TORONTO (miningweekly.com) – Precious-metals producer Primero Mining on Wednesday said net income for the first three months of the year was 42.52% lower than the same quarter of 2012 as a result of higher expenses and a foreign exchange gain in 2012 that boosted profit.

Net profit for the period ended March 31 totalled $17.3-million or $0.18 a share, compared with $30.1-million or $0.34 a share for the three months ended March 31, 2012.

Adjusted net income, which mainly excluded the impact of foreign exchange rate changes on deferred tax balances, was $9.4-million or $0.10 a share, half of the $18.8-million or $0.21 a share reported in the same quarter a year earlier. Seven analysts had on average expected adjusted earnings of $0.06 a share.

Revenues in the quarter were 5% higher at $46.3-million as a result of selling 24 736 oz of gold at an average realised price of $1 626/oz, and 1.48-million ounces of silver at an average realised price of $4.12/oz. This compared with revenue of $44-million for the same period in 2012 from selling 23 004 oz of gold at an average realised price of $1 678/oz and 1.33-million ounces of silver at an average realised price of $4.08/oz.

All of the silver ounces in the first quarters of 2013 and 2012 were sold at a fixed price pursuant to the silver purchase agreement with metals streaming firm Silver Wheaton.

The Canadian gold and silver producer also on Wednesday announced the Federal Court of Australia had approved its C$119-million acquisition of Brisbane-based Cerro Resources, giving the company access to a highly prospective gold project and a silver project in Mexico.

Cerro’s main asset is a 69% shareholding in the feasibility-stage Cerro Del Gallo project. The deposit has one-million ounces of gold-equivalent proven and probable reserves and a further 2.3-million ounces of gold-equivalent measured and indicated resources.

Under the terms of the agreement, Primero would acquire all the issued and outstanding ordinary shares of Cerro for 0.023 of its own shares for every one Cerro share held.

A new company would be created to retain Cerro’s non-Cerro del Gallo projects and interest, with existing Cerro shareholders receiving 80.1% of the ordinary shares in the new company.

Primero would provide A$4-million in funding for the new company and would receive a 19.9% stake, with anti-dilution rights for two years. Primero would also be entitled to appoint one director to the new company’s board.

The new company would be focused on unlocking the potential value at the Namiquipa silver and the Espiritu Santo gold/silver projects, also in Mexico.

The transaction was expected to close at the end of May.

The company’s shares were up by 6.26% at C$5.77 apiece on the TSX on Wednesday.