Quantcast

Buenaventura Announces Second Quarter 2011 Results

July 26, 2011

LIMA, Peru, July 26, 2011 /PRNewswire/ — Compania de Minas Buenaventura S.A.A. (“Buenaventura” or “the Company”) (NYSE: BVN; Lima Stock Exchange: BUE.LM), Peru’s largest, publicly-traded precious metals mining company, announced today results for the second quarter 2011. All figures have been prepared in accordance with Peruvian GAAP and are stated in U.S. dollars (US$).

Comments from the Chief Executive Officer:

Mr. Roque Benavides, Buenaventura’s Chief Executive Officer, stated:

“Net income in the second quarter reached US$204.2 million, an 83% increase when compared to the figure reported in 2Q10 (US$111.6 million). EBITDA from Buenaventura’s Direct Operations was US$179.2 million, 103% higher than the figure reported in 2Q10 (US$88.4 million), while EBITDA including Yanacocha and Cerro Verde increased 64%, from US$245.6 million in 2Q10 to US$403.1 million in 2Q11.

These results were mainly driven by an increase in gold and copper sales from Buenaventura’s direct operations, as well as the higher metal prices.


    Financial Highlights (in millions of US$, except EPS figures):
    --------------------------------------------------------------
                            2Q11     2Q10      Var%   6M11     6M10   Var%
                            ----     ----      ----    ----     ----   ----
    Total Revenues          343.3    225.4       52%   719.0    427.1    68%
    --------------          -----    -----      ---    -----    -----   ---
    Operating Income        147.8     51.5      187%   324.3    116.7   178%
    ----------------        -----     ----      ---    -----    -----   ---
    EBITDA                  179.2     88.4      103%   384.1    172.9   122%
    ------                  -----     ----      ---    -----    -----   ---
    (BVN Direct
     Operations)**
    --------------
    EBITDA                  403.1    245.6       64%   797.6    526.1    52%
    ------                  -----    -----      ---    -----    -----   ---
    (inc. Yanacocha and
     Cerro Verde) **
    -------------------
    Net Income              204.2    111.6       83%   422.5    268.0    58%
    ----------              -----    -----      ---    -----    -----   ---
    EPS*                     0.80     0.44       83%    1.66     1.05    58%
    ----                     ----     ----      ---     ----     ----   ---
    (*) As of June 30, 2011, Buenaventura had 254,442,328 shares
    outstanding.

    ** Within this release, Buenaventura presents financial measures in
    accordance with Peruvian GAAP and also on a non-GAAP basis.  EBITDA
    (Buenaventura Direct Operations) and EBITDA (including Yanacocha and
    Cerro Verde) included in this release are non-GAAP financial
    measures. Please see the consolidated financial information below
    for information reconciling non-GAAP financial measures to
    comparable Peruvian GAAP financial measures.

Operating Revenue

During 2Q11, net sales were US$327.3 million, a 54% increase when compared to the US$212.0 million reported in 2Q10. This was explained by an increase in the volume of gold and copper sold, as well as higher realized prices across all metals.

Royalty income increased 20% from US$13.4 million reported in 2Q10 to US$16.0 million in 2Q11 due to higher revenues at Yanacocha.


    Operating Highlights     2Q11       2Q10   Var%  6M11    6M10   Var%
    --------------------     ----       ----   ----   ----    ----   ----
    Net Sales                 327.3      212.0   54%   690.8  399.6    73%
    ---------                 -----      -----  ---    -----  -----   ---
    (in millions of US$)
    --------------------
    Average Realized
     Gold Price Gold
     (US$/oz)*                1,514      1,214   25%   1,457  1,168    25%
    ----------------          -----      -----  ---    -----  -----   ---
    Average Realized
     Gold Price (US$/oz)
     inc. Yanacocha           1,508      1,199   26%   1,454  1,155    26%
    --------------------      -----      -----  ---    -----  -----   ---
    Average Realized
     Silver Price
     (US$/oz)*                37.01      18.34  102%   35.70  17.73   101%
    ----------------          -----      -----  ---    -----  -----   ---
    Average Realized
     Lead Price
     (US$/MT)*                2,494      1,865   34%   2,519  2,016    25%
    ----------------          -----      -----  ---    -----  -----   ---
    Average Realized
     Zinc Price
     (US$/MT)*                2,260      2,029   11%   2,321  2,137     9%
    ----------------          -----      -----  ---    -----  -----   ---
    Average Realized
     Copper Price
     (US$/MT)*                9,103      6,730   35%   9,334  7,033    33%
    ----------------          -----      -----  ---    -----  -----   ---
    (*) Buenaventura's Direct Operations

                                Sales Content
                        2Q11      2Q10    Var%   6M11      6M10     Var%
    Gold (in oz)*       126,314   105,112   20%   246,916   203,248    21%
    Gold (in oz) inc.
     Yanacocha          275,387   261,019    6%   519,413   539,778    -4%
    Silver (in oz)*   2,768,290 2,833,313   -2% 6,379,511 5,541,847    15%
    Lead (in MT)*         4,657     5,808  -20%     7,404    10,963   -32%
    Zinc (in MT)*         8,517     9,977  -15%    16,451    21,336   -23%
    Copper (in MT)*       3,832     2,769   38%    10,889     4,813   126%
    (*) Buenaventura Direct Operations

Accumulated net sales in 2011 were US$690.8 million, a 73% increase compared to the same period in 2010 (US$399.6 million), while royalty income was US$28.2 million, a 3% increase when compared to the US$27.5 million reported in the comparable period 2010.

Production and Operating Costs

Buenaventura’s equity production(1) in 2Q11 was 120,641 ounces of gold, 10% higher than the 109,974 ounces reported in 2Q10 due to the production from La Zanja (initiated production in September 2010). Silver production in 2Q11 was 3.7 million ounces, an 11% increase when compared to the figure reported in 2Q10 (3.4 million oz) due to higher production from El Brocal.

Equity production(1) in the first six month period 2011 was 237,259 ounces of gold and 7.5 million ounces of silver. This represented a 14% increase in gold production (207,744 ounces in 1H10), and a 19% increase in silver production compared to 2010 (6.4 million ounces).

                           Equity Production (1)
                       2Q11      2Q10    Var%   6M11      6M10     Var%
                       ----      ----    ----    ----      ----     ----
    Gold (oz)          120,641   109,974   10%   237,259   207,744    14%
    ---------          -------   -------  ---    -------   -------   ---
    Gold (oz) inc.
     Yanacocha         269,778   261,953    3%   512,202   544,274    -6%
    --------------     -------   -------  ---    -------   -------   ---
    Silver (oz)      3,732,135 3,372,803   11% 7,549,314 6,358,862    19%
    -----------      --------- ---------  ---  --------- ---------   ---
    Lead (MT)            4,617     4,938   -7%     7,757     9,222   -16%
    ---------            -----     -----  ---      -----     -----   ---
    Zinc (MT)            6,164     6,850  -10%     8,772    14,302   -39%
    ---------            -----     -----  ---      -----    ------   ---
    Copper (MT) inc.
     Cerro Verde        17,134    15,914    8%    35,985    31,338    15%
    ----------------    ------    ------  ---     ------    ------   ---

Orcopampa’s (100% owned by Buenaventura) production from the Chipmo mine in 2Q11 was 69,335 ounces, 7% lower than the 74,924 ounces reported in 2Q10 due to lower ore grade, as well as a three-day strike at the property. The old tailings treatment produced 5,876 gold ounces (compared to 5,558 ounces in 2Q10). As a consequence, total gold production in 2Q11 was 75,211 ounces, 7% lower than the 80,482 ounces reported in 2Q10. Accumulated total gold production in the first six-month period 2011 was 153,601 ounces, a 1% increase when compared to 2010 (152,601 ounces). (See Appendix 2)

Cash operating cost in 2Q11 was US$445/oz, 23% higher when compared to 2Q10 (US$362/oz). This was mainly explained by:

  1. 45% increase in labor costs explained by higher wages and one-time bonuses for negotiations with unions.
  2. 27% increase in supply consumption: diesel and support materials.
  3. Partially offset by an increase in silver by-product contribution due to higher silver content and prices.

At Poracota, gold production in 2Q11 was 13,427 ounces, a decrease of 10% when compared to 2Q10 (14,968 ounces) due to lower ore grade. Accumulated gold production for the first six-month period 2011 was 25,528 ounces, 12% lower than the figure reported in 2010 (28,897 ounces) (See Appendix 2). Cash operating cost was US$936/oz, 2% higher than the figure reported in 2Q10 (US$919/oz).

Total royalties paid to the government at both Orcopampa and Poracota in 2Q11 totaled US$4.3 million.

At Uchucchacua (100% owned by Buenaventura), total silver production in 2Q11 was 2.0 million ounces, a 14% decrease when compared to 2.4 million ounces in 2Q10 due to lower tonnage treated, as a result of a 21-day stoppage in April, in addition to a lower recovery rate. Zinc production in 2Q11 was 1,049 MT, 44% lower than the figure reported in 2Q10 (1,881 MT), while lead production decreased 32% (1,359 MT in 2Q11 vs. 2,002 MT in 2Q10). In 1H11, silver production was 4.6 million ounces, zinc production was 2,951 MT and lead production was 3,381 MT (vs. 4.4 million ounces, 3,397 MT and 3,758 MT, respectively, in 1H10).

Cash operating cost in 2Q11 was US$17.74/oz, a 49% increase compared to US$11.12/oz in 2Q10. This increase was primarily due to:

  1. The 14% lower production mentioned above.
  2. Higher commercial deductions to payable silver content due to the increased price of silver.
  3. Lower zinc and lead by-product contribution.
  4. Higher labor costs mainly due to an increase in workers’ profit sharing.

Total royalties paid to the government at Uchucchacua in 2Q11 totaled US$1.6 million.

At Antapite (100% owned by Buenaventura), total production in 2Q11 was 7,824 ounces of gold, a decrease of 18% compared to 2Q10 (9,560 ounces), mainly due to a decrease in ore grade (See Appendix 2). Accumulated gold production was 16,078 ounces, a 3% decrease when compared to 2010 (16,630 oz).

Gold cash operating cost in 2Q11 was US$1,024/oz, 34% higher than in 2Q10 (US$764/oz), mainly due to the aforementioned decrease in gold production.

Total royalties paid to the government at Antapite in 2Q11 totaled US$0.2 million.

La Zanja (53.06% owned by Buenaventura) total production in 2Q11 was 36,920 ounces of gold (19,568 ounces attributable to Buenaventura), while the cash operating cost was US$304/oz.

Total royalties paid to the government at La Zanja in 2Q11 totaled US$0.9 million.

At El Brocal (46.08% owned by Buenaventura), in 2Q10 the treatment of polymetalic ore was resumed after devoting full plant capacity to treat copper ores during 4Q10 and 1Q11.

At Colquijirca, total zinc production was 9,650 MT in 2Q11, in-line with the figure reported in 2Q10 (Appendix 2). Total silver production in 2Q11 was 1.0 million ounces, a 78% increase when compared to the 0.6 million ounces reported in 2Q10. Total lead production in 2Q11 was 4,812 MT, a 32% increase when compared to 3,642 MT in 2Q10.

For 1H11, total zinc production was 9,650 MT, a 55% decrease when compared to the 21,569 MT reported in 1H10. In the case of silver, total production increased 26%, from 1.2 million ounces in 1H10 to 1.5 million ounces in 1H11. Lead production for the first six months 2011 was 4,812 MT, 30% lower than the same period in 2010 (6,915 MT).

Zinc cash cost in 2Q11 was a negative US$183 vs. US$1,096/MT in 2Q10. This was due to a higher silver by-product contribution due to an increase in silver production and prices.

Copper production in 2Q11 was 3,922 MT, 29% higher than 2Q10 (3,036 MT). Copper cash cost in 2Q11 was US$4,723/MT, a 16% increase when compared to the US$4,075/MT reported in 2Q10. Accumulated copper production for 2011 was 11,395 MT, 120% higher than 2Q10 (5,178 MT).

Total royalties paid to the government at Colquijirca and Marcapunta in 2Q11 totaled US$1.4 million.

General and Administrative Expenses

General and administrative expenses in 2Q11 were US$19.5 million, 33% lower than the figure reported in 2Q10 (US$29.2 million) due to a lower long-term compensation provision. For 1H11, general and administrative expenses were US$36.5 million versus US$40.5 million in 1H10 (10% decrease).

Exploration Costs in Non-Operational Mining Sites

Exploration costs at non-operational mining sites, which include care and maintenance, in 2Q11 were US$12.1 million, a 17% increase compared to the US$10.3 million reported in 2Q10. Buenaventura’s main exploration efforts were focused at the Marcapunta (US$1.4 million), Trapiche (US$1.1 million) and Mallay (US$2.0 million) projects.

Exploration costs at non-operational mining sites in 1H11 were US$22.7 million, 25% higher than 1H10 (US$18.2 million).

Operating Income

Operating income in 2Q11 was US$147.8 million, a 187% increase compared to the US$51.5 million reported in 2Q11. This increase was mainly due to the 52% increase in total revenues as a result of higher average realized prices and increases in the volume of gold and copper sold.

Operating income in the first six month period 2011 was US$324.3 million versus US$116.7 million in the same period in 2010.

Share in Associated Companies

During 2Q11, Buenaventura’s income from non-consolidated affiliates was US$129.6 million, 50% higher than the US$86.2 million reported in 2Q10. Yanacocha’s contribution to these results increased 4%, from US$62.7 million in 2Q10 to US$64.9 million in 2Q11, while Cerro Verde’s contribution increased 179% from US$25.9 million in 2Q10 to US$72.3 million in 2Q11.

In 1H11, Buenaventura’s income from non-consolidated affiliates was US$235.3 million, 19% higher than the US$198.4 million reported in 1H10.

YANACOCHA

At Yanacocha (43.65% owned by Buenaventura), 2Q11 gold production was 341,665 ounces of gold, a 3% decrease compared to 2Q10 (352,556 ounces) due to a 39% decline in ore mined and a higher stripping ratio.

Costs applicable to sales at Yanacocha in 2Q11 were US$564/oz, 39% higher than the figure reported in 2Q10 (US$406/oz) due to higher diesel and electricity costs, as well as higher consumption of processing commodities (lime, grinding balls and cyanide).

Net income at Yanacocha in 2Q11 was US$149.1 million, a 3% increase compared to the 2Q10 figure (US$144.3 million). Accumulated net income in 2011 was US$259.8 million, 15% lower than in the same period 2010 (US$306.8 million).

During 2Q11, EBITDA totaled US$284.2 million, an increase of 12% compared to 2Q10 (US$254.0 million). This increase was mainly due to a 23% increase in revenues (US$520.2 million in 2Q11 vs. US$424.4 million in 2Q10) due to a 27% increase in realized price of gold. Accumulated EBITDA in 1H11 was US$478.1 million, 9% lower than 1H10 (528.1 million).

Capital expenditures at Yanacocha were US$272.0 million in 2Q11.

CERRO VERDE

At Cerro Verde (19.26% owned by Buenaventura), 2Q11 copper production was 76,905 MT, a 2% increase when compared to 2Q10 (75,386 MT). Accumulated total copper production in 1H11 was 156,204 MT, 4% increase compared to 150,339 MT in 1H10.

During 2Q11, Cerro Verde reported net income of US$343.3 million, a 151% increase when compared to US$136.8 million in 2Q10. This was mainly due to a 98% increase in sales revenues (US$744.0 million in 2Q11 versus US$375.7 million in 2Q10). Net income in 1H11 was US$710.9 million, 89% higher than US$375.4 million in 1H10.

Capital expenditures at Cerro Verde in 2Q11 totaled US$31.3 million.

Net Income

This quarter, Buenaventura’s net income was US$204.2 million (US$0.80 per share), 83% higher compared to the US$111.6 million (US$0.44 per share) reported in 2Q10. This increase was mainly due to a 187% increase in operating income and a 50% increase in income from associated companies. Accumulated net income in 1H11 was US$422.5 million, 58% higher when compared to 1H10 (US$268.0 million).

Project Development

LA ZANJA EXPANSION

  • Pampa Verde Project. Construction began during 2Q11. As of June 30, 2011, total project expenditures were US$3.62 million. The total Investment for this project is US$32.5 million. Completion is expected in 3Q12.

          La Zanja Structure         Progress as of June 30, 2011
          ------------------         ----------------------------
    San Pedro Sur Leach Pad Stage
     II                                                       34.52%
    -----------------------------                             -----
    San Pedro Sur Waste Rock
     Deposit                                                  53.38%
    ------------------------                                  -----
    Pampa Verde Pit                                               0%
    ---------------                                             ---
    Pampa Verde Top Soil Deposit                               7.62%
    ----------------------------                               ----
    Pampa Verde Waste Soil
     Deposit                                                   6.50%
    ----------------------                                     ----
    Pampa Verde Acid Water Plant                               2.40%
    ----------------------------                               ----
    Pampa Verde Auxiliary Access                              70.78%
    ----------------------------                              -----

The Pampa Verde pit mine planning, design and production schedule will start at the end of 4Q11.

MANGANESE SULFATE PLANT

  • Buenaventura started the design of a manganese sulfate plant in 1Q11 with a total budget of US$56.4 million. As of June 30, 2011, total expenditures were US$ 10.1 million. The project includes a leaching facility, a sulfuric acid plant and a manganese sulfate plant.
  • The leaching processing facility is expected to be completed in 1Q12. This facility will treat the Uchucchacua Mine Lead-Silver concentrates by removing the manganese content through a leaching process.

TANTAHUATAY

  • Total CAPEX is US$79.8 million. As of June 30, 2011, total expenditures were US$71.3 million. The mine construction progress is summarized in the following chart:


              Structure              Progress as of June 30, 2011
              ---------              ----------------------------
    Tantahuatay Pit (mine
     planning)                                                  100%
    ---------------------                                       ---
    Waste Rock Deposit                                        90.21%
    ------------------                                        -----
    Waste Soil Deposit                                        99.46%
    ------------------                                        -----
    Top Soil Deposit                                          97.35%
    ----------------                                          -----
    Leaching Platform                                         89.09%
    -----------------                                         -----
    Processing Plant                                          99.01%
    ----------------                                          -----

HUANZA HYDROELECTRICAL PLANT

  • As of June 30, 2011, Buenaventura’s total investment in the Huanza Project was US$91.1 million, representing 66% of the entire budget. US$77.0 million of the total amount invested was financed via a leasing agreement with Banco De Credito Del Peru (Total leasing agreement: US$119.0 million).
  • Construction progress at the Huanza Project includes:
    1. Water Conduction Tunnel: 7,165 m of excavation was completed, representing 63.5% of scheduled construction.
    2. Powerhouse: the Powerhouse excavation and hill slope sustenance were completed and the first shipment of electromechanical equipment arrived, which represents 18% of the Powerhouse’s construction.
    3. Pallca Dam: the Dam excavation was completed, and the slab placement has started.

Other Information

On July 22, 2011, Buenaventura completed the purchase of 100% ownership of Inversiones Colquijirca S.A. The purpose of the transaction was to obtain direct political and economic control of Sociedad Minera El Brocal S.A.A. As a consequence, Buenaventura increased its economic interest from 46.08% to 53.24%.

Company Description

Compania de Minas Buenaventura S.A.A. is Peru’s largest, publicly traded, Precious Metals Company and a major holder of mining rights in Peru. The 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 Peru (Orcopampa, Poracota, Uchucchacua, Antapite, Julcani and Recuperada). Buenaventura also has a controlling interest in three mining companies (El Brocal, La Zanja and CEDIMIN) as well as a minority interest in several other mining companies in Peru. The Company owns 43.65% of Minera Yanacocha S.R.L. (a partnership with Newmont Mining Corporation), an important precious metal producer, 19.26% of Sociedad Minera Cerro Verde, an important Peruvian copper producer, and 49% of Canteras del Hallazgo S.A, which owns the Chucapaca project.

For a printed version of the Company’s 2010 Form 20-F, please contact the persons indicated below, or download a PDF format file from the Company’s web site.

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’s 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’s, Yanacocha’s and Cerro Verde’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.

**Tables to follow**

APPENDIX 1

                              Equity Participation in
                 Subsidiaries and Affiliates (as of June 30, 2011)
                                     BVN                 Operating
                                   Equity %         Mines / Business
                                   --------          ----------------
    Cedimin S.A.C*                   100.00            Shila / Paula
    --------------                   ------            -------------
    Consorcio Energetico de                   Energy - Huanza Hydroelectrical
     Huancavelica S.A*               100.00               Project
    -----------------------          ------  --------------------------------
    Buenaventura Ingenieros S.A*     100.00       Engineering Consultant
    ----------------------------     ------       ----------------------
    Minera La Zanja S.A*              53.06              La Zanja
    --------------------              -----              --------
    Sociedad Minera El Brocal
     S.A.A*                           46.08 Colquijirca and Marcapunta Project
    -------------------------         ----- ----------------------------------
    Canteras del Hallazgo S.A **      49.00          Chucapaca Project
    ----------------------------      -----          -----------------
    Compania Minera Coimolache S.A
     **                               40.09         Tantahuatay Project
    ------------------------------    -----         -------------------
    Minera Yanacocha S.R.L **         43.65              Yanacocha
    -------------------------         -----              ---------
    Sociedad Minera Cerro Verde
     S.A.A **                         19.26             Cerro Verde
    ---------------------------       -----             -----------
    (*)Consolidates
    (**) Equity Accounting

APPENDIX 2

                                                GOLD PRODUCTION
                                      Three Months Ended June 30
                                      --------------------------
                                   Orcopampa               Orcopampa Old
                                                              Tailings
                              2011     2010           2011    2010
                              ----     ----    %      ----    ----    %
                                              ---                    ---
    Ore Milled  DST        123,766  124,130      0% 98,302  74,923     31%
    Ore Grade OZ/ST           0.59     0.63     -6%   0.08    0.08     -5%
    Recovery Rate %          95.2%    96.1%    -1%   75.8%   81.5%    -7%
    Ounces Produced         69,335   74,924     -7%  5,876   5,558      6%
                            ------   ------    ---   -----   -----    ---


                                        Six Months Ended June 30
                                        ------------------------
                                    Orcopampa               Orcopampa Old
                                                               Tailings
                              2011     2010             2011     2010
                              ----     ----     %       ----     ----    %
                                               ---                     ---
    Ore Milled  DST        249,233  231,426       8% 188,819  160,428    18%
    Ore Grade OZ/ST           0.60     0.62      -3%    0.08     0.08   -10%
    Recovery Rate %          95.3%    95.9%     -1%    75.4%    81.2%   -7%
    Ounces Produced        142,906  140,054       2%  10,830   12,547   -14%
                           -------  -------     ---   ------   ------   ---


    Orcopampa Total
     Production     2Q11 75,211 4Q09 80,482 6M11 153,736 6M10 152,601


                                      Three Months Ended June 30
                                      --------------------------
                                    Antapite                  Poracota
                              2011     2010           2011    2010
                              ----     ----    %      ----    ----    %
                                              ---                    ---
    Ore Milled  DST         37,588   38,228     -2% 61,577  62,004     -1%
    Ore Grade OZ/ST           0.22     0.26    -17%   0.25    0.29    -14%
    Recovery Rate %          96.9%    96.6%     0%   85.8%   82.0%     5%
    Ounces Produced          7,824    9,560    -18% 13,427  14,968    -10%
                             -----    -----    ---  ------  ------    ---


                                        Six Months Ended June 30
                                        ------------------------
                                    Antapite                   Poracota
                              2011     2010             2011     2010
                              ----     ----     %       ----     ----    %
                                               ---                     ---
    Ore Milled  DST         73,404   68,233       8% 122,002  116,668     5%
    Ore Grade OZ/ST           0.23     0.25     -10%    0.25     0.30   -16%
    Recovery Rate %          96.2%    96.5%      0%    84.0%    83.6%    0%
    Ounces Produced         16,078   16,630      -3%  25,528   28,897   -12%
                            ------   ------     ---   ------   ------   ---

                               LA ZANJA
                             2Q11     2Q10     %     6M11    6M10     %
                             ----     ----    ---    ----    ----    ---
    Ounces Produced         36,920        0         62,071       0
                            ------      ---         ------     ---

                                               SILVER PRODUCTION
                                Three Months Ended June 30
                                --------------------------
                           Uchucchacua                Conquijirca
                         2011        2010             2011      2010
                         ----        ----    %        ----      ----  %
                                            ---                      ---
    Ore Milled  DST   216,556     245,797    -12%  422,358   350,703   20%
    Ore Grade OZ/ST     13.50       13.67     -1%     3.01      2.32   30%
    Recovery Rate %     70.0%       69.8%     0%     77.9%     69.0%  13%
    Ounces Produced 2,048,524   2,377,107    -14%  990,635   560,481   77%
                    ---------   ---------    ---   -------   -------  ---


                                  Six Months Ended June 30
                                  ------------------------
                            Uchucchacua                Colquijirca
                         2011        2010              2011        2010
                         ----        ----     %        ----        ----   %
                                             ---                        ---
    Ore Milled  DST   495,534     475,526       4%  422,358     710,172  -41%
    Ore Grade OZ/ST     13.00       13.17      -1%     3.01        2.38   27%
    Recovery Rate %     70.6%       70.0%      1%     77.9%       67.3%  16%
    Ounces Produced 4,550,606   4,415,063       3%  990,635   1,135,135  -13%
                    ---------   ---------     ---   -------   ---------  ---

                                                ZINC PRODUCTION
                                      Three Months Ended June 30
                                      --------------------------
                                  Uchucchacua               Colquijirca
                              2011     2010            2011     2010
                                               %                        %
    Ore Milled  DST        216,556  245,797    -12% 422,358  350,703     20%
    Ore Grade %              1.18%    1.57%   -25%    3.71%    4.47%   -17%
    Recovery Rate %          45.1%    53.6%   -16%    68.0%    68.0%     0%
    ST Produced              1,156    2,073    -44%  10,637   10,657      0%
                             -----    -----    ---   ------   ------    ---


                                        Six Months Ended June 30
                                        ------------------------
                                   Uchucchacua               Colquijirca
                              2011     2010             2011     2010
                                                %                        %
    Ore Milled  DST        495,534  475,526       4% 422,358  710,172   -41%
    Ore Grade %              1.27%    1.53%    -17%    3.71%    4.74%  -22%
    Recovery Rate %          51.2%    51.1%      0%    68.0%    70.7%   -4%
    ST Produced              3,253    3,744     -13%  10,637   23,775   -55%
                             -----    -----     ---   ------   ------   ---

Note:

EBITDA (Buenaventura Direct Operations) consists of earnings before net interest, taxes, depreciation and amortization, share in associated companies, net, loss on currency exchange difference, other, net, provision for workers’ profit sharing and provision for long-term officers’ compensation.

EBITDA (including Yanacocha and Cerro Verde) consists of EBITDA (Buenaventura Direct Operations), plus (1) Buenaventura’s equity share of EBITDA (Yanacocha) and (2) Buenaventura’s equity share of EBITDA (Cerro Verde). EBITDA (Yanacocha) and EBITDA (Cerro Verde) were similarly calculated using financial information provided to Buenaventura by Yanachocha and Cerro Verde, respectively.

Buenaventura presents EBITDA (Buenaventura Direct Operations) and EBITDA (including Yanacocha and Cerro Verde) to provide further information with respect to its operating performance and the operating performance of its equity investees, Yanachocha and Cerro Verde. EBITDA (Buenaventura Direct Operations) and EBITDA (including Yanacocha and Cerro Verde) are not a measure of financial performance under Peruvian GAAP, and may not be comparable to similarly titled measures of other companies. You should not consider EBITDA (Buenaventura Direct Operations) and EBITDA (including Yanacocha and Cerro Verde) as alternatives to operating income or net income determined in accordance with Peruvian GAAP, as an indicator of Buenaventura’s, Yanacocha’s or Cerro Verde’s operating performance, or as an alternative to cash flows from operating activities, determined in accordance with Peruvian GAAP, as an indicator of cash flows or as a measure of liquidity.

APPENDIX 4

    Compania de Minas Buenaventura S.A.A. and subsidiaries
    Consolidated Balance sheet
    As of June, 30 2011  and  December, 31 2010
                                                        2011         2010
     Assets                                       US$(000)    US$(000)
     Current assets
     Cash and cash equivalents                       615,301      600,796
     Financial asset at fair value through profit
      and loss                                        51,152       50,154
     Trade accounts receivable, net                  141,562      160,928
     Other accounts receivable                        30,895       23,593
     Accounts receivable from related parties         23,599       18,903
     Embedded derivatives for concentrates sales       1,063       13,645
     Inventory, net                                  129,293       82,081
     Prepaid  expenses                                29,942       21,615
                                                      ------       ------
     Total current assets                          1,022,807      971,715

     Other accounts receivable                         1,533        1,538
     Accounts receivable from related parties         36,869       20,736
     Inventory                                        39,370       27,104
     Prepaid expenses                                  2,144       12,887
     Investment in associates                      1,661,801    1,412,414
     Mining concessions and property, plant and
      equipment, net                                 597,788      532,577
     Development costs, net                           78,525       86,340
     Deferred income tax  asset                      168,453      201,454
     Other assets                                      5,831        6,095
     Total assets                                  3,615,121    3,272,860
                                                   ---------    ---------

     Liabilities and shareholders' equity, net
     Current liabilities
     Trade accounts payable                           85,945       91,374
     Income tax payable                               25,284       26,538
     Other liabilities                               101,245      115,838
     Accounts payable from related parties               620        1,584
     Embedded derivatives for concentrates sales         244            -
     Hedge derivative financial instruments            9,526       16,291
     Financial obligations                             2,004        2,018
     Total current liabilities                       224,868      253,643

     Other long-term liabilities                     101,867      116,214
     Accounts payable from related parties             1,379        1,370
     Financial obligations                            79,656       55,134
     Hedge derivative financial instruments            4,521        6,897
     Deferred income tax  liabilities                 18,214       21,152
     Total liabilities                               430,505      454,410
                                                     -------      -------

     Shareholders' equity net

     Capital stock, net of treasury shares of
      US$62,622,000 in the year 2011 y 2010          750,540      750,540
     Investments shares, net of treasury shares
      of US$142,000 in the year 2011 y 2010            2,019        2,019
     Additional  paid-in capital                     225,978      225,978
     Legal reserve                                   162,639      162,633
     Other reserves                                      269          269
     Retained earnings                             1,821,772    1,483,233
     Cumulative translation loss                     (34,075)     (34,075)
     Cumulative unrealized, loss                      (3,399)      (6,875)
                                                   2,925,743    2,583,722
     Minority interest                               258,873      234,728
                                                     -------      -------
     Total shareholders' equity, net               3,184,616    2,818,450
                                                   ---------    ---------

     Total liabilities and shareholders' equity,
      net                                          3,615,121    3,272,860
                                                   ---------    ---------

    Compania de Minas Buenaventura S.A.A. and subsidiaries
    Consolidated Statements of income
    For the three and six month period ended June 30, 2011 and  June 30, 2010

                                                      For the three month
                                                     period ended June, 30
                                                     ---------------------
                                                       2011            2010
                                                  US$(000)        US$(000)
     Operating income
     Net sales                                      327,302         212,028
     Royalty income                                  15,982          13,357
     Total income                                   343,284         225,385

     Operating costs
     Cost of sales, excluding depreciation and
      amortization                                   96,545          80,979
     Exploration in units in operation               24,065          22,114
     Depreciation and amortization                   23,605          16,952
     Total operating costs                          144,215         120,045
     Gross income                                   199,069         105,340
                                                    -------         -------

     Operating expenses
     Administrative expenses                         19,500          29,193
     Royalties                                       16,987          12,120
     Exploration in non-operating areas              12,096          10,299
     Sales expenses                                   2,648           2,215
     Total operating expenses                        51,231          53,827
                                                     ------          ------

     Operating income                               147,838          51,513
                                                    -------          ------

     Other income (expenses), net
     Share in associates companies by the equity
      method, net                                   129,609          86,163
     Interest incomes                                 2,042             775
     Interest expenses                               (1,282)         (1,709)
     Loss (income) from currency exchange
      difference, net                                   (25)             60
     Other, net                                         968             303
     Total other income, net                        131,312          85,592

     Income before income tax and minority
      interest                                      279,150         137,105

     Provision for income tax                       (48,690)        (17,826)

     Net income                                     230,460         119,279
                                                    -------         -------

     Net income attributable to minority interest   (26,286)         (7,691)

     Net income attributable to  Buenaventura       204,174         111,588
                                                    -------         -------

     Basic and diluted earnings per share
      attributable to
     Buenaventura, stated in U.S. dollars              0.80            0.44
                                                       ----            ----


                                                   For the six month period
                                                         ended June, 30
                                                   ------------------------
                                                       2011            2010
                                                  US$(000)        US$(000)
     Operating income
     Net sales                                      690,782         399,637
     Royalty income                                  28,249          27,484
     Total income                                   719,031         427,121

     Operating costs
     Cost of sales, excluding depreciation and
      amortization                                  208,057         152,790
     Exploration in units in operation               46,324          40,448
     Depreciation and amortization                   44,998          33,511
     Total operating costs                          299,379         226,749
     Gross income                                   419,652         200,372
                                                    -------         -------

     Operating expenses
     Administrative expenses                         36,482          40,472
     Royalties                                       31,310          20,774
     Exploration in non-operating areas              22,700          18,154
     Sales expenses                                   4,853           4,277
     Total operating expenses                        95,345          83,677
                                                     ------          ------

     Operating income                               324,307         116,695
                                                    -------         -------

     Other income (expenses), net
     Share in associates companies by the equity
      method, net                                   235,314         198,417
     Interest incomes                                 5,377           4,470
     Interest expenses                               (3,427)         (4,195)
     Loss (income) from currency exchange
      difference, net                                  (823)           (694)
     Other, net                                       3,035           3,467
     Total other income, net                        239,476         201,465

     Income before income tax and minority
      interest                                      563,783         318,160

     Provision for income tax                       (94,229)        (33,734)

     Net income                                     469,554         284,426
                                                    -------         -------

     Net income attributable to minority interest   (47,048)        (16,438)

     Net income attributable to  Buenaventura       422,506         267,988
                                                    -------         -------

     Basic and diluted earnings per share
      attributable to
     Buenaventura, stated in U.S. dollars              1.66            1.05
                                                       ----            ----

    Compania de Minas Buenaventura S.A.A. and subsidiaries
    Consolidated Statements of cash flows
    For the three and six month period ended June 30, 2011 and  June 30, 2010
                                                    For the three month
                                                    period ended June, 30
                                                    ---------------------
                                                     2011            2010
                                                US$(000)        US$(000)
    Operating activities
    Proceeds from sales                           322,494         249,680
    Royalties received                              9,495          14,290
    Value Added Tax  recovered                      8,405             316
    Interest received                               1,721           1,017
    Payments to suppliers and third parties      (141,355)       (132,600)
    Payments to employees                         (27,689)        (14,477)
    Income tax paid                               (31,285)        (10,422)
    Payment of royalties                          (19,236)        (17,943)
    Payments of interest                             (100)           (363)
                                                     ----            ----

    Net cash and cash equivalents provided by
     operating activities                         122,450          89,498
                                                  -------          ------

    Investment activities
    Decrease (increase) in time deposit             3,102         (34,774)
    Proceeds from sales of plant and equipment          -              53
    Additions to mining concessions, property,
     plant and equipment                          (63,428)        (55,360)
    Payments for purchase of investments shares    (7,940)         (1,963)
    Disbursements for development activities       (2,604)         (7,933)

    Net cash and cash equivalents used in
     investment activities                        (70,870)        (99,977)
                                                  -------         -------

    Financing activities
    Increase in financial obligations              14,128          11,449
    Payments of long-term debt                     (1,007)         (9,888)
    Dividends paid                                (83,967)        (82,690)
    Dividends paid to minority shareholders of
     subsidiary                                   (25,551)         (7,752)

    Net cash and cash equivalents used in
     financing activities                         (96,397)        (88,881)
                                                  -------         -------

    (Decrease) increase  in cash and cash
     equivalents during the period, net           (44,817)        (99,360)
    Cash and cash equivalents at beginning of
     period                                       660,118         489,799

    Cash and cash equivalents at period-end       615,301         390,439
                                                  -------         -------


                                                     For the six month
                                                    period ended June, 30
                                                    ---------------------
                                                     2011            2010
                                                US$(000)        US$(000)
    Operating activities
    Proceeds from sales                           719,289         471,846
    Royalties received                             23,645          31,962
    Value Added Tax  recovered                     12,440           2,617
    Interest received                               4,201           2,065
    Payments to suppliers and third parties      (350,730)       (238,232)
    Payments to employees                         (86,143)        (55,882)
    Income tax paid                               (61,517)        (28,418)
    Payment of royalties                          (34,809)        (29,283)
    Payments of interest                             (676)         (2,841)
                                                     ----          ------

    Net cash and cash equivalents provided by
     operating activities                         225,700         153,834
                                                  -------         -------

    Investment activities
    Decrease (increase) in time deposit            17,935         (53,704)
    Proceeds from sales of plant and equipment          -             654
    Additions to mining concessions, property,
     plant and equipment                         (104,776)       (109,812)
    Payments for purchase of investments shares   (17,019)         (7,265)
    Disbursements for development activities       (4,390)        (10,391)

    Net cash and cash equivalents used in
     investment activities                       (108,250)       (180,518)
                                                 --------        --------

    Financing activities
    Increase in financial obligations              25,515          23,055
    Payments of long-term debt                     (1,007)       (225,104)
    Dividends paid                                (83,967)        (82,690)
    Dividends paid to minority shareholders of
     subsidiary                                   (25,551)        (12,592)

    Net cash and cash equivalents used in
     financing activities                         (85,010)       (297,331)
                                                  -------        --------

    (Decrease) increase  in cash and cash
     equivalents during the period, net            32,440        (324,015)
    Cash and cash equivalents at beginning of
     period                                       582,861         714,454

    Cash and cash equivalents at period-end       615,301         390,439
                                                  -------         -------

(1) Production includes 100% of Buenaventura’s operating units, 100% of CEDIMIN, 53.06% of La Zanja and 46.08% of El Brocal.

Visit our website:
http://www.buenaventura.com

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: ddominguez@buenaventura.com.pe

Contacts in New York:
Peter Majeski
i-advize Corporate Communications, Inc.
Tel: (212) 406-3694
Email: buenaventura@i-advize.com

SOURCE Compania de Minas Buenaventura S.A.A.


Source: newswire



comments powered by Disqus