Revenue was US$201.4 million in the second quarter of 2012, on silver equivalent sales of 6.9 million ounces (6.8 million ounces of silver and 2,400 ounces of gold), a record for the Company. This represents a 3% increase from the US$194.8 million of revenue generated in the second quarter of 2011. This was due to a 36% increase in the number of silver equivalent ounces sold, which was partially offset by a 24% decrease in the realized price per silver equivalent ounce. The increase in silver equivalent ounces sold was primarily related to the timing of shipments of stockpiled concentrate in addition to increased production at some of the mines underlying the Company's silver purchase agreements.
Costs and Expenses
Average cash costs [ 1] in the second quarter of 2012 were US$4.06 [ 1] per silver equivalent ounce, compared with US$4.14 [ 1] during the comparable period of 2011. This resulted in cash operating margins [ 1]of US$25.01 [ 1] per silver equivalent ounce, a 27% decrease compared to the second quarter of 2011, primarily a result of a 24% decrease in the realized price per silver equivalent ounce.During the second quarter of 2012, the Company recorded an income tax expense of US$2.8 million, which includes a non-cash deferred income tax expense of US$2.5 million, attributable primarily to the reversal of previously recognized deferred income tax assets relating to the decline in fair value of long-term investments in common shares and to income from Canadian operations. This compares to an income tax expense of $2.4 million in the comparable period of the previous year, which included a non-cash deferred income tax expense of $2.2 million. Earnings and Operating Cash Flows