Financial statement 2013 by Mineros S.A.

Financial Report 2013

Management report

FINANCIAL REPORT 2013 - MINEROS S.A.

Management report SHAREHOLDERS’ MEETING MARCH 19 OF 2014 Messrs. Shareholders: We are glad to present to you the report of activities and results of fiscal year 2013.

scrap gold supply fell by 14% to 1,331 tons, the lowest in the past five years.

I. EXTERNAL ISSUES:

From the perspective of demand, worldwide jewelry manufacturing increased by 13% to 2,198 tons, the highest since 2008, and accounting for 46% of total demand.

GOLD PRICE During 2013 the price of gold exhibited a negative behavior. Since 2012 closing date, after 12 consecutive years on the rise, the commodity’s price fell by 27.33% from USD 1,657.50 per ounce to USD 1,204.50 per ounce. The maximum quote for 2013 USD was 1,693.75/oz and the minimum USD 1,192.00/oz. This behavior was explained by the recovery of macroeconomic indicators in developed countries in general, and in the United States in particular, which gave rise to liquidation of large amount of gold-supported financial instruments. In 2013, world output grew by 4% to 2,982 tons evidencing the industry’s inelasticity vis-à-vis the dramatic price fall. Retail

GOLD PRICE EVOLUTION BETWEEN JANUARY AND DECEMBER OF 2013 6

Management report

Global investment in gold fell by 11% to 1,342 tons. Sale by institutional players of part of their gold positions, often by liquidating ETFs, also contributed to the price drop. For 2014, physical demand is expected to support current prices; however, there is a risk of additional decline due both to large holdings of gold-supported ETFs and positive performance of employment and inflation rates in the US that may give rise to additional cuts to monetary stimuli and increased liquidation of ETFs. Likewise, the strong price drop of 2013 is expected to give rise to decreased growth in supply given the reduction of output margins aggravated in turn by the increase in total costs.

ALLUVIAL OPERATION (in thousands)

Management report

Ounces

Output in ounces and volume (m3)

VOLUME OUTPUT IN OUNCES

II. INTERNAL ISSUES A- Output Gold output for alluvial operation totaled 94,381 ounces, almost exactly as last year’s, despite the 12-day activities suspension in light of a probable labor conflict and the impact of terrorist attacks against our infrastructure. For underground operation total output was 15,128 ounces. Hemco operation in Nicaragua produced 62,553 gold equivalent ounces, with 67% participation of purchases to Panama-miners. Altogether, total output of MINEROS S.A. as a group was 172,062 equivalent gold ounces. Production estimates for 2014 take into account the start of reconstruction of Bucket Dredge No. 5 last November 25, keeping it out of production until July. Arrival to the country during the first half of last year of two new suction dredges worth $34,300 million will partly compensate impact on total output. Alluvial operation estimates output of 97,661 ounces and underground operation 23,744 ounces. Hemco (Nicaragua) projects 79,299 ounces for this year with increase in its own production. Total expected for 2014 is 200,704 ounces.

B- RESERVE BALANCE At December 31, 2013, alluvial mineral reserves including proved reserves and measured and indicated resources totaled 281,000,000 cubic meters with 1,141,000 ounces of equivalent fine gold.

Additionally, there are 230,000 ounces of gold from exploitation types other than dredges. At the underground operation of La Ye mine, there are 630,000 tons with content of 119,000 ounces of equivalent gold including proved reserves and measured and indicated resources. The company carries out intense brownfield exploration campaigns so as to maintain a reserve balance that permits smooth planning of future operations.

C- INVESTMENTS During the year, the company earmarked $91,055 million for new projects of which, $67,154 million were conducted via leasing and $23,900 with own funds. We would like to highlight the progress of the expansion project from 7.5 MW to 19 MW of Providencia power plant, where we have been working for about two years. The project has seen considerable delays and will only be in operation in the first half of the year due to technical difficulties and to the difficult public order situation in the area. Other projects that received all our attention and an important allotment of resources were: • Purchase and commissioning of suction dredges. • Planning and repair start-up of Dredge No. 5. In 2014, OPEX will amount to $30,000 million, 80% of it with company’s own funds.

FINANCIAL REPORT 2013 - MINEROS S.A.

III. FOREIGN SECTOR AND OTHER ISSUES TO HIGHLIGHT

place during the first months of the year. An agreement was achieved in the first one during a pre-strike period. Unfortunately, the same result was not reached at OPERADORA MINERA S.A.S., the company operating the La Ye mine. We will discuss this later on the report.

1. MINING SECTOR

4. GROWTH PLAN

External circumstances of mining projects are ever more difficult substantially delaying their normal development. 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, their execution is impossible, translating into higher costs and risks for investors.

In development of our future plans, we have embarked in intense search for new projects. Exploration tasks carried out during 2013 totaled $24,962 million.

This is a major cause for the lack in the last 25 years of new significant mining operations in the country. Without clear official positions in support of the sector it won’t be possible for projects in exploration or feasibility stage to become real. Illegal mineral exploitation 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. 2. PUBLIC ORDER The company received during the year the invaluable support of the National Military Forces for the protection of people and assets. Our deepest gratitude, without them the permanence of the company would not be possible. This support nonetheless, during the past year the company’s electric infrastructure suffered many attacks including destruction of 26 electricity towers and attacks to the power generation facilities. This meant $10,700 million additional costs for recovery of equipment, purchase of fuel, purchase of energy to the national power system, and 3,424 ounces of gold output less. The company invested in security and risk coverage for its equipment: • Insurance premiums for $3,174 million • Comprehensive protection for $5,115 million

5. CROPS As part of our environmental compensation and sustainable development program, we have continued our planting activities of rubber trees and other species. Progress so far is as follows: • 98 hectares to enter production shortly • 300 hectares planted the previous year • 800 hectares in planting process All these properties are located in the municipalities of Zaragoza and Caucasia (Antioquia province). We are in the process of establishing a corporation with Entre Ríos group of Guatemala for assembly and operation of a rubber processing plant in the municipality of Caucasia. The plant will process the output of our plantations as well as that of other growers in the influence area yielding a product of export quality that will improve the price obtained by growers. 6. SOCIAL RESPONSIBILITY In keeping our commitment to the company’s social responsibility in its 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.

3. LABOR RELATIONS

Regarding environmental matters we would like to highlight that thanks to the application of technologies developed by our engineers and technicians, with outstanding results in terms of recovery efficiency, the company does not use mercury in its production processes, something which permits us to talk about Green Gold for our alluvial output.

Negotiations of new labor agreements both at MINEROS S.A. with Sintramienergética El Bagre Division, and at OPERADORA MINERA S.A.S with Sintramienergética Zaragoza Division took

We specially recommend reading our Sustainability Report 2013, also being handed today, since it shows significant advances in this field which is part of the value we add to our shareholders.

Despite the above, the support of the Armed Forces has been decisive to maintain control and be able to continue operations.

Starting this year, we will decrease exploration activities in incipient projects to focus on advanced or operating stages. The budget for the year is $15,000 million.

Management report

A. Training in Human Rights to 561 workers in cooperation with the Office of the United Nations High Commissioner for Human Rights. B. Agreement with Agencia Nacional para la Superación de la Pobreza Extrema (National Agency for Overcoming Extreme Poverty – ANSPE for its Spanish initials) whereby the company commits itself to work during the next three years to end extreme poverty for 384 families in its area of influence. By the end of the year we had already surpassed the goal for the three years. C. Beekeeping productive project: We currently have 38 beekeeping families with an average of 18 beehives per family that are already receiving additional earnings to improve their sustenance. D. Interactuar – Fundación MINEROS Agreement: To support and train entrepreneurs in subjects such as administration and image marketing among others. Support to entrepreneurs for seed capital contests. E. Civil harmony: El Bagre Municipal Office - Fundación MINEROS Alliance. Mobilization in defense of citizens’ rights, community living committees, campaign against fireworks and many other programs aimed both at improving the municipality’s life and at economic, social and institutional integration leading to peace conditions. F. Improvement of quality of education: Agreement between the Municipality of El Bagre, Fundación para la Formación Integral del Ser Humano and Fundación MINEROS. Operating at 5 educational centers, its goal is to train and form teachers and students to enhance and avail from the students’ talent and establish learning rhythms, styles, needs and preferences. 7. ACKNOWLEDGMENTS Year 2013 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: 1. National Award to Management Excellence and Innovation granted by the Ministry of Commerce and Tourism (Corporación Calidad) 2. Sustainable Colombia Environmental Responsibility Award 2013 granted by Fundación Siembra Colombia (Fifth Edition):

First Prize for the river turtle management and conservation program. 3. Siembra Colombia Sustainability Index 2013 of Fundación Siembra Colombia: First Prize for environmental development level)

sustainability

(High

Management report

Of these endeavors we draw attention to:

IV.- ASSOCIATED COMPANIES A. CIn March, as part of this plan, and as reported in our meeting last year, we purchased 90% of HEMCO S.A., a company based in Nicaragua. All our efforts are focused on this activity as we believe in its great potential; although it is still too early to show results, we are convinced that its relevance will be similar to the one we currently have in Colombia. Time as well as economic and human resources have to be invested to carry out this operation at a high technical and administrative level, supported by management systems that guarantee a long-term sustainable operation. Main indicators for the company during 2013 were: • Output – 62,553 ounces • Number of persons employed – 1,387 • Total revenue – USD 88,585,961 • Total salaries paid – USD 15,226,668 • Total taxes and royalties paid – USD 6,565,999 • Net income – USD 4,476,065

B. EXPLORADORA MINERA S.A.S.

Along 2013, this company carried out exploration activities in several areas, starting from initial stages such as regional prospecting and review of 54,700 ha. distributed in 8 groups and 22 mining titles until advanced stages like local exploration and drilling and tunneling in the Nechí project. The main activities were carried out in 4 projects including 12 exploration targets located in Antioquia, Caldas, Tolima and Bolivar Provinces. The conceptual study for the Nechí project, a necessary input for the pre-feasibility study, started on the basis of the estimation of resources and with the support of consulting firm AMEC. The corporation posted net income for $186 million finishing the year with 78 workers in its payroll and a monthly average of 156 people.

FINANCIAL REPORT 2013 - MINEROS S.A.

C. OPERADORA MINERA S.A.S.

The year 2013 was especially difficult for this company due to the lack of agreement between the Management and the representatives of unionized workers on a new labor agreement; as a result a strike was declared from May 16 to July 29. By the end of July, the workers requested the Ministry of Labor to establish an arbitration tribunal. To the date of this report the arbitration award has not yet been rendered. The company ended 2013 with 632 workers. In the last months, it had started mining operations in the Los Mangos and Icacales projects, which will mean increasing to 720 the number of people in the payroll. Net income amounted to $54 million.

We are still waiting for CORTOLIMA’s approval of the Environmental Management Plan submitted to their consideration in July of 2012 in order to start this project whose estimated output is 20,000 ounces per year.

E. UNIPALMA DE LOS LLANOS S.A.

MINEROS S.A. owns 17.4% stake at this corporation. Its output for 2013 was 62,363 tons of own fruit and 27,509 tons of third parties’ fruit. Economic results were not good due to the fall in international palm oil prices and the poor results of the seeds business.

D. COMPAÑÍA MINERA DE ATACO S.A.S.

Revenue

(in millions of Colombian Pesos)

Revenue

At our shareholders’ meeting of 2012 we reported that in order to obtain the environmental license for this project we had redesigned extraction and processing and had renounced to some of the areas susceptible of exploitation.

Revenue

Total Cost and Cash Cost (US Dollars per Ounce) Cash Cost (USD/OZ) Total Cost (USD/OZ)

Year

Management report

Sales, at $287,363 million, were 20% lower than in 2012. Total output went to export reaching a net sum of USD 154 million. Average price at USD 1,396 per ounce equals 16% decrease over 2012. As mentioned at the beginning of this report, the year was affected by lower output (8%) and lower gold prices. • Operating income totaled $111,268 million • Net income totaled $43,644 million Financial revenues: At the end of the fiscal year, the company showed an investment portfolio worth $59,020 million, 12% of which corresponds to shares quoted on the Stock Exchange, 3% to investments abroad, and the balance, to fixed-income securities in Colombia. Revenue from this activity included $1,509 million from sale of investments, $743 million from dividends, and $7,805 million from yields of fixed-income securities. As of December 31, 2013, appreciation of shares listed on the Stock Exchange reached $2,382 million. • EBITDA: $146,583 million equivalent to 51% of sales. • EVA: EVA accumulated for the year stands at $52,432 million or 32%. • EQUITY: Shareholders’ equity grew by 6% from $536,504 million to $567,181 million with corresponding stock’s book value at $1,810 The quote of the stock of MINEROS S.A. lost 15.04% value while the IGBC depreciated by 11.18%. • INDEBTEDNESS: During the year, the company maintained optimal indebtedness levels only using bank loans for routine treasury transactions; it conducted leasing operations for the Hydroelectric Plant project and the purchase of suction dredges. • Operating margin was 39% compared to 53% in 2012 • Net income margin was 15% compared to 37% in 2012 This variation stems mainly from having recorded as expense economically non-viable projects, from the low output resulting from the cease of operations at OPERADORA MINERA, and from the low prices of gold along 2013.

VI. MISCELLANEOUS A. INTERNATIONAL FINANCIAL REPORTING STANDARDS – IFRS

Management report

V. FINANCIAL ANALYSIS

Colombia will start applying International Financial Reporting Standards –IFRS– in 2015. Adoption of such standards will be first required from stock issuers, which means substantial changes in the financial and accounting structure of companies. To adapt to the new policies it is necessary to record against results any investment made in exploration, and only the portion corresponding to the feasibility stage can be capitalized. For this reason, the company carried against results (other expenditures) the accumulated cost of unsuccessful exploration projects and projects in incipient stages ($48,863 million) as well as the expenses related to the purchase of Hemco (Nicaragua) ($7,997 million), which cannot be recorded in asset accounts. There is a difference of criterion with the Statutory Auditor office regarding the account in which this figure shall be recorded; however, it does not alter the final effect on the company’s net results. This decision had a major impact on our results but it permits us to advance in the streamlining of balance sheet accounts that will be at any rate mandatory in the next years.

B. In 2013, commercial transactions for $3,447 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. Insurance policies were hired with Colpatria under optimal market conditions, upon quote from other insurance companies.

C. 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 2013. D. Our analyses show that for 2014 it is possible to expect an average price of USD 1,250 per ounce. E. The managers and the Board of Directors certify that: 1. The company fully complies with all rules regarding intellectual property and copyrights. 2. In compliance with paragraph 2 of Article 87 of Law 1676 of 2013, the company states that it has not hindered the free circulation of invoices issued by sellers or suppliers

FINANCIAL REPORT 2013 - MINEROS S.A.

F. The Corporation’s legal representative certifies that in 2013, the Management

verified the correct operation of the systems for disclosure and control of financial information established at the company, in compliance with paragraph of Article 47 of Law 964 of 2005.

G. According to verification 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. The Board of Directors and the Management wish to thank the effort and dedication of our employees and workers as well as their commitment to meeting the goals we have set. Eduardo Pacheco Cortés José Fernando Llano Escandón Alberto León Mejía Zuluaga Santiago Perdomo Maldonado Miguel Urrutia Montoya Alberto Mejía Hernández Alvaro Escobar Restrepo

Beatriz E. Uribe R. President February 20 of 2014

Management report

Statutory Auditorsâ&#x20AC;&#x2122; Report

FINANCIAL REPORT 2013 - MINEROS S.A.

STATUTORY AUDITORS’ REPORT To the shareholders of MINEROS S.A.:

I have audited the balance sheets of MINEROS S.A. at December 31, 2013 and 2012 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. The 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

Statutory Auditors’ Report

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. 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 the 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.

Statutory Auditors’ Report

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 the 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.

LINA MARÍA VELÁSQUEZ ÁLVAREZ Statutory Auditor Professional Card 61321Designated by Deloitte & Touche Ltda. February 21, 2014.

Financial Statements

FINANCIAL REPORT 2013 - MINEROS S.A.

ASAMBLEA GENERAL DE ACCIONISTAS MARZO 19 DE 2014

Certification of Financial Statements 18

Financial Statements

BEATRIZ E.URIBE RESTREPO President

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

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.

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, 2013, 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 REPORT 2013 - MINEROS S.A.

MINEROS S.A.

Balance Sheets at December 31, 2013 and 2012 (In thousands of Colombian Pesos)

ASSETS

2013

2012

Note

CURRENT ASSETS Cash Marketable securities

$ 5

Cash and cash equivalents

1,094,044

178,866,006

60,113,925

179,667,423 47,471,260

59,628,088

Prepaid expenses and other assets

5,719,895

PROPERTY, PLANT AND EQUIPMENT

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

RE-APPRAISALS

MEMORANDUM ACCOUNTS

232,477,361

146,557,763

127,034,600

146,557,763

127,034,600

5,912,137 37,351,761 103,435,566 140,239,179

5,543,832 33,657,859 15,967,465 132,109,323 (*)

286,938,643

187,278,479

93,568,301

64,302,258

652,526,615

$ 611,092,698

277,209,708

$ 256,196,770

8 9 10 11

5,338,678 (*)

125,461,908 7

TOTAL ASSETS

801,417

59,019,881

Accounts receivable

TOTAL CURRENT ASSETS

(*) Reclassified for comparative effects.

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.

Balance Sheets at December 31, 2013 and 2012 (In thousands of Colombian Pesos)

LIABILITIES AND EQUITY

2013

2012

Note

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

15 16 17 18 19

TOTAL CURRENT LIABILITIES

3,503,307 4,181,686 10,708,695 7,775,300 4,560,814 # 11,954,891

50,715 3,185,104 15,479,320 22,101,837 3,624,284 10,377,043

42,684,693

54,818,303

Taxes on equity Deferred tax Financial liabilities

17 17 14

14,385,067 27,262,136

4,569,767 14,379,992 -

RETIREMENT PENSIONS

1,013,890

820,980

TOTAL NON-CURRENT LIABILITIES

42,661,093

19,770,739

TOTAL LIABILITIES

85,345,786 #

74,589,042

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

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

158,953 1,551,099 3,592,255 16,912,520 93,568,301 11,191,283 (5,611,007) 402,173,691 43,643,734

21 21 21 21 13 21

158,953 1,551,099 16,912,520 64,302,258 11,191,283 (5,611,007) 314,266,520 133,732,030

567,180,829

536,503,656

652,526,615

611,092,698

277,209,708

256,196,770

Financial Statements

CURRENT LIABILITIES

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

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

FINANCIAL REPORT 2013 - MINEROS S.A.

MINEROS S.A.

Income Statements

For the years ended December 31, 2013 and 2012 (In thousands of Colombian Pesos, except net income per share)

2013

2012

Note PRECIOUS METALS PRODUCTION

PRODUCTION COSTS ADMINISTRATION EXPENSES Operating income NON-OPERATING (EXPENDITURES) REVENUES, NET

287,363,439

(155,170,094)

(12,471,069)

(11,360,099)

111,267,925

190,910,156

(46,761,917)

7,099,017

64,506,008

198,009,173

(20,862,274)

(64,277,143)

43,643,734

133,732,030

YEAR'S NET INCOME NET INCOME PER SHARE

357,440,349

(163,624,445)

Income before provision for income tax and CREE PROVISION FOR INCOME TAX AND CREE

166.78

511.04

The accompanying notes are an integral part of these financial statements

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)

Balances at December 31, 2013

Appropriations: Capital surplus Gifts Dividends declared Year's income Year's movements

Balances at December 31, 2012

Appropriations: Gifts Tax on equity Year's income Dividends declared Year's movements

Balances at December 31, 2011

1,551,099

3,592,255 -

$ 3,592,255

Capital Surplus

BEATRIZ E.URIBE RESTREPO President

$ 158,953

1,551,099

$ 158,953

1,551,099

Additional Paid -in Capital

$ 158,953

Capital

(In thousands of Colombian Pesos)

$ 16,912,520

Equity Revaluation

$ (5,611,007)

Treasury Stock

79,477

Legal Reserve

$ 24,335,253

2,400,000 -

$ 21,935,253

2,400,000 -

$ 19,535,253

Reserve for Assets Protection

1,338,000 (1,338,000)

1,160,000 (1,160,000) -

Reserve for gifts

Financial Statements

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

30,503,013

30,503,013 -

Reserve for Balance-Reduction Depreciation

OTHER RESERVES

The accompanying notes are an integral part of these financial statements

$ 11,191,283

Reserve for Repurchase of Shares

For the years ended December 31, 2013 and 2012

Statement of Changes in Stockholders’ Equity

MINEROS S.A.

$ 402,173,691

89,245,171 (1,338,000)

$ 314,266,520

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

$ 238,353,860

Total Other Reserves

$ 93,568,301

29,266,043

$ 64,302,258

6,093,106

$ 58,209,152

Revaluation Surplus

Year's Income

$ 43,643,734

(89,245,171) (44,486,859) 43,643,734 -

$ 133,732,030

(77,072,660) 133,732,030 (38,729,735) -

$ 115,802,395

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

$ 347,255,948

55,004,158 -

$ 292,251,790

73,512,660 -

$ 218,739,130

Reserve for New Projects Development

$ 567,180,829

3,592,255 (1,338,000) (44,486,859) 43,643,734 29,266,043

$ 536,503,656

(1,160,000) 133,732,030 (38,729,735) 6,093,106

$ 436,568,255

Total Equity

FINANCIAL REPORT 2013 - MINEROS S.A.

MINEROS S.A.

Statement of Changes in Financial Position For the years ended December 31, 2013 and 2012 (In thousands of Colombian Pesos)

2013 Financial resources generated by operations Net income of the period

43,643,734

2012 $

133,732,030

Add (less) charges (credits) not affecting working capital

Depreciation Inventory amortization Other assets amortization Retirement pensions Deferred tax Loss in the sale of equipment Gain in sale of fixed assets Income from equity method

22,134,924 2,977,171 44,631,614 192,910 5,078 89,395 (94,666) (2,827,327)

19,660,971 5,577,394 4,454,913 110,707 14,379,992 (1,000) (292,074)

110,752,833

177,622,933

4,262,610 27,262,136

2,504,070 794,858 -

Total sources of funds Use of funds Long-term accounts receivable Additions to property, plant and equipment Dividends declared Increase in inventories Increase in other assets Gifts Increase in long-term investments Tax on equity

142,277,579

180,921,861

Total uses of funds

237,159,423

Working capital provided by operations Sources of funds Decrease in long-term investments Sale of property, plant and equipment Increase in long-term liabilities

(Decrease) increase in working capital

368,305 45,915,426 44,486,859 6,671,073 52,761,470 1,338,000 81,048,520 4,569,770

(94,881,844)

404,768 29,040,228 38,729,735 5,976,190 49,408,032 (*) 1,160,000 4,569,770 129,288,723 $

51,633,138

CHANGES IN WORKING CAPITAL COMPONENTS:

(107,015,453) 292,627 (119,846,125) 12,156,828 381,217

(Decrease) increase in current assets Cash Marketable investments Accounts receivable Deferred charges

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

(DECREASE) INCREASE IN WORKING CAPITAL

38,251,026 148,057 34,630,996 4,387,449 (915,476) (*)

12,133,609

13,382,112

(3,452,592) (996,583) 4,770,625 14,326,537 (936,530) (1,577,848)

94,939 577,118 (3,161,567) 18,712,446 (111,275) (2,729,549)

(94,881,844)

51,633,138

(*) Reclassified for comparative effects.

The accompanying notes are an integral part of these financial statements

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.

Statement of Cash Flows For the years ended December 31, 2013 and 2012 (In thousands of Colombian Pesos)

2013 $

Changes in assets and liabilities (Increase) Decrease in: Accounts receivable Accounts receivable from employees Deferred charges Inventories Increase (Decrease) in: Suppliers Accounts payable Taxes, liens and duties Labor liabilities Other liabilities Long-term liabilities

43,643,734

133,732,030

22,134,924 2,977,171 44,631,614 192,910 5,078 89,395 (94,666) (2,827,327)

19,660,971 5,577,394 4,454,913 110,707 14,379,989 (1,000) (292,074)

110,752,833

177,622,930

(5,412,923) (368,305) (381,217) (6,671,073)

(4,387,449) (404,768) 915,476 (*) (5,976,190)

996,583 (4,770,625) (14,326,537) 936,530 1,577,848 (4,569,770)

(577,118) 3,161,567 (18,712,446) 111,275 2,729,549 (4,569,767)

(32,989,489)

(27,709,871)

NET FUNDS PROVIDED BY OPERATING ACTIVITIES

77,763,344

149,913,059

CASH FLOWS FROM INVESTMENT ACTIVITIES Increase in accounts receivable from related parties (Decrease) in long-term investments Acquisition of property, plant and equipment, net Acquisition of other assets, net Increase in accounts receivable

6,743,905 81,048,520 41,652,816 52,761,470

(2,504,070) 28,245,370 49,408,032 (*)

NET FUNDS USED IN INVESTMENT ACTIVITIES

182,206,711

75,149,332

CASH FLOWS FROM FINANCING ACTIVITIES Increase in financial liabilities Payment of financial liabilities Dividends paid Gifts

34,561,405 (3,846,677) (44,486,859) (1,338,000)

538,202 (633,141) (38,729,735) (1,160,000)

(15,110,131)

(39,984,674)

(119,553,498) 179,667,423

34,779,053 144,888,370

NET FUNDS USED IN FINANCING ACTIVITIES NET CHANGES IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD

60,113,925

Financial Statements

CASH FLOWS FROM OPERATION ACTIVITIES Net income Adjustments to reconcile income to net cash provided by operation activities: Depreciation Inventory amortization Amortization of deferred charges Retirement pensions Deferred tax Loss in the sale of equipment Gain in sale of fixed assets Income from equity method

2012

179,667,423

(*) Reclassified for comparative effects. 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

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

FINANCIAL REPORT 2013 - MINEROS S.A.

MINEROS S.A.

FINANCIAL RATIOS (In thousands of Colombian pesos)

Indicator Current Ratio

LIQUIDITY INDICATORS measure the company's capacity to pay its shortterm liabilities

Acid Test

Soundness

Working Capital

Fixed Assets Turnover

ACTIVITY OR EFFICACY INDICATORS measure the results of management decisions on the administration of resources

Operating Assets Turnover

Total Assets Turnover

Accts. Payable to Suppliers - Days

Customers Receivables - Days

Return on Assets

Return on Equity

PROFITABILITY INDICATORS measure return obtained with respect to sales, to company's assets or to capital contributed by shareholders

Earnings per Share

Gross Margin

Operating margin

Net Margin

Financial Statements

Dec-13

Current Assets

125,461,908

Current Liabilities

42,684,694

Liquid Assets

60,113,924

Current Liabilities

42,684,694

Dec-12 2.94

234,729,158

1.41

179,667,423

652,526,615 85,345,786

74,589,043

Current Assets - Current Liabilities

82,777,215

179,910,855

Net Sales

287,363,439 307,252,736

Net Sales

287,363,439

Gross Operating Assets

469,068,246

Net Sales

287,363,439

Total Assets

652,526,615

Average Accts. Payable X 365 days

1,050,226,395

Term Purchases

34,527,991

Accounts Receivable

1,587,402

Net Sales

7.65

0.94

Net Income

43,643,734 652,526,615

Net Income

43,643,734

Net Equity

567,180,829

Net Income

43,643,734

0.61

123,738,994

Net Sales

287,363,439

Operating Income

111,267,925

Net Sales

287,363,439

EBITDA

146,581,949

Net Sales

287,363,439

Net Income

43,643,734

Net Sales

287,363,439

Capacity of the company to pay its current liabilities with the assets that are convertible to cash in the short term

8.19

Company's capacity to show financial consistency

357,440,349

Value remaining after paying all short-term liabilities

1.32

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

357,440,349

0.91

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

0.58

Company’s efficiency in using assets to generate sales

394,449,146

0.44

357,440,349 611,092,697

30.42

1,030,850,885

30.42

33,890,996

1.99

16,584,115

16.7

992,890

6.69%

133,732,030

21.88%

611,092,697 7.69%

133,732,030

24.93%

536,503,655 166.78

261,687

Gross Income

611,092,697

133,732,030

511.04

261,687 43.06%

202,270,255

190,910,156

220,603,433

133,732,030 357,440,349

Assets' capacity to generate earnings

Return on shareholder’s or partner’s investment

Net income per share

53.41%

Income obtained from sales after discounting costs and expenses and before covering financial obligations

61.72%

Income obtained without considering financial expenses, taxes and all other accounting expenses that do not imply cash outlays

37.41%

Income generated by each Peso of sales, irrespective of whether they correspond to the corporate purpose or not

357,440,349

15.19%

Time taken to convert accounts receivable from customers into cash

Income obtained from sales after discounting operational costs

357,440,349

51.01%

Days taken to pay suppliers accounts

56.59%

357,440,349 38.72%

How many Pesos of current assets there are for each Peso that has to be paid in the short term

3.28

270,323,063

798,232

Total Assets

4.28

54,818,304

Total Assets

Gross Fixed Assets

Interpretation

54,818,304

Total Liabilities

No. of Shares or Participation Rights

EBITDA Margin

Formula

MINEROS S.A.

FINANCIAL RATIOS

DEBT INDICATORS measure the degree and type of creditors' participation in the financing of the company's investment

Leverage or Total Indebtedness

Total Liabilities

85,345,786

Total Assets

652,526,615

Short-term Debt

Current Liabilities

42,684,694

Total Assets

652,526,615

Financial Leverage or Financial Indebtedness

Financial Debt Short Term

Total Financial Liabilities

30,765,442

Total Assets

652,526,615

Financial Liabilities - Short Term Total Assets

3,503,307

Equity

567,180,829 652,526,615

EBITDA

146,581,949

Total Financial Liabilities

30,765,442

EBITDA / Financial Debt

74,589,043

12.21%

Proportion of assets financed by third party funds

8.97%

Proportion of assets financed by third party funds in the short term

0.01%

Proportion of assets financed by financial institutions

0.01%

Proportion of assets financed by financial institutions in the short term

87.79

For each Peso invested in the company how much corresponds to the owners

611,092,697

6.54%

54,818,304 611,092,697

4.71%

50,715 611,092,697

0.54%

652,526,615

Total Assets

Ownership Index

13.08%

50,715 611,092,697

86.92

536,503,655 611,092,697

4.76

220,603,433

4,349.87

50,715

EBITDA's coverage of debt

OTHER P/E

3,765

Price per Share Earnings per Share

22.57

4,609

167

9.02

511

Price of shares in the securities market versus income generated by each share

SPECIAL DISCLOSURES

2007

2008

2009

2010

2011

2012

2013

Total Assets Total liabilities Equity Share par value

209,812 18,845 190,967 729.75

275,847 27,136 248,711 950.41

356,623 44,966 311,657 1,190.95

420,559 40,025 380,534 1,454.16

514,618 78,050 436,568 1,668.28

611,093 74,589 536,504 2,050.17

652,527 85,346 567,181 2,167.40

Financial Statements

(In thousands of Colombian pesos)

FINANCIAL REPORT 2013 - MINEROS S.A.

Proposition for earnings distribution MINEROS S.A. SHAREHOLDERS’ MEETING MARCH 19 OF 2014

EARNINGS FOR THE YEAR 2013 AMOUNT TO

$ 43,643,733,886

IT IS PROPOSED THAT THEY BE DISTRIBUTED AS FOLLOWS:

YEAR’S NET INCOME FOR A MONTHLY DIVIDEND OF $ 10.00 PER SHARE DURING THE APRIL 2014-MARCH 2015 PERIOD ON 261,687,402 OUTSTANDING SHARES, PAYABLE QUARTERLY IN ADVANCE

$ 43,643,733,886

$ 31,402,488,240

FOR SOCIAL ACTIONS

1,000,000,000

RESERVE FOR PROTECTION OF ASSETS

2,400,000,000

RESERVE FOR NEW PROJECTS

5,925,183,042

RESERVE FOR DEFERRED TAXES

2,916,062,604

EQUAL AMOUNTS

$ 43,643,733,886

Dividend will be paid between the 10th and the 20th of the respective quarter to be paid. Dividend of the quarter will be paid to shareholders who are registered in the shareholder register during the ex-dividend period determined in the General Regulations of the Stock Exchange, based on Article 2 of Decree 4766 of 2011.

Management report

Notes to the financial statements

FINANCIAL REPORT 2013 - MINEROS S.A.

MINEROS S.A.

NOTES TO THE FINANCIAL STATEMENTS AT DECEMBER 31 OF 2013 AND 2012

(In thousands of Colombian Pesos, except when noted otherwise)

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. In March of 2013, upon authorization of the Board of Directors and due report to the Financial Superintendency as relevant information, MINEROS S.A. acquired, through a special corporate vehicle, 90% of the capital stock of Nicaraguan corporation HEMCO S.A. This company conducts an important operation of underground gold exploitation, open-pit mining and purchase of gold-content metal to small miners in the region.

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

• Materiality

NOTE 2. ACCOUNTING POLICIES 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

Notes to the financial statements

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, 2013 representing 5% or more of current assets, other assets, current liabilities, longterm liabilities and equity are disclosed.

• Investments

or decreases in the subordinate company’s equity derived from the period’s results, Opinion No. 2010074197-001 of November 30 of 2010 of the Financial Superintendency providing that the totality of earnings or losses generated during the accounting period must be taken into account, is applied.

Investments are accounted at cost, which does not exceed realization 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. • Investments are classified as fixed-income and variableincome, depending on the return they generate. • According to control, they are classified as controlling and noncontrolling, subject to the provisions of the Colombian Code of Commerce. • Investments in subordinate companies in which the company holds, directly or indirectly, more than 50% of capital stock are accounted by the equity method prospectively applied as from January of 1994. Under this method, investments are accounted at cost, and subsequently adjusted, with a credit or charge to the income statement, to recognize the participation in earnings and losses in the subordinated companies occurred since January 1, 1994, after eliminating unrealized earnings among the subordinate companies and the parent company. • For subordinate companies acquired during the reporting period, application of the equity method as regards to increases

• Cash distributions of earnings of these companies are recorded as a decreased value of the investments. Additionally, the proportional participation in other equity accounts of the subordinate company, other than the results of the period, is recorded as increased value of the investments by charging the equity account surplus from equity method. Once the equity method is recorded, if the intrinsic value of the investment is lower than its book value, a provision is charged to the income statement. • Any excess of the investment’s intrinsic value over its book value at the end of the reporting period is accounted separately as re-appraisal of assets charging the equity account revaluation surplus. • Based on the cause or reason motivating the investment, they are voluntary or mandatory.

• 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 can only be depreciated through the straight-line system.

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:

Again, in 2013, the company used the special balance-reduction depreciation system to calculate income tax. Application of the system generated as net effect a lower value of depreciation deduction in taxable income for $1,479,388 ($4,165,804 – $5,645,192), as follows: $4,165,804 corresponds to increased value of balance-reduction depreciation deduction resulting from: depreciation for purchase of fixed assets in 2013,fiscal value of deduction between fiscal depreciation and per-books depreciation of assets prior to 2013, $5,645,192 corresponds to the decreased value of deduction for balance-reduction depreciation resulting from: depreciation due to retirement of fixed assets in 2013, fiscal value of deduction between fiscal depreciation and per-books depreciation of assets prior to 2013 (In 2012, additional deduction of income tax was $43,575,733) As provided in article 159 of Law 1607/12, for purchases of fixed assets after January 1, 2013, the residual value was 10% of the respective asset’s cost (0% in 2012).

FINANCIAL REPORT 2013 - MINEROS S.A.

• Inventories 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 Prepaid expenses These are mainly: insurance premiums that are amortized according to the terms of the respective loans and policies, dredges’ spare parts and other equipment.

• Deferred charges 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 bio-factory) 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 gain/loss 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, 2013 and 2012 were translated into Colombian Pesos at the market representative rate for the end of the month certified by the Financial Superintendency ($1,926.83/USD in 2013 and $1,768.23/USD in 2012). Exchange gain/loss 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 gain/ loss is recorded against the income statement of the period. All other exchange gains and losses are recorded as financial revenue or expense.

Notes to the financial statements

As provided in Decree 4918 of 2007, the exchange gain/loss of variable-income investments in subordinate companies abroad is recorded in surplus from equity method as higher or lower value of equity.

• Tax on equity 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 and surtax and the income tax for equity purposes (CREE, for its Spanish initials) 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 per-books and fiscal figures, provided there is reasonable expectation that such differences will revert in the future.

• Income tax for equity purposes (CREE) This new tax, established by Law 1607/12 (latest tax law amendment) in benefit of employees, job creation and social investment, is determined on a basis different from that of income tax. The applicable tax rate for 2013 and 2014 will be 9% of taxable basis; for subsequent years it will be 8%.

• • Infrastructure assets leasing: Under this type of contract, the company recognizes neither assets nor liabilities for the goods received. Rentals are recorded in the income statement as leasing expenses. Article 89 of Law 223 of 1995 sets the requirements and conditions for an infrastructure leasing contract to be recognized as operational leasing, as follows: 1. The leasing contract term must not be lower than 12 years. 2. The subject matter of the contract must be development of infrastructure projects in the transportation, power, telecommunications, drinking water and basic sanitation sectors.

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.

the period is recorded under assets and revaluation surplus under equity. When the realization 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

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.

Balances at December 31, 2013 and 2012 correspond to inflation adjustments to equity accounts until December 31, 2006, minus the tax on equity and corresponding surtax recorded in compliance with Law 1370 of 2009 and Decree 4825 of 2010. According to current regulations, this balance cannot be distributed as income until the company is liquidated or capitalized.

• Additional paid-in capital

• Memorandum accounts

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

Control memorandum accounts record financial information for the purpose of control, contingencies, and future transactions’ commitments; fiscal memorandum accounts record differences between per-books values and values for fiscal effects as well as corresponding advance payments of infrastructure leasing contracts with Leasing Bancolombia S.A.

• Reappraisals Reappraisals correspond to differences between the commercial or cadastral appraisal and the net book value of real estate property; for all other fixed assets susceptible of appreciation (impairment of value), reappraisals are determined through technical appraisals conducted every three years. Such reappraisals are recorded in separate asset 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. Reappraisal of investments as of December 31, 2013 and 2012 was conducted as established in circular letter 011 of 1998 of the Securities Superintendency (today, Financial Superintendency) as follows: • 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 The statement of cash flows was prepared by the indirect method. For purposes of preparing the cash flows statement the company classifies as cash equivalents those investments maturing in three months or less counted from their initial issuance date.

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

• Convergence to International Financial Reporting Standards

• When the realization value of long-term investments of noncontrolled companies is higher than cost, reappraisal for

As provided in Law 1314 of 2009, Regulatory Decree 2784 of December of 2012 and Decree 3024 of 2013, for matters

Notes to the financial statements

• Labor liabilities

FINANCIAL REPORT 2013 - MINEROS S.A.

of preparation of financial information the company belongs to Group 1; accordingly, on February 26, 2013, it presented to the Financial Superintendency the corresponding IFRS implementation plan. The initial Statement of Financial Position at January 1, 2014 shall be submitted to the Financial Superintendency not later than June 30, 2014; the first financial statements under International Financial Reporting Standards shall be issued on December 31, 2015.

â&#x20AC;˘ Reclassifications Some figures in the financial statements of 2012 were reclassified for matters of comparison with 2013.

â&#x20AC;˘ Consolidation of financial statements These separate financial statements do not consolidate assets, liabilities, equity and results of subordinate companies. Investments of these companies are accounted through the equity method. Legal requirements bind the company to additionally present consolidated financial statements to the Shareholders Meeting for its approval; however, these separate financial statements are the ones used for dividend distributions and other appropriations. Considering that foreign companies prepare their financial statements under International Financial Reporting Standards (IFRS) using a body of coherent and high-quality accounting principles, and considering that such structure of principles is considered adequate as a technical accounting reference in Colombia, such subsidiaries do not make substantial adjustments to their financial statements and do not homologate accounting policies, with the exception of the differences that contradict the principle of essence over form.

NOTE 3. FOREIGN-CURRENCY BALANCES At December 31, the company has the following foreign-currency assets and liabilities which are recorded at their Pesos equivalent on such date: 2013

2012

USD

PESOS

USD

PESOS

Assets

$ 4.739

$ 9.130.867

$ 9.376

$ 16.578.759

Liabilities

(15.924)

(30.682.103)

$ (11.185)

$ (21.551.236)

$ 9.376

$ 16.578.759

NET POSITION * Figures in Dollars are expressed in thousands

NOTE 4. ACCOUNTS RECEIVABLE At December 31, accounts receivable included:

2013 Advanced taxes paid (1)

$ 42.615.401

$ 11.075.831

Related companies (2)

7.718.787

578.377

Advance payments (3)

4.145.701

9.421.412

Yields receivable (4)

2.066.990

8.091.339

Foreign customers (5)

1.587.402

16.578.759

Miscellaneous accounts receivable

857.154

1.039.827

Loans to personnel

636.653

680.359

National customers

5.356

TOTAL

Notes to the financial statements

2012

59.628.088

47.471.260

(1) Corresponds to both balances in the company’s favor determined in private VAT calculations whose reimbursement requests were being

processed at December 31, and to balance in favor for income tax, as follows:

2013 Fourth VAT bimonthly period 2011 (a)

2012

$ 2.068.966

First VAT bimonthly period 2012

1.814.112

Second VAT bimonthly period 2012

1.676.260

1.776.077

Fourth VAT bimonthly period 2012

1.432.199

1.447.603

Fifth VAT bimonthly period 2012

880.282

1.988.844

Sixth VAT bimonthly period 2012

1.952.184

1.957.526

First VAT bimonthly period 2013

1.704.548

Second VAT bimonthly period 2013

1.739.691

Third VAT bimonthly period 2013

1.119.491

Fourth VAT bimonthly period 2013

1.352.593

Fifth VAT bimonthly period 2013

2.957.032

Sixth VAT bimonthly period 2013

2.431.768

22.703

21.486.275

$ 42.615.401

$ 11.075.831

Discountable taxes to be compensated Private income tax return balance in favor TOTAL

a. Regarding this request for reimbursement, Dirección de Impuestos y Aduanas Nacionales – DIAN (Tax and Customs Authority) issued writ of

At closing date of the financial statements, the requests for reimbursement of years 2013 and 2012 were pending filing with DIAN due to deficiencies in its Internet platform. The company and its legal and tax counsels consider that all these advance payments will be recoverable once all claims are brought to the tax authority, reason why no loss is estimated.

(2) Balances owed by the following related companies:

2013

2012

Balance payable by Operadora Minera S.A.S. for administration services rendered in the fourth quarter (second half 2012).

$ 97.535

$ 363.565

Balance payable by Operadora Minera S.A.S. for administration services rendered in the fourth quarter (second half 2012).

77.788

214.812

6.768.615

774.849

Balance payable by Hemco Nicaragua S.A. for working capital (USD 3,500,000 at 9.75% annual rate) Balance payable by Hemco Nicaragua S.A. for administration services and operating costs of 2013. TOTAL (See Note 12)

$ 7.718.787

Notes to the financial statements

prohibition No. 609152 of October 23, 2012, subsequently upheld by Resolution 1082 of October 28, 2013 on occasion of the reconsideration requested by the company; the company is in the process to file nullity and redress suit with the Supreme State Court of Antioquia.

578.377

FINANCIAL REPORT 2013 - MINEROS S.A.

(3) Corresponds to third parties’ balances at December 31 for

different items related to the normal development of the company’s business, as follows:

2013 Advance payments to contractors

3.634.749

Advance payments to suppliers Other advance payments

7.816.828

439.735

1.120.230

71.217

84.354

400.000

Advance payments for rural plots TOTAL

2012

$ 4.145.701

9.421.412

(4) Shows financial yields from fixed-income investments and

premiums paid in purchase process of these securities.

(5) Balances owed by the following foreign customers:

CONCEPT

2013

INTL Commodities Inc. (USA)

Metalor (Switzerland) TOTAL

2012

1.189.543

$ 16.578.759

397.859

1.587.402

$ 16.578.759

During the fiscal year: a. The company did not deem necessary to recognize provisions for

doubtful accounts to protect likely loss contingency of commercial accounts receivable.

b. In 2013, no accounts receivable were written off. c. There are no receivables one year or more overdue other than the

tax advance payments for which all recovery legal actions are being carried out.

NOTE 5. VALORES NEGOCIABLES A diciembre 31, los valores negociables se descomponían así: 2013 Certificate of deposit - CD

$ 17.000.000

$ 77.500.000

Other investments abroad (4)

13.884.703

4.069.787

Public bonds – local currency

9.000.000

11.160.000

Shares in local corporations (2)

8.812.656

18.562.730

Treasuries – TES

5.792.000

37.063.026

Private bonds – local currency

3.743.031

16.491.388

Participation in trust estates with trust companies (1)

1.337.624

156.831

1.039.898

56.332

2.182.053

4.949

467.307

9.917.462

59.788.126

179.791.275

(768.245)

(925.269)

$ 59.019.881

$ 178.866.006

Shares in foreign corporations (3) Other investments (5) Trust funds administered by brokerage firms (on demand) Funding operations Subtotal Allowance for impairment of investments TOTAL

2012

Notes to the financial statements

(1) Rights held as on December 31, 2013 and 2012 in Trust Estate P195 Grupo Contempo Ltda. Oficinas Oxo - Bogotá in Fidubogotá S.A. In 2013

no amount was received for restitution of contributions ($33,449 in 2012); $450,376 was recorded in 2013 for financial yields ($356,708 in 2012).

(2) At December of 31 of 2013, the company had as marketable securities the following investments in shares in corporations:

ISSUER Grupo de Inversiones Suramericana S.A.-A.D.P. Grupo Nutresa S.A. ISA S.A. E.S.P * Celsia S.A. Cementos Argos S.A. – Preferencial Inversiones Argos S.A. – Preferencial * Inversiones Argos S.A. * Fondo Bursátil Ishares Colcap* Fogansa S.A. * Cementos Argos S.A. * Conconcreto S.A. * Cartón de Colombia S.A. * Banco de Occidente S.A. Tablemac S.A. * Banco Popular S.A. * TOTAL

No. SHARES (UNITS) 54.357 50.879 86.300 154.500 69.853 28.485 20.600 19.999 175.000 26.280 151.036 27.200 5.367 8.103.080 95.729

MARKET PRICES (BOOK VALUE) $ 1.907.451 1.346.292 1.154.927 877.560 673.335 606.915 435.735 366.483 350.000 303.675 220.763 218.144 214.646 79.293 57.437 $ 8.812.656

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

ISSUER Ecopetrol S.A. Suramericana de Inversiones A.D.P. Nutresa S.A. ISAGEN S.A. E.S.P. * Bancolombia S.A. ISA S.A. E.S.P. * Cementos Argos S.A.* Suramericana de Inversiones A.O. Celsia S.A.* Inversiones Argos S.A. A.D.P. Banco Davivienda S.A. Inversiones Argos S.A. Grupo Aval S.A. ADP * Fondo Bursátil Ishares COLCAP Fogansa S.A. * Grupo Aval S.A. A.O * Pacific Rubiales Energy Corp* Conconcreto S.A.* Cartón de Colombia S.A. * Canacol Energy Ltda. * Banco de Occidente S.A. * Tablemac S.A. Banco Popular S.A. * TOTAL

No. SHARES (UNITS) 597.700 60.357 70.599 539.000 41.000 86.300 99.900 26.400 154.500 28.485 24.500 26.600 343.248 19.999 175.000 195.213 4.110 149.860 27.200 7.500 5.367 8.103.080 95.729

MARKET PRICES (BOOK VALUE) $ 3.255.271 2.345.096 1.794.590 1.360.934 1.228.818 1.154.927 1.154.378 995.290 870.461 606.916 572.575 562.648 446.222 366.482 350.000 253.777 252.991 220.764 218.144 213.595 202.121 79.293 57.437 $ 18.562.730

Notes to the financial statements

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

FINANCIAL REPORT 2013 - MINEROS S.A.

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. a. Reappraisals ISSUER

2013

Cementos Argos S.A. – preferencial

2012 $

93.360

Grupo Nutresa S.A.

66.973

59.158

Banco de Occidente

12.525

7.099

Suramericana de Inversiones A.D.P.

113.845

Ecopetrol S.A.

96.955

Bancolombia S.A.

71.303

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

57.916

Inversiones Argos S.A.

51.627

Banco Davivienda S.A.

15.337

Fondo bursátil Ishares COLCAP

15.265

Suramericana de Inversiones A.O.

921

Celsia S.A.

TOTAL

$ 179.957

482.327

B. Impairment of value ISSUER ISA S.A. E.S.P.

2012 $

376.513

318.727

Fogansa S.A.

99.750

35.000

Cartón de Colombia S.A.

68.544

46.784

Inversiones Argos S.A. – Preferencial

54.780

Cementos Argos S.A.

46.913

137.088

Fondo Bursátil Ishares Colcap

44.780

Inversiones Argos S.A.

35.246

Conconcreto S.A.

19.886

18.431

Tablemac S.A.

16.089

12.199

Banco Popular S.A.

5.744

9.573

Canacol Energy Ltd.

171.274

Pacific Rubiales Energy Corp.

84.698

Celsia S.A. E.S.P.

46.493

Banco de Occidente S.A.

30.377

ISAGEN S.A. E.S.P.

10.631

Grupo Aval – A.O.

2.333

Grupo Aval – A.D.P.

1.661

TOTAL

2013

Notes to the financial statements

768.245

925.269

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, 2013: ISSUER

PARTICIPATION PERCENTAGE

Ecopetrol S.A.

ECONOMIC ACTIVITY

DIVIDENDS RECEIVED

N.A.

Hidrocarburos

$ 157.344

Grupo de Inversiones Suramericana S.A.

0,00%

Holding Inver.

63.118

Grupo Nutresa S.A.

0,01%

Alimentos

25.223

N.A.

Financiera

22.714

Bancolombia S.A. Cementos Argos S.A.

0,00%

Cementos

17.268

ISA S.A. E.S.P.

0,01%

Transp.Energía

15.453

Celsia S.A. E.S.P.

0,01%

Gen.Energía

15.064

N.A.

Financiera

13.246

Inversiones Argos S.A.

0,00%

Holding Inver.

12.421

Fondo Bursátil Ishares Colcap

0,00%

Financiera

8.628

Banco de Occidente S.A.

0,00%

Financiera

8.034

Cartón de Colombia S.A.

0,01%

Ind.Papelera

8.006

Conconcreto S.A.

0,01%

Construcción

2.998

Banco Popular S.A.

0,00%

Financiera

2.246

Tablemac S.A.

0,02%

Ind.Maderera

810

Fogansa S.A.

0,16%

Ganadería

Grupo Aval – ADP

The following was disclosed at December 31 of 2012 regarding marketable securities: PARTICIPATION PERCENTAGE

Ecopetrol S.A.

0.0015%

Grupo Inversiones Suramericana S.A. A.O. ISAGEN S.A. E.S.P

ECONOMIC ACTIVITY

DIVIDENDS RECEIVED

Hidrocarburos

$ 177.360

0.0056%

Financiera

49.040

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 S.A. 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 S.A. 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

Notes to the financial statements

ISSUER

FINANCIAL REPORT 2013 - MINEROS S.A.

(3) Shares in foreign corporations

(4) Other Investments abroad

At December of 2013, the company had in its investment portfolio the following investments in shares of foreign corporations:

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:

ISSUER

MARKET VALUE

NO. OF SHARES

Compañía de Minas Buenaventura

4.880

Quia Resources Inc.

13.320.000

(BOOK VALUE)

105.501 $

TOTAL

51.330

$ 156.831

At December of 2012, MINEROS S.A. had in its investment portfolio the following investments in shares of foreign corporations: ISSUER

MARKET VALUE

NO. OF SHARES

(BOOK VALUE)

SPDR S&P 500 ETF TR.

(BOOK VALUE)

36.101

$ 12.847.127

SPDR SER TR S6 P REGL BKG ETF

6.702

524.422

Financial Sector SPDR (XLI)

12.183

513.154

TOTAL

$ 13.884.703

At December 31, 2012, ETFs established abroad included:

13.320.000

Compañía de Minas Buenaventura

4.880

310.211

Petrominerales Ltd.

6.150

93.761

SPDR S&P 500 ETF TR.

10.189

$ 2.565.729

1.039.898

Ishares MSCI Emerging MKT (EEM)

17.616

1.381.464

1.714

122.594

635.926 FUND

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 2013. B. Their market-price re-appraisal was based on the closing price at the corresponding stock exchange on the last business day of 2013.

(BOOK VALUE)

TOTAL

Compañía de Minas Buenaventura Petrominerales Ltda.

ECONOMIC ACTIVITY

(5) Other investments

Other investments include the following: DETAILS

DIVIDENDS RECEIVED

Minería

Hidrocarburos

2.782 2.196

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) Petrominerales Ltd. (Canadá) Compañía de Minas Buenaventura (Perú) Merrill Lynch & Co. Inc. (USA) TOTAL

Notes to the financial statements

2013

$ 4.069.787

In 2013, the company recorded against results revenues for $1,759,667 ($386,912 in 2012) as adjustment to the market value of such investments.

C. Additionally, the following information is disclosed: ISSUER

2012

$ 937.591 $ 3.299.621 -

269.973

236.556

44.832

7.526

$ 1.174.147 $ 3.621.952

MARKET VALUE

NO. UNITS

Ishares Xinhua China 25 (FXI)

Investments in shares abroad:

MARKET VALUE

NO. UNITS

Quia Resources Inc.

TOTAL

FUND

Títulos devolución de impuestos Cuentas en Money Market en el exterior. Operaciones Over Night TOTAL

2013 $

2012 - $ 1.931.186

56.332

162.455

88.412

$ 56.332 $ 2.182.053

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 2013 and 2012. Investments in CDs, bonds and TES correspond to high-liquidity securities

NOTE 6. PREPAID EXPENSES AND OTHER ASSETS At December 31, this account included: 2013

2012

Spare parts for dredges and other equipment

5.004.032

Insurance (1)

3.656.738

715.863

TOTAL

1.681.940

$ 5.719.895

5.338.678

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

NOTE 7. PROPERTY, PLANT AND EQUIPMENT At December 31, this account included: 2013

2012 $

4.964.788

3.448.978

Buildings and constructions

17.498.424

15.815.760

Machinery and equipment

159.574.868

153.677.333

65.811.237

57.232.619

Electric plants and networks Furniture and fixtures

903.852

903.851

Transportation equipment

8.563.531

8.408.480

Computer equipment

1.942.202

1.868.804

Machinery and equipment under assembly (1)

36.408.860

27.290.636

Constructions in progress (1)

11.304.131

1.395.759

Other Subtotal Less: Accumulated depreciation Deferred depreciation (2) TOTAL

280.843 $

307.252.736

280.843 $

270.323.063

(202.722.134)

(186.864.196)

42.027.161

43.575.733

$ 146.557.763

$ 127.034.600

Notes to the financial statements

ASSET Land

As on December 31, 2013, no restrictions or encumbrances affect the companyâ&#x20AC;&#x2122;s above-mentioned property, plant and equipment. (1) At December 31, 2013, construction works 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.

FINANCIAL REPORT 2013 - MINEROS S.A.

Assets with their respective adjusted cost, accumulated adjusted depreciation, realization value and associated appreciation and impairment of value are detailed as follows:

DECEMBER 2013 ASSET

ADJUSTED COST

Land

$ 4.964.788

ADJUSTED DEPRECIATION AND/OR DEPLETION $

APPRAISAL

RE-APPRAISAL

$ 20.881.235

$ 15.916.447

Buildings and constructions

17.498.424

4.279.510

20.113.089

6.894.175

Machinery and equipment

159.574.868

117.125.777

84.133.276

41.684.185

65.811.237

31.825.907

42.811.391

8.826.061

903.852

445.975

N.A.

Transportation equipment

8.563.531

5.767.424

4.132.316

1.336.209

Computer equipment

1.942.202

1.188.808

N.A.

Machinery and equipment under assembly

36.408.860

N.A.

Constructions in progress

11.304.131

N.A.

280.843

61.572

N.A.

$ 307.252.736

$ 160.694.973

Electric plants and networks Furniture and fixtures

Other assets TOTAL (See Note 13)

$ 74.657.077

DECEMBER 2012 ASSET Land

3.448.978

DEPRECIATION $

APPRAISAL -

17.035.033

RE-APPRAISAL $

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 (See Note 13)

ADJUSTED COST

Notes to the financial statements

$ 50.583.516

NOTE 8. LONG-TERM ACCOUNTS RECEIVABLE Balances payable by the company’s employees from loans granted for periods longer than one year, as follows: CONCEPT

2013

2012

Housing loans (1)

$ 5.842.973

$ 5.483.885

69.164

59.947

$ 5.912.137

$ 5.543.832

Vehicle loans TOTAL (1) Los préstamos a empleados a largo plazo se hacen a un tasa promedio de DTF + 3 anual.

NOTE 9. INVENTORIES At December 31, this account included: CONCEPT

2013

Materials and consumables

2012

$ 32.845.584

$ 29.429.228

Materials in transit

3.079.387

2.512.318

Workshop orders under process

1.426.790

1.716.313

$ 37.351.761

$ 33.657.859

TOTAL

NOTE 10. LONG-TERM INVESTMENTS

CORPORATION

PARTICIPA TION %

NO. OF SHARES

REALIZATION VALUE OR BOOK VALUE

ADJUSTED COST

Mineros LLC (USA) (1)

100%

$ 87.228.588

Bonanza Holding S.A. (Nicaragua) (1)

0,1%

Operadora Minera S.A.S.

100%

200.437

8.743.837

Exploradora Minera S.A.S

100%

20.000

865.569

Cía. Minera de Ataco S.A.S.

100%

20.000

200.000

213.048

13.048

17,74%

493.214.074

6.213.742

23.042.962

16.829.219

N.A

N.A.

4.500

Unipalma de los Llanos S.A.S. Club de Banqueros (right) Subtotal Promotora de Proyectos S.A. Distrito de Negocio S.A.S.

APPRECIATION (IMPAIRMENT OF VALUE) -

$ 103.256.245

$ 16.842.267

1,60%

124.399

99.321

27.368

(71.953)

40%

80.000

69.058

(10.942)

Subtotal (See Note 13)

179.321

TOTAL

$ 103.435.566

Notes to the financial statements

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

96.427

(82.895)

$ 16.759.372

(1) The cost of these investments abroad was adjusted at December 31, 2013 to the market representative exchange rate published by the

Colombian Financial Superintendency.

FINANCIAL REPORT 2013 - MINEROS S.A.

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

CORPORATION Compañía Minera de Ataco S.A.S.

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

APPRECIATION (IMPAIRMENT OF VALUE)

100%

Unipalma de los Llanos S.A.

REALIZATION VALUE OR BOOK VALUE

9.155

11.546.188

1,60%

124.399

99.321

23.760

(75.560)

40%

80.000

77.566

(2.434)

Subtotal

179.321

TOTAL

$ 15.967.465

101.326

$ 27.435.658

(77.994) $ 11.468.194

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: Below is a list of the economic activity, total value of assets, liabilities, equity and results of the year of the companies where longterm investments are held, recorded according to the equity method.

2013 CORPORATION Mineros LLC (USA) (1)

ECONOMIC ACTIVITY

TOTAL ASSETS

TOTAL LIABILITIES

TOTAL EQUITY

YEAR’S RESULTS

Inversionista

241.548.914

154.320.326

87.228.588

2.587.822

Operadora Minera S.A.S.

Minería

11.013.968

2.270.131

8.743.837

53.761

Exploradora Minera S.A.S.

Minería

1.297.866

432.297

865.569

185.744

Compañía Minera de Ataco S.A.S. (*)

Minería

213.980

932

213.048

3.893

(*) Mineros S.A. does not consolidate with Compañía Minera de Ataco because it is in unproductive stage.

2012 CORPORATION

ECONOMIC ACTIVITY

TOTAL ASSETS

TOTAL LIABILITIES

YEAR’S RESULTS

Operadora Minera S.A.S.

Minería

10.975.127

2.285.051

8.690.076

31.208

Exploradora Minera S.A.S.

Minería

1.871.156

1.191.330

679.826

260.866

Compañía Minera de Ataco S.A.S. (*)

Minería

212.011

2.856

209.155

6.634

(*) Mineros S.A. does not consolidate with Compañía Minera de Ataco because it is in unproductive stage.

TOTAL EQUITY

Notes to the financial statements

Below are the economic activities and income accrued of long-term investments in non-controlled corporations: CORPORATION

ACCRUED INCOME 2013

ECONOMIC ACTIVITY

ACCRUED INCOME 2012

Unipalma de los Llanos S.A.

Agroindustria

261.448

1.147.859

Promotora de Proyectos S.A.

Inversionista

Distrito de Negocios S.A.S.

Construcción

Equity structure of subordinate companies subject to application of the equity method at December 31:

2013 CORPORATION Mineros LLC (USA)

Capital stock

Capital Surplus

Year’s results

Reserves

Results from prior years

Total equity

81.055.914

3.584.852

2.587.822

87.228.588

Operadora Minera S.A.S.

200.437

3.369.563

5.120.076

53.761

31.208

8.743.837

Exploradora Minera S.A.S.

200.000

479.825

185.744

260.866

865.569

Compañía Minera de Ataco S.A.S. (*)

200.000

9.155

3.893

6.634

213.048

(*) Mineros S.A. does not consolidate with Compañía Minera de Ataco because it is in unproductive stage.

2012 Capital stock

Capital Surplus

Reserves

Year’s results

Results from prior years

Total equity

Operadora Minera S.A.S.

200.437

3.369.563

5.088.868

31.208

981.988

8.690.076

Exploradora Minera S.A.S.

200.000

218.960

260.866

145.303

679.826

Compañía Minera de Ataco S.A.S. (*)

200.000

2.521

6.634

2.521

209.155

(*) Mineros S.A. does not consolidate with Compañía Minera de Ataco because it is in unproductive stage.

The company does not consider redemption of permanent investments within the three (3) calendar years following the closing date of the financial statements. According to the provisions of Joint Circular Letter 009 of the Superintendency of Corporations and 013 of the Securities Superintendency (today Financial Superintendency) of December of 1996, External Circular Letter 001 of January of 1996 of the Securities Superintendency (today Financial Superintendency) and 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. Below is a description of the corporate purpose of the companies that are recorded through the equity method:

(1) Mineros LLC

Notes to the financial statements

CORPORATION

The corporation Mineros LLC was established under the laws of the State of Delaware, U.S., on March 05, 2013 and it is duly registered with the Secretary of State of Delaware. The corporate purpose is to take part in any type of commercial activity. Mineros LLC is the holder of 99.99% of capital stock of Nicaraguan Bonanza Holding S.A., who in turn owns 90% of Hemco Nicaragua S.A.; this latter carries out a gold exploitation operation in the municipality of Bonanza, a North Atlantic region in Nicaragua.

FINANCIAL REPORT 2013 - MINEROS S.A.

Figures include the financial position of Mineros LLC at December 31, 2013 after consolidation with Bonanza Holding S.A. and Hemco Nicaragua S.A.

Operadora Minera S.A.S. 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, exploitation, industrialization, or development in any form, of renewable and non-renewable resources.

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.

Compañía Minera de Ataco S.A.S. 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). Its main offices are located in the city of Ibagué. Until December 31, 2013 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; application for the license was presented on July 23, 2012. Additionally, the Works Program (PTO for its Spanish initials was submitted to the Agencia Nacional Minera – ANM (National Mining Authority) on November 21, 2012. Since the company is in the pre-operational stage, earnings recorded until December 31, 2013 and 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)).

Participation in results: CORPORATION

2013

Mineros LLC (USA)

2012 $ 2.587.822

Operadora Minera S.A.S.

53.761

31.208

Exploradora Minera S.A.S.

185.744

260.866

$ 2.827.327

$ 292.074

Compañía Minera de Ataco S.A.S. (*) Total (*) Mineros S.A. does not consolidate with Compañía Minera de Ataco because it is in unproductive stage.

Método de participación en patrimonio CORPORATION Mineros LLC (USA) (*) Mineros S.A. does not consolidate with Compañía Minera de Ataco because it is in unproductive stage.

Notes to the financial statements

2013 $

2012 3.592.254

NOTE 11. OTHER ASSETS At December 31, this account included: 2013

2012

Intangibles Financial leasing contracts: Net value of vehicles acquired under contract with Leasing Bancolombia S.A.

15.746

41.732

Net value of two IHC Beaver 1,600 kVA suction dredges Model 2013 acquired through contract subscribed with Bancolombia Panamá S.A.

29.239.974

Total intangibles

29.255.720

41.732

Amount invested in exploration to determine possible economically exploitable gold deposits. (1)

89.863.131

109.237.617

Balance to be amortized of exploration, development, and pre-operating costs and expenses of the La Ye mine (entered operation in May 2010).

7.847.309

17.558.599

Costs and expenses incurred in rubber plantation and bio-factory projects on the company’s land.

7.601.153

5.271.375

Costs incurred in IT modernization - Renova Project

5.671.866

110.983.459

132.067.591

$ 140.239.179

$ 132.109.323

Mining Projects:

Total proyects TOTAL OTHER ASSETS (*) Reclassified for comparative effects $2,251,797 from the prepaid expenses account.

2013 El Bagre District Project Remedios Project

2012

$ 27.776.231

$ 27.845.939

4.000.886

12.676.444

Nechí Project

12.742.861

15.750.241

Santa Elena (Bolivar Province) Project

12.900.949

9.768.499

Amalfi Project

5.552.568

9.558.741

Caldas Province Projects

5.392.948

9.029.958

Tolima Project

5.825.529

8.818.671

13.226.653

6.099.447

Join Venture Anglo Gold Guamocó

3.806.690

Peru Project

1.066.159

El Catorce (Bolivar Province) Project

Brownfield Exploration Other mining projects TOTAL

2.112.419

2.444.506

2.704.409

$ 89.863.131

$ 109.237.617

Notes to the financial statements

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

In 2013, the company, based on technical reports presented by the Geology Area, carried to the period’s results as non-operating expenses $48,863,286 of mining projects considered economically non exploitable (2012 $4,078,363).

FINANCIAL REPORT 2013 - MINEROS S.A.

NOTE 12. TRANSACTIONS WITH RELATED PARTIES At December 31, transactions with related companies included: ACCOUNTS RECEIVABLE

2013

Operadora Minera S.A.S. (See Note 4.2)

2012 $

Exploradora Minera S.A.S (See Note 4.2)

97.535

363.565

77.788

Hemco Nicaragua S.A. (See Note 4.2)

214.812

7.543.464

TOTAL

$ 7.718.787 ACCOUNTS PAYABLE

2013

Operadora Minera S.A.S. (La Ye Mine operation services - See Note 16) Operadora Minera S.A.S. (purchase of materials) Exploradora Minera S.A.S (mandate contract fees for exploration activities in several mining projects - (See Note 16) Exploradora Minera S.A.S (Costs and expenses to be reimbursed under execution of mandate contract - (See Note 16) TOTAL

578.377

2012 $ 1.840.915

$ 1.951.461

401.876

24.808

70.722

342.600

1.037.264

$ 2.610.199

$ 3.059.447

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 2013 and 2012, the following transactions were carried out with related companies and/or subsidiaries:

COMPANY FROM WHICH REVENUE WAS RECEIVED OR WHICH MADE THE PAYMENT

CONCEPTO

Proyecto Sabaletas S.A.S.

Revenues from administration services

Operadora Minera S.A.S.

2013 $

2012 -

$ 79.815

Revenues from administration services

435.635

608.331

Exploradora Minera S.A.S.

Revenues from administration services

315.166

439.288

Hemco Nicaragua S.A.

Interest

74.201

Hemco Nicaragua S.A.

Technical and administrative services

Proyecto Sabaletas S.A.S.

Purchase cost of other articles

Operadora Minera S.A.S.

Cost of operation services for La Ye Mine

Operadora Minera S.A.S.

Rental costs

Exploradora Minera S.A.S.

Cost of exploration services

911.587

22.500

18.011.598

15.908.295

152.464

566.654

796.080

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. In 2013, commercial transactions for $3,447 million related to insurance premiums for the different policies covering the company were conducted

with CompaĂąĂa de Seguros Colpatria, with which members of the Board of Directors have economic links. Insurance policies were hired with Colpatria under optimal market conditions, upon quote from other insurance companies.

No other operation with corporations in which members of the Board of Directors have direct or indirect economic interest was carried out along the year 2013.

Notes to the financial statements

NOTE 13. RE-APPRAISALS At December 31, this account included: ASSET

2013

2012

PROPERTY, PLANT AND EQUIPMENT (1) Land

Buildings Machinery and equipment River fleet equipment Transportation equipment

$ 13.586.055

6.894.175

5.828.423

41.684.185

28.132.526

505.910

357.424

830.299

400.442

8.826.061

2.278.646

$ 74.657.077

$ 50.583.516

2.151.852

2.250.548

Aqueducts, plants and networks Subtotal (See Note 7)

15.916.447

INVESTMENTS Marketable investments Rights in trust estates (Grupo Comtempo Oficinas Oxo Trust Estate) Long-term investments 16.759.372

11.468.194

Subtotal

Investments in corporations - Net (See Note 10)

$ 18.911.224

$ 13.718.742

TOTAL

$ 93.568.301

$ 64.302.258

property, plant and equipment which were conducted by Francisco Ochoa AvalĂşos S.A.S. firm, domiciled in MedellĂn 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. For 2013, appraisals of property, plant and equipment were updated according to the CPI of the year (1.94%) and were compared to the net cost of assets at December 31, 2013.

NOTE 14. FINANCIAL LIABILITIES

Notes to the financial statements

(1) In November of 2012, the company hired commercial appraisals of

As of December 31, financial liabilities included: 2013 Financial leasing contracts (1) Foreign financial entities (2) Credit cards Subtotal financial liabilities TOTAL SHORT-TERM LIABILITIES TOTAL LONG-TERM LIABILITIES

2012 17.093

30.721

30.682.104

66.246

19.994

$ 30.765.443

3.503.307 $ 27.262.136

50.715 50.715

FINANCIAL REPORT 2013 - MINEROS S.A.

(1) At December 31 of 2013, financial leasing contract No. 121708 with Leasing Bancolombia S.A. for purchase of one vehicle, as follows:

CONTRACT

INSTALLMENTS

121708

BALANCE

MATURITY

OUT STANDING INSTALL MENTS

17.093 Marzo 7/2016

TOTAL

PURCHASE OPTION

350

$ 17.093

ACCRUED INTEREST

RATE

8.34% E.A.

$ 1.893

$ 350

$ 1.893

At December 31 of 2013, financial leasing contract No. 121708 with Leasing Bancolombia S.A. for purchase of one vehicle, as follows:

CONTRACT

INSTALLMENTS

BALANCE

MATURITY

OUT STANDING INSTALL MENTS

103632

$ 6.630

Enero 3/2014

121708

$24.091 Marzo 7/2016

TOTAL

PURCHASE OPTION

$ 30.721

ACCRUED INTEREST

RATE

849

11.08% E.A.

$ 1.052

350

8.34% E.A.

2.675

$ 1.199

$ 3.727

Year (2) Corresponds to international financial leasing contract No. 999651 for USD

16,315,335.57, with 120-month term and final maturity on May 20, 2023, payable in quarterly installments at a fixed rate of 8% quarterly in arrears, as follows:

Maturity of long-term liabilities in the next years:

2015

Value $

2.382.408

2016

2.579.568

2017

2.797.705

2018

2.954.553

2019 y posteriores Total long-term liabilities

16.547.902 $

27.262.136

NOTE 15. SUPPLIERS Liabilities from purchase of goods for the development of mining-activity-related operations, which are paid within the next thirty (30) days.

NOTE 16. ACCOUNTS PAYABLE Corresponds to short-term liabilities for different items derived from the normal development of the companyâ&#x20AC;&#x2122;s business, as follows: 2013 Related companies (1) (See Note 12) Contractors

2.610.199

3.059.447

1.312.127

1.431.382

33.598

660.757

Withholding tax

902.600

749.990

Sales tax withheld

118.745

542.554

Payable costs and expenses

Turnover tax

16.111

6.196

Payroll withholdings and contributions

1.235.059

1.266.005

Miscellaneous accounts payable

4.480.256

7.762.989

TOTAL

2012

Notes to the financial statements

$ 10.708.695

15.479.320

(1) Balance in favor of Operadora Minera

S.A.S. for $1,840,915 (2012 $1,951,461) for execution of the contract for provision of mining exploitation services, and $401,876 (2012 $0) for purchase of materials and balance in favor of Exploradora Minera S.A.S. for $24,808 (2012 $70,722) for fees of delegated administration contract and $342,600 (2012 $0) for execution of works under mandate contract.

NOTE 17. TAXES, LIENS AND DUTIES A. Short term Includes the following items: 2013

Income tax current fiscal year (b)

625.675

623.787

16.902.925

Tax on equity (a)

4.569.766

4.569.770

Income tax for equity purposes – CREE (b)

2.579.859

5.355

$ 7.775.300

$ 22.101.837

Gold Taxes TOTAL

a. According to Law 1370 of 2009 and Legislative Decree No. 4825 of

2010, the company calculated tax on equity equal to $18,279,076, taking as basis the 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 2013, the company paid tax on equity for $4,569,770. El saldo por pagar correspondiente al 2014 se clasificó dentro del pasivo a corto plazo por $4.569.766.

b. Tax regulations applicable to the company provide:

Income tax applicable rate for 2013 is 25%; for 2012 it was 33%. The income tax rate deduction was established in Law No 1607 of December of 2012; this law also established the income tax for equity purposes –CREE– at 9% rate which entered into force on January 1st of 2013. Article 22 of Law 1607 determined CREE’s taxable basis as an alternative taxable income. CREE income tax basis is calculated separately from income tax without taking into account fiscal procedures applied until 2012. CREE income tax basis is calculated together with income tax, additionally excluding such items not expressly taken into account for the CREE (Article 22 of Law 1607 /12).

Effective tax rates for income tax stood at 24.04% for the year 2013 and 32.46% for the year 2012, due to the temporary and permanent differences between commercial income and net taxable income. Effective tax rate for income tax for equity purposes stood at 8.90% for the year 2013, due to the temporary and permanent differences between commercial income and net taxable income. 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 income tax for equity purposes (CREE) and, at any rate, before July 1, 2013). 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. Accordingly, during the period named, fiscal bases of items included in tax returns will remain unaltered. Likewise, requirements for accounting procedures for recognition of special fiscal situations will lose validity on the date of application of the new accounting regulatory framework. Below is a summary of the main entries to reconcile commercial income and net taxable income for income tax, taxable basis for CREE, and per-books equity and fiscal equity.

Notes to the financial statements

Income tax of prior fiscal years

2012

FINANCIAL REPORT 2013 - MINEROS S.A.

1. Reconciliation between commercial income and net taxable income for income tax 2013

2012

$ 64.506.008

$ 198.009.173

2.504.071

(766.755)

(4.650.226)

Revenues not earned from equity method

(2.827.327)

(292.074)

Revenues from appreciation of shares

(2.538.798)

(3.398.055)

Deductions for new rubber plantations

(1.767.842)

(1.237.397)

(43.575.733)

(1.338.000)

(1.160.000)

Shares impairment

1.613.974

3.621.952

Loss in sale and retirement of assets

1.505.092

625.716

951.031

1.479.593

430.746

$ 60.491.661

$ 151.203.488

33% income tax on net taxable income

49.897.151

25% income tax on net taxable income

15.122.915

14.379.992

15.122.915

$ 64.277.143

5.739.359

20.862.274

$ 64.277.143

Per books pre-tax income Plus: Dividends actually received, recording under the equity method Less: Revenues not constituting income or windfall profit

Increased depreciation expense resulting from balance reductions Donations paid against reserve that constitute fiscal deduction Plus: Non-deductible expenses:

Levy on financial transactions Other non-deductible expenses NET TAXABLE INCOME - INCOME TAX

Deferred tax from increased value of fiscal depreciation $43,575,733 Subtotal provision for income tax and surtax Subtotal income tax for equity purposes (CREE) (2) TOTAL INCOME TAX AND CREE PROVISION

In 2013, due to income tax advance paid in 2012 for $32,758,878, withholdings and self-withholdings for $3,590,356, and fiscal discounts for $629,800, the company ended the year with a balance in favor for $21,486,275 for income tax, which is shown in Note 4 - Accounts Receivable.

Notes to the financial statements

2. Reconciliation between commercial income and taxable basis for income tax for equity purposes, in force as of taxable year 2013. 2013 Per-books taxable income before income tax for equity purposes

$ 64.506.008

Less: Revenues not constituting income or windfall profit

(766.755)

Revenues not earned from equity method

(2.827.327)

Revenues from appreciation of shares

(2.538.798)

Balance-reduction depreciation due to purchases of fixed assets during 2013 and increased fiscal value of deduction between fiscal and per-books deduction Plus: Non-deductible expenses:

(4.165.804)

Gifts (Articles 125 and 55 of Fiscal Law)

173.160

Shares impairment

1.613.974

Loss in sale and retirement of assets

1.505.092

Levy on financial transactions

625.716

Other non-deductible expenses

1.479.593

TAXABLE BASIS

$ 59.604.859

9% income tax for equity purposes on net taxable income

5.364.437

Deferred tax from increased value of fiscal depreciation on $4,165,804

374.922

TOTAL PROVISION FOR INCOME TAX FOR EQUITY PURPOSES – CREE

$ 5.739.359

3. Reconciliation between per-books equity and fiscal equity Difference between per-books equity and fiscal equity Per-books shareholders’ equity

2013

2012

$ 567.180.828

$ 536.503.656

15.010.742

15.003.779

1.257.561

1.043.746

1.548.572

(93.568.301)

(64.302.258)

(43.575.733)

Surplus from equity method

(3.592.255)

FISCAL TAXABLE EQUITY

$ 487.837.148

$ 444.673.190

Plus: Liabilities not fiscally recognized Land fiscal adjustment Higher value of property, plant and equipment from effect of balance reduction fiscal depreciation. Less: Re-appraisals of investments and property, plant and equipment not fiscally recognized Menor valor propiedad, planta y equipo por efecto de la depreciación fiscal por reducción de saldos.

Notes to the financial statements

From the $5,364,437 balance payable, withholdings and self-withholdings for CREE for $2,784,578 are subtracted yielding a balance payable of $2,579,859 that is recorded in the short term.

Tax returns for income tax and surtax until 2011 taxable year are definitive since the company availed in this year from the audit benefit provided for in Article 689 of Fiscal Law.

FINANCIAL REPORT 2013 - MINEROS S.A.

NOTE 19. DIVIDENDS PAYABLE

B. Long-term Includes the following items: 2013

2012

The balance at December 31 corresponds to:

Deferred income tax

$ 14.010.145

$ 14.379.992

Deferred income tax for equity purposes

374.922

4.569.767

$ 14.385.067

$ 18.949.759

Tax on equity TOTAL

According to Article 78 of Decree 2649 of 1993, the company recorded this tax as the difference between per-books and fiscal depreciation resulting from reduction of balances of property, plant and equipment. Deferred Taxes – The company availed from the fiscal benefit of flexible depreciation whose effect on income tax and income tax for equity purposes was:

2013 Regular dividends declared (1)

2012

$ 10.205.808

$ 9.682.434

Accrued dividends payable

915.906

Former periods dividends

833.177

694.609

$ 11.954.891

$ 10.377.043

TOTAL

(1) For income tax, an increased value of actual tax paid, which,

according to accounting standards was recorded as current income tax payable.

(2) For CREE, a decreased value of actual tax paid, which, according to

accounting standards was recorded as tax payable.

The company will amortize in the next years the depreciation recorded for tax purposes. For the increased fiscal depreciation to be valid, a non-distributable reserve was established equivalent to 70% of the increased deduction. Also, from the taxed reserve established in the past year for matters of the balance-reduction depreciation, the amount equivalent to the reserve’s release was transferred to non-taxed reserves, and remains at the disposal of the Shareholders’ Meeting.

(1) According to Minutes No. 52 of the Regular Shareholder’s Meeting

of March 20 of 2013, the proposal for payment of dividends was approved. Monthly dividend is $11.50 per share on total 261,687,402 outstanding shares, for a monthly value of $3,009,405 for the April 2013-March 2014 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 Colombian Stock Exchange, as provided in article 2 of Decree 4766 of 2011, are entitled to the month’s dividend. Payment of $32 extra dividend per share payable in four installments of $8 each in April, July and October of 2013 and January of 2014 was approved in the same Shareholders’ Meeting (Minutes No. 52). $44,486,859 was appropriated from earnings of the year 2012 for payment of dividends.

NOTE 18. LABOR LIABILITIES

For the current fiscal year, $32,531,967 has been accrued for the periods between April and December.

At December 31, labor liabilities included: 2013 Severance payments

$ 2.322.705

$ 2.245.542

1.548.665

789.210

Salaries payable

437.219

334.794

Interest on severance payments

252.225

254.738

$ 4.560.814

$ 3.624.284

Vacations

TOTAL

2012

Notes to the financial statements

2013

2012

Dividends declared in 2013

44.486.858

38.729.735

Dividends paid

32.531.967

28.352.692

Dividends payable

11.954.891

10.377.043

NOTE 20. RETIREMENT PENSIONS

NOTE 21. EQUITY

The retirement pensions currently under the responsibility of Mineros S.A. correspond to those employees, 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.

A. Capital Stock

2013 Pension liabilities according to actuarial estimates Less: Retirement pension provision recorded by the company. Retirement pensions to be provided in the next 16 years

$ 1.490.781

2012 $ 1.283.327

(476.891)

(462.347)

$ 1.013.890

$ 820.980

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

$ 192.910

$ 110.708

181.736

178.211

$ 374.646

$ 288.919

*In Colombian Pesos At December 31 of 2013 and 2012, reserve for repurchase of shares totals $11,191,283. At December 31 of 2013 and 2012, total 56,218,850 repurchased shares stand at $5,611,007 (no repurchase of own shares took place along the years 2013 or 2012). 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. Capital surplus Corresponds in its entirety to the exchange gain/loss on the initial investment in Mineros LLC.

C. Legal reserve Colombian law requires the company to transfer at least 10% of annual net income 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 2013 and 2012 the balance equals $79,477 or 50% of subscribed and paid-in capital.

D. Equity revaluation and additional paid-in capital

Notes to the financial statements

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 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, 2013, the accumulated amortized percentage of the actuarial calculation stands at 67.97% (63.97% at December 31 of 2012). As of December 31, retirement pensions included:

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 2013 and 2012.

Equity revaluation for $16,912,520 and additional paid-in capital for $1,551,099 cannot be distributed as earnings but are susceptible of tax-free capitalization. In 2011, tax on equity for $18,279,076 was recorded against equity revaluation.

Pension liabilities correspond to seventeen (17) people at December 31, 2013 and 2012.

FINANCIAL REPORT 2013 - MINEROS S.A.

E. Other reserves The balance of this account includes: 2013 For future expansions (1)

2012

$ 308.154.141

$ 248.983.558

Acquisition of property, plant and equipment, net (1)

24.335.253

21.935.253

Balance reductions reserve

30.503.013

Other

39.101.807

43.268.232

$ 402.094.214

$ 314.187.043

TOTAL

(1) Changes in these reserves are the result of appropriations approved by the Regular Shareholders’ Meeting held on March 20, 2013, according to

Minutes No. 52.

NOTE 22. MEMORANDUM ACCOUNTS Correspond to the following items and amounts: MEMORANDUM ACCOUNTS Difference between per-books income and fiscal income (income tax and CREE)

2012

$ (7.436.108)

$ (46.805.685)

Difference between per-books equity and fiscal equity

79.343.682

91.830.466

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

51.922.876

$ 123.830.450

$ 96.947.657

58.000.000

70.000.000

Sub-total fiscal memorandum accounts (Net) Infrastructure leasing contracts pending execution (1) Infrastructure leasing contracts executed (2) Appreciation of fully depreciated property, plant and equipment (2) Retirement pensions policy reserve Contingent liabilities for ongoing labor claims. TOTAL (1) Infrastructure leasing contract No. 119709 subscribed on December

28 of 2010 with Leasing Bancolombia S.A. for construction of Central Hidroeléctrica Providencia III, worth $58,000,000,000 for a term of 144 months and with interest rate equivalent to DTF T.A., plus 3.25 points for advances. At December 31, 2013, Leasing Bancolombia S.A. has disbursed $75,693,925 (2012 $33,957,252) for execution of this contract. Mineros S.A. in turn, recorded in 2013 $4,166,713 (2012 $1,138,841) for interest on disbursements made by Leasing Bancolombia S.A. as advances.

2013

Notes to the financial statements

6.326.357 81.855.280

82.316.492

6.762.621

435.000

170.000

$ 277.209.708

$ 256.196.770

(2) Corresponds to infrastructure leasing contract No. 119709 subscribed

on December 28, 2010 with Leasing Bancolombia S.A. for uprating and expansion of Central Hidroeléctrica Providencia with 144-month term starting January 6, 2014, interest rate DTF T.A. + 3.25 points and purchase option for $63,264.

(3) In accordance with the provisions of Communication No. 2010045038-

011 of August 13, 2010 of the Financial Superintendency regarding recording of this kind of appreciations.

NOTE 23. OPERATING REVENUE 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 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: FOREIGN CUSTOMER

2013

2012

INTL Commodities Inc.(USA)

39%

34%

Auramet Trading (USA)

33%

24%

Argor Heraeus S.A. (Switzerland)

23%

26%

Metalor (Switzerland) TOTAL

16%

100%

NOTE 24. NON-OPERATING REVENUES AND EXPENDITURES As of December 31, this accounts included: 2013

2012 $ 7.334.318

$ 10.823.017

Indemnities (*)

6.365.078

295.762

Exchange gain/loss

5.907.545

3.781.470

Income from equity method

2.827.327

292.074

Recoveries and realizations

2.417.524

1.246.766

Revenues from appreciation of shares

2.381.774

2.330.252

Services

1.772.267

1.138.352

Gain in sale of investments

1.508.859

552.028

773.527

949.965

Miscellaneous Dividends and participations

743.033

1.683.718

Gold price hedge contracts

523.545

2.784.120

Trust rights

450.376

356.078

Gain in sale of fixed assets

94.666

1.000

Sale of agricultural products

60.621

47.023

Leases

44.930

47.683

UVR accounts adjustment

18.599

105.841

Other financial yields

1.194

1.775

Amortized discounts

15.241

$ 33.225.183

$ 26.452.165

TOTAL NON-OPERATING REVENUES

Notes to the financial statements

NON-OPERATING REVENUES Financial yields

(*) Lawsuit with FLSmith for works in Mina La Ye Processing Plant.

FINANCIAL REPORT 2013 - MINEROS S.A.

NON-OPERATING EXPENDITURES Amortization of mining projects (4)

2013

2012

$ 48.863.286

$ 4.078.363

10.961.383

1.196.629

Interest and financial expenses

8.034.031

1.299.352

Exchange gain/loss

4.113.986

4.488.521

Taxes assumed (1)

2.692.364

2.433.920

Investments impairment

1.613.974

3.621.952

Loss in securities trading (2)

1.383.378

200.917

Claims fees

Other expenses (5)

1.233.899

64.412

Hedging contracts

795.925

172.566

Aids and charities (3)

173.160

298.287

Retirement of property, plant and equipment

121.714

873.708

Premiums paid in options contracts

624.521

TOTAL NON-OPERATING EXPENDITURES

Commissions

$ 79.987.100

$ 19.353.148

TOTAL NON-OPERATING REVENUES AND EXPENDITURES – NET

$ (46.761.917)

7.099.017

(1) Corresponds mainly to levy on financial transactions and non-deductible VAT charges. (2) Loss on securities trading

ENTITY Ecopetrol

2012 $ 737.092

$ 3.645

Cementos Argos S.A.

210.735

Canacol Energy LTDA

168.726

Bancolombia S.A.

120.057

Pacific Rubiales Energy Corp.

72.571

90.667

Dirección del Tesoro Nacional

31.281

35.673

Grupo de Inversiones Suramericana S.A.

20.264

Isagen S.A. E.S.P.

7.307

Inversiones Argos S.A.

7.196

Cartera Colectiva Petroval

4.096

26.960

Grupo Nutresa S.A.

4.024

Almacenes Éxito S.A.

31.237

Vanguard Intl Equi

9.671

Merrill Lynch

2.750

Corficolombiana S.A.

313

$ 1.383.378

$ 200.916

Saldos menores

TOTAL

2013

Notes to the financial statements

(3) Aids and charities

Empresa Social del Estado Hospital San Juan de Dios – ANORI

2013

2012 $ 23.928

$ 55.833

Fundación para el Progreso de Antioquia

20.340

19.648

La Fundación de Mineros S.A.

20.000

Corp. Ensamble Vocal de Medellín

15.000

Fundación secretos para contar

12.734

Fundación Protección Héroes de la Patria

11.500

25.000

Corporación Excelencia en la Justicia

8.600

8.100

Iglesia evangélica interameric.de Colom.

8.000

Asociación Nal .de Exportadores-ANALDEX

7.500

Sociedad benéfica Santa Ana

7.000

Hermanitas de los pobres mi casa

6.000

La Casita de Nicolás

5.000

Nazaret

5.000

Seminario Misionero arquid. redempt .Mater

5.000

Asoc. de exalumnos Facultad Nal. de Minas

3.000

Fundación alianza Parkinson Colombia

3.000

Periódico El Mundo S.A.

2.300

Corporación Hogar

2.200

1.000

Corporación amigos de superarse

1.600

Fundación Fondo Social ANDI

1.388

1.348

Cuantías Menores

1.070

20.826

Fundación Nal. Atención Int. al niño con cáncer

1.000

3.000

Asoc. Obras Social .En Benef.de la Policía

1.000

2.000

El comité de rehabilitación de Antioquia

1.000

Fuerzas Militares de Colombia – Ejército Nacional.

75.300

Corp. Festival de Cine Santa Fe de Antioquia

30.000

Asoc. Piscícola Turist. Nueva Espe. el Real

11.232

Fundación Mi Sangre

10.000

Fundación Jardín Botánico de Medellín. “Joaquín Antonio Uribe”

10.000

Antioquia le canta a Colombia

7.500

Corp. para el avance de la geología y la Minería

5.000

Fundación San Martín de Porres

3.000

Centros de Formación Familiar

1.200

Asoc. Medellín de Lucha contra el cáncer

1.000

$ 173.160

$ 298.287

TOTAL

Notes to the financial statements

ENTITY

(4) Exploration projects in different areas of the country and abroad considered economically not viable for the company. (5) Mostly, expenses related to acquisition of Hemco Nicaragua S.A. ($7,997,780) through establishment of Mineros LLC.

FINANCIAL REPORT 2013 - MINEROS S.A.

NOTE 25. 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 2010, are listed below: ENTITY

TYPE OF OPERATION

PAR VALUE

GOLD OUNCES

Foreign Exchange Hedges (collars)

USD 13.600.000

Auramet (USA)

Commitments on forwards (delivery)

6.000

INTL Commodities (USA)

Commitments on forwards (delivery)

12.000

Gold price hedges (put options)

9.700

Foreign Exchange Hedges (call options)

9.700

USD 13.600.000

37.400

Bancolombia S.A. -

INTL Commodities (USA) Coberturas sobre precios del oro (Opciones put) INTL Commodities (USA) Coberturas de Divisas (Opciones call) TOTAL At December 31 of 2012, these operations included: ENTITY

TYPE OF OPERATION

PAR VALUE

Colpatria S.A.

Foreign Exchange Hedges (collars)

USD 51.550.000

Banco de Bogotá S.A.

Foreign Exchange Hedges (collars)

18.000.000

Colpatria S.A.

Foreign Exchange Forwards

2.500.000

Corficolombiana S.A.

Foreign Exchange Forwards

TOTAL

3.000.000 USD 75.050.000

NOTE 26. SUBSEQUENT EVENTS After closing of the company’s general-purpose financial statements at December 31, 2013, DIAN issued the following administrative acts related to approval of reimbursement requests of VAT balances in favor that are pending: RESOLUTION NO.

DESCRIPTION

1150

January 22/2014

First VAT bimonthly period 2012

1149

January 22/2014

Second VAT bimonthly period 2012

TOTAL

DATE

Notes to the financial statements

VALUE (thousands of Pesos) $ 1.168.193 1.776.077 $ 2.944.270

Notes to the financial statements

Consolidated Financial Statement

FINANCIAL REPORT 2013 - MINEROS S.A.

Statutory auditors’ report To the shareholders of MINEROS S.A. 1. I have audited the consolidated balance sheets of MINEROS S.A. and its subsidiaries MINEROS LLC, OPERADORA MINERA S.A.S. and EXPLORADORA MINERA S.A.S. at December 31, 2013 and 2012 and the corresponding consolidated statements of income, of changes in the 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. 2. The 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.

Consolidated Financial Statement

3. 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 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 consolidated 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 consolidated financial statements. I consider that my audits provide a reasonable basis for the opinion which I express.

5. As mentioned in Note 24 to the financial statements, MINEROS S.A. recognized and classified as other expenditures the amortization of unsuccessful mining projects worth $48,863 million at December 31, 2013. Such expenses should have been classified as amortization expenses. 6. In my opinion, except for the effect of the classification of expenses on the income statement of 2013, based on my audits and on those of the statutory auditors of the subordinate companies referred to in paragraph four above, the aforementioned financial statements, present fairly, in every significant aspect, the consolidated financial position of MINEROS S.A. and its subordinate companies as of

December 31, 2013 and 2012, 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 VELÁSQUEZ ÁLVAREZ Statutory Auditor Professional Card 61321-T Designated by Deloitte & Touche Ltda. February 21, 2014

Consolidated Financial Statement

4. At December 31, 2013 and 2012, MINEROS S.A. has direct and indirect investments in OPERADORA MINERA S.A.S. and EXPLORADORA MINERA S.A.S., companies consolidated under the global integration method which represent, after elimination of reciprocal balances, 1.19 % and 2.10% of total consolidated assets and 0.01% and 0.35% of total consolidated revenue, respectively. Such financial statements were audited by other statutory auditors, who expressed unqualified opinions thereon.

FINANCIAL REPORT 2013 - MINEROS S.A.

MINEROS S.A. AND SUBORDINATE COMPANIES

Consolidated balance sheet at december 31, 2013 and 2012 (In thousands of Colombian Pesos)

ASSETS

2013

2012

Note

CURRENT ASSETS Cash Marketable securities

67,620,290

183,864,470

64,345,985

48,832,743 7,743,747

5,873,168 2,463,930 140,303,373

240,440,960

212,030,213

129,434,037

212,030,213

129,434,037

5,912,137 402,831 52,924,316 6,597,572 143,567,481 142,787,972

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

352,192,309

174,595,859

93,568,301

64,302,258

TOTAL CURRENT ASSETS PROPERTY, PLANT AND EQUIPMENT

1,000,371 182,864,099

Prepaid expenses and other assets Inventories

65,381,117

Cash and cash equivalents Accounts receivable

2,239,173

OTHER ASSETS: Long-term accounts receivable Deferred tax Inventories Long-term investments Goodwill Other

RE-APPRAISALS

8 9 10 11 12

TOTAL ASSETS MEMORANDUM ACCOUNTS

BEATRIZ E.URIBE RESTREPO President

Consolidated Financial Statement

798,094,196

608,773,114

277,896,655

259,244,868

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. AND SUBORDINATE COMPANIES

Consolidated balance sheet at december 31, 2013 and 2012 (In thousands of Colombian Pesos)

LIABILITIES AND EQUITY

2013

2012

Note

15 16 17

TOTAL CURRENT LIABILITIES

39,295,315 7,999,330 13,721,194 12,692,483 6,251,658 11,954,891

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

91,914,871

54,503,589

Labor liabilities Estimated liabilities Financial liabilities Deferred tax Taxes on assets

16 18 14 15 15

1,766,866 1,791,181 114,141,810 14,549,358 -

14,379,992 4,723,039

RETIREMENT PENSIONS:

1,013,890

820,980

TOTAL NON-CURRENT LIABILITIES

133,263,105

19,924,011

TOTAL LIABILITIES

225,177,976

74,427,600

MINORITY INTEREST SHAREHOLDERS’ EQUITY

6,861,577

Capital stock Additional paid-in capital Equity revaluation Revaluation surplus Capital surplus

20 20 20 13 20

158,953 1,551,099 16,912,520 93,568,301 3,592,255

158,953 1,551,099 16,912,520 64,302,258 -

Reserve for repurchase of shares Treasury stock Other appropriated reserves Year's income

20 20

11,191,283 -5,611,007 402,173,691 42,517,547

11,191,283 -5,611,007 314,266,520 131,573,888

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

BEATRIZ E.URIBE RESTREPO President

566,054,642

534,345,514

798,094,196

608,773,114

277,896,655

259,244,868

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)

Consolidated Financial Statement

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

FINANCIAL REPORT 2013 - MINEROS S.A.

MINEROS S.A. AND SUBORDINATE COMPANIES

CONSOLIDATED INCOME STATEMENT at december 31, 2013 and 2012 (In thousands of Colombian Pesos)

2013

2012

Note

PRECIOUS METALS PRODUCTION

Production costs

450,265,985

358,710,639

(294,519,400)

(157,313,186)

Administration expenses

(12,505,431)

(11,483,647)

OPERATING INCOME

143,241,154

189,913,806

(64,444,350)

6,252,953

78,796,804

196,166,759

(29,964,575)

(64,592,871)

NON-OPERATING REVENUES (EXPENDITURES), NET

INCOME BEFORE PROVISION FOR INCOME TAX

Provision for income tax

MINORITY INTEREST

6,314,682

YEAR'S NET INCOME

42,517,547

131,573,888

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)

$ 1,551,099

$ 3,592,255

BEATRIZ E.URIBE RESTREPO President

$ 158,953

Consolidated Financial Statement

December 31, 2013

Balances at

$ 16,912,520

11,191,283

$ 79,477

$ 24,335,253

2,400,000

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

(5,611,007)

(1,338,000)

1,338,000

30,503,013

$ 402,173,691

(1,338,000)

89,245,171

$ 314,266,520

(1,160,000)

77,072,660

$ 238,353,860

$ 93,568,301

29,266,043

$ 64,302,258

6,093,106

$ 58,209,152

Revaluation Surplus

Year's Income

131,573,888

(77,072,660)

$ 115,405,496

(89,245,171)

$ 131,573,888

2,158,142

$ 42,517,547

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

$ 347,255,948

55,004,158

$ 292,251,790

73,512,660

$ 218,739,130

Total Other Reserves

42,517,547

$ 21,935,253

(1,160,000)

1,160,000

Reserve for New Projects Development

$ 79,477

2,400,000

$ 19,535,253

Reserve for Balance-Reduction Depreciation

$ -5,611,007

$ 79,477

Reserve for Gifts

Year's movements

3,592,255

11,191,283

$ -5,611,007

Reserve for Assets Protection

Year's income

Gifts

$ 16,912,520

11,191,283

Legal Reserve

(44,486,859)

$ 1,551,099

Treasury Stock

Dividends declared

Surplus from equity method

$ 158,953

Appropriations:

December 31, 2012

Balances at

$ 16,912,520

Reserve for Repurchase of Shares

396,899

Equity Revaluation

(38,729,735)

Year's income

Tax on equity

Capital Surplus

Year's movements

$ 1,551,099

Additional Paid -in Capital

OTHER RESERVES

Dividends declared

Gifts

$ 158,953

Appropriations:

December 31, 2011

Balances at

Capital

(In thousands of Colombian Pesos)

For the years ended December 31, 2013 and 2012

STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

Mineros S.A. and Subordinate Companies

$ 566,054,642

31,424,185

42,517,547

(44,486,859)

(1,338,000)

3,592,255

$ 534,345,514

6,490,005

(38,729,735)

131,573,888

(1,160,000)

$ 436,568,255

Total Equity

FINANCIAL REPORT 2013 - MINEROS S.A.

MINEROS S.A. AND SUBORDINATE COMPANY

CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012 (In thousands of Colombian Pesos)

2013

Net income Add (less) credits (charges) to income not affecting working capital Depreciation Inventory amortization Amortization of intangible assets Retirement pensions Other assets amortization Deferred tax Loss in sale of equipment Gain in sale of fixed assets Working capital obtained from operations Total sources of funds Increase (decrease) in minority interest Sale of property, plant and equipment Increase in long-term liabilities Increase in capital surplus Increase in equity resulting from translation Total working capital obtained WORKING CAPITAL USED IN: Increase in long-term accounts receivable Acquisition of property, plant and equipment Increase in inventories Increase in goodwill Increase in other assets Dividends declared Gifts Decrease in tax on equity Total working capital used

(DECREASE) INCREASE IN WORKING CAPITAL CHANGES IN WORKING CAPITAL COMPONENTS:

Increase (decrease) in current assets

Cash Marketable securities Accounts receivable Prepaid expenses Inventories Decrease (increase) in current liabilities Financial liabilities Suppliers Accounts payable Taxes, liens and duties Labor liabilities Dividends payable (DECREASE) INCREASE IN WORKING CAPITAL

(*) Some entries were classified for comparative effects

BEATRIZ E.URIBE RESTREPO President

2012

WORKING CAPITAL OBTAINED FROM: Operations -

Consolidated Financial Statement

42,517,547

131,573,888

35,690,206 2,977,171 163,898 192,909 44,631,614 169,366 89,395 (145,666)

19,840,445 4,599,098 65,620 110,708 5,433,209 14,379,992 -

126,286,440 126,286,440 6,861,577 5,289,426 117,869,223 3,592,255 2,158,141

176,002,960 176,002,960

262,057,062

176,399,859

368,305 123,519,536 21,299,679 143,567,481 60,303,033 44,486,858 1,338,000 4,723,039 399,605,931

404,768 28,244,287 4,867,177 46,285,636 38,729,735 1,160,000 4,723,042 124,414,645

(137,548,869)

396,899

51,985,214

(100,137,587) 1,238,802 (117,482,982) 15,513,242 (1,870,579) 2,463,930

36,543,389 65,420 30,458,325 4,683,323 1,336,321

(37,411,282) (39,244,600) (4,802,478) (229,683) 9,651,167 (1,207,840) (1,577,848)

15,441,825 94,939 810,964 (1,816,133) 19,236,872 (155,268) (2,729,549)

(137,548,869)

51,985,214

The accompanying notes are an integral part of these 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. AND SUBORDINATE COMPANY

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012 (In thousands of Colombian Pesos)

CASH FLOWS FROM OPERATION ACTIVITIES Net income Adjustments to reconcile net income to net cash provided by (used in) operations:

2012

42,517,547

131,573,888

35,690,206 2,977,171 163,898 44,631,614 192,909 169,366 89,395 (145,666) 1,126,187

19,840,445 4,599,098 65,620 5,433,209 110,708 14,379,992 2,158,141

127,412,627

178,161,101

(15,881,547) 1,870,579 (2,463,930)

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

4,802,478 229,683 (9,651,167) 1,577,848 2,974,706 (4,723,039) 1,791,181

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

(19,473,208)

(26,494,340)

NET FUNDS PROVIDED BY OPERATING ACTIVITIES

107,939,419

151,666,761

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

(118,286,382) (223,912,602)

(28,244,287) (52,914,055)

NET FUNDS USED IN INVESTMENT ACTIVITIES

(342,198,984)

(81,158,342)

CASH FLOWS FROM FINANCING ACTIVITIES Increase in financial liabilities Payment of financial liabilities Dividends declared Gifts Minority interest Capital surplus

157,233,088 (3,846,677) (44,486,858) (1,338,000) 6,861,577 3,592,255

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

NET FUNDS PROVIDED BY (USED IN) FINANCING ACTIVITIES

118,015,385

(39,984,674)

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

(116,244,180) 183,864,470

30,523,745 153,340,725

Depreciation Inventory amortization Amortization of intangibles Other assets amortization Retirement pensions Deferred tax Loss in sale of equipment Gain in sale of fixed assets Effect on consolidation other than results- unrealized income Changes in assets and liabilities (Increase) Decrease in: Accounts receivable Prepaid expenses Minerals inventory Increase (Decrease) in: Suppliers Accounts payable Taxes, liens and duties Dividends payable Labor liabilities Tax on equity Estimated liabilities

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR

67,620,290

183,864,470

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

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

Consolidated Financial Statement

2013

FINANCIAL REPORT 2013 - MINEROS S.A.

SHAREHOLDERS’ MEETING MARCH 19 OF 2014

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

Consolidated Financial Statement

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

MINEROS S.A. AND SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

CONSOLIDATED AS OF DECEMBER 31 OF 2013 AND 2012 (In thousands of Colombian Pesos, except when noted otherwise)

Mineros de Antioquia S.A. is a private corporation established on November 14 of 1974 by public deed No. 6161 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. 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 following corporations are included in the consolidated financial statements of Mineros S.A.

Operadora Minera S.A.S. The simplified joint stock company Operadora Minera S.A.S. was incorporated according to Colombian regulations on March 10 of 2009; 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. The company 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.

Exploradora Minera S.A.S. 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 remuneration.

Mineros LLC Established under the laws of the State of Delaware (United States) on March 5, 2013; its corporate purpose is the conduction of any type of commercial activity and its term is perpetual. Mineros LLC is the holder of 99.9% of capital stock of Nicaraguan Bonanza Holding S.A., who in turn owns 90% of Hemco Nicaragua S.A.; this latter carries out a gold exploitation operation in the municipality of Bonanza, a North Atlantic region in Nicaragua. Consequently, Mineros LLC consolidates with Bonanza Holding S.A., and this one in turn, with Hemco Nicaragua S.A. and Subsidiaries (Vesubio Mining, S.A., Minerales Matusalén, S.A. and Rosita Mining, S.A.).

NOTE 2. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS Consolidation Companies in Colombia must prepare individual general-purpose financial statements that are presented to the Shareholders’ Meeting and are the basis for dividend distributions and other appropriations. Additionally, the Code of Commerce

Consolidated Financial Statement

NOTE 1. OPERATIONS OF THE CONSOLIDATED COMPANIES

FINANCIAL REPORT 2013 - MINEROS S.A.

requires preparation of consolidated general-purpose financial statements that are also presented to the Shareholders Meeting for its approval and do not constitute basis for dividend distributions and appropriation of earnings. According to the rules issued by the Financial Superintendency, consolidated financial statements include the accounts of the companies with respect to which any of the following conditions exists: A. When more than 50% of capital belongs to the company, either directly or through its subordinate companies, or the subordinate companies of the latter. B. When the company and the subordinate companies have, jointly or individually, the right to issue the number of votes making up the minimum majority to decide in the partnersâ&#x20AC;&#x2122; meeting or in the shareholdersâ&#x20AC;&#x2122; meeting, or have the number of votes necessary to elect the majority of the members of the Board of Directors, if any. C. When the company, either directly or through or with the help of the subordinate companies, by reason of an act or business with the controlled corporation or with its partners, exercises a dominant influence in the decisions of the corporationâ&#x20AC;&#x2122;s administration bodies.

companies are added to the financial statements of the parent or controlling company, after eliminating in the parent or controlling company the investment made by it in the equity of the subordinate company, as well as the reciprocal operations and balances existing on the closing date of the consolidated financial statements. Elimination of balances and transactions between the parent company and the subordinate companies, as well as among them, and the determination of minority interest, proportional equity value, and amortization of the excess and/or defect of the investment cost over the per-books value, have been conducted according to the rules established by the Financial Superintendency in Circular Letter No. 002 of 1998, amended by Circular Letter No. 011 of 1998. The financial information of the subordinate companies consolidated by Mineros S.A. is prepared, when possible, on the basis of the same accounting criteria and methods; closing date is December 31, the same closing date set by the parent company for its operations and presentation of financial statements according to the bylaws and as provided in Article 9 of Decree 2649 of 1993.

The consolidated financial statements are prepared according to the accounting principles generally accepted in Colombia. The Management must make estimates and assumptions that affect the figures reported for assets and liabilities, the disclosures of contingent assets and liabilities as on the date of the financial statements, and the figures reported for revenue and expenses during the reporting period. Actual results may differ from such estimates.

Considering that associated foreign companies prepare their financial statements under International Financial Reporting Standards (IFRS) and accounting principles generally accepted in the United States, using a body of coherent and high-quality accounting principles, and considering that such structure of principles is considered adequate as a technical accounting reference in Colombia, such affiliates do not make substantial adjustments to their financial statements in order to homologate accounting policies, with the exception of the differences that contradict the principle of essence over form.

The consolidation method used for the preparation of the financial statements is the global integration method, in which, total assets, liabilities, equity and results of the subordinate

Following is the detail of assets, liabilities, equity and results of the fiscal year for each of the companies included in the consolidation (expressed in Colombian Pesos):

YEAR 2013 TOTAL PARTICI PATION

ASSETS $ 11.013.968

LIABILITIES $

EQUITY

2.270.131

$ 8.743.837

FISCAL YEAR RESULTS $

53.761

Exploradora Minera S.A.S.

100%

1.297.867

432.297

865.569

185.744

Mineros LLC (USA)

100%

241.548.914

154.320.326

87.228.588

2.587.822

YEAR 2012 TOTAL PARTICI PATION

ASSETS

LIABILITIES

EQUITY

Operadora Minera S.A.S.

100%

$ 10.975.126

$ 2.285.051

$ 8.690.075

Exploradora Minera S.A.S.

100%

1.871.156

1.191.330

679.826

Consolidated Financial Statement

FISCAL YEAR RESULTS $

31.208 260.866

Mineros LLC (USA), Bonanza Holding S.A. and Hemco Nicaragua S.A. are included in the consolidated figures as from fiscal year 2013; the two latter companies are directly controlled by Mineros LLC (USA). Below is the effect of consolidation of financial statements of the company and its subordinate companies for 2013: CONSOLIDATED BALANCES BEFORE ELIMINATIONS Assets Liabilities and minority interest Equity

ELIMINATIONS

CONSOLIDATED ENDING BALANCE

$ 906.387.364

$ 108.293.168

$ 798.094.196

242.368.541

10.328.986

232.039.554

$ 664.018.823

$ 97.964.181

$ 566.054.642

Reconciliation between Mineros S.A.’s equity and consolidated equity: 2013 Unrealized gains from sale of assets Consolidated equity

NOTE 3. MAIN ACCOUNTING POLICIES AND PRACTICES According to legal regulations, in the preparation of its consolidated financial statements the parent company shall abide by the accounting principles generally accepted in Colombia, by the rules established by the Colombian Financial Superintendency and by other legal provisions. Below is a summary of the main accounting policies and practices that the company has accordingly adopted:

Essence over form Consolidated companies recognize and disclose economic resources and funds according to their essence or economic reality and not only by their legal form; for this reason they apply the accounting principles that permit adequate recognition of the economic facts in each of the countries where they operate.

Translation of financial statements Colombian regulations lack a technical framework establishing accepted translation methods; they do provide however, that it is correct to refer to a higher-level regulation. For this reason, for the translation process we chose the guidelines of International Financial Reporting Standards (IFRS), specifically, International Accounting Standard IAS 21 “Effects of variations in foreign exchange rates”.

2012 $ 567.180.829

$ 536.503.655

1.126.187

2.158.141

$ 566.054.642

$ 534.345.514

Accordingly, the financial statements of companies abroad reflect as functional currency the currency of the country, and as presentation currency, the Colombian Peso. In order to arrive at this currency a translation process into dollars is necessary, reason why, in countries whose currency is other than the US Dollar or any other currency at par with it, they are translated from the original country’s currency into US dollars according to methodology of IAS 21, as follows: • Assets and liabilities are translated at the exchange rate in force on the closing date. • Equity accounts are translated at the exchange rate in force on the date of each transaction. • Income statement accounts are translated at the exchange rate in force on the date of each transaction. Should the foregoing be impossible, the average exchange rate for each month shall be used. • Exchange gains/losses are recorded in shareholders’ equity under the accumulated translation adjustments account, which represents differences from translation of income statement items at average exchange rates and translation of balance sheet items at closing exchange rates. Subsequently, the figures in US Dollars are translated into Colombian Pesos using the market representative rate in force, as certified by the Colombian Financial Superintendency.

Consolidated Financial Statement

Individual equity

FINANCIAL REPORT 2013 - MINEROS S.A.

Inflation adjustments Decree No. 1536 of May 7, 2007 amended Decrees 2649 and 2650 eliminating application of integral inflation adjustments. The rule provides that inflation adjustments made since January of 1992 until December 31 of 2006 will make part of the balance of the respective accounts. The balance of Equity Revaluation account cannot be distributed until the corporation is liquidated or capitalized. In the event it is capitalized, it will be used to absorb losses if the corporation incurs in a dissolution event; under no circumstance may it be used for capital reimbursements. In the event of a debit balance, it may be decreased with the results of the period or of former periods, upon compliance with regulations about earnings established in the Code of Commerce. Law 1111 of 2006 offered the possibility of charging the tax on equity against this account without affecting results, a choice made by Mineros S.A. with enough balance in this account.

Materiality for preparation of the financial statements The preparation of financial statements according to accounting principles generally accepted in Colombia requires the Management to make estimates and assumptions that affect the sums reported for assets and liabilities on the closing date for financial statements as well as the amounts reported for revenue and expenses during the period. In general, recognition and presentation of economic facts are made according to their relative importance or materiality. For the 2013 financial statements, the materiality considered was disclosure of entries equivalent to 5% or more of current assets, other assets, current liabilities, long-term liabilities and equity.

Cash and cash equivalents Cash in hand and banks, savings deposits and all high-liquidity investments are considered cash and cash equivalents.

Translation of foreign-currency transactions and balances Transactions in foreign currency are recorded at the applicable exchange rates in force on the date of the transaction. At the close of each year, balances receivable or payable and investments in foreign currency are adjusted at the market representative rate certified by the Financial Superintendency. With regard to balances receivable or payable in foreign currency, the exchange gains/losses are charged to the income statement provided they are not imputable to costs of acquisition of assets. Exchange

Consolidated Financial Statement

gains/losses are imputable to the acquisition cost of assets when they take place while such assets are under construction or installation, and until they become operational. Starting in 2007, as provided in Decree 4918 of same year, the exchange difference of variable-income investments in subordinate companies abroad is recorded in surplus from equity method as higher or lower value of equity.

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

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

Investments As provided by the Colombian Financial Superintendency, investments shall be classified and recorded as follows: 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. â&#x20AC;˘ Investments are classified as fixed-income and variableincome, depending on the return they generate. â&#x20AC;˘ According to control, they are classified as controlling and non-controlling, subject to the provisions of the Colombian Code of Commerce. â&#x20AC;˘ Based on the cause or reason motivating the investment, they are voluntary or mandatory.

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, in Colombia, 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 of 2012, for fiscal effects, the controlling company (Mineros S.A.) 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 2011) as provided in Art. 158-3 of the Fiscal Law. According to the provision of the aforementioned rule, these fixed assets can only be depreciated through the straight-line system. In Colombia, as provided in article 159 of Law 1607/2012, for purchases of fixed assets after January 1, 2013, the residual value was 10% of the respective assetâ&#x20AC;&#x2122;s cost (0% in 2012). In Hemco Nicaragua S.A., the useful life estimated for fixed assets that are depreciated through the straight-line system is 5 to 10 years for buildings and facilities, 5 years for machinery and industrial equipment, and 5 years for vehicles, furniture and fixtures and accessories. No residual value is considered.

1. Mining projects are amortized on the basis of the depositâ&#x20AC;&#x2122;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 according to an expert technical opinion approved by the Board of Directors. 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. 3. Other deferred charges include major spare parts for dredges and insurance premiums, which are amortized according to the duration of the spare part or the term of the policy, in periods ranging between one and five years. 4. In Nicaragua, development costs of mining concessions with estimated economically recoverable gold reserves are deferred until the project is sold, abandoned or put into operation.

Inventories

In Hemco Nicaragua S.A., there is a gold inventory that is valued at the lowest between production cost and estimated sale price less the finishing and sale costs. Additionally, there is an inventory of materials and supplies, whose cost is determined by the average cost method and recorded as current asset.

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

Goodwill Companies in Colombia record as goodwill acquired the additional sum paid over the book value, certified by the respective corporation, in the purchase of shares or participation stock of an economically active entity when control over it is held or acquired, as provided in Articles 260 and 261 of Law 222 of 1995 and all other rules amending, supplementing or substituting it. At the close of each fiscal year, or at close of the month taken as basis for the preparation of the special financial statements, the company evaluates the goodwill originated in each investment so as to verify its origin in the balance sheet. In other countries, goodwill is determined in accordance with the accounting regulations applicable where the subordinate companies operate, framed within a higher-level rule according to the accounting principles generally accepted in Colombia and the provisions of the Colombian Financial Superintendency and

Consolidated Financial Statement

For Mineros S.A., inventories of materials and consumables, dredge and plants maintenance materials, parts and other accessories 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.

FINANCIAL REPORT 2013 - MINEROS S.A.

according to the provisions of Article 11 of Decree No. 2649 of 1993 as regards essence over form. Because of the foregoing, we are currently in the process of allocating the higher value paid, according to financial information international rules for determination of goodwill, corresponding to the combination of businesses originated when Bonanza Holding acquired control of Hemco Nicaragua S.A. Clarification is made that the term for carrying out such revision is one year expiring on March 9, 2014, date of acquisition.

Labor liabilities

Tax on equity and surtax

Labor liabilities are adjusted at the end of each period on the basis of legal provisions and labor agreements in force.

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

Taxes, liens and duties Income tax provision is determined on the basis of commercial income, adequately relating the period’s revenue to its corresponding costs and expenses, or, on the basis of presumptive income on taxable equity, in case it exceeds net taxable income. Additionally, the effect of temporary differences between perbooks and fiscal figures when dealing with certain items is recorded as deferred income tax provided there are reasonable expectations that such differences will revert. In Colombia, starting in fiscal year 2013, companies are subject to an income tax rate of 25% (33% until 2012); this lower rate was established in Law 1607 of 2012 (latest tax law amendment). Additionally, this Law 1607 established the income tax for equity purposes –CREE– starting in 2013 at a 9% rate on taxable basis for the years 2013 to 2015 and 8% for following years. Article 22 of Law 1607 determined CREE’s taxable basis as an alternative taxable income. In Nicaragua, Hemco Nicaragua S.A. is subject to income tax at a rate of 30% of taxable earnings. Payments of value added tax and area fees are considered part of the minimum income tax payment of the period. Deferred income tax is accounted through the passive method and is applied to temporary differences between the per-books value of assets and liabilities and the values used for fiscal effects. A tax deferred liability represents a taxable temporary difference while a tax deferred asset represents a deductible temporary difference. In Nicaragua, as provided in Law 822 (Ley de Concertación Tributaria) and its regulations, income tax payable shall be the highest amount between the income tax at 30% rate of taxable net income and the minimum payment of 1% of gross revenue.

Consolidated Financial Statement

For the consolidation process, the company maintains the labor liabilities determined in the countries in accordance with the accounting techniques and the implicit legal obligations acquired by the subsidiaries. Accordingly, the company does not consider it necessary to prepare again the accounting estimates resulting from recording of consolidated labor benefits and other benefits to employees on a basis different from that of the countries that generated their own liabilities.

Retirement pension liability represents the present value of all future expenditures that the company shall pay in favor of its pensioners or beneficiaries (mostly personnel with long span of service). Respective charges to annual results are made based on actuarial studies that comply with legal regulations in force, and are prepared under methods such as the system of actuarial equivalence for overdue pensions, and overdue and prospective fractioned immediate life-pensions. Pension payments made during the fiscal year are charged directly of the period’s results. In the case of the associates covered by the new social security regime in Colombia (Law 100 of 1993), the company sees to its retirement pension obligations through payment of contributions to Colpensiones and/or 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 Reappraisals correspond to differences between the commercial or cadastral appraisal and the net book value adjusted for inflation of real estate property; for all other fixed assets susceptible of appreciation (impairment of value), reappraisals are determined through technical appraisals conducted every three years. Such reappraisals are recorded in separate asset 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. Reappraisal of investments as of December 31, 2013 and 2012 was conducted as established in External Circular Letter 011 of 1998 of the Securities Superintendency (today, Financial Superintendency) in the case of Mineros S.A., and Circular

• In the case of Mineros S.A., for marketable variableincome investments, when their realization value (stock exchange quote or intrinsic value) is higher than their cost, the reappraisal increases or decreases 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. • In the case of the subordinate companies, for marketable variable-income investments when their realization 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 realization 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 realization value of long-term investments of non-controlled companies is higher than cost, reappraisal for the period is recorded under assets and revaluation surplus under equity. When the realization 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.

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 In Colombia, memorandum accounts include commitments pending formalization, contingent rights or liabilities such as the value of assets and securities given as collateral, guarantees granted, unused letters of credit, assets and securities received in custody or as guarantee, fully depreciated assets, and the difference between fiscal and per-books equity values.

Convergence to International Financial Reporting Standards Pursuant to the provisions of Law 1314 of 2009 and regulatory decrees 2784 of December of 2012 and 3024 of 2013, 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.

Gifts

Since Mineros S.A. and its subsidiaries belong to Group 1, the mandatory transition period starts on January 1, 2014 and the issuance date of the first comparative financial statements under IFRS will be December 31, 2015. On February 26, 2013, the company presented to the Financial Superintendency the implementation plan for IFRS.

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

The initial Statement of Financial Position at January 1, 2014 shall be submitted to the Financial Superintendency not later than June 30, 2014.

Equity revaluation

Statement of cash flows

Balances at December 31, 2013 and 2012 correspond to inflation adjustments to equity accounts until December 31, 2006, minus the tax on equity and corresponding surtax recorded

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

Consolidated Financial Statement

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:

FINANCIAL REPORT 2013 - MINEROS S.A.

NOTE 4. FOREIGN-CURRENCY TRANSACTIONS

NOTE 5. ACCOUNTS RECEIVABLE

Colombian current regulations permit free negotiation of foreign currencies through banks and other financial intermediaries at free exchange rates.

At December 31, this account included:

However, most foreign-currency transactions still require compliance with certain legal requirements. Operations and balances in foreign currency are translated at the market representative exchange rate, as certified by the Colombian Financial Superintendency; such was the rate used for the preparation of the financial statements at December 31, 2013 and 2012. The market representative exchange rate as on December 31, 2013 was $1,926.83/USD (2012, $1,768.23/USD). 2013 USD Assets Liabilities NET POSITION

2012 PESOS

$ 12.591

$ 24.260.717

(35.691)

(68.770.490)

$ (23.100) $ (44.509.773)

USD

PESOS

$9.767 $ 17.270.302 -

$ 9.767 $ 17.270.302

Public entities *

Other Customers Advance payments to suppliers and contractors Yields receivable Loans to personnel TOTAL

2013 $ 43.296.625 9.226.246 4.549.024

2012 $ 12.710.933 1.150.689 16.584.115

4.198.892

9.387.420

2.112.035

8.112.679

963.163

886.907

$ 64.345.985

$ 48.832.743

*Balance in favor in tax returns (sales tax and income tax). Increase in 2013 arises mainly from $21,486,275 balance in favor in the income tax return in Colombia of the parent company.

NOTE 6. MARKETABLE SECURITIES At December 31, this account included: 2013 Certificate of deposit - CD * Other investments abroad (4) Public bonds – local currency Shares in local corporations (2) Treasuries – TES Private bonds – local currency Funding operations Other investments (5) Participation in trust estates with trust companies (1) Trust funds administered by brokerage firms (on demand) Shares in foreign corporations (3) Subtotal Provision for impairment of investments in shares of local corporations TOTAL

2012 $ 19.505.369 13.884.703 9.000.000 8.812.656 5.792.000 3.743.031 1.588.210 1.475.342 1.337.624 853.596 156.831 $ 66.149.362

$ 79.250.000 4.069.787 11.160.000 18.562.730 37.063.026 17.241.388 10.781.824 2.182.053 1.337.624 1.101.038 1.039.898 $ 183.789.368

(768.245)

(925.269)

65.381.117

$ 182.864.099

* Variation stems from investment made for purchase of Hemco Nicaragua S.A. In 2013, a portion of marketable investments were sold for the purchase of Hemco.

Consolidated Financial Statement

(1) Rights held as on December 31, 2013 and 2012 in Trust Estate P195 Grupo Contempo Ltda. Oficinas Oxo - Bogotá in Fidubogotá S.A. In 2013 no

amount was received for restitution of contributions ($33,449 in 2012); $450,736 was recorded as financial yields ($356,708 in 2012).

(2) At December 31, 2013, the company had as marketable securities the following investments in shares of Colombian corporations:

ISSUER Grupo de Inversiones Suramericana S.A.-A.D.P. Grupo Nutresa S.A. ISA S.A. E.S.P * Celsia S.A. Cementos Argos S.A. – Preferencial Inversiones Argos S.A. – Preferencial * Inversiones Argos S.A. * Fondo Bursátil Ishares Colcap * Fogansa S.A. * Cementos Argos S.A. * Conconcreto S.A. * Cartón de Colombia S.A. * Banco de Occidente S.A. Tablemac S.A. * Banco Popular S.A. * TOTAL

NO. SHARES (UNITS) 54.357 50.879 86.300 154.500 69.853 28.485 20.600 19.999 175.000 26.280 151.036 27.200 5.367 8.103.080 95.729

MARKET PRICE (BOOK VALUE) $ 1.907.451 1.346.292 1.154.927 877.560 673.335 606.915 435.735 366.483 350.000 303.675 220.763 218.144 214.646 79.293 57.437 $ 8.812.656

* Recorded at purchase price, because of their impairment.

At December 31, 2012, Mineros S.A. and its subordinate companies had as marketable securities the following investments in shares of Colombian corporations:

Ecopetrol S.A. Suramericana de Inversiones S.A. A.D.P. Nutresa S.A. ISAGEN S.A. E.S.P. * Bancolombia S.A. ISA S.A. E.S.P. * Cementos Argos S.A.* Suramericana de Inversiones S.A. A.O. Celsia S.A.* Inversiones Argos S.A A.D.P. Banco Davivienda S.A. Inversiones Argos S.A. Grupo Aval S.A. A.D.P. * Fondo Bursátil Ishares Colcap Fogansa S.A. * Grupo Aval S.A. A.O * Pacific Rubiales Energy Corp* Conconcreto S.A.* Cartónz de Colombia S.A. * Canacol Energy Ltda. * Banco de Occidente S.A. * Tablemac S.A. * Banco Popular S.A. * TOTAL

NO. SHARES (UNITS) 597.700 60.357 70.599 539.000 41.000 86.300 99.900 26.400 154.500 28.485 24.500 26.600 343.248 19.999 175.000 195.213 4.110 149.860 27.200 7.500 5.367 8.103.080 95.729

MARKET PRICE (BOOK VALUE) $ 3.255.271 2.345.096 1.794.590 1.360.934 1.228.818 1.154.927 1.154.378 995.290 870.461 606.916 572.575 562.648 446.222 366.482 350.000 253.777 252.991 220.764 218.144 213.595 202.121 79.293 57.437 $ 18.562.730

Consolidated Financial Statement

ISSUER

* Recorded at purchase price, because of their impairment.

FINANCIAL REPORT 2013 - MINEROS S.A.

(3) At December 31, 2013, Mineros S.A. and its subordinate companies had in their investment portfolio the following investments in shares of

foreign corporations:

ISSUER Compañía de Minas Buenaventura Quia Resources Inc. TOTAL

NO. OF SHARES 4.880 13.320.000

MARKET VALUE (BOOK VALUE) $ 105.501 51.330 $ 156.831

At December 31, 2012, Mineros S.A. and its subordinate companies had in their investment portfolio the following investments in shares of foreign corporations: ISSUER Quia Resources Inc. Compañía de Minas Buenaventura Petrominerales Ltd. TOTAL

NO. OF SHARES 13.320.000 4.880 6.150

MARKET VALUE (BOOK VALUE) $ 635.926 310.211 93.761 $ 1.039.898

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 2013.

b. Their market-price re-appraisal was based on the closing price at the corresponding stock exchange on the last business day. (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.

At December 31, 2013, ETFs included: FUND SPDR S&P 500 ETF TR. SPDR SER TR S6 P REGL BKG ETF Financial Sector SPDR (XLI) TOTAL

NO. UNITS 36.101 6.702 12.183

MARKET VALUE (BOOK VALUE) $ 12.847.127 524.422 513.154 $ 13.884.703

10.189 17.616 1.714

MARKET VALUE (BOOK VALUE) $ 2.565.729 1.381.464 122.594 $ 4.069.787

At December 31, 2012, ETFs included: FUND SPDR S&P 500 ETF TR. Ishares MSCI Emerging MKT (EEM) Ishares Xinhua China 25 (FXI) TOTAL

NO. UNITS

In 2013, the company recorded against results revenues for $1,759,667 ($386,912 in 2012) as adjustment to the market value of such investments. (5) Other investments include:

DETAILS Tax reimbursement securities Money market accounts abroad Overnight operations TOTAL

2013

2012 $ 1.419.010 56.332 $ 1.475.342

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

Consolidated Financial Statement

$ 1.931.186 162.455 88.412 $ 2.182.053

NOTE 7. PROPERTY, PLANT AND EQUIPMENT At December 31, this account included: ASSET Land Buildings and constructions Constructions in progress and machinery under assembly Machinery and equipment Electric plants and networks Furniture and fixtures Transportation equipment Computer equipment Other assets Subtotal Less: Accumulated depreciation Deferred depreciation (1) TOTAL (1) (1)

2013

2012 $

8.204.367 21.517.849

3.448.978 15.815.760

82.246.928

28.686.395

192.714.638 65.811.237 2.781.415 15.259.728 1.942.202 280.843 $ 390.759.207 (220.756.155) 42.027.161 $ 212.030.213

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

Deferred depreciation corresponds to that taken for fiscal purposes.

The company has established on fixed assets owned by Hemco Nicaragua S.A. the collateral pledges listed below: a. Banco de AmĂŠrica Central S.A. (BAC). - Short-term facility up to USD 4,500,000 ($8,670,735): machinery and equipment and transportation equipment for USD 2,376,500 ($4,579,111) - Long-term loan for USD 6,700,000 ($12,909,761 thousand): machinery and equipment and transportation equipment for USD 8,912,032 ($17,171,971 thousand). b. Caterpillar Finance S.A. Heavy machinery and transportation equipment for USD 1,936,584 ($3,731,468 thousand).

Corresponds to balances payable by the employees of Mineros S.A. from loans granted for periods longer than one year, whose reclassification as long-term receivables was considered prudent at December 31, as follows: 2013 Housing loans to employees (1) Vehicle loans TOTAL

2012 $ 5.842.973 69.164 $ 5.912.137

$ 5.483.885 59.947 $ 5.543.832

Consolidated Financial Statement

NOTE 8. DEUDORES LARGO PLAZO

(1) Los prĂŠstamos de vivienda a empleados a largo plazo se hacen a un tasa promedio del DTF + 3 anual

FINANCIAL REPORT 2013 - MINEROS S.A.

NOTE 9. INVENTORIES At December 31, this account included: 2013 Materials and consumables

2012 $ 46.065.630

$ 30.373.177

Materials in transit

5.968.773

2.512.318

Gold inventory

2.463.930

Workshop orders under process

1.426.790

1.716.313

455.474

$ 56.380.597

$ 34.601.808

(992.351)

Inventory subtotal

$ 55.388.246

$ 34.601.808

Short-term inventories

Long-term inventories

$ 52.924.316

Other SUBTOTAL Less: Estimate for inventory obsolescence

2.463.930

$ 34.601.808

NOTE 10. LONG-TERM INVESTMENTS

At December 31, 2011, long-term investments included: CORPORATION

PARTICI PATION %

REALIZATION VALUE OR BOOK VALUE

RE-APPRAISALS (IMPAIRMENT)

NO. OF SHARES

ADJUSTED COST

17,74%

493.214.074

$ 6.213.742

$ 23.042.962

$ 16.829.219

100%

20.000

200.000

213.048

13.048

Distrito de Negocio S.A.S.

40%

80.000

69.058

(10.942)

Club de Banqueros (un derecho)

N.A.

4.500

1,60%

124.399

99.321

27.368

(71.953)

0,1%

$ 6.597.572

$ 23.356.936

$ 16.759.372

Unipalma de los Llanos S.A. Compañía Minera de Ataco S.A.S.

Promotora de Proyectos S.A. Otros TOTAL

(1) The cost of these investments abroad was adjusted at December 31, 2013 to the Market Representative Exchange Rate certified by the Colombian

Financial Superintendency.

Consolidated Financial Statement

At December 31, 2012, long-term investments included: CORPORATION 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.

PARTICI PATION %

REALIZATION VALUE OR BOOK VALUE

RE-APPRAISALS (IMPAIRMENT)

NO. OF SHARES

ADJUSTED COST

100%

20.000

$ 200.000

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

TOTAL

209.155

9.155

*Not consolidated because it is in unproductive stage

ECONOMIC ACTIVITY

ACCRUED INCOME 2013

ACCRUED INCOME 2012

Unipalma de los Llanos S.A.

Agroindustria

$ 261.448

$ 1.147.859

Promotora de Proyectos S.A.

Inversionista

Minería

Construcción

Compañía Minera de Ataco S.A.S. Distrito de Negocio S.A.S.

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

Goodwill shown in the consolidated financial statements at December 31, 2013 corresponds to the higher value paid in the purchase for $143,567,481 of 90% of capital stock of Hemco Nicaragua S.A., resulting from comparing the per-books value of the corporation’s equity, on the purchase date, with the value actually paid to the company’s former shareholders.

We are currently in the process of allocating the higher value paid, according to financial information international rules for determination of goodwill, corresponding to the combination of businesses originated when Bonanza Holding acquired control of Hemco Nicaragua S.A. Clarification is made that the term for carrying out such process is one year expiring on March 9, 2014, date of acquisition. Results of allocation of higher value paid are thus expected before such date.

Consolidated Financial Statement

NOTE 11. GOODWILL

FINANCIAL REPORT 2013 - MINEROS S.A.

NOTE 12. OTHER ASSETS As of December 31, this account included: 2013 Financial leasing contracts: Net value of assets acquired through financial leasing contracts subscribed with Leasing Bancolombia S.A. and Bancolombia PanamĂĄ S.A. Projects: Amount invested in exploration to determine possible economically exploitable gold deposits (El Bagre District, Anglo Gold Joint Venture projects, and others) in Colombia. Value invested in mining projects in Nicaragua Costs and expenses incurred in rubber plantation and biofactory projects on the companyâ&#x20AC;&#x2122;s land. Costs incurred in IT modernization - Renova Project Balance to be amortized of exploration, development, and pre-operating costs and expenses of the La Ye mine (entered operation in May 2010). TOTAL

2012

$ 29.255.720

$ 41.732

* 89.806.644

* 107.232.748

2.965.280

7.601.153

5.271.375

5.671.866

7.487.309

15.306.802

$ 142.787.972

$ 127.852.657

* Balance after reciprocal eliminations for consolidation

NOTE 13. RE-APPRAISALS Re-appraisals of assets at December 31 are explained as follows: ASSET PROPERTY, PLANT AND EQUIPMENT (1) Land Buildings Machinery and equipment River fleet equipment Transportation equipment Aqueducts, plants and networks Subtotal INVESTMENTS Marketable investments Rights in trust estates (Grupo Comtempo Oficinas Oxo Trust Estate) Long-term investments Investments in corporations - Net (See Note 10) Subtotal TOTAL

Consolidated Financial Statement

2013 $

2012

15.916.447 6.894.175 41.684.185 505.910 830.299 8.826.061 $ 74.657.077

$ 13.586.055 5.828.423 28.132.526 357.424 400.442 2.278.646 $ 50.583.516

2.151.852

2.250.548

16.759.372 $ 18.911.224 $ 93.568.301

11.468.194 $ 13.718.742 $ 64.302.258

(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. 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. For 2013, appraisals of property, plant and equipment were updated according to the CPI of the year (1.94%) and were compared to the per-books cost at year’s closing.

NOTE 14. FINANCIAL LIABILITIES At December 31, these liabilities included: 2013 Financial leasing contracts (1)

2012 $

Foreign financial entities (2) Credit cards SUBTOTAL FINANCIAL LIABILITIES

17.093

153.352.880

67.152

19.994

$ 153.437.125

TOTAL SHORT-TERM LIABILITIES

39.295.315

TOTAL LONG-TERM LIABILITIES

30.721

50.715 50.715

$ 114.141.810

(1) At December 31 of 2013, financial leasing contract No. 121708 with Leasing Bancolombia S.A. for purchase of one vehicle, as follows:

CONTRACT

INSTALL MENTS

BALANCE

60 TOTAL

17.093

MATURITY Marzo 7/2016

OUT STANDING INSTALL MENTS 27

17.093

PURCHASE OPTION 350

RATE

8.34% E.A.

$ 350

ACCRUED INTEREST $ 1.893 $ 1.893

CONTRACT

INSTALL MENTS

BALANCE

MATURITY

OUT STANDING INSTALL MENTS

PURCHASE OPTION

RATE

ACCRUED INTEREST

103632

$ 6.630

Enero 3/2014

$ 849

11,08% E.A.

$ 1.052

121708

24.091

Marzo 7/2016

350

8,34% E.A.

2.675

TOTAL

$ 30.721

$ 1.199

$ 3.727

Consolidated Financial Statement

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

FINANCIAL REPORT 2013 - MINEROS S.A.

(2) Foreign financial liabilities incurred in US Dollars and translated into thousands of Colombian Pesos are detailed below:

ENTITY

RATE

VALUE

Banco de América Central S.A.

7,500%

Banco Lafise Panamá S.A. *

7.684.335

01/12/2014

7,000%

9.098.920

22/03/2018

Banco Lafise Costa Rica S.A. *

7,000%

5.459.352

22/03/2018

Lafise Bank S.A. *

7,000%

1.819.784

22/03/2018

Banco de América Central *

6,875%

15.331.679

22/03/2018

Banco de América Central *

7,000%

11.965.079

22/03/2018

Banco de Bogotá S.A. (Colombia) *

7,000%

3.639.568

22/03/2018

Ficohsa *

6,875%

7.279.136

22/03/2018

Banco Lafise Bancentro *

6,875%

22.883.782

22/03/2018

Banco Lafise Bancentro *

7,000%

14.558.271

22/03/2018

N.A.

91.752

15/04/2015

Bancolomia Leasing (Panamá) S.A.

8% T.V.

30.682.103

15/07/2023

Banco de América Central S.A.

8,000%

1.341.261

16/03/2016

Banco de América Central S.A.

8,000%

2.752.814

21/03/2016

Banco de América Central S.A.

8,000%

1.304.770

01/04/2016

Banco de América Central S.A.

8,000%

758.922

22/12/2016

Banco de América Central S.A.

8,000%

2.357.008

22/01/2017

Banco de América Central S.A.

8,000%

768.805

03/01/2017

Libor 6 meses +5,75%

11.560.980

14/10/2016

Caterpillar Finance S. A.

9,000%

99.868

30/08/2014

Caterpillar Finance S. A.

8,600%

207.997

01/11/2016

Caterpillar Finance S. A.

8,500%

62.449

01/09/2014

Caterpillar Finance S. A.

8,500%

127.610

01/11/2014

Caterpillar Finance S. A.

8,600%

95.220

01/03/2017

Caterpillar Finance S. A.

8,600%

263.845

10/10/2017

Caterpillar Finance S. A.

8,600%

11.097

21/10/2017

Caterpillar Finance S. A.

8,500%

167.927

01/12/2017

Caterpillar Finance S. A.

8,600%

978.546

01/03/2018

Leasing NIMAC (Nicaragua)

Banco de Bogotá S.A (Colombia)

TOTAL

MATURITY

$ 153.352.880

* Financial liabilities with Bancentro Lafise correspond to disbursements received by Bonanza Holding S.A. for acquisition of Hemco Nicaragua S.A.

Financial commitments acquired under these liabilities are described in Note 24.

Consolidated Financial Statement

NOTE 15. TAXES, LIENS AND DUTIES Liabilities show the net balance payable by the companies for income tax, after discounting withholdings at the source applied to each of them, the advance payments for taxes and the balances payable for other taxes: 2013

2012

Income tax current fiscal year 33% rate – national

$ 625.675

$ 17.584.026

Income tax current fiscal year 25% rate – national

15.148

Income tax current fiscal year 30% rate – foreign

3.472.967

Tax on equity – national

4.723.038

9.446.084

Income tax for equity purposes (CREE) – national

2.602.542

477.007

31.227

14.010.145

14.379.992

Deferred income tax – foreign

164.291

Deferred income tax for equity purposes – national

374.922

5.355

776.106

$ 27.241.841

$ 41.446.684

(14.385.067)

(14.379.992)

(164.291)

(4.723.042)

12.692.483

22.343.650

Deferred income tax – national

Gols tax – national Ad valorem tax on metals – foreign Subtotal Less long-term portion for national deferred tax Less long-term portion for foreign deferred tax Less long-term portion for national tax on equity TOTAL SHORT-TERM PORTION

Tax regulations applicable to the company and its subordinate companies in Colombia provide: A. The last two installments of the tax on equity shall be paid in 2014. B. Income tax applicable rate for 2013 is 25%; for 2012 it was 33%. The income tax rate deduction for 2013 was established in Law No. 1607 of December of 2012; this law also established the income tax for equity purposes – CREE– at 9% rate for the years 2013 to 2015, entering into force on January 1st of 2013. CREE tax basis is calculated together with income tax, additionally excluding such items that the rule did not expressly take into account for the CREE (Article 22 of Law 1607 of 12). C. The basis to determine income tax and CREE tax cannot be lower than 3% of net fiscal equity on the last day of the immediately previous taxable period.

D. As of 2004, income tax payers performing transactions with foreign related or associated parties are required, for income tax and surtax purposes, to determine their ordinary and extraordinary revenues, costs and deductions, assets and liabilities, taking into consideration for these transactions the prices and profit margins of comparable transactions with or among not economically related parties. For 2013, the company was not required to file a report on transfer prices or its corresponding supporting documentation. E. Income tax returns of Mineros S.A., Operadora Minera S.A.S. and Exploradora Minera S.A.S. are definitive until fiscal year 2011. F. Economic groups’ obligation to report consolidated financial statements – No later than on June 30, each year, duly registered economic groups shall submit in magnetic media to the Tax and Customs Authority (DIAN) their consolidated financial statements together with their respective attachments.

Consolidated Financial Statement

Sales tax – national

FINANCIAL REPORT 2013 - MINEROS S.A.

G. Accounting rules â&#x20AC;&#x201C; 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. Accordingly, during the period named, fiscal bases of items included in tax returns will remain unaltered. Likewise, requirements for accounting procedures for

recognition of special fiscal situations will lose validity on the date of application of the new accounting regulatory framework. Determination of income tax for the years ended on December 31 is as follows:

2013 Taxable income for national companies with 33% rate

Current income tax at 33% rate

2012 - $ 152.160.236 -

50.212.878

Taxable income for national companies with 25% rate

61.447.240

Current income tax at 25% rate

15.361.810

Taxable income for national companies with 9% rate

64.726.233

Current income tax for equity purpose at 9% rate

5.825.361

Taxable income for foreign companies with 30% rate

29.258.013

8.777.404

Deferred income tax basis for national companies with 33% rate

43.575.733

Current deferred income tax at 33% rate

14.379.992

$ 29.964.575

$ 64.592.871

Current income tax at 30% rate

Total provision for income tax and CREE tax charged to results

NOTE 16. LABOR LIABILITIES At December 31, labor liabilities included:

A. Short-term 2013 Severance payments Vacations Salaries payable Interest on severance payments Christmas gift payable TOTAL

2012 $ 3.011.989 2.364.603 442.334 332.724 100.008 $ 6.251.658

$ 3.058.042 1.129.578 511.690 344.508 $ 5.043.818

B. Long-term 2013 Labor compensations (1)

2012 $ 1.766.866

(1) Actuarial estimate to determine the amount of labor compensations established in favor of workers who resign or are fired, in accordance with

Nicaraguan labor law.

Consolidated Financial Statement

NOTE 17. DIVIDENDS PAYABLE The balance at December 31 corresponds to: Regular dividends declared (1) Accrued dividends payable Former periods dividends TOTAL

2013 $ 10.205.808 915.906 833.177 $ 11.954.891

2012 $ 9.682.434 694.609 $ 10.377.043

(1) According to Minutes No. 52 of the Regular Shareholder’s Meeting of March 20 of 2013, the proposal for payment of dividends was approved.

Monthly dividend is $11.50 per share on total 261,687,402 outstanding shares, for a monthly value of $3,009,405 for the April 2013-March 2014 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 Colombian Stock Exchange, as provided in article 2 of Decree 4766 of 2011, are entitled to the month’s dividend. Payment of $32 extra dividend per share payable in four installments of $8 each in April, July and October of 2013 and January of 2014 was approved in the same Shareholders’ Meeting (Minutes No. 52). $44,486,859 was appropriated from earnings of the year 2012 for payment of dividends. For the current fiscal year, $32,531,967 has been accrued for the periods between April and December. According to Minutes No. 07 of March 20, 2013, earnings of 2012 for $31,208 were appropriated at Operadora Minera S.A.S. to establish equity reserves. The same situation took place in Exploradora Minera S.A.S. with earnings of 2012 for $260,866, as approved in Minutes No. 3 of the Shareholders Meeting held on March 20, 2013.

NOTE 18. ESTIMATED LIABILITIES This item corresponds to the present value of liabilities estimated by independent appraisers of the rehabilitation costs

of mining sites where the Nicaraguan operation is being carried out once the mining exploitation activities end.

The retirement pensions currently under the responsibility of Mineros S.A. correspond to those employees, 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 worker’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.

Consolidated Financial Statement

NOTE 19. RETIREMENT PENSIONS

FINANCIAL REPORT 2013 - MINEROS S.A.

As of December 31, retirement pensions included: 2013 Pension liabilities according to actuarial estimates Less: Retirement pension provision recorded by the company. Retirement pensions to be provided in the next 16 years

2012 $ 1.490.781 (476.891) $ 1.013.890

$ 1.283.327 (462.347) $ 820.980

As of December 31, the value carried to expenses breaks down as follows: 2013 Pension appropriations Pension payments TOTAL

2012 $ 192.910 181.736 $ 374.646

$ 110.708 178.211 $ 288.919

Pension liabilities relate to seventeen (17) people at December 31, 2013 and 2012 corresponding to Mineros S.A. Operadora Minera S.A.S. and Exploradora Minera S.A.S. do not have any retirement pension liability since this risk was assumed by the ISS and the private pension funds.

NOTE 20. EQUITY A. Capital 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 of Mineros S.A., 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 2013 and 2012. At December 31 of 2013 and 2012, reserve for repurchase of shares totals $11,191,283. At December 31 of 2013 and 2012, total 56,218,850 repurchased shares stand at $5,611,007 (no repurchase of own shares took place along the years 2013 or 2012). 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.

Consolidated Financial Statement

For matters of consolidation of financial statements, total subscribed and paid-in capital and corresponding equity entries of Operadora Minera S.A.S., Exploradora Minera S.A.S. and Mineros LLC, were eliminated.

B. Legal reserve Colombian law requires the companies to transfer at least 10% of annual net income 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 2013 and 2012 the balance equals $79,477 or 50% of subscribed and paid-in capital.

C. Equity revaluation and additional paid-in capital Equity revaluation and additional paid-in capital cannot be distributed as earnings but may be capitalized tax-free.

NOTE 21. MEMORANDUM ACCOUNTS Memorandum accounts include fiscal memorandum accounts, guarantees granted and disclosure of contingent liabilities and contingent rights, as follows: MEMORANDUM ACCOUNTS Difference between per-books income and fiscal income

2013 -

$ (46.456.737)

Difference between per-books income and fiscal income (income tax and CREE)

(7.025.706)

Difference between per-books equity and fiscal equity

79.343.682

91.849.691

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

51.922.876

$ 124.240.852

$ 97.315.830

58.000.000

70.000.000

6.326.357

81.855.280

82.316.492

6.762.621

Contingent rights for civil works contracts

276.545

2.679.925

Contingent liabilities for ongoing labor claims.

435.000

170.000

$ 277.896.655

$ 259.244.868

TOTAL

2012

HidroelĂŠctrica Providencia III, worth $58,000,000,000 for a term of 144 months and with interest rate equivalent to DTF T.A., plus 3.25 points for advances. At December 31, 2013, Leasing Bancolombia S.A. has disbursed $75,693,925 (2012 $33,957,252) for execution of this contract. Mineros S.A. in turn, recorded in 2013 $4,166,713 (2012 $1,138,841) for interest on disbursements made by Leasing Bancolombia S.A. as advances.

(2) Corresponds to infrastructure leasing contract No. 119709 subscribed on December 28, 2010 with Leasing Bancolombia S.A. for uprating and

expansion of Central HidroelĂŠctrica Providencia with 144-month term starting January 6, 2014, interest rate DTF T.A. + 3.25 points and purchase option for $63,264.

(3) In accordance with the provisions of Communication No. 2010045038-011 of August 13, 2010 of the Financial Superintendency regarding recording

of this kind of appreciations.

Consolidated Financial Statement

(1) Infrastructure leasing contract No. 119709 subscribed on December 28 of 2010 with Leasing Bancolombia S.A. for construction of Central

FINANCIAL REPORT 2013 - MINEROS S.A.

NOTE 22. NON-OPERATING REVENUES AND EXPENDITURES At December 31, non-operating revenues and expenditures included: NON-OPERATING REVENUES Financial yields

2013 $ 7.510.368

$ 11.399.107

Insurance indemnities

6.185.442

29.353

Exchange gain/loss

5.578.970

3.781.470

Recoveries and realizations

2.491.378

1.067.984

Revenues from appreciation of shares

2.381.774

2.330.252

Other

1.941.313

1.696.332

Gain in sale of investments

1.508.982

578.159

Dividends

743.033

1.683.717

Revenue from gold price hedge contracts

523.545

3.029.597

Gain in sale of fixed assets

159.190

20.417

UVR monetary adjustment

18.599

105.841

1.194

373.094

$ 29.043.788

$ 26.095.323

2013

2012

$ 48.863.286

Other financial revenue TOTAL

NON-OPERATING EXPENDITURES Amortization of mining projects

4.078.363

Other

21.358.391

4.056.353

Interest and financial expenses

14.549.702

1.992.532

Exchange gain/loss

4.229.525

4.489.068

Investments impairment

1.613.974

3.621.952

Loss on securities trading

1.427.050

247.271

Gold price option contracts

795.925

172.500

Total financial expenses

461.279

875.767

Gifts

173.160

298.287

15.846

10.277

$ 93.488.138

$ 19.842.370

$ ( 64.444.350)

$ 6.252.953

Banking expenses TOTAL TOTAL NET

2012

Consolidated Financial Statement

NOTE 23. OTHER DISCLOSURES Personnel and associated expenses: YEAR 2013 COMPANY

OTHER EMPLOYEES

TOTAL

896

946

Operadora Minera S.A.S.

621

624

Exploradora Minera S.A.S.

274

277

Hemco Nicaragua S.A

1.075

1.078

2.866

2.925

OTHER EMPLOYEES

TOTAL

Mineros S.A.

TOTAL

SENIOR LEVEL STAFF

YEAR 2012 COMPANY Mineros S.A.

SENIOR LEVEL STAFF 41

828

869

Operadora Minera S.A.S.

607

611

Exploradora Minera S.A.S.

418

421

1.853

1.901

OTHER EMPLOYEES

TOTAL

PERSONNEL EXPENSES YEAR 2013 COMPANY Mineros S.A.

SENIOR LEVEL STAFF $ 5.536.634

$ 39.247.304

$ 44.783.938

Operadora Minera S.A.S

391.993

10.761.260

11.153.253

Exploradora Minera S.A.S

341.215

5.556.900

5.898.115

Hemco Nicaragua S.A

710.065

23.883.792

24.593.857

$ 6.979.907

$ 79.449.256

$ 86.429.163

TOTAL

YEAR 2012 SENIOR LEVEL STAFF

OTHER EMPLOYEES

TOTAL

$ 4.433.742

$ 43.309.005

$ 47.742.747

Operadora Minera S.A.S

464.637

6.749.052

7.213.689

Exploradora Minera S.A.S

388.727

6.386.029

6.774.756

$ 5.287.106

$ 56.444.086

$ 61.731.192

TOTAL

Consolidated Financial Statement

COMPANY Mineros S.A.

FINANCIAL REPORT 2013 - MINEROS S.A.

NOTE 24. COMPROMISOS ESPECIALES By public deed No. 17 of March 22, 2013 granted before notary public in the city of Managua, the guarantees listed below were established with Banco Lafise Bancentro S.A. (Nicaragua) to cover financial liabilities incurred by Bonanza Holding S.A.:

1. Collateral pledge

On 1,080,000 shares of Hemco Nicaragua S.A., equivalent to 90% of the corporationâ&#x20AC;&#x2122;s capital stock.

2. First mortgage collateral

On the following mining concessions of which Hemco Nicaragua S.A. is the holder:

CONCESSION Bonanza

12.269,75

LOCATION Municipality of Bonanza, North Atlantic Autonomus Region

Monte Fresco 1

Municipality of Rosita, North Atlantic Autonomus Region

Monte Fresco 2

Municipality of Rosita, North Atlantic Autonomus Region

Monte Carmelo 1

51,55

Municipality of Rosita, North Atlantic Autonomus Region

Monte Carmelo 2

103,10

Municipality of Rosita, North Atlantic Autonomus Region

Bonanza H-I

AREA HECTARES

16.184,25

Municipality of Bonanza, North Atlantic Autonomus Region

Hemco Bonanza - II

5.105,43

Municipality of Bonanza, North Atlantic Autonomus Region

Hemco Bonanza - III

2.625

Municipalities of Bonanza and Siuna, North Atlantic Autonomus Region

Hemco Bonanza - IV

10.773,43

Municipalities of Bonanza and Rosita, North Atlantic Autonomus Region

Hemco Bonanza - V

2.996,50

Municipality of Bonanza, North Atlantic Autonomus Region

Hemco Bonanza - VI

7.737,03

Municipalities of Siuna and Bonanza, North Atlantic Autonomus Region

Hemco Siuna - I

17.874,12

Municipality of Siuna, North Atlantic Autonomus Region

Hemco Siuna - II

6.173,71

Municipality of Siuna, North Atlantic Autonomus Region

Hemco Siuna - III

19.775

Municipality of Siuna, North Atlantic Autonomus Region

Hemco Siuna - VI

12.250

Municipality of Siuna, North Atlantic Autonomus Region

Hemco Rosita I

9.750

Municipality of Rosita, North Atlantic Autonomus Region

Hemco Rosita IV

13.750

Municipality of Rosita, North Atlantic Autonomus Region

Hemco Rosita V

28.927,87

Municipalities of Rosita, Bonanza and Siuna, North Atlantic Autonomus Region

Hemco Rosita VI

13.644,80

Municipality of Rosita, North Atlantic Autonomus Region

Hemco Waspan I

25.301,57

Municipalities of Waspan and Bonanza, North Atlantic Autonomus Region

Hemco Waspan II

35.308,20

Municipalities of Waspan, Rosita and Bonanza, North Atlantic Autonomus Region

HB-5

2.800

Municipality of Bonanza, North Atlantic Autonomus Region

HB-VI

300

Municipality of Bonanza, North Atlantic Autonomus Region

Hemco RB-I

11.700

Municipalities of Rosita and Bonanza, North Atlantic Autonomus Region

Hemco RB-II

6.700

Municipalities of Siuna and Bonanza, North Atlantic Autonomus Region

Consolidated Financial Statement

3. Other collateral pledges - One hundred shares (100% of capital stock) of Minerales Matuzalen S.A., domiciled in the city of Esteli (Nicaragua), of which Hemco Nicaragua S.A. is the holder. - Seven hundred shares (70% of capital stock) of Vesubio Mining S.A., domiciled in Managua (Nicaragua), of which Hemco Nicaragua S.A. is the holder.

4. Other first mortgage collateral Established by Minerales Matuzalen S.A. on the concession called Matuzalen with 7,200 hectares and located in the Municipality of Waspan, North Atlantic Autonomus Region, Nicaragua.

NOTE 25. SUBSEQUENT EVENTS After closing of the companyâ&#x20AC;&#x2122;s general-purpose financial statements at December 31, 2013, DIAN issued the following administrative acts related to approval of reimbursement requests of VAT balances in favor that are pending:

DATE

ITEM

1150

January 22/2014

First VAT bimonthly period 2012

1149

January 22/2014

Second VAT bimonthly period 2012

TOTAL

VALUE (thousands of pesos) $ 1.168.193 1.776.077 $ 2.944.270

Consolidated Financial Statement

RESOLUTION NO.

Financial Report 2013 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