Buenaventura Announces Third Quarter 2012 Results

31.10.2012  |  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 third 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 third quarter was US$185.6 million, 11% lower than
the figure reported in 3Q11 (US$208.7 million). EBITDA from
Buenaventura′s Direct Operations was US$158.5 million, 37% lower than
the figure reported in 3Q11 (US$252.3 million), while EBITDA including
Affiliates decreased 14%, from US$446.5 million in 3Q11 to US$384.4
million in 3Q12.

These results were mainly explained by lower gold volume sold from
Buenaventura′s direct operations, as well as lower silver and base metal
prices. Higher costs also impacted results due to an increase in
contractor expenses as well as higher supply costs.

(*) As of September 30, 2012, Buenaventura had 254,232,571 shares
outstanding.

Within this release, Buenaventura presents financial measures in
accordance with IFRS, as well as on a non-GAAP basis.

Operating Revenue

During 3Q12, net sales were US$394.0 million, 6% lower than the US$418.1
million reported in 3Q11. This was explained by lower metal prices and
gold volume sold.

Royalty income increased 4% from US$17.1 million reported in 3Q11 to
US$17.9 million in 3Q12 due to higher revenues at Yanacocha.

Accumulated net sales in the first nine-month period 2012 were
US$1,084.7 million, 2% lower than the figure reported in the same period
2011 (US$1,108.9 million), while royalty income was US$54.6 million, a
20% increase when compared to the US$45.4 million reported in 2011.

Production and Operating Costs

Buenaventura′s equity production¹ in 3Q12 was 112,750 ounces
of gold, 5% higher than the 107,157 ounces reported in 3Q11 mainly due
to an increase in Orcopampa and Tantahuatay production. Silver
production in 3Q12 was 4.7 million ounces, a 12% increase when compared
to the figure reported in 3Q11 (4.2 million oz).

Equity production¹ in the first nine-month period 2012 was
337,761 ounces of gold and 13.2 million ounces of silver. This
represented a 2% decrease in gold production (344,751 ounces in 2011),
and a 17% increase in silver production compared to 2011 (11.2 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) total gold
production in 3Q12 was 70,588 ounces, 17% higher than the 60,171 ounces
reported in 3Q11. Production from the Chipmo mine in 3Q12 was 65,362
ounces, 25% higher compared to the 52,265 ounces reported in 3Q11 due to
a 16% increase in tonnage treated and 6% higher ore grade (See Appendix
2). The old tailings treatment produced 5,226 gold ounces (compared to
7,906 ounces in 3Q11). Accumulated total gold production in the first
nine-month period 2012 was 200,599 ounces, a 6% decrease when compared
to 2011 (213,906 ounces).

Cash operating cost in 3Q12 was US$537/oz, 3% lower when compared to
3Q11 (US$554/oz). This was mainly explained by the 16% increase in gold
ounces recovered due to higher tonnage treated and better ore grades.

At Uchucchacua(100% owned by Buenaventura), total silver
production in 3Q12 was 2.79 million ounces, a 1% increase when compared
to 2.75 million ounces in 3Q11 due to a 4% higher recovery rate (See
Appendix). Zinc production in 3Q12 was 2,628 MT, 57% higher than the
figure reported in 3Q11 (1,673 MT), while lead production increased 14%
(2,259 MT in 3Q12 vs. 1,975 MT in 3Q11). In the first nine-month period
2012, silver production was 8.25 million ounces; zinc production was
6,879 MT, while lead production was 6,145 MT vs. 7.30 million ounces,
4,625 MT and 5,308 MT, respectively, in 2011.

Cash operating cost in 3Q12 was US$16.8/oz, in-line with the US$16.7/oz
in 3Q11. It is important to note that efficiency improvements at
Uchucchacua have permitted the Company to offset the increase in
contractor, labor and supply costs, which have affected the entire
industry.

At Julcani (100% owned by Buenaventura), total production in 3Q12
was 589,838 ounces of silver, 3% lower compared to 3Q11 (605,346
ounces). In the first nine-month period 2012, silver production was 1.82
million ounces, 0.5% higher than in 3Q11 (1.82 million ounces).

Silver cash operating cost in 3Q12 was US$14.6/oz, 15% higher than the
3Q11 cash cost (US$12.52/oz). This was mainly due to:

1. A 9% increase in labor costs

2. Contractor costs rose 25% due to higher labor costs, which impacted
unit prices, as well as a 39% increase of DDHH work.

La Zanja (53.06% owned by Buenaventura) total production in 3Q12
was 29,702 ounces of gold, a 24% decrease when compared to 3Q11 (39,262
ounces). This was in-line with the 2012 mining plan. Accumulated gold
production in the first nine-month period 2012 was 83,718 ounces, 17%
lower when compared to first nine-month period 2011 (101,333 ounces).
Cash operating cost in 3Q12 was US$620/oz, 72% higher than 3Q11
(US$360/oz) due to a higher stripping as well as an increase in supply
costs (mainly explained by an increase of reagent consumption and
prices). These costs were in-line with the 2012 budget.

Tantahuatay (40.04% owned by Buenaventura) total production in
3Q12 was 39,194 ounces of gold (15,678 ounces attributable to
Buenaventura). In the first nine-month period 2012, gold production was
105,929 ounces (42,372 attributable to Buenaventura). Cash operating
cost in 3Q12 was US$326/oz.

At El Brocal(53.76% owned by Buenaventura), Zinc
production in 3Q12 was 13,298 MT, a 5% decrease when compared to 3Q11
(14,025 MT). Silver production increased 22% from 1.0 million ounces in
3Q11 to 1.2 million ounces in 3Q12. Lead production was 4,816 MT, 3%
higher than 4,693 MT reported in 2011. During the first nine-month
period 2012, total zinc production was 34,949 MT, a 48% increase when
compared to the 23,675 MT reported in 2011. In the case of silver, total
production increased 16%, from 2.5 million ounces in 2011 to 2.9 million
ounces in the first nine-month period 2012. Lead production in the first
nine-month period 2012 was 12,329 MT, 30% higher than 2011 (9,504 MT).

Zinc cash costs was US$975/MT in 3Q11 compared to a negative US$458/MT
in 3Q12. This was explained by a decrease in silver by-product
contribution due to lower prices.

At Marcapunta, copper production was 3,754 MT, 17% lower than the 4,549
MT reported in 3Q11. For the first nine-month period 2012, copper
production decreased 41% (15,944 MT in 3Q11 versus 9,438 MT in 3Q12).
Cash cost at Marcapunta was US$6,754/MT in 3Q12 (vs. US$3,922/MT in
3Q11).

General and Administrative Expenses

General and administrative expenses in 3Q12 were US$22.9 million, 2%
higher than the figure reported in 3Q11 (US$22.3 million). This figure
included US$4.0 million in metallurgical research studies. For the first
nine-month period 2012, general and administrative expenses were US$77.7
million versus US$58.8 million in 2011 (a 32% increase).

Exploration Costs at Non-Operational Mining Sites

Exploration costs at non-operational mining sites, which include care
and maintenance, in 3Q12 were US$27.4 million, a 114% increase compared
to the US$12.8 million reported in 3Q11. Buenaventura′s main exploration
efforts were focused at the Trapiche (US$5.1 million), Tambomayo (US$4.4
million), San Gregorio (US$4.0 million), Chancas/Focus (US$2.8 million)
and Breapampa (US$2.1 million) projects.

Exploration costs at non-operational mining sites in the first
nine-month period 2012 reached US$73.2 million, 106% higher than 2011
(US$35.5 million).

Operating Income

Operating income in 3Q12 was US$120.6 million, a 44% decrease compared
to the US$214.0 million reported in 3Q11. This decrease was mainly due
to a 27% increase in operating costs, while revenues decreased 5%.

For the accumulated first nine-month period 2012, operating income was
US$331.6 million versus US$540.3 million in 2011 (a decrease of 39%).

Share in Associated Companies

During 3Q12, Buenaventura′s share in associated companies was US$116.3
million, 8% higher than the US$107.7 million figure reported in 3Q11.
Yanacocha′s contribution to these results decreased 18%, from US$79.8
million in 3Q11 to US$65.1 million in 3Q12, while Cerro Verde′s
contribution increased 38% from US$31.8 million in 3Q11 to US$43.7
million in 3Q12.

For the first nine-month period 2012, Buenaventura′s share in associated
companies was US$374.3 million, 9% higher than the US$343.9 million
reported in 2011.

YANACOCHA

At Yanacocha (43.65% owned by Buenaventura), 3Q12 gold production was
353,710 ounces of gold, 8% higher than 3Q11 production (328,411 oz).
Accumulated gold production in the first nine-month period 2012 was
1,110,117 ounces, 16% higher than in 2011 (958,290 oz).

Costs applicable to sales (CAS) at Yanacocha in 3Q12 were US$539/oz, 15%
lower than the figure reported in 3Q11 (US$633/oz) due to higher
production and lower mining costs. Net income at Yanacocha in 3Q12 was
US$150.5 million, 18% lower compared to the 3Q11 figure (US$183.3
million). Accumulated net income in the first nine-month period 2012 was
US$550.8 million, 24% higher than in 2011 (US$443.1 million).

During 3Q12, EBITDA totaled US$316.1 million, a 3% decrease compared to
3Q11 (US$327.2 million). This decrease was mainly due to an increase in
other expenses related to unexpected employee terminations. Accumulated
EBITDA in the first nine-month period 2012 was US$1,055.9 million, 31%
higher than 2011 (US$805.3 million).

Capital expenditures at Yanacocha were US$262.6 million in 3Q12 and
US$822.9 for the first nine-month period 2012.

CERRO VERDE

At Cerro Verde (19.58% owned by Buenaventura), 3Q12 copper production
was 69,150 MT, a 3% decrease compared to the figure reported in 3Q11
(71,255 MT). Accumulated total copper production in the first nine-month
period 2012 was 200,775 MT, 12% lower than 227,622 MT in 2011.

During 3Q12, Cerro Verde reported net income of US$219.7 million, a 33%
increase when compared to US$164.9 million in 3Q11. This was mainly due
to a 22% decrease in sales revenues (US$575.0 million in 3Q12 versus
US$470.1 million in 3Q11). Accumulated net income in the first
nine-month period 2012 was US$625.9 million, 29% lower than US$875.8
million in 2011.

Capital expenditures at Cerro Verde in 3Q12 totaled US$148.8 million and
US$400.8 in the first nine-month 2012 period.

CANTERAS DEL HALLAZGO (Chucapaca project)

At Canteras del Hallazgo (49% owned by Buenaventura), expenses
attributable to Buenaventura totaled US$6.7 million, mainly due to
social expenses (US$8.2 million in 3Q11). For the first nine-month
period 2012, attributable expenses were US$20.1 million (US$21.3 million
in 2011).

COIMOLACHE (Tantahuatay operation)

At Coimolache (40.04% owned by Buenaventura), attributable contribution
was US$13.5 million (US$4.4 million in 3Q11). For the first nine-month
period 2012, attributable contribution was US$31.4 million (US$3.5
million in 2011)

Net Income

Buenaventura′s 3Q12 net income was US$185.6 million (US$0.73 per share),
an 11% decrease compared to the US$208.7 million (US$0.82 per share)
reported in 3Q11. Accumulated net income in the first nine-month period
2012 was US$545.6 million, 14% lower when compared to 2011 (US$631.0
million).

Project Development

LA ZANJA DEVELOPMENT PROGRAM

• Pampa Verde Project will allow the development of a new open
  pit, an expansion of the current leach pad and improvements to the
  operation′s road access. Construction began in 2Q11. The project′s
  total investment is US$70.4 million. Completion is expected in 1Q13.
  

TANTAHUATAY DEVELOPMENT PROGRAM

• 
  The acid water dam was completed
  
• 
  Cienaga Norte project: The Environmental Impact Assessment approval is
  expected by the end of 4Q12.
  

PORACOTA ? ULTRAFINE MILLING

• 
  The Poracota Ultrafine Milling project began in 1Q12. The project′s
  total investment is US$4.5 million.
  
• 
  The objective of this project is to process material from Manto
  Aguila. Project completion is expected by the end of 1Q13.
  

RIO SECO MANGANESE SULFATE PLANT

• 
  Buenaventura continued with the construction of the manganese sulfate
  plant. The project′s total budget is US$ 90.0 million.
  
• 
  The project includes an acid leaching facility, a sulfuric acid
  production plant and a manganese sulfate crystallization plant.
  
• 
  Pilot tests for the leaching processing facilities are expected in
  4Q12. The operation of the sulfuric acid and the manganese sulfate
  plant is expected in 1Q13.
  

BREAPAMPA

• 
  As of September 30, 2012, construction at the Breapampa Project was
  completed for a total budget of US$48.0 million.
  
• 
  Currently, the Company is waiting for water and operating permits.
  

HUANZA HYDROELECTRICAL PLANT

• 
  Construction progress at the Huanza Project included:
  

1. Water Conduction Tunnel: 10,074 meters of excavation was completed,
representing 100%.

2. Powerplant: civil work was 90% complete.

3. Pallca Dam: 97% was complete (48,500m³ of concrete).

4. The construction of electromechanical equipment is nearly complete,
and will be delivered on schedule. Equipment construction is 20%
complete.

Other Information

At the Board of Directors meeting held October 30, 2012, the following
resolutions were passed:

Declaration of a cash dividend of US$0.20 per share, or ADS, to be paid
in U.S. dollars on November 30, 2012 to shareholders of record as of
November 16, 2012.

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;
19.58% 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 nine-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 nine-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 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 IFRS, 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 IFRS, as an
indicator of Buenaventura′s, affiliates operating performance, or as an
alternative to cash flows from operating activities, determined in
accordance with IFRS, as an indicator of cash flows or as a measure of
liquidity.

APPENDIX 4