Buenaventura Announces Second Quarter 2012 Results

01.08.2012  |  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 second quarter 2012. All figures have been prepared in
accordance with IFRS 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 was US$152.6 million, which was 23%
lower than the figure reported in 2Q11 (US$197.6 million). EBITDA from
Buenaventura′s Direct Operations was US$112.9 million, 38% lower than
the figure reported in 2Q11 (US$182.5 million), while EBITDA including
Affiliates decreased 16%, from US$406.3 million in 2Q11 to US$341.9
million in 2Q12.

These results were mainly explained by the higher cost of and
exploration costs at non-operating mining sites.

(*) As of June 30, 2012, Buenaventura had 254,442,328 shares outstanding.

? Within this release, Buenaventura presents financial measures
in accordance with Peruvian GAAP, as well as on a non-GAAP basis. EBITDA
(Buenaventura Direct Operations) and EBITDA (including Affiliates)
included in this release are non-GAAP financial measures. Please see the
consolidated financial information below for information reconciling
non-GAAP financial measures with Peruvian GAAP financial measures.

Operating Revenue

During 2Q12, net sales were US$331.8 million, similar to the US$327.3
million reported in 2Q11. Higher silver, zinc and lead volume sold
positively offset lower silver and base metal prices, as well as the
decline in gold sales.

Royalty income increased 17%, from US$16.0 million reported in 2Q11 to
US18.7 million in 2Q12 due to higher revenues at Yanacocha.

(*) Buenaventura′s Direct Operations

(*) Buenaventura Direct Operations

Accumulated net sales in the first six-month period 2012 were US$690.7
million, in-line with the figure reported in the same period in 2011
(US$690.8 million), while royalty income was US$36.8 million, a 30%
increase when compared to the US$28.2 million reported in 2011.

Production and Operating Costs

Buenaventura′s equity production¹ in 2Q12 was 107,168 ounces
of gold, 11% lower than the 120,641 ounces reported in 2Q11 mainly due
to a decrease in Orcopampa and Poracota production. Silver production in
2Q12 was 4.5 million ounces, a 32% increase when compared to the figure
reported in 2Q11 (3.4 million oz).

Equity production¹ in the first six-month period 2012 was
225,022 ounces of gold and 8.5 million ounces of silver. This
represented a 5% decrease in gold production (237,259 ounces in 2011),
and 13% higher silver production compared to 2011 (7.5 million ounces).

¹ Production includes 100% of Buenaventura′s operating units,
100% of CEDIMIN, 53.06% of La Zanja, 40.04% of Tantahuatay and 53.76% of
El Brocal.

Orcopampa′s(100% owned by Buenaventura) production from
the Chipmo mine in 2Q12 was 56,762 ounces, 18% lower than the 69,335
ounces reported in 2Q11 due to a 15-day strike and 15% lower ore grade
(See Appendix 2). The old tailings treatment produced 3,984 gold ounces
(compared to 5,876 ounces in 2Q11). As a consequence, total gold
production in 2Q12 was 60,745 ounces, 19% lower than the 75,211 ounces
reported in 2Q11. Accumulated total gold production in the first
six-month period 2012 was 130,010 ounces, a 15% decrease when compared
to 2011 (153,736 ounces).

Cash operating cost in 2Q12 was US$541.6/oz, 23% higher when compared to
2Q11 (US$441/oz). This was mainly explained by:

At Poracota, gold production in 2Q12 was 6,231 ounces, a 54% decrease
when compared to 2Q11 (13,427 ounces) due to the aforementioned 15-day
strike, lower ore grade and a decrease in the recovery rate (See
Appendix 2). Accumulated gold production in the first six-month period
2012 was 17,551 ounces, 31% lower than the figure reported in 2011
(25,528 ounces). Cash operating cost was US$1,851/oz, 98% higher than
the figure reported in 2Q11 (US$936/oz), mainly explained by the 54%
decrease in gold ounces produced.

At Uchucchacua(100% owned by Buenaventura), total silver
production in 2Q12 was 2.71 million ounces, a 33% increase when compared
to 2.04 million ounces in 2Q11 due to higher tonnage treated and a
higher recovery rate (See Appendix). Zinc production in 2Q12 was 2,036
MT, 94% higher than the figure reported in 2Q11 (1,050 MT), while lead
production increased 39% (1,891 MT in 2Q12 vs. 1,359 MT in 2Q11). In the
first six-month period 2012, silver production was 5.46 million ounces,
zinc production was 4,247 MT, while lead production was 3,889 MT vs.
4.55 million ounces, 2,952 MT and 3,381 MT, respectively, in 2011.

Cash operating cost in 2Q12 was US$16.65/oz, a 6% decrease compared to
US$17.63/oz in 2Q11. This decrease was primarily due to higher silver
production (an increase of 33%).

At Julcani (100% owned by Buenaventura), total production in 2Q12
was 602,764 ounces of silver, 1% lower when compared to 2Q11 (604,985
ounces. In the first six-month period 2012, silver production was 1.23
million ounces, 2% higher than in 2Q11 (1.21 million ounces).

Silver cash operating cost in 2Q12 was US$12.33/oz, in-line with the
2Q11 cash cost (US$12.52/oz).

La Zanja (53.06% owned by Buenaventura) total production in 2Q12
was 27,687 ounces of gold, a 25% decrease when compared to 2Q11 (36,920
ounces). Accumulated gold production in the first six-month period 2012
was 54,016 ounces, 13% lower when compared to first six-month period
2011 (62,071 ounces in 2011). Cash operating cost in 2Q12 was US$607/oz,
100% higher than 2Q11 (US$303/oz) due to lower production (25%
decrease), a 58% increase in labor expenses, a 40% increase in supply
expenses (mainly explained by an increase of reagent consumption) and a
28% increase of contractor expenses. This product is in-line with the
project′s forecast.

Tantahuatay (40.04% owned by Buenaventura) Total production in
2Q12 was 39,129 ounces of gold (15,652 ounces attributable to
Buenaventura). In the first six-month period 2012, gold production was
66,735 ounces (26,695 attributable to Buenaventura). Cash operating cost
in 2Q12 was US$385/oz and US$433/oz in the first six month period.

At El Brocal(53.76% owned by Buenaventura), Zinc
production in 2Q12 was 14,044 MT, a 46% increase when compared to 2Q11
(9,650 MT). Silver production increased 18% from 1.1 million ounces in
2Q11 to 1.3 million ounces in 2Q12. During the six-month period 2012,
total zinc production was 21,651 MT, a 124% increase when compared to
the 9,650 MT reported in 2011. In the case of silver, total production
increased 12%, from 1.5 million ounces in 2011, to 1.7 million ounces in
the first six-month period 2012. Lead production in the first six-month
period 2012 was 7,513 MT, 56% higher than 2011 (4,812 MT).

Zinc cash costs increased from a negative US$183/MT in 2Q11 to
US$1,511/MT in 2Q12. This was explained by the 98% lower by-product
contribution due to a decrease in silver and lead realized prices.

General and Administrative Expenses

General and administrative expenses in 2Q12 were US$25.0 million, 28%
higher than the figure reported in 2Q11 (US$19.5 million) due to a
provision for early retirement contingencies and metallurgical research
studies. For the first six-month period 2012, general and administrative
expenses were US$54.8 million versus US$36.5 million in 2011 (50%
increase).

Exploration Costs in Non-Operational Mining Sites

Exploration costs at non-operational mining sites, which include care
and maintenance in 2Q12 were US$26.4 million, a 118% increase compared
to the US$12.1 million reported in 2Q11. Buenaventura′s main exploration
efforts were focused at the Trapiche (US$3.9 million), Tambomayo (US$3.8
million), San Gregorio (US$3.6 million), Chancas (US$3.3 million) and
Breapampa (US$2.2 million) projects.

Exploration costs at non-operational mining sites in the first six-month
period 2012 were US$45.8 million, 102% higher than 2011 (US$22.7
million).

Operating Income

Operating income in 2Q12 was US$79.4 million, a 46% decrease compared to
the US$147.9 million reported in 2Q11. This decrease was mainly due to a
32% increase in operating costs, while revenues increased 2%.

Accumulated in the first six-month period 2012, operating income was
US$210.9 million versus US$326.3 million in 2011 (decrease of 35%).

Share in Associated Companies

During 2Q12, Buenaventura′s share in associated companies was US$122.0
million, in-line with the US$123.2 million figure reported in 2Q11.
Yanacocha′s contribution to these results increased 33%, from US$64.9
million in 2Q11 to US$86.6 million in 2Q12, while Cerro Verde′s
contribution decreased 49% from US$65.9 million in 2Q11 to US$33.9
million in 2Q12.

For the first six-month period 2012, Buenaventura′s share in associated
companies was US$258.0 million, 9% higher than the US$236.2 million
reported in 2011.

YANACOCHA

At Yanacocha (43.65% owned by Buenaventura), 2Q12 gold production was
389,979 ounces of gold, 14% higher than 2Q11 production (341,665 oz).
Accumulated gold production in the first six-month period 2012 was
756,407 ounces, 20% higher than in 2011 (629,880 oz).

Costs applicable to sales (CAS) at Yanacocha in 2Q12 were US$488/oz, 13%
lower than the figure reported in 2Q11 (US$564/oz) due to higher
production and lower mining costs, partially offset by higher workers'
participation costs and lower by-product credits. Net income at
Yanacocha in 2Q12 was US$198.3 million, a 33% increase compared to the
2Q11 figure (US$149.1 million). Accumulated net income in the first
six-month period 2012 was US$400.3 million, 54% higher than in 2011
(US$259.8 million).

During 2Q12, EBITDA totaled US$375.3 million, a 32% increase compared to
2Q11 (US$284.0 million). This increase was mainly due to an 18% increase
in revenues (US$615.4 million in 2Q12 vs. US$520.2 million in 2Q11).
Accumulated EBITDA in the first six-month period 2012 was US$739.2
million, 55% higher than 2011 (US$477.7 million).

Capital expenditures at Yanacocha were US$332.9 million in 2Q12 and
US$560.3 for the first six-month period 2012.

CERRO VERDE

At Cerro Verde (19.41% owned by Buenaventura), 2Q12 copper production
was 68,329 MT, an 11% decrease compared to the figure reported in 2Q11
(76,905 MT). Accumulated total copper production in the first six-month
period 2012 was 131,625 MT, 16% lower than 156,368 MT in 2011.

During 2Q12, Cerro Verde reported net income of US$173.9 million, a 49%
decrease when compared to US$343.3 million in 2Q11. This was mainly due
to a 35% decrease in sales revenues (US$482.2 million in 2Q12 versus
US$744.0 million in 2Q11). Accumulated net income in the first six-month
period 2012 was US$406.1 million, 43% lower than US$710.9 million in
2011.

Capital expenditures at Cerro Verde in 2Q12 totaled US$169.8 million and
US$252.0 in the first six-month 2012 period.

CANTERAS DEL HALLAZGO (Chucapaca project)

At Canteras del Hallazgo (49% owned by Buenaventura), expenses
attributable for Buenaventura totaled US$8.1 million due to the
execution of the exploration program (US$7.1 million in 2Q11). For the
six-month period 2012, attributable expenses were US$13.4 million
(US$13.1 million in 2011).

COIMOLACHE (Tantahuatay operation)

At Coimolache (40.04% owned by Buenaventura), attributable contribution
was US$9.6 million (negative US$0.5 million in 2Q11). For the six-month
period 2012, attributable contribution was US$17.9 million (negative
US$0.8 million in 2011)

Net Income

Buenaventura′s 2Q12 net income was US$152.6 million (US$0.60 per share),
a 23% decrease compared to the US$197.6 million (US$0.90 per share)
reported in 2Q11. Accumulated net income in the first six-month period
2012 was US$360.0 million, 15% lower when compared to 2011 (US$422.3
million).

Project Development

LA ZANJA DEVELOPMENT PROGRAM

• The Pampa Verde Project will include the development of a new
  open pit, expansion of the current leach pad and improvements to the
  operation′s road access. Construction began in 2Q11. As of June 30,
  2012, total project expenditures were US$39.02 million (total
  investment is US$70.4 million). Completion is expected in 1Q13.
  

TANTAHUATAY DEVELOPMENT PROGRAM

• The Cienaga Norte Project includes the Leach Pad′s Stage II
  (additional 10.5 Ha), development of the Cienaga Norte Pit and an
  access road between the leach pad and the open pit. Total CAPEX
  totaled US$20 million. Project construction will begin as soon as the
  environmental impact assessment is approved.
  

MALLAY

• 
  Mallay mine construction was completed in March 2012. The project has
  already received the mine operating license. Production began April
  2012.
  
• 
  During 2Q12, Mallay production included 138,000 Ag Oz, 800MT Pb and
  1050MT Zn.
  
• 
  Currently, Mallay holds Brownfield exploration investments in the
  Chancas?Chiptaj area.
  

RIO SECO MANGANESE SULFATE PLANT

• 
  Buenaventura continued with the construction of the manganese sulfate
  plant with a total budget of US$76.0 million. As of June 30, 2012,
  total expenditures were US$44.5 million. The project includes an acid
  leaching facility, a sulfuric acid production plant and a manganese
  sulfate crystallization plant.
  
• 
  The leaching processing facilities are expected to be completed by the
  end of 4Q12. The construction of the Sulfuric Acid and the Manganese
  Sulfate Plant is expected to be ready 4Q12. Construction and start-up
  tests at both plants are scheduled at the end of 2012.
  

BREAPAMPA

• 
  As of June 30, 2012, Buenaventura′s total investment at the Breapampa
  Project was US$40.3 million, representing 84% of the entire budget
  (US$48.0 million).
  
• 
  Construction progress includes:
  

• 
  This project should be completed by the end of 3Q12. Production will
  also begin at end of 3Q12
  
• 
  Expected gold production in 2012 is approximately 22,000 ounces
  

HUANZA HYDROELECTRICAL PLANT

• 
  As of June 30, 2012, construction progress at the Huanza Project
  included:
  

Other Information

At the Board of Directors meeting held July, 31, 2012, the following
resolutions were passed:

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;
19.41% 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 2011 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

(1) First time adoption of International Financial Reporting
Standards ('IFRS?)

As part of the first adoption of the International Financial Reporting
Standards (IFRS) in Peru, as of October 14, 2011, through Resolution
N ?102-2011-EF/94.01.1, the Superintendence of Securities Market ('SMV?,
before CONASEV), required to all legal entities under its supervision to
adopt IFRS since the year The first six-month period 2012.

For periods up to and including the year ended December 31, 2011, the
Company prepared its financial statements in accordance with Generally
Accepted Accounting Principles in Peru (Peru GAAP). These consolidated
financial statements, for the year ended December 31, The first
six-month period 2012, are the first the Company has prepared in
accordance with IFRS, in which the Company has applied IFRS 1 'First
Time Adoption of International Financial Reporting Standard? in the
opening balance as of January 1, 2011, transition date to IFRS. The IFRS
1 application implies that all the standards are apply retrospectively
at the transition date, including certain mandatory exceptions and
voluntary exemptions defined in the standard.

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

(*)Consolidates

(**) Equity Accounting

APPENDIX 2

APPENDIX 3

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 Affiliates) consists of EBITDA (Buenaventura Direct
Operations), plus (1) Buenaventura′s equity share of EBITDA (Yanacocha)
(2) Buenaventura′s equity share of EBITDA (Cerro Verde), plus (3)
Buenaventura′s equity share of EBITDA (Coimolache) plus (4)
Buenaventura′s equity share of EBITDA (Canteras del Hallazgo). All
EBITDA mentioned were similarly calculated using financial information
provided to Buenaventura by the affiliated companies.

Buenaventura presents EBITDA (Buenaventura Direct Operations) and EBITDA
(including affiliates) to provide further information with respect to
its operating performance and the operating performance of its equity
investees, the affiliates. EBITDA (Buenaventura Direct Operations) and
EBITDA (including affiliates) 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 affiliates) as
alternatives to operating income or net income determined in accordance
with Peruvian GAAP, as an indicator of Buenaventura′s, affiliates
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