Revenue was US$161.3 million in the third quarter of 2012, on silver equivalent sales of 5.1 million ounces (4.8 million ounces of silver and 6,900 ounces of gold). This represents a 13% decrease from the US$185.2 million of revenue generated in the third quarter of 2011. This was due to a 13% decrease in the realized price per silver equivalent ounce, which was only slightly offset by a 1% increase in the number of silver equivalent ounces sold. The relatively small increase in ounces sold relative to those produced in the quarter was primarily related to the timing of shipments of stockpiled concentrate and doré at some of the mines underlying the Company's silver and precious metal purchase agreements.
Costs and Expenses
Average cash costs [ 1 ] in the third quarter of 2012 were US$4.16 [ 1 ] per silver equivalent ounce, compared with US$4.12 [ 1 ] during the comparable period of 2011. This resulted in cash operating margins [ 1 ]of US$27.20 [ 1 ] per silver equivalent ounce, a 15% decrease compared to the third quarter of 2011, primarily a result of a 13% decrease in the realized price per silver equivalent ounce.During the third quarter of 2012, the Company recorded an income tax expense of US$513,000, which includes a non-cash deferred income tax expense of US$361,000, attributable primarily to income from Canadian operations, partially offset by the recognition of deferred income tax assets relating to the increase in fair value of long-term investments in common shares. This compares to an income tax expense of US$8.6 million in the comparable period of the previous year, which included a non-cash deferred income tax expense of US$8.4 million which was primarily due to the reversal of previously recognized deferred income tax assets due to the decline in fair value of long-term investments in common shares held. Earnings and Operating Cash Flows