Financial Statement 2012 by Mineros S.A.

Financial Report 2012 Fotos tomadas por: John Jairo Betancur Salinas, Departamento de Mantenimiento El茅ctrico y Electr贸nico de MINEROS S.A.

Financial Report

2012

Management Report

Management Report 2012 - MINEROS S.A.

SHAREHOLDERS’ MEETING MARCH 20 OF 2013

Messrs. Shareholders:

FINANCIAL REPORT

We are pleased to present to your consideration the results and activities of fiscal year 2012. The results we are presenting today are the consequence of a series of good internal and external factors that generated important returns for our shareholders: a 3% gold price increase, 2% production step-up, and good production costs performance. The largest contribution to these results came from the subterranean operation, with the discovery of an enriched area, and the processing of material extracted along unproductive operation periods, which had an impact on average extraction cost.

I - EXTERNAL ISSUES Along 2012, the price of gold saw its twelfth consecutive year on the rise: price for this commodity advanced 7.14% between closing of 2011 (1,563.70 USD/troy oz.) and closing of 2012 (1,675.35 USD/troy oz.). The minimum along the year was 1,539.57 USD/troy oz., while the

GOLD PRICE

(Dollars per Ounce)

2012

FINANCIAL REPORT 2012 - MINEROS S.A.

maximum stood at 1,790.40 USD/troy oz. The market’s high volatility stemmed from not only the sovereign debt problems of the Eurozone countries, looming as a destabilizing threat on the single currency, but also the USA’s still high unemployment rate that forced continuation of a lax monetary policy from that country’s monetary authorities. From the standpoint of supply, world mining production for 2013 is expected to be slightly lower than that for 2012. As to gold demand for jewelry, a decrease is expected with respect to 2012, driven by the metal’s high prices; no meaningful changes arose in the technological utilization of gold; with respect to investment, nearly 10.27% increase was observed in ETF’s holdings, whereas a drop in demand for ingots and coins is estimated, a trend opposing that of 2011. The official sector (central banks) significantly increased its purchases as has been the case since early 2010. Increased supply is expected for 2013, as a result of production start-up of new mining projects; also expected is increased gold demand as an investment asset and from the official sector, due mainly to the downturn the world’s main powers continue to face. The current milieu makes 2013 another prospective positive year for gold prices; the Eurozone and the United States will both keep lax monetary policies in order to balance their economies, which will keep gold in high demand, as an investment asset.

Management Report

Production in ounces and volume m3 alluvial operation

Ounces

Volume m3

(thousands)

YEAR VOLUME

II - INTERNAL ISSUES 1-OUTPUT The company produced 3,683 kilograms of fine gold in 2012, equivalent to 118,401 ounces and 2.3% up on 2011; this year’s figure includes 24,295 ounces from the subterranean operation. Additionally, the company produced 2,747 kilograms of silver. Total volume of alluvial deposits removed was 26,332,743 cubic meters, with 93,966 tons ground at La Ye Mine. Production estimates for 2013 take into account that reconstruction of Bucket Dredge No. 5 will start at year’s end, keeping it out of production for 8 months. Importation of two new Suction Dredges, a $28,000-million investment in the first quarter, will partly offset this impact on total production. 2- INVESTMENTS Along the year, the company invested $68,884 million in new technology projects. The most outstanding were: • Suction dredges: IHC Company from Holland is constructing two additional dredges that are more powerful and have higher depth dredge capacity; acceptance tests will be conducted at the constructor’s plant by late January and early February of 2013; dredges are expected to arrive in Colombia between April and May. Management Report

PRODUCTION - OUNCES

• Hydroelectric Plant: With respect to construction and generating capacity increase, Providencia I Unit (1.8 MW) was received at port to undergo operation tests by the end of February. As to Providencia III (9.9 MW), tunnel construction (1.2 km advance by January 2013) and diversion works are currently underway with operation tests planned for the second half of the year.

III- OTHER ASPECTS TO HIGHLIGHT 1- MINING SECTOR As mentioned in our previous report to the shareholders, circumstances external to the mining projects make their normal development ever harder. The radical position of many entities against the mining industry, and the lack of balanced information about its pros and cons, make it necessary to invest a great amount of resources in activities that add no value to the projects, but without which it is impossible to develop them. On the other hand, executive and legislative bodies have proposed, and in many cases passed, measures that make our activity ever more taxing, while narrowing the financial margin of possible projects, in such a way that only large mineral deposits are economically viable and justify the large investments in environmental recovery and relations with the community that are indispensable nor only to

2012 - MINEROS S.A.

comply with regulation, but also to achieve support from the community and control entities. Another factor contributing to the sluggish advance of mining projects is the slow issuing of licenses and permits, from both the mining authority, that has not received new requests in almost two years, and the environmental authorities, whose time-consuming decision-making processes take years, so compromising not only the mining sector development, but also that of construction and infrastructure. Illegal mining keeps on wreaking havoc on the environment and notoriously affecting the image of companies that, like us, have made big efforts to show the viability of responsible and sustainable mining.

FINANCIAL REPORT

2- PUBLIC ORDER In the previous year, the company was also the target of several attacks on its electric infrastructure, resulting in halted production, repairs and higher energy purchases from the national electric system, amounting to $3,682 million. However, we thank the support from the National Military Forces that has allowed us to forward our endeavors in such difficult regions. 3- LABOR RELATIONS Along the year, we enjoyed the best relations with our work force and their union representatives. The results of a labor climate study show that our efforts in this field have had important effects, and that we, the group of people making up MINEROS S.A., work toward common objectives, and are totally intent on being better each day. So as to strengthen our team’s quality, we have embarked in a modernization process of our whole Human Resources management, which we will implement at the rate allowed by resources availability. Along the current year, we will negotiate new collective bargaining agreements for the staff of Mineros S.A. engaged in alluvial operation, as well as of OPERADORA MINERA S.A.S., dedicated to the subterranean operation. We expect these talks will come to a successful end, granting agreements that will redound to improved conditions of our associates, while standing as guarantee that the company can obtain satisfactory results, even in the case of eventual and substantial decrease of precious metal prices. 4- ENVIRONMENT In the development of our responsible and sustainable mining policy, the company invested along the year $5,100 million in prevention, mitigation, and environmental recovery programs.

FINANCIAL REPORT 2012 - MINEROS S.A.

Outstanding among these expenditures are: • Productive farms $276 million • Reforestation $561 million • Wetland recovery $316 million • Waste management $421 million • Hydroelectric plants $536 million • Fauna management $111 million • Legal management $585 million • Personnel expenditures $906 million Investment budget for this area for 2013 amounts to $6,327 million. These items do not include those that although recorded as production cost contribute importantly to good environmental management. 5- CROPS As part of our environmental compensation program, we have continued our planting activities of rubber trees and other varieties. Progress so far is: • 98 hectares to enter production shortly • 300 hectares planted the previous year • 800 hectares in preparation stage: all these properties are located at Zaragoza, along the road linking it to Caucasia. Additionally, 1,020 hectares were purchased in the Municipality of Nechí, where native regional species and rubber will be planted. Total investment in these environmental projects along 2012 was $1,718 million, with $4,096 million budgeted for the current year. 6- SOCIAL RESPONSIBILITY In keeping our commitment to corporate social responsibility in the company’s area of influence, and seeking the inhabitants’ well-being and the enhancement of the towns’ self-management abilities, we have developed a wide program spanning several fronts. The efforts of our team of experts in these areas are already bearing fruit, especially as regards to housing, health, education, and community management. During the year, the company invested directly $2,139 million. Additional $557 million were invested through Fundación MINEROS for a total of $2,696 million in CSR. The Sustainability Report we are delivering today regarding our accomplishment for 2012 shows important performance in this field that makes up part of the value added for our shareholders.

IV- ASSOCIATED COMPANIES A- EXPLORADORA MINERA S.A.S.

Along 2012, it advanced exploration activities starting from initial stages like regional prospecting to advanced stages like local exploration with progress in tunnels. Activities were carried out in six projects including 15 exploration targets located in Antioquia, Caldas, Tolima and Bolivar Provinces. Exploration was conducted in several stages: the regional stage, aimed at identification of the best regions with geological / mining potential, achieving a volume of inferred resources of 3,552,983 tons, representing 12% more than the volume established for 2011. The advanced exploration stage achieved a volume of measured and indicated resources amounting to 295,000 gold ounces, a figure significantly higher than the 71,924 gold ounces reported by late 2011. The main exploration activities included drilling of 15,487 m in regional prospecting, and 27,500 m in advanced stages, outdoing the previous year’s results by 13%; also, 2,200 m of exploration tunnels were constructed, compared to 1,781 m for 2011, and 12,888 samples were taken for lab analysis, or 75% more than the previous year. The corporation posted income for $261 million, and finished the year with 272 workers in its payroll. Due Diligence was conducted in joined efforts with GOLDSANDS DEVELOPMENT COMPANY in the Río Marañón Valley (Perú) where the results obtained determined that exploitable channels exist in the region, albeit for small-scale exploitation, different from the characteristics required by MINEROS S.A. Therefore, the decision was made to terminate the contract with this company.

Management Report

During 2012, QUIA RESOURCES conducted exploration programs in the south of Bolivar Province; some targets of interest were spotted out, although no resource estimate was reported. The investment made in this company comes up to USD 2,225,699, for 12.62% participation.

B- OPERADORA MINERA S.A.S.

This is the company operating the La Ye Mine in the Municipality of Zaragoza. At year’s end, it had 611 people hired, generating $31 million net income. Merger of Proyecto Sabaletas S.A.S. was made through this corporation with OPERADORA MINERA S.A.S. acting as the absorbing company. The assets became part of this latter. The closing process of the mine was commenced involving all the activities mandated by law aiming at mitigation of the project’s environmental and social impact.

C- COMPAÑÍA MINERA DE ATACO S.A.S.

The environmental impact study was submitted to Corporación Autónoma Regional de Tolima (CORTOLIMA), the entity in charge of granting the environmental license. As of the date of this report, no decision has been made in this regard. With moderate optimism, we expect approval of the environmental impact study in the first semester of 2013.

D- UNIPALMA DE LOS LLANOS S.A.

MINEROS S.A. owns 17.4% stake at this corporation. In 2012 output was 54,542 tons of fruit and net income stood at $3,030 million.

V- FINANCIAL ANALYSIS Sales, at $357,440 million, were 5% higher than in 2011. Total output went to export reaching a net sum of USD 199.7 million. Average price at USD 1,663.61 per ounce equals 4% increase over 2011. In pesos per gram, 3% increase was due to the Colombian peso revaluation. Along the year, the company paid taxes and royalties worth $12,574 million to the municipalities of El Bagre and Zaragoza, an amount that must be earmarked for social improvement programs. • Operating income totaled $190,910 million: 10% up on 2011. • Net income was $133,732 million, 15% up on the period under comparison. • Financial revenues: At the end of the fiscal year, the company had an investment portfolio worth $178,866 million, of which 11% corresponds to shares quoted in the Stock Exchange, 3% to investments abroad, and the balance, to fixed-income securities in Colombia.

Management Report

7- ACKNOWLEDGMENTS Year 2012 was especially rich for us in recognition of our work in general, and of our social and environmental preservation acts. We received the following recognitions: • Colombian Award for Management Quality – granted by the Ministry of Commerce, Industry and Tourism and the Corporación Calidad • Award for Corporate Transparency – granted by the Governments of Antioquia Province and Medellin City • Award for Best Environmental Practices Program – granted by the Colombian-British Chamber of Commerce • Institutional Award from the School of Mining of Universidad Nacional • Golden Castellano Medal – granted by the City Council of El Bagre Municipality: Corporate Social Responsibility

Revenues

2012 - MINEROS S.A.

Revenues

(in millions of Colombian pesos)

FINANCIAL REPORT

Revenues

Total Cost and Cash Cost

$ / ounce

(pesos per ounce)

Year

Total Cost

Revenues from this activity included $552 million from sale of investments, $1,683 million from dividends, and $11,302 million from yields of fixed-income securities. As of December 31st 2012, appreciation of shares listed on the Stock Exchange reached $2,330 million. • EBITDA: EBITDA amounted to $220,603 million equivalent to 61.7% of sales. • EVA: EVA accumulated for the year stands at $110,071 million, 82.03%. • Equity: Shareholders’ equity increased 22% from

FINANCIAL REPORT 2012 - MINEROS S.A.

Cash Cost

• • • •

$436,568 million to $536,504 million; corresponding book value per share including appreciation is $2,050.17. The stock of MINEROS S.A. depreciated by 11.64% during the year. Indebtedness: Along 2012, the company kept external indebtedness levels at a minimum, using bank loans for routine treasury operations only. Operating margin stood at 53% versus 51% in 2011. Net income margin was 37% compared to 34% in 2011.

A. In the second half of 2012 we started the Information Technology modernization project with an 18-month work timetable, adopting not only updated equipment and software, but also the best work practices, to guarantee better and timely availability of information for decisionmaking and operation control. B. In compliance with the provisions of Circular Letter 10 of 2013 of the Financial Superintendency, the Company is currently in the process of adopting the International Financial Reporting Standards (IFRS) for its Group 1 entities, pursuant to the provisions of Regulatory Decree 2784 of December 28 of 2012. C. A preliminary agreement was reached in December with firm FLSmidth regarding our claim for damages and loss of revenue for their breach of construction and assembly contract for processing plant of La Ye Mine. Final compensation stood at USD$7 million, though it was not included in the figures corresponding to 2012 given that it was legalized after fiscal closing date.

H. At December 31 of 2012, balances in favor from sales taxes, susceptible of reimbursement, amount to $11,053 million and are being claimed from DIAN, given that such entity is applying the criterion of “Sales taxes trapped in inventories” in order to establish the balance susceptible of reimbursement for every bimonthly period. I. Production planning for 2013 indicates 3,817 kilograms of fine gold output. Based on gold price outlook, and provided the Peso holds its exchange rate in a stable manner, the company’s economic results will comply with our shareholders’ expectations. J. The managers and the Board of Directors certify full compliance by the company with all rules regarding intellectual property and copyrights. K. The Corporation’s legal representative certifies that in 2012, the Management verified the correct operation of the systems for disclosure and control of financial information established in the company, in compliance with paragraph of Article 47 of Law 964 of 2005.

D. In 2012, commercial transactions for $3.064 million related to insurance premiums for the different policies covering the company were conducted with Compañía de Seguros Colpatria, with which members of the Board of Directors have economic links.

L. According to review conducted by our legal counsels, the Company faces no legal processes that may jeopardize its economic stability. This report contains, as a part of itself, the provisions of article 446 of the Code of Commerce. The books and reports mandated by Law have been made available to the shareholders since convening date of this Meeting.

E. Insurance policies were hired with Colpatria under optimal market conditions, upon quote from other insurance companies.

The board of directors and the Management want to thank the effort and dedication of our workers and associates to achieve the results we are reporting today.

F. No other operation with companies in which Board of Directors’ members or the company’s managers have direct or indirect economic interest was carried out along the year 2012. G. In order to comply with the mandate of Law 603/2000 amending Article 47 of Law 222 of 1995, we hereby report that Suite Four of Antioquia Province’s Administrative Court, through judgment of August 2 of 2012, annulled the requirements from the Tax and Customs Direction (DIAN) on the company for payment of tax on gold corresponding to the March-December period of 1998, and denied the petition to pay the sums calculated through such requirements ($1,024,773,424, plus default interest). DIAN appealed this decision before the State Council, and decision is pending.

Eduardo Pacheco Cortés José Fernando Llano Escandón Santiago Vásquez Haupt Santiago Perdomo Maldonado Miguel Urrutia Montoya Alberto Mejía Hernández Álvaro Escobar Restrepo

Beatriz E. Uribe R. President February 20, 2013

Management Report

VI- MISCELLANEOUS

. Statutory Auditorâ&#x20AC;&#x2122;s Report

FINANCIAL REPORT

2012 - MINEROS S.A.

Statutory Auditor’s Report

I have audited the balance sheets of MINEROS S.A. at December 31, 2012 and 2011 and the corresponding statements of income, of changes in shareholders’ equity, of changes in financial position, and of cash flows for the years then ended, as well as the summary of the main accounting policies and other explanatory notes. Management is responsible for the preparation and correct presentation of the financial statements in conformity with the accounting principles generally accepted in Colombia. Such responsibility includes: designing, implementing and maintaining an internal control system adequate for the preparation and presentation of the financial statements, free from significant errors due to fraud or error, selecting and applying appropriate accounting policies, and establishing the accounting estimates that are reasonable under the circumstances. My responsibility is to audit said financial statements and express an opinion thereon based on my audits. I obtained the information necessary to comply with my duties and carry

FINANCIAL REPORT 2012 - MINEROS S.A.

out my work in accordance with auditing standards generally accepted in Colombia. Those standards require that I plan and perform the audit to satisfy myself that the financial statements are free from significant errors. An audit of financial statements includes examining, on a test basis, the evidence supporting the amounts and disclosures included in the financial statements. The audit procedures selected depend on the auditor’s professional judgment, including an evaluation of the risk of significant errors in the financial statements. In evaluating the risk, the statutory auditor considers the Company’s internal control relevant for the preparation and reasonable presentation of the financial statements, in order to design audit procedures appropriate to the circumstances. An audit also includes evaluating the accounting principles used and the significant accounting estimates made by Management, as well as evaluating the overall presentation of the financial statements. I consider that my audits provide a reasonable basis for the opinion which I express.

S t a t u t o r y A u d i t o r ’s R e p o r t

In my opinion, the aforementioned financial statements, taken from the accounting books, present fairly, in every significant aspect, the financial position of MINEROS S.A. as of December 31, 2012 and 2011, the results of its operations, the changes in its equity, the changes in its financial position, and its cash flows for the years then ended, in conformity with accounting principles generally accepted in Colombia, applied on uniform basis. Also, based on the scope of my audit, I report that the Company’s books were kept in conformity with legal requirements and accounting techniques; the transactions recorded in the accounting books and the administrators’ acts complied with the bylaws and the decisions of the Shareholders’ Meeting and the Board of Directors; the correspondence, the accounting vouchers and the minutes books and share register were properly kept and safeguarded; the management report agrees with the basic financial statements; and the Company is not in default with the contributions to the Integral

Social Security System. My evaluation of the internal control carried out in order to establish the scope of my audit tests did not reveal that the Company had not followed adequate measures with respect to internal control and the preservation and custody of its assets and those of third parties in its possession.

LINA MARÍA VELÁZQUEZ ÁLVAREZ Statutory Auditor T.P. 61321-T Designated by Deloitte & Touche Ltda.

February 25, 2013

Financial Statements

2012 - MINEROS S.A. FINANCIAL REPORT

Shareholders’ Meeting March 20 of 2013

Certification of Financial Statements

FINANCIAL REPORT 2012 - MINEROS S.A.

The undersigned, Legal Representative and Chief Accounting Officer of the company, under whose responsibility the financial statements were prepared, in compliance with the bylaws, hereby declare that they have previously verified the assertions therein contained, which have been faithfully taken from the books.

HĂ&#x2030;CTOR TRESPALACIOS T. Chief Accounting Officer Mat. 32758-T

Financial Statements

BEATRIZ E.URIBE RESTREPO President

In my capacity as Legal Representative of MINEROS S.A., and in compliance with Article 46 of Law 964 of 2005, I hereby certify that the general-purpose financial statements of this corporation as on December 31, 2012, and their corresponding notes, do not contain defects, inaccuracies or errors that prevent ascertaining the true financial position and operations of the company.

BEATRIZ E.URIBE RESTREPO President

Financial Statements

MINEROS S.A.

Balance Sheets at December 31, 2012 and 2011

FINANCIAL REPORT

2012 - MINEROS S.A.

(In thousands of Colombian pesos)

BEATRIZ E.URIBE RESTREPO President

HÉCTOR TRESPALACIOS T. Chief Accounting Officer Professional Card No. 32758-T

FINANCIAL REPORT 2012 - MINEROS S.A.

LINA MARÍA VELÁSQUEZ ÁLVAREZ Statutory Auditor Professional Card 61321Designated by Deloitte & Touche Ltda. (See attached opinion)

MINEROS S.A.

Balance Sheets at December 31, 2012 and 2011

Financial Statements

(In thousands of Colombian pesos)

BEATRIZ E.URIBE RESTREPO President

Financial Statements

HÉCTOR TRESPALACIOS T. Chief Accounting Officer Professional Card No. 32758-T

LINA MARÍA VELÁSQUEZ ÁLVAREZ Statutory Auditor Professional Card 61321Designated by Deloitte & Touche Ltda. (See attached opinion)

MINEROS S.A.

Income Statements

For the years ended December 31, 2012 and 2011

FINANCIAL REPORT

2012 - MINEROS S.A.

(In thousands of Colombian Pesos, except net income per share)

BEATRIZ E.URIBE RESTREPO President

HÉCTOR TRESPALACIOS T. Chief Accounting Officer Professional Card No. 32758-T

FINANCIAL REPORT 2012 - MINEROS S.A.

LINA MARÍA VELÁSQUEZ ÁLVAREZ Statutory Auditor Professional Card 61321Designated by Deloitte & Touche Ltda. (See attached opinion)

Financial Statements

BEATRIZ E.URIBE RESTREPO President

(In thousands of Colombian Pesos, except net income per share)

Financial Statements

HÉCTOR TRESPALACIOS T. Chief Accounting Officer Professional Card No. 32758-T

For the years ended December 31, 2012 and 2011

LINA MARÍA VELÁSQUEZ ÁLVAREZ Statutory Auditor Professional Card 61321Designated by Deloitte & Touche Ltda. (See attached opinion)

Statements of Changes in Shareholders’ Equity

MINEROS S.A.

Statements of Changes in Financial Position

FINANCIAL REPORT

2012 - MINEROS S.A.

For the years ended December 31, 2012 and 2011 (In thousands of Colombian pesos)

BEATRIZ E.URIBE RESTREPO President

HÉCTOR TRESPALACIOS T. Chief Accounting Officer Professional Card No. 32758-T

FINANCIAL REPORT 2012 - MINEROS S.A.

LINA MARÍA VELÁSQUEZ ÁLVAREZ Statutory Auditor Professional Card 61321Designated by Deloitte & Touche Ltda. (See attached opinion)

MINEROS S.A.

Statements of Cash Flows

For the years ended December 31, 2012 y 2011

Financial Statements

(In thousands of Colombian pesos)

BEATRIZ E.URIBE RESTREPO President

Financial Statements

HÉCTOR TRESPALACIOS T. Chief Accounting Officer Professional Card No. 32758-T

LINA MARÍA VELÁSQUEZ ÁLVAREZ Statutory Auditor Professional Card 61321Designated by Deloitte & Touche Ltda. (See attached opinion)

MINEROS S.A.

FINANCIAL RATIOS (In thousands of Colombian pesos)

Dec-12

Dec-11

Liquidity measures the company's capacity to pay its short-term liabilities.

Current Assets Current Liabilities

234,729,158 54,818,304

4.28

194,226,335 68,200,415

2.85

For each Peso payable of current liabilities, the Company has in short-term current assets,

LIQUIDITY

as many Pesos as the value of the current ratio

FINANCIAL REPORT

2012 - MINEROS S.A.

Liquidity Ratios Current Ratio

Acid test

Liquid Assets Current Liabilities

179,667,423 54,818,304

3.28

144,888,370 68,200,415

2.12

For each Peso payable of current liabilities, the Company has in short-term current assets, as many Pesos as the acid-test ratio

Solidity

Total Assets Total Liabilities

Working capital

Current assets - Current liabilities

611,092,697 74,589,043

8.19

514,618,479 78,050,224

6.59

Company's capacity to show financial consistency

$ 179,910,855

126,025,919

Remaining current assets after paying all short-term liabilities

Efficacy indices (Return) Gross income margin

AC TIVIT Y

Return on revenues

Fixed assets turnover

Efficacy or return indices assess results of management decisions when administering resources

Production Cost Operating revenues

Net income Net revenue

133,732,030 357,440,349

157,085,066 339,939,249

53.79%

37.41%

115,802,395 339,939,249

34.07%

Relation between income after non-operating revenues and expenses and taxes that may diminish the Company’s capacity to generate returns

Sales Gross fixed assets

357,440,349 270,323,063

1.32

How much can be generated in sales out of each Peso invested in fixed assets

Sales Gross operating assets

Total assets turnover

Total sales Total Assets

Return on assets

56.59%

How much can be used to cover operating and non-operating expenses out of each Peso generated

Operating assets turnover

Suppliers turnover

155,170,094 357,440,349

357,440,349 394,449,146

0.91

1.39

339,939,249 331,110,232

1.03

How much can be generated in sales out of each Peso invested in operating assets

357,440,349 611,092,697

0.58

339,939,249 514,618,479

0.66

30.42

735,259,450 24,172,913

30.42

133,732,030 611,092,697

21.88%

115,802,395 514,618,479

22.50%

133,732,030 536,503,655

24.93%

115,802,395 436,568,254

26.53%

Company’s efficiency using assets to generate sales Average accounts payable X 365 days 1,030,850,885

Term purchases

Net income Assets

339,939,249 244,355,157

33,890,996

Days the company takes to pay accounts to its suppliers

Return on the company investment

Return on equity

Net income Net equity

RETURN

Return on shareholder’s or partner’s investment

Income per share

Net income (Pesos) No. of shares or participation rights

133,732,030 261,687

Gross return

Gross income Operating revenues

202,270,255 357,440,349

56.59%

Operating return

Operating income Total operating revenues

190,910,156 357,440,349

53.41%

Net Return

Net income Net sales

133,732,030 357,440,349

37.41%

Net income per share and participation right

511.04

Gross income percentage generated by the Company’s sales

Amount of operating income generated by each Peso of sales

115,802,395 261,687

442.52

182,854,182 339,939,249

53.79%

172,661,243 339,939,249

50.79%

115,802,395 339,939,249

34.07%

Net income generated by each Peso of net sales, independent of whether it corresponds to the company’s social purpose or not

FINANCIAL REPORT 2012 - MINEROS S.A.

MINEROS S.A.

FINANCIAL RATIOS

Financial Statements

(In thousands of Colombian pesos)

Financial Statements

FINANCIAL REPORT

2012 - MINEROS S.A.

Proposition regarding earnings distribution MINEROS S.A. SHAREHOLDERS’ MEETING MARCH 20 OF 2013

EARNINGS FOR THE YEAR 2012 AMOUNT TO

$ 133,732,029,633

IT IS PROPOSED THAT THEY BE DISTRIBUTED AS FOLLOWS:

YEAR'S NET INCOME FOR A MONTHLY DIVIDEND OF $11.50 PER SHARE DURING THE APRIL 2013-MARCH 2014 PERIOD ON 261,687,402 OUTSTANDING SHARES

$ 133,732,029,633

$ 36,112,861,476

FOR AN EXTRA DIVIDEND OF $32.00 PER SHARE PAYABLE IN FOUR INSTALLMENTS OF $8 EACH IN APRIL, JULY AND OCTOBER OF 2013 AND JANUARY OF 2014.

8,373,996,864

FOR SOCIAL ACTIONS

1,338,000,000

RESERVE FOR PROTECTION OF ASSETS

2,400,000,000

RESERVE FOR NEW PROJECTS

55,004,157,881

RESERVE FOR DEFERRED TAXES

30,503,013,412

EQUAL AMOUNTS

$ 133,732,029,633

Dividend will be paid between the 10th and the 20th of each month. Shareholders registered in the Shareholder Register on the ex-dividend period determined in the General Regulations of the Stock Exchange, as provided in article 2 of Decree 4766 of 2011, are entitled to the month’s dividend.

FINANCIAL REPORT 2012 - MINEROS S.A.

Notes to the financial statements

MINEROS S.A.

NOTES TO THE FINANCIAL STATEMENTS AT DECEMBER 31 OF 2012 AND 2011

FINANCIAL REPORT

2012 - MINEROS S.A.

(Cifras expresadas en miles de pesos, excepto donde se indique lo contrario)

NOTE 1.

COMPANY OPERATIONS Mineros de Antioquia S.A. is a private corporation established on November 14, 1974 by public deed No 6161 of the 4th Notary Public Office of Medellin for a term of ninety-nine (99) years. According to decision of the Regular Shareholders’ Meeting of March 17 of 2004, minutes No. 43, the corporate name was changed to MINEROS S.A. Such decision was formalized through public deed No. 1038 of April 19 of 2004 of the 17th Notary Public Office of Medellín. The company has as its purpose the conduction of any type of business, activities, endeavors, acts and contracts related to the mining industry in general, of either precious metals, metallic and non-metallic mineral substances or hydrocarbons. To comply with its corporate purpose, the company’s operation center is located in El Bagre (Antioquia province) and its main administrative offices in Medellín.

assumptions in order to determine the valuation of some of the individual entries in the financial statements and to make the required disclosures. Although they may differ in their final effect, Management considers that the estimates and assumptions used were adequate under the circumstances and that they agree with the accounting principles generally accepted in Colombia. Certain accounting principles applied by the company could disagree with the accounting principles generally accepted in other countries. The main accounting policies used by the company are:

• Accounting system The company uses the accrual accounting system, according to which revenues and expenditures are recorded when incurred, regardless of whether payment or collection has been in cash.

• Monetary unit

NOTE 2.

According to legal provisions, the monetary unit used by the company for the balance sheet and income statement accounts is the Colombian Peso.

The financial statements of MINEROS S.A. have been prepared and presented according to accounting principles generally accepted in Colombia, for which purpose the Management has to make certain estimates and

• Materiality

ACCOUNTING POLICIES

FINANCIAL REPORT 2012 - MINEROS S.A.

The company’s policy for disclosing accounting entries in its financial statements in order to determine their

materiality is based on the relative importance of each sub-account with respect to the account group to which it belongs. Accordingly, balance sheet entries at December 31, 2012 representing 5% or more of current assets, other assets, current liabilities, long-term liabilities and equity are disclosed.

• Investments are classified as fixed-income and variableincome, depending on the return they generate.

• Investments

• Based on the cause or reason motivating the investment, they are voluntary or mandatory.

• According to control, they are classified as controlling and non-controlling, subject to the provisions of the Colombian Code of Commerce.

Investments are accounted at cost, which does not exceed sale value.

• Investments are classified as marketable and long-term, according to the intention of realization. Marketable investments are those easy to realize within a term of up to three calendar years, and for which, there is a serious intention of realization. Long-term investments are those which are seriously intended to be held for at least three calendar years.

• Property, plant and equipment These are recorded at cost, which includes inflation adjustments from January 1 of 1992 until December 31 of 2006. Maintenance and repair expenditures that do not increase the useful life of respective assets are recorded as a charge in the income statement, as they are incurred. For accounting effects, depreciation is calculated by the straight-line method, based on the estimated useful life of assets, using the following depreciation annual rates:

BUILDINGS AND CONSTRUCTIONS

MACHINERY AND EQUIPMENT

ELECTRIC PLANTS AND NETWORKS

FURNITURE AND FIXTURES

DREDGES

TRANSPORTATION EQUIPMENT

COMPUTER EQUIPMENT

10%

15%

20%

Starting January 1, 2012, for fiscal effects, the company adopted the balance reduction depreciation system (Art. 134 of Fiscal Law), with the exception of those fixed assets on which special deduction for investment in productive real fixed assets had been requested in previous fiscal periods (from 2007 to 2010) as provided in Art. 158-3 of the Fiscal Law. According to the provision of the aforementioned rule, these fixed assets con only be depreciated through the straight-line system. Due to the change in the depreciation system for fiscal purposes, the company will request in fiscal 2012 an additional income deduction amounting to $ 43,575,733. No residual value is estimated by the company for its assets, given that it considers this value to be of no relative importance, and thus assets are depreciated in their totality.

Notes to the financial statements

Based on External Circular Letter 011 of 1998 of the Financial Superintendency (former Securities Superintendency), the company classifies investments as follows:

• Inventories

2012 - MINEROS S.A.

Inventories correspond to materials and consumables, dredge maintenance materials, and others; they are valued at the lowest between average cost and market value. Materials in transit and workshop orders under process are valued at their actual manufacturing or acquisition costs.

• Deferred charges

FINANCIAL REPORT

As provided by accounting and fiscal regulations, amortization policies for deferred charges depend on their nature, as follows: A. Mining projects are amortized on the basis of the deposit’s estimated exploitation time, starting on the date when respective revenue starts. When exploration investments result to be fruitless, they are amortized in the same year when the project is determined to be unviable. B. Agricultural projects (rubber plantation and biofactory) are amortized along the estimated cultivation time, upon conclusion of their non-productive period. C. All other deferred charges are accounted at cost; amortization is carried out through the straight-line method with periods ranging between one (1) and five (5) years.

• Exchange difference Transactions in foreign currencies are recorded at the applicable exchange rate in force on the date of the transaction. Balances receivable, investments abroad, financial liabilities and accounts payable are adjusted monthly. The balances of such accounts at December 31, 2012 and 2011 were translated into Colombian Pesos at the market representative rate for the end of the month certified by the Financial Superintendency ($ 1,768.23/USD in 2012 and $ 1,942.70/USD in 2011). Exchange difference resulting from accounts payable and foreign-currency liabilities used to purchase inventories, deferred charges, and property, plant and equipment are capitalized until the asset is in condition of being used or disposed of. From that moment on, the exchange difference is recorded against the income statement of the period. All other exchange gains and losses are recorded as financial revenue or expense.

FINANCIAL REPORT 2012 - MINEROS S.A.

• Equity tax and surtax In accordance with the Law that regulates accounting principles generally accepted in Colombia and considering the alternatives for accounting recording established there, the company chose to record such tax and its corresponding surtax against the equity revaluation account.

• Income tax The company determines the provision for income tax on the basis of the highest between taxable income and presumptive income estimating it at rates specified by the tax law; additionally, it records as deferred income tax the effect of temporary differences between books and taxes with respect to certain entries, provided there is reasonable expectation that such differences will revert in the future.

• Labor liabilities Labor liabilities are accounted as provided by legal regulations and binding collective bargaining agreements. Retirement pension liabilities payable by the company are determined based on actuarial studies as provided by legal regulations. Annual retirement pension provision is adjusted in a rational and systematical way. Pension payments are charged to the results of the year. In the case of the associates covered by the social security regime (Law 100 of 1993), the company sees to its retirement pension obligations through payment of contributions to pension funds under the terms and conditions mandated by that law.

• Additional paid-in capital The excess of placed shares price over their par value is recorded in the capital surplus account, additional paid-in capital.

• Reappraisals

• Memorandum accounts

These correspond to differences between commercial or cadastral appraisal and net book value of real estate property. Such reappraisals are recorded in separate assets and equity accounts as revaluation surplus, which is not distributable. Impairment of value of real estate property is recorded through provision charged to the period’s expenses.

Control memorandum accounts record financial information for control purposes, contingencies, and future transactions commitments; fiscal memorandum accounts record differences between accounting values and values for fiscal matters.

• For marketable fixed-income investments, the latest cost in books is recorded with a contra entry in the income statement accounts. • Marketable variable-income investments are valued by affecting their latest cost recorded, with a contra entry in the results of the period, recognizing the revenue or expense produced depending on the increase or decline of investment, respectively.

• Gifts The company records donations against fiscal period results or against occasional reserves established for such purpose by the Shareholders’ Meeting.

• Net income per share Net income per share is calculated on the weighted average number of outstanding subscribed shares during each period.

• Statement of cash flows

• Long-term investments of controlled companies are accounted through the equity method.

The statement of cash flows was prepared by the indirect method.

• When the sale value of long-term investments of noncontrolled companies is higher than cost, reappraisal for the period is recorded under assets and revaluation surplus under equity. When the sale value is lower than cost, the difference will affect reappraisal and revaluation surplus, without limitation upon the fact that their net balance might be of a contrary nature.

• Convergence to International Financial Reporting Standards

• Equity revaluation Balances at December 31, 2012 and 2011 correspond to inflation adjustments to equity accounts until December 31, 2006, minus the equity tax and corresponding surtax recorded in compliance with Law 1370 of 2009 and Legislative Decree 4825 of 2010. According to current regulations, this balance cannot be distributed as income until the company is liquidated or capitalized.

Pursuant to the provisions of Law 1314 of 2009 and regulatory decrees 2706 and 2784 of December, 2012, the company is bound to initiate convergence between the accounting principles generally accepted in Colombia and the International Financial Reporting Standards (IFRS). To this end, the Public Accounting Technical Council issued the Strategic Directive that classifies Companies in three groups. Since the company belongs to Group 1, it has January 1, 2014, as the date set to start its mandatory transition period, and December 31, 2015, as the issuance date of the first comparative financial statements under IFRS.

In 2011, the company accrued the totality of equity tax for $18,279,076 by decreasing the balance of the equity revaluation account.

Notes to the financial statements

NOTE 3.

ACCOUNTS RECEIVABLE (2) Corresponds to balances in the company’s favor determined in private VAT calculations whose reimbursement requests were being processed at December 31, to discountable taxes non subject to VAT reimbursement pending compensation in future periods, and to reimbursement requests of excess payments, as follows:

At December 31, accounts receivable included:

ITEM

FINANCIAL REPORT

2012 - MINEROS S.A.

National customers

2012 $

2011 5.356

ITEM Jan-Feb VAT

Foreign customers (1)

16.578.759

21.033.519

Advanced taxes paid (2)

11.075.831

10.568.950

Related companies (3)

578.377

597.225

Loans to associates

680.359

Miscellaneous accounts receivable Yields receivable (4) Advance payments (5) TOTAL

INTL Commodities Inc. (USA)

1.814.112

1.776.077

1.808.999

May-Jun VAT

2.068.966

Jul-Aug VAT

2.068.966

1.805.907

610.199

Jul-Aug VAT

1.447.603

1.039.827

913.000

Sep-Oct VAT

1.988.844

1.993.982

8.091.339

6.056.782

Nov-Dec VAT

1.957.526

2.103.134

22.703

21.739

Reimbursement request of excess withholding tax paid

766.126

Withholding tax

9.421.412

3.304.136

$ 47.471.260

$ 43.083.811

2012

Discountable taxes to be compensated (exploration activities)

TOTAL 2011

$ 16.578.759

$ 9.627.735

Argor Heraeus (Switzerland)

11.346.101

Metalor (Switzerland)

59.683

$ 16.578.759

$ 21.033.519

TOTAL

2011

Mar-Apr VAT

(1) Balances owed by the following foreign customers:

ITEM

2012

11.075.831

10.568.950

a. The receivable balance for the fourth bimonthly period of 2011 ($1,805,907) was effectively reimbursed by DIAN, but the tax return was later corrected, dragging with it the receivable balance of the third bimonthly period of 2011 ($ 2,068,966), whose reimbursement was also requested. At the date of the financial statements for 2012, DIAN had issued a resolution abstaining to decide on this proceeding, which was appealed on December 20 of 2012. With regard to the requests for reimbursement of the first and second bimonthly periods of 2012, DIAN issued a special requirement proposing disavowal of the totality of the receivable balance, on the criterion that it is the taxpayer’s duty to demonstrate the amount of sales tax “trapped in inventories”, that is, to determine discountable taxes directly linked to exports effectively carried out along the period. On this criterion, sustained mainly by DIAN Medellin, it can be expected that the other reimbursement requests pending at December 31 of 2012 will be affected as well, in which case the Company will take all legal action allowed by the Tax Law.

FINANCIAL REPORT 2012 - MINEROS S.A.

(3) Balances owed by the following related companies:

ITEM Balance payable by Proyecto Sabaletas S.A.S. for administration services rendered in the second half of 2011.

ITEM

2012

2011

Balance payable by Operadora Minera S.A.S. for administration services rendered in the second half of the year.

363.565

Balance payable by Exploradora Minera S.A.S. for administration services rendered in the second half of the year.

214.812

TOTAL

80.581

2012

Advance payments to suppliers

$ 1.120.230

$ 468.342

Advance payments to contractors

7.816.828

2.328.687

Advance payments for rural plots

400.000

84.354

507.107

$ 9.421.412

$ 3.304.136

Other advance payments 307.984

2011

TOTAL

(a) Variation corresponds mainly to advance payments associated with Projects.

$ 578.377

208.660

$ 597.225

(4) Shows financial yields from fixed-income investments and premiums paid in purchase process of these securities. (5) Corresponds to third parties’ balances at December 31 for different items related to the normal development of the company’s business, as follows:

• During fiscal year: A. The company did not deem necessary to establish provisions for doubtful accounts to protect likely loss contingency from commercial accounts receivable. B. In 2012, no accounts receivable were written off. C. There are no accounts receivable more than one year overdue.

NOTE 4.

At December 31, marketable securities included: ITEM

2012

2011

$ 1.337.624

$ 1.371.073

467.307

1.342.562

Certificate of deposit - CD

77.500.000

40.500.000

Public bonds – local currency

11.160.000

9.000.000

Private bonds – local currency

16.491.388

24.126.804

Treasuries – TES

37.063.026

39.476.567

9.917.462

6.933.862

18.562.730

15.960.972

Shares in foreign corporations (3)

1.039.898

1.448.782

Other investments abroad (4)

4.069.787

3.782.383

Other investments (5)

2.182.053

2.285.077

179.791.275

146.228.082

(925.269)

(1.993.072)

$ 178.866.006

$ 144.235.010

Participation in trust estates with trust companies (1) Trust funds administered by brokerage firms (on demand)

Hedging operations Shares in local corporations (2)

Subtotal Allowance for impairment of investments TOTAL

Notes to the financial statements

MARKETABLE SECURITIES

(1) Rights held as on December 31, 2012 and 2011 in the Trust Estate. P195 Grupo Contempo Ltda. Oficinas Oxo - Bogotá in Fidubogotá S.A. Along 2012, $33,449 was received from this Trust Estate as refunded contributions (2011 - $383,265) and $356,078 as financial yields.

At December of 31 of 2011, the company had as marketable securities the following investments in shares in corporations:

(2) At December of 31 of 2012, the company had as marketable securities the following investments in shares of Colombian corporations:

FINANCIAL REPORT

2012 - MINEROS S.A.

ISSUER

NO.SHARES (UNITS)

MARKET VALUE (IN BOOKS)

ISSUER

MARKET VALUE (IN BOOKS)

471.200

$ 2.002.416

Grupo Nutresa S.A. *

70.599

1.735.432

2.345.096

ISAGEN S.A. E.S.P.*

539.000

1.360.934

70.599

1.794.590

Bancolombia S.A.

41.000

1.157.515

539.000

1.360.934

Cementos Argos S.A. *

99.900

1.156.314

Bancolombia S.A.

41.000

1.228.818

ISA S.A. E.S.P *

86.300

1.154.927

ISA S.A. E.S.P. *

86.300

1.154.927

30.770

1.011.830

Cementos Argos S.A.*

99.900

1.154.378

Grupo de Inversiones Suramericana S.A.-A.D.P.

Suramericana de Inversiones A.O.

16.110

991.652

26.400

995.290

Pacific Rubiales Energy Corp. *

154.500

870.461

Suramericana de Inversiones S.A. *

26.400

994.369

Inversiones Argos S.A. A.D.P.

28.485

606.916

Colinversiones S.A. E.S.P *

154.500

870.461

Banco Davivienda S.A.

24.500

572.575

Helm Bank S.A. *

1.658.000

718.245

Inversiones Argos S.A.

26.600

562.648

Banco Davivienda S.A.

24.500

507.940

Grupo Aval S.A. ADP *

343.248

446.222

Grupo Aval – A.D.P. *

343.248

446.222

Fondo Bursátil Ishares COLCAP

19.999

366.482

Grupo Aval – A.O. *

195.213

253.777

Fogansa S.A. *

175.000

350.000

Fogansa S.A. *

175.000

350.000

Conconcreto S.A. *

145.153

220.763

Grupo Aval S.A. A.O *

195.213

253.777

Cartón de Colombia S.A.

27.200

218.144

4.110

252.991

Canacol Energy Ltd. *

75.000

213.595

149.860

220.764

Banco de Occidente S.A. *

5.367

202.121

27.200

218.144

Inversiones Argos S.A. *

10.600

199.016

Canacol Energy Ltda. *

7.500

213.595

Tablemac S.A.

10.000.000

99.400

Banco de Occidente S.A. *

5.367

202.121

Banco Popular S.A. *

95.729

57.437

8.103.080

79.293

Corficolombiana S.A. *

654

22.691

95.729

57.437

Almacenes Éxito S.A.

619

15.771

Ecopetrol S.A.

597.700

$ 3.255.271

Suramericana de Inversiones A.D.P.

60.357

Nutresa S.A. ISAGEN S.A. E.S.P. *

Celsia S.A.*

Pacific Rubiales Energy Corp* Conconcreto S.A.* Cartón de Colombia S.A. *

Tablemac S.A. * Banco Popular S.A. * TOTAL

$ 18.562.730

* Recorded at purchase price, because of their impairment of value.

FINANCIAL REPORT 2012 - MINEROS S.A.

Ecopetrol S.A.

NO.SHARES (UNITS)

TOTAL

$15.960.972

* Recorded at purchase price, because of their impairment of value.

In compliance with the provisions of Circular Letter 011 of 1998 of the Securities Superintendency (today Financial Superintendency), the company recorded the respective appreciation (impairment of value) of variable-income investments (national and foreign) affecting the latest investment cost recorded , increasing (decreasing) their amount, with the fiscal year’s results affected as a contra account. With respect to investments in shares of corporations owned at December 31, the following values corresponding to appreciation (impairment of value) were recorded as revenues (expenses).

A. Reappraisals ISSUER

2012

Suramericana de Inversiones A.D.P.

2011 $ 113.845

11.805

Ecopetrol S.A.

96.955

120.005

Bancolombia S.A.

71.303

6.967

Grupo Nutresa S.A.

59.158

Inversiones Argos S.A. A.D.P.

57.916

Inversiones Argos S.A.

51.627

Banco Davivienda S.A.

15.337

259.879

Fondo bursátil Ishares COLCAP

15.265

921

Cartón de Colombia S.A.

21.195

Tablemac S.A.

2.600

Almacenes Éxito S.A.

949

482.327

$ 423.400

Suramericana de Inversiones A.O.

TOTAL

B. Impairment of value 2012 $

2011 318.727

171.025

Canacol Energy Ltd.

171.274

115.105

Cementos Argos S.A.

137.088

75.158

Pacific Rubiales Energy Corp.

84.698

422.167

Cartón de Colombia S.A.

46.784

Celsia S.A. E.S.P.

46.493

264.761

Fogansa S.A.

35.000

Banco de Occidente S.A.

30.377

41.111

Conconcreto S.A.

18.431

20.734

Tablemac S.A.

12.199

ISAGEN S.A. E.S.P.

10.631

223.719

Banco Popular S.A.

9.573

7.658

Grupo Aval – A.O.

2.333

12.581

Grupo Aval – A.D.P.

1.661

10.047

Helm Bank S.A.

210.797

Nutresa S.A.

200.851

Grupo de Inversiones Suramericana A.O.

162.220

Inversiones Argos S.A.

19.795

Corficolombiana S.A. TOTAL Notes to the financial statements

343

925.269

$ 1.993.072

Notes to the financial statements

ISSUER ISA S.A. E.S.P.

To comply with the provisions of the Financial Superintendency regarding disclosures, the following is additionally reported with regard to such investments as on December 31, 2012:

FINANCIAL REPORT

2012 - MINEROS S.A.

ISSUER

PARTICIPATION PERCENTAGE

ECONOMIC ACTIVITY

DIVIDENDS RECEIVED

Ecopetrol S.A.

0.0015%

Hidrocarburos

177.360

Grupo Inversiones Suramericana A.O.

0.0056%

Financiera

49.040

ISAGEN S.A. E.S.P

0.0237%

Transp. Energía

41.171

Bancolombia S.A.

0.0080%

Financiera

28.625

Nutresa S.A.

0.0153%

Alimentos

24.855

ISA S.A. E.S.P

0.0078%

Transp. Energía

19.004

Grupo Aval A.D.P

0.0070%

Financiera

15.137

Cementos Argos S.A

0.0155%

Cementos

13.786

Celsia S.A. E.S.P

0.0215%

Generad. Energía

13.567

Banco Davivienda S.A.

0.0244%

Financiera

11.760

Grupo Aval A.O.

0.0014%

Financiera

8.609

Grupo Inversiones Suramericana A.D.P.

0.0057%

Financiera

8.012

Cartón de Colombia S.A.

0.0253%

Ind. Papelería

8.001

Banco de Occidente .S.A.

0.0034%

Financiera

7.165

Conconcreto S.A.

0.0166%

Construcción

6.843

Tablemac S.A.

0.0239%

Ind. Maderera

3.789

Inversiones Argos S.A. A.D.P

0.0207%

Financiera

3.283

Inversiones Argos S.A.

0.0041%

Financiera

3.063

Banco Popular S.A.

0.0012%

Financiera

2.211

Corficolombiana S.A.

0.0001%

Financiera

1.397

Pacific Rubiales Energy Corp.

0.0015%

Hidrocarburos

607

Fondo Bursátil Ishares Colcap

0.0158%

Financiera

243

Canacol Energy Ltda.

0.0121%

Hidrocarburos

Fogansa S.A.

0.2872%

Ganadería

FINANCIAL REPORT 2012 - MINEROS S.A.

The following was disclosed at December 31 of 2011 regarding marketable securities. PARTICIPATION PERCENTAGE 0.0011% 0.0001% 0.0198% 0.2909% 0.0080% 0.0014% 0.0153% 0.0087% 0.0078% 0.0408% 0.0215% 0.0034% 0.0253% 0.0432% 0.0012% 0.0009% 0.0394% 0.0059% 0.0072% 0.0056% 0.2872% 0.0146% 0.0001% 0.0066%

ISSUER Ecopetrol S.A. Corficolombiana S.A. ISAGEN S.A.E.S.P. Helm Bank S.A. Bancolombia S.A. Grupo Aval – AO Grupo Nutresa S.A. Cementos Argos S.A. ISA S.A. E.S.P. Conconcreto S.A. Celsia S.A. E.S.P. Banco de Occidente S.A. Cartón de Colombia S.A. Banco Davivienda S.A. Banco Popular S.A. Inversiones Argos S.A. Tablemac S.A. Pacific Rubiales Energy Corp. Grupo Aval – ADP Inversiones Suramericana AO Fogansa S.A. Canacol Energy Ltda. Almacenes Éxito S.A. Grupo de Inversiones Suramericana S.A. – A.D.P.

ECONOMIC ACTIVITY Hidrocarburos Financiera Gener.Eléctrica Financiera Financiera Financiera Alimentos Cementos Trans. Energía Construcción Gener. Eléctrica Financiera Ind.Papelera Financiera Financiera Financiera Ind. Maderera Hidrocarburos Financiera Inversiones Ganadería Hidrocarburos Comerc.retail Financiera

DIVIDENDS RECEIVED $ 46.451 30.661 27.469 26.282 20.561 15.268 13.665 13.064 11.238 11.131 10.005 6.738 6.630 2.640 2.114 1.590 1.300 -

At December of 2012, the company had in its investment portfolio the following investments in shares of foreign corporations: ISSUER

NO. OF SHARES

Quia Resources Inc.

13.320.000

Compañía de Minas Buenaventura Petrominerales Ltd.

MARKET VALUE (IN BOOKS)

ISSUER

NO. OF SHARES

MARKET VALUE (IN BOOKS)

635.926

Quia Resources Inc.

2.620.000

4.880

310.211

Compañía de Minas Buenaventura

4.880

363.478

6.150

93.761

Petrominerales Ltd.

6.150

193.396

Merrill Lynch & Co. Inc.

2.709

97.888

TOTAL

At December of 2011, MINEROS S.A. had in its investment portfolio the following investments in shares of foreign corporations:

$ 1.039.898

TOTAL

Notes to the financial statements

794.020

1.448.782

Notes to the financial statements

(3) Shares in foreign corporations

FINANCIAL REPORT

2012 - MINEROS S.A.

B. Their market-price re-appraisal was based on the closing price at the corresponding stock exchange on the last business day of 2012. C. Additionally, the following information is disclosed: ISSUER

ECONOMIC ACTIVITY

DIVIDENDS RECEIVED

Compañía de Minas Buenaventura

Minería

Petrominerales Ltd.

Hidrocarburos

4.140

Financiera

3.875

Merrill Lynch & Co. Inc.

5.118

Along the year, the following amounts were charged to the income statement to adjust the value of these investments to market price. ISSUER Quia Resources Inc. (Canadá)

2012 $

Petrominerales Ltd. (Canadá) Compañía de Minas Buenaventura (Perú)

1.174.465

269.973

206.278

44.832

26.596

FUND

7.526 $

3.621.952

19.163 $

(BOOK VALUE)

SPDR S&P 500 ETF TR.

6.600

Ishares MSCI Emerging MKT (EEM)

17.616

1.298.406

Vanguard INTL Equity Index FD

7.207

555.141

Financial Sector SPDR (XLI)

5.566

140.570

Ishares Xinhua China 25 (FXI)

1.714

116.110

762

63.018

Ishares S& P Latin América 40 (ILF)

In 2012, the company recorded against results revenues for $386,912 as adjustment to the market value of such investments. In 2011, it recorded $517,609 as impairment of value.

Other investments include the following: DETAIL

Money market accounts abroad. Overnight operations

NO. (UNITS)

MARKET VALUE

(BOOK VALUE)

SPDR S&P 500 ETF TR.

10.189

$ 2.565.729

Ishares MSCI Emerging MKT (EEM)

17.616

1.381.464

1.714

122.594

TOTAL

1.609.138

$ 3.782.383

Tax reimbursement securities

These are Exchange Traded Funds (ETF) established overseas, that replicate, in general terms, an international financial asset and are traded in stock exchanges as follows:

Ishares Xinhua China 25 (FXI)

TOTAL

1.426.502

(4) Other Investments abroad

FUND

MARKET VALUE

NO. (UNITS)

(5) Other investments

Merrill Lynch & Co. Inc. (USA) TOTALES

3.299.621

2011

At December 31, 2011, ETF established abroad included:

$ 4.069.787

FINANCIAL REPORT 2012 - MINEROS S.A.

Commercial papers TOTAL

2012 $

2011

1.931.186

162.455

90.807

88.412

194.270

2.000.000

$ 2.182.053

$ 2.285.077

The company’s management considers that adequate investment portfolio diversification exists in order to reduce financial risk. There are no restrictions affecting investment balances at December 31 of 2012 and 2011.

NOTE 5.

PREPAID EXPENSES At December 31, this account included:

DETAIL

2012

Spare parts for dredges and other equipment

2011 3.656.738

2.511.277

Pre-operating expenses

2.251.797

2.663.789

Insurance (1)

1.681.940

1.079.088

7.590.475

$ 6.254.154

TOTAL

(1) Corresponds mainly to fire and terrorism insurance policy for the companyâ&#x20AC;&#x2122;s dredges.

NOTE 6.

PROPERTY, PLANT AND EQUIPMENT At December 31, this account included: 2012

Land

2011 3.448.978

2.074.927

Buildings and constructions

15.815.760

14.735.574

Machinery and equipment

153.677.333

148.230.882

57.232.619

56.371.497

903.851

Transportation equipment

8.408.480

7.119.363

Computer equipment

1.868.804

974.554

27.290.636

10.970.926

1.395.759

160.152

2.655.348

280.843

158.083

Electric plants and networks Furniture and fixtures

Machinery and equipment under assembly (1) Constructions in progress Mining properties Other Subtotal

270.323.063

Less: Accumulated depreciation Accumulated depletion Deferred depreciation (2) TOTAL

Notes to the financial statements

244.355.157

(186.864.196)

(123.250.608)

(2.655.348)

43.575.733

127.034.600

118.449.201

Notes to the financial statements

ASSET

As on December 31, 2012, no restrictions or encumbrances affect the companyâ&#x20AC;&#x2122;s above-mentioned assets. (1) At December 31, construction and machinery and equipment in set-up process correspond mainly to expansion of Providencia I Hydroelectric Power Plant and construction of Providencia III Hydroelectric Power Plant. (2) Deferred depreciation corresponds to that taken for fiscal purposes. See Note 12.

FINANCIAL REPORT

2012 - MINEROS S.A.

Assets with their respective adjusted cost, accumulated adjusted depreciation, sale value and associated appreciation and impairment of value are detailed as follows: DECEMBER 2012 ASSET Land

COST ADJUSTED $

DEPRECIATION

3.448.978

APPRAISAL -

17.035.033

APPRECIATION $

13.586.055

Buildings and constructions

15.815.760

3.577.920

18.066.263

5.828.423

Machinery and equipment

153.677.333

106.539.007

75.270.852

28.132.526

57.232.619

26.711.210

32.800.055

2.278.646

903.851

361.135

N.A.

Transportation equipment

8.408.480

5.098.319

4.068.319

757.866

Computer equipment

1.868.804

967.299

N.A.

Machinery and equipment under assembly

27.290.636

N.A.

Constructions in progress

1.395.759

N.A.

280.843

33.573

N.A.

$ 270.323.063

$ 143.288.463

Electric plants and networks Furniture and fixtures

Other assets TOTAL

$ 50.583.516

DECEMBER 2011 ASSET Land

COST ADJUSTED $ 2.074.927

DEPRECIATION AND/OR DEPLETION ADJUSTED

APPRECIATION

$ 10.185.314

2.655.348

N.A.

Buildings and constructions

14.735.574

2.861.695

16.553.051

4.679.172

Machinery and equipment

148.230.882

94.232.993

75.849.245

21.851.357

56.371.497

20.384.635

43.587.174

7.600.312

903.851

276.295

N.A.

7.119.363

4.621.476

3.428.818

930.931

974.554

860.870

N.A.

Machinery and equipment under assembly

10.970.926

N.A.

Constructions in progress

160.152

N.A.

Other assets

158.083

12.644

N.A.

-0

$ 244.355.157

$ 125.905.956

Mining properties

Electric plants and networks Furniture and fixtures Transportation equipment Computer equipment

TOTAL

FINANCIAL REPORT 2012 - MINEROS S.A.

APPRAISAL

8.110.387

$ 43.172.159

NOTE 7.

LONG-TERM ACCOUNTS RECEIVABLE Balances payable by the company’s workers from loans granted for periods longer than one year, as follows: ITEM

2012

Housing loans (1)

$ 5.483.885

$ 5.062.772

59.947

76.292

$ 5.543.832

$ 5.139.064

Vehicle loans TOTAL

2011

(1) Long-term loans to associates pay an average DTF + 3 annual rate

NOTE 8.

INVENTORIES At December 31, this account included: ITEM

2012

Materials and consumables

2011

$ 29.429.228

$ 30.390.450

Materials in transit

2.512.318

1.128.505

Workshop orders under process

1.716.313

1.260.003

480.105

$ 33.657.859

$ 33.259.063

Other TOTAL

LONG-TERM INVESTMENTS At December 31, 2011, long-term investments included:

CORPORATION

Compañía Minera de Ataco S.A.S.

PARTICIPATION %

NO. OF SHARES

ADJUSTED COST

20.000

17,74%

493.214.074

6.213.742

17.750.775

11.537.033

Exploradora Minera S.A.S.

100%

20.000

679.826

Operadora Minera S.A.S.

100%

200.437

8.690.076

N.A.

4.500

$ 15.788.144

$ 27.334.332

Club de Banqueros (un derecho) Subtotal Promotora de Proyectos S.A. Distrito de Negocios S.A.S.

200.000

209.155

9.155

11.546.188

1,60%

124.399

99.321

23.760

(75.560)

40%

80.000

77.566

(2.434)

Subtotal

TOTAL

$ 15.967.465

Notes to the financial statements

RE-APPRAISALS (IMPAIRMENT OF VALUE)

100%

Unipalma de los Llanos S.A.

SALE VALUE OR BOOK VALUE

179.321

101.326 $ 27.435.658

(77.994) $ 11.468.194

Notes to the financial statements

NOTE 9.

At December 31, 2011, long-term investments included % DE PARTICIPACIÓN.

S O C IED A D

Proyecto Sabaletas S.A.S.

2012 - MINEROS S.A.

COSTO AJUSTADO

VR. DE REALIZACIÓN O VALOR INTRÍNSECO

VALORIZACIÓN

(DESVALORIZACIÓN))

100%

337.000

$ 9.786.281

17,74%

493.214.074

6.213.742

18.983.809

12.770.067

Exploradora Minera S.A.S.

100%

20.000

418.960

Operadora Minera S.A.S.

100%

20.000

1.376.658

Compañía Minera de Ataco S.A.S.

100%

20.000

200.000

202.521

2.521

Distrito de Negocio S.A.S.

40%

80.000

Club de Banqueros (un derecho)

N.A.

4.500

Unipalma de los Llanos S.A.

FINANCIAL REPORT

No de ACCIONES

Subtotal

$ 18.080.141

Promotora de Proyectos S.A.

1,60%

Subtotal TOTAL

124.399

30.852.729

12.772.588

99.320

26.248

(73.072)

99.320

26.248

(73.072)

$ 18.179.461

$ 30.878.977

$ 12.699.516

CORPORATION

Unipalma de los Llanos S.A.

ECONOMIC ACTIVITY

ACCRUED INCOME 2011

ACCRUED INCOME 2012

Agroindustria

$ 1.147.859

$ 238.422

Operadora Minera S.A.S.

Minería

31.208

981.987

Proyecto Sabaletas S.A.S.

Minería

2.782.301

Exploradora Minera S.A.S.

Minería

260.866

145.303

Inversionista

Minería

Construcción

Promotora de Proyectos S.A. Compañía Minera de Ataco S.A.S. Distrito de Negocios S.A.S.

The company does not consider redemption of permanent investments within the three (3) calendar years following the closing date of financial statements. As provided in Joint Circular Letter 009 of the Superintendency of Corporations and 013 of the Securities Superintendency (today Financial Superintendency) of December of 1996, in

FINANCIAL REPORT 2012 - MINEROS S.A.

External Circular Letter 001 of January of 1996 of the Securities Superintendency (today Financial Superintendency) and in Regulatory Decree 2649 of 1993, investments in subordinates where the parent company owns over 50% of capital must be recorded through the equity method and their financial statements must be consolidated.

Operadora Minera S.A.S.

The financial situation of the company at December 31 was as follows:

Operadora Minera S.A.S. was incorporated through private document on March 10 of 2009, filed with the Medellin Chamber of Commerce on April 2 of 2009 under No. 4129. Its corporate purpose is to carry out any licit civil or commercial act, especially activities of preservation, exploration, export, industrialization, or development in any form, of renewable and non-renewable resources.

2012 Assets

200.437

200.000

Capital Surplus

3.369.563

Reserves

5.088.867

194.671

31.208

981.987

The value of the investment in Operadora Minera S.A.S., where the company owns 100% of shares was recorded in 2012 and 2011 by the equity method, generating an increase in investment of $31,208 ($981,987 in 2011) originated in the year’s results.

Exploradora Minera S.A.S. Exploradora Minera S.A.S. was incorporated through private document on March 15 of 2010, filed with the Medellin Chamber of Commerce on April 6 of same year under No. 5067. Its corporate purpose is to carry out any licit civil or commercial act, especially mining exploration activities. The financial situation of the company as of December 31 was as follows:

421.056

EQUITY

2012 Assets

2011

1.871.156

$ 1.455.558

1.191.330

1.036.599

Capital stock

437

Capital surplus

3.369.563

Equity:

Reserves

3.912.210

Capital stock

200.000

314.902

Reserves

218.960

73.656

Revenues

1.816.847

Year’s results

260.866

145.303

Expenses

226.587

1.607.843

64.392

Year’s results

Sales costs Production costs - indirect TOTAL

$ 9.520.113

Notes to the financial statements

9.520.113

Liabilities

The value of the investment in Exploradora Minera S.A.S., where the company owns 100% of shares was recorded in 2012 by the equity method, generating an increase in investment of $260,866 ($145,303 in 2011) originated in the year’s results.

Notes to the financial statements

LIABILITIES

1.797.392

Year’s results

CREDIT

$ 7.306.389

2.285.051

Capital stock

BALANCES

ASSETS

$ 3.174.050

Equity:

On the date of merger formalization (November 15 of 2012), the following entries were incorporated into the accounting books of OPERADORA MINERA S.A.S.:

DEBIT

$ 10.975.126

Liabilities

As recorded in the minutes of Shareholders’ Meeting No. 6 of October 08 of 2012, filed with the Mercantile Register of Medellin City Chamber of Commerce on December 15 of 2012 under number 20372, merger was approved between OPERADORA MINERA S.A.S., as the beneficiary corporation, and PROYECTO SABALETAS S.A.S. (also a MINEROS S.A. subsidiary) as the merged corporation. This latter corporation used to operate a processing plant for gold-containing slag at Sitio Viejo county, in the municipality of Titiribí (Antioquia Province).

TYPE OF ACCOUNT

2011

Compañía Minera de Ataco S.A.S.

Its main offices are located in the city of Ibagué. Until December 31, 2012 the company had not started any exploitation activities and it has only conducted endeavors leading to obtain from Corporación Autónoma Regional del Tolima – CORTOLIMA the environmental license for the mining project; official application was filed on July 23, 2012. Also, on November 21, 2012, the Work Program was submitted to the National Mining Agency (ANM)

FINANCIAL REPORT

2012 - MINEROS S.A.

Compañía Minera de Ataco S.A.S. was incorporated through private document on April 11 of 2011, filed with the Ibagué Chamber of Commerce on April 18 of same year under No. 00043218. Its main corporate purpose is gold mining exploration and exploitation through mining concession contracts 4971 and 4974 located in the municipality of Ataco (Tolima province).

Since the company is in the pre-operational stage, earnings recorded until December 31, 2012 were not accounted by the equity method and its financial statements were not taken into account for consolidation of financial statements conducted by Mineros S.A. as controlling corporation (Financial Superintendency Circular Letter No. 002 of 1998, First Title, Chapter II, No. 5.3 (c)). The financial situation of Compañía Minera de Ataco S.A.S. as of December 31 was as follows: 2012 Assets

2011

$ 212.462

$ 203.510

3.307

989

200.000

Former periods earnings

2.521

Year’s results

6.634

2.521

Liabilities Equity: Capital stock

NOTE 10.

OTHER ASSETS At December 31, this account included: DETAIL

2012

2011

Financial leasing contracts: Net value of vehicles acquired through financial leasing with Leasing Bancolombia S.A.

$ 41.732

$ 107.352

109.237.617

73.139.920

15.306.802

10.126.935

5.271.375

3.781.997

$ 129.857.526

$ 87.156.204

Projects: Amount invested in exploration to determine possible economically exploitable gold deposits. (1) Balance to be amortized on account of exploration, development, and pre-operating costs and expenses of the La Ye mine (entered operation in May 2010). Costs and expenses incurred in rubber plantation and biofactory projects on the Company’s land. TOTAL

FINANCIAL REPORT 2012 - MINEROS S.A.

(1) At December 31, the amounts invested in mining projects are as follows:

ITEM El Bagre District

2012

2011

$ 27.845.939

$ 28.350.209

Remedios Project

12.676.444

8.495.435

Nechí Project

15.750.241

8.681.745

Santa Elena Project (Bolivar Province)

9.768.499

4.883.221

Amalfi Project

9.558.741

6.220.973

Caldas Province Projects

9.029.958

5.751.819

Tolima Project

8.818.671

5.476.723

El Catorce Project (Bolivar Province)

6.099.447

1.760.399

Join Venture Anglo Gold Guamocó

3.806.690

3.119.315

Peru Project

1.066.159

Brownfield exploration

2.112.419

160.015

Other mining projects

2.704.409

240.066

$ 109.237.617

$ 73.139.920

TOTAL

In the year 2011, the company carried to the period’s results $3,512,629 of economically non-exploitable mining projects ($4,954,463 in 2011)

NOTE 11.

At December 31, transactions with related companies included:

ACCOUNTS RECEIVABLE

2012

2011

Operadora Minera S.A.S. (See Note 3.3)

$ 363.565

$ 307.984

Exploradora Minera S.A.S (See Note 3.3)

214.812

208.660

Proyecto Sabaletas S.A.S. (See Note 3.3)

80.581

578.377

$ 597.225

TOTAL ACCOUNTS RECEIVABLE ACCOUNTS PAYABLE Operadora Minera S.A.S. (La Ye Mine operation services - See Note 15)

$ 2012

2011

$ 1.951.461

733.471

Exploradora Minera S.A.S (mandate contract fees for exploration activities in several mining projects - (See Note 15)

70.722

69.751

Exploradora Minera S.A.S (Costs and expenses to be reimbursed under execution of mandate contract - (See Note 15)

1.037.264

1.013.032

$ 3.059.447

$ 1.816.254

TOTAL CREDITORS

Notes to the financial statements

TRANSACTIONS WITH RELATED PARTIES

As provided in First Title, Chapter III, number 1 of External Circular Letter 02 of 1998 of the Securities Superintendency (today, Financial Superintendency), it is also disclosed that: a. In the years 2012 and 2011, the following transactions were carried out with related companies and/or subsidiaries:

FINANCIAL REPORT

2012 - MINEROS S.A.

COMPANY FROM WHICH REVENUE WAS RECEIVED OR WHICH MADE THE PAYMENT

ITEM

2012

2011

Proyecto Sabaletas S.A.S.

Revenues from administration services

$ 79.815

$ 171.998

Operadora Minera S.A.S.

Revenues from administration services

608.331

483.183

Exploradora Minera S.A.S

Revenues from administration services

439.288

339.103

Proyecto Sabaletas S.A.S.

Purchase of of supplies and raw materials

131.823

Proyecto Sabaletas S.A.S.

Purchase cost of other articles

22.500

216.619

Operadora Minera S.A.S.

Cost of operation services for La Ye Mine

15.908.295

15.640.244

Operadora Minera S.A.S.

Rental costs

152.464

Exploradora Minera S.A.S

Cost of exploration services

796.080

577.512

b. The previously described operations were conducted under normal market conditions and no differences existed with respect to the general terms applicable to similar operations carried out with third parties. c. Outside commercial operations carried out with corporations where some economic link exists with members of the company’s Board of Directors, indicated in the management report, during 2012 and 2011, no other mercantile operations were carried out with legal representatives or corporations where any of the previously mentioned is the beneficial owner of 10%

NOTE 12.

RE-APPRAISALS At December 31, this account included:

ASSET TYPE PROPERTY, PLANT AND EQUIPMENT (1) Land Buildings Machinery and equipment River fleet equipment Transportation equipment Aqueducts, plants and networks Subtotal INVESTMENT Marketable investments Rights in trust estates (PA Grupo Comtempo Oficinas Oxo Trust Estate) Long-term investments Investments in corporations - Net (See Note 9) Subtotal TOTAL

FINANCIAL REPORT 2012 - MINEROS S.A.

2012 $ 13.586.055 5.828.423 28.132.526 357.424 400.442 2.278.646 $ 50.583.516

2011 $

8.110.387 4.679.172 21.851.357 358.154 572.777 7.600.312 $ 43.172.159

2.250.548

2.337.477

11.468.194 $ 13.718.742 $ 64.302.258

12.699.516 $ 15.036.993 $ 58.209.152

(1) In November of 2012, the company hired commercial appraisals of property, plant and equipment which were conducted by Francisco Ochoa Avalúos S.A.S., a firm domiciled in Medellín and identified with TIN 900.400.170-5. Real estate property was appraised using the comparative or market method and cost or replacement method. In the case of machinery and equipment, quotes for similar machines and equipment were taken into account, their original value was updated translating it into United States Dollars as of that date, and impairment of value factors due to old age and use were later applied; also their current state was analyzed with technicians. Both assets in depreciation process and fully depreciated assets in use were appraised, with the appreciation of the totally depreciated assets in use recorded under memorandum accounts.

NOTE 13.

FINANCIAL LIABILITIES As of December 31, financial liabilities included:

ITEM

2012

Credit cards

$ 19.994

$ 62.912

30.721

82.742

$ 50.715

$ 145.654

Financial leasing contracts (1) TOTAL

2011

(1) At December 31 of 2012, financial leasing contracts No. 103632 and 121708 with Leasing Bancolombia S.A. for purchase of vehicles, as follows:

INSTALLMENTS

BALANCE

MATURITY

INSTALMENTS PENDING

103632

$6.630

Enero 3/2014

121708

24.091

Marzo 7/2016

TOTAL

$ 30.721

PURCHASE OPTION

RATE

849

11.08% E.A.

$ 1.052

350

8.34% E.A.

2.675

$ 1.199

ACCRUED INTEREST

$ 3.727

At December 31 of 2011, financial leasing contracts No. 103632, 108668 and 121708 with Leasing Bancolombia S.A. for purchase of three vehicles, as follows:

CONTRACT

INSTALLMENTS

BALANCE

MATURITY

INSTALMENTS PENDING

PURCHASE OPTION

RATE

ACCRUED INTEREST

103632

$ 11.890

Enero 3/2014

$ 849

11.08% E.A.

$1.408

108668

40.657

Marzo 15/2015

595

17% E.A.

3.946

121708

30.195

Marzo 7/2016

350

8.34% E.A.

2.345

TOTAL

Notes to the financial statements

$ 82.742

$ 1.794

$ 7.699

Notes to the financial statements

CONTRACT

NOTE 16.

NOTE 14.

TAXES, LIENS AND DUTIES

SUPPLIERS

Liabilities from purchase of goods for the development of mining-activity-related operations, which are paid within the next thirty (30) days.

A. Short term Includes the following items:

FINANCIAL REPORT

2012 - MINEROS S.A.

ITEM

NOTE 15.

Income tax (1)

ACCOUNTS PAYABLE Corresponds to short-term liabilities for different items derived from the normal development of the companyâ&#x20AC;&#x2122;s business, as follows: ITEM

2012

Related companies (1) (See Note 11)

2011

$ 2.022.183

$ 803.221

1.431.382

633.070

Payable costs and expenses

660.757

486.069

Withholding tax

749.990

729.693

Sales tax withheld

542.554

476.250

6.196

4.747

Payroll withholdings and contributions

1.266.005

1.078.197

Miscellaneous creditors (2)

8.800.253

8.106.506

Contractors

Turnover tax

15.479.320 $

$ 36.244.513

4.569.770

Gold Taxes

5.355

TOTAL

$ 22.101.837

$ 40.814.283

Equity tax (2)

(1) Balance payable for income tax was determined as follows:

ITEM Income tax provision

2011

$ 49.897.151

$ 56.846.805

Less: Advance income tax paid

28.333.311

17.633.926

Withholding tax

4.660.915

3.017.049

535.417

623.787

584.100

$17.526.712

$36.244.513

Discount for special contribution for the power sector Add: Provision of former years

12.317.753

(1) Balance in favor of Operadora Minera S.A.S. for $1,951,461 (2011 $733,471) for execution of the contract for provision of mining exploitation services, and balance in favor of Exploradora Minera S.A.S. for $70,722 (2011 $69,751) for fees of delegated administration contract. (2) Includes $1,037,264 in favor of Exploradora Minera on account of costs and expenses to be reimbursed.

2011

$ 17.526.712

TOTAL TOTAL

2012

FINANCIAL REPORT 2012 - MINEROS S.A.

(2) According to Law 1370 of 2009 and Legislative Decree No. 4825 of 2010, the company calculated equity tax equal to $18,279,076, based on taxable equity held on January 1, 2011, and 4.8% rate plus 1.2% surtax. Tax return was filed in May of 2011 and payment will be made in eight equal installments in 2011, 2012, 2013 and 2014. In May and September of 2012, the company paid equity tax for $4,569,770. Balance payable for 2014 was classified under long-term liabilities for $4,569,767 (2011-$9,139,537).

The company is subject to income tax at a nominal rate of 33%, applicable to taxable income Effective tax rates stood at 25.20% for 2012 and 32.9% for 2011, due to the permanent differences between commercial income and net taxable income. Below is a summary of the main entries to reconciliate commercial income and net taxable income, as well as accounting equity and fiscal equity.

1. Reconciliation between commercial income and net taxable income

Per books pre-tax income

2012

2011

$ 198.009.173

$ 172.649.200

2.504.071

(4.650.226)

(513.545)

(292.074)

(3.909.591)

Revenues from appreciation of shares

(3.398.055)

(222.156)

Deductions for new rubber plantations

(1.237.397)

(866.676)

(43.575.733)

(1.160.000)

(1.000.000)

3.621.952

3.873.125

1.063.873

Other non-deductible expenses

951.031

791.456

Otros gastos no deducibles

430.746

397.359

$ 151.203.488

$ 172.263.045

33% income tax on net taxable income

49.897.151

56.846.805

Deferred tax from increased value of fiscal depreciation $43,575,733

14.379.992

$ 64.277.143

$ 56.846.805

Plus: Less:

Dividends effectively recorded through equity method Revenues not constituting income or windfall profit Revenues not earned from equity method

Depreciation expense increased value resulting Donations paid against reserve that constitute fiscal deduction Plus:

Non-deductible expenses: Shares impairment of value Penalties and default interest Levy on financial transactions

NET TAXABLE INCOME

TOTAL INCOME TAX AND SURTAX PROVISION

Notes to the financial statements

ITEM

2. Reconciliation between accounting equity and fiscal equity Difference between per books equity and fiscal equity

2012

FINANCIAL REPORT

2012 - MINEROS S.A.

Per-books shareholdersâ&#x20AC;&#x2122; equity

2011

$ 536.503.656

$ 436.568.255

15.003.779

584.100

1.043.746

Less: Appreciation of investments and property, plant and equipment not fiscally recognized

(64.302.258)

(58.209.152)

Lower value of property, plant and equipment from effect of fiscal depreciation of reduced balances.

(43.575.733)

$ 444.673.190

$ 378.943.203

Plus: Liabilities not fiscally recognized Land fiscal adjustment

FISCAL TAXABLE EQUITY

The companyâ&#x20AC;&#x2122;s income tax and surtax returns until fiscal year 2011 are definitive, with the exception of fiscal year 2010, given that for such year, the corporation was not covered by the audit benefit provided for in article 28 of Law 863 of 2003 since it requested special 30% deduction on investment in real productive fixed assets established in article 158-3 of Tax Law fiscal benefit derogated as of 2011 (Law 1430 of 2010).

Exemptions

Legal entities who pay income tax and surtax are exempted of payment of quasi-fiscal contributions in favor of Servicio Nacional del Aprendizaje (SENA) and Instituto Colombiano de Bienestar Familiar (ICBF) corresponding to employees earning, considered individually, up to 10 statutory minimum wages. This exemption enters into force when the withholding tax system is implemented for collection of the Business Equity Contribution (CREE) and, at any rate, before July 1, 2013).

Tax Law Amendment

Below is a summary of some changes to the Colombian tax regime for the years 2013 and following, introduced by Law 1607 of December 26, 2012:

Income tax and surtax

Tariff on taxable income of legal entities changes to 25% starting January 01, 2013. Business Equity Contribution (CREE, for its Spanish initials) Starting as of January 01, 2013. This contribution is calculated on the basis of gross revenue less revenue not constituting income, costs, deductions, exempt income and windfall profits; 8% tariff. For the years 2013, 2014 and 2015 it will be 9%. When refining the base for CREE contribution calculation, compensation of income of the taxable period with fiscal losses or with excesses of presumptive income from former periods is not allowed.

FINANCIAL REPORT 2012 - MINEROS S.A.

Accounting rules

It is established that, only for tax effects, the references to accounting rules contained in tax regulation will continue in force during four years after the International Financial Reporting Standards become binding. Therefore, and for the aforementioned period, fiscal basis for the entries included in the income tax returns will remain unchanged. In the same manner, the requirements for recognition of special fiscal situations will lose validity as of the application date of the new regulatory accounting frame.

Obligation of Economic Groups to disclose consolidated financial statements

It is established that not later than June 30 of each year, duly registered economic and / or corporate groups must submit their consolidated financial statements, including their respective attachments, on magnetic medium to the National Customs and Tax Administration.

B. Long-term Includes the following items: ITEM

2012

Deferred income tax (1)

$ 14.379.992

2011 $

Equity tax

4.569.767

9.139.537

TOTAL

$ 18.949.759

$ 9.139.537

(1) In accordance with Article 78 of Decree 2649 of 1993, the company recorded this tax, corresponding to the difference arising between the calculation of accounting depreciation and fiscal depreciation for reduction of property, plant and equipment balances. Deferred taxes – The company availed of the fiscal benefit of flexible depreciation, whose application effect was a lower effective payment of income tax, which has been registered as deferred payable income tax, according to accounting standards. Along the next few years, the company will amortize depreciation registered for fiscal purposes. In order to obtain the increased fiscal depreciation, a non-distributable reserve equivalent to 70% of the increased deduction was established from earnings.

NOTE 17.

LABOR LIABILITIES At December 31, labor liabilities included: 2012

Severance payments

2011 $ 2.245.542

$ 2.250.316

Interest on severance payments

254.738

254.965

Vacations

789.210

734.945

Salaries payable

334.794

272.783

$ 3.624.284

$ 3.513.009

TOTAL

NOTE 18.

DIVIDENDS PAYABLE The balance at December 31 corresponds to: ITEM

2012

Regular dividends declared (1) Former periods dividends TOTAL

2011 $ 9.682.434

$ 7.065.560

694.609

581.934

$ 10.377.043

$ 7.647.494

(1) According to Minutes No. 51 of the Regular Shareholder’s Meeting of March 21 of 2012, the proposal for payment of dividends was approved. Monthly dividend is $10 per share on total 261,687,402 outstanding shares, for a monthly value of $2.616.874.020 for the April 2012-March 2013 period, payable between the 10th and the 20th day of each month. Shareholders registered in the shareholder register on the ex-dividend day of the same period determined in the General Regulations of the Stock Exchange, as provided in article 2 of Decree 4766 of 2011, are entitled to the month’s dividend. The above-mentioned Regular Shareholder’s Meeting (Minutes No. 51) approved payment of special dividend of $28 per share, payable in four installments of $7 each in April, July and October of 2012 and January of 2013. Total dividends paid for $38,729,735,496 were taken from earnings of the year 2011. For the current fiscal year, $29,047,301,622 has been accrued for the periods between April and December.

Notes to the financial statements

ITEM

NOTE 19.

FINANCIAL REPORT

2012 - MINEROS S.A.

RETIREMENT PENSIONS LThe retirement pensions currently under the responsibility of Mineros S.A. correspond to those workers, who on the date of the ISS Transfer Resolution (November of 1997), had expectations to qualify for the special retirement pension agreed in the Collective Bargaining Agreement (18 years of service, 47 years of age), and therefore, the recognition date depended on the workerâ&#x20AC;&#x2122;s will, or to those workers, who on the date of the same Resolution were not active company workers, and had retired with the expectation of retirement pension, with only the age requirement pending.

Fiscal regulation is used as the basis for recording of retirement pensions. The company has carried out actuarial calculations for retirement pensions on the basis of the technical parameters determined in Decree 2498 of 1988. These parameters were modified as of 1998 upon issuance of Regulatory Decree 1517 of 1998 (Paragraph 1, Article 1), by Article 1 of Decree 2783 of December 20 of 2001, by Article 1 of Regulatory Decree 51 of 2003, and recently, by Article 1 of Decree 4565 of December 7 of 2010, distributing the percentage to amortize actuarial calculation up to the year 2029 in a linear form. At December 31, 2012, the accumulated amortized percentage of the actuarial calculation stands at 63.97% (59.97% at December 31 of 2011).

As of December 31, retirement pensions included: ITEM Pension liabilities according to actuarial estimates Less: Retirement pension provision recorded by the Company RETIREMENT PENSIONS TO BE PROVIDED IN THE NEXT 18 YEARS

2012

2011 $ 1.283.327

$ 1.184.324

(462.347)

(474.051)

$ 820.980

$ 710.273

$ 110.708

$ 22.855

178.211

171.220

$ 288.919

$ 194.075

As of December 31, the value carried to expenses breaks down as follows: Pension appropriations Pension payments TOTAL

NOTE 20. EQUITY

A. Capital Stock Pubic deed 1030 of April 13 of 2005 of Notary Public Office 17 of Medellin formalized Minutes 44 of the Regular Shareholdersâ&#x20AC;&#x2122; Meeting of March 18 of 2005, where the authorized capital of $200,000 was divided into 400,000,000 common shares, each with a par value of fifty cents ($0.50*). Of these shares, 317,906,252 had been subscribed and paid for at December 31 of 2012 and 2011. * In Colombian Pesos At December 31 of 2012 and 2011, reserve for repurchase of shares totals $11,191,283.

FINANCIAL REPORT 2012 - MINEROS S.A.

At December 31 of 2012 and 2011, total 56,218,850 repurchased shares stand at $5,611,007 (no repurchase of own shares took place along the years 2012 or 2011). According to Article 396 of the Colombian Code of Commerce, as long as these shares remain the property of the corporation, the rights inherent to them shall be suspended.

B. Legal reserve Colombian law requires the company to transfer at least 10% of annual earnings to a legal reserve until the balance of the reserve is equal to 50% of subscribed capital. Such reserve cannot be distributed but can be used to absorb losses. As of December 31 of 2012 and 2011 balance equals $79,477 or 50% of subscribed and paid-in capital.

C. Equity revaluation and additional paid-in capital

In 2011, total equity tax for $18,279,076 was recorded against equity revaluation.

Equity revaluation ($16,912,520) and additional paid-in capital ($1,551,099) cannot be distributed as earnings but are susceptible of tax-free capitalization.

D. Other reserves

ITEM For future expansions (1)

The balance of this account includes: 2012

2011

$ 248.983.558

$ 175.470.899

For acquisition or replacement of property, plant and equipment (1)

21.935.253

19.535.253

Other

43.268.232

$ 314.187.043

$ 238.274.384

TOTAL OCCASIONAL RESERVES

(1) Changes in these reserves are the result of appropriations approved by the Regular Shareholdersâ&#x20AC;&#x2122; Meeting held on March 21, 2012, according to Minutes No. 51.

NOTE 21.

MEMORANDUM ACCOUNTS

Correspond to the following items and amounts:

Difference between per-books income and fiscal income

2012

2011

$ (46.805.685)

$ (386.156)

Difference between per-books equity and fiscal equity

91.830.466

57.625.052

Property, plant and equipment on which special deduction for investment in real productive fixed assets has been requested (Article 8, Law 1111/06)

51.922.876

$ 96.947.657

$ 57.238.896

Infrastructure leasing contracts pending execution (1)

70.000.000

Appreciation of fully depreciated property, plant and equipment (2)

82.316.492

118.969.285

6.762.621

170.000

240.000

$ 256.196.770

$ 253.210.802

Sub-total fiscal memorandum accounts (net)

Retirement pensions policy reserve Contingent liabilities for ongoing labor claims TOTAL

(1) Infrastructure leasing contracts No. 119709 and 119710 subscribed on December 28 of 2010 with Leasing Bancolombia S.A. for expansion of Providencia I Hydroelectric Plant and construction of Providencia III Hydroelectric Plant, worth $12,000,000 and $58,000,000 respectively, for a duration of 144 months and with interest rate equivalent to DTF T.A., plus 3.25 points for both contracts. At December 31, 2012, Leasing Bancolombia S.A. has disbursed $3,711,400 (contract No. 119709) and $33,957,252 (contract No. 119710) for execution of such contracts. Mineros S.A. in turn, respectively recorded in 2012 $190,269 and $1,138,841 for interest on disbursements made by Leasing Bancolombia S.A. as advances. (2) In accordance with the provisions of Communication No. 2010045038-011 of August 13 of 2010 of the Financial Superintendency regarding recording of this kind of appreciations.

Notes to the financial statements

MEMORANDUM ACCOUNTS

NOTE 22.

OPERATING REVENUES Amounts received and/or accrued as a result of the activities developed in compliance with its corporate purpose through delivery of goods proper to the mining activity. In order to comply

FINANCIAL REPORT

2012 - MINEROS S.A.

FOREIGN CUSTOMER

with the provisions of Number 2 of Article 117 of Regulatory Decree 2649/93, regarding disclosure of revenue percentages received from main customers from sale of precious metals (gold, silver) exported in its entirety directly or indirectly through SCL, we report the following:

2012

2011

INTL Commodities Inc. (USA)

34%

33.96%

Argor Heraeus S.A. (Switzerland)

26%

36.63%

Auramet Trading (USA)

24%

Metalor (Switzerland)

16%

29.34%

C.I. Goldex S.A. (Colombia)

0.03%

C.I. Dhows Congo S.A. (Colombia)

0.04%

100%

TOTAL

NOTE 23.

NON-OPERATING REVENUES AND EXPENDITURES As of December 31, these accounts included: NON-OPERATING REVENUES Financial yields

2012

2011 $ 10.823.017

$ 6.735.601

Exchange difference

3.781.470

4.120.174

Gold price hedge contracts

2.784.120

837.505

Revenues from appreciation of shares

2.330.252

222.156

Dividends and participations

1.683.718

572.466

Recoveries and realizations

1.246.766

1.116.340

Services

1.138.352

1.017.036

Miscellaneous

949.965

995.053

Income from the sale of investments

552.028

92.606

Trust rights

356.078

Indemnities

295.762

403.797

Income from equity method

292.074

3.909.591

UVR accounts adjustment

105.841

152.817

Rentals

47.683

62.190

Sale of agricultural products

47.023

73.991

Amortized discounts

15.241

7.567

Other financial yields

1.775

8.858

Income from the sale of fixed assets

1.000

108.439

17.266

$26.452.165

$20.453.453

Sale of miscellaneous materials TOTAL NON-OPERATING REVENUES

FINANCIAL REPORT 2012 - MINEROS S.A.

NON-OPERATING EXPENDITURES

2012

Exchange difference

2011 $ 4.488.521

$ 3.222.619

Amortization of mining projects

4.078.363

6.955.926

Investments impairment of value

3.621.952

3.873.125

Taxes assumed (1)

2.433.920

2.339.866

Interest and financial expenses

1.299.352

77.530

Other expenses

1.196.629

1.581.958

Premiums paid in options contracts

873.708

656.440

Commissions

624.521

349.253

Aids and charities (3)

298.287

301.216

Loss in securities trading (2)

200.917

215.473

Hedging contracts

172.566

630.723

64.412

8.186

253.181

$ 19.353.148

$ 20.465.496

$ 7.099.017

$ (12.043)

Fees Retirement of property, plant and equipment TOTAL NON-OPERATING EXPENDITURES TOTAL NON- OPERATING REVENUES AND EXPENDITURES NON OPERATING – NET

(1) Corresponds mainly to levy on financial transactions and non-deductible VAT charges.

ENTITY Pacific Rubiales Energy Corp.

2012

2011 $ 90.667

$ 43.977

Dirección del Tesoro Nacional

35.673

41.469

Almacenes Éxito S.A.

31.237

Cartera Colectiva Petroval

26.960

Vanguard Intl Equi

9.671

Ecopetrol

3.645

Merrill Lynch

2.750

313

32.107

Grupo Aval Acciones y Valores

68.702

Banco de Bogotá S.A.

24.590

Saldos menores

4.628

$200.916

$ 215.473

Corficolombiana S.A.

TOTAL

Notes to the financial statements

(2) Loss on securities trading

(3) Aids and charities

ENTITY

FINANCIAL REPORT

2012 - MINEROS S.A.

Military Forces of Colombia - National Army

2012

2011 $ 75.300

Empresa Social del Estado Hospital San Juan de Dios -ANORI

55.833

Corp. Santa Fe de Antioquia Film Festival

30.000

Fundación Protección Héroes de la Patria

25.000

Other minor

20.826

69.481

Fundación para el Progreso de Antioquia

19.648

18.748

Asoc. Piscicola Turist. Nueva Espe. el Real

11.232

Fundación Mi Sangre

10.000

Fundación Jardín Botánico De Medellín. “Joaquín Antonio Uribe”

10.000

Corporación Excelencia en la Justicia

8.100

7.800

Asociación Antioquia le Canta a Colombia

7.500

Corp. Para El Avance de la Geología y La Minería

5.000

La Casita de Nicolás

5.000

Fundación San Martin de Porres

3.000

Fundación Nal. Atención Int. Al Niño Con Cáncer

3.000

Periódico El Mundo S.A.

2.300

Asoc. Obras Social .En Benef.de la Policía

2.000

Fundación Fondo Social ANDI

1.348

Centros de Formación Familiar

1.200

Asoc. Medellin de Lucha Contra El Cáncer

1.000

Corporación Hogar

1.000

Military Forces General Command

120.890

Fundación Incluir Colombia

19.297

Partido Liberal Colombiano

15.000

$298.287

$ 301.216

TOTAL

FINANCIAL REPORT 2012 - MINEROS S.A.

NOTE 24.

SPECIAL COMMITMENTS – FUTURE OPERATIONS In compliance with Article 115, Number 17 of Regulatory Decree 2649/93, the operations of futures on financial assets executed by the company with different entities, valid as of December 31 of 2012, are listed below:

ENTITY Colpatria S.A. Banco de Bogotá S.A.

TYPE OF OPERATION OPERATION Foreign Exchange Hedges(Collars) Foreign Exchange Hedges (Collars)

NOMINAL VALUE USD USD 51.550.000 18.000.000

Colpatria S.A.

Foreign Exchange Forwards

2.500.000

Corficolombiana S.A.

Foreign Exchange Forwards

3.000.000

TOTAL

USD 75.050.000

At December 31 of 2011, these operations included:

Bancolombia S.A. Banco de Bogotá S.A. Banco Colpatria S.A.

TYPE OF OPERATION OPERATION Foreign Exchange Hedges (Collars) Foreign Exchange Hedges (Collars) Foreign Exchange Hedges (Collars)

NOMINAL VALUE USD USD 24.300.000 10.400.000 2.500.000

Banco de Bogotá S.A.

Foreign Exchange Forwards

925.652

Banco de Occidente S.A.

Foreign Exchange Forwards

800.540

Banco Colpatria S.A.

Foreign Exchange Forwards

500.000

TOTAL

NOTA 25.

SUBSEQUENT EVENTS In early February of 2013, and on the grounds of the work carried out by the company on the mining titles owned by GOLDSANDS DEVELOPMENT COMPANY in Northeastern Peru, under the option agreement subscribed with such company, the decision was made to cancel the project, given that the due diligence

Notes to the financial statements

USD 39.426.192

work did not evidence the possibility of the project magnitude envisioned by MINEROS S.A. At closing date of the general purpose financial statements for December 31 of 2012, the company is carrying out due diligence process for a mining concern in Nicaragua that it is considering to purchase.

Notes to the financial statements

ENTITY

Consolidated Financial Statement

2012 - MINEROS S.A. FINANCIAL REPORT

Statutory Auditorâ&#x20AC;&#x2122;s Report To the shareholders of MINEROS S.A. I have audited the consolidated balance sheets of MINEROS S.A. and its subsidiaries OPERADORA MINERA S.A.S. and EXPLORADORA MINERA S.A.S. as on December 31, 2012, and PROYECTO SABALETAS S.A.S., OPERADORA MINERA S.A.S and EXPLORADORA MINERA S.A.S. at December 31, 2011 and the corresponding consolidated statements of income, of changes in the shareholdersâ&#x20AC;&#x2122; equity, of changes in financial position, and of cash flows for the years then ended, as well as the summary of the main accounting policies and other explanatory notes. Management is responsible for the preparation and correct presentation of the financial statements in conformity with the accounting principles generally accepted in Colombia. Such responsibility includes: designing, implementing and maintaining an internal control system adequate for the preparation and presentation of the financial statements, free from significant errors due to fraud or error, selecting and applying appropriate accounting policies, and establishing the accounting estimates that are reasonable under the circumstances.

FINANCIAL REPORT 2012 - MINEROS S.A.

My responsibility is to audit said financial statements and express an opinion thereon based on my audits. I did not audit the financial statements of Operadora Minera S.A.S. and Exploradora Minera S.A.S., consolidated subsidiaries whose financial statements show total assets after elimination of reciprocal balances representing 2.1% and 3.11% of consolidated assets at December 31, 2012 and 2011, respectively, and revenues after elimination of reciprocal balances representing 0.35% and 4% of total consolidated revenues for the years ended on such dates. Such financial statements were audited by other statutory auditors whose reports have been provided to me. The opinion I express herein regarding the consolidated financial statements, in relation to the amounts included of such consolidated subsidiaries, is based solely, on the information provided by the statutory auditors of the subsidiaries. I obtained the information necessary to comply with my duties and carry out my work in accordance with auditing standards generally accepted in Colombia. Those standards require that I plan and perform the audit to satisfy myself that the financial statements are free from significant errors.

Consolidated Financial Statement

2012 and PROYECTO SABALETAS S.A.S., OPERADORA MINERA S.A.S. and EXPLORADORA MINERA S.A.S. as on December 31, 2011, the results of its operations, the changes in its equity, the changes in its financial position, and its cash flows for the years then ended, in conformity with accounting principles generally accepted in Colombia, applied on uniform basis.

LINA MARÍA VELÁZQUEZ ÁLVAREZ Statutory Auditor Professional Card 61321-T Designated by Deloitte & Touche Ltda.

Consolidated Financial Statement

An audit of financial statements includes examining, on a test basis, the evidence supporting the amounts and disclosures included in the financial statements. The audit procedures selected depend on the auditor’s professional judgment, including an evaluation of the risk of significant errors in the financial statements. In evaluating risk, the statutory auditor considers the Company’s internal control relevant for the preparation and reasonable presentation of the financial statements, in order to design audit procedures appropriate to the circumstances. An audit also includes evaluating the accounting principles used and the significant accounting estimates made by Management, as well as evaluating the overall presentation of the financial statements. I consider that my audits provide a reasonable basis for the opinion which I express. In my opinion, on the basis of my audit and that of other statutory auditors, the aforementioned consolidated financial statements present fairly, in every significant aspect, the consolidated financial position of MINEROS S.A. and its subsidiaries OPERADORA MINERA S.A.S. and EXPLORADORA MINERA S.A.S. as on December 31,

February 25, 2013

MINEROS S.A. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS AT DECEMBER 31, 2012 AND 2011 (In thousands of Colombian pesos)

2012 - MINEROS S.A.

ASSETS

2012

2011

Note

CURRENT ASSETS Cash

FINANCIAL REPORT

Marketable securities

Cash and cash equivalents Accounts receivable

Prepaid expenses TOTAL CURRENT ASSETS PROPERTY, PLANT AND EQUIPMENT 5

Long-term accounts receivable Inventories Long-term investments Other assets

RE-APPRAISALS

7 8 9

MEMORANDUM ACCOUNTS

BEATRIZ E.URIBE RESTREPO President

934,951

182,864,099

152,405,774

183,864,470

153,340,725

48,832,743

44,149,420

7,743,747

6,407,426

240,440,960

203,897,571 121,030,195

129,434,037

121,030,195

5,543,832 34,601,808 6,597,562 127,852,657

5,139,064 34,333,729 6,597,563 87,065,849

174,595,859

133,136,205

64,302,258

58,209,152

$ 608,773,114

516,273,123

$ 259,244,868

257,498,249

HÉCTOR TRESPALACIOS T. Chief Accounting Officer Professional Card No. 32758-T

FINANCIAL REPORT 2012 - MINEROS S.A.

129,434,037

TOTAL ASSETS

1,000,371

LINA MARÍA VELÁSQUEZ ÁLVAREZ Statutory Auditor Professional Card 61321Designated by Deloitte & Touche Ltda. (See attached opinion)

MINEROS S.A. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS AT DECEMBER 31, 2012 AND 2011 (In thousands of Colombian pesos)

LIABILITIES AND EQUITY

2012

2011

Note CURRENT LIABILITIES Financial liabilities Suppliers Accounts payable Taxes, liens and duties Labor liabilities Dividends payable

50,715 3,196,852 13,491,511 22,343,650 5,043,818 10,377,043

12 13 14

TOTAL CURRENT LIABILITIES

54,503,589

Equity taxes Deferred tax Retirement pensions

69,945,414

4,723,039 14,379,992 820,980

12 12 15

145,654 4,007,816 11,675,378 41,580,522 4,888,550 7,647,494

9,446,081 710,272

TOTAL NON-CURRENT LIABILITIES

19,924,011

10,156,353

TOTAL LIABILITIES

74,427,600

80,101,767

158,953 1,551,099 16,912,520 64,302,258 11,191,283 -5,611,007 314,266,520 131,573,888

158,953 1,551,099 16,912,520 58,209,152 11,191,283 -5,611,007 238,353,860 115,405,496

Capital stock Additional paid-in capital Equity revaluation Revaluation surplus Reserve for repurchase of shares Treasury stock Other appropriated reserves Year's income

16 16 16 10 16 16

TOTAL SHAREHOLDERS’ EQUITY TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY MEMORANDUM ACCOUNTS

BEATRIZ E.URIBE RESTREPO President

Consolidated Financial Statement

534,345,514

436,171,356

608,773,114

516,273,123

259,244,868

257,498,249

HÉCTOR TRESPALACIOS T. Chief Accounting Officer Professional Card No. 32758-T

Consolidated Financial Statement

SHAREHOLDERS’ EQUITY

LINA MARÍA VELÁSQUEZ ÁLVAREZ Statutory Auditor Professional Card 61321Designated by Deloitte & Touche Ltda. (See attached opinion)

MINEROS S.A. AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS AT DECEMBER 31, 2012 AND 2011

2012 - MINEROS S.A.

(In thousands of Colombian pesos)

2012

2011

Note

FINANCIAL REPORT

PRECIOUS METALS PRODUCTION

$ 358,710,639

Production costs Administration expenses OPERATING INCOME

-157,313,186

-163,891,387

-11,483,647

-10,360,435

189,913,806

NON-OPERATING REVENUES (EXPENDITURES), NET

INCOME BEFORE PROVISION FOR INCOME TAX Provision for income tax YEAR'S NET INCOME

179,456,855

6,252,953

196,166,759 12

$ 353,708,677

-5,075,596

174,381,259

-64,592,871 $ 131,573,888

-58,975,763 $ 115,405,496

The accompanying notes are an integral part of these financial statements.

BEATRIZ E.URIBE RESTREPO President

HÉCTOR TRESPALACIOS T. Chief Accounting Officer Professional Card No. 32758-T

FINANCIAL REPORT 2012 - MINEROS S.A.

LINA MARÍA VELÁSQUEZ ÁLVAREZ Statutory Auditor Professional Card 61321Designated by Deloitte & Touche Ltda. (See attached opinion)

Consolidated Financial Statement

$ 158,953

$ 1,551,099

Consolidated Financial Statement

$ 1,551,099

Additional Paid -in Capital

BEATRIZ E.URIBE RESTREPO President

BALANCES AT DECEMBER 31, 2012

Transfer Gift Year's increase Year's income

BALANCES AT DECEMBER 31, 2011

Transfer Gift Equity revaluation Year's increase Year's income

BALANCES AT DECEMBER 31, 2010

Capital

$ -5,611,007

Treasury stock

$ 79,477

Legal Reserve

$ 21,935,253

2,400,000 -

$ 19,535,253

2,400,000 -

$ 17,135,253

Reserve for asset protection

1,160,000 -1,160,000 -

1,000,000 -1,000,000 -

Reserve for gifts

$ 292,251,790

73,512,660 -

$ 218,739,130

50,786,951 -

$ 167,952,179

Reserve for development of new projects

$ 314,266,520

77,072,660 -1,160,000 -

$ 238,353,860

54,186,951 -1,000,000 -

$ 185,166,909

Total other reserves

$ 131,573,888

-115,405,496 131,573,888

$ 115,405,496

-91,866,085 115,405,496

$ 91,866,085

Year's Income

HÉCTOR TRESPALACIOS T. Chief Accounting Officer Professional Card No. 32758-T

$ 16,912,520

-18,279,076 -

$ 35,191,596

Equity Revaluation

$ 64,302,257

6,093,105 -

$ 58,209,152

-2,806,299 -

$ 61,015,451

Revaluation Surplus

LINA MARÍA VELÁSQUEZ ÁLVAREZ Statutory Auditor Professional Card 61321Designated by Deloitte & Touche Ltda. (See attached opinion)

The accompanying notes are an integral part of these financial statements.

11,191,283

Reserve for repurchase of shares

APPROPRIATED

(In thousands of Colombian pesos)

FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

MINEROS S.A. AND SUBSIDIARIES

$ 534,345,514

-38,332,836 -1,160,000 6,093,105 131,573,888

$ 436,171,356

-37,679,134 -1,000,000 -18,279,076 -2,806,299 115,405,496

$ 380,530,369

Total equity

MINEROS S.A. Y SUBORDINADAS

ESTADOS CONSOLIDADOS DE CAMBIOS EN LA SITUACIÓN FINANCIERA al 31 de Diciembre de 2012 y 2011 (Cifras expresadas en miles de pesos )

2012

2011

Financial resources generated by operations

2012 - MINEROS S.A.

Net income of the period

Add (less) charges (credits) not affecting working capital Depreciation Amortization of intangible assets Provision for retirement pensions Other assets and inventories amortization Depreciation charged to projects Deferred tax Working capital provided by operations

131,573,888

115,405,496

19,840,445 65,620 110,708 10,032,307 14,379,992

22,276,207 36,127 22,854 17,575,720 306,061 -

176,002,960

155,622,465

396,899

9,446,081 444,966 3,851

176,399,859

165,517,363

404,768 28,244,287 51,152,813 4,723,042 38,729,735 1,160,000 -

21,257,986 44,412,357 37,682,985 1,000,000 18,279,075

124,414,645

122,632,403

FINANCIAL REPORT

Sources of funds Increase in accounts payable Decrease in long-term accounts receivable Increase in equity resulting from consolidation Total sources of funds Use of funds Increase in long-term accounts receivable Additions to property, plant and equipment Increase in other assets Decrease in equity tax Dividends declared Gifts Equity tax Total uses of funds INCREASE IN WORKING CAPITAL

51,985,214

42,884,960

36,543,389

70,916,182

CHANGES IN WORKING CAPITAL COMPONENTS:

Increase (decrease) in current assets Cash Marketable securities Accounts receivable Prepaid expenses

65,420 30,458,325 4,683,323 1,336,321

Decrease (increase) in current liabilities

15,441,825

Financial liabilities Suppliers Accounts payable Taxes, liens and duties Labor liabilities Dividends payable

-28,031,222

94,939 810,964 -1,816,133 19,236,872 -155,268 -2,729,549

INCREASE IN WORKING CAPITAL

BEATRIZ E.URIBE RESTREPO President

-67,166 42,707,208 24,261,923 4,014,217

HÉCTOR TRESPALACIOS T. Chief Accounting Officer Professional Card No. 32758-T

FINANCIAL REPORT 2012 - MINEROS S.A.

51,985,214

-58,481 -168,996 -2,436,345 -23,851,718 -637,146 -878,536 $

42,884,960

LINA MARÍA VELÁSQUEZ ÁLVAREZ Statutory Auditor Professional Card 61321Designated by Deloitte & Touche Ltda. (See attached opinion)

MINEROS S.A. Y SUBORDINADAS

ESTADOS CONSOLIDADOS DE CAMBIOS EN LA SITUACIÓN FINANCIERA al 31 de Diciembre de 2012 y 2011 (Cifras expresadas en miles de pesos )

2012 CASH FLOWS FROM OPERATION ACTIVITIES Net income Adjustments to reconcile income to net cash provided by operation activities: Depreciation Amortization of intangible assets Provision for retirement pensions Other assets and inventories amortization Depreciation charged to projects Deferred tax Effect on consolidation other than income statement

Changes in assets and liabilities (Increase) Decrease in: Accounts receivable Prepaid expenses Increase (Decrease) in: Suppliers Accounts payable Taxes, liens and duties Dividends payable Labor liabilities Equity Tax

131,573,888

2011

19,840,445 65,620 10,032,307 110,708 14,379,992 2,158,141

22,276,207 36,126 17,575,720 306,061 22,855 396,899

178,161,101

156,019,364

-5,088,091 -1,336,321

-23,816,957 -4,014,217

-810,964 1,816,133 -19,236,872 2,729,549 155,268 -4,723,042

168,996 2,436,345 23,851,718 878,536 637,146 9,446,081

-26,494,340 NET FUNDS PROVIDED BY OPERATING ACTIVITIES

115,405,496

9,587,649

151,666,761

165,607,013

CASH FLOWS FROM INVESTMENT ACTIVITIES Acquisition of property, plant and equipment Acquisition of other assets

-28,244,287 -52,914,055

-21,257,987 -44,805,405

NET FUNDS USED IN INVESTMENT ACTIVITIES

-81,158,342

-66,063,392

CASH FLOWS FROM FINANCING ACTIVITIES (Decrease) increase in financial liabilities Dividends paid Gifts Equity tax

-94,939 -38,729,735 -1,160,000 -

58,481 -37,682,985 -1,000,000 -18,279,075

NET FUNDS USED IN FINANCING ACTIVITIES

-39,984,674

-56,903,579

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD

30,523,745 153,340,725 $

183,864,470

42,640,042 110,700,683 $

153,340,725

Consolidated Financial Statement

NET CHANGES IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD

The accompanying notes are an integral part of these financial statements.

BEATRIZ E.URIBE RESTREPO President

Consolidated Financial Statement

HÉCTOR TRESPALACIOS T. Chief Accounting Officer Professional Card No. 32758-T

LINA MARÍA VELÁSQUEZ ÁLVAREZ Statutory Auditor Professional Card 61321Designated by Deloitte & Touche Ltda. (See attached opinion)

2012 - MINEROS S.A. FINANCIAL REPORT

Shareholders’ Meeting March 20 of 2013

Certification of Financial Statements The undersigned, Legal Representative and Chief Accounting Officer of the company, under whose responsibility the financial statements were prepared, in compliance with the bylaws, hereby declare that they have previously verified the assertions therein contained, which have been faithfully taken from the books.

BEATRIZ E.URIBE RESTREPO President

FINANCIAL REPORT 2012 - MINEROS S.A.

HÉCTOR TRESPALACIOS T. Chief Accounting Officer Mat. 32758-T

MINEROS S.A. AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS CONSOLIDATED AS ON DECEMBER 31, 2012 AND 2011 (In thousands of Colombian Pesos, except when noted otherwise)

NOTE 1.

The corporation has its operation center in the municipality of Zaragoza (Antioquia province), Naranjal and Corderito localities, and its administrative offices in Medellín. The duration of the company is indefinite.

Mineros de Antioquia S.A. is a private corporation established on November 14 of 1974 by public deed No 6161 of the 4th Notary Public Office of Medellin for a term of ninety-nine (99) years. Through public deed No. 1038 of April 19 of 2004, it changed its corporate name to MINEROS S.A.

As recorded in the minutes of Shareholders’ Meeting No. 6 of October 08 of 2012, filed with the Mercantile Register of Medellin City Chamber of Commerce on December 15 of 2012 under number 20372, merger was approved between OPERADORA MINERA S.A.S., as the beneficiary corporation, and PROYECTO SABALETAS S.A.S. (also a MINEROS S.A. subsidiary) as the merged corporation. This latter corporation used to operate a processing plant for goldcontaining slag at Sitio Viejo county, in the municipality of Titiribí (Antioquia Province).

OPERATIONS OF THE CONSOLIDATED COMPANIES

The company has as its purpose the conduction of any type of business, activities, endeavors, acts and contracts related to the mining industry in general, of either precious metals, metallic and non-metallic mineral substances or hydrocarbons. To comply with its corporate purpose, the company’s operation center is located in El Bagre (Antioquia province) and its headquarters in Medellín. The financial statements at December 31, 2012 are consolidated among MINEROS S.A., the controlling corporation, and the subsidiaries OPERADORA MINERA S.A.S. and EXPLORADORA MINERA S.A.S. In 2011, the consolidation process of financial statements took place among the same corporations plus the subsidiary PROYECTO SABALETAS S.A.S., which was merged into OPERADORA MINERA S.A.S. in 2012

On the date of merger formalization (November 15 of 2012), the following entries were incorporated into the accounting books of OPERADORA MINERA S.A.S.: BALANCES TYPE OF ACCOUNT ASSETS LIABILITIES

DEBIT

CREDIT

$ 7.306.389

421.056

• OPERADORA MINERA S.A.S.

Capital stock

437

Capital surplus

3.369.563

Simplified joint stock company OPERADORA MINERA S.A.S. was incorporated according to Colombian regulation on March 10 of 2009, and its corporate purpose is to carry out all kinds of licit acts, especially in the areas of preservation, exploration, exploitation, industrialization and availing of any form of renewable and nonrenewable resources. The private document related to its incorporation was filed with the mercantile register of the Chamber of Commerce of Medellin City on April 2 of 2009, in book 9, under number 4129.

Reserves

3.912.210

314.902

Revenues

1.816.847

Expenses

226.587

1.607.843

64.392

$ 9.520.113

Consolidated Financial Statement

Year’s results

Sales costs Production costs - indirect TOTAL

Consolidated Financial Statement

EQUITY

FINANCIAL REPORT

2012 - MINEROS S.A.

â&#x20AC;˘ EXPLORADORA MINERA S.A.S.

principles generally accepted in Colombia, could disagree with the accounting principles generally accepted in other countries.

Simplified joint stock company Exploradora Minera S.A.S. was incorporated through private document on March 15 of 2010, filed with the Medellin Chamber of Commerce on April 6 of same year under No. 067. Its corporate purpose is to carry out any licit civil or commercial act, and its economic activity consists of conducting mining exploration works in the different work fronts and projects that MINEROS S.A. has around the country. For such effect, it has subscribed a delegated administration contract with the parent company in exchange for a remuneration.

Although they may differ in their final effect, Management considers that the estimates and assumptions used were adequate under the circumstances and that they agree with the accounting principles generally accepted in Colombia. The main accounting policies used for the preparation of the consolidated financial statements are:

Consolidation basis

NOTE 2.

ACCOUNTING POLICIES The consolidated financial statements of MINEROS S.A. and its subsidiaries OPERADORA MINERA S.A.S. and EXPLORADORA MINERA S.A.S. have been prepared and presented according to accounting principles generally accepted in Colombia. Certain accounting principles applied for matters of consolidation of MINEROS S.A. and its subsidiaries, according to accounting

The attached consolidated financial statements include the financial statements of MINEROS S.A. and its subsidiaries OPERADORA MINERA S.A.S. and EXPLORADORA MINERA S.A.S. where MINEROS S.A. holds, as of December 31, 2012, 100% of shares. All significant balances and operations between the companies were deleted during consolidation. Assets, liabilities, equity and results of MINEROS S.A. and its subsidiaries as of December 31, 2012 and 2011, and for the year ended on that date, are:

Year 2012

$ 611.092.698

$ 10.975.126

EXPLORADORA MINERA S.A.S. $ 1.871.156

74.589.042

2.285.051

1.191.330

Equity

536.503.656

8.690.075

679.826

Results

133.732.030

31.208

260.866

ITEM

MINEROS S.A.

Assets Liabilities

OPERADORA MINERA S.A.S.

Year 2011 ITEM Assets Liabilities

MINEROS S.A. $ 514.618.480

PROYECTO OPERADORA MINERA SABALETAS S.A.S. S.A.S. $ 11.417.311 $ 3.174.050

EXPLORADORA MINERA S.A.S. $ 1.455.558

78.050.225

1.631.030

1.797.392

1.036.598

Equity

436.568.255

9.786.281

1.376.658

418.960

Results

115.802.395

2.782.301

981.987

145.303

FINANCIAL REPORT 2012 - MINEROS S.A.

Methodology In accordance with article 122 of Regulatory Decree 2649 of 1993, for matters of consolidation, all balances and reciprocal operations among companies as of the closing date of such reports, and for the period mentioned, were deleted.

Accounting system The companies use the accrual accounting system, according to which revenues and expenditures are recorded when incurred, independently of whether payment or collection has been in cash.

• According to control, they are classified as controlling and non-controlling, subject to the provisions of the Colombian Code of Commerce. • Based on the cause or reason motivating the investment, they are voluntary or mandatory.

According to legal provisions, the monetary unit used by the companies for the balance sheet and income statement accounts is the Colombian Peso.

Materiality The company’s policy for disclosing accounting entries in its consolidated financial statements in order to determine their materiality is based on the relative importance of each subaccount with respect to the account group to which it belongs. Accordingly, balance sheet entries at December 31, 2012 and 2011 representing 5% or more of current assets, other assets, current liabilities, long-term liabilities and equity, are disclosed.

Investments Investments are recorded at cost or at the inflation-adjusted cost until December 31, 2006, as the case may be, and which does not exceed sale value. Based on External Circular Letter 11 of the Securities Superintendency (today Financial Superintendency) of 1998, in the case of MINEROS S.A., and Circular Letter 05 of 1998 of the Superintendency of Corporations, in the cases of OPERADORA MINERA S.A.S. and EXPLORADORA MINERA S.A.S., the companies classify investments as follows:

Property, plant and equipment These are recorded at cost, which includes inflation adjustments from January 1 of 1992 until December 31 of 2006. Maintenance and repair expenditures that do not increase the useful life of respective assets are recorded as a charge in the income statement, as they are incurred. Starting January 1, 2012, for fiscal effects, the company adopted the balance reduction depreciation system (Art. 134 of Fiscal Law), with the exception of those fixed assets on which special deduction for investment in productive real fixed assets had been requested in previous fiscal periods (from 2007 to 2010) as provided in Art. 158-3 of the Fiscal Law. According to the provision of the aforementioned rule, these fixed assets con only be depreciated through the straight-line system. No residual value is estimated by the company for its assets, given that it considers this value to be of no relative importance, and thus assets are depreciated in their totality. For accounting effects, depreciation is calculated by the straightline method, based on the estimated useful life of assets, using the following depreciation annual rates:

BUILDINGS AND CONSTRUCTIONS

MACHINERY AND EQUIPMENT

ELECTRIC PLANTS AND NETWORKS

FURNITURE AND FIXTURES

DREDGES

TRANSPORTATION EQUIPMENT

COMPUTER EQUIPMENT

10%

15%

20%

Consolidated Financial Statement

Monetary unit

Inventories

FINANCIAL REPORT

2012 - MINEROS S.A.

Inventories correspond to materials and consumables, dredge maintenance materials, parts and other accessories; they are valued at average cost using a permanent or continuous inventory system. Materials in transit and workshop orders under process are valued at their actual manufacturing or acquisition costs.

Equity tax and surtax In accordance with the Law that regulates accounting principles generally accepted in Colombia and considering the alternatives for accounting recording established there, the company chose to record such tax and its corresponding surtax against the equity revaluation account.

Deferred charges

Income tax

As provided by accounting and fiscal regulations, amortization policies for deferred charges depend on their nature, as follows:

The companies determine the provision for income tax on the basis of the highest between taxable income and presumptive income estimating it at rates specified by the tax law; additionally, it records as deferred income tax the effect of temporary differences between books and taxes with respect to certain entries, provided there is reasonable expectation that such differences will revert in the future.

1. Mining projects are amortized on the basis of the deposit’s estimated exploitation time, starting on the date when respective revenue starts. When exploration investments result to be fruitless, they are amortized in the same period when they are so determined. 2. Agricultural projects (rubber plantation and bio-factory of MINEROS S.A.) are amortized along the estimated cultivation time, once concluded the non-productive period.

Labor liabilities

3. Other deferred charges are mainly dredges’ major spare parts and insurance premiums, which are amortized according to the duration of the spare part or the policy’s validity period, along periods ranging between one (1) and five (5) years.

Retirement pension liabilities payable by the company are determined based on actuarial studies as provided by legal regulations. Annual retirement pension provision is adjusted in a rational and systematical way. Pension payments are charged to the income statement.

Exchange difference

In the case of the associates covered by the social security regime (Law 100 of 1993), the company sees to its retirement pension obligations through payment of contributions to pension funds under the terms and conditions mandated by that law.

Transactions in foreign currencies are recorded at the applicable exchange rate in force on the date of the transaction. Balances receivable of investments abroad, financial liabilities and accounts payable are adjusted monthly. The balances of such accounts at December 31 were translated into Colombian Pesos at the market representative rate for the end of the year certified by the Financial Superintendency ($1,768.23/ US$ in 2012 and $1,942.70/US$ in 2011). Exchange difference resulting from accounts payable and foreign-currency liabilities used to purchase inventories, deferred charges, and property, plant and equipment is capitalized until the asset is in condition of being used or disposed of. From that moment on, the exchange difference is recorded against the income statement of the period. All other exchange gains and losses are recorded as financial revenue or expense.

FINANCIAL REPORT 2012 - MINEROS S.A.

Labor liabilities are adjusted at year’s close as provided by legal regulations and binding collective bargaining agreements.

Additional paid-in capital The excess of placed shares price over their par value is recorded in the capital surplus account, additional paid-in capital.

Reappraisals These correspond to differences between commercial or cadastral appraisal and net book value of real estate property; for all other assets susceptible to appreciation (impairment of value), they are determined through technical appraisals

Reappraisal of investments as of December 31, 2012 and 2011 was conducted as established in circular letter 011 of 1998 of the Securities Superintendency (today, Financial Superintendency) in the case of MINEROS S.A., and Circular Letter 05 of 1998 of the Superintendency of Corporations, in the cases of OPERADORA MINERA S.A.S. and EXPLORADORA MINERA S.A.S., as follows: • In the case of MINEROS S.A., for marketable variableincome investments, when their sale value (stock exchange quote or book value) is higher than their cost, the reappraisal affects the investments’ latest cost registered, by increasing or decreasing their amount, and it will have a contra entry in the results of the period, recognizing the revenue or expense produced depending on the increase or decline of investment, respectively. • In the case of the subsidiaries, for marketable variableincome investments when their sale value (stock exchange quote or intrinsic value) is higher than cost, reappraisal is recorded for the period under assets and revaluation surplus under equity. When the sale value is lower than cost, the difference will affect reappraisal and revaluation surplus, when it is higher, a provision will be recorded in the income statement. • Long-term investments of controlled companies are accounted through the equity method. • When the sale value of long-term investments of noncontrolled companies is higher than cost, reappraisal for the period is recorded under assets and revaluation surplus under equity. When the sale value is lower than cost, the difference will affect reappraisal and revaluation surplus, without limitation upon the fact that their net balance might be of a contrary nature.

Equity revaluation Balances at December 31, 2012 and 2011 correspond to inflation adjustments to equity accounts until December 31, 2006, minus the equity tax and corresponding surtax recorded in compliance with Law 1370 of 2009 and Legislative Decree 4825 of 2010. According to current regulations, this balance cannot be distributed as income until the company is liquidated or capitalized.

Memorandum accounts Control memorandum accounts record financial information for control, contingencies, and future transactions commitments; fiscal memorandum accounts record differences between perbooks values and values for fiscal matters.

Statement of cash flows The statement of cash flows was prepared by the indirect method. To this end, cash, checking and savings accounts balances, as well as high-liquidity marketable investments are considered as cash and cash equivalents.

Convergence to International Financial Reporting Standards Pursuant to the provisions of Law 1314 of 2009 and regulatory decrees 2706 and 2784 of December, 2012, the company is bound to initiate convergence between the accounting principles generally accepted in Colombia and the International Financial Reporting Standards (IFRS). To this end, the Public Accounting Technical Council issued the Strategic Directive that classifies Companies in three groups. Since the parent company belongs to Group 1, it has January 1, 2014, as the date set to start its mandatory transition period, and December 31, 2015, as the issuance date of the first comparative financial statements under IFRS. Consolidated Financial Statement

conducted every three years. Such reappraisals are recorded in separate assets and equity accounts as revaluation surplus, which is not distributable. Impairment of value of real estate property is recorded through provision charged to the period’s expenses.

Gifts Gifts are recorded against fiscal period results or against occasional reserves established for such purpose by the Shareholders’ Meeting.

Consolidated Financial Statement

NOTE 3.

ACCOUNTS RECEIVABLE At December 31, this account included: ITEM

2012

Customers

2011 $

FINANCIAL REPORT

2012 - MINEROS S.A.

Public entities

16.584.115

$ 21.206.574

12.710.933

11.583.628

886.907

846.791

Loans to associates Advance payments to suppliers and contractors Yields receivable

9.387.420

3.858.367

8.112.679

6.125.518

Other

1.150.689

528.542

48.832.743

$ 44.149.420

TOTAL

NOTE 4.

MARKETABLE SECURITIES At December 31, this account included: ITEM Participation in trust estates with trust companies (1) Trust funds administered by brokerage firms (on demand) Certificate of Deposit - CD

2012

2011 1.337.624

$ 1.371.073

1.101.038

1.977.106

79.250.000

45.000.000

Public bonds

11.160.000

10.750.000

Private bonds

17.241.388

24.126.804

Treasuries - TES

37.063.026

39.476.567

Shares in local corporations (2)

18.562.730

15.960.972

1.039.898

1.448.782

10.781.824

7.220.082

Other investments abroad (4)

4.069.787

3.782.383

Other investments (5)

2.182.053

3.285.077

$ 183.789.368

$ 154.398.846

(925.269)

(1.993.072)

$ 182.864.099

$ 152.405.774

Shares in foreign corporations (3) Hedging operations

Subtotal Allowance for impairment of value of investments TOTAL

(1) Rights held as on December 31, 2012 and 2011 in Trust Estate P195 Grupo Contempo Ltda. Oficinas Oxo - Bogotรก in Fidubogotรก S.A. Along 2012, $356,078 was received from this Trust Estate as financial yields (2011 - $383,265 as refunded contributions). (2) At December of 31 of 2012, the company had as marketable securities the following investments in shares of Colombian corporations:

FINANCIAL REPORT 2012 - MINEROS S.A.

Ecopetrol S.A.

NO.SHARES (UNITS)

MARKET VALUE (IN BOOKS) 597.700

3.255.271

Suramericana de Inversiones A.D.P.

60.357

2.345.096

Nutresa S.A.

70.599

1.794.590

539.000

1.360.934

Bancolombia S.A.

41.000

1.228.818

ISA S.A. E.S.P. *

86.300

1.154.927

Cementos Argos S.A.*

99.900

1.154.378

Suramericana de Inversiones A.O.

26.400

995.290

154.500

870.461

Inversiones Argos S.A. A.D.P.

28.485

606.916

Banco Davivienda S.A.

24.500

572.575

Inversiones Argos S.A.

26.600

562.648

Grupo Aval S.A. ADP *

343.248

446.222

19.999

366.482

Fogansa S.A. *

175.000

350.000

Grupo Aval S.A. A.O *

195.213

253.777

4.110

252.991

149.860

220.764

27.200

218.144

Canacol Energy Ltda. *

7.500

213.595

Banco de Occidente S.A. *

5.367

202.121

8.103.080

79.293

95.729

57.437

ISAGEN S.A. E.S.P. *

Celsia S.A.*

Fondo Burs谩til Ishares COLCAP

Pacific Rubiales Energy Corp* Conconcreto S.A.* Cart贸n de Colombia S.A. *

Tablemac S.A. * Banco Popular S.A. * TOTAL

$ 18.562.730

* Recorded at purchase price, because of their loss of value.

Consolidated Financial Statement

ISSUER

As of December of 2008, MINEROS S.A. and its subsidiaries had as marketable securities the following investments in shares of Colombian corporations:

ISSUER

MARKET VALUE (IN BOOKS) $

2.002.416

2012 - MINEROS S.A.

471.200

Grupo Nutresa S.A. *

70.599

1.735.432

ISAGEN S.A. E.S.P.*

539.000

1.360.934

Bancolombia S.A.

41.000

1.157.515

Cementos Argos S.A. *

99.900

1.156.314

ISA S.A. E.S.P *

86.300

1.154.927

FINANCIAL REPORT

Ecopetrol S.A.

NO.SHARES (UNITS)

Grupo de Inversiones Suramericana S.A.-A.D.P.

30.770

1.011.830

Pacific Rubiales Energy Corp. *

16.110

991.652

Suramericana de Inversiones S.A. *

26.400

994.369

154.500

870.461

1.658.000

718.245

Banco Davivienda S.A.

24.500

507.940

Grupo Aval – A.D.P. *

343.248

446.222

Grupo Aval – A.O. *

195.213

253.777

Fogansa S.A. *

175.000

350.000

Conconcreto S.A. *

145.153

220.763

Cartón de Colombia S.A.

27.200

218.144

Canacol Energy Ltd. *

75.000

213.595

5.367

202.121

10.600

199.016

10.000.000

99.400

95.729

57.437

Corficolombiana S.A. *

654

22.691

Almacenes Éxito S.A.

619

15.771

Colinversiones S.A. E.S.P * Helm Bank S.A. *

Banco de Occidente S.A. * Inversiones Argos S.A. * Tablemac S.A. Banco Popular S.A. *

TOTAL

$ 15.960.972

* Recorded at purchase price, because of their loss of value.

FINANCIAL REPORT 2012 - MINEROS S.A.

(3) As of December of 2008, MINEROS S.A. and its subsidiaries had in their investment portfolio the following investments in shares of foreign corporations:

ISSUER

NO. OF SHARES

Quia Resources Inc. Compañía de Minas Buenaventura Petrominerales Ltd TOTAL

13.320.000 4.880 6.150

MARKET VALUE (IN BOOKS) $

635.926 310.211 93.761 $ 1.039.898

As of December of 2008, MINEROS S.A. and its subsidiaries had in their investment portfolio the following investments in shares of foreign corporations: ISSUER

MARKET VALUE (IN BOOKS)

NO. OF SHARES

Quia Resources Inc. Compañía de Minas Buenaventura Petrominerales Ltda. Merrill Lynch & Co. Inc. TOTAL

2.620.000 4.880 6.150 2.709

794.020 363.478 193.396 97.888 $ 1.448.782

Investments in shares abroad: A. Were purchased in Dollars in different stock exchanges of the United States, and their cost was translated into Colombian Pesos at the Market Representative Rate of December 31 of 2012. B. Their market-price re-appraisal was based on the closing price in the corresponding stock exchange on the last business day of 2012. (4) Other Investments abroad These are Exchange Traded Funds –ETF– established overseas, that replicate, in general terms, an international financial asset and are traded in stock exchanges as follows:

FUND

NO. (UNITS)

SPDR S&P 500 ETF TR. Ishares MSCI Emerging MKT (EEM) Ishares Xinhua China 25 (FXI) TOTAL

10.189 17.616 1.714

MARKET VALUE (IN BOOKS) $ 2.565.729 1.381.464 122.594 $ 4.069.787

FUND SPDR S&P 500 ETF TR. Ishares MSCI Emerging MKT (EEM) Vanguard INTL Equity Index FD Financial Sector SPDR (XLI) Ishares Xinhua China 25 (FXI) Ishares S& P Latin América 40 (ILF) TOTAL

Consolidated Financial Statement

NO. (UNITS)

MARKET VALUE (IN BOOKS) 6.600 17.616 7.207 5.566 1.714 762

$ 1.609.138 1.298.406 555.141 140.570 116.110 63.018 $ 3.782.383

Consolidated Financial Statement

Al 31 de diciembre de 2011 los ETF se discriminaban así:

In 2012, the company recorded against results $386,912 as adjustment to market value of such investments. In 2011, it recorded $517,609 as impairment of value. (5) Other investments

FINANCIAL REPORT

2012 - MINEROS S.A.

Other investments include the following:

DETAIL Tax reimbursement titles Money market accounts abroad. Overnight operations balance Commercial papers TOTAL

2012

2011 $ 1.931.186 162.455 88.412 $ 2.182.053

90.807 194.270 3.000.000 $ 3.285.077

The companies’ management considers that adequate investment portfolio diversification exists in order to reduce financial risk.

NOTE 5.

PROPERTY, PLANT AND EQUIPMENT Al 31 de diciembre, esta cuenta se descomponía así: ASSET Land Buildings and constructions Constructions in progress and machinery under assembly (1) Machinery and equipment Electric plants and networks Furniture and fixtures Transportation equipment Computer equipment Other assets Mining properties Subtotal Less: Accumulated depreciation Accumulated depletion Deferred depreciation (2) TOTAL

2012

2011 $

3.448.978 15.815.760

2.074.927 14.735.574

28.686.395

11.131.078

158.039.986 57.712.163 903.851 8.482.480 1.883.881 280.843 $ 275.254.337 (189.396.033) 43.575.733 $ 129.434.037

152.593.535 56.851.041 903.851 7.234.797 989.631 158.083 2.655.348 $ 249.327.865 (125.642.322) (2.655.348) $ 121.030.195

As on December 31, 2012, no restrictions or encumbrances affect the companies’ above-mentioned assets. (1) At December 31, construction and machinery and equipment in set-up process correspond mainly to expansion of Providencia I Hydroelectric Power Plant and construction of Providencia III Hydroelectric Power Plant. (2) Deferred depreciation corresponds to that taken for fiscal purposes. See Note 16.

FINANCIAL REPORT 2012 - MINEROS S.A.

NOTE 6.

LONG-TERM ACCOUNTS RECEIVABLE Corresponds to balances payable by workers of MINEROS S.A. from loans granted for periods longer than one year, whose reclassification as long-term receivables is considered prudent at December 31, as follows: ITEM Housing loans to employees(1) Vehicle loans TOTAL

2012

2011 $ 5.483.885 59.947 $ 5.543.832

$ 5.062.772 76.292 $ 5.139.064

(1) Long-term housing loans to associates pay an average DTF + 3 annual rate

NOTE 7.

INVENTORIES At December 31, this account included: ITEM Materials and consumables Materials in transit Workshop orders under process Other TOTAL

2012

2011 $ 30.373.177 2.512.318 1.716.313 $ 34.601.808

$ 31.465.116 1.128.505 1.260.003 480.105 $34.333.729

NOTA 8.

LONG-TERM INVESTMENTS At December 31, 2012, long-term investments included: PARTICIPATION %

Compañía Minera de Ataco S.A.S Unipalma de los Llanos S.A. Club de Banqueros (un derecho) Promotora de Proyectos S.A. Distrito de Negocios S.A.S. TOTAL

Consolidated Financial Statement

NO. OF SHARES

ADJUSTED COST

200.000

SALE VALUE OR BOOK VALUE

209.155

RE-APPRAISALS (IMPAIRMENT OF VALUE)

100%

20.000

9.155

17,74%

493.214.074

6.213.742

17.750.775

11.537.033

N.A.

4.500

1,60%

124.399

99.320

23.760

(75.560)

40%

80.000

77.566

(2.434)

$6.597.562

$ 18.065.756

$ 11.468.194

Consolidated Financial Statement

CORPORATION

At December 31, 2011, long-term investments included: PARTICIPATION %

FINANCIAL REPORT

2012 - MINEROS S.A.

CORPORATION

Unipalma de los Llanos S.A. Compañía Minera de Ataco S.A.S. Distrito de Negocio S.A.S. Club de Banqueros (un derecho) Promotora de Proyectos S.A. TOTAL

NO. OF SHARES

ADJUSTED COST

SALE VALUE OR BOOK VALUE

RE-APPRAISALS (IMPAIRMENT OF VALUE)

17,74%

493.214.074

$ 6.213.743

$ 18.983.810

$ 12.770.067

100%

20.000

200.000

202.521

2.521

40%

80.000

N.A.

4.500

4.500.

1,60%

124.399

99.320 $ 6.597.563

26.248 $ 19.297.079

(73.072) $ 12.699.516

As provided in Second Title, Chapter I, number 1.8 of External Circular Letter 02 of 1998 of the Securities Superintendency (today, Financial Superintendency), the following is added regarding long-term investments: CORPORATION Unipalma de los Llanos S.A. Promotora de Proyectos S.A. Compañía Minera de Ataco S.A.S. Distrito de Negocio S.A.S.

ECONOMIC ACTIVITY Agro-industry Investing Mining Construction

ACCRUED INCOME 2012 ACCRUED INCOME 2011 $ 1.147.859 -

$ 238.422 -

The companies do not consider redemption of permanent investments within the three (3) calendar years following the closing date of financial statements.

NOTE 9.

OTHER ASSETS As of December 31, this account included: CLASE DE ACTIVO

2012

2011

Financial leasing contracts: Net value of vehicles acquired through financial leasing with Leasing Bancolombia S.A.

41.732

107.352

Projects: Amount invested in exploration to determine possible economically exploitable gold deposits. (El Bagre District, Anglo Gold Joint Venture projects, and others) Costs and expenses incurred in rubber plantation project on the Company’s land.

* 107.232.748

* 72.743.020

5.271.375

3.781.997

15.306.802

10.433.480

$ 127.852.657

$ 87.065.849

Deferred charges; Balance to be amortized of exploration, development, and pre-operating costs and expenses of the La Ye mine (entered operation in May 2010) TOTAL * Balance after reciprocal deletions for consolidation purposes.

FINANCIAL REPORT 2012 - MINEROS S.A.

NOTE 10.

RE-APPRAISALS As of December 31, re-appraisals of assets included: ASSET Property, plant and equipment Land Buildings Machinery and equipment River fleet equipment Transportation equipment Aqueducts, plants and networks Marketable investments Rights in trust estates (Grupo Comtempo Oficinas Oxo Trust Estate) Long-term investments Investments in corporations - net (See Note 8) Subtotal TOTAL

2012

2011

13.586.055 5.828.423 28.132.526 357.424 400.442 2.278.646

8.110.387 4.679.172 21.851.357 358.154 572.777 7.600.312

2.250.548

2.337.477

11.468.194 13.718.742 $ 64.302.258

12.699.516 15.036.993 $ 58.209.152

In November of 2012, MINEROS S.A. hired commercial appraisals of property, plant and equipment which were conducted by Francisco Ochoa O. AvalĂşos S.A.S., a firm domiciled in MedellĂn and identified with TIN 900.400.170. Real estate property was appraised using the comparative or market method and cost or replacement method. In the case of machinery and equipment, quotes for similar machines and equipment were taken into account, their original value was updated translating it into United States Dollars as of that date, and impairment of value factors due to old age and use were later applied; also their current state was analyzed with technicians. Both assets in depreciation process and fully depreciated assets in use were appraised, with the appreciation of the totally depreciated assets in use recorded under memorandum accounts.

NOTE 11.

FINANCIAL LIABILITIES As of December 31, this account included: 2012

2011 $ 19.994 30.721 $ 50.715

$ 62.912 82.742 $ 145.654

(1) At December 31 of 2012, financial leasing contracts No. 103632 and 121708 with Leasing Bancolombia S.A. for purchase of vehicles, as follows:

CONTRACT 103632 121708 TOTAL

INSTALLMENTS 52 60

Consolidated Financial Statement

BALANCE

MATURITY

$ 6.630 January 3/2014 24.091 March 7/2016 $ 30.721

INSTALLMENTS PENDING 12 39

OPC. DE COMPRA $ 849 350 $ 1.199

RATE 11,08% E.A. 8,34% E.A.

ACCRUED INTEREST $ 1.052 2.675 $ 3.727

Consolidated Financial Statement

ITEM Credit cards Financial leasing contracts (1) TOTAL

At December 31 of 2011, financial leasing contracts No. 103632, 108668 and 121708 with Leasing Bancolombia S.A. for purchase of three vehicles, as follows: CONTRACT

FINANCIAL REPORT

2012 - MINEROS S.A.

103632 108668 121708 TOTAL

INSTALLMENTS 52 60 60

BALANCE

MATURITY

INSTALLMENTS PENDING

$ 11.890 January 3/2014 40.657 March 15/2015 30.195 March 7/2016 $ 82.742

OPC. DE COMPRA

24 39 51

$ 849 595 350 $ 1.794

ACCRUED INTEREST

RATE 11,08% E.A. 17% E.A. 8,34% E.A.

$ 1.408 3.946 2.345 $ 7.699

NOTE 12.

TAXES, LIENS AND DUTIES Income tax and surtaxes provision as of December 31 included: COMPANY

2012

MINEROS S.A. Current year income tax Deferred income tax PROYECTO SABALETAS S.A.S. Current year income tax OPERADORA MINERA S.A.S. Current year income tax EXPLORADORA MINERA S.A.S. Current year income tax TOTAL

2011 $ 49.897.151 14.379.992

$ 56.846.805 -

1.535.451

169.252

506.155

146.476 $ 64.592.871

87.352 $ 58.975.763

The companies are subject to income tax at a nominal rate of 33%, applicable to taxable income. Liabilities show the net balance payable by the companies for income tax, after discounting withholding tax applied to each of them and prepaid taxes, as well as the balance payable of other taxes, as follows:

Taxes, liens and duties payable - short-term COMPANY MINEROS S.A. Income tax Equity tax (1) Gold Taxes OPERADORA MINERA S.A.S. Sales tax 6th bi-monthly period Equity tax (1) EXPORADORA MINERA S.A.S. Income tax PROYECTO SABALETAS S.A.S. Income tax Equity tax (1) TOTAL

FINANCIAL REPORT 2012 - MINEROS S.A.

2012

2011

$ 17.526.712 4.569.770 5.355

$ 36.244.513 4.569.770 -

31.227 153.272

120.445 -

57.314

23.315

22.343.650

469.207 153.272 41.580.522

Taxes, liens and duties payable - long-term COMPANY

2012

2011

MINEROS S.A. Equity tax (1)

4.569.767

9.139.536

OPERADORA MINERA S.A.S. Equity tax (1)

153.272

306.545

4.723.039

$ 9.446.081

PROYECTO SABALETAS S.A.S. Equity tax (1) TOTAL

COMPANY

2012

2011

MINEROS S.A. Long-term deferred tax (2) TOTAL

14.379.992

$ 14.379.992

(1) The companies, as provided in Law 1370 of 2009 and Legislative Decree No. 4825 of 2010, determined equity tax taking as basis the taxable equity held on January 1, 2011 at a tax rate of 4.8% plus 1.2% surtax. Tax returns were filed in May of 2011 and payment will be made in eight equal installments in 2011, 2012, 2013 and 2014. EXPLORADORA MINERA S.A.S. is not liable for such tax given that it didnâ&#x20AC;&#x2122;t meet the required amount of fiscal equity

Tax Law Amendment

Exemptions

Below is a summary of some changes to the Colombian tax regime for the years 2013 and following, introduced by Law 1607 of December 26, 2012:

Legal entities who pay income tax are exempted of payment of quasi-fiscal contributions in favor of Servicio Nacional del Aprendizaje (SENA) and Instituto Colombiano de Bienestar Familiar (ICBF) corresponding to employees earning, considered individually, up to 10 statutory minimum wages. This exemption enters into force when the withholding tax system is implemented for collection of the Business Equity Contribution (CREE) and, at any rate, before July 1, 2013).

Income tax and surtax Tariff on taxable income of legal entities changes to 25% starting January 01, 2013. Business Equity Contribution (CREE, for its Spanish initials) Starting as of January 01, 2013. This contribution is calculated on the basis of gross revenue less revenue not constituting income, costs, deductions, exempt income and windfall profits; 8% tariff. For the years 2013, 2014 and 2015 it will be 9%. When refining the base for CREE contribution calculation, compensation of income of the taxable period with fiscal losses or with excesses of presumptive income from former periods is not allowed.

Consolidated Financial Statement

Accounting rules It is established that, only for tax effects, the references to accounting rules contained in tax regulation will continue in force during four years after the International Financial Reporting Standards become binding (2015). Therefore, and for the aforementioned period, fiscal basis for the entries included in the income tax returns will remain unchanged. In the same manner, the requirements for recognition of special fiscal situations will lose validity as of the application date of the new regulatory accounting frame.

Consolidated Financial Statement

(2) It corresponds to MINEROS S.A., company that availed of the fiscal benefit of flexible depreciation, whose application effect will be a lower effective payment of income tax, which has been registered as deferred payable income tax, according to accounting standards. Along the next few years, the company will amortize depreciation registered for fiscal purposes. In order to obtain the increased fiscal depreciation, a non-distributable reserve equivalent to 70% of the increased deduction was established from earnings of tax year 2012.

Obligation of Economic Groups to disclose consolidated financial statements

FINANCIAL REPORT

2012 - MINEROS S.A.

NOTE 13.

LABOR LIABILITIES At December 31, labor liabilities included: ITEM Severance payments Interest on severance payments Vacations Salaries payable TOTAL

2012

2011 $ 3.058.042 344.508 1.129.578 511.690 $ 5.043.818

$ 3.079.274 492.256 1.034.497 282.523 $ 4.888.550

NOTA 14.

DIVIDENDS PAYABLE The balance at December 31 corresponds to: ITEM Regular dividends declared (1) Former periods dividends TOTAL

2012

2011 $ 9.682.434 694.609 $ 10.377.043

$ 7.065.560 581.934 $ 7.647.494

(1) According to Minutes No. 51 of the Regular Shareholder’s Meeting of MINEROS S.A. of March 21 of 2012, the proposal for payment of dividends was approved. Monthly dividend is $10 per share on total 261,687,402 outstanding shares, for a monthly value of $2.616.874.020 for the April 2012-March 2013 period, payable between the 10th and the 20th day of each month. Shareholders registered in the Shareholder Register on the ex-dividend period determined in the General Regulations of the Stock Exchange, as provided in article 2 of Decree 4766 of 2011, are entitled to the month’s dividend. The above-mentioned Regular Shareholder’s Meeting (Minutes No. 51) approved payment of special dividend of $28 per share, payable in four installments of $7 each in April, July and October of 2012 and January of 2013. $38,729,735 was appropriated from earnings of the year 2011 for payment of dividends. For the current fiscal year, $31,551,373 has been accrued for the periods between April and December. According to minutes No. 4 of the Regular Shareholders’ Meeting of PROYECTO SABALETAS S.A.S. (before the merger), proposed payment of dividends for $2,504,071 was approved. In OPERADORA MINERA S.A.S. 2011 earnings for $981,987 were appropriated to establish equity reserves, according to Shareholders’ Meeting Minutes No. 5 of February 25 of 2012, a situation repeated with EXPLORADORA MINERA S.A.S. with 2011 earning for $145,303 for 2011, as approved in Minutes No. 2 of the Shareholders’ Meeting of February 25 of 2012.

FINANCIAL REPORT 2012 - MINEROS S.A.

NOTE 15.

RETIREMENT PENSIONS The retirement pensions currently under the responsibility of MINEROS S.A. correspond to those workers, who on the date of the ISS transfer Resolution (November of 1997), had expectations to qualify for the special retirement pension agreed in the Collective Bargaining Agreement (18 years of service, 47 years of age), and therefore, the recognition date depended on the workerâ&#x20AC;&#x2122;s will, or to those workers, who on the date of the same Resolution were not active company workers, and had retired with the expectation of retirement pension, with only the age requirement pending.

Fiscal regulation is used as the basis for recording of retirement pensions. The parent company has carried out actuarial calculations for retirement pensions on the basis of the technical parameters determined in Decree 2498 of 1988. These parameters were modified as of 1998 upon issuance of Regulatory Decree 1517 of 1998 (Paragraph 1, Article 1), by Article 1 of Decree 2783 of December 20 of 2001, by Article 1 of Regulatory Decree 51 of 2003, and recently, by Article 1 of Decree 4565 of December 7 of 2010, distributing the percentage to amortize actuarial calculation up to the year 2029 in a linear form. At December 31 of 2011, the accumulated amortized percentage of the actuarial calculation stands at 63.97% (59.97% at December 31 of 2011).

As of December 31, retirement pensions included:

ITEM

2012

Pension liabilities according to actuarial estimates Less: Retirement pension provision recorded by the Company RETIREMENT PENSIONS TO BE PROVIDED IN THE NEXT 17 YEARS

2011 $ 1.283.327

$ 1.184.324

(462.347)

(474.052)

820.980

710.272

As of December 31, the value carried to expenses breaks down as follows: ITEM

2012

Pension appropriations

2011 $ 110.708

Pension payments TOTAL

22.855

178.211

171.220

$ 288.919

$ 194.075

Pension liabilities correspond to seventeen (17) people at December 31, 2012 and 2011.

NOTE 16.

Of these shares, 317,906,252 had been subscribed and paid for at December 31 of 2012 and 2011. * In Colombian Pesos

A. Capital

At December 31 of 2012 and 2011, reserve for repurchase of shares totals $11,191,283.

EQUITY

Pubic deed 1030 of April 13 of 2005 of Notary Public Office 17 of Medellin formalized Minutes 44 of the Regular Shareholdersâ&#x20AC;&#x2122; Meeting of MINEROS S.A. of March 18 of 2005, where the authorized capital of $200,000 was divided into 400,000,000 common shares, each with a par value of fifty cents ($0.50)*.

Consolidated Financial Statement

* In Colombian Pesos At December 31 of 2012 and 2011, total 56,218,850 repurchased shares stand at $5,611,007 (no repurchase of own shares took place along the years 2012 or 2011).

Consolidated Financial Statement

OPERADORA MINERA S.A.S. and EXPLORADORA MINERA S.A.S. are not liable for pension liabilities since such risk has been assumed by ISS and private pension funds.

According to Article 396 of the Colombian Code of Commerce, as long as these shares remain the property of the corporation, the rights inherent to them shall be suspended.

FINANCIAL REPORT

2012 - MINEROS S.A.

Subscribed and paid-in capital of OPERADORA MINERA S.A.S. is represented by 200,437 shares with par value of $1,000 each, as recorded in Minutes No. 6 of the Special Shareholdersâ&#x20AC;&#x2122; Meeting of October 8 of 2012, through which merger with PROYECTO SABALETAS S.A.S. was approved. Subscribed and paid-in capital of OPERADORA MINERA S.A.S. is represented by 20,000 shares with par value of $10,000 each. For matters of consolidation of financial statements, total subscribed and paid-in capital and corresponding equity entries of OPERADORA MINERA S.A.S. and EXPLORADORA MINERA S.A.S., were deleted, as were corresponding equity entries.

B. Legal reserve Colombian law requires the companies to transfer at least 10% of annual earnings to a legal reserve until the balance of the reserve is equal to 50% of subscribed capital. Such reserve cannot be distributed but can be used to absorb losses.

C. Equity revaluation and additional paid-in capital Equity revaluation and additional paid-in capital cannot be distributed as earnings but may be capitalized free of taxes. In 2011, total equity tax for $18,279,076 was recorded against equity revaluation.

NOTA 17.

MEMORANDUM ACCOUNTS Memorandum accounts include fiscal accounts, guarantees granted and disclosure of contingent liabilities and contingent rights as follows: MEMORANDUM ACCOUNTS Difference between per-books income and fiscal income Difference between per-books equity and fiscal equity Special 40% and 30% deduction on investment in real income-producing fixed assets according to paragraph 2 of Article 158-3 of Fiscal Law. Subtotal Infrastructure leasing contracts pending execution (1) Contingent labor liabilities Retirement pensions policy reserve Contingent rights for civil works contracts Promissory notes received as collateral Appreciation of fully depreciated property, plant and equipment (2) Pledge on personal property without ownership TOTAL

2012 $ (46.456.737) 91.849.691

2011 $

29.685 57.634.985

51.922.876

97.315.830 70.000.000 170.000 6.762.621 2.679.925 82.316.492 $ 259.244.868

$ 57.664.670 70.000.000 240.000 6.762.621 1.711.673 900.000 118.969.285 1.250.000 $ 257.498.249

(1) Infrastructure leasing contracts No. 119709 and 119710 subscribed on December 28 of 2010 with Leasing Bancolombia S.A. for expansion of Providencia I Hydroelectric Plant and construction of Providencia III Hydroelectric Plant, worth $12,000,000 and $58,000,000,000 respectively, for a duration of 144 months and with interest rate equivalent to DTF T.A., plus 3.25 points for both contracts. At December 31, 2012, Leasing Bancolombia S.A. had disbursed $3,711,400 (contract No. 119709) and $33,957,252 (contract No. 119710) for execution of such contracts. MINEROS S.A. in turn, respectively recorded in 2012 $190,269 and $1,138,841 for interest on disbursements made by Leasing Bancolombia S.A. as advances. (2) In accordance with the provisions of Communication No. 2010045038-011 of August 13 of 2010 of the Financial Superintendency regarding recording of this kind of appreciations.

FINANCIAL REPORT 2012 - MINEROS S.A.

NOTE 18.

NON-OPERATING REVENUES AND EXPENDITURES As of December 31, non-operating revenues and expenditures included:

Financial yields

2012 $

2011 11.399.107

$ 7.182.759

Exchange difference

3.781.470

4.120.174

Revenues from gold price hedge contracts

3.029.597

837.505

Revenues from appreciation of shares

2.330.252

222.156

Dividends

1.683.717

572.466

Recoveries and realizations

1.067.984

Income from the sale of investments

578.159

162.172

Other financial revenues

373.094

UVR currency adjustment

105.841

Income from the sale of fixed assets

20.417

Insurance indemnities

29.353

145.724

1.696.332

2.862.115

$ 26.095.323

$ 6.105.071

Other TOTAL

NON-OPERATING EXPENDITURES Exchange difference

2012 $

2011 4.489.068

3.222.619

Amortization of mining projects

4.078.363

4.954.463

Investments impairment of value

3.621.952

3.873.125

Interest and financial expenses

1.992.532

1.544.687

Total financial expenses

875.767

Loss on securities trading

247.271

216.920

Gold price option contracts

172.500

396.877

10.277

6.838

Gifts

298.287

301.216

Other

4.056.353

6.663.922

Banking expenses

TOTAL

19.842.370

21.180.667

TOTAL NET

6.252.953

(5.075.596)

Consolidated Financial Statement

NON-OPERATING REVENUES

NOTE 19.

ADDITIONAL DISCLOSURES

The effect of consolidation represented in the financial statements as of December 31, 2012 and 2011, and for the years ended on such dates, decrease in assets of $2,319,584 for 2012 and of $1,654,643 for 2011; decrease in liabilities of $161,442 for 2012 and increase of $2,051,542 for 2011; and a decrease in equity of $2,158,142 for 2012 and $396,899 for 2011.

FINANCIAL REPORT

2012 - MINEROS S.A.

Personnel and associated expenses:

COMPANY MINEROS S.A. OPERADORA MINERA S.A.S. EXPLORADORA MINERA S.A.S. TOTAL

YEAR 2012 SENIOR LEVEL STAFF OTHER EMPLOYEES 41 828 4 607 3 418 48 1.853

TOTAL 869 611 421 1.901

COMPANY MINEROS S.A. PROYECTO SABALETAS S.A.S. OPERADORA MINERA S.A.S. EXPLORADORA MINERA S.A.S. TOTAL

YEAR 2011 SENIOR LEVEL STAFF OTHER EMPLOYEES 41 803 65 4 411 3 416 48 1.695

TOTAL 844 65 415 419 1.743

COMPANY MINEROS S.A. OPERADORA MINERA S.A.S EXPLORADORA MINERA S.A.S TOTAL

YEAR 2012 SENIOR LEVEL STAFF OTHER EMPLOYEES $ 4.433.742 $ 43.309.005 464.637 6.749.052 388.727 6.386.029 $ 5.287.106 $ 56.444.086

TOTAL $ 47.742.747 7.213.689 6.774.756 $ 61.731.192

COMPANY MINEROS S.A. PROYECTO SABALETAS S.A.S. OPERADORA MINERA S.A.S EXPLORADORA MINERA S.A.S TOTAL

YEAR 2011 SENIOR LEVEL STAFF OTHER EMPLOYEES $ 4.189.886 $ 39.731.413 720.519 366.599 8.894.202 159.743 4.129.258 $ 4.716.228 $ 53.475.392

TOTAL $ 43.921.299 720.519 9.260.801 4.289.001 $ 58.191.620

PERSONNEL EXPENSES.

FINANCIAL REPORT 2012 - MINEROS S.A.

NOTE 20.

TYPE OF OPERATION Foreign Exchange Hedges (Collars) Foreign Exchange Hedges (Collars) Foreign Exchange Forwards Foreign Exchange Forwards

NOMINAL VALUE USD USD 51.550.000 18.000.000 2.500.000 3.000.000 USD 75.050.000

Este mismo tipo de operaciones al 31 de divciembre de 2011 eran las siguientes: ENTITY Bancolombia S.A. Banco de Bogotá S.A. Banco Colpatria S.A. Banco de Bogotá S.A. Banco de Occidente S.A. Banco Colpatria S.A. TOTAL

TYPE OF OPERATION Foreign Exchange Hedges (Collars) Foreign Exchange Hedges (Collars) Foreign Exchange Hedges (Collars) Foreign Exchange Forwards Foreign Exchange Forwards Foreign Exchange Forwards

NOMINAL VALUE USD USD 24.300.000 10.400.000 2.500.000 925.652 800.540 500.000 USD 39.426.192

NOTE 21.

SUBSEQUENT EVENTS At closing date of the general purpose financial statements for December 31 of 2012, the company is carrying out due diligence process for a mining concern in Nicaragua that it is considering to purchase.

Consolidated Financial Statement

In early February of 2013, and on the grounds of the work carried out by MINEROS S.A. on the mining titles owned by GOLDSANDS DEVELOPMENT COMPANY in Northeastern Peru, under the option agreement subscribed with such company, the decision was made to cancel the project, given that the due diligence work did not evidence the possibility of the project magnitude envisioned by MINEROS S.A.

Consolidated Financial Statement

Financial Report 2012

Teléfono (Phone): +57 4 2665757 Carrera 43 A N° 14 -109, piso 6 Edificio Nova Tempo Medellín, Colombia Teléfono (Phone): +57 4 8372383 Calle 46 N° 46 - 01 El Bagre, Antioquia, Colombia www.mineros.com.co