Inmet Announces Fourth Quarter Earnings from Operations of $112 Million Compared to $89 Million in the Fourth Quarter of 2011

Inmet Announces Fourth Quarter Earnings from Operations of $112 Million 
Compared to $89 Million in the Fourth Quarter of 2011 
TORONTO, CANADA -- (Marketwire) -- 02/21/13 -- Inmet Mining
Corporation (TSX:IMN) -  
All amounts in US dollars unless indicated otherwise 
Fourth quarter highlights 


 
--  Strong earnings from operations 
    Earnings from operations were $112 million compared to $89 million in
    the fourth quarter of 2011. This increase is due to the strong
    performance of our operations. Earnings were negatively affected by the
    timing of shipments at Cayeli and finalization adjustments, together
    totalling $11 million for the quarter or $0.15 per share. 
 
--  Copper and zinc production exceeded expectations 
    Our operations produced 111,700 tonnes of copper and 66,300 tonnes of
    zinc in 2012, exceeding our target ranges for the year. Las Cruces has
    consistently achieved monthly design capacity of 6,000 tonnes of copper
    cathode since first crossing this threshold in April 2012. 
 
--  Increase in closure liabilities for closed properties
    We recognized a charge of $10 million in earnings from operations, or
    $0.14 per share, for an increase in estimated costs for post-closure
    obligations at our closed properties this quarter. This compares to a
    charge of $16 million recognized in the fourth quarter of 2011 primarily
    as a result of a decrease in the discount rates we applied in
    determining the liabilities at period end. 
 
--  Net income reduced by foreign exchange losses
    Net income of $38 million this quarter reflects after-tax foreign
    exchange losses of $19 million, or $0.27 per share, mainly on US dollar
    cash held in our euro-based entities. Our excess cash balances are held
    in US dollar funds as we plan to use these funds for the construction of
    Cobre Panama. 
 
--  Construction of Cobre Panama progressing 
    By the end of the year, Minera Panama S.A. had entered into commitments
    for approximately $4.1 billion, representing 67 percent of estimated
    capital expenditures for the Cobre Panama project.  
 
--  Issuance of $500 million in senior unsecured notes
    On December 18, 2012, we issued $500 million in senior unsecured notes,
    the proceeds of which will be us
ed to fund development of Cobre Panama.
    The notes bear a coupon rate of interest of 7.5 percent and mature on
    June 1, 2021. 
 
--  First Quantum offer
    On January 9, 2013, First Quantum Minerals Ltd. (First Quantum)
    commenced an unsolicited offer to acquire all of Inmet Mining's issued
    and outstanding common shares for consideration of cash or First Quantum
    shares or a combination of cash and First Quantum shares. Inmet's Board
    of Directors, on the recommendation of its Special Committee of the
    independent directors and with input from its, and the Special
    Committee's, financial and legal advisors, has recommended that Inmet
    shareholders reject this offer for reasons as set out in the Directors'
    Circular mailed to shareholders. 
 
Key financial data                                                          
----------------------------------------------------------------------------
                                             three months ended December 31 
(thousands, except per share amounts)          2012        2011      change 
----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS                                                        
                                                                            
Sales                                                                       
Gross sales                                $259,868    $233,394         +11%
Net income                                                                  
Net income from continuing operations       $38,221     $46,544         -18%
Net income from continuing operations                                       
 per share                                    $0.56       $0.67         -16%
Net income from discontinued operations           -           -           - 
Net income from discontinued operations                                     
 per share                                        -           -           - 
Net income attributable to Inmet                                            
 shareholders                               $38,775      46,544         -17%
Net income per share                          $0.56       $0.67         -16%
Cash flow                                                                   
Cash flow provided by operating                                             
 activities                                $116,851     $70,768         +65%
Cash flow provided by operating                                             
 activities per share(1)                      $1.68       $1.02         +65%
                                                                            
Capital spending(2)                        $342,467     $57,100        +500%
----------------------------------------------------------------------------
                                                                            
OPERATING HIGHLIGHTS                                                        
Production                                                                  
  Copper (tonnes)                            27,600      26,200          +5%
  Zinc (tonnes)                              20,700      17,900         +16%
  Pyrite (tonnes)                           222,500     210,500          +6%
Copper cash cost (US $ per pound)(3)          $0.85       $0.82          +4%
----------------------------------------------------------------------------
 
----------------------------------------------------------------------------
                                                     year ended December 31 
(thousands, except per share amounts)          2012        2011      change 
----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS                                                        
                                                                            
Sales                                                                       
Gross sales                              $1,123,977    $947,911         +19%
Net income                                                                  
Net income from continuing operations      $330,076    $256,314         +29%
Net income from continuing operations                                       
 per share                                    $4.78       $3.86         +24%
Net income from discontinued operations           -      80,786        -100%
Net income from discontinued operations                                     
 per share                                        -       $1.22        -100%
Net income attributable to Inmet                                            
 shareholders                              $331,211    $337,100          -2%
Net income per share                          $4.78       $5.08          -6%
Cash flow                                                                   
Cash flow provided by operating                                             
 activities                                $543,392    $391,976         +39%
Cash flow provided by operating                                             
 activities per share(1)                      $7.83       $5.90         +33%
                                             
                               
Capital spending(2)                        $785,761    $201,909        +289%
----------------------------------------------------------------------------
                                                                            
OPERATING HIGHLIGHTS                                                        
Production                                                                  
  Copper (tonnes)                           111,700      84,800         +32%
  Zinc (tonnes)                              66,300      80,400         -18%
  Pyrite (tonnes)                           891,700     804,900         +11%
Copper cash cost (US $ per pound)(3)          $0.88       $0.86          +2%
----------------------------------------------------------------------------
                                     as at December 31    as at December 31 
FINANCIAL CONDITION                               2012                 2011 
(US millions, except ratio)                                                 
Current ratio                                 8.4 to 1             9.3 to 1 
Net working capital balance                     $2,358               $1,263 
Cash balance (including bonds and                                           
 other securities; millions)                    $3,618               $1,655 
Gross debt(4)                                   $1,960                  $17 
Net debt (net cash)(5)                         ($1,658)             ($1,639)
Shareholders' equity attributable                                           
 to Inmet shareholders                          $3,972               $3,306 
----------------------------------------------------------------------------
(1) Cash flow provided by operating activities divided by average shares    
    outstanding for the period.                                             
(2) The year ended December 31, 2012 includes capital spending of $713      
    million at Cobre Panama. The year ended December 31, 2011 includes      
    capital spending of $129 million at Cobre Panama.                       
(3) Copper cash cost per pound is a non-GAAP financial measure - see        
    Supplementary financial information on pages 31 to 33.                  
(4) Gross debt includes long-term debt and the current portion of long-term 
    debt                                                                    
(5) Net debt (net cash) is a non-GAAP measure defined as long-term debt less
    cash and short-term investments, including bonds and other securities.  

 
Fourth quarter press release 
Where to find it 


 
Our financial results                                   5                   
Key changes in 2012                                     5                   
Understanding our performance                           5                   
  Earnings from operations                              8                   
  Corporate costs                                       13                  
Results of our operations                               15                  
  Cayeli                                                16                  
  Las Cruces                                            19                  
  Pyhasalmi                                             21                  
Status of our development project                       23                  
  Cobre Panama                                          23                  
Managing our liquidity                                  26                  
Financial condition                                     30                  
Supplementary financial information                     31                  

 
In this press release, Inmet means Inmet Mining Corporation and we,
us and our mean Inmet and/or its subsidiaries and joint ventures.
This quarter refers to the three months ended December 31, 2012.  
Change in Inmet's functional and presentation currencies to the US
dollar  
The decision to construct Cobre Panama has significantly increased
Inmet's exposure to the US dollar. Effective June 1, 2012, the US
dollar was adopted as Inmet's functional currency on a prospective
basis. We translated Inmet's May 31, 2012 financial statement items
from Canadian dollars to US dollars using the May 31, 2012 exchange
rate US $0.97 per Canadian dollar (Transition Rate). Our operating
entities continue to measure the items in their financial statements
using their functional currencies; Cayeli and Cobre Panama use the US
dollar, and Pyhasalmi and Las Cruces use the euro. 
At the same time we changed our presentation currency from Canadian
dollars to US dollars and now report our results in US dollars. We
have restated all comparative financial statements from previously
reported Canadian dollar amounts to US dollars using the Transition
Rate. 
Caution with respect to forward-looking statements and information 
Securities regulators encourage companies to disclose forward-looking
information to help investors understand a company's future
prospects. This interim report contains statements about our
business, results of operation and future financial condition.  
These statements are "forward-looking" because we have used what we
know and expect today to make a statement about the future.
Forward-looking statements usually include words like may, expect,
anticipate, believe or other similar words. Our objectives and
outlook have been prepared based on our existing operations,
expectations and circumstances. Actual events and results could be
substantially different, however, because of the risks and
uncertainties associated with our business or events that happen
after the date of this interim report. 
You should not place undue reliance on forward-looking statements. As
a general policy, we do not update forward-looking statements except
if there is an offering document or where securities legislation
requires us to do so.  
Although we have attempted to identify factors that would cause
actual actions, events or results to differ materially from those
disclosed in the forward-looking statements or information, there may
be other factors that cause actions, events or results not to be as
anticipated, estimated or intended. Also, many of the factors are
beyond the control of Inmet. Accordingly, readers should not place
undue reliance on forward-looking statements or information. Inmet
undertakes no obligation to update forward-looking statements or
information as a result of new information after the date of this
interim report except as required by law. All forward-looking
statements and information herein are qualified by this cautionary
statement. 
Our financial results  


 
----------------------------------------------------------------------------
                                             three months ended December 31 
(thousands, except per share amounts)          2012        2011      change 
----------------------------------------------------------------------------
EARNINGS FROM OPERATIONS(1)                                                 
Cayeli                                      $16,493     $34,668         -52%
Las Cruces                                   73,397      40,384         +82%
Pyhasalmi                                    32,395      30,190          +7%
Other                                      
  (9,924)    (16,190)        -39%
----------------------------------------------------------------------------
                                            112,361      89,052         +26%
----------------------------------------------------------------------------
DEVELOPMENT AND EXPLORATION                                                 
Corporate development and exploration        (8,620)     (6,333)        +36%
----------------------------------------------------------------------------
CORPORATE COSTS                                                             
General and administration                  (14,896)     (7,487)        +99%
Investment and other income                 (16,279)     (3,883)       +319%
Finance costs                                (2,632)     (2,314)        +14%
Income and capital taxes                    (31,713)    (22,491)        +41%
----------------------------------------------------------------------------
                                            (65,520)    (36,175)        +81%
----------------------------------------------------------------------------
Net income from continuing operations        38,221      46,544         -18%
Income from discontinued operation (net                                     
 of taxes)                                        -           -           - 
Non-controlling interest                        554           -        +100%
----------------------------------------------------------------------------
Net income attributable to Inmet                                            
 shareholders                               $38,775     $46,544         -17%
----------------------------------------------------------------------------
Income from continuing operations per                                       
 common share                                 $0.56       $0.67         -16%
----------------------------------------------------------------------------
Diluted income from continuing                                              
 operations per common share                  $0.56       $0.67         -16%
----------------------------------------------------------------------------
Basic net income per common share             $0.56       $0.67         -16%
----------------------------------------------------------------------------
Diluted net income per common share           $0.56       $0.67         -16%
----------------------------------------------------------------------------
Weighted average shares outstanding          69,366      69,332           - 
----------------------------------------------------------------------------
 
----------------------------------------------------------------------------
                                                     year ended December 31 
(thousands, except per share amounts)          2012        2011      change 
----------------------------------------------------------------------------
EARNINGS FROM OPERATIONS(1)                                                 
Cayeli                                     $162,879    $154,618          +5%
Las Cruces                                  279,250     122,373        +128%
Pyhasalmi                                   111,357     138,597         -20%
Other                                       (17,104)    (16,190)         +6%
----------------------------------------------------------------------------
                                            536,382     399,398         +34%
----------------------------------------------------------------------------
DEVELOPMENT AND EXPLORATION                                                 
Corporate development and exploration       (35,616)    (28,273)        +26%
----------------------------------------------------------------------------
CORPORATE COSTS                                                             
General and administration                  (53,522)    (33,306)        +61%
Investment and other income                  24,206      29,748         -19%
Finance costs                               (10,070)     (9,182)        +10%
Income and capital taxes                   (131,304)   (102,071)        +29%
----------------------------------------------------------------------------
                                           (170,690)   (114,811)        +49%
----------------------------------------------------------------------------
Net income from continuing operations       330,076     256,314         +29%
Income from discontinued operation (net                                     
 of taxes)                                        -      80,786        -100%
Non-controlling interest                      1,135           -        +100%
----------------------------------------------------------------------------
Net income attributable to Inmet                                            
 shareholders                              $331,211    $337,100          -2%
----------------------------------------------------------------------------
Income from continuing operations per                                       
 common share                                 $4.78       $3.86         +24%
----------------------------------------------------------------------------
Diluted income from continuing                                              
 operations per common share                  $4.75       $3.85         +23%
----------------------------------------------------------------------------
Basic net income per common share             $4.78       $5.08          -6%
----------------------------------------------------------------------------
Diluted net income per common share           $4.75       $5.06          -6%
----------------------------------------------------------------------------
Weighted average shares outstanding          69,362      66,432          +4%
----------------------------------------------------------------------------
(1) Gross sales less smelter processing charges and freight, cost of sales  
    including depreciation and provisions for mine reclamation at closed    
    properties.                                                             
                                                                            
Key changes in 2012                                                         
                                                                            
----------------------------------------------------------------------------
                             three months ended      year ended             
(millions)                          December 31     December 31     see page
----------------------------------------------------------------------------
EARNINGS FROM OPERATIONS                                                    
Market Factors                                                              
Higher (lower) copper prices                 $1            ($35)           8
Lower zinc prices                             -              (7)           8
Lower other metal prices         
            (6)             (9)           8
Lower smelter processing                                                    
 charges                                      -               4           10
Foreign exchange - decreased                                                
 operating costs                              1               5           11
Operational Factors                                                         
Higher sales volume at Las                                                  
 Cruces, net of production                                                  
 costs                                       27             196           20
Higher (lower) sales volumes                                                
 at our other mines                          (2)             11            8
Higher operating costs at our                                               
 other mines                                 (5)             (9)          11
Higher depreciation due to                                                  
 Las Cruces production                       (3)            (17)          12
Lower (higher) charge for                                                   
 mine rehabilitation at                                                     
 closed properties                            6              (1)          11
Other                                         4              (1)            
----------------------------------------------------------------------------
Increase in operating                                                       
 earnings, compared to 2011                  23             137             
Higher taxes from higher                                                    
 income                                      (9)            (29)          14
Higher corporate development,                                               
 exploration and                                                            
 administrative costs                       (10)            (28)          13
Foreign exchange changes                    (11)             (4)          13
Other                                        (1)             (2)            
----------------------------------------------------------------------------
Higher (lower) net income                                                   
 from continuing operations                                                 
 compared to 2011                            (8)             74             
Lower income from                                                           
 discontinued operation - Ok                                                
 Tedi                                         -             (81)          14
Non-controlling interest                      -               1             
----------------------------------------------------------------------------
Lower net income attributable                                               
 to Inmet shareholders                                         
             
 compared to 2011                           ($8)            ($6)            
----------------------------------------------------------------------------

 
Understanding our performance 
Metal prices 
The table below shows the average metal prices we realized this
quarter and year to date. 
The prices we realize include finalization adjustments - see Gross
sales on page 8. 


 
----------------------------------------------------------------------------
                    three months ended December 31   year ended December 31 
                          2012      2011    change     2012    2011  change 
----------------------------------------------------------------------------
Copper (per pound)       $3.48     $3.51        -1%   $3.59   $3.84      -7%
Zinc (per pound)         $0.88     $0.87        +1%   $0.88   $0.97      -9%
----------------------------------------------------------------------------

 
Copper 
Copper prices on the London Metals Exchange (LME) averaged $3.61 per
pound this year, or 10 percent lower than the average in 2011 of
$4.00 per pound. Although average copper prices were lower in 2012,
prices recovered substantially from the sharp decline that occurred
in the fourth quarter of 2011. LME copper prices averaged $3.59 per
pound in the fourth quarter, an increase of 6 percent over the
comparative quarter of 2011.  
Zinc 
LME zinc prices averaged $0.89 per pound this quarter, an increase of
3 percent over the fourth quarter of 2011. For the year, LME zinc
prices averaged $0.88 per pound, 11 percent lower than the average
2011 zinc price of $0.99 per pound.  
Exchange rates 
Exchange rates affect our revenue and earnings. The table below shows
the average exchange rates we realized this quarter and year to date
compared to 2011. 


 
----------------------------------------------------------------------------
                            three months ended            year ended        
                                December 31               December 31       
                             2012     2011 change      2012     2011 change 
----------------------------------------------------------------------------
Exchange rates                                                              
  1 C$ to US$               $1.01    $0.98     +3%    $1.00    $1.01     -1%
  1 euro to US$             $1.30    $1.35     -4%    $1.29    $1.39     -7%
  1 US$ to Turkish lira   TL 1.79  TL 1.83     -2%  TL 1.80  TL 1.65     +9%
----------------------------------------------------------------------------

 
Compared to the same quarter last year, the value of the US dollar
depreciated 3 percent relative to the Canadian dollar, and
appreciated 4 percent relative to the euro and 2 percent relative to
the Turkish lira.  
Our earnings are affected by changes in foreign currency exchange
rates when we: 


 
--  translate the operating expenses of our euro-based operations from their
    functional currency to US dollars 
--  revalue US dollars that we hold in cash at our operations whose
    functional currency is the euro 
--  translate Cayeli's Turkish lira denominated costs into its functional
    currency (US dollars). 

 
Prior to the adoption of the US dollar as Inmet's functional currency
effective June 1, 2012, our earnings were affected by changes in
foreign currency exchange rates when we revalued our US dollar
denominated cash, bonds and other securities and senior unsecured
notes held corporately at Inmet.  
Treatment charges for zinc decreased this year 
Treatment charges are one component of smelter processing charges. We
also pay smelters for content losses and price participation.  
The table below shows the average charges we realized this quarter
and year to date. Treatment charges for zinc concentrates were lower
this year than in 2011, reflecting agreements we have signed with
customers. 


 
----------------------------------------------------------------------------
                     three months ended December 31  year ended December 31 
(US$)                     2012      2011     change     2012   2011  change 
----------------------------------------------------------------------------
Treatment charges                                                           
  Copper (per dry                                                           
   metric tonne of                                                          
   concentrate)            $54       $55         -2%     $58    $57      +2%
  Zinc (per dry                                                             
   metric tonne of                                                          
   concentrate)           $193      $184         +5%    $184   $216     -15%
----------------------------------------------------------------------------
Price participation                                                         
  Copper (per pound)     $0.00     $0.02       -100%   $0.00  $0.02    -100%
  Zinc (per pound)       $0.00    ($0.02)      +100%   $0.00 ($0.01)   +100%
----------------------------------------------------------------------------
Freight charges                                                             
  Copper (per dry                                                           
   metric tonne of                                                          
   concentrate)            $47       $58        -19%     $53    $51      +4%
  Zinc (per dry                                                             
   metric tonne of                                                          
   concentrate)            $26       $11       +136%     $25    $22     +14%
----------------------------------------------------------------------------

 
Statutory tax rates  
The table below shows the statutory tax rates for each of our taxable
operating mines. 


 
----------------------------------------------------------------------------
                                               2012 
       2011      change 
----------------------------------------------------------------------------
Statutory tax rates                                                         
  Cayeli                                         24%         24%          - 
  Las Cruces                                     30%         30%          - 
  Pyhasalmi                                    24.5%         26%       -1.5%
----------------------------------------------------------------------------

 
Earnings from operations  


 
----------------------------------------------------------------------------
                                             three months ended December 31 
(thousands)                                      2012       2011     change 
----------------------------------------------------------------------------
Gross sales                                  $259,868   $233,394        +11%
Smelter processing charges and freight        (26,155)   (27,330)        -4%
Cost of sales:                                                              
  Direct production costs                     (85,739)   (75,962)       +13%
  Inventory changes                             4,549      6,780        -33%
  Other non-cash expenses                     (10,083)   (20,995)       -52%
  Depreciation                                (30,079)   (26,835)       +12%
----------------------------------------------------------------------------
Earnings from operations                     $112,361    $89,052        +26%
----------------------------------------------------------------------------
 
----------------------------------------------------------------------------
                                                     year ended December 31 
(thousands)                                      2012       2011     change 
----------------------------------------------------------------------------
Gross sales                                $1,123,977   $947,911        +19%
Smelter processing charges 
and freight       (113,996)  (126,569)       -10%
Cost of sales:                                                              
  Direct production costs                    (321,385)  (292,893)       +10%
  Inventory changes                            (3,740)       645       -680%
  Other non-cash expenses                     (21,502)   (24,427)       -12%
  Depreciation                               (126,972)  (105,269)       +21%
----------------------------------------------------------------------------
Earnings from operations                     $536,382   $399,398        +34%
----------------------------------------------------------------------------

 
Significantly higher gross sales this year  


 
----------------------------------------------------------------------------
                                             three months ended December 31 
(thousands)                                2012          2011        change 
----------------------------------------------------------------------------
Gross sales by operation                                                    
  Cayeli                                $58,742       $77,124           -24%
  Las Cruces                            136,909        97,731           +40%
  Pyhasalmi                              64,217        58,539           +10%
----------------------------------------------------------------------------
                                       $259,868      $233,394           +11%
----------------------------------------------------------------------------
Gross sales by metal                                                        
  Copper                               $198,076      $177,344           +12%
  Zinc                                   36,533        33,307           +10%
  Other                                  25,259        22,743           +11%
----------------------------------------------------------------------------
                                       $259,868      $233,394           +11%
----------------------------------------------------------------------------
 
----------------------------------------------------------------------------
                                                     year ended December 31 
(thousands)                                2012          2011        change 
----------------------------------------------------------------------------
Gross sales by operation                                                    
  Cayeli                               $358,964      $342,458            +5%
  Las Cruces                            538,981       345,568           +56%
  Pyhasalmi                             226,032       259,885           -13%
----------------------------------------------------------------------------
                                     $1,123,977      $947,911           +19%
----------------------------------------------------------------------------
Gross sales by metal                                                        
  Copper                               $902,575      $674,116           +34%
  Zinc                                  125,362       171,538           -27%
  Other                                  96,040       102,257            -6%
----------------------------------------------------------------------------
                                     $1,123,977      $947,911           +19%
----------------------------------------------------------------------------

 
Key components of the change in gross sales: increasing sales volumes
at Las Cruces, lower realized copper prices for the year  


 
----------------------------------------------------------------------------
                                    three months ended           year ended 
(millions)                                 December 31          December 31 
----------------------------------------------------------------------------
Higher (lower) copper prices                        $1                 ($35)
Lower zinc prices                                    -                   (7)
Lower other metal prices                            (6)                  (9)
Higher sales volumes at Las Cruces                  35                  221 
Higher (lower) copper sales                                                 
 volumes at Cayeli                                 (14)                  44 
Higher (lower) zinc sales volumes                    3                  (39)
Higher other sales volumes                           7                    - 
Other                                                -                    1 
----------------------------------------------------------------------------
Higher gross sales, compared to                                             
 2011                                              $26                 $176 
----------------------------------------------------------------------------

 
We record sales that settle during the reporting period using the
metal price on the day they settle. For sales that have not settled,
we use an estimate based on the month we expect the sale to settle
and the forward price of the metal at the end of the reporting
period. We recognize the difference between our estimate and the
final price by adjusting our gross sales in the period when we settle
the sale (finalization adjustment). 
This quarter, we recorded $5 million in negative finalization
adjustments from third quarter shipments.  
At the end of this quarter, the following sales had not been settled: 


 
--  20 million pounds of copper provisionally priced at US $3.59 per pound 
--  19 million pounds of zinc provisionally priced at US $0.94 per pound. 

 
The finalization adjustment we record for these sales will depend on
the actual price we receive when they settle, which can be up to five
months from the time we initially record the sales. We expect these
sales to settle in the following months: 


 
----------------------------------------------------------------
------------
(millions of pounds)                                     copper         zinc
----------------------------------------------------------------------------
January 2013                                                 16           19
February 2013                                                 4            -
----------------------------------------------------------------------------
Unsettled sales at December 31, 2012                         20           19
----------------------------------------------------------------------------

 
Higher copper sales volumes, lower zinc sales volumes this year 
Our sales volumes are directly affected by the amount of production
from our mines and our ability to ship to our customers. This
quarter, timing of shipments resulted in copper sales volumes lagging
production volumes by a combined 1,900 tonnes as compared to 3,100
tonnes in the fourth quarter of 2011.  
Sales volumes 


 
----------------------------------------------------------------------------
                                             three months ended December 31 
                                               2012        2011      change 
----------------------------------------------------------------------------
Copper contained in concentrate               8,300      10,300         -19%
Copper cathode (tonnes)                      17,400      12,800         +36%
----------------------------------------------------------------------------
Total copper (tonnes)                        25,700      23,100         +11%
Zinc (tonnes)                                19,000      17,300         +10%
Pyrite (tonnes)                             299,700     175,900         +70%
----------------------------------------------------------------------------
 
----------------------------------------------------------------------------
                                                     year ended December 31 
                                               2012        20
11      change 
----------------------------------------------------------------------------
Copper contained in concentrate              46,600      41,200         +13%
Copper cathode (tonnes)                      68,800      42,000         +64%
----------------------------------------------------------------------------
Total copper (tonnes)                       115,400      83,200         +39%
Zinc (tonnes)                                65,100      84,400         -23%
Pyrite (tonnes)                             852,500     809,200          +5%
----------------------------------------------------------------------------

 
Production 


 
----------------------------------------------------------------------------
                                             three months ended December 31 
Inmet's share                          2012            2011          change 
----------------------------------------------------------------------------
Copper (tonnes)                                                             
  Cayeli                              7,000           8,600             -19%
  Las Cruces                         17,300          14,100             +23%
  Pyhasalmi                           3,300           3,500              -6%
----------------------------------------------------------------------------
                                     27,600          26,200              +5%
----------------------------------------------------------------------------
Zinc (tonnes)                                                               
  Cayeli                             11,100          11,300              -2%
  Pyhasalmi                           9,700           6,600             +47%
----------------------------------------------------------------------------
                                     20,800          17,900             +16%
----------------------------------------------------------------------------
Pyrite (tonnes)                                                             
  Pyhasalmi                         222,500         210,500              +6%
----------------------------------------------------------------------------
 
----------------------------------------------------------------------------
                                                     year ended December 31 
Inmet's share                          2012            2011          change 
----------------------------------------------------------------------------
Copper (tonnes)                                                             
  Cayeli                             31,400          28,700              +9%
  Las Cruces                         67,700          42,100             +61%
  Pyhasalmi                          12,600          14,000             -10%
----------------------------------------------------------------------------
                                    111,700          84,800             +32%
----------------------------------------------------------------------------
Zinc (tonnes)                                                               
  Cayeli                             40,700          48,100             -15%
  Pyhasalmi                          25,600          32,300             -21%
----------------------------------------------------------------------------
                                     66,300          80,400             -18%
----------------------------------------------------------------------------
Pyrite (tonnes)                                                             
  Pyhasalmi                         891,700         804,900             +11%
----------------------------------------------------------------------------
 
-----------------------------------------------
                                               
Inmet's share                    objective 2013
-----------------------------------------------
Copper (tonnes)                                
  Cayeli                        27,800 - 30,900
  Las Cruces                    68,500 - 72,000
  Pyhasalmi                     12,000 - 13,400
-----------------------------------------------
                              108,300 - 116,300
-----------------------------------------------
Zinc (tonnes)                                  
  Cayeli                        35,900 - 39,900
  Pyhasalmi                     20,300 - 22,500
-----------------------------------------------
                                56,200 - 62,400
-----------------------------------------------
Pyrite (tonnes)                                
  Pyhasalmi                             820,000
-----------------------------------------------

 
2012 production compared to target 
Copper production slightly exceeded our target range as copper grades
and recoveries at Cayeli exceeded expectations. Zinc production also
exceeded our target range as zinc grades and recoveries at both
Cayeli and Pyhasalmi were higher than expected. We produced more
pyrite at Pyhasalmi than our target to meet the increased customer
demand in China.  
2012 production compared to 2011 
Copper production was higher than in 2011 mainly because of higher
production at Las Cruces. Zinc production was lower than in 2011 due
to lower zinc grades at Cayeli and Pyhasalmi. This quarter, zinc
production was higher than the fourth quarter of 2011 due to higher
grades and recoveries at Pyhasalmi. Pyhasalmi increased pyrite
production this year to meet higher customer demand. 
2013 outlook for sales 
We use our production objectives to estimate our sales target. 
We expect overall copper production in 2013 of between 108,300 tonnes
and 116,300 tonnes, in line with 2012.  
We expect zinc production volumes in 2013 to decrease by
approximately 10 percent as zinc grades trend more towards overall
reserve grades at Cayeli and Pyhasalmi.  
Our revenues are also affected by the metal prices we receive.  
According to international research, copper supply should grow
modestly in 2013. Production
 from the start-up of new operations and
improvements at existing mines could be somewhat offset by the risk
of mine underperformance, delays to existing or new development
projects and possible labour disruptions. Continued strong demand is
expected in China, coupled with continued economic recovery in Europe
and the United States. The small expected market surplus should
support copper prices in 2013 at a level similar to 2012. 
For zinc, modest increases are expected in both market supply and
demand with a contracting market surplus. These market trends should
support average prices in 2013 above those of 2012. 
Zinc smelter processing charges down, copper charges up this year 


 
----------------------------------------------------------------------------
                                             three months ended December 31 
(thousands)                                  2012         2011       change 
----------------------------------------------------------------------------
Smelter processing charges and                                              
 freight by operation                                                       
 Cayeli                                   $12,856      $14,373          -11%
 Las Cruces                                   861          351         +145%
 Pyhasalmi                                 12,438       12,606           -1%
----------------------------------------------------------------------------
                                          $26,155      $27,330           -4%
----------------------------------------------------------------------------
Smelter processing charges and                                              
 freight by metal                                                           
 Copper                                    $8,425      $10,986          -23%
 Zinc                                      13,479       11,251          +20%
 Other                                      4,251        5,093          -17%
------------
----------------------------------------------------------------
                                          $26,155      $27,330           -4%
----------------------------------------------------------------------------
Smelter processing charges by type,                                         
 and freight                                                                
 Copper treatment and refining                                              
  charges                                  $2,923       $3,683          -21%
 Zinc treatment charges                     7,101        6,199          +15%
 Copper price participation                     -          416         -100%
 Zinc price participation                     (56)        (648)         -91%
 Content losses                             8,199        8,930           -8%
 Freight                                    7,796        8,449           -8%
 Other                                        192          301          -37%
----------------------------------------------------------------------------
                                          $26,155      $27,330           -4%
----------------------------------------------------------------------------
 
----------------------------------------------------------------------------
                                                     year ended December 31 
(thousands)                                  2012         2011       change 
----------------------------------------------------------------------------
Smelter processing charges and                                              
 freight by operation                                                       
 Cayeli                                   $67,348      $69,424           -3%
 Las Cruces                                 2,374        1,188         +100%
 Pyhasalmi                                 44,274       55,957          -21%
----------------------------------------------------------------------------
                                         $113,996     $126,569          -10%
----------------------------------------------------------------------------
Smelter processing charges and                                              
 freight by metal                                                           
 Copper                                   $49,439      $42,368          +17%
 Zinc                                      46,296       63,500          -27%
 Other                                     18,261       20,701          -12%
----------------------------------------------------------------------------
                                         $113,996     $126,569          -10%
----------------------------------------------------------------------------
Smelter processing charges by type,                                         
 and freight                                                                
 Copper treatment and refining                                              
  charges                                 $17,847      $14,410          +24%
 Zinc treatment charges                    23,402       34,368          -32%
 Copper price participation                     -        1,542         -100%
 Zinc price participation                     (10)      (1,872)         -99%
 Content losses                            36,626       42,427          -14%
 Freight                                   35,066       34,477           +2%
 Other                                      1,065        1,217          -12%
----------------------------------------------------------------------------
                                         $113,996     $126,569          -10%
----------------------------------------------------------------------------

 
For the year, and the quarter, changes in our copper treatment and
refining charges are due to changes in copper-in concentrate sales
volumes. Sales volumes also drove variations in zinc treatment
charges at Cayeli and Pyhasalmi, in addition to more favorable terms
with smelters, reflecting a deficit in the zinc concentrate market at
the time our 2012 contracts were negotiated. 
2013 outlook for smelter processing charges and freight  
We expect our costs for copper treatment and refining to be higher in
2013 than in 2012 as the global copper concentrate supply is expected
to narrowly exceed smelter capacity in 2013, shifting the market to a
slight surplus position towards the end of the year. We do not expect
to pay copper price participation in 2013. 
We expect total zinc smelter processing charges, including price
participation, to be slightly higher than 2012. 
Las Cruces sells its copper cathode production directly to buyers in
the Spanish and Mediterranean markets and therefore does not incur
smelting processing charges and has relatively low freight costs.  
We expect our ocean freight costs to be similar to rates realized in
2012.  
Higher direct production costs and cost of sales  


 
----------------------------------------------------------------------------
                                             three months ended December 31 
(thousands)                                  2012         2011       change 
----------------------------------------------------------------------------
Direct production costs by operation                                        
  Cayeli                                  $25,758      $23,991           +7%
  Las Cruces                               43,506       37,798          +15%
  Pyhasalmi                                16,475       14,173          +16%
----------------------------------------------------------------------------
Total direct production costs              85,739       75,962          +13%
Inventory changes                          (4,549)      (6,780)         -33%
Charges for mine rehabilitation and                                         
 other non-cash charges                    10,083       20,995          -52%
-------------------------------------------------------------------
---------
Total cost of sales (excluding                                              
 depreciation)                            $91,273      $90,177           +1%
----------------------------------------------------------------------------
 
----------------------------------------------------------------------------
                                                     year ended December 31 
(thousands)                                  2012        2011        change 
----------------------------------------------------------------------------
Direct production costs by operation                                        
  Cayeli                                  $94,330     $93,237            +1%
  Las Cruces                              167,142     142,941           +17%
  Pyhasalmi                                59,913      56,715            +6%
----------------------------------------------------------------------------
Total direct production costs             321,385     292,893           +10%
Inventory changes                           3,740        (645)         -680%
Charges for mine rehabilitation and                                         
 other non-cash charges                    21,502      24,427           -12%
----------------------------------------------------------------------------
Total cost of sales (excluding                                              
 depreciation)                           $346,627    $316,675            +9%
----------------------------------------------------------------------------

 
Direct production costs  
Direct production costs were $28 million higher this year ($10
million higher this quarter) mainly because higher production at Las
Cruces increased variable electricity, consumables and royalty costs,
somewhat offset by the impact of the weaker euro relative to the US
dollar.  
Charges for mine rehabilitation and other non-cash charges  
These charges include accruals for asset retirement obligations,
provisions for severance
 and retirement and other non-cash expenses.
We recorded an additional $17 million this year for post-closure
liabilities at our closed properties, including $10 million in the
fourth quarter. $7 million of these costs related to the decrease in
discount rates and the US dollar to Canadian dollar exchange rate we
applied in determining the liabilities in the first nine months of
2012. Under IFRS, we are required to revalue our asset retirement
obligations for changes in market risk-free interest rates - this
discount rate decrease reflects the current low interest rate
environment. Additionally, this quarter we recognized a $4 million
increase in our estimated closure obligations at Troilus for ongoing
treatment of tailings effluent for suspended solids and associated
labour costs, as well as increased estimated cash flows required to
remediate our other closed properties. In 2011, we recorded increased
asset retirement obligations of $16 million: $5 million for closure
liabilities at Troilus related to an increase in our estimated
closure obligations for ongoing treatment of tailings effluent for
suspended solids and associated labour costs and $11 million from a
decrease in the discount rates we applied. 
2013 outlook for cost of sales (excluding depreciation) 
We expect consolidated direct production costs to be slightly higher
in 2013 because higher production at Las Cruces will increase total
variable costs, primarily electricity, consumables and royalties. We
also expect slightly higher direct production costs at Cayeli in 2013
due to increased labour and electricity costs, and increased costs
associated with higher expected tonnes processed in 2013 than in
2012.  
Our budget for 2013 assumes our costs at Pyhasalmi will be similar to
2012. 
Certain variable costs may continue to affect our earnings, depending
on metal prices: 


 
- royalties at Cayeli are affected by its net income                        
- royalties at Las Cruces are affected by its net sales.                    

 
The total amount we report in US dollars will also be affected by the
value of the euro and the Turkish lira relative to the US dollar. 
Additionally, changes in market risk-free interest rates could
significantly increase or decrease our costs related to mine
rehabilitation at our closed properties. At December 31, 2012, the
interest rates we used to value our asset retirement obligations at
our closed properties ranged from 1.1 percent to 2.4 percent. 
Higher depreciation 


 
----------------------------------------------------------------------------
                                             three months ended December 31 
(thousands)                                2012          2011        change 
----------------------------------------------------------------------------
Depreciation by operation                                                   
  Cayeli                                 $4,702        $5,391           -13%
  Las Cruces                             22,331        19,129           +17%
  Pyhasalmi                               3,046         2,315           +32%
----------------------------------------------------------------------------
                                        $30,079       $26,835           +12%
----------------------------------------------------------------------------
 
----------------------------------------------------------------------------
                                                     year ended December 31 
(thousands)                                2012          2011        change 
----------------------------------------------------------------------------
Depreciation by operation                                                   
  Cayeli                                $24,692       $21,337           +16%
  Las Cruces                             92,037        74,931           +23%
  Pyhasalmi                              10,243         9,001           +14%
----------------------------------------------------------------------------
                                       $126,972      $105,269           +21%
----------------------------------------------------------------------------

 
Depreciation was higher this year than last mainly because of higher
copper sales volumes at Las Cruces and Cayeli.  
2013 outlook for depreciation 
We expect depreciation to be higher in 2013 because of higher sales
volumes at Las Cruces.  
Corporate costs 
Corporate costs include corporate development and exploration,
general and administration costs, taxes, interest and other income.  
Spending on corporate development and exploration 
Corporate development and exploration costs were approximately $8
million higher than 2011, which mainly reflects our higher budget for
2012 to explore for world class deposits.  
2013 outlook for corporate development and exploration 
We expect spending on exploration in 2013 to be slightly higher than
2012, focusing on Mexico, Chile and Peru, where we have established
field offices, the United States and on Cobre Panama to drill more
exploration targets on the concession there. We will also continue
exploring in areas around our existing operations.  
General and administration 
General and administration costs are largely for management
remuneration, governance and strategy. Costs in 2012 were $19 million
higher than 2011 mainly because stock-based compensation expense was
$10 million higher. As a result of the decision to proceed with full
construction of Cobre Panama, we recognized a non-cash stock-based
compensation expense of $8 million this year on Long-Term Incentive
Plan (LTIP) units issued in previous years that relate to the
project. This expense represents the cumulative impact from the
units' grant dates to December 31, 2012, on a 100 percent award
basis, as no value was attributed to these units prior to a positive
construction decision for Cobre Panama. See note 22c to our 2011
annual financial statements for more details on thes
e units. The
increase in general and administration expense also reflects
increased human resources and other costs supporting the growth of
the business and construction activities for Cobre Panama.  
2013 outlook for general and administration 
We expect general and administration costs in 2013 to be similar to
those in 2012. 
Investment and other income  


 
----------------------------------------------------------------------------
                                    three months ended            year ended
                                           December 31           December 31
(thousands)                            2012       2011       2012       2011
----------------------------------------------------------------------------
Interest income                      $3,818     $4,668    $15,144    $16,099
Foreign exchange gain (loss)        (19,608)    (8,327)     6,270     10,446
Dividend and royalty income             759      1,460      2,988      2,944
Other                                (1,248)    (1,684)      (196)       259
----------------------------------------------------------------------------
                                   ($16,279)   ($3,883)   $24,206    $29,748
----------------------------------------------------------------------------

 
Foreign exchange gains and losses 
We have foreign exchange gains or losses when we revalue certain
foreign denominated assets and liabilities. 
Our foreign exchange gains and losses were from: 


 
----------------------------------------------------------------------------
                                   three months ended            year ended 
                                          December 31           December 31 
(thousands)                           2012       2011       2012       2011 
----------------------------------------------------------------------------
Translation of US dollar cash                                               
 held by Corporate prior to June                 
                           
 2012 inclusive of proceeds of                                              
 notes offering                          -          5     27,338     (8,001)
Translation of US dollar senior                                             
 unsecured notes prior to June                                              
 2012                                    -          -    (16,884)         - 
Translation of US dollar bonds                                              
 and other securities prior to                                              
 June 2012                               -     (8,321)     4,330     11,232 
Translation of US dollar cash                                               
 held in euro-based entities       (14,771)         -    (15,998)         - 
Translation of Cdn dollar cash                                              
 held by Corporate subsequent to                                            
 May 2012                             (357)         -      2,231          - 
Translation of Cdn dollar bonds                                             
 and other securities subsequent                                            
 to May 2012                        (2,067)         -      7,912          - 
Translation of other monetary                                               
 assets and liabilities             (2,413)       (11)    (2,659)     7,215 
----------------------------------------------------------------------------
                                  ($19,608)   ($8,327)    $6,270    $10,446 
----------------------------------------------------------------------------

 
We recognized net foreign exchange gains of $15 million this year
from the revaluation of US dollar denominated cash, bonds and other
securities and the senior unsecured notes held in Inmet prior to the
change in its functional currency from the Canadian dollar to the US
dollar effective June 1, 2012. As of this date, Inmet's US
dollar-denominated monetary assets and liabilities were no longer
revalued. Instead we began recognizing foreign exchange impacts on
the revaluation of Inmet's Canadian dollar denominated monetary
assets and liabilities with a gain of $10 million in 2012 on Canadian
dollar denominated cash, bonds and other securities due to a
weakening in the US dollar relative to the Canadian dollar. We
recognized a foreign exchange loss of $2 million this quarter on
these Canadian dollar denominated holdings.  
Additionally, in 2012 we began holding our euro-based operations'
excess cash in US dollars. We recognized $16 million in foreign
exchange losses this year, including $15 million this quarter, on the
revaluation of US denominated cash balances to euros due to a
depreciation in the US dollar relative to the euro.  
2013 outlook for investment and other income 
Investment and other income is affected by the balance of our cash,
bonds and other securities, and by interest rates and exchange rates.
We are capitalizing interest income earned on funds from the proceeds
of our senior unsecured notes (as we are capitalizing interest costs
on the senior unsecured notes). At December 31, 2012, we held Cdn
$218 million in cash, bonds and other securities subject to
translation in our US dollar denominated accounts and US $599 million
in cash subject to translation in our euro accounts.  
Income tax expense 


 
----------------------------------------------------------------------------
                                             three months ended December 31 
(thousands)                                  2012         2011       change 
----------------------------------------------------------------------------
Cayeli                                     $3,983       $9,444              
Las Cruces                                 18,371        8,097              
Pyhasalmi                                   8,013        6,612              
Corporate and other                         1,346       (1,662)             
----------------------------------------------------------------------------
                                          $31,713      $22,491              
----------------------------------------------------------------------------
Consolidated effective tax rate                45%          33%          +8%
----------------------------------------------------------------------------
 
---------------------------------------------------------------------------
                                                     year ended December 31
(thousands)                                  2012         2011       change
---------------------------------------------------------------------------
Cayeli                                    $32,923      $50,947             
Las Cruces                                 72,495       22,788             
Pyhasalmi                                  23,951       30,710             
Corporate and other                         1,935       (2,374)            
---------------------------------------------------------------------------
                                         $131,304     $102,071             
---------------------------------------------------------------------------
Consolidated effective tax rate                28%          28%           -
---------------------------------------------------------------------------

 
Our tax expense changes as our earnings change. 
The consolidated effective tax rate was higher this quarter compared
to the same quarter of 2011 mainly because of the improvement in
earnings at Las Cruces, combined with its lower intergroup interest
expense as it repaid a portion of its intergroup debt earlier this
year. Additionally, we realized higher foreign exchange losses and
other corporate costs this quarter for which there is no tax
recovery.  
2013 outlook for income tax expense 
We expect the statutory tax rates at our operations in 2013 to remain
the same as they were in 2012, unless a statutory tax rate change is
enacted. We expect income tax expense to increase in 2013 due to
higher income from operations mainly from higher sales volumes as Las
Cruces, offset partly by lower expected copper sales volumes at
Cayeli. 
Discontinued operation - 2011  
We sold our 18 percent equity interest in Ok Tedi in January 2011,
and have reported our results relating to Ok Tedi in that year as
discontinued operations. After-tax income of $81 million in 2011
includes net earnings of $17 million in January 2011, before the
sale, and a gain on sale of $64 million net of withholding taxes. We
paid Papua New Guinea withholding taxes of $27 million on the sale. 
Results of our operations 
2013 estimates 
Our financial review by operation includes estimates for our 2013
operating earnings and operating cash flows. We have based these
estimates on our 2013 objectives for production (using the midpoints
in our production volume ranges) and cost per tonne of ore milled
(cost per pound of copper produced at Las Cruces), as well as the
following assumptions for the year:  


 
------------------------------------------------------------
Copper price                  US $3.60 per pound            
Zinc price                    US $1.00 per pound            
euro to C$ exchange rate      $1.25                         
Working capital               Assume no changes             
------------------------------------------------------------

 
Cayeli 


 
----------------------------------------------------------------------------
                                             three months ended December 31 
                                                 2012       2011     change 
----------------------------------------------------------------------------
Tonnes of ore milled (000's)                      319        316         +1%
Tonnes of ore milled per day                    3,500      3,400         +1%
----------------------------------------------------------------------------
Grades (percent)                  c
opper          3.0        3.5        -14%
                                  zinc            5.0        5.3         -6%
----------------------------------------------------------------------------
Mill recoveries (percent)         copper           74         79         -6%
                                  zinc             69         67         +3%
----------------------------------------------------------------------------
Production (tonnes)               copper        7,000      8,600        -19%
                                  zinc         11,100     11,300         -2%
----------------------------------------------------------------------------
Cost per tonne of ore milled                      $81        $76         +7%
----------------------------------------------------------------------------
 
----------------------------------------------------------------------------
                                                     year ended December 31 
                                                 2012       2011     change 
----------------------------------------------------------------------------
Tonnes of ore milled (000's)                    1,218      1,195         +2%
Tonnes of ore milled per day                    3,300      3,300         +2%
----------------------------------------------------------------------------
Grades (percent)                  copper          3.3        3.2         +3%
                                  zinc            5.0        6.0        -17%
----------------------------------------------------------------------------
Mill recoveries (percent)         copper           78         75         +4%
                                  zinc             66         68         -3%
----------------------------------------------------------------------------
Production (tonnes)               copper       31,400     28,700         +9%
                                  zinc         40,700     48,100        -15%
----------------------------------------------------------------------------
Cost per tonne of ore milled                      $77        $78         -1%
----------------------------------------------------------------------------

 
Copper production exceeded target this year 
Cayeli's mine production reached a record 1.21 million tonnes this
year. The increase in mine production is the result of consistent
ground support and rehabilitation performance, improved mine planning
processes, including new scheduling software capable of quick
scenario reviews, and capturing further benefits from the mine
control system implemented in 2011.   
Mill production this year reached a record of 1.22 million tonnes.
Managing tailings density and coordination with the mine's pastefill
requirements were key in achieving the higher throughput level this
year. Copper production in 2012, at 31,400 tonnes, was better than in
2011 and exceeded the high end of our guidance range due to higher
copper grades and recoveries. Zinc production was significantly lower
than in 2011, consistent with our expectations, due to the lower zinc
grade and associated lower recoveries.  
Cost per tonne of ore milled was slightly lower than 2011 mainly
because we processed more ore this year. Higher cost per tonne of ore
milled this quarter reflects higher costs for electricity and a study
Cayeli has undertaken to further increase its productivity. 
The three-year labour agreement at Cayeli expired in May 2012. The
negotiation of a new labour agreement, initially delayed due to
changes to government labour regulations, is proceeding in early 2013
and we will make a strong effort to manage labour cost escalations to
retain our cost competitiveness. 
Our tax filings remain subject to examination by applicable tax
authorities for a certain length of time following the tax year to
which those filings relate. In 2012 Cayeli became the subject of an
audit of its 2008 to 2011 taxation years. On February 4, 2013, Cayeli
received an assessment from the Turkish tax authorities adjusting the
amount of withholding taxes to be remitted on dividends paid by
Cayeli to its direct shareholder. The shares of Cayeli are owned by
an indirect wholly-owned Spanish subsidiary of Inmet. The Turkish tax
authorities have taken the position that Inmet and not the Spanish
subsidiary is the beneficial owner of the dividends. The Turkish tax
authorities are therefore taking the position that the withholding
tax on the dividends should be the 15 percent domestic rate and not
the reduced rate of 5 percent under the Turkey-Spain tax treaty. The
dividends paid during the period assessed total TL 628 million. The
assessed tax liability is TL 63 million (US $35 million) plus
interest and penalties. Our view is that the relevant facts and
circumstances support the position that Cayeli fulfilled its tax
remittance obligations and Cayeli intends to vigorously dispute the
assessment. 
2013 outlook for production  
In 2013, the production level should increase from 1.2 million tonnes
to 1.25 million tonnes. The mine should benefit from the
commissioning of the two new ore passes by the third quarter of 2013,
the extension of a shotcrete slickline to the lower levels of the
mine, improved lower mine infrastructure and the addition of stope
production from a new mining block, all of which should ease pressure
on existing production areas. Cayeli's ground conditions require
constant monitoring and reinforcement, including the need to minimize
any underground void area. Continued progress in meeting the
challenges of poor ground conditions and planned operational
efficiencies is aimed at reducing the risks associated with achieving
our production plan.   
Both copper and zinc recoveries should be lower in 2013, reflecting
the increased proportions of metallurgically challenging ore types.  
We expect to produce between 27,800 tonnes and 30,900 tonnes of
copper and between 35,900 tonnes and 39,900 tonnes of zinc in 2013.  
We expect operating costs in 2013 to be slightly higher than 2012
levels primarily due to increased manpower levels, increased
electricity costs and increased mine department consumables. 
Financial review  
Lower copper sales volumes due to lower copper production volumes and
timing of shipments this quarter  


 
----------------------------------------------------------------------------
                          three months ended          year ended            
(millions unless                 December 31         December 31  objective 
otherwise stated)             2012      2011      2012      2011       2013 
----------------------------------------------------------------------------
Sales analysis                                                              
Copper sales (tonnes)        5,100     6,900    33,200    27,500     29,400 
Zinc sales (tonnes)         10,000     9,900    40,000    50,000     37,900 
                         ---------------------------------------------------
Gross copper sales             $36       $53      $258      $214       $233 
Gross zinc sales                19        19        77       101         84 
Other metal sales                4         5        24        27         17 
                         ---------------------------------------------------
Gross sales                     59        77       359       342        334 
Smelter processing                                                          
 charges and freight           (13)      (14)      (67)      (69)       (74)
----------------------------------------------------------------------------
Net sales                      $46       $63      $292      $273       $260 
----------------------------------------------------------------------------
Cost analysis                                                               
Tonnes of ore milled                                                        
 (thousands)                   319       316     1,218     1,195      1,250 
Direct production costs                                       
              
 ($ per tonne)                 $81       $76       $77       $78        $81 
----------------------------------------------------------------------------
Direct production costs        $26       $24       $94       $93       $101 
Change in inventory             (4)       (3)        2        (1)         - 
                                                                            
Depreciation and other                                                      
 non-cash costs                  8         9        33        26         32 
----------------------------------------------------------------------------
Operating costs                $30       $28      $129      $118       $133 
----------------------------------------------------------------------------
Operating earnings             $16       $35      $163      $155       $127 
----------------------------------------------------------------------------
Operating cash flow            $64        $8      $170      $152       $120 
----------------------------------------------------------------------------

 
The objective for 2013 uses the assumptions listed on page 15. 
The table below shows what contributed to the change in operating
earnings and operating cash flow between 2012 and 2011. 


 
----------------------------------------------------------------------------
                                    three months ended           Year ended 
(millions)                                 December 31          December 31 
----------------------------------------------------------------------------
Lower metal prices                                 ($5)                 ($8)
Higher (lower) copper sales                                                 
 volumes                                           (11)                  34 
Lower zinc sales volumes                             -                  (11)
Higher smelter processing charges                                           
 and freight                                         -                    1 
Higher operating costs                              (2)                  (1)
Lower (higher) depreciation                          1                   (3)
Other                                               (2)                  (4)
----------------------------------------------------------------------------
Higher (lower) operating earnings,                                          
 compared to 2011                                  (19)                   8 
Change in tax expense because of                                            
 foreign exchange changes in                                                
 Cayeli's Turkish lira accounts                      2                   13 
Changes in working capital (see                                             
 note 17 on page 52)                                72                   (8)
Higher depreciation                                 (1)                   3 
Other                                                2                    2 
----------------------------------------------------------------------------
Higher operating cash flow,                                                 
 compared to 2011                                  $56                  $18 
----------------------------------------------------------------------------

 
Capital spending 


 
-----------------------------------------------------
                      three months ended December 31 
(thousands)             2012        2011      change 
-----------------------------------------------------
Capital spending      $8,300      $3,400        +144%
-----------------------------------------------------
 
-----------------------------------------------------
                              year ended December 31 
(thousands)             2012        2011      change 
-----------------------------------------------------
Capital spending     $17,500     $12,700         +38%
-----------------------------------------------------
 
----------------------------
                   objective
(thousands)             2013
----------------------------
Capital spending     $18,000
----------------------------

 
We spent $18 million in capital this year to begin construction of a
pair of new ore passes, add to the underground mobile fleet, improve
underground pastefill and water drainage infrastructure, replace the
surface concrete batch plant, and continue mine development. In 2011
we spent $13 million to engineer the new ore passes, purchase mobile
equipment, install column flotation cells and a conveyor dust
collection system in the mill, add surface water runoff capacity, and
continue our mine development.  
2013 outlook for capital spending  
We expect to spend $18 million on capital in 2013, including $6
million on mine development and $5 million to complete the upgrade of
our ore pass system to address deterioration that has accumulated
over time from normal abrasion.  
Las Cruces  


 
----------------------------------------------------------------------------
                                             three months ended December 31 
(100 percent)                                    2012       2011     change 
----------------------------------------------------------------------------
Tonnes of ore processed (000's)                   276        231        +19%
----------------------------------------------------------------------------
Copper grades (percent)                           6.9        6.9          - 
----------------------------------------------------------------------------
Plant recoveries (percent)                         90         86         +5%
----------------------------------------------------------------------------
Cathode copper production (tonnes)             17,300     14,100        +23%
----------------------------------------------------------------------------
Cost per pound of cathode produced              $1.14      $1.21         -6%
----------------------------------------------------------------------------
 
----------------------------------------------------------------------------
                                                     year ended December 31 
(100 percent)                                    2012       2011     change 
----------------------------------------------------------------------------
Tonnes of ore processed (000's)                 1,082        776        +39%
----------------------------------------------------------------------------
Copper grades (percent)                           7.1        6.5         +9%
----------------------------------------------------------------------------
Plant recoveries (percent)                         88         84         +5%
----------------------------------------------------------------------------
Cathode copper production (tonnes)             67,700     42,100        +61%
----------------------------------------------------------------------------
Cost per pound of cathode produced              $1.12      $1.54        -27%
----------------------------------------------------------------------------

 
Plant production consistently at or above design capacity  
2012 was a year of significant accomplishments for Las Cruces with
plant production averaging the design capacity of 6,000 tonnes of
copper cathode for the last 9 months of the year. This production
level was reached following a shutdown in March to remove and
re-align the ball mill gearing as well as to make numerous operating
improvements to improve process flows. Las Cruces produced 17,300
tonnes of copper cathode in this quarter of 2012, with a three day
maintenance shutdown, and achieved plant recoveries of 90 percent. 
The plant reliability increased in all areas during 2012 with stable
reactor and agitator performance and further improvements to
crushing, conveying and grinding. In all, 12 days of planned downtime
were required for ongoing plant maintenance compared to our original
plan of 20 days. Overall copper recoveries were 88 percent in 2012,
an improvement from 84 percent in 2011 due to the full implementation
of the leach feed surge tank with oxygen addition. Plant feed grades
averaged 7.1 percent during the year, compared to 6.5 percent in
2011. 
Las Cruces production of 67,700 tonnes of copper cathode this year
was significantly higher than 42,100 tonnes in 2011 as a result of
process improvements and came within 1.5 percent of the high end of
our guidance range. 
Cost per pound of copper produced was significantly lower than in
2011 due to higher production volumes. 
2013 outlook for production 
In 2013, we will concentrate on reducing recovery losses downstream
of the leaching reactors that have increased with the increase in
copper cathode production and due to operating with process solutions
that contain more copper. 
We expect to produce between 68,500 tonnes and 72,000 tonnes copper
cathode in 2013. The plant will be tested at higher ore throughput
and lower grade to assess the effects on plant performance before we
enter into lower copper grade areas of the mine that we expect in
2014. 
We expect cost per pound of copper in 2013 to be similar to 2012
levels. 
Financial review  
Higher sales volumes due to higher production  


 
----------------------------------------------------------------------------
                         three months ended          year ended             
(millions unless                December 31         December 31   objective 
otherwise stated)            2012      2011      2012      2011        2013 
----------------------------------------------------------------------------
Sales analysis                                                              
Copper sales (tonnes)      17,400    12,800    68,900    42,000      70,300 
                        ----------------------------------------------------
Gross copper sales           $137       $98      $539      $345        $562 
Smelter processing                                                          
 charges and freight           (1)        -        (2)       (1)         (3)
----------------------------------------------------------------------------
Net sales                    $136       $98      $537      $344        $559 
----------------------------------------------------------------------------
Cost analysis                                                               
Pounds of copper                                                            
 produced (millions)           38        31       149        93         155 
Direct production costs                                                     
 ($ per pound)              $1.14     $1.21     $1.12      1.54       $1.11 
----------------------------------------------------------------------------
Direct production costs       $43        38      $167      $143        $172 
Change in inventory             -        (3)        2         1           - 
Depreciation and other                                                      
 non-cash costs                20        23        89        78          93 
----------------------------------------------------------------------------
Operating costs               $63       $58      $258      $222        $265 
----------------------------------------------------------------------------
Operating earnings            $73       $40      $279      $122        $294 
----------------------------------------------------------------------------
Operating cash flow           $50       $44      $320      $188        $386 
----------------------------------------------------------------------------

 
The objective for 2013 uses the assumptions listed on page 15. 
The table below shows what contributed to the change in operating
earnings and operating cash flow between 2012 and 2011. 


 
----------------------------------------------------------------------------
                                    three months ended           year ended 
(millions)                                 December 31          December 31 
----------------------------------------------------------------------------
Higher (lower) copper prices,                                               
 denominated in US dollars                          $4                 ($28)
Higher copper sales volumes                         32                  220 
Higher smelter processing charges                                           
 and freights                                       (1)                  (1)
Higher operating costs in base                                              
 currency                                           (7)                 (35)
Foreign exchange - decreased                                                
 operating costs                                     2                   13 
Higher depreciation                                 (3)                 (17)
Other                                                6                    5 
----------------------------------------------------------------------------
Higher operating earnings,                                                  
 compared to 2011                                   33                  157 
Changes in working capital (see                                             
 note 17 on page 52)                               (29)                 (42)
Change in depreciation                               3                   17 
Other                                               (1)                   - 
----------------------------------------------------------------------------
Higher operating cash flow,                                                 
 compared to 2011                                   $6                 $132 
----------------------------------------------------------------------------

 
Capital spending  


 
----------------------------------------------------------------------------
                                             three months ended December 31 
(thousands)                              2012           2011         change 
----------------------------------------------------------------------------
Capital spending                      $18,000         $9,700            +86%
----------------------------------------------------------------------------
 
----------------------------------------------------------------------------
                                                     year ended December 31 
(thousands)                              2012           2011         change 
----------------------------------------------------------------------------
Capital spending                      $43,200        $51,900            -17%
----------------------------------------------------------------------------
 
---------------------------------------------
                                    objective
(thousands)                              2013
---------------------------------------------
Capital spending                      $49,000
---------------------------------------------

 
We spent $43 million this year mainly on mine development, tailings
facility expansion and land purchase. In 2011, we spent $52 million
mainly for mine development, tailings facility expansion and plant
improvements. 
2013 outlook for capital spending 
We expect to spend $49 million on capital projects in 2013. The
largest expenditures should be for mine development ($22 million),
tailings facility expansion ($5 million), debottlenecking ($8
million) and other plant improvement projects. 
Pyhasalmi 


 
----------------------------------------------------------------------------
                                             three months ended December 31 
                                                   2012      2011    change 
----------------------------------------------------------------------------
Tonnes of ore milled (000's)                        351       348        +1%
Tonnes of ore milled per day      
                3,800     3,800        +1%
----------------------------------------------------------------------------
Grades (percent)                     copper         1.0       1.1        -9%
                                     zinc           3.0       2.1       +43%
                                     sulphur         41        43        -5%
----------------------------------------------------------------------------
Mill recoveries (percent)            copper          97        95        +2%
                                     zinc            93        90        +3%
----------------------------------------------------------------------------
Production (tonnes)                  copper       3,300     3,500        -6%
                                     zinc         9,700     6,600       +47%
                                     pyrite     222,500   210,500        +6%
----------------------------------------------------------------------------
Cost per tonne of ore milled                        $47       $41       +15%
----------------------------------------------------------------------------
 
----------------------------------------------------------------------------
                                                     year ended December 31 
                                                   2012      2011    change 
----------------------------------------------------------------------------
Tonnes of ore milled (000's)                      1,384     1,386         - 
Tonnes of ore milled per day                      3,800     3,800         - 
----------------------------------------------------------------------------
Grades (percent)                     copper         1.0       1.1        -9%
                                     zinc           2.0       2.6       -23%
                                     sulphur         42        42         - 
----------------------------------------------------------------------------
Mill recoveries (percent)            copper          96        96         - 
                                     zinc            92        91        +1%
----------------------------------------------------------------------------
Production (tonnes)                  copper      12,600    14,000       -10%
                                     zinc        25,600    32,300       -21%
                                     pyrite     891,700   804,900       +11%
----------------------------------------------------------------------------
Cost per tonne of ore milled                        $43       $41        +5%
----------------------------------------------------------------------------

 
Lower grades this year in-line with annual objectives 
Pyhasalmi continued its strong performance in 2012, processing 1.4
million tonnes of ore and achieving copper recoveries of 96 percent
and zinc recoveries of 92 percent. Backfill supply was reliable and
the underground open void volume was maintained below planned levels. 
Both copper and zinc production were at the high end of our guidance
range but lower than in 2011, as expected, because of lower grades in
the areas we mined. A record 891,700 tonnes of pyrite concentrate was
produced this year to meet higher customer demand. 
Operating costs were higher this year than they were in 2011 due to
higher labour, consumables and contractor costs, and due to the
incremental costs associated with producing more pyrite.  
2013 outlook for production 
Pyhasalmi expects to mine 1.4 million tonnes of approximately 1
percent copper and 1.7 percent zinc in 2013, and produce between
12,000 tonnes and 13,400 tonnes of copper and 20,300 tonnes and
22,500 tonnes of zinc. Zinc production should be lower than it was in
2012 as we expect a decrease in zinc grades in 2013.  
Pyhasalmi expects to produce and sell 820,000 tonnes of pyrite in
2013. 
Operating costs are expected to remain at levels consistent with
2012. 
Financial review 
Lower earnings because of lower sales volumes and realized metal
prices this year 


 
----------------------------------------------------------------------------
                         three months ended          year ended             
(millions unless                December 31         December 31   objective 
otherwise stated)            2012      2011      2012      2011        2013 
----------------------------------------------------------------------------
Sales analysis                                                              
Copper sales (tonnes)       3,200     3,400    13,400    13,700      12,700 
Zinc sales (tonnes)         9,000     7,400    25,100    34,400      21,400 
Pyrite sales (tonnes)     299,700   175,900   852,500   809,200     820,000 
                        ----------------------------------------------------
Gross copper sales            $25       $27      $106      $114        $101 
Gross zinc sales               18        14        48        70          47 
Other metal sales              21        18        72        76          61 
                        ----------------------------------------------------
Gross sales                    64        59       226       260         209 
Smelter processing                                                          
 charges and freight          (12)      (13)      (44)      (56)        (42)
----------------------------------------------------------------------------
Net sales                      52       $46      $182      $204        $167 
----------------------------------------------------------------------------
Cost analysis                                                               
Tonnes of ore milled                                                        
 (thousands)                  351       348     1,384     1,386       1,370 
Direct production costs                                                     
 ($ per tonne)                $47       $41       $43       $41         $42 
----------------------------------------------------------------------------
Direct production costs       $16       $14       $60       $57         $58 
Change in inventory             -        (1)        -        (1)          - 
Depreciation and other                                                      
 non-cash costs                 4         3        11         9          12 
----------------------------------------------------------------------------
Operating costs               $20       $16       $71       $65         $70 
----------------------------------------------------------------------------
Operating earnings            $32       $30      $111      $139         $97 
----------------------------------------------------------------------------
Operating cash flow           $28       $23       $97      $114         $84 
----------------------------------------------------------------------------

 
The objective for 2013 uses the assumptions listed on page 15. 
The table below shows what contributed to the change in operating
earnings and operating cash flow between 2012 and 2011. 


 
----------------------------------------------------------------------------
                                    three months ended           year ended 
(millions)                                 December 31          December 31 
----------------------------------------------------------------------------
Lower copper prices                                $ -                  ($6)
Higher (lower) zinc prices                           1                   (3)
Higher (lower) zinc sales volumes                    3                  (11)
Lower copper sales volumes                          (2)                  (5)
Higher (lower) other metal sales                     3                   (3)
Lower smelter processing prices                                             
 and freight                                         1                    4 
Higher operating costs in base                                              
 currency                                
           (3)                  (8)
Foreign exchange - decreased                                                
 operating costs                                     1                    5 
Other                                               (2)                  (1)
----------------------------------------------------------------------------
Higher (lower) operating earnings,                                          
 compared to 2011                                    2                  (28)
Change in tax expense                               (1)                   7 
Changes in working capital (see                                             
 note 17 on page 52)                                 3                    5 
Other                                                1                   (1)
----------------------------------------------------------------------------
Higher (lower) operating cash                                               
 flow, compared to 2011                             $5                 ($17)
----------------------------------------------------------------------------

 
Capital spending  


 
----------------------------------------------------------------------------
                                             three months ended December 31 
(thousands)                                    2012        2011      change 
----------------------------------------------------------------------------
Capital spending                             $2,600      $1,900         +37%
----------------------------------------------------------------------------
 
----------------------------------------------------------------------------
                                                     year ended December 31 
(thousands)                                    2012        2011      change 
----------------------------------------------------------------------------
Capital spending                             $8,600      $7,000         +23%
----------------------------------------------------------------------------
 
---------------------------------------------------
                                          objective
(thousands)                                    2013
---------------------------------------------------
Capital spending                             $8,000
---------------------------------------------------

 
2013 outlook for capital spending  
Capital spending of $8 million in 2013 will primarily be to replace
underground mobile equipment, upgrade the pyrite flotation cleaner
cells and flotation air blower system, and improve the reclaim water
system.  
Status of our development project 
Cobre Panama 
Construction progress 
For a visual update on our construction progress, we invite you to
visit our photo gallery on Inmet's web site at www.inmetmining.com. 
At December 31, 2012, total construction was 9.3 percent completed
compared to a planned completion percentage of 10.9 percent. We made
the following advancements in the project's development this quarter: 
Infrastructure  


 
--  Our Engineering, Procurement and Construction Management (EP+CM)
    contractor, Joint Venture Panama (JVP), progressed with detailed
    engineering and procurement, earthworks and ground preparation for camps
    and road construction. We began the commissioning of the mine site's
    camp and general pioneering work is progressing well, including
    development work on the quarry and coastal road construction.  
--  Progress at the port site in Punta Rincon included completion of the
    jack-up barges allowing safe mooring of barges at the port site, and the
    mobile crusher allowing rock production to commence at the port site.
    The camp platform at the port site was completed in early 2013. 

 
Power plant 


 
--  Our Engineering, Procurement and Construction (EPC) contractor, SK
    Engineering and Construction, progressed with detailed engineering and
    procurement activities, and with planning. Geotechnical work has started
    and the fabrication of long-lead equipment continued as planned. 

 
Process plant 


 
--  We completed our evaluation of process plant bids and awarded the
    contract for detailed engineering and procurement services to Joint
    Venture Panama in late 2012. Upon satisfactory advancement of detailed
    engineering and procurement of certain equipment, we expect to award the
    contract for construction of the process plant in the third quarter of
    2013. 

 
MPSA and its contractors' workforce comprise more than 90 percent
local residents from the Provinces of Cocle and Colon, Panama. The
combined construction workforce is expected to increase to more than
9,000 people by the end of 2014.  
Our one-team approach for safety and health execution on the project
has led to the current lost-time injury frequency of less than 0.23
injuries per 200,000 work hours worked since the Full Notice to
Proceed was issued in May 2012. 
Capital spending 
The following table provides a breakdown of capital expenditures on a
100 percent basis.  


 
----------------------------------------------------------------------------
                          three months ended         year ended             
                                 December 31        December 31   objective 
(US$ millions)                 2012     2011     2012      2011        2013 
----------------------------------------------------------------------------
Capital spending since                                                      
 issuance of full notice                                                    
 to proceed (FNTP)             $243       $-     $593        $-      $2,147 
Interest paid on senior                                                     
 unsecured notes                 70        -       70         -         169 
Changes in working capital        -        -      (81)       (5)        (75)
Capital spending prior to                                                   
 FNTP                             -       42     $131       134           - 
----------------------------------------------------------------------------
Capital spending in the                                                     
 consolidated statements                                                    
 of cash flows                 $313      $42     $713      $129      $2,241 
----------------------------------------------------------------------------

 
We expect completion to take approximately 44 months from the point
we issued Full Notice to Proceed. The schedule below provides the
expected timing of capital spending by year.  


 
----------------------------------------------------------------------------
                                                        Franco-             
                                Total      Inmet's     Nevada's             
                         expenditures  share after       Stream       KPMC's
(US$ millions)           (100% basis)       Stream      funding    20% share
----------------------------------------------------------------------------
Cumulative spending at                                                      
 December 31, 2012               $593         $313           $-      $280(1)
Future capital spending:                                                    
2013                            2,147        1,435          283          429
2014                            2,527        1,516          506          505
2015                              914          520          211          183
----------------------------------------------------------------------------
Total direct costs             $6,181       $3,784       $1,000       $1,397
----------------------------------------------------------------------------
(1) Includes KPMC's $161 million payment to acquire a 20% interest in MPSA, 
    which increased KPMC's share of total project funding to $1.4 billion   
    and reduced Inmet's share by an equal 
and offsetting amount.            

 
Capital commitments 
Since construction commenced in May 2012, contracts have been awarded
for mass earthworks and quarry development at both the mine and port
sites, the tailings management facility, the coastal road joining the
mine to the port, permanent and temporary camp construction, the port
causeway and commodity berth, infrastructure and the power plant,
detailed engineering and procurement of certain equipment for the
process plant, the mobile mine equipment fleet, fuel supply,
construction camp catering and the mine pre-stripping. The total
value of commitments that MPSA has entered into since the start of
full construction is approximately $4.1 billion, representing 67
percent of estimated capital expenditures. MPSA expects to award the
construction contract for the mineral processing plant during the
third quarter of 2013. 
Funding plan 
The table below outlines the total project funding plan as at
December 31, 2012. 


 
----------------------------------------------------------------------------
                                                         Total expenditures 
(US$ millions)                                                 (100% basis) 
----------------------------------------------------------------------------
Total construction budget for Cobre Panama                           $6,181 
Less: Cumulative project funding at December                                
 31, 2012                                                                   
  Inmet's share                                                        (400)
  Attributable to non-controlling interest                                  
   (KPMC)                                                              (261)
----------------------------------------------------------------------------
Cumulative funding to date                                             (661)
Less: Future funding                                                        
  Attributable to precious metal stream                                     
   partner (Franco-Nevada)                                           (1,000)
  Attributable to non-controlling interest                                  
   (KPMC)                                                            (1,136)
----------------------------------------------------------------------------
Inmet's share of future funding                                       3,384 
----------------------------------------------------------------------------
Less: Cash on hand at December 31, 2012                                     
 (includes bonds and other securities and                                   
 excludes MPSA cash)                                                 (3,531)
----------------------------------------------------------------------------
Excess funding position at December 31, 2012                           $147 
----------------------------------------------------------------------------

 
Increase to Cobre Panama reserves and mine life  
In December 2012, we announced an increase to proven and probable
mineral reserves at Cobre Panama. The additional mineral reserves
reflect the completion of work on resource definition, metallurgical
recoveries, pit design and other engineering, allowing us to include
the Balboa, Brazo and Botija Abajo mineralization in our mine plan
for Cobre Panama. The additional mineral reserves increased Cobre
Panama's total estimated contained copper by 27 percent to
approximately 26 billion pounds, and increased estimated contained
gold by 41 percent to approximately 7.3 million ounces. These
additional mineral reserves have been integrated into a revised mine
plan that extends the estimated mine life for Cobre Panama from 31 to
40 years.  
2013 outlook for development 
We plan to: 
Infrastructure 


 
--  Continue with mobilization of major contractors for bulk earthworks and
    complete the construction of platforms for the power plant and process
    plant. 
--  Complete development of additional quarries to support construction
    activity at the port, mine site, tailings management facility and
    coastal road. 
--  Continue the installation of temporary and permanent camps at the plant
    and port sites. 
--  Award contracts for the construction of the remainder of infrastructure.
--  Develop and implement an operational readiness strategy to allow for the
    start of pre-stripping activities in 2014. 

 
Power Plant 


 
--  Progress with detailed engineering and procurement for the power plant
    and geotechnical investigation work. 
--  Begin construction activities for the power plant following site
    capture. 

 
Process Plant 


 
--  Complete detailed engineering, procurement of equipment and award the
    contract for construction of the process plant. 
--  Start construction activities for the process plant following site
    capture. 

 
Other 


 
--  Continue to build our privilege to operate through intensive dialogue
    with stakeholders at the community, regional and national levels, to
    increase their understanding of the project and its benefits to Panama,
    and our understanding of their potential concerns. 
--  Continue to develop and implement, with the assistance of our EPC/M
    contractors, our one-team, project specific health & safety and
    environmental and social mitigation plans that are consistent with the
    Environmental and Social Impact Assessment and Inmet's Corporate
    Responsibility Standards and Procedures. 
--  Continue to grow the strength of our management team and human resources
    dedicated to the project. 

 
Managing our liquidity 
We develop our financing strategy by looking at our long-term capital
requirements and deciding on the optimal mix of cash, future
operating cash flow, credit facilities and project financing.  
Our capital structure includes a liquidity cushion that gives us the
flexibility to deal with operational disruptions or general market
downturns. 


 
----------------------------------------------------------------------------
                                     three months ended          year ended 
                                            December 31         December 31 
(millions)                               2012      2011      2012      2011 
----------------------------------------------------------------------------
CASH FROM OPERATING ACTIVITIES                                              
Cayeli                                    $64        $8      $170      $152 
Las Cruces                                 50        44       320       188 
Pyhasalmi                                  28        23        97       114 
Corporate development and                                                   
 exploration not incurred by                                                
 operations                                (6)       (4)      (22)      (21)
General and administration                (10)       (5)      (37)      (26)
Realized foreign exchange gains                                             
 (losses) on cash                         (15)        -        14        (8)
Other                                       6         5         1        (7)
----------------------------------------------------------------------------
                                          117        71       543       392 
----------------------------------------------------------------------------
CASH FROM INVESTING AND FINANCING                                           
Purchase of property, plant and                                             
 equipment                               (342)      (57)     (786)     (202)
Purchase and maturity of bonds and                                          
 other securities, net                     44        13    (1,452)     (226)
Sale of 20 percent interest in Cobre                                        
 Panama                                     -         -       161         - 
Long-term debt borrowing                  493         -     1,922         - 
Funding from non-controlling                                                
 shareholders                              40         -       100         - 
Issuance of common shares                   -         -         -       486 
Dividends on common shares                 (7)       (7)      (14)      (13)
Foreign exchange on cash held in                                            
 foreign currency                          15       (23)       25        (5)
Other                                      (1)       (4)       (6)        3 
----------------------------------------------------------------------------
                                          242       (78)      (50)       43 
----------------------------------------------------------------------------
CASH FROM DISCONTINUED OPERATION (OK                                        
 TEDI)                                      -         -         -       297 
----------------------------------------------------------------------------
Increase (decrease) in cash               359        (7)      493       732 
Cash and short-term investments                                             
  Beginning of period                   1,182     1,055     1,048       316 
----------------------------------------------------------------------------
  End of period                        $1,541    $1,048    $1,541    $1,048 
----------------------------------------------------------------------------

 
Our available liquidity also includes $2,077 million of bonds and
other securities ($607 million at December 31, 2011), providing a
total of $3,618 billion in capital available to finance our growth
strategy as at December 31, 2012. 
OPERATING ACTIVITIES 
Key components of the change in operating cash flows 


 
----------------------------------------------------------------------------
                                    three months ended           year ended 
(millions)                                 December 31          December 31 
----------------------------------------------------------------------------
Higher earnings from operations                                             
 (see page 5)                                      $23                 $137 
Add back higher depreciation                                                
 included in earnings from                                                  
 operations                                          3                   22 
Lower income tax expense                             -                   18 
Higher corporate development and                                            
 administrative costs                               (7)                 (12)
Realized foreign exchange loss on                                           
 cash held by Inmet Corporate                      (15)                  22 
Changes in working capital (see                                             
 note 17 on page 52)                                51                  (38)
Other                                               (9)                   2 
----------------------------------------------------------------------------
Higher operating cash flow,                                                 
 compared to 2011                                  $46                 $151 
----------------------------------------------------------------------------

 
Operating cash flows this quarter and year to date were higher than
in 2011 primarily due to higher earnings from operations before
non-cash charges. The increase this quarter was also due to a
reduction in net working capital, mainly due to the timing of income
tax payments made by Pyhasalmi, and payments received from Cayeli's
customers. 
This year, the increase in net working capital reflects higher
accounts receivable at Las Cruces associated with higher copper
cathode sales during 2012 and the timing of collections from
customers.  
2013 outlook for cash from operating activities 
The table below shows expected operating cash flow from our
operations, based on our outlook for metal prices and production (see
page 15), and the assumptions in Results of our operations (starting
on page 15).  
2013 estimated operating cash flow by operation  


 
----------------------------------------
                                        
(millions)                              
----------------------------------------
Cayeli                              $120
Las Cruces                           386
Pyhasalmi                             84
----------------------------------------
                                    $590
----------------------------------------

 
INVESTING AND FINANCING 
Capital spending  


 
----------------------------------------------------------------------------
                             three months ended        year ended           
                                    December 31       December 31  objective
(millions)                        2012     2011     2012     2011       2013
----------------------------------------------------------------------------
Cayeli                              $8       $3      $18      $13        $18
Las Cruces                          18       10       43       52         49
Pyhasalmi                            3        2        9        7          8
Cobre Panama                       313       42      713      129      2,241
Corporate and other                  -        -        3        1         10
----------------------------------------------------------------------------
                                  $342      $57     $786     $202     $2,326
----------------------------------------------------------------------------

 
Please see Results of our operations and Status of our development
project for a discussion of actual results and our 2013 objectives.
Capital spending this year was mainly for Cobre Panama.  
Purchase and maturing of investments 
In 2012, we invested $2.3 billion in US dollar-denominated bonds and
other securities comprising US Treasury bonds, Canadian government
and corporate bonds and Supranational bonds with credit ratings of A
to AAA. The securities mature between 2013 and 2018 and have a
weighted average annual yield to maturity of 0.31 percent. During the
year, $840 million of securities matured. In 2011, we used most of
the US dollar proceeds from the sale of Ok Tedi to buy $274 million
in US Treasury bonds with AA credit ratings and $67 million of bonds
matured.  
Issuance of senior unsecured notes 
On May 18, 2012, we issued $1.5 billion in senior unsecured notes,
bearing a coupon rate of interest of 8.75 percent and maturing on
June 1, 2020. The notes were priced at 98.584 percent of their face
value, yielding proceeds of $1.43 billion net of the discount and
transaction fees. On December 18, 2012, we issued an additional $0.5
billion of senior unsecured notes, bearing a coupon rate of interest
of 7.5 percent and maturing in June 2021. The notes were priced at
100 percent of their face value, yielding proceeds of $493 million
net of transaction fees. Interest is payable on the notes
semi-annually on December 1 and June 1 of each year. As the proceeds
will be used to fund the development of Cobre Panama, interest costs
will be capitalized to project assets during the construction period. 
These notes are unconditionally guaranteed on a senior unsecured
basis by certain Inmet subsidiaries. The notes contain certain
customary covenants and restrictions for a financing instrument of
this type.  
Sale of 20 percent interest in Cobre Panama 
On April 25, 2012, KPMC completed its acquisition of a 20 percent
interest in MPSA. KPMC acquired its interest for $161 million in
cash. Together with the 20 percent of funding of the estimated $6.2
billion of development costs for Cobre Panama it will provide during
the construction period, this amounts to total funding
 of $1.4
billion. During 2012, KPMC provided $100 million of this funding ($40
million this quarter). 
Issuance of common shares - 2011  
In May 2011, a subsidiary of Temasek Holdings (Private) Ltd.
exchanged its subscription receipts for 7.78 million Inmet common
shares and we received cash of $486 million. 
Cash from discontinued operation - 2011  
In January 2011, we sold our 18 percent equity interest in Ok Tedi
for net proceeds of $297 million (after Papua New Guinea withholding
taxes). 
2013 outlook for investing and financing 
Capital spending  
We expect capital spending to be $2,326 million in 2013. The more
significant items include: 


 
- $2,241 million at Cobre Panama to advance construction activities on the  
  project                                                                   
- $49 million at Las Cruces, including $22 million for mine development, as 
  well as other capital projects including a tailings facility expansion and
  certain plant improvements.                                               

 
Sale of precious metal stream to Franco-Nevada  
In August 2012, we announced the completion of a precious metals
stream agreement with Franco-Nevada. Under the terms of the
agreement, a wholly-owned subsidiary of Franco-Nevada will provide a
$1 billion deposit which will be used to fund a portion of Cobre
Panama project capital costs. The deposit will become available after
Inmet's funding since issuing a FNTP reaches $1 billion (expected by
mid-2013) and will be provided pro-rata on a 1:3 ratio with Inmet's
subsequent funding contributions. 
Financial condition 
Our strategy is to make sure we have sufficient liquidity (including
cash and committed credit facilities) to finance our operating
requirements as well as our growth projects. At December 31, 2012, we
had $3,618 million in total funds, including $1,541 million of cash
and short-term investments and $2,077 million invested in bonds and
other securities. 
Cash 
At December 31, 2012 our cash and short-term investments of $1,541
million included cash and money market instruments that mature in 90
days or less.  
Our policy is to invest excess cash in highly liquid investments of
high credit quality, and to limit our exposure to individual
counterparties to minimize the risk associated with these
investments. We base our decisions about the length of maturities on
our cash flow requirements, rates of return and other factors. 
At December 31, 2012, we held cash and short-term investments in the
following: 


 
--  A to AAA rated treasury funds and money market funds managed by leading
    international fund managers, who are investing in money market and
    short-term debt securities and fixed income securities issued by leading
    international financial institutions and their sponsored securitization
    vehicles. 
--  Cash, term and overnight deposits with leading Canadian and
    international financial institutions. 

 
See note 4 on page 45 in the consolidated financial statements for
more details about where our cash is invested. 
Bonds and other securities 
We hold a portfolio of bonds and other securities to provide better
yields while minimizing our investment risk. As at December 31, 2012,
our portfolio was $2,077 million. The portfolio includes: 


 
--  34 percent US Treasury bonds 
--  25 percent Canadian and provincial government bonds 
--  37 percent corporate bonds 
--  4 percent Supranational bonds. 

 
The securities mature between 2013 and 2018.  
Restricted cash 
Our restricted cash balance of $78 million as at December 31, 2012
included: 


 
--  $20 million in cash collateralized letters of credit for Inmet 
--  $57 million at Las Cruces related to a reclamation bond, issuing letters
    of credit to suppliers and the local water authority and for its labour
    bond to the government 
--  $1 million for future reclamation at Pyhasalmi. 

 
COMMON SHARES 


 
----------------------------------------------------------------------------
Common shares outstanding as of December 31, 2012 and                       
 February 21, 2013                                                69,365,748
----------------------------------------------------------------------------
Deferred share units outstanding as of December 31, 2012             109,022
(redeemable on a one-for-one basis for common shares)                       
----------------------------------------------------------------------------

 
Additional risk factor 
We have significantly increased our cash balance following the
issuance of our senior unsecured notes for the construction of Cobre
Panama. For U.S. federal income tax purposes a non-U.S. corporation
may be classified as a "passive foreign investment company" (PFIC)
for U.S. federal income tax purposes in any taxable year in which
either (1) at least 75 percent of its gross income is passive income,
or (2) on average at least 50 percent of the gross value of its
assets is attributable to assets that produce passive income or are
held for the production of passive income. Based on our analysis, we
do not believe that we are a PFIC in the current taxation year. The
methods used to determine income and assets for the purpose of this
test are subject to interpretation and judgement, and based on the
manner in which fair value is determined, the analysis could show
that we are a PFIC. If we are classified as a PFIC, U.S. taxpayers
that hold our common shares could be subject to adverse U.S. federal
income tax consequences, including increased tax liabilities and
possible additional reporting requirements. As the determination of
PFIC status is made annually at the close of each tax year and is
dependent on a number of assumptions, there can be no assurance that
Inmet is not a PFIC in the current year or will not become a PFIC in
any future tax year. U.S. taxpayers that hold our common shares are
urged to consult their tax advisors concerning the potential U.S.
federal income tax consequences of holding common shares if Inmet
were considered a PFIC in any year. 
Supplementary financial information 
Pages 32 and 33 include supplementary financial information about
cash costs. These measures do not fall into the category of
International Financial Reporting Standards.  
We use unit cash cost information as a key performance indicator,
both on a segmented and consolidated basis. We have included cash
costs as supplementary information because we believe our key
stakeholders use these measures as a financial indicator of our
profitability and cash flows before the effects of capital investment
and financing costs, such as interest.  
Since cash costs are not recognized financial measures under
International Financial Reporting Standards, they should not be
considered in isolation of earnings or cash flows. There is also no
standard way to calculate cash costs, so they are not a reliable way
to compare us to other companies. 
About Inmet 
Inmet is a Canadian-based global mining company that produces copper
and zinc. We have three wholly-owned mining operations: Cayeli
(Turkey), Las Cruces (Spain) and Pyhasalmi (Finland), and have an 80
percent interest in the Cobre Panama development project, currently
in construction. 
This press release is also available at www.inmetmining.com. 
Fourth quarter conference call 
Will be held on 


 
--  Friday, February 22, 2013 
--  8:30 a.m. Eastern Time 
--  webcast available at
    http://events.digitalmedia.telus.com/inmet/022213/index.php or
    www.inmetmining.com 

 
You can also dial in by calling 


 
--  Local or international: +1.416.340.8530 
--  Toll-free within North America: +1.877.240.9772 

 
Starting at approximately 10:30 a.m. (ET) Friday, February 22, 2013,
a conference call replay will be available 


 
--  Local or international: +1.905.694.9451 passcode 7813798 
--  Toll-free within North America: +1.800.408.3053 passcode 7813798 
 
INMET MINING CORP
ORATION                                                    
Supplementary financial information                                         
                                                                            
Cash costs                                                                  
2012 For the year ended December 31                                         
                                             per pound of copper            
                                  ------------------------------------------
                                                   LAS                      
                                     CAYELI     CRUCES PYHASALMI      TOTAL 
----------------------------------------------------------------------------
(US dollars)                                                                
                                                                            
Direct production costs               $1.27      $1.08     $2.18      $1.26 
Royalties and variable                                                      
 compensation                          0.11       0.06         -       0.07 
Smelter processing charges and                                              
 freight                               0.97       0.02      0.95       0.39 
Metal credits                         (1.47)         -     (3.81)     (0.84)
                                  ------------------------------------------
                                                                            
Cash cost                             $0.88      $1.16    ($0.68)     $0.88 
                                  ------------------------------------------
                                                                            
2011 For the year ended December                                            
 31                                                                         
                                             per pound of copper            
                                  ------------------------------------------
                                                   LAS                      
                                     CAYELI     CRUCES PYHASALMI      TOTAL 
----------------------------------------------------------------------------
(US dollars)                                                                
                                                                            
Direct production costs               $1.35      $1.55     $1.93      $1.54 
Royalties and variable                                                      
 compensation                         $0.18       0.07         -       0.10 
Smelter processing charges and                                              
 freight                              $1.48       0.01      1.16       0.70 
Metal credits                         (2.41)         -     (4.02)     (1.48)
                                  ------------------------------------------
                                                                            
Cash cost                             $0.60      $1.63    ($0.93)     $0.86 
                                  ------------------------------------------
                                                                            
                                                                            
Reconciliation of cash costs to statements of earnings                      
2012 For the year ended December 31                                         
                                             per pound of copper            
                                  ------------------------------------------
                                                                            
(millions of US dollars, except                    LAS                      
 where otherwise noted)              CAYELI     CRUCES PYHASALMI      TOTAL 
----------------------------------------------------------------------------
GAAP reference                      page 17    page 20   page 22            
                                                                            
Direct production costs                 $94       $167       $60       $321 
Smelter processing charges and                                              
 freight                                 67          2        44        113 
By product sales                       (101)         -      (120)      (221)
Adjust smelter processing and                                               
 freight, and sales to production                                           
 basis                                    1          -        (3)        (2)
                                  ------------------------------------------
Operating costs net of metal                                                
 credits                                $61       $169      ($19)      $211 
Inmet's share of production                                                 
 (000's)                             69,200    149,200    27,800    246,200 
                                  ------------------------------------------
Cash cost (US dollars)                $0.88      $1.16    ($0.68)     $0.88 
                                  ------------------------------------------
                                                                            
2011 For the year ended December                                            
 31                                                                         
                                             per pound of copper            
                                  ------------------------------------------
(millions of US dollars, except                    LAS                      
 where otherwise noted)              CAYELI     CRUCES PYHASALMI      TOTAL 
----------------------------------------------------------------------------
GAAP reference                      page 17    page 20   page 22            
                                                                            
Direct production costs                 $93       $143       $57       $293 
Smelter processing charges and                                              
 freight                                 69          1        56        126 
By product sales                       (128)         -      (146)      (274)
Adjust smelter processing and                                               
 freight, and sales to production                                           
 basis                                    4          -         4          8 
                                  ------------------------------------------
Operating costs net of metal                                                
 credits                                $38       $144      ($29)      $153 
Inmet's share of production                                                 
 (000's)                             63,300     92,900    30,800    187,000 
                                  ------------------------------------------
Cash cost (US dollars)                $0.60      $1.63    ($0.93)     $0.86 
                                  ------------------------------------------
                                                                            
                                                                            
INMET MINING CORPORATION                                                    
Supplementary financial information                                         
                                                                            
Cash costs                                                                  
2012 For the three months ended December 31                                 
                                             per pound of copper            
                                 -------------------------------------------
                                                   LAS                      
                                    CAYELI      CRUCES PYHASALMI      TOTAL 
-------------------
---------------------------------------------------------
(US dollars)                                                                
                                                                            
Direct production costs              $1.59       $1.11     $2.30      $1.37 
Royalties and variable                                                      
 compensation                         0.08        0.05         -       0.05 
Smelter processing charges and                                              
 freight                              1.03        0.02     $1.21       0.42 
Metal credits                        (1.68)          -    ($4.71)     (0.99)
                                 -------------------------------------------
                                                                            
Cash cost                            $1.02       $1.18    ($1.20)     $0.85 
                                 -------------------------------------------
                                                                            
2011 For the three months ended                                             
 December 31                                                                
                                             per pound of copper            
                                 -------------------------------------------
                                                   LAS                      
                                    CAYELI      CRUCES PYHASALMI      TOTAL 
----------------------------------------------------------------------------
(US dollars)                                                                
                                                                            
Direct production costs              $1.15       $1.19     $1.86      $1.27 
Royalties and variable                                                      
 compensation                         0.09        0.05         -       0.06 
Smelter processing charges and                                              
 freight                              1.13        0.01      0.92       0.50 
Metal credits                        (1.71)          -     (3.36)     (1.01)
                                 -------------------------------------------
                                                                            
Cash cost                            $0.66       $1.25    ($0.58)     $0.82 
                                 -------------------------------------------
                                                                            
                                                                            
Reconciliation of cash costs to statements of earnings                      
2012 For the three months ended December 31                                 
                                             per pound of copper            
                                 -------------------------------------------
(millions of US dollars, except                    LAS                      
 where otherwise noted)             CAYELI      CRUCES PYHASALMI      TOTAL 
----------------------------------------------------------------------------
GAAP reference                     page 17     page 20   page 22            
                                                                            
Direct production costs                $26         $43       $16        $85 
Smelter processing charges and                                              
 freight                                13           1        12         26 
By product sales                       (23)          -       (39)       (62)
Adjust smelter processing and                                               
 freight, and sales to                                                      
 production basis                        -           -         2          2 
                                 -------------------------------------------
Operating costs net of metal                                                
 credits                               $16         $44       ($9)       $51 
Inmet's share of production                                                 
 (000's)                            15,500      38,200     7,200     60,900 
                                 -------------------------------------------
Cash cost (US dollars)               $1.02       $1.18    ($1.20)     $0.85 
                                 -------------------------------------------
                                                                            
2011 For the three months ended                                             
 December 31                                                                
                                             per pound of copper            
                                 -------------------------------------------
(millions of US dollars, except                    LAS                      
 where otherwise noted)             CAYELI      CRUCES PYHASALMI      TOTAL 
----------------------------------------------------------------------------
GAAP reference                     page 17     page 20   page 22            
                                                                            
Direct production costs                $24         $38       $14        $76 
Smelter processing charges and                                              
 freight                                14           -        13         27 
By product sales                       (24)          -       (32)       (56)
Adjust smelter processing and                                               
 freight, and sales to                                                      
 production basis                       (1)          -         1          - 
                                 -------------------------------------------
Operating costs net of metal                                                
 credits                               $13         $38       ($4)       $47 
Inmet's share of production                                                 
 (000's)                            19,000      31,100     7,700     57,800 
                                 -------------------------------------------
Cash cost (US dollars)               $0.66       $1.25    ($0.58)     $0.82 
                                 -------------------------------------------
                                                                            
                                                                            
INMET MINING CORPORATION                                                    
Quarterly review                                                            
(unaudited)                                                                 
                                                                            
Latest Four Quarters                                                        
--------------------------------------------------------------------------- 
                                      2012   2012(2)        2012   2012(1)  
(thousands of US dollars, except    Fourth      Third     Second      First 
 per share amounts)                quarter    quarter    quarter    quarter 
----------------------------------------------------------------------------
STATEMENTS OF EARNINGS                                                      
Gross sales                      $ 259,868  $ 327,187  $ 251,395  $ 285,527 
Smelter processing charges and                                              
 freight                           (26,155)   (30,023)   (28,480)   (29,338)
Cost of sales (excluding                                                    
 depreciation)                     (91,273)   (91,096)   (84,634)   (79,624)
  Depreciation                     (30,079)   (37,633)   (29,193)   (30,067)
                                 -------------------------------------------
                                   112,361    168,435    109,088    146,498 
Corporate development
 and                                                   
 exploration                        (8,620)    (7,905)   (10,290)    (8,801)
General and administration         (14,896)   (12,982)   (15,899)    (9,745)
Investment and other income        (16,279)     1,645     45,103     (6,263)
Finance costs                       (2,632)    (2,463)    (2,379)    (2,596)
Income tax expense                 (31,713)   (42,135)   (31,444)   (26,012)
                                 -------------------------------------------
Income from continuing                                                      
 operations                      $  38,221  $ 104,595  $  94,179  $  93,081 
                                 -------------------------------------------
Net income attributable to:                                                 
  Inmet equity holders           $  38,775  $ 104,897  $  94,458  $  93,081 
  Non-controlling interest            (554)      (302)      (279)         - 
                                 -------------------------------------------
                                 $  38,221  $ 104,595  $  94,179  $  93,081 
                                 -------------------------------------------
                                                                            
Net Income per share                                                        
  Basic                          $    0.56  $    1.51  $    1.36  $    1.35 
  Diluted                        $    0.56  $    1.50  $    1.35  $    1.34 
                                                                            
Previous Four Quarters                                                      
----------------------------------------------------------------------------
(thousands of US dollars, except  2011(1)    2011(1)    2011(1)    2011(1)  
 per share amounts)                 Fourth      Third     Second      First 
                                   quarter    quarter    quarter    quarter 
----------------------------------------------------------------------------
STATEMENTS OF EARNINGS                                                      
Gross sales                      $ 233,394  $ 253,432  $ 214,894  $ 246,191 
Smelter processing charges and                                              
 freight                           (27,330)   (35,865)   (32,793)   (30,581)
Cost of sales (excluding                                                    
 depreciation)                     (90,177)   (78,563)   (71,302)   (76,633)
  Depreciation                     (26,835)   (26,452)   (25,802)   (26,180)
                                 -------------------------------------------
                                    89,052    112,552     84,997    112,797 
Corporate development and                                                   
 exploration                        (6,333)    (4,539)    (4,417)   (12,984)
General and administration          (7,487)    (9,669)    (7,995)    (8,155)
Investment and other income         (3,883)    34,640      4,581     (5,590)
Finance costs                       (2,314)    (2,301)    (2,310)    (2,257)
Income tax expense                 (22,491)   (32,696)   (20,588)   (26,296)
                                 -------------------------------------------
Income from continuing                                                      
 operations                         46,544     97,987     54,268     57,515 
Income from discontinued                                                    
 operation (net of taxes)                           -          -     80,786 
                                 -------------------------------------------
                                 $  46,544  $  97,987  $  54,268  $ 138,301 
                                 -------------------------------------------
Net income attributable to:                                                 
  Inmet equity holders           $  46,544  $  97,987  $  54,268  $ 138,301 
  Non-controlling interest               -          -          -          - 
                                 -------------------------------------------
                                 $  46,544  $  97,987  $  54,268  $ 138,301 
                                 -------------------------------------------
Income from continuing                                                      
 operations per share                                                       
  Basic                          $    0.67  $    1.41  $    0.83  $    0.94 
  Diluted                        $    0.67  $    1.41  $    0.83  $    0.93 
Income from discontinuing                                                   
 operations per share                                                       
  Basic                          $       -  $       -  $       -  $    1.32 
  Diluted                        $       -  $       -  $       -  $    1.31 
Net Income per share                                                        
  Basic                          $    0.67  $    1.41  $    0.83  $    2.26 
  Diluted                        $    0.67  $    1.41  $    0.83  $    2.24 
                                                                            
1. Information restated from previously reported Canadian dollar amounts to 
US dollar amounts at May 31, 2012 exchange rate of US $0.97 per Canadian    
dollar.                                                                     
2. Investment and other income in the third quarter has been recast as a    
result of a reassessment of the embedded derivative relating to the senior  
unsecured notes prepayment option as being closely related at inception. The
net effect was a decrease to investment and other income for the third      
quarter of 2012 and an equivalent decrease in net income in that period.    
                                                                            
                                                                            
INMET MINING CORPORATION                                                    
                                                                            
Consolidated statements of financial position                               
(Unaudited)                                                                 
                                                                            
                                         December     December     December 
As at balance sheet date         Note         31,          31,          31, 
(thousands of US dollars)   reference        2012      2011(1)      2010(1) 
----------------------------------------------------------------------------
                                                                            
Assets                                                                      
Current assets:                                                             
  Cash and short term                                                       
   investments                      4  $1,541,219   $1,048,457     $316,045 
  Restricted cash                   5       1,291          784          597 
  Accounts receivable                     160,387      101,867      115,628 
  Inventories                              92,399       87,654       69,860 
  Current portion of                                                        
   bonds and other                                                          
   securities                       6     883,599      175,921       52,201 
  Assets held for sale                          -            -      308,935 
                                      --------------------------------------
                                        2,678,895   $1,414,683      863,266 
Restricted cash                     5      77,050       69,538       67,831 
Property, plant and                                                         
 equipment                              2,632,297    1,772,766    1,680,858 
Bonds and other                                                             
 securities            
             6   1,193,088      430,787      311,091 
Deferred income tax                                                         
 assets                                       895          317        8,444 
Other assets                                1,643        1,380        2,261 
                                      --------------------------------------
Total assets                           $6,583,868   $3,689,471   $2,933,751 
----------------------------------------------------------------------------
                                                                            
Liabilities                                                                 
Current liabilities:                                                        
  Accounts payable and                                                      
   accrued liabilities              7     282,676      138,596     $132,009 
  Provisions                        8      20,041       13,087       17,106 
  Current portion of long                                                   
   term debt                        9      17,870            -            - 
  Liabilities associated                                                    
   with assets held for                                                     
   sale                                         -            -      108,338 
                                      --------------------------------------
                                          320,587     $151,683      257,453 
Long-term debt                      9   1,941,989       16,581       16,091 
Provisions                          8     227,146      170,025      157,235 
Other liabilities                          18,243       17,156       17,541 
Deferred income tax                                                         
 liabilities                              104,099       28,351       12,127 
                                      --------------------------------------
Total liabilities                       2,612,064     $383,796      460,447 
                                      --------------------------------------
                                                                            
Commitments and                                                             
 contingencies                     18                                       
                                                                            
Equity                                                                      
Share capital                           1,541,773    1,541,324    1,054,927 
Contributed surplus                        64,825       64,629       64,028 
Share based compensation           10      21,896        8,256        6,334 
Retained earnings                       2,176,197    1,851,010    1,527,342 
Accumulated other                                                           
 comprehensive loss                11     (85,413)    (159,544)    (179,327)
                                      --------------------------------------
Total equity attributable                                                   
 to Inmet equity holders               $3,719,278   $3,305,675    2,473,304 
Non-controling interest            12     252,526            -            - 
                                      --------------------------------------
Total equity                           $3,971,804   $3,305,675   $2,473,304 
                                      --------------------------------------
Total liabilities and                                                       
 equity                                $6,583,868   $3,689,471   $2,933,751 
----------------------------------------------------------------------------
(1)refer to note 3 for effect of change in presentation currency to the US  
 Dollar                                                                     
(See accompanying notes)                                                    
                                          
INMET MINING CORPORATION                  
Segmented statements of financial position
(unaudited)                               
                                                                
                                                               
                             CORPORATE                     LAS 
2012 As at December 31         & OTHER      CAYELI      CRUCES 
---------------------------------------------------------------
                                                               
(thousands of US dollars)                 (Turkey)     (Spain) 
                                                               
Assets                                                         
Cash and short-term                                            
 investments               $ 1,128,087 $   148,678 $   157,903 
Other current assets           894,911      41,529     148,250 
Restricted cash                 19,804           -      55,629 
Property, plant and                                            
 equipment                       3,764     134,389     852,955 
Bonds and other securities   1,092,056     101,032           - 
Other non-current assets         1,466       1,072           - 
                           ------------------------------------
                           $ 3,140,088 $   426,700 $ 1,214,737 
                           ------------------------------------
                                                               
Liabilities                                                    
Current liabilities        $    61,204 $    54,111 $    59,288 
Long-term debt               1,941,989           -           - 
Provisions                      79,809      21,772      69,189 
Other liabilities                  681           -      17,562 
Deferred income tax                                            
 liabilities                       889           -      91,594 
                           ------------------------------------
                           $ 2,084,572 $    75,883 $   237,633 
                           ------------------------------------
 
                                                    DISCONTINUED            
                                             COBRE  OPERATIONS -            
2012 As at December 31       PYHASALMI      PANAMA       OK TEDI       TOTAL
----------------------------------------------------------------------------
                                                      (Papua New            
(thousands of US dollars)    (Finland)    (Panama)       Guinea)            
                                                                            
Assets                                                                      
Cash and short-term                                                         
 investments               $    22,071 $    84,480 $           - $ 1,541,219
Other current assets            51,823       1,163             -   1,137,676
Restricted cash                  1,617           -             -      77,050
Property, plant and                                                         
 equipment                      70,166   1,571,023             -   2,632,297
Bonds and other securities           -           -             -   1,193,088
Other non-current assets             -           -             -       2,538
                           -------------------------------------------------
                           $   145,677 $ 1,656,666 $           - $ 6,583,868
                           -------------------------------------------------
                                                                            
Liabilities                                                                 
Current liabilities        $    19,472 $   126,512 $           - $   320,587
Long-term debt                       -           -             -   1,941,989
Provisions                      35,800      20,576             -     227,146
Other liabilities                    -           -             -      18,243
Deferred income
 tax                                                         
 liabilities                    11,616           -             -     104,099
                           -------------------------------------------------
                           $    66,888 $   147,088 $           - $ 2,612,064
                           -------------------------------------------------
                                                               
                                                               
                                                               
                             CORPORATE                     LAS 
2011 As at December 31         & OTHER      CAYELI      CRUCES 
---------------------------------------------------------------
                                                               
(thousands of US dollars)                 (Turkey)     (Spain) 
                                                               
Assets                                                         
Cash and short-term                                            
 investments               $   711,427 $   133,215 $   131,799 
Other current assets           183,715      44,728      83,926 
Restricted cash                 16,306           -      51,667 
Property, plant and                                            
 equipment                       1,196     137,736     869,308 
Bonds and other securities     351,082      79,705           - 
Other non-current assets         1,262         435           - 
                           ------------------------------------
                           $ 1,264,988 $   395,819 $ 1,136,700 
                           ------------------------------------
                                                               
                                                               
Liabilities                                                    
Current liabilities        $    21,305 $    41,460 $    53,152 
Long-term debt                  16,581           -           - 
Provisions                      68,823      17,450      53,857 
Other liabilities                  655           -      16,501 
Deferred income tax                                            
 liabilities                         -           -      17,095 
                           ------------------------------------
                           $   107,364 $    58,910 $   140,605 
                           ------------------------------------
 
                                                                            
                                                    DISCONTINUED            
                                             COBRE  OPERATIONS -            
2011 As at December 31       PYHASALMI      PANAMA       OK TEDI       TOTAL
----------------------------------------------------------------------------
                                                      (Papua New            
(thousands of US dollars)    (Finland)    (Panama)       Guinea)            
                                                                            
Assets                                                                      
Cash and short-term                                                         
 investments               $    46,109 $    25,907 $           - $ 1,048,457
Other current assets            51,893       1,964             -     366,226
Restricted cash                  1,565           -             -      69,538
Property, plant and                                                         
 equipment                      66,103     698,423             -   1,772,766
Bonds and other securities           -           -             -     430,787
Other non-current assets             -           -             -       1,697
                           -------------------------------------------------
                           $   165,670 $   726,294 $           - $ 3,689,471
                           -------------------------------------------------
                                                                            
                                                                            
Liabilities                                                                 
Current liabilities        $    16,418 $    19,348 $           - $   151,683
Long-term debt                       -           -             -      16,581
Provisions                      29,895           -             -     170,025
Other liabilities                    -           -             -      17,156
Deferred income tax                                                         
 liabilities                    11,256           -             -      28,351
                           -------------------------------------------------
                           $    57,569 $    19,348 $           - $   383,796
                           -------------------------------------------------
                                                               
                                                               
                                                               
                             CORPORATE                     LAS 
2010 As at December 31         & OTHER      CAYELI      CRUCES 
---------------------------------------------------------------
                                                               
(thousands of US dollars)                 (Turkey)     (Spain) 
                                                               
Assets                                                         
Cash and short-term                                            
 investments               $    51,493 $   104,324 $    57,961 
Other current assets            58,851      57,084      57,708 
Restricted cash                 16,368           -      49,883 
Property, plant and                                            
 equipment                         754     147,799     911,496 
Bonds and other securities     248,288      62,803           - 
Other non-current assets           922       5,571       4,212 
                           ------------------------------------
                           $   376,676 $   377,581 $ 1,081,260 
                           ------------------------------------
                                                               
                                                               
Liabilities                                                    
Current liabilities        $    29,322 $    38,393 $    45,718 
Long-term debt                  16,091           -           - 
Provisions                      55,707      20,920      54,644 
Other liabilities                  655           -      16,886 
Deferred income tax                                            
 liabilities                       171           -           - 
                           ------------------------------------
                           $   101,946 $    59,313 $   117,248 
                           ------------------------------------
 
                                                                            
                                                    DISCONTINUED            
                                             COBRE  OPERATIONS -            
2010 As at December 31       PYHASALMI      PANAMA       OK TEDI       TOTAL
----------------------------------------------------------------------------
                                                      (Papua New            
(thousands of US dollars)    (Finland)    (Panama)       Guinea)            
                                                                            
Assets                                                                      
Cash and short-term                                                         
 investments               $    93,970 $     8,297 $           - $   316,045
Other current assets            64,088         664       308,826     547,221
Restricted cash                  1,580           -             -      67,831
Property, pla
nt and                                                         
 equipment                      64,854     555,955             -   1,680,858
Bonds and other securities           -           -             -     311,091
Other non-current assets             -           -             -      10,705
                           -------------------------------------------------
                           $   224,492 $   564,916 $     308,826 $ 2,933,751
                           -------------------------------------------------
                                                                            
                                                                            
Liabilities                                                                 
Current liabilities        $    27,994 $     7,688 $     108,338 $   257,453
Long-term debt                       -           -             -      16,091
Provisions                      25,964           -             -     157,235
Other liabilities                    -           -             -      17,541
Deferred income tax                                                         
 liabilities                    11,956           -             -      12,127
                           -------------------------------------------------
                           $    65,914 $     7,688 $     108,338 $   460,447
                           -------------------------------------------------
                                                                            
INMET MINING CORPORATION                                                    
Consolidated statements of changes in equity                                
(unaudited)                                                                 
                                                                            
----------------------------------------------------------------------------
                             Attributable to Inmet equity holders           
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                                            
(thousands of US        Note      Share   Retained  Contributed  Share based
 dollars)          reference    Capital   earnings      surplus compensation
----------------------------------------------------------------------------
Balance as at                                                               
 December 31,                                                               
 2010                        $1,054,927 $1,527,342      $64,028       $6,334
Comprehensive                                                               
 income                               -    337,100            -            -
                                                                            
Equity settled                                                              
 share-based                                                                
 compensation                                                               
 plans                              198          -          601        1,922
                                                                            
Dividends                             -    (13,432)           -            -
Issuance of share                                                           
 capital                        486,199          -            -            -
                            ------------------------------------------------
Balance as at                                                               
 December 31,                                                               
 2011                        $1,541,324 $1,851,010      $64,629       $8,256
                            ------------------------------------------------
Comprehensive                                                               
 income                               -    331,211            -            -
                                                                            
Equity settled                                                              
 share-based                                                                
 compensation                                                               
 plans                              449          -          196       13,640
                                                                            
Dividends                             -    (13,616)           -            -
Equity funding                                                              
 from non-                                                                  
 controlling                                                                
 shareholder                          -          -            -            -
Sale of 20                                                                  
 percent interest                                                           
 in Cobre Panama          12          -      7,592            -            -
                            ------------------------------------------------
Balance as at                                                               
 December 31,                                                               
 2012                         1,541,773  2,176,197       64,825       21,896
                            ------------------------------------------------
 
                                                                        
------------------------------------------------------------------------
                          Attributable to Inmet equity holders          
------------------------------------------------------------------------
                     Accumulated                                        
                           other                                        
                   comprehensive                       Non-             
(thousands of US   income (loss)                controlling       Total 
 dollars)              (note 11)        Total      interest      equity 
------------------------------------------------------------------------
Balance as at                                                           
 December 31,                                                           
 2010                  ($179,327)  $2,473,304           $ -  $2,473,304 
Comprehensive                                                           
 income                   19,783      356,883             -     356,883 
                                                                        
Equity settled                                                          
 share-based                                                            
 compensation                                                           
 plans                         -        2,721             -       2,721 
                                                                        
Dividends                      -      (13,432)            -     (13,432)
Issuance of share                                                       
 capital                       -      486,199             -     486,199 
                 -------------------------------------------------------
Balance as at                                                           
 December 31,                                                           
 2011                  ($159,544)  $3,305,675           $ -  $3,305,675 
                 -------------------------------------------------------
Comprehensive                                                           
 income                   68,358      399,569         4,867     404,436 
                                                                        
Equity settled                                                          
 share-based                                                       
     
 compensation                                                           
 plans                         -       14,285             -      14,285 
                                                                        
Dividends                      -      (13,616)            -     (13,616)
Equity funding                                                          
 from non-                                                              
 controlling                                                            
 shareholder                   -            -       100,000     100,000 
Sale of 20                                                              
 percent interest                                                       
 in Cobre Panama           5,773       13,365       147,659     161,024 
                 -------------------------------------------------------
Balance as at                                                           
 December 31,                                                           
 2012                    (85,413)  $3,719,278      $252,526  $3,971,804 
                 -------------------------------------------------------
                                                                            
INMET MINING CORPORATION                                                    
Consolidated statements of earnings                                         
(unaudited)                                                                 
                                                                            
                                        Three Months                        
                                               Ended             Year Ended 
                                         December 31            December 31 
(thousands of US                                                            
 dollars except per                                                         
 share amounts)        reference     2012    2011(1)        2012    2011(1) 
----------------------------------------------------------------------------
                                                                            
Gross sales                      $259,868   $233,394  $1,123,977   $947,911 
Smelter processing                                                          
 charges and freight              (26,155)   (27,330)   (113,996)  (126,569)
Cost of sales                                                               
 (excluding                                                                 
 depreciation)                    (91,273)   (90,177)   (346,627)  (316,675)
  Depreciation                    (30,079)   (26,835)   (126,972)  (105,269)
----------------------------------------------------------------------------
Earnings from                                                               
 operations                       112,361     89,052     536,382    399,398 
                                                                            
Corporate development                                                       
 and exploration                   (8,620)    (6,333)    (35,616)   (28,273)
General and                                                                 
 administration                   (14,896)    (7,487)    (53,522)   (33,306)
Investment and other                                                        
 income                       13  (16,279)    (3,883)     24,206     29,748 
Finance costs                 14   (2,632)    (2,314)    (10,070)    (9,182)
----------------------------------------------------------------------------
Income before taxation             69,934     69,035     461,380    358,385 
                                                                            
Income tax expense            15  (31,713)   (22,491)   (131,304)  (102,071)
----------------------------------------------------------------------------
Income from continuing                                                      
 operations                        38,221     46,544     330,076   $256,314 
Income from                                                                 
 discontinued                                                               
 operation (net of                                                          
 taxes)                                 -          -           -     80,786 
----------------------------------------------------------------------------
Net income                         38,221     46,544     330,076   $337,100 
----------------------------------------------------------------------------
Net income (loss)                                                           
 attributable to:                                                           
Inmet equity holders               38,775     46,544     331,211   $337,100 
Non-controlling                                                             
 interests                           (554)         -      (1,135)         - 
----------------------------------------------------------------------------
                                   38,221     46,544     330,076   $337,100 
----------------------------------------------------------------------------
Earnings per common                                                         
 share                        16                                            
Income from continuing                                                      
 operations                                                                 
  Basic                             $0.56      $0.67       $4.78      $3.86 
  Diluted                           $0.56      $0.67       $4.75      $3.85 
----------------------------------------------------------------------------
Income from                                                                 
 discontinued                                                               
 operation                                                                  
  Basic                               $ -          -         $ -      $1.22 
  Diluted                             $ -          -         $ -      $1.21 
----------------------------------------------------------------------------
Net income                                                                  
  Basic                             $0.56      $0.67       $4.78      $5.08 
  Diluted                           $0.56      $0.67       $4.75      $5.06 
----------------------------------------------------------------------------
(1) refer to note 3 for effect of change in presentation currency to the US 
 Dollar                                                                     
(See accompanying notes)                                                    
                                
INMET MINING CORPORATION        
Segmented statements of earnings
(unaudited)                     
                                                                  
                                                                 
2012 For the year ended      CORPORATE                       LAS 
 December 31                   & OTHER       CAYELI       CRUCES 
-----------------------------------------------------------------
                                                                 
(thousands of US dollars)                  (Turkey)      (Spain) 
                                                                 
Gross sales                $         -  $   358,964  $   538,981 
Smelter processing charges                                       
 and freight                         -      (67,348)      (2,374)
Cost of sales (excluding                                         
 depreciation)                 (17,104)    (104,045)    (165,320)
  Depreciation                       -      (24,692)     (92,037)
                           --------------------------------------
                                                                 
Earnings from operations       (17,104)     162,879      279,250 
                               
                                  
Corporate development and                                        
 exploration                   (22,490)      (1,347)      (1,600)
General and administration     (53,522)           -            - 
Investment and other                                             
 income                         25,241         (524)       1,580 
Finance costs                   (3,340)      (1,155)      (4,753)
Income tax expense              (1,935)     (32,923)     (72,495)
                           --------------------------------------
Net income from continuing                                       
 operations                $   (73,150) $   126,930  $   201,982 
                                                                 
Income from discontinued                                         
 operation (net of taxes)            -            -            - 
                           --------------------------------------
                                                                 
Net income (loss)          $   (73,150) $   126,930  $   201,982 
                           --------------------------------------
 
                                                                            
                                                    DISCONTINUED            
2012 For the year ended                     COBRE     OPERATIONS            
 December 31                PYHASALMI      PANAMA       -OK TEDI      TOTAL 
----------------------------------------------------------------------------
                                                                            
                                                      (Papua New            
(thousands of US dollars)   (Finland)    (Panama)        Guinea)            
                                                                            
Gross sales                $  226,032  $        -  $           - $1,123,977 
Smelter processing charges                                                  
 and freight                  (44,274)          -              -   (113,996)
Cost of sales (excluding                                                    
 depreciation)                (60,158)          -              -   (346,627)
  Depreciation                (10,243)          -              -   (126,972)
                          --------------------------------------------------
                                                                            
Earnings from operations      111,357           -              -    536,382 
                                                                            
Corporate development and                                                   
 exploration                   (4,368)     (5,811)             -    (35,616)
General and administration          -           -              -    (53,522)
Investment and other                                                        
 income                        (1,727)       (364)             -     24,206 
Finance costs                    (726)        (96)             -    (10,070)
Income tax expense            (23,951)          -              -   (131,304)
                          --------------------------------------------------
Net income from continuing                                                  
 operations                $   80,585  $   (6,271) $           - $  330,076 
                                                                            
Income from discontinued                                                    
 operation (net of taxes)           -           -              -          - 
                          --------------------------------------------------
                                                                            
Net income (loss)          $   80,585  $   (6,271) $           - $  330,076 
                          --------------------------------------------------
                                                              
                                                              
                                                              
2011 For the year ended     CORPORATE                     LAS 
 December 31                  & OTHER      CAYELI      CRUCES 
--------------------------------------------------------------
                                                              
(thousands of US dollars)                (Turkey)     (Spain) 
                                                              
Gross sales                $        -  $  342,458  $  345,568 
Smelter processing charges                                    
 and freight                        -     (69,424)     (1,188)
Cost of sales (excluding                                      
 depreciation)                (16,190)    (97,079)   (147,076)
  Depreciation                      -     (21,337)    (74,931)
                           -----------------------------------
                                                              
Earnings from operations      (16,190)    154,618     122,373 
                                                              
Corporate development and                                     
 exploration                  (20,590)     (1,612)       (435)
General and administration    (33,306)          -           - 
Investment and other                                          
 income                        20,074       7,521       1,686 
Finance costs                  (3,720)       (570)     (4,027)
Income tax expense              2,374     (50,947)    (22,788)
                           -----------------------------------
Net income from continuing                                    
 operations                $  (51,358) $  109,010  $   96,809 
                                                              
Income from discontinued                                      
 operation (net of taxes)           -           -           - 
                           -----------------------------------
                                                              
Net income (loss)          $  (51,358) $  109,010  $   96,809 
                           -----------------------------------
 
                                                                            
                                                                            
                                                    DISCONTINUED            
2011 For the year ended                     COBRE     OPERATIONS            
 December 31                PYHASALMI      PANAMA       -OK TEDI      TOTAL 
----------------------------------------------------------------------------
                                                                            
                                                      (Papua New            
(thousands of US dollars)   (Finland)    (Panama)        Guinea)            
                                                                            
Gross sales                $  259,885  $        -  $           - $  947,911 
Smelter processing charges                                                  
 and freight                  (55,957)          -              -   (126,569)
Cost of sales (excluding                                                    
 depreciation)                (56,330)          -              -   (316,675)
  Depreciation                 (9,001)          -              -   (105,269)
                          --------------------------------------------------
                                                                            
Earnings from operations      138,597           -              -    399,398 
                                                                            
Corporate development and                                                   
 exploration                   (3,478)     (2,158)             -    (28,273)
General and administration          -           -              -    (33,306)
Investment and other                                                        
 income                      
     447          20              -     29,748 
Finance costs                    (865)          -              -     (9,182)
Income tax expense            (30,710)          -              -   (102,071)
                          --------------------------------------------------
Net income from continuing                                                  
 operations                $  103,991  $   (2,138) $           - $  256,314 
                                                                            
Income from discontinued                                                    
 operation (net of taxes)           -           -         80,786     80,786 
                          --------------------------------------------------
                                                                            
Net income (loss)          $  103,991  $   (2,138) $      80,786 $  337,100 
                          --------------------------------------------------
INMET MINING CORPORATION                                                    
Segmented statements of earnings                                            
(unaudited)                                                                 
                                                                    
                                                                    
                                                                    
2012 For the three months     CORPORATE                         LAS 
 ended December 31              & OTHER        CAYELI        CRUCES 
--------------------------------------------------------------------
                                                                    
(thousands of US dollars)                    (Turkey)       (Spain) 
                                                                    
                                                                    
Gross sales                $          -  $     58,742  $    136,909 
Smelter processing charges                                          
 and freight                          -       (12,856)         (861)
Cost of sales (excluding                                            
 depreciation)                   (9,924)      (24,691)      (40,320)
  Depreciation                        -        (4,702)      (22,331)
                           -----------------------------------------
                                                                    
Earnings from operations         (9,924)       16,493        73,397 
                                                                    
Corporate development and                                           
 exploration                     (5,679)         (355)            5 
General and administration      (14,896)            -             - 
Investment and other                                                
 income                         (12,970)          376        (2,238)
Finance costs                      (867)         (293)       (1,190)
Income tax expense               (1,346)       (3,983)      (18,371)
                           -----------------------------------------
Net income from continuing                                          
 operations                $    (45,682) $     12,238  $     51,603 
                                                                    
                                      -             -             - 
                           -----------------------------------------
                                                                    
Net income (loss)          $    (45,682) $     12,238  $     51,603 
                           -----------------------------------------
                                                                    
 
                                                                            
                                                                            
                                                    DISCONTINUED            
2012 For the three months                   COBRE   OPERATIONS -            
 ended December 31          PYHASALMI      PANAMA        OK TEDI      TOTAL 
----------------------------------------------------------------------------
                                                                            
                                                      (Papua New            
(thousands of US dollars)   (Finland)    (Panama)        Guinea)            
                                                                            
                                                                            
Gross sales                $   64,217  $        -  $           - $  259,868 
Smelter processing charges                                                  
 and freight                  (12,438)          -              -    (26,155)
Cost of sales (excluding                                                    
 depreciation)                (16,338)          -              -    (91,273)
  Depreciation                 (3,046)          -              -    (30,079)
                          --------------------------------------------------
                                                                            
Earnings from operations       32,395           -              -    112,361 
                                                                            
Corporate development and                                                   
 exploration                   (1,028)     (1,573)             -     (8,620)
General and administration          -           -              -    (14,896)
Investment and other                                                        
 income                          (953)       (494)             -    (16,279)
Finance costs                    (186)        (96)             -     (2,632)
Income tax expense             (8,013)          -              -    (31,713)
                          --------------------------------------------------
Net income from continuing                                                  
 operations                $   22,215  $   (2,153) $           - $   38,221 
                                                                            
                                    -           -              -          - 
                          --------------------------------------------------
                                                                            
Net income (loss)          $   22,215  $   (2,153) $           - $   38,221 
                          --------------------------------------------------
                                                                            
                                                              
                                                              
                                                              
2011 For the three months   CORPORATE                     LAS 
 ended December 31            & OTHER      CAYELI      CRUCES 
--------------------------------------------------------------
                                                              
(thousands of US dollars)                (Turkey)     (Spain) 
                                                              
                                                              
Gross sales                $        -  $   77,124  $   97,731 
Smelter processing charges                                    
 and freight                        -     (14,373)       (351)
Cost of sales (excluding                                      
 depreciation)                (16,190)    (22,692)    (37,867)
  Depreciation                      -      (5,391)    (19,129)
                           -----------------------------------
                                                              
Earnings from operations      (16,190)     34,668      40,384 
                                                              
                                                              
Corporate development and                                     
 explorat
ion                   (4,466)       (377)       (429)
General and administration     (7,487)          -           - 
Investment and other                                          
 income                        (5,544)        480         910 
Finance costs                    (941)       (148)     (1,009)
Income tax expense              1,662      (9,444)     (8,097)
                           -----------------------------------
Net income from continuing                                    
 operations                $  (32,966) $   25,179  $   31,759 
                                                              
Income from discontinued                                      
 operation (net of taxes)           -           -           - 
                           -----------------------------------
                                                              
Net income (loss)          $  (32,966) $   25,179  $   31,759 
                           -----------------------------------
                                                              
 
                                                                            
                                                                            
                                                    DISCONTINUED            
2011 For the three months                    COBRE    OPERATIONS            
 ended December 31          PYHASALMI       PANAMA      -OK TEDI      TOTAL 
----------------------------------------------------------------------------
                                                                            
                                                      (Papua New            
(thousands of US dollars)   (Finland)     (Panama)       Guinea)            
                                                                            
                                                                            
Gross sales                $   58,539  $         - $           - $  233,394 
Smelter processing charges                                                  
 and freight                  (12,606)           -             -    (27,330)
Cost of sales (excluding                                                    
 depreciation)                (13,428)           -             -    (90,177)
  Depreciation                 (2,315)           -             -    (26,835)
                          --------------------------------------------------
                                                                            
Earnings from operations       30,190            -             -     89,052 
                                                                            
                                                                            
Corporate development and                                                   
 exploration                   (1,061)           -             -     (6,333)
General and administration          -            -             -     (7,487)
Investment and other                                                        
 income                           156          115             -     (3,883)
Finance costs                    (216)           -             -     (2,314)
Income tax expense             (6,612)           -             -    (22,491)
                          --------------------------------------------------
Net income from continuing                                                  
 operations                $   22,457  $       115 $           - $   46,544 
                                                                            
Income from discontinued                                                    
 operation (net of taxes)           -            -             -          - 
                          --------------------------------------------------
                                                                            
Net income (loss)          $   22,457  $       115 $           - $   46,544 
                          --------------------------------------------------
                                                                            
                                                                            
INMET MINING CORPORATION                                                    
Consolidated statements of comprehensive income                             
(unaudited)                                                                 
                                                                            
                                     Three Months Ended          Year Ended 
                                            December 31         December 31 
                                Note                                        
(thousands of US dollars)  reference     2012   2011(1)       2012  2011(1) 
----------------------------------------------------------------------------
                                                                            
                                                                            
Net income                            $38,221   $46,544   $330,076 $337,100 
                                     ---------------------------------------
                                                                            
Other comprehensive income                                                  
 for the period:                                                            
Continuing operations                                                       
  Changes in fair value of                                                  
   bonds and other                                                          
   securities                          (1,175)     (649)       296   (3,552)
  Currency translation                                                      
   adjustments                         38,266  (107,104)    73,176    4,026 
                                                                            
Reclassification to net                                                     
 income of losses on bonds                                                  
 and other securities                     659     3,440        659    3,440 
Income tax recovery                                                         
 related to bonds and                                                       
 other securities - other                                                   
 comprehensive income                       -         -          -       15 
                                     ---------------------------------------
                                       37,750  (104,313)    74,131    3,929 
                                     ---------------------------------------
Other comprehensive income                                                  
 from discontinued                                                          
 operation (net of taxes)                   -         -          -   15,854 
                                     ---------------------------------------
                                                                            
Comprehensive income                  $75,971  ($57,769)  $404,207 $356,883 
----------------------------------------------------------------------------
(1)refer to note 3 for effect of change in presentation currency to the US  
 Dollar                                                                     
(See accompanying notes)                                                    
                                                                            
                                                                            
INMET MINING CORPORATION                                                    
Consolidated statements of cash flows                                       
                                                                            
(unaudited)                                                                 
                                 Three Months Ended              Year Ended 
             
                           December 31             December 31 
                                                                            
(thousands of US       Note                                                 
 dollars)          reference       2012     2011(2)        2012     2011(2) 
----------------------------------------------------------------------------
                                                                            
Cash provided by                                                            
 (used in)                                                                  
 operating                                                                  
 activities(1)                                                              
                                                                            
Net income from                                                             
 continuing                                                                 
 operations                     $38,221     $46,544    $330,076    $256,314 
Add (deduct) items                                                          
 not affecting                                                              
 cash:                                                                      
  Depreciation                   30,079      26,835     126,972     105,269 
  Deferred income                                                           
   taxes                         18,431       9,233      72,569      25,504 
  Accretion                                                                 
   expense on                                                               
   provisions and                                                           
   capital leases                 2,163       1,855       8,289       7,393 
  Change in asset                                                           
   retirement                                                               
   obligations at                                                           
   closed sites                   9,924      16,190      17,104      16,190 
  Foreign exchange                                                          
   loss (gain)                    4,056       6,031       6,361     (20,384)
  Stock based                                                               
   compensation                   5,158       2,209      17,323       3,473 
  Other                           4,252       7,715       6,155       3,940 
Settlement of                                                               
 asset retirement                                                           
 obligations                     (4,969)     (4,209)     (8,503)    (10,509)
Net change in non-                                                          
 cash working                                                               
 capital                  17      9,536     (41,635)    (32,954)      4,786 
                             -----------------------------------------------
                                116,851      70,768     543,392     391,976 
                             -----------------------------------------------
                                                                            
Cash provided by                                                            
 (used in)                                                                  
 investing                                                                  
 activities                                                                 
                                                                            
Purchase of                                                                 
 property, plant                                                            
 and equipment                 (342,467)    (57,100)   (785,761)   (201,909)
Acquisition of                                                              
 bonds and other                                                            
 securities                6   (537,345)     (2,121) (2,291,513)   (296,014)
Maturity of bonds                                                           
 and other                                                                  
 securities                     581,488      15,613     839,673      66,508 
Funding received                                                            
 under Cobre                                                                
 Panama option                                                              
 agreement                            -           -           -      12,310 
Sale (purchase) of                                                          
 short-term                                                                 
 investments, net              (507,636)     80,055    (249,177)   (251,632)
Other                                 -      (3,730)          -         255 
                             -----------------------------------------------
                                                                            
                               (805,960)     32,717  (2,486,778)   (670,482)
                             -----------------------------------------------
                                                                            
Cash provided by                                                            
 (used in)                                                                  
 financing                                                                  
 activities                                                                 
                                                                            
Issuance of common                                                          
 shares                               -           -           -     486,199 
Long-term debt                                                              
 borrowing, net of                                                          
 transaction costs         9    492,837           -   1,921,868           - 
Dividends on                                                                
 common shares                   (6,857)     (6,719)    (13,616)    (13,432)
Financial                                                                   
 assurance                                                                  
 payments                          (228)       (202)     (5,454)     (2,493)
Funding by non-                                                             
 controlling                                                                
 shareholder                     40,000           -     100,000           - 
Sale of 20 percent                                                          
 interest in Cobre                                                          
 Panama                   12          -           -     160,952           - 
Other                              (170)       (522)     (1,982)     (2,767)
                             -----------------------------------------------
                                525,582      (7,443)  2,161,768     467,507 
                             -----------------------------------------------
                                                                            
                                                                            
Foreign exchange                                                            
 on cash held                                                               
  in foreign                                                                
   currencies                    15,445     (22,796)     25,203      (5,204)
                             -----------------------------------------------
                                                                            
Cash provided by                                                            
 discontinued                                                               
  operation    
                       -           -           -     297,220 
                             -----------------------------------------------
                                                                            
Increase in cash:              (148,082)     73,246     243,585     481,017 
Cash:                                                                       
  Beginning of                                                              
   period                     1,181,665     716,752     789,998     308,981 
                             -----------------------------------------------
  End of period              $1,033,583    $789,998  $1,033,583    $789,998 
Short term                                                                  
 investments                    507,636     258,459     507,636     258,459 
                             -----------------------------------------------
                                                                            
Cash and short-                                                             
 term investments            $1,541,219  $1,048,457  $1,541,219  $1,048,457 
----------------------------------------------------------------------------
                                                                            
(See accompanying                                                           
 notes)                                                                     
                                                                            
(1)Supplementary                                                            
 cash flow                                                                  
 information:                                                               
                                                                            
  Cash interest                                                             
   paid                         $70,365         $ -     $71,426      $1,118 
  Cash taxes paid               $13,951     $29,038     $65,936     $92,102 
----------------------------------------------------------------------------
(2)refer to note 3 for effect of change in presentation currency to the US  
 Dollar                                                                     
                                                                            
                                  
INMET MINING CORPORATION          
Segmented statements of cash flows
                                  
(unaudited)                       
                                                                   
                                                                   
                                                                   
For the year ended December    CORPORATE                           
 31, 2012                        & OTHER       CAYELI   LAS CRUCES 
-------------------------------------------------------------------
                                                                   
(thousands of US dollars)                    (Turkey)      (Spain) 
Cash provided by (used in)                                         
 operating activities                                              
Before net change in non-                                          
 cash working capital           ($40,830)    $158,909     $372,140 
Net change in non-cash                                             
 working capital                   3,131       11,307      (52,337)
                             --------------------------------------
                                 (37,699)     170,216      319,803 
                             --------------------------------------
Cash provided by (used in)                                         
 investing activities                                              
                                                                   
                                                                   
Purchase of property, plant                                        
 and equipment                    (3,732)     (17,531)     (43,217)
Acquisition of bonds and                                           
 other securities             (2,271,677)     (19,836)           - 
Maturity of bonds and other                                        
 securities                      839,673            -            - 
Sale (purchase) of short-                                          
 term investments, net          (249,177)           -            - 
                             --------------------------------------
                              (1,684,913)     (37,367)     (43,217)
                             --------------------------------------
Cash provided by (used in)                                         
 financing activities                                              
Funding by non-controlling                                         
 shareholder                           -            -            - 
Long-term obligations          1,921,868            -            - 
Funding received - Cobre                                           
 Panama option agreement               -            -            - 
Other                            (16,744)           -       (4,379)
                             --------------------------------------
                               1,905,124            -       (4,379)
                             --------------------------------------
                                                                   
                                                                   
                                                                   
Foreign exchange on cash                                           
 held in foreign currencies       20,289         (977)         930 
                             --------------------------------------
                                                                   
                                                                   
Cash provided by                                                   
 discontinued operation                -            -            - 
                             --------------------------------------
                                                                   
                                                                   
Intergroup funding                                                 
 (distributions)                 (35,318)    (116,409)    (247,033)
                             --------------------------------------
Increase (decrease) in cash      167,483       15,463       26,104 
Cash:                                                              
  Beginning of year              452,968      133,215      131,799 
                             --------------------------------------
  End of period                  620,451      148,678      157,903 
Short term investments           507,636            -            - 
                             --------------------------------------
Cash and short-term                                                
 investments                  $1,128,087     $148,678     $157,903 
                             --------------------------------------
                                                                   
 
                                                                           
                                                                           
                                                  DISCONTINUED             
For the year ended December                COBRE    OPERATIONS             
 31, 2012                   PYHASALMI     PANAMA      -OK TEDI       TOTAL 
---------------------------------------------------------------------------
                                                                           
                                                    (Papua New             
(thousands of US dollars)   (Finland)   (Panama)       Guinea)             
Cash provided by (used in)                                                 
 operat
ing activities                                                      
Before net change in non-                                                  
 cash working capital         $92,306    ($6,179)          $ -    $576,346 
Net change in non-cash                                                     
 working capital                4,945          -             -     (32,954)
                            -----------------------------------------------
                               97,251     (6,179)            -     543,392 
                            -----------------------------------------------
Cash provided by (used in)                                                 
 investing activities                                                      
                                                                           
                                                                           
Purchase of property, plant                                                
 and equipment                 (8,648)  (712,633)            -    (785,761)
Acquisition of bonds and                                                   
 other securities                   -          -             -  (2,291,513)
Maturity of bonds and other                                                
 securities                         -          -             -     839,673 
Sale (purchase) of short-                                                  
 term investments, net              -          -             -    (249,177)
                            -----------------------------------------------
                               (8,648)  (712,633)            -  (2,486,778)
                            -----------------------------------------------
Cash provided by (used in)                                                 
 financing activities                                                      
Funding by non-controlling                                                 
 shareholder                        -    100,000             -     100,000 
Long-term obligations               -          -             -   1,921,868 
Funding received - Cobre                                                   
 Panama option agreement            -    160,952             -     160,952 
Other                               -         71             -     (21,052)
                            -----------------------------------------------
                                    -    261,023             -   2,161,768 
                            -----------------------------------------------
                                                                           
                                                                           
                                                                           
Foreign exchange on cash                                                   
 held in foreign currencies       389      4,572             -      25,203 
                            -----------------------------------------------
                                                                           
                                                                           
Cash provided by                                                           
 discontinued operation             -          -             -           - 
                            -----------------------------------------------
                                                                           
                                                                           
Intergroup funding                                                         
 (distributions)             (113,030)   511,790             -           - 
                            -----------------------------------------------
Increase (decrease) in cash   (24,038)    58,573             -     243,585 
Cash:                                                                      
  Beginning of year            46,109     25,907             -     789,998 
                            -----------------------------------------------
  End of period                22,071     84,480             -   1,033,583 
Short term investments              -          -             -     507,636 
                            -----------------------------------------------
Cash and short-term                                                        
 investments                  $22,071    $84,480           $ -  $1,541,219 
                            -----------------------------------------------
                                                                           
                                                               
                                                               
For the year ended December   CORPORATE                   LAS  
 31, 2011                       & OTHER     CAYELI     CRUCES  
---------------------------------------------------------------
                                                               
(thousands of US dollars)                 (Turkey)    (Spain)  
Cash provided by (used in)                                     
 operating activities                                          
Before net change in non-cash                                  
 working capital               ($55,319)  $132,064   $198,630  
Net change in non-cash                                         
 working capital                 (4,615)    19,755    (10,177) 
                              ---------------------------------
                                (59,934)   151,819    188,453  
                              ---------------------------------
Cash provided by (used in)                                     
 investing activities                                          
Purchase of property, plant                                    
 and equipment                   (1,055)   (12,708)   (51,935) 
Acquisition of bonds and                                       
 other securities              (280,830)   (15,184)         -  
Maturity of bonds and other                                    
 securities                      66,508          -          -  
Funding received under Cobre                                   
 Panama option agreement              -          -          -  
Sale (purchase) of short-term                                  
 investments, net              (258,678)         -      7,046  
Other                               255          -          -  
                              ---------------------------------
                               (473,800)   (27,892)   (44,889) 
                              ---------------------------------
                                                               
                                                               
Cash provided by (used in)                                     
 financing activities           472,540          -     (5,033) 
                              ---------------------------------
                                                               
                                                               
Foreign exchange on cash held                                  
 in foreign currencies                -        642     (3,781) 
                              ---------------------------------
                                                               
                                                               
Cash provided by discontinued                                  
 operation                            -          -          -  
                              ---------------------------------
                                                               
                                                               
Intergroup funding                                             
 (distributions)                462,669    (95,678)   (53,848) 
                              ---------------------------------
                                                               
Increase (decrease) in cash     401,475     28,891     80
,902  
Cash:                                                          
 Beginning of year               51,493    104,324     50,897  
                              ---------------------------------
 End of period                  452,968    133,215    131,799  
Short term investments          258,459          -          -  
                              ---------------------------------
Cash and short-term                                            
 investments                   $711,427   $133,215   $131,799  
                              ---------------------------------
 
                                                                            
                                                   DISCONTINUED             
For the year ended December                 COBRE  OPERATIONS -             
 31, 2011                    PYHASALMI     PANAMA       OK TEDI       TOTAL 
----------------------------------------------------------------------------
                                                    (Papua New              
(thousands of US dollars)    (Finland)   (Panama)       Guinea)             
Cash provided by (used in)                                                  
 operating activities                                                       
Before net change in non-cash                                               
 working capital              $113,953    ($2,138)          $ -    $387,190 
Net change in non-cash                                                      
 working capital                  (177)         -             -       4,786 
                             -----------------------------------------------
                               113,776     (2,138)            -     391,976 
                             -----------------------------------------------
Cash provided by (used in)                                                  
 investing activities                                                       
Purchase of property, plant                                                 
 and equipment                  (7,024)  (129,187)            -    (201,909)
Acquisition of bonds and                                                    
 other securities                    -          -             -    (296,014)
Maturity of bonds and other                                                 
 securities                          -          -             -      66,508 
Funding received under Cobre                                                
 Panama option agreement             -     12,310             -      12,310 
Sale (purchase) of short-term                                               
 investments, net                    -          -             -    (251,632)
Other                                -          -             -         255 
                             -----------------------------------------------
                                (7,024)  (116,877)            -    (670,482)
                             -----------------------------------------------
                                                                            
                                                                            
Cash provided by (used in)                                                  
 financing activities                -          -             -     467,507 
                             -----------------------------------------------
                                                                            
                                                                            
Foreign exchange on cash held                                               
 in foreign currencies          (2,608)       543             -      (5,204)
                             -----------------------------------------------
                                                                            
                                                                            
Cash provided by discontinued                                               
 operation                           -          -       297,220     297,220 
                             -----------------------------------------------
                                                                            
                                                                            
Intergroup funding                                                          
 (distributions)              (152,005)   136,082      (297,220)          - 
                             -----------------------------------------------
                                                                            
Increase (decrease) in cash    (47,861)    17,610             -     481,017 
Cash:                                                                       
 Beginning of year              93,970      8,297             -     308,981 
                             -----------------------------------------------
 End of period                  46,109     25,907             -     789,998 
Short term investments               -          -             -     258,459 
                             -----------------------------------------------
Cash and short-term                                                         
 investments                   $46,109    $25,907           $ -  $1,048,457 
                             -----------------------------------------------
INMET MINING CORPORATION            
Segmented statements of cash flows  
(unaudited)                         
                                                                 
                                                                 
                                                                 
For the three months ended   CORPORATE                           
 December 31, 2012             & OTHER       CAYELI   LAS CRUCES 
-----------------------------------------------------------------
                                                                 
(thousands of US dollars)                  (Turkey)      (Spain) 
Cash provided by (used in)                                       
 operating activities                                            
Before net change in non-                                        
 cash working capital         ($28,968)     $17,617      $94,801 
Net change in non-cash                                           
 working capital                 6,409       46,272      (44,973)
                           --------------------------------------
                               (22,559)      63,889       49,828 
                           --------------------------------------
Cash provided by (used in)                                       
 investing activities                                            
Purchase of property,                                            
 plant and equipment              (892)      (8,343)     (18,027)
Acquisition of bonds and                                         
 other securities             (537,097)        (248)           - 
Maturity of bonds and                                            
 other securities              581,488            -            - 
Sale (purchase) of short-                                        
 term investments             (507,636)           -            - 
                           --------------------------------------
                              (464,137)      (8,591)     (18,027)
                           --------------------------------------
                                                                 
                                                                 
Cash provided by (used in)                                       
 financing activities                                            
Funding by non-controlling                                       
 shareholder                         -            -            - 
Long-term obligations          492,837            -            - 
Other                           (7,021)           -         (305)
                       
    --------------------------------------
                               485,816            -         (305)
                           --------------------------------------
                                                                 
                                                                 
                                                                 
Foreign exchange on cash                                         
 held in foreign                                                 
 currencies                     11,224           65        2,984 
                           --------------------------------------
                                                                 
                                                                 
Intergroup funding                                               
 (distributions)              (192,066)       1,678       (3,889)
                           --------------------------------------
Increase (decrease) in                                           
 cash                         (181,722)      57,041       30,591 
Cash:                                                            
  Beginning of year            802,173       91,637      127,312 
                           --------------------------------------
  End of period                620,451      148,678      157,903 
Short term investments         507,636            -            - 
                           --------------------------------------
Cash and short-term                                              
 investments                $1,128,087     $148,678     $157,903 
                           --------------------------------------
 
                                                                            
                                                                            
                                                   DISCONTINUED             
For the three months ended                  COBRE  OPERATIONS -             
 December 31, 2012          PYHASALMI      PANAMA       OK TEDI       TOTAL 
----------------------------------------------------------------------------
                                                    (Papua New              
(thousands of US dollars)   (Finland)    (Panama)       Guinea)             
Cash provided by (used in)                                                  
 operating activities                                                       
Before net change in non-                                                   
 cash working capital         $25,926     ($2,061)          $ -    $107,315 
Net change in non-cash                                                      
 working capital                1,828           -             -       9,536 
                          --------------------------------------------------
                               27,754      (2,061)            -     116,851 
                          --------------------------------------------------
Cash provided by (used in)                                                  
 investing activities                                                       
Purchase of property,                                                       
 plant and equipment           (2,618)   (312,587)            -    (342,467)
Acquisition of bonds and                                                    
 other securities                   -           -             -    (537,345)
Maturity of bonds and                                                       
 other securities                   -           -             -     581,488 
Sale (purchase) of short-                                                   
 term investments                   -           -             -    (507,636)
                          --------------------------------------------------
                               (2,618)   (312,587)            -    (805,960)
                          --------------------------------------------------
                                                                            
                                                                            
Cash provided by (used in)                                                  
 financing activities                                                       
Funding by non-controlling                                                  
 shareholder                        -      40,000             -      40,000 
Long-term obligations               -           -                   492,837 
Other                               -          71             -      (7,255)
                          --------------------------------------------------
                                    -      40,071             -     525,582 
                          --------------------------------------------------
                                                                            
                                                                            
                                                                            
Foreign exchange on cash                                                    
 held in foreign                                                            
 currencies                     1,172           -             -      15,445 
                          --------------------------------------------------
                                                                            
                                                                            
Intergroup funding                                                          
 (distributions)              (34,890)    229,167             -           - 
                          --------------------------------------------------
Increase (decrease) in                                                      
 cash                          (8,582)    (45,410)            -    (148,082)
Cash:                                                                       
  Beginning of year            30,653     129,890             -   1,181,665 
                          --------------------------------------------------
  End of period                22,071      84,480             -   1,033,583 
Short term investments              -           -             -     507,636 
                          --------------------------------------------------
Cash and short-term                                                         
 investments                  $22,071     $84,480           $ -  $1,541,219 
                          --------------------------------------------------
                                                             
                                                             
                                                             
For the three months       CORPORATE                     LAS 
 ended December 31, 2011     & OTHER      CAYELI      CRUCES 
-------------------------------------------------------------
                                                             
(thousands of US dollars)               (Turkey)     (Spain) 
Cash provided by (used                                       
 in) operating activities                                    
Before net change in non-                                    
 cash working capital        ($6,338)    $33,654     $60,044 
Net change in non-cash                                       
 working capital               1,397     (25,475)    (15,959)
                          -----------------------------------
                              (4,941)      8,179      44,085 
                          -----------------------------------
Cash provided by (used                                       
 in) investing activities                                    
Purchase of property,                                        
 plant and equipment            (345)     (3,437)     (9,666)
Acquisition of bonds and                                     
 other securities             (1,807)       (314)          - 
Maturity of bonds and         
                               
 other securities             15,613           -           - 
Sale (purchase) of short-                                    
 term investments             80,056           -          (1)
Other                         (2,790)       (940)          - 
                          -----------------------------------
                              90,727      (4,691)     (9,667)
                          -----------------------------------
                                                             
                                                             
Cash provided by (used                                       
 in) financing activities     (6,836)          -        (607)
                          -----------------------------------
                                                             
Foreign exchange on cash                                     
 held in foreign                                             
 currencies                        -      (5,422)     (8,667)
                          -----------------------------------
                                                             
Cash provided by                                             
 discontinued operation     (297,220)          -           - 
                          -----------------------------------
                                                             
Intergroup funding                                           
 (distributions)             346,804         (54)    (14,675)
                          -----------------------------------
Increase (decrease) in                                       
 cash                        128,534      (1,988)     10,469 
Cash:                                                        
  Beginning of year          324,433     135,203     121,331 
                          -----------------------------------
  End of period              452,967     133,215     131,800 
Short term investments       258,459           -           - 
                          -----------------------------------
Cash and short-term                                          
 investments                $711,426    $133,215    $131,800 
                          -----------------------------------
                                                             
 
                                                                            
                                                                            
                                                  DISCONTINUED              
For the three months                       COBRE  OPERATIONS -              
 ended December 31, 2011   PYHASALMI      PANAMA       OK TEDI        TOTAL 
----------------------------------------------------------------------------
                                                   (Papua New               
(thousands of US dollars)  (Finland)    (Panama)       Guinea)              
Cash provided by (used                                                      
 in) operating activities                                                   
Before net change in non-                                                   
 cash working capital        $24,928        $115           $ -     $112,403 
Net change in non-cash                                                      
 working capital              (1,598)          -             -      (41,635)
                         ---------------------------------------------------
                              23,330         115             -       70,768 
                         ---------------------------------------------------
Cash provided by (used                                                      
 in) investing activities                                                   
Purchase of property,                                                       
 plant and equipment          (1,914)    (41,738)            -      (57,100)
Acquisition of bonds and                                                    
 other securities                  -           -             -       (2,121)
Maturity of bonds and                                                       
 other securities                  -           -             -       15,613 
Sale (purchase) of short-                                                   
 term investments                  -           -             -       80,055 
Other                              -           -             -       (3,730)
                         ---------------------------------------------------
                              (1,914)    (41,738)            -       32,717 
                         ---------------------------------------------------
                                                                            
                                                                            
Cash provided by (used                                                      
 in) financing activities          -           -             -       (7,443)
                         ---------------------------------------------------
                                                                            
Foreign exchange on cash                                                    
 held in foreign                                                            
 currencies                   (7,224)     (1,483)            -      (22,796)
                         ---------------------------------------------------
                                                                            
Cash provided by                                                            
 discontinued operation            -           -       297,220            - 
                         ---------------------------------------------------
                                                                            
Intergroup funding                                                          
 (distributions)             (75,914)     41,059      (297,220)           - 
                         ---------------------------------------------------
Increase (decrease) in                                                      
 cash                        (61,722)     (2,047)            -       73,246 
Cash:                                                                       
  Beginning of year          107,831      27,954             -      716,752 
                         ---------------------------------------------------
  End of period               46,109      25,907             -      789,998 
Short term investments             -           -             -      258,459 
                         ---------------------------------------------------
Cash and short-term                                                         
 investments                 $46,109     $25,907           $ -   $1,048,457 
                         ---------------------------------------------------

 
Notes to the consolidated financial statements 
1. Corporate information 
Inmet Mining Corporation is a publicly traded corporation listed on
the Toronto stock exchange. Our registered and head office is 330 Bay
Street, Suite 1000, Toronto Canada. Our principal activities are the
exploration, development and mining of base metals. 
2. Basis of presentation and statement of compliance 
We prepared these interim consolidated financial statements using the
same accounting policies and methods as those described in our
consolidated financial statements for the year ended December 31,
2012, except as described in note 3. These interim financial
statements are in compliance with International Accounting Standard
34, Interim Financial Reporting (IAS 34). Accordingly, certain
information and disclosure normally included in annual financial
statements prepared in accordance with International Financial
Reporting Standards have been omitted or condensed. The preparation
of financial statements in accordance with IAS 34 requires us to use
certain critical accounting estimates and requires us to exercise
judgem
ent in applying our accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where assumptions
and estimates are significant to the financial statements, have been
set out in note 4 to our consolidated financial statements for the
year ended December 31, 2012. These interim financial statements
should be read in conjunction with our consolidated financial
statements for the year ended December 31, 2012, which are included
in our 2012 annual report. 
3. Change in functional and presentation currencies to the US dollar 
Prior to June 1, 2012, Inmet Mining's functional currency and our
presentation currency were the Canadian dollar. The decision to
proceed with full scale development of Cobre Panama has significantly
increased Inmet Mining's exposure to the US dollar considering: 


 
--  Inmet Mining's share of the development costs for the project, the vast
    majority of which are denominated in US dollars; and 
--  our issuance of US $1.5 billion of senior unsecured notes 

 
Consequently, effective June 1, 2012, the US dollar was adopted as
Inmet Mining's functional currency. Our operating entities continue
to measure the items in their financial statements using their
functional currencies; Cayeli and Cobre Panama use the US dollar, and
Pyhasalmi and Las Cruces use the euro. IFRS requires a change in
functional currency to be accounted for prospectively. We therefore
translated Inmet Mining's May 31, 2012 financial statement items from
Canadian dollars to US dollars using the May 31, 2012 exchange rate
US $0.97 per Canadian dollar (Transition Rate). The resulting
translated amounts for non-monetary items are treated as their
historical cost. 
Following the change in Inmet Mining's functional currency, we
elected to change our presentation currency from Canadian dollars to
US dollars as we believe that changing the presentation currency to
US dollars will provide shareholders with a more accurate reflection
of our underlying financial performance and position. The change in
presentation currency represents a voluntary change in accounting
policy. We have restated all comparative financial statements from
previously reported Canadian dollar amounts to US dollars using the
Transition Rate. 
4. Cash and short-term investments 


 
----------------------------------------------------------------------------
                                    December        December        December
                                    31, 2012        31, 2011        31, 2010
----------------------------------------------------------------------------
Cash and cash equivalents:                                                  
Liquidity funds                     $806,269        $375,523        $188,415
Term deposits                         51,243           6,548          51,306
Overnight deposits                    31,387          70,389           4,182
Bankers' acceptances                       -             891               -
Money market funds                    14,410         126,336          38,774
Corporate                                  -          11,593               -
Bank deposits                        130,274          31,722          26,304
Provincial short-term notes                -         166,996               -
----------------------------------------------------------------------------
                                   1,033,583         789,998         308,981
----------------------------------------------------------------------------
                                                                            
Short-term investments:                                                     
Corporate                                  -          48,588               -
Term deposits                        211,536               -           7,064
Provincial                            15,079         187,191               -
Bankers' acceptances                  21,494          22,680               -
Asset backed securities           259,527(i)               -               -
----------------------------------------------------------------------------
                                     507,636         258,459           7,064
----------------------------------------------------------------------------
Total cash and short-term                                                   
 instruments                      $1,541,219      $1,048,457        $316,045
----------------------------------------------------------------------------
(i) Bank sponsored securitized programs with highest credit quality rating  
and supported by global liquidity lines.                                    

 
5. Restricted cash  


 
----------------------------------------------------------------------------
                                         December     December     December 
                                         31, 2012     31, 2011     31, 2010 
----------------------------------------------------------------------------
                                                                            
Collateralized cash for letter of                                           
 credit facility - Inmet                  $19,804      $16,306      $16,368 
Mining                                                                      
Collateralized cash for letters of                                          
 credit - Las Cruces                       56,920       52,451       50,480 
Collateralized cash for Pyhasalmi                                           
 reclamation                                1,617        1,565        1,580 
                                      --------------------------------------
                                           78,341       70,322       68,428 
Less current portion:                                                       
Collateralized cash for letters of                                          
 credit - Las Cruces                       (1,291)        (784)        (597)
----------------------------------------------------------------------------
                                          $77,050      $69,538      $67,831 
----------------------------------------------------------------------------

 
6. Bonds and other securities 
The table below provides a breakdown of our bonds and other
securities as at the balance sheet date by financial instrument
classification. 


 
----------------------------------------------------------------------------
                                              December   December   December
                                              31, 2012   31, 2011   31, 2010
----------------------------------------------------------------------------
Current available for sale securities (a)     $736,387        $ -        $ -
Current held to maturity securities (b)        147,212    175,921     52,201
                                            --------------------------------
                                               883,599    175,921     52,201
                                                                            
Available for sale securities (a)              824,092          -          -
Held to maturity securities (b)                366,513    427,727    308,483
                                            --------------------------------
                                             1,190,605    427,727    308,483
Other                                            2,483      3,060      2,608
----------------------------------------------------------------------------
                                            $2,076,687   $606,708   $363,292
----------------------------------------------------------------------------
                                                                            
 (a) In 2012, we invested US cash of $2,223 million in US dollar-denominated
     Treasury, corporate and Supranational bonds and other securities with  
     credit ratings of A- to AAA. These securities mature between 2013 and  
     2018 and have a weighted average yield to maturity of 0.29 percent. We 
     designated these securities as available for sale and recognized them  
     at fair value. During the year, $662 million securities matured (2011 -
     nil).                                                                  
                                                                            
 (b) In 2012, we purchased $69 million (2011 - $292 million) of US Treasury 
     bonds, US Corporate bonds and Canadian and Provincial government bonds.
     During the year, securities with a face value of $178 million matured  
     (2011 - $67 million). The securities have an annual yield to maturity  
     of 1.1 percent. We designated these bonds as held to maturity,         
     measuring them initially at fair value and subsequently at amortized   
     cost.                                                                  

 
7. Accounts payable and accrued liabilities  
The table below shows the significant components of our accounts
payable and accrued liabilities balance. 


 
----------------------------------------------------------------------------
                                            December    December    December
                                            31, 2012    31, 2011    31, 2010
----------------------------------------------------------------------------
                                                                            
Accounts payables and accrued                                               
 liabilities                                $258,024    $117,725     $91,778
Amounts payable related to metal sales         3,788         737         573
Income taxes payable                          20,864      20,134      39,658
----------------------------------------------------------------------------
                                            $282,676    $138,596    $132,009
----------------------------------------------------------------------------

 
8. Provisions 
We recorded an additional $14 million of asset retirement obligations
this year ($10 million this quarter), for liabilities at our closed
properties. $7 million of this increase is the result of a decrease
in the discount rates we applied in determining the liabilities.
Additionally, we recognized $7 million due to an increase in our
estimated closure costs, primarily at Troilus for on-going treatment
of tailings and associate labour costs. We also recognized
liabilities of $20 million at Cobre Panama as a result of development
activities that took place during the year. 
In 2011, we recorded increased asset retirement obligations of $16
million: $5 million for additional closure liabilities at Troilus,
and $11 million from a decrease in the discount rates we applied. 
9. Long-term debt 


 
----------------------------------------------------------------------------
                                      December 31, December 31, December 31,
                                              2012         2011         2010
----------------------------------------------------------------------------
Senior unsecured notes(a):                                                  
8.75% notes                             $1,449,315         $  -         $  -
7.5% notes                                 492,674            -            -
                                      --------------------------------------
                                         1,941,989            -            -
                                      --------------------------------------
Promissory note                             17,870       16,581       16,091
----------------------------------------------------------------------------
                                         1,959,859       16,581       16,091
----------------------------------------------------------------------------
Less current portion:                                                       
Promissory note                             17,870            -            -
----------------------------------------------------------------------------
Total long-term debt                    $1,941,989      $16,581      $16,091
----------------------------------------------------------------------------

 
(a) On May 18, 2012, we issued $1,500 million aggregate principal
amount of 8.75 percent senior unsecured notes (8.75 percent Notes)
due June 2020. The 8.75 percent Notes were priced at 98.584 percent
of their face value, yielding proceeds of $1,445 million net of the
discount and directly attributable transaction costs. 
We may redeem, prior to June 1, 2016, up to 35 percent of the 8.75
percent Notes with the net proceeds of certain equity offerings at a
redemption price equal to 108.75 percent of the principal amount plus
accrued interest. Prior to June 1, 2016, we may redeem the 8.75
percent Notes in whole or in part at 100 percent of their principal
amount, plus accrued interest, plus a premium that effectively
compensates the holder fully for lost interest between the redemption
date and June 1, 2016. We may redeem the 8.75 percent Notes at any
time on or after June 1, 2016 at the redemption prices and periods
set forth below, plus accrued and unpaid interest: 


 
June 1, 2016                             104.375 percent                    
June 1, 2017                             102.188 percent                    
June 1, 2018 and thereafter              100.000 percent                    

 
On December 18, 2012, we issued $500 million aggregate principal
amount of 7.5 percent senior unsecured notes (7.5 percent Notes) due
June 2021. The 7.5 percent Notes were priced at 100 percent of their
face value, yielding proceeds of $493 million net of the directly
attributable transaction costs. 
We may redeem, prior to December 1, 2015, up to 35 percent of the 7.5
percent Notes with the net proceeds of certain equity offerings at a
redemption price equal to 107.5 percent of the principal amount plus
accrued interest. Prior to December 1, 2016, we may redeem the 7.5
percent Notes in whole or in part at 100 percent of their principal
amount, plus accrued interest, plus a premium that effectively
compensates the holder fully for lost interest between the redemption
date and December 1, 2016. We may redeem the 7.5 percent Notes at any
time on or after December 1, 2016 at the redemption prices and
periods set forth below, plus accrued and unpaid interest: 


 
December 1, 2016                         103.750 percent                    
December 1, 2017                         101.875 percent                    
December 1, 2018 and thereafter          100.000 percent                    

 
These senior unsecured notes have been designated as Other
liabilities and accounted for initially at fair value and
subsequently at amortized cost using the effective interest rate
method. Interest is payable on the notes semi-annually on December 1
and June 1 of each year. As the proceeds are being used to fund the
development of Cobre Panama, interest costs are being capitalized to
project assets during the construction period of this project. The
notes are unconditionally guaranteed on a senior unsecured basis by
Inmet and certain subsidiaries. The notes contain certain customary
covenants and restrictions for a financing instrument of this type. 
10. Stock-based compensation 
During 2012, the following issuances were made under our equity-based
compensation plans: 
Stock option plan 
On February 22, 2012, a grant of 83,084 options was made to senior
management, with an exercise price of Cdn $64.17, graded vesting and
an expiry date of February 21, 2019. We calculated the compensation
expense for these options using the Black Scholes valuation model and
assuming the following weighted average parameters, resulting in a
weighted average fair value per option of Cdn $29.23 per option: 5
year expected life, 50 percent expected volatility, expected dividend
rate of 0.3 percent annually and a risk free interest rate of 1.5
percent. 
Performance share unit (PSU) plan 
On February 21, 2012, the Board granted 36,580 PSUs to senior
executives based on a 5 day Volume Weighted Average Price prior to
the grant date of Cdn $64.17 and a 3 year vesting period from January
1, 2012 to December 31, 2014. 
We used a Monte Carlo simulation model to calculate the compensation
expense for the PSUs assuming no forfeitures, historical average
volatilities and a risk free interest rate of 1.0 percent, resulting
in December 31, 2012 fair values per PSU of Cdn $133.61 and Cdn
$109.26, respectively, for the 2011 and 2012 awards. 
We recognized the following share-based compensation expense in
general and administration relating to all outstanding equity-based
awards: 


 
----------------------------------------------------------------------------
                                    three months ended            year ended
                                              December              December
                                                    31                    31
                                       2012       2011       2012       2011
----------------------------------------------------------------------------
                                                                            
Stock option plan                    $1,068     $1,383     $5,090     $3,688
Performance share unit plan           2,592        455      3,038        750
Long-term incentive plan (LTIP)       1,121          -      7,880        735
Deferred share unit plan                327        224      1,119        997
Share award plan                         50        147        196        601
----------------------------------------------------------------------------
                                     $5,158     $2,209     17,336     $6,771
----------------------------------------------------------------------------

 
11. Accumulated other comprehensive loss 
Accumulated other comprehensive loss includes: 


 
----------------------------------------------------------------------------
                                         December     December     December 
                                         31, 2012     31, 2011     31, 2010 
----------------------------------------------------------------------------
                                                                            
Unrealized losses on gold forward                                           
 sales contracts sales                                                      
  (net of tax of $nil) (December 31,                                        
   2011 - $nil, December 31, 2010 -                                         
   $2,350)                                   $  -         $  -      ($5,481)
Unrealized gains (losses) on bonds                                          
 and other securities                                                       
  (net of tax of $91) (December 31,                                         
   2011 - $91, December 31, 2010 -                                          
   $76)                                       421         (534)        (438)
Currency translation adjustment           (85,834)    (159,010)    (173,408)
----------------------------------------------------------------------------
Accumulated other comprehensive loss     ($85,413)   ($159,544)   ($179,327)
----------------------------------------------------------------------------

 
Currency translation adjustments 
The table below is breakdown of our currency translation adjustments. 


 
----------------------------------------------------------------------------
                                         December     December     December 
                                         31, 2012     31, 2011     31, 2010 
----------------------------------------------------------------------------
                                                                            
Pyhasalmi (euro functional currency)     ($18,981)    ($27,378)    ($23,580)
Las Cruces (euro functional currency)     (63,557)    (103,071)     (90,456)
Cayeli (US dollar functional                                                
 currency)                                (12,003)     (15,068)     (20,243)
Cobre Panama (US dollar functional                                          
 currency)                                  8,707      (13,493)     (28,757)
Ok Tedi (US dollar functional                                               
 currency)                                      -            -      (10,372)
----------------------------------------------------------------------------
                                         ($85,834)   ($159,010)   ($173,408)
----------------------------------------------------------------------------

 
12. Sale of 20 percent interest in Cobre Panama 
On April 25, 2012, Korea Panama Mining Corporation (KPMC) completed
its acquisition of a 20 percent interest in Minera Panama, owner and
developer of Cobre Panama. KPMC acquired its interest for $161
million in cash, representing, together with US $30 million it
already paid, its 20 percent share of development costs to that date.
As we continued to control Minera Panama after the closing of this
transaction, the sale was treated as a capital transaction with the
$8 million difference between 20 percent of our book value of Cobre
Panama and the consideration received recognized in retained
earnings. 
13. Investment and other income 


 
----------------------------------------------------------------------------
                                   three months ended            year ended 
                                             December              December 
                                                   31                    31 
                                      2012       2011       2012       2011 
----------------------------------------------------------------------------
                                                                            
Interest income                     $3,818     $4,668    $15,144    $16,099 
Foreign exchange gain (loss)       (19,608)    (8,327)     6,270     10,446 
Dividend and royalty income            759      1,460      2,988      2,944 
Other                               (1,248)    (1,684)      (196)       259 
----------------------------------------------------------------------------
                                  ($16,279)   ($3,883)   $24,206    $29,748 
----------------------------------------------------------------------------
Foreign exchange gain (loss) is                                             
 a result of:                                                               
----------------------------------------------------------------------------
                                                                            
                                   three months ended           year ended  
                                          December 31           December 31 
                                      2012       2011       2012       2011 
----------------------------------------------------------------------------
                                                                            
                                                                            
Translation of US dollar cash                                               
 held in euro based entities      ($14,771)       $ -   ($15,998)       $ - 
Translation of US dollar cash                                               
 held by Corporate prior to June                                            
 2012                                    -          5     27,338     (8,001)
Translation of US dollar senior                                             
 unsecured notes prior to June                                              
 2012                                    -          -    (16,884)         - 
Translation of US dollar bonds 
                                             
 and other securities prior to                                              
 June 2012                               -     (8,321)     4,330     11,232 
Translation of Cdn dollar cash                                              
 held by Corporate subsequent to                                            
 May 2012                             (357)         -      2,231          - 
Translation of Cdn dollar bonds                                             
 and other securities subsequent                                            
 to May 2012                        (2,067)         -      7,912          - 
Translation of other monetary                                               
 assets and liabilities             (2,413)       (11)    (2,659)     7,215 
----------------------------------------------------------------------------
                                  ($19,608)   ($8,327)    $6,270    $10,446 
----------------------------------------------------------------------------

 
14. Finance costs 


 
                                  three months ended              year ended
                                         December 31             December 31
                                    2012        2011        2012        2011
----------------------------------------------------------------------------
                                                                            
Interest on note payable            $277        $282      $1,067      $1,119
Accretion on note payable            192         176         714         670
Accretion on provisions and                                                 
 capital lease obligations         2,163       1,856       8,289       7,393
----------------------------------------------------------------------------
                                  $2,632      $2,314     $10,070      $9,182
----------------------------------------------------------------------------

 
15. Income tax 
For the three months ended December 31, 2012: 


 
                   Corporate      Cayeli  Las Cruces   Pyhasalmi            
                   and other    (Turkey)     (Spain)   (Finland)       Total
----------------------------------------------------------------------------
                                                                            
Current income                                                              
 taxes                  $474      $5,838       ($795)     $7,765     $13,282
Deferred income                                                             
 taxes                   872      (1,855)     19,166         248      18,431
----------------------------------------------------------------------------
Income tax                                                                  
 expense              $1,346      $3,983     $18,371      $8,013     $31,713
----------------------------------------------------------------------------
                                                                            
For the three                                                               
 months ended                                                               
 December 31,                                                               
 2011:                                                                      
----------------------------------------------------------------------------
                                                                            
                   Corporate      Cayeli  Las Cruces   Pyhasalmi            
                   and other     (Turkey)     (Spain)   (Finland)      Total
----------------------------------------------------------------------------
                                                                            
Current income                                                              
 taxes               ($1,577)     $7,907         $81      $6,847     $13,258
Deferred income                                                             
 taxes                   (85)      1,537       8,016        (235)      9,233
----------------------------------------------------------------------------
Income tax                                                                  
 expense             ($1,662)     $9,444      $8,097      $6,612     $22,491
----------------------------------------------------------------------------
                                                                            
For the year                                                                
 ended December                                                             
 31, 2012:                                                                  
----------------------------------------------------------------------------
                                                                            
                                                 Las                        
                   Corporate      Cayeli      Cruces   Pyhasalmi            
                   and other     (Turkey)     (Spain)   (Finland)      Total
----------------------------------------------------------------------------
                                                                            
Current income                                                              
 taxes                $1,002     $33,536        $255     $23,942     $58,735
Deferred income                                                             
 taxes                   933        (613)     72,240           9      72,569
----------------------------------------------------------------------------
Income tax                                                                  
 expense              $1,935     $32,923     $72,495     $23,951    $131,304
----------------------------------------------------------------------------
                                                                            
For the year                                                                
 ended December                                                             
 31, 2011:                                                                  
----------------------------------------------------------------------------
                                                                            
                   Corporate      Cayeli  Las Cruces   Pyhasalmi            
                   and other     (Turkey)     (Spain)   (Finland)      Total
----------------------------------------------------------------------------
                                                                            
Current income                                                              
 taxes               ($2,171)    $46,840        $606     $31,292     $76,567
Deferred income                                                             
 taxes                  (203)      4,107      22,182        (582)     25,504
----------------------------------------------------------------------------
Income tax                                                                  
 expense             ($2,374)    $50,947     $22,788     $30,710    $102,071
----------------------------------------------------------------------------

 
16. Net income per share 


 
----------------------------------------------------------------------------
                                    three months ended            year ended
                                           December 31           December 31
(thousands)                            2012       2011       2012       2011
----------------------------------------------------------------------------
Income from continuing                                                      
 operations available to common                                             
 shareholders                       $38,221    $46,544   $331,211   $256,314
Income from discontinued                                                    
 operations available to common                                             
 shareholders                             -          -          -     80,786
----------------------------------------------------------------------------
Net income available to common                                              
 shareholders                       $38,221    $46,544   $331,211   $337,100
----------------------------------------------------------------------------
                                                                            
                                    three months ended            year ended
                                           December 31           December 31
(thousands)                            2012       2011       2012       2011
----------------------------------------------------------------------------
Weighted average common shares                                              
 outstanding                         69,366     69,332     69,362     66,432
Plus incremental shares from                                                
 assumed conversions:                                                       
Deferred share units                    109        122        109        122
Long term incentive plan units          312          -        312         18
----------------------------------------------------------------------------
Diluted weighted average common                                             
 shares outstanding                  69,787     69,454     69,783     66,572
----------------------------------------------------------------------------

 
The table below shows our earnings per common share for the three
months ended December 31. 


 
----------------------------------------------------------------------------
                                              three months ended December 31
(US dollars per share)                          2012                    2011
----------------------------------------------------------------------------
                                   Basic     Diluted       Basic     Diluted
Net income from continuing                                                  
 operations per share              $0.56       $0.56       $0.67       $0.67
Income from discontinued                                                    
 operations per share                  -           -           -           -
----------------------------------------------------------------------------
Net income per share               $0.56       $0.56       $0.67       $0.67
----------------------------------------------------------------------------

 
The table below shows our earnings per common share for the year
ended December 31. 


 
----------------------------------------------------------------------------
                                                      year ended December 31
(US dollars per share)                          2012                    2011
----------------------------------------------------------------------------
                                   Basic     Diluted       Basic     Diluted
Net income from continuing                                                  
 operations per share              $4.78       $4.75       $3.86       $3.85
Income from discontinued                                                    
 operations per share                  -           -        1.22        1.21
----------------------------------------------------------------------------
Net income per share               $4.78       $4.75       $5.08       $5.06
----------------------------------------------------------------------------

 
17. Statements of cash flows 


 
                                                                            
For the three months ended December 31, 2012:                               
                                                                            
----------------------------------------------------------------------------
                      Corporate     Cayeli Las Cruces  Pyhasalmi            
                      and other   (Turkey)    (Spain)  (Finland)      Total 
----------------------------------------------------------------------------
                                                                            
Accounts receivable     ($1,241)   $39,020   ($47,627)   ($5,399)  ($15,247)
Inventories                   -     (4,956)       266        (79)   ($4,769)
Accounts payable and                                                        
 accrued liabilities      7,301     14,281      2,623        233     24,438 
Taxes payable               348     (2,059)    (1,842)     7,075      3,522 
Provisions                 (283)         -      1,607          -      1,324 
Other                       284        (14)         -         (2)       268 
----------------------------------------------------------------------------
                         $6,409    $46,272   ($44,973)    $1,828     $9,536 
----------------------------------------------------------------------------
                                                                            
For the three months ended December 31, 2011:                               
                                                                            
----------------------------------------------------------------------------
                      Corporate     Cayeli Las Cruces  Pyhasalmi            
                      and other   (Turkey)    (Spain)  (Finland)      Total 
----------------------------------------------------------------------------
                                                                            
Accounts receivable        $342   ($17,642)   ($6,758)    $6,314   ($17,744)
Inventories                   -     (3,009)    (4,984)    (1,286)    (9,279)
Accounts payable and                                                        
 accrued liabilities      2,253        816     (4,297)     1,486        258 
Taxes payable            (1,146)    (6,593)        80     (7,856)   (15,515)
Provisions                  (52)         -          -          -        (52)
Other                         -        953          -       (256)       697 
----------------------------------------------------------------------------
                         $1,397   ($25,475)  ($15,959)   ($1,598)  ($41,635)
----------------------------------------------------------------------------
                                                                            
For the year ended December 31, 2012:                                       
                                                                            
----------------------------------------------------------------------------
                  Corporate      Cayeli  Las Cruces   Pyhasalmi             
                  and other    (Turkey)     (Spain)   (Finland)       Total 
----------------------------------------------------------------------------
                                                                            
Accounts                                                                    
 receivable         ($4,066)     $2,318    ($56,492)      ($801)   ($59,041)
Inventories               -       1,296        (150)        441       1,587 
Accounts payable                                                            
 and accrued                                                                
 liabilities          5,274      11,096       3,540       1,148      21,058 
Taxes payable         2,206      (3,395)       (842)      4,161       2,130 
Provisions             (283)          -       1,607           -       1,324 
Other                     -          (8)          -          (4)        (12)
----------------------------------------------------------------------------
                     $3,131     $11,307    ($52,337)     $4,945    ($32,954)
----------------------------------------------------------------------------
                                                                            
For the year ended December 31, 2011:                                       
                                                                            
----------------------------------------------------------------------------
                  Corporate      Cayeli  Las Cruces   Pyhasalmi             
                  and other    (Turkey)     (Spain)   (Finland)       Total 
----------------------------------------------------------------------------
                                                                            
Accounts                                                                    
 receivable           ($180)    $12,895    ($10,913)    $15,875     $17,677 
Inventories               -      (1,121)     (7,713)     (1,328)    (10,162)
Accounts payable                                                            
 and accrued                                                                
 liabilities          1,142       7,615       8,535        (234)     17,058 
Taxes payable        (4,887)       (803)        (86)    (14,234)    (20,010)
Provisions             (690)          -           -           -        (690)
Other                     -       1,169           -        (256)        913 
----------------------------------------------------------------------------
                    ($4,615)    $19,755    ($10,177)      ($177)     $4,786 
----------------------------------------------------------------------------

 
18. Commitments 
Capital commitments 
As at December 31, 2012, Cobre Panama had committed $3.6 billion (net
of spending to that date) on a 100 percent basis for the design and
supply of coal-fired power plant, two SAG mills, four ball mills, and
the related gearless drive, engineering and other construction
activities. 
Las Cruces committed $5 million for the upgrade of its safety
infrastructure. 
Sale of precious metal stream to Franco-Nevada Corporation
(Franco-Nevada) 
In August 2012, we announced the completion of a precious metals
stream agreement with Franco-Nevada. Under the terms of the
agreement, a wholly-owned subsidiary of Franco-Nevada will provide a
$1 billion deposit which will be used to fund a portion of Cobre
Panama project capital costs. The deposit will become available after
Inmet's funding since issuing a Full Notice to Proceed reaches $1
billion and will be provided pro-rata on a 1:3 ratio with Inmet's
subsequent funding contributions. 
The amount of precious metals deliverable under the stream is indexed
to the copper in concentrate produced from the entire project and
approximates 86 percent of the payable precious metals attributable
to Inmet's 80 percent ownership based on the current mine plan.
Beyond the currently contemplated mine life, the precious metals
deliverable under the stream will be based on a fixed percentage of
the precious metals in concentrate. 
Franco-Nevada will pay to MPSA an amount for each ounce of precious
metals delivered equal to $400 per ounce for gold and $6 per ounce
for silver (subject to an annual adjustment for inflation) for the
first 1,341,000 ounces of gold and 21,510,000 ounces of silver
(approximately the first 20 years of expected deliveries) and
thereafter the greater of $400 per ounce for gold and $6 per ounce
for silver (subject to an adjustment for inflation) or one half of
the then prevailing market price. In all cases the amount paid is not
to exceed the prevailing market price per ounce of gold and silver. 
Cayeli tax audit 
Our tax filings remain subject to examination by applicable tax
authorities for a certain length of time following the tax year to
which those filings relate. In 2012 Cayeli became the subject of an
audit of its 2008 to 2011 taxation years. On February 4, 2013, Cayeli
received an assessment from the Turkish tax authorities adjusting the
amount of withholding taxes to be remitted on dividends paid by
Cayeli to its direct shareholder. The shares of Cayeli are owned by
an indirect wholly-owned Spanish subsidiary of Inmet. The Turkish tax
authorities have taken the position that Inmet and not the Spanish
subsidiary is the beneficial owner of the dividends. The Turkish tax
authorities are therefore taking the position that the withholding
tax on the dividends should be the 15 percent domestic rate and not
the reduced rate of 5 percent under the Turkey-Spain tax treaty. The
dividends paid during the period assessed total TL 628 million. The
proposed tax liability is TL 63 million (US $35 million) plus
interest and penalties. Our view is that the relevant facts and
circumstances support the position that Cayeli fulfilled its tax
remittance obligations and Cayeli intends to vigorously dispute the
assessment.
Contacts:
Inmet Mining Corporation
Jochen Tilk
President and Chief Executive Officer
+1.416.860.3972 
Inmet Mining Corporation
Flora Wood
Director, Investor Relations
+1.416.361.4808
www.inmetmining.com
 
 
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