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MANAGEMENT’S DISCUSSION AND ANALYSIS
DRIVING GROWTH FROM WITHIN
Brownfields Exploration
At the San Jose Mine, the exploration budget for 2015 is $3.5 million, which includes 12,000 meters of drilling. The
program at the mine’s 64,400 hectare concession package is focusing on three main initiatives:
• Continue exploring through underground drilling an additional 300 meters of the northern extent of the Trinidad
North zone outside the shell of existing inferred resources, drill testing on approximate 100 meter centers,
• Subject to community agreements, drill test from surface the northern strike projection of the vein system
beyond Trinidad North, and,
• Evaluation and target generation work on multiple prospects within the property package: Veta Maria, La Noria,
San Jose West, San Dionisio Ocotlan, Los Ocotes and El Portillo.
At the Caylloma Mine, the Company has allocated a modest exploration budget of $0.7 million for 2015. Over the years
the Company has built a sufficient resource and reserve base which permits a reduction in exploration drilling for a year
without compromising short or medium term production plans. The main exploration initiative for 2015 is the evaluation
of our concessions located approximately 25 kilometers to the south of the Caylloma District, where Compañia de Minas
Buenaventura is developing the high-grade Tambomayo silver and gold project.
Results of Operations
Consolidated Metal Production
QUARTERLY RESULTS
Three months ended December 31,
2014
2013
Consolidated Metal Production
Caylloma
San Jose
Consolidated
Caylloma
San Jose
Consolidated
Silver (oz)
544,977
1,083,215
1,628,191
542,457
917,668
1,460,125
Gold (oz)
335
8,561
8,896
632
6,420
7,052
Lead (000’s lbs)
4,084
–
4,084
3,770
–
3,770
Zinc (000’s lbs)
6,986
–
6,986
6,676
–
6,676
Production cash cost (US$/oz Ag)*
7.70
4.13
5.32
8.29
5.55
6.56
All-in sustaining cash cost (US$/oz Ag)* 14.64
9.42
12.51
18.55
10.78
15.49
* Net of by-product credits from gold, lead, and zinc
YEAR TO DATE RESULTS
Years ended December 31,
2014
2013
Consolidated Metal Production
Caylloma
San Jose
Consolidated
Caylloma
San Jose
Consolidated
Silver (oz)
2,202,540 4,396,760
6,599,300
2,104,061
2,527,203
4,631,264
Gold (oz)
1,820
33,496
35,316
2,212
19,031
21,242
Lead (000’s lbs)
16,152
–
16,152
17,780
–
17,780
Zinc (000’s lbs)
27,361
–
27,361
25,211
–
25,211
Production cash cost (US$/oz Ag)*
7.02
3.52
4.69
7.65
6.53
7.03
All-in sustaining cash cost (US$/oz Ag)* 14.13
12.07
14.48
20.83
15.89
20.45
* Net of by-product credits from gold, lead, and zinc
The 2014 consolidated production highlights are as follows:
Silver and gold production were 10% and 9% respectively above 2014 production guidance
Silver production of 6,599,300 ounces; 42% increase over 2013
Gold production of 35,316 ounces; 66% increase over 2013
Zinc production of 27,360,530 pounds; 9% increase over 2013
Lead production of 16,152,285 pounds; 9% decrease from 2013
Compared with the prior year, silver and gold production increased 42% and 66%, respectively, explained largely by the
commissioning of the San Jose plant expansion to 1,800 tpd in September 2013 and to 2,000 tpd in April 2014.
Consolidated Cash Cost per Payable Ounce of Silver
All-in sustaining cash cost per ounce of payable silver for 2014, net of by-product credits, decreased to $14.48 (2013:
$20.45) per ounce as a result of higher payable ounces of silver operations (refer to non-GAAP financial measures). All-
in sustaining cash cost per ounce of payable silver for 2014 was below the annual guidance.
