,919,927 |   |   |   |   |   |
| Buildings                                                        |       | 192,336,319               |       | 1,028,446     |       | 25,765,611    |       | (193,631 | ) | 218,936,745 |   |   |   |   |   |
| Computer   equipment                                             |       | 4,808,430                 |       | 641,357       |       | 374,904       |       | (805,893 | ) | 5,018,798 |   |   |   |   |   |
| Machinery   and equipment                                        |       | 195,022,170               |       | 35,602,006    |       | 25,268,762    |       | (4,903,295 | ) | 250,989,643 |   |   |   |   |   |
| Vehicles                                                         |       | 9,883,800                 |       | 1,381,250     |       | 563,223       |       | (593,507 | ) | 11,234,766 |   |   |   |   |   |
| Tools                                                            |       | 1,861,177                 |       | 910,800       |       | 57,671        |       | (49,880 | ) | 2,779,768 |   |   |   |   |   |
| Land                                                             |       | 5,729,053                 |       | —        |       | —        |       | (41,371 | ) | 5,687,682 |   |   |   |   |   |
| Access   ramps, galleries and related assets                     |       | 410,527,041               |       | 187,729,907   |       | 35,915,217    |       | — |   | 634,172,165 |   |   |   |   |   |
| Mine   closure assets                                            |       | 44,220,087                |       | 28,745,112    |       | —        |       | — |   | 72,965,199 |   |   |   |   |   |
| Construction   in progress                                       |       | 75,348,593                |       | 34,494,243    |       | (61,893,084   | )          | — |   | 47,949,752 |   |   |   |   |   |
| Advances   to suppliers                                          |       | 5,218,172                 |       | 24,870,754    |       | (3,845,882    | )          | — |   | 26,243,044 |   |   |   |   |   |
| Provision   for impairment of construction in progress (1)  |       | (18,442,119               | )          | 847,425       |       | —        |       | — |   | (17,594,694 | ) |   |   |   |   |
| **Total 2012**                                                   |       | 1,049,267,636             |       | 316,450,664   |       | 34,420,144    | (3)        | (7,065,704 | ) | 1,393,072,740 |   |   |   |   |   |
| **Total 2011 (Unaudited)**                                       |       | 799,927,575               |       | 252,298,570   |       | —        |       | (2,958,509 | ) | 1,049,267,636 |   |   |   |   |   |

 
| ** **                                                       | ** ** | **2012**                          | ** ** | **2011**      | ** ** |
|------------------------------------------------------------------|------------|-----------------------------------|------------|---------------|------------|
| ** **                                                       | ** ** | **Accumulated depreciation** | ** ** | ** **    | ** ** |
| ** **                                                       | ** ** | **At beginning**             | ** ** | ** **    | ** ** | ** ** | ** ** | ** ** | ** ** | **At end** | ** ** | **Net book** | ** ** | **Net book** | ** ** |
| **Main account**                                            | ** ** | **of the year**         | ** ** | **Additions** | ** ** | **Transfers** | ** ** | **Decreases** | ** ** | **of the year** | ** ** | **value** | ** ** | **value** | ** ** |
|                                                             |       |                              |       |          |       |   |   |   |   |   |   |   |   | **(Unaudited)** |   |
| Furniture,   fixtures and office equipment                       |       | 2,414,986                         |       | 625,668       |       | — |   | (249,530 | ) | 2,791,124 |   | 3,978,821 |   | 3,468,091 |   |
| Facilities                                                       |       | 30,141,061                        |       | 8,338,143     |       | (629 | ) | (61,058 | ) | 38,417,517 |   | 89,502,410 |   | 86,730,775 |   |
| Buildings                                                        |       | 58,081,682                        |       | 15,821,606    |       | — |   | (187,237 | ) | 73,716,051 |   | 145,220,694 |   | 134,254,637 |   |
| Computer   equipment                                             |       | 3,448,615                         |       | 650,077       |       | (3,917 | ) | (750,114 | ) | 3,344,661 |   | 1,674,137 |   | 1,359,815 |   |
| Machinery   and equipment                                        |       | 65,479,354                        |       | 34,578,408    |       | 1,336 |   | (3,665,659 | ) | 96,393,439 |   | 154,596,204 |   | 129,542,816 |   |
| Vehicles                                                         |       | 3,705,998                         |       | 1,505,567     |       | — |   | (319,306 | ) | 4,892,259 |   | 6,342,507 |   | 6,177,802 |   |
| Tools                                                            |       | 429,157                           |       | 452,033       |       | 3,210 |   | (24,295 | ) | 860,105 |   | 1,919,663 |   | 1,432,020 |   |
| Land                                                             |       | —                            |       | —        |       | — |   | — |   | — |   | 5,687,682 |   | 5,729,053 |   |
| Access   ramps, galleries and related assets                     |       | 255,003,562                       |       | 148,576,148   |       | 841,713 |   | — |   | 404,421,423 |   | 229,750,742 |   | 155,523,479 |   |
| Mine   closure assets                                            |       | 8,429,878                         |       | 3,157,372     |       | — |   | — |   | 11,587,250 |   | 61,377,949 |   | 35,790,209 |   |
| Construction   in progress                                       |       | —                            |       | —        |       | — |   | — |   | — |   | 47,949,752 |   | 75,348,593 |   |
| Advances   to suppliers                                          |       | —                            |       | —        |       | — |   | — |   | — |   | 26,243,044 |   | 5,218,172 |   |
| Provision   for impairment of construction in progress (1)  |       | —                            |       | —        |       | — |   | — |   | — |   | (17,594,694 | ) | (18,442,119 | ) |
| **Total 2012**                                                   |       | 427,134,293                       |       | 213,705,022   | (2)        | 841,713 | (3) | (5,257,199 | ) | 636,423,829 |   | 756,648,911 |   |   |   |
| **Total 2011 (Unaudited)**                                       |       | 276,094,295                       |       | 152,858,685   | (2)        | — |   | (1,818,687 | ) | 427,134,293 |   |   |   | 622,133,343 |   |

 

----

(1) As detailed in Exhibit III.

(2) 11,462,815 y 6,904,514 relate to the depreciation of property, plant and equipment capitalized in other property, plant and equipment in the year ended December 31, 2012 and 2011, respectively

(3) Transfers from intangible assets

 

23

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**Exhibit II**

 

**MINERA SANTA CRUZ SA**

**CHANGES IN INTANGIBLE ASSETS**

**FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011**

(Stated in Argentine pesos — Note 2II)

 
| ** **                    | ** ** | **2012**                       | ** ** | ** **   | ** ** | ** **    | ** ** |
|-------------------------------|------------|--------------------------------|------------|--------------|------------|---------------|------------|
| ** **                    | ** ** | **Original cost**         | ** ** | ** **   | ** ** | ** **    | ** ** |
| ** **                    | ** ** | **At the beginning** | ** ** | ** **   | ** ** | ** **    | ** ** | **At end** | ** ** | ** ** | ** ** | ** ** | ** ** |
| **Description**               | ** ** | **of the year**      | ** ** | **Increase** | ** ** | **Transfers** | ** ** | **of the year** | ** ** | ** ** | ** ** | ** ** | ** ** |
|                          |       |                           |       |         |       |          |       |   |   |   |   |   |   |
| Rights of use - Power line    |       | 74,065,907                     |       | —       |       | —        |       | 74,065,907 |   |   |   |   |   |
| Software                      |       | 2,200,311                      |       | 21,812       |       | 327,202       |       | 2,549,325 |   |   |   |   |   |
| Exploration expenses          |       | 60,008,458                     |       | 36,571,417   |       | (34,747,346   | )          | 61,832,529 |   |   |   |   |   |
| Preoperating costs            |       | 104,195,120                    |       | —       |       | —        |       | 104,195,120 |   |   |   |   |   |
| **Total 2012**                |       | 240,469,796                    |       | 36,593,229   |       | (34,420,144   | )          | 242,642,881 |   |   |   |   |   |
| **Total 2011****(Unaudited)** |       | 215,450,416                    |       | 25,019,380   |       | —        |       | 240,469,796 |   |   |   |   |   |

 
| ** **                    | ** ** | **2012**                          | ** ** | ** **   | ** ** |
|-------------------------------|------------|-----------------------------------|------------|--------------|------------|
| ** **                    | ** ** | **Accumulated amortization** | ** ** | **2011**     | ** ** |
| ** **                    | ** ** | **At the beginning**    | ** ** | ** **   | ** ** | ** ** | ** ** | **At end** | ** ** | **Net book** | ** ** | **Net book** | ** ** |
| **Description**               | ** ** | **of the year**         | ** ** | **Increase** | ** ** | **Transfers** | ** ** | **of the year** | ** ** | **value** | ** ** | **value** | ** ** |
|                          |       |                              |       |         |       |   |   |   |   |   |   | **(Unaudited)** |   |
| Rights of use - Power line    |       | 19,626,814                        |       | 4,800,984    |       | — |   | 24,427,798 |   | 49,638,109 |   | 54,439,093 |   |
| Software                      |       | 1,273,317                         |       | 325,181      |       | — |   | 1,598,498 |   | 950,827 |   | 926,994 |   |
| Exploration expenses          |       | 841,713                           |       | —       |       | (841,713 | ) | — |   | 61,832,529 |   | 59,166,745 |   |
| Preoperating costs            |       | 36,651,515                        |       | 5,956,670    |       | — |   | 42,608,185 |   | 61,586,935 |   | 67,543,605 |   |
| **Total 2012**                |       | 58,393,359                        |       | 11,082,835   |       | (841,713 | ) | 68,634,481 |   | 174,008,400 |   |   |   |
| **Total 2011****(Unaudited)** |       | 47,030,910                        |       | 11,362,449   |       | — |   | 58,393,359 |   |   |   | 182,076,437 |   |

 

24

----

 

**Exhibit III**

 

**MINERA SANTA CRUZ SA**

**CHANGES IN ALLOWANCES, PROVISIONS AND RESERVES**

**FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011**

(Stated in Argentine pesos — Note 2II)

 
| ** **                                                    | ** ** | **Beginning** | ** ** | ** **   | ** ** | ** **   | ** ** | ** **   | ** ** | **Ending**  | ** ** |
|---------------------------------------------------------------|------------|---------------|------------|--------------|------------|--------------|------------|--------------|------------|-------------|------------|
| **Account**                                                   | ** ** | **Balance**   | ** ** | **Increase** | ** ** | **Decrease** | ** ** | **Recovery** | ** ** | **Balance** | ** ** |
|                                                          |       |          |       |         |       |         |       |         |       |        |       |
| **Deducted from assets:**                                     |       |          |       |         |       |         |       |         |       |        |       |
|                                                          |       |          |       |         |       |         |       |         |       |        |       |
| **CURRENT ASSETS**                                            |       |          |       |         |       |         |       |         |       |        |       |
|                                                          |       |          |       |         |       |         |       |         |       |        |       |
| Provision for obsolescence of materials                       |       | 3,736,797     |       | 11,768,346   | (1)        | (1,776,770   | )(3)       | —       |       | 13,728,373  |       |
|                                                          |       |          |       |         |       |         |       |         |       |        |       |
| **NON-CURRENT ASSETS**                                        |       |          |       |         |       |         |       |         |       |        |       |
|                                                          |       |          |       |         |       |         |       |         |       |        |       |
| Allowance for doubtful tax receivables                        |       | 3,755,777     |       | —       |       | —       |       | —       |       | 3,755,777   |       |
| Provision for impairment of   construction-in-progress assets |       | 18,442,119    |       | —       |       | —       |       | (847,425     | )(1)       | 17,594,694  |       |
| **Total decluded from assets, 2012**                          |       | 25,934,693    |       | 11,768,346   |       | (1,776,770   | )          | (847,425     | )          | 35,078,844  |       |
| **Total decluded from assets, 2011 (Unaudited)**              |       | 26,413,383    |       | 3,293,715    |       | (9,476       | )          | (3,762,929   | )          | 25,934,693  |       |
|                                                          |       |          |       |         |       |         |       |         |       |        |       |
| **INCLUDED IN LIABILITIES**                                   |       |          |       |         |       |         |       |         |       |        |       |
| Reserve for lawsuits and contingencies                        |       | 4,052,153     |       | 3,943,650    | (2)        | (3,061       | )(3)       | (1,437       | )(2)       | 7,991,305   |       |
| **Total included in liabilities,   2012**                     |       | 4,052,153     |       | 3,943,650    |       | (3,061       | )          | (1,437       | )          | 7,991,305   |       |
| **Total included in liabilities,   2011 (Unaudited)**         |       | 2,241,753     |       | 3,528,290    |       | (1,192,257   | )          | (525,633     | )          | 4,052,153   |       |

 

----

(1) Included in “Financial income (expense) and holding gains (losses), net” in the statement of income.

(2) Includes 1,125,871 allocated to “Financial income (expense) and holding gains (losses), net” and 2,816,342 to “Other income (expenses), net” in the statement of income.

(3) Decrease due to use of provision in the year.

 

25

----

 

**Exhibit IV**

 

**MINERA SANTA CRUZ SA**

**FOREIGN CURRENCY ASSETS AND LIABILITIES**

**AS AT DECEMBER 31, 2012 AND 2011**

(Stated in Argentine pesos — Note 2II)

 
| ** **                                                                                    | ** ** | **2012**                  | ** ** | **2011**                     | ** ** |
|-----------------------------------------------------------------------------------------------|------------|---------------------------|------------|------------------------------|------------|
| ** **                                                                                    | ** ** | ** **                | ** ** | ** **                   | ** ** | **Exchange rate** | ** ** | **Amount in** | ** ** | **Amount in** | ** ** |
| ** **                                                                                    | ** ** | **Foreign currency** | ** ** | **in Argentine**        | ** ** | **Argentine** | ** ** | **Argentine** | ** ** |
| **Item**                                                                                      | ** ** | **and amount**       | ** ** | **pesos used (1)** | ** ** | **pesos** | ** ** | **pesos** | ** ** |
| ** **                                                                                    | ** ** | ** **                | ** ** | ** **                   | ** ** | ** ** | ** ** | ** ** | ** ** | **(Unaudited)** | ** ** |
| **CURRENT ASSETS**                                                                            |       |                      |       |                         |       |   |   |   |   |   |   |
|                                                                                          |       |                      |       |                         |       |   |   |   |   |   |   |
| Cash                                                                                          |       |                      |       |                         |       |   |   |   |   |   |   |
| Cash on hand                                                                                  |       | USD                       |       | 1,207                        |       | 4.878 |   | 5,886 |   | — |   |
| Cash in bank                                                                                  |       | USD                       |       | 7,427,778                    |       | 4.878 |   | 36,232,700 |   | 52,700,151 |   |
| Investments                                                                                   |       |                      |       |                         |       |   |   |   |   |   |   |
| Term deposits                                                                                 |       | USD                       |       | 6,027,780                    |       | 4.878 |   | 29,403,510 |   | 138,052,356 |   |
| Trade receivables                                                                             |       | USD                       |       | 38,677,727                   |       | 4.878 |   | 188,669,951 |   | 120,756,570 |   |
| Other receivables                                                                             |       |                      |       |                         |       |   |   |   |   |   |   |
| Advances to suppliers                                                                         |       | USD                       |       | 29,858                       |       | 4.878 |   | 145,647 |   | 2,132,270 |   |
|                                                                                          |       | -                         |       | —                       |       | — |   | — |   | 37,103 |   |
| Security deposits                                                                             |       | USD                       |       | 10,578                       |       | 4.878 |   | 51,599 |   | 148,948 |   |
| Prepaid insurance                                                                             |       | -                         |       | —                       |       | — |   | — |   | 6,167,145 |   |
| Companies in accordance with Article 33 of   Law No 19,550 and other related regulations |       | USD                       |       | 230                          |       | 4.878 |   | 1,123 |   | 83,770 |   |
| Customs benefits                                                                              |       | USD                       |       | 2,578,368                    |       | 4.878 |   | 12,577,281 |   | 5,095,540 |   |
| Advance of royalties                                                                          |       | USD                       |       | 3,082,284                    |       | 4.878 |   | 15,035,382 |   | — |   |
| Other                                                                                         |       | -                         |       | —                       |       | — |   | — |   | 757,727 |   |
| Property, plant and equipment                                                                 |       |                      |       |                         |       |   |   |   |   |   |   |
| Advances to suppliers                                                                         |       | -                         |       | —                       |       | — |   | — |   | 1,484,490 |   |
|                                                                                          |       |                      |       |                         |       |   |   |   |   |   |   |
| **NON-CURRENT ASSETS**                                                                        |       |                      |       |                         |       |   |   |   |   |   |   |
| Other receivables                                                                             |       |                      |       |                         |       |   |   |   |   |   |   |
| Customs benefits                                                                              |       | USD                       |       | 5,900,745                    |       | 4.878 |   | 28,783,832 |   | 24,017,786 |   |
| **Total assets**                                                                              |       |                      |       |                         |       |   |   | 310,906,911 |   | 351,433,856 |   |
|                                                                                          |       |                      |       |                         |       |   |   |   |   |   |   |
| **CURRENT LIABILITIES**                                                                       |       |                      |       |                         |       |   |   |   |   |   |   |
| Accounts payable                                                                              |       |                      |       |                         |       |   |   |   |   |   |   |
| Trades payable                                                                                |       | USD                       |       | 3,360,831                    |       | 4.918 |   | 16,528,566 |   | 13,910,253 |   |
|                                                                                          |       | EUR                       |       | 83,642                       |       | 6.504 |   | 544,009 |   | 40,114 |   |
|                                                                                          |       | -                         |       | —                       |       | — |   | — |   | 756 |   |
|                                                                                          |       | CAD                       |       | 3,028                        |       | 4.927 |   | 14,919 |   | 25,689 |   |
|                                                                                          |       | AUD                       |       | 1,224                        |       | 5.094 |   | 6,237 |   |   |   |
| Accrued liabilities                                                                           |       | USD                       |       | 3,881,605                    |       | 4.918 |   | 19,089,733 |   | 33,328,589 |   |
|                                                                                          |       | AUD                       |       | 2,243                        |       | 5.094 |   | 11,425 |   | 9,833 |   |
|                                                                                          |       | EUR                       |       | 30,579                       |       | 6.504 |   | 198,886 |   | 231,147 |   |
|                                                                                          |       | CAD                       |       | 10,202                       |       | 4.927 |   | 50,266 |   | 338,008 |   |
|                                                                                          |       | -                         |       | —                       |       | — |   | — |   | 6,856 |   |
| Companies in accordance with Article 33 of   Law No 19,550 and other related regulations |       | USD                       |       | 1,271,817                    |       | 4.918 |   | 6,254,796 |   | 6,182,271 |   |
| Loans                                                                                         |       | -                         |       | —                       |       | — |   | — |   | 166,528,894 |   |
|                                                                                          |       |                      |       |                         |       |   |   |   |   |   |   |
| **NON-CURRENT LIABILITIES**                                                                   |       |                      |       |                         |       |   |   |   |   |   |   |
| Other liabilities                                                                             |       |                      |       |                         |       |   |   |   |   |   |   |
| Provision for mine abandonment and closure                                                    |       | USD                       |       | 15,430,133                   |       | 4.918 |   | 75,885,392 |   | 46,700,778 |   |
| **Total liabilties**                                                                          |       |                      |       |                         |       |   |   | 118,584,229 |   | 267,303,188 |   |

 

----

USD = United States dollar

AUD = Australian dollar

EUR = Euros

CAD = Canadian dollar

 

(1) Exchange rates as at December 31, 2012

 

26

----

 

**Exhibit V**

 

**MINERA SANTA CRUZ SA**

**BREAKDOWN OF INVESTMENTS, RECEIVABLES AND PAYABLES**

**AS AT DECEMBER 31, 2012**

(Stated in Argentine pesos — Note 2II)

 
| ** **                          | ** ** | **Assets**      | ** ** | **Liabilities** | ** ** |
|-------------------------------------|------------|-----------------|------------|-----------------|------------|
| ** **                          | ** ** | ** **      | ** ** | **Accounts**    | ** ** | **Other** | ** ** | **Accounts** | ** ** | **Payroll and social** | ** ** | **Taxes** | ** ** | **Dividends** | ** ** | **Other** | ** ** |
| ** **                          | ** ** | **Investments** | ** ** | **receivables** | ** ** | **receivables** | ** ** | **payable** | ** ** | **security taxes** | ** ** | **payable** | ** ** | **payable** | ** ** | **liabilities** | ** ** |
| **Term**                            | ** ** | **(3)**         | ** ** | **(2)**         | ** ** | **(2)** | ** ** | **(2)** | ** ** | **(2)** | ** ** | **(2)** | ** ** | **(2)** | ** ** | **(1)** | ** ** |
|                                |       |            |       |            |       |   |   |   |   |   |   |   |   |   |   |   |   |
| **With no maturity**                |       | —          |       | —          |       | — |   | — |   | — |   | — |   | — |   | 7,991,305 |   |
|                                |       |            |       |            |       |   |   |   |   |   |   |   |   |   |   |   |   |
| **With maturity**                   |       |            |       |            |       |   |   |   |   |   |   |   |   |   |   |   |   |
|                                |       |            |       |            |       |   |   |   |   |   |   |   |   |   |   |   |   |
| **To mature:**                      |       |            |       |            |       |   |   |   |   |   |   |   |   |   |   |   |   |
|                                |       |            |       |            |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Up   to three months                |       | 30,403,665      |       | 166,186,635     |       | 63,506,269 |   | 85,193,523 |   | 65,595,659 |   | 9,718,465 |   | — |   | — |   |
| From   three months to six months   |       | —          |       | 22,483,316      |       | 37,277,319 |   | — |   | — |   | 124,186,052 |   | 21,863,941 |   | — |   |
| From   six months to nine months    |       | —          |       | —          |       | 16,475,357 |   | — |   | — |   | — |   | — |   | — |   |
| From   nine months to twelve months |       | —          |       | —          |       | 28,921,640 |   | — |   | — |   | — |   | — |   |   |   |
| Over   one year                     |       | —          |       | —          |       | 31,601,527 |   | — |   | 4,057,999 |   | — |   | — |   | 75,885,392 |   |
| **Total to maturity**               |       | 30,403,665      |       | 188,669,951     |       | 177,782,122 |   | 85,193,523 |   | 69,653,658 |   | 133,904,517 |   | 21,863,941 |   | 75,885,392 |   |
| **Total with maturity**             |       | 30,403,665      |       | 188,669,951     |       | 177,782,122 |   | 85,193,523 |   | 69,653,658 |   | 133,904,517 |   | 21,863,941 |   | 75,885,392 |   |
| **Total**                           |       | 30,403,665      |       | 188,669,951     |       | 177,782,122 |   | 85,193,523 |   | 69,653,658 |   | 133,904,517 |   | 21,863,941 |   | 83,876,697 |   |

 

----

(1) Excludes deferred tax liability.

(2) Does not include accrued interest. Net of provisions.

(3) Accruing interest at an annual rate of 0.03%.

 

27

----

 

**Exhibit VI**

 

**MINERA SANTA CRUZ SA**

**INFORMATION REQUIRED IN ACCORDANCE WITH ARTOCLE 64, SECTION B) OF LAW No. 19550**

**FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010**

(Stated in Argentine pesos — Note 2II)

 
|                                        |       | **2012**           |       | **2011**     | ** ** | **2010**        |       |
|---------------------------------------------|------------|--------------------|------------|--------------|------------|-----------------|------------|
| ** **                                  | ** ** | **Administrative** | ** ** | **Selling**  | ** ** | **Exploration** | ** ** | **Costs of** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| **Item**                                    | ** ** | **expenses**       | ** ** | **expenses** | ** ** | **expenses**    | ** ** | **production** | ** ** | **Total** | ** ** | **Total** | ** ** | **Total** | ** ** |
| ** **                                  | ** ** | ** **         | ** ** | ** **   | ** ** | ** **      | ** ** | ** ** | ** ** | ** ** | ** ** | **(Unaudited)** | ** ** | **(Unaudited)** | ** ** |
| Exploration   rights                        |       | —             |       | 106,500,746  |       | —          |       | — |   | 106,500,746 |   | 101,914,445 |   | 58,543,024 |   |
| Rents   and deposits                        |       | 1,987,222          |       | 55,601       |       | 40,000          |       | 3,587,764 |   | 5,670,587 |   | 4,463,847 |   | 3,888,337 |   |
| Amortization   and depreciation             |       | 392,604            |       | 378          |       | 1,398           |       | 212,930,662 |   | 213,325,042 |   | 157,316,620 |   | 136,089,610 |   |
| Geochemical   analyses and tests            |       | —             |       | 3,130,731    |       | 1,003,440       |       | 3,858,353 |   | 7,992,524 |   | 3,251,910 |   | 3,185,394 |   |
| Fuel,   lubricants and explosives           |       | 16,006             |       | —       |       | 2,474           |       | 14,738,682 |   | 14,757,162 |   | 12,697,507 |   | 10,516,576 |   |
| Commissions                                 |       | —             |       | 4,432,125    |       | —          |       | 270,674 |   | 4,702,799 |   | 4,699,797 |   | 1,440,890 |   |
| Post   and telephone                        |       | 828,362            |       | 29,677       |       | —          |       | 1,141,467 |   | 1,999,506 |   | 2,739,133 |   | 1,664,670 |   |
| Mining   rights and registrations           |       | 391,602            |       | —       |       | —          |       | 1,277,645 |   | 1,669,247 |   | 1,742,448 |   | 1,592,043 |   |
| Donations                                   |       | 1,351,528          |       | —       |       | —          |       | — |   | 1,351,528 |   | 5,789,850 |   | 1,873,330 |   |
| Shipping   expenses                         |       | —             |       | 14,672,198   |       | —          |       | — |   | 14,672,198 |   | 7,235,668 |   | 7,475,229 |   |
| Energy   purchased                          |       | 77,143             |       | —       |       | —          |       | 8,260,414 |   | 8,337,557 |   | 4,715,685 |   | 4,576,914 |   |
| Haulage   and transport                     |       | 16,023             |       | 19,126,155   |       | —          |       | 5,002,517 |   | 24,144,695 |   | 18,472,735 |   | 16,766,227 |   |
| Bank   fees                                 |       | —             |       | —       |       | —          |       | — |   | — |   | — |   | 666,003 |   |
| Fees   and compensation for services        |       | 10,105,750         |       | 1,855,610    |       | 25,004,567      |       | 52,650,670 |   | 89,616,597 |   | 52,486,265 |   | 45,268,224 |   |
| Taxes,   charges and contributions          |       | 10,624,695         |       | —       |       | —          |       | 4,601,028 |   | 15,225,723 |   | 8,609,644 |   | 7,437,157 |   |
| Travel,   meal and entertainment expenses   |       | 4,432,076          |       | 5,760        |       | 132,877         |       | 30,360,721 |   | 34,931,434 |   | 26,516,206 |   | 22,552,545 |   |
| Royalties                                   |       | —             |       | —       |       | —          |       | 29,723,689 |   | 29,723,689 |   | 24,963,770 |   | 15,258,423 |   |
| Repairs   and maintenance                   |       | 315,023            |       | 1,801        |       | 2,213           |       | 10,878,815 |   | 11,197,852 |   | 12,746,116 |   | 19,534,125 |   |
| Security   and surveillance                 |       | 4,508              |       | —       |       | —          |       | 7,808,698 |   | 7,813,206 |   | 5,289,640 |   | 4,491,041 |   |
| Insurance                                   |       | 115,924            |       | 854,182      |       | —          |       | 7,006,652 |   | 7,976,758 |   | 6,807,834 |   | 5,826,493 |   |
| Salaries   and social security taxes        |       | 18,591,846         |       | —       |       | 3,277,383       |       | 219,330,693 |   | 241,199,922 |   | 154,327,011 |   | 109,928,970 |   |
| Inputs,   consumable materials and supplies |       | 216,119            |       | 2,250,673    |       | 349,032         |       | 84,397,208 |   | 87,213,032 |   | 78,955,384 |   | 62,363,766 |   |
| Ore   treatment                             |       | —             |       | —       |       | —          |       | 72,613 |   | 72,613 |   | 4,925,289 |   | 3,823,836 |   |
| Other   employee benefits                   |       | 49,174             |       | —       |       | —          |       | 239,936 |   | 289,110 |   | 318,305 |   | 20,330 |   |
| Miscellaneous                               |       | 523,754            |       | —       |       | 65,473          |       | 565,290 |   | 1,154,517 |   | 1,401,158 |   | 697,904 |   |
| **Total 2012**                              |       | 50,039,359         |       | 152,915,637  |       | 29,878,857      |       | 698,704,191 |   | 931,538,044 |   |   |   | *** *** |   |
| **Total 2011 (Unaudited)**                  |       | 46,202,785         |       | 131,204,650  |       | 7,931,335       |       | 517,047,497 |   |   |   | 702,386,267 |   |   |   |
| **Total 2010 (Unaudited)**                  |       | 36,884,881         |       | 81,474,786   |       | 9,216,801       |       | 417,904,593 |   |   |   |   |   | 545,481,061 |   |

 

28

----

 

**Exhibit VII**

 

**MINERA SANTA CRUZ SA**

**COSTS OF SALES**

**FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010**

**(Stated in Argentine pesos — Note 2II)**

 
| ** **                               | ** ** | **2012**    | ** ** | **2011**        | ** ** | **2010**        | ** ** |
|------------------------------------------|------------|-------------|------------|-----------------|------------|-----------------|------------|
| ** **                               | ** ** | ** **  | ** ** | **(Unaudited)** | ** ** | **(Unaudited)** | ** ** |
| Inventories at the beginning of the year |       | 22,256,663  |       | 22,402,339      |       | 14,677,927      |       |
|                                     |       |        |       |            |       |            |       |
| Costs of production (Anexo VI)           |       | 698,704,191 |       | 517,047,497     |       | 417,904,593     |       |
|                                     |       |        |       |            |       |            |       |
| Less: inventories at the end of the year |       | (65,275,344 | )          | (22,256,663     | )          | (22,402,339     | )          |
|                                     |       |        |       |            |       |            |       |
| Cost of sales for the year               |       | 655,685,510 |       | 517,193,173     |       | 410,180,181     |       |

 

29

----