Financial Statement 2014 by Mineros S.A.

Management report

FINANCIAL REPORT 2014 - MINEROS S.A.

SHAREHOLDERS’ MEETING MARCH 18 OF 2015 MANAGEMENT REPORT Messrs. Shareholders:

We are glad to present to you the report of activities and results of fiscal year 2014.

I.- EXTERNAL ISSUES: GOLD PRICE Despite the gold price volatility along 2014, variations between beginning and closing quotes were not significant. After the sharp fall of last year, the commodity’s price fell by 0.7% since 2013 closing date from USD1,204.50 per ounce to USD1,196.00 per ounce. The maximum price observed along the year was USD1,385.00/oz and the minimum USD1,142.00/oz, behavior that is explained by the solid recovery of the leading economic indicators in the United States which prompted total dismounting of the QE3 monetary stimuli and raised expectations of an increase in the federal funds interest rate in 2015; this event significantly appreciated the US Dollar versus all other currencies, considerably reducing the appetite for the precious metal.

GOLD PRICE EVOLUTION BETWEEN JANUARY AND DECEMBER OF 2014 6

Management report

During 2014 the world’s mining output increased by 2.06% to 3,114 tons. Scrap supply (recycled gold) fell by 11.09% to 1,122 tons – the lowest in the last 6 years. Likewise, the supply for ETFs decreased sharply from 880 tons in 2013 to 159 tons in 2014, a decline of 82%. From the perspective of demand, worldwide jewelry fabrication, which contributes with about 50% of such, fell by 9.7% to 2,153 tons. Central banks kept on increasing their reserves to a total of 477 tons during 2014, 17% up on a year ago. The demand for ingots and coins dropped by about 40% to 1,064 tons. A reduction in the mining output supply is expected for 2015 due to both the closing of some operations and the decrease of reserves resulting from the gold price decline since 2011; nonetheless, the risk of lower prices continues latent considering the possible increase in United States interest rates and the economic deceleration observed in Europe and Asia.

Management report

GOLD PRICE EVOLUTION DURING THE LAST 10 YEARS

PRODUCCIÓN EN ONZAS Y VOLUMEN m3 OPERACIÓN ALUVIAL (cifras en miles)

II. INTERNAL ISSUES A. OUTPUT At 95,355 ounces, alluvial gold output for the year was 1.2% up on 2013. At 22,295 ounces, underground output was 54.8% higher than in 2013, year when the company experienced a labor strike of 79 days. Hemco’s output was 64,928 ounces for total consolidated output of 182,578 ounces of gold. Output estimates for current year are: - Alluvial operation – 83,735 oz - Underground operation – 24,647 oz - Hemco – 73,840 oz - Estimated total – 182,213 oz

The expected decrease in alluvial operation is due to a change in the exploitation policy defined by the board of directors on the basis of the deposit’s life expectation; it is intended that by working lower grades, and considering the current information regarding reserves and mining properties, the deposit’s life could be extended to 16 years.

B. RESERVE BALANCE At December 31, 2014, alluvial mineral reserves including proved reserves and measured and indicated resources totaled 337 cubic meters with 1,342,310 ounces of equivalent fine gold. At the underground operation of La Ye mine there are 605,000 tons with content of 95,000 ounces of equivalent gold including proved reserves and measured and indicated resources. The company carries out brownfield exploration campaigns so as to maintain a reserve balance that permits smooth planning of future operations.

FINANCIAL REPORT 2014 - MINEROS S.A.

C. INVESTMENTS During the year, the company earmarked $45,249 million for new projects of which, $16,902 million were conducted via leasing and $28,347 with own funds. One of the major investments was stage III of Providencia hydroelectric power plant. This project experienced major delays and cost overruns due to the presence of a geological fault very difficult to overcome as well as to the region’s public order situation. We expect to start generating in March, which will permit us to trade, beginning in April, the energy not used in the operation. The other project carried out during the year was the reconstruction of dredge No. 5, conducted in less time than as estimated and within budget.

III. FOREIGN SECTOR AND OTHER ISSUES TO HIGHLIGHT

We have maintained very good relations with the trade unions representing our workers both in the alluvial operation and in Operadora Minera. As to the latter, the conflict arising during the negotiation of a new collective bargaining agreement in 2013 was solved through an arbitration award. The company demanded some of its clauses, and given that by the end of the year there was not yet a decision regarding the issue, it summoned the workers in order to find a solution, and additionally, to conduct negotiations of a new agreement for the October 2014 - October 2016 period. We consider the agreement reached fair for the parties and in accordance with the operation’s economic capability. With the alluvial operation’s union, whose collective bargaining agreement expires next May 1st, we will start negotiations we hope will yield a good arrangement considering the current conditions of the company in the face of lower gold prices.

1. MINING SECTOR

4. GROWTH PLAN

The country’s conditions continue to be very difficult for the conduction of mining activities. In addition to the legal instability regarding issues that affect the sector, the mounting opposition from communities to the mining activity has found no decided support by authorities despite the companies’ full compliance with the law.

Under its future plans and given the external and internal circumstances, the company has modified its strategy aiming its growth to the acquisition of projects in advanced exploration stages or already in production

On the other hand, the illegal exploitation of minerals continues causing serious damages to the environment creating difficult situations in exploitation areas and notoriously affecting the image of companies that attest to the possibility of responsible and sustainable mining. The company has been working with mining authorities to find an adequate solution for the activity of artisanal miners; however, red tape thwarts such programs.

2. ORDEN PÚBLICO 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 such the permanence of the company would not be possible. The company invested in security and risk coverage for its equipment the following amounts: • For insurance premiums $3,487 million • For comprehensive protection $5,437 million

3. LABOR RELATIONS

Management report

Additionally, our efforts will focus on increasing operation resources for Hemco Nicaragua S.A., where there are excellent growth perspectives, with estimated exploration investment of USD8 million for this year.

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: • 700 hectares planted • 190 hectares to be planted in 2015. All these properties are located in the municipalities of Zaragoza and Caucasia (Antioquia province). Since the Guatemalan companies declined investing in this project we are conducting conversations with Colombian companies who could contribute not only funds but also knowledge about the market and its management.

In keeping our commitment to corporate social responsibility in the company’s area of influence, and seeking the inhabitants’ well-being and the enhancement of the towns’ self-management abilities, we have developed a wide program spanning several fronts. The efforts of our team of experts in these areas are already bearing fruit, especially as regards to housing, health, education, and community management. We specially recommend reading the report of the endeavors carried out in 2014, also being handed today, since it shows significant advances in this field which is part of the value we add to our shareholders. Here we especially highlight the creation of the ENVIRONMENTAL MINING CENTER, a project developed in association with the government of Antioquia Province, SENA and the municipality of El Bagre that started activities in January with 450 students. At the center, students will be trained in activities related to mining, the region’s vocation, permitting their entrance to the formal economy A. Beekeeping productive project. With international cooperation funds managed by our foundation we have increased this program’s scope going from 38 to 174 benefited families, with an average of 22 beehives per family. B. Recovery of environmental liabilities created by informal mining. Its first stage is financed by royalties and has the endorsement of the Secretary of Mines of the Province of Antioquia. 132 ha have been identified in El Bagre and Zaragoza to be recovered under our model of agrarian-forest farms. C. Subscription to the United Nations Global Compact. Subscription to the Red Colombiana contra el Trabajo Infantil (Colombian Network against Child Labor). D. Improvement of the communities’ physical infrastructure. Resources for bridges, roads, public utilities, recreation, educational institutions, etc. E. Community living. Through harmony and safety committees and with training of leaders in issues related to human rights, social management, citizen ombudsmen organizations, etc. This program was chosen by “Programémonos para la paz” of the Antioquia Province Government as the model to be replicated in the province’s municipalities.

Management report

related to protection and respect for human rights with the participation of the company’s workers, community leaders, local authorities, armed forces, contractors and suppliers.

6. RESPONSABILIDAD SOCIAL

7. ACKNOWLEDGMENTS: Two important recognitions were received in 2014. • National Award to Management Excellence and Innovation granted by Corporación Calidad with the support of the Ministry of Trade, Industry and Tourism. • Andesco award to CSR “Environment” in the category Other Sector of the National Economy. Both recognitions fill us with pride and boost our commitment to the search for worldwide organizational practices.

IV. ASSOCIATED COMPANIES A. HEMCO NICARAGUA S.A.

With a highly qualified technical team decisively committed to our goals, we have devoted a large portion of our efforts particularly to the following areas: 1. Regularizing the artisanal mining model by supporting the cooperatives and quality controls to the mineral delivered by them. 2. Development of plant-efficiency improvement projects having reached today 1,000 tons of daily production with a recovery factor of 85% and availability above 80%. 3. Improving the mine’s operational aspects both in production and in development and brownfield exploration to increase the balance of reserves. 4. Project to integrate processes with Mineros in order to achieve better practices and procedures. 5. Maintenance of good relations with authorities and communities, and strict environmental, industrial-safety and occupational-health controls. Main indicators for the company during 2014 were: • • • • • •

Output – 64,928 ounces Number of persons employed – 1,391 Total revenue – USD80,715,867 Total salaries paid – USD12,867,405 Total taxes and royalties paid – USD3,207,878 EBITDA Margin – 17.90%

F. Human Rights and Company. In 2014 we conducted 16 conferences on awareness and promotion of issues

FINANCIAL REPORT 2014 - MINEROS S.A.

B. EXPLORADORA MINERA S.A.S.

As mentioned before, we have decreased exploration activities in incipient projects having focused instead on searching for investment opportunities. Also, and in order to lower unnecessary costs, we have carried out a detailed review of the company’s titles to discard and return those titles with no good possibilities of becoming viable projects and to reduce the personnel engaged in such tasks. The Nechí project is not financially feasible yet considering the deposit conditions and current gold prices. The corporation posted net income for $108 million, and finished the year with 53 workers in its payroll.

C. OPERADORA MINERA S.A.S.

This is the company currently carrying out underground exploitation operations. In this deposit we have sought to improve efficiency and lower costs in order to make it profitable even at current prices. Its main figures were: • • • •

Total tons produced – 126,904 Equivalent gold output – 23,284 oz Recovery percentage – 86.7% EBITDA Margin – 18%

The corporation posted net income for $650 million, and finished the year with 695 workers in its payroll.

Ingresos (cifras en millones de pesos)

Management report

D. COMPAÑÍA MINERA DE ATACO S.A.S.

At our shareholders’ meeting of 2012 we reported that in order to obtain the environmental license for this project we had fully redesigned extraction and processing and had renounced to some of the areas susceptible of exploitation. 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 2014 was 63,575 tons of own fruit and 25,141 tons of third parties’ fruit. Net sales totaled $40,454 million, EBITDA was $1,599 million and net income $818 million.

V. ANÁLISIS FINANCIERO Sales at $302,309 million were 5% higher than in 2013. Total output went to export reaching a net sum of USD151 million. Average price at USD1,275.13 per ounce equals 9.8% decrease over 2013, which was offset in part in the last quarter by the devaluation of the Peso.

Management report

Costo total Cash cost

Costo Total y Cash Cost (Dólares por onza)

2014

Operating income – $105,589 million Net income – $45,420 million • Financial revenues: At the end of the fiscal year, the company showed an investment portfolio worth $38,967 million, 37% of which corresponds to shares quoted on the Stock Exchange, 0.3% to investments abroad, and the balance, to fixed-income securities in Colombia. Revenue from this activity included $858 million from sale of investments, $189 million from dividends, and $5,924 million from yields of fixed-income securities. As of December 31st 2014, appreciation of shares listed on the Stock Exchange reached $658 million. • EBITDA – $143,373 million, equivalent to 47% of sales. Equity – Shareholders’ equity grew by 11% from $567,181 million to $630,328 million with corresponding stock’s book value at $2,408. The quote of the stock of Mineros S.A. lost 34% value while the IGBC depreciated by 11%. • Indebtedness: In order to have title to the investment in HEMCO NICARAGUA S. A. acquired under a special purpose vehicle, the company hired a USD50 million loan. Due to legal formalities the acquisition of the shareholding had not been legalized; as a result, the corresponding entry in the balance sheet appears as an advance payment. • Operating margin was 35% versus 39% in 2013 due to increased environmental costs Net income margin at 15% is the same as in 2013

VI. MISCELLANEOUS A. INTERNATIONAL FINANCIAL REPORTING STANDARDS – IFRS Colombia will start applying International Financial Reporting Standards (IFRS) in 2015. Adoption of such standards is first required from stock issuers meaning substantial changes in the financial and accounting structure of companies. In compliance with instructions issued by the Financial Superintendency, the Opening Statement of Financial Position (ESFA for its Spanish initials) was submitted to them on July 30, 2014, while the first Financial Statements under IFRS will be issued on December 31, 2015. 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 or incipient-stage projects ($15,260 million). There is a difference with the Statutory Auditor office regarding the account where this figure is to be recorded; however, this 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. SAP PROJECT With investment of $11,979, the company implemented an ERP (SAP) for the financial, payroll and supply chain areas. With the difficulties characteristic of these processes, it is already fully operational, something that will highly improve controls and funds earmarking.

C. In 2014, commercial transactions for $3,957 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.

answered; however, we expect the issue to be solved favorably. As ordered by law, we have disclosed the markets information about the amounts that may compromise the company’s equity upon the final calculation of this lien.

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

company faces no legal processes that may affect its economic stability.

D. 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.

This report contains, as a part of itself, the provisions of article 446 of the Code of Commerce. The books and reports mandated by Law have been made available to the shareholders since convening date of this meeting.

E. As explained before, our production estimates for 2015 are

smaller than those of 2014 due to Board of Directors policy of working in lower grade zones so as to expand the company’s term.

F. The managers and the Board of Directors certify that: A. The company fully complies with all rules regarding intellectual property and copyrights. B. 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.

I. According to verification conducted by our legal counsels, the

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 Álvaro Escobar Restrepo

G. The Corporation’s legal representative certifies that in 2014, 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. H. In June, Corantioquia issued an invoice to the company for

environmental discharge duties. A request for reconsideration on the basis of ANLA decisions regarding the company’s production system was presented. To date, the request has not been

Beatriz E. Uribe R. Presidente February 18, 2015

STATUTORY AUDITORS’ REPORT

FINANCIAL REPORT 2014 - 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, 2014 and 2013 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 the

Statutory auditors’ report

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.As mentioned in Note 11 to the financial statements, the company at December 31, 2014 and 2013 recognized and classified as other expenditures the amortization of unsuccessful mining projects worth $15,260 million and $48,863 million,

Statutory auditors’ report

respectively. Such expenses should have been classified as amortization expenses. In my opinion, except for the effect of the classification of expenses on the income statement of 2014 and 2013 as indicated above, the aforementioned financial statements, taken from the accounting books, present fairly, in every significant aspect, the financial position of MINEROS S.A. as of December 31, 2014 and 2013, the results of its operations, the changes in its equity, the changes in its financial position, and its cash flows for the years then ended, in conformity with accounting principles generally accepted in Colombia, applied on uniform basis. Also, based on the scope of my audit, except for what has been mentioned in the fourth paragraph, I report that the company’s books were kept in conformity with legal requirements and accounting techniques; the transactions recorded in the accounting books and the administrators’ acts complied with the bylaws and the decisions of the Shareholders’ Meeting and the Board of Directors; the correspondence, the accounting vouchers, the minutes books and share register were properly kept and safeguarded; the management report agrees with the

basic financial statements; the company is not in default with the contributions to the Integral Social Security System; and mechanisms for prevention and control of asset laundering have been implemented as established in External Circular Letter No. 60 of 2008. My evaluation of the internal control carried out in order to establish the scope of my audit tests did not reveal that the company had not followed adequate measures with respect to internal control and the preservation and custody of its assets and those of third parties in its possession.

HAROL ALBERTO MURILLO O. Statutory Auditor Professional Card 196770-T Designated by Deloitte&Touche Ltda. February 24, 2015.

Financial Statements

FINANCIAL REPORT 2014 - MINEROS S.A.

SHAREHOLDERS’ MEETING MARCH 18 OF 2015

CERTIFICATION OF FINANCIAL STATEMENTS 18

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.

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

Financial Statements

BEATRIZ E.URIBE RESTREPO President

In my capacity as legal representative of MINEROS S.A., and in compliance with Article 46 of Law 964 of 2005, I hereby certify that the general-purpose financial statements of this corporation as on December 31, 2014, 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 2014 - MINEROS S.A.

MINEROS S.A.

Balance Sheets at December 31, 2014 and 2013 (In thousands of Colombian pesos)

LIABILITIES AND EQUITY

2014

2013

Note

CURRENT ASSETS Cash

Marketable securities

Cash and cash equivalents

1,391,946

1,094,044

38,966,589

59,019,881

40,358,535

60,113,925

Accounts receivable

151,601,878

59,628,088

Prepaid expenses and other assets

2,899,117

5,719,895

194,859,530

125,461,908

185,917,343

146,557,763

185,917,343

146,557,763

24,193,237 40,114,076 119,086,531 109,404,926

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

292,798,770

286,938,643

124,581,385

93,568,301

TOTAL CURRENT ASSETS PROPERTY, PLANT AND EQUIPMENT

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

RE-APPRAISALS

8 9 10 11

TOTAL ASSETS MEMORANDUM ACCOUNTS

798,157,028

652,526,615

395,188,562

277,209,708

The accompanying notes are an integral part of these balance sheets

BEATRIZ E.URIBE RESTREPO President

Financial Statements

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

HAROL ALBERTO MURILLO ORREGO Statutory Auditor Professional Card 196770-T Designated by Deloitte & Touche Ltda. (See attached opinion)

MINEROS S.A.

Balance Sheets at December 31, 2014 and 2013 (In thousands of Colombian pesos)

LIABILITIES AND EQUITY

2014

2013

Note

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

15 16 17 18 19

TOTAL CURRENT LIABILITIES

38,446,887 3,775,998 15,719,759 14,359,701 4,225,144 8,794,414

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

85,321,903

42,684,693

Deferred tax Financial liabilities

17 14

12,555,963 68,902,848

14,385,067 27,262,136

RETIREMENT PENSIONS

1,048,201

1,013,890

82,507,012

42,661,093

167,828,915

85,345,786

158,953 1,551,099 22,709,109 16,912,520 124,581,385 11,191,283 (5,611,007) 413,414,937 45,419,834

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

TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES

Financial Statements

CURRENT LIABILITIES

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

21 21 21 21 13 21 21

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

630,328,113

567,180,829

798,157,028

652,526,615

395,188,562

277,209,708

The accompanying notes are an integral part of these balance sheets

BEATRIZ E.URIBE RESTREPO President

HÉCTOR TRESPALACIOS T. Chief Accounting Officer Professional Card 32758-T

HAROL ALBERTO MURILLO ORREGO Statutory Auditor Professional Card 196770-T Designated by Deloitte & Touche Ltda. (See attached opinion)

FINANCIAL REPORT 2014 - MINEROS S.A.

MINEROS S.A.

Income Statements

For the years ended December 31, 2014 and 2013 (In thousands of Colombian Pesos, except net income per share)

2014

2013

Note

PRECIOUS METALS PRODUCTION

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

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

YEAR'S NET INCOME NET INCOME PER SHARE

302,308,612

287,363,439

(182,281,483)

(163,624,445)

(14,438,108)

(12,471,069)

105,589,021

111,267,925

(31,462,415)

(46,761,917)

74,126,606

64,506,008

(28,706,772)

(20,862,274)

45,419,834

43,643,734

173.57

166.78

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 32758-T

HAROL ALBERTO MURILLO ORREGO Statutory Auditor Professional Card 196770-T Designated by Deloitte & Touche Ltda. (See attached opinion)

Gift

Year's income

Dividends declared

Year's movements

December 31, 2014

158,953

Balances at

Capital surplus

158,953

Appropriations

December 31, 2013

Balances at

Year's movements

Year's income

Gift

Dividends declared

158,953

Appropriations

Surplus from equity method

Balances at December 31, 2012

Capital

19,116,854

3,592,255

$ 22,709,109

Capital Surplus

Equity Revaluation

$ 11,191,283

Reserve for Repurchase of Shares

$ (5,611,007)

Treasury Stock

$ 79,477

Legal Reserve

26,735,253

2,400,000

24,335,253

2,400,000

21,935,253

Reserve for Asset Protection

(1,000,000)

1,000,000

(1,338,000)

1,338,000

Reserve for Gifts

Financial Statements

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

33,419,076

2,916,063

30,503,013

Reserve for Balance-Reduction Depreciation

OTHER RESERVES

The accompanying notes are an integral part of these financial statements

$ 16,912,520

BEATRIZ E.URIBE RESTREPO President

1,551,099

Additional Paid -in Capital

(In thousands of Colombian pesos)

For the years ended December 31, 2014 and 2013

Statement of Changes in Stockholdersâ&#x20AC;&#x2122; Equity

MINEROS S.A.

$ 413,414,937

(1,000,000)

12,241,246

$ 402,173,691

(1,338,000)

89,245,171

$ 314,266,520

Total Other Reserves

$ 124,581,385

31,013,084

$ 93,568,301

29,266,043

$ 64,302,258

Revaluation Surplus

HAROL ALBERTO MURILLO ORREGO Statutory Auditor Professional Card 196770-T Designated by Deloitte & Touche Ltda. (See attached opinion)

$ 353,181,131

5,925,183

$ 347,255,948

55,004,158

$ 292,251,790

Reserve for New Projects Development

$ 45,419,834

(31,402,488)

45,419,834

(12,241,246)

$ 43,643,734

(44,486,859)

43,643,734

(89,245,171)

$ 133,732,030

Year's Income

$ 630,328,113

31,013,084

(31,402,488)

45,419,834

(1,000,000)

19,116,854

$ 567,180,829

29,266,043

(44,486,859)

43,643,734

(1,338,000)

3,592,255

$ 536,503,656

Total Equity

FINANCIAL REPORT 2014 - MINEROS S.A.

MINEROS S.A.

Statement of Changes in Financial Position For the years ended December 31, 2014 and 2013 (In thousands of Colombian pesos)

2014

Financial resources generated by operations Net income of the period

45,419,834

2013 $

43,643,734

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

Depreciation Inventory amortization Other assets write-offs Other assets amortization Retirement pensions Deferred tax Loss in sale of equipment Gain in sale of fixed assets Loss (Income) from equity method Working capital provided by operations

27,254,860 4,077,418 15,534,253 13,654,005 34,311 (1,829,104) 28,525 4,289,571

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

108,463,673

110,752,833

735,488 68,902,848

4,262,610 27,262,136

178,102,009

142,277,579

18,281,100 38,138,479 27,262,136 31,402,488 6,839,733 1,000,000 823,682 27,593,979 151,341,597

368,305 45,915,426 44,486,859 6,671,073 1,338,000 81,048,520 52,761,470 4,569,770 237,159,423

Sources of funds Sale of property, plant and equipment Increase in long-term liabilities Total sources of funds Use of funds Long-term accounts receivable Additions to property, plant and equipment Decrease in financial liabilities Dividends declared Increase in inventories Gifts Increase in long-term investments Increase in other assets Tax on equity Total uses of funds Increase (Decrease) in working capital

26,760,412

(94,881,844)

CHANGES IN WORKING CAPITAL COMPONENTS:

Increase (Decrease) in current assets

69,397,622

(107,015,453)

Cash Marketable investments Accounts receivable Deferred charges

297,902 (20,053,292) 91,973,790 (2,820,778)

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

(Increase) Decrease in current liabilities

(42,637,210)

12,133,609

(34,943,580) 405,688 (5,011,064) (6,584,401) 335,670 3,160,477

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

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

INCREASE (DECREASE) IN WORKING CAPITAL

BEATRIZ E.URIBE RESTREPO President

Financial Statements

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

26,760,412

(94,881,844)

HAROL ALBERTO MURILLO ORREGO Statutory Auditor Professional Card 196770-T Designated by Deloitte & Touche Ltda. (See attached opinion)

MINEROS S.A.

Statement of Cash Flows

For the years ended December 31, 2014 and 2013 (In thousands of Colombian pesos)

2014 $

45,419,834

43,643,734

27,254,860 4,077,418 15,534,253 13,654,005 34,311 (1,829,104) 28,525 4,289,571

22,134,924 2,977,171

108,463,673

110,752,833

41,492,996 2,820,778 (6,839,733)

(5,781,228) (381,217) (6,671,073)

NET FUNDS PROVIDED BY OPERATING ACTIVITIES

(405,688) 5,011,064 6,584,401 (335,670) (3,160,477) 45,167,671 153,631,344

996,583 (4,770,625) (14,326,537) 936,530 1,577,848 (4,569,770) (32,989,489) 77,763,344

CASH FLOWS FROM INVESTMENT ACTIVITIES Increase in accounts receivable from related parties Increase (Decrease) in long-term investments Acquisition of property, plant and equipment Sale of Fixed Assets Acquisition of other assets Advance payments for investment acquisition

(17,238,706) (823,682) (38,138,479) 735,488 (27,593,979) (134,509,180)

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

NET FUNDS USED IN INVESTMENT ACTIVITIES

(217,568,538)

182,206,711

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

148,517,033 (71,932,741) (31,402,488) (1,000,000)

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

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

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

44,631,614 192,910 5,078 89,395 (94,666) (2,827,327)

44,181,804

(15,110,131)

(19,755,390) 60,113,925 40,358,535

(119,553,498) 179,667,423 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 Other assets amortization Other assets write-offs Retirement pensions Deferred tax Loss in sale of equipment Gain in sale of fixed assets Loss (Income) from equity method

2013

The accompanying notes are an integral part of these financial statements

BEATRIZ E.URIBE RESTREPO President

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

HAROL ALBERTO MURILLO ORREGO Statutory Auditor Professional Card 196770-T Designated by Deloitte & Touche Ltda. (See attached opinion)

FINANCIAL REPORT 2014 - MINEROS S.A.

MINEROS S.A.

ÍNDICES FINANCIEROS

Por los años terminados el 31 de diciembre de 2014 y 2013 (Cifras expresadas en miles de pesos colombianos)

Indicator Current Ratio

LIQUIDITY INDICATORS measure the company's capacity to pay its short-term 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

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

Income per share

Operating margin

Margen Operacional

EBITDA Margin

Net Margin

Financial Statements

Calculation

Dec-14

Current Assets

194,859,530

Current Liabilities

85,321,904

Liquid Assets

40,358,535

Current Liabilities

85,321,904

Dec-13 2.28

125,461,908

0.47

60,113,924

798,157,028 167,828,916

85,345,786

Current assets / Current liabilities

109,537,626

82,777,215

302,308,612 373,867,176

Net Sales

302,308,612

Gross Operating Assets

619,392,762

Net Sales

302,308,612

Total Assets

798,157,028

Accounts Receivable Net Sales (day)

2,835,764

Net Income

45,419,834 798,157,028

Net Income

45,419,834

Net Equity

630,328,112

Net Income No. of Shares or Participation Rights

Gross Income Net Sales

Operating Income Net Sales

EBITDA

Net Sales

Net Income Net Sales

4.76

0.81

0.49

Company's capacity to pay its current liabilities with the assets that are convertible to cash in the short term

652,526,615

7.65

Company's capacity to show financial consistency

287,363,439

Value remaining after paying all short-term liabilities

0.94

Sales generated by each Peso invested in fixed assets

287,363,439

0.61

Sales generated by each Peso invested in operating assets

0.44

Company’s efficiency using assets to generate sales

1.99

Time taken to convert accounts receivable from customers into cash

469,068,246

0.38

287,363,439 652,526,615

3.38

1,587,402 798,232

5.69%

43,643,734

6.69% Assets' capacity to generate earnings

652,526,615

7.21%

45,419,834 173.57 261,687

120,027,129 39.70% 302,308,612

105,589,020 34.93% 302,308,612

143,373,270 47.43% 302,308,612

45,419,834 15.02% 302,308,612

1.41

307,252,736

839,746

Total Assets

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

42,684,694

Total Assets

Net sales

2.94

42,684,694

Total Liabilities

Gross Fixed Assets

Interpretation

43,643,734

7.69% Return on shareholder’s or partner’s investment

567,180,829

43,643,734 166.78

Earnings per share

261,687

123,738,994 43.06% Income obtained from sales after discounting operating costs 287,363,439

111,267,925 38.72% Income obtained from sales after discounting operational costs and administrative expenses 287,363,439 146,581,949 51.01% Income obtained without considering financial expenses, taxes and operational costs and 287,363,439 expenses that do not imply cash outlays 43,643,734 15.19% Income generated by each Peso of sales, irrespective of whether they correspond to the corporate purpose or not

287,363,439

MINEROS S.A.

Ă?NDICES FINANCIEROS

Por los aĂąos terminados el 31 de diciembre de 2014 y 2013 (Cifras expresadas en miles de pesos colombianos)

798,157,028

Total Assets

798,157,028

Total Assets

Financial Debt - Short Term

EBITDA / Financial Debt

30,765,442

38,446,887

Total Assets

798,157,028

4.82%

652,526,615

3,503,307

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

4.71%

Proportion of assets financed by financial institutions

0.54%

Proportion of assets financed by financial institutions in the short term

630,328,112 78.97%

567,180,829 86.92%

Total Assets

798,157,028

652,526,615

EBITDA

143,373,270

Total Financial Liabilities

107,349,735

1.34

Proportion of assets financed by third party's funds

6.54%

652,526,615

Financial Liabilities - Short-term

Equity

Ownership index

42,684,694 652,526,615

107,349,735 13.45%

Total Financial Liabilities

Financial debt

85,345,786 13.08% 652,526,615

85,321,904 10.69%

Current Liabilities

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

167,828,916 21.03%

Total Assets

146,581,949

4.76

Proportion of assets financed by equity

Financial Statements

Total Liabilities

Total debt

EBITDA's coverage of debt

30,765,442

OTHER

SPECIAL DISCLOSURES Total assets Total liabilities Equity Share par value

2,863

Price Per Share (year average)

P/E

2008 275,847 27,136 248,711 950.41

2009 356,623 44,966 311,657 1,190.95

16.50

174

Income Per Share

3,765

22.57

167

2010

2011

2012

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

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

2013

2014

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

798,157 167,829 630,328 2,408.71

FINANCIAL REPORT 2014 - MINEROS S.A.

PROPOSITION REGARDING EARNINGS DISTRIBUTION MINEROS S.A. SHAREHOLDERS’ MEETING MARCH 18, 2015 EARNINGS FOR THE YEAR 2014 AMOUNT TO

$ 45,419,833,831

IT IS PROPOSED THAT THEY BE DISTRIBUTED AS FOLLOWS:

YEAR’S NET INCOME

FOR A MONTHLY DIVIDEND OF $10 PER SHARE DURING THE APRIL 2015-MARCH 2016 PERIOD ON 261,687,402 OUTSTANDING SHARES PAYABLE QUARTERLY IN ARREARS

$ 31,402,488,240

FOR SOCIAL ACTIONS

1,000,000,000

RESERVE FOR PROTECTION OF ASSETS

2,400,000,000

FOR NEW PROJECTS

7,781,035,117

RESERVE FOR DEFERRED TAXES

2,836,310,474

EQUAL AMOUNTS

$ 45,419,833,831

Management report

$ 45,419,833,831

NOTES TO THE FINANCIAL STATEMENTS

FINANCIAL REPORT 2014 - MINEROS S.A.

MINEROS S.A.

NOTES TO THE FINANCIAL STATEMENTS AT DECEMBER 31 OF 2014 AND 2013

(In thousands of Colombian pesos, except where stated 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 Superintendence as relevant information, Mineros S.A. acquired, through a special corporate vehicle, 90% of the capital stock of Nicaraguan corporation Hemco Nicaragua 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. In 2014, Mineros S.A. directly acquired additional 5% of shares of Hemco Nicaragua S.A. from a minority shareholder.

NOTE 2.

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 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, 2014 representing 5% or more of current assets, other assets, current liabilities, longterm liabilities and equity are disclosed.

ACCOUNTING POLICIES

• Investments

The financial statements of Mineros S.A. have been prepared and presented according to accounting principles generally accepted in Colombia, for which purpose the Management has to make certain estimates and assumptions in order to determine the valuation of some of the individual entries in the financial statements and to make the required disclosures.

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

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:

• Investments are classified as fixed-income and variableincome, depending on the return they generate. • According to control, they are classified as controlling and non-controlling, 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 is 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 subordinate companies occurred since January 1, 1994, after eliminating unrealized earnings among subordinate companies and the parent company. For subordinate companies acquired during the reporting period, application of the equity method as regards to increases 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.

• 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 subordinate companies, 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 EQUIP-MENT

10%

15%

20%

Notes to the financial statements

• 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.

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 aforementioned rule, these fixed assets can only be depreciated through the straight-line system.

FINANCIAL REPORT 2014 - MINEROS S.A.

For 2014, the company used the special balance-reduction depreciation system to calculate income tax and income tax for equity purposes. Application of the system generated as net effect a lower value of depreciation deduction in taxable income for $4,168,312 ($7,004,622 – $2,836,310), as follows: 1. 1 . $2,836,310 corresponds to increased value of balancereduction depreciation deduction resulting from: • Depreciation for purchase of fixed assets in 2014. • Fiscal value of deduction between fiscal depreciation and per-books depreciation of assets prior to 2014. 2. $7,004,622 corresponds to the decreased value of deduction for balance-reduction depreciation resulting from: • Depreciation for retirement of fixed assets in 2014 • Fiscal value of deduction between fiscal depreciation and per-books depreciation of assets prior to 2014 In 2013, this system’s net effect was a lower amount of depreciation deduction in taxable income for $1,479,388. 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).

• 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

Notes to the financial statements

respective revenue starts. Unsuccessful exploration investments are amortized in the year when the project was determined as unviable, and at any rate, not later than within the next two (2) years, at Management’s choice. 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, 2014 and 2013 were translated into Colombian Pesos at the market representative rate for the end of the month as certified by the Financial Superintendency ($2,392.46/USD in 2014 and $1,926.83/USD in 2013). 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. 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.

• 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 in benefit of employees, job creation and social investment, is determined on a basis different from that of income tax. The tax rate will be

• 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. T he subject matter of the contract must be development of infrastructure projects in the transportation, power, telecommunications, potable water and basic sanitation sectors.

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

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

• Reappraisals 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 (or 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, 2014 and 2013 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. • 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.

• Equity revaluation Balances at December 31, 2014 and 2013 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.

• Memorandum accounts Notes to the financial statements

9% of taxable basis for 2013 and 2014, and 8% for subsequent years; however, Law 1739 of 2014 (latest tax law amendment) established 9% as permanent rate starting 2015.

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.

• 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.

FINANCIAL REPORT 2014 - MINEROS S.A.

â&#x20AC;˘ Statement of cash flows

â&#x20AC;˘ Consolidation of financial statements

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.

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.

â&#x20AC;˘ Convergence to International Financial Reporting Standards

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.

As provided in Law 1314 of 2009, Regulatory Decree 2784 of December of 2012 and Decree 3024 of 2013, for matters 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 Opening Statement of Financial Position at January 1, 2014 was submitted to the Financial Superintendency on July 30, 2014; the first financial statements under International Financial Reporting Standards shall be issued on December 31, 2015.

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:

2014

Assets

USD *

PESOS

$ 65.426.84

$ 156.531.105

(41.655.17)

(99.658.324)

(15.924)

(30.682.103)

56.872.781

$ ( 11.185)

$ (21.551.236)

Liabilities NET POSITION

$ 23.771.67

* Figures in Dollars are expressed in thousands

Notes to the financial statements

2013

USD * $

4.739

PESOS $

9.130.867

NOTE 4.

ACCOUNTS RECEIVABLE At December 31, accounts receivable included: 2014 Public entities (1)

2013

8.795.095

42.615.401

Related companies (2)

135.249.789

7.718.787

Advance payments (3)

1.300.112

4.145.701

Revenues receivable (4)

1.638.290

2.066.990

Foreign customers (5)

2.835.764

1.587.402

Miscellaneous accounts receivable

1.052.156

857.154

730.672

636.653

$ 151.601.878

$ 59.628.088

Loans to personnel TOTAL

(1) Corresponds to balances in the company’s favor determined in private calculations that were being processed at December 31, as follows:

Fourth VAT bimonthly period 2011 (a)

2014 2.068.966

$ 2.068.966

First VAT bimonthly period 2012

1.814.112

Second VAT bimonthly period 2012

1.676.260

Fourth VAT bimonthly period 2012

1.432.199

Fifth VAT bimonthly period 2012

880.282

Sixth VAT bimonthly period 2012

1.039.253

1.952.184

9.624

1.704.548

Second VAT bimonthly period

1.739.691

Third VAT bimonthly period

1.119.491

Fourth VAT bimonthly period

1.352.593

Fifth VAT bimonthly period

2.957.032

Sixth VAT bimonthly period

2.431.768

Fifth VAT bimonthly period 2014

2.201.568

Sixth VAT bimonthly period 2014

2.392.834

Income tax withholding receivable (b)

1.074.187

8.663

21.486.275

$ 8.795.095

$ 42.615.401

First VAT bimonthly period

Turnover Tax Private income tax return balance in favor TOTAL

2013

(a) Regarding this request for reimbursement, Dirección de Impuestos y Aduanas Nacionales – DIAN (Tax and Customs Authority) issued writ of 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 filed nullity and redress suit with the Supreme State Court of Antioquia, which was admitted on May 30, 2014.

Notes to the financial statements

CONCEPTO

(b) Includes excess paid for $1,074,187 to DIAN in 2014 for tax withholding of periods 12 of 2010, 1, 2 and 3 of 2011 for which return of payment not owed is being claimed to the tax authority.

The company and its legal and tax counsels consider that all these balances in favor will be recoverable once all claims are brought to the tax authority, reason why no loss is estimated.

FINANCIAL REPORT 2014 - MINEROS S.A.

(2) Balances owed by the following related companies: 2014 Balance payable by Operadora Minera S.A.S. for administration services rendered in the fourth quarter of the year.

68.123

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

97.535

77.788

17.341.629

6.768.615

637.486

774.849

134.509.180

35.000

$ 135.249.789

$ 7.718.787

Balance payable by Hemco Nicaragua S.A. for working capital and interest on loans (USD7,248,451 at 15% annual effective rate; USD3,500,000). Dec 31/13, current portion Balance payable by Hemco Nicaragua S.A. for administration services. Balance payable by Bonanza Holding S.A. (Nicaragua) as advance payment for purchase of shares of Hemco Nicaragua S.A. (USD56,222,123). Balance payable by Entre Ríos Colombia S.A.S. TOTAL

2013

(3) Corresponds to third parties’ balances at December 31 for different items related to the normal development of the company’s business, as follows: 2014 Advance payments to suppliers

2013

$ 1.265.334

$ 439.74

34.778

Advance payments to contractors

3.634.749

Other advance payments

71.217

1.300.112

$ 4.145.701

Advance payments to workers

TOTAL

(4) Shows financial yields from fixed-income investments, interest accrued under loan transactions with Hemco Nicaragua S.A., and invoices receivable for several items. (5) Balances owed by the following foreign customers: 2014 INTL Commodities Inc. (USA)

$ 1.933.161

$ 1.189.543

Metalor (Switzerland)

609.791

397.859

Auramet Trading (LLC)

292.812

$ 2.835.764

$ 1.587.402

TOTAL

2013

During the fiscal year:

b. In 2014, no accounts receivable were written off.

a. The company did not deem necessary to recognize provisions for doubtful accounts to protect likely loss contingency of commercial accounts receivable.

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.

Notes to the financial statements

NOTE 5.

MARKETABLE SECURITIES At December 31, marketable securities included: 2014

2013

$ 1.337.624

14.457.933

8.812.656

127.470

156.831

13.884.703

2.418.970

56.332

Certificate of deposit - CD

17.000.000

Public bonds – local currency

9.000.000

9.063.838

5.792.000

72.404

3.743.031

1.727.351

4.949

13.288.885

Shares in local corporations (2) Shares in foreign corporations (3) Other investments abroad (4) Other investments (5)

Treasuries – TES Private bonds – local currency Trust funds administered by brokerage firms (on demand) Shares REPO rights Subtotal

$ 42.494.475

Allowance for impairment of investments TOTAL

(3.527.886) $ 38.966.589

59.788.126 (768.245)

59.019.881 Notes to the financial statements

Participation in trust estates with trust companies (1)

(1) Corresponde a los derechos poseídos al 31 de diciembre de 2014 y 2013 en el P.A. P195 Grupo Contempo Ltda. Oficinas Oxo Bogotá en Fidubogotá S.A. En 2014 y 2013 no se recibió ningún valor por restitución de aportes; por concepto de rendimientos financieros se registraron $514.016 en 2014 ($450.376 en 2013). (2) A diciembre 31 de 2014, la Compañía tenía como valores negociables por inversiones en acciones de sociedades anónimas las siguientes: ISSUER Ecopetrol S.A. * Bancolombia S.A. * TOTAL

No. SHARES (units)

MARKET PRICES (BOOK VALUE)

3.390.000

$ 11.532.852

100.000

2.925.081

3.490.000

$ 14.457.933

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

FINANCIAL REPORT 2014 - MINEROS S.A.

At December of 31 of 2013, the company had as marketable securities the following investments in shares of Colombian corporations: No. SHARES (units)

ISSUER

MARKET VALUE (BOOK VALUE)

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

54.357

$ 1.907.451

Grupo Nutresa S.A.

50.879

1.346.292

ISA S.A. E.S.P *

86.300

1.154.927

154.500

877.560

Cementos Argos S.A. – Preferencial

69.853

673.335

Inversiones Argos S.A. – Preferencial *

28.485

606.915

Inversiones Argos S.A. *

20.600

435.735

Fondo Bursátil Ishares Colcap*

19.999

366.483

175.000

350.000

26.280

303.675

151.036

220.763

27.200

218.144

5.367

214.646

8.103.080

79.293

95.729

57.437

Celsia S.A.

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

$ 8.812.656

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

B. Impairment of value

A. Reappraisals ISSUER Cementos Argos S.A. preferencial

2013 -

93.360

Ecopetrol S.A. Bancolombia S.A.

2014 $

2013

3.353.991

173.895

ISA S.A. E.S.P.

376.51

Fogansa S.A.

99.75

Cartón de Colombia S.A.

68.544

Inversiones Argos S.A. Preferencial

54.78

Cementos Argos S.A.

46.913

Fondo Bursátil Ishares Colcap

44.78

Inversiones Argos S.A.

35.246

Grupo Nutresa S.A.

66.973

Conconcreto S.A.

19.886

Banco de Occidente S.A.

12.525

Tablemac S.A.

16.089

Celsia S.A.

7.099

Banco Popular S.A.

5.744

$ 179.957

TOTAL

2014

ISSUER

Notes to the financial statements

TOTAL

$ 3.527.886

768.245

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, 2014: PARTICIPATION PERCENTAGE

ISSUER

DIVIDENDS RECEIVED

ECONOMIC ACTIVITY

Ecopetrol S.A.

N.A.

Hydrocarbons

Bancolombia S.A.

N.A.

Financial

The following was disclosed at December 31 of 2013 regarding marketable securities: PARTICIPATION PERCENTAGE

ECONOMIC ACTIVITY

N.A.

Hydrocarbons

Ecopetrol S.A.

DIVIDENDS RECEIVED $ 157.344

Grupo de Inversiones Suramericana S.A.

0,00%

Holding Inv.

63.118

Grupo Nutresa S.A.

0,01%

Food

25.223

N.A.

Financial

22.714

Cementos Argos S.A.

0,00%

Cement

17.268

ISA S.A. E.S.P.

0,01%

Energy Transport

15.453

Celsia S.A. E.S.P.

0,01%

Energy Generation

15.064

Financial

13.246

Bancolombia S.A.

Grupo Aval – ADP

N.A.

Inversiones Argos S.A.

0,00%

Holding Inv.

12.421

Fondo Bursátil Ishares Colcap

0,00%

Financial

8.628

Banco de Occidente S.A.

0,00%

Financial

8.034

Cartón de Colombia S.A.

0,01%

Paper

8.006

Conconcreto S.A.

0,01%

Construction

2.998

Banco Popular S.A.

0,00%

Financial

2.246

Tablemac S.A.

0,02%

Wood Ind.

810

Fogansa S.A.

0,16%

Cattle

(3) Shares in foreign corporations At December of 2014, the company had in its investment portfolio the following investments in shares of foreign corporations:

ISSUER Quia Resources Inc. TOTAL

No. OF SHARES 13.320.000

$ 127.470

At December of 2013, Mineros S.A. had in its investment portfolio the following investments in shares of foreign corporations:

MARKET VALUE (BOOK VALUE) $ 127.470

Notes to the financial statements

ISSUER

ISSUER Compañía de Minas Buenaventura

4.880

Quia Resources Inc.

13.320.000

TOTAL

MARKET VALUE (BOOK VALUE)

No. OF SHARES $

105.501 51.330 $

156.831

FINANCIAL REPORT 2014 - MINEROS S.A.

Investments in shares abroad:

A. 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 2014. B. Their market-price re-appraisal was based on the closing price at the corresponding stock exchange on the last business day of 2014. C. The following information is additionally disclosed regarding dividends received from corporations abroad:

ISSUER Compañía de Minas Buenaventura

ECONOMIC ACTIVITY

DIVIDENDS RECEIVED

(5) Other investments Other investments include the following: FUND Tax reimbursement securities Money market accounts abroad. TOTAL

$ 2.333.614

2013 $

85.356 $ 2.418.970

56.332

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

Along the year, the following amounts were charged to the income statement to adjust the value of these investments to market price.

There are no restrictions affecting investment balances at December 31 of 2014 and 2013.

ISSUER Quia Resources Inc. (Canadá)

Minería

TOTAL

2014 $

2013 -

Compañía de Minas Buenaventura (Perú) $

Investments in bonds and TES correspond to high-liquidity securities

937.591

236.556

$ 1.174.147

NOTEA 6.

(4) Other investments abroad At December 31, 2013 they were represented by ETFs established abroad, which generally replicate an international financial asset, as follows:

PREPAID EXPENSES AND OTHER ASSETS At December 31, this account included: DETALLE

FUND SPDR S&P 500 ETF TR. SPDR SER TR S6 P REGL BKG ETF Financial Sector SPDR (XLI) TOTAL

No. UNIDADES

VALOR DE MERCADO

(COSTO SEGÚN LIBROS)

36.101

$ 12.847.127

6.702

524.422

12.183

513.154 $ 13.884.703

In 2013, the company recorded against results revenues for $1,759,667 as adjustment to the market value of such investments.

2014

Notes to the financial statements

Spare parts for dredges and other equipment Insurance (1) TOTAL

2014

2013

$ 1.290.389

$ 5.004.032

1.608.728

715.863

$ 2.899.117

$ 5.719.895

(1) Corresponds mainly to fire and terrorism insurance policy for the company’s dredge

NOTA 7.

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

2014

Land

2013

4.964.788

Buildings and constructions

22.454.570

17.498.424

Machinery and equipment

216.766.460

159.574.868

63.227.825

65.811.237

Electric plants and networks Furniture and fixtures

903.852

Transportation equipment

9.288.223

8.563.531

Computer equipment

1.942.202

Machinery and equipment under assembly (1)

38.197.893

36.408.860

Constructions in progress (1)

15.840.520

11.304.131

280.843

373.867.176

$ 307.252.736

(224.166.768)

(202.722.134)

36.216.935

42.027.161

185.917.343

$ 146.557.763

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

As on December 31, 2014, no restrictions or encumbrances affect the companyâ&#x20AC;&#x2122;s above-mentioned property, plant and equipment. (1) At December 31, 2014, construction works and machinery and equipment in set-up process correspond mainly to expansion of Providencia I Hydroelectric Power Plant (in operation since December 2013) and construction of Providencia III Hydroelectric Power Plant. (2) Deferred depreciation corresponds to that taken for fiscal purposes.

Notes to the financial statements

Assets with their respective adjusted cost, accumulated adjusted depreciation, realization value and associated appreciation and impairment of value are detailed as follows: DECEMBER 2014 ASSET Land

ADJUSTED COST $

4.964.788

ADJUSTED DEPRECIATION AND/OR DEPLETION $

APPRAISAL

RE-APPRAISAL

$ 21.645.488

16.680.700

Buildings and constructions

22.454.570

5.352.748

25.581.363

8.479.541

Machinery and equipment

216.766.460

135.254.975

143.309.475

61.797.990

63.227.825

38.795.676

41.446.818

17.014.669

903.852

530.814

Transportation equipment

9.288.223

6.523.215

4.300.638

1.535.630

Computer equipment

1.942.202

1.402.834

N/A

Machinery and equipment under assembly

38.197.893

N/A

Constructions in progress

15.840.520

N/A

280.843

89.571

N/A

$ 373.867.176

$ 187.949.833

$ 236.283.782

$ 105.508.530

Electric plants and networks Furniture and fixtures

Other assets TOTAL (See Note 13)

FINANCIAL REPORT 2014 - MINEROS S.A.

DICIEMBRE 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

$ 172.071.307

$ 74.657.077

Electric plants and networks Furniture and fixtures

Other assets TOTAL (See Note 13)

NOTE 8.

LONG-TERM ACCOUNTS RECEIVABLE Balances payable by the company’s employees from loans granted for periods longer than one year, as follows: 2014 Balance payable by Hemco Nicaragua S.A. – working capital loans, long-term portion

17.238.706

Housing loans (1) $

6.855.618

5.842.973

98.913

69.164

Vehicle loans TOTAL

2013

24.193.237

5.912.137

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

NOTE 9.

INVENTORIES At December 31, this account included: 2014

2013

$ 36.449.092

$ 32.845.584

Materials in transit

1.636.205

3.079.387

Workshop orders under process

2.028.779

1.426.790

$ 40.114.076

$ 37.351.761

Materials and consumables

TOTAL

Notes to the financial statements

NOTE 10.

LONG-TERM INVESTMENTS A diciembre 31 de 2014, las inversiones permanentes se descomponían así: CORPORATION

PARTICIPATION %

No. of SHARES

ADJUSTED COST

VALUE REALIZATION OR BOOK VALUE

Mineros LLC (USA) (1)

100%

$ 102.456.174

Hemco Nicaragua S.A.

60.000

5.036.758

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

0.1%

Operadora Minera S.A.S. (1)

100%

200.437

4.387.124

Exploradora Minera S.A.S. (1)

100%

20.000

573.901

Cía. Minera de Ataco S.A.S.

APPRECIATION (IMPAIRMENT OF VALUE) $

100%

20.000

200.000

213.048

13.048

Unipalma de los Llanos S.A.S.

17.74%

493.214.074

6.213.742

22.747.033

16.533.291

Entre Ríos de Colombia S.A.S.

35%

7.000.000

35.000

Club de Banqueros (un derecho)

N.A.

4.500

$ 118.907.210

22.995.081

Subtotal Promotora de Proyectos S.A. Distrito de Negocios S.A.S.

16.546.339

1.60%

124.399

99.321

26.000

(73.321)

40%

80.000

90.685

10.685

Subtotal

179.321

TOTAL (See Note 13)

$ 119.086.531

116.685

$ 23.111.766

(62.636)

$ 16.483.703

(1) These investments were accounted on December 31, 2014 and 2013 by the equity method. At December 31, 2013, long-term investments included: PARTICIPATION %

No. of SHARES

ADJUSTED COST

VALUE REALIZATION OR BOOK VALUE

APPRECIATION (IMPAIRMENT OF VALUE)

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

$ 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

CORPORATION

96.427

(82.895)

$ 16.759.372

FINANCIAL REPORT 2014 - MINEROS S.A.

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 disclosed 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 long-term investments are held, recorded according to the equity method.

2014 ECONOMIC ACTIVITY

TOTAL ASSETS

TOTAL LIABILITIES

TOTAL EQUITY

YEAR’S RESULTS

Inversionista

$ 315.018.325

$ 212.562.151

$ 102.456.174

$ (5.047.744)

Operadora Minera S.A.S.

Minería

7.111.094

2.723.971

4.387.123

649.842

Exploradora Minera S.A.S.

Minería

892.287

318.386

573.901

108.331

CORPORATION Mineros LLC (USA) (1)

(*) Investment at subordinate Compañía Minera de Ataco S.A.S is not included since it is in unproductive stage.

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

INCOME ACCRUED 2014

INCOME ACCRUED 2013

Unipalma de los Llanos S.A.

Agro-industry

261.448

Promotora de Proyectos S.A.

Investor

Distrito de Negocio S.A.S.

ECONOMIC ACTIVITY

Notes to the financial statements

Construction

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

2014 Capital Surplus

$ 82.257.616

$ 21.787.437

$ (5.047.744)

$ 3.458.865

$ 102.456.174

Operadora Minera S.A.S.

200.437

3.369.563

167.281

649.842

4.387.123

Exploradora Minera S.A.S.

200.000

265.569

108.331

573.901

Mineros LLC (USA)

Year´s Results

Former Year’s Results

Capital Stock

CORPORATION

Reserves

Total equity

2013

Mineros LLC (USA)

Capital Stock

Capital Surplus

Year´s Results

Reserves

$ 81.055.914

$ 3.584.852

Operadora Minera S.A.S.

200.437

Exploradora Minera S.A.S. Compañía Minera de Ataco S.A.S. (*)

Former Year’s Results

Total equity

$ 2.587.822

$ 87.228.588

3.369.563

5.088.868

53.761

31.208

8.743.837

200.000

218.959

185.744

260.866

865.569

200.000

2.521

3.893

6.634

213.048

Notes to the financial statements

CORPORATION

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

La 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 subordinate companies 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:

Mineros LLC 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, North Atlantic Autonomous Region, Nicaragua.

FINANCIAL REPORT 2014 - MINEROS S.A.

Figures include the financial position of Mineros LLC at December 31, 2014 after consolidation with Bonanza Holding S.A. and Hemco Nicaragua S.A.

were not consolidated as provided by Title One, chapter II, 5.3 c) of External Circular Letter No. 002 of 1998 of the Financial Superintendency, since the company is in pre-operational stage.

Operadora Minera S.A.S.

Compañía Minera de Ataco 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.

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).

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. Additionally, Mineros S.A. has control over the corporation Compañía Minera de Ataco S.A.S. whose investment is not accounted by the equity method; its financial statements

Its main offices are located in the city of Ibagué. Until December 31, 2014 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. At closing date of the general-purpose financial statements at December 31, 2014, these administrative authorities had not yet pronounced themselves on this regard.

Participation in results: CORPORATION

2014

Mineros LLC (USA)

2013 $ (5.047.744)

$ 2.587.822

Operadora Minera S.A.S.

649.842

53.761

Exploradora Minera S.A.S.

108.331

185.744

$ (4.289.571)

$ 2.827.327

TOTAL

Participation in equity: CORPORATION Mineros LLC (USA)

Notes to the financial statements

2014

2013 $ 22.709.109

$ 3.592.254

NOTE 11.

OTHER ASSETS At December 31, this account included: DETALLE

2014

2013

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

122.653

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

122.653

15.746 29.239.974

29.255.720

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

72.715.039

89.863.131

Balance to be amortized of exploration, development, and pre-operating costs and expenses of the La Ye mine (entered operation in May 2010). Includes pre-operating costs of Los Mangos and Icacales mines that are processed at La Ye Mine plant.

13.835.541

7.847.309

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

10.994.949

7.601.153

Costs incurred in IT modernization projects.

11.676.744

5.671.866

60.000

Total projects

$ 109.282.273

$ 110.983.459

TOTAL OTHER ASSETS

$ 109.404.926

$ 140.239.179

Investments in improvement projects for alluvial exploitation operation.

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

El Bagre District Project

2013

$ 14.399.664

$ 27.776.231

4.207.762

4.000.886

Nechí Project

11.200.952

12.742.861

Santa Elena Project (Bolivar Province)

14.463.948

12.900.949

Amalfi Project

5.907.324

5.552.568

Caldas Province Projects

5.575.818

5.392.948

5.825.529

El Catorce Project (Bolivar Province)

14.779.404

13.226.653

Anglo Gold Guamocó Joint Venture

512.333

Brownfield Exploration

784.513

Other mining projects

883.321

2.444.506

$ 72.715.039

$ 89.863.131

Remedios Project

Tolima Project

TOTAL

Notes to the financial statements

2014

In 2014, the company, based on technical reports presented by the geology area, carried to the period’s results as non-operating expenses $15,260,349 corresponding to mining projects considered economically unviable (2013 $48,863,286).

FINANCIAL REPORT 2014 - MINEROS S.A.

NOTE 12.

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

2014

2013

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

$ 68.12

$ 97.54

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

77.788

637.486

7.543.464

134.509.180

35.000

135.249.789

$ 7.718.787

Hemco Nicaragua S.A. (See Note 4.2) Bonanza Holding S.A. (Nicaragua) (See Note 4.2) Entre Ríos de Colombia S.A.S. TOTAL

$ ACCOUNTS PAYABLE

Operadora Minera S.A.S. (La Ye Mine operation services - See Note 16)

2014 $

2013 1.942.799

$ 1.840.915

Exploradora Minera S.A.S (Costs and expenses to be reimbursed under execution of mandate contract - (See Note 16)

268.631

342.600

Exploradora Minera S.A.S (mandate contract fees for exploration activities in several mining projects - (See Note 16)

19.293

24.808

401.876

2.230.723

$ 2.610.199

Operadora Minera S.A.S. (purchase of materials) TOTAL

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 2014 and 2013, the following transactions were carried out with related companies and/or subordinate companies: COMPANY FROM WHICH REVENUE WAS RECEIVED OR WHICH MADE THE PAYMENT

2014

2013

Operadora Minera S.A.S.

Administration services revenues

$ 342.402

$ 435.635

Exploradora Minera S.A.S.

Administration services revenues

202.563

315.166

Hemco Nicaragua S.A.

Interest revenues

3.632.018

74.201

Hemco Nicaragua S.A.

Technical and administrative services

2.823.333

911.587

Operadora Minera S.A.S.

Cost of operation services for La Ye Mine

21.570.381

18.011.598

Operadora Minera S.A.S.

Rental costs

722.378

Exploradora Minera S.A.S.

Cost of exploration services

317.852

566.654

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 2014, 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. 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 2014.

Notes to the financial statements

NOTE 13.

RE-APPRAISALS At December 31, this account included: ASSET Land

2014 $

16.680.700

Buildings

15.916.447

8.479.541

6.894.175

61.797.990

41.684.185

407.748

505.910

1.127.882

830.299

17.014.669

8.826.061

$ 105.508.530

$ 74.657.077

2.589.152

2.151.852

16.483.703

16.759.372

Machinery and equipment River fleet equipment Transportation equipment Aqueducts, plants and networks Subtotal (See Note 7)

2013

INVESTMENTS Marketable investments Rights in trust estates (Grupo Comtempo Oficinas Oxo Trust Estate) Long-term investments Investments in corporations - Net (See Note 10) Subtotal

19.072.855

$ 18.911.224

TOTAL

$ 124.581.385

$ 93.568.301

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 2014, appraisals of property, plant and equipment were updated according to the CPI of the year (3.66%) and were compared to the net cost of assets at December 31, 2014.

Notes to the financial statements

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

NOTE 14.

FINANCIAL LIABILITIES As of December 31, financial liabilities included: 2014 Financial leasing contracts (1)

Foreign financial entities (2) Temporary sale and repurchase agreements (3) Credit cards

2013 123.437

17.093

98.127.869

30.682.104

9.061.928

36.501

66.246 $ 30.765.443

Subtotal financial liabilities

107.349.735

TOTAL SHORT-TERM LIABILITIES

38.446.887

TOTAL LONG-TERM LIABILITIES

68.902.848

$ 27.262.136

3.503.307

FINANCIAL REPORT 2014 - MINEROS S.A.

(1) At December 31 of 2014, the following financial leasing contracts are subscribed with Leasing Bancolombia S.A. for purchase of vehicles, as follows:v CONTRACT

INSTALLMENTS

121708

167498

TOTAL

BALANCE $

9.654 113.783

MATURITY

PENDING INSTALLMENTS

Marzo 7/2016

350

8.34% E.A.

$ 1.189

Agosto 12 / 2019

$ 11.990

6.91% EA

$ 2.653

$ 123.437

PURCHASE OPTION

ACCRUED INTEREST

RATE

$ 12.340

$ 3.842

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

TOTAL

BALANCE $ 17.093

MATURITY

PENDING INSTALLMENTS

Marzo 7/2016

PURCHASE OPTION $ 350

$ 17.093

ACCRUED INTEREST

RATE 8.34% E.A.

$ 350

$ 1.893 $ 1.893

(2) Balances of financial liabilities abroad at December 31: FINANCIAL ENTITY

2014 SHORTTERM

Bancolombia (Panama) S.A., international financial leasing No. 999651, for USD16,315,335.57, term 120 months, payable in quarterly installments with 8% T.V. fixed interest rate, maturing on May 20, 2023.

Banco de Bogotรก Miami Agency, unnumbered promissory note, for USD39,006,530, term 72 months, payable in semi-annual installments at Libor + 2.8% E.A., maturing on November 27, 2019. Banco de Bogotรก (Panama), unnumbered promissory note, for USD2,008,939, term 6 months, payable in semi-annual installments at Libor + 1.2% E.A., maturing on June 16, 2015. TOTAL LIABILITIES

2013 LONGTERM

SHORTTERM

LONGTERM

$ 3.486.214

$ 27.195.890

24.418.716

68.902.848

4.806.305

$ 29.225.021

$ 68.902.848

$ 3.486.214

$ 27.195.890

(3) Temporary sale and repurchase of securities Operation with TES owned by Mineros S.A. carried out with Bolsa de Valores de Colombia on December 29, 2014, maturing on January 5, 2015 at 4.6% E.A. rate.

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.

Notes to the financial statements

NOTA 16.

ACCOUNTS PAYABLE Corresponds to short-term liabilities from different items related to the normal development of the Companyâ&#x20AC;&#x2122;s business, as follows: 2014 Related companies (See Note 12)

2013 2.230.723

Contractors

2.610.199

1.099.903

1.312.127

660.367

333.598

1.291.807

902.600

173.462

118.745

13.164

16.111

Payroll withholdings and contributions

1.634.606

1.235.059

Miscellaneous accounts payable

8.615.727

4.480.256

$ 15.719.759

$ 10.708.695

Payable costs and expenses Withholding tax Sales tax withheld Turnover tax

TOTAL

NOTE 17.

TAXES, LIENS AND DUTIES A. Short term Includes the following items: 2014 Income tax prior fiscal years Income tax current fiscal year (1)

2013 866.636

625.675 -

4.569.766

3.449.247

2.579.859

$ 14.359.701

$ 7.775.300

Tax on equity Income tax for equity purposes (CREE) (2) TOTAL

10.043.818

2014 Income tax provision

2013

$ 20.587.310

$ 15.122.915

Deferred tax payable

(709.078)

(1.041.251)

Transfer to current income tax payable

1.751.156

1.411.295

Subtotal payable tax

21.629.388

15.492.959

Income tax advance payment calculated

(7.739.227)

(32.758.878)

Tax withholdings applied to the company

(3.846.343)

(3.590.356)

Tax discounts TOTAL TAX PAYABLE /BALANCE IN FAVOR

Notes to the financial statements

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

(629.800)

$ 10.043.818

$ (21.486.075)

(2) The balance payable for income tax for equity purposes (CREE) was determined as follows: 2014 Provision for CREE income tax Transfer to current CREE income tax payable Subtotal CREE tax payable CREE tax self-withholdings TOTAL TAX PAYABLE

2013

$ 7.864.194

$ 5.364.437

630.416

8.494.610

5.364.437

(5.045.363)

(2.784.578)

$ 3.449.247

$ 2.579.859

FINANCIAL REPORT 2014 - MINEROS S.A.

Tax regulations applicable to the company provide that the income tax rate applicable for 2014 is 25%, and that of income tax for equity purposes (CREE) is 9%. Article 22 of Law 1607 determines CREE taxable basis as an alternative taxable income. CREE taxable basis is calculated apart from that for income tax by considering the items specifically not taken into account in the income tax. Effective tax rates for income tax were 26.82% for the year 2014 and 23.44% for the year 2013 due to the permanent differences between commercial income and fiscal taxable income as shown in the reconciliation prepared for such matter.

The effective tax rate for income tax for equity purposes was 10.89% for 2014 and 8.90% for 2013, due to the permanent differences between commercial income and the taxable basis as shown in the reconciliation shown further ahead. Below is a summary of the main entries to reconcile commercial income and net taxable income for income tax, per-books income and the taxable basis for CREE, and per-books equity and fiscal equity.

1. Reconciliation between commercial income and net taxable income for income tax 2014 Per books pre-tax income

2013

$ 74.126.606

$ 64.506.008

5.406.555

(6.213.746)

(766.755)

(758.174)

(2.827.327)

Revenues from appreciation of shares

(1.411.537)

(2.538.798)

Deductions for new rubber plantations

(2.718.770)

(1.767.842)

Gifts paid against reserve that constitute fiscal deduction

(1.000.000)

(1.338.000)

Shares impairment

3.856.905

1.613.974

Loss in foreign corporations through equity method

5.047.744

Loss in sale and retirement of assets

1.129.693

1.505.092

Recovery of balance-reduction depreciation

4.168.312

Levy on financial transactions

583.952

625.716

Other non-deductible expenses

131.700

1.479.593

82.349.240

$ 60.491.661

25% income tax on net taxable income

20.587.310

15.122.915

Subtotal provision for income tax and surtax

20.587.310

15.122.915

8.119.462

5.739.359

Plus: Dividends actually received recorded through equity method Less: Revenues not constituting income or windfall profit Revenues not earned from subordinate companies through equity method

Plus: Non-deductible expenses:

NET TAXABLE INCOME - INCOME TAX

Subtotal income tax for equity purposes (CREE) TOTAL INCOME TAX AND CREE TAX PROVISION

Notes to the financial statements

28.706.772

20.862.274

2. Reconciliation between commercial income and the taxable basis for income tax for equity purposes (CREE) CONCEPTO Per-books income before income tax for equity purposes

2014

2013

$ 74.126.606

$64.506.008

5.406.555

(6.213.746)

(766.755)

(758.174)

(2.827.327)

Revenues from appreciation of shares and securities

(1.411.537)

(2.538.798)

Balance-reduction depreciation due to purchases of fixed assets during 2013 and highest fiscal value of deduction between fiscal and per-books depreciation

(4.165.804)

Plus: Dividends actually received initially recorded through equity method Less: Revenues not constituting income or windfall profit Revenues not earned from subordinate companies through equity method

Gifts (Articles 125 and 55 of Fiscal Law)

1.311.920

173.160

Gifts (Articles 125 and 55 of Fiscal Law)

1.613.974

Financial assets loss of value

3.856.905

Loss in domestic and foreign corporations through equity method

5.047.744

Loss in sale and retirement of assets

1.129.693

1.505.092

Levy on financial transactions

583.952

625.716

4.168.312

131.700

1.479.593

$ 87.379.930

$ 59.604.859

7.864.194

5.364.437

255.268

374.922

8.119.462

$ 5.739.359

Recovery of balance-reduction depreciation Other non-deductible expenses TAXABLE BASIS 9% income tax for equity purposes on taxable basis Deferred tax from increased value of fiscal depreciation TOTAL PROVISION FOR INCOME TAX FOR EQUITY PURPOSES (CREE)

Notes to the financial statements

Plus: Non-deductible expenses:

3. Reconciliation between per-books equity and fiscal equity DIFFERENCE BETWEEN PER-BOOKS EQUITY AND FISCAL EQUITY

2014

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

$ 630.328.113

$ 567.180.828

866.635

15.010.742

1.083.318

1.257.561

1.548.572

3.527.886

Plus: Liabilities not fiscally recognized Land fiscal adjustment Higher value of property, plant and equipment from effect of balance-reduction fiscal depreciation Investment provision Other Less: Re-appraisals of investments and property, plant and equipment not fiscally recognized

2013

181.426 (124.581.385)

(93.568.301)

Surplus from equity method

(23.030.434)

(3.592.255)

Reduced value of property, plant and equipment from effect of balance-reduction fiscal depreciation.

(36.216.935)

$ 452.158624

$ 487.837.147

FISCAL TAXABLE EQUITY

FINANCIAL REPORT 2014 - MINEROS S.A.

B. Long-term

Includes the following items: 2014

Deferred income tax

2013

$ 9.482.007

Deferred income tax for equity purposes TOTAL

$ 14.010.145

3.073.956

374.922

$ 12.555.963

$ 14.385.067

ccording 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: (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. Tax Law Amendment – Below is a summary of some changes to the Colombian tax regime for the years 2015 and following, introduced by Law 1739 of December 23, 2014: Tax on wealth – Established starting on January 01, 2015. This tax is applicable to possession of wealth (gross equity minus outstanding debt) equal to or higher than $1,000 million as on January 01, 2015. The legal liability accrues on January 01, 2015, January 01, 2016 and January 01, 2017. The taxable basis for the tax on wealth is the gross equity of legal entities minus outstanding debts as on January 01, 2015, 2016 and 2017. Its marginal rate corresponds to:

Taxable Basis Ranges

2015

2016

2017

From $0 to $2,000,000

0,20%

0,15%

0,05%

From $2,000,000 to $3,000,000

0,35%

0,25%

0,10%

From $3,000,000 to $5,000,000

0,75%

0,50%

0,20%

From $5,000,000 onwards

1,15%

1,00%

0,40%

Mineros S.A. shall pay in 2015, within the time periods set by the National Government, approximately $4,928,083 thousand as tax on wealth. Income tax for equity purposes (CREE) and surtax – As from taxable year 2016 and transitorily for 2015, the rate for CREE tax will be 9%. Fiscal losses incurred by CREE taxpayers starting in 2015 may be offset with this tax. Additionally, the excess over the minimum basis of CREE (fiscally readjusted) may also be offset starting 2015 within the next 5 years.

Notes to the financial statements

The CREE surtax is established for 2015, 2016, 2017 and 2018. The surtax applies to taxpayers whose annual CREE tax return yields income that is equal or greater than $800 million. The marginal rate applicable for the surtax will be:

Surtax Taxable basis $800 million

2015

2016

2017

2018

Income tax and surtax – The residence for fiscal matters is clarified. The rates for income obtained by foreign corporations and entities not ascribable to a permanent branch office or establishment are as follows:

Year 2015

2016

2017

2018

39%

40%

42%

43%

The fiscal discount for taxes paid abroad is changed distributing it between income tax and CREE tax in a 64% and 36% proportion. Changes introduced to fiscal incentives: i) Deduction for investments in research, technological development and innovation; ii) Income tax fiscal discount for VAT paid in the purchase of capital goods and heavy machinery. Exchange gain/loss of foreign investments will have no fiscal effect until the moment the respective investment is transferred. Additionally, the entry into force of the limitation to deductions for cash payments is postponed until 2019 and following years. Other provisions – Mechanisms for conciliation, transaction and special payment conditions to conclude proceedings and discussions between taxpayers and the authorities related to fiscal, customs and foreign exchange issues and contributions to the social security system, are again established.

Notes to the financial statements

In no case shall the CREE tax or its surtax be offset with balances in favor for concept of other taxes calculated in tax returns. Likewise, balances in favor resulting from CREE tax returns may not be offset with debts of other taxes, advance payments, withholdings, interest and penalties.

NOTE 18.

LABOR LIABILITIES At December 31, labor liabilities included: 2014 Severance payments Vacations Salaries payable Interest on severance payments TOTAL

2013

$ 2.245.752

2.322.705

1.692.067

1.548.665

38.155

437.219

249.170

252.225

$ 4.225.144

4.560.814

FINANCIAL REPORT 2014 - MINEROS S.A.

NOTE 19. DIVIDENDS

The balance at December 31 corresponds to: 2014 Regular dividends declared (1)

2013

$ 7.850.622

$ 10.205.808

915.906

943.792

833.177

$ 8.794.414

$ 11.954.891

Accrued dividends payable Former periods dividends TOTAL

(1) According to Minutes No. 53 of the Regular Shareholder’s Meeting of March 19 of 2014, the proposal for payment of dividends was approved. Monthly dividend is $10 per share on total 261,687,402 outstanding shares, for a monthly value of $2,616,874 for the April 2014-March 2015 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.

$31,402,488,240 was appropriated from earnings of the year 2013 for payment of dividends.

For the current fiscal year, $22,608,074 has been accrued and paid for the periods between April and December. 2014 Dividends declared in 2014

$ 31.402.488

$ 44.486.858

Dividends paid

(22.608.074)

(32.531.967)

DIVIDENDS

$ 8.794.414

$ 11.954.891

NOTE 20.

RETIREMENT PENSIONS 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. 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

2013

Notes to the financial statements

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, 2014, the accumulated amortized percentage of the actuarial calculation stands at 72.01% (67.97% at December 31 of 2013). As of December 31, retirement pensions included: 2014 Pension liabilities according to actuarial estimates Less: Retirement pension provision recorded by the company. Retirement pensions to be provided in the next 16 years

2013

$ 1.455.618

$ 1.490.781

(407.417)

(476.891)

$ 1.048.201

$ 1.013.890

As of December 31, the value carried to expenses breaks down as follows: 2014

2013

Pension appropriations

$ 197.558

$ 192.910

34.311

181.736

$ 231.869

$ 374.646

Pension payments TOTAL

Pension liabilities correspond to seventeen (17) people at December 31, 2014 and 2013.

NOTE 21. EQUITY

A. Capital Stock Pubic deed 1030 of April 13 of 2005 of Notary Public Office 17 of Medellin formalized Minutes 44 of the Regular Shareholdersâ&#x20AC;&#x2122; Meeting of March 18 of 2005, where the authorized capital of $200,000 was divided into 400,000,000 common shares, each with a par value of fifty cents ($0.50*). Of these shares, 317,906,252 had been subscribed and paid for at December 31 of 2014 and 2013.

D. Equity revaluation and additional paid-in capital

* In Colombian Pesos

The balance of this account includes:

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.

At December 31 of 2014 and 2013, reserve for repurchase of shares totals $11,191,283. At December 31 of 2014 and 2013, total 56,218,850 repurchased shares stand at $5,611,007 (no repurchase of own shares took place along the years 2014 or 2013). 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 2014 and 2013 the balance equals $79,477 or 50% of subscribed and paid-in capital.

2014

2013

$ 314.079.324

$ 308.154.141

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

26.735.253

24.335.253

Balance-reduction reserve (special depreciation system)

33.419.076

30.503.013

Other

39.101.807

$ 413.335.460

$ 402.094.214

For future expansions (1)

TOTAL

Notes to the financial statements

E. Other reserves

(1) Changes in these reserves are the result of appropriations approved by the Regular Shareholdersâ&#x20AC;&#x2122; Meeting held on March 19, 2014, according to Minutes No. 52.

FINANCIAL REPORT 2014 - MINEROS S.A.

NOTE 22.

MEMORANDUM ACCOUNTS Correspond to the following items and amounts: 2014 Difference between per-books income and fiscal income (income tax and CREE) Difference between per-books equity and fiscal equity Property, plant and equipment on which special deduction for investment in real productive fixed assets was requested (Article 8, Law 1111/06) Sub-total fiscal memorandum accounts (Net) Infrastructure leasing contracts pending execution (1)

$ 12.924.882

$ (7.436.108)

178.350.915

79.343.682

51.922.876

$ 243.198.673

$ 123.830.450

58.000.000

6.326.357

86.397.152

81.855.280

6.757.737

6.762.621

835.000

435.000

$ 395.188.562

$ 277.209.708

Infrastructure leasing contract executed (2) Appreciation of fully depreciated property, plant and equipment (2) Retirement pensions policy reserve Contingent liabilities for ongoing labor claims. TOTAL

2013

(1) Infrastructure leasing contract No. 119709 subscribed on December 28 of 2010 with Leasing Bancolombia S.A. for construction of Providencia III Hydroelectric Plant, 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, 2014, Leasing Bancolombia S.A. has disbursed $92,893,336 (2013 $75,693,925) for execution of this contract. Mineros S.A. in turn, recorded in 2014 $11,911,855 (2013 $4,166,713) for interest on disbursements made by Leasing Bancolombia S.A. as advances. (2) In accordance with the provisions of Communication No. 2010045038-011 of August 13, 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 SCI, we report the following: FOREIGN CUSTOMER

2013

INTL Commodities Inc. (USA)

46%

39%

Auramet Trading (USA)

41%

33%

Argor Heraeus S.A. (Switzerland)

23%

Metalor (Switzerland)

100%

TOTAL

2014

Notes to the financial statements

NOTE 24.

NON-OPERATING REVENUES AND EXPENDITURES As of December 31, these accounts included: NON-OPERATING REVENUES Financial yields Indemnities Exchange gain/loss* Appreciation of securities Income from equity method Recoveries and realizations Revenues from appreciation of shares Services Gain in sale of investments Miscellaneous Dividends and participations Gold price hedge contracts Trust rights Gain in sale of fixed assets Sale of agricultural products Leases UVR accounts adjustment Other financial yields TOTAL NON-OPERATING REVENUES

2014 $ 5.447.232 1.319.702 36.476.725 346.868 758.174 2.242.748 311.375 3.368.298 858.429 189.323 283.121 471.314 33.946 69.199 48.751 5.850 $ 52.231.055

2013 $ 7.334.318 6.365.078 5.907.545 2.827.327 2.417.524 2.381.774 1.772.267 1.508.859 773.527 743.033 523.545 450.376 94.666 60.621 44.930 18.599 1.194 $ 33.225.183

* Variation corresponds to advance payment to Bonanza Holding S.A. for USD56 million for acquisition of the shares of Hemco Nicaragua S.A. Taxes assumed (1) Loss in securities trading (2) Aids and charities (3) Amortization of mining projects (4) Other expenses (5) Exchange gain/loss* Interest and financial expenses Investments impairment Hedging contracts Financial assets loss of value Other non-operating expenditures Debt prepayment penalty Sales tax (increased costs and expenses) Communications expense Commissions Community aid Maintenance fees Retirement of property, plant and equipment Claims fees Premiums paid in option contracts TOTAL NON-OPERATING EXPENDITURES TOTAL NON-OPERATING REVENUES AND EXPENDITURES â&#x20AC;&#x201C; NET

2014 $ 1.286.457 774.446 311.920 15.534.252 7.831.100 29.120.645 7.667.691 5.047.744 3.885.166 3.856.905 3.339.965 2.474.131 1.210.601 588.730 378.530 228.025 151.741 5.421 $ 83.693.470 $ (31.462.415)

2013 $ 2.692.364 1.383.378 173.160 48.863.286 10.961.383 4.113.986 8.034.031 1.613.974 795.925 121.714 1.233.899 $ 79.987.100 $ (46.761.917)

Notes to the financial statements

Non-operating expenditures

FINANCIAL REPORT 2014 - MINEROS S.A.

(1) Corresponds mainly to levy on financial transactions and non-deductible VAT charges. (2) Loss on securities trading. * Variation corresponds to balance of a loan for USD38 million for advance payment for acquisition of the shares of Hemco Nicaragua S.A. ENTITY Interconexión Eléctrica S.A E.S.P Ecopetrol S.A.

2013 356.350

737.092

Cartón de Colombia S.A.

90.601

Grupo de Inversiones Suramericana S.A.

66.923

20.264

SPDR SER TR S&P

66.478

Cementos Argos S.A.

55.215

210.735

Canacol Energy LTDA

168.726

Fondo Bursatil ISHAR Colcap

34.174

Pacific Rubiales Energy Corp.

72.571

Dirección del Tesoro Nacional

31.281

Grupo Nutresa S.A.

22.659

4.024

Empresas Públicas de Medellín E. S. P.

14.990

Banco Popular S.A.

14.358

Banco de Bogotá S.A.

10.700

Tablemac S.A.

9.848

Concreto S.A.

8.870

Banco de Occidente S.A.

5.870

Bancolombia S.A.

5.540

120.057

Isagen S.A. E.S.P.

2.861

7.307

Inversiones Argos S.A.

7.196

Cartera Colectiva Petroval

4.096

9.009

$ 774.446

$ 1.383.378

Saldos menores TOTAL

2014

Notes to the financial statements

(3) Aids and charities 2014

Partido Liberal Colombiano Centro Democrático y/o Sergio N. Echavarría M.

2013 200.000

50.000

23.928

21.050

20.340

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

Corporación Excelencia en la Justicia

10.000

8.600

Iglesia Evangélica Interameric Colom.

8.000

Antioquia Le Canta a Colombia

7.500

Corporación Ensamble Vocal

5.000

Seminario Diocesano Tomás de Aquino

5.000

Fundación Nal. Atención Int. al Niño con Cáncer

2.500

1.000

Fundación Mónica Uribe por Amor

2.400

Corporación en Defensa del Desprotegido Colombiano

2.000

Fundación Fondo Social ANDI

1.430

1.388

Asoc. Obras Social .En Benef. de la Policía

1.000

Fundación Búcaros

800

Fundación Arca Mundial

560

El comité de Rehabilitación de Antioquia

500

1.000

7.500

Empresa Social del Estado Hospital San Juan de Dios – ANORI Fundación para el Progreso de Antioquia

Asociación Nal. de Exportadores-ANALDEX 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

Corporación Amigos de Superarse

1.600

2.180

1.070

$ 311.920

$ 173.160

Cuantías Menores 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) Mainly expenses related to the project bank continuously managed by the company. *

Variation corresponds to balance of a loan for USD 38 million for advance payment for acquisition of Hemco Nicaragua S.A. las acciones de Hemco Nicaragua S.A.

FINANCIAL REPORT 2014 - MINEROS S.A.

NOTA 25.

SPECIAL COMMITMENTS â&#x20AC;&#x201C; 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 2014, are listed below: ENTITY

TYPE OF OPERATION

PAR VALUE

GOLD OUNCES

Banco de Occidente S.A.

Foreign Exchange Hedges (collars)

USD10.350.000

Colpatria S.A.

Foreign Exchange Hedges (collars)

USD 8.150.000

Auramet (USA)

Commitments on forwards (delivery)

8.400

INTL Commodities (USA)

Commitments on forwards (delivery)

10.800

USD18.500.000

19.200

TOTAL

Este mismo tipo de operaciones al 31 de diciembre de 2013 eran las siguientes: Foreign Exchange Hedges (collars)

TYPE OF OPERATION

Bancolombia S.A.

Foreign Exchange Hedges (collars)

Auramet (USA)

PAR VALUE

GOLD OUNCES

USD 13.600.000

Commitments on forwards (delivery)

6.000

INTL Commodities (USA)

Commitments on forwards (delivery)

12.000

INTL Commodities (USA)

Gold price hedges (put options)

9.700

INTL Commodities (USA)

Foreign Exchange Hedges (call options)

9.700

TOTAL

USD 13.600.000

37.400

NOTE 26.

SUBSEQUENT EVENTS The results presented in the several financial statements that make part of these report were prepared on the basis of each and every data and operations known by the company and notified by different means, originated, accrued and recorded, with positive or negative incidence on the period ended. Therefore, the company is not aware of any other fact or event subsequent to the closing date hereof that substantially modify the financial statements and their corresponding explanatory notes.

Notes to the financial statements

NOTE 27.

SPECIAL CONTINGENCY Article 42 of Law 99/93 (amended by Article 211 of Law 1450/11) established environmental discharge duties for the direct and indirect use of water resources in any type of economic activity or service. In turn, Regulatory Decree 2667 of 2012 regulated the technical and legal issues to be taken into account in determining the duty payable by its passive subjects. Based on the powers conferred by Law to the respective environmental authorities, Corporaci贸n Aut贸noma Regional del Centro de Antioquia (CORANTIOQUIA) issued Resolution 441 of 2013 setting the individual discharge limits of Mineros S.A. and designating the company as passive subject of the environmental discharge duty. On May 22, 2014, the company filed with the Administrative Tribunal nullity and redress claim against such Resolution; at December 31, 2014, closing date of the general-purpose financial statements, no decision had been made.

Notes to the financial statements

Additionally, decision by CORANTIOQUIA about the request for reconsideration of the administrative act that recalculated the environmental discharge duty for 2013 is still pending.

Consolidated Financial Statement

FINANCIAL REPORT 2014 - MINEROS S.A.

STATUTORY AUDITORS’ REPORT To the shareholders of MINEROS S.A. 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, 2014 and 2013 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. 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

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 the 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.

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.

As mentioned in Note 22 to the consolidated financial statements, the company at December 31, 2014 and 2013, recognized and classified as other expenditures the amortization of unsuccessful mining projects worth $15,260 million and $48,863 million, respectively. Such expenses should have been classified as amortization expenses.

HAROL ALBERTO MURILLO O. Statutory Auditor Professional Card 196770-T Designated by Deloitte & Touche Ltda.

In my opinion, except for the effect of the classification of expenses on the income statement of 2014 and 2013 as indicated above, the aforementioned consolidated financial statements present fairly, in every significant aspect, the financial position of MINEROS S.A. as of December 31, 2014 and 2013, the results

February 24, 2015.

Consolidated Financial Statement

At December 31, 2014 and 2013, 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, 0.70% and 1.19% of total consolidated assets and 0% and 0.01% of total consolidated revenue, respectively. Such financial statements were audited by other statutory auditors, who expressed unqualified opinions thereon.

FINANCIAL REPORT 2014 - MINEROS S.A.

MINEROS S.A. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET AT December 31, 2014 AND 2013

Por los años terminados el 31 de diciembre de 2014 y 2013 (In thousands of Colombian pesos)

ASSETS

2014

2013

Note

CURRENT ASSETS Cash

Marketable securities

46,730,529

67,620,290

34,627,283

64,345,985

2,899,117 5,897,034

5,873,168 2,463,930

90,153,963

140,303,373

272,939,673

212,030,213

272,939,673

212,030,213

7,435,253 555,686 60,604,993 6,632,578 181,462,266 111,002,271

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

367,693,047

352,192,309

124,581,385

93,568,301

Prepaid expenses and other assets

TOTAL CURRENT ASSETS PROPERTY, PLANT AND EQUIPMENT

2,239,173 65,381,117

Cash and cash equivalents

Inventories

41,872,480

Accounts receivable

4,858,049

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

855,368,068

798,094,196

395,446,673

277,896,655

HÉCTOR TRESPALACIOS T. Chief Accounting Officer Professional Card 32758-T

HAROL ALBERTO MURILLO ORREGO Statutory Auditor Professional Card 196770-T Designated by Deloitte & Touche Ltda. (See attached opinion)

MINEROS S.A. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET AT December 31, 2014 AND 2013

Por los años terminados el 31 de diciembre de 2014 y 2013 (In thousands of Colombian pesos)

LIABILITIES AND EQUITY

2014

2013

Note

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

15 16 17

TOTAL CURRENT LIABILITIES

59,300,304 13,579,995 19,641,289 16,589,295 6,948,958 8,794,414

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

124,854,255

91,914,871

Labor liabilities Estimated liabilities Financial liabilities Deferred tax

16 18 14 15

2,672,238 2,382,546 78,309,691 12,816,673

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

RETIREMENT PENSIONS:

1,048,201

1,013,890

97,229,349

133,263,105

222,083,604

225,177,976

3,274,207

6,861,577

TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES MINORITY INTEREST

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

20 20 20 13 20

158,953 1,551,099 16,912,520 124,581,385 22,709,108

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

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

20 20

11,191,283 -5,611,007 413,414,936 45,101,980

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

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

BEATRIZ E.URIBE RESTREPO President

630,010,257

566,054,642

855,368,068

798,094,196

395,446,673

277,896,655

HÉCTOR TRESPALACIOS T. Chief Accounting Officer Professional Card 32758-T

Consolidated Financial Statement

SHAREHOLDERS’ EQUITY

HAROL ALBERTO MURILLO ORREGO Statutory Auditor Professional Card 196770-T Designated by Deloitte & Touche Ltda. (See attached opinion)

FINANCIAL REPORT 2014 - MINEROS S.A.

MINEROS S.A. AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENT AT DECEMBER 31, 2014 AND 2013 (In thousands of Colombian pesos)

2014

2013

Note PRECIOUS METALS PRODUCTION

Production costs

463,887,002

450,265,985

(320,597,849)

(294,519,400)

Administration expenses

(14,609,210)

(12,505,431)

OPERATING INCOME

128,679,943

143,241,154

(48,820,472)

(64,444,350)

79,859,471

78,796,804

(34,600,063)

(29,964,575)

157,428

6,314,682

NON-OPERATING REVENUES (EXPENDITURES), NET

INCOME BEFORE PROVISION FOR INCOME TAX Provision for income tax

MINORITY INTEREST YEAR'S NET INCOME

45,101,980

42,517,547

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 32758-T

HAROL ALBERTO MURILLO ORREGO Statutory Auditor Professional Card 196770-T Designated by Deloitte & Touche Ltda. (See attached opinion)

Dividends declared

Year's income

Year's movements

Surplus from equity method

Gift

Unrealized earnings

1,551,099

Additional Paid -in Capital

22,709,108

19,116,853

3,592,255

Translation Adjustments

$ 16,912,520

Consolidated Financial Statement

$ 16,912,520

Equity Revaluation

BEATRIZ E.URIBE RESTREPO President

The accompanying notes are an integral part of these financial statements

December 31, 2014

158,953

Year's movements

Balances at

Year's income

Dividends declared

Appropriations

December 31, 2013

Unrealized earnings

158,953

Gift

Balances at

158,953

Surplus from equity method

Appropriations

December 31, 2012

Balances at

Capital

(In thousands of Colombian pesos)

$ 11,191,283

Reserve for Repurchase of Shares

For the years ended December 31, 2014 and 2013

79,477

Legal Reserve

$ 26,735,253

2,400,000

$ 24,335,253

2,400,000

$ 21,935,253

Reserve for Asset Protection

HÉCTOR TRESPALACIOS T. Chief Accounting Officer Professional Card 32758-T

(5,611,007)

-5,611,007

Treasury Stock

MINEROS S.A. AND SUBSIDIARIES Statement of Changes in Stockholders’ Equity

(1,000,000)

1,000,000

(1,338,000)

1,338,000

Reserve for Gifts

33,419,076

2,916,063

30,503,013

Reserve for Balance-Reduction Depreciation

OTHER RESERVES

$ 413,414,937

(1,000,000)

12,241,246

$ 402,173,691

(1,338,000)

89,245,171

$ 314,266,520

Total Other Reserves

31,013,084

93,568,301

29,266,043

64,302,258

$ 124,581,385

Revaluation Surplus

HAROL ALBERTO MURILLO ORREGO Statutory Auditor Professional Card 196770-T Designated by Deloitte & Touche Ltda. (See attached opinion)

353,181,131

5,925,183

347,255,948

55,004,158

292,251,790

Reserve for New Projects Development

45,101,980

(31,402,488)

1,126,187

(12,241,246)

42,517,547

(44,486,859)

2,158,142

(89,245,171)

131,573,888

Year's Income

630,010,257

31,013,084

45,101,980

(31,402,488)

1,126,187.00

(1,000,000)

19,116,853

566,054,642

29,266,043

42,517,547

(44,486,859)

2,158,142

(1,338,000)

3,592,255

534,345,514

Total Equity

FINANCIAL REPORT 2014 - MINEROS S.A.

MINEROS S.A. AND SUBSIDIARY

CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION FOR THE YEARS ENDED December 31, 2014 AND 2013 (In thousands of Colombian pesos)

2014

2013*

WORKING CAPITAL OBTAINED FROM: Operations -

Net income Add (less) credits (charges) to income not affecting working capital: Depreciation Inventory amortization Other assets write-offs Other assets amortization Retirement pensions Deferred tax Loss in sale of equipment Gain in sale of fixed assets Goodwill Translation adjustment Working capital provided by operations Total sources of funds Decrease (increase) in minority interest Sale of property, plant and equipment Increase in other assets 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 long-term investments Increase in inventories Decrease (increase) in minority interest Decrease (increase) in long-term liabilities Dividends declared Gifts Decrease in equity tax

45,101,980

34,151,725 4,077,418 13,534,253 15,654,005 34,311 28,525 (33,946) (18,777,933) 93,770,338

35,690,206 2,977,171 44,631,614 163,898 192,909 169,366 89,395 (145,666) (143,567,481) 3,592,255 (13,688,786)

93,770,338

(13,688,786)

4,389,756 2,444,588 1,126,187

5,289,426 (60,303,033) 2,158,141

101,730,869

(66,544,252)

1,523,116 99,445,520 35,006 11,758,095 3,587,370 36,068,068 31,402,488 1,000,000 -

368,305 123,519,536 21,299,679 (6,861,577) (117,869,223) 44,486,858 1,338,000 4,723,039

184,819,663

Total working capital used

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

42,517,547

(83,088,794)

71,004,617 $

(137,548,869)

Increase (Decrease) in current assets

(50,149,410) 2,618,876 (23,508,637) (29,718,702) (2,974,051) 3,433,104

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

Decrease (increase) in current liabilities

(32,939,384) (20,004,989) (5,580,665) (5,920,094) (3,896,813) (697,300) 3,160,477

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

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

(83,088,794)

(137,548,869)

(*) Some entries were classified for comparative effects. The accompanying notes are an integral part of these financial statements

BEATRIZ E.URIBE RESTREPO President

Consolidated Financial Statement

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

HAROL ALBERTO MURILLO ORREGO Statutory Auditor Professional Card 196770-T Designated by Deloitte & Touche Ltda. (See attached opinion)

MINEROS S.A. AND SUBSIDIARY

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEARS ENDED December 31, 2014 AND 2013 (In thousands of Colombian pesos)

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

Depreciation Inventory amortization Other assets write-offs 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 Translation adjustment

45,101,980

2013* $

42,517,547

34,151,725 4,077,418 13,534,253 15,654,005 34,311 (1,732,685) 28,525 (33,946) 317,854 (34,432,225)

35,690,206 2,977,171 44,631,614 163,898 192,909 169,366 89,395 (145,666) 1,126,187 3,592,255

Changes in assets and liabilities (Increase) Decrease in: Accounts receivable Prepaid expenses Minerals inventory

76,701,215

131,004,882

28,195,586 2,974,051 (3,433,104)

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

Increase (Decrease) in: Suppliers Accounts payable Taxes, liens and duties Dividends payable Labor liabilities Tax on equity Estimated liabilities

5,580,665 5,920,094 3,896,813 (3,160,477) 1,602,672 591,364

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

42,167,664

(19,473,208)

NET FUNDS PROVIDED BY OPERATING ACTIVITIES

118,868,879

111,531,674

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

(79,401,472) (8,540,180)

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

NET FUNDS USED IN INVESTMENT ACTIVITIES

(87,941,652)

(342,198,984)

CASH FLOWS FROM FINANCING ACTIVITIES Decrease (increase) in financial liabilities Dividends declared Gifts Minority interest

(15,827,130) (31,402,488) (1,000,000) (3,587,370)

153,386,411 (44,486,858) (1,338,000) 6,861,577

NET FUNDS PROVIDED BY (USED IN) FINANCING ACTIVITIES

(51,816,988)

114,423,130

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

(20,889,761) 67,620,290

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

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR

46,730,529

67,620,290

Consolidated Financial Statement

2014

(*) Some entries were classified for comparative effects.

The accompanying notes are an integral part of these financial statements

BEATRIZ E.URIBE RESTREPO President

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

HAROL ALBERTO MURILLO ORREGO Statutory Auditor Professional Card 196770-T Designated by Deloitte & Touche Ltda. (See attached opinion)

FINANCIAL REPORT 2014 - MINEROS S.A.

SHAREHOLDERS’ MEETING MARCH 18 OF 2015

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 Presidente

Consolidated Financial Statement

HÉCTOR TRESPALACIOS T. Chief Accounting Officer Professional Card 32758-T

MINEROS S.A. AND SUBSIDIARIES

OTES TO THE FINANCIAL STATEMENTS CONSOLIDATED AS OF DECEMBER 31 OF 2014 AND 2013 (In thousands of Colombian Pesos, except when noted otherwise)

OPERATIONS OF THE CONSOLIDATED COMPANIES Mineros de Antioquia S.A. is a private corporation established on November 14 of 1974 by public deed No. 6161 of the 4th Notary Public Office of Medellin for a term of ninety-nine (99) years. Through public deed No. 1038 of April 19 of 2004, it changed its corporate name to MINEROS S.A. 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. Below are the corporations included in the consolidated financial statements of Mineros S.A.

Operadora Minera S.A.S. Simplified joint stock company Operadora Minera S.A.S. was incorporated according to Colombian regulation on March 10 of 2009, and its corporate purpose is to carry out all kinds of

licit acts, especially in the areas of preservation, exploration, exploitation, industrialization and availing of any form of renewable and nonrenewable resources. The private document related to its incorporation was filed with the mercantile register of the Chamber of Commerce of Medellin City on April 02, 2009, in book 9, under No. 4129. The company has its operation center in the municipality of Zaragoza (Antioquia Province), Naranjal and Icacales localities (Los Mangos and Icacales mines), 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 under Colombian laws 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.

Consolidated Financial Statement

NOTE 1.

FINANCIAL REPORT 2014 - MINEROS S.A.

Mineros LLC Established under the laws of the State of Delaware, U. S. A., on March 05, 2013; its corporate purpose is to carry out any commercial activity and its term is indefinite. 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, North Atlantic Autonomous Region, Nicaragua. Consequently, Mineros LLC consolidates with Bonanza Holding S.A., and this one in turn, with Hemco Nicaragua S.A. and Affiliates (Vesubio Mining, S.A., Minerales Matusalén, S.A. and Rosita Mining S.A.).

NOTE 2.

BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS Consolidación Companies in Colombia shall prepare general-purpose individual financial statements that are presented to the Shareholders’ Meeting and constitute the basis for the distribution of dividends and other appropriations. Additionally, the Code of Commerce requires preparation of general-purpose consolidated financial statements that are also presented to the Shareholders’ Meeting for its approval but are not the basis for the distribution of dividends and earnings appropriation. According to rules issued by the Financial Superintendency, the consolidated financial statements include the accounts of the companies respect to which either of the following conditions apply: A. More than 50% of capital belongs to the company, directly or through or with the assistance of its subordinate companies or of the subordinate companies of the latter. B. The company and its subordinate companies have, jointly or separately, right to cast the minimum number of votes that make up the deciding majority in the members’ or shareholders’ meeting, or have the number of votes necessary to elect the majority of the members of the Board of Directors, should there be such a board. C. The company, directly or through or with the assistance of its subordinate companies, by reason of an act or business with the controlled corporation or with its shareholders, exercises dominant influence on the decisions of the corporation’s administration bodies.

Consolidated Financial Statement

The consolidated financial statements are prepared according to accounting principles generally accepted in Colombia. The Management must make estimates and assumptions that affect the assets and liabilities figures reported, the contingent assets and liabilities disclosed as on the date of the financial statements, and the revenues and expenses disclosed during the reporting period. The actual result may differ from such estimates. The consolidation method used for the preparation of the financial statements is the global integration method which adds to the parent or controlling company’s financial statements all the assets, liabilities, equity and results of the subordinate companies, after eliminating in the parent or controlling company the investment made by it in the subordinate company’s equity, 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; it is taken as on December 31, the date established by the parent company as its closing date of operations and presentation of financial statements as provided in the articles of incorporation and in Article 9 of Decree 2649 of 1993. 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 deemed adequate as a technical accounting reference in Colombia, such subsidiaries 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. 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 thousands of Colombian Pesos):

YEAR 2014 TOTAL PARTICIPATION

ASSETS

Operadora Minera S.A.S.

100%

$ 7.111.094

Exploradora Minera S.A.S.

100%

Mineros LLC (USA)

100%

LIABILITIES $

YEAR’S RESULTS

EQUITY

2.723.971

$ 4.387.123

649.842

892.287

318.386

573.901

108.331

315.018.325

212.562.151

102.456.174

(5.047.744)

YEAR 2013 TOTAL PARTICIPATION

ASSETS

Operadora Minera S.A.S.

100%

$ 11.013.968

Exploradora Minera S.A.S.

100%

Mineros LLC (USA)

100%

LIABILITIES $

YEAR’S RESULTS

EQUITY

2.270.131

$ 8.743.837

53.761

1.297.867

432.297

865.569

185.744

241.548.914

154.320.326

87.228.588

2.587.822

Below is the effect of consolidation of financial statements of the company and its subordinate companies for 2014: Consolidated balances before eliminations Assets

Consolidated ending balance

Eliminations

$ 1.121.178.733

$ (265.810.665)

$ 855.368.068

Liabilities and minority interest

383.433.424

(128.075.613)

225.357.811

Equity

737.745.309

(107.735.052)

630.010.257

Below is the effect of consolidation of financial statements of the company and its subordinate companies for 2013: Consolidated balances before eliminations

Consolidated ending balance

Eliminations

$ 906.387.364

$ (108.293.168)

$ 798.094.196

Individual equity

242.368.541

(10.328.988)

232.039.553

Unrealized gains from sale of assets

664.018.823

( 97.964.181)

566.054.642

2014 Individual equity Unrealized gains from sale of assets Consolidated equity

Consolidated Financial Statement

Reconciliation between Mineros S.A.’s equity and consolidated equity: 2013

$ 630.328.113

$ 567.180.829

317.856

1.126.187

630.010.257

566.054.642

FINANCIAL REPORT 2014 - MINEROS S.A.

NOTE 3.

MAIN ACCOUNTING POLICIES AND PRACTICES 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 facts 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”. 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

Consolidated Financial Statement

into Colombian Pesos using the market representative rate in force, as certified by the Colombian Financial Superintendency.

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 2014 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 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 2007, as provided in Decree 4918 of same year, 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.

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.

Accounting system

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

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.

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

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:

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

10%

15%

TRANSPORTATION EQUIPMENT

COMPUTER EQUIPMENT

20%

Consolidated Financial Statement

Starting January of 2012, for fiscal effects, the controlling company (Mineros S.A.) adopted the balance-reduction depreciation system (Article 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 asset’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.

FINANCIAL REPORT 2014 - MINEROS S.A.

Inventories 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. 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: 1. Mining projects are amortized on the basis of the deposit’s estimated exploitation time, starting on the date when respective revenue starts. Unsuccessful exploration investments are amortized in the same period when such condition is determined on the basis of a technical opinion delivered by an expert that is approved by the Board, and at any rate, not later than within the next two (2) years, at Management’s choice.

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 per-books 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. 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; however, Law 1739 of 2014 (latest tax reform) set the rate at 9% permanently. 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.

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.

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.

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.

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.

Goodwill

Labor liabilities

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 the Code of Commerce, amended by articles 26 and 27 of Law 222 of 1995 and all other rules amending, supplementing or substituting them.

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 consolidated labor benefits and other benefits to employees on a basis different from that of the countries that generated their own liabilities.

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.

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.

Consolidated Financial Statement

In Colombia 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 to 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 private pension funds under the terms and conditions mandated by that law.

• 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..

Additional paid-in capital

Gifts

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

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

Reappraisals Reappraisals correspond to differences between the commercial or cadastral appraisal and the net book value of real estate property adjusted for inflation; for all other fixed assets susceptible of appreciation (or 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, 2014 and 2013 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 Letter 05 of 1998 of the Superintendency of Corporations, in the cases of Operadora Minera S.A.S. and Exploradora Minera S.A.S., as follows: • In the case of Mineros S.A., for marketable variableincome investments, when their 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.

Equity revaluation Balances at December 31, 2014 and 2013 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 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.

Consolidated Financial Statement

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

Convergence to International Financial Reporting Standards Pursuant to the provisions of Law 1314 of 2009 and regulatory decrees 2784 of December, 2012 and 3024 of 2013, the company is bound to initiate convergence between the accounting principles generally accepted in Colombia and the International

FINANCIAL REPORT 2014 - MINEROS S.A.

Financial Reporting Standards (IFRS). To this end, the Public Accounting Technical Council issued the Strategic Directive that classifies companies in three groups.

Superintendency the implementation plan for IFRS; the Opening Statement of Financial Position was submitted to the Superintendency on July 30, 2014.

Since Mineros S.A. and its affiliates belong to Group 1, they have January 1, 2014, as the date set to start the mandatory transition period, and December 31, 2015 as the issuance date of the first comparative financial statements under IFRS. On February 26, 2013, the company presented to the Financial

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

NOTE 4.

FOREIGN-CURRENCY TRANSACTIONS Colombian current regulations permit free negotiation of foreign currencies through banks and other financial intermediaries at free exchange rates. 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, 2014 and 2013. The market representative exchange rate as on December 31, 2014 was $2,392.46/USD (2013, $1,926.83/USD).

2014 Assets Liabilities NET POSITION

2013

USD *

PESOS

$ 65.427

$ 156.531.480 99.210.531 $ 57.320.949

41.468 $ 23.959

USD *

12.591 (35.691) $ (23.100)

PESOS

24.260.717 (68.770.490) $ (44.509.773)

NOTE 5.

ACCOUNTS RECEIVABLE At December 31, this account included: Public entities (1) Other (2) Customers Advance payments to suppliers and contractors Yields receivable Loans to personnel TOTAL

2014 $ 9.611.019 16.751.678 2.835.764 3.092.271 1.554.141 782.410 $ 34.627.283

2013 $ 43.296.625 9.226.246 4.549.024 4.198.892 2.112.035 963.163 $ 64.345.985

(1) Decrease in this item relative to 2013 obeys basically to returns actually received by Mineros S.A. in 2014 for income tax and sales tax. (2) Increase in 2014 is explained by Hemco Nicaragua S.A. operation.

Consolidated Financial Statement

NOTE 6.

MARKETABLE SECURITIES At December 31, this account included: 2014 Certificate of deposit - CD*

2013

19.505.369

Other investments abroad *

13.884.703

Public bonds – local currency *

9.000.000

Shares in local corporations (1)

14.457.933

8.812.656

9.063.838

5.792.000

72.404

3.743.031

Funding operations

2.113.676

1.588.210

Other investments (2)

2.618.283

1.475.342

Participation in trust estates with trust companies (3)

1.337.624

13.350.064

2.259.074

853.596

127.470

156.831

Treasuries – TES Private bonds – local currency

Shares REPO rights Trust funds administered by brokerage firms (on demand) Shares in foreign corporations (4) Subtotal

Provision for impairment of investments in shares of local corporations TOTAL

45.400.366

(3.527.886) $

41.872.480

66.149.362 (768.245)

65.381.117

Variation stems from redemption of securities to finance the operation in Nicaragua and the purchase of shares of Hemco S.A.

(1) At December 31, 2014, the company had as marketable securities the following investments in shares of Colombian corporations:

Ecopetrol S.A. * Bancolombia S.A. * TOTAL

No. SHARES (units)

MARKET PRICE (BOOK VALUE)

3.390.000

$ 11.532.852

100.000

2.925.081

Consolidated Financial Statement

ISSUER

$ 14.457.933

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

FINANCIAL REPORT 2014 - MINEROS S.A.

At December 31, 2013, Mineros S.A. and its subordinate companies had as marketable securities the following investments in shares of Colombian corporations: ISSUER

No. SHARES (units)

MARKET PRICE (BOOK VALUE)

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

54.357

$ 1.907.451

Grupo Nutresa S.A.

50.879

1.346.292

ISA S.A. E.S.P *

86.300

1.154.927

154.500

877.560

Cementos Argos S.A. – Preferencial

69.853

673.335

Inversiones Argos S.A. – Preferencial *

28.485

606.915

Inversiones Argos S.A. *

20.600

435.735

Fondo Bursátil Ishares Colcap *

19.999

366.483

175.000

350.000

26.280

303.675

151.036

220.763

27.200

218.144

5.367

214.646

8.103.080

79.293

95.729

57.437

Celsia S.A.

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 *

$ 8.812.656

Recorded at purchase price, because of their impairment of value

(2) Other investments 2014 Tax reimbursement securities Money market accounts abroad. TOTAL

2013 2.532.927

$ 1.419.010

85.356

56.332

$ 2.618.283

$ 1.475.342

(3) Rights held as on December 31, 2014 and 2013 in Trust Estate P195 Grupo Contempo Ltda. Oficinas Oxo - Bogotá in Fidubogotá S.A. In 2014 and 2013 no amount was received for restitution of contributions; $514,016 was recorded in 2014 for financial yields ($450,376 in 2013). (4) As of December 31, 2014, Mineros S.A. and its subsidiaries had in their investment portfolio the following investments in shares of foreign corporations:

ISSUER Quia Resources Inc. TOTAL

Consolidated Financial Statement

No. OF SHARES 13.320.000

MARKET PRICE (BOOK VALUE) $

127.470

As of December 31, 2013, Mineros S.A. and its subsidiaries had in their investment portfolio the following investments in shares of foreign corporations: ISSUER

MARKET PRICE (BOOK VALUE)

No. OF SHARES

Compañía de Minas Buenaventura Quia Resources Inc.

4.880

$ 105.501

13.320.000

51.330

TOTAL

156.831

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. B. Their market-price re-appraisal was based on the closing price at the corresponding stock exchange on the last business day of December. The company’s management considers that adequate investment portfolio diversification exists in order to reduce risk.

NOTE 7.

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

Land

2014

2013

$ 8.445.243

8.204.367

Buildings and constructions

42.202.400

21.517.849

Constructions in progress and machinery under assembly

77.211.492

82.246.928

284.360.030

192.714.638

63.227.826

65.811.237

4.718.363

2.781.415

23.358.525

15.259.728

1.942.201

1.942.202

280.843

$ 505.746.923

$ 390.759.207

(269.024.184)

(220.756.155)

36.216.934

42.027.161

$ 272.939.673

$ 212.030.213

Machinery and equipment Electric plants and networks Furniture and fixtures Transportation equipment Computer equipment Other assets Subtotal Less:

Accumulated depreciation Deferred depreciation (1)

TOTAL

Consolidated Financial Statement

ASSET

(1) Deferred depreciation corresponds to that taken for fiscal purposes.

FINANCIAL REPORT 2014 - MINEROS S.A.

The company has established on fixed assets owned by Hemco Nicaragua S.A. the collateral pledges listed below: a) Banco de América Central S.A. (BAC). • Short-term facility up to USD4,500,000 ($10,766,070 thousand): machinery and equipment and transportation equipment for USD2,376,500 ($5,685,681 thousand).

• Long-term facility up to USD6,700,000 ($16,029,482 thousand): machinery and equipment and transportation equipment for USD8,912,032 ($21,321,680 thousand). b) Caterpillar Finance S.A. Heavy machinery and transportation USD1,564,009 ($3,741,829 thousand).

equipment

for

NOTE 8.

LONG-TERM ACCOUNTS RECEIVABLE 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: 2014 Housing loans to employees (1)

$ 7.336.340

$ 5.842.973

98.913

69.164

$ 7.435.253

$ 5.912.137

Vehicle loans TOTAL

2013

(1) Housing loans to associates pay an average DTF + 3 annual rate

NOTE 9.

INVENTORIES At December 31, this account included: 2014 Materials and consumables

2013

$ 57.254.012

$ 46.065.630

Materials in transit

1.636.205

5.968.773

Gold inventory *

5.897.034

2.463.930

Workshop orders under process

2.028.779

1.426.790

353.472

455.474

67.169.502

56.380.597

(667.475)

(992.351)

Other SUBTOTAL Less: Estimate for inventory obsolescence Inventories subtotal

Short-term inventories Long-term inventories

66.502.027

(5.897.034) $

60.604.993

55.388.246 (2.463.930)

52.924.316

* Gold inventory in Nicaragua is among the assets guaranteeing a loan with Banco de Bogotá (Nicaragua), whose balance at December 31, 2014 was USD4,800,000.

Consolidated Financial Statement

NOTE 10.

LONG-TERM INVESTMENTS At December 31, 2014, long-term investments included:

CORPORATION Unipalma de los Llanos S.A.

Participation % 17,74%

No. of SHARES

REALIZATION VALUE OR BOOK VALUE

ADJUSTED COST

re-appraisals (impairment)

493.214.074

$ 6.213.742

$ 22.747.033

$ 16.533.291

Compañía Minera de Ataco S.A.S.

100%

20.000

200.000

213.048

13.048

Distrito de Negocios S.A.S.

40%

80.000

90.685

10.685

Entre Ríos de Colombia S.A.S.

35%

7.000.000

35.000

4.500

Club de Banqueros (un derecho)

Promotora de Proyectos S.A.

1,60%

124.399

99.321

26.000

(73.321)

Otros (1)

0,1%

$ 6.632.578

$ 23.116.266

$ 16.483.703

TOTAL

(1) The cost of these investments abroad was adjusted at December 31, 2014 to the market representative exchange rate published by the Colombian Financial Superintendency. At December 31, 2013, long-term investments included:

Unipalma de los Llanos S.A.

17,74%

No. of SHARES

ADJUSTED COST

493.214.074

REALIZATION VALUE OR BOOK VALUE

re-appraisals (impairment)

6.213.742

$ 23.042.962

$ 16.829.219

Compañía Minera de Ataco S.A.S.

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

Promotora de Proyectos S.A.

1,60%

124.399

99.321

27.368

(71.953)

Otros

0,1%

6.597.572

$ 23.356.936

$ 16.759.372

TOTAL

Consolidated Financial Statement

CORPORATION

Participation %

FINANCIAL REPORT 2014 - MINEROS S.A.

ACCRUED INCOME 2014

ECONOMIC ACTIVITY

Unipalma de los Llanos S.A.

Agroindustria

Promotora de Proyectos S.A.

817.169

$ 261.448

Inversionista

Minería

Entre Ríos de Colombia S.A.S.

Agroindustria

Distrito de Negocio S.A.S.

Construcción

$ 2.130.351

N.A.

Compañía Minera de Ataco S.A.S.

Hemco Nicaragua S.A.

ACCRUED INCOME 2013

Minería

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

NOTE 11. GOODWILL

Goodwill shown in the consolidated financial statements at December 31, 2014 and 2013 corresponds to the higher value paid in the purchase 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.

NOTE 12.

OTHER ASSETS At December 31, this account included: 2014

2013

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

122.653

$ 29.255.720

Projects: Amount invested in exploration to determine possible economically exploitable gold deposits in Colombia *

72.397.187

89.806.644

Value invested in mining projects in Nicaragua

1.915.197

2.965.280

Investments in improvement projects for alluvial operation (Colombia)

Costs and expenses incurred in rubber plantation and biofactory projects on the company’s land.

10.994.949

7.601.153

Costs incurred in IT modernization

11.676.744

5.671.866

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

13.835.541

7.487.309

TOTAL * Balances after reciprocal eliminations for consolidation

60.000

Consolidated Financial Statement

$ 111.002.271

$ 142.787.972

NOTE 13.

RE-APPRAISALS Re-appraisals of assets at December 31 are explained as follows: ASSET

2014

2013

PROPERTY, PLANT AND EQUIPMENT (1) Land

16.680.700

Buildings

15.916.447

8.479.541

6.894.175

61.797.990

41.684.185

407.748

505.910

1.127.882

830.299

17.014.669

8.826.061

$ 105.508.530

$ 74.657.077

2.589.152

2.151.852

Machinery and equipment River fleet equipment Transportation equipment Aqueducts, plants and networks Subtotal (Note 7)

INVESTMENTS Marketable investments Rights in trust estates (Grupo Comtempo Oficinas Oxo Trust Estate) Long-term investments Investments in corporations - Net (See Note 10)

16.483.703

16.759.372

19.072.855

$ 18.911.224

$ 124.581.385

$ 93.568.301

Subtotal

TOTAL

(1) In November of 2012, the company hired commercial appraisals of property, plant and equipment owned in Colombia; they 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 2014, appraisals of property, plant and equipment were updated according to the CPI of the year (3.66%) and were compared to the net cost of assets at December 31, 2014.

NOTE 14.

FINANCIAL LIABILITIES

2014 Financial leasing contracts (1)

Foreign financial entities (2)

2013 123.437

17.093

128.383.135

153.352.880

9.061.928

41.495

67.152

SUBTOTAL FINANCIAL LIABILITIES

$ 137.609.995

$ 153.437.125

TOTAL SHORT-TERM LIABILITIES

59.300.304

TOTAL LONG-TERM LIABILITIES

78.309.691

$ 114.141.810

Temporary sale and repurchase of securities (3) Credit cards

Consolidated Financial Statement

At December 31, this account included:

39.295.315

FINANCIAL REPORT 2014 - 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

167498

TOTAL

BALANCE

9.654

MATURITY

OUTSTANDING INSTALLMENTS

Marzo 7/2016

113.783 Agosto 12 / 2019

$ 123.437

PURCHASE OPTION

RATE

ACCRUED INTEREST

350

8.34% E.A.

$ 1.189

11.990

6.91% EA

$ 2.653

$ 12.340

$ 3.842

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

121708

INSTALLMENTS

TOTAL

BALANCE

$ 17.093

MATURITY

OUTSTANDING INSTALLMENTS

Marzo 7/2016

$ 17.093

PURCHASE OPTION

$ 350

RATE

ACCRUED INTEREST

8.34% E.A.

$ 350

$ 1.893 $ 1.893

(2) Foreign financial liabilities incurred in US Dollars and translated into thousands of Colombian Pesos are detailed below: ENTITY Banco de Bogotá S.A. Miami Agency (Colombia) Banco de Bogotá (Panamá) (Colombia) Banco de América Central S.A. Banco de América Central S.A. Banco de América Central S.A. Banco de América Central S.A. Banco de América Central S.A. Banco de América Central S.A. Banco de América Central S.A. Banco de América Central S.A. Banco de América Central S.A. Banco de América Central S.A. Banco de América Central S.A. Banco de América Central S.A. Banco de Bogotá (Nicaragua) Banco de América Central S.A. Banco de América Central S.A. Banco de América Central S.A. Banco de América Central S.A. Banco de América Central S.A. Banco de América Central S.A. Leasing NIMAC (Nicaragua) Caterpillar Finance S. A. Caterpillar Finance S. A. Caterpillar Finance S. A. Caterpillar Finance S. A. Caterpillar Finance S. A. Caterpillar Finance S. A. TOTAL

Consolidated Financial Statement

RATE Libor+2.8 E.A. Libor+1.2 E.A. 8,000% 8,000% 8,000% 8,000% 8,000% 8,000% 8,000% 8,000% 8,000% 8,000% 8,000% 8,000% Libor 6 meses +5.7 E.A 8,000% 8,000% 8,000% 8,000% 8,000% 7,500% 15, 00% 8,600% 8,500% 8,500% 8,600% 8,600% 8,600%

VALUE $ 93.321.563 4.806.305 99.686 59.810 199.371 59.810 299.056 598.115 342.919 149.528 2.392.460 2.851.014 1.913.968 861.285 11.483.808 965.489 1.987.383 959.275 654.581 2.057.518 670.261 26.553 134.621 85.266 255.841 71.786 108.635 967.228 $ 128.383.135

MATURITY Noviembre/2019 Junio/2015 Enero/2015 Febrero/2015 Febrero/2015 Febrero/2015 Marzo/2015 Abril/2015 Abril/2015 Mayo/2015 Octubre/2015 Noviembre/2015 Diciembre/2015 Diciembre/2015 Octubre/2016 Marzo/2016 Marzo/2016 Abril/2016 Diciembre/2016 Enero/2017 Enero/2017 Abril /2015 Noviembre/2015 Marzo /2017 Diciembre/2017 Diciembre/2015 Diciembre/2015 Marzo/2018

(3) Temporary sale and repurchase of securities:

Operation with TES owned by Mineros S.A. carried out with Bolsa de Valores de Colombia on December 29, 2014, maturing on January 5, 2015 at 4.6% E.A. rate.

Guarantees granted under these liabilities are described in Note 24.

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

Income tax current fiscal year 33 % rate – national

$ 625.675

Income tax current fiscal year 25% rate – national

240.961

Income tax current fiscal year 25% rate – national

10.053.221

15.148

853.816

3.472.967

4.723.038

3.458.807

2.602.542

477.007

9.482.007

14.010.145

260.710

164.291

3.073.956

374.922

Ad valorem tax on metals – foreign

533.794

776.106

Other tax withholdings

821.112

1.909

$ 29.405.968

$ 27.241.841

(12.555.963)

(14.385.067)

(260.710)

(164.291)

$ 16.589.295

$ 12.692.483

Income tax current fiscal year 30% rate – foreign Tax on equity – national Income tax for equity purposes (CREE) 9% rate – national Sales tax – national Deferred income tax – national Deferred income tax – foreign Deferred income tax for equity purposes – national

Other taxes Subtotal Less long-term portion for national deferred tax Less long-term portion for foreign deferred tax TOTAL SHORT-TERM PORTION Tax regulations applicable to the company and its subordinate companies in Colombia provide:

expressly take into account for the CREE (Article 22 of Law 1607 of 12).

A. The applicable rate for income tax for 2014 is 25% and for income tax for equity purposes (CREE) is 9% as established in Law 1607 of 2012

B. 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.

CREE tax basis is calculated together with income tax, additionally excluding such items that the rule did not

C. As of 2004, income tax payers performing transactions with foreign related or associated parties are required, for

Consolidated Financial Statement

2014

FINANCIAL REPORT 2014 - MINEROS S.A.

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. D. Income tax returns of Mineros S.A., Operadora Minera S.A.S. and Exploradora Minera S.A.S. are definitive until fiscal year 2011. E. 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. F. 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 as from the date of application of the new accounting regulatory framework. Tax Law Amendment – Below is a summary of some changes to the Colombian tax regime for the years 2015 and following, introduced by Law 1739 of December 23, 2014: Tax on wealth – Established starting on January 01, 2015. This tax is applicable to possession of wealth (gross equity minus outstanding debt) equal to or higher than $1,000 million as on January 01, 2015. The legal liability accrues on January 01, 2015, January 01, 2016 and January 01, 2017. The taxable basis for the tax on wealth is the gross equity of legal entities minus outstanding debts as on January 01, 2015, 2016 and 2017. Its marginal rate corresponds to:

Taxable Basis Ranges

2015

2016

2017

From $0 to $2,000,000

0,20%

0,15%

0,05%

From $2,000,000 to $3,000,000

0,35%

0,25%

0,10%

From $3,000,000 to $5,000,000

0,75%

0,50%

0,20%

From $5,000,000 onwards

1,15%

1,00%

0,40%

Consolidated Financial Statement

Mineros S.A. and Operadora Minera S.A.S shall pay in 2015, within the time periods set by the National Government, approximately $4,928,083 and $17,638 (thousand) as tax on wealth. Income tax for equity purposes (CREE) and surtax – As from taxable year 2016 and transitorily for 2015, the rate for CREE tax will be 9%. Fiscal losses incurred by CREE taxpayers starting in 2015 may be offset with this tax. Additionally, the excess over the minimum basis of CREE (fiscally readjusted) may also be offset starting 2015 within the next 5 years. In no case shall the CREE tax or its surtax be offset with balances in favor for concept of other taxes calculated in tax returns. Likewise, balances in favor resulting from CREE tax returns may not be offset with debts of other taxes, advance payments, withholdings, interest and penalties. The CREE surtax is established for 2015, 2016, 2017 and 2018. The surtax applies to taxpayers whose annual CREE tax return yields income that is equal or greater than $800 million. The marginal rate applicable for the surtax will be:

Surtax

2015

2016

2017

2018

Taxable basis $ 800 million

The surtax will be subject to 100% advance payment, calculated on the CREE taxable basis over which the taxpayer calculated such tax for the immediately preceding fiscal year. The advance payment of CREE surtax shall be paid in two annual installments within the time periods set in the regulations. For 2015, CREE surtax for Mineros S.A. and Operadora Minera S.A.S. was calculated at $4,328,996 and $27,920 (thousand), respectively. Income tax and surtax – The residence for fiscal matters is clarified. The rates for income obtained by foreign corporations and entities not ascribable to a permanent branch office or establishment are as follows:

Year 2015

2016

2017

2018

39%

40%

42%

43%

The fiscal discount for taxes paid abroad is changed distributing it between income tax and CREE tax in a 64% and 36% proportion.

Additionally, the entry into force of the limitation to deductions for cash payments is postponed until 2019 and following years.

Changes introduced to fiscal incentives: i) Deduction for investments in research, technological development and innovation; ii) Income tax fiscal discount for VAT paid in the purchase of capital goods and heavy machinery.

Other provisions â&#x20AC;&#x201C; Mechanisms for conciliation, transaction and special payment conditions to conclude proceedings and discussions between taxpayers and the authorities related to fiscal, customs and foreign exchange issues, and contributions to the social security system are again established.

Exchange gain/loss of foreign investments will have no fiscal effect until the moment the respective investment is transferred.

The calculation of income tax for the years ended on December 31 is as follows:

2014 Taxable income for national companies with 25% rate

2013

$ 83.889.072

$ 61.447.240

Current income tax at 25% rate

20.972.268

15.361.810

CREE taxable income for national companies with 9% rate

91.756.077

64.726.233

Current income tax for equity purpose at 9% rate

8.258.047

5.825.361

Taxable income for foreign companies with 30% rate

17.899.161

29.258.013

5.369.748

8.777.404

$ 34.600.063

$ 29.964.575

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 Severance payments Vacations

$ 3.162.371

$ 3.011.989

2.156.865

2.364.603

68.674

442.334

356.004

332.724

1.205.044

100.008

$ 6.948.958

$ 6.251.658

Salaries payable Interest on severance payments Christmas gift payable TOTAL

2013

Consolidated Financial Statement

2014

B. Long term Labor compensations (1)

2014

2013

$ 2.672.238

$ 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.

FINANCIAL REPORT 2014 - MINEROS S.A.

NOTE 17.

DIVIDENDS PAYABLE The balance at December 31 corresponds to: 2014 Regular dividends declared (1) Accrued dividends payable Former periods dividends TOTAL

2013

$ 7.850.622

$ 10.205.808

915.906

943.792

833.177

$ 8.794.414

$ 11.954.891

(1) According to Minutes No. 53 of the Regular Shareholder’s Meeting of March 19 of 2014, the proposal for payment of dividends was approved. Monthly dividend is $10 per share on total 261,687,402 outstanding shares, for a monthly value of $23,009,405 for the April 2014-March 2015 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.

According to Minutes No. 08 of March 28, 2014, earnings of 2013 for $53,762 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 2013 for $185,744, as approved in Minutes No. 4 of the Shareholders Meeting held on March 28, 2014.

Later on, as attested in minutes No. 8 and 9 of the Shareholders Meetings of Operadora Minera S.A.S. held on March 28 and May 9, 2014, distribution of dividends for $5,006,556 was approved.

$31,402,488,240 was appropriated from year 2013 earnings for payment of dividends.

For the current fiscal year, $22,605,074 has been accrued and paid for the periods between April and December.

Likewise, as attested in minutes No. 5 of the Shareholders Meeting Exploradora Minera S.A.S. held on October 28, 2014, distribution of dividends for $400,000 was approved. distribución de dividendos por valor total de $400.000.

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.

NOTE 19.

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

Fiscal regulation is used as the basis for recording 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, 2014, the accumulated amortized percentage of the actuarial calculation stands at 72.01% (67.97% at December 31 of 2013).

As of December 31, retirement pensions included: 2014

2013

$ 1.455.618

$ 1.490.781

Less: Retirement pension provision recorded by the company.

(407.417)

(476.891)

Retirement pensions to be provided in the next 16 years

$ 1.048.201

$ 1,013,890

2014

2013

Pension liabilities according to actuarial estimates

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

Pension appropriations Pension payments TOTAL

$ 197.558

$ 192.910

34.311

181.736

$ 231.869

$ 374,646

Pension liabilities include seventeen (17) people at December 31, 2014 and 2013 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 (currently Colpensiones) and the private pension funds.

NOTE 20. EQUITY

A. Capital

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 2014 and 2013, the balance equals $79,477 or 50% of subscribed and paid-in capital.

Consolidated Financial Statement

Pubic deed 1030 of April 13 of 2005 of Notary Public Office 17 of Medellin formalized Minutes 44 of the Regular Shareholdersâ&#x20AC;&#x2122; Meeting of Mineros S.A. of March 18 of 2005, where the authorized capital of $200,000 was divided into 400,000,000 common shares, each with a par value of fifty cents ($0.50*). Of these shares, 317,906,252 had been subscribed and paid for at December 31 of 2014 and 2013.

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.

FINANCIAL REPORT 2014 - MINEROS S.A.

NOTE 21.

MEMORANDUM ACCOUNTS Memorandum accounts include fiscal memorandum accounts, guarantees granted and disclosure of contingent liabilities and contingent rights, as follows: MEMORANDUM ACCOUNTS

2014

Difference between per-books income and fiscal income (income tax and CREE) Difference between per-books equity and fiscal equity Property, plant and equipment on which special deduction for investment in real productive fixed assets was requested (Article 8, Law 1111/06) Sub-total fiscal memorandum accounts (Net) Infrastructure leasing contracts pending execution (1)

2013

13.182.993

178.350.915

79.343.682

51.922.876

$ 243.456.784

$ 124.240.852

58.000.000

Infrastructure leasing contract executed Appreciation of fully depreciated property, plant and equipment (2) Retirement pensions policy reserve Contingent rights for civil works contracts 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 Providencia III Hydroelectric Plant, worth $58,000,000, for a term of 144 months and with interest rate equivalent to DTF T.A., plus 3.25 points for advances. At December 31, 2014, Leasing Bancolombia S.A. has disbursed $92,893,336 (2013 $75,693,925) for execution of this contract. Mineros S.A. in turn, recorded in 2014 $11,911,855 (2013

(7.025.706)

6.326.357 86.397.152

81.855.280

6.757.737

6.762.621

276.545

835.000

435.000

$ 395.446.673

$ 277.896.655

$4,166,713) for interest on disbursements made by Leasing Bancolombia S.A. as advances. (2) In accordance with the provisions of Communication No. 2010045038-011 of August 13, 2010 of the Financial Superintendency regarding recording of this kind of appreciations.

NOTE 22.

NON-OPERATING REVENUES AND EXPENDITURES At December 31, non-operating revenues and expenditures included: NON-OPERATING REVENUES Financial yields Insurance indemnities Exchange gain/loss Recoveries and realizations Revenues from appreciation of shares Other Gain in sale of investments Dividends Revenue from gold price hedge contracts Gain in sale of fixed assets UVR Monetary readjustment Total financial revenue TOTAL

Consolidated Financial Statement

2014 $ 2.415.117 948.310 32.823.035 2.285.894 674.537 1.231.236 858.429 189.323 283.121 33.946 5.850 $ 41.748.798

2013 7.510.368 6.185.442 5.578.970 2.491.378 2.381.774 1.941.313 1.508.982 743.033 523.545 159.190 18.599 1.194 $ 29.043.788

NON-OPERATING EXPENDITURES

2014

Amortization of mining projects

2013

$ 17.998.473

48.863.286

Debt prepayment penalty

2.474.131

Sales tax (increased costs and expenses)

1.210.601

Taxes assumed (1)

1.571.063

Other

1.402.155

21.358.391

Interest and financial expenses

16.279.066

14.549.702

Exchange gain/loss

26.656.404

4.229.525

3.856.910

1.613.974

795.191

1.427.050

3.885.166

795.925

56.860

461.279

Gifts

311.920

173.160

Banking expenses

388.921

15.846

Other expenses

7.831.100

Other non-operating expenses

5.851.309

Investments impairment Loss on securities trading Gold price option contracts Other financial expenses

TOTAL

90.569.270

TOTAL NET

$ (48.820.472)

93.488.138

$ ( 64.444.350)

NOTE 23.

OTHER DISCLOSURES

Personnel and associated expenses:

SENIOR LEVEL STAFF

OTHER EMPLOYEES

TOTAL

Mineros S.A.

970

1.026

Operadora Minera S.A.S.

752

756

Exploradora Minera S.A.S.

124

127

Hemco Nicaragua S.A

1.327

1.332

TOTAL

3.173

3.241

SENIOR LEVEL STAFF

OTHER EMPLOYEES

TOTAL

Mineros S.A.

896

946

Operadora Minera S.A.S.

621

624

Exploradora Minera S.A.S.

274

277

Hemco Nicaragua S.A

1.075

1.078

TOTAL

2.866

2.925

COMPANY

Consolidated Financial Statement

YEAR 2014

YEAR 2013 COMPANY

FINANCIAL REPORT 2014 - MINEROS S.A.

PERSONNEL EXPENSES YEAR 2014

COMPANY

SENIOR LEVEL STAFF

OTHER EMPLOYEES

TOTAL

$ 9.308.232 393.850 469.148 781.071 $10.952.301

$ 41.302.695 14.744.977 2.783.471 27.466.361 $ 86.297.504

$ 50.610.927 15.138.827 3.252.619 28.247.432 $ 97.249.805

SENIOR LEVEL STAFF

OTHER EMPLOYEES

TOTAL

$ 5.536.634 391.993 341.215 710.065 $ 6.979.907

$ 39.247.304 10.761.260 5.556.900 23.883.792 $ 79.449.256

$ 44.783.938 11.153.253 5.898.115 24.593.857 $ 86.429.163

Mineros S.A. Operadora Minera S.A.S Exploradora Minera S.A.S Hemco Nicaragua S.A TOTAL

YEAR 2013

COMPANY Mineros S.A. Operadora Minera S.A.S Exploradora Minera S.A.S Hemco Nicaragua S.A. TOTAL

NOTE 24.

1. 1.

SPECIAL COMMITMENTS 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.: CONCESSION Bonanza Monte Fresco 1 Monte Fresco 2 Monte Carmelo 1 Monte Carmelo 2 Bonanza H-I Hemco Bonanza - II Hemco Bonanza - III Hemco Bonanza - IV Hemco Bonanza - V Hemco Bonanza - VI Hemco Siuna - I Hemco Siuna - II Hemco Siuna - III Hemco Siuna - VI Hemco Rosita I Hemco Rosita IV Hemco Rosita V Hemco Rosita VI Hemco Waspan I Hemco Waspan II HB-5 HB-VI Hemco RB-I Hemco RB-II

Consolidated Financial Statement

AREA (HECTARES) 12.269,75 64 40 51,55 103,10 16.184,25 5.105,43 2.625 10.773,43 2.996,50 7.737,03 17.874,12 6.173,71 19.775 12.250 9.750 13.750 28.927,87 13.644,80 25.301,57 35.308,20 2.800 300 11.700 6.700

Collateral pledge

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

2. 1. First mortgage collateral On the following mining concessions of which Hemco Nicaragua S.A. is the holder: LOCATION

Municipality of Bonanza, North Atlantic Autonomous Region Municipality of Rosita, North Atlantic Autonomous Region Municipality of Rosita, North Atlantic Autonomous Region Municipality of Rosita, North Atlantic Autonomous Region Municipality of Rosita, North Atlantic Autonomous Region Municipality of Bonanza, North Atlantic Autonomous Region Municipality of Bonanza, North Atlantic Autonomous Region Municipalities of Bonanza and Siuna, North Atlantic Autonomous Region Municipalities of Bonanza and Rosita, North Atlantic Autonomous Region Municipality of Bonanza, North Atlantic Autonomous Region Municipalities of Siuna and Bonanza, North Atlantic Autonomous Region Municipality of Siuna, North Atlantic Autonomous Region Municipality of Siuna, North Atlantic Autonomous Region Municipality of Siuna, North Atlantic Autonomous Region Municipality of Siuna, North Atlantic Autonomous Region Municipality of Rosita, North Atlantic Autonomous Region Municipality of Rosita, North Atlantic Autonomous Region Municipalities of Rosita, Bonanza and Siuna, North Atlantic Autonomous Region Municipality of Rosita, North Atlantic Autonomous Region Municipalities of Waspan and Bonanza, North Atlantic Autonomous Region Municipalities of Waspan, Rosita and Bonanza, North Atlantic Autonomous Region Municipality of Bonanza, North Atlantic Autonomous Region Municipality of Bonanza, North Atlantic Autonomous Region Municipalities of Rosita and Bonanza, North Atlantic Autonomous Region Municipalities of Siuna and Bonanza, North Atlantic Autonomous Region

3. 1.

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. 1.

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 company’s general-purpose financial statements at December 31, 2014, the guarantees supporting the financial liabilities incurred by Bonanza Holding S.A. with

Banco Lafise Bancentro S.A. (Nicaragua) were cancelled through public deed No. 19 granted before notary public in the city of Managua on February 13, 2015.

NOTE 26.

Article 42 of Law 99/93 (amended by Article 211 of Law 1450/11) established environmental discharge duties for the direct and indirect use of water resources in any type of economic activity or service. In turn, Regulatory Decree 2667 of 2012 regulated the technical and legal issues to be taken into account in determining the duty payable by its passive subjects.

441 of 2013 setting the individual discharge limits of MINEROS S.A. and designating the company as passive subject of the environmental discharge duty. On May 22, 2014, the company filed with the Administrative Tribunal nullity and redress claim against such Resolution; at December 31, 2014, closing date of the general-purpose financial statements, no decision had been made.

Based on the powers conferred by Law to the respective environmental authorities, Corporación Autónoma Regional del Centro de Antioquia (CORANTIOQUIA) issued Resolution

Additionally, decision by CORANTIOQUIA about the request for reconsideration of the administrative act that recalculated the environmental discharge duty for 2013 is still pending..

Consolidated Financial Statement

SPECIAL CONTINGENCY

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