Buenaventura Announces Third Quarter 2011 Results

29.10.2011  |  Business Wire

Compañia 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 third 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 third quarter reached US$208.0 million, a 19%
increase when compared to the figure reported in 3Q10 (US$174.3
million). EBITDA from Buenaventura′s Direct Operations was US$248.0
million, 87% higher than the figure reported in 3Q10 (US$132.8 million),
while EBITDA including Yanacocha and Cerro Verde increased 31%, from
US$340.0 million in 3Q10 to US$443.9 million in 3Q11.

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.

As a consequence and in accordance to the Company′s dividend policy, the
Board has approved a cash dividend of US$0.23 per share, which
represents an increase of 44% compared to the interim dividend paid in
4Q10 (US$0.16 per share).

(*) As of September 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 3Q11, net sales were US$418.1 million, a 57% increase when
compared to the US$265.9 million reported in 3Q10. 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 22% from US$14.0 million reported in 3Q10 to
US$17.1 million in 3Q11 due to higher revenues at Yanacocha.

Accumulated net sales in 2011 were US$1,108.9 million, a 67% increase
compared to the same period in 2010 (US$665.5 million), while royalty
income was US$45.4 million, a 9% increase when compared to the US$41.5
million reported in the comparable period 2010.

Production and Operating Costs

Buenaventura′s equity production¹ in 3Q11 was 107,157 ounces
of gold, 10% lower than the 118,367 ounces reported in 3Q10 due a
decrease in Orcopampa ?s production. Silver production in 3Q11 was 4.2
million ounces, a 15% increase when compared to the figure reported in
3Q10 (3.6 million oz) due to higher production from Uchucchacua and El
Brocal.

Equity production¹ in the first nine months period 2011 was
344,751 ounces of gold and 11.2 million ounces of silver. This
represented a 6% increase in gold production (326,113 ounces in 2010),
and 12% increase in silver production compared to 2010 (10.0 million
ounces).

Orcopampa′s(100% owned by Buenaventura) production from
the Chipmo mine in 3Q11 was 52,265 ounces, 31% lower than the 76,153
ounces reported in 3Q10 due to lower ore grade and a decrease in the
recovery rate (See Appendix 2). The old tailings treatment produced
7,906 gold ounces (compared to 5,675 ounces in 3Q10). As a consequence,
total gold production in 3Q11 was 60,171 ounces, 26% lower than the
81,828 ounces reported in 3Q10. Accumulated total gold production in the
first nine month period 2011 was 213,906 ounces, a 9% decrease when
compared to 2010 (234,430 ounces).

Cash operating cost in 3Q11 was US$554/oz, 52% higher when compared to
3Q10 (US$365/oz). This was mainly explained by:

At Poracota, gold production in 3Q11 was 12,584 ounces, a decrease of
22% when compared to 3Q10 (16,230 ounces) due to lower ore grade and a
decrease in the recovery rate (See Appendix 2). Accumulated gold
production in the first nine month period 2011 was 38,111 ounces, 16%
lower than the figure reported in 2010 (45,127 ounces). Cash operating
cost was US$1,085/oz, 18% higher than the figure reported in 3Q10
(US$923/oz), explained by the lower gold ounces produced.

Total royalties paid to the government at both Orcopampa and Poracota in
3Q11 totaled US$4.4 million.

At Uchucchacua(100% owned by Buenaventura), total silver
production in 3Q11 was 2.8 million ounces, a 12% increase when compared
to 2.5 million ounces in 3Q10 due to higher tonnage treated and higher
silver grade (See Appendix). Zinc production in 3Q11 was 1,673 MT, 15%
lower than the figure reported in 3Q10 (1,970 MT), while lead production
decreased 10% (1,975 MT in 3Q11 vs. 2,193 MT in 3Q10). In 9M11, silver
production was 7.3 million ounces, zinc production was 4,625 MT and lead
production was 5,635 MT vs. 6.9 million ounces, 5,367 MT and 5,951 MT,
respectively, in 9M10.

Cash operating cost in 3Q11 was US$16.58/oz, a 27% increase compared to
US$13.08/oz in 3Q10. This increase was primarily due to higher
commercial deductions (US$3.65/oz) to payable silver content due to the
increased silver price.

Total royalties paid to the government at Uchucchacua in 3Q11 totaled
US$2.7 million.

At Antapite (100% owned by Buenaventura), total production in
3Q11 was 6,392 ounces of gold, a decrease of 32% compared to 3Q10 (9,396
ounces), mainly due to a decrease in ore grade (See Appendix 2).
Accumulated gold production was 22,470 ounces, a 14% decrease when
compared to 2010 (26,026 oz).

Gold cash operating cost in 3Q11 was US$1,350/oz, 59% higher than in
3Q10 (US$850/oz), mainly explained to the aforementioned decrease in
gold production.

Brownfield exploration efforts in the Pucarumi area began 4 months ago,
and after 156 meters of drifting works, the Company can report
interesting results (average 70cm with 10 gr/MT of gold).

Total royalties paid to the government at Antapite in 3Q11 totaled
US$0.2 million.

La Zanja (53.06% owned by Buenaventura) total production in 3Q11
was 39,262 ounces of gold, a 268% increase when compared to 3Q10 (10,660
ounces). Accumulated gold production in 2011 was 101,333 ounces
(compared to 10,660 ounces in 2010). Cash operating cost in 3Q11 was
US$360/oz, 7% lower than in 3Q10 (US$387/oz).

Total royalties paid to the government at La Zanja in 3Q11 totaled
US$1.9 million.

Tantahuatay (40% owned by Buenaventura) started production in
August. Total production in 3Q11 was 16,269 ounces of gold (6,508 ounces
attributable to Buenaventura). Cash operating cost in 3Q11 was US$462/oz.

At Colquijirca (53.66% owned by Buenaventura), total zinc
production was 14,025 MT in 3Q11, 2% higher than the figure reported in
3Q10 (13,771 MT). Total silver production in 3Q11 was 962,849 ounces, a
26% increase when compared to the 765,963 ounces reported in 3Q10. Total
lead production in 3Q11 was 4,693 MT, in-line with the figure reported
in 3Q10 (Appendix 2).

For the first nine month period 2011, total zinc production was 23,675
MT, a 33% decrease when compared to the 35,340 MT reported in 2010. In
the case of silver, total production increased 31%, from 1,901,098
ounces in 2010 to 2,497,294 ounces in 2011. Lead production for the
first nine months 2011 was 9,504 MT, 18% lower than the same period in
2010 (11,583 MT).

Zinc cash cost in 3Q11 was a negative US$458 vs. US$648/MT in 3Q10. This
was due to a higher silver by-product contribution due to an increase in
silver production and prices.

Copper production in 3Q11 was 4,549 MT, 172% higher than 3Q10 (1,672
MT). Copper cash cost in 3Q11 was US$3,922/MT, a 34% decrease when
compared to the US$5,940/MT reported in 3Q10. Accumulated copper
production in 2011 was 15,944 MT, 133% higher than 3Q10 (6,850 MT).

Total royalties paid to the government at Colquijirca and Marcapunta in
3Q11 totaled US$2.7 million.

General and Administrative Expenses

General and administrative expenses in 3Q11 were US$22.3 million, 23%
lower than the figure reported in 3Q10 (US$29.2 million) due to a lower
long-term compensation provision. For 9M11, general and administrative
expenses were US$58.8 million versus US$69.6 million in 9M10 (16%
decrease).

Exploration Costs in Non-Operational Mining Sites

Exploration costs at non-operational mining sites, which include care
and maintenance, in 3Q11 were US$12.8 million, a 65% increase compared
to the US$7.8 million reported in 3Q10. Buenaventura′s main exploration
efforts were focused at the Marcapunta (US$2.0 million), Pachuca in
Mexico (US$1.5 million), Colquemayo (US$1.2 million) and Mallay (US$1.5
million) projects.

Exploration costs at non-operational mining sites in the 2011
accumulated period were US$35.5 million, 37% higher than in 2010
(US$25.9 million).

Operating Income

Operating income in 3Q11 was US$210.2 million, a 129% increase compared
to the US$91.8 million reported in 3Q10. This increase was mainly due to
the 56% increase in total revenues as a result of higher average
realized prices and increases in the volume of gold and copper sold.

Accumulated 2011 operating income was US$534.5 million versus US$208.5
million in the same period 2010 (increase of 156%).

Share in Associated Companies

During 3Q11, Buenaventura′s share in associated companies was US$106.5
million, 10% lower than the US$118.4 million reported in 3Q10.
Yanacocha′s contribution to these results increased 28%, from US$62.4
million in 3Q10 to US$79.8 million in 3Q11, while Cerro Verde′s
contribution decreased 46% from US$58.5 million in 3Q10 to US$31.5
million in 3Q11.

For the accumulated 2011 period, Buenaventura′s share in associated
companies was US$341.8 million, 8% higher than the US$316.8 million
reported in 2010.

YANACOCHA

At Yanacocha (43.65% owned by Buenaventura), 3Q11 gold production was
328,411 ounces of gold, an 8% decrease compared to 3Q10 (355,150 ounces)
due to a 29% decline in ore mined and a higher stripping ratio.

Costs applicable to sales at Yanacocha in 3Q11 were US$633/oz, 45%
higher than the figure reported in 3Q10 (US$437/oz) due to higher
workers′ participation and an increase in third party and government
royalties.

Net income at Yanacocha in 3Q11 was US$183.3 million, a 28% increase
compared to the 3Q10 figure (US$143.6 million). Accumulated net income
in 2011 was US$443.2 million, 2% lower than in the same period 2010
(US$450.5 million).

During 3Q11, EBITDA totaled US$327.2 million, an increase of 29%
compared to 3Q10 (US$253.9 million). This increase was mainly due to a
27% increase in revenues (US$555.8 million in 3Q11 vs. US$436.4 million
in 3Q10) due to a 35% increase in the realized price of gold.
Accumulated EBITDA in 2011 was US$805.3 million, 3% higher than in 2010
(US$781.4 million).

Capital expenditures at Yanacocha were US$284.3 million in 3Q11.

CERRO VERDE

At Cerro Verde (19.27% owned by Buenaventura), 3Q11 copper production
was 71,255 MT, a 5% decrease when compared to 3Q10 (74,768 MT).
Accumulated total copper production in 2011 was 227,622 MT, in-line with
the production in 2010.

During 3Q11, Cerro Verde reported net income of US$164.9 million, a 46%
decrease when compared to US$304.1 million in 3Q10. This was mainly due
to a 30% decrease in sales revenues (US$470.1 million in 3Q11 versus
US$675.9 million in 3Q10). Accumulated net income in 2011 was US$875.8
million, 29% higher than US$679.5 million in 2010.

Capital expenditures at Cerro Verde in 3Q11 totaled US$67.7 million.

Net Income

This quarter, Buenaventura′s net income was US$208.0 million (US$0.82
per share), 19% higher compared to the US$174.1 million (US$0.68 per
share) reported in 3Q10. This increase was mainly due to a 118% increase
in operating income, partially offset by a 10% decrease in income from
associated companies. Accumulated net income in 2011 was US$630.5
million, 43% higher when compared to 2010 (US$440.2 million).

Project Development

LA ZANJA EXPANSION

• Pampa Verde Project. Construction began in 2Q11. As of
  September 30, 2011, total project expenditures were US$12.8 million.
  Total Investment at this project is US$32.5 million. Completion is
  expected in 3Q12.
  

Overall, the Pampa Verde Project (including works in San Pedro Sur) is
43% complete.

RIO SECO MANGANESE SULFATE PLANT

• 
  Buenaventura continued with the construction of the manganese sulfate
  plant with a total budget of US$70.0 million. As of September 30, 2011
  total expenditures were US$28.5 million. The project includes a
  leaching facility, a sulfuric acid plant and a manganese sulfate plant.
  
• 
  The leaching processing facilities are expected to be completed in
  1Q12.
  
• 
  The detailed engineering for the Sulfuric Acid and Manganese Sulfate
  Plant is expected to be ready in 2Q12. Erection and start-up tests at
  both plants are scheduled by the end of 2012.
  

HUANZA HYDROELECTRICAL PLANT

• 
  As of September 30, 2011, Buenaventura′s total disbursement at the
  Huanza Project was US$108.1 million, representing 75% of the entire
  budget. US$88.5 million of the total amount invested was financed via
  a leasing agreement totaling US$119.0 million.
  
• 
  Construction progress at the Huanza Project includes:
  

1. Water Conduction Tunnel: 8,797.94 meters of excavation was completed,
representing 74.4%

2. Powerplant: work is underway to install
electromechanical equipment.

3. Pallca Dam: current progress is 20%.

Other Information

The Board of Directors Meeting held October 28, 2011, passed the
following resolution:

Declaration of a cash dividend of US$0.23 per share or ADS, to be paid
in U.S. dollars on November 30, 2011 to shareholders of record as of
November 14, 2011.

Company Description

Compañía 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*, Recuperada*, El Brocal, La
Zanja, Coimolache and CEDIMIN*).

The Company owns 43.65% of Minera Yanacocha S.R.L (a partnership with
Newmont Mining Corporation), an important precious metal producer;
19.27% of Sociedad Minera Cerro Verde, an important Peruvian copper
producer, and 49% of Canteras del Hallazgo S.A, owner the Chucapaca
project.

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

(*) Operations wholly owned by Buenaventura

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.

________________________________

¹ Production includes
100% of Buenaventura′s operating units, 100% of CEDIMIN, 53.06% of La
Zanja and 53.66% of El Brocal.

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