Compania de Minas Buenaventura Announces Fourth Quarter 2008 Results
Buenaventura S.A.A. (“Buenaventura” or “the Company”) (NYSE: BVN; Lima Stock
company, announced today its results for the fourth quarter 2008. All figures
have been prepared according to Peruvian GAAP and are stated in U.S. dollars
Comments from the Chief Executive Officer:
“As expected, due to the decline in commodity prices, Buenaventura
reported a net loss of
“Operating income in the fourth quarter was
than the figure reported in 4Q07, while EBITDA from Buenaventura’s direct
4Q07. EBITDA including Yanacocha and Cerro Verde decreased 72% from
“These results are explained by silver and lower base metal prices, which
reduced not only the by-product contribution at the Company’s direct
operations, but also had an significant negative effect at Cerro Verde.”
During 4Q08, net sales were
in the prices of silver and base metals, as well as lower volume of silver,
lead and zinc sold. On the other hand, gold volume sold, as well as the
realized price of gold remained stable.
Royalty income during 4Q08 totaled
compared to the
Net sales for the full year period were
compared to 2007 (
a 43% increase when compared to
Production and Operating Costs
Buenaventura’s equity production(1) during 4Q08 was 113,068 ounces of
gold, 4% higher than the 109,132 ounces reported in 4Q07; and 4,007,958 ounces
of silver, a 5% decrease when compared to the 4,198,027 ounces reported in
Equity production (1) for the accumulated twelve-month period was 422,732
ounces of gold and 15,530,981 ounces of silver. This represented an increase
of 5% in gold production (404,166 ounces in 2007), and a 5% increase in silver
production compared to 2007 (14,765,694 ounces).
At Orcopampa (100%), total gold production in 4Q08 was 78,459 ounces, a
13% increase when compared to the 69,146 ounces reported in 4Q07. This
production includes 8,304 gold ounces from old tailings treatment. Accumulated
gold production for the twelve-month period 2008 was 284,511 ounces, a 6%
increase when compared to 2007 (267,935 ounces).
Cash operating cost during 4Q08 was
1. A 30% increase in exploration and development (3,896m drifted in 4Q08
vs. 2,987m in 4Q07).
2. A 24% increase in contractor’s fees due to lower rock quality.
3. Higher consumption of mine support supplies and higher steel prices.
Cash operating costs for 2008 were
At Poracota, gold production in 4Q08 was 13,736 ounces, while the cash
operating cost was
period 2008 was 46,126 ounces, while the cash cost was
Total royalty paid to the government at both Orcopampa and Poracota in
At Uchucchacua (100%), total silver production during 4Q08 was 3,034,526
ounces, similar to 4Q07 production (2,986,989 oz). Zinc production decreased
11% (from 3,
decreased 11% (2,774 MT in 4Q08 vs. 3,
Accumulated production for the twelve-month period 2008 was 11,417,199
ounces of silver, 16% higher than 2007 (9,873,771 ounces); 11,
an increase of 44% when compared to 2007 (7,
higher than in 2007 (8,
Cash operating cost in 4Q08 was
1. The lower lead and zinc by-product contribution due to lower production
and realized prices. This explained the
4Q08 this contribution was
partially offset by a decrease in treatment charges.
2. An increase in contractor expenses due to the 22% increase in tonnage
exploited and the 41% increase in diamond drilling works.
It is important to mention that in
following decisions in order to adjust its operations to new market
1. Ceased exploitation and treatment of the zinc, lead and low silver
2. Switched the new concentrating circuit (
3. Ceased the cyanidation process.
As a consequence, silver cash operating costs decreased from
Cash operating cost for 2008 was
Total royalty paid to the government at Uchucchacua in 4Q08 was
At Antapite (100%), total production in 4Q08 was 9,130 ounces of gold, a
decrease of 51% compared to 4Q07 (18,627 ounces), mainly due to a 55% decrease
in gold grade from 0.43 Oz/ST to 0.19 Oz/ST and a lower recovery rate (from
96.4% in 4Q07 to 93.5% in 4Q08). Accumulated gold production was 43,319
ounces, a 40% decrease when compared to 2007 (72,171 oz).
Gold cash operating cost in 4Q08 was
compared to the
content due to lower grades, while tonnage exploited remained stable.
2008 cash operating costs were
Total royalty paid to the government at Antapite in 4Q08 was
At Colquijirca (El Brocal 35.78%), total zinc production was 18,
4Q08, a 24% decrease when compared to the 24,467 MT reported in 4Q07 due to a
23% decrease in the ore grade and a decrease in the recovery rate. Total
silver production during 4Q08 was 841,744 ounces, a 52% decrease when compared
to the 1,797,276 ounces reported in 4Q07 due to lower silver grade.
For the twelve-month period 2008, total zinc production was 81,
6% decrease when compared to the 87,
silver, total production decreased 37% from 7,099,097 ounces in 2007 to
4,493,191 ounces in 2008.
At Marcapunta, copper production for 4Q08 was 2,090 MT and 7,496 MT for
the 2008 accumulated period.
Zinc cash operating cost for 4Q08 was
MT in 4Q07, due a decrease in lead and silver contribution. Full year cash
operating cost was
Total royalty paid to the government at Colquijirca in 4Q08 was
General and administrative expenses for 4Q08 were a positive
provision.” Due to this factor, general and administrative expenses for the
twelve-month period 2008 totaled
Exploration Costs in non-operational mining sites
Exploration costs in non-operational mining sites during 4Q08 were
4Q07. The main efforts were focused at the Marcapunta (
sites during the twelve-month period 2008 were
when compared to 2007 (
Operating income in 4Q08 was
lower sales due to a decrease in silver and base metal prices, as well as
higher costs at the Company’s direct operations. The provision for the
“Impairment for long term assets” also negatively impacted operating income by
Accumulated operating income for 2008 was
when compared to the
Share in Affiliated Companies
During 4Q08, Buenaventura’s income from non-consolidated affiliates was
in 4Q07. This decrease was explained by a lower contribution from Cerro Verde
income from non-consolidated affiliates was
37% compared to the
At Yanacocha (43.65%), 4Q08 gold production was 419,329 ounces of gold, a
decrease of 11% when compared to 4Q07 (469,760 ounces). Gold production for
the twelve-month 2008 period was 1,810,338 ounces, an increase of 16% when
compared to the 1,563,670 ounces reported in 2007.
Costs applicable to sales (CAS) at Yanacocha during 4Q08 were
17% higher than the figure reported in 4Q07 (
Net income at Yanacocha during 4Q08 was
when compared to the 4Q07 figure (
During 4Q08, EBITDA totaled
increase in costs applicable to sales (CAS), which offset the higher realized
gold prices, (
twelve-month period 2008 was
compared to the
CAPEX for 4Q08 was
At Cerro Verde (19.05%), 4Q08 copper production was 79,894 MT, a 4%
increase when compared to 4Q07 (76,
During 4Q08, Cerro Verde reported a net loss of
to net income of
sales revenue, which decreased from
of sales at quotational period.
Accumulated 2008 net income was
to 2007 (
increase of 2% compared to 2007 (
CAPEX in 4Q08 totaled
This quarter, Buenaventura’s net loss was
1. The 84% decrease in operating income.
2. The 71% decrease in contribution from affiliates
Net income for the twelve-month period 2008 was
— The integration of the Carmen and Socorro mines at level 3990 concluded
in 4Q08 as scheduled.
In the Carmen mine, Master Shaft facilities at level 3920 were completed
deepening to reach level 3920 (760m) in 4Q09.
In the Socorro Mine, a pilot chimney connected level 4060 with level 3990
(70m) at the Luz Shaft in
level 3960 and is expected to deepen until level 3920 (292m) by the end of
During 2008, total investment in both projects amounted
— As of
3230 and will continue to reach level 3170 (60m) by the end of this year.
Accumulated investment during 2008 was
— The deepening of the Prometida Shaft reached level 3340 in
1. Deepening of the shaft to reach level 3290 (50m). 2. Raising the shaft to communicate with surface (175m). Accumulated investment during 2008 was US$1.0 million.
At the Board of Director’s meeting, held
passed the following resolution:
To call for the Annual Shareholders Meeting to be held
— Approve the financial statements as of
— Approve the 2008 Annual Report
— Approve the appointment of Medina, Zaldivar, Paredes & Asociados
Sociedad Civil, Member of Ernst & Young Global, as external auditors for 2009.
— Approve a cash dividend of
Compania de Minas Buenaventura S.A.A. is
precious metals company and a major holder of mining rights in
Company is engaged in the mining, processing, development and exploration of
gold and silver and other metals via wholly owned mines as well as through its
participation in joint exploration projects.
Buenaventura currently operates several mines in
Uchucchacua, Antapite, Julcani, Recuperada and Caraveli), has controlling
interest in two mining companies (CEDIMIN and El Brocal) as well as a minority
interest in several other mining companies in
Minera Yanacocha S.R.L. (a partnership with Newmont Mining Corporation), an
important precious metal producer, and 19.05% in Sociedad Minera Cerro Verde,
an important Peruvian copper producer.
To request a printed version of the Company’s 2007 annual report on 20-F
form contact the persons indicated below.
Note on Forward-Looking Statements
This press release may contain forward-looking information (as defined in
the U.S. Private Securities Litigation Reform Act of 1995) that involve risks
and uncertainties, including those concerning the Company’s, Yanacocha and
Cerro Verde’s costs and expenses, results of exploration, the continued
improving efficiency of operations, prevailing market prices of gold, silver,
copper and other metals mined, the success of joint ventures, estimates of
future explorations, development and production, subsidiaries’ plans for
capital expenditures, estimates of reserves and Peruvian political,
economical, social and legal developments. These forward-looking statements
reflect the Company’s view with respect to the Company and Yanacocha’s future
financial performance. Actual results could differ materially from those
projected in the forward-looking statements as a result of a variety of
factors discussed elsewhere in this Press Release.
1) Production includes 100% of operating units, 100% of CEDIMIN and
35.78% of El Brocal.
Contacts in Lima: Roque Benavides / Carlos Galvez Compania de Minas Buenaventura S.A.A. Tel: (511) 419-2538 / 419-2540 Investor Relations: Daniel Dominguez Tel: (511) 419-2536 Email: email@example.com Contacts in New York: Maria Barona / Peter Majeski i-advize Corporate Communications, Inc. Tel: (212) 406-3690 Email: firstname.lastname@example.org
SOURCE Compania de Minas Buenaventura S.A.A.